1. Say goodbye to next-day delivery: One of the major cuts involves the end of overnight delivery for priority packages. That means companies that guarantee next-day delivery via the USPS will need to adjust their delivery options. It also means companies that need to get something out to a vendor, prospect or client ASAP will likely have to go with FedEx or UPS.
2. The speed of standard delivery: Because the USPS is eliminating 487 mail-processing centers and 28,000 jobs, standard letters and other parcels are expected to be delivered in 2-4 days (as opposed to the 1-3 days most people have come to expect).
3. Mailing costs are about to increase: The most direct way to increase revenue is to either save on costs or increase profits. The recent cuts are a major cost-cutting measure. But you can expect postage rates and other mail-related costs to increase, as the USPS continues to cope with the loss of nearly a third of its business over the past three years.

Source: “Next-Day Mail Faces Postal Service Cuts,” by Steven Greenhouse, New York Times, 12/5/11.

In a recent interview with Platt’s Energy Week, ex-Shell president John Hofmeister claimed Americans could be paying $5 a gallon for gas by the beginning of 2012.

How so?

Hofmesiter describes a “perfect storm” of mounting circumstances that could lead to the rapid (if not unavoidable) increase of gas prices.

Among those circumstances:

• higher global demand for oil
• gas prices steadily rising again (They’re up 4% over the past month and 16% over the past year), and
• oil prices (per barrel) escalating again … They eclipsed $90 a barrel for the first time since 2008 last week.

Of course, optimists believe the $5 a gallon mark is a near impossibility, at least in the next year or so, pointing to new oil resources and drilling practices that will likely offset any other factors. But the possibility still remains, and it’s best C-level execs start to monitor the situation sooner rather than later.

Before gas prices become a major issue again, management may want to:

• encourage outbound employees to schedule a cluster of meetings in the same region on the same days of the week, to cut down on gas mileage
• keep an eye on the mileage rate and consider a proactive increase on your own to take the burden off of employees (who are already strapped as it is)
• encourage “carshare” and car pool programs, and
• consider gas cards as incentives or rewards.

Source: “Ex-Shell President Sees $5 Gas in 2012,” by Laurie Segall, CNNMoney, 12/27/10,

But there are four specific reasons the majority of today’s buyers won’t agree to a sale, according to a Harvard Business Review study.

And those reasons have more to do with selling skills than any type of budgetary constraints.

Here are the four areas prospects feel salespeople should pay more attention to, and how salespeople can overcome them to win more business:

1. Focus on the prospect’s buying process. More than a quarter of today’s prospects say their biggest complaint is that salespeople don’t take enough time to understand (and follow) their buying processes. That not only frustrates prospects, in many cases it makes it difficult for them to agree to do business at all. Partnering with prospects early on to create a timeline for the sale — based on how their process works and when they’d like to make a buying decision — builds trust, and it also helps salespeople know when prospects are simply stalling to avoid saying, “no.”
2. Be attentive to buyers’ needs. Nearly one-fifth of buyers feel salespeople need to develop sharper listening skills. Even when certain assumptions seem like no-brainers, many prospects would prefer salespeople ask more questions to confirm suspicions and understand their business better. With so much information available online these days, it’s much easier for salespeople to do precall research. By asking a prospect if his or her assumptions are correct, a salesperson can avoid any type of miscommunication further down the line. Plus, it shows the salesperson has done his or her homework.
3. Less push, more pull. Twelve percent of buyers feel salespeople should be less aggressive, rather than trying to push them into buying decisions before they’re ready to commit. Traditionally, trial closes have been an effective way to gauge whether prospects are prepared to agree to a sale. But another tactic that works for today’s salespeople is gaining small commitments along the way in order to make prospects feel less intimidated by the notion of making a final buying decision. That commitment may be as simple as getting prospects to agree to a second meeting or having them agree to a demo. The goal is to slowly invest the prospect in the process so the overall commitment of agreeing to do business isn’t nearly as daunting.
4. Consistent follow through. Another 17% of prospects want salespeople to follow up with them on a more consistent basis (or resolve problems in a more timely manner). Taking notes during each sales call has always been an effective way to ensure nothing falls between the cracks. But with desktop tools like Microsoft Outlook and Office, as well as Blackberry devices and iPhones, salespeople can also set automatic reminders to alert them when — and why — they need to follow up with prospects.

Source: “Sales Reps’ Biggest Mistakes,” by Tom Atkinson, Harvard Business Review.

Dial your IT chief’s extension and ask him or her for your company’s annual spending levels on a few of these tech “biggies”:

• e-mail
• desktop systems, and
• your ERP system.

And give ’em 24 hours to get you an answer.

Most won’t be able to do it. In fact, 62% of CIOs admitted they were “not at all confident” or merely “somewhat confident” their departments could provide an accurate answer in that time frame.

That’s according to a new survey of CIOs by tech solutions firm Apptio.

Some of the other alarming findings:
•    IT often has no system to track or allocate costs
•    There’s zero transparency in the budgeting breakdown of tech costs
•    IT performs only an annual calculation of the total cost of ownership, and
•    Senior managers barely understand the cost per IT service.

The consequences of these shortcomings last much longer than budgeting time: Just 14% of CIOs feel they’re very well equipped to make accurate cost-based or ROI-based decisions year-round.

So what’s a cost-conscious company to do? There are some best practices that can increase understanding of where
those tech dollars go – and whether or not they’re going to the most profitable pursuits:

1. Put more Finance in IT. A mere 12% of IT costs are billed back based on accounting principles like activity-based costing or consumption-based allocation. And more than half of IT departments have no regular financial reporting process. No company can afford to have a department with as many dollars at its disposal as IT lack these accounting staples.

2. Press for frequent updates. Once IT’s doing a better job of tracking the annual cost to deliver and maintain each IT service, it’s time to go a step further. Be certain IT is updating the total cost of ownership frequently. Ideal: monthly, though only 12% of your peers do this now.

3. Open the dialogue. This isn’t strictly an issue between Finance and IT. You need other managers involved, too. And IT has some very specific ideas on how they want to get into that conversation: They suggest showing managers the cost and usage (frequency or volume of use) of each IT service as a valuable way to discuss the demand for those services.

For more on the survey “Market Intelligence Report: CIO Survey on Total Cost of Ownership and Return on Investment for IT Projects,” go to www.apptio.com

Desperate times may call for desperate measures, but don’t fall victim to these four common pitfalls.

Nicholas Read, author of Selling to the C-Suite, warns against falling victim to these four classic mistakes organizations can easily make during a whirlwind economy:

1. Increasing advertising/marketing budgets. In B2B sales, most buying decisions take a long time — in many cases much longer than the average ad campaign. Fortunately, in this age of social media, it’s possible for companies to promote new benefits as often as they like without adding costs.
2. Slashing prices. Cutting prices is a short-term solution that diminishes profits and eventually causes buyers to question the value of your goods/services.
3. Cutting expenses. A lot of sales expenses are necessary in order to close deals. Cutting T&E almost always has a negative impact on overall closing rates.
4. Pushing more productivity. Rather than risk burnout, focus on the fundamentals and provide salespeople with better leads and more opportunities to succeed.

Source: “Selling to the C-Suite” by Nicholas Read.

The recession is lifting in some metro areas much quicker than others, which is precisely why now’s the time to start prospecting in these U.S. cities:

1. Austin, TX. Austin was a burgeoning city before the recession hit, and that momentum has helped it maintain job growth throughout the recession with more optimistic signs on the horizon, according to a recent Forbes study. With a robust local economy fueled by a huge tourist trade (thanks to two annual week-long music and arts festivals and the University of Texas), Austin is one of the best (and often untapped) regions for sales and marketing organizations to focus their efforts.
2. San Jose, CA. Technology is one of the few fields that’s continued to expand despite the recession, which is a large part of the reason this Silicon Valley mainstay has emerged as a decent area to canvass. San Jose is home to several progressive companies in need of cutting-edge solutions. Companies that are able to respond to that need are in an excellent position to win more business.
3. Portland, OR. Over the past five years or so, Portland has grown more attractive to young professionals looking for an affordable city to live in. Portland still struggles with high unemployment, but its reputation as a center for green companies and eco-friendly initiatives put it at the forefront of metro areas that are in a position to grow and thrive.
4. New York, NY. Times may be tough and rent may be high, but New York is still the city that never sleeps. New York makes the list not so much because it is recovering from the recession quickly, but because the rest of the country needs New York to recover quickly. Plus, there are always new businesses and opportunities booming in Manhattan.
5. Olympia, WA. Olympia benefits from two emerging dynamics. First, the job market in Olympia is growing. Second, a lot of businesses are migrating to Olympia as a way to escape Seattle’s higher rent, taxes and overall cost of doing business.
6. Washington, DC. The public sector in D.C. is hiring again, and that’s good for the private sector in the nation’s capital as well. Meanwhile, the local housing market is beginning to stabilize, all of which are positive signs for sales organizations looking for metro regions to target.
7. Los Angeles, CA. While the show biz industry may not have proven as “recession proof” as it had during past downturns, L.A. is rebounding quite nicely. The job growth forecast for the next three years is optimistic and the region is a large source of GDP — a key economic indicator that’s continued to grow for the past two fiscal quarters.
8. Raleigh, NC. Raleigh is fourth overall when it comes to metro job growth, and the forecast for future job growth is positive as well. Combine that with a low 5% unemployment rate and a reasonable cost of doing business, and Raleigh is an ideal place to seek out new sales opportunities.
9. Fort Collins, CO. Fort Collins boasts reasonably low mortgage rates for a metro area, which is a tremendous draw for young professionals. But job growth is also projected to improve during the next three years. Beyond that, Fort Collins isn’t targeted by businesses nearly as much as Denver — which means there may be untapped opportunities waiting to be found.
10. Greenville, NC. Small city, low cost of doing business and a reasonable amount of job growth make Greenville a worthwhile stop for any sales organizations looking for hidden treasure.

How has the recession impacted your area? Have you started to see any signs of recovery? Let us know in the Comments Box below.

Adapted from “20 Cities Surviving the Recession,” by Miranda Marquitt, MainStreet, 5/11/10.

The best strategy for execs who are either enrolled in one of these programs, or considering enrollment is to read the terms and conditions ASAP. Here are three common reasons members should always not only read the fine print, but review the terms and conditions regularly:

1. A lot of companies tweak the rules annually: Depending on what type of ROI a company is seeing from its rewards program, as well as several other factors, the company may not only adjust point values, but also the actual rewards and incentives that members are entitled to.
2. Some partnerships are temporary: A lot of companies partner with one another to add value to their rewards programs by offering customers more choices. This combined approach is great for attracting more members and strengthening both brands. But if one or both companies determines it’s not seeing the ROI it would like, the two may dissolve their partnership, which means rewards members may not be able to redeem their points for specific incentives any longer.
3. Points may expire after a certain amount of time: Most companies want members to redeem their points, so they don’t have to deal with a backlog years later (or when the points program is terminated). One way companies avoid problems like that is by mandating rewards points be redeemed within a certain amount of time. Be sure to check the terms and ensure you still have plenty of time to accumulate points before you need to redeem them.

Have you had any positive/negative experiences with rewards programs? If so, how were they resolved?

Feel free to share your feedback in the comments section below.

Source: “Financial Tuneup: Check the Rules of Your Rewards Program,” by Ron Lieber, New York Times, 4/14/10.

1. Cap their minutes: Much like gas and meals, there needs to be consequences in place to keep people from taking advantage of the company’s expense policy. One suggestion: Set a limit on how many minutes salespeople can bill each month. Just be sure to provide them with a reasonable amount of time to conduct business.
2. See if you’re eligible for a family/business plan: One of the major reasons cell phone costs run so high is that salespeople buy their own models from different carriers — and that means different plans, charges, etc. Simplify matters by restructuring the department’s cell plan. Check with all the major carriers to see what type of group plan/discount you can get by having all your salespeople use the same network. A lot of cell phone companies don’t charge or deduct minutes for calls made to others who are on the same network. That means salespeople can contact you, each other or anyone else without eating up minutes.  Bonus: The plan can be set up so the bills are sent directly to you, which will help deter excessive personal use.
3. Have salespeople hand in a bill rather than a receipt: This isn’t a policy you want to enforce heavily, as it may cause salespeople to feel like you’re micromanaging — or prying into their affairs. But if you have one or two reps who continually go over their limit, let them know you’ll only sign off on their bills if you can see where all their charges are coming from. Chances are, if the bill is unusually high the salesperson is either charging the company for personal use, or he/she needs an updated cell phone plan.
4. Consider unlimited text plans: Almost everyone is texting these days. In many cases, salespeople can avoid short calls (to confirm an appointment, answer a quick question, etc.) by simply sending a text. Most unlimited text plans are inexpensive, and they can save salespeople — and the company — a significant amount.
5. Monitor online fees: Some salespeople need to use their cell phone’s Web service. If your company’s getting clobbered by online cell phone fees, let salespeople know you’re monitoring those fees. A lot of salespeople like to have the most up-to-date cell phone models, which may carry significant airtime fees and other expenses along with them. Every six months or so, compare past cell phone expenses to current ones to see if the costs are higher. If they are, zero in on where the extra expenses are coming from so you can determine whether they’re necessary or not.

Can you think of any other tips we haven’t mentioned? How do you manage cell phone expenses?

We’d love to read what you think in the comments section below.

Based in part on “8 ways to cut your cell phone bill,” by Dory Devlin, Shine, 2/8/10

In some cases, you’ll want them to squeeze all the life out of resources until the financial forecast improves. But in some cases you’ll have to bite the bullet and spend some money.

The trick is to know when it’s best to upgrade, make do, or do without.
Here’s how:

• If it involves security – upgrade. For example, newer routers include better firewalls and virus and spyware protection. So don’t replace a dead router with the same old model. It’s worth the cost to upgrade, particularly if it’ll provide wireless access.
• If your company needs new desktops, go for laptops instead. Laptops have gone down in price, offer features comparable to desktops, and use about a third of the energy. But, if it’s for a road warrior and doesn’t support full disk encryption, don’t buy it.
• If the company’s Microsoft Exchange mail server needs to be upgraded or replaced, switch to an e-mail hosting service instead. These services offer all the same features, including add-on Microsoft services like shared calendars and SharePoint, for a fraction of the cost and none of the maintenance hassles.
• If it isn’t broke, don’t fix it. If it’s really having a negative impact on employees’ ability to work, they’ll let you know. Otherwise, it can wait.

Double-digit increases are in store for employers once again, according to the latest estimates.

These new benchmarks from Buck Consultants can let you know what type of hikes to budget for next year.

By plan type
Check out how much more your company should prepare to pay in the next year, based on the type of plans you offer:

• Preferred Provider Organization (PPO): an 11% increase (vs. 11.1% a year ago)
• Point-of-Service (POS): a 10.2% hike (compared with 10.8%
  most recently)
• Health Maintenance Organization (HMO): an 11% jump (vs. 11.1% in 2009), and
• High Deductible Consumer-Driven: a 10.4% increase (compared with 10.7% this year).

An expensive ‘extra’
Of course, the medical plans themselves aren’t the only bills you foot when it comes to employees’ health care.

You’ll want some aspirin for yourself after reading this: When it comes to prescription drugs, you can count on paying an additional 10.8%. That’s on top of the 11.4% more employers were expected to cough up last year.