Using Quick Response Codes to Promote Your Business

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Fatheadz has long used race car sponsorships to promote its line of oversize sunglasses. But because racing fans didn’t often connect to his website while at the track, Chief Executive Rico Elmore felt he was missing a marketing opportunity. After learning about Quick Response (QR) codes earlier this year, he slapped some of the squiggly squares on the Fatheadz autograph cards he hands out at races. Now, fans with smart phones use them to get information instantly about their favorite drivers—and a look at Fatheadz’s glasses. Although data is still coming in, Elmore says, June is shaping up to be the Indianapolis company’s best sales month ever.

Quick Response codes were developed about 15 years ago, but they are just starting to be adopted by small U.S. companies like Elmore’s, says Jared Smith, CEO of Talent Evolution, a digital marketing consultancy in Laguna Niguel, Calif. Smith spoke recently to Smart Answers columnist Karen E. Klein about using the codes.

Karen E. Klein: Where did the QR code come from?

Jared Smith: It’s actually been around since the mid-1990s, mainly in Japan. In the U.S., they’ve popped into awareness in the last 18 months. People have started noticing them on products and in magazines.

I’m doing a lot of seminars and speaking about them because small business owners are starting to wonder how to leverage them.

How do they work?

They are actually 2D bar codes that you scan with your smart phone or other mobile device. You have to download a QR code reader; then you can use them to access all kinds of information, including web addresses, personal or professional contact information, or Internet landing pages. There are several QR apps you can download for free.

So you have to know a little about them, and you have to get the technology to be able to use them. Does that make them kind of exclusive?

Yes, you have to know a little bit to use them, but once you understand them, it’s very easy to learn more. I bring a QR code blown up to poster size to my workshops, and people are amazed. They always say, “I’ve seen that. What is it?”

What kind of awareness do you find among small business owners?

About 50 percent have no idea what I’m talking about. Another 50 percent are somewhat familiar with the technology. All of them want to know more, especially about how they can begin using them.

What’s the best way for small businesses to use them?

We recommend that our customers use them to drive people to a specific product or service, not just as a link to their website. When you’re using it for the first time, you need to educate people and include a call to action with it. Tell them what to do: “Scan this code and get more information” or “receive a discount.”

How do they best fit into an overall marketing plan?

They are great tools to leverage what you’re doing offline, say with a print ad campaign, or your business card, or product packaging. We’re going to start seeing more of them on television and websites, too.

The QR code can take someone to a specific landing page, like a video testimonial or your company’s Facebook page. One of the key things is to have the QR code provide an extra level of information. You want people to think this is going to show them something really cool.

You can also use the QR code as a tracking tool by tying it to a special promotion. For instance, we use one to promote our workshop, and we give those who scan it 25 percent off the price. That’s a great metric.

How does a company create one of these codes?

You use a tool called a QR code generator. Again, it’s free, and there are several different applications you can use to generate them. You plug in the URL where you want the code to go, and then you get an image of the code. You right-click on that and copy and paste it into your materials.

And if you’re using it on print material, you’d send the image to your designer or printer?

Yes, just make sure they test it. You don’t want thousands of copies of an ad going out with a code that doesn’t go to the right place.

The other thing you want to do is make sure the pages you link to QR codes are mobile-ready, so people can view them easily within their phone.

Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.

Why Food Startups Are Getting Hot

The U.S. restaurant industry grew by 1.4 percent in 2010, interest in new food co-operatives is at its highest level in 30 years, and sales of packaged ethnic foods are booming, fueled by adventurous Gen Yers raised on the Food Network. Even venture capitalists, long focused on technology startups, are grabbing plates and getting in line: Tech entrepreneur Jonathan Kaplan, creator of the Flip camera, reportedly snagged $10 in million in venture capital funding for his grilled-cheese restaurant concept, The Melt. For more than two decades, CPA Karen Burns has worked as a partner at San Francisco consulting firm Sensiba San Filippo to help startup entrepreneurs break into the food and beverage industry. The market may be sizzling—particularly for organic, sustainable products—but poses extra challenges to new entrepreneurs, says Burns. She spoke recently with Smart Answers columnist Karen E. Klein. Edited excerpts of their conversation follow.

Karen E. Klein: Are you seeing a lot of interest from entrepreneurs who want to break into the food industry?

Karen Burns: It has really increased within the last five years. I think what’s driving this trend are the many medical studies that are being done about issues like obesity in children, diabetes, and allergies. A lot of entrepreneurs are making products to help their customers with medical issues.

Gluten-free is an example. No one ever heard of these products just a few years ago. Now you can go into a major market and there’ll be an entire aisle with products that are gluten-free.

What basic advice do you give to people who contact you for help?

Know your product and do that product well. Don’t bite off too much, too early. Have a go-to-market strategy and be very successful with it before you expand. You can have a very tiny menu to start. You don’t have to have 18 different SKUs [stock-keeping units] of products that you’re selling.

Are you seeing venture capital funds get interested in food startups?

Definitely, especially within the last three to five years. An organization called the Pacific Community Ventures Fund is focusing specifically on the food and beverage industry. Now some other funds are cropping up that want to get in on it, too.

What other areas are particularly hot right now?

Ethnic food is big, particularly some of the Asian foods that have not traditionally been so popular in the U.S., like Taiwanese and Filipino. Being in the San Francisco Bay Area, there are so many Asian entrepreneurs who have come to our country in the last generation, all of them with family recipes. They locate in ethnic communities initially and serve people from their own niche, but eventually other people also want to try their menus and they take off in the mainstream.

What are the particular challenges of getting into the food business?

From day one, there are compliance issues: tax returns that need to be filed, even if you don’t owe anything; product ingredient labeling; health department inspections. Like any business, startups need to do budgets and take their cash-flow forecasting to banks and outside investors.

If you want your company to be able to market itself as environmentally conscious, there are green initiatives that you can use to get various certifications in different states. There are some credits you may be able to get for that from a tax perspective and some programs that you may be able to find on your state or local level to help you finance it.

What do you recommend for early startups that want to get their products consumed?

So many of them start at farmer’s markets, which is a great idea. Trader Joe’s and Whole Foods (WFM) walk the farmer’s markets looking for the next great thing. Of course, it can be a trap to get very wide distribution early on because the retailers’ demands are extensive and the margins are very thin. I tell clients to watch their overhead very closely if they do get picked up by a volume retailer.

What’s the funding picture like for small food companies?

I think it’s getting a little bit better. We’re starting to see that financial institutions have cleaned up their portfolios, bad debt is off their balance sheets for 2011, and they’re willing to take on some new risk. Also, there clearly is an awakening in the [venture capital] market to invest in this area.

A lot of food production companies are family businesses, however, and they don’t want to take on outside money. And all startup entrepreneurs should expect to have to personally guarantee the funding. That’s a hard nut—but from the financial institution’s point of view, if you’re not willing to stand behind your business, why should they?

As people are coming out of the recession and trying to get financing, I’m advising them that it’s okay to forecast a break-even quarter and then maybe have a slight profit. The bank would rather see you hit or exceed your forecast than have you forecast all roses and not hit it.

Q: Do you have any tax tips?

Definitely look to take advantage of [research and development] credits and enterprise zone credits at the federal and state levels. If you can locate your business in an inner city area, not only do you get tax relief but you might also get hiring credits and access to advisors that will give you low-cost or free consulting help.

If you’re doing research on making a new product or making your existing products better, you can claim the R&D credit. Even if your business is not making money early on, you can start capturing the data and claiming the credits because there are carry-forward provisions that can be used in the future.

If your company is doing its production domestically, you can file for something called DPAD, theDomestic Production Activities Deduction. You fill out a form that calculates what your deduction is, based on sales relative to domestic production. Companies that do everything domestically get a higher permanent deduction. It’s worth looking into.

Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.

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• Why Food Startups Are Getting Hot (foodforfuture.wordpress.com)
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Don’t Market to the Mirror

“I don’t watch TV.”

I can’t tell you the number of times I’ve heard those words from individuals running businesses or company divisions. While the claim is usually a bit of an exaggeration, I generally have no reason to doubt it. I’m not surprised that people who run successful companies have little time (or concern) for much of the mind-numbing programming that passes for entertainment these days.

That said, it would be a mistake for business leaders to conclude that because they don’t watch TV, nobody does. Most Americans don’t get up every morning with the burden of running a company on their shoulders. Most watch a great deal of television—an average of more than four hours per day, according to Nielsen. Any business leader who rejects the prospect of TV advertising (or direct mail, online video, mobile marketing, pay-per-click, or any other form of outreach) simply because of his or her personal preferences is making a mistake.

Yet it happens more often than you might think—particularly at small companies in which the chief executive officer must wear many hats. It’s easy to project your own thoughts, opinions, attitudes, and behaviors on the broader population, particularly people you believe would be good prospective customers. But while you might share some things in common with prospects, based on the industry in which you do business (a love of scuba diving, a belief in solar power, and so forth), there will always be fundamental differences—not least that you know and care much more about your business than even your most ardent fans do. You’re already sold, by definition. Your prospects, by definition, are not.

EMPATHIZE AND PERSEVERE

With that in mind, here are five common ways the “marketing to the mirror” mistake can manifest itself. See how many you have embraced.

The giant logo. Not only do you love your brand, you’re paying for the space and by gosh, you want to see a big, bright logo beaming from it. Your prospective customers, however, are either unfamiliar with your brand or have some incomplete or mistaken impression of its value to them. If they’re accosted by a giant logo before your marketing message has had a chance to get through, they may skip the ad and miss the point entirely.

The overstuffed ad. Have you ever heard a radio commercial in which the words go by so fast that you can’t process anything? Seen an ad in a magazine so riddled with bullet points that you don’t know where to begin? Or driven past a billboard loaded with so much copy that it would take binoculars and three changes of the traffic light to process? In advertising, as in many things in life, less is often more. Additional words do not always translate to better communication. On the contrary, they are likely to hinder it.

The magic slogan. Ah, the slogan: so misunderstood, so overappreciated. You and your team put so much time and effort into creating those three or five little words that they’re overflowing in meaning and packed with power—to you. To the rest of the world, they’re just three or five little words. They may make a nice ribbon to tie around your advertising package, but they’re not the package itself—and certainly not the prize inside. Don’t put more faith in a slogan you came up for your brand than you’d place in some words heralding someone else’s. (See “What’s in a Phrase?”)

The “my” buy. Who listens to jazz radio? Or classical music? Or that easy listening station that drones on in dentist offices and elevators? I don’t. But a lot of people do. If they didn’t, those formats wouldn’t exist. We all gravitate naturally to the radio stations we listen to, the TV programs we watch, the websites we visit, the newspapers and magazines we read, and the social networks in which we participate. There’s nothing wrong with advertising in places you personally frequent, as long as they’re good outlets to reach people you’re targeting. Just don’t make the mistake of thinking that because something is of interest to you, it’s of interest to them—or that because it’s irrelevant to you, it’s irrelevant to them.

The one-hit wonder. It’s likely that you find your ads quite convincing: one exposure and you’re sold. Alas, that’s not the way things work in the cluttered and cacophonous world of modern communications. My research among some of the most successful companies in the U.S. shows that those that enjoy the greatest long-term success tend to run campaigns for more than two years at a stretch. If you’re wondering why your new advertising isn’t setting the world on fire, it may be because it’s new. Every fire takes time to spread.

One of the most difficult things to do in marketing is to step out of your own shoes and into those of your customers and prospects. It’s a critical first step in effectively conveying your message. If you can sustain your business by preaching to the choir, go for it. But if you need to expand your customer base, recognize that what you do and how you think is not necessarily reflected in your target audience’s behavior. Look, listen, and feel through their eyes, ears, and hands and you might see more of their feet crossing your threshold.

Steve McKee is president of McKee Wallwork Cleveland and author of When Growth Stalls: How It Happens, Why You’re Stuck, and What to Do About It. Find him on Twitter and LinkedIn.

gScreen SpaceBook: Fail

gScreen SpaceBook

I can understand needing the extra screen real estate to accomplish more visually-intensive work, but I can’t understand anyone who’d lug this behemoth anywhere. Because the gScreen SpaceBook is too much size and not enough Space Age to do you any good.

The SpaceBook’s claim to glory is its massive dual 17.3-inch screen setup, which earns it brownie points for being the first of its kind. Certainly not the most graceful of beasts. And she’s not built for comfort either, weighing about ten pounds. But, doomed to your desktop as it would be, it doesn’t push the envelope with what’s under the hood. Surprising, since you’d expect it to right? The high-end model packs a quad-core Intel Core i7-740M processor, 8GB of RAM, and an NVIDIA GeForce GTS 250M video card. But no Sandy Bridge. No Thunderbolt. No Blu-Ray XL. Nothing really to justify its $2795 price tag. While gScreen just made it available for pre-order, this old girl is already dead in the water

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The Rise of the Russian Concept Boutique

In the past year, Moscow has witnessed a mini-explosion of high-end clothiers that specialize in all manner of “concepts,” from “biznesman” to “hooker-chic”

At the 3.14 Project, one of Moscow’s newest and most exclusive “concept stores,” the typical customer is in his mid-30s and rich. He has a mullet, bad taste, and a man crush on Vladimir Putin. Owner Alexander Moisyenkov’s job is to transform these consumers—who favor glittery Armani suits, Versace jeans, Dolce & Gabbana sunglasses, and an extra splash of Acqua di Parma—into modern fashionistos. “He can buy the new Mercedes (DAI),” Moisyenkov explains, “but we want him to drive the vintage Porsche.”

To ease this transition, Moisyenkov has created an intimate store that offers nouveau riche shoppers “a new luxury,” as he calls it. “That is the concept of this concept store: the atmosphere,” he says. “Here you are losing yourself in the time.” His store’s name refers to the Greek number pi, “because it goes on forever and ever.”

In the past year, Moscow has witnessed a mini-explosion of high-end fashion boutiques that specialize in all manner of “concepts.” These stores—whose conceits range from “modern woman” to “biznesman” and “Lower East Side” to “hooker-chic”—offer alternatives to big-name luxury labels. In the past decade, brands such as Fendi and Gucci have headlocked the wealthy Russian fashion scene to such a degree that boutique owners refer to the phenomenon as “the Italian Plague.” By contrast, concept stores carry lesser-known, super-pricey designers—such as Sweden’s Acne Studios and Australia’s Akira Isogawa—that adhere to some amorphous concept. They tend to be owned by power divorcées and ex-models married to “minigarchs.” Some are even run by people like Moisyenkov, entrepreneurs who know something about fashion and Russian consumption habits.

Among the best known are Mood Swings (concept: femme fatale), Kuznetsky Most 20 (sugar daddy), Rehab Shop (Courtney Love), and Twins S.h.o.p.p. (indie rock). Cara&Co (Lights! Camera! Action!), which opened in 2007, has become famous among local designers and fashion bloggers, and owner Rosa Alpert is planning a second location in Sydney. LeForm, the only concept store that’s too cool to have a concept, has been around since 1997—before the concept of concept stores existed. Owner Rodion Mamontov says that so many people crave the gritty-chic look today that “Dolce & Gabbana doesn’t look like Dolce & Gabbana anymore.”

No matter their specific concept, these boutiques specialize in fashion-forward and muted—but still expensive—pieces. They also rely on a particular brand of aspiring oligarch logic. Instead of flying to London or New York to buy a pair of Rupert Sanderson suede heels for $600 or a Tim Van Steenbergen sheepskin jacket for $1,800, shoppers can stay in Russia and impress fellow poseurs by spending as much as 50 percent more for a look that would work in any major metropolis.

And that’s the point. For the past few years, the Kremlin has tried to project an image of normalcy. Russia belongs to the G8, has been chosen to host the 2014 Winter Olympics and 2018 World Cup, and brokers nuclear arms deals with Washington. Many concept store owners feel they’re acting in line with the Kremlin’s wishes by helping the superrich look shabby—just as they do in Los Angeles. According to James R. Fenkner, a senior analyst at Moscow-based Red Star Asset Management, “Designers and retailers are taking their cue from the Kremlin’s strong-Russia theme. All businesses in Russia must pay attention to the Kremlin’s wishes.”

LeForm’s Mamontov says he had to lean on his family to raise the nearly $600,000 to open his first boutique in the late 1990s. After its success, he had no trouble raising capital for his second store, in 2007. “This is how people are dressing now,” says Mamontov. Perhaps as a result, neither he nor his investors have run into trouble with the government. Nina L. Khrushcheva, former Soviet Premier Nikita Khrushchev’s great-granddaughter and a professor of international affairs at New York’s New School, explains that Russia expects the private sector to follow its lead. “Everything in Russia is political, as is the case in most autocratic countries,” she says. “The way literature was in the U.S.S.R., so it is now with fashion or concept stores.”

While concept stores may project the right aura, it’s unclear how many consumers can actually afford them. Most store owners say they have only 200 to 300 reliable customers—those who have received VIP cards with discounts of up to 30 percent. Mamontov estimates his stores average 90 customers and $10,000 in sales per day. Says Georgiy Kostava, a 3.14 Project spokesman: “You cannot expect traffic in a place like this. It’s a different way of consumption.” As any night at Moscow’s Vogue Café makes abundantly clear, rhinestones, sequins, and flashy things with lots of zippers remain very much in fashion.

Here lies the challenge of the concept store’s long-term viability: its very concept. While the stereotype of the 1990s oligarch—Adidas tracksuit, gaggle of Uzi-wielding bodyguards, and abundant prostitutes—has evolved (oligarchs no longer wear tracksuits), the need to display wealth has not. “These men have short-d—k syndrome,” says Cara&Co’s Alpert. “He has a trophy wife, and he wants her to have a trophy bag.” If that trophy wife comes home with a pair of Henry Cuir sheepskin heels—they run $760 at Cara&Co—her husband might ask why they’re not from Gucci, Alpert explains.

Some owners are maneuvering around the issue of subtlety through unsubtle price gouging. “If we sell something with gold,” says LeForm’s Mamontov, “we don’t call it gold. We call it yellow metal. If we sell something with diamonds, we call them transparent stones. With the price, people can understand.” Alas, laments Alpert, “What we need are more foreigners and gays. That would be so great. These people have fashion sense.” Although a new breed of homegrown fashionistas may soon emerge. “Russian girls are open to everything since traditions have been destroyed so many times in the 20th century,” says Moscow fashion blogger Vlasta Sofia Guryeva. “They learn very fast.”

A few concept stores have tapped into something all Russian consumers crave: exclusivity. Moisyenkov understands this better than most. Amid 3.14 Project’s high ceilings, exposed brick, and glowing chandelier, he leads a visitor to a special place—underground. “We call it our ‘between friends’.

By Peter Savodnik