The Relationship Between Customer Loyalty and Data Security

There’s a strong connection between customer loyalty and data security, according to a recent report from Bank of America Merchant Services and Forrester.

If your small business isn’t updating its data security tools and payment processing methods regularly, it could really cost you.

The Relationship Between Customer Loyalty and Data Security

According to the Small Business Payments Spotlight, nearly 40 percent of consumers have had their credit or debit card, bank account or other personal financial information stolen. And 20 percent of those consumers who have had their information stolen said they would not shop with a small business that has experienced a data breach.

In addition to the tangible cost that small businesses have to pay in order to resolve the breach, which could add up to more than $50,000 according to the report, suffering such a breach could cost you even more in lost customers.

Of course, there are things you can do to provide some extra protection and security for your data and the data of your customers. The report offered a few areas where small businesses could look to improve, including updating POS systems to accept EMV chip card payments, investing in employee training for handling payments securely and purchasing security software.

Bank of America Merchant Services’ Head of Small Business Jill Calabrese Bain said in a company release, “As we reviewed the data from small business owners and consumers, the surprisingly strong connection between customer loyalty and payments security and convenience really stood out. We were intrigued to find that nearly a third of small business owners want and need more education about mitigating fraud and other risks to payment security.”

The Small Business Payments Spotlight features even more insights about payment security and consumer preferences. You can view the full report on Bank of America Merchant Service’s website.

Hacker Photo via Shutterstock

This article, "Suffering a Data Breach Will Cost You Customers Who’ve Been Hacked, Too" was first published on Small Business Trends

Can Mobile Construction Apps Save Your Company Time and Money? (INFOGRAPHIC)

Like any other business, the foundation of a successful construction business depends on effective communication and documentation. And this is where many construction companies — especially the small businesses — tend to struggle.

The Rise of Mobile Construction Apps

That’s why, a growing number of construction companies are now turning to mobile apps to get organized.

An Effective ‘App’roach to Boosting Productivity

According to data shared by construction productivity software company PlanGrid, 32 percent of mobile productivity software users saved five plus hours per week on average. That’s particularly significant for any small business owner.

Data also shows how mobile apps can reduce inefficiencies to save costs. To give an example, a one percent reduction of construction costs can potentially save $100 billion a year globally. (So you can imagine how much it can save at your small construction firm.)

Transforming a Construction Company’s Triple Bottom Line

Mobile apps are attractive to construction businesses as they provide a number of benefits. Some of these benefits include real-time information updates, document storage and improved accountability.

By making processes more streamlined and communication more transparent, mobile apps ultimately help businesses boost customer satisfaction.

Lay the Groundwork for Success

But success depends on how well a business leverages the technology. It’s therefore crucial that a business understands who needs it and how best it can be used. For that, it’s important to answer a few questions.

For example, which departments at your construction business can collaborate better using the app? Do they need training? Who can guide them to become more digitally proficient?

An app can deliver desired results only when the organization knows how to use it. With the right solutions, it’s easier to navigate the route.

To learn more about how an app can help you build a more structured construction business, check out the infographic below:

Can Mobile Construction Apps Save Your Company Time and Money? (INFOGRAPHIC)

Drill Photo via Shutterstock

This article, "Can a Mobile App Save Your Construction Company Time and Money? (INFOGRAPHIC)" was first published on Small Business Trends

Understand Your Risk to Know How Much to Spend on Cybersecurity

Do you know the cost/benefit breakdown of the cybersecurity you have in place for your small business?

To be more precise, how much should you invest in cybersecurity protection in relation to your actual monetary risk? The findings of the new report from the Better Business Bureau, titled, “The State of Small Business Cybersecurity in North America” offers some hints.

The report was released as part of National Cybersecurity Awareness Month. And one of the more distressing data points regarding small businesses indicates half of them could only stay profitable for about a month after loosing critical data.

The BBB surveyed around 1,100 businesses in the U.S., Canada, and Mexico with 71.4, 28.5, and 0.1 percent of the respondents coming respectively from those countries.

How Much Are Small Businesses Losing?

According to the report, the annual average loss from cyber attacks is estimated at $79,841. The median loss came in at $2,000, with the maximum total loss at $1 million. This, of course, will vary greatly with the size of your company and the type of cyberattack you have sustained.

Still Bill Fanelli, CISSP, chief security officer for the Council of Better Business Bureaus and co-author of the report, emphasized the vulnerability of many small businesses. “Profitability is the ultimate test of risk. It’s alarming to think that half of small businesses could be at that much risk just a short time after a cybersecurity incident,” Fanelli said.

Do You Know How Much to Spend On Cybersecurity?

Fanelli still stresses small businesses must avoid going overboard. He explains “It doesn’t do any good for a small business to adopt a $10,000 solution if the potential risk reduction is only worth $5,000.”

With that in mind, the report used a formula created by two professors at the University of Maryland, Martin P. Loeb and Lawrence A. Gordon. Using this formula, a small business owner can calculate the best possible investment in prevention to safeguard their company from cybersecurity attacks.

The five step process begins by estimating the loss; estimating risks; identifying investments; estimating savings; and making the calculation. You can get details of the formula on the free download of the report here.

The report adds, “As long as the potential savings exceeds the cost of investment, then it is a cost-effective measure that should be implemented.”

Hacking Photo via Shutterstock

This article, "Understand Your Risk, Then Invest in Your Small Business Cybersecurity Plan" was first published on Small Business Trends

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11 Questions to Ask Your Cloud Service Provider

Once you’ve decided to adopt cloud computing, it’s time to begin your search for a cloud services provider.

A cloud service provider (CSP) is a company that offers one or more pieces of cloud computing functionality including SaaS, PaaS, and IaaS.

Likely, the first thing you’ll discover when looking for a cloud service provider is that there’s a very large number to choose from. How do you know which provider is the right one for your small business? The key to success lies in the answers to the questions below.

Questions to Ask Your Cloud Service Provider

As with web hosting providers, not all cloud service providers are equal. By asking these questions, in no particular order except the first, you can quickly eliminate many potential providers from your list.

1. What Cloud Computing Services Do You Provide?

This is a great first question for quickly weeding out a number of providers from your list. After all, if they don’t provide the cloud services you need, they won’t be a good fit.

For example, if you want an end-to-end SaaS business management suite, and a service provider doesn’t offer that, you can stop asking your questions and remove them from this list.

2. Where Is Our Data Stored?

You want to make sure that your data is being held in an up-to-date data center. This will help insure both reliability and performance as you access services.

It’s a bonus when the provider has a fall-back data center or two. That way, if there’s a problem at the primary data center (i.e. earthquake, flood, power loss), your services will fail over to a secondary data center with little to no interruption on your end.

3. How Secure Is Our Data?

Security is always important, especially when it comes to safeguarding customer data. Ask your provider about:

  • Their security policies and practices;
  • The size and experience of their security team; and
  • Past breaches and issues.

4. Do You Perform Regular Backups and How Fast Can You Perform a Restore when Needed?

Backup and restore is a critical cloud computing functionality. If your data gets deleted, corrupted, or even becomes a victim of ransomware, the best solution is to restore a recent backup.

Timing is important here as the older the backup, the more data you end up losing when it’s restored. Ask potential providers if they provide hot backups, ones that run regularly during the day. That way, you’ll only miss an hour or two of data when you perform a restore.

Also ask how long it takes to have a restore done. You don’t want to wait days to be back in business.

5. How Frequent Are Your Service Outages and How Long Do They Last on Average?

As the average cost of downtime for SMBs is $7,900 per minute, this is a business-critical question.

Don’t be put off by a provider that has experienced outages; it happens to them all. Instead, focus on the number of outages and how long they last. A great cloud service provider has few outages and they should not last long.

Also ask about maintenance outages. These are scheduled outages during which the provider upgrades their hardware and software. Find out how much warning you get before these occur (so you can accommodate them) and whether they happen during business hours (which will impact you directly).

6. How Easy Is It to Manage My Services?

Most small businesses have small IT teams — if they have them at all. Therefore, being able to easily manage their hosted services is an important factor in selecting a provider.

Many providers offer consolidated services management functionality and that goes a long way toward helping a small business do more with less.

7. How Flexible Are My Services?

One of the big advantages of cloud computing is the ability to add capacity and services as they’re needed, and remove them when they are no longer being used. This “flexible consumption” license model will save your small business money by enabling it to run short-term projects without having to permanently purchase hardware and software licenses.

Make sure your cloud provider offers flexible consumption. If you don’t need it now, you likely will be glad to have it in the future.

8. Can You Consolidate All My Service Charges Into One Bill?

Both your IT and finance team will be glad you asked this question because, by consolidating your cloud services bill into one, you’ll get an overall view of what you’re buying and what you’re using.

In the case of the flexible consumption licensing model mentioned above, it will enable you to quickly see if you’re paying for services you no longer use or, if you’re coming close to a limit and need to purchase more services.

While you’re at it, ask potential cloud service providers about service charge increases. How often do they occur and how much warning do you get before they happen?

9. What Service-Level-Agreements (SLAs) Do You Offer?

A service-level-agreement (SLA) is just that — a promise to provide a specific level of service whether that’s uptime, backups, restores or more.

A service provider often offers more than one tier of SLAs. For example, a lower-priced tier may promise that a restore request will be completed within one business day while a higher-priced tier promises that a restore request will be completed within one hour.

Also ask about penalties, such as financial compensation or free services for a period of time, if the provider does not meet the promises within an SLA.

10. Can You Provide References?

This is a very important question to ask. Don’t take the service provider’s word for how good they are. Ask to talk to current customers without the provider being present.

Also, search Google for “(provider name) review”. This way, you can find more feedback and input as you make your decision.

11. What cloud offers are in place to do a proof of concept to showcase your services?

Most companies don’t ask for offers that are in place to explore a proof of concept. For example, if you have an application that needs to be migrated to cloud infrastructure, Meylah offers $1,500 in free assessment services to easily help you build a plan for migration or $2,000 in development services towards a cloud application development.

Wrapping Up

The questions above will enable your small business to whittle down the list of potential cloud service providers to a manageable amount.

Once a provider passes that gauntlet, feel free to ask more questions including technical specifications and limits as well as industry-specific compliance needs.

Do not stop asking questions until you’re satisfied that a provider is the right fit for your business. Always remember, it’s much cheaper to discover things beforehand then after.

Cloud Technology Photo via Shutterstock

This article, "11 Questions to Ask Your Cloud Service Provider" was first published on Small Business Trends

Focus On Small Data Analytics For Better Performance - and Use These Two "Data Hacks" to Do It

Big Data is a hot topic. And it can work wonders for the right kind of company.

As a small business, however, you are not the “right kind of company”.

The REAL gold is in your Small Data.

The Benefits of Small Data Analytics

Leveraging Small Data can provide huge gains in profitability and cash flow (some studies have shown that the increase can be as high as 50 – 60 percent).  And it allows you to do it in a low-risk way, in a very short period of time (how does next week, next month, or next quarter grab you?)

Small Data is the transactional data captured by your interactions with customers, suppliers, team members, and your products and services.  It’s the data that is residing in things like your accounting system, your CRM, your ERP, Excel spreadsheets, and similar small data troves.

A full-on undertaking to leverage your Small Data requires equal parts data science, programming, forensic auditing, and creativity.

Small Data Hacks

However, to get you started down your Small Data analytics journey, I’d like to give you two very effective “small data hacks” that you can use to begin apply the power of Small Data.

Try these in your company.  I think you will be pleasantly surprised at what you discover.

Small Data Hack #1 – CVPM Analysis

CVPM Analysis is a way of dissecting the way your business looks from a granular, or transactional level.  To do your CVPM Analysis you need to analyze your revenue, your gross profit, and your overhead on a “per transaction” basis.

What you are looking for are changes in these granular amounts over time.  For example, over the last three fiscal years.  Or if more relevant, over the last four most recent quarters.  Generally, better insights are gained by looking at your CVPM Analysis over three full fiscal years.

Let’s look an example of two different businesses to clarify this concept. Some relevant data from each of the businesses is as follows:

Business Alpha Business Beta
(A)   Number of Customers 1,000 370
(B)     Frequency Per Year 0.5 6.0
(C)   Average Gross Profit $ 350 $79
Gross Profit (A x B x C) $175,000 $175,380

This information tells us that we are looking at two businesses with completely different approaches and structures (two different business models).

Business Alpha maintains a large number of customers who only buy something about every two years (frequency of 0.5 per year), but it’s a bigger ticket item than Business Beta.

Business Beta has far fewer customers (about one-third as many), but they buy a smaller ticket item much more frequently (about every two months).

But look at the end result. Both businesses return pretty much identical Gross Profit results. Each business has about $175,000 to cover overhead expenses, repay debts, re-invest in growth, and provide a return to owners.

Small Data Hack #2 – Product Matrix Analysis

Product Matrix Analysis is a method of looking at specific customers, or customer segments, and comparing sales by product (or product category) for each customer.  It provides a view of the breadth of revenue from each customer derived from your different products and services.

It usually most effective to start at more aggregated levels, and drill into more detail as the data and analyses indicate.

Product Matrix Analysis is most powerful when it is done with the following dimensions:

  • Customer – sales
  • Customer – revenue
  • Customer – gross profit
  • Market or business segment
  • Geography
  • Industry

The tables below provide an example to guide you:

Sales Revenue By Customer
Customer Revenue
Acme $   35,000
ACX $   23,600
Bergstrom $   74,835
Manilo SP $ 126,959
TOTAL $ 260,394

The information contained in this first table is interesting.  But it does not provide a lot of detail about the components of the revenue total for each customer.  At best, it would likely lead you and your sales team to be content with Manilo SP’s volume of revenue and simply “try to sell more” to Acme and ACX.

The table below provides a more detailed, and useful view of the same customers, using the concepts of Product Matrix Analysis.

Product Penetration Matrix (by revenue)
Customer Product A Product B Product C Product D TOTAL
Acme $   35,000 $     nil $     nil $   nil $  35,000
ACX $     nil $     nil $     nil $ 23,600 $  23,600
Bergstrom $   12,500 $ 19,325 $   1,350 $ 41,660 $  74,835
Manilo SP $ 103,000 $ 23, 009 $     950 $   nil $ 126,959
TOTAL $ 150,500 $ 42,334 $   2,300 $ 65,260 $ 260,394

The information from this Product Matrix Analysis would likely lead to different conclusions.

For example, although Manilo SP looked like we should be satisfied with their revenue (when only sales revenue from the first table was used), we actually shouldn’t be satisfied at all.  They are purchasing a relatively small amount of products C and D from us.

So Get Hacking

Now that you have read about these two hacks, get going with small data analytics right away.

Take the next hour or two, gather your team, and decide to apply CVPM Analysis and Product Matrix Analysis in your company.

You’ve got nothing but increased profit and cash flow to gain.

Data Concept Photo via Shutterstock

This article, "Take Advantage of These 2 Small Data Hacks to Grow Your Business" was first published on Small Business Trends