Year end Tax Tips
Our trusted DMCNY accountant offers us—again—a gaggle of useful tips for tax and financial planning at yearend 2013. [David, watch out! We’re going to have to make this an annual thing!]
A health savings account. These provide a great tax break, even if you don’t itemize your deductions. And the money helps you pay medical expenses. Keep in mind, if you don’t use all of the money in one year, you may carry it to the next year, even if you change jobs.
Party time. You can only write off half of your business meals and entertainment expenses. But if you hold an event, like a party, a picnic or a BBQ, for the entire company, that’s 100% deductible.
Obamacare. If you are having trouble understanding the new law (and who isn’t), go to: http://www.youtube.com/watch?v=JZkk6ueZt-U&feature=youtu.be
Married couples of the same sex. All who are legally married will now have to file federal returns as married, even if they live in a state that doesn’t recognize their marriage. The rules for state returns depend on the law of the state where you live.
December 31 is the last day to set up and deposit up to $51k into your solo 401(k). It’s also the deadline for setting up your Keogh retirement plan.
New York State driver’s license. You may have to forfeit your license if you owe more than $10k in taxes.
Warm up. If you are retiring and want to move someplace warm, look into 3 questions: How the state taxes retirement income; what the sales and real estate taxes are; and whether there is an estate tax. Keep in mind that states offering tax breaks in one area may raise revenue by taxing other activities. State rules vary widely. One place to start your research is http://www.taxadmin.org.
The tax man cometh. Starting January 1, 2013, for married couples with income over $250k (and singles above $200k), there is a 3.8% tax on investment income, including dividends, capital gains and rental income. There will also be a 0.9% tax on wages above those amounts. The top tax rate is now 39.6%. So, it makes sense to keep taxable bonds, REITs, and high paying stocks in your tax-deferred retirement accounts. You can then keep tax-exempt bonds in your regular investment account, since those earnings are not included in income for this tax calculation.
For any further questions, club members may reach David at email@example.com.
B2B Email Best Practices
The ad tech industry is abuzz with emerging technologies and new techniques, but email marketing remains one of the most important tools in the B2B marketer’s toolbox. The cornerstone of today’s business communications, email goes out at the rate of over 122 billion messages every hour, and 68 percent of marketers say that email marketing is vital to their business.
That said, email marketing in 2014 is not the same as it was in the ‘90s. Here are current best practices for B2B marketers looking to leverage email for customer engagement, acquisition, retention, CRM and more.
Make subject lines count. The subject line is the very first interaction your customers have with your message, so craft it carefully to encourage them to actually open the email. It should be short, benefits-driven and compelling. Self-service email provider MailChimp recommends 50 characters or less, and—though your grade school composition teacher may cringe—don’t waste valuable space on unnecessary punctuation. We’ve also found that capitalizing the important words lifts engagement, and that recipients are 22 percent more likely to open emails addressed to them by name.
Content is (obviously) key. This may sound like a no-brainer, but your email’s content should also adhere to certain best practices. Keep it clear and concise. Also be sure that it actually delivers on the promise of the subject line. And keep the salesy stuff out of it. It’s a marketing message, but don’t beat users over the head. Don’t focus only on yourself; asking questions within the body of the email message has been shown to boost customer interest and click-through rates.
Go with eye-catching creative. This also sounds obvious, but many B2B marketers eschew color and design elements in favor of a more “professional looking” black and white, text-heavy message when, actually, a little color goes a long way toward capturing interest and driving action. We don’t recommend neon green letters and flashing banners, but we’ve found that orange and red are colors that pop, especially for Call To Action buttons. Also, those buttons are more likely to get clicked if they are placed either at the beginning of the message, the end, or both.
Test, test, test. Who cares how beautiful or compelling the email is if it never actually makes it to the inbox? Be sure to regularly test delivery rates to avoid getting stuck in spam filters, which can be even stricter for some corporate domains. Also, regularly conduct A/B testing to optimize campaign performance and surface any issues.
Go mobile. Your B2B prospects are doing business on their smartphones and tablets, so if your design isn’t optimized for mobile and responsive to action via mobile devices, you’re way behind the curve. This is no longer optional.
Email is still one of the most effective ways to engage on a one-to-one basis with B2B customers and prospects, but it is important to understand how your B2B audiences use and respond to email in general in order to actually begin that dialogue and maintain it over the lifecycle of that customer. Keep your communications concise, benefit-oriented, eye-catching and device-agnostic and you’re sure to reap the rewards of this tried and true channel.
Unhappy About Your Campaign Results? Take a Look at Your Marketing Department’s Goals
No matter how well you execute your marketing campaigns—sharp copy, fresh products, appealing promotions—your own marketing department’s organization, goals and metrics will have a surprising influence on your long term success. Are you organized so that everyone gets the “big picture” that will lead to success? Do the performance metrics you use to evaluate key staff truly reflect the organization’s long-term goals? What, in fact, is the big picture for your organization, and what are those long-term goals?
For some marketers, the answers are easy. In the high-growth years, you may be simply looking to acquire as many customers as fast as possible. In which case, you are marketing at virtually maximum frequency at any opportunity.
But most of us face limited marketing resources, and we manage a large customer file that needs careful segmentation and contact frequency strategies. We know that we need to acquire not just any customer, but one that will be profitable.
So, where does your organization come in? Let’s take customer acquisition. Most of us operate with a negative cost per acquisition. That means we have to rely on future sales to justify the prospecting program. But if your customer-acquisition group operates in a silo or is measured based simply on how many customers they bring onto the file each year, it doesn’t take long for even a gifted marketer to start acquiring the low-hanging fruit—the one-and-dones, the promotion grabbers with no likely subsequent purchasing.
Perhaps the biggest improvement in prospecting over the last decade has been the ability to leverage the wealth of data contained in prospecting databases to predict the potential demand of a given prospect, and target those names within a list or database that are more likely to provide sufficient return on your marketing investment.
Unfortunately, every customer file is eventually infiltrated with lower-value customers. That’s why so many of your customers lie dormant. It’s not your marketing efforts. It’s not your products. It’s their needs. They simply may not require more of your product or service.
Now consider your retention versus reactivation efforts. You’ve probably invested in external data enhancement to understand your customers better. You have some sense of which are your best customers and most likely to reorder in large amounts. But when it comes to reactivation, do you treat those customers really differently? Once the customer has aged to a certain point, do you reduce the number and frequency of contact?
If you broke down the wall between retention and reactivation roles within your department, you would notice that some of those inactive customers are actually better suited to increased investment and the normal retention sequence.
Even more challenging is looking at which active customers aren’t worthy of the normal retention sequence. Does your marketing organization facilitate slotting some of those active customers into the less expensive reactivation sequence? Too many of us throw good money after a bad acquisition, like mailing expensive full-offer catalogs eighteen times a year to a customer who is inherently unlikely to order frequently or in substantial quantities.
The next time you look at how your marketing department is organized, and what metrics are used to measure their behavior, consider your long-term goals around customer acquisition, retention, reactivation and profitabilty. Aligning your organization with your goals and metrics is the ticket to improved campaign success.
Blair D. Barondes is vice president of database marketing at MeritDirect, with a 25-year history of innovation in B2B marketing, including MeritDirect's MeritBase, the MeritMatch multi-channel matchback, and Mercury Response-Analysis toolkits. Reach him at firstname.lastname@example.org.
Your Email Reputation Depends on These Top 10 Must-Knows
Email marketing is still a top priority for marketers who seek leverage in their ability to target customers with relevant offers. But it’s very concerning when you realize 20% of emails don’t make it to the consumer’s inbox, according to data from ReturnPath.
Getting delivered requires some due diligence and care, but it also means giving consumers what they want. Web mail providers pay attention when consumers flag an email as spam, and when they leave the email unopened. Here are the 10 ways to improve your email marketing:
1. Email Append, Direct: Today, it’s a risky move to append email addresses to your database and then email those customers without an opt-in. Many email service providers will not allow their customers to use this method, because it can hurt the sender reputation.
2. Email Append, Indirect: Appending your list to a third party list and emailing customers through the third party is still okay—on the surface. However, it’s highly recommended that you use a positive opt-in method, requiring the customer to click on a link and give their permission.
3. Email Change of Address (ECOA): This service, which is not recommended, provides a new email address if old one is no longer working. While the majority of consumers have more than one email address, it’s important to remember that email permission is based on a particular email address, not a customer record. When the email address goes bad, so does your permission.
4. Cleansing: Take a hard look at your list. Remove those hard bounces and any soft bounces that have occured a few times. When you send emails to bad addresses again and again, it hurts your reputation, wastes your money and impacts your ROI.
5. Filter Out Inactives: Consider only communicating with customers who have engaged (via opens or clicks, for example) with you in the past 90 days This keeps your list fresh, improves your metrics and mitigates any deliverability impact of using old addresses.
6. Email Verification of Address (EVOA): Use EVOA to verify that email addresses are correct. Give your subscriber an opportunity to fix them, in real-time if possible.
7. Organic Acquisition: Look across your customer’s touch points with your brand and find opportunities to offer an opt-in. Look at web sites, social networks or even in-store locations. Build your list with customers who indicate that they want to receive your messages, to ensure relevancy.
8. Preference Center: Create a preference center to give subscribers the ability to change their frequency, channel or content types. Put them in control of the message.
9. Monitor Delivery: Watch your email’s performance, by campaign and in aggregate. Watch for trends that indicate emails are not being delivered—and act quickly.
10. Mobile: As more consumers move toward mobile devices like smartphones and tablets, leverage mobile-aware emails to ensure relevancy based on the device they are viewed on, as well as the content they deliver.
Remember that your subscribers are interested in your message, but it’s easy to lose their love. Relevant messages that matter will keep them opening and clicking, and will help you maintain a good email sender reputation—in a world where reputation is everything.
Pre-testing: A Better Way to Beat the Control
The A/B split test is as fundamentally sound, as it is slow, expensive and inefficient.
Direct mail testing—even for high-volume mailers—means putting a finite number of possible tests in market. These tests are either incremental changes or wholesale redesigns. The former usually assures incremental gain/loss, and the latter requires a lot of risk and reputational capital.
Truth is, the vast majority of tests fail. For two reasons.
1) The control is hard to beat. It benefits immensely from something your test package can never have—exposure. Your target audience, however large, is still finite. You mail the same people over and over. Even non-buyers are exposed to the control.
2) Coming up with a test, or 10 tests or 100, for a single campaign is like searching for a needle in the haystack. The number of possible test packages is infinite, and you are forced to choose an imperceptibly small percentage of them to mail.
In split testing, the odds are against you. With a complete redesign, the odds are even more onerous. The A/B test will tell you if the new package test wins or not. But it cannot tell you why. Perhaps there are components within the complete redesign that are clear winners, but are getting drowned out by the weaker elements.
So, what is a better alternative? Look no further than the consumer package goods industry for an idea. CPG marketer do lots of in-market testing, also lots of product development work in advance. By comparison, the direct marketing world does very little.
The methodology now available to direct marketers is sophisticated, but simple and intuitive. In short, It is an online testing program through which your target audience evaluates thousands of different direct mail package ideas in mere minutes.
The secret to its success, and why this pre-testing matches up with live test results so well, is the ability to replicate real-world choice and decision making by:
1- Showing the target audience concepts, packages or offers holistically, just as they view them home.
2- Asking the target audience answer one question—overall preference—within a few seconds, the same amount of time you get before your package is thrown in the trash.
Behind the scenes is very sophisticated statistical modeling to answer the question we really want to know, which is Why? You end up with scores for every single test element, which may encompass 30 or 40 different component parts of a direct mail package (OE, letter, buck slip, reply form) and, in turn, thousands of package combinations.
The business upside is four fold:
- Test exponentially more ideas in a radically shorter period of time.
- Put fewer tests in the mail, and at higher volume, to get to rollout faster.
- Find out exactly what impact each component has on preference and response.
- Test big ideas, those that would never make it in the mail unless you have empirical proof they can work, in a low cost, low risk environment.
A/B split testing method has been around for decades, and yet direct marketing has changed dramatically, with more channels, better targeting, better production methods and now, a better way to beat the control.