Monday, March 25, 2013

Branding Tips

Your brand is a promise that you make to your customers – one they need to experience again and again to believe. When considering your brand, come up with a promise that provides a unique benefit to your customers. Then, keep that promise consistent and reinforce it through every interaction you have.

Weigh in: What promises do you make to your customers and how do you back them up?

“A business based on brand is, very simply, a business primed for success.” -David F. D’Alessandro

Many small business owners mistakenly think that branding is simply about slapping up a well-designed logo on their website and then waiting around as the sales start pouring in.

Here’s the truth of the matter. A brand isn’t about your logo. And it isn’t about the color choices on your website.

And, it isn’t about your mission statement.

A brand is simply a promise that you make to your customers.

And, for your brand to work, you need to create a big, bold promise to your prospects.

Furthermore, your prospects need to experience your small business promise again and again (and, yes even again), before it takes hold.

But, as a Shoestring Marketer, you don’t have Starbuck’s marketing budget to launch your brand promise. Does that mean that you can’t effectively brand your small business? No way.

Even the smallest one-person operation can effectively launch a brand promise in today’s marketplace.

Here are 5 branding tips to keep in mind when designing a bold promise to your potential clients and customers:

1.    Bold brand promises are unique.

Your brand promise can NOT be something that your customers automatically expect, like “great service” or “quick delivery.” You need to think outside of the box and make a promise that your prospects are not expecting.

2.    Strong brand promises capture the core benefit you provide the consumer.

It’s essential that you identity the main benefit your customers receives when they do business with you. Once you’ve figured that out, you need to wrap your promise around that essential benefit.

3.    Bold brand promises are simple.

You only have three seconds to convey your brand promise to your prospects, so it’s better to be clear than clever. A confused prospect will never make a purchase.

4.    Bold brand promises are consistent.

You’ve got to be steady, reliable and unfailing when delivering your brand promise. If you’re brand is perky, happy and cheerful, then you’re not allowed to get crabby at your customers. Ever.

5.    Bold brand promises constantly reinforce their message.

Once your brand promise takes hold, you need to make sure that every single interaction that you have with your prospects and customers reinforces your brand promise.

If your small business promises some form of “education,” then every single email, sales letter, video, podcast and newsletter should clearly educate your prospect.

So, take the time to figure out what promise you can make to your prospect that offers then a truly unique benefit.  Then, keep that promise simple, consistent and constant. This is how your businesses brand will grow exponentially over time.

Friday, March 15, 2013

She's denied a mortgage after a 3-cent debt hurts her credit score: Roseman

This real life example provides a great credit coaching opportunity as this could happen to any client.

Ellen Roseman Personal Finance, Published on Fri Dec 28 2012
Diane Lowe's story will make you think twice about ignoring a balance on a credit card, even for only a few pennies.
While shopping at the Hudson's Bay Co., she decided to get a company credit card in order to get 10 per cent off her purchases.
Though she paid off the balance and cancelled the card last June, she started receiving monthly bills for 3 cents on her closed account.
Lowe admits she did nothing, thinking the small debt would be written off. This was a big mistake.
Large companies often report an outstanding balance to the credit bureaus (Equifax and TransUnion), which can downgrade your credit score and make it hard for you to qualify for a new loan.
In Lowe's case, she bought a new house in November and tried to move her portable mortgage at 2.2 per cent interest. But the bank turned her down.
"Now I'm paying 4.15 per cent interest with a secondary lender," she said.
"I have had multiple mortgages for 20 years and I have been a landlord for 10 years. I have always been in good standing credit wise."
That wasn't all. She couldn't get a line of credit from the bank for a deposit on her new home and had to refinance her existing house to pay the builder.
Capital One Canada, which handles the HBC credit card business, apologized to Lowe after I forwarded her emails. It also sent letters to the credit bureau and the bank that had refused her credit applications.
Spokeswoman Laurel Ostfield said credit card issuers had to report to the credit bureaus when payments weren't made by customers.
"It is important to review your statements every month to ensure you are not carrying an outstanding balance, because even small amounts can still negatively affect your credit score," Ostfield said.
"We encourage any customer who is unsure about an amount owing to contact us right away, so we can work with them to keep their account in good standing."
Lowe did call the Bay once she found out her credit score had been slashed. She asked for forgiveness of the balance — now grown to six cents — but nothing happened.
"I said, 'You guys are spending 67 cents to mail me an invoice for six cents. No wonder the Bay is going bankrupt.' I think I upset someone that day.
"Now I'm going to be paying thousands more in interest. Two separate houses are affected by my stupid comment."

Monday, March 11, 2013

24 things you didn't know about credit cards

TORONTO STAR Henry StancuStaff Reporter, Published on Thu Oct 27 2011
The idea for what would later become credit cards was published in 1887 in a utopian novel called Looking Backward.
1. The idea of using a card for purchases was first published in 1887 by Edward Bellamy in his utopian novel Looking Backward.
2. Diners Club issued the first credit (charge) card in 1950, and it was honored at about two dozen New York City restaurants.
3. The first widely accepted plastic charge card was issued in 1958 by American Express.
4. American Express rolled out its Platinum Card with an annual fee of $250 in 1984 and today its extremely exclusive black titanium Centurion card carries a $2,500 annual fee and requires the holder to spend $250,000 a year.
5. The first credit card allowing payment over time was the BankAmericard in 1959, renamed Visa in 1977.
6. Formed by a group of U.S. bankers in 1966, the Interbank Card Association began using the name Master Charge in 1969 and renamed it MasterCard in 1979.
7. MasterCard was the first to place a hologram on its cards to deter fraud in 1984 and others soon followed.
8. The Discover Card was introduced by Sears in 1985. Unlike others at the time, it charged no annual fee.
9. Credit cards have a uniform shape and size as their dimensions are governed by the ISO 7810 standard, an international guide for identification cards.
10. The average U.S. citizen has four credit cards, in Canada, the average is two.
11. The credit card delinquency rate in Canada is half what it is in the U.S.
12. There are 72 million credit cards issued in Canada according to
13. A 2010 U.S. survey found close to 610 million credit cards were issued south of the border.
14. Credit cards account for 5 per cent of the average Canadian's total household debt.
15. With roughly 65 per cent of Canadians paying their credit card balance in full each month, the interest rate for two-thirds of credit card users is zero.
16. A 2011 survey by The Strategic Counsel, a market research group, found 64 per cent of Canadians pay their balance off in full every month, while just half of American households do.
17. The Canadian Bankers Association reports there are about 71 million Visa and MasterCard cards in circulation in Canada.
18. Next to mortgages, credit cards account for the second highest proportion of consumer debt in Canada.
19. Most Canadians use their credit card as a method of payment, not a means of borrowing.
20. Advertising "No pre-set spending limit" is a bit of a stretch as limits are based on income, spending patterns and credit card history.
21. About 60 per cent of consumers have a rewards credit card.
22. People are likely to spend more money paying with a credit card than with cash.
23. Studies have shown credit cards can increase the consumption of less healthy food.
24. Counting out and handing over cash is more stressful than using a credit card, research suggests.
Source: Canadian and U.S. banking, marketing and debt-counseling surveys and studies

Cash poor...Can you still afford to buy a home?

By | Thu, 7 Mar, 2013 12
All of the recent changes to Canadian mortgage rules make it pretty clear: Regulators want to dissuade first-time homebuyers from purchasing a property with nothing down. Yet, despite changes that did away with 100 percent financing back in 2008, and the recent barring of cash-back mortgages by the Canada Mortgage and Housing Corp., buyers can still manage to take a step up the real estate ladder with little upfront cash. The question is - does it make financial sense?
Let's weigh the options....
Why it's best to have a robust down payment
While saving for a sizable down payment can be a huge financial burden, it's an investment that can save you a considerable amount of cash in the long run. Remember – the smaller your down payment, the riskier you look to a bank. Low down payment home mortgages require more leverage, and high leverage borrowers are open to a substantially higher risk of bankruptcy.
While larger down payments inherently help lenders, they also benefit borrowers in a variety of ways. This is especially true for buyers who are planning to sell in the early years of their residential mortgage. With the recommended 20 percent down payment, you'll generally have enough equity built in to your property to cover closing costs, even if there has been a 10 percent decline in the market value of the home.
Alternative down payment options
Coming up with tens of thousands of dollars for a down payment isn't always an option, especially when you're a young, first-time homebuyer. Houses are expensive - no ifs, ands or buts about it! At a time when the average Canadian home price hovers around $356,000, the Canadian Association of Accredited Mortgage Professionals has found that more than one-fifth of all renters have less than $5,000 put away for a down payment.
So what's a cash-poor house hunter to do?
For many, the answer is to seek out an alternative down payment source.
Borrowing from nontraditional sources
When buying a home in Canada, you generally need a minimum down payment of 5 percent of the purchase price of the home. It's worth noting at this point that legislation prohibits you from borrowing that 5 percent from your mortgage lender if that lender is a bank or federal trust company.
However, you're free to borrow your down payment from a number of different credit sources. Popular choices include a line of credit, personal loan, or even a credit card. Of course, tossing your down payment onto your VISA isn't the most responsible way to manage your investment (don't do it!).
If you're thinking about borrowing your down payment, get ready for some serious interest charges. More often than not, the interest rate on a borrowed down payment will be much higher than that on your mortgage, or have a riskier variable rate, at the very least.]
The cash-back option
It's worth noting that any lender who isn't federally regulated (like a credit union, for example) can still offer cash-back down payment mortgage products. Not surprisingly, the interest rates on these offers are astronomical. Homebuyers are also required to come up with the cash for closing costs, including legal and inspection fees, as well as land transfer taxes, and other fees.
Be wary: There's speculation that the loophole that enables some institutions to offer this product will be eliminated in 2013 through new mortgage insurer and/or provincial regulations.
The RRSP Home Buyers' Plan
First-time homebuyers are encouraged to take advantage of the government's Home Buyers' Plan (HBP) in order to draw upwards of $25,000 from their RRSPs in order to fund their down payment. And while this is a great option, it comes with a few red flags. First, draining your retirement savings in your 20s and 30s means you'll risk losing years of tax-deferred investment gains. Secondly, any installments that aren't paid back before the deadline are taxed as income on that year's income tax statement. Statistics show that as many as one-quarter of HBP participants miss or underpay on an installment.
Going with a gifted down payment
Generous relatives are often willing to help fund a down payment through a financial gift to a first-time homebuyer. In most cases, however, lenders will only consider gifted down payments from a parent, grandparent or sibling.
It's important to note that a "gifted" down payment is very different from a personal loan from a relative. With a gift, there's no expectation to pay the relative back. If you're borrowing money from a relative in order to make ends meet, this is not a gift. It's an additional liability that your lender will need to consider as it increases a borrower's debt obligations.
Proceed with caution & get advice
When it comes to buying a house with someone else's money, always remember to be careful. Just because you qualify for a cash-back mortgage or have enough squirreled away in your RRSP doesn't mean you're ready to shoulder the responsibilities of a mortgage. Talk with an accredited mortgage broker and your trusted financial advisors before you make your final financing decisions. is a free personal finance and education site for women.
Nothing contained herein is intended to provide personalized financial, legal or tax advice. Before implementing any financial strategy, you should obtain information and advice from your financial, legal and/or tax advisers who are fully aware of your individual circumstances.