KISS Avoidance

I’ve never advocated the use of the KISS principle in the practicalities of marketing. The acronym Keep It Simple Stupid conveniently suggests one avoid emitting information that may complicate or confuse and omit information to misguide and deceive. When marketing to small business, I’ve discovered well-educated owners make the best clients. It is our responsibility as business professionals to provide detailed recommendations so our clients can make educated decisions.

Avoid the KISS.

Here’s evidence to my claim. An agent challenged a recent GEM proposal because it showed a 2.50% State Unemployment Tax Assessment (SUTA) or reemployment tax. The agent’s prospect had obtained a competitive quote for services with a 1% SUTA. On surface it appeared GEM’s proposal would cost 1.50% more than the competitions. However, the competition never revealed that GEM’s proposal honored the cut-offs when reaching a $7000 wage base and the competition did not. The business employed 8 workers.

An annual estimated payroll for the 8 ee’s in the group came to $260,000. GEM’s SUTA would only be applied to $56,000 of the wage base ($7000x8 ee’s). The competition’s rate would apply to the entire $260,000 of wages.

$56,000x2.50%= $1400

$260,000x1%= $2600

If group retention is 100% throughout the year, the competition’s annual cost for SUTA would be $1200 above GEM’s proposed rate. GEM’s SUTA would average .54% - nearly 1% lower than the competition for the payroll year. In the previous year, the employer replaced 2 ee’s. Considering the timing of the replacements, there would have been an annual variance of only $105- still in reach of a 1% rate reduction. When properly informed, the educated prospect became a client, and a professional bond between the agent and business owner occurred. The agent never attempted to KISS.

I’m sometimes frustrated by the inability to provide direct detailed information to business owners in order to demonstrate how co-employer relationships can assist them in growing their business. Many businesses avoid attempted solicitation because they’ve been KISSed to many times before. Therefore, GEM’s marketing strategy is directed towards agents and brokers- of small to mid-size business owners- with earnest recommendations and educated solutions to help manifest professional advisement for their clients.

I’m also surprised with how many small business owners share a reluctance to grow. Some claim the inability to find skilled workers as a cause. Others fear expansion due to an uncertainty with the economic landscape and concerns with an eventual recession. Still others claim the cost of expanding a workforce as a deterrent and consider co-employment as an expensive apparatus that only provides payroll administration and the furnishing of workers compensation Certificates of Insurance (COI’s) to pull permits and be in state compliance. Competitive payroll companies seize on these misgivings with KISS offers of payroll and comp at a lower cost.

GEM believes the co-employment relationship contributes to a mutual incentive to grow a client’s business. A Professional Employer Organization (PEO) should provide cost-effective design to help small to mid-size businesses mitigate costs and enhance efficiencies beyond the expense of payroll administration and the issuing of COI’s. GEM offers many added services including detailed analysis on fixed labor costs. Knowing a defined labor rate- that includes incentives and benefits to attract and retain quality workers- is essential to business owners in the trades and should be factored into their estimations when creating bid proposals. Many contractors know to markup materials for waste, for instance, but are unsure how to calculate and job cost their labor burden.

Providing solutions is complicated and requires agent and brokers to listen to the prospects concerns and then offer valued-added suggestions. I believe the agents and brokers adhering to this discipline are professionals. Most business owners prefer contracting with an honest professional they can trust before buying from a commissioned driven salesman who wants to KISS.