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5 Ways Mistakes Can Make a Business Better

mistakeWith little cash, and even less wine industry experience, Michael Houlihan and Bonnie Harvey launched Barefoot Wine in – where else – their laundry room. They built the brand and later sold it to wine giant E&J Gallo.

Now the business owner duo share what they learned along the way with other business owners. One of their major lessons: Improving your business by admitting mistakes. Houlihan believes that customers judge you more by how you react to mistakes than how you behave when all is well. “Every business makes mistakes,” he says. “Denying that they’ve happened only makes an already awkward situation worse.”

In short, dodging responsibility hurts your reputation more than if you’d owned up in the first place.  (In this vein, my posts on avoiding the accountability blame game and how to create a winning business culture might also be of interest.)

Since they knew almost nothing about wine making or the wine business at the outset, Bonnie and Michael – who’ve written a book called “The Barefoot Spirit” (Evolve Publishing, 2013) – made their share of doozies. Some even threatened the entire business. So they quickly resolved not to fret errors, but rather make them opportunities to grow.

For example, Barefoot once put the wrong bar code on a store’s shipment of Cabernet, causing it to ring up at a lower price. Barefoot itself caught the mistake and Michael quickly showed up at the store’s corporate office with a check for the store’s loss, plus extra for the expense of dealing with the mistake. He then informed the manager in detail how Barefoot was changing its internal processes to make sure the bar code problem would not happen again.

Here are five things that must happen for mistakes to make your business better:

1)    You own up

This can be tough, and uncomfortable. But you need to utter the mea culpa and acknowledge that you are, in fact, not perfect. The sooner you own up, the easier it is. There’s less drama and you can get on with fixing the situation faster. Besides, says Houlihan, people actually like a little imperfection now and then. It shows a level of authenticity, vulnerability and humanity. And it’s hard to be angry with someone who says, “You’re right – I messed up.”

2)    You figure out how it happened

Admitting fault, however, isn’t enough. If you simply try to put it behind you you’ve just increased the chances it will happen again. Dig into it. Find out why the mistake occurred so you can fix the faulty procedure or process. That’s why Barefoot Wine made sure its employees weren’t afraid to make or report mistakes – those that involve technical errors, that is. Houlihan is adamant that bad behavior or inability to perform should not be overlooked. “Real progress in progressive companies is often built on the backs of mistakes and the improvements they spark,” he says.

3)    You don’t blame, you aim

Sometimes it might be easy, and temporarily satisfying, to point the finger at someone for a mistake. But if it happened on your watch, and you are accountable for the finished product, you ultimately share the blame in the customer’s eyes. So get to the bottom of what happened and aim your focus on what you and your business can do to prevent the mistake from happening again.

4)    You write it down

This is an important but often overlooked step. If you successfully resolve whatever sparked an error, pat yourself on the back and say, “Well, that’s cleaned up!” you’re making another mistake. If you don’t write down or record it in some way, even you (not to mention others) are in danger of repeating the original error. Says Houlihan, “When you’re still smarting from the pain of a mistake it’s easy to think you’ll always remember what went wrong. But over time things get fuzzy and you won’t.”

5)    You resolve it won’t happen again

Along with your apology, assure the injured parties that it – whatever “it” was – won’t happen again. Voluntarily describe how the mistake happened and what changes you are implementing to prevent its recurrence. And most importantly, tell the other party how you and your business are going to make things right. Handling an error this way will reinforce the feeling that you are, ultimately, a trustworthy company.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main

8 Ways to Earn True Customer Love

Many businesses are content if their customers seem “generally satisfied” overall. Others aspire to something more — they seek the kind of passionate customer satisfaction that inspires glowing thank you letters and backyard fence (or social media) recommendations.

If you suspect customers aren’t quite feeling that kind of love for your business, you’ve probably got some work to do. In a sense, customers who aren’t wholeheartedly with you might as well be against you. Customers who lack the love factor can actually be more damaging to your business than those who do business with your competitors.

That’s because people who aren’t yet customers of yours might at least try you out in the future. But those who are blasé about your business have already tried out your product or service and found you lacking in some respect. That’s not good.

Earning true customer loyalty – the kind that translates into recommendations and referrals – takes commitment, innovative ideas, energy and a little old-fashioned elbow grease. You, as business owner, must clarify for everyone else just what it is you want to accomplish with customers. This includes partners, employees, vendors and others who support what your business does.

And lest we forget, customer “love” also translates into a better bottom line. A recent American Express survey found that 75% of small business customers are willing to spend more with businesses that provide great service – up from just 58% two years ago.  And here’s the kicker: A hefty 78% of consumers have bailed on a transaction or not made an intended purchase because of poor service.

Here are eight things that will help customers find the love:

1. End the obstacle course

Take the initiative to find out when customers need (or will soon need) service or help – before they have to ask. The magical customer service moment is when your call, email or postcard offering help arrives at the precise moment the customer needs it.  Meanwhile, make it clear to each and every customer exactly how they can get service or help from your business when they need it – including a name and contact information.

2. Avoid customer hot potato

Whenever possible, the person who speaks to a customer first should “own” that customer for the duration of their visit. Companies send signals of disrespect by passing off a customer to “someone who can better help you with your problem.”  Yeah, right.

3. Streamline your website

Many small business websites seem cobbled together – a collection of different areas with different terminology and logic for getting around. Figure out one look and message you want to send, and stick with that.

4. Fix (for real) the big issues bugging your customers

Millions of businesses ask, ever so thoughtfully, “How can we improve?” That’s good. But how many really listen and act on what they hear? Customers read inaction as lack of caring and won’t bother to respond the next time you ask. A business that makes changes based on what it hears from customers earns more love.

5. Invest in customer loyalty

Customers have had it with loyalty programs that are just too much work or offer skimpy benefits. Try offering customers something without them having to ask or pay extra for it.

6. Offer customers real choices

Don’t bind customers into the fake choice of letting them “opt out” of something. Let them know up front that they can decide to get emails, offers or whatever from you and give them a choice.

7. Make someone responsible

Maybe it’s you. Or perhaps you make it part of someone else’s responsibilities. Either way, you call attention to your company’s passionate and persistent commitment to customer care. Be sure to reward employees publicly for exceptional customer care performance.

8. Put your money where your mouth is

Define specific customer care objectives that are right for your business, put some resources behind them, and figure out how you will measure the results.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main

5 Ways to Make Service Part of Your Business DNA

Customer service expert Ron Kaufman has a radical notion that great service shouldn’t be as hard as it seems to be for so many businesses to deliver. “Service is everywhere,” says Kaufman, author of the new book Uplifting Service: The Proven Path to Delighting Customers, Colleagues and Everyone Else you Meet. “But there’s a disconnect between the volume of service we need and the quality of service we are giving and receiving. Businesses have turned a simple concept into a catastrophic cliché. They remain blind to the fact that true service comes not from demands and dashboards, but from a basic desire to take care of other people.”

Here are five keys to making exceptional customer service part of your business DNA:

1) Start by instilling a service orientation in your business.

Unfortunately, when most small businesses hire someone new, the part of new orientation that relates to customer service is often nonexistent. “This is your desk; this is your password; those are your colleagues; these are the tools we use. Welcome to the organization. Now get to work.”

“Service orientation goes far beyond induction,” says Kaufman. “Zappos is an example of one company that really gets this. Its four-week cross-department process is an example of new-hire orientation at its finest—deeply embedding and delivering on the company’s brand and core value, ‘Deliver WOW Through Service.’ Zappos understands that new team members should feel informed, inspired, and encouraged to contribute to the culture.”

2. Establish an engaging service vision.

A clear and engaging service vision will unify and energize everyone in your business to aim high for customer service. It doesn’t matter whether you call this building block your service vision, mission, core value, guiding principle, credo, motto, slogan, saying, or tagline. What matters is that your engaging service vision is actually engaging.

3. Communicate your service goals.

A company’s service communications can be as big and bold as signs in the front of the store proclaiming your commitment to customer satisfaction, or as simple as including employees’ hobbies or passions on their nametags. Service communications are used to educate and inform, to connect people, and to encourage collaboration, motivate, congratulate, and inspire.

“They’re essential because they can be used to promote your service vision, showcase your new hires, announce your latest contest, explain have you measure good service, and give voice to your customers’ compliments and complaints,” says Kaufman. Service communications keep your people up-to-date with what’s happening, what’s changing, what’s coming next, and most of all what’s needed now.

4. Offer service recognition and rewards.

Service recognition and rewards are vital building blocks of a service culture. They are a way of saying “thank you,” “job well done,” and “please do it again” all at the same time. Recognition is a human performance accelerator and one of the fastest ways to encourage repeat service behavior.

“While money may seem like the most obvious reward for employees, it isn’t always the most effective,” says Kaufman. “An auto dealership I know of learned this lesson the hard way. It paid its sales team a special bonus for achieving high levels of customer satisfaction. But when bonus payments were curtailed during a sales slump, customer satisfaction levels also fell.”

Genuine appreciation makes a more lasting impact on any employee. And there are tons of great ways to reward and recognize. You can do it in public, in private, in person, in writing, for individuals, or for teams. You can do it with a handwritten note, a standing ovation, tickets to a concert or ball game, an extra day off, dinner for the family or many other ways.

5. Create a common service language.

The whole domain of service suffers from weak clichés, poor distinctions, and inaccurate common sense. “Oh, you want service?” an employee asks. “Well, you’ll have to talk to our service department.” Or, “You want something else or something different? That’s not our policy.”

“We create meaning with language, and we can change our world by inventing or adopting new language. Your common service language should be meaningful and attractive—a shared vocabulary to focus the attention and the actions of your team. It should clarify meaning, promote purpose, and align everyone’s intentions and objectives,” says Kaufman.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

How Return-on-Relationship (ROR) Trumps ROI

Small business owners traditionally view customer relationships this way: You produce a product or service, and customers pay you money, some of which you re-invest in finding more customers.

But Bill Lee, author of a new book called The Hidden Wealth of Customers (Harvard Business Review Press, 2012) has a different notion.  Wouldn’t it be far more effective if you let the customers you already have help drive your sales and marketing efforts and fuel your growth? Makes sense, right?  No matter how much you spend on marketing and advertising through outside channels, they are still at least one layer removed from actual buyers. Existing customers have the best handle on understanding your potential customers, hands down.

Lee’s research has revealed this: Businesses that achieve rapid growth are the ones that don’t just think of customers as “people or businesses that buy stuff” but rather as advocates, influencers and contributors.

That’s a key mindset that can work magic for small and local businesses of all kinds, no matter where they are or what they sell. Instead of thinking only about a return of investment (ROI) on your marketing dollars spent, start thinking also about a “return on relationship” (ROR) with your customers.

The truth is, says Lee, your customers are incredibly well equipped to market, sell and even help develop your products and services.

Here are six ways that customers can help grow your business better than you can:

1) Attract high-value information from and about other customers and prospects.

Existing customers have inside knowledge of their peers that can be super valuable. For example, they know what movies they watch, which restaurants they visit, where they like to travel and so on. Consider a company called Westlaw, which provides research services for law firms. It realized that its clients were interested in how they and the markets they served stacked up to other firms and markets. So Westlaw created something called Peer Monitor, which collects and aggregates client information (anonymously, with their permission) and turned it into a lucrative new business.

2) Believably promote your product or service.

No matter how hard you try, you can never be as believable in promoting your own business as one of your customers can. It’s this simple: You’re trying to sell something. Your customer isn’t. That fact alone makes them far more credible to other potential customers than outside agencies or internal employees.

3) Close the sale.

Yes, customers also make better salespeople than you do. They can honestly say, “This product or service worked for me and it can work for you too.” Look for ways to connect existing customers with prospects.  Many business owners find that prospects are far more interested in talking to other customers than to you or others at your firm.

4) Connect with their peers (your prospects).

Prospects are much more open to opportunities of connecting with friends and peers than they are with getting close to companies. That’s human nature. But too often when companies try to form “communities” around their business or brand they put the focus on the business logos and a company spokesperson. Instead, look for ways to creatively foster dialog between customers and their peers that touches on issues related to your products or services.

5) Energize your online and social media marketing.

Try as they might, many small businesses get nowhere with their social media marketing efforts. Often that’s because they try to force traditional ways of communicating into the social sphere.  Try other creative ways, such as video and mobile to engage customers in social media.

6) Help you enter new markets.

Typically, a small business hoping to enter a new market will hire and agency or use employees to help with research. How about using local customers in those areas?  Find and engage local VIP players to play a central role in your effort. Use them for product testing and feedback and to communicate your message.

Too many small businesses say, “customers are our best assets” but never leverage those assets. By using social media and other methods to harvest those assets, you can spark a new source of growth for your business.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

8 Ways to Deftly Handle Customer Complaints

When a small business receives a customer complaint it has two basic choices: Treat the complaining customer like a pain in the neck, or use the complaint as an opportunity to improve.

Business owners who are adept at handling and learning from complaints know all too well that one complaining customer might represent many others with the same problem who did not speak up. They’re the ones who tell others, complain about you online, and take their business elsewhere. Here are eight ways to deftly handle customer complaints, suggested by Ron Kaufman, author of “Uplifting Service: The Proven Path to Delighting Your Customers” (Evolve Publishing, 2012).

  1. Thank the customer for bringing it to your attention. “Show appreciation for the complaining customer’s time, effort, communication, feedback, and suggestions,” says Kaufman. “Always keep in mind that the customer didn’t have to come to you at all. They could have simply taken their business elsewhere.”
  2. Don’t be defensive. It’s easy to get defensive when an angry customer is on the other end of the line or in your face. Just remember that customers with complaints tend to exaggerate situations, so getting defensive will only make it worse. When a customer complains, they’re doing so because they feel wronged in some way. You don’t have to agree with what they’re saying. But you do have to hear them out. That’s how you move the conversation in a positive direction.
  3. Acknowledge what’s important to the customer. Even if you think the customer’s complaint is unfair, there is something they value that your business didn’t deliver on. Embrace that value. “What the customer wants is to feel right,” says Kaufman. “When you agree with their value dimension, you’re telling them they are right to value this specific thing.” For example, if a customer says your service was slow, then that customer values speed. You might then acknowledge that they deserve quick, efficient service.
  4. Apologize once, upfront. Every service provider knows that the customer is not always right. But the customer is always the customer. You don’t have to admit you were wrong, but you should apologize for the inconvenience. When you do that, you’re showing understanding and empathy.
  5. Express your desire to improve. When you understand what the customer values, show them things your business does that helps you perform well in that area. Calmly explain what happened. “Show you are sincere about your commitment to do well in the areas the customer values,” says Kaufman. “At the very least, you can say you’re going to make sure everyone at your business knows about the problem so it won’t happen again.
  6. Offer helpful information. Part of hearing the customer out is answering any questions they have about the specific situation. Provide additional, useful information as much as you can. If they ask a question that you don’t know the answer to, tell them you’ll find out.  And then actually follow through. These are additional opportunities for you to say through your actions that you value their business.
  7. Contain the problem. Let’s say a family is at a crowded theme park on a hot day. The youngest child in the group starts to have an all-out meltdown. Suddenly, a theme park staff member sweeps onto the scene and whisks the family into a special room. Inside, they find an air conditioned room with water and other beverages, an ice cream machine, a bathroom, a comfortable sitting area, etc. The only thing missing in the room is any connection to the theme park’s brand. That’s because this room is used to isolate customers from the brand until they’re all — parents and children —having a more pleasurable experience.  “That’s how you contain a problem,” says Kaufman.
  8. Recover. Show the customer you care about them, even if you feel your business did everything right. Businesses worry that they’ll get taken advantage of if they offer vouchers, discounts, or freebies as part of their service recovery. But in reality that rarely happens. “Offer the customer something and then explain that you’re doing so as a gesture of goodwill or a token of your appreciation,” says Kaufman. Businesses do this because they know that a successfully recovered customer can become their most loyal advocate.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

How Rock Star Customers can Help You Grow

In an age of digital discovery and social media, here’s something that more and more local business are learning:  Existing customers can be one of the most powerful growth engines ever.  One way to put this engine to work is to identify and harness the hidden marketing potential in your “Rock Star” customers.

But watch out: they might not be the ones you think. For example, they aren’t necessarily the biggest spenders or most loyal. Loyal customers don’t always promote you (in fact, it’s likely they’re not), while big spending customers may not be profitable or have a good story to tell.

So who are your Rock Stars?

Bill Lee, CEO of an educational organization called the Customer Reference Forum, says your Rock Stars are simply the ones with the biggest potential to promote your business and influence others. “First, they’re loyal—that’s the price of admission,” says Lee. “They have a good story to tell about how your product or service helps them. Second, they’re eager to tell it. Third, they have access—and want to gain more access—to influential networks that contain more buyers like them. And fourth, they want to build their reputation and influence in such networks.”

But as much as they might love you, these Rock Star customers won’t help grow your business on their own. Even customers who identify themselves as “promoters” in customer surveys—saying they’d be highly likely to refer you to a colleague or friend—aren’t actually doing so. Studies have shown that only about 10 percent of self-described promoters actually refer profitable new customers. The key is this: You have to take the initiative and make it easy for them to do so.

Make it About Them

To make it work, it has to be all about them – not about you, says Lee, who is also author of a book called “The Hidden Wealth of Customers” (Harvard Business Review Press, 2012).

One tactic that works with Rock Stars is community marketing that recognizes how people buy things locally, from a refrigerator or flat screen TV, to a new roof or a doctor’s services. In that context, most people aren’t likely to seek out a salesperson or collect brochures. Instead, they’ll talk to friends, neighbors, colleagues or other peers to find out what or whom they’re using.

Some big companies have caught on to this. For example, Microsoft has brilliantly deployed “customer advocates” to leverage this natural approach to buying, particularly overseas. Microsoft will find local “MVP” customers who are well-connected in their local communities and want to increase their status, and help them do so by providing access to early releases and “insider knowledge.”

Getting known through established locals is faster—as well as more affordable—than trying to get locals to know a business through advertising, PR, big splash events, and other traditional marketing. Small businesses can use this same approach.

Make Yourself an Influencer

But instead of relying on your Rock Stars to carry the ball completely, the trick is to enlist their help in making you more of a “thought leader” in your own industry or community. Many business owners fall into the rut of seeking influencers—such as bloggers with large followings, or prominent personalities in their markets or communities.  But it’s usually better to be the influencer yourself – enlisting your Rock Stars to help you do it.

A good local business providing exceptional solutions to a community or market has two things that no outside influencer can match, says Lee. You have actual customers who are happy, plus you have your own “subject matter experts” (you and your employees) who work with these customers all the time. That alone gives you far more valuable knowledge than the usual outside influencer.

Perhaps the best thing about Rock Star customers is that they already exist, quietly thriving under the radar, waiting for you to discover them and put them to work. Failing to do so is a little like being a homeowner who knows a stash of gold is hidden in the wall but never uses a metal detector to find it.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

10 Commandments of Great Customer Service

Forced to do more with less, small businesses that have managed to survive or even thrive have recognized one key factor: You can’t always compete on price, but you can compete on service. And the best thing about great customer service is that providing it doesn’t cost anything. When your competition is scrounging for customers, you have to hold yours close, and that starts with great customer service.

“Today’s small business owners should know that cutting costs will not save a business,” says Ed Hess, author of the new book Growing an Entrepreneurial Business (Stanford University Press, 2011) and professor at the University of Virginia’s Darden Graduate School of Business. “Customers are concerned about their own finances. When they visit your business, they need to feel cherished. They don’t expect rock bottom prices everywhere, but they do expect good treatment.”

Here are 10 commandments for creating great customer service:

  1. Happy employees create happy customers. Employee satisfaction translates to great customer service.  Employees who like their jobs and care about the business they work for are more likely to go the extra mile for a customer.  Creating that feeling in your employees will pay you back exponentially.
  2. Always respond quickly. Your customers are busy, too. They shouldn’t be left wondering what kind of service they are going to receive or when. Answering email inquiries, returning phone calls and responding to messages or other contacts on Facebook or other social media should be part of a daily routine. 
  3. Make it easy to do business with you. Never make customers jump through hoops to buy something from you. Have a return policy that is easy to understand and puts customer interests first. Provide refunds quickly and efficiently.
  4. Keep customers informed of what’s happening. When customers know what’s happening with an order or request, they can enjoy doing business with you. For example, if you’re handling a return and typing information into a computer, you might say, “I’m entering the date of purchase and product number so we can make sure to give you the maximum refund possible.”
  5. Use technology to provide good service. Today’s technology offers every small business the means to provide service more quickly and efficiently than ever. “Business owners sometimes assume that customers don’t like to be communicated with online,” says Hess. “And for some that might be the case. But most people appreciate the ease that online communication provides.”
  6. Make your customers feel valued. Understand that each and every one of your customers is special. As the late business guru Peter Drucker said: The sole purpose of business is to serve customers. Make sure your employees understand this, and that above all else they must focus on making customers feel valued and appreciated.
  7. Remember, disgruntled customers won’t complain; they just won’t come back. If you don’t take time to provide excellent service, customers won’t take time to tell you how to improve your business. What’s more, unhappy customers will tell others about their bad experience. And in this age of social media, the ripple effect can be very damaging.
  8. Provide special training for frontline employees. Employees who interact directly with customers are critical to your business. “Their attitudes, communication skills and style of service are what customers associate with your business,” says Hess. “Make sure they are trained to handle the potentially stressful task of working with customers.”
  9. Make sure the first customer is happy before moving on to the next. Customers value quick service just as much as they value quality service. But you can’t sacrifice one for the other. “It’s important to make sure one customer is satisfied before you move on to the next,” says Hess. “That can be as simple as asking, ‘Is there anything else I can do for you today?’”  
  10. Compensate for mistakes. Never shortchange your customers. “If a mistake was made or some other circumstance is preventing you from providing the best level of customer service, find a way to make it up to your customer,” says Hess. Give employees the latitude to provide customers with solutions when they can’t satisfy a need. 

Copyright © 2000-2011 BizBest® Media Corp.  All Rights Reserved.

How to fix Customer Slipups

Companies both large and small often spend time and money on big customer service ideas intended to woo new clients in the door only to lose their regular customers over little service slipups. “Customer relationships are made or broken when something goes wrong,” says customer service expert Maribeth Kuzmeski, founder of Red Zone Marketing in Chicago. “If you don’t have well-developed service recovery techniques in place, you’ll lose the customer every time.”

In an age of social media, it takes only one disgruntled customer to create a disaster for a small company. The internet has greatly amplified the customer’s voice. If someone were to “go viral” with a negative story about your business, you might lose a lot more than one sale, so it pays to have a strong service recovery plan in place.

“You can absolutely keep and create loyal customers in today’s economy, but you have to have the service chops to take care of them,” says Kuzmeski. “When you do so, you can create clients for life and guarantee the success of your business.”

Here are five things you can do:

1. Learn to recognize and truly understand your customer’s situation. Provide an individual care approach for your customers. For example, someone with children will have very different concerns from a busy businessperson and vice versa. So you must train your employees to recognize these key differences and adjust their responses accordingly. “Teach service employees to understand the context of a situation and to sympathize with customers,” says Kuzmeski.

2. Deliver on what you tell the customer after a slipup. Customer service is more than reciting a tired phrase such as “someone will be right there to help you.” Be specific about how the problem will be resolved. When handling a service issue, let the customer know what’s going to happen and when. The more information customers have, the less anxious they feel.

3. Treat any second complaint like a dire emergency. Most people are fairly forgiving after one mistake—assuming you address it promptly. But when you get a second complaint, well, it’s time to go into emergency mode. At that point there’s no room for further delay or error. If you want to keep your customer, you must make sure the problem is taken care of immediately.

4. Make sure the service concept permeates from top to bottom at your business. Make it a team effort. Don’t let employees “silo” your business by approaching customer service only from the narrow perspective of their own particular job or responsibility. Make sure that everyone understands the customer service plan and that everyone knows how to work together to solve customer problems.

5. Don’t assume your customers will give you a second chance. Think about it this way: If a customer has taken the time to call you about a problem, you are already getting lucky, so you’d better take care of it fast. You don’t always get a chance to make it right. Often, customers will just move on.

“Remember that your competition is constantly trying to sell the same product cheaper, faster and better than you,” says Kuzmeski. “Don’t make it easy for them by providing inadequate customer service.”

Copyright © 2000-2011 BizBest Media Corp.  All Rights Reserved.