The premium price lesson taught by craft beer

The craft beer explosion in the US over the last 5 to 10 years is a great lesson in premium price / premium product / premium services and customer ascension.

So what is the big lesson to learn from craft beer? Is it that you could make beer that only a certain percentage of the market will drink? Is it that you can put anything from talcum powder to motor oil in your wort as an ingredient and someone out there will want to drink it? Is it that you can charge for one pint what previously would have been a tolerable price for a six-pack?

But I don’t WANT an $80 diaper!

Those answers are all accurate at some level.

However, the biggest lesson is that in any market (including yours), there is a percentage of the market that’s willing to pay a premium price for a premium product. Products and services have had “Good, Better, Best” for years. Despite that, there are still many businesses out there that only offer a single product line with very little variation or options, premium services, or the opportunity to “ascend” to the next tier of product buyer.

These opportunities are not limited to automobiles, cigars, locally brewed beers, or any other thing. You can buy cheap toilet paper and you can buy fancy toilet paper. Speaking of, there are companies making a living selling diapers that cost $80 each.

While I don’t want to buy an $80 diaper, it’s clear that some portion of the diaper buying public does. That’s the trap that you can’t let yourself get caught in. It doesn’t matter that you and I aren’t interested in an $80 diaper. All that matters is that enough people are buying them. The same goes for a bottle of craft beer that might cost $12, $29, or much more. The challenge is finding a product that fits a market.

Premium price changes everything

In whatever you sell, there is almost certainly a premium price product or service opportunity – or both. You’ll never know where the price ceiling sits until you test it. We’ve all been offered an up-sell (want fries with that?), but this is different. Successful efforts typically result in a new tier of products and/or services. Sometimes, it reveals a completely different type of customer. It also allows ascension for some of the customers you have now.

Testing new product / service / price tiers could result in a new way of doing business for a subset of the people you serve. It may also reveal that there are additional price / product / service tiers between your existing regular and premium-priced options.

A successful “bar” that closes at 8:00 pm?

Montana micro-breweries are a fascinating example of finding an undiscovered tier in a market. They operate under a number of restrictions that impede their growth, including (recently raised) limits on the number of barrels they can brew each year.

Two additional restrictions that would ordinarily seem fatal to a traditional drinking establishment have instead created a new market tier.

First, Montana breweries with a taproom / tasting room may only serve 48 ounces (three pints) per patron per day. This might seem like a rather punitive restriction, but it doesn’t work out that way. First, most craft beers have a higher alcohol content than “regular” beer. As a result, three pints per visit is usually enough. Ever seen a bouncer in a brewery’s taproom? I haven’t. You’re more likely to see families and friends meeting together with their kids. Yes, in a taproom.

Second, Montana brewery tasting rooms cannot serve beer after 8:00 pm – at least not without getting a more costly / complex alcoholic beverage license. The traditional thought process would presume the 8:00 pm close dooms the tasting rooms. Instead, they’ve become gathering places after work, or before/after shopping and/or recreation. You’ll often see groups in a tasting room that you’d rarely see at a bar.

Without the typical late night hours of a bar, employees get home early enough to do some homework, put their kids to bed, or get a decent night’s sleep before their “real job”  (or college).  Likewise, these businesses avoid the occasional negative late night bar behavior that some places have to contend with.

While these limitations are restrictive, they’ve created a consumption tier that all but eliminates the negative behaviors sometimes associated with traditional bars.

The question is – what could be the premium-priced craft beer in your business?

Discarding clients & the math of job security

How often are you discarding clients? When fussy, needy, and/or high-maintenance clients complain repeatedly, there’s significant temptation to simply toss them out with the garbage. Some business owners build “filters” into their marketing designed to repel such clients.

When an existing client provokes thoughts of “Life’s too short to deal with this“, who fires them? How is the decision reached? Is the process documented? How is the decision communicated to the client and to your team?

Hammers, nails & curmudgeons

I asked some friends how they describe people they’d fire as clients. Their responses included unreasonable, unrealistic, frustrated, afraid, disgruntled, troublesome, pedantic, rebarbative, cranky pants, curmudgeon, etc.

Are you teaching your team that getting rid of imperfect clients is the only acceptable solution? Owners know there are situations that don’t merit dropping a client. Owners discard clients based on their experience. Does your team have that experience to back up their decisions? Take care that your team doesn’t use this tactic like a hammer while seeing every complaining customer as a nail.

It’s essential to be careful using “You’re fired!” as too-frequent use can damage your reputation. Businesses learn to detect bad apples and few are surprised when these clients get fired. Taken too far, your business can get a reputation for arrogance. People will think you discard clients the first time there’s an objection or even a question. You don’t want your reputation to be “At the first hint of a problem or even a question, they tell people to leave and not come back.” Some prospects will hear that and decide not to show up.

The math of discarding clients

Discarding clients sometimes feels as easy as pulling a splinter. The pain and aggravation fades quickly, making you wonder why you ever tolerated them. Even so, every choice to discard a client impacts your bottom line. While getting rid of high-maintenance “time vampires” will probably improve your bottom line, you have to be careful not to let your team believe that’s the only solution available. That’s where the math kicks in.

If your team gets rid of one customer a month, what does that mean to your bottom line? You likely know the typical customer’s lifetime customer value (LCV). Owners usually know how often the typical customer buys from them. They also typically know how much customers spend on average per transaction. Combined with the rate at which you are adding new customers, you can determine what an improper “firing” costs you and how long it takes to recover from it.

Uninformed profitability math

Employees don’t usually know the financial impact of discarding clients. When you explain the financials of your business to your team, it helps them understand why you think the way you do. Tools like “The Great Game of Business” (start with the book) help employees understand how the business works financially (free resources) vs. how they think it works.

Learning how the business works from a financial perspective encourages employees think more like owners. It can alter “I’m working my tail off for $15 an hour while the owner gets rich.” to something closer to reality. Even if the owner IS getting rich due in part to the risks they took & the investments they made, “uninformed profitability math” isn’t healthy. This “uninformed profitability math” rarely create behaviors that are positive for the business.

Many employees have never had the opportunity to see how their work (and how they work) impacts company financials. Meanwhile, business owners regularly complain how their people don’t think like owners. Part of that thought process is understanding the financial impact of events that occur in the business each day. Knowing that what your work does for the bottom line carries substantial value.

A “We’re having a good (or bad) month” message to employees is rarely accompanied by data explaining why. Understanding what good and bad month means affects the security a team member feels about their job. This impacts their confidence in their ability to provide for their family – and certainly affects job performance and attitude.

What does “we’re having a good/bad month” mean at your business? What message does it send to your team?

Photo by Shinichi Haramizu

Is it better to keep a customer or replace them?

“$29 per month… NEW CUSTOMERS ONLY!” Most of us have seen something like this and thought less than pleasant things about a vendor who hangs these new customer offers out in public where existing customers can see them. That bargain basement deal that’s not available to existing customers doesn’t make you feel good about your decade-long relationship with that business. The loyal customers who have stuck through good times and bad with that vendor – including their mistakes (which we all make).

The thought?

“Where’s my screaming deal?”

It isn’t that these deals are inherently bad. The mistake is putting them out there in front of everyone – including your current customers. If you can find a way to avoid showing the “loss leader for new customers only” offer to existing customers – avoid it. In some media, you can’t avoid it – so don’t use that kind of offer there. It ticks off your loyal customers. Every. Single. Time. Your customer service team gets to take flak about this each time you run these promotions.

Meanwhile, a lack of communication to existing customers plants the thought in customers’ minds that their vendors take them for granted. We know you’re thinking of us when you outsource customer service to Jupiter to save $1.29 per hour, or when you discuss how to shrink receivables. What sort of effort do you invest to retain existing customers?

If you have convinced your customers that you aren’t thinking about them & that you’re more concerned about getting new customers – why should they feel differently about you? You’re advertising for new clients everywhere. While those ads are out there chasing down more new customers to fill the leaky customer bucket, are your long-time loyal customers (and the rest of your customers) being ignored?

All the single ladies

Look at it this way: If you’re someone’s steady “significant other” and they are constantly out chasing down new “others”, most of you wouldn’t take that so well.

Why should your customers feel any different when they aren’t being wooed, cared for, thanked, communicated with, or given any special attention? They only seem to get attention when they call to report (or complain) about a service, delivery, or product failure. Once the initial sale is concluded, is the only time you connect with your clients when they contact you, or something has broken or otherwise gone wrong?

“That’s what everyone else does.”

You might be thinking “That’s what everyone else does. Why should I behave differently?

You are, or have been, a customer of car dealers, cable companies, dry cleaners, restaurants, various repair shops, handyman services, plumbers, sewage tank pumpers, electricians, hair salons, clothing stores, hardware stores, quick lube shops, etc. Almost all of them are advertising for new customers this week. How many of them are ALSO communicating with you to keep you, to bring you back, to make you feel good about being a customer, and/or encourage you to refer them to someone you respect and/or care about?

Very few.

They’ll likely continue appearing to take you for granted for weeks, months, or years – all while chasing new customers, all while grumbling about churn as they slowly lose customers to someone else’s $29 new customer offer. Don’t be that business.

Doing only one of these (looking for new, caring for existing) is not sustainable. Yes, I know it’s more work to do both. Most places need to get new customers, but most of those same places spend a lot more money & effort to get a new customer than they do to keep and care for an existing customer. Doing both means making an effort to protect the asset you paid for – yes, customers are an asset. Perhaps not in accounting terms, but in the real world where customers don’t grow on trees, we’d all rather have more long-time customers and others begging to do business with us.

Don’t spend $12 to get a customer this month, only to ignore them hereafter and hope they stick around, and then go spend $12 to get another one. That assumes you know how much it costs to get a customer (and it’s always more than you think).

Recycling customers is expensive.

Take better care of your existing clientele. Well cared for clients tend to buy more, buy more often, & for a longer period of time. They refer their friends & colleagues because they finally found someone who gets it. Be that someone.

Photo by martin.mutch

Training: One cure for sales problems

When having a conversation about sales problems, I might remind you about the folly of only taking cash (depending on the type of business). I might also remind you to eliminate the tedious & annoying out of your buying process. There are cases where that’s useful, but mostly – it isn’t. But not today. Today, I’d like to remind you of the value of training your sales team.

You’ve got questions

Heard of Quora.com? Quora is a website where you can ask questions. Many times, you’d never have access to those who answer: world-class subject matter experts. If you asked an airplane question, you might hear from an engineer who helped design it & three commercial pilots who fly it.

Why Quora? Because I found a Quora question pertinent to this discussion: “What can businesses learn from the military?” It reminds me of the not well informed “Why don’t non-profits run like a business?” question, but this is a much better question.

A Marine named Jon Davis who deployed to Iraq & Afghanistan answered: “Training”.  His answer breaks down like this: 1) A detailed process to track progress. 2) Regular job specific training. 3) An annual schedule to ensure standards are met. 4) Find & reward teachers. 5) Ignore the “training them to leave” myth. 6) Discipline.

If those six items are checkboxes – can you check any of them?

I’ve recently met several folks who work in the car business. The one I wrote about last week is the only one I’ve encountered recently who knew the product well. I don’t mean he could wake him in the middle of the night & tell me (blindfolded) how to change a timing belt. I mean he didn’t have to run to the showroom to find out the horsepower for a vehicle whose manufacturer makes cars with only two engine choices across the entire product line. Yes, it happened.

This isn’t a sales team failure. It’s a management failure. Are you preparing your salespeople to succeed? Product knowledge isn’t what sells cars. Rapport is. Guiding me to a “special value” (car that’s been on the lot too long) because it pays more than a mini (minimum commission) doesn’t build rapport.

A question about the value of rapport: What’s worth more to you, getting that “special value” off the lot, or creating a relationship that provokes me to return every x years to buy only from you for the rest of my vehicle buying days, while also encouraging my friends to do so? You decide.

Sometimes product knowledge is critical: “Can you help me find a good red wine?” The salesperson who knows less about your product than most prospects will struggle – & reflect poorly on your business. You need someone who understands the problems your prospects want to solve & how your solutions address them.

Don’t have a sales team? Still affects you.

One of the best parts of the answer Jon gives relates to on-boarding. He describes how the military trains recruits and leads them. He then compares that to the training that most businesses provide: haphazardly, if at all, and with little ongoing mentoring –  which unfortunately matches my observations over time.

You probably hire experienced people so they’ll step in & become effective quickly. Do they do it the way you want it done? Did they learn a completely different way of doing what you do? What if you don’t want them to do it that way? How will they learn your proprietary way of doing things?

Don’t assume an experienced new hire has mastered the systems, machinery, methods, and processes your business uses to succeed. Learn from their experience, but train / mentor them.

No matter what, the last thing you ought to be doing is turning them loose on your customers, prospects, products, and services and simply assuming that everything’s going to work out. Maybe it will. They might survive, or get by, or be good enough. Did you exert all that effort to find just the right person only to toss them to the lions with the expectation that they’d get by?

How much does it cost each time you have to replace a poorly trained salesperson who failed? How much does it cost to keep someone who isn’t as effective as they could be because they had to learn your ways by the seat of their pants?

Photo by formatc1

Accepting change: How can you help?

New technology is full of emotional change. Everyone finds their own pace when it comes to accepting the changes that come when adopting new technology. With brand new technology, the differences in adoption rates widen even more. Some folks won’t touch new technology. Other people prefer to wait a little while and let someone else take the punches that “first implementers” must often withstand. There are those who consider how the new tech can help them, and if it can, they’ll dive in wholeheartedly. Finally, some chase the Bright Shiny Object (BSO) – no, not the eclipse. The BSO distracts them just like a randomly reflected spear of piercing sunlight off a car windshield grabs your attention while driving.

This isn’t limited to technology

Segmenting the speed of accepting change isn’t new. A series of books by Geoffrey Moore, starting with “Crossing the Chasm“, examined this in detail. However, the phenomena isn’t limited to technology. Anything in our lives that introduces change tends to fit into these segments of how much (and how early) we’re willing to dive in. We’re creatures of habit, even in how we change. Our hesitancy or comfort to try new things impacts every purchase – including the uptake of anything new or different. Some of us love change. Some hate it. Most are somewhere in the middle. Many occupying the “fat part of the (Bell) curve” need a reason to change. Maybe not a big reason, but a reason all the same.

Ever tried to get a young child to try a new food? If so, you probably didn’t give them an adult-sized serving the first time you had them try it. As with the kid and that broccoli they (at first?) loved to hate, it’s often best to ease people into a new thing. Sometimes, you have to offer them something they crave (like ice cream for dessert) if they’re brave enough to choke down their broccoli.

It’s no different with adults. Try to convince a pickup driver to change from Ford to Chevy or Dodge. Ask a golfer to change clubs. Ask a frequent flier to change airlines. In each case, you’ll probably face substantial resistance.

How is that different from you wanting them to switch to your restaurant, hardware store, dinner menu, or IT company from the one they’re comfortable with?

IT ISN’T.

Risk reversal reduces friction

If you need someone to make a change in order for your venture (or career) to succeed – you need to figure out where the friction comes from. Whether you’re trying to work with the pickup driver, golfer, or frequent flier, what creates the resistance that keeps them from considering a change? Risk is a common source.

When we wanted people to change to our software years ago, almost everyone had a 30 day money-back guarantee. A few had a 60 day one. We changed ours from 30 to a full year. The difference in refunds is trivial between 30, 60 and 365 days. The perception of who takes the risk, however, changes completely.

I was on several car lots over the weekend. Of maybe eight different dealers, I met one salesperson who was hustling. He clearly understood that the goal was to get a new customer, not simply to sell a car. Almost anyone can sell a car (or whatever you and I sell), a real salesperson is looking to create customers for life.

Anyhow, this guy offered to send a car home with me for a few days to make sure it fits. Sure, I know how this works. It’s like a test drive on steroids. If they get you to test drive it, they know how much more likely it is that you’ll buy (trust me, there’s lots of data). “Take the car for a few days and see how it fits” is the next step up from a test drive. Even so, it’s a proven risk reversal strategy. We know we’re likely to miss something on a test drive. When our neighbors see the car, when we see that it fits in the garage, & when the rest of the family reacts – it’ll be tougher to return it.

Your challenge: Determine what’s necessary to reduce resistance to the point that your prospects will consider making a change. What risk(s) must you take off the table? “Change” in this case means make a sale and get a new client.

Photo credit: Frank Winkler

Sustainable revenue demands leadership

Recently, an employee of a tool company publicly commented (in a snarky way) about another vendor in their market. The target of his remarks isn’t a competitor. They create tools which complement what’s created by tools sold by the company that the snarky guy works for. Do employees who publicly snark about a vendor (or a client) think about the outcome of a vendor conflict that escalates badly? Perhaps. Let’s take a look at what’s at stake. The situation speaks to the leadership you provide to your people, even at a small company, and how it affects the sustainability of your company, and possibly that of your market.

What does sustainable company really mean?

We talk about sustainable companies and how culture, hiring, marketing, product, service, and leadership all contribute to create a company that lasts a very long time. Let’s tear this down into the pieces you and I can directly relate to. We’ll do it in the context of the two companies I’m referring to, but keep in mind that these things affect every company – including yours.

Many millions of dollars (and other currencies) are made each year from work created by the tools sold by the company that snarky guy works for. The company is rather small and one might think they’re insignificant in the big picture when compared to the big vendors who own that market internationally. You might think the same thing about your business. Don’t. When you look at regularly performed analyses of tool usage worldwide, the snarky guy’s company rarely appears on the list. In the rare occasions when it does appear on such lists, it’s in the second 50 or second hundred. In this market (perhaps like yours), it may seem insignificant. As such, why should we care what one employee said in public, right?

The leadership of that “insignificant” company should care. As should you when your people speak.

The math of an “insignificant” company

While there may “only” be 5000 to 10000 people worldwide who own tools made by snarky guy’s company, a portion of them are generating a good income – good enough to support their families for decades in some cases. This is not “random math”. I know a fair number of these folks. Many have employees. A few have 50 or more employees in the U.S. and/or scattered around the globe, and/or their products are a critical tools for companies with many employees.

When you take that community as a whole, we’re conservatively talking about between 100,000 and 200,000 people affected by the income generated via products created by these tools. Included in that figure are employees, customers, family members of the vendors, client companies, and other groups directly affected by that income. Expand that to the users of the products created by these people by adding those who make a living from the products. Add those making a living where these products are a critical tool in their work day. Now add their employees and families. Add the vendors all of these companies and families buy from. While this tool isn’t a global leader (and that’s OK), it still creates a significant amount of impact. For those who keep the lights on and their kids fed based on income rooted in those tools or businesses run by products created with those tools, it’s quite personal.

I suspect the 100,000 to 200,000 figure is quite low, even though it’s the estimated cumulative impact of one small tool maker who rarely (if ever) shows up on the radar of their industry. Small, much like the impact from any number of small businesses in your town. Including yours, perhaps.

So how does leadership affect sustainability?

The impact of even the smallest of companies must be taken seriously. Your company may seem insignificant compared to large multi-nationals, but the sustainability and leadership of your company has real impact. It affects homes, cars, kids, retirements, groceries, utility bills, and college plans for more families than you may have considered. Your team’s behavior follows the leadership example you set, which reflects upon your community, your company and you. Counsel your people about speaking about your company, your clients, your competitors, and those you collaborate with even in the smallest of ways. The smallest of things start a forest fire. When they do, everyone gets burned. Photo by Payton Chung

Where is the friction in your business?

What do you repeatedly force your clients to do that they simply shouldn’t have to do? Put another way, how does your business frustrate your clients? When dealing with your business, what drives them crazy?

What’s friction?

Can’t open the package without a Jedi sword? Can’t read your boarding pass printed in that microscopic font? Have to do this and this and this and that to buy or pickup a purchase, only to have to start over again? Can’t find out when something will be delivered? Have an appointment window that stretches from sunrise to sundown? Press one because your call is important to us and will be answered by the next available agent?

Yes, those kinds of things. They aren’t the sole domain of the cable company or that big company that’s easy to despise. Small businesses do these things as well, so we have to be vigilant and chase these things out of the building.

Sometimes these things are simple and inexpensive to fix, yet failing to address them creates a point of aggravation between you and your customers. These points of aggravation are often the tiniest of things. Like a grain of sand in your shoe, they could be the start of something much worse if allowed to fester.

Should it fester, you may lose a customer. Losing even one customer to one of these little things will transform that friction-creating “little thing” from inexpensive to very expensive. Remember, losing a customer usually isn’t losing a single sale – it’s losing all future sales from that customer. Friction is expensive.

How do I find these aggravating things?

Ask.

But what to ask? No matter who you’re talking to, poke around in their experiences with you regarding installation, deployment, service, customization, billing, paperwork, repairs, upgrades, financing, returns, shipping, etc. Ask questions about these things using different terms. Repeat yourself until you get the details you need. Using different terms in your questions will provoke different reactions and prod different memories from your customers.

Ask your best customers.

They’re the ones you’d hate to lose. The ones you know by name when they walk in the door. The ones whose names are familiar to your bookkeeper – and not because they don’t pay their bills. They’ll tell you different things than your newest customers, but that’s OK. There isn’t one frustration that fits everyone. Your business has many components. If you sell a number of products and services, you’ll need to ask the best customers of each. You’ll likely get different answers for each product and service.

Ask your newest customers.

Because everything is new, they’re quite likely to be more sensitive to oddities and more observant about every little thing your company does. Listen carefully to these folks. They may mention things that you’re vested in. You might get defensive. Fight that urge. There may be a perfectly valid reason for doing whatever it is. Brainstorm with the customer how you could accomplish this result in some other way.

Ask lost customers.

Did you lose a customer to another vendor? Give them a call, or see if they’ll set a time to visit in person. Make sure they understand that you aren’t there to sell them, but instead, you want to know what went wrong. What could you have done better? How did you frustrate or annoy them? This lost customer probably isn’t alone. Follow up with them once you’ve addressed the things they mentioned. A handwritten card thanking them and briefly describing what you’ve done to correct these things will both thank them and tempt them.

Preventing the growth of friction

Bear in mind that these things aren’t often created intentionally. Most of the time, “they just happen” and we miss them long enough that they become systemic. Once they become systemic, they seem normal and we have to battle a little harder to identify and evict them from how we do things.

Create a culture of ownership for finding and fixing these things. When your team has the permission to fix these things on the spot and bring the situation to your next process improvement discussion (ie: lunch), fixes don’t have to wait. Set boundaries as needed, but be careful to encourage improvement without waiting for seven signatures and a wax seal.

Photo by theilr

Work, Caring, and Filtering Employers

While last week’s “don’t work and don’t care” piece was inspired by comments about millennial workers, those “tests” evaluate things important about all prospective employees. Yet there’s more. One non-millennial responded: “Saw your blog post. Filtering employees is only part of the problem. The other side of the coin is filtering employers.

Exactly. So how do you filter employers?

Don’t filter employers because…

Do you avoid employers who filter prospective employees as I described? Don’t. The more care someone takes when hiring someone to join your team, the more likely that person will fit in and carry their share of the load. Good employers have learned to place small obstacles or tasks in the process to identify those who don’t pay attention to details and/or don’t follow instructions. “Email your resume to gimmeajob@company.com in Microsoft Word format” tells someone you aren’t a bot, you read and follow instructions, and you have a baseline of necessary skills. Can you use Word? Can you email an attachment? Is your grammar horrific? Did you use a spellchecker? If you submit a resume littered with errors, employers will rightly discern that you aren’t a good fit for their work, or the quality their work demands. For some jobs, these kinds of skills things are critical – even if they aren’t the core job skill.

Some employers have a complex interview process. As long as the interviews are engaging, it’s OK. If some interviewers are disinterested or not engaged (such as during a team interview), give the impression they don’t want to be there, or are unprepared to interview you, investigate. Ask about their hiring process. They’ll either be able to describe it, or not. If they tap dance, beware. Ask why they are involved in the process of selecting you as a candidate, but do so late in the discussion. You don’t want probing questions to take the interviewer off-task.

Even so, they need to sell you on their company as a good place to work. How prepared for the interview was this person? Did they seem to know little about you? Did you get the impression they were reading your resume, cover letter and other materials for the first time while conducting the interview? This could indicate a lack of organization, a lack of preparation, a random “Hey, go interview this person” assignment, or it could be that the person who normally conducts that interview is traveling or sick.

Filtering employers

You already know that you’ll be asked if you have questions. Do you prepare for them in advance? It’s clear from my comments that you should expect the interviewer to be prepared – and the same holds for you. The quality of your questions is critical.

Your questions during the interview:

  • Indicate whether or not you did your homework on the company.
  • Identify reason(s) to walk away, or become even more enthusiastic about the job.
  • Help the interviewer figure you out while letting you play detective.

About 20 years ago, I flew to West Virginia to interview for a senior executive-level position. Something seemed off, so I dug deeper than usual. At the time, online information was scarce, except for stock market info. I found news of a buyout, a bankruptcy, & reorganization. I asked about these things during my visit. They were floored – no one else asked about these events. They told me later that these questions were the turning point to them making an offer. I didn’t take the job, but I learned a valuable lesson about homework.

Ask about:

  • … company meetings: Do they have an agenda? Are people there who don’t need to be? Are they frequent or infrequent? Are they productive? These things speak to management style and organization, among other things.
  • … projects: How are projects managed? What happens after a successful project? What about an unsuccessful one? Ask to hear project “war stories”.
  • … the sales team: Some companies have them, some do not. The longevity of the sales team, if there is one, can indicate how things are going.
  • … how they use data: Is there a CRM or other strategic data use?
  • … their on-boarding process. What should you expect day one?
  • … crisis management. How did the last crisis / emergency get handled? What did the company learn from it? Was it something that allowed a change in process / design so it could be prevented in the future? How did this affect the staff?

If someone wonders why you care about these things – tell them that you’re looking for a solid, well-run company to grow with, not simply a paycheck.

Photo by adpowers

They don’t want to work & they don’t care like I do

Human resources. Human capital. Two terms that I really don’t care much for (especially the latter one), yet they attempt to describe what is usually the most important part of your business: employees.

You might think your customers / clients are the most important part of your business, but without good employees who want to take care of your clients, one of two things happens: Either you won’t have any clients or you’ll be doing all the work yourself – which sounds more like a job than it does a business. Two complaints I hear most often: “They don’t want to work” and “They don’t care like I do“.

They don’t want to work

If you have people working for you who don’t want to work, it’s not their fault. It is your company’s fault because the company hired them.

They may be lazy. You may be exactly right about why they are lazy, but it doesn’t matter. The fact that they are lazy and the reason(s) for that laziness are irrelevant. It’s relevant that the company hired them before figuring out they were lazy. Your job as the hiring manager is to find a way to figure out who is lazy (etc) and be sure not to hire them.

Repeatedly complaining (for example) that “all millennials are lazy and don’t want to work” is not only incorrect, but a waste of time. If the millennials your company hired don’t want to work, blame the broken process used to hire them. If three of every 100 applicants show the right stuff, then make sure your process finds the three.

Hiring people is easier if you put a process in place that makes it all but impossible for someone to join your team when they have the attributes of someone who can’t be successful at your place. This process doesn’t come in a box from Amazon. You can’t simply open the box and plug it in. It requires ongoing attention. It’s work. It takes time. It isn’t easy. The process needs to involve the people a prospective employee will work with, and those they will work for.

There are people who shouldn’t work at your place with your people. Your job is to eliminate them before you hire them. To eliminate each attribute that you don’t want working at your business, you add steps to the process that identify those attributes. “Drama queen” is a one of the attributes I eliminate, noting that these folks are both male and female.

Do you want to hire passive aggressive jerks who will tick off your customers? If not, your hiring process needs a way to filter out those people. Sometimes, it isn’t easy, but if you wanted “easy”, you shouldn’t have started / bought a business.

Attributes like lazy, passive aggressive, or any other that cause you to wish you’d never hired someone are no different than “must be able to lift 70 pounds”. They are a minimum qualification for employment. It isn’t the job prospect’s responsibility to apply only for jobs that they are ideal for. That might be nice, but isn’t realistic. It’s your job to sort them.

They don’t care like I do

Of course they don’t. Remember, they aren’t owners, so it will be rare that they will care like you do. They don’t have as much at risk as the owner and they sure don’t have as much potential upside as the owner.

Expecting someone to act like an owner at $10 an hour is silly. Training them to think like an owner and then giving them more responsibility (and more cash) when they act that way is a whole different thing. Some will still work hard, but won’t think like an owner. Some will work hard and think like an owner once they are trained and learn that there are things to be gained by doing so.

A rare few will act like an owner, at least to the extent they can. “These people” will start caring when they figure out that you do. That starts at the hiring time. If you find a way to stop adding lazy, crazy, and dazed to their department, they will notice. If you ask them for referrals, they won’t suggest you hire their dodgy, lazy friends. It simply makes more work for them. Instead, you’ll get the friends they trust to do their part.

Photo by jonny goldstein

“Sink or Swim” is not training

Pentagon Secretary Rumsfeld once said “…you go to war with the army you have, not the army you might want or wish to have at a later time.” He wasn’t referring to the Army personnel, or to their level of training, but to the number of Humvees that were not armored and therefore prepared for Iraq-style guerrilla warfare, IEDs, etc.

While you don’t need armored equipment for your team, they do still need to be prepared to succeed in their roles. Failing that, they will show up and do their best. Rumsfeld’s troops may have lacked the amount of armored equipment, but they didn’t lack training.

That is one of the primary differences between the military and business: Businesses often fail to invest sufficiently in training. It doesn’t matter if they are new to the business or experienced. Your team needs training and equipment. A lack of training might prevent reasonably effective use of the equipment you provide.

Sink or swim isn’t training

Employees are sometimes expected prove their worth via “sink or swim”. They’re expected to get started and become effective and valuable on their own. Failing to do so is “sinking”, and may result in the loss of that person’s job. When the employee is new, and the skill require is sales, sink or swim is usually little more than setting up the employee for failure.

I’ve seen this touted as a means of “separating the men from the boys“, so to speak. The euphemism is about identifying who is ready and able to produce results, but the reality is more nuanced than that. When you put an untrained or poorly trained sales employee on the floor, on the lot, or wherever they work with prospective customers, never forget this: They’re dealing with prospects.

At your car lot or furniture store, you know the business. If 100 people walk in on a Saturday, you can probably tell me within a small margin of error how many are “just looking” and how many are ready to buy. Likewise, you probably can tell me how many of that 100 you’ll likely sell that day. How many of those prospects are you willing to give to someone else because an untrained salesperson loses them? First impressions are everything. If your team is ineffective when the prospect makes that first visit to the showroom, lot or office, you probably know the likelihood that they will return.

Sink or swim undermines a new (or inexperienced) employee’s confidence, which will certainly be reflected in their performance and interaction with every prospect and client. Worse yet, your prospect may leave and never return because they had an ineffective, unproductive experience with someone who simply wasn’t trained well enough to provide for their needs.

Think of the most valuable customer you have. The one who buys furniture every 10 years for their 50 employee office. Or the one with a fleet of pickups for their on-site service people. How would you feel if you found out your new salesperson was sinking when they met the person who would have been your next “most valuable customer”?

Training isn’t fluff. You can tie real dollars to it.

Got the basics?

They’re called “The basics” because everyone should know them. Don’t assume everyone knows them. Train the basics. Vince Lombardi started a championship run by saying “This is a football” to a roomful of experienced pro football players. Take nothing for granted.

As I visit businesses with the intent of making a purchase, I routinely encounter salespeople who exhibit behavior that leaves the impression that they are untrained, or perhaps under-trained. Some are young and perhaps inexperienced, yet some are not as young and not as inexperienced.

Commissioned salespeople walk around without business cards, don’t know their product as well as the prospect, don’t attend to new arrivals “in the sales arena”, etc. At some level, these problems are the salesperson’s responsibility, yet new and under-trained salespeople don’t often realize they are under-trained. They can lose a great prospect who “appears indecisive”, but in reality is annoyed. Ultimately, these issues are on management. Management decides who gets trained, when, and for what skills.

Good salespeople deliver value. I visited a Michael’s Saturday to get a frame re-glassed. The employee in framing told me exactly what would happen, when it would happen, what else I could expect, and the guaranteed service window. This was not a big ticket purchase – yet this person was obviously well trained in what to communicate to me. I’ll go back because that guy made a routine purchase memorable. Isn’t that what you want?

Photo by Jay Phagan