photo credit: rick

One of the things I’ve always counseled you to use in your marketing is testimonials: carefully chosen things your customers have said about their experiences using your products and services.

On Dec 1 2009, that changes a bit.

In some ways, it’s a good thing. It’ll make almost all those lame infomercials edit their fake testimonials.

In others, it’s a bad thing because it will punish (or frighten) good businesses by making them think they can no longer use testimonials or that the ones they can use have to be gutted.

Neither is true.

A great testimonial addresses…

…a common sales objection.

Getting a testimonial – particularly a strong, believable, honest one that directly addresses a common sales objection – can be difficult. Not so much because they are hard to get, but because people don’t always like to talk about their use of a product/service. A lot of that depends on what it is.

Not everyone understands what kind of testimonials are truly valuable. When people tell you they love the product or that they love working with you and your service is wonderful, those are nice and heartwarming comments, but they aren’t strong testimonials.

One type of strong testimonial states specific results, such as “We’re up 70% in same month, prior year sales after working with Mark to improve our marketing over the last 3 months”. That’s a good testimonial, and it’s (naturally) the exact type of thing the FTC doesn’t like.

Why? Because it states specific results that might be 100% factual for one person (or 100, if you have that many), but it still doesn’t mean that every single Joe Blow can achieve the same results by simply falling out of bed in the morning.

If everyone who buys your product can’t typically achieve a documented, 100% factual result stated in a testimonial when THEY use your product / service, you will have a problem using that testimonial EVEN IF 99% OF YOUR CUSTOMERS NEVER USE IT.

Isn’t that grand? “Lowest common denominator” comes to mind.

As you likely assume, these regulations came about mostly because of the bad apples out there. So be it. Let’s get to the details.

Bad apples beware

The new FTC regulations that take effect on December 1 2009 that will require you to be far more careful about the testimonials you use.

Quoting the hard-to-believe results of one highly-motivated person and then saying “these results are not typical” is no longer sufficient. You have to state typical results that your customers get when using your product or service. If those turn out to be difficult or impossible to achieve, expect the FTC to come calling – and not for dinner.

If you haven’t already done so, you need to check your marketing materials TODAY for any claims that – no matter how real and accurate – are not typical.

You can see the FTC-issued guidance on this at http://www.ftc.gov/opa/2009/10/endortest.shtm

This applies to bloggers, advertisers of products/services and many others, so I strongly suggest you give it a look. It’s not a game. Regardless of what party is running Washington, these folks seem to revel in making examples out of business people to ’send a message’ to everyone else.

Sometimes, these things come down very unfairly. Don’t let it happen to you.

More details from the FTC are available here.

Be gone with you, Debbie Downer

Now that we have the “Debbie Downer” stuff out of the way, there is some good news in this because it does punish the slime in your market along with the good guys.

Several things come out of this, but one thing is clear – it makes measurement all that much more critical to your success.

If your product or service can somehow anonymously document what it does – easy for some products and services, almost impossible for others – you will be ahead of the game.

A lot of this applies to software businesses and those with automation in their products / services – but if testimonials are important to your business, measurement might become essential across your entire product line.

Implement results measurement into your products and services. Not only will it help your product / service, but it will help you sell them to those who REALLY need them AND it’ll be the evidence you need to prove the results of typical use.

NO, I’m not a lawyer. If testimonials are central to everything you do, I strongly urge you to consult your attorney about these regulations.

Meanwhile, you should be measuring results. Imagine what will happen if your products / services can prove to your customers what they are doing for them (and what they are not).

That’s why we’ve had this measurement conversation for years prior to the FTC forcing it upon you.

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photo credit: country_boy_shane

I lived in AR and TX during those states’ great “comeuppance” with their teachers (AR teacher certification under Gov Bill Clinton and No Pass, No Play in TX, among others).

It’s always interesting to watch the teacher’s unions protest testing and measurement of the skills of their members. But this isn’t a political rant, it’s an observation about the importance of measurement.

You might face some pushback in your business when you start doing these things – but remember whose business it is, and who is responsible for making payroll.

If you feel any responsibility for your employees’ job security (they should too), then you owe it to them to see who isn’t carrying their load and either fix em or get rid of them.

Every employee in the shop knows who the lamers are. Quite often, it annoys them too.

I’ll leave the rest to Malcolm Gladwell, author of Blink and likewise, today’s guest post. He just happens to use teachers as one of his examples – and an easy to comprehend example at that.

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photo credit: eyeSPIVE

Ever messed up a bid?

Even after 25 years in the IT business (much less other stuff), I find that one of the hardest things to do accurately is bid a sizable time and materials-based project.

If you’re in IT, you know all the reasons.

Stuff changes. Requirements aren’t necessarily what they really are. Features get added, removed, changed and re-added.

It can be troubling if you live by (or try to live by) a schedule.

As long as the communication channels are open, it works out. It works out because over the years, you’re zig zagging across the good bid/ouch line with smaller and smaller zigs and zags each time (mostly).

But I deal in atoms not pixels!

Yeah, that’s another reference to Free. I’ll stop with that eventually.

I wonder how big construction, architecture or engineering firms can afford to do that zig/zag thing.

Pixels are cheap. Atoms are not, especially when you’re talking about a project like a mall, a bridge or 23.3 miles of Interstate highway. Which brings us to yesterday’s measurement discussion.

I was talking to a guy in the construction biz a while ago and asked him about this. Based on all the bidding processes for huge municipal (etc) construction projects, are any of them right? It seems like they all go over budget and over time.

Can you imagine what the expense of being wrong is if you’re the construction, engineering or architecture firm?

Parts is parts

And then I was thinking… buildings, roads and bridges break down into finite tasks just like programs do.

In the programming world – or at least in the academic one – there’s something called function point analysis.

The theory is that you can assess the time/complexity/cost of a project simply by counting the function points it contains. Rumor has it that it works if used properly. Guess how many businesses I’ve encountered using it over the last 25 years.

Doughnut. Zippo. None.

Why? Because it’s hard work. For small clients, it may not be worth the effort. Add to that, it means you have to properly plan and spec the work in pretty good detail. Not a lot of people want to put that effort in before handing a job to a programming staff to complete it.

On the other hand, not even Electronic Data Systems used it when I was there back in the Ross Perot days and we checked, rechecked and re-tested *everything*. Twice. Three times after 5pm.

I beam with joy

Let’s get back to the architects and such.

As I noted, buildings, bridges etc break down into components like beams, walls, pillars, etc. (Now you see why I just had to talk about function points, sorta.)

Like programmers (perhaps more so), these folks deal with complex bids with lots of variables.

They bid a bridge job because they have the best bridge designer in the state. Or condo. Or stadium. Whatever.

3 days before the bids are opened and awarded, she gets hit by a bus. Or gets a 3x salary offer from some Middle East engineering firm. Or disappears to find herself by walking the Great Wall.

Regardless of the reason, she’s gone.

It isn’t unusual, but it sure will throw your design time estimate a wicked curve ball and any technically-oriented business might see this.

What if?

What if your design software had the ability to measure how long it took to design an I-beam that will hold a dynamic load (ie: a load that changes/moves). Or how long it takes to design a retention pond at a factory.

So what, right?

OK…Imagine that your design software has the ability to do that for each staffer, broken down for each possible component of a building, screened-in patio, bridge, truss, lake, or other feature.

Like function points in software, the design software might keep track of all this based on complexity – such as by the number of load points and force vectors, or maybe square footage and materials have an impact.

Maybe experience and type of training comes into play. Maybe you learn that the designer’s college choice impacts these numbers.

Speed, Quality, Complexity

Now, imagine that this software can aggregate all this data by employee, by component.

With a little extra effort, you eventually figure out which designers are the best at designing each type of component.

A combination of speed, quality and work complexity ends up telling you exactly who to allocate to a particular piece of design and most likely that comes along with a very accurate estimate of the time needed to do the job.

If you break down the design of the most complex project you ever had, you know how many I-beams, trusses, concrete walls, pillars and so forth there are, as well as what kind of loads they have.

And now – because you have measurements of what the real work takes – you can make a bid that is far more accurate than the guesses those other folks are making.

Now imagine that you make the software that allows for this kind of measurement.

Your customers are the ones who bid more accurately. They win more bids. They become more successful. Your software becomes their secret weapon. You know what that means.

Imagine soft puffy clouds

Now… consider this discussion in the context of the service you provide, from programming to sports writing to graphic arts to small engine repair to architecture to plumbing or whatever.

You may already do some of this assessment by the seat of your pants / gut feel. Is it accurate? Be honest with yourself, it doesn’t matter what you tell me.

But would it be as accurate as an ongoing set of measurement data that is based on your current staff mix? I doubt it.

Would it help? Let’s see.

• Imagine how much easier it would be to manage a project if you knew exactly what each component required time-wise.
• Imagine how much easier it would be to manage a project if you knew exactly how to allocate your people to different details of the project.
• Imagine what your sales staff would face out in the field when they realize they can confidently bid a job and know it’ll come in on time and on budget and they can whip out performance reports to prove it.
• Imagine how your testimonials would change and the impact that would have on prospects.
• Imagine how your customer retention numbers would improve.
• Imagine what something like this could do for your staff’s morale. Never a late project, ever again. Well, maybe almost never.

Measurement. Might be a good idea, ya think?

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photo credit: BruceTurner

Despite Chris’ assertion that information wants to be free, some of it just isn’t. Sorry.

In fact, some information is worth far more than the paper it is printed on (or the pixels it lights up).

For example, imagine that your company publishes technical articles. Short, sweet, fine-tuned to a specific purpose for a very specific audience.

The trick is making money from them, so maybe you’ve found that the best way to do that for your company (vs all other models) is to charge for access to your publication.

The Wall Street Journal does this. So does Investor’s Business Daily, as do a number of publications (online or print) in technical fields like auto mechanics, programming and FOREX trading.

Prove it

One of the biggest challenges these firms have is proving their publication’s worth at renewal time.

When renewal time comes up, or the charge appears on the credit card bill, the customer thought process goes something like this:

Come on, why should I pay $300 a year for a technical investing article resource when I can find everything Google has indexed for free?

The answer these businesses might commonly respond with include some of these:

• Because it’s well-indexed so you can quickly find the exact trading info you need.
• Because it has a search engine that understands investing terminology so you can quickly find exactly what you need
• Because our publication is fine-tuned to the audience’s investing style (or whatever). It’s as if it was written solely for day traders with between $4200 and $6500 to trade per day.
• Because it includes proven step-by-step guides for trading without losing my shorts (pun intended).

All of that is warm, fuzzy but not so exciting.

#3 and #4 aren’t bad but #1 and #2 are Google’s domain. They get better at it every day and paying you for it is going to get less and less likely unless you are much, much better at it in your specialty area.

I got your proof right here

Bottom line, almost all of that is pretty subjective. Bean counters (and spouses?) want hard numbers: “Why do you need this?”

Why not let them tell you?

If your article instructs them and provides them with a skill or offers a way to discover a new technique, make sure your feedback mechanisms (on the site or whatever) allow a way to say “Dude, this article saved me 2 or 3 days of struggling with this task”.

And yeah, it’s a lot like a Digg or a reTweet, but it’s more accurate than that.

The mechanism that works for you might need to be a number they can type in, or it might be a radio button with selections like “Waste of my time”, “Saved me maybe an hour”, “HUGE, DUDE. This got me back on track after a week”.

Whatever it is, it provides them with a way to tell you how much time, money, etc your information, your service, your product, your help saved them.

Think about where you could go with that info, even if it is largely anecdotal and not scientifically defensible.

If you have 100 clients and they (on average) provide feedback via a mechanism like this that says you save them 112 hours per year, seems to me that your prospects might want to know that information.

It also seems like it would be a great way to totally defuse the “your price is too high” argument (and maybe a number of others).

It might tell you how outrageous you can make your money-back guarantee. If it’s 30 days but it should be a year or 5 years, these numbers will give you some insight into it.

Who knows, you might even find out that your pricing and your value proposition are in vastly different places.

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While the news is littered with discussion, arguments and political posturing about the U.S. Government bailout of the financial industry, there’s no meaningful discussion about more than 27 million Main Street businesses that never get that kind of help.

So, being the nice guy that I am:), I’ve assembled 5 strategies to help you weather the storm swirling in Washington and New York, without spending a cent of taxpayer money:

1. Measure twice, cut once
2. MACTAROMI
3. Dot those i’s, cross those t’s
4. Help them thrive
5. No more secrets

Let’s talk about each of these.

Measure twice, cut once

Be brutal about getting rid of unnecessary overhead. I’m talking about the kind of stuff you don’t need and never needed, NOT the kind of overhead that you can tie to revenue and profit.

For example, I’m not talking about laying off quality staff members. Instead, I’m looking directly at those expenses that shouldn’t have been there in the first place.

Ever wonder how a big company can cut 25,000 employees and still manage to not only stay in business, but continues to deliver their products and services? Did they ever really need those 25,000 people?

Look at your waste. What gets thrown away? Can manufacturing waste be reused or resold? Can it be used to serve another purpose? Look at every consumable with a critical eye, not just for elimination, but for re-use or replacement by a more efficient product, commodity or service.

MACTAROMI – Measure All Campaigns To Accelerate Return on Marketing Investment

Yeah, that acronym is a little cheesy:)

While some will suggest that you cut your marketing expenses during tight markets, I simply can’t agree with this advice. Do you really want to disappear off the radar of those who are still buying? I don’t think so.

If you are measuring your marketing response and know where the best ROI for your marketing dollar comes from, you should be spending as much as you can to keep bringing customers to your door. Of course, this assumes positive ROI from those marketing campaigns.

It isn’t just about which marketing effort generates the most responses, but also the return on your advertising dollar. The right combination will have you happily filling out deposit slips while your competitors wonder where their customers went.

Still, some are sorely tempted to cut all costs, including marketing. If you’re going to do so, knowing which efforts produce the worst results could result in two thought processes: Cut that campaign, or figure out why it isn’t working and correct the problem.

On the other hand, if you don’t know which marketing efforts actually work because you aren’t measuring their response, how would you know what to cut? You could easily cut your most effective campaign.

This is a great time to start measuring if you aren’t doing so.

Dot those i’s, cross those t’s

Ever notice that people perform long needed home repairs or improvements right before they sell a home, or that they wait until in the middle of winter to fix a draft under the basement door? Contractors could tell you plenty of these stories.

In tight times, the last thing you need is to have leaks of any kind, particularly revenue pouring down a storm drain.

Make sure there aren’t any gaps in the movement of paper around your office. One lost piece of paper might lose your next million dollar customer (could be a referral you miss out on…)

Create checklists to make sure that no ball gets dropped and permanently incorporate the lists into your workflow.

Make sure leads are getting called back, scripts (If you have them) are being followed, sources of leads are being recorded and that return calls, emails and faxes are being made on time.

If you don’t have a “What’s next?“, find or create one. If you have one, make sure everyone is well aware of it and selling it.

Monitor every delivery and installation and follow up to make sure the customer was thrilled.

Ask for referrals as part of every single sale. “If you have a friend who needs our kind of help, we’d be honored if you’d recommend us. Here’s a card for 5 of your friends.”

Every time another business does something to annoy you, write it down and dig around in your business to make sure you aren’t doing the same thing. Then fix it. Today.

Do the simple, obvious things that you know you should always be doing, but didn’t because there was always plenty of business. These things might just be the difference you need – and they might just turn out to be the boost that catapults you into that next growth phase.

Help them thrive

Both your staff and your clients can use all the help they can get.

For your staff, look for those that are struggling. Don’t wait for them to pull themselves out of a sales slump. Help them. Buddy them up with a salesperson who is doing well these days, even if you have to pay the successful buddy an extra point or two of commission as a thanks. The more success encountered by the least successful salesperson, the better things will be for everyone.

For your clients, look at these 5 things for their business (and don’t stop there if you have ideas). How can you help them become more efficient? How can your products and services make them a leaner, stronger, higher productivity business? It might just be a piece of advice that came from a success that you had in your business. The last thing you want is the failure (or even a downturn) for your customer.

For your prospects, do the same thing. Maybe they’re buying $12k worth of stuff from someone else every year, but that might change if you’re the one offering them some help to assure their success. A great way to do this is by sending them your client newsletter, which shouldn’t really be a sales piece.

No more secrets

No matter what your state of mind about the current economic news, you simply have to recognize that news of rough economic times might concern your staff far more than it concerns you.

If you’re doing a good job of taking care of business, you might still be pretty confident of hitting your numbers and continuing to grow. Losing the business, or laying off people might be the farther thing from your mind.

However, you are not your staff.

They might be petrified about the news. They might have friends or family members who just got laid off. Do you really want them focused on the latest gloom and doom on CNN (much less the local gossip), worrying about how they’ll feed their kids if you lay them off, or would you prefer they watched the tight tolerances in your manufacturing shop because they know things are OK in your business?

Put yourself in their place: Wouldn’t be nice to know that sales were flowing in steadily and that making payroll is not a touch and go situation?

Ask your staff what they would do to improve productivity and cut unnecessary costs, making sure to let them know that you are working hard to make the company a stronger employer and that their help is essential to that process.

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Several of my clients use direct mail for the obvious reasons – it works. Like a chainsaw in the hands of the skilled artisan, the results can be amazing.

Or they can be downright awful.

Common mistakes people make when using direct mail:

• Talking about the wrong thing
• Not knowing your numbers
• Making assumptions
• Not segmenting your mailing

Let’s look at each of these direct mail mistakes (yes, they could also be made in other media).

Talking about the wrong thing

You might remember a project from several months ago where we talked about political candidate websites and what you can learn from them and their signup processes.

I’m still on all those lists, mostly so I can see what techniques they’re using.

One of the candidates keeps emailing me at the end of each month, asking for a contribution and reminding me that the campaign contribution reporting period ends the next day.

As if I care.

I’m a voter, or in small business terms, a prospect.

I don’t give a flip about campaign reporting periods. I care about issues and what a candidate is going to do about them – something rarely (if ever) mentioned in detail in their contacts.

You wouldn’t offer to talk about AARP to a teenager. Why would you contact your prospects and talk about something they don’t care about? Don’t do it.

Not knowing your numbers

Before you stick that thing in the mail, you better have way to track who responds and of those who respond, who orders.

Yes, I mean keep track of and take action based on: How many you mailed, how many the mailing caused to respond, or how many of those who responded actually bought.

Making assumptions

In particular, making assumptions about the relationship you have with the person you mailed to.

I received a piece of mail not long ago that was personalized and made reference to things I had done in the past with this entity, yet made a slew of inaccurate assumptions about our relationship.

The result? The mailer hit the trash before I finished reading it.

You wouldn’t steal a kiss at the front door as you picked up someone on a blind date. Don’t make assumptions about the relationship you have with those you are mailing to.

Not segmenting your mailing

If you were doing the mailing for Ford Motor Company, would you send the same brochure to everyone in the country?

Of course not. But you probably do it with your mailings.

• The same people who buy a Mustang Cobra are not likely to be buying an Escape Hybrid.
• The same people who buy a F350 Diesel are not likely to be buying a Probe.

And yes, it is possible a family might have both, but your mailing’s goal shouldn’t be to sell BOTH, or you’ll end up sending 300 million identical mailers out and getting 0.0000001% response from them.

• You send the camper and boat owners, construction business owners, farmers and similar businesses info about the heavy-duty diesel trucks.
• You send the Mustang Cobra mailing to successful people in the right income brackets and age groups (if you are Ford, you know exactly what those brackets / groups are).
• You send the Escape Hybrid mailing to people who subscribe to Mother Earth News or Money, as well as kayak owners in the Pacific Northwest. But only those in certain income brackets.

You segment your mailing rather than rain huge piles of random paper down on their heads that do little more than empty your bank account.

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