photo credit: elbfoto

Last time we talked briefly about things to consider in the early going of the business you just started.

We talked a little about the product/service, but focused mostly on some basics about licenses/permits and getting supplies with a little taste of business model talk.

The reality is that we shouldn’t have talked about most of that stuff, but we had to start with that conversation because it’s the type of thing new business owners expect to hear.

You might be thinking “I’ve already got a product, I’ve already got a business (even if it’s only a few days old) and I need to know what to do to start. NOW. RIGHT NOW. So help, already…”

Problem is, that’s not the best place to start if you want to build something lasting.

Fake left, go right

Sorry for rushing ahead last time, but I wanted to get you into analysis mode just a little bit before we moved ahead (or back) to this step.

We did talk briefly about the business model and I hope that provoked you a little. Ideally, it made you think that you might not have all the info you need to work out the details of your model. Those of you who thought hard about it probably wondered if you didn’t have a lot more work to do.

You do.

Before you order those business cards, buy those supplies, determine your costs and set your prices…you need to research your market.

This means far more than doing a keyword check to see how many Google searches there are for “gold plated harmonica” (if that’s your business), much less finding out if GoldPlatedHarmonica.com is available and at what level the competition is already delivering these items. Those things are just part of the process.

Questions, questions

How much do you really know about the market you’re entering? Assuming the market isn’t brand new, have you researched industry product, service, supply and performance trends? What do they indicate as areas of opportunity? Areas to avoid? What are the emerging product/service trends in this market?

Are you familiar enough with your prospective ideal customer to enter their market? Or will you stand out in the wrong way and alienate your business from them?

Who buys gold plated harmonicas? Where do they live? What kind of stores do they purchase music supplies in? What else do they buy at the same time? How many are sold per year? Where are they purchased – online, in stores or both? How many are purchased annually? Are their peaks and valleys in purchasing habits? Are there peaks and valleys in supply? Are there legislative, import or similar issues that you must deal with at startup or on a one-time basis? Are there any liability concerns for the product and its use?

How many do they buy over their lifetime as a purchaser of gold-plated harmonicas? Is there a progression of better and better purchases? Is there the possibility of referrals by your existing customers to others who favor gold-plated harmonicas? Are there opportunities to render service, deliver purchases or offer training classes?

At what age do people start upgrading to gold-plated harmonicas? At what age do they stop purchasing? How do people decide to be in the market for gold-plated harmonicas? What do they buy in the year or two prior to moving up to a gold-plated one? Where can you buy replacement parts? Is there a repair market or do people replace them? Is there a scrap market? (they are gold-plated, after all)

Who dominates the market today? Why do they dominate the market? What will you do to set yourself apart from them? Is it possible to partner with them?

These questions come into play when writing a marketing plan but many of them also have bearing on your business model / business plan.

Are you asking enough of the right questions? Are you doing the research necessary to assure that your business plan / model make sense given the market of available buyers?

These questions are not intended to scare you out of a market. Quite the contrary, they are intended to make your entry strong enough to keep you there.

photo credit: Sebastian Mary

Recently I received an email from a reader who said my blog made them feel like they had come in during the middle of a movie.

Why? Because they’re at the startup stage in their business, while many of my posts focus on existing businesses.

Fair enough. Let’s talk about startups.

The overwhelming load at startup can freeze you in your tracks. You’re just starting to learn how to market (usually). You may need to know where to find less-expensive supplies, how to introduce your product to customers and how to price what you make/do.

Best of all, you’re trying to figure out how to do all of this on a limited budget without feeling like your investment is as fickle as a bet at the horse races.

It’s a tall climb. It feels like there’s so much you’re supposed to do before you start and the list gets longer on opening day.

What Nike would say

The key is to start.

People freeze in pre-launch because they’re worried about everything being perfect…which frequently breaks your focus on starting. You may have heard this described as “perfect is the enemy of good” (or “of done”).

Don’t you need business cards first? Or a fancy color brochure? Or a sign? No, no and maybe. Where a home-based manufacturing or service business is concerned, the answers are likely no, no and no.

Permits: You need to take care of whatever permits, licensing and tax registration requirements exist in your state/community/neighborhood. Not optional.

Business cards, stationery, brochures, etc: I still don’t have a business card. I just haven’t gotten around to it. In my business, people who meet me almost always know or have heard of me – and that’s intentional. I make it super easy to find and contact me, yet I haven’t met many of my clients face to face. If you sell what you make on the internet, you might not meet your customers except at a trade show (trade show prep is another post). You may absolutely need a business card – but it shouldn’t stop you from opening the doors.

Is it an attractive model?

You might be just starting to figure out how to price your products and services. Typically, people in a new business start as low as possible, thinking that’s their “in”. Price should never be your only competitive edge. One edge, sure. Only edge? Never.

Setting a price depends on your business model. If your business model doesn’t makes sense financially on day one, it might never make sense.

Start by determining your fixed and variable costs. Fixed means “expenses incurred even if you don’t sell a thing”. Variable means “expenses that change as sales volume changes”. Of course, you’ll want to have some money left for your salary, taxes, utilities, marketing, support/service, and profit margin.

This requires knowing your numbers. Knowing what every supply costs, knowing how much time processes take so that you know your labor costs, whether you or someone else is performing that labor. Use a yellow pad, spreadsheet, whatever. Don’t get tied up by the mechanism. Start.

Note: Profit is not salary. More on that another day.

Don’t forget the locals

Everyone looks on the net for quality supplies at low prices, but don’t forget the locals. You might be surprised to find that you don’t need to pay always-rising shipping costs (because “free shipping” isn’t free) to buy beeswax from three states over because there’s a beekeeper in your community who can deliver it *today*.

You might have to buy online at first, but never stop talking to customers and friends about your supply needs. Find online communities of people who make similar products or serve similar customers. For handmade goods, the communities at Etsy.com are good and there are others out there in every niche. People in these communities are surprisingly helpful and will tell you things a website/catalog wouldn’t ever mention.

Feed your mind

No matter how insane my schedule, my daily ToDo list includes a page from Peter Drucker’s and John Maxwell’s daily readers. They’re a great centering read to start my day. Don’t underestimate the value of this.

Next in this series, identifying who’s just right for your porridge.

photo credit: Zigar

When your store is out of stock on an item…what does your staff do and say?

When I was out of state not long ago, I looked around for a pair of light hikers for everyday wear. I knew exactly what I wanted right down to the model name.

I visited a locally owned store, but they didn’t have my size in stock. A few days later, I visited a box store. They had the shoe on the wall (which is never my size), but they didn’t have any others. They didn’t even have the match to the one on the wall.

As I got into the car in the box store parking lot, I called the locally owned store again just in case they had some new arrivals. Nope.

They offered to order a pair for me, but I told them I was visiting from elsewhere and wouldn’t be around when they arrived.

At this point, they had choices:  Focus on the sale, focus on the customer or try harder.

What’s your focus?

If your sales people are trained to focus on the sale, they might say “Nope, we don’t have any” and be disappointed that they didn’t get a sale. If that’s the end of the conversation, your customer might go elsewhere – losing the sale and the customer.

If your sales people are trained to focus on the customer, they might say “Nope, we don’t have any. Have you looked at (competitor number one) or (competitor number two)? They both carry that brand.”

If your sales people are trained to focus on keeping your customers happy, they might say ”Nope, we don’t have any. If you come by and let us fit you in a similar shoe in that brand, I can order that model in your size and have it shipped to you. If it doesn’t fit like you want, we’ll take care of you until you’re happy or we’ll give your money back.”

What they did was refer me to two of their competitors (one was the store whose parking lot I was in). The second one had my size in stock, so 20 minutes later, I had my shoes and was heading for the in-laws place.

The “try harder” choice might not have been what I wanted, but I wasn’t given a choice. Keep in mind that you can always fall back from the “try harder” position if the customer isn’t interested in or cannot use that kind of help.

The important thing

You might think that the locally owned retailer lost a sale, but that isn’t as important as keeping the customer over the long term.

While I wasn’t able to buy the shoes from the place I wanted, they were able to help me find them.

They could’ve run me off quickly by saying “We don’t have that size.”

They didn’t do that. I suspect their handling of the call was the result of training driven by a management decision.

I wasn’t a familiar voice calling them on the phone. While I’ve bought from their store on and off for 20 years, they don’t know that because they keep paper sales tickets. I’m not there often enough to be a familiar face / voice and had not been in their town for two years.

Yet they treated me like someone they want to come back.

Do you treat your customers that way? Do your online competitors?

Competition from tomorrow?

Sometimes business owners complain about online competition.

Yet online stores can rarely provide instant gratification. It’s difficult for them to help you buy something you need today for a meal, event, dinner, date, meeting or presentation happening later today.

They can rarely deliver the kind of service a local, customer-focused business can offer.

Online often gets a foothold when local service and/or selection are poor and focused on the wrong thing. Even with online pricing, a product isn’t delivered until tomorrow.

When you aren’t competing strongly against tomorrow, you really aren’t even competing against today.

Focus on helping them get what they want and need. Whether they are local or remote, customers just want to be well taken care of and get what they came for.

photo credit: ClaireDelRey

We almost didn’t open it, thinking it was junk mail.

Why would the University of Georgia send us mail way out here in Montana?

We aren’t alumni. Our kids don’t go there, nor do we have prospective students considering the school.

The letter was addressed to “The Riffey Family” (printed, not hand-addressed), which may have subconsciously given it a chance it normally wouldn’t have received.

The postage applied was pre-sorted metering like that from a postage machine. Result: It looked like any other junk mail with the exception of the “family” thing.

The letter made it home from the Post Office only because I thought it might be something related to my wife’s doctoral studies, even though she had never mentioned UGA to me.

Blondie

Months ago, we had to put Blondie (our 11 year old Golden Retriever mix) to sleep.

She was suffering from painful arthritis and surgery to repair tendons hadn’t helped her escape a life that had become much like walking on broken glass. Our oldest son came home for the weekend because he wanted to be with her. They hadn’t even charged us for the euthanasia, probably because we’d spent so much on Blondie’s care with them.

The letter was about Blondie. It came from the development (fundraising) office at the University of Georgia Veterinary School.

A letter that almost didn’t make it home. A letter that almost didn’t get opened.

A letter said that our vet, Dr. Mark Lawson from Glacier Animal Hospital, had made a donation to the vet school in Blondie’s memory.

Think hard about your mail

Imagine if we hadn’t known that our vet had made that donation…all because the envelope carrying that notification letter looked “too junky”.

Think hard about your mail.

It does no good to spend time and money sending mail if it never makes it home from the post office. It isn’t just about paper costs, printing, postage costs and the speed of slapping on pre-printed labels.

Everything ON the envelope requires thought because someone, somewhere HAS to decide to open it…and if they don’t, you just wasted time, money and an opportunity. Perhaps more.

Everything IN the envelope requires thought. You might have one shot to make an impression and/or provoke an action.

If you don’t send mail to people, keep in mind that the same considerations apply to anything else you put in front of customers and prospects. If it looks like junk, it might get treated that way.

P.S.

Would you take your dogs anywhere else? What a nice gesture. Wow.

photo credit: db Photography | Demi-Brooke

All of us have heard “Perfect is the enemy of good.”

This post defines it pretty well.

To me, “Done is the engine of more” is pretty clarifying.

photo credit: opensourceway

Here’s your sign.

While it is a well-known “redneck” comedian punch line, it’s also something you should be looking for.

Some signs you must seek out, while others have been right in front of you all year long.

Many of those signs are buried in your existing business data.

Habits

Your business data illustrates your customers’ behavior, including buying and service calls. Some companies use it, some don’t.

For example, I realized today that I hadn’t sent out thank yous to a few clients. It’s been a very hectic, deadline-filled November and December and this is something I usually do right after Thanksgiving.

Not this year. And no, it wasn’t on my calendar because it’s just ingrained behavior. Bad Mark. Bad, Bad, Bad.

When I do remember this (and now, when it pops up on my calendar), I use high-end vendors to ship items like fresh or smoked salmon to a short list of folks that I do business with year-in and year-out.

One of the reasons I forgot? I didn’t get a catalog from either of the two vendors that I usually use. Well, sort of. I got a catalog two months ago, but that isn’t prime ordering season for “corporate gifts”.

The problem with this is that these businesses know when I order. If they look at the data from prior orders, they could *predict* when I place an order and what I might buy, much less where I’d send it.

Predictable Male Behavior

If I bought a two pound smoked salmon for the last five years, they know this because the ship to isn’t my name or address (not to mention the “It’s a gift” checkbox on the order form).

Given typical male shopping predictability (“get in, get out, move on”), they could have won the order by simply dropping a card in the mail or sending me an email saying “Hey Mark, we appreciate that you’ve ordered our delicious smoked salmon as a gift for the last five years, would you like us to send Joe another two pounds or would you prefer something different but in the same price range, such as our crab sampler?”

Or something like that. How tough would that be? No cold call. No catalog. Just an email from data that already tells them how I behave.

Do you want to do this for everyone? Probably not, but it would be of use in concept at the very least. Look at your order/sales data. Not just across the board, but for your best customers, however you define that. When do they buy? Might be a good time to place a reminder in front of them.

Look for the heat

Have you ever looked at a heat map?

On a heat map, the “hotter” looking places are either the locations where most people click or they indicate where eye-tracking tools determined that people are looking most of the time when they view a page.

Below, you can see an example website heat map illustrating click locations.

The red places indicate locations where the most people clicked.

The yellow and green areas are slightly less popular click locations and the blue are even less frequently clicked.

In other words, red is hot, yellow is warm, green is cool, blue is cold – just like on a graphical heat display – only this one shows the locations where people click on this web page.

Videos also do a nice job of illustrating data on a heat map, like this click location map.

This video shows a heat map eye movement on a video advertisement and the results aren’t what you might assume from seeing the still preview image.

Stir

Like any other measurement device, tools like the heat map help you understand if your site is well-designed for your user community (they are not alike from niche to niche) and can indicate usability issues, copywriting problems (and wins) and design strengths and weaknesses.

Your sales/order data is full of behavioral information.

People tend to be visual learners. What if we stirred these two together?

What would you learn if you looked at your calendar overlaid with a heat map based on your lead, sales, order and service data?

photo credit: makelessnoise

Every year, in fact – every month, I have some formal “airplane time” set aside for putting thought into where my business is, where it’s going and what adjustments it needs to zig-zag its way to where it belongs.

Ultimately all of that relates to where it leads you, how it changes your business and hopefully, your life.

Since preparations for an all-out-assault on the in-laws’ place are in their final hours, stocking stuffers came to mind.

Stocking stuffers for your business, that is.

Stuffers at all levels

When I sit down for one of these sessions, the proper mix of present, past and future is always on my mind.

On top of that stocking is the a gift from the past. If you think back, you’ve had failures. Forget ‘em. Dwelling over them is a waste of time and it’s wrong kind of self-talk. At the same time, you learned lessons. Never forget those. Leverage them. They’re a gift if you learn from them.

Which of these lessons are possible to repeat? Whatever they are, put systems in place to help you prevent them from ever happening again, just like the systems you have in place to manage and organize the rest of your business.

What have you learned from the systems of your business’ past?

Digging deeper

A little further down in your stocking is a gift from the present – What your business is doing today.

Look hard at your existing revenues and where they come from. What areas can have layers (or ladders) added? Which areas can be transformed into recurring revenue? Of the customers you have, what needs do they have that you aren’t serving? What can you do to build a stronger foundation, infrastructure for your business today that will serve your customers better?

If you have staff, are they creating enough value to make it easy to keep them on the job? If not – it’s your job to fix that. If you haven’t created work for them that generates profit (directly or indirectly), find some even if it requires training them to improve their value to you and to their family.

Stability today is what gives you the ability to think clearly, breathe and create the business you had in mind when you started. These steps are what help you get there. Every day, work on one of them. Pick the one that can impact your business the most and knock it out.

At the very bottom

Dig deep into your stocking. At the very bottom you’ll find a permission slip. That’s your gift from the future.

It’s there to grant you serious time for thought, one of the best gifts you can give yourself.

Choose an afternoon or a morning, whatever works best for you. Rather than spending time in the present, take an hour to look far enough into the future to see the business in its ideal state.

If it was hitting on all cylinders, what would it look like? What kind of customers would line up to do business there? What would you know about their needs and wants? What products and services would your business offer? Think abou every single aspect of that “perfect” business. What makes it resilient? What kind of innovation fuels its growth?

What would your staff’s experience include? Would you even have a staff?

Layers

In this “perfect” state, what would your involvement be? You might be so excited to get to work each day that you can’t sleep past five a.m. Or you might stop by the business once a week if you feel like it. Whatever seems right for you.

With those things in hand, work backwards from that ideal state to today, layer by layer, year by year, month by month. With each step, ask yourself what it would take to make each aspect of this future vision happen.

Work your way back to today. Those layers…they’re the 10,000 foot view of your plan. When you’ve worked your way back to today, you’re ready.

The next step is to work the plan that gets you to that desired state.

First, you’ve got to come up with it. You have half a day. Go.

photo credit: Délirante bestiole [la poésie des goupils]

Our clients are so stupid!

Is that your company’s vibe?

If you aren’t sure, ask the people who staff your front desk, sales department and/or customer support/service positions.

At one time, the majority of my software customers were studio photographers.

Their industry was making the massive shift from film to digital. Prior to that, many (if not most) of them had a love/hate relationship with computers. Digital *forced* them to deal with computers and business growth pushed them there as well.

It wasn’t at all unusual for a photographer to apologize for being “stupid” (their words) when asking for help, because they weren’t “experts on computers”.

I reminded them that we’re all stupid about something, noting that I’d look pretty stupid if they started asking me questions about posing, lighting and other technical things about their business. Photographers back then (late 1990s – early 2000s) usually weren’t computer experts and didn’t need to be. Today, technical expertise is a necessity in their business thanks to digital photography and videography.

Unicorns and Clouds

One of my first duties in the technology business was “dealing with users”. I was trained early on that the people on the other end of the phone paid the bills.

Fast forward a few years… A small handful of people are discussing various technology topics and one says “How does one explain to a customer that there is no ‘cloud’? There is only someone else’s remote server. There are also no unicorns.”

Naturally, the wiseguys call this person out for claiming that there are no unicorns, but soon the conversation resumes in technoworld.

At first, this person was reminded that, technically at least, a remote server isn’t the same thing as a cloud.

One tried to keep the conversation civil, wondering aloud if the easiest way to explain it was to ask the customer to “define the word ‘cloud’ as if you could find it in Webster’s dictionary.” He continued noting that a cloud is a group of servers and that the number and location of those servers could vary.

The original questioner remained in “my customer is stupid” mode by commenting that the customer’s data “lives” somewhere and that it isn’t just floating in space, following that with a comment that perhaps a cloud is a “server with blue spray paint and cotton balls.”

It was noted to this person that a cloud and a server are far from the same thing, offering that “a cloud is multiple redundant servers with the ability to fail over, load balance, etc. not just one box in granny’s house out of state”.

That got nowhere and was quickly rebuked by “This customer isn’t that smart. Says he doesn’t want his data on a server, he wants it “in the cloud”. I think he’s watching too many television commercials.” followed by “As I sit here at home backing up my entire website via FTP before updating our shopping cart software, bored silly while it takes forever. Considering how long it’s taking me to back up my website, I can’t imagine why this guy wants ‘cloud’ storage”

Enough!

At this point, I’d heard enough and said this situation shows why he needed to have established a position as the “expert” in his market. His response: “That’s what I like about my other business. The customers don’t presume to know anything about it.”

It was painfully clear at that point that he wasn’t interested in hearing legitimate reasons on his customer’s behalf. He just wanted to whine about a customer others would be glad to have, but I wasn’t done. I noted that his customer’s business might require travel and thus need access from anywhere.

He didn’t care.

I then suggested (with a touch of sarcasm) that his customers might have picked up an airline magazine (which often discuss business topics, given their market) and that he could have defused the whole thing by educating his customers with a pre-emptive “This is a cloud and why you might (or might not) want to use one” blog post.

Your customers want your leadership, not your disdainful, disrespectful scorn. Be their expert, but never underestimate them.

photo credit: write_adam

As I look back over the last 12 years or so, I’m convinced that Scott Dinsmore is exactly right.

None of us have least bit of a clue what we can really do. Not the faintest idea.

On the contrary, we’re all fairly sure what we can’t do. But the whole “can’t” thing is really way too easy. It’s the can that hard.

“Can too”

Remember when you were a kid and your best friend or your brother or sister would get into a silly argument? One of you would say “Can too!”, to which the other would reply with an insightful “Can not!”?

While it sounds a lot like most modern-day political conversations, the same thing goes on inside our heads all the time.

Have you ever put any thought into which one of you wins? I mean the yous inside of you.

Rather than get you all weirded out with touchy-feely stuff, here’s an example.

Except for a couple of months when in Tennessee, I’ve been running several times a week since sometime early this year.

I’d go to the place where I run and get after it on the elliptical or the treadmill (usually both, back to back) until I’d run two or three miles. On a big day, I’d go five. As I got back in the groove from my time out of town, I managed to get 12-20 miles in every week.

Those miles were chipped away at what seemed like a decent enough pace until I was done. Despite the drenched clothes and sometimes grumpy knees, it hit me one day that I was slugging along at a rather generous pace of 11 to 14 minute miles.

Faster than your grandmother, but not what I expected after months. Something bugged me.

Kinda like Monk

It was that danged Nike+ smartphone app.

Like most running/hiking tracker applications, it has a GPS and a motion sensor so it can record your pace and distance.

The troubling part is that there’s a records display and the 10k one was empty. I’m one of those undiagnosed sometimes OCD types about some things (we all have “those things”, it seems) and that empty spot just made me nuts.

One day, I couldn’t take it any more. I decided to fill that box one Wednesday a few weeks back.

Took me 90 minutes the first time. Pathetically slow, but the box was filled with nowhere to go but down (in pace/time). In over 50 years I had run a 10k once.

Two days later, I ran another one. Then a weird thing happened.

My regular run pacing started to shrink like a fat guy locked in a sauna. Instead of 15 minutes on average to do each of slightly more than 6 miles, I started seeing my long run fastest-mile-pace dropping from 12 or 13 minutes per mile to nine and change.

Because I didn’t know I could do that, I guess I just did. The Nike slogan suddenly made more sense than ever before.

Start.

Not all that long ago, a guy told me I couldn’t do something. Said I’d be back in 6 months.

So I did it anyway…12 years ago.

The specifics don’t matter. The lesson is simple: Start. Then don’t quit.

I know…it’s a platitude you’ve heard 1000 times. Have you heeded it?

If you’re going to invest your time, energy and money in something, put it into something impossible, insane, unprecedented, life-changing. Don’t waste all that energy on something that isn’t worth darned near losing your mind over. Do something that’s so killer, so incredibly difficult, so rewarding and yes…so profitable that you don’t have any idea how you’ll make it work.

That hunger has value you can’t imagine.

Start. Now.

Maybe you’ve already started

Your business might be stuck at that 15 minute mile type of plateau. What do you do? How do you go faster, better, stronger? Every week I write about strategies to break through business plateaus.

Is your plateau breaker sitting there like that empty 10k record box?

Sometimes you just have to do something you’ve never done to learn the potential of what you really can do.

Anyone can just plod along. Why not do something impossible?

photo credit: kenteegardin

In Steve Denning’s Forbes commentary this week, he mentions a presentation made by author and Harvard business professor Clayton Christensen decrying U.S. business schools’ focus on numbers-above-all, saying the pursuit of profit is killing innovation and the US economy.

The pursuit of profit is not the problem, nor is profit itself.

What the always interesting and provocative Christensen veers away from (to discuss related issues) is that the problem occurs when the pursuit of profit is taken to the extreme.

I’ll say it again so the naysayers hear me as clearly as possible: The problem is not profit, nor is the problem our quest for profit.

Profit is good. Profit is one of the fuels that drive communities, families and businesses to do more and better things.

The problem occurs when profit is the only value a company’s management uses to decide right from wrong, good from bad, do it from don’t do it.

When that occurs, we end up with exactly what Christensen talks about – and that’s why he called U.S. business schools to task for it.

No numbers?

I do not mean that you should make all your decisions from some touchy-feely “Let’s all sing kumbaya” kind of place.

Remember that I teach all sorts of measurement mechanism for all sorts of things, from internet, to customer retention, to improving direct mail response, to finding your one number and so on. Remember that I talk about finding little things to improve profitability all the time.

Yet you should also remember that in that same context, I do not suggest that these improvements should be found at all costs. Nor do I suggest that you eke out these little bumps in profit at all costs.

There’s no doubt that financial ratios, profit and other financial measures are critical parts of business decision making.

These numbers do not/should not stand alone. It’s likely there will be times where you must focus solely on dollars, often due to short term needs. Over the long term, your situation won’t always be that way and your decision-making won’t always be so focused on the short term.

Christensen’s point is driven home particularly well by the quarterly reports make or break the stock prices of stock exchange listed companies. The nature of quarterly reports encourages short-term decision making. In some cases, shareholder lawsuits reinforce that these short term decisions should be driving the business.

But that is short-sighted.

However…

You simply cannot exclude character, ethics, economic sustainability, community sustainability or consideration of what is best for the customer and your staff from the decision making process and expect things to end well.

When the only thing on your mind is the numbers, the decisions of national retail chains who start their After-Thanksgiving sales at midnight the Friday after Thanksgiving seem downright obvious.

It’s just math, so the discussion leading to a decision sounds like this: “The earlier we can open, the better the chance we can get the sale and the more it’s about us”. Sounds a bit like “How early and then supposedly influential can our Presidential primary become?”, doesn’t it?

Re-read that: “You simply cannot exclude character, ethics, economic sustainability, community sustainability or consideration of what is best for the customer or your staff from the decision making process and expect things to end well.”

I saw a sign in a local store this week (this is not a chain or franchise) saying they would be open at 4:00 am on the Friday after Thanksgiving. Perhaps they are hoping that they’ll catch some traffic heading to (or worse, back from) the box retailers who have midnight to 4:00am openings.

Really? 4 am in a small mountain town?

The Race

Don’t get me wrong. Black Friday shopping hours are just a symptom.

This is about the core fundamental business values being instilled in students today and the importance of having someone in your organization with the gumption to say “That looks great for the numbers, but is this all we’re about?”

Whether it’s said or not said, others will watch this process, learn something from it and model the behavior when they make a decision.

Sometime in the wee hours of Black Friday, I hope some introspection happens.

Etsy’s new Facebook app, the Gift Recommender, is a smart move and a great example of ways to use your data to attract more business.

I’ve no doubt that some will see Etsy’s “social commerce” via Facebook as “creepy” or invasive, but I suggest you give it a try to get an idea how this new app might impact your business or generate some ideas.

If Facebook isn’t your thing, but any form of retail is, create a test Facebook account with a throwaway email address so you too can see what the fuss is about.

Etsy is widely known for their belief in automated software testing. You can read about their latest project in their developers’ blog at  http://codeascraft.etsy.com/2011/11/09/engineering-social-commerce/

Hat tip to Scobleizer for pointing it out.

One of the rungs on your ascension ladder should include cater-to-their-every-whim service – within the context of your business.

Audible has figured this out, as you can see from the screen shot above.

I’ve told you about my use of it in the software business (“done-for-you software setups in 7 days, guaranteed”) as a way of getting new users started quickly as a way of increasing sales, improving our percentage of sales closed and improving our service so that renewal / maintenance agreements were a non-issue.

Have you figured it out? If so, I’d like to hear what your “cater to their every whim” concierge service is like.

photo credit: Pink Sherbet Photography

On many occasions, I have advised you to offer higher-priced, higher-value products and services because they focus you on high-lifetime-value customers whose loyalty extends beyond what’s on sale this week.

Likewise, we’ve talked about using those higher-priced products and services to “subsidize” the value-priced part of your business so that you can find more high-lifetime-value clients from that group.

What I’ve been urging you to do is build a customer ascension ladder.

It’s not like you haven’t seen this before. You’re probably on several of them and might not realize it. Despite that, it’s entirely possible that you haven’t used it strategically in your business.

Ladders you know

Take a look at Kraft cheese.

If you want sliced cheese in a wrapper, you might buy Kraft Singles. In their product ladder, Velveeta Slices are a bit of a luxury item. To step beyond that, you have to go to a higher-value Kraft brand name…Cracker Barrel and you might have to slice it yourself.

Some of you might never buy these brands, but you buy cheese, you’re in another vendor’s cheese ladder (Kraft may own them too).

A simple ladder that everyone is familiar with is car brands.

Ford Motor Company has Ford, Mercury and Lincoln. General Motors has Chevrolet, Pontiac, Buick and Cadillac (among others). These brands illustrate simple ascension ladders.

Back in the olden days, your typical Chevy customer longed to step up the ladder and get a Cadillac someday and in fact, doing so was a sign to their co-workers, friends and family that they had “made it”. Likewise, many Ford customers longed to own a Lincoln Continental.

Today, things are bit more muddled in the car business and these things aren’t the universal success/status symbols like they once were. F250′s, Hummers and Escalades have supplanted them to some extent, illustrating that the idea and the desires are still valid.

Where’s your ladder?

What works for Kraft, Ford and General Motors also works no matter what you sell.

The ladder works for firewood, imported crystal, septic tanks or legal services…and for whatever you do.

Whatever you sell, you can usually sell more by designing an ascension ladder for your customers. It isn’t just about selling more, more, more. It’s about matching what your customers want to what you sell…which tends to make you sell more.

If some of your customers need/want an Escalade and all you sell is Yugos (the “Mona Lisa of bad cars“), you’re going to lose them. If selling Escalades isn’t your thing, that’s fine. Even so, deal with it strategically as you should know how long this progression takes based on customer

You may already have a makeshift ladder in place. It isn’t like “good, better, best” is some sort of secret of brilliant business owners.

What you seldom see is a business strategically designed to move people from through the tiers of “good, better, best”, identifying the most likely “best” buyers based on their behavior, buying habits and other factors (such as demographics and psychographics).

Designing your ladder

Take a hard look at your customers from end to end. Do the same with your prospects, who tend to be substantially different from your long-time customers.

For example, consider the differences between a customer of 20 years who is starting to think about retirement and a customer who just got their first job. Their needs, values and *what* they value day-to-day might be completely different as it relates to your products and services. “First job” is just one example and may not have any impact on their choices for what you sell. Something else definitely will, so pay attention.

If you take this task seriously, you should be able to segment your customers into groups based on any number of things from age-based needs to buy frequency to number of calls for help. You may find that there are correlations between any of these individual segments.

What you’re looking for is segments that would respond positively to the same message, the same product/service offer. Other customers might use a different version of the same service that may not interest this particular group. Thus, the importance of the message/offer.

Next….Show them the ladder you’ve designed.

photo credit: Ed Siasoco (aka SC Fiasco)

On NPR not long ago, the Postmaster General spoke about the US Postal Service’s financial situation.

At the close of the interview, the Postmaster made a point of saying that he doesn’t pay any bills online, noting that it wouldn’t be right for him to do so. I suspect he probably feels that it wouldn’t be right if he used FedEx or UPS.

In fact, the truth is just the opposite.

Using these services would help him understand his competition’s offerings from a consumer perspective, and see where his agency is lacking, both in service and in their offerings.

If you aren’t at least familiar with the customer experience of a product/service that is taking you to the cleaners, you’re unlikely to understand what the attraction is much less the weaknesses and potential new opportunity ideas they might give you.

Even if you plan to stick with your current product, it will help you see new competitive angles, perhaps even new markets.

You aren’t likely to find all innovation within yourself. You also won’t find it all by studying your competition’s offerings, but it is worth the time to study the things customers have left you for – if you expect to get your mojo back.

photo credit: Luz Adriana Villa A.

A question came in earlier this month… “How do I compete with businesses that can offer similar products/services at a lower cost?”

The question is “Why are you depending on price to close your sales?”

It’s important to examine because *so many* people focus on it. In a weak economy, it’s natural for price pressures to be everywhere. Did you choose to compete on price, or did it sneak up on you?

If price is your edge, it should be an intentional, strategic choice. All else being equal, price will be the natural decision maker since buyer won’t have to sacrifice based on price.

The trouble is, all else is seldom equal.

Wiggling

In product sales, a competitor’s prices are usually lower because they sell more and can get better pricing from their suppliers. If supply costs are the issue, that’s something you can fix as your sales volume increases.

Until you get there, find some wiggle room. You may find that it makes price less important or even takes it off the table.

Wiggle?

There’s almost always some wiggle room in a price-sensitive situation for the underdog who is hungry enough to do more (ie: provide more value) than the “low price leader”. Remember, they’re the one totally focused on price and their entire business is built around it (think “WalMart”). Want to compete with WallyWorld on price? Only if you’re crazy.

Is price *really* the only way you compete with your competition? Not in my experience.

Whether you sell products or services, there are certainly those who shop solely on price, but there are always others who want more and don’t mind paying a little more for it.

Are there no other ways that you can add value to these products and services? Have you asked your customers?

Take some time to listen to your customers. I’m confident that if you listen, you’ll find a way to take the focus off price and put it on things that will matter a week or a month from now, when price is far less important.

Let’s talk about an example, something price sensitive and seemingly generic…like carpet cleaning.

Being seldom equal

I could call a dozen carpet cleaners who will do two bedrooms and a hall for $79 (or whatever). Maybe one or two of them would do a good enough job to earn a call back, even though I suspect all of them would do a good job when it came to cleaning the carpet.

Maybe your carpet cleaning skills are only 2% better than everyone else’s, or maybe they’re a little worse (yes, you need to work on that). It matters, but it isn’t necessarily what people highly value when they get this work done.

Your job is to be their carpet cleaner. The name that comes to mind when someone mentions a dirty carpet or that they need to get theirs done.

Not because you’re the one who happened to do it yesterday, but because you’re the only one they’d dream of calling after the way you handled it last time (and the time before, and the time before). You’re the one they talk about at church, in the aisle at the grocery store, at lunch the next day, on the golf course.

Your name comes up at all of those places because you did things no one else ever has and you did things in a way that no one else ever has. The next morning, they’re still reeling from the experience.

An experience? It can be. They may live in a tiny bungalow or a 12,000 square foot mansion. Either way, you can design and deliver a consistent end-to-end experience that they just can’t forget and can’t stop telling their friends about. Ask “What else can we do?”

Rethink your pricing

Despite improving what you deliver, it’s still worth putting thought into your pricing.

Companies often price their goods based on cost, the needs of their sales people, their catalog or their e-commerce store rather than in a way that attracts customers.

Your wholesale costs can’t be ignored, but you can restructure your pricing in conjunction with increased value and change the rules of the game.

photo credit: m.a.x

Productivity is pretty important, but it had better apply to the right sort of work.

Even if your employees are incredibly efficient at whatever they do, if their work no longer brings substantial value to the table, your business could evaporate.

The failure to automate the work that can and should be automated will eventually push your costs out of line with the competition. If some of the work you do now could be automated without losing quality, you have to take an honest look at it.

Remember…If you don’t address this issue, the marketplace will do it for you.

If you’ve ever had to lay someone off, you know it isn’t fun. When they walk out for the last time, they have to go home and tell their family and they have to figure out what’s next. It won’t feel any better that it happened because you weren’t paying attention – and it certainly won’t help you to be understaffed.

In order to avoid this, you have to look for places to become more efficient. It has to be done without losing quality, distinction or value. It’s possible that your choice becomes your new edge and that the staffer who was doing the low value work ends up managing the process that replaced their labor.

Are you still doing the right things?

Sometimes, automation isn’t enough. You realize (or the market tells you) that you’re doing the wrong work.

Every month, you have to ask yourself about your business and about your people, “Am I doing the right sort of work? If not, am I ready to? If not, what do I have to do to get there?”

If your work can be outsourced easily, you’re living on borrowed time.

If you’re a middleman adding zero value, you’re living on borrowed time.

You already know this if you’re paying attention and being honest with yourself. Even so, it’s nothing to be ashamed of unless you ignore it. Everyone faces market challenges but we don’t have to seek them out and invite them in for dinner.

There’s nothing that says you have to do what you do now, that your people can’t learn a new skill that someone places a high value these days or that your business can’t start making something that people will line up to buy.

The kind of work you should be seeking is the kind of work that produces real value and/or requires taking real responsibility for what you deliver.

Think about the vendors who serve your business. How many of them take real responsibility for the products and services they provide? Now consider the vendor you’d NEVER fire. You know why. They care as much as you do.

What if you don’t want to change?

“Boy, the way Glenn Miller played”…

Edith and Archie sang that song in the 70s about music from decades earlier, looking back upon what they saw as their golden years.

No matter how wonderful those golden years were, no matter what decade they were in, now isn’t then. Even in 1939, the handwriting was on the wall for Mike Mulligan and his Steam Shovel.

If you warmly recall that time two, three or even four decades ago when your area had low unemployment, the best jobs, more work than you could do and close to the highest per capita wages in the country.

Those decades are long gone. So are many of the high-paying jobs that were valued back then. Just like that steam shovel.

Everyone deals with it.

Many “middle class” jobs of a century ago (like coal and ice delivery) were steady jobs. They’re gone. It’s not much different with many of the jobs from 20-30-40 years ago.

If this describes your business, understand that I’m not trying to make light of that. I was trained as a programmer. 20 years later, tens of millions of people in India, the Ukraine, China and elsewhere can do what most “first world” programmers do for $10-20 an hour. I understand the competitive pressures.

If your work can be outsourced at $10-20 an hour, you have to ask yourself…”How much value do I really deliver?”

Take charge. Do the right work.

photo credit: nattu

Twenty-three years ago, I sold a now-kinda-embarrassing piece of software to someone and started a relationship that continues to this day.

Two weeks ago, I found out that one of the biggest problems facing the client at that time was…. SAND in the keyboard.

No matter how much you know about a customer…there’s always something lurking back there that can help you understand, if only you find a way to get to it.

How well do you know your clientele?

photo credit: rainy city

Last weekend I spent some time visiting my youngest son at college in Western Oregon.

While there, we visited the Portland Saturday Market, which is full of homemade goods from art to clothing to food.

While many of the booths offered business cards that had a website on them, a very small percentage of the booths displayed a website address.

I didn’t see a single QR code.

Extending your reach

After talking to several of the booth owners, I got the impression that many were showing up every Saturday or Sunday at the market and “letting business happen to them”. That’s why I mentioned the booths not displaying a website address or a QR code.

It’s right to be focused on making sales that day, but you want to make it as easy as possible to remember your site, share it and come back for more – even if you can’t make it to Saturday Market.

Lots of tourists visit the market, so it’s important to engage them once they’ve gone home rather than limiting your market reach to “people in downtown Portland on any random Saturday”.

None of the businesses we bought items from asked for contact information so that they could keep us informed about new products and the like.  No question, it would have to be asked in the right way given people’s dislike of spam but that CAN be done.

A motel in Eastern Oregon once asked me, “Can I get your email address so that we can contact you if you leave an item in your room?” Who *hasn’t* left something in a hotel room? It strikes dead center on the “well, of course, I don’t want to lose my stuff” nerve. Simple and smart.

Purrrrr

There was a bright spot at the market in addition to some really great art and hand-made products: the booth for “The Spoiled Cat”, where a woman and her daughter were selling catnip pillows,

The sides and back wall of her booth were plastered with laminated 8″ x 10″ photos that her customers had sent in. Each photo was of a cat mauling, loving, hugging and/or generally having a ball jonesing on their catnip pillows.

Some of the photos were hilarious. That booth stood out to anyone in her target market – cat owners and friends/family of cat owners.

Exactly what it should have done.

Is that what your booth does?

photo credit: mackarus

You may have seen those odd-looking square barcodes in newspapers and magazines, on product boxes, etc.

You might even have noticed them in the middle of the star-shaped signage in some Macy’s television commercials.

They’re called “QR codes“.

Why should business owners should care about them?

A smartphone can scan/read a QR code, which will take it to a specific web site address (URL).

Why use them at all? Who really cares about yet another barcode?

Your prospects and customers do. Some of your websites make it really hard to buy.

For prospects and customers using smartphones, it can be particularly annoying. But your customers don’t use smartphones, right?

Let’s talk about that. Currently, Nielsen (yes, those TV ratings people count other things too) says 40% of U.S. cell phone users use a smartphone.

A web search will tell you that there are 327 million active mobile subscriptions in the U.S. Yes, that’s more mobile subscriptions than there are adults, per the 2010 census. The numbers get a little whacked partly because of the number of people with a personal account/cellphone and a business one (provided to them or otherwise).

327 million is a fairly big number. Too big, maybe. To get a better handle on the numbers, a glance at a 2009 CTIA (wireless telecom industry group) survey of their members report indicated that 257 million Americans have data-capable devices and about half of those are phones. The rest are laptops and tablets. So we’ve reduced the number to roughly half the population, which is close to the Nielsen number.

Again, that’s a end-of-2009 number….BEFORE the availability of iPhone4 (and 4S), iPad and other modern-ish tablets.

Seems to me a number that’s even 10 million smartphones too big would be enough to provoke interest in the experience mobile/smartphone website users have at your site.

So now that you have big scary (or exciting) numbers to think about – particularly if your business deals in retail, tourism and other core business-to-consumer fields – get back to solving “we make it hard to buy” problem.

Important safety tip about using QR codes

Never (yes, never) use your home page URL as the destination.

Reason #1 – QR code users are, by definition, mobile users. Presumably you have a URL that is designed to be used by mobile browser users so they don’t spend all of their time squinting, pinching and spreading (or pressing zoom buttons) to read about your cool new product. If your site automatically senses mobile browsers and changes behavior or reroutes them to pages designed for mobile users, all the better.

Reason #2 – Sending them directly to your home page can make it far more difficult to measure inbound visitor numbers.

Why is that important? Because you want to know how your QR code links are performing by media/by ad/by publication etc. If you have them going to different URLs (web site addresses) such as MyReallyCoolsite.com/QR1 and MyReallycoolsite.com/QR2, then you can figure out their individual performance.

If QR code A works better than QR code B, you have information about the effectiveness of the media, placement and other characteristics of the location of that code. You can eliminate this reason by including QR code specific analytics codes (Google Analytics, et al) in your URLs, but that doesn’t eliminate the most important reason…

Reason #3 – Why did they scan (and hopefully share) that QR code/URL? Because they wanted something specific that they were looking at RIGHT THEN. If I’m looking at a Corvette ad in an in-flight magazine, do I want to go to Chevy.com or do I want to go to the page that describes the smokin’ Vette I’m looking at?

The primary reason to use them

Consider how annoying it is to navigate not-so-mobile friendly sites on a smartphone. Make yours the friendly, easy site for mobile users.

Make your customers’ life easier. Make it easier for them to visit your site, visit the right page and share something about your business that they want to share.

Ask anyone in the publishing business about pass-along numbers. They’re important to readership, so much so that they claim pass-along readership as an asset to advertisers.

Transfer that thought to your website, catalog, ads, trade show materials, demo products and other materials. Do they need a QR code so that people can view/share them easily?

In many cases, I think so.

Why do they leave your site?

Why don’t they buy?

Why do they abandon a shopping cart after going to the trouble to shop on your site, select items and add them to a cart in the desired size and color?

This might give you an idea or two…