Categories
Competition Entrepreneurs Management Positioning Small Business Strategy

Take bad competition seriously

I don’t talk much about competitors.

I avoid it for a couple of reasons. First, because you have far more to gain by investing time and effort into improving your own business. Second, worrying about what someone else is doing is usually a waste of time since you have no control over their behavior.

There are a couple of exceptions:

  • When a competitor does something smart.
  • When a competitor repeatedly damages the reputation of your market.

We’re going to spend most of today focused on the worst of these.

When a competitor does something smart

When you do something smart, a competitor will copy what you did – perhaps. Other times, competitors will watch what you did and fail to see value in it, fail to understand it, or decide that it’s not a good fit for their business.

Sometimes, you’re the one watching that happen. You owe it to yourself to pay enough attention so that when a competitor does something smart, you can analyze what your action would be. For example, if you run a high end hotel and the other high end hotel in town adds valet parking,  you’re going to need to think about how to respond.

The key here is not usually the thing being done. It’s seeing the move for what it is. Deciding why it was done and what it accomplishes isn’t always obvious. Consider it carefully.

Competition damaging the market

Usually a competitor who can’t get out of their own way will find a way to go out of business. This allows us to ignore them and let them flame out on their own.

Sometimes we aren’t that lucky. When that happens, what we’ll find is a business (and owner) who damages their own business, but not bad enough to make it fail. You’ll see this in markets with enough demand that even a poorly run business can find a way to make enough to survive.

The problem is that a business run this poorly creates a reputation that can damage every business in the sector. If there’s more than one of them, it’s a matter of time before their combined reputation stains an entire market full of businesses.

Including yours.

Don’t take it.

Are you willing to let your competition destroy the reputation of the market you’re in? Of the business you’ve worked so hard to build?

Think about the effort you invest to market and sell what you’ve worked so hard on. What would it take to accomplish the same thing if your reputation wasn’t what it is right now?

How many times have you heard people discuss putting off a transaction with a vendor because of prior experience with another vendor? You know of markets that already have this problem.

How would you cope with a business or group of businesses that do things to cause the public to think less of the rest of the businesses in your market?

Are you sure they don’t already exist? If not, how do you find them?

Finding bad eggs

Whether these reputation-damaging competition exists or not, you’re likely to find the scoop on the social review networks where your clients report their experiences.

In general, Yelp is the best place to start since their reviews aren’t limited to any single type of business. They do have more restaurants (for example) than many other types of businesses, but their coverage is quite broad.

In some cases, you’ll find more industry focused social review services, such as TripAdvisor. Finally, if your client community includes students, their school / university may have a review service, ombudsman or similar.

You should be reviewing and responding to comments on these services on a regular basis, but in this case, you’re looking for your competition.

If you find consistent patterns of client abuse and reputation damage that span a number of your competitors, you have a decision to make.

What to do

If you can take the guilt-by-association reputation damage, or you don’t think it will affect you, stick to working on your business – but keep an eye on it.

If it’s more than you can take or it gets worse, you have a few choices:

  • Buy them out.
  • Turn up the competitive heat.
  • Decide what you’re willing to do to save your business. Remember, your business and its jobs are at stake.

Are you willing to lose your business because they don’t care about theirs?

Categories
Competition Habits Improvement Leadership Management Small Business The Slight Edge

Making good metrics into better metrics

The last two weeks I’ve been dancing around the topic of metrics without getting to the point, which is: How are things?

More importantly, how do you know?

Most businesses have some metrics. Some are very data-driven, some are barely so and there are plenty in between those two points. One of the differences between the very data-driven companies and those that are “sort of driven” is the quality of the metrics.

Good data vs. great data

There’s nothing wrong with good data. It’s certainly better than no data. Good data includes facts and figures like sales, costs, profit, inventory, payables and receivables.

Here are some good metrics: We have 1207 trucks on the road. Our drivers make $0.38 per electronically logged mile. It costs us $1.39 per mile for truck, driver, fuel and overhead (taxes, insurance, maintenance, etc).

Key to making good metrics into better metrics: Drill deeper. Hiding inside most good metrics is better, actionable information.

Quality isn’t just about accuracy, it’s also about the depth of the metric and the insight it communicates. What would happen if you drilled deeper into your good metrics? Would you find additional information to take action on?

Let’s drill deeper into the trucking metrics I mentioned above – on one topic: downtime.

Downtime isn’t on the list of metrics. It’s hidden inside overhead. It’s not solely about the maintenance to get the rig back on the road. It has hard costs (repair parts, repair labor) to you and to the driver (lost mileage and thus lost pay), in addition to the possible cost to your reputation. Showing up late or not at all not only risks your relationship with the client, but may also put their client relationships at risk. Embarrassing a good client by showing up late with their clients’ goods and materials can cost you far more than the price of that run.

What if that downtime makes you late for the next pickup? How far can this cascade across your business and the business of your clients?

Drilling down into good metrics

Here are a few downtime related questions to drill down with:

How many minutes of unplanned downtime do your trucks average per 100000 miles? What’s the average cost to get them back on the road, per incident? Per downtime hour? What would the change in revenue and expenses be if you could cut the average time in half?

If all of your rigs are company-owned, which model and model year are accruing the most downtime? For companies who lease rigs from drivers, which model and model year accrue the most downtime?

Is this downtime consistent across all owners or is there an 80/20 breakdown, where 20% of the drivers are accruing 80% of the downtime? Same 80/20 question for company-owned rigs. What costs are within 10% of the rest of the industry? Which ones aren’t?

Can any of these differences in performance be resolved with references to a better repair shop, a different brand of part / fuel / oil, better record keeping, more frequent maintenance or a different maintenance process?

For the ones that are outside industry norms, what can be done to leverage and improve the ones where you are beating the industry? Is there a legitimate reason for your business to be “below industry standards” in some ways?

Getting to better metrics

Having the answers to your business’ drill-down questions helps you improve consistently on a sustainable basis.

There are a couple of keys to drilling down:

Get organized. Before you can find better metrics inside your good data, your good data needs to be organized.

Take it a bite at a time. It’s easy to do one pushup before you get in the shower. Tomorrow, it’ll be easier to do two. Next week, 10 will seem easy. If you try to take on all of this at once, it will be discouraging because of the size of the task and the complexity of it. Keep it simple so it’s easier to delegate later.

Leave the rabbit chasing for another day. There will be plenty of time to address the things you notice while drilling down into one thing. You will almost certainly notice other things that require attention. Resist the urge to jump on them. Instead, make note of them and then finish the task at hand.

Procrastination is not a good metric. Start today. The more you know, the better prepared you’ll be for radical industry changes, like big rigs without drivers.

Categories
Automation Competition Improvement Management Manufacturing quality Small Business systems The Slight Edge

The importance of performance metrics

Last time, we talked about metrics that answer questions to help you increase sales.

Metrics aren’t solely about sales and marketing. Quality and performance metrics drive your business. Can you identify a few that would cause serious concern if they changed by as little as five percent?

If there are, how are you monitoring them? Monitoring and access to that info is what I was initially referring to last time. The performance metrics I’ve been working on are a mix of uptime, event and work completion information. In each case, a metric could indicate serious trouble if it changed substantially.

Uptime metrics

An uptime metric shows how long something has been running without incident. In some fields, particularly technology, it’s not unusual to have seemingly crazy uptime expectations.

Anyone who has picked up a landline phone is familiar with the standard in uptime metrics – the dial tone. For years, it was the standard because it was quite rare to pick up the phone and not get a dial tone. Its presence became an expectation, much as our as yet unfilled expectation of always-unavailable cell and internet service is today. The perceived success rate of the dial tone is probably a bit higher than reality thanks to our memory of the “good old days”.

Today’s replacement for the dial tone is internet-related service. Years ago a business would feel isolated and threatened when phone service went out. Today, it’s not unusual for a business to feel equally vulnerable when internet service is out. The seemingly crazy uptime expectations are there because more businesses function across timezones (much less globally) than they did a few decades ago. Web site / online service expectations these days are at “nine nines” or higher.

Nine nines of uptime, ie: 99.9999999% uptime, is a frequently quoted standard in the technology business. Taken literally, this means less than one second of downtime in 20 years. There are systems that achieve this level of uptime because they aren’t dependent on one machine. The service is available at that level, not any one device. Five nines (99.999%) of uptime performance allows for a little over five minutes of downtime per year. Redundancy allows this level of service to be achieved.

Events that idle equipment and people are expensive. What’s your uptime metric for services, systems, critical tools like your CNC, trucks on the road (vs. on the side of the road), etc?

Event metrics

Event metrics are about how often something happens, or doesn’t happen – like “days since a lost work injury” or “days since we had to pull a software release because of a serious, previously unseen bug“.

In those two examples, the event is about keeping folks focused on safety first and safety procedures, as well as defensive programming and completeness of testing. You might measure how many crashes your software’s metrics reported in the last 24 hours and where they were. Presumably, this would help you focus on what to fix next.

What event metrics do you track?

Work completion metrics

Work completion metrics might be grouped with event metrics, but I prefer to keep them separate. Work completion is a performance and quality metric.

Performance completion not only shows that something was finished, but that successful completion is a quality indicator. Scrap rates and scrap reuse get a lot of attention from manufacturers in part because of the raw material costs associated with them. Increasing scrap rates can indicate performance and quality problems that need immediate attention.

One system I work with processes about 15,000 successful events a day – not much in the technology world when compared to Google or Microsoft, but critical for that small business. If the number dropped to only 14,900 per day, their phones and email would light up with client complaints, so there’s a lot of emphasis on making sure that work completes successfully. Catching and resolving problems quickly is critical, so redundant status checks happen every 15 seconds.

Events of this nature are commonly logged, but reviewing logs is tedious work and can be error prone. Logs add up quickly and can contain many thousands of lines of info per day – too much to monitor by hand / eye via manual methods.

These days, business dashboards are a much more consumable way of communicating this type of information quickly and keeping attention on critical numbers – such as this example from klipfolio.com:

business performance metrics dashboard

What work completion metrics do you track?

Categories
Buy Local Competition Employees Ethics Marketing

Sunshine marketing is self defense

Have you ever signed a non-compete, non-disclosure clause as a condition of employment? Do you make your employees and / or contractors sign one?

I’ve used/signed a few over the years. Companies can’t risk serious insider knowledge of their business by having employees pass it to their competition. Non-competes provide a mechanism to protect yourself but their scope should make sense. Historically, judges aren’t inclined to prevent people from earning a living, as long as they haven’t stolen their former employers’ intellectual or competitive assets.

Non-compete, non-disclosures make sense

General Motors wouldn’t want a senior executive to jump to Ford after absorbing a substantial amount of internal GM intelligence. Asking that exec to sign a non-compete, non-disclosure with reasonable scope makes sense.

However, there’s a new class of non-compete clause users: companies in low wage service industries. We’re talking about clauses that limit job mobility for people who make sandwiches, deliver food and bus tables. These broad non-competition clauses prevent entry-level employees from working for another business within a distance of two miles.

These clauses are gaining scrutiny because of the conditions they create for the employee. Rather than risk the perception of being sued or being unable to change jobs, they may stay in an unpleasant job for fear of repercussions. Not all employees will care about this, but some will.

Sunshine solves a lot of problems

While I doubt you’ve ever worried about not being able to hire a new employee because they might have worked at a certain franchise sandwich shop in the last two years, it’s bigger than that. They’re limiting your potential employee pool.

What if your next amazing employee didn’t fit in at that shop but fears that working in your pizza joint might land them in court? From the employee’s perspective, there are a number of unpleasant scenarios that a fear-mongering boss could wield over those who signed one of these broad non-competes. These concerns could keep someone in an unpleasant, dangerous, illegal or unfavorable position – or they may leave the restaurant business forever, even if they love it.

The answer is sunshine.

When you come into a room and turn on the lights, cockroaches head for crevices. When you pull a tarp off of a pile of lumber in the spring, the critters hiding inside scatter for cover.

Likewise, you need sunshine marketing to shine a light on situations like this.

“Worried about your non-compete? We gladly hire former employees of X-Y-Z. We’ve got your back.”

“Our employees have the freedom to come or go as their needs change. We hope they’ll stay and grow with us, but if they move on, we aren’t going to chase them with lawyers.”

“Our team is happy to serve you because we pay a good wage and provide a fun place to work. The secret to our success is our focus on providing great food (or whatever), great people and great service, not shackling our team to a non-compete agreement.”

You get the idea.

Sunshine marketing to the rescue

Why would I suggest provoking a local franchise owner and their corporate parent? Because they’ve already declared war against your business. As a condition of employment, applicants (regardless of job role) must sign a non-compete agreement preventing them from working at any business within two miles if 10% or more of the business’ revenue comes from sandwiches – including yours.

In other words, everyone they hire must sign paperwork saying they can’t work for you. Are you going to take that?

What will happen if you hire one of their former employees? Most likely, nothing. Do franchise owners have nothing better to do than visit competitors to check for the presence of former employees? If their former employee works for you, will they file suit? Can they afford the cost of dragging you into court for something this frivolous?

If so, let them.

The court of public opinion will crucify them and it will be your responsibility to hand the cross and nails to the local and national media. Even if the corporate parent supplies the franchise with free legal support (doubtful), you’ll have the kind of PR that dreams are made of: a corporate parent threatening your locally-owned business with legal action because you hired a (probably) minimum wage employee trying to support their family or pay their way through college.

Are you going to let that slide?

Categories
Competition customer retention Entrepreneurs Improvement Lean Small Business

Shadow Everything

Warning: I’m about to discuss some technology things (yes, again), with good reason: Information Technology (IT) is a leading indicator with parallels in every business niche, including yours.

This isn’t about IT. It’s about everything.

Control

Historically, a company’s staff has had a love / hate relationship with IT. IT’s all powerful control was easy in the mainframe days. No department could afford to get their own, much less the staff to manage it and the space to house it.

Once IT grudgingly accepted the PC, things moved along calmly for a couple of decades. We’ve now circled back to the point where IT has once again become an obstacle in many companies.

Enter Shadow IT.

What is Shadow IT?

Shadow IT is departmental IT resources purchased to achieve a result faster, cheaper and better than the result a department is getting from their company’s centralized IT staff – whether that’s one person or 1000.

Consider who has the budget and who benefits from Shadow IT’s ROI.

Somewhere in the market where tech people are trying to close a sale, there’s a hungry group of owners who would love nothing better than to take over thanks in part to the advantages provided by tools that don’t depend on the status quo and/or lobbyist-funded legislation dating back to Eisenhower.

Seek those who want to change

In many companies, IT’s primary responsibility is to make sure nothing ever changes. Not in all companies, mind you, but certainly in the misguided ones.

The act of not doing anything in a misguided company is mind bogglingly simple. That’s why startups keep going after entrenched niches where a rarefied few are doing something other than clinging to what they always did and how they did it – that is, the companies whose primary R&D budget might be smaller than their political contribution budget.

The startup crowd targets and finds ways to disrupt and displace these businesses. They do so by seeking out those who WANT to change. Those who don’t look to improve are left behind to fend for themselves – which seems to be what they want, until it’s too late.

Let me clarify the “make sure nothing ever changes” comment. It’s OK to take incremental, ever-more-feisty steps to make sure nothing ever changes in production or under peak load. It’s another thing entirely when those actions morph into “Do nothing. Change nothing. Don’t break anything, in fact, don’t touch or move anything. EVER.

Not doing anything beyond acting in the interest of self-preservation is politician work, not IT work. It results in…

Shrinkage

CEB (formerly the “Corporate Executive Board”) reports on global corporate data and trends in that data. A few quotes from a CEB report from last year:

  • IT budgets projected to shrink 75% over the next 5 years.
  • Around 10% of CIOs, particularly in large multinational energy, pharmaceutical and consumer companies, already have a cross-departmental role.
  • Nearly 80% of IT professionals will see multiple changes in their responsibilities, skills needs and objectives, as the IT organization adapts to changing business needs over the next five years.
  • Corporate IT departments will shrink by as much as 75% over the next five years as businesses adapt to the cloud and changing economic conditions.

The result of this: Cloud computing and Shadow IT, which is often based on cloud computing.

Who invests in Shadow?

Shadow IT investors have budgets. They seek serious ROI. These are not people looking for things to remain as they are. They’re dissatisfied with how things are. They know there are tools that can work faster, smarter, cheaper.

Shadow IT requires risk, offers reward, but it doesn’t come without a price. These processes must be robust, well-documented and… work, because IT doesn’t have the desire much less the resources to research or repair Shadow IT assets and processes. Shadow investments demand full responsibility from their investors.

Shadow IT isn’t the real challenge. I think you’ll see IT and its shadows go round and round as each generation of departmental and personal computing reveals itself.

By now, you’re wondering how this Shadow IT problem could possibly involve your small business. Did he trick me into reading this far?

Shadow Everything.

No, because the thing I’m seeing more and more of is “Shadow Everything”.

The ranks of people “dissatisfied with how things are and wanting tools that work faster, smarter, cheaper” isn’t limited to IT.

They’re everywhere and they will invest in Shadow Everything.

What will you invest in? And your clients?

Categories
Automation Competition Manufacturing Small Business strategic planning systems

Half of China’s companies do this

Recently, I was reading a story in the New York Times about a Chinese city’s effort to vastly expand their use of industrial robotics. The story’s video hits home 98 seconds in.

The official being interviewed indicates that the city’s goal is to reduce the number of employees by half and finishes his sentence by saying “many companies are working toward this goal“.

Not one company in one town. Not the company responsible for the birth of Chinese industrial robotics, but “many companies”.

Why expand robotics use?

They’re doing this by working toward the creation and deployment of high-quality “human-like” robotics technology.

A senior manager at one of their leading manufacturers of industrial robots says “China’s demand for industrial robots has been on the rise year after year. Compared to America, Japan and Europe, the increase in demand is enormous.

When I dig a little deeper, I find that there are a number of reasons for this drive to expand the robotization of China – and not all of them are expected:

  • They can’t hire enough people fast enough.
  • Their level of output has stagnated because there are only so many places to put all of these people, which drives…
  • They are encouraging people who have abandoned rural areas to move back to their hometowns – in part to take some of their skills with them.
  • To cut manufacturing costs.
  • To increase safety

What’s this got to do with your small business?

Perhaps nothing. However, a few of the items on China’s list are likely to fit business needs where you are, even though the scale of your project might be dwarfed by a large Chinese manufacturing business.

Can’t hire enough people fast enough.

Not a week goes by without hearing this from someone. Now, to be sure, some of this is driven by salary levels, but most of it is driven by the availability (or lack of it) of trained people in some skill areas. It’s of particular concern in rural areas where you find specialized businesses putting down roots, or simply growing out of local need to create jobs and enterprise.

One of the key things that challenge the expansion of modern businesses in rural areas is the availability of skilled workers with advanced skill sets. Not everyone needs these, but those who do struggle to fill openings when they’re ready to expand.

Abandoned rural areas

China’s encouraging people to move back to their hometowns, in part because some of their urban centers are overwhelmed. Hopefully some of this is also because of a desire to improve urban worker lifestyles. The abandonment of rural hometowns isn’t limited to China, however. In the U.S., rural communities have been shrinking due to “brain drain” as their graduates move away to college and either don’t ever return, or perhaps don’t return for several decades. If they wait several decades, they don’t necessarily come back to town and start families. Instead, they come back as empty nesters.

To lure graduates with newly-gained modern skills, their hometown needs a place to work where they can use those skills. Kids don’t run off to college and get an engineering degree so they can move back to town and manage a franchise restaurant.

To cut manufacturing costs

As I noted above, the graduates we want to keep at home need a place to leverage their skills and that place needs to be competitive in the global market they serve, otherwise the jobs are tenuous as the employer simply cannot compete in the long term.

To increase safety

Safety has been a topic for discussion here in Montana for a while, due to a less than ideal safety record in recent years. While some of this can be addressed through training and safety equipment, there is another way to cut down on dangerous work.

Yes, robotics

These last four items can be addressed in part – not completely – through robotics. Maybe you aren’t ready today. Maybe you don’t manufacture today. Maybe you already have some automation in place. Maybe you and your staff worry that you will be risking your business and its jobs by involving robotics.

Maybe you’ll be risking your business and its jobs if you don’t involve robotics.

While it’s not applicable to every business, it’s worth a look. A safer, more productive workplace creates jobs that more likely to stick around.

Categories
Box stores Competition customer retention Improvement Small Business Starbucks

Winning against the chain store

Yesterday, I sat down in a store that’s part of a Montana-based coffee shop chain. I wanted a quick cup and I had about an hour to write before a young man’s Eagle Board that was down the street, so this location was a perfect fit.

I drove past Starbucks to reach this place. I try to visit locally owned places whenever possible, and like many, I’m a creature of habit. This place has spent a lot of time as my writing venue over the years. The visit reminded me of some reasons why the chain store wins your neighborhood.

Habitual habitat

I admit that when it comes to coffee, I’m not most people. Maybe I’m a coffee nerd. Even so, let me shine a light on some reasons why people go to their place instead of your place – and most of them have nothing to do with coffee – unless they’re coffee nerds too.

When I visit a coffee shop, I tend to seek out a place that roasts its own beans every week rather than using what was trucked to them after being roasted and packaged months ago.

I sit at the same table in this particular shop, if possible. It’s out of the sun and elevated so I can sit or stand and work, and it has its own power outlet. From that perch, I can see the entire store and observe customer service and other things that I write about.

What changed?

I hadn’t been in this shop for a while, so the absence made it easier to notice what was different.

The outlet next to “my” table had been fixed. It had been loose for years, so being rid of that looseness was nice.

When I ordered a mug, I got a paper cup. They still have mugs. I rarely take coffee to go. I prefer ceramic. Hey, I warned you.

The coffee was lawsuit hot. In other words – way too hot, even to sip. 10 minutes later, it was drinkable. Do you have any idea how long that wait is for someone who is enjoying the aroma of a new-to-them coffee that they can’t wait to taste? Reminder: I said I wasn’t a normal coffee drinker.

I ordered a pastry. In the old days, I was always asked if I wanted it warmed up (whatever “it” might be). Regardless of my answer, they’d deliver it on a plate with a fork rather than ask me to stand at the counter and wait on it. This time, it was handed to me across the counter, still in cellophane. No wait, but no plate and no “Would you like it warmed up?”

You might think these details are silly, but these are the kinds of details that transform an average experience at a nearby shop into “the only place they’ll go for recreational gathering place coffee”, much less “Simply can’t work at home today coffee”.

I’d guess that the real change since my last visit relates to who trains the staff and how. They were cordial, friendly and all that – but the experience had changed.

What didn’t change?

I was greeted when I entered.

Once it cooled, the coffee (a new one this time) was excellent.

Once I unwrapped it, the pastry was excellent despite not being warmed up.

The wifi worked.

I had a quiet place to write for an hour.

What about Starbucks?

What are you doing to stand out from the “sterile” parts of a national chain? What are you doing to make me drive past the chain store to go to your place – other than being locally owned?

Not all of you own a coffee shop, but most have a national chain or regional player in your market. Seek parallels. Take the stuff they do well (like consistency) and use it to improve your place. Ignore the stuff they do poorly, other than to eliminate it from your place. Stand out by making yours the only place they’ll go – and make sure everyone knows why.

Don’t think that a national chain can’t appear in your market. In less than a year, my favorite little town of 4000 people has gained two national auto parts chain stores.

Stand out before you have no choice. Many of the things you might do are things that the chains aren’t allowed to do.

tl:dr – Training. Metrics. Detail.

Categories
Competition customer retention Customer service Management Productivity Small Business

How to build a follow up system

Last time, we discussed why it’s important to consistently follow up with your clients. Consistency requires a system to manage the process, track the follow ups and remind you when they need to be done. Without a system, daily challenges can take over your day. Result: follow ups are forgotten.

After I posted, @BeckyMcCray suggested that I show how to build a follow up system, so let’s do that.

Identify your touch points

When you build a house, you determine a list of requirements before starting construction. You need to know how many bedrooms and bathrooms you want and whether there will be a basement and/or a garage. From there, a set of plans will guide the construction process and provide the information needed to create the materials list. A follow up system does the same for your follow ups.

To get started, make a list of all the follow up actions (ie: touch points) that you want your follow up system to manage. A touch point is an opportunity to inform, educate, placate, calm, reinforce, remind, warn, notify or advise.

Identifying touch points should be easy because you know your business. I’ll use one of my favorite examples: the small engine repair shop that sells, rents (perhaps) and services outdoor power equipment, like mowers, chain saws, leaf blowers and garden tillers.

Here’s my list:

  • Repair started
  • Repair delayed, parts ordered
  • Repair resumed, parts received
  • Repair completed
  • Repair delivery schedule needed
  • Repair delivery date/time reminder
  • Order placed
  • Order delayed
  • Order shipped
  • Order received
  • Order delivery schedule needed
  • Order delivery date/time reminder
  • Payment plan schedule – upon creation of plan
  • Payment due reminder – 10 days out, to allow for banking online bill pay processing time
  • Payment due reminder
  • Payment overdue
  • Automated payment reminder (payment will be charged to card soon)
  • Automated payment confirmation (payment charged to card)
  • Automated payment failed
  • Automated payment card expiration warning
  • Automated payment card expired
  • Rental return reminder – at beginning of rental
  • Rental return reminder – return due soon
  • Spring tune up for warm weather equipment (eg: mowers, blowers, tillers)
  • Fall tune up for cold weather equipment (eg: snowblowers, ground thawing gear)
  • Oil change reminder
  • Winter storage service offer
  • Winter storage service pickup scheduling needed (ie: in the late fall/early winter, to pick up your equipment for storage)
  • Winter storage service pickup date/time reminder
  • Winter storage delivery scheduling needed (ie: in the spring, to return your equipment to your home/business)
  • Winter storage delivery date/time reminder

My list is intentionally long to give you ideas, but don’t let it distract or discourage you. Keep your list simple by starting with the most important touch points on your list. Build the system around those, then add more over time.

Let’s build a follow up system

Now that we’ve mapped out the touch points, let’s build a system.

Group the follow ups on your list by what drives their use. For example, do they occur when acquiring a new client, when processing an order, or when selling/delivering a service? The type of activity that drives them will be reflected in the system you setup for that follow up.

For example, a service order for a mower might produce a follow up list that looks like this:

  • Repair pickup schedule needed
  • Repair pickup date/time reminder
  • Repair – Equipment picked up
  • Repair started
  • Repair delayed, parts ordered
  • Repair resumed, parts received
  • Repair completed
  • Repair delivery schedule needed
  • Repair delivery date/time reminder
  • Repair – Equipment delivered
  • Repair – Equipment picked up

Each item would have a place to mark that it was done, that a call (or some other form of contact) was made, who did it and the date/time it was done. Want more info? Add space for notes at each step.

The medium used to work and record these steps doesn’t matter at first. What matters is that you perform the steps and refine your system. As it gets more difficult to manage a low-tech system, you should seek out a technology-based solution. By that time, you’ll have a much easier time figuring out what will work for you and what won’t.

To reiterate why a system is important, look at the list of steps and consider how it makes your business look and your customer feel if a step or two never happens or if it’s delayed by days or weeks because “it fell through a crack”.

A system can all but eliminate the cracks.

Categories
Automation Competition customer retention Getting new customers Management Small Business

A simple, high value tactic many miss

When people know that you help small businesses and you’ve had a newspaper column since 2007, everyone who has a bad (or even mildly annoying) experience at a business wants to tell you about their latest adventure in commerce.

Sometimes I hear about situations that really aren’t the fault of the business. Other times, the stories I hear make me wonder what the business owner(s), or their staff, is thinking. Of course, there are always two sides to any conflict, including the parts you never hear from either side.

Conflict isn’t number one

While you might think disagreements and conflicts are the number one think I hear about, that isn’t the case. Today’s topic isn’t really about conflict, but it can easily become a source of conflict if the affliction goes untreated.

The affliction? No follow up. Insufficient follow up often feels like no follow up. Prospects call or email and want to order something. Their call or email goes unanswered. They get frustrated. They call someone else in your market. You not only lose the sale, but you probably lose the possibility of ever having that person as a client.

Recently, I heard a story from someone who wanted to buy an item, called several vendors in that market, failed to get any follow up action or contacts by anyone in the market, then called a nationwide retailer with a local presence and didn’t even hear back from them. When they contacted the retailer, the retailer’s staff couldn’t provide any information about when the item would show up, much less if it was on its way. At this point, months have gone by without any progress, despite involving several vendors.

So, on a $500+ purchase, multiple vendors in the same market appear to be unwilling to do the work to close the sale. Normally, this situation would make me a bit suspicious of the would-be purchaser’s mood, but in this case, I know them well enough that this isn’t about the person wanting to buy.

Follow up. That’s all.

While this is a pretty unusual situation, the key for all of this is follow up. Return calls, emails, etc are a necessity to close a sale and keep a client. So why would vendors who routinely sell a $500-3000 item fail to do that? I can’t explain it. What I can do is tell you that this isn’t unusual. Lots of businesses fail to follow up enough, or fail to follow up at all.

Solo entrepreneurs fail to do it. Small companies fail to do it. Medium sized companies fail to do it. Large companies fail to do it. I can’t explain why, but I can tell you it is the number one source of frustration of the people I talk to. I hear it about salespeople, order departments, support and customer service as well as repair and service people.

Communicate. It’s that simple. It’s not a sign of weakness. It’s a sign you care about your business, much less about your clientele and their needs. It’s an incredibly easy and inexpensive way to make a client stick around and develop a loyalty to your business that’s incredibly hard to break. Think of it as an almost impregnable fence that your competition can’t get past to gain access to your customers. It’s not expensive or complicated.

Why doesn’t follow up happen?

Follow up doesn’t fail to happen because the business owner or their staff don’t want to take care of their clientele. Most of them do care. Sometimes it isn’t obvious that follow up isn’t happening, or the owners and staff don’t realize that some of the most important follow up is letting their clients know what’s going on even when nothing has changed.

The most common reason that follow up doesn’t happen is that there’s no system to manage it. Without a system to make sure it happens, today’s daily chaos takes over and those follow up tasks are soon forgotten.

When I say “system”, I mean a mechanism that makes sure that you follow up with clients, whether or not the system consists of paper, technology or something else.

The key is that you put together something that you and the staff will actually use because “I need to remember to call Joe” isn’t a system for anything other than disappointing Joe.

 

Categories
attitude Competition Entrepreneurs Ideas Improvement Positioning Small Business strategic planning

Looking to disrupt a market?

2015 is shaping up to be a big year in Montana for Startup Weekend. With the Billings event already under our belt and three more scheduled this year (Great Falls, Bozeman, Butte), lots of people are looking for startup ideas.

One place that gets a lot of interest is “stodgy” established markets that are lucrative but neglected from a modernization and/or innovation perspective.

It’s easy to point out markets whose former leaders felt things were good enough. Those markets now have to compete with Craigslist, Uber, Airbnb, SpaceX, Apple iTunes, Spotify, Netflix, Amazon, Expedia, Kickstarter, Zillow and so on.

Ironically, some of these companies have awakened their markets to the point where they are now being disrupted by startups and in some cases, by the original leader in the market.

Things are as they should be in these markets. We earn the privilege to stay in our market every day. When we don’t, we often expose opportunity we’ve ignored, provoking someone to disrupt a market.

Resting on laurels

It’s easy to look at existing markets for disruption candidate because so many existing businesses invite competition simply by virtue of how they treat their clientele.

For example:

  • Do you work with businesses that take you for granted?
  • Treat you poorly?
  • Treat you with disdain?
  • Treat you like they’re doing you a favor?

dWhen a business leaves you feeling like one or more of those, it’s difficult not to consider what it would take to disrupt them out of the picture.

Want to disrupt a market? Disrupt yourself

Look back at that list. Does your business you make your customers feel that way? If they do, one way to fix it is to disrupt yourself. So where do you start?

Four ways that startups disrupt an existing business (or market) are through speed, improved customer service, decoupling and unbundling. Two of these are forgone conclusions that you simply cannot avoid, speed and improved customer service, while the other two are rapidly becoming assumed competitive angles.

Speed – No one’s resistant to the market’s need for more speed at the same or better level of quality. Conventional wisdom says that it can’t be done – “Pick any two: cheap, fast or good“, but conventional wisdom rarely considers what the startup list at the top of the page not only tried, but accomplished.

Improved customer service – To be sure, there are companies out there that do well both in revenue while treating their clientele poorly, but their days are numbered. One by one, they will be picked off – and I’m happy to help their competition do it.

Unbundling – Unbundling involves separating the sale of an item from the delivery of that item. Expedia is an unbundler. They took services offered by travel service providers and unbundled them from the provider who delivers them, made it easy to buy and search for what travelers needed, sold them and collected their cut. Expedia got substantial market share because they made it easy to find and compare flights without having to deal with each provider’ web site and/or phone tree. Unbundling has somewhat limited scope because it only happens at consumption / purchase time, which is why decoupling businesses started popping up.

Decoupling – A decoupler pulls apart the evaluate-select-purchase process that used to be performed at one established business. Decouplers focus on radical improvement of a single part of the process. For example, retailers face competition from decouplers who might mail samples to someone’s home, allowing them to skip a trip to the mall to decide what they want. Once the mall trip is eliminated, another step in the evaluate, select, purchase process might be removed elsewhere. Any point along the evaluate, select, deliver, purchase process is a candidate for decoupling. While the social aspects of that trip to the mall can’t yet be delivered to your mobile device, there are plenty of other ways to address shoppers’ social needs.

Try Startup Weekend Therapy

Stuck on how to disrupt yourself? Take part in a Startup Weekend. I’d be shocked if a weekend in that environment didn’t provide you with ideas and mindset adjustments to bring back to your business.

Want more? Here are a few links to startup idea resources.

http://ideamarket.com/founders.html

http://www.paulgraham.com/ambitious.html

http://paulgraham.com/startupideas.html

http://www.inc.com/rahul-varshneya/4-places-to-look-for-your-next-startup-idea.html

http://old.ycombinator.com/ideas.html (this list is aging, but they might seed a useful idea)

http://www.ideaswatch.com/