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attitude Business model Competition Entrepreneurs Setting Expectations Small Business strategic planning Strategy

The can that’s hard

Orion constellation panorama
Creative Commons License 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?

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Business culture Business Ethics Competition Corporate America Customer relationships Entrepreneurs Leadership Small Business

Profit is not the problem

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.

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Automation Business Resources Direct Marketing ECommerce Etsy Facebook Marketing marketing to the affluent Marketing to women Sales Small Business systems Word of mouth marketing

Etsy’s Social Commerce: Smart at Christmas

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.

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Blogging Business model Community Competition Consumer Advocacy Customer relationships customer retention Facebook Feedback Getting new customers Marketing marketing to the affluent Marketing to women Setting Expectations Small Business Word of mouth marketing

The ROI of Social Media is…

Two minutes and change that hit some of “the what and the why” discussed during my Social Media – A Roadmap for Small Businesses talk this week.

The ROI of social media is that your business is still here in five years.

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Advertising Business model Competition Customer relationships customer retention Getting new customers marketing to the affluent Marketing to women Positioning Sales service Small Business Strategy The Slight Edge

Where’s my concierge?

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.

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Business model Competition Customer relationships customer retention Getting new customers market research Marketing Positioning Small Business strategic planning

Show them the ladder

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-priced Kraft brand name like Cracker Barrel and you might have to slice it yourself.

Some of you might never buy these brands, but if 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: https://www.flickr.com/photos/rod_waddington/

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attitude Business culture Competition Creativity customer retention Ideas Improvement Small Business

Do you know what you’re missing?

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.

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Business model Competition Positioning Pricing Small Business

All else is seldom equal

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.

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attitude Business model Competition Creativity customer retention Employees Entrepreneurs Leadership Management Manufacturing Positioning Productivity Small Business strategic planning

The Right Kind of Work

SUPERSEDED
Creative Commons License 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.

 

 

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Buy Local Creativity Direct Marketing Homemade products Internet marketing Marketing Small Business Social Media Trade Shows Word of mouth marketing

URL the Cat

Oh Happy me !!
Creative Commons License 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?