Ask questions while the answers still matter

Back in November 2017, my wife hit a deer at 70 mph on a four-lane road on her way to work in the pre-dawn hours a few days before Thanksgiving. The events that followed provided a number of takeaways for business owners, in addition to pointing out the importance of asking questions while the answers still matter.

tl;dr – If you have an admin with little or no domain knowledge make the initial sale, review what they sold. Call or email to suggest any changes based on your experience, what you know about your customer, or tell them you did so and have no changes to suggest. Speaking of, follow up regularly with customers who have damage claims. Consider what carnage has been introduced into their lives. Don’t make your customers do your job. Even better, have a documented process for your team thats over and above what the national carrier forces upon you. Don’t be an order taker.

Timeline

Monday 11/20 – National claim office person tells me they expect the car to be totaled. They tell me to run out and collect whatever I need from the car because they are going to tow it to a salvage facility. I make 2 trips out to the car, which is 12 miles down the road. 1 of those trips is my fault, forgot the garage door opener and the plates. Took the plates since we may never see it again. Presumably we’ll be able to use them on the replacement car. Tow truck driver also predicted it would be totaled because five air bags were deployed.

Tuesday 11/21 – Based on what the national claim center told me on Monday 11/20, they are supposed to pick up the car from the tow place today. They didn’t.

Wednesday 11/22 (day before Thanksgiving) – Salvage yard’s tow truck goes to pick up the car, a day late. The tow place that originally picked up the car is closed for Thanksgiving.

Thursday 11/23 – Thanksgiving. Didn’t expect anything to happen today.

Friday 11/24 – Nothing happens. Not really surprising. Tow place is probably still closed.

Monday 11/27 – I call the claims office and find out nothing has happened. Person I spoke to seemed kind of short with me. Maybe they think I’m asking too many questions or being too persistent by expecting them to predict / commit to dates when something will happen. I didn’t get fussy (yet) so maybe she was getting abused by someone else before getting me.

Interestingly, when I call, the system knows I have a claim based on my phone # and asks me to press 1 to confirm that’s the claim I’m calling in about. Despite that, when I am connected to an agent, they ask for my name and claim number. Agent tells me that they haven’t got any scheduled date in the system for review of the car. Then they tell me it was never picked up from the tow place (this was supposed to happen on Tuesday).

I get the idea that this process will never complete without me hounding them every single day. I no longer feel like a client whose car was ripped from my hands. I now feel like a transactional sucker who pays someone to abuse me when and if I need their services.

It has been a week since the accident. Zero contact from the agent.

Takeaway – If you make your customers do your job, they are going to be frustrated, or they are going to expect a great deal. Set expectations up front.

Tuesday 11/28 – I will call and see if the car got towed to the salvage yard today. I will ask if an adjuster is now scheduled to visit the yard and assess the status of the vehicle. Call the agent and ask what the process is supposed to look like. Am I expected to nag the adjusters and the claim office every day or twice a day to get this stuff done in a reasonable timeframe?

Called mid-afternoon. Spoke to a very helpful woman named Tonya. “Tow dispatched but we cant tell if it was moved yet.” Adjuster will “automatically” check the car once it is “checked in” at the salvage yard, but that check-in hadnt happened yet. Otherwise, she didn’t have further info on the schedule.

Wednesday 11/29 – Called about noon. Got Donna (I think – was hard to hear at first). She was very friendly and ended up having to call the salvage yard and other people to find out out what was going on. The car is now at the salvage yard and checked-in, so the adjuster is expected to look it over in the next 2-3 days. Tomorrow is possible, but she couldn’t give me a firm date as the adjusters apparently work their own schedule. Doesn’t sound like they are insurance company employees, but I might be reading too much into her comments about their appointment schedule and work load. It’s possible that adjusters work for an adjuster firm that handles estimates / assessments for multiple insurance companies in rural areas. I don’t know the workload of these folks, but that would seem more efficient than every company having their own and trying to keep them all busy. I’m guessing someone who reads this might have more information about that.

Takeaway – When a situation clearly has the potential to frustrate a customer, a little extra effort on the part of your team goes a long way.

Thursday 11/30 – Received a voice mail about 820am saying that the vehicle is repairable (ie: they will not total it). They asked me to call them back. Called and reached Paige, who explained the situation and the benefits (warranties and such) that selecting a body shop that the insurance company “works with” (ie: trusts, has ongoing experience with, saves them money and probably hassle/paperwork). She emailed me a list. I reviewed the list, posted a few names on Facebook to see if any Missoula-based people had suggestions about the list. Chose one of the shops suggested to me. Called insurance company back, told them which body shop to use.

Later in the day, called back, asked Raul to explain the benefit that you get when using a body shop on insurance company’s preferred list (you can choose anyone, including a vendor not on their list). The deal is that repairs and anything else that comes up related to the wreck are guaranteed by the insurance company for as long as you own the car. NOTE: I haven’t seen the actual terms of this guarantee as yet. Given that we keep cars until they “BluesBrother“, this is a potentially valuable benefit, so we chose a shop on their list.

This is what I mean by “BluesBrother”:

Estimate arrived in my email. Called claim line again, turns out this estimate is actually from the insurance adjuster. $6200. Car is scheduled to be towed to the body shop on Friday.

Takeaway – Give your customers a good reason to make the choices you want them to make.

Friday 12/1 Car being moved from salvage yard to Action Auto Body in Missoula.

Monday 12/4 Called body shop, talked to John,  who happened to be the guy finishing up the estimate. Tells me it will take a week to get parts and 2 weeks to do the work. Very nice, detail oriented guy who seemed happy to answer all my questions without sounding the least bit tired or annoyed.

Takeaway – Having technically adept people on the phone who also fully understand how to work with a customer who lost use of a car is a big plus. Being able to do that job and put up with 15 minutes of questions from me without getting frustrated is impressive.

Tuesday 12/12 While I haven’t heard a word from anyone at the insurance company or the body shop since 12/4, today I received an automated survey email from insurance company. The nine page survey asked me to evaluate the claim handling. The survey clearly isn’t designed to be filled out until the claim is completed, yet it allows only 10 days to complete the survey – which will expire at least a week before the body shop expects to have the car back to me. Obviously, the technology generating the surveys has no visibility into the status of the claim in question.

Takeaway – If you care about survey responses, make sure the surveys are sent at the proper time. Automation handles this kind of stuff in it’s sleep – if it’s automated with the right data. “Ask questions while the answers still matter” also means don’t ask too soon.

Thursday 12/15 Received a mailer from insurance company suggesting that I could refinance the Subaru at a lower rate. Only if they’re offering negative interest.

Takeaway – Wording on your direct mail matters as much as it does in tweet or email. The assumptions you make can make your marketing piece all but invisible.

Friday 12/16 Talked to body shop. As of today, all the parts showed up, so they will start work on Monday the 19th. Parts were supposed to take a week, but my guess is that ground shipping has been impacted by Christmas shipping season. It’s clear we wont’t get the car back in 2017.

Tuesday 12/20 30 days since hitting the deer. Zero contact with the agent during that time.

Friday 12/29 Work is underway, had to order another couple of parts for previously unseen damage, and those parts have not arrived yet. Holiday shipping traffic and people on vacation have probably slowed delivery. Body shop estimates the car will be completed sometime the week of the 8th-12th.

Monday 1/8 Checked in with body shop. They asked me to bring in plates so they could drive it. They say the car is pretty much done, looks great. Told me that they were taking the car to Subaru to get it started again and certify sensors and automated driver-assist systems, etc. He cannot start the car, so Subaru apparently has to reset the computer or similar. Once they get it back from Subaru, they will highway test it to make sure all is well, and then we’ll be done with it.

Wednesday 1/10 Checked in with body shop. They reminded me to get plates to them. I have no car since the Mrs is driving mine to work and they are not open outside normal working hours, so I’ll have to drop them off during off-hours.

Saturday 1/13 Dropped the plates by the body shop so they could drive it.

Tuesday 1/16 Spoke with John at the body shop. Subaru has had the car for about 10 days. They were unable to get the car started for days. Apparently, they were unable to convince the computer to allow it to start and no one knew what to do. I’ve seen what happens when this occurs at other dealers – the service manager calls the factory and gets some help. Apparently, they managed to get it running a couple days later because a factory-certified master mechanic happened to be passing through Missoula and helped them figure it out. Makes me wonder if our local dealer has any factory-certified mechanics for 2018 vehicles. John tells me they told him to come pick it up. He did. On the short drive back to his shop, John sees that the dash is lit up like a Christmas tree – every light is on. Clearly, the dealer didn’t finish the job and left the car in a state where it is running, but not ready to return to the customer (ie: me). No idea if driving in this condition would have eventually caused engine damage. Body shop guy turns around, returns the car to them, tells them not to bother giving the car back until it is 100% perfect. I suspect it wasn’t worded that way, but the point was still made.

Takeaway – Notice how the body shop advocated for the customer? Can you imagine the response you’d get if you made a similar demand of your dealer’s service department?

Takeaway – Don’t all dealers have at least one factory-certified master technician? If you have them and you know the other dealers don’t, why isn’t your advertising letting people know this important detail?

Friday 1/19 Spoke with John at the body shop. He tells me that Subaru seems to be making progress. They found a sensor or something that needed to be replaced, so they ordered it for Monday (1/22) delivery.

Saturday 1/20 60 days since hitting the deer. Zero contact with the agent during that time.

Tuesday 1/23 Spoke with John at body shop. Dealer still has not returned the car to them. He didn’t know if they received the part on Monday, or what progress had been made. Said Dar has been working with them and that he would know, but he was gone for the day.

Wednesday 1/24 Called body shop to see if they had any news from Subaru. Dealer is still trying to figure out engine issue.

Friday 1/26 Body shop called. Subaru dealer still lost on what’s going on. Thought it was figured out, they gave him the car on Thursday. Once again, on the drive back to the shop, it started throwing engine failure warnings, so he turned around and took it back.

Monday 1/29 Body shop called, said that Subaru finally reproduced the problem so now they seem to have it narrowed down to a computer error or an oil sensor error. Apparently the problem is intermittent. Every programmer you know will tell you this makes the problem harder to find.

Wednesday 1/31 Called body shop. They explained that after they called Subaru late on 1/29 after we last talked and found that Subaru techs determined that the one of the car’s computers was messed up. They figured this out by swapping a new car’s computer into our car and re-testing, as well as swapping ours to a new car. As your programmer friends will tell you, this is debugging 101. Replace / disable the components that are involved, but do so one at a time. Why it took three weeks to arrive at that point, I have no idea. Interestingly, the dealer does not stock computers for the current model year even though the Outback is the highest selling model in the U.S. as of 2016 with a mere 16.0 days to turn (ie: days on lot before it gets sold ). Perhaps computers don’t fail that often. Dealer apparently isn’t allowed to take the computer from a new car, so they had to order one (delivery time: three to four days). Body shop was hopeful (but not super confident) that he would get it back late Thursday or early Friday so he could get it to us before the end of the day on Friday.

Friday 2/2 Body shop called in the morning to say that he got the car back and that it was OK. They need it for a few more hours to finalize cleanup and then we can have it. I was able to pick up the car about 4:30pm. The total repair bill was just short of $16,000. Later that night, I got a detailed email receipt from the body shop, as well as an automated email from the insurance company that an “updated claim estimate” had been received. The body shop gassed it up before returning it.

Takeaway – Filling the tank was not required and not expensive, but it was a nice gesture when returning someone’s car after over two months. What “not required and not expensive” things can you do to impress your clients?

Saturday 2/3 Received an automated email from the insurance company noting that the claim had been paid. On a Saturday. Despite decades of working on automated systems, I’m shocked this didn’t require management approval, particularly given the amount (almost $16K). It appears from Friday night and Saturday driving that the car is back to pre-deer condition. Body shop’s paint/finish job was very well done.

Takeaway – Systems work. While the efficiency provided by inter-company systems produce a time and cost savings benefit to the insurance company, body shop and dealer, these systems are also a benefit to customers.

Verdict of the experience:

Body shop – Great job, both on the work and as an advocate for me when dealing with the local dealer. Slower than expected, but three holidays and the shipping time for multiple parts orders didn’t help. At times, they seemed surprised that I didn’t go ballistic on them or at least take out my frustration with the situation on them during our calls. I never felt the need to do that because they kept me informed, set expectations, and were clearly playing the role of advocate for me when dealing with the dealer. They didn’t make me do their job.

Local dealer – They had the car for over three weeks. I wonder what would have happened if that factory-certified technician from somewhere else hadn’t been in the area twice while our car was being diagnosed. I got the impression that this guy was the savant who twice rescued the dealer’s service department from throwing up their hands and giving up. Imagine if a random customer had been dealing with the dealer instead of a peer in their industry. The body shop guys tell me that they still believe in the dealer’s service department, so that goes a long way. The dealer should appreciate that they were held to the body shop’s standards.

National claims office – Outside of a slow start with the tow (which added a week) and the adjuster (which added another week) and one episode of snark on the phone, they performed as expected.

Local agent – Was a non-factor in the process. Agent missed a substantial opportunity to create a relationship and show how they care for clients.

What’s missing from this timeline?

A personal contact from the agent.

The lady who cuts my hair knows more about our experience with the deer hit and the subsequent repair adventures than my (former) insurance agent. If this seems normal, you have the wrong agent or you are the wrong agent.

In the nine weeks between hitting the deer and getting our car back, our only contact with the agent’s office has been my call to their office where I talked to his admin on the morning of the deer hit. She was pleasant, asked if everyone was ok, took a little bit of info, then transferred me to the national claim office. That part was expected as the priority at the time is to get started on repairing the car once we’re clear that there were no injuries.

A week after getting our car back, it was clear our agent wasn’t going to reach out. I called them to move our coverage to the CFalls agent we previously worked with for almost 15 years (call it a corrected oversight).  The old agent’s admin was pleasant and said she would take care of it, noting that she would contact me if they needed more info. She didn’t ask about my wife or the car, which tells me that their customer contact software doesn’t give them any sort of recent history to help “make conversation” & check in on a customer’s satisfaction level during customer calls.

The next day, the agent called me for what I believe is the first time in three and a half years.

He was calling to tell me that he had released our policies to CFalls & to ask if we were moving because of something they’d done. It was too late to ask. They might be able to fix it for someone else, but for anyone wearing the customer hat, it doesn’t matter. Some might share, but most are going to say whatever gets the guy off the phone – and that’s exactly what I did. I was busy with work at the time and didn’t have time to get into what would probably become an hour-long discussion.  Interestingly, the agent said he asks the same question of customers transferring business to his office – ie: what made you leave the other agent? What about the gap between getting and losing a customer?

It’s critical to ask good questions, but be sure to ask them while the answers still matter.

Fill gaps of inattention

So let’s get back to the real reason I bothered to share all of this with you: To help you understand how you might be leaving gaps of inattention in your relationship with your customers.

After my wife hit a deer at 70 MPH on a pitch dark morning just before 6:00 am, no one called during that nine week period to ask if:

  • … the driver is still doing OK (injuries and issues often show up days/weeks later)
  • … we’ve gotten the car back or to ask if we know why it’s taking so long (we have and I do).
  • … if we’re satisfied with the repairs (we are).
  • … if we want to make any coverage changes (we do).

This is below my expectations.

Some agents might say they “aren’t allowed” to make that sort of contact with customers. Don’t confuse being a real person who cares about their clients with being an order taker.

If your parent company doesn’t allow you to have personal, caring contact with your clients, find another company to represent. If anything, that sort of rule may indicate how that company will treat you someday.

Some insurance agents reading this might be thinking “we’re not told to do that“. Bear in mind that there are many things you should do to keep and care for a client that no one tells you to do.

Don’t be an order taker.

An order taker says “Do you want fries with that?”, yet an order taker can show some humanity and assess the purchaser on their feet and comment/question accordingly when appropriate.

An order taker can be replaced at will. I can switch to another agent for the same company without a second thought. I can switch to another insurance company without much thought, if all I want to do is compare dollars and cents.

On the other hand, if a client is madly in love (maybe that’s a stretch) with the care and attention provided by their insurance agent and their team, you’ll have to pry them away in most cases.

Which agency do you want to own? Which agency do you want to use? The order taker or the caring, attentive team?

Did You Know…That You Should Follow Up?

misty
Creative Commons License photo credit: antaean

If you look at the path a prospect follows on the way to becoming a customer and then, at their path as a new customer; youâ??ll see plenty of places where it would be valuable for them to receive an occasional tap on the shoulder.

With that tap comes just a little bit of info, but it won’t/shouldn’t always be a sales message, at least not explicitly.

Consider these 3 little words: â??Did you know?â?

They start sentences like these:

  • Did you knowâ?¦ that if you get stuck, we have 24 x 7 customer support lines?
  • Did you knowâ?¦ that 90% of businesses fail after a fire destroys their business – and much of that is because they are underinsured. Those who might have made it often donâ??t because they donâ??t have their current customer/order data backed up, which means that on fire day + 1, they have no idea who needs a follow up, who placed an order yesterday, etc. Using the automated backup feature in our software can save your business. Weâ??ll be happy to show you how it works.
  • Did you knowâ?¦ that many of our customers find our software’s dashboard feature motivational to them and their staff? Here’s a link to a video showing you how to turn it on.
  • Did you knowâ?¦ that we offer a 180 day money back guarantee? Thereâ??s simply no risk to putting our product/service to work for you.
  • Did you knowâ?¦ that we offer free online training videos that are broken down by function and only last 2-3 minutes? You can take a brief break, learn what you need to know right now and get back to work.

You get the idea.

Look at the typical timeline for a prospect.

Where do YOUR prospects need a little bit of assistance, a hand on the shoulder or a Did You Know?

After theyâ??ve bought, when do they need a little help? For customers youâ??ve had for months or years, are there new features or new things you do for your customers? Put each of these items in your follow up system and let them know when it is appropriate for each customer.

They can be emailed and blogged, but they should also go out in your printed newsletter.

You *do* have a printed monthly customers-only newsletter, right? 4 pages is enough. Seems like a little thing but itâ??ll never get ignored if itâ??s good.

All of these things put together will start to build a follow up system that no competitor will duplicate. And thatâ??s exactly what we want.

Message received: “DONT CONTACT US”

As you might be aware, I’m the Scoutmaster of a local Boy Scout troop here in Columbia Falls.

I’ve been involved as a Scouting volunteer in numerous forms for about 20 years, at levels as low as you can get, and as high as a VP on our Council Executive Committee.

As a result, I have a pretty fair knowledge of the organization, and I know where to find info when I need it.

Earlier this week, I decided to call the National office of the Boy Scouts of America in Irving to ask a few questions.

Normally, Scouting officials expect folks to ask these questions of the local council office (ours is in Great Falls), but the questions I had were of the nature that the local council office couldn’t possibly answer them.

I should note that the local Council President, the Scout Executive (paid position, similar to Executive Director) and most of the Executive Committee are friends. I know when they won’t know the answer to a question I have – and this is one of em. Enough background, now the story.

So, I moseyed over to Scouting.org (the BSA’s national website) and got one message loud and clear.

Is anyone home?

The message being sent by scouting.org: DONâ??T CONTACT US.

The main page of scouting.org has no phone numbers on it. No postal address. No physical address. No map to the National Scouting Museum or to National HQ (both in Irving).

There’s no “Contact us” link or contact page. There is a link to find a local council office (ie: Ask them, not us).

Even in the area where it gives direction for someone applying for a job (I am not) all they offer is a PO Box for the 4 regional offices. No fax, no phone, no physical address.

So I broke down and did a search. The results?

  • Search the website for “Irving”…. you’ll find no hits.
  • Search the website for “National office” or “national headquarters”… you’ll find no hits.
  • Search the website for “scouting museum”… you’ll find no hits.

If you dig around and end up on scoutingfriends.org, youll eventually find an email form and a PO Box for Irving. But still, no phone number.

If you wanted to contact the national office for something of national consequence – such as giving them a bazillion dollars, becoming a major sponsor of the National Jamboree, calling the Scouting museum to make a donation, or simply to ask a question that a council office absolutely CANNOT answer (in my case, I guarantee it), you are out of luck unless your message is suitable for US Mail.

The girl’s got it

By contrast, girlscouts.org has a contact us link at the bottom of the main page, which takes you to a page with a mailing address, physical address, a phone number, a local council office finder tool and email contact form.

There is always a silver lining when stuff like this happens. In this case, the silver lining is that I have a new question for my Communications merit badge students: “Look at scouting.org and tell me if you can see anything wrong with it, Communications MB -wise.”

It’s easy to forget the simple things. Your customers want to talk to you. A “Contact us” link is one of those simple, essential, first impression things.

Offer customer-focused reasons vs. “It’s our policy”

Charlie Steep
Creative Commons License photo credit: ckindel

For months, my youngest son has been saving for a new set of skis. Given the instant gratification culture we’re surrounded by, its a good thing to watch a kid save his shekels for a few months for something he really wants.

The timing is good for him to reach his goal, as we’ve gotten over 5 feet of snow on the mountain in the last 7 days. Skiers and snowboard riders are in heaven around here.

On Saturday, it was payday. He finally went to pick up his new skis (Elan something – you can tell I’m not a ski geek). He took them to a local ski house to get bindings mounted and fitted to his (also new) vacuum-fitted boots. The store is known for having an expert repair staff and this sort of work is critical to safely enjoying a pair of skis.

So he drops off the skis and asks if he can have them the next day. No problem, they say.

“No problem”

When he calls, they aren’t ready and in fact, it turns out they haven’t been started because the experts forgot to ask for details like weight and skier skill level – important factors in setting up bindings. He’s a patient kid (not sure where he got that from) so 90 minutes later, he goes to pick them up only to be told that he can’t have them.

Why? Because he’s not 18. 

He can’t enter into a legal contract because he’s a minor. The contract? A likely unenforceable “legal document” aka waiver of liability for injuries that might occur as a result of some problem with the repair/binding installation. 

Until a parent signs the waiver, his skis are held hostage. 

Because of that little detail, a parent (that’s me) has to stop what they’re doing and drive 25 minutes each way to the store to sign a piece of paper that is more than likely unenforceable. Why unenforceable? Because if someone has valid cause to sue and an expert can prove the binding install (for example) was the cause of an accident, this 5×9 piece of paper isn’t going to make much difference. 

Oddly enough, my son doesn’t have to get a signature to buy the skis. He doesn’t have to get a signature to buy boots, poles or bindings either. But he does have to get a signature if someone installs the bindings onto the skis for him.

It’s just our policy

When my son calls me to get his skis out of purgatory, I ask him to put the store guy on the phone.

When I question the ski shop guy, I get comments like “I just do the work” and “Its just our policy”.

Do I care if he just does the work? Do I care that “its just our policy”? Not even. When your staff answers questions like this – do your clients care? 

I’m not asking him why I have to sign the paper. I know that’s just something the store’s legal team cooked up because the industry advises they do so and I just have to tolerate it. 

I’m asking the ski repair guy why the store think it’s ok to take a kid’s money when they know the kid can’t consummate the sale and take delivery of their product.

I’m also asking them why they aren’t informing their customer at the time of the sale that picking up this item will require a parent signature. Telling them at that time, and perhaps sending them home with a form to allow for future pickups might prevent future customer service issues like this. 

Instead, I get nothing but policy speak. Bleah.

Making it better

What would have been better? Something like this:

“We require a parent signature because our management feels that most parents would want to know about purchases and repairs that have a potential to impact their child’s safety and experience on the slopes. While our legal team has their own reasons, we feel it’s important that parents are aware when we are selling certain items to their children. If you want to avoid this in the future, we’ve created an option for parents who don’t need at-purchase-time notification for each purchase. We started this program for our expert skiers and snowboard riders, like local world class snowboard rider Tanner Hall. If you trust the expertise of your kids, you can sign this special form that lets them get bindings and repairs done without parental interruption. The cool thing is that you still get a postcard in the mail each time they make a purchase covered by the agreement, so you know what’s going on.”

That’s what would have been better. 

Look, every customer realizes that businesses have to protect themselves, but they don’t have to care. 

Train your staff to communicate things in customer-centric reasoning, rather than “corporate legal” policy statements. That’s what the paperwork is for. Your staff is there to create and improve upon the relationship you have with your clients, not to spout policy.

So much for that day on the slopes

Going back to what happened with the store…By the time I drop what I’m doing and drive 25 minutes to the store to sign the waiver, it’s not even worth making the trip to the mountain because the lifts on the advanced slopes close at 3pm. What kind of taste does that leave in a customer’s mouth? My son spends more money at this store than I do. Far more:)

Bottom line: Make it easy to do business with your company. If you have policies in place that might be misunderstood by your clients or that might inconvenience them, explain them before they cause a problem and find ways to avoid the inconvenience altogether. This entire episode could have been avoided without reducing the company’s legal protection.

[audio:http://www.rescuemarketing.com/podcast/ItsOurPolicy.mp3]

Stampedes and shootings: Just another Black Friday

It’s hard to imagine why big national retailers continue to play the fools game, thinking that by discounting their prices 40-50% or more they’ll increase their profit.

Perhaps they think they’ll make it up on volume.

When you cut prices, the first thing that you give up is a piece (or all) of your profit.

Retailers who spent the weekend falling all over themselves catering to an upscale clientele don’t have this problem, especially if they’ve cultivated and groomed the relationship with that clientele all year long.

They didn’t have to go to the home of an employee and explain how a young employee was trampled to death, simply by having the misfortune of being the guy who unlocked the front door to his employer’s store.

When price is the only way you have to differentiate yourself from your competition, you deserve any pain you feel on your financial statement at the end of the quarter.

Is that the only competitive edge that you can find? If so, you aren’t looking hard enough.

Is there a Wal-Mart in Pamplona?

Another “competitive edge” – one that contributed directly to last weekend’s trampling death and injuries at a Long Island WalMart – is the special sale that starts at 0-dark-thirty in the morning and offers limited items at the special pricing. 2010 update about stampede.

Our store is better because we can get our people to the store before yours. Woooo, impressive.

If your competitors’ move their start time to an hour before yours, when does it end? Do you start a Cold War over who can open their doors first? In an ultra-competitive environment, is that really how you want your clientele to choose who their vendor is?

Do you really have to stir up a frenzy over one (or 10, whatever) $299 plasma screen TV to get people into your store? Is that the only edge you have?

Don’t get me wrong. I’ve told you to read Cialdini and will again. We’ve discussed scarcity and will again. However, we’ve also discussed common sense. Hopefully, we don’t have to discuss making sure your staff and clients leave the store alive.

Is it really worth having 300-400 people stampede over your staff and each other as if their survival depends on it? This isn’t the first time it has happened. Human behavior is not a surprise in these circumstances.

Yeah, sure. You can blame a small percentage of morons for this ridiculous behavior, but it isn’t just the customers in that store who were in the wrong. But… big retail, in their typical lazy way – they continue to confuse the customer with the sale as the most valuable part of their business.

All this focus on creating temporary insanity among your prospects for one transaction on one day illustrates the lousy, if not non-existent, relationship that most large US retailers have with the buying public.

That’s where the problems really lie. When you commoditize your marketplace by competing solely on price, you’re one of two things: Wal-Mart or crazy.

Wal-Mart can afford to do these things. Their entire business – and the systems that drive it – is built around that premise. They have the logistics, automation, buying power and mammoth size to make it happen.

If you aren’t Wal-Mart or crazy, you have to do something different and better. I don’t mean to suggest that you can just double your prices, do nothing else and expect all to go right with the world.

You can’t.

Remember, Business is Personal. Build the relationship. Deliver the value. When nothing else matters, they’ll shop on price.

Make other things matter.

[audio:http://www.rescuemarketing.com/podcast/StampedesAndShootingsBlackFriday.mp3]

How to be a business burnout. Or not.

Just the other day, I was talking with a client about the long term future of their business, and after being quizzed a bit, reflecting with them on what provoked me to sell my software biz several years ago.

This client has a small business people-wise, but its quite successful. Remarkably, that is the problem.

Been there, seen that, done it as well. Lived it again during that conversation.

Nothing else I’ve ever said in this blog is as important as what I’m about to discuss with you.

Simple Simon was a pie man

Growth happens.

Unless you’re rude, a dope, someone who thinks they know it all, unlucky, or someone seriously in the wrong line of work, if you are paying close attention to your customers and their needs (and knocking them out of the park) – your business is pretty likely to grow.

At some point in that growth, many business owners find themselves in the situation that Lucy and Ethel find themselves in below: (2m58s video)

While Lucy and Ethel are employees in the video, the point is the same for business owners.

It’s the classic problem covered in the E-Myth – the pie baker who gets overwhelmed with the business of making pies – but really it’s much more than that.

It’s a big reason I push you to document all your business processes.

It’s the reason I made it easier for clients to document their processes – by creating a simple app for them and their staffs to document, catalog, print and view the procedures.

It certainly isn’t the <ahem> millions in royalties I receive because of all the links in this blog to the E-Myth book at Amazon.com. You’ll have to trust me on that one:)

Pinch point

If you are the technician in your business, whatever that means – your business has a single, huge limitation. A pinch point.

It doesn’t matter whether you are making pies, doing heart surgery through a microscope, negotiating complex international commerce agreements between countries; programming complicated, real-time rocket fuel calculations for the next generation of space shuttles or carving bear figurines out of logs using a chainsaw – you’re a technician.

If you’re the owner AND technician, your business is limited by one thing.

You.

Unless you are very, very lucky (sort of), you are likely to work harder and longer than anyone you hire.

Delta 331 heavy, ascend to cruising altitude

2007_08_15_bos-lax-sba_009.JPG
Creative Commons License photo credit: dsearls

If you are working 14-16-18 hour days to get your dream off the ground, it’s a thrilling time (business-wise, at least). Everything is exciting.

Imagine an airline pilot on their first heavy takeoff. An astronaut on their first shuttle trip. Ok, maybe your biz isn’t as exciting as the shuttle ride, but its as close as you might get.

As for the effort you put in, that’s like a Boeing 777 taking off from your local airport, or the shuttle launching into orbit. The 777 burns LOTS more fuel per mile getting to its cruising altitude than it does once it levels off.

Likewise, the shuttle and its boosters burn thousands of pounds of fuel getting to escape velocity, only to have essentially effortless flight in space until its return to Earth.

You, however, are not like the Boeing 777 or the space shuttle. Fast forward a few years. Perhaps your business has reached cruising altitude.

Despite reaching cruising altitude, you’re still working 12-14 hour days 5-6-7 days a week, burning the same amount of fuel it took to reach escape velocity. That’s ok for a while, but didn’t you start your business to get freedom as well as the money?

(at this point, I’m assuming you’re nodding “yes”)

Those 12-14 hour days still exist because you’re still the owner and technician. Even if you have gathered some staff members to swat the skeeters away so you can focus on the real work, you’ve probably found that the real work (Yes, I mean the technician work) will expand to fill the container you give it.

The difference between you and Mark Cuban

You don’t see serial entrepreneurs in that position. They still have time to run a fistful of multi-million dollar businesses and a NBA basketball franchise, and have enough time left over to annoy the SEC (the government agency, not the athletic conference).

For many entrepreneurs, the startup phase is the only phase they can tolerate.

Everything else bores them and their business easily lives without them. They build businesses with the intention of selling them as soon as the business reaches cruising altitude.

Right at the end of the most expensive, most exciting phase of the business’ lifespan, they can leave or replace themselves with another qualified CEO/owner in short order.

What would that do to your business as it is currently structured?

Imagine if you walked out the door, handed the keys to the new owner and never came back. Would your business thrive? Would it be likely to survive?

Serial entrepreneurs might take a serious bag of management savvy and leadership skills out the door with them, but walking out the door still doesn’t kill their business. Likewise, they often start other businesses, still without having to work 120 hours a week.

The important distinction between most small business owners and most serial entrepreneurs? The serial entrepreneurs aren’t technicians.

Before you make an assumption about the small business owners I’m talking about… we aren’t talking about being smart or not being smart.

It isn’t just small business people sharpening mower blades, making pies, frying donuts and changing oil. The same issue arises for chiropractors, dentists, attorneys, physicians and others in technician roles.

Be careful what you wish for

Here’s another way of looking at it: If your largest competitor had a serious problem such as health, health of a parent, car accident, bailout related issues – and ALL of their business came to you starting tomorrow… Could you handle it?

If you suddenly found the Holy Grail of marketing for your niche and people flocked to do business with you, could you triple the number of clients you serve in a month?

Same issue.

Becoming easily replaceable isn’t easy

Consider that you have figured out that if your business is to grow (perhaps massively), you have to hire someone to do the technical work you do so that you can manage the firm.

If you plan to have the time to actually manage this growing firm instead of getting pulled back into the technical end of things, you can’t afford to hire someone brand new to the field.

Likewise, you can’t afford someone who has to be babysat, so this person (2 persons, more likely) will need to have a similar degree and depth of experience.

Result: It might take 2 or 3 new staff members to replace you to the point that would allow you to spend your time on the right things (marketing and management), much less to go home at a normal time without working into the evening from your La-Z-Boy or rising at 4am so that you can have some form of family life in the evenings without doing that La-Z-Boy thing.

At your current cash flow and revenue levels, can you afford to hire 2 people with your degree and depth of experience? If not, will hiring those two people allow you to make enough deals to pay them?

If the answer is no, or if the answer is “yes, but I really don’t want to do that”, then you have 2 choices.

Decide to grow, or decide to find a business model/strategy that works with you as the technician.

Either way, your business has to be structured so that the world doesn’t come to an end if your cell battery dies while you walk the beach on Maui at sunset with your spouse.

Meh. You old guys are grumpy.

If you’re 25ish, single and reading this, you might be thinking – “Meh. That old guy doesn’t know what he’s talking about“.

Things that might change your mind:

  • When a spouse, kids, a surprise set of triplets, a house, dogs, cats, kid sports leagues and that dust behind the fridge comes calling – and your business suddenly can’t get as much as you as it used to, and neither can your family.
  • When a friend takes off to the Caribbean for 3 weeks without a cell phone or laptop, and you can’t go because the business can’t deal with you being gone that long.
  • When a competitor’s business is up for sale and buying it would allow you to totally dominate the market – but you don’t know how you’d possibly handle doubling or tripling the number of customers you have – overnight.
  • On April 28, 1998, I had 213 new customers that I didn’t have on April 27th. With a staff of 2, of which I was one. On May 1, 1999 I had 269 new customers that I didn’t have on April 30, 1999 with a staff of 4, again including myself. Trust me when I say that these kinds of changes alter your life even if you think you’ve seriously prepared for them.
  • When an opportunity you’ve wished for all your life is suddenly right in front of you, and you have to choose between it and billing hours that you know you need in order to pay next month’s bills (and the baby comes next month).

Desperately Seeking Susan (er, I mean Clarity)

How you structure your business for the future is one of the most important things you’ll ever do for your business, yourself and your family.

If after 3 or 4 years you haven’t structured your business so that you can walk away for a week without total chaos taking over – you haven’t created a business. You’ve created a job.

Just because it’s built that way now doesn’t mean it has to stay that way.

So how do you change your business so that it’ll fit a lifestyle you’d actually want to live long term – while it remains a raging success?

What do you do? Where do you start?

Stay tuned…

[audio:http://www.rescuemarketing.com/podcast/HowToBeABusinessBurnout.mp3]

Does your small business send personal emails?

Back in January, Denny Hatch was discussing some emails he received: some personalized, some not.

I wanna hold your hand
photo credit: batega

Would you rather receive this (his example):

Date: 14 Jan 2008 03:58:31- 0800
From: â??Ticketmasterâ?
To: xxxxx
Subject: Event Reminder: Young Frankenstein

Ticketmaster Event Reminder
Hello Denison Hatch. Your event is happening soon!
Young Frankenstein.

When:
Friday, January18, 2008
8:00pm

Where:
Hilton Theater
213 West 42nd Street
New York, NY 10036

Or this:

Dear Valued Customer,

On behalf of the hundreds of Delta Global Sales professionals dedicated to serving you and your travelers worldwide, â??Thank You!â? for choosing Delta as your preferred airline

To Delta’s credit, they no longer send me “Dear Valued Customer” emails, they got a clue sometime after I posted that and started using my name. I don’t know if the blog post had anything to do with it or not. I mean, sure, I know that automated systems sent the email, but someone, somewhere at Delta had to write the template. A real person. Presumably, that person was charged with writing a personal note to a client whose business they appreciate.

However, there are dozens of other businesses that continue to send me “Dear Valued Customer” emails.

Credit card companies. Utility companies. Car dealerships. Clothing and outdoor gear vendors.

The fact that Ticketmaster was smart enough to send a reminder email was pretty cool. People are busy. We need reminders, even if we have a Day-Timer, a PDA, a smart phone, a spouse, Outlook reminders and a personal assistant.

The fact that Ticketmaster made the email timely and personalized made it seem real, as if a person typed it.

Would Denny be as impressed if he received the email after the show? Or if it said “Dear Valued Ticketmaster Customer” or similar?

This doesn’t just extend to emails. Same goes for letters, postcards, phone calls, packaging, shipping info, and so on.

How many contacts in your business touch your customers personally? How many are annoying, impersonal Dear Valued Customer grams?

What would you rather receive from the businesses you frequent?