Categories
Entrepreneurs Small Business

What’d you learn in 2020?

Was 2020 your best year ever? Was it your worst? I’ve talked with people dealing all three types of results, except that those conversations don’t really describe three types of results. It’s more like two easy to understand types of results and a wide spectrum of results between those two extremes. After an “eventful period”, I always wonder what people and companies will do next.

As you get older, you start seeing patterns during stressful, challenging periods. Younger people today seem to grasp this earlier than I did when I was their age. At least it seems that way.

One pattern is that you learn who people and companies really are. For example: there are takers, there are givers and there are those who do both. Stressful times don’t create those tendencies, but they do tend to amplify them.

There are people who seem to need pressure to perform their best. Likewise, there are people who need no pressure to perform their best. If you manage both of these people, it’s important to understand their differences.

I wonder what you’ll do differently this year vs. last year. I wonder what you’ll do the same. What did 2020 teach you about your business, your team (if you have one), your customers, and yourself.

My biggest takeaway from 2020 had nothing to do with COVID or the election.

I realized that I need to work harder than ever to spend time with smart, talented people. People smarter than me at things I find important. I’ve done this for years but in 2020, I doubled down. I’m already working even harder on this in 2021 because the payoff from last year’s effort was major.

At the least, the one thing to take from 2020 is that you made it. Hopefully your business did too. While there were a lot of human traits on display in 2020, there was at least one that stood out.

Resilience.

We can take a punch – in whatever form that might present itself. Doesn’t mean we don’t get hurt, but we get back up and try again. Even when it’s “wrong” or ill-advised.

There’s this guy in the valley I’ve been watching. Young guy. I knew him when he was a kid. He’s tried jobs. He’s tried his own business a couple of times. It never seemed to work out, at least not with enough consistency to depend on for the long haul. I could see his frustration – and so could everyone else. He wore it on his sleeve. I worried about him. Privately sent some advice. He’s a good man. He just hadn’t yet found his thing… until he did. Somehow, he managed to find it in 2020, of all places. I don’t see him angry anymore. He’s happy. He’s enjoying his work – and his customers seem to be as well.

He kept getting back up. That’s the part I’m proud of him for.

A sizable percentage of the country’s businesses are going to have to do the same, including some right here.

Encourage them when you can. Send some business their way when you can. Help them get back up off the floor after taking the punches 2020 handed out.

Wouldn’t it be a shame if they were unable to help you a few months or years from now because they’re closed – perhaps because not enough people did a little bit to help them back in 2021.

If your business had an amazing year, great. Depending on the reasons for that result, don’t get all cocky on us and assume that success will continue simply because you’re brilliant (even if you are). Keep proving your brilliance.

If your business had an awful year, perhaps the worst since your first year in business, don’t look at yourself in the mirror like you’re an idiot (even if you are). If your business survived, that’s something.

Depending on the reason(s) for the trouble, hopefully 2021 will be your great comeback. Or maybe last year was the signal that you need to try something else. If you do change business paths, take your resilience with you, along with the lessons of last year. They’ll both come in handy.

Take care of the people who take care of your customers. Spend more time with people who are smarter than you about something you find important.

Photo by Josh Hild on Unsplash

Categories
Employees

A linchpin makes it all come together

Is there someone in your company whose abrupt departure would cause unholy chaos? Seth Godin called them a linchpin.

You probably aren’t worried about staff members quitting right now. Many employees are simply hoping they’ll be kept on the team until the vaccine does its thing and life resumes to whatever the next normal looks like. Similarly, many employers are hoping business remains strong enough that they can keep paying their team until some form of normalcy returns.

And yet, there’s one type of employee to be concerned about. They’re the glue that holds everything together. I’m talking about someone whose departure could bring the house down, even though might not be apparent.

They’re the folks who “are the company”. If you have someone like that, ask yourself: Do we treat and compensate them in a manner that correlate to their value to the company & our customers?

When the economy starts growing again and it’s clear that the turnaround is going to stick, many companies will be hiring. Finding great people to do the work your company does is your second most important job. Keeping the great ones you have is the first.

Your linchpin will be the one other companies are looking for. They’re not just a member of the team, they’re an essential cog in your business.

You need a plan to keep them.

We’ll talk about four areas:

  • What happens if you don’t keep them?
  • Compensate linchpins properly
  • Treat them like you value them.
  • Make their leadership official.

What happens if you don’t keep them?

When the economy turns around, many businesses will see a glut of applications.

The linchpin will have their choice of jobs, even if they aren’t looking. If you don’t know who they are, which is entirely possible in a larger company, your first step is to identify them. Your managers should know and if they don’t, that should tell you something about the work your managers are doing. In a smaller company, you probably know who they are.

A friend recently told me about their primary contact at the CPA firm who does their taxes. They gave the firm and their clients two years notice that they were retiring. Normally, this would seem unusual. Taxes are often once-a-year transactions, so their announcement was two transactions worth of notice – reasonable.

The company where they worked did nothing to replace them. Maybe they assumed it’d be business as usual. They were “only” a middle tier employee doing tax work – they weren’t a CPA. How much impact could their departure have?

This linchpin retired this past summer. The week of December 3rd, my friend got a letter that his CPA firm was dissolving. Not in a few months or after tax season. Immediately.

It turns out the now-retired person was the glue holding the office and their business processes together. Imagine having a CPA firm for over 20 years and having to tell all of your clients in December that you won’t be able to help them with their upcoming tax filings. Not this year, not ever.

Compensate a linchpin well

I can think of two people who worked for me who were linchpins. They’ve probably been linchpins everywhere they’ve worked. 

I had control of J’s compensation, but I was young and stupid. The company was new, so every dollar had to be watched. No excuses – I was less of a leader back then.

We treated her like the valuable linchpin she was but whenever I think back to that time, I wish I had paid her better, even though she made higher than average for the position at that time and made more than at her previous job.

20 years later, I’ve yet to find a more effective peer, though I haven’t given up my search.

It doesn’t matter what they do. These people do whatever they do so well and create such an amazing experience that their customers (internal or external) would be up in arms if they left.

For the person you’re thinking of, are you paying them at a level that indicates how much the company values them? It’s easy to say “Well, they’re in a role whose market pay isn’t higher.” Do you make the decisions or does your budget? Do you know what the impact on your company would be if someone offered them $200 more a week than you pay them, so they left because they needed the money?

If you don’t currently have the funds, talk with them. They need to know they’re appreciated and how you’re thinking about them. Keep your promises. 

While money is important, it’s not all about compensation. There are at least two other things you can and should do to recognize your linchpins. 

Treat them like you value them

T reminds me of the person who retired from the CPA firm, ie: they are the glue that holds everything together. Her magic manifested itself during new customer onboarding, customer training and similar duties.

That company’s onboarding process was complex and technical – and was made more challenging by the variety of customer environments we encountered.

During the onboarding process, she’d discover things the customer never told sales – things no one knew about the organization or their business process. Things the customer didn’t often realize they needed or needed to stop.

These are the things you discover when you get down to bare metal in order to add a new capability for a customer. And yet, I watched the company treat her indifferently at times, as a hassle at others, with reverence at other times, and ultimately as a difficult person who was essential, so the company tolerated her… until it didn’t.

I say tolerated because no one seemed to like managing her. We got along well perhaps because I was fortunate enough to figure out her motivation. She loved the work and her customers. Anything that got in the way of that didn’t sit well with her, but the secret was that her occasional grumpiness was sourced entirely in her concern about a customer’s poor experience. The customer always came first. She’d schedule an onboarding at two am if necessary.

I put myself between the aforementioned treatment and her as much as I could because her value was evident. I saw first hand what she was getting done. She had above-average patience with customers, as well as a load of industry knowledge, technical skill, and the ability to navigate the crazy things we sometimes find at a customer site – without losing it.

There was literally no one else at the company who could do her job. While I had the technical abilities, I didn’t have the industry knowledge. She had both, as well as the ability to work with customers.

The value of people like this is immense. Maybe you can’t pay them like a VP, but you’d better treat them with the same consideration. They’re worth it. Finding out their value by virtue of their departure will be expensive and painful. It’s not all about compensation.

Make their leadership official

The people we’re talking are often asked to train new team members, even those in more senior roles. There’s a reason linchpins are often asked to train others – and it isn’t necessarily their skill.

It’s the example they set and the attitude they bring to the work. 

The thing about spreading what this person does is that how they do their work is what makes them a leader. Sure, they may have more experience and maybe more advanced skills than others, but usually, it’s their attitude and the care they take doing the actual work.

Instead of thinking “I’m just a worker bee, this isn’t important work”, they work as if they realize that every step in the process is an important part of the whole, even their part, because it is.

That mindset and the thought processes they convey can be transferred to other people by using them as mentors or trainers. While this may not be a true management role, having someone act as a mentor or trainer is still recognizing them as a leader. Having a fancy title or management responsibility doesn’t make you a leader. Your actions do that. Most of them are leaders long before that – and often remain leaders even if the title and responsibility is never conveyed.

The people around them already know they’re a leader. Having them mentor or train others tells the linchpin that YOU know. That’s important. It sends a company-wide message that recognize their leadership, even though they aren’t “management”.

You probably have a linchpin on your team – maybe more than one if you’re lucky. Question is, can you keep them?

Photo by Becca Tapert on Unsplash

Categories
Communication Project Management

The Expectations Gap

I read with some interest a NY Times piece about the parallel stories of two companies working on a COVID vaccine – Pfizer and Moderna. It caught my eye because I knew a little bit about Moderna – they’re a very small company playing in a very big game. I figured they were hoping to use a vaccine success as their launchpad to the big time. The parallels between vaccine development and testing and the nature of most custom work, whether it’s programming, building a custom home, etc are fascinating.

There’s a quote in the story about Moderna’s technology that identified the key to going after the virus (the spike protein, apparently) within two days of receiving the genetic sequence of the virus, which follows:

That’s from January. The comments about this process reminded me so much of custom work. Specifically, of showing a customer the mockup of an application or website that maybe took a day or so to develop. Mockups don’t take long because they don’t do much. They’re just a visual example that proposes a look for the real software / webpage. The idea is to get feedback from your customer *before* doing a ton of work.

Mockups are everywhere

It’s not terribly different from the 3D mock ups that you can create if you remodel or build homes. There’s architectural design software that’s simply amazing in that respect. The realism is impressive. I remember seeing it a few years ago. You could design a house in 3D including landscaping. Once done, you could visually “walk” through the design and get a feel how it would look – all in very realistic 3D. While impressive, it was still nothing more than a mockup. Like mockups in other industries, it looked real, but it didn’t do anything.

The parallel isn’t exactly like Moderna situation but it’s similar. Here’s how: once you identify what you have to build – in detail – and you get agreement on it, the hard part is done.

I don’t mean that building whatever you mocked up doesn’t require a lot of work, technology, raw materials, time, communication, know-how, etc. It does. Even so, the work to figure out what you needed to build in the first place, can be most difficult. Getting consensus on an on-budget design that everyone agrees on – and it’s actually what’s needed – can be rather difficult.

Many times a project is doomed from the outset because there wasn’t enough communication to describe what was wanted and why, what the possible solutions look like, and what solution makes the most sense for the situation. What ends up getting built is what we thought someone wanted, only to find out both sides made too many assumptions and failed to ask enough questions. Mockups are great for reducing these problems.

New school design

What Moderna did in two days is flat out amazing, particularly when you compare it to how it was done in the past. Old school methods of building vaccines were in some cases done by getting people sick and studying the reactions in the sick peoples’ bodies. From those reactions, scientists, doctors, chemists and others eventually came up with a vaccine. Today, much of that work happens in a computer. That’s an oversimplification medically, biochemically, and probably in other ways – but you get the idea.

Some of you may remember the SETI project from years ago. After you installed their software, it would download and process a small amount of the radio telescope data collected by the Arecibo observatory – yes, the one in Puerto Rico that suffered damage resulting in it being permanently taken offline. SETI’s software would process the data and send it back to the SETI system, which would use whatever processing your computer had done to figure out if that data was valuable.

Early this year, I stumbled across similar project for medical study called Folding@HomeFolding@Home is working on protein folding analysis for COVID and other diseases. I read somewhere that some of the data processed by this project helped produce some portion of the vaccine solution – but I don’t know the details. This happened thanks to a large number of people all over the globe letting their computer do these computations and analysis in the background. As a group, these computers served someone as an equivalent to a medical supercomputer. That’s important to this work because supercomputers are rare, in demand, and really expensive.

Before I digress further, let’s explore how expectation gaps appear.

Expectations gap?

So if Moderna’s software figured out the spike protein after two days of work in January 2020, you might be thinking “Gee, it’s November, why don’t we have a vaccine yet?”

It’s a reasonable question and it brings the discussion back to our mockup discussion.

By identifying the shape that a vaccine has to match, they’ve done a very important piece of work. It’s a mockup of part of the work of producing a vaccine (yes, a sizable oversimplification).

Once you have a vaccine, it has to be tested, including time-consuming human trials. That process is often where the work doesn’t pass muster. Once it’s been tested, accepted by the FDA, and probably other work I haven’t mentioned, then you have to manufacture millions of doses. That requires sourcing raw materials – some of which may be expensive, time-consuming to make, etc.

You have to figure out the logistics of delivering it and administering it to millions. That takes money, people, logistics, systems, and time, but that’s not the point.

Communication is essential

What fascinated me about it was the gap in expectations between the reality of the work and what we (the general public) expect.

Anyone who has done custom work learns very early on that if you don’t manage the expectations gap, you’re in trouble. I suppose it’s a good thing that Moderna’s successful protein work didn’t make it into the news in early January since they didn’t yet have a vaccine. They simply had the protein match. Some who knew of this success had expectations for a quick solution, not realizing that the process had just begun – thus creating an expectations gap.

Despite the fact that the typical multiple year process of figuring out what to build had been reduced to two days thanks to years of effort, testing, and trials on other diseases, plenty of work remained.

First US Polio case: 1894. Polio vaccine approved: 1960.

They felt they’d have a vaccine in 18 months vs. four years, the recent best case for vaccine development. A reminder: It took 76 years to get a polio vaccine. Science has improved and our expectations have kept pace.

That’s the lesson those who do custom work must learn from this. We have to be careful to manage expectations because it’s so easy for the customer to see very early on what looks like a finished product but isn’t – because we want to get feedback from them.

Whether it’s a house design, software, a website, or whatever – there’s a lot of work required to get from that mockup, to something that only works on the programmer’s machine and nowhere else (aka “WOMM” – works on my machine), to a point where it works on every computer, browser, mobile device or whatever.

This gap is “significant”, kind of like the gap that can be created when a home builder gets the foundation poured, framing done and the roof on. All of a sudden it looks like a house. Get windows and the front door on and it starts to look like a real house – but it’s only been a couple of months. Why does the rest take so long? If your expectations aren’t set properly, conflict is coming.

Avoiding the expectations gap

Why? Because the first 80% looks like everything and the second 80% is hard to see from the curb. A house may not be wired, plumbed, sheet rocked, painted, etc. The builder may be waiting on various tags / permits. It may lack cabinets, appliances, flooring, fixtures, etc. It may not be cleaned up or landscaped.

Some of these things are hard to see from the street, where it doesn’t look much different from the day the roof was finished. It’s similar to me showing you an app on my machine, where it works in the environment I work in every day – where it’s easy to make it work.

It’s critical when doing custom work to make sure that you explain what people are seeing and what’s left. Part of doing that (and not catching a lot of grief) involves your expertise in knowing what it takes to get from point A to point B because until you know the expectation gap may also be in your head. This gap is a good way to assess the expertise of someone that you’re planning to hire.

The house in the hills

Back in the 90s, we built a custom home – architect and all. When we interviewed the builder, who came with good references, he set expectations for us from the outset. He said “All the references had projects that went pretty well. But I should tell you, every 10 or 20 projects we have one that seems to the homeowner like a complete disaster. It will feel like everything that can go wrong, does go wrong. It turns out fine in the end. Most times we can control those things, but sometimes we can’t. Between the weather, people, suppliers, subcontractors, and everyone else that’s involved – there’s a lot of moving parts and opportunity for things to go wrong. What you need to know is that I will take care of these things if that happens.”

At the time, I appreciated the warning, but didn’t think much about it. We never think the gap is going to get us.

Unfortunately, that’s what happened. We had maybe eight or ten things go wrong that seemed like a disaster at the time. Halfway through framing, the builder said “The way the architect designed this staircase… it didn’t go anywhere. The only way to build it so you could walk upstairs was to make some adjustments.” He simply took care of it.

A concrete truck got stuck in the backyard, slid down the slope of our lot and jammed itself against a tree on the neighbor’s lot (which fortunately didn’t have a house on it yet). They had to call another concrete truck to pull first one out. Meanwhile, the concrete was getting hotter and hotter, meaning it was going difficult to spread once it was poured.

Filling the expectations gap

That night I stop by the house after work and find guys in the dark working hard trying to spread the concrete before it sets. I can tell by how hard they’re working that it’s already decided to set and they’re doing their best to make it work. They ended up having to pour another small layer to smooth everything out. Other things happened, but it didn’t matter because a) he set the expectation and b) he took care of it. While the problems were annoying, the builder did what he said he’d do. He filled the expectations gap.

Years later I ran into a real estate agent who had a similar expectation gap filler. She had a checklist for the refrigerator when she listed your house. She said “Here’s a list of things that may go wrong between now and the time your home sale closes. Some are normal, some are crazy. If they happen, I will let you know and I will take care of it.”

She set the expectation and filled the gap appropriately. That’s really all customers want. When they hire you to do a custom job, they want it taken care of. Whether the work is selling your house, building software, or a tax return, customers simply want a professional to finish the job and handle whatever problems arise.

Your turn

The good news is that this is a fairly easy situation to improve. You already know all the things that can go wrong. You’ve dealt with 99% of them. Why not document them? Present them to your customers in a way that turns them into a way to show you’ve got experience and expertise on your side. Make sure they know what your response will be.

Don’t fear putting them in writing – not so much as a guarantee, but as a “We’ve got your back.” Remember, they’re coming to you for a result, not for the mess between point a and point b.

You might be worried that your competitors will copy what you do in this area. The rare one might, but most won’t. It’s surprising how many things you can do for your customers right out in the open where your competitors can see them – and they’ll simply watch. Some will attempt them and find them too much work. Don’t worry about your competitors. Worry about your customers.

So… how are you filling the expectations gap for your customers? How can you bridge that gap and give your customers more confidence that they’ll be well cared for?

Photo by Denny Luan on Unsplash

Categories
Sales

Do you have 10 min to jump on a call?

Have you been asked to “jump on a call” lately? Almost daily, some guy emails, leaves a voice message, or ‘reaches out’ on LinkedIn and, despite having zero prior contact with them, immediately wants to know if you have “10 minutes to jump on a call” with them. It floors me that salespeople have enough free time to send cold emails asking for a cold call regarding a service that we are the worst possible fit for.

He did no research, or more likely, whoever or whatever gave him the lead expended very little effort to toss me in the lead pile, other than perhaps a LinkedIn scrape or email list rental.

I ignored the first email, figuring that the email was sent on his behalf by an automated system. If someone replies, it’s his job to respond and try to make the sale. In most cases, there’s a weak manual effort involved, or a poorly setup automatic system – meaning they’d give up after one email.

Not this time

He emails again, or his systems do. Either way, better than not having done so at all – but that still doesn’t fix the lack of fit. This time, it’s clear to me that ignoring him isn’t going to work (which is fine, BTW). Ordinarily, I’d click the “Junk” button and be done with it. For whatever reason, I decided to see what he was made of.

Having been a user of the service he’s selling, I know who’s a good fit for the service – and we aren’t. I tell him four reasons why the company is not a good fit for their service. Should be clear to him that we are a waste of his sales time.

He replies – and this one is not an automated email. He actually wrote it, typos and all. He says “As you grow” or “When you grow” or some such, let me know when you’re ready for us.

He isn’t paying attention to what I said. His somewhat mechanical response implies that we’re a young, tiny company and are just aren’t ready for them yet. It leaves the impression (perhaps false) that he doesn’t care. If that’s true, that tells me his company doesn’t care. Maybe they do, maybe they don’t – they’re quite large and successful.

Required: Paying attention

The not paying attention part is trouble. It leaves people with the idea that you don’t care – even if you do.

I reply to the sales guy’s email: “We’ve been in business for decades. The 4 items I mentioned that don’t make us a fit for your software (which I have used before) are intentional decisions about the way our business operates. They will not change.”

Silence.

I gave him an opening. If he checks LinkedIn, he can gather additional info. From that, he can assume (perhaps incorrectly) that I know others similar roles. Perhaps those companies could use his software. He could have asked for a referral. He didn’t.

The gift I gave him was saying that I have used his software before. I didn’t say “I used it and it was awful.” (it wasn’t) His opportunity to respond to that gift was to reply, thank me for being a former user (whatever) and “Do you know people in positions like yours who might be a better fit?”

The dog ate my homework

When you don’t do your homework, you waste my time AND yours. Wasting time due to life’s little curveballs is simply an opportunity to make adjustments. Wasting time because a salesperson didn’t properly qualify a lead (me) – is another thing altogether.

One of the four items I responded to the guy with is publicly available information if you want it. The rest might be discerned from digging around a little, but it takes less time to email an unqualified lead than it does to do your homework, so most companies send the email.

The problem is that when salespeople don’t do their homework, they make less money. Their company suffers too. They spend time on leads they’ll most likely never close. They have x minutes per day to work leads. You don’t want to waste even five minutes on someone who will never, ever buy.

Try this: Spend two minutes researching each lead. Unless you’re required to work every single lead, your time will be better spent doing a little research and eliminating the obviously poor matches.

Photo by Quino Al on Unsplash

Categories
Business culture

Do you wear their t-shirt?

The “Business is Personal” origin story is at the core of what “Business is Personal” is. Back in 2005 I started talking to my sales manager about selling the business. They decided they wanted to buy it. This was good because they understood the business, as well as the value of the business. I knew they could take care of the customers, so I wasn’t really concerned about the future of the business from the customers’ perspective. Some people may not care but I didn’t want to sell the business to somebody who would promptly goof it up. We took something that was struggling, fixed it, and grew it 12X. It meant something to me.

What made it gel?

Over the next couple of months, we were getting things figured out and settling on a price, among other things. One day, they made a remark that didn’t sit well with me at all. I remember taking whatever it was as an insult.

It’s funny that I cannot remember the specifics of what they said, despite being a seminal moment in my career – at least from a “I stand here” perspective. It wasn’t simply a “you rubbed me the wrong way” thing – it was fundamentally a “This is not how things are done” sort of thing.

When I reacted to this, they said “Mark, it’s not personal. It’s just business.” Their explanation was that their comment wasn’t a personal attack on me – and therefore it was ‘just business’.

I disagreed. Not because they were insulting me, but because I believed business IS personal – and I proceeded to explain why. While we got the transaction done and I moved on from the business, that conversation remains with me to this day. Not the long-forgotten conflict, but the clarity that business is indeed personal and the reasons why.

Even my kids know

Back when we got together with other people, it wasn’t uncommon for work to come up in conversation. When that happened, how you’re treated by your employer will color your comments – or have you keep them short. Whether you’re treated well or poorly at work, it’s difficult not to take it personally – and it’ll show in your conversations with others.

If your kids hear you and your significant other talking about how things are going at work, they get it. Maybe not all of it, but kids are not stupid. They listen, and learn. They understand when work is treating their parent well, even if they don’t understand the details. They can tell from the look on your face and the tone of your voice.

Would you wear their t-shirt?

When your employees walk through the grocery store with t-shirt or a ballcap that has the name of your business on it. Some people walk by and might say “Yeah, love that place.” Some people won’t say a word. Some people will nod or tip their cap. Some might make a negative comment.

Is the person wearing the hat or shirt ambivalent to the comments? Perhaps. There will be some who don’t care, but most will elicit a personal reaction – even if they keep it to themselves.

It’s their place of work. It’s where they spend a fair amount of time learning, refining, working as a expert in their field. Even if you hate the company, you’ll likely have some reaction if someone says that place’s work sucks – because it reflects on your work, even if in a small way.

I think back to the places I’ve worked since 1983 and asked myself whether I’d want to wear a t-shirt with each employer’s name on it. There are a couple that I wouldn’t choose to wear. The reasons don’t matter. Maybe it seems like a trivial thing, but wearing them reflects upon me. It’s personal.

Would you wear your employer’s t-shirt around town if you had a choice? Why? Why not? Is it personal much?

I built that

When you’ve built something from scratch, or you’ve been part of the team who built a company from nothing, it means something. You helped take it from a garage in a back alley to something sustainable and solid.

If I asked you about it, you aren’t likely to say “We built a strong company from nothing against tall odds, but it was just work.”

Nobody says things like that – because Business is Personal.

Categories
Direct Marketing

Be in context

A number of businesses I regularly talk to have been working on big new projects over the last six months. Perhaps you have been too. Things have changed for some, not so much for others. A number of folks have been thinking hard about their customers and what’s impacted them in the last six months, then got to work building something to help… something that’s good for the seller as well as the buyer. The next step is how to present it to your market. Things aren’t what they were this time last year. How does that impact the introduction of your new project? To me, the impact is significant. Do you dare waste that effort with an introduction that no one understands?

Take a pulse

Unless absolutely nothing has changed for your customers (and maybe despite the fact that nothing has changed – if that’s the case), assuming you can go at your existing customer base with the same type of message you might have approached them with last November might not be ideal.

Obvious or not, we’re in a situation where, for some customers it would be okay to use messaging similar to what we would have used last November. Yet last year’s message might catch others completely out of sorts.

Most of us can’t afford to introduce something brand new with a message that falls completely flat. That first impression is important. We don’t get a second chance for a first introduction – so it has to be the right one.

If our introduction doesn’t resonate with them simply because of their current situation – that’s on us.

Maybe you have customers who are one person businesses. And perhaps others who are five employee shops. Maybe some have 15, 20 or 30 employees. Each of those customers (prospects), regardless of what they do, may have navigated the last six months differently. Each of them is probably in a different place today. Because of that, the message you use to introduce the thing you’ve been working so hard on must take each of their situations into consideration.

What’s changed?

Given whatever has changed in your business, and whatever has changed in your customers’ (prospects’) businesses, your intro should be carefully considered. Don’t be surprised if you need to address each group with a message specifically for them. While you might typically do that anyway – today may be a unique situation.

Don’t be surprised to find that you need a specific message for the one person shops. Their last six months could have been amazing, horrific, or somewhere in between. They may deliver what they do in a different way. They may be in a different business altogether – in the same market. They may be in a different market. You need to know. What that one person shop had to do could be completely different compared to the five, 10, or 20 employee company.

If you address the 30 person company with the same message that you send to the one person shops your message may fall on deaf ears. It may not make sense in November 2020 for that size customer in your market, even if it’s perfect for a different sized customer.

These are things you need to figure out with one-to-one conversations with customers of each size. You know the right customer sizes. Reach out and find out how things are going. Ask what’s changed, what hasn’t changed, if needs have changed, and which ones haven’t.

Use what you learned

Use what you learn in those conversations to determine how you address each of those groups of customers. One of the last things you want to do is approach them with something new that they sorely need and do so in a way that isn’t easily understandable, doesn’t resonate with what they think their current needs are, doesn’t make any sense, or sounds like you haven’t been paying attention.

On the other hand, if your approach shows that you’re paying attention, that your new offering fills a need they may not have had six months ago, or simply fills a new need, your efforts might find a receptive audience.

Whatever the case, it’s critical that your message makes it clear that you’ve been watching, listening, and using those discoveries to start the conversation in a way that shows you’re ready, willing, and able to help.

Don’t waste that first impression.

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Categories
Employees Leadership Small Business

Adaptable to change?

Last week, we discussed ways that employees could make themselves more valuable to their employer and thus, more likely to keep their job. These were focused on how many owners / managers look at their team when things are tight. When things are tight, reducing expenses is always on the table – and rightly so.

We see this done poorly by large corporations on a regular basis. The news will mention that some large company laid off 30,000 workers at one time. It’s hard not to wonder who is managing a business that suddenly figured out they had 30,000 “extra” people. A company doesn’t often find itself in this situation overnight and it’s rarely a secret inside the company when you’re on the way there. Sure, there may be changes happening in your market, but you don’t wait to take action until your only next step is letting 30,000 people go. A company’s leadership shows whether they are adaptable to change, are stuck in denial, or somewhere in between.

That gets us back to keeping your job. One of the angles I didn’t discuss last week was that the likelihood of your continued employment (read: value to your employer) may depend on your demonstrated adaptability to change.

Change never stops

It’s a permanent fixture. Some will pretend nothing has changed or will attempt to take their company back to some magical time in the past, but they are fooling themselves. And yet, these folks exist.

Look back 10 or 20 years in your industry. Has nothing in your business changed? Even the most “primitive” supposedly low-tech businesses have changed in some way over the last couple of decades. How you as an employee respond to changes is everything. Your ability to adapt to change is central to your value to a company. This responsibility to be adaptable doesn’t end there. More than ever, your responsibility extends to your own career.

What do employees see?

When you look back at businesses that failed – regardless of size – one of the major turning points was their inability to recognize change – or their outright denial of approaching changes.

If you see a lack of response to clear and obvious changes in your employer’s market, you’d better be aware of what the company is doing to deal with these changes. If nothing appears to be happening, ask – carefully – about the company’s perspective is on a change that’s become obvious to you.

Don’t position it as criticism. You may not know what has been researched, decided upon, or planned in response to the change. The situation may be top of mind for your company’s leadership.

You may be able to detect this during your conversation. It may become clear that they recognize it and are planning (or taking) action to deal with it.

Alternatively, you may get a vague answer to your question about this change. You may be told “Good question, we’ll talk about that in our next full staff meeting. Thanks for bringing it up.” As long as those gatherings (virtual or otherwise) happen reasonably often, have patience and take action based on how that discussion goes.

On the other hand…

If your question is dismissed as if you don’t know what you’re asking, or you get a response indicating the conversation is over, you need to think about what this change really means. Maybe you misread it. Maybe they misread it. Either way, you need to find out which it is.

Look around and find out how it is affecting your competitors – not just locally, but in a handful of places. You may have to track down industry-wide publications and see if this change is being discussed. Call a competitor’s sales number and ask them about the change you’re concerned about. Don’t accept their response as the be-all, end-all, but file it with everything else you’ve learned.

That’s not my job

Why does this matter? Because you need to figure out if the change risks your career and financial future. Yes, a little bit of Captain Obvious – but this is on you. With very rare exceptions, no one is coming to save or protect your career – except you. It IS your job, like it or not.

If you’ve found yourself employed by a company that isn’t paying attention, you might be the next layoff – no matter how valuable you are. It’s on you not to be surprised.

Photo by Tim Stief on Unsplash

Categories
Employees Management

How to keep a job

Most of the time, I’m writing to employers – business owners – because most of us need some sort of help at one time or another. One of the things they sometimes struggle with and rarely discuss – particularly with their staff – are things like hiring, making payroll, figuring out who is making things happen, etc. All managers need help that they haven’t asked for.

What’s frustrating them?

If it isn’t already obvious, ask. Yes, ASK. If it’s obvious, see what you can do to take care of the problem. Find a way to ask that shows you care – assuming you do. If you don’t, maybe you’re what’s frustrating them. If you don’t care and it’s because of something going on in the shop / office, don’t they deserve to know? Don’t assume they do – because managers don’t see / hear everything.

If any of these things are your sweet spot – the things you like to do and are good at – offer to help and tell them why – **because** they are your sweet spot.

Who picks up the socks?

What I’m referring to here is little things left undone around the office. If you take care of these things, it will usually get noticed. If it doesn’t get noticed after a week or so, ask if it’s OK that you take care of those things when you have a few minutes at the end of your work day.

There are people who notice these things and people who don’t. Of the people who notice them, there are those who walk past them and those who pick things up and put them away, etc. Be the second person. It’s a little thing but it sends a message that you care about the place. In some cases, you might be eliminating a safety issue that keeps a co-worker from being injured.

This may seem like a little thing, but injuries to someone can impact production, potentially cause missed deadlines, and perhaps result in additional costs for your company. If the injured person is a key employee due to their skill, knowledge etc – the impact might be more significant. Despite those things, none of us want a co-worker to get hurt on the job – and we don’t want that for ourselves.

Create additional value

I know, “create additional value” seems a little buzzword-y, but think about the things you do from A to Z. Little things make a difference to your employer, but also to your company’s customers. Small touches take only a moment, but can make a difference. You know how this feels when it’s done for you.

A good way to create additional value is to notice things that can be improved AND do something about them. Duh, right? All of us can probably think of projects around the office or shop that seem to get hung up for reasons clearly within our control – yet it happens anyway. What’s the cost of a delayed project? Do we have to refund all or part of a payment? Do we lose a job? Does it cause us to lose a customer? Maybe all three.

Someone sees what’s causing the problem, even if it isn’t you. If you’re that person, make an adjustment if you can do so without creating drama. If you don’t know, ask a co-worker. Someone probably has a theory about what the problem is. Why wait until some manager notices – IF they notice?

I know these are simple, obvious things. If you think that, you’re probably already doing these things. If you aren’t, ask yourself why. Solve problems even before you’re asked – unless that can cause other problems.

Might help you get a job

Interestingly enough, these things are also good conversation during an job interview. Hiring managers and owners want to be sure that you’re the right person. Those who have gotten good at hiring have usually gotten that way by initially being bad at hiring.

Ask them what’s frustrating them, what isn’t getting done for unknown reasons, what’s taking too long. Do so from a place of curiosity, not ego. You’re trying to find out how you can help, not reminding them of their shortcomings. If the things they bring up are strong points for you, say so. Tell them how you think you can help. Tell them why you like doing those things and what your past experience is in fixing those problems. If you can discuss prior outcomes from similar work, do so.

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Categories
Management Pricing Product management

Is it time to raise prices?

I recently received a question from someone who was curious about how to raise prices. They have service customers paying a monthly fee going back almost 20 years. All their customers are on the same price plan – and they’ve had always been at that price. They were concerned that they could not raise prices without losing a bunch of customers – a legitimate concern since they hadn’t changed their pricing in close to 20 years.

There’s a couple things to look at here. First off, if you’ve had customers for 20 years, you’re probably not going to raise prices by such an egregious amount that you’re going to lose a bunch of them.

One possible exception to that – you’re seriously under charging now, losing money and what some might consider an egregious increase is actually what you need to get your margins right. However, this seems extremely unlikely after 20 years unless losing money on this product is a recent development. What I usually find when I see someone’s books is that they’re doing OK, but could be doing a lot better if their pricing made more sense.

While this conversation could have a lot of variables, the raise prices question comes up fairly often. Many times “How do I raise prices for existing clients” ends with “… who have been paying ‘nothing’ forever?”

Customers going back almost 20 years who were all on the same price plan, so the company didn’t know what to do. They were concerned that they could not raise prices, without losing a bunch of customers.

There’s a couple things to look at here. First off, if you’ve had customers for 20 years, you’re probably not going to raise prices by such an egregious amount that you’re going to lose a bunch of them unless you’re seriously under charging now and actually losing money.

If you’re still losing money after 20 years. it’s hard not to wonder what’s wrong with you, or whoever is funding you. I’m guessing that’s unlikely. I didn’t look at this company’s books, but if I had, I suspect that they’re doing okay. And could be doing a lot better if the pricing and their price structure, made more sense.

It’s a bad time to raise prices

The first reaction to get out of the way is that now is a universally bad time to raise prices. It’s COVID time. It’s October. It’s 2020. Winter is coming. My competitors haven’t raised prices recently. Sales are down. We can find many reasons why the time is bad to raise prices. Some of them may be true, but that doesn’t mean it’s a bad time.

Of course, raising prices for existing customers isn’t the same as raising them for new customers. While you’re focused primarily on pricing, keep in mind that “the price” is but a single component of “pricing”. Pricing includes volume, service delivery, packaging, price tiers, timeliness, value proposition, and other things.

How you sell this new pricing needs to be carefully thought out, particularly if it involves a restructuring of delivery, service structure, etc. Sometimes customers you’ve had for 20 years commonly have different needs and bought for different reasons than those who bought recently. Sometimes not. You should know.

A common thought is “What features can I add to the existing product so that I can raise the price for existing customers?” While that’s useful – do your existing customers want the new features you’re dreaming up to add to the product?

Negative margins? Nope.

The company with the question sells software as a service, but the conversation applies to almost any service that has a recurring service model. Sure, there are some exceptions to the “any service” thing, but there are an awful lot of parallels across industries.

First off… these customers don’t expect you to lose your shirt just so they can do whatever they do with your product / service. If they expect that, they’ll disappear when you make these changes and frankly – that’s a good thing. No one needs customers who buy a product with a negative profit margin. Sure, you might say “Well you know with the whole COVID thing, I can’t afford to get rid of customers.” Tell me, how many customers do you want if you’re losing money on each one? Do most businesses really want even one more customer that costs them more than they charge that customer? In almost every case – no. The exceptions are by design.

If I raise prices, I’ll lose customers

Almost everyone I talk to about these things feels this way when they prepare to raise prices. We know we might lose a few, but sometimes people get this wild idea that they’re going to lose 80% of their customers because of a price increase. Are you really providing that little value to your customers? I doubt it. I suspect you know your customers better than that. In my experience, it simply doesn’t work out that way. You’ll probably lose some but the math will probably work out with you doing less work and making more – even if the increase is small.

So how do prices get like this?

There are many reasons, including an addiction to coupons, not paying attention to margins, missing the impact of step costs as volume increases – among others. The two reasons I see most often are “we can’t do it now” and inattention. When I say inattention, I don’t mean anything specific. It’s as simple as not taking a regularly scheduled look at prices, costs, margins, etc – and then doing something about it when you find something wrong.

Back to the person who asked the question. They indicated that their customers had been paying $29 a month for between 15 and 20 years with zero price increases during that time. I don’t know how many customers they have – I didn’t ask because it doesn’t matter. I assume they are at least marginally profitable at that price level – or were until recently.

Given that customers have been paying $29 a month for 15 to 20 years, they either see $29 as a no-brainer value-wise or they are the type of person who never looks at their bank statements. If you have 1000 of them and 10% leave, you’ve lost $2900 a month. If you raise the price to a mere $32, you regain more than the $2900. But we’re not going to do that.

Stop the bleeding

First off, you have to keep things from getting any worse. Start by determining a fair price with a reasonable margin for new customers. If this is your entry level pricing – figure out what can be removed from it and remove it from that lowest tier. Do it now – before lunch. You should know what can be removed after 20 years.

Your entry price still needs to be a no-brainer, but it shouldn’t include every single thing you do. If you aren’t sure, ask whoever deals with customers all day. Sales, support, service – whoever. Ask them specifically. What portion of our services do our new customers rarely use or not need? Of the things that remain, are there any that create a significant hassle? Pull that one too. Your entry level customers should not have high support costs – and you should work on that next if they do.

Change that price and the explanation of accompanying services right now – before you do anything else. Once you do this, you know that whether you get 10, 100 or 1000 customers in the next month – it won’t be making things worse.

It doesn’t matter how the old price compares to the new one. It simply has to make sense to new customers. Maybe the old price was one percent of what the new price is. It doesn’t matter. What matters is that your new customers see value in what you deliver for that price.

The hard work

Before we worry about the old customers and their $29 price, we need to finish setting the new pricing. Get together with your team and see if you can group the customers you’ve gotten in the three years into a few segments. Don’t get complicated here. You can always do this again later – and you might.

Maybe you have customers new to the industry and for them, the entry service level (and price) is ideal for them. What other natural groupings do you have? Your people will know if you don’t. Ask them questions and do not interrupt. Listen. Take notes. Say “tell me more” or “is there anything else” until they’re done. Let them empty their minds on the table. They’re on the front lines. They may not know your costs or margins, but they know your customers.

Discuss what those groups need of the service levels you offer. Don’t make things up. Use data and conversations to drive decisions. Review the decisions with the team to make sure the grouping of services to a particular customer segment makes sense.

Once you’re done with that, look at your numbers, whether they are in some fancy software or on a chalkboard in the shop. Figure out a price that makes sense for each tier. Not a price relative to the 20 year old price, or even a price that tries to “look right” when compared to the entry price. Make the price a good value that preserves your margins.

Update all your prices and service information to reflect all of this work. Ask for feedback as people buy. You’ll want to know why they chose tier A instead of tier B. What’s different about the customers who consistently choose A over B, and vice versa. The value… the economics must make sense – but the mix of services at that level must also make sense. You wouldn’t give a teenager a Tesla X on an icy winter morning. You also wouldn’t send them out without studded snow tires on their 15 year old sedan.

It’s time to raise prices. Finally.

Tell your existing customers the truth about your unsustainable pricing and what you’ve done about it. They’re going to figure it out eventually anyway. Explain your new tiers and tell them what you believe is a good process for identifying where they belong. Don’t get all sales pitchy. Tell them how it is, tell them when the old price disappears and tell them specifically what they need to do and when. Make it as easy as possible – then make it easier. You’re not punishing them for the last 20 years. You’re setting things up so you’ll be around to help them for the next 20.

Some people will not understand. They will leave. Thank them for their time with you and let them go. Don’t argue with them. It’s their decision. A small percentage will be angry. Let them be. You can’t change that about people. It’s their decision. Thank them and move on.

So you raised your prices and the world didn’t end, but you know the problem isn’t completely solved.

With the new pricing, the economics of your business will change. Pay attention. You may have to go through a price exercise like this more often. You may find that assumptions about you customers will change – or maybe they won’t. Either way, you need to stay on top of it.

Don’t do anything that’s not sustainable. It was a lot of work to get out of the mess you were in. Let’s not do it again if we can avoid it.

Explain the economics

Some will wonder why your prices are what they are. It’s their nature. Your costs are usually none of their business. People don’t buy stuff from you because your costs are $x or $y. They buy because they want or need something and the value is acceptable.

If you need to explain your prices – do it as a value proposition. For example “We charge $1200 per month for our service, while allows our customers to save an average of 47 work hours of labor (for example) per week.” Buy or don’t buy becomes simple math at that point.

Sometimes, this is harder than it sounds, but you may as well do it because they are absolutely going to do it – and they may miss something because they don’t know your service or the follow on benefits as well as you do. There are times when all of the benefits are simply not obvious. Make them obvious.

Even if they choose not to buy your stuff, make it easy for them to assess their decision. If you need 90 minutes on the phone and 13 finance questions to close a sale, find a way to make it easier to understand.

This doesn’t mean assume your customers are dumb or lazy. They are busy. They don’t have time to mess around with spreadsheets and deep research and thought about your service. Make it like the buffet. Lay it out in front of them so all they have to do is choose – even if the choice is “not now”.

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Categories
Entrepreneurs

Questions are better than answers

I’m always looking for great questions. “What exactly does a great question look like?”, you might ask. (Good question – ha!) Sometimes, you know right away, but a lot of times you don’t. It comes to you after you’ve spent two or three hours contemplating the answer, or digging into the data that hopefully contains the answer. Then… you turn a corner and think “Holy cow, -this- is why I was asked that question.” For that last type of question, it’s not often obvious until you’ve thought a while, grumbled a few times, and rooted around in the garden long enough to find that turnip.

Questions burn a little

Naturally, I have some examples of questions that have provoked a lot of thought for me. Some drove me to change my mind about something. Others clarified a decision I’d been struggling with. Some made me realize they needed to be asked because they made me defensive.

I recently heard a new one that I suspect will be valuable as I dig into it. It made me start thinking about it as soon as I heard it. The reverse of this one is also worth considering.

What you do believe about your market that most people don’t believe -and why?

Tuto Assad

This next one makes you think about how your business is structured and how (and how long) you leverage the work your firm does. And in some situations, it might burn a little.

“How much did you earn -last month- from work you finished 5 years ago?”

Perry Marshall

Questions provoke

Sometimes questions go a little further. They provoke thought, and perhaps rile you up and make you defensive.

What benefit/feature/system, if removed from your offering, would devastate your clients? Now reverse that. What aspect is missing from your offering that would devastate your clients if they lost it?

Unknown

Questions sometimes spawn more questions. This one has me wondering “How does that provoke your thinking about your products and services?” and “How does it change how you talk about what you offer?” I wonder what your clients would say and whether it would be different from what you’re thinking.

What one number, if changed, would dramatically improve your business in the next year – excluding increased sales?

Tim Francis

If your spouse had a heart attack or was in a car accident or similar and you had to care for them for two months, how would your business’ needs be attended to? How would the business bills get paid? Who would supervise current projects? Who would sell and organize the next new project and get it moving? 

The Rescue Interview

Some questions also make you work, like Tim’s. It’s easy to say “we’ll sell more” to solve a problem, but sometimes you can’t solve it that way. Questions designed to help you reach a conclusion that should be obvious, but provoke taking a look at a situation from a different angle.

The questions I find most effective are the ones that make me defensive at first. When a question finds your accomplishment, expertise, ability, motivation, and capabilities leaving something to be desired, it’s natural to be defensive at first – and it’s a good indication that you needed to hear it.

What do you *really* want?

This is one of my favorites because it gets people to discuss what they really want. It has nothing to do with the details of what you’re selling and goes straight to the person’s big picture needs. The answer seldom comes back reflecting the bullet points from your proposal or items on your invoice.

If we were getting together a year from today, what would have to happen during that year, looking back on it, for you to feel satisfied with your progress?

Dan Sullivan

More than a question

Not everything has to be a question. Sometimes a simple comment can change how you do things even if it isn’t stated in the form of a question. A couple of my favorites:

Leaders who don’t listen will eventually be surrounded by people who have nothing to say.

Andy Stanley

The day that the business doesn’t need you day to day is the day that you own a business.  Until then, you run a business.

Bryan Miles

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