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.

Photo by Mariko margetson on Unsplash

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.

Photo by Nate Johnston on Unsplash

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”.

Photo by Bertrand Borie on Unsplash

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

Photo by Sharon McCutcheon on Unsplash

Categories
customer retention

What do your customers believe?

As we slowly move toward whatever the next normal, think about how your customers navigate this week or next. Perhaps more than ever, it seems like an ideal time to lock yourself in your office and do the things you’ve always done better than they’re being done today. While I’m all about continuous improvement, hunkering down may not get your business from the before times to the after times, much less through the during times. For consumer-facing business, listening is as important as ever – thus the image. Noting the image above, restricted traffic in Glacier National Park after Labor Day is not a thing anyone has seen before. These days, normal is not a thing. Being good at adjusting is a valuable skill.

It doesn’t care what we think

It doesn’t really matter whether you believe about the pandemic because the virus and the impacts of it don’t care. The economy doesn’t care what you think about it. Customers (mostly) don’t care what you think about it.

What matters is your execution: What you do to deal with the what’s going on today, which I call the “during time”. Even though it’s a slightly different during time than May / June, which was considerably different from March / April – despite all of them being part of during time.

Customer behavior in the during times will continue to adjust. Think about how behavior of restaurant customers has ebbed and flowed over the past few months. My guess is that these changes will continue until there’s a widely-trusted vaccine – but that doesn’t really matter.

One thing that matters

What does matter is how the during times alter the behavior of those who spend money at your business. Let’s say you have a restaurant. I’d say there’s a good bet that demand for your outside seating has outstripped the outside seating you have.

That’s a good place to start even if you don’t have a restaurant because it’s easy to think about. Here in Montana, our smoky 93 degree days are probably gone for the year.. maybe. Our friends in Oregon may send us more smoke because they’re a sharing kind of folks.

Our recent cool overnight temperature are a little reminder that winter is coming. Depending on what phase we’re, some restaurants are surviving (or at least coping) thanks to carryout and outdoor seating. The reason for expanded outdoor seating is primarily sunshine and ventilation. What has to be done to take ventilation issues off the table as winter approaches?

There have been a number of studies about in-building airflow. They might be right. They might be wrong. By its very nature, scientific research starts as inaccurate because data / testing / research is sparse, then it zigs and zags toward a conclusion as data / testing / research increases. It’s similar to how businesses (generally) get better at what they do as they zero in on the right product/service formula for their market.

What do customers believe?

Ventilation studies don’t care what we believe. What matters is what restaurant customers believe. Whether your restaurant is setup for maximum outdoor seating and no inside seating, or the opposite doesn’t really matter as long as the health department is happy with the setup.

The gotcha is that customers also have a choice. They’ve probably sent a message already, by either showing up as if nothing has changed, or by just telling you (or “demanding”) outside seating, or more outside seating, or even by leaving because there isn’t outdoor seating.

For businesses dealing with those customers, it’s something you have to address before the weather turns. I am sure there are a number of companies willing to upgrade your ventilation system to eliminate any concerns about ventilation. Even if you spend 100 grand to neutralize the air so that every cubic foot of air through your place gets nuked or at least satisfactorily sanitized… it doesn’t matter.

What matters is what your customers think about it. They might be “Facebook doctors” or they might be a world-class scientist. Their concerns might be irrational, or spot on.

All that matters is “Do they believe in whatever you did?” based on their beliefs.

As with any sales job, you have to think how they think. You have to choose to have the conversation with specific subgroups of those people. You can’t talk to the millennials in the same way (mostly) that you talk to the boomers or the way you talk to the greatest generation.

For now, we’re all figuring it out as we go along – regardless of what we believe. Start the conversation on those terms.

Categories
Employee Training Getting new customers Sales

A scruffy old boat and missed opportunities

Recently, I bought a $300 boat. I hear you laughing. Yes, I know the joke about the favorite two days of a boat owner’s life (the day they buy it and the day they sell it). This isn’t a story about a boat as much as it is about thinking about every person who walks in the door of your business (virtually or for real).

This scruffy old boat is a 1988 Bayliner, even though none of this is really about the boat. It’s about the lens that you view someone through when they enter your business and how important it is that your entire staff is trained to use that lens.

So I bought this boat at this ridiculous price because a friend had to get rid of it and was unable to sell it for a year for various reasons. As you’d expect, a $300 boat needs a little bit of work. Given a full schedule and a serious lack of boat mechanic chops, I decided to take it to a boat shop.

It’s a sizable shop. Clearly successful, well-funded, nice showroom, plenty of inventory, employees all over the place, etc. So I drop off the boat and tell them what’s going on. They say they’ll be able to get to it early the following week, which is fine. The eight day wait isn’t surprising since every mechanic shop (of any kind) that I’ve talked to over the last month is backed up for weeks.

Educate the newbie

That was the first missed opportunity. It’s the first time I’ve ever been in this business and they know.

How? Why? Because they took my name, phone number, address, and email at the Service Desk. Everyone in the building has a computer in front of them. With that information, their system should know that I’ve never called, bought or rented anything there, etc. Yet, they missed an opportunity. The showroom and parts department is not crowded with customers for obvious reasons (it’s Monday 10am).

No one confirms that it’s my first visit – so what if I’m standing at the service desk. No conversation about the things they carry that I can pickup any time rather than order and wait online. No curiosity about what other boating I do (kayaking is not boating, IMO). No brief tour to make sure I know what resources are available to me there – even if I only have a couple of minutes.

In the following eight days until they look at the boat I was not contacted. I wouldn’t expect the service department to contact me as they’d already told me what to expect. Again, they have all my contact info. No postcard, email, or fruit bouquet (yes, the fruit would be overkill).

Another missed opportunity.

Once again, a motorhead

After 10 days, I called to see what was going on. The service department guy said the boat needed a starter and it’d be $1200. I was proud that I didn’t laugh.

I’m not much of a motorhead anymore but I wasn’t born yesterday so $1200 to replace a starter seemed a bit off. I asked the service guy and found that it was two hours to remove and replace the starter (WHAT?), another three quarters of an hour to test it, then another 90 min for possible follow up diagnosis (because something else is probably wrong).

Still, I asked for an estimate to fix the starter. The starter and solenoid were just short of $400 which seemed a bit rich for a starter, but there are good, better, and best marine starters if you look around. This one just happened to be the best – which is probably not ideal for a 32 year old boat. I told him I’d pick it up.

I mosey in to pick up the boat today, wait 20 minutes (after paying) for somebody to grab it out of the locked yard even though I called in advance to advise them that I was coming and they said they’d pull it around, then the service guy asked them to pull it out, then I had to come in and ask again.

The service guy gave me the estimate because it included part numbers. I thought that was nice of him as having the numbers will save me some time when I put on my motorhead hat. He agreed that it was nuts to spend $1200 to put a starter on a scruffy 32 year old boat. So I’ll be doing that next week when the $72 part arrives.

Look for signals, ask questions

I wonder if I will ever hear from them again. Multiple opportunities were missed. Will it continue?

The question to ask yourself is when somebody sends us a signal that they are interested in what we do, what happens? Sure, the context matters. It isn’t as if I would have wanted a 40 minute tour of the facility, or to get a 20 minute call from the owner.

Still, it’s September in Montana. Winter is right around the corner, at least from the boat’s perspective. There was comment about whether they offer winterization or winter boat storage. Who knows?

There was also no “here’s a list of the other services we offer that are useful to owners of older boats”, “So, do you own any other boats?”, or even “Got any other boating questions?” Remember, I told them that I just bought it, yet there was no “Dude, is his your first boat? If so, here’s our handy booklet of all the stuff someone should know (and what parts we’re happy to help with)”

None of that.

You might think that somebody who brings a 32 year old boat in for service doesn’t deserve those questions because they’ve already sent a signal that if they’re going to buy a $300 boat, they’re probably not going to buy a $40,000 boat (much less a $400,000 boat).

But you’d be wrong and I have receipts.

See, this place also sells campers. I happen to be in the market for one, but they don’t know that because they didn’t ask. But that isn’t why you’d be wrong.

Treat all of them like buyers

Back in the mid ’80s, I was fresh out of college, working my first job in the big city, and money was super tight. Of course, this means I visited Forest Lane Porsche in Dallas one Saturday afternoon. An older sales guy walks over to greet me as I step out of my 1980 fire engine orange Buick Century.

He didn’t look at me like “Crud, another one of those guys.” He didn’t make a snide remark. He treated me like I was getting ready to buy the most expensive car on the lot. At the time, it struck me that he treated me like he thought he was going to sell me a car that day.

So after we talked a little bit about the cars and I told him that I was a fan of the cars and was burning a little time on a Saturday afternoon. He said, “That’s cool. I’ll be here when you come back.”

THAT caught my attention. Normally when a wet behind the ears 23 year old admits to a salesperson that they wasted their time, that isn’t the kind of response you get. Maybe the kind ones will say nothing, turn on their heel and head back into the building until an actual buyer shows up.

So I asked him why. “Look, I pulled up in the parking lot in this ridiculous orange Buick. I’m young. You know I’m not buying a Porsche today or even next week. Why did you just say what you said?”

And he gave me the sales lesson of all time: “I treat everybody that comes on this lot like they’re gonna buy the most expensive car on a lot because I have no way to know that they’re not.”

Knowing I had another question coming, he continued: “I learned this lesson by accidentally being nice to a guy who came onto the lot in an old beat up pickup truck. He stepped out of that truck in muddy galoshes and overalls. He looked like he’d been working the fields all day. That guy wrote me a check for six figures for a car that day – the first time I met him. I didn’t take anybody for granted after that. Everyone who visits this lot looks like a customer to me.

A couple of years later, there was a story in the paper about that guy, who was retiring from the dealership. It turned out he’d been their most prolific salesperson for years. Not at all surprising.

Imagine if your team did the same. You might sell a camper or something.

Categories
Business model E-myth Entrepreneurs Leadership

Selling your boomer business

I recently received a note from someone who read “Boomer Business For Sale“. They had some questions about different aspects of selling their business, and I suspect they aren’t alone, so let’s address them here. The premise of the original discussion was that there are roughly 60,000 boomers who are getting ready to retire who are also business owners, and that either someone is going to buy those businesses, or they’re going to disappear. I see this happen with increasing frequency and find it such a waste. These businesses aren’t disappearing because they’re unprofitable. They’re disappearing because they can’t find a new owner.

Recently I saw where a beloved 57 year old butcher shop in Missoula closed. A butcher shop doesn’t stay open that long if it isn’t doing things right – yet… no buyer.

If substantial numbers of these boomer owned businesses disappear, it’ll have an impact on the towns where they live, the people they employ, the people whose businesses they buy supplies and equipment from, the accountants, bankers and attorneys they use – and the revenue that feeds in other businesses.

Ideally, we (as a whole) would benefit if we could reduce the number of businesses that close rather than changing hands. Ideally, we (as a whole) would benefit if we could reduce the number of businesses that close rather than changing hands.

How do I find a buyer?

One of the questions I was asked was about how to market the business that’s for sale. In a word, carefully. Your first thought might be a business broker. In my experience, they should be your last resort because most of them put too many obstacles between you and the prospective buyer.

For starters, don’t put a “For Sale” sign out front. More often than not, tells people “We’re about to close”, which will give some customers the idea that they should look elsewhere before it’s too late. That’s not going to help you in the short term, and it’s not going to help whoever buys your business. If you find a buyer, they’re going to have to win some portion of that business back – and if you have a piece of the future, you’d prefer they didn’t have to do that.

You’ll encounter three types of prospective buyers. Some are buying a job and an income. While that’s fine, many of them will have little / no experience running a business. They will almost certainly want you to owner finance. While there’s nothing wrong with owner financing (in fact, it’s a great way to get your asking price), you’re going to be more concerned offering financing to someone who doesn’t know what it feels like to cut payroll checks, lose sleep over business issues, and deal with grumpy customers – while still keeping them

Other buyers are typically looking for an investment. Not private equity, but experienced business people who want to add to their business portfolio. They own businesses for a living.

Finally, there are competitors and complimentary businesses (the ones two or three towns down the road are good candidates). An in-town candidate is OK, but revealing your sale plans to an in-town competitor can create problems.

Don’t forget competitors

Of all the competitors and complimentary businesses in your market, which of them deserve your business? Which of them are good enough to take your business on and not embarrass you? Why? If you see your best customer in the grocery store six months from now, are you going to be happy to see them, or are you going to turn and go down another aisle?

If you sell to a competitor, you want to sell to the one who isn’t going to make you change aisles. Even though the check is cleared and you’re completely uninvolved in the business, you’re part of that community, and you don’t want to be embarrassed by the buyer’s behavior.

I’d look first at investors, as well as competitors who do what you do, but not in your community. Maybe they have a similar service three towns down the road and they’re looking to grow their business. You could have an intermediary (banker/lawyer) contact them to keep your identity under wraps at first. They don’t need to know whose business it is to examine your financials – which they should ask for very early in the conversation.

Training the new owner

If you’re actively working in the business, you’ll have to train someone to take over that job. In a business where the work is physically demanding, you might be tempted to limit candidates to people who are physically capable and willing to take on that work. If you do that, it’ll reduce the size of your pool of potential buyers.

Unless you are selling to a competitor who doesn’t need to be trained, training will come to come at the worst possible time. You’ve mentally decided to get out (and were there for months before selling), and now, you’re obligated to train this new person. Your sale isn’t really, truly final until that work is done.

The new owner may not even know that they like it yet. Perhaps they’ve done it for someone else for 15 years, and they think that’s what they want to do but they don’t know until they actually run / own it. What if it takes longer than expected? If you walk away, it could damage the business. If you have a fee for additional training in your sales deal (you should), then that still commits you to even more time.

This all started because you were ready to retire. Now you’re spending time training this person and may have to silence the “I should have kept it”, “They don’t get it”. “Will they ever learn?” thoughts. Prepare for this.

Are you really ready to retire?

The idea is that this group of 60,000 Boomer business owners is ready to retire. Are you really? Do you know what’s going to occupy your time once you cash out?

I’ve had conversations with a number of people who retired and were thrilled that they fished, hiked, and golfed every day for three months.. until they got bored. Some people don’t get bored with it. Some might cut back to every other day. Still, some are not cut out for 100% leisure.

A better question might be “Are you ready to sell, or is this about getting out of working every day?” In a business where the work is physical, it’s easy to understand the desire to back off at some point. Our bodies start telling us that they aren’t 29 anymore. Maybe climbing ladders isn’t as easy or fun as it used to be.

You don’t have to go from “I own it / work in it every day” to “I have nothing to do with it.” There are other choices.

Maybe a competitor is better?

Selling to a competitor or complimentary business should be an easier exit. Someone who is already successful and in a similar business is more likely to be able to organize the resources needed to buy you out since they’re already successful and have clientele in that market.

Somebody who owns a competitive / complimentary business is more likely to stick with it. They know what they’re getting. So if you do get to a point where you agree for at least a partial owner finance, a competitor / complimentary business is a better choice.

Don’t get me wrong, there are highly motivated, sharp people out there who are looking for an income and a job, and they’ll have bigger dreams than just buying a job. Maybe they’re going to buy yours first, then buy two or three more, and maybe make an empire out of it. You’ll know when you meet one of them – and you’ll know who is real and who is blowing smoke.

The real pain of selling

If you ask business owners who’ve sold their business, they’ll probably mention that due diligence was a pain. Someone doing proper research isn’t intentionally making it a hassle, but it’s a lot of preparation to satisfy due diligence questions. Be prepared for that before you say “It’s for sale.” Ask your banker, attorney & someone you know who has sold / bought a business recently about the processes. Prepare in advance, as it’s not fun to do that work under deadline when you have a buyer at the door, checkbook in hand. The last thing you really need is to feel the pressure of “I’ve got to produce all these documents and all these numbers under a deadline before they go buy something else.”

All this information should be available if your managerial accounting & business metrics are under control, but they usually aren’t.

Consider being an owner

This whole selling a business thing is complicated, isn’t it? Now you know why a lot of businesses simply close. Selling a business is work. It’s usually worth it, but it isn’t easy. And yet, it’s possible to avoid a fair bit of the work we’re discussing.

Some of you have been running a business for a long time. Some have been working for / in the business, as well as owning it. Running it and working for it are not the same. If you have to get in the truck every day and go out to a job site, or open the computer and stick your face in a spreadsheet or programming tool in order for your business to get paid, you’re working for the business, even if you own it.

It doesn’t have to stay that way. If you’re not sure about the pain of stepping away, consider finding someone to take on the physical part of the job. In that mode, you’re hiring skilled people for a specific job (as opposed to “business owner”).

For now, let them do the work. Do nothing but manage that business. Once you see what it takes to manage the business day by day – while doing nothing else – then you can easily identify the skills needed to bring on a manager. Perhaps you look for a manager who is interested in owning the business, perhaps in partnership with the person you hired for the “skilled position”.

Test your team – and yourself

At some point, you should have systems and processes setup so that the skilled person is handling whatever “working for the business” work that generates revenue, and your manager is… managing. Get things to the point where you can take off for three weeks and disappear (or so they think – if you need that at first).

Because you still own the place you’ll want to have internal controls in place. These inform you and your manager that everything is where it should be, running as it should be, etc. Combined with a few metrics, you can watch the business from afar.

What metrics? Think about a few pieces of info from each department that would allow you to sleep comfortably knowing your team has everything under control. Even if you don’t see them as “departments”, they still exist. Finance and Sales exist even in the smallest of companies. You already know what metrics are important. Now consider what’s important at a distance.

Finance: What’s AR look like? What’s your free cash look like? Are any payments overdue? Are we current on tax filings?

Sales: What was revenue last week? Last month? How many bookings do we have for the next 30 / 60 days?

Even though you could get the numbers yourself, a regular report from your manager that provides these figures and advises what they’re doing about them will be useful for non-distracted time away from the business and quality sleep.

Still uncomfortable? Still can’t sleep? Maybe the wrong manager. Maybe insufficient systems or metrics. Get with the manager and get to the bottom of what’s uncomfortable and have them patch that hole.

One thing to avoid, unless there’s no choice – avoid getting back into the weeds. Guide your manager through the weeds. Have them guide their team through the weeds. Don’t get into them yourself.

You have options

For the short term, ownership can be an easier option. You can be involved with the business when they need your expertise, while stepping off for a while to determine what your future looks like. All the while, you can take a distribution from the business, even though it may be lower than what you were taking before.

You’ll still have all the equity until you decide to consider your next step, like selling the business to your manager and lead “do-er”, or selling it to someone else.

The unanticipated reward is that a business that no longer requires you to be there every day is worth more and is easier to sell. Until that day comes, it’ll be easier on your mind and your back.

Photo by Jonny Caspari on Unsplash