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Business culture Business model Customer relationships Improvement Leadership Marketing Positioning Setting Expectations Small Business strategic planning

Creating client loyalty = dependability

What’s the easiest way of creating client loyalty?

The “easiest” way will differ by business. The key is to keep using it once you determine what’s easiest for yours.

I can’t promise that one way is easier than others but one of the ways I’ve found is to be the business your clients depend on to the point of rabid dependence.

I don’t mean that the relationship should be unhealthy, or that you should depend only on that client’s business. What I mean is that their dependency on *you* should be as strong as you can make it for as many top tier clients you can handle.

This will require systems because delivering this level of service manually rarely scales well much less remains consistent across employee changes, vacations and family crises (etc).

Isn’t that dependency up to them?

No, not if you’re paying attention.

The level of dependency is up to you because you’re the one who makes decisions about how you serve them. They might decide WHAT, but you decide the HOW. Only you can make the strategic decision to deliver more than they expected and do so with an owner’s mindset.

That owner’s mindset is critical: “We did this because if I was you, I’d want to watch out for this situation.”

It’s tough to quantify for you how much value this can create in the relationship with your clients, so I’ll say “a lot”.

You might be thinking that you can’t do this because your car wash business isn’t like my business, but this doesn’t matter. You could hand dry the cars after they pull out of the wash, even though that isn’t what your clients are paying for. Incremental cost – almost nothing. Value delivered – plenty.

Anyone can apply this mindset.

Ask them

Have you asked your customers if they depend on you? Ask.

You want to know what they depend on you for, and when you last disappointed them. Ask them how they depend on you and if there are things that they wish they could depend on you for. If they’re a good match, that’s new business on a silver platter.

Ultimately, you want them to know, not just think, that your business has their back. Consider the vendors you use that are so dependable, you don’t feel the need to check up on them.

Do you even have any that good? Is this a choice (perhaps due to your selection of service level\pricing) or is it because no one offers as much as you’d like to get? Have those vendors asked you if you could depend on them more?

Have you asked your clients that question?

I can’t afford to be that dependable

Maybe you’re thinking that you can’t afford to provide dependency-class service to your clientele. While you probably can’t provide it to everyone at your current price structure, there’s always going to be a group who needs more and will invest in better products and services. All they need to know is better offers exist.

What would you have to deliver to make it perfectly reasonable to add a zero to the price you get for your product or service? Add a zero = 10x. Since I suspect most aren’t going to easily see a 10X change, let’s start smaller.

What could you do to double the perceived value of the products and services you provide for the clients that you most want to depend on you?

For example, if you’re an attorney who charges $3000 for a document, you might be struggling with the idea that you could charge $6,000 much less $30,000 for it. Key: Start by changing the perception that the price is for a piece of paper.

Perception of value matters

Perception of value includes service level.

For example, if I buy a car and it breaks down, what happens when I call the dealer for help? Whether they act as my personal car genie or blow me off doesn’t change the value of the car (or does it?), but it certainly affects the perceived value of my purchase.

Over the long term your rewards are always proportionate to the value you provide. Premium pricing for the clients who need / want dependency provides you with the margin necessary to provide extraordinary value, while providing leeway to guide lower-tier clients up the ladder.

How are you creating client loyalty?

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Amazon Automation Box stores Business culture Business model Competition Direct Marketing E-myth ECommerce Leadership Retail Small Business strategic planning Technology Wal-Mart

Doing ahead, not just thinking ahead

Quite often, I talk with business owners about thinking ahead.

Something that happened yesterday tells me that I need to change my terminology to “Doing ahead.”

Why the change?

Primarily, I’m concerned that small businesses are thinking ahead, but stopping there.

Thinking ahead discussions often include strategic thoughts of putting yourself out of business by inventing new products and services for your customers that replace your current top seller.

So let’s talk retail for a moment, since they’re an easy example.

Every time you enter a WalMart store (something I try to avoid – I’m just not into the crowds), you’re likely to see something different. Just a little thing here or there that’s different. Sometimes it’s a test to see how something works, other times it’s the result of such tests.

What you never see is exactly the same store, time after time, town after town. Sure, the overall store is quite similar overall but there’s almost always something different. Something being tested. Something being implemented.

This effort isn’t limited to their brick and mortar stores. WalMart and the rest of big retail spend a lot of time looking at how they can improve the performance of their online retail properties. They have lots on their todo list simply by comparing themselves to Amazon.com – which blows away most (if not all) online retailers in end to end performance and customer engagement.

This is the price they pay for ignoring Amazon during their climb to cruising altitude.

What we don’t see is massive shifts designed to make the store or parts of the store irrelevant. It doesn’t mean they aren’t there, but they’re much harder to see in a brick and mortar store. Honestly, I can’t think of the last time I saw a brick and mortar store do something like this but I suspect I just don’t recall it.

Amazon tweaks too

Naturally, Amazon.com is working hard to improve what they already do – testing and tweaking their retail site and their back end (such as the systems that email you about things you might be interested in). You can see evidence of this on a regular basis.

Meanwhile – they’re doing things like what you see in the video above (More video here from 60 Minutes).

This isn’t just about speed, though that is certainly part of it. Keep in mind that this also means that Amazon can deliver without using any of the established shipping systems – all of which have legislative limitations as complex as those currently preventing the use of shipping drones. The only difference is that no one wrote a pile of legislation in the 1920’s to protect the USPS, Fedex or UPS – all of whom are just as likely to have drones in their future.

Parts of this are not just changing the rules but eliminating them wholesale. I would expect this to be implemented in other countries long before it happens in the U.S., due to the legislative challenges here. We’re already well on the way to delivering relief supplies via drone. Why not retail?

Learning while looking ahead

Learn from seeing Amazon look years ahead without a guaranteed payoff, hitting on pain points, looking to shorten the sales cycle (money loves speed), looking to eliminate competitive disadvantages with WMT, looking to improve/control shipping, etc – while ignoring the fact that they can’t put the drones into service and prepare for the day when they can.

They’ll be learning new things about their business and their customers as well.

The challenge for you and for businesses all over the world is not to see another way that Amazon will eat your lunch, or to think you’re safe because you aren’t in retail, aren’t near an Amazon fulfillment center or are in a rural location unlikely to be served by drones.

Your challenge is to think beyond the advances you’ve been working on or considering. Those advances are important, but you also need to be figuring out things that are years off, all while considering what will replace them.

The dangerous thought is to ignore these things because they don’t threaten you now and wont for years.

Why is that so dangerous? Because that’s exactly what many in Amazon’s market did a decade or so ago – and they still haven’t caught up from making that mistake.

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Automation Business culture Business Resources Buy Local Customer relationships Employees Improvement Positioning Setting Expectations Small Business strategic planning

Why isn’t everyone on time?

IMG_1362

One of the things I notice while working with clients (and being one) is that some of us are pretty good at making things hard on our customers.

Hard on customers?

You might be.

Let’s clean up a few things so you can make it easier on them (and easier to keep them as clients).

Show up on time

Given that so many people have smart phones, smart watches, computers in their cars and so on – you would *think* that they’d be on time more often.

When you don’t show up when you said you would, you make it hard on your customers. I know, I know. You can’t always do that.

Here’s what you can do – the instant you know there’s a chance you’ll be late, call to warn them. Give them options (bail or wait?) If you can, dispatch someone else to take care of their situation. Few things annoy a customer or partner more than setting time aside (or taking time off work) to meet you, only to have you show up 90 minutes late without a call.

While it’s an obvious, common sense competitive edge, why isn’t everyone on time?

Close the four hour window

My impression is that a lot of vendors are getting better at this, but there are still enough out there telling their customers that they’ll meet them between 8:00 AM and noon, or “sometime in the afternoon”.

This shows a (perhaps passive) lack of respect for the customer’s time.

Do you really manage your time and your staff / equipment resources so poorly that you can’t estimate arrival windows to smaller increments than half a day? I doubt it. I think you’ve gotten used to it and haven’t changed it because it’s comfortable. Comfortable for you, that is. I assure you that your customers don’t feel this way. Don’t trust me on this – ask your customers if they’d appreciate a smaller window. They might even pay more to get a smaller window.

Arrive with what you need

Sometimes, you don’t know what the deal is because the customer didn’t explain the situation too well. Sometimes you don’t know what size of this or that to show up with, and if you took this too far and showed up with the right parts every time, you’d have to drive an eighteen wheeler to work. While you probably can’t know what you need every single time, do what you can to reduce the “I’ll be right back, gotta grab some parts” trips. They increase your overhead and they annoy your customer.

Make it easy to pay

Offer some payment convenience.

Fewer and fewer people like handing over a piece of paper with their bank account number on it (ie: a check). If you get a smartphone-enable credit card reader such as Square, you save a trip to the bank and they get to pay without a check – if that’s what they want to do.

Keep track of the paper

If you must save the business paperwork that your customers send you and you can’t replace the paper system with something else (assuming that thing will work better), make sure you can find their paperwork when you need it.records. I recently sold a house. On two separate occasions, the deal was almost scuttled (or made far more expensive) because someone misfiled paperwork related to little things like septic plans and wells. A sharp agent is the only thing that prevented an expensive, annoying outcome.

Making it easy back at the ranch

Fact is, we don’t limit this “making it hard” thing to customers. We’re also pretty good at making things hard on our own people.

While work isn’t necessarily supposed to be easy, there’s no reason to make it more difficult than it already is. Each of the make-it-easier for customers things have an impact on your staff. Your internal systems for communication, tracking and appointment management are critical to making this easy to fulfill for your clients. If they aren’t, your products and servers are much less likely to be delivered in a friction-free manner. Don’t make your staff fight the system to get their work done.

Always be looking for bumpy spots and internal / external hassles you can eliminate. Make it easy for them to recommend you to someone, and to call you back the next time.

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attitude Business culture Employees Entrepreneurs Leadership Small Business strategic planning Strategy

Start the right things

A while back, a friend sent me a link to an old blog post called “30 things to stop doing to yourself“.

It struck me that while the list was intended for application in your personal life, the list could also be applied to your business – with a tweak or two.

Rather than talking about 30 things to stop doing, I decided to discuss a shorter list of things to start doing. Yes, lists are old school – but the things on the list require pigheaded determination to keep folks tending to them. A reminder never hurts.

Start spending time with the right kind of people. – This includes customers, mentors or other leaders of the right sort. What’s the right sort? The ones who spend their time trying to improve, grow and bring the rest of town and/or your industry with them. Don’t forget to start being the right kind of people.

Start tackling the things that challenge your business rather than waiting on them. – Few business challenges get better over time. The rest tend to fester like an untreated wound.

Start being transparent. – Not “politician transparent”, but really, truly transparent. Faux transparency is as useful as horse biscuits – yet that’s exactly what we get from most businesses. You’ll be amazed what can happen when you simply stop pretending, stop hiding, stop manufacturing spin and stop playing games. Think you aren’t doing that now? Think about it. Consider what a frank, win-win conversation with your staff, your suppliers and your customers could produce. Opportunity, for one – which will start with the next list item. Worried about the reaction? It’ll be no worse that the reaction if everyone figures out for themselves that the business they know isn’t the real business after all.

Start putting your customers’ needs front and center. – As Zig Ziglar said, if you help enough others get what they want, you’ll get what you want. If someone moves your cheese and you whine about it – you’re focused on the wrong things.

Start being what you are rather than what you aren’t. – Deliver the value you love to deliver and the right customers will love *that* business. I don’t mean the well-worn or often misguided/misinterpreted “do what you love and the money will come”. I mean do what your customers love to get from you. Not sure what that is? Ask them. They know what you rock at and they know why they value it more than anyone else’s. What do they see as the work you have the most enthusiasm and insight for – particularly that which no one else brings? Yes, I know you can do the other 37 things that everyone else in your market does. Remember that “focus on customer needs” thing?

Start making mistakes. – No, I don’t mean start goofing up intentionally. Your customers need your business to stretch so you’re ready for the place they’re going. They either go with you, or without. If you aren’t messing up, you either aren’t doing anything or you aren’t doing anything interesting or new. Your best customers are the ones who will leave you behind if you’re on cruise control.

Start having higher standards. – Seek out customers, employees, products and partners who force you to improve your processes, people, products and services. If you accept what you accept now, you may as well hit the complacency cruise control – which is all too easy when things are going well. This doesn’t mean not doing anything until you can do it perfectly. It means having a constant focus on improvement, including learning from the mistakes we just talk about.

Start accepting that you aren’t ready. – Nobody is. Start anyway. They call it comfort zone, but it has another name – the place your company was before it woke up, before it doubled our sales, before it started working with better customers, before it raised its standards, before it discovered that new market, and so on. The way it used to be that you’d never go back to if you could help it.

All of these things are going to impact your culture, processes and much more. Some employees, customers, vendors and partners will not be ready for that. Plan how you’re going to deal with that and communicate well.

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Business culture Creativity Entrepreneurs Improvement Influence Leadership Personal development Resources Small Business strategic planning Strategy The Slight Edge

Who needs a mentor? Not me!

Note: I am blogging on behalf of Visa Business and received compensation for my time from Visa for sharing my views in this post, but the views expressed here are solely mine, not Visa’s. See full disclosure at the bottom of this post.

Thanks to the kindness of a few people and a good mix of intent and luck, I’ve been fortunate to meet a number of people that I consider mentors or significant influencers.

In several cases, I’ve managed to work with them in person, via email or phone calls.

More often than not, I meet them at conferences – but not at conferences related to the industries I work (or have worked) in. That’s where the intent and luck take over.

Who are mine?

For me, the list is easy: Jim Rohn, Dan Kennedy, Peter Drucker, Tom Peters, Dan Sullivan and Chet Holmes.

Each of them have something in common: Without hesitation, they can name a mentor who was instrumental in getting them on the right path in their earlier years. They all struggled, and in some cases, did so mightily and more than once in their lives.

At their level of achievement, the fact that they can point to a mentor who was instrumental in their success is a critical lesson. It’s one each of us should take away from observing what makes high-achieving people tick.

None of them claim to “figure it out” on their own – even though they specialize in a particular area of business and have substantially raised the level of “play” in their respective specialty.

If these people managed to find and learn from mentors, shouldn’t all of us?

Why do entrepreneurs need mentors?

You might be wondering why you even need a mentor.

A few reasons…

  • We can all use a dose of clarity now and then. Sometimes more often.
  • We need to hear a perspective that we don’t have about our challenges .
  • We need a fresh set of eyes on something we’re about to do, already doing or failed at doing.
  • We need someone to be honest with us when no one else will.
  • We need advice from someone whose experience and knowledge is far beyond on own.
  • We need to be asked the question that will transform what we do.
  • We need the counsel of someone who will provide a stern correction before we make a ridiculous mistake.

Where do you get these things now?

How do I choose mine?

I’ve found that you don’t often choose them. In fact, sometimes they happen to you or someone brings them to you. There’s a lot of “when the student is ready, the teacher will appear” going on when it comes to mentors.

It can take serious effort to find a mentor. You might have to pay them. Don’t cheat yourself on this – the results from working with the right mentor can (and should) be worth at least 10 times your investment – hopefully more.

Here’s the things I look for:

  • A history of success that’s 10-100 times beyond where I’ve been – in any field. Recurring success, preferably.
  • Someone who can see through me and isn’t shy about doing it.
  • An ability to ask simple questions or make simple suggestions that floor me or make me rethink my angle on something. You can find this most often through their writing (books, blogs, etc).
  • Someone who asks questions about myself or my work that I can’t immediately answer.

What would you look for?

What about other influences?

Other influencers come from outside the business world, or their influence has little (if anything) to do with business. For example, Hildy Gottlieb has a habit of making comments that provoke me to think differently and before long, that thought bubbles up and provokes some of my sharpest clarity in discussions that end up helping her. While our relationship is not at all about business, business tends to be the context where I process our conversations – at least initially.

What about you?

You might think you don’t have any business mentoring someone, but that just isn’t true. There are always people who need advice, a little wisdom, some clarity and an occasional poke in the ribs. Make yourself available to someone – it’s likely to improve far more than their life. More often than not, it’ll make you reconsider some of your own struggles, even if they are worlds apart from the person you’re mentoring.

Mentorship and influence isn’t just about dollars and cents. It’s about dollars and sense – and a lot more.

 

DISCLOSURE: I am blogging on behalf of Visa Business and received compensation for my time from Visa for sharing my views in this post, but the views expressed here are solely mine, not Visa’s. Visit http://facebook.com/visasmallbiz to take a look at the reinvented Facebook Page: Well Sourced by Visa Business.

The Page serves as a space where small business owners can access educational resources, read success stories from other business owners, engage with peers, and find tips to help businesses run more efficiently.

Every month, the Page will introduce a new theme that will focus on a topic important to a small business owner’s success. For additional tips and advice, and information about Visa’s small business solutions, follow @VisaSmallBiz and visit http://visa.com/business.

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Box stores Buy Local Competition Customer relationships Getting new customers Retail Small Business strategic planning Strategy Wal-Mart

The big showrooming lie: “It’s all about price.”

Last time, we talked about how showrooming is impacting the retailer, briefly discussed what causes it and covered how a home store’s effective website selling experience helped me save time by avoiding a trip to a store that couldn’t decide whether it could help me.

All the retailers say it’s about price and the research agrees.

Since everyone’s in agreement, let’s dive in.

What makes people showroom?

Piles of research make it hard to argue that showrooming is about price. A recent Harris poll indicated that 96 percent of showrooming was at least “somewhat about price”, while 82% said price was “very” or “extremely important”.

Ask anyone why they showroom and they will almost always say “price”. What reason do they have to lie? It must be about price.

So how should retailers react? Let’s look at a few real-world reactions.

What Best Buy did

Two years ago, showrooming was hammering Best Buy and their financial performance showed it. While it might not have been the sole cause, it’s tough to argue that it wasn’t a factor – particularly since their stores are reported as “most often showroomed”.

They first took an “us vs. the customer” stance. They blocked out shelf barcodes so customers couldn’t scan them. They required that manufacturers provide Best Buy specific product codes (SKUs). These SKUs appear in package and shelf barcodes. Since they’re unique to Best Buy, consumers couldn’t easily price check an item vs. prices at Amazon.com.

These strategies weren’t particularly effective, nor did they improve customer relations.

Since then, they’ve had success using these strategies:

  • Price matching vs. Amazon.com
  • Improving their website shopping experience
  • Offering more in-store promotions and discounts
  • Improving their on-floor knowledge about new products.

Half of these strategies rely on price. For now, Best Buy has the resources and buying power to price match Amazon and WalMart, but I think you’ll see this backfire in the long term.

Using discounting to make a sale breeds a relationship that’s easily broken. All it takes is someone else’s lower price to “steal” your customer.

I’m not saying price isn’t important, it’s simply a poor long-term relationship builder. The easiest customer to lose is a customer you gained solely by having the lowest price – so that better not be your only edge.

What WalMart did

Rather than fighting the price checking that built them, WalMart leverages having the customer in store – even when there to showroom.

They have an app that produces a list of items that are on sale that day, which is displayed on your phone when you enter the store. The app also lets you scan barcodes and keep track of what you’ve decided to buy.

They embraced their customers’ behavior to their advantage. While people might enter the store to showroom, they’re likely to buy something else they need if they’re made aware of on-sale items while in the store.

So why the “selling by price is bad” conversation for Best Buy and “selling by price is good” for WalMart? Simple. Their business models are much different. Unlike Best Buy, WalMart’s business model is designed around “Lowest price. Always.” and driven by world-class logistics.

The takeaway from WalMart’s showrooming strategy? Taking advantage of customer behavior you can’t change is much easier than fighting it.

What an Aussie retailer did

Earlier this year, a Consumerist story told of an Australian retailer who battled showrooming with a “Just Looking” fee.

Their strategy? Charge everyone who enters the store a five dollar “Just looking” fee and refund it when a purchase is made.

Is this really how you want to make a first impression with a prospect, much less engage a customer? I think not.

Consumers: “It’s about price, but it isn’t.”

So…what’s the big lie?

Remember the 82% of consumers who told Harris Polls that price was “very/extremely important” and the 96% who said it was “somewhat” important?

Despite those big numbers, 70% of the same respondents said that if they had a good shopping experience at an online store, they would be less likely to buy the item elsewhere, even if it was cheaper.

The same goes for local retail.

Showrooming is more complex than just price. A small retailer can address the problem in ways big retail can’t or won’t.

Next time, we’ll drill down on what’s really behind “It’s about price, but it isn’t”.

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Business model Getting new customers Improvement Lead generation Marketing Positioning Small Business strategic planning Strategy

Should your business grow horizontally or vertically?

When I see a business focused solely on a horizontal or vertical market, it’s hard not to wonder if that focus is what’s really best for them.

What do I mean by “vertical” and “horizontal” markets?

A vertical market serves a certain type of customer, even if the work performed for them is of broad use across many types of customers.

Welding isn’t really a vertical market, but underwater or aluminum welding could be. Narrowing that further might identify a business that specializes in aluminum component welding for recreational boat manufacturers.

A horizontal market is one where “every business” could be your customer. Their needs include technology, accounting, legal, taxes, insurance services and public relations, among others.

A horizontally-focused public relations firm might serve businesses in retail, hospitality, legal, manufacturing and other sectors, while a vertical PR firm might focus on a single type of client, like PR for the outdoor recreation equipment market.

A combination of horizontal and vertical might result in a firm that offers PR services to many types of customers, but only for a certain type of media, such as periodicals (magazines and newspapers).

Whether you’re positioned horizontally or vertically, you’d better be focused on your core customer.

What’s a core customer?

A core customer is one whose needs fit your business’ sweet spot – the customer that’s ideal for what your business does. Revenue from customers like these usually make up the majority of your revenue, perhaps 80% or more.

A law firm who specializes in transactional business might see their core customer as “local business owners with five to 20 employees”. These customers generate transactional legal work related to real estate, employment, business transfer and related activity.

It’s easy to identify them because of the nature of their business structure and activity. They hire and fire, they buy and sell business assets, and they build, buy, sell and update facilities as they grow or change what they do.

How you identify your core customer is critical if you’re going to continue to improve how well you’re serving them, how many you retain over time and how many new ones you acquire.

Expanding your market with a question

Ask yourself this: “Could a little adjustment radically expand what you accomplish – without abandoning your core customer?”

Looking back at the transactional law firm… many of their clients could’ve started out with one person doing everything. If the transactional law firm looking for new customers ignored those solos, they’d miss a fair number of future core customers who matured from a solo into that desirable employer/client of five to 20 staffers.

One of the things business owners tend to avoid is change, unless we can’t avoid it. If your attorney has served you well as you’ve grown, you’re unlikely to switch firms unless they really mess up.  That makes it even tougher to get new clients who are already perfect for you. Without significant differentiation, a special “mojo” or something that screams “You have to use US!”, where are your new “ideal customers” coming from?

Given the tendency to avoid change and the thought process that some solos are future five-to-20 employee businesses, the natural thing to do is get more of those solos and do what it takes to keep them as they grow into the core customers you wanted all along.

Your challenge is to figure out (at least) three things:

  • What the solo needs and wants NOW
  • How you can serve them as they grow
  • How to tell which solos will become an ideal customer.

This isn’t just about law firms – they’re just today’s example. “The question” applies to your business as well…I promise.

Everything or nothing?

Many vendors sell the same products and services in the same packaging (real or virtual) to everyone. Being everything to everyone usually means you’re special to no one.

Horizontal vendors can stand out by customizing what they do for a certain vertical market – rather than selling the same “box of stuff” to everyone.

Vertically focused businesses can seek out customers whose needs are similar to their core customers’. Dentists and energy companies couldn’t be more different, yet they both use scanning technologies to find correctable defects. Is there a sweet spot there?

Whether horizontal or vertical, you can grow without abandoning what you do and how you do it.

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Advertising Competition Customer relationships Direct Mail Direct Marketing Email marketing Getting new customers Improvement Internet marketing Lead generation marketing to the affluent Marketing to women Sales Small Business Social Media strategic planning The Slight Edge

How to segment your customer list

Have you heard that you should “segment” your customers before marketing to them?

Ever wondered what that means, much less how you’d do that?

We’re going to talk about that today in simple terms, but before we do that, you might be wondering …

Why should I segment my customers?

Good question.

You want to segment your marketing is to achieve something called “Message-to-market match“.

Let me explain with an example. Let’s say your company sells women’s underwear.

Would you advertise the same underwear in the same way with the same photos and the same messaging to each of these groups?

  • Single women
  • Pregnant women
  • Newlyweds
  • Moms of girls approaching puberty
  • Dads of girls approaching puberty
  • 50-plus women
  • 80-plus women
  • Women under 5′ 6″ tall
  • “Plus sized” women
  • “Tiny” women
  • Very curvy women
  • Not-so-curvy women
  • Women who have survived breast cancer
  • Significant others

I’ll assume you answered “No”.

Message-to-market match” means your message is refined for a specific group of recipients so that it’s welcome and in-context, rather than annoying and out of left field.

A lack of message-to-market match is why people tune out ads and pitch so much mail – the message isn’t truly for them. If it happens enough times, everything you send them is ignored. Ouch.

Like the recycling bin

When recycling different materials, the processes required to break down cardboard (shredding, pulping, etc) will differ from the process that prepares glass, plastic or animal manure for reuse.

Think of your messages in the same way. If the message a customer receives doesn’t make any sense because it’s out of context, it’s like recycling something with the wrong process. The money, time and energy invested in creating and delivering the wrong message will be wasted. Worse yet, the wrong message can alienate your customer and/or make your business look clueless.

Ever received an offer “for new customers only” from a business that you’ve worked with for months or years? How does that make you feel?

You might think a generic piece of news is received the same way by everyone – when in fact that news might excite some customers and annoy the rest. The time spent considering this and segmenting your announcement can save a lot of pain.

Your First Oil Change

Look at the groups listed for the underwear business. That’s customer segmentation.

If you sent “The Single Dad’s guide to helping your daughter pick out her first bra” to the entire customer list, how many would think “This is exactly what I need”? Only the single dads group. Most others would hit delete, unsubscribe, click the “Spam” button or just think you’re not too swift.

The smart folks sending the “first bra” piece would break it down further by sending a different guide to the moms than they send to the dads.

Need a simpler version? Chevy vs. Ford vs. Dodge. Harley vs. every other bike. You shouldn’t have the same conversation with these groups, even if you sell something common to all of them, like motor oil.

Think that list is broken down too much? Don’t. I just scratched the surface.

Why people think they can’t segment

– They don’t have or “get” technology.

Whether you use a yellow pad or a fancy customer relationship management (CRM) system, you can make this work. If not, consider a better way to keep track of things.

Long before computers, savvy business people would sort customers into the “blue pile, red pile, yellow pile” before putting together a marketing piece. No technology is no excuse.

– Their media doesn’t offer segmenting.

What if your chosen media doesn’t provide a way to target a specific segment? They don’t deliver special Yellow Page books to single people, retired people, CPAs or car dealers – so how do you segment your message?

You can segment those media buys by message since many vendors are unable to deliver a different book, newspaper, magazine or radio/TV ad to different types of customer – which should also improve ad ROI.

You might be getting pressure from internet-savvy staff (or vendors) to drop old-school media. If it works now (do you know?), dropping them makes no sense.

– They don’t have a customer list

Start creating one today, even if it’s on a yellow pad. Figure out what differences are important to you and record them.

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attitude Automation Business culture customer retention design Good Examples Improvement Leadership Manufacturing Positioning quality service Setting Expectations Small Business Software business strategic planning The Slight Edge

Perfect is the enemy of done – or is it?

A couple of weeks ago, NASA celebrated the one year anniversary of Curiosity Rover landing on Mars.

As someone who has been taking pictures since the ’60s, I still find it amazing that we can tell a satellite orbiting Mars to take a picture of a Jeep-size spacecraft parachuting to its landing 62 million miles away and have the photo on my laptop 20 minutes later.

The photos and video of the landing and all that led up to that event reminds me of the oft-quoted remark “Perfect is the enemy of done.”

Does it need to be “perfect”?

While shipping something and iterating its benefits, features and quality are perfectly acceptable strategies for many products and services, I think we shortchange ourselves if we don’t keep in mind that there’s a time and a place for “better than done”.

I was trained by engineering professors during my college days, so “perfect” means something well beyond “done” to me, often well beyond four decimal places.

Perfection is extremely difficult to achieve and even harder to prove , so let’s settle on a “Much better than where it is now” definition so we can keep the engineers happy.

Using that definition, perfect makes no sense for most work under most circumstances. For example, software programs are never “perfect” and while you can always sand a surface with a finer grit of sandpaper, does it matter if you take an 800-grit-smooth surface to where 10000 grit will smooth it?

Perhaps a better question is this: Is the cost and time investment worth going past “good enough/done” to reach for those “perfect” four, nine or 27 decimal places?

Going beyond a seemingly ridiculous number of decimal places is one reason why Curiosity made it to Mars and still rumbles across the Red Planet today – yet it’s unlikely that Curiosity is perfect.

BUT… it is extremely well-designed and resilient.

Design and Resilience

My point is this: while perfect is certainly the enemy of done for much of the work that you and I deliver, that doesn’t eliminate the need to put serious thought into the design and resilience of our best products and services – if not all of them.

It’s not unusual for us to design something based on immediate and short-term needs, never taking the time to consider what happens if it encounters situations and customers our short-term design never considered.

The information we don’t have is often as important as what we know and assume at design time.

When you send a product like Curiosity to Mars, you don’t get an opportunity to replace a part you didn’t think through as well as you should have. You can’t make a service call or throw a tarp over it while you rip it apart to figure out how to resolve today’s problem.

Instead, your design time process has to include what *could* happen and how your product would react and extract itself from an unexpected situation….long before you load it onto a rocket, pallet, download page or Fedex box.

What if your product…

  • Finds itself being used by a customer 10 times bigger than your design-time’s “Ideal Customer”? Or 10 times smaller?
  • Is being used in an unfriendly environment? A high-security or low-security situation?
  • Lasts 10 years longer than you expected? Remember – the work or result it provides still reflects on your business.
  • Cost 250% more to replace once it’s installed – and that installation takes 253 days  (the time it took for Curiosity to reach Mars).

When Curiosity lifts off, it was too late to turn a screw, change a part’s materials, or sand and polish it to an even-higher tolerance fit.

Think about your best stuff – no matter what you do. What would happen to it under the conditions described above? Would it be worth more if it handled those things without breaking a sweat?

How would you react when that extra bit of design effort pays off? What revenue will result? What will that first few seconds of success feel like?

PS: The sum of *all* NASA spending over the last 50 years is $800 billion. Lots of money. Yet that 50 years of exploration and discovery were cheaper than the government bailout of Wall Street, which cost $850 billion. A stunning comparison of ROI, even before thinking about the spin-off technologies from NASA’s work that have trickled down to business and industry, much less the things that impact our daily lives.

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The forgotten 25% – will they be your customers?

The “Merging Method” of Agricultural Genetic Modification – (MMAGM)
Creative Commons License photo credit: Ian Sane

On average, 25% of US students drop out of high school.

I have little tolerance for “being average”, mostly because little changes have a way of propelling you well above average.

It isn’t that average is bad, but remember that average is like scoring 50th percentile on a test – half of the people are below average.

On any one test, maybe that’s not a big deal – unless the test is your life.

It’s “just how it is”

While the overall U.S. dropout rate is 25%, 50% of American Indian students drop out.

Regardless of lineage, some say that’s just how it is because “most dropouts are disconnected and unmotivated”, or they’re “intellectually under-performing” – meaning they’d never be able to graduate because they aren’t smart enough to complete the work required to graduate.

Whether those things are true or not, it doesn’t seem ideal for a community’s future to have 25% of students stumble out of school with little or no life, work or business skills any more than than it would to return to the days when two million kids aged seven to 12 worked 70 hour weeks in factories and coal mines. Never mind that it took Congress over 100 years to outlaw child labor, and even then, did so only to allow depression-era adults to get work.

Some of the 25% will struggle, suffer and become the people we look away from, some will manage thanks to skills gained from their family, and some will figure it out.

What can we do?

So what can a community do to improve the chances of a good outcome?

I wonder if some life skills (like budgeting and goal setting), some technical skills (like welding, heavy equipment operation or diesel repair) and/or some business skills (such how to plan and start a new business on a shoestring budget) might give these kids the foundation they need to become “a normal part of society” (you can decide what that means).

For this, we may need to know about the portion of the 25% who got past their slow start.

It’s likely that there’s research showing what improves the likelihood of helping these kids get started on the road to a successful life where they can find rewarding work, save some money for a rainy day, have a family if they wish and prepare themselves financially for old age. We may need to know the turning points that kept them out of prison, “soup kitchens” and shelters.

25 percent is acceptable

25% may seem pretty bad, yet as our day goes on, many of us manage to accept it. Either we think we can’t do anything about it, or we’re doing all we can just to keep our own stuff together.

Here’s how 25% feels in other parts of our lives:

  • Three eggs of every dozen would be rotten.
  • Three beers in every twelve pack are flat.
  • When you put a dollar into a change machine, you always get three quarters back.
  • One tire on your car is always flat.
  • Two pieces of every pizza have no sauce, cheese or toppings.
  • 7500 U.S. commercial flights crash every day.

If these things happened daily, there would be plenty of uproar, Congressional hearings and so on.

Yet one in four dropping out is what we seem to accept as a society, as long as our kid or adorable little grandchild isn’t dropping out – kind of like how 25% of Veterans living on the street is somehow OK (?), as long as it isn’t our family’s Veteran.

Look, I’m not saying big brother should swoop in and (s)mother these kids. What I’m saying is that we should recognize and attempt to improve how we address the real and societal costs that result from dropping out and as a result, how these kids deal with the life they’ve chosen, the life they appear to have chosen, and/or the hand they’ve been dealt.

The exception cases, like the 1.2% of dropouts who start multi-million dollar companies, shouldn’t be an escape clause. It should instead suggest how we identify patterns of success. What was different about those dropouts and could that affect more of them?

What does this have to do with business?

These people are potential customers, potential employees and/or their family members. They’re part of the community where you and your staff work, play and live. Isn’t that enough to make it matter?