If you didn’t, think about this: What would happen to your business if the hard drive containing your customer list, orders, accounting and communications with customers and vendors failed? What would it cost if you lost that data?
I asked startup CEO Doug Odegaard from Missoula for a quick angle on the cost of not keeping good backups. He said “Add up how much people owe you and how much it cost to build your business and that is how much it is worth.”
Pratik, a tech business owner from New Jersey who also owns a restaurant, added this: “and don’t forget the good will and revenue loss until operations can resume again“, then reminded me of his experience with a fire:
“Mark, if you recall when we had the fire caused by lightning at the pizzeria, I had the entire customer base with purchasing and sales history synced to my home. Insurance company had the first check cut in 10 days of the claim. This practice is so important. We had our standing corporate catering resume in one week from an alternate commercial kitchen which kept revenue coming in as well as routed our VOIP phone service to my mobile for those customers that tried calling. Made recovery a bit easier.”
What’s it worth?
That metric Doug offered merits consideration. If you can’t wrap your head around the cost of starting over, doing inventory from scratch, calling all of your customers (assuming you have their contact information somewhere) and asking them to tell you what they orders, how much people owe you and so on, then ask yourself this:
How would you like to go back to the day you started your business and start over?
Ask your insurance agent how many businesses survive a fire or flood if they don’t have these things taken care of.
Professional development mentors remind us that we must take care of ourselves first.
They advise that we improve ourselves mentally, physically and emotionally – in other words, attend first to our overall health – so that we’re better prepared to perform well in our roles at work, at home and in our community.
Personal finance mentors do the same when they remind us to pay ourselves first. If we don’t, something will always come up that consumes those funds, leaving us ill-prepared for our future.
Airline flight attendants ask us to put on our oxygen mask first, then help others sitting near us, because we can’t help our kids or significant others if we’re unable to breathe.
Here’s the technology version of putting your mask on first:
Backup your business data.
Test your backups regularly to be sure you can restore them.
Rotate your backup media off-site so that a theft or on-site fire or water damage don’t render your backups useless at the time you’ll need them most.
Document your backup and restore process so that you can restore and get systems running again even though your technology wizard is on a 16 hour flight to Australia.
Investigate, plan and implement real-time disaster recovery for your business data, particularly if your business model has little downtime tolerance.
This may seem like a hassle. It may seem like unnecessary overhead. Don’t be tempted by those thoughts.
Fact is, if you put your mask on first, you’ll be in a better position to help your customers solve their problems, grow their business and keep paying you. Why? Because your business will be more resilient.
Look back at the business impacts from an event like Hurricanes Sandy or Katrina. If you were impacted by those storms, how would you service customers who weren’t in the storm track? If you can’t, you know they’re likely to find someone else who can.
Your “Someday” is coming
These kinds of things that happen when your business can’t take a power outage, a hard drive crash or similar disruptions. The question isâ€¦ when?
No one can point to a date and declare (in their Darth Vader voice) that “Your systems are going to fail on this day.”
What I can guarantee, even without considering Katrina, Sandy, Boardwalk fires, blizzards and ice storms, is that it’ll happen…Someday. These things happen to electronic, mechanical devices. You can either be prepared for them or not.
At least once a week, I hear from someone whose “Someday” has arrived. Three times last month I saw it happen to businesses who didn’t have backups. Like a TV show involving the Kardashians, it’s drama you don’t need.
You might think that hardware failures happen more often to businesses that don’t have backups. The reality is that businesses with good backups simply restore them and keep working, so we don’t hear much about their hardware problems. One result of this is that making backups is ignored until it’s too late.
This puts the security of your clients, your employees, your clients’ employees and the families of all these people at risk.
If your most important database disappeared right now, how would that impact your business? How would you recover? How long would it take to get back to where you are right now, productivity-wise? When did you last test your ability to restore your data from a backup?
If you don’t know the answers, ask your technology people. Don’t do it in an accusing fashion, just explain that you’re concerned about the possibility of hardware failure and natural disasters, so you’d like to know what the backup and recovery plan is and how long the recovery period will take for your business. These are things management should know.
Remember, it’s an asset
While there is no good time for this to happen, history suggests that failures are likely during your busy season, or during financial month / quarter / year end.
The good news is that if you have your backup and restore act together, you might lose some time and productivity when your Someday comes, but you’re far less likely to lose your job or your business.
Backup your data. Test your backups to make sure the restores will work. Schedule these tasks.
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.Â 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.
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 limitationsÂ 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.Â 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.
If you have a retail store, you’ve almost certainly had people showrooming in your store.
If you haven’t heard the term,”showrooming” can be summarized as “shopping at local stores to check out an item before buying online.”
Showrooming takes different forms and includes:
Price checking items on the internet while walking through a store.Â That bottle of foo-foo shampoo is $28.99 at the local grocery. Maybe it’s cheaper online, so people use the barcode to find a price at Amazon. A showroomer might even order right there in aisle five before they forget.
Going to a local store to check out a product you plan to buy online.
Electronics stores and retailers who sell complex, expensive items like cameras are most often showroomed. Â Seems harmless until you consider that the local retailer is paying rent, salaries and other expenses to provide you with a free way to make sure that thing you want is really what you want – so you can leave their store and buy it at Amazon or B&H.
Internet-ready smartphones didn’t create showrooming. It’s just easier now. The same thing happened to retailers during the catalog mail order era.
Rather than complaining about it, let’s take a different tack.
One antidote to showrooming: A decent website
Showrooming isn’t just about checking out products and then going home to order them. The good kind happens too – meaning your website shows what you have in stock that’s ready to pick up today or when you can deliver it.
I’m in the process of moving to a new place. One of the unbridled joys of moving is packing your stuff. With the long weekend in front of me, I figured I’d knock out a bunch of packing. Silly me – even though I started the day with 40 boxes, I ran out Saturday evening.
Thus began the battle. U-Haul places are closed because of the long weekend. Most home stores and some box stores carry moving boxes, but it was after six, so that meant I was out of luck locally and would have to drive to town. I don’t “drive to town” for giggles, so I started surfing in hopes that someone had them in stock. If not, then my weekend plans will change (yes, a little of me was hoping I’d come up empty.)
Call it reverse showrooming, but I want to find what I need before I go chasing all over the valley for no reason.
The first box store site shows that their stock is online-order only unless I want to wait a few hours to find out what they *do* have – and then only after placing a “pick up and wait for a call/email/text” order – which felt more like betting on horses.
Some sites make searches like this easy.
For example,Â Home Depot has a filter on their website that eliminates anything that isn’t in stock at my “home store” (the store that I’ve told the site is closest to me). That works well, since I want immediate gratification – if you can call a shopping trip for boxes “gratification” (doubtful). Anyhow, if I can see what’s in stock, then I don’t have to take a chance at a 36 mile round trip for no reason. Finding up to date store inventory info on their site means they help me avoid wasting time and money – even at full price.
In Home Depot’s case, they also have tabs showing “All products”, “In-Store”, or “Online” – plus the filter I mentioned above.
I drove the 40 minutes and spent the 40 bucks because my local retailer was closed (which is OK) and because Home Depot’s site had enough information to allow me to make a solid decision.
Why do people showroom?
One reason is price, but for many products, the online merchant has done a poor job of selling the item. As a result, the prospect has to invest additional time to find the product and make sure it’s really what they want/need.
Why can’t your store site do that?
TIP: Big corporate stores often use automatically collected product data pulled from manufacturer data feeds (I’ve worked on these systems). Want some evidence? Look at a nationally-sold item at several large retail websites. Is the description identical? Is the picture?
You can do better. Next time, we’ll dig deeper on the causes of showrooming and discuss some solutions.
I mentioned the Meeker internet / technology trends report last week on Facebook, but I thought I should summarize a few important nuggets from it for small businesses, particularly small software businesses.
30 percent growth in mobile users in the last year.
50% growth in bandwidth use by mobile devices. Specifically, 15% of all internet bandwidth use is mobile, up from 10% last year.
Tablet use continues to expand quickly. Apple sold more iPads (140k) than iPhones (60k) last year.
More tablets shipped in the last quarter of 2012 than desktops, despite being on the market only 3 years.
Photo sharing is on pace to double since last year. Last year, about 375MM photos were shared per day. This year, users have already shared more than 500MM photos per day on average.
Wearable device usage is doubling every month so far this year.
More people access the internet via mobile device in China than via desktop – in a population of over 560 million internet users.
45% of Groupon transactions are now online. 2 years ago that number was 15%.
I recommend you check out the whole slideshow, even if you aren’t in the technology business. This stuff affects almost everyone in almost every business.
During the Amazon Web Services (AWS) Re:Invent conference‘s “fireside chat” with Jeff Bezos, he told a story about during a professional development session where he (like all senior Amazon management) spent two days on the Amazon customer service call center staff.
Stop for just a minute.
If your business is small – you likely spend time on customer service, even if not by choice.
Depending on the size of your business, you’re might be insulated from your customer service people and likely from your customers. While it isn’t something you want to do every day, I assure you the value of doing what Amazon senior management does here is sizable.
Listen to the quality
I’ve sat within earshot of my customer service staff. You learn a lot about your quality. Sometimes you learn things about your quality that runs a chill up your spine – but that’s better than not knowing.
That’s what Bezos learned.
During the session, he handled calls and operated the customer support system while being coached through the process by an experienced Amazon customer service person as each customer called in.
While this had to be hugely educational for him about unmet needs and/or streamlining processes for his customer service team, he learned a unexpected lesson – how things really work when it comes to product quality at Amazon, which gave him an idea to improve quality and do so before the cost of low quality grew.
Listen to Bezos describe the result – how Amazon now handles poor products, poor packaging and enables their staff to communicate quality information (and make decisions) about them – much like Toyota’s assembly line allows anyone to “pull the cord” to stop the line to deal with a defect (2 minutes, 47 seconds from 18:01 to 20:48):
Can your sales/service people pull a poorly-made or poorly-packaged product off the sales floor? How long will you sell a lame product or perhaps worse – a good product delivered poorly – to your “valued customers”?
How would this impact your buying process and related contracts? How would this impact your product quality and delivery feedback processes? Note Bezos’ use of the un-word “systematize” – not just making more work, but making a new system to make the work and customer experience better.
If you don’t do these things (in your own way, of course), are you willing to deal with the disadvantage this creates between your business and businesses that handle this as Amazon does? What else could you do rather than this to assure the same level of highly-consistent quality of products and packaging?
Remember, this isn’t about replicating what Amazon does. The important thing is to replicate or improve upon the results.
Doing the right work
While discussing a week-long Kaizen (quality) professional development training session, Bezos talks about a Japanese consultant who chastised him for sweeping up some dust on the warehouse floor (1 minute, 54 seconds from 20:49 to 22:43):
Eliminating the source of dirt is more important than finding a better janitor or a better broom. Obvious, once you think about it.
Smart businesses regularly do something new and different in their market, producing really good results.
I don’t mean not-so-thoughtful act of cloning a service or a product. I’m talking about the processes and systems that a strong business depends on and eventually turns to as a strategic advantage. Might be a sales or marketing process, might be front or back office.
Once the value is shown, even of a non-obvious system/process, why wouldn’t these things be duplicated by business B when they see business A gaining value from them?
Sometimes the new system/process was intentionally designed to be complex so that it would be hard for competitors to duplicate.
Sometimes those complexities don’t impact a small local business but a parallel business need for a similar system still exists in that business that should be considered.
Sometimes we have this odd tendency to watch someone do something great and stop right there because it’s so easy to assume that we can’t do what others have done.
Sometimes the lead isn’t followed because of ingrained beliefs like “Yes, but that’ll never work here.”
What’s your reason? What system would transform your business front office? What would transform the back office? These things don’t have to be massive or expensive. As one of my mentors says, “Little hinges swing big doors.”
Mary Meeker’s annual Internet Trends presentation is always an attention getter.
For some, a wake-up-call, for others… a reminder.
No matter what it is for you, there’s some valuable trend info there worth looking at in the context of your software business.
“Rapid mobile adoption still in early stages.”
Think about that for a moment. Apple has more than 100 million mobile devices sold (65 million iPads in 8 quarters) and dominates US smartphone sales. Android does the same for the rest of the world…and we’re still in the “early stages”.
This isn’t a surprise, but it’s a common mistake for entrepreneurs to feel like if they aren’t first, they’re worst – and for some, that they shouldn’t even try. Someone has to be first – and sometimes their most important achievement is to show everyone else that the market is viable.
It’s still very early for mobile, despite what you might gather from industry doomers, but there’s plenty of time to be the second mouse who gets the cheese.
Look around your clients’ offices. Are their salespeople 100% mobile? If they have any kind of fleet, are their drivers/pilots? What about their warehouse / lot / logistics people? Are their in-house pickers on mobile devices yet? What about their salespeople? Can they enter a lead, produce and email a quote and close a sale – including accepting a check, depositing a check, getting a contract signature, emailing the signed contract and/or taking a credit card – from their mobile phone?
Can they use their mobile phone to perform core functionality like this in your software? My guess is… Probably not.
Some of your software might never be on a mobile device in its current form. Yet parts of it might make sense, particularly for outside sales and other mobile workers. One thing is almost certain: This kind of mobile flexibility will be difficult to avoid in the future because customers will demand it or move to someone else who delivers it.
One of the more challenging aspects of the move to mobile is the cross-architecture requirements. A few years back, you could dictate mobile hardware because phones couldn’t do the work. You’d have customers buy expensive ruggedized Symbol devices and that allowed you to control the scope of development.
Not anymore. Today,Â you need to be ready to consider adding iOS, Android, WinRT, Java, HTML5 and who knows what else to your development efforts. Now maybe you don’t start development on all of those at once but you’d better be considering how each of them apply in your market.
If you aren’t, are you ready to give up the testimonial-writing, market-leading customers in your client base? They’ll often be the ones who move first to new solutions that leverage advanced technology – even if it’s just to do a pilot and set their next long-term strategy.
Globally, only 18% of people have mobile access, but the growth rate was 37% over the last year. In the U.S., 29% have a tablet compared to 2% three years ago.
Rethink your apps.
“8% growth in internet users, driven by emerging markets”
79% of the U.S. population has internet access today, while only 10% of the population of India has it.
Of that 10%, 44 million use a smartphone. The rest use a mix of desktop/laptop and cell phone. For those who get to the net via mobile device, it doesn’t always happen on a smartphone. Meeker noted thatÂ 200 million farmers in India receive ag subsidies via their cell phone.
Intuit recognized this situation early on by having business development people in place in India. One of theirÂ success stories there is a service that delivers daily pricing information to farmers via text message. They’re adding 20,000 users a week to this text message based service, which helps farmers get more for their produce at market.
“Suddenly” the translation to Farsi and adaptation to “non-smart” cell phones seems more interesting…
For U.S. software companies, these are areas of concern. At 79%, our climb only has so much headroom left. International is a natural next step given the growth numbers.The U.S. is number eight in growth rate of new internet users, behind China, India, Indonesia,Â Philippines, Nigeria, Mexico and Russia.
Why worry? Because small U.S. software companies tend to avoid internationalization. Grab 10 small software company product downloads off the net. How many of them support other languages? Other currencies? Other taxation systems?
If internationalization is a problem, how functional is business development outside the U.S. for American companies? How else will you get accurate business development knowledge in those countries? Add to that, many countries have barriers to outside companies building a presence inside their borders – just like the U.S. does.
This is an area of great potential, but it doesn’t come without serious work. It isn’t as simple as running your product’s text strings through Google Translate.
Don’t forget Android.Â In 13 quarters, Android has lined up 250MM mobile phone users, with the majority outside the U.S. Â Combine that with a different platform with many different screen formats and this is where you mull over your answer to “How bad do you want it?” when looking at the potential return.
As the smartphone enters the developing world en mass, there’s still a big upside. In the U.S., we think we’ve seen it all. Globally, there are 953 million smartphone subscribers. Seems like a lot, after all that’s about 3 times the size of the U.S. population.
Yet for all mobile phones, the smartphone subscribers number jumps to 6.1 billion (see image below). Compare those two numbers carefully when considering your near term app strategy.
Many would suggest you build a smartphone app for these developing markets ASAP. I suggest you consider where you are now before taking that step. In particular, think about “the reason to get a sale“.
Many will read these numbers and think “Yeah, but…” Â The “but” is about where the buyers are and where the traffic is.
Currently 10% of global internet traffic is mobile. It was 4% two years ago.
What about buyers? Meeker said 8% of e-commerce is mobile-based and that the click through rate on mobile is still 1/5th of what desktop click through is.
8% globally is a big number and has little choice but to go up.Â Can your site handle it? Can your clients’ sites?
In India, there is now more mobile-based internet traffic than there is traffic from desktops/laptops. Breathe that in before your next long-term product strategy meeting.
These three graphics tell a lot of stories. There is one thing they don’t say.
One thing these graphics don’t say is “Who’s next?”
That’s how early things are. Meeker called it “Spring Training” because there are so many opportunities related to the net and mobile that the season really hasn’t started. Maybe in the U.S., we’re jaded to the opportunity that remains because we have this habit of assuming that everyone is like we are. 15 minutes on your tech support line will clear that up.
For those willing to think and work differently…different results are possible.Â Look back over these slides and my comments. How will they, how could they impact your business?
Thanks to KPCB, I’ve included the slide deck here…
Meeker’s talk wasn’t all good news. She referred to KPCB’s now-famous (and sobering) USA Inc. video/report that looks at the financial performance of the U.S. as if it was a business. Regardless of your politics, it’s worth a look. An October 2012 USA Inc slide deck is hereÂ and the 2011 video is here.
Do your customers and prospects let your calls go to voice mail?
Do they open your emails? If they were, you’d know (or should).
Think about why *you* let calls go to voice mail and why you ignore certain emails.
While you might be busy and decide to let calls go to voice mail, more often than not, when the caller id appears – you can’t think of a reason to bother taking the call.
Is relevance the reason?
Lets discuss a few examples.
I get my internet from a local cable provider. While they offer telephone and cable service, we don’t use those services. About twice a week, the “(cable vendor) Robocall department” (as the number is named on my phone) calls me to ask what TV, phone and internet service I use.
Every time they call, they ask the same question. They want to know what service I use for internet / TV / phone. Funny thing is, they’re calling to get information they already know. The caller never has any idea that I am already their customer.
It doesn’t have to be that way, even with an outside telemarketing firm. While I’d be unlikely to use one, that doesn’t mean they can’t be effective.
Most modern telemarketing firms are well beyond the stone age “dialing for dollars” mode of the past. They’re capable of taking a list you provide to them and filtering out existing customers from their call list. They are also capable – automatically, if you use a good one – of changing the script used by the caller so that they don’t seem totally uninformed.
If instead of “who do you use?” they asked something like “I see you use our internet, but not our cable…” and started the conversation there – that would at least be in context. Someone experienced enough to run a huge cable firm’s marketing and sales department should know this.
On the other hand, if you’re a small business owner, this makes perfect sense, but you might never have considered its impact.
If you send email or make cold (or even warm) calls, are the conversations pertinent to those customers? If they were, you might get a better response.
I have a 401K plan. The vendor regularly emails me…..to sell me their 401K plan.
These emails are personalized – they know I have multiple accounts with them. Yet they send emails that talk as if they have no clue about our business relationship.
These things make your company (and you) look inept, or at the least, like the left hand has no idea what the right’s doing. It tells me your systems and the people running them are just going through the motions, wasting money that impacts other people’s livelihoods and perhaps driving up your prices.
Doing things this way:
Starts the conversation in the wrong direction. You have just seconds to get enough attention to get peoples’ attention. Don’t waste it by talking out of context.
Makes you look like you have no idea who I am. Not in the “Do you know who I am?” way, but the “Do you know / care that I’m already your customer?” way.
Leaves money on the table. Instead of trying to sell me the thing that clients like me buy after buying the last thing I bought from you, you’re trying to resell the thing I already have.
Wastes the opportunity to discuss something customers care about – the thing they already bought. IE: Rather than discussing how to get the most out of my 401K, they’re trying to sell one.
Your marketing systems should know your paying customers and engage them in THEIR context with you – not as total strangers.
Recently a 79 year old national magazine announced they will become digital-only as of January 2013. This couldn’t have been a rash decision, given the contracts in place for printing and distribution, much less the internal changes/considerations necessary to make a change like this.
Yet a subscriber tells me she just got a renewal offer in the mail – and it didn’t say a word about the fact that it wouldn’t be in print.
When you communicate with your customers, be in context. If 10% more people responded positively, what’s that worth?