Week 49 – Learn to Accept Change, Even Enjoy It

The most intriguing thing to me about a business owner who fails to gain control and grow is that often they have the tools and information available to them, they just do not put them to use! I think one of the main reasons people fail to act is the fear of change, or the fear of things just becoming different to what they are now. So things really suck right now, but if I try all of these crazy things life MIGHT get even worse. If you are to make progress, create new income streams, grow your business; some things just have to change. There is no way around this.

Everyday the world around us changes, life changes, and business changes. Change is caused by many things, sometimes it’s because people invent better ways to handle everyday problems. Other times it is inspired by a business that is striving to be more efficient. Your competitors may have found a way to remove some steps from a generations old process and if you supply product or services that those steps rely on, you may find your business disappears.

"It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change." -- Charles Darwin

As new competitors enter your market they can set new standards of service or cleanliness or value. You have to pay attention to what the public start to demand. This can be so gradual that you don’t even notice especially if you are tied up with trivial problems and employee issues. If you accept that things WILL change, no MIGHT change then you can schedule time each month to evaluate what the new standards in your line of business might be. It should be clear to you that there is nowhere to hide. Nothing is more certain than the world continuing to change. You need to adapt to this change, keep fresh and constantly review the results of your business and process innovations. Change with the times but more importantly, put in place systems to make the changes stick.

Let’s have one last look at how you are going to increase your business by 15% in multiple key areas:

1. Number of Leads – The number of phone calls or visits generated each year by your marketing. For a specific review, read Week 7.
   
2. Conversion Rate, Average Value of Sale and your Margins – the rate at which you convert prospects into actual customers as well as the average amount those customers spend with you each year. Margins are the gross profit you make on each sale. Once you have the leads, people who walk into or call your business are silently begging to be led. You need to take control and lead them to the best solution to their problem. Take risk out of these transactions and you will close far more sales. Finally, existing customers are your best source of business. You need to remain in contact and have them coming back to buy more often. For a specific review, read Week 23 and Week 25.
   
3. Number of Visits per Customer – the average number of times per year your customer purchases your product or service. You need to create new income streams to reduce the risk to your business. You need to set-up referral programs and ensure they are a lasting success. Finally you need to give your customers the tools to easily send you new business and never, ever give up when people say no! For a specific review, start reading at Week 27.

Week 48 - Revisiting Systems, Freeing Up Your Future

Week 48 serves as a reminder that “systems” implemented in your business have internal and external functions. I want you to look back over the previous ten weeks and really try to embrace systems. Systems are the key to success in any business so this is not just an area to tighten up, it is an area to evaluate and re-invent, on an on-going basis. Here are the key coaching tips to assist with your review:

INTERNAL

• Start building your operations manual today. The quickest way to get going is to develop a checklist for each and every function in your business.
• Through a friend see if you can make contact with someone who owns a franchise. Call them, explain that you are trying to improve your business by putting systems in place and could you come in and look over their Operations Manual.
• Blame a system, not a person.
• Buy and read Building the Happiness Centered Business by Dr Paddy Lund. Set about implementing The Courtesy System in your business.

EXTERNAL

• Listen and then ACT. Listen to your customers; resolve to make contact with at least 10 per month. Ask probing questions about your service or product quality. Take action using the information you gather.
• Following your customer audit, consider how the customer’s perception affects your ability to price at a premium.
• Conduct “presearch” within your industry. You are searching for what your customers want or expect from a business such as yours in the future.
• Employ a “secret shopper” if applicable. Otherwise work out another way to test your systems and employees on a regular basis. This could include friends calling in (phone, email or fax) or one of your colleagues actually ordering services from your business and giving you a report.

Perform a service audit of your business:

• How do we treat our customers? Try to identify 10 areas which you can improve on and look out for “Not My Job” syndrome.
• Do your employees have all the tools they need to do their work efficiently?
• Read the books Fish and The 22 Immutable Laws of Marketing.

Marketing Musings: Maestro of DVD Distribution

Although not that suitable for the smaller business, I do like Reed Hastings fresh (CEO of Netflix) approach to management.

PAY LAVISHLY Higher-than-average salaries—and tying bonuses and raises to the market, not a pool—can make stars less likely to bolt. Money is no object in hiring.

PROVIDE COMPENSATION CHOICE Employees are more likely to excel if they can pick how much of their compensation they get in stock rather than cash.

FOSTER TALENT HUNTERS Encouraging everyone to hire the three people they've loved working with most during their careers creates an intense, fun workplace.

LET THEM GO Don't give B performers a middling raise. Give them a decent chunk of cash and show them the door. And don’t surprise them. The laid-off leave with their dignity.

LIMIT RULES They reduce error. But they also stymie innovation. At Netflix, employees are responsible for their choices, even in how much vacation to take.

The full article is here at BusinessWeek.

Marketing Musings: Oh No, The Sandgate Hotel

Gordon Ramsay is a master at picking apart hospitality establishments that have lost their way (or never had it!) What's incredible is how simple many of the mistakes appear but also how as an owner, you can be so oblivious to the solutions due to the pace and drama of the place. I highly recommend you seeking out the entire episode of Ramsay's Kitchen Nightmares: Sandgate Hotel. As a small business owner, it will probably be the most entertaining yet informative hour you have experienced.

Marketing Musings: Joie de Vivre Thrives

In Week 43 I discussed employees. How the heck do you inspire and encourage them to treat the business as if it were their own? Inc. Magazine has a great interview this month with Chip Conley who owns a chain of boutique hotels in California. Chip talks about being inspired by the psychologist Abraham Maslow; you might have come across Maslow’s “Hierarchy of Needs” before, you know, food and shelter at the bottom of the pyramid and so on?

What is impressive about Chip Conley is that he used the Hierarchy Pyramid as a guide for his own business and replaced the categories with the needs of an employee. And so it goes, the employee needs money (food and shelter) but as you work up the pyramid you get to things like recognition for a job well done and near the top, needs like meaning and creative expression.

There is no one silver bullet for ensuring every employee buys into your vision and treats your business as their own, but tools like this should be embraced to ensure you are doing all you can to make it a reality.

Week 47 - Systematizing the Marketing Function to Keep You Running at Peak Performance

You know you need a system for greeting your clients and you also need one for capturing their details, but don’t forget that the most important systems of all are the ones related to your marketing. Why so? Because marketing activity is the primary source of new business leads. If you approach it haphazardly you will jeopardize all of your other efforts.

Imagine for a minute that you walk into a new job as a marketing manager and the boss hands you a folder titled “Our Marketing System”. Inside the folder you find an in-depth description of all the campaigns that have been run in the past and everything that is planned for the next six months. In addition to this, you find a summary of success and failures to date as well as a list of “ideas and marketing methods” still to be tested.

As a new employee you would feel empowered and very glad that you are not starting from the beginning. The owner of the business is even happier because there is a good chance you can simply pick up where the previous employee left off. Think of your marketing manual as an “operations manual” all of its own. You should be setting aside 1 hour per week to review the results of your test campaigns and feeding that data into decisions regarding your next move. You must commit this time to this exercise. Book 1 hour in your diary each week, for the next three months. You should get into the habit by then. If you don’t do this, your marketing will get stale, your testing and measurement will become non-existent. Basically you will be back to square one!

Frequently review the key marketing concepts:

Testing – what else can you test? Look for new ways to present your offer, new formats or new mediums. For example, try a print ad, then try it in color, then try it in a different magazine or web site. You are looking for the best return for your hard earned dollars.

Measurement – make sure you are measuring the right aspects of your campaigns and spending time thinking about what the data actually means. Feed the findings back into your next campaign and aim to increase your results.

USP – is this still appropriate for your business or have other ME TOO companies diluted the value of your proposition? Keep it fresh and relevant, it may never have to change, but be aware of what is going on around you.

Advertising – are you following the rules when it comes to writing your ads? Use the advertising checklist (Week 20) against EVERY advertisement that you run. Ignore the rules and you can expect your results to drop.

Innovation – it is hard to keep your marketing fresh if you do not have any new products or services to tell the world about. Use your time wisely and commit to a certain number of new products or services per quarter. This will feed straight into your marketing machine and create a snowball effect of new business.

Referrals and repeat purchase programs – never forget that if you rely on one or two income streams, your business is ALWAYS at serious risk. By being on the lookout for new distribution opportunities, you will create a valuable stream of pre-sold prospects that do not cost your business anywhere near as much as cold prospects in time or money.

Marketing Musings: Big Bucks Turnaround

Would you do anything for a dollar? It seems that high flying auto executives just might. Just months after private equity interests purchased Chrysler the company has attracted some high flying execs from Toyota and the Lexus Division. Why would these folks leave their positions leading sales and marketing for the clear world leader? Ferrari I can see. A new breed of hybrid company, definitely. But Chrysler?

I am well aware that you have to start somewhere but this is no ordinary turnaround (as the headhunter has sold it). For me, it all starts with the product and as long as the products fail to meet the competitive standard (both design and quality wise) and the company is forced to cut costs and discount to move their product, the spiral will continue. It strikes me as a pretty daunting role. Not impossible, but there are there are 50 million other reasons why (at least reportedly in James Press’s case) the challenge was taken up and the private equity bet is that these people also believe they can do it!