May 12, 2014 | Marketing
In my meetings with business owners, I will often ask if they would hire an employee for $40,000 a year and then never check to see if they accomplished anything or even showed up to work. They usually look at me as if I have three heads, and say “Of course not!” Then I ask why they do just that with their marketing budget. Then I get the ‘aha’ moment from them.
Obviously some marketing budgets are significantly more and others are less, but the principle remains the same. Our marketing expenditures are often determined by what we have done in the past, or what we feel is too expensive. I spoke to a business owner who told me they stopped advertising in the Yellow Pages completely after previously having a full-page ad. When I asked why, they said it was too expensive. I asked what type of results they had gotten, and if they received any type of reporting. The business owner indicated the reporting was excellent, but they were too busy to ever look at the reports.
I’m not promoting one advertising medium over another as they all have their strengths and applications. I am saying that unless you want a $40,000 employee that does not show up, it is imperative that we test and measure the results from our marketing to make informed decisions on what to increase, decrease, add and subtract. Here are a few simple concepts to start the process.
- Define your purpose for the marketing investment: If the purpose of the marketing is to drive revenues and profits, then the measurements of success need to reflect that. If the purpose is something else, then adjust your measurements accordingly.
- Track your leads and record the prospect’s data: At the very minimum always ask the prospect some version of “How did you hear about?” Collect their information and put it in a database. The goal is to know how many leads (and ultimately how much profit) per week are coming from each marketing medium and be able to continue to contact those leads. I know from my mystery shopping this is a huge leak in the pipeline for most businesses.
- Know your key numbers: Marketing is simply a matter of buying clients for less than their lifetime values. Many businesses will not break even until after a new client makes more than two purchases. A chiropractor and a hair salon are two good examples where loyal clients have many transactions over a period of years. The two key numbers are acquisition cost (cost of gaining a new client) and lifetime value (how much the average new client will spend as your client). The key to making marketing an investment is to keep the acquisition cost as low as possible while driving the lifetime value as high as possible. Do you know your numbers?
- Use the information you collect to make educated decisions: Once we record the information over time, we will know the acquisition cost for each marketing technique as well as the number of new clients driven by each technique. You will likely notice a significant difference in the lifetime value of clients from different techniques. Build the information over time and use it to determine how to allocate your budget.
Obviously there are entire books written about these concepts. The key is to start systematically recording your information now to increase your revenues and build your decision making database.
Whatever you do, make sure you’re getting a great return on your investment from that $40,000 employee! Learn more.
May 6, 2014 | Planning & Goal Setting, Self
As a business owner, you’ll never have enough time to get to everything done. Since you can’t create more time, the real challenge lies in the ability to think ahead, and to have the discipline to do things in order of importance. Using the power of priorities makes the difference between a successful business and just surviving. And the same is true for all areas of our lives.
Leadership trainer and author John Maxwell says, “Thinking ahead and prioritizing responsibilities marks the major differences between a leader and a follower.”
Most people have heard of the Pareto Principle, more commonly known as the 80/20 Principle. Roughly stated, that in most businesses 80% of your business comes from 20 % of your customers.
Other examples of the Pareto Principle are:
Tasks 20 percent of your tasks will bring in 80 percent of your results.
Reading 20 percent of the book contains 80 percent of the content.
Job 20 percent of our work gives us 80 percent of our satisfaction.
Products 20 percent of the products bring in 80 percent of the profits.
So… when it comes to your priorities, 20 percent of your priorities will give you 80 percent of your production, IF you spend your time, energy, money and personnel on the top 20 percent of your priorities. When you do this you are getting a 400% or fourfold return in productivity. Think what this would mean in your business! That’s the power of priorities.
Every business person needs to understand the Pareto Principle as it applies to their personal productivity.
So if you have 10 tasks on your list (you do have them written down on a list right?), 2 of them will produce 5 to 10 times the value of the others. Interestingly, they probably all take roughly the same amount of time to complete. So doesn’t it make sense to find the 2, and focus on them first?
This is the area where most people fall down. You look at your list (you do have a written list right?) and you see 10 things. You see 2 that look easy and fast and you want to feel like you’ve accomplished something, so you say to yourself, OK, lets just bang those out and then I can focus on the harder activities. Hours later, you still haven’t gotten to those top priority projects, it’s now afternoon and your energy is waning, and you don’t have a large enough block of time left to do them, so you vow to tackle them first thing tomorrow. But hey, you cleared out all that clutter from your inbox! Lather, rinse, repeat.
As a business owner, you can decide whether you will be reactive or proactive when it comes to the use of your time. The question is not, “Will I be busy?” but “How will I invest my time?” It’s not “Will my calendar be full?,” but “What will fill my calendar?” Focus on your top 2 priorities that will deliver the highest value first thing in the morning, leave the administrivia for later in the day when you are more tired, and watch your productivity and personal satisfaction rise to new heights!
For more tools on prioritizing your day, go read Brian Tracy, “Eat That Frog“.
Apr 28, 2014 | Team
How often do you hear your employees say “Thank Goodness it’s Monday!” Not too often, I bet.
We spend most of our waking lives at work, so why not make it a place where people look forward to coming – especially Monday.
When you provide an environment that encourages, promotes and nurtures a “friendly, warm and caring work place”, business and life will become more pleasant for everyone, the end result being that productivity, morale and your bottom line will improve.
Do you notice and celebrate each team member’s birthday? How about their anniversary with the company? Do your team feel the office is a community they below to? Do you have regular team outings, more than a once a year holiday party? Pizza, or even better, a healthy choice for lunch on Friday? What little things do you do to show you appreciate each of your team members? Are there opportunities for the whole team to share in each others’ successes?
Begin by asking your team what they would appreciate, “their wish list,” to enhance their work environment. You’ll be surprised how little they really want.
Take into consider everyone’s needs and try choosing a few, especially the most popular request, and implement them into the routine of the company. If they are items you need to buy think of it as an investment. Investing, for example, in a new microwave oven, better quality coffee, a water cooler or fresh bagels on the Monday morning coffee break every now and then, are some are the sorts of things that you can do to show you care about your employees.
If there isn’t much of a budget for it or the company can’t afford it, (which you can always find a few extra dollars here and there) then try to do little things that don’t cost much or anything, like a company potluck or a team building FUN Day! Go bowling; show a movie in-house with popcorn. The point is to let your employees know that you care and appreciate all their hard work. Without the hard work of your employees, where would you business be? Investing in them is really investing in your company!
We are all “social animals’ who perform best when we feel appreciated and enjoy the people we work with. When your employees are happy and satisfied, it will show in their work, they will show it with your customers, and then it will show in your profit. How you treat your employees is how they treat your customers. Want your customers to feel special? Start with your team. Everyone wins!
Have a great week! If you need more ideas get in touch with me.
Apr 21, 2014 | Marketing
How can you do great marketing on a budget? If you find yourself cutting back heavily on your marketing budget because of the need to reduce costs, it does not mean that you also need to cut back on your marketing activities. Marketing is paramount in times of economic distress.
How then can you keep your marketing efforts alive despite a dwindling fund?
There are many marketing initiatives available that are free of hard costs or have a minimal cash outlay with a relatively high return that small businesses can effectively employ to remain competitive.
Here are nine such techniques that can help you survive and thrive through tough times.
- Networking – Networking with local business groups, local ‘service’ groups such as Round Table, Lions, local business associations etc, or even at your children’s school or the church, etc. can be a great marketing technique that does not cost a thing.
- Referral Program – Ask your existing customers to recommend you to a friend and, if necessary, give them some form of reward (high perceived value to them, low cost to you) for doing this.
- Targeted Direct Mail – A carefully written letter sent to a tightly targeted list and then followed up by phone to increase response rate can work wonders for your business.
- “A” Board – An “A” board in front of your premises if you have a retail location.
- Improved Signage – Improve your signage to cover more of the services you offer or be more visible.
- Marketing Collateral – A small brochure or flyer promoting all of your services sent out with invoices (some of your customers may not be aware of everything you offer) or direct to your customer base is a cost-effective marketing technique.
- Email Newsletters – While it can cost a small amount to set up a template or get an email service, email newsletters come with only a small cost to use as long as you have the time to write the content yourself. There is no postage associated and they are typically free to send.
- Vehicle Signs – Post signs on your vehicles – you have a free poster site, why not use it! Car signs can be made relatively inexpensively.
- Internet/Online Marketing – There are a plethora of free/low cost options available online, such as blogs, social media, membership communities like LinkedIN, Facebook, Twitter, Blogs, Meetup, Yelp etc. where you can market your products and services. YouTube can be used effectively to demonstrate your product and with the help of social media tools, these videos can reach a newer, wider audience.
It is important to remember that reducing your marketing budget does not mean that you must also minimize your marketing initiatives. The biggest mistake businesses make during a downturn is to cut down on their marketing activities. Using these free, or low cost marketing techniques will help your company stay afloat during rocky times. Get in touch with me if you want more ideas.
Apr 13, 2014 | Customers
Eight Ways to Turn Customers into Fans, part 2
So how did you do this week with turning your customers into raving fans?
Are you connecting with your audience on social media? Did you set aside time in your calendar to explore ideas? Did you spend any time thinking about the four principles we looked at last week? Did you take action on any of them? Did you tell anyone else about your goal?
But how do you actually achieve that? Here are the last four of eight proven principles you can use to make sure your customers are raving fans (the first four I posted last week):
- Bounce back with effective service recovery. Sometimes things do go wrong. When it happens to your customers, do everything you can to make things right again, as soon as possible. Fix the problem. Show sincere concern for any discomfort, frustration or inconvenience. Then “do a little bit more” by giving your customers something positive to remember – a token of goodwill, a small gift of appreciation, a discount on future orders, or an upgrade to a higher class of product.
This is not the time to lay blame for what went wrong, or to calculate the costs of repair. Restoring customer goodwill is worth the price in future orders and new business.
- Appreciate your complaining customers. Customers with complaints may be your best allies in building and improving your business. They point out where your system is faulty, and where procedures are weak or problematic. They show you where your products are below expectations or your service doesn’t measure up. They point out areas where your competitors are getting ahead, or where your team is falling behind. These are the same insights and conclusions that people pay consultants to provide…but a “complainer” gives them to you free.
And remember, for every one person who complains, there are many more that won’t even bother to tell you. The others just take their business elsewhere. At least the complainer gives you a chance to reply and set things right.
- Take personal responsibility. In many organizations, people are quick to blame others for problems or difficulties at work: managers blame staff, staff blame managers, engineering blames sales, sales blames marketing and everyone blames finance. This doesn’t help. In fact, with all the finger-pointing going on, it tends to make things worse.
Blaming yourself doesn’t work either. No matter how many mistakes you may have made, tomorrow is another chance to do better. You need high self-esteem to give good service. Beating yourself up doesn’t help.
It doesn’t make sense to blame the computers, the system or the budget, either. This kind of justification only prolongs the pain before the necessary changes take place.
The most reliable way to bring about constructive change in your organization is to take personal responsibility and help make good things happen. Make recommendations, propose new ideas, give your suggestions, volunteer to help out with problem-solving teams and projects. .
See the world from your customers’ point of view. We often get so caught up in our own world that we lose sight of what our customers actually experience
- Make time to stand on the other side of the counter, or listen on the other end of the phone. Be a “mystery shopper” at your own place of business. Or be a customer for your competition. What you notice is what your customers experience every day!
Finally, remember that service is the currency that keeps our economy moving. “I serve you in one business, you serve me in another.” When either of us improves, the economy gets a little better. When both of us improve, people are sure to take notice. When everyone improves, the whole economy grows stronger. So, let’s all start looking after our customers and let the economy look after itself. If you need help on creating raving fans in your business, get in touch with me to set up a complimentary consultation.
Apr 7, 2014 | Customers
How do you turn customers into Raving Fans?
Like it or not, we live in the fast paced, high stakes world of social media. Make a mistake with a customer and the world will know about it instantly on Twitter, Facebook, Yelp, Pinterest and the like. How do you stay ahead of the game? The best way to generate positive posts and reviews, and retain your customers in the process, is by paying constant attention to your customer’s needs and expectations, and giving them only positive fuel for the fire. It doesn’t take much for someone to feel like they need to go post the bad news about your business. But if the mix is right, the occasional negative ones will go largely unnoticed.
But how do you actually achieve that? Here are the first four of eight proven principles you can use to make sure your customers are raving fans (the last four I’ll post next week):
- Understand how your customers’ expectations are rising and changing over time. What was good enough last year isn’t good enough now. Use customer surveys, interviews and focus groups to really understand what your customers want, what they value, and think about what they are getting, (or not getting) from your business. When was the last time you did a customer survey? Turning customers into fans is a never-ending process, never stop doing this.
- Use quality service to differentiate your business from your competition. Your products are reliable and up to date … but your competitors’ are likely to be, too. Your delivery systems are fast and user-friendly, but so are your competitors’! Make a real difference by providing personalized, responsive and “extra-mile service” that stands out in a unique way which customers will appreciate and remember. Brainstorm ideas with your team. Come up with something that will truly stand out, something that no one else is doing.
- Set and achieve high service standards. Go beyond basic and expected levels of service to provide your customers with desired and even surprising interactions. Determine the “norm” for service in your industry, and then find a way to go beyond it. Give more choice than “usual”, be more flexible than “normal”, be “faster” than the average and extend a “better” warranty than all the others or a better guarantee. Your customers will notice your higher standards. But your competitors can eventually copy even the highest standards. So don’t slow down. Keep on improving.
- Learn to manage your customer’s expectations. You can’t always give customers everything their hearts desire. Sometimes you need to bring their expectations into line with what you know you can deliver. The best way to do this is by first building a reputation for making and keeping clear promises. Once you have established a base of trust and good reputation, you only need to ask your customers for their patience in the rare circumstances when you cannot meet their first requests. Nine times out of 10 they will extend the understanding and the leeway that you need. The second way to manage customer’s expectations and turn them into raving fans (indeed, to exceed them) is with the tactic called “Under Promise and Over Deliver”. It works like this: your customer wants something done fast. You know it will take one hour to complete. Don’t tell your customer. Let them know you will rush the project…but then promise 90 minutes. Then, when you finish in just an hour (as you knew you would be all along), your customer is delighted that you actually finished the job “so quickly”.
Set aside an hour this week, put it into your calendar right now, when you can spend the time to think about these four principles to turn customers into fans. Pick one, and spend the rest of the hour coming up with how you are going to implement it in your business. Make it a goal. Set yourself a deadline for achieving it, and write out all of the steps it will take to achieve it. Put those steps on your calendar. Now tell someone else about your goal, and when you’ll achieve it and how you will measure your success. Need help? Ask your team, your partner, or call your coach. Remember, it doesn’t matter what you know, it only matters what you do with what you know. Go do something.
Stay tuned, next week I’ll post the last four principles! Can’t wait? Get in touch with me now.
