Monthly Archives: October 2011

When Saving Money is Bad Business

When is the worst time to try to save money?  When your customer has a problem.

Two stories illustrate the challenge with this:

– Yesterday, the transmission on my XC90 went out, just 30,000 miles after it had been replaced.  Unfortunately, after it had been replaced last time, and I was having issues, my (former) mechanic told me that it was probably just “settling in.”   I then asked if there was a warranty (in case it WAS a real problem) and they said it was 18,000 miles.   Given that I had just spent $4,000;  perhaps they would have been smarter to tell me to bring it in so they could fix it, and then they could have offered me a longer warranty.    Because, once I felt like they were not really standing behind their work; they lost me as a customer for EVERYTHING.

– My parents were paying for a monthly “pass” at a car wash service.  One day, they brought their car in for a wash and the system ruined their customized license plate (had their names on it) AND broke a side mirror.  Rather than give them $125 to pay for repairing the mirror; the Car Wash said it was not their responsibility.  So, to save $125 one time, the Car Wash lost a customer for life; which will cost them hundreds over a lifetime.  And guess how many people now know about their problems with that Car Wash?

What is tragic is that: everyone knows how valuable customers are.  We have all heard how much more expensive it is to acquire a new customer than keep a current one.  Every business owner prides themselves on providing great “Customer Service.”

So, WHY do businesses continue to have issues dealing with customers?  Because most businesses do not have a specific process to deal with issues.

The fact is: you cannot just SAY you believe in customer service.  What you must do is EXECUTE when the situation comes up. When your customer calls you with a problem; that is your chance to shine!

Here is your four step “THRILL Your Customer” Process:

1.  Apologize.  After all, you ARE sorry your customer had a problem, right?  Even if it is not your fault; your customer often will relax if you just say you are sorry.

2.  Offer to make it right.   Yes, it may cost you a little to have a longer warranty; or repair that mirror.  But, how little that is compared to the lifetime value of a customer?

3.   Give your customer something free.  Wouldn’t THAT set you apart?  What if, instead of refusing to fix that mirror, the Car Wash had paid to replace it AND given my parents a free month?  How many people would they have then told about their positive experience?

4.  Step back and examine how could avoid the issue in the future.   In steps 1-3, you addressed the symptom; in this step you address the cause.  Skip this step, and it WILL cost you more money in the long run to deal with customer issues (as you deal with the same problem again and again).

In the end, when your customer has a problem; use it as an opportunity to create a “Raving Fan” AND improve your quality.  Making your customers happy is almost always a path to profitability.

If You Love Your Business, Let It Go

How many of you are working INCREDIBLY hard, keeping all the pieces of your business together?  Sure, you have a team; but you find it essential that the important decisions are made by you.  After all, your business is your baby!  No one else cares as much about your business as you do. And, if you do not steer the ship, the economy will catch up to you.  Right?

The challenge is…you are not running your business.  Your business is running YOU!  And  it seems like there is no end in sight to this chaos.

So how do you stop this?  You need to “let your business go.”

No, not sell it.  But enlist and/or hire a team to take over  the day-to-day aspects of running the business so that YOU can focus on the Vision and Strategy.

Will your team make mistakes?  Certainly.  But, you can minimize them by using a structured Apprenticeship Program along with a well-developed Operations and Training Manual (including job descriptions and workflow documentation).

Will it take time to write manuals and train the team?  Absolutely.  However, the time that you spend documenting what needs to be done,  and training someone, will be MORE than made up for once you hand off that  task.  Even if the job, for example, takes you 2 hours per week; you could spend 20 hours writing a manual and training someone, and you would be “time positive” in less than 90 days.

And what could you do in your business if you had an extra 104 hours, or 2 ½ weeks every year to work ON your business instead of IN your business?  How happy will your family be (or will YOU be?) if you can get home at a reasonable time in the evening?

So, if you really do love your business, let it go!

Why your Success is Holding You Back

A few months ago, I read a terrific book by Rebel Brown, called Defy Gravity.  In the book, Rebel very eloquently lays out the case that sometimes the way that you achieved success in the past is exactly what is holding you back from future success.    (I recommend that you read the book, as it is full of great insights).

This week, a business owner told me that “the Economy” has really hurt his retail store.  I asked him what he was doing differently now that could help change the tide; that perhaps we could sit down and see what opportunities existed.   After all, I saw that you cannot order products directly from his website (it says “Contact us”).

His response, “I have 30 years of Retail Experience.  You could not teach me anything I do not already know.  The Economy is just bad.”

Uh-oh.  That is a sure sign of the “Gravity” that afflicts so many business owners.  In his mind, he knew what needed to be done; but it was some unchangeable external things which were the problem.  If only those would change….

As a Business Coach, the biggest obstacle I find in clients and prospects is NOT that they do not WANT success.   It is that they do not want to CHANGE THEMSELVES.

And I get it…many of you have built your business to maybe $100k or $500k or $1 Million dollars in revenue; often by pure force of your knowledge, your will and tremendous effort.   However, the business climate is changing; so you must be willing to change your approach to your business.    Try new approaches, even those completely against what you may have done in the past.  Get help from DIFFERENT people, even if they go against everything you think you know.

The best analogy I can give is that many business owners have been standing in sunshine for years.  But, now that it is raining, too many are just assuming that they MUST get wet.   Maybe it is time to get out the Umbrella!

4 ways to Pick Your Prospects to Power Your Profitability

You probably do not need to be told this: some customers are more profitable than others.  If you can learn to pick the RIGHT prospects to be your customers, you will truly accelerate your profitability.

While this is more challenging to do than to say, there are some things you can do in your marketing to bring yourself more profitable customers.

1.  Target those prospects with a bigger reason, or “Why,” they want your product.  This is not a question of how they will use your product.  It is really about the emotions associated with what you sell.    A good example is a landscaper who markets not to people who just want a nice-looking flowerbed; but to the people who want top win “Yard of the Month.”  So, instead of dropping flyers off at the houses with ugly  lawns; they introduce themselves to the people with the BEST lawns in the neighborhood.

2.  Make your Advertising about your most profitable Customer.   I am sitting here looking at numerous ads that are basically a list of items or services.   When you do this, you are BEGGING people to shop you around.  And those people who are looking to “shop” you are very price sensitive.    A construction company that says they do Patios gets less profitability from their customers than the contractor who offers Backyard Entertainment Areas.

3.  Position yourself as an INVESTMENT instead of a purchase.    Interestingly enough, many businesses strip away features and benefits from their offerings to be able to offer (what THEY think is) the lowest price.  Unfortunately, this moves you closer to becoming a purchase instead of an investment; and, when that happens, you end up targeting prospects who are MORE price sensitive.   Wal-Mart can sell bicycles to children who want to ride them around the neighborhood; you should sell bicycles to people who are looking to ride in triathlons.

4.  Focus your marketing on customers for whom your product is a LOW % of their cash flow.  The smaller the percentage; the easier it is for you to get them to “try it out” if they have never used your product/service before.   The key word in this rule:  FOCUS.    This rule is almost never broken intentionally; but because you think that promoting yourself to “as many people as possible” is the way to go.    Whether you have $1,000 or $100,000 to spend on Marketing;  focus your resources on those who can more easily afford more of your product or services.    As an added benefit, once these prospects become your customers: you can increase your profitability by offering them more opportunities to invest in and benefit from your products and services.

In your business, the more you work you do around making sure you are marketing to the RIGHT prospects; the more likely they will come to YOU, and the less work you will do trying to convince them to buy.

Coach Roger’s Business Growth Excuse “Hall of Fame”

As I boarded my flight to Ft. Lauderdale this morning (heading to our Franchise Conference – no beach for me, because we spend all of our time learning), I was once again impressed by the efficiency and friendliness of the team at Southwest
Airlines.  Sure, it’s not the same as the private jets I flew on when I was working on restaurant turnarounds at KFC and Joe’s Crab Shack; but Southwest reminds me that a “big company” can still provide great personal service.

So that’s my inspiration for today’s post: Coach Roger’s “Business Growth Excuse Hall of Fame.”  These are the top reasons business owners rationalize for not taking massive action to grow their businesses (tip: trying to get more “word of mouth” referrals does NOT count as massive action).   If you recognize any of these in yourself; then my coaching to you today is to take out a piece of paper and write down a one paragraph “action plan” to make a change (you are not making an excuse to avoid this, are you?).

#1 – “I do not want to grow too fast, because that would limit my ability to provide great customer service.”   Sorry, but if Southwest Airlines can get thousands of planes across the country to ferry millions of passengers, while still having friendly flight attendants and on-time performance; this one does not work for you.

#2 – “I do not have any time to work on my business.  There is so much to do.”  I am going to have to call you on that one.  What this REALLY means is that you have prioritized other things in front of growing your business.  (Or, perhaps you need to read my previous post “5 Ways to Free up at least 5 hours/week”)

#3 – “The economy is tough.”  Well, yes it is.  But many of the most successful companies (like FedEx and General Electric) were founded during recessions/depressions.  Those companies were started by people who had VISION, and the COMMITMENT to succeed.

#4 – “I do not have any money to spend on marketing.”   There are hundreds of ways to promote your business without spending tons of money.   All it takes is a little research, the willingness to try new things, and the discipline to measure results to see what works (and walk away from what does not).

#5 – “What I have been doing has worked to get me here; so I am not going to change it.”  That is perfectly fine, as long as the markets/ your competitors/your
prospects do not change.  But, if you wear shorts all Summer when it is 90 degrees outside; is it wise to keep doing that when it falls to freezing just because that worked for you for several months?   Rather than wait until your business is freezing by a surprise “cold front”; take action now to stay ahead of challenges and changes.

#6: “I have tried everything, and nothing seems to work.”  Here is where the wheat is separated from the chaff: how willing are you to persevere; even if nothing seems to work.  Colonel Sanders heard thousands of “no’s” until a Utah businessman named
Pete Harman said yes, and Kentucky Fried Chicken was born.   And Colonel Sanders was not exactly a “spring chicken” (pun intended) when he started out.

I would love to read comments from you if you recognize any of these in yourself, and have
written out your Action Plan to make a change.  Also, feel free to share YOUR favorite
excuses.  Maybe your comments can help others.