Tag Archives: Management

Why Pilot Pete and Entrepreneur Ed Don’t Make Enough Money

Pete had been an airline pilot for 20 years.

One day Pete was talking to his friend, Ed the Entrepreneur, and noticed that Ed’s business was doing pretty well.   Apparently, Ed had all of the things necessary to “hit it big”:

– A product customers loved, with great “word of mouth” advertising;

– Years of experience “in the industry”;

– An incredible work ethic;

– and a lot of people who really “liked” him.

In fact, Ed was SO busy working in and growing his business; that he never sat down and wrote a “Business Plan” or a developed “Strategy.”  As long as he kept working persistently, Ed told Pete, one day he would achieve everything he dreamed about.

Pete felt this made perfect sense.  After all, when you know what you are doing technically, and people are coming “on board”; if you stop and take the time to Plan, it will just slow down your momentum and cut down on the “freedom” that comes from being your own boss.

So, the day before Thanksgiving a couple of years ago, Pete and several of his pilot friends talked about this and decided that since they knew how to fly, their planes were full of fuel, and people were getting on board the airplanes; it would be a waste of time to file flight plans or listen to the Air Traffic Controllers.    After all, most had been flying for a LONG time; so their Plans were “in their heads.”  What could go wrong?

So they took off together…….

– 2 ran into each other before they left the runway – because they were going so fast that, by the time they saw each other, it was too late;

– 5 got lost and crashed into mountains that were higher than the clouds below the flight path of the planes;

– 7 had to make so many “course corrections” that the fuel they started with was not enough and they ended up crashing;

– 4 had mid-air collisions with other planes that seemed to “come out of nowhere”;

– 5 landed at the wrong airports;

– 2 DID make it to their correct destinations, but it took them twice as long as expected.

Pete was one that made it to the right airport, several hours late; and he was fired.  AND he lost his Pilot’s license; so now he’s a cashier at McDonald’s (pays less than a job as a commercial airline pilot).

What about you?  Are you so convinced in your own abilities, your “experience,” and current “busy-ness” that you don’t think that you need a Plan (or maybe you will get one when things “slow down”)? 

Just because you are moving fast, does not mean that you are going to be successful in the long run:

– The Planes that run into each other on the runway are those businesses that do not do their market research, and run into a competitor to their “unique” offering that they never knew existed;

– The Planes that hit the mountains are those businesses that believe that they have “made it,” but never plan far enough ahead to anticipate surprise obstacles like shifting markets, loss of a big customer, or changing customer requirements;

– The Planes that run out of fuel are the businesses who, because they lack a clear plan, run out of cash before they hit their “tipping point” (happens a LOT);

– The Planes that have mid-air collisions are the businesses who do not plan and forecast continuously and so never see new competitors until it is too late;

– The Planes that land at the wrong airports are those businesses who, while they eventually get “somewhere,” do not achieve what they had hoped for;

– The Planes that DO make it to the right airport are those businesses who eventually succeed, but after a LOT more pain, stress, and time than they should have needed.

Ignore Pete.  This is your ideal time RIGHT NOW to sit down and create a comprehensive plan, WITH accountability; so that your business will take off quickly,  fly with less stress, and land at your goals in the time frame that YOU want.

By the way, Ed’s not doing so well in his business because his “word of mouth” customers do not come frequently enough to support Ed and his family.

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– Roger Boneno, Roger@CoachRogerBoneno.com

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Jackie and her Ladder – A Business Story

Once upon a time there was a very nice lady named Jackie.  Jackie sold cupcakes and cookies from her cozy little home in the suburbs that she built herself.

Now, Jackie made great cupcakes…and cookies.   And Jackie was even pretty skilled at building houses. 

But..she was missing one small skill:  she did not know how to cut out and put in a door.

So, Jackie bought a ladder and put it up her Chimney. 

Every day, Jackie climbed up the Chimney with her cupcakes and cookies, sold them in the marketplace, and went back home through the Chimney.  It was an OK life.  And, since she was pretty good at going up and down the Chimney every day, Jackie lived a nice life.

That is, until Louise moved into the neighborhood.

Louise DID know how to build a door.  And she could fit not just cupcakes and cookies through the door, but Cakes and Coolers of Ice Cream.

And, if Louise did not have a specific item, she could go back easily into her house and get it.    As fast as Jackie was able to climb up and down the ladder; Louise’s door was still faster.

So, Jackie HAD gotten better at what she was doing.  But, because she was missing a crucial skill, her sales started falling. 

Everyone still agreed that Jackie had great cupcakes and cookies; but Jackie eventually went out of business. 

All because Jackie was convinced that her 20 years of ladder-climbing and cupcake/cookie selling experience were going to continue to sustain her.  She never saw Louise and her door coming until it was too late.

How many of you out there keep saying that you DON’T need help; because what you do has been working?

Well, THIS is what I help you do with a PLAN.  We’ll not just determine how you get from where you are now to where you want to be; but we’ll find out:

– Do you need a Door (a different marketing approach, new team members or better recruiting/hiring/team motivation plans)?

– How do you even ANTICIPATE a potential door-building competitor (there are simple financial indicators that will reveal problems long before they become catastrophes)?

– How do you build the door, or get the bank to lend you money to purchase one (having helped companies obtain millions of dollars in funding, I’ll teach you how you can get the bank to loan you more money at a lower rate)?

– Do you need to have Cakes and Ice Cream (new products or services)?

– How could you get your Cakes and Ice-Cream to market quickly and profitably?

It’s time, RIGHT NOW, for you to get that Plan. 

A Strategic Plan helps you now AND will provide you a way to see the signals if something is going wrong.  Plus, you learn how to be agile enough to respond to changing markets and customer desires.  AND MAKE MORE PROFIT. 

While I’m not Bob Villa with a tool chest building a house; I AM like a Bob Villa of Business Plan building.  Check out this LinkedIn Profile (at last check, 29 Strategic Planning endorsements and 35 Written Recommendations).

When we are finished you will have, IN WRITING, a LIVING DOCUMENT FOR YOU!

Engage Now for a Very Special Year-end rate.  CLICK HERE and reserve your spot!  On Saturday night,  November 17, 2012,  the $997 rate becomes the regular, $2,500 rate.

Remember:    It is OK for you to say “No” and keep going up and down your ladder without a Professional plan.  Just make sure that you DECIDED to do that; instead of letting it happen to you like it did to Jackie..by default.

5 Financial Metrics Every Business Owner MUST Know and Pay Attention to (and Why)

It’s Halloween, so I wanted to pick what is a SCARY topic for many business owners: FINANCIALS.

Apparently, for most business owners (even solopreneurs), this is such a scary topic that they choose to ignore it.  The thinking goes that, as long as there is money in the bank after bills are paid, the business is doing well.  Leave it to the accountants.

Unfortunately, this is like saying that as long as you can still walk, you are “healthy.”  In reality, there may be growing problems that, unless you know how to look for them, will catch you by surprise.  After all, how many times have you heard someone mention a business closing and say, “I thought they were doing OK”?

Just like you need to pay attention to your blood pressure, cholesterol, glucose, and many other levels; it is essential that you as a business owner keep track of these:

1.  Revenue:  Current vs prior year, vs last 12 month average, vs. last 3 month average.    Revenue is, obviously, a measure of your businesses’ ability to get people to PAY for what you deliver.  That said, it is essential to understand what revenue is doing.

– Versus Prior Year:  How are you doing right now, versus the same time last year?  This is just a basic measure

– Versus Prior 3 Months:  This is particularly important in fast growing businesses.  So, if your average sales from June – August were $40,000, and September is $50,000; then you have the appearance of rapid growth.  That said, do the same analysis on last year (prior year September versus prior year June – August) to understand if the growth is just a seasonal “bump”

– Versus prior 12 months:  This helps you understand your current results versus what the average sales were over the last year.  Think of the prior 12 months as a “water level” for your business.  Is the current month’s revenue above, at, or below that “water level”

Once you know these numbers, do the analysis.   What was the reason for the change this month vs. the comparison periods?  Any new Marketing initiatives?  Different team members?  New products?  Product mix changes?  New Team members or lost team members?  New customer service initiatives?

2.  Transactions:  Do all of the same analysis that you did on Revenue.  If you are building your business well, then you should see steady increases in transaction counts.  Even more telling is if you can define whether your “mix” of transactions is coming from new customers, repeat customers on a regular buying cycle, or maybe repeat customers attracted because of a new marketing campaign or improvements in service.

3. Revenue per Customer:  What is each customer giving you for each purchase?  If this changes, is it because your prices went up; or are people buying different products?  Perhaps you trained your team on “trade-up” strategies, and they worked.

4.  Margins:  You must know your Margins, both:

Gross Margin:  For ever dollar you sell, there is a DIRECT cost of the product.  For example, a restaurant sells a meal for $10, but its cost of food, paper goods, garnishes, etc is $30; while it’s cost of labor directly attributable to the sale, both the cook and servers, is 20%: so, your Gross margin is 50% (100% less 30% less 20%)

Net margin:  Besides the costs directly attributable to the individual sale, you have your fixed costs like rent, management salaries, utilities, repairs and maintenance, training, office supplies, etc..etc…  Net Margin is what is left over after ALL costs have been subtracted from revenue.

WATCH CAREFULLLY the movement of Gross Margin and Net Margin, both  on an individual basis as well as compared to each other.  This analysis is a great way to “catch” waste and potential issues in your expenses that often are never looked at until they become huge problems

5.  Net Working Capital.  The “official” definition is current assets minus current liabilities.  What I tell my clients is to pay attention to this number as “how much money could I spend RIGHT NOW, if all of the bills due in 30 days had to be paid RIGHT NOW.”  I know it’s not the formal definition that the Accounting Board would approve; but it lets you have a real sense of what you have.

IF this number is negative, you had better know exactly why this is the case and have a specific path to make it positive soon (not “hope,” but a specific plan).  For example, you may invest in a new marketing campaign today that makes your Net Working Capital fall into the negative; but the expected return from the campaign will make your business a profit to make Net Working Capital positive in 60 days.

The fact is, TRULY successful businesspeople “know their numbers” because those are indicators of the health of the business.  Thinking that these are just “for the accountants” is a sure way for you to make poor decisions about the future of your business.

I’m going to be blunt and loud:  STOP WORKING SO DOGGONE HARD IN YOUR BUSINESS AND START UNDERSTANDING WHAT’S HAPPENING TO IT.  Understand and analyze your numbers, or you WILL struggle more than you have to.  If your sales are up, know why.  Maybe there is something you should be doing more of.  If sales are down, don’t throw “the economy” excuse at it; know why.  Is it seasonal?  Did your product mix change?  Is your team not providing great service.  etc., etc, etc.  Knowing your numbers will catch a brushfire before it burns down the forest.

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If you do not really understand how to do this, then make an investment in your future and invest in a coach who gets it (not just a “marketing coach”).   Get out of the “scarcity” mindset (I do not have the money to invest now..maybe later), and into an “abundance” and belief mindset (I have potential that can be maximized and I believe in myself and my business enough to start maximizing it now).  Every day you spend in scarcity just guarantees more scarcity.

Why a Short-Term View and poor Math Skills are Bad for your Business

OK, I might have frightened many of you.

Math?

Well, the good news is that we’re not going to do any regressions or differential equations today.  So…breathe slowly into the bag; and let’s talk.  I am going to do the math FOR you.

Many of you own a business that is very stressful for you.  You constantly worry about cash flow.  You feel pain because your team does not seem to care about anything but their paychecks.  And, you sometimes wish that you could wave a magic wand, so people could “Get it” about the value you provide. You might even have to discount your prices, which drives you crazy (after all, you are worth more, aren’t you?).

To make matters worse:  you keep thinking things will “get better”; but, six months go by, and it’s just as tight and stressful as it was six months ago.  One year passes, and you wonder why things seem to be just as bad, or worse, than they were at the same time last year.

So, let’s do a little math (I’ll walk you through it 🙂 ).

  1. What if you invested $15,000 over six months to learn some proven tactics to get new customers and build a more motivated team?  Or, you invested that $15,000 to train 3 or 4 of your managers with a Management Training program; so they could  close some of their skill gaps?
  2. What if, based on extensive data, that investment were proven to get a 5-1 return (so, exchange $15,000 for $75,000 in one year)?  BUT, to be conservative, you won’t believe anything more than a 2.5-1 return (so, you invest $15,000 and get $37,500 back in 6 months – Net profit is $37,500 – $15,000:  $22,500).
  3. Then, you were able to take that $22,500 and grow it just 3% per year for 10 years.

Over 10 years, with a conservative view, your $15,000 investment would be worth $257,937. 

If you took the full 5:1 return, and grew it at 5%/year; you would have $15,000 become $754,674That’s a quarter of a million dollars extra in your pocket, for a $15,000 investment.

This is why the short-term view of fearfully holding onto money limits the greatness of so many business owners.  The simple math is that, holding onto the $15,000, with no change in how you do things in your business, will just result in more of the same stress and a return of $0, won’t it?

The fact is, whether you are talking about investing in a coach/consultant or a management training program; your long-term benefits are huge.   Here is a personal case study:  I invested in my own coach even when I could not afford one; because I realized the value of having someone to get me to think outside my personal experiences and make decisions even when I was not sure of the potential results.   It’s why, when I owned a business coaching franchise, my business was 3 times as big as the average coach in that system (which made me the top Franchisee).       All franchisees had the same “system,” but my coach made me prospect when I did not want to; he gave me strategies that I had not considered; he helped me focus when I was looking at “shiny objects”; and he even helped me realize why a strategy that HAD been working suddenly lost effectiveness.   Even a coach needs a coach.

There is a reason that an elite athlete invests in coaches, even though he has an enormous amount of talent.  The one-tenth of a second that his coach helps him cut from his 40-yard dash time could be worth millions of dollars.

For a business owner, there might be one thing you or your managers are not doing that, with the right training, you could discover can make you millions of dollars, or remove 90% of the stress you experience every day.

Am I the right coach/consultant for you?  Most likely not:  unless you are in the restaurant or hospitality business (private coaching/consulting), or have a management team helping run your business (our classroom-based training program).   But, I promise you that there IS someone out there who is a great fit for you.   And, doing the math, thinking that you are saving money by not making the investment in closing your skill gaps is absolutely bad for your business.

Take Action Today, and start your path to investing in your future success.

I am connected to a lot of coaches/consultants; so feel free to connect with me on Facebook, Twitter, or Linkedin; read what they write and post, then contact those who might be the best fit for you.

Are You an Acorn on Concrete?

Here is a simple question:

Are you an Acorn on Concrete?

What do I mean?

This morning, as I came back from dropping my daughter at school, I saw an Acorn on my porch.  Hmmm.  How successful will that Acorn be at becoming an Oak Tree if it stays on the concrete?  It’s only about 6 inches from the soil; but it may as well be a mile away.

Maybe that’s you: do you have potential, but are struggling to grow because you are just in the wrong place?   Ask yourself these questions:

1.  WHY are you in your particular business?     Just because you CAN do it, does not mean that you SHOULD do it.  I once coached a bookkeeper who was good at the numbers; but who LOVED Real Estate.   I discovered this because, every time I gave her an assignment around marketing her bookkeeping business; she always had some “obstacle” keeping her from doing it.    So, being a successful bookkeeper will most likely be an incredible challenge for her; since that’s not really her passion.

2. Have you examined the REAL potential of your business methodology?   I did not say your business might have little potential; but your methodology.  If you spend all of your time doing business TASKS; but little time strategizing or marketing, success will elude you.  This is one reason most “coaches” and “consultants” struggle to make money:  their methodology requires too much of THEM.  So, every time they get a new client, their pipeline to get new customers shrinks.  They cycle up and down; but never have any real “Freedom.”

3.  Does your business “Get you up in the morning”?   Do you get up every day, excited about how your business is bringing a benefit to others; and is allowing you to live the best life you can?  Or, do you say, “here we go again”; or “I can’t wait until Friday [the idea that you would spend 4.5/7 of your life (the week) looking forward to 2.5/7 (the weekend) is just..dare I say it..crazy!] .   If you do not LOVE what you do, then you WILL subconsciously derail yourself from increasing demand for it.

4.  Are you open to getting help?  It MIGHT be that you ARE in the right business, and you LOVE what you do; but you are doing just a couple of things (or NOT doing a few things) that make the difference between success and struggling.   Maybe, like the Acorn,  all you need to do is to have someone who will find the right place to “plant” your business, and it will grow exponentially.    All the “experience” in the world will not help you; if you continue doing the wrong things.  And, since you should never confuse effort with results; a struggling business means that there is a gap between what you are doing and what you should be doing.

All I am saying in this post is that, it does not matter if you are the smartest person in the world with the POTENTIAL to be a multi-millionaire.  If you are not in the right place, you will struggle.  Even if you are “close,” the wrong place is still the wrong place.

Make a decision RIGHT NOW (not later today, or tomorrow) whether you are truly in the right place and, if not, take action to change.

5 Fibs Business Owners Tell Themselves

Yes, I said it.  Many business owners are completely deceiving themselves.  Maybe not intentionally.  But, read this with an open mind and ask yourself, “Have I ever said this?”

Fib #1 – My Customers LOVE my Restaurant/Store/product/service.

This is what I call THE BIG ONE.  Why?  Because you know it is not true if your sales are not consistently going up by at least 15% to 20% (or more).    The simplest way that I discover this with potential clients is to ask them how many customers rave about their food and/or service; but do not come back for 6 months.  That means they only LIKE you; because, if they REALLY LOVED you, they would buy from you a lot more often.

So, if you are not getting as many repeat customers as you would like:  do some research, study your customers, and then create a little Love-Connection with your customers by targeting what they REALLY want.

Fib #2 – I’m as Profitable as I can be, given my sales

EVERY SINGLE P&L I have ever seen (hundreds of them) has, upon analysis with a well-trained eye, thousands of dollars of poorly spent cash.   Perhaps it is in poorly spent marketing dollars; or just “accepting” that your Cost of Goods Sold is a certain percentage because “that’s what it has always been.”     Maybe it is because you are not negotiating or bidding out supplies (are you still buying your office coffee from Office Max?).   Meanwhile, you could have spent that money on employee incentives, bonuses, or (be wild) paying YOURSELF.

This is why one of the first things I like to do with new clients is ask to see their P&L, and then understand how much they control their margins.  While you will never “save yourself to prosperity,” you should have tight control of your expenses.

Fib #3 – I Care about my Employees

If you say, “That’s not a lie, I really DO care!”; then you will be able to say “yes” to all of the following:

– Your employees get paid a base, plus a variable bonus (Tips do NOT count); so that they can tie their effort to the overall success of the business;

– You ALWAYS get rid of employees who have bad attitudes if they continue it after you have coached them to change; so that the rest of the team does not have morale problems knowing that you have a “double standard.”

– You hold regular weekly/monthly/annual meetings, and encourage feedback and ideas on how to improve the experience for the customer; since it is your customers’ purchased that keep your team members employed.

– You have a SYSTEM to encourage teamwork and cooperation among your employees; so that they enjoy working together and feel like part of a TEAM.

– You have clear Training Manuals and Processes; so that employees do not feel “thrown to the wolves” when they start a new job.

For those of you for whom all of the above are true, we’ll change this to “4 Fibs….”

Fib #4 –   I believe in my Offering

If this were REALLY the case, then you would be doing everything you could to get it in the hands of as many people as possible.    And, for THAT to be true, you would need to be as creative as possible in your marketing and promotions; instead of relying on Word of Mouth, or Groupons, or pictures of your food on Facebook.     There are usually dozens of ways to promote Restaurants, for example; but most owners are spending far less than they should to grow their businesses, and doing far too much discounting.

If you TRULY believed in your product, you would spend more because you knew that would help more people know about you, and discount less because you believe in the value of your offering.

Yes, I know that you may not have time to learn about unique and creative marketing tactics; but that’s why there are people like me, who have experience and constantly study it.

Fib #5 – These challenges are a “temporary problem” that will “go away when _____ happens”

If you have owned a business for more than 6 months, you know that while you are waiting for the smoke to clear from one challenge, another one always pops up.   I was talking to a Restaurant Owner the other day who gave me this exact story; but I could see in her eyes that this was nothing more than a “wish.”   The only way things will get better is taking MASSIVE, EDUCATED, GOAL ORIENTED ACTION.   Taking action is good; but not understanding why you should do one thing vs another, while lacking a clear definition of success is like trying to play Quarterback in the NFL by just throwing the ball blindfolded:  the odds are very slim that you will throw it in the right place, even if you put an enormous amount of effort into it.

I would love to hear your feedback on this.  What other prevarications do business owners tell themselves?

4 Ways that you Block your Potential Customers from Buying

“Sales cures all ills.”

Most people have heard that saying before.   Now, it’s not ALWAYS true (since I have seen a lot of business owners who do not understand that they are selling at a loss  – many of my Restaurant clients sell a lot of things at a loss, until I help them see why their profit is almost zero).

That said, if you have SOME margin control, increasing Sales DOES help quite a bit, wouldn’t you agree?

So, here’s the strange part:  many business owners – Restaurants, retail, even B2B – put up giant obstacles to getting sales from eager prospects.

What are the Top 4 ways you Block your Customers from Buying?

1.  You make it hard for your best prospects to hear or see you:  When I was working on marketing campaigns for Joe’s Crab Shack; one time we were doing a coupon as part of a “Welcome to our Email Club” campaign.  When Tilman Fertitta, our CEO, was asked about the coupon, he responded with “Do you think I use coupons?”

Somewhat of a humorous note; but an excellent point for you:  unless you have actually defined SPECIFICALLY who your best prospects are, you will not be able to create marketing that actually talks directly to those prospects.   Your prospect WANTS your product; NEEDS your product; will PAY for your product; but you create such generic messages that they never can hear you above the 10,000 other messages they get every day.  Your message of how you “have the best product, service and prices” makes you just another black and white penguin on an icecap filled with penguins.

2.  You get your prospect excited, then Ignore him.   Many of you have prospects out there who have heard of you and actually like what you have to offer.  They are ready to buy,  But, you do not answer the phone when they call to find out your hours.  Or, they call and leave a message, but no one ever calls them back.  Or, worse, they call and you transfer them to another line that never answers.

Maybe you have called them when they are busy themselves; but you forget to call them back, so they buy your product from someone else.

Yes, you are busy.  Maybe your restaurant is having a busy lunch, or you have back-to-back sales appointments; but, without a strong SYSTEM to ensure prospect contacts get answered. your customer will feel ignored.  And, just to be clear, ignored prospects rarely buy.

3.   You speak German when your prospect speaks French – I am not really talking about languages in the literal sense.  I AM talking about all of the advertising out there that is based on the business owner’s perspective, instead of the customer’s perspective.  Your lunch menu says that you have $8 lunches; but your customer really wants 30 minute lunches.  Or, you talk about the beauty of your landscaping designs, when your customer wants to know if what you plant will last more than 6 months.

Do some research, talk to current customers as well as people who do not buy from you; and find out the language they want to hear.  You may be surprised to find out that just a few tweaks in HOW you talk to potential customers can have a massive impact on how MUCH they buy from you.

4.  You “bring him the check before he sees the Dessert Menu” – One of my rules when we go to a restaurant is that, if the server brings me the check before I see the Dessert Tray or Menu, we do not order dessert at the restaurant.  That’s a lost sale for the restaurant, and lower tip for the server.

But, even B2B businesses do this: you find something your customer wants and you are so excited to get a sale; that you do not ask follow-up questions to see if there are more ways for you to serve them.  In your mind, you are yelling “Hooray,” while your customer is thinking, “I sure wish they would do this also, because I wanted it.”  You DO have that extra product or service, but the prospects don’t find out until they have bought that from someone else (when it’s too late for you).

To wrap up, how many of you have said or thought that you wished you had more sales?   Before you just throw more money at marketing, or offer more discounts; see what you might be doing to block the sales that are already waiting to come to you.  You may find that just a few simple adjustments can make a massive difference in your sales growth!

I really would like your feedback on this.  Is there anything else that you have found “blocking” customers from buying from you?  

Comment below, or email me at Roger@CoachRogerBoneno.com.

Marketing Lessons from a Tried and True Hollywood Formula

How many of you have seen the Hollywood love story formula (even if it was just because your girlfriend or wife wanted to watch it):

       Boy feels lonely

       Boy meets girl of his dreams, but girl already has a “boyfriend”

       Boy starts “courting” girl by being her “friend”

       Girl starts to confide in boy, who is a great listener

       By being true to himself, Boy’s “authenticity”starts to attract girl

       Girl realizes her “boyfriend” is not so great after all (or a jerk)

       Girl falls in love with her “friend.”

Interestingly enough, this formula is filled with lessons for you as a business owner.

Lesson #1: There are PLENTY of great customers out there to grow your business, even in a bad economy. When I talk to Restaurant Owners, for example, who say that the “economy”has hurt their businesses; what they are REALLY saying is that their customers have just made other choices.  Maybe the customer decided to stay home; or perhaps they just decided to go elsewhere.  You may need to change how you look; but your first job is to find out where your customers are.

Lesson #2:  If the boy had just walked up to the girl and said, “I’m a great guy.  Do you want to be my boyfriend?” he would most likely have gotten an awkward silence and then,“I already have a boyfriend.”  At that point, his chances of winning her over are tiny. But that’s what many businesses try every day.  They put ads out there that say (for example), “I have great food.  Come and be my customer.”  And your customer thinks, “I already have a restaurant I like to go to.”

Instead of just telling everyone that you are great; learn to listen to what customers are saying. You have to be careful here, because it is the subtext that is most important.  For example, your customer says they will try you out if you give them a “deal,” so you run big discount coupons; but they really just want to know WHY they should try you and how they could justify paying the price you charge.    When you run “deals,” you basically tell your customer that your product was not worth what you were charging; so they were right all along to go elsewhere when they are willing to pay “full price.”  This is why the data shows how so few “deal”customers ever become loyal “full price” customers (no matter how hard you want to believe that you can “convert” them; the fact is, once you set a “reference price,”customers fixate upon it).

Lesson #3: The girl who dates the boy because of his “social status” or other superficial reason, is never really happy; instead, she is just trying to avoid the perceived “pain” of being unpopular. And, even though she really would be much happier with someone else (like her “friend”), she won’t easily “break-up”with the boyfriend she is with now.    In the same way, many of your potential customers are absolutely “settling” for your competitors:  they are not really “thrilled” with their current choices; but they would rather stay there than risk changing because they fear the unknown experience.  So, your job is to help them understand why, if they come to you, they will not experience what they fear. 

Offer them a guarantee. Show them testimonials.  Create an active program to create “Raving Fans” who praise you online.  (This is why I include both Marketing and Operations improvement in all of my packages; because you do not want to bring in MORE people who will give you poor online reviews.)

Lesson #4:  It may not happen overnight; but maintain focus on what the CUSTOMER needs and they WILL learn to “love you.”  Listen to your customers, provide an outstanding product, great service, and a differentiated reason to come back; and your profits will grow exponentially.
Let me know your thoughts by adding a comment below.

4 Reasons to Ask Before Listening to “Joe”

My oldest child is a 15-year-old boy who is about to enter 10th grade.  Of course, his school assigned him 2 books for “Summer Reading”:  Inherit the Wind & 1984.  He has read Inherit the Wind; however, even though school starts this Wednesday (yes, THAT early), he has not yet finished 1984.

When I suggested to him today that he needs to finish this book now, his comment to me was that, “Joe (not his real name) says that his Honors English teacher last year did not even quiz them on the Summer Reading” (my son is also in Honors English).  I was talking to a friend of mine this morning about this (his son is the same age as mine), and he suggested that this would be a great BLOG subject.   And he is absolutely right – because too many business owners are listening to “Joe.”  And “Joe’s” advice is often very risky.

For a business owner, “Joe” is that brother, cousin, nephew, parent, fortune-teller, or anyone else who gives you opinions about how to run your business.  Here are 4 questions to ask yourself before following “Joe’s” advice.

– Does the advice apply to what worked in the past, but may not be applicable NOW?  Just as my son’s friend was talking about what happened last year, to him individually, one time; many times the advice others give you is based on what happened to them one time, individually.   So, it might apply to your situation, but it most likely will not.

Does the advice come from an individual’s opinion, or is it based on FACTS?  “Joe” is making an assumption, but most likely has not talked to others about THEIR experiences.  Find out if the person can give you not just what they did, but how it specifically helped them.   Get numbers, percentages, and names of those involved.   Also, have others followed the same path, and what where their results?

What are the consequences to your “advisor” if the advice is wrong?  If my son decides not to read the book, and the teacher gives him a test this week, Joe does not lose points.  How many people are willing to give you advice, but will not be impacted if the advice is bad.  This is one reason why I have incorporated performance based investments in all of my programs: if what we do works, then we BOTH win.

Are you taking advice because it is good for you, or because it is self-serving?  Obviously, my son is not thrilled to be reading a book that he considers “boring.”  So, the advice to not read works for him; but only in the short run.   Is this you?  Are you spending time doing activities that you know are not highly profitable, but ARE easy?  Are you avoiding making an investment that requires a little risk, but has a big potential reward (like hiring a coach, or having a professionally designed website); because you have a fear of spending the money?

The reality is: we are constantly surrounded by people who want to give us great “advice.”   However, as I have heard it said, be sure you are getting COUNSEL and not OPINIONS.  So, before you listen to all of those people who want to tell you how to run your business, just ask yourself these few simple questions.

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Schedule a free 15 minute call with me today – Marketing Guru, Financial Wizard, and Team Motivation Expert – and we’ll talk about how to build a strong Brand targeting your Ideal Customers.     https://my.timedriver.com/191CR   We work together based on a performance program, so you your investment is based on RESULTS.

5 Reasons why Groupon is a Losing Con-Game

Here you go, kid.  It’s free.  Just try it!

And so begins the addictive use of…….

Groupons and LivingSocial Deals.

Do consumers love them..yes.  Are they good for most businesses?  ABSOLUTELY NOT.  They are a Con-Game that appeals to business owners who do not know how to sell their products or services for what they are worth.

Why are they a Con-Game?   To quote the great Sales Trainer Tom Hopkins, “If you are selling someone something that is NOT good for THEM, then you should be locked-up; because, when you do that, you are nothing more than a Con-Man.”

So, let’s list the reasons Groupons and LivingSocial “deals” are very poor business-building strategies:

1.  They appeal to “deal-seekers,” and not your IDEAL customers.  Statistically, deal-seekers are not looking to become loyal customers of a product; rather, they are loyal to whoever offers them the best deal.

2,  By a focus on price, and not value; they tell your CURRENT customers that the full-price they have been paying was too much.   When people think they have paid too much, they feel “ripped-off” and you easily lose them.  So, even when you gain a few “tryers” who come back later; you risk losing regular customers who WERE paying full price.

3.  Because they reduce your margins, they encourage (or force) you to cut corners on value delivery.  In a Groupon, if you offer a coupon of $5 for $10 of product; you only get to keep $2.50 (Groupon gets $2.50 – sweet deal for them.  Why do you think they sold it for so much money?).    Think about it…you are getting $2.50 for $10 of product!  I have run into several business owners who tell me that, because they get so many Groupon customers; they had to reduce the quality of their product to stay afloat.  That is a death spiral.

4.  They create an addictive reliance on the “Groupon” check.    The fact is, Groupons bring in people; so the business owner begins to think that they “work.”  Never mind that these are not loyal customers, that your margins are taking a beating, and that you have traded out your IDEAL customers for deal-seekers; the initial transaction increase sure looks good.  However, the longer you do them, the more of your customer mix becomes the deal-seekers.  So, just like a drug addict; you cross a threshold where you CAN’T quit.  I know of a Steakhouse in which 90% of his customers are Groupon or LivingSocial Deals.  His annual revenues are $1m, but he is losing money hand over fist; so he does not pay himself anything and his waiters get paid salaries because the Groupon deal-seekers do not tip well.   Every month, the check he gets from Groupon pays for the next month’s expenses (like a mini Ponzi scheme); when, as most coupons do, the Groupons lose their effectiveness, he will be in desperate trouble.

5.  The money you “pay” Groupon could be spent far more effectively building you as a BRAND, and not as a DEAL.  Just like any Con-Game, Groupon looks low-risk.  After all, they collect the money and then pay you half of what they collect.  If you sell 100 $10 for $20 Groupons, for example; you collect $500.  But, Groupon keeps $500.  Because that looks like a good deal, you may do it for a few more months.  Unfortunately, for the reasons above, you are not BUILDING a business; you are becoming a “deal-house.”  If you just took that $500/month for 3 or 4 months and put it into a good BRAND-building marketing campaign; you would be MUCH better off in the long-term. Unfortunately, once you start crushing your margins; eventually you have no money to spend on a well-targeted marketing campaign.

Am I passionate about getting people to stop using these deeply discounted deals?  Absolutely!  Just like a Cardiologist might not want to watch some eat fried foods every day (even though it tastes good); I don’t like watching business owners get taken in by the Groupon and LivingSocial Con-Games!

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Build a BRAND, not a deal-house.   Schedule a 15 minute call with meMarketing Guru, Financial Wizard, and Team Motivation Expert – and we’ll talk about how to build a strong Brand targeting your Ideal Customers:    https://my.timedriver.com/191CR   (PS.  even if you have not done a Groupon, call me.  🙂 )