Covert Customer Loss

Smart companies budget their marketing, advertising, and sales costs, and these costs can be significant, but even greater when they don't produce the desired results. Take the following example into consideration.

Say you spend $15,000 per month in total marketing, advertising, and sales costs. For this, you expect to get 100 new customers per month. That's $150 per new customer (assume this is a great deal with a high return-on-investment). What if you only attract 80 new customers? Now your cost is almost $188 per customer. Many companies have relatively low profit margins which means when your cost per new customer increases by $38, like in this example, your margins are swallowed up in the new customer loss. Incidentally, another way to look at this is that with only 80 new customers, you lost $3,000 in advertising costs (because they were ineffective) plus all of the sales revenue that you hoped to receive from those lost 20 new customers. Assuming a 10% margin, each of the 20 lost new customers would have brought the company $165, for a total of $3,300. That's a total loss of $6,300 per month, and over $75,000 per year if this continues. Wait just a minute!

$75,000? We should probably take a deeper look into why our marketing, advertising, and sales budget was so ineffective. So, you go back and find that your ads are perfectly designed and perfectly located in the perfect geographic areas and media to make a perfect impact. Your sales team is doing a perfect job attracting new customers and your marketing plan was written perfectly to maximize the company's tools in each of the promotional areas.

Really? Then what happened? All of this perfect effort achieved a 20% loss in new customers. I'll tell you what happened. Your receptionist turned away new customers when they called because she didn't understand how valuable that call was. Your on-site staff wanted to leave early a few nights so they weren't available to help the new customers. Your phone was busy when the new customers called, so they just called the next number listed in the yellow pages. Your staff underwhelmed new customers by their lack of customer focus or by their lack of product knowledge. You had some crazy policy or procedure that unknowingly limited new customers and nobody told you about the problem. When the customer called, your phone sales staff wasn't trained well enough to close the deal.

And. . . all of this stuff happened right under your nose. It happened in the evening when you were no longer in the office. It happened during the afternoon when you were really busy working in the business. It happened because you and your management team didn't have or make time to ensure that it did not happen. This is one other very important reason for you to spend more time working ON the business than IN the business. It's another reason that you must focus your effort on training, not only your staff, but their managers as well. You need to set up "secret shopper" phone calls to find out what's being said on the phone. Send "secret shoppers" into the office / store to find out how the on-site sales team operates. You must find all of the areas of covert customer loss that kill your business right under your nose.

When you don't know that all of these things are happening (and believe me, they are happening), you spend more time on advertising. You fire your sales team, you re-work your otherwise effective marketing plan. You spend valuable time and money on all of the wrong things and then as a result, you continue to get the same poor returns.

Be aware of your company's areas of covert customer loss. Find them, and you will see the result of your otherwise excellent plan, people, and marketing materials.

Working ON the Business

As a top manager or business owner, the way you spend your time at work will determine the impact you have on the business - either positive or negative. You can not allow yourself to get buried in the day-to-day tasks of your organization. If you, for example, answer phones, stock shelves, purchase inventory, or do other work that could be handled by someone else, you are hurting your business because you aren't serving your primary purpose of growing the business. When you spend most of your time working in the business, it's like you're a hamster on a wheel - you're working really hard and getting no where.

As the top manager or owner, you need to spend the vast majority of your time working on the business. When you work ON the business, you are doing things that grow the company in many different ways, from creating policies and procedures, to devising strategy for getting new customers. Some tasks that you should be doing instead of the day-to-day tasks of the operation are:

1. Writing and modifying policies and procedures.
2. Writing marketing and strategic plans.
3. Creating budgets and reviewing financial statements.
4. Talking to customers to get their feedback on ways to improve the business.
5. Training others to do the day-to-day tasks of the organization.
6. Reviewing sales reports.
7. Reviewing your chart of graphs to find problems and opportunities.
8. Training people to do the training of others.
9. Delegating assignments and following up on their completion.
10. Working with suppliers to get better deals.
11. Talking to established clients and future prospects.
12. Talking to your staff to find out what problems they are having and identify areas needing improvement.
13. Creating new products for sale.
14. Building alliances with complimentary products and services.
15. Finding ways to get more efficient.

These important tasks can not be left to someone else. You are ultimately responsible for the success or failure of you operation. Jefferey Fox suggests (and I agree) that you first need to hire a office / business manager and a marketing / sales person. You will be able to delegate many key tasks to these positions which will save you the time you need to work on the business. While these people will also be charged with doing their part to work on the business, their key responsibilities will be to work in the business and ensure that your priorities are handled effectively.

Working ON the business is the only way for you to grow the business to the level that you envision in your own mind. Start delegating the day-to-day tasks of the organization and do the things needed to grow your business.

10 Tools for Getting a Pay Raise

Some companies give cost-of-living increases. Others give automatic pay increases annually. Still others give pay increases in the form of bonuses (that are often undeserved). When you want the pay raise that you really "deserve", you need to use these tools.

1. Most importantly - you must ask for the raise.

2. Calculate and present your worth / value to the organization. How much did you do in sales in the past year? How do you rank among your co-workers? What was the overall dollar value of your performance?

3. Present the market value for your position / job title in your geographic area. You can use web sites like www.salary.com to find a very rough estimate of your market value. A better way to do this would be for you to call other businesses and talk to others who do your same kind of job. When you share salary information with others in your industry, you give those other people tools that they can work with and this will probably convince them to talk to you about salary. This is a form of salary survey like salary.com uses - only on a smaller scale. (Note: your company probably has policies on discussing salary with your co-workers. Don't violate this policy and get yourself fired. That's why I suggested talking to people in other companies.)

4. Be willing to take on new responsibilities that will increase your future value to the organization.

5. Ask for more than you expect to receive. This gives your supervisor room to negotiate. When you concede some of the money that you're asking for, you supervisor gets to "win" when he/she gives you less that you ask for and you actually "win" because you get a nice pay raise. This is a proven negotiation technique that works. Even if it seems silly, do it anyway.

6. Don't expect to get your answer today but know that the longer your supervisor takes to "think about it", the less likely you are to get what you want. The better your presentation of facts and the more likable you are already, the more likely you are to get resolution sooner than later.

7. If you don't get an answer today, you must always ask, "what day can I expect you to have a decision on this matter?" It's important that you have a mutually agreed upon time line. The longer it takes, the less likely you are to get the result you deserve. So, get a firm deadline.

8. If your supervisor is required to take your request to a higher authority, ask them to take a stand for you. Here's what you have to say: "Considering my high value to the organization and the market rate that is above what I'm currently getting paid, will you recommend to your boss that I get my requested pay increase?" When you get the supervisor to commit to helping you, he/she will be very likely to make a strong effort to do so, if for nothing else, to remain consistent with their agreement to help. This is a powerful influence technique.

9. Ask for objections to find out what, if anything, would prevent you from getting your raise. When you don't know what the objections are, you can't change anyone's mind. You need to know what your supervisor is thinking if you want a good outcome.

10. Tell the supervisor that they already agree with your position. I love this one the most. When you are presenting all of the facts, you tell your supervisor, "You'll agree that I'm being paid less than market value, especially considering my excellent production." Or, you might say, "Our company values high performance, that's why you'll agree that rewarding my performance is the right thing to do." Or, "I'm sure we agree that high performance deserves high reward." The key is that anytime you can emphasize points of agreement with your presentation of facts, you will significantly influence your situation.

Finally, many people think that it's a good idea to threaten to quit if you don't get what you ask for. What a bad mistake! Never, ever, ever do this unless you are ready to walk out the door right now. Threatening to quit does not win you favor with your employer -present or future. If your value is not perceived as being high, you are probably punching your ticket with the threat of quitting. Even if you were previously perceived as being valuable, now you have left a bad taste in your employer's mouth and that's a devastating result for you. Threatening to quit is only going to work if your employer is short on other talented people in your position, but only in the short-term. As soon as someone else is hired, you could be fired. Lastly on this topic, never threaten to quit unless you already have another job lined up. You might just be asked to leave right then.

Don't make yourself jobless when you're just trying to get a raise. Instead, follow these 10 tools, stay employed, and get the raise you deserve.

Critical Missing Sales Step

Businesses that do great marketing and sales have a well written marketing plan, with a killer sales offering, a compelling message, and effective marketing and sales materials. As part of the marketing plan, one or more sales people may be charged with face-to-face marketing with key referral sources. During these sales attempts, the marketer / sales person will try to get time with key decision makers. They will hopefully present the sales materials (brochures, booklets, presentations, etc.) in a way that compels the decision maker to send them more new business / customers.

But, with the potential high cost of marketing and sales, and in spite of the effective sales materials, the effort to reach decision makers, and even with having what you think is a spectacular marketing / sales person, if the following critical sales step is missed, the entire cost and effort could result in a frustrating and damaging nothing. What is this critical missing step?

Always Ask For The New Business. Always Ask For The Sale. Always Ask For The Referral.

Yes - you must ask if you want to receive. This seems so obvious, but the number of sales attempts that end without actually asking for the business is shocking. This sometimes happens when the sales / marketing person is intimated by the decision maker, so you must hire someone for this position who is not only very skilled, but very confident (almost cocky). It also happens when the sales person is not trained on effective sales techniques or even worse - when the sales person simply doesn't believe in your product. In the first case, you need to make sure your sales team is highly trained. In the last case, you just have the wrong person in that key position. Get someone else fast.

Asking for the new business can dramatically improve your sales effectiveness. While there's a lot that plays into this step (enough to write an entire entry on the subject) you must be aware that your sales / marketing team may not be doing it, and this is hurting your business. Make this part of your marketing and sales policies. In policy, you should clearly mandate that asking for the business is part of the sales and marketing process. Asking for the business should also be found in your marketing and sales materials. Do not take it for granted that your customers will do business with you just because you have good materials and good people. Instead, always ask for them to do business with you.

Management Fire Fighters

A management fire fighter is someone who is great at fixing problems. In fact, they know exactly what to do in most problem situations. Everytime a customer complains, the management fire fighter is there to fix the problem. Everytime a staff member has a problem, the management fire fighter knows the solution. That problem can happen over and over again, and the management fire fighter will never forget the solution. The management fire fighter will handle problems as often as they occur, even if a subordinate manager is there to help. The management fire fighter doesn't need to waste any time teaching others how to solve problems, because solving problems is his job. To the management fire fighter, fixing problems feels good. It makes that manager feel very useful. And, while the management fire fighter feels really good about always being able to fix every problem over and over and over again, he is also damaging the business.

As a manager, everytime you have an opportunity to solve a problem, you should take extra time to write it up. Writing it up means identifying the problem, determining its root cause, and implementing a solution - all in writing. After its all written up, you then need to train those involved, with your new written solution, so that the problem never happens again.

Many times, organizational problems occur due to a lack of policy or inadequate existing policy. When you find this, you must recommend and implement new or revised written policy and then distribute it throughout the organization. Policy is another form of written solution to problems. In absence of solid, written policy, people will make up their own rules. While they probably think these unwritten rules make sense, they very well may not fit into the bigger picture. It is the manager's job to make sure employees do not need to create their own rules.

Similar to written policies, managers need to also implement written, step-by-step procedures for how to do each job. It doesn't matter if only one person is involved in a process or if multiple people are involved, written routing procedures will crystallize the task and make it more simple. Written routing procedures are also excellent training tools. Managers can literally teach each step of the process, one-at-a-time, to make sure each new associate is able to do their job successfully. Finally, written routing procedures can be made more efficient because when working the procedures, you can find ways to make each procedure more simple or to combine processes so that the cycle time is at its lowest. Shortened time cycles can give an organization a decided strength advantage over the competition.

The last way a management fire fighter damages the business is by not training other managers how to do the job right and how to train others to do the job right. Instead, the manager should always have the direct supervisor involved in the solution, writing up the problem, creating policy, fine-tuning routing procedures, and training staff. When you are able to delegate future problem-solving to your subordinate managers, your time will be free to make big-picture decisions and grow the business instead of hurting the business.

So, don't play the role of management fire fighter. There is absolutely no value in fixing every problem over and over again. Write it up. Implement effective policy. Create routing procedures. Shorten time cycles. Train managers. Focus on the big picture.

What are You Really Selling?

I think it's critically important for you to understand what you're really selling to people. If you can't identify your real product, you will never be able to effectively sell your product or service to the masses that you want to sell to. Let me give you some great examples.

1. Hair Stylists do not sell hair cuts.
2. Chiropractors do not sell adjustments.
3. Electronics stores do not sell big screen TV's.
4. Furniture stores do not sell beds.
5. TV advertisers do not sell advertising.
6. Realtors do not sell houses.
7. Athletic shoe stores do not sell shoes.
8. Lawn Care guys don't sell lawn mowing.
9. Gyms don't sell gym memberships.
10. Photographers don't sell photos.

So, what do all of these people really sell? Well, hair stylists sell people self-confidence and a strong ego. Chiropractors sell relaxation and freedom from pain. Electronics stores sell an entertainment experience you can share with your friends and family. Furniture stores sell the best night's sleep you've ever had. TV advertisers sell companies a dramatic increase in new customers. Realtors sell dreams and a better life. Athletic shoe stores sell a better jump shot. Lawn Care guys sell a beautiful yard that is the envy of the neighborhood. Gyms sell beach-ready bodies and photographers sell memories that last forever.

When you know exactly what you sell, you're able to create more effective advertisements with more powerful headlines and better sales pitches. You create a mission that everyone who works for you can get behind and believe in. Most importantly, you give your customers an emotional reason for buying from you instead of your competition.

What are you selling?

Think BIG!

The most successful people in our history have been big thinkers. Thinking big is a key ingredient to reaching huge goals. Instead of thinking incrementally, you need to think exponentially. My company just finished back-to-back record-breaking years. After reaching such a great accomplishment, I decided that I wanted to double in the next two years. So, I set a goal to double in the next two years. Simple. In order to reach big goals, you first must set big goals. Guess what has happened? The first 2 months of this year were double the average of the last 2 years. Setting big goals can be powerful. We'll keep it going in that direction too!

What big goals have you set for yourself and your business? Guess what? They aren't big enough, so set them higher. The pastor of my church, who is a very wise and great man, once said that God wants us all to achieve great things. He said that regardless of how big we think, it's never big enough. So, of course I look back at my business goal of doubling and I wonder how small that goal really is compared to my abilities. We'll sure see.

Get out of your comfort zone. Anyone can set conservative and easy goals. If anyone can do it, then it's not good enough. Be a little uncomfortable with your big goals. I want people to think you're just being cocky when you announce your goals. Good! Let them think that.

And, that leads to the next point - announce your goals publicly. You need to write them down, share them with others, and be held accountable for reaching those goals. Most people will work like hell to do what they say they are going to do. So, say it loud. Everyone in the organization, in your family, and your circle of friends needs to be aware of your big goals. Give yourself something big to live up to.

What's the worst thing that could happen by setting big goals - even bigger goals, announcing them and then working like crazy to reach them? Only good things can happen. Shoot for the moon and reach the stars. If I plan to double, but then only increase profit by 50%, do you think anyone's going to ridicule me? Heck no! I'll be known as the guy who broke company records 3 years in a row. I'll take that any day. Wouldn't you?

So, think BIG - BIGGER! Be careful though. This kind of thinking could make you famous.

5 Marketing Tips That Make the Competition Invisible

If you want to truly beat the competition and be untouchable in your market, you have to follow these unbeatable marketing tips and make your competition invisible to your customers.

1. You must have a remarkable headline that grabs the audience's attention. Take this blog's title for example. Notice how is doesn't say something like, "Use these marketing ideas" or "Good marketing ideas". Instead, it stops you cold. After all, who doesn't want to make the competition invisible.

2. Use information in your marketing materials that is useful and of great interest to your target audience. This information should set you far apart from the competition. For example, if you are a personal trainer, don't tell the reader that you are certified and you have been a trainer for 5 years. Everyone expects their trainers to be certified. So what? Instead, tell them that your training techniques have helped your clients achieve massive reductions in body fat. Tell them about your clients that met all of their goals and were very happy with you. Tell them how compared with working out without a trainer, your training techniques achieve a 70% greater improvement in body composition. (PS: don't forget to add your certification to the ad.)

3. Use color and pictures that get people's attention. Don't use the same stuff that everyone else is using unless there is clear evidence that it works so good that you must use it. Otherwise, it is a good idea to stand out and be noticed. After that, you better have a killer headline and intriguing content.

4. Connect the dots between your offering and the audience's needs. Tell people why they need what you have. Tell them all of the things others use your product for. Tell them the very best uses for your product or the very best reasons others use your product (or service).

5. If something bad could happen if customers don't choose you over the competition, absolutely point that out and be emphatic about it. But, be careful you don't unintentionally talk bad about a specific competitor or competitor's product. This could get you into unnecessary legal trouble. Instead, you need to point out exactly how you or your product will solve their problems, even if they don't yet know that the problem exists.

For more information or assistance on ways to supercharge your marketing materials, email me at chelmsmba@aol.com.

Great Managers Reject Average

Great managers reject average because they know that it comes at the cost of excellence. Average does just enough to get by. It requires little effort or thought. It achieves average results. It settles for second best and even third best. Average doesn't impress customers, but it also doesn't bother them too much. It doesn't look for better ways to do things and it doesn't identify problems to be fixed. Average clocks in and clocks out and works just for a pay check. It is not invested in the company, the customers, or even in itself.

Despite its rejection by great managers, average is widely accepted by most of the public. Is anyone really ever surprised anymore when someone doesn't address them by name? Do we ever really complain when service is average or substandard? At restaurants, don't we see mistakes with the meal as just part of the experience?

I recently had an experience with a major delivery carrier that actually caused me to write this blog. After the delivery agency promised to have my package to my home after 5pm, the delivery attempt actually happened at 3:15pm. I was home by 4:15pm (early considering the promised delivery time), so I called the carrier and asked them to send the delivery man back to my house before the end of his shift. Fortunately, he was still in town, so I thought I was in luck. However, despite being just 10 minutes from my house, I was told that he couldn't make it back, but that I could meet him on the other side of town. I could drive 10 minutes to receive my home delivery, after the delivery time was not honored, but the driver could not spare those 10 minutes for me - the customer. When I questioned this decision to the telephone "service" agent, she actually told me that this decision was based on "driver discretion".

Driver discretion! But, what about the customer? It was too much for me to expect a promised delivery time, or an additional 10 minutes of drive time to just satisfy a customer. Don't these average companies know that they have competitors who will earn these customers right away from them? And guess what - it will take a just-better-than-average effort.

Now, as an example, here's how that delivery experience could have gone:

Telephone Service Agent - "Mr. Helms, please accept my apology for the mix-up. I am going to call the driver right away and re-route him directly back to your house. Can you hold the line for just a short moment please sir?" When she comes back on the line: "Mr. Helms, the driver wanted me to convey his sincere apologies as well. He understands that you left work early to receive this package on-time and he is going to be back at your house in 10 minutes. Will that be OK with you Mr. Helms? Also, the next time you need to ship a package Mr. Helms, please give the attendant the following reference number and receive 50% off of your delivery. We really appreciate your confidence in our ability to delivery your package on-time and with great accuracy Mr. Helms. Have a great day and enjoy your package!"

Mr. Helms - "Wow!"

Directive to all Managers: DO NOT ACCEPT OR TOLERATE AVERAGE!

Expect excellence in everything you do, and in everything your company does. Train your staff to be excellent. Recruit and hire only those people who have a history of and desire for excellence. Make your customers say, "WOW!" Achieve excellent results. Set high targets and exceed them. Reward your employees for achieving excellent results. Never reward average, as these are not results - these are the things that happen naturally just for getting out of bed in the morning. When you shoot for excellence, your company will be the sacred "Purple Cow" in your industry and certainly in your town.

Yes, great managers reject average because they know that average comes at the expense of the only acceptable outcome - EXCELLENCE.

Boost Productivity With High Morale

Do not overlook the critical importance of having high morale among your staff. People who are unhappy, for good reasons or not, do an overall worse job than those who are happy. Unhappy or dissatisfied employees will be unproductive and make mistakes - even willful mistakes. These people will be more likely to run off your customers and they will bad mouth you to the public. You will pay them hour by hour and day by day to do a poor job and hurt your business until the day that you finally decide to fire them. The worst thing about this is that if you would have done a better job of boosting productivity by boosting morale, you could have avoided all of the bad things that happened. So, the question is: "How do I boost morale in my organization?"

The first thing you must do is ask the staff what's wrong and what's right, what they like and what they dislike, how they feel about management, what they would change about the company, and certainly other questions that are relevant to your organization. You need to take these answers very seriously - especially the trends or the responses that come up over and over again. Let the staff know that you are taking their responses seriously and take appropriate actions on the things that you can change. Communicate the reasons you can't change other things so that the staff at least knows they were considered.

How can you get positive responses that are leading to high productivity and excellent results? Great question! Here are some things you can do and that you really should do right away.

1. Give consistent positive feedback to everyone and for everything that deserves it, even for the smallest things.

2. Sincerely tell people thank you for doing a good job - consistently and often.

3. Don't obsess over the negative and don't panic, especially publicly for the staff to see.

4. Reward success. Set up a reward system for reaching desired targets. These do not have to be in the form of huge bonuses. Small, public rewards and recognitions will go a long way.

5. Give awards such as employee of the month or top performer award.

6. Be super-nice to people. Let them know that you LIKE them and that you CARE about them.

7. Do the little things that cost little and mean a lot. This is different in every office. In my office, it would be something as simple as letting the staff choose different color uniforms when we purchase new uniforms anyway.

8. Train your management team to be supportive to staff and to be expert in their work areas. Expert and supportive managers create high morale among their direct reports.

9. Train employees so that they are expert at their jobs. Highly trained employees tend to have higher job satisfaction because they are equipped to do a good job.

10. Speak nicely of employees in front of their coworkers, their managers, their husbands or wives, and others. Public recognition and compliments make people feel good and want to do a good job. This is very powerful.

Do not under-estimate the power of high morale over your company's productivity. If you ignore it, do not be surprised when you miss the mark. To break records, do the right things to keep people happy and motivated.

High-Value Marketing Tips

Your marketing department might just be you, or as described in The Ultimate Sales Machine, "A one-person army," or you might have multiple people on your marketing team. Either way, you need to understand these important marketing tips in order to run a tight and effective marketing machine.

1. Use a marketing budget to avoid excessive and wasteful spending. However, always exceed the budget on everything that gives you your desired return-on-investment.

2. Test, test, test. This means finding out what works and what does not work. Kill everything that doesn't produce new customers.

3. Survey customers to find out what works. What the manager thinks is irrelevant if the customers don’t agree. Stop funding for all marketing projects that are not supported by positive customer feedback.


4. Establish multiple pillars of marketing. For example: web sites, yellow pages, brochures, mail-outs, signs.

5. Create a customer-referral program. Reward referrals for the right kinds of customers.

6. Make customers say, “WOW” in order to become a referable company. Focus close attention to excellent customer service.


7. Formula for Growth = Capture + Amplify + Maintain. Capture new clients. Amplify the customer relationship. Maintain that client relationship. (From Your Management Sucks!)

8. When customers leave, you must find out why. Try to get them back and learn from mistakes.

9. Always ask for referrals, especially from happy customers.

10. Don’t try to win awards with advertising. The best award is new customers.

Do What Nobody Else Will Be Able To

I heard a quote several years ago that changed my total point-of-view and I have never forgotten it. Do what nobody else is willing to do today so that you can do what nobody else is able to do later. After hearing this, I re-evaluated everything.

I had to first determine what I wanted to be able to do later. I needed big dreams.

1. Vacation in Las Vegas with my wife anytime that I want to go.
2. Drive a Ferrari (this is my dream car).
3. Send both of my sons to Notre Dame.
4. Retire before I'm 50.
5. Buy my wife her dream house.

For me, this required a total paradigm shift. I started thinking like the kind of person who would accomplish those goals. Along the way (and I am still not close YET) I have made some momentum-accelerating decisions.

1. I get out of bed earlier than before.
2. I eat only healthy foods.
3. I work out (hard) at least 4 days per week.
4. Every time I get into my car, I listen to an audio book instead of the radio or music CD's.
5. I keep 2 or 3 business books on my nightstand to read when I'm going to sleep.
6. Instead of Sportscenter, I usually watch CNBC or Fox Business Network.
7. I became a member of the American Management Association to keep up-to-date on current management topics.
8. I am learning other aspects of business that I wasn't very good at before (web design currently).
9. My wife and I are getting out of debt (or as I call it: working towards financial freedom).
10. I write these blogs which along with helping others, also helps to keep me sharp because I want my blog topics to be super-relevant to everyone that reads it.

I am doing what others don't want to do today and I will be able to do things that others won't be able to do later. Can you say the same thing? What is your list of things to do now so that you can achieve your future goals? I hope you will be able to vacation at your favorite spot, drive your dream car, send your kids to your favorite school, and give your wife her dream house. I especially hope you don't have to work into your 60's or 70's just to survive financially.

I think this is the kind of thing that separates #1's from everyone else. If you're not doing this already, get started! Do today what nobody else is willing to do so that you can do later what nobody else is able to do.

Customers, Customers, Customers

Wonder what this blog's about? Wrong! It's about customers.

Peter Drucker, the father of management, said the purpose of business is to create customers.

Jeffrey J. Fox says the only reason for business to exist is to solve a customer's problem and make customers feel good.

Jay Abraham says that you should fall in love with your customers.

So, let's put these 3 comments together into one tremendous customer service statement:

The purpose of business is to create customers and keep them by solving their problems and making them feel good by falling in love with them.

Just imagine the idea of falling in love with customers. What would you do for a customer that you were in love with? I like to say that there is no wrong way to make a customer happy. If you're in love with the customer, you'll do whatever it takes for his or her happiness. Don't forget to hire people who also want to love your customers and train them to love them the same way that you do.

It's interesting that Drucker says the purpose of business is to create customers. He even makes a point to say that profit is the wrong measuring stick. Wow! That one really made me think. Imagine though - what would happen to your profit if new customers stopped showing up?

I think, talk about, and act on customers and customer service a lot. Do you? If you're my competition, feel free to cut it out right away. Thanks.

Record-Breaking Business Tracking Systems

Business Tracking Systems help managers break company records. The saying goes like this: "if you measure something, it will improve." This is easy to say, but how do you measure something and what do you measure? Managers need to be able to develop effective business tracking systems that answer these questions.

First, what is a business tracking system? This is a systematic measuring of primary and secondary indicators of business growth. This can be done with weekly and monthly reports of many different types from informal or formal reports, to dashboard charts or graphs. The way I prefer to track these indicators uses Microsoft Excel.

Excel has add-ins that allow you to use extensive spreadsheets to build charts of graphs that can be easily formatted and maintained by filling in cells at any pre-determined interval. Each new cell creates a new graph plot. One of my current chart of graphs consists of more than 50 primary and secondary indicators. An example of a primary indicator may be Total Sales, whereas a secondary indicator may be Sales per Day or Sales per Customer or Sales From a Particular Item or Service.

When these graphs are on an up-trend, it's good and you need to find out why and work to improve on those successes. When a graph is on a down-trend, you should find out why, identify problems and solve them, and find improvements that turn the graph around. Tracking these indicators using graphs gives the manager a "dashboard" that makes managing the business more efficient and helps to focus the manager on top priorities as well as areas that require further or new training.

What you measure, will improve, but what you track using business tracking systems will help you break records. If you don't have an effective business tracking system in place already, get it done right away. For more help setting up your company's business tracking system, feel free to email me a chelmsmba@aol.com. I have created systems that track more than 200 business indicators. I can help you too.

Does Your Marketing Plan Address All the Right Areas?

A top-level marketing plan must address all areas of marketing, even the often forgotten areas. To evaluate the effectiveness of your company's plan, answer the following questions.

Who? - Who will your plan specifically target?
Where? - Where do you find your customers?
How? - How will your customers find you?
Why? - Why should your customers buy from you?
What? - What do you have to offer that differentiates you from your competition?
When? - When will everything in the plan happen?

How do you know?
1. How do you know which marketing efforts are working?
2. How will you track the ways in which customers find out about you?
3. How will you know if your marketing and sales teams are doing the right job?
4. What will you immediately stop doing?

What information should you use?
1. What has worked for you in the past?
2. What are customers telling you now?
3. What is your marketing cost per new customer, for each marketing pillar?
4. What are your strengths, weaknesses, opportunities, and threats?
5. What drives your company's economic engine?

What areas are missing from your plan?
1. Did you consider the impact of customer service on your current and future customers?
2. Does your plan contain any customer retention initiatives?
3. Does your plan address an increase of sales dollars and sales attempts per customer?
4. Did you consider your competitors' offerings?
5. How do your individual marketing pillars tie together?

Do you have adequate training at all levels of the organization?
1. How will you train all of your staff on customer service, retention, and sales?
2. How will you train your sales team to use influential sales tactics to increase customer value?
3. How will you train your marketing and promotions team to create killer headlines?
4. How will you educate all levels of the organization on the efforts of the other departments?
5. How will you ensure that everyone understands how to sell your products.

Your marketing plan will need to consider all of these questions. It will also include a complete list of all marketing, promotion, and sales efforts, along with a strategic time-table for each. The marketing plan is a complex piece of the organization's total strategy. A complete and effective plan is the necessary first step for the marketing team.

Be Fanatical About Training

It has been said (and I agree) that people are not your greatest asset, only the right people are. Well, assuming you have the "right" people in place, now it's your job, as manager, to make sure they can do the right job, the right way. To do this, you must be fanatical about training.

Training doesn't start when you have hired someone new. It doesn't even start when that person begins working their new position. No. Training starts when the manager decides what training materials and methods to use, when to use them, and how frequently to use them. Managers should create standardized training protocols, with standardized materials, that all people in the organization must complete, as a condition of employment.

Once these protocols and materials are available, then the decision of when and how often to train can be determined. The answer to this is immediate and often. Immediately train all new associates. Assign a pro to work with them in a standardized manner, 1-on-1. Test new associates on all training materials. Role play with them. Make sure they can do the job as easily as if they have been doing it for years.

Then, train often. Training is not a one-time event. The manager's job is to make sure all of the staff remains at the top of their game. New systems need to be trained along with older, existing systems. Use weekly meetings wisely and keep your staff working and thinking at a very high level by keeping them shart thru ongoing training.

Give staff relevant business topics to discuss openly. Quiz them. Give them new written materials to read and discuss from the internet. Ask them what problems they are having and what solutions they can recommend. Perform in-services on equipment, software, and communications. Emphasize customer service.

Educate the staff on an ongoing basis about exactly what it takes to remain a necessary and successful part of the organization's mission and goals.

A highly trained and educated staff will excel in every area. This staff will break records. This staff will be a REFLECTION of its manager. As a manager, ask yourself how you want others to see you when they interact with your staff.

To confidently answer this question, be fanatical about training.

Creating Successful Positions Within an Organization

People fail at their jobs when positions are not created properly, by managers, so that the position can be successful. The vast majority of business problems are system / position problems and not people problems. Poor management says that when a person isn't doing a good job, it must be that person's fault due to lack of ability or lack of desire. So often though, the reality is that people don't fail - instead the position was not designed well enough for any person to do a good job in it.

A smart manager knows that their own success depends on the success of each person they supervise. They know that a well-defined and solidly-structured job position will help to create the success they expect and that is expected of them as managers.

To create a successful position within any organization, follow these guidelines.

1. Define the position with a Mission Statement.
2. Define clear goals for the position along with indicators of success.
3. Fit the position into an (already existing) organizational chart.
4. Write a very clear and detailed job description.
5. Write routing steps and policies for the position.
6. Create a tracking system that illustrates problems and successes.
7. Choose the right person to fit the position.
8. Fanatically train the new person with written training materials.
9. Introduce and integrate the new position (and person) into the organization.
10. Continually follow up on progress and give timely and appropriate feedback.

First, notice that finding the right person doesn't occur until step 7 in this process. The rest is about the structure and definition of the position, not the person. Follow these steps and you will find that the majority of your employees will perform like all-stars. Give them the tools to be successful and you, as manager, will be successful.

Finally, realize that each of these 10 steps depends first on the manager's ability. Even step 7 requires the manager to be able to match the right person with the position, and even to be able to identify talented people in the first place. Lesson: the manager's abilities can make or break an organization. Use those abilities and these 10 steps to create successful positions that good people can be successful in.

Are Your Customers Coming Back?

"Fine." If your customers say this, everything is not fine. What's worse? When they say nothing at all. Most customers won't tell you when they are unhappy. They'll tell everyone else though. Depending on how unhappy a customer is, they could just keep telling people bad things about you right up to the point that they completely forget you. This may be the only time it is good for the customer to forget about you and your business.

I think that it is fairly well understood that unhappy customers tell a lot more people about your business than happy customers do. What is usually missed, are the very fortunate subtle hints you get when an unhappy customer decides to speak up. And, these hints usually sound something like this: "fine." "How was everything Mrs. Jones?" "Fine." "Is there anything else we can do for you?" "No thanks. I'm fine."

Guess what's next? You never hear from that customer again, but depending on how not fine things really were, all of her friends will hear about you for quite a long time. Those friends might even pass the word along to their friends too. Not so fine, huh?

So, here's what you have to do. Wow them! Work like crazy to make your customers enthusiastically happy. These customers will turn into walking advertisements, except these advertisements will also have some level of influence over those they are advertising (talking) to. It's not enough for you to personally wow them. You must also train all of your staff to do the same. In fact, this must be a part of each person's job description.

Finally, survey your customers. Find out what they think about everything that's going on in your organization. Don't do anything without the customers' approval. Add this to an enthusiastic experience and you won't have to worry about whether or not your customers are coming back. They'll be back and they'll bring others with them.

To get started, read "The Fred Factor" by Mark Sanborn, and "Raving Fans" by Ken Blanchard. These easy-to-read books will set your organization on the right path to creating enthusiastically happy customers.

Develop Strategy to Win in Business

To win in business, you must have a clearly defined strategy that is communicated to all levels of the organization. Strategy can be devised for an entire organization AND for individual business units within an organization. Yes, all managers can create and follow a strategy, especially when the organization's strategy is clear enough that business unit managers understand what their goals and mission are. A great business unit manager will go the extra mile to have a strategy that allows the individual business unit to set goals and break records.

In order to create a strategic plan, you must have a focused mission statement that motivates the organization to work together to accomplish the organizations goals. A great mission statement will bring out an emotional response from the reader. You want all members of the organization to not only be behind the mission, but to live the mission by taking it to heart. This emotional mission must also be customer-focused and customer-centered since getting new customers is the most important function of business.

After a mission, strategy depends on an acute understanding of the organizations SWOT - Strengths, Weaknesses, Opportunities, Threats. Build on strengths. Minimize weaknesses. Take advantage of opportunities. Defend against and attack threats. Strengths and weaknesses are primarily internal factors, while opportunities and threats can exist internally and externally. It is best to bring the top minds in the organization together in order to clearly identify and define an organization's SWOT.

Finally, after a clearly defined mission and SWOT analysis, the strategy is created. Remember, strategy should be focused on creating new customers. However, the other ways to increase revenue (other than creating new customers) is to create more sales per customer and to increase customer visits. Also, don't forget to get more efficient so that you can reduce costs and become more profitable.

Organizations need clearly defined strategies in order to win in business. So, first create the plan, then follow through and remember to set up feedback points to make sure the plan is working.