Make This Your Most Profitable Year Ever – Profitability Tips
Recently, Anita Campbell interviewed me on our recent webinar and came up with some great ideas for you here.
Achieving Your Best and Highest Use®
Best and Highest Use® is when you look at your company and its impact on your customers. Is it still helping resolve their pain, achieve their opportunities, and succeed as much as it used to?
Or despite continuing to deliver more and more are your customers paying you less and less?
Watch my video on Achieving Your Best and Highest Use®
Is Your Price Right?
Filed under: Business Growth, Profitable Growth, Top Line Growth
Pricing has always been one of the greatest games in business. In times of scarcity, this is ever so true. The price you offer has to reflect value, convey trust and cover costs of sales, delivery, and unfortunately, collections. And you have to be able to get your price.
How do you know when a price is right? Let’s say that you meet a prospect for lunch in an attempt to close a deal. When you finally come to the point of stating your price, one of three things happens:
• Your prospect immediately says no, stands, and walks away.
• Your prospect immediately says yes, shakes your hand, and treats you, the waiter, and everyone at the surrounding tables to champagne.
• Your prospect contemplates the offer. The long silence feels like an ocean in your head until you hear that magical word: Yes!
In two of the three situations you closed the deal, but only in the third have you done it right. If the prospect rejects the offer out of hand, he believes the price is too high, which means that you have failed to sell the benefits of what your company provides. If the prospect takes the offer immediately, you have given away too much value for too low a price; your prospect feels like he’s discovered a Van Gogh original at a garage sale! You know you’ve got it right when your prospect accepts your offer only after some deliberation. In this case, he knows the value he is losing if he says no. Ultimately, your price is your demonstration of value. If you are getting your price in difficult times, congratulations, for you are truly valued for your value.
Triggering Trust
Before the great recession, business trust was easier to earn and bestow. Taking a chance on a new vendor or offering your prospect a sweetheart deal was good business and could be fun. There was a stronger connection between gaining a one time buyer and turning him or her into a loyal customer. These days, earning small business trust is harder so knowing the triggering events in your business is ever more critical. So what is a trigger event?
There is that moment in a new relationship when two people, formerly strangers, share an expectation of being together every Saturday night. The new toothbrush in the medicine cabinet … Brunch with the parents … Wandering together into a jewelry store and ending up in front of the diamond rings. Coincidence? No. It’s a trigger event.
Trigger events signify relationship milestones. In terms of prospects and customers, we can locate common triggers in order to predict behavior and offer them what they need when they are ready. Common trigger events include:
• The third sale
• The second problem (resolved to satisfaction)
• The fourth reorder
• The third season
• The second referral
These vary by industry, so you may find a different pattern with your customers. Study your data and nail down typical buying patterns. Begin by defining which products or services:
• New buyers are likely to choose first.
• Encourage the most return purchases.
• Are one-time impulse buys.
• Are most popular with existing customers.
In an age where relationships take longer to build or repair, understanding what triggers business trust and thus customer loyalty is ever more important. Know your customers’ trigger points, focus on building their trust and you will earn their loyalty.
If Rockers, Preachers and Flashers Have, How Can You?
What do Eddie Van Halen, Reverend Billy Graham, and Hugh Hefner have in common?
All three built award-winning multi-million dollar enterprises and turned them over to their children. Wolfgang Van Halen, Franklin Graham and Christie Heffner have all assumed control over what their parents started. Wolfgang can play guitar and arouse groupies as well as Eddie ever did. Franklin has expanded his father’s legendary church foundation and Christie ran Playboy Enterprises for 26 years. If these disparate families have all enjoyed successful transitions why can’t you and your child create the same success?
If you hear yourself say, but business and family is different, you may be right. Here’s why.
It may actually be tougher these days because not as many few children want their parent’s businesses. Assuming you’re not a rocker, preacher or flasher, your small business may just not be that much fun or as interesting. Would you go into your business if you had the choice to do so today? And with so much turbulence and uncertainty, would you make the same sacrifices or learn the new skills your business needs to profitably grow forward?
Many owners’ children I know have missed out on the benefits of a life of adversity, and while they enjoyed an adolescence of privilege, they understand they face a future full of unexpected challenges. But I am sure that Wolfgang Van Halen, Franklin Graham and Christie Heffner would say that it was the same for them.
So what lessons can we learn from these famous offspring? They:
Were never denied their heritage or status and when they decided it was time, they actively demanded leadership and were groomed for it
Took many of their best practices from their parents and clearly executed them in new markets and methods.
Faced crises their parents never did and restructured their organizations in order to take their businesses forward.
The simple lesson seems to be, that if and when your children want your business let them step up and ask for the responsibility and authority to run it. If you believe your child has the right stuff, hopefully they will come to believe it too and in time to let you plan to let you both plan for a smooth handoff. And while it’s unlikely they will be rockers, preachers or flashers, you never know and can only hope they make good choices like you taught them.
What’s your conscience and what’s your scapegoat?
When we were asked, that is, before the Great Recession, “How’s business?” we were taught to respond, “Good, but could be better!” Now, its, “Better, but could be good!” But even worse, just asking, “How’s business?” these days can all but start a political argument!
How many of the following reasons have you heard an owner use for why business is down?
1. Obama
2. Buyer Inertia
3. The Deficit
4. Buyer Confidence
5. Taxes
6. Buyer Trust
But while grousing is understandable, how serious can we be if we picked any of the odd numbered reasons? Aren’t these really excuses?
Does your buyer really say or believe they’re not buying from you because of Obama, the deficit or taxes?
No! And even if it was true, how can you influence these reasons?
If you picked the even numbers, congratulations, you are self-aware and willing to accept that your actions can influence your results. Why? Because you can influence your buyer’s inertia, confidence, and trust. Here’s how:
2. Inertia is the greatest enemy of creating change and results. If your buyer can avoid risk through inaction, they well may. Your recourse is to convince them that their pain of not changing is greater than their pain of changing. Help your buyer to connect their inactivity to poor results and instigate the epiphany you need them to have.
4. Buyer confidence is the fuel of our economy and your success. Remind them how their prior actions created their past success and how much control they really do have over their destiny. Modify your product, service and message so it reinforces your buyer’s confidence as much as possible.
6. Trust has been a casualty of our great recession. Ronald Reagan used to say, “Trust, but verify.” Give your buyer opportunities to verify and even shift their risk onto you if you both can afford it.
Small business is at its best when courageous owners take personal responsibility for their success.
Carpe diem!
Packaging for new channels.
With so many net opportunities to sell your value are you sure you can keep selling yours in the same old way?
If you know you can’t how do you know where to change your ways?
Watch my video on Packaging for the new channels.
To Tweet or to Sell or If You’re Blogging How Can You Be Closing!
Five Tipping Points for You to Decide.
There is a real divide between business people who swear by and swear at Web 2.0.
To Social media “moguls”, even questioning Web 2.0 is so old-school!
They say, “Unless you get known and seen on your blog, their blogs, tweet about it and post on LinkedIn and Facebook, you will never get credible as an expert or grow your brand with prospects!”
“If you aren’t getting business from social media, then you just don’t have good content or you aren’t online enough.”
I add; no one wants to be sold but everyone wants to buy. Social networking allows you to become trusted and provide bite-sized pieces of value to prospects before they are ready to buy.To entrepreneurs and owners whose firms live on creating qualified prospects and personally closing sales, the impact Web 2.0 has on running their P&L’s is at best a mystery and at worst a narcotic.
They say,
“Nobody ever buys from me without establishing a trusting, personal relationship; the only profiteers on the Internet are those teaching others how to make money on-line”
“The web commoditizes everything, the only people you are attracting on-line are your competition or wannabee buyers without money or a clue.”
I personally don’t see most buyers of B2B products and services, especially owners of established companies using social media beyond websites, especially to find and choose suppliers.
So what should you be doing on-line (beyond the basics of a great website, SEO and customer communications?)
Here are five tipping points for you to decide.
Circle Yes, Maybe or No for each Tipping Point below.
- Tipping Point One. Does your economic buyer do more than Google your business name, your competitors or your industry’s key words when deciding to buy what you sell? Yes, Maybe or No
- Tipping Point Two. Is your product or service rated, judged, influenced or approved by others who go on-line to learn about your firm and its value? Yes, Maybe or No
- Tipping Point Three. Do your customers or clients interact with each other or belong to a definable on-line community? Yes, Maybe or No
- Tipping Point Four. Are there others selling your product or service who can track profitable sales back to leads or customers they found through social media? Yes, Maybe or No
- Tipping Point Five. Is there an employee, vendor or partner who is willing to do your blogging, tweeting and other social media on commission or get paid paid-for-performance? Yes, Maybe or No
Add up your Yes’s, Maybe’s and No’s. Whatever you have the most of should drive your commitment to social media.
Regardless of your answers and your decision, as a business owner, it’s your responsibility to profitably grow your business. Keep the following in mind.
Awareness, trust and conceptual agreement is one thing, qualifying a decision maker who has time, need, authority and money for your product or service and buys is the only measure of profitable growth.
Direct mail response marketing gave advertising a measurable ROI; something will come along to make social media accountable.
Now I guess I should go post this on my blog, tweet it which will feed into my LinkedIn and Facebook accounts so all the social media experts can blast me and business owners won’t read it!
You Must Understand, We All Wear Many Hats Here
If you run or work with a small business, how many times have you said or heard the phrase, “We all wear several hats” to explain how work gets done? In these times, everyone is working harder and doing more with less. But in this ADD world of constant distractions, when are multiple hats more of a burden than a blessing?
Why Must We Wear So Many Hats? It will always be a challenge for a small business to get all its work done. Staffing up to run sales, production and the office in turbulent times often means sharing work. Today’s organizations may be leaner and flatter, but all the technology, systems and controls have created the need for many specialists whose unique skills are only needed on a part-time basis. So, sales staffs take on marketing responsibilities, software specialists manage hardware and the back office also serves as the front office. So, when is it an excuse and when is this fair?
Wearing multiple hats in a small business works when staff is proactively dealing with tasks and challenges. For example, if people know whose part-time task it is to communicate with customers before there is a problem or evacuate the building before there is a fire, multiple jobs are fine. Also, if multiple hats give a company the ability to focus on root causes, that’s fine. An example of this would be a cross-functional task force, assembled to reduce the reasons mistakes are made.
Wearing multiple hats is an excuse when staff is called upon randomly or by “who has time” to reactively solve a recurring problem. If your people are pulled out of their office jobs to make deliveries whenever sales people exceed quota, this would be an example of poor planning. Also, if part of someone’s job is to regularly redo the work of another, this is dealing with a symptom rather than the root cause of someone else’s poor performance.
Three things to do to make sure multiple hats work:
- Make sure people clearly understand the outcomes you expect. The mark of any good small business employee is their embracing of the goals of the business. If they are not working toward selling, delivering, developing or protecting the business, then why not?
- Staff must be personally accountable for their actions. Small businesses cannot provide direct supervision of anyone. The best staff works under general supervision and manages themselves.
- Any small business needs to ensure it is structured to implement its tactics. For example, if the firm wants to meet the unique needs of different customer segments it best not be organized regionally. Too often small business stays organized to implement old tactics despite claiming it is pursuing new opportunities.
Small business will always wear and lament they wear too many hats. Make sure the multiple hats are helping more than they are hurting.
Letter From The Editor: Trust Everyone; Trust No One; But Always Trust Yourself
In 1918 US Senator Hiram Warren Johnson said, “The first casualty of war is truth,” but in 2010 I say that the first casualty of our great recession is trust. In this dubious recovery, many business owners tell me they plan to expand their businesses if they could only trust:
- Their customers to pay on time
- Their bankers to guarantee lending terms even at higher rates
- The political insanity to stop
Well, they and it won’t. But I am watching the most successful business owners learning to run their businesses like a game of “wack-a-mole.” They don’t know where the next menace will pop up, but they do know one will appear and they have learned to trust their ability to beat any threat down.
What and How to Trust
As a younger executive, my bosses told me to “trust everyone, trust no one.” Because I took it literally, it seemed so insincere. But later, after starting out as a naïve business owner risking everything, I learned what it really meant, “Follow the golden rule but protect your assets.”
But now after these last 24 not-business-as-usual months, “Trust everyone, trust no one” is insufficient because:
- Lawyers say a contract is less of a promise and more a guide for resolving a dispute
- Government voids time-honored commitments but then create new ones with little rhyme or reason
- Buyers will save themselves first at any cost to their vendors
But trust is an essential ingredient to profitably grow a business. An owner must trust there’s a demand for their products, and that loyalty among their staff and suppliers will come through. So how and what can a business owner trust? My advice in 2010 is to trust yourself and remember the old saying; Age and experience will always beat youth and energy.
Recognize that your intuition and judgment are only getting better. No one can take away your experience, education and expertise. It is more valuable than the news, money or even a consultant!
Develop the confidence and conviction you need to profitably grow your business in 2010. And trust yourself. The best reason why you will make good decisions is that you will believe in them!
