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!
ModCloth: From fashion passion to profit
Andy in the news – a video case study.
Time To Focus On Predictable, Profitable Growth: Open Letter To Credit Officers
An Open Letter To Chief Credit Officers
Dear Chief Credit Officer:
An open letter to Chief Credit Officers.
If your objective is to protect your bank’s assets while providing credit to stable companies with positive cash flow, then making good lending decisions right now must be very difficult.
Certainly, your portfolio companies have cut direct costs and overhead to the bone. But how good are these owners at forecasting top line revenues?
These days, most owners aren’t sure. After all their cost cutting, a borrower’s unpredictable sales revenues could now have a greater impact on your credit risk than controlling his costs. While $1 of overhead reduction means a $1 drop to the bottom line, a $1 increase in sales only increases the bottom line by thirty cents or less. But since most companies are already operating on bare bones, a positive variation in that thirty percent can quickly lead to profitable growth and reduce your credit risk. Or send the customer into workout if revenues just don’t come in as promised.
So if predictable sales revenues are critical to your customers’ need for credit and the quality of the loans you can make, how can you help your customers better predict the revenues and profitability?
If your customers’ projections (and your loans) are still based on historical sales or industry ratios, are they real? If not, are they too optimistic; too pessimistic?
In our post recession economy, changes in customers’ buying behaviour, on-line and off-line sales channels, and pricing are very likely. And these changes will mean your portfolio companies’ sales projections could be way off. Both over and under.
If you are interested in your portfolio companies taking a better approach to predicting profitable growth, here are three questions you can ask your borrowers:
- Explain how your existing customers have changed their buying behavior and its impact on your firm’s profitability.
- Describe how you intend to grow sales profitably without increasing your firm’s cost of goods sold or overhead.
- How do you plan to use new sales and marketing channels to reach younger buyers and create new offers that appeal to buyers no longer willing to pay more for better service?
If your borrowers have logical, practical answers to these questions, lend them what they need because they have a handle on their predictable growth. If they don’t, question their revenue forecasts. Have your borrower visit www.profitablegrowth.com for helpful tips on how they can get the answers you need.
PS. If you are a business owner, isn’t it a better idea to stay one step ahead of your banker. After all it’s your business, risk and profits!
The Road To Unprofitable Growth Is Paved With One Dollar Fajitas
Today I met an old friend for lunch at Chili’s.
We had years of catching up to do.
But not before our caffeinated waitress hawked every feature, pushed every special and described each of her favorites on the menu! First, we ignored. Then we resisted. Ultimately, we succumbed and ordered “her” mushroom steak fajita special. At last, we could share our business/family trials and traumas.
What's your one-dollar fajita story from the business world?
But no! Our waitress burst in to tell us that for a dollar more we could each get a second fajita order, packaged to go no less.
Fine, we shrugged and she left.
But yet again, she returned, crestfallen with news that her manager would not let her offer the mushroom steak fajitas for a dollar more, so out came the menus to pick different fajitas.
I think you get the picture, but Chili’s doesn’t. For me, lunch is about connecting not cuisine.
Why would any business cut its returns by 50%? Devalue its product line? And harass its customers in the process? Of course, your business wouldn’t do any of this. Right?
But are you sure? Have you thought about sending secret shoppers into your business? They might just help you discover how to save money, upscale your products and delight your customers.
Back to my Chili’s experience.
Continuing through lunch our waitress brought out three rounds of soft drinks. Lining them up she said, “In case we ran out.” Then she gave us two checks so that we wouldn’t fight over them.
This reminds me of some business owners and entrepreneurs.
What assumptions are we making about our businesses? What assumptions are we making about what our customers really want and expect from us?
What silly story can you add to mine? Come on, I know you have a one dollar fajita story crying to be told!
An Anonymous Case Study of Survival and Profitable Growth
Recently, I had lunch with a partner of one of my national and very private clients who I hadn’t seen since the November 2008 election. He gave me permission to recount his story.
Last Fall, he was disenchanted, dismayed and worried that his processing and services businesses could not survive the perfect storm of bankrupting clients, a government regulatory beat-down and a no-credit economy.
His outlook disturbed me since he and his family were savvy, intelligent and highly committed operators. Hell-bent on creating organic growth. As individuals, they are personally accountable and walk their own talk of practicing the Golden Rule.
After small talk about our families, I took a deep breath and asked the obvious, “So how is your business now?”
He took grinned and said, “While it has never been so tough I did what I needed to and I have good news.”
My jaw dropped as I listened to his story.
“Last Fall, my business was in deep trouble. My customers were dying, my Best and Highest use was commoditizing and my overhead was unaffordable. Here’s what I did and too bad we didn’t do it any sooner.”
- Reviewed every paying customer and determined what proprietary value I was providing. I revised pricing where I was and where I wasn’t.
- Cut my head count by 1/3, which was tough but my new mantra is to ask, “What’s my return on every dollar invested?”
- Accepted that we could not cost-cut our way to profitable growth and refocused our development efforts.
- Developed new services and products which leveraged Obama’s social agenda and regulations. Who knew there would be opportunities?
- Stopped making cold calls and pursued referrals. If someone we do business with has entrée into a target prospect, we request an introduction and remember who helps us.
- Recognized that there are now two kinds of buyers; transactional and relationship. Transactional customers get no frills and pay as they go. Relationship buyers get full service and lots of frills.
- Overhauled my health insurance benefits, while maintaining its costs and service levels. My litmus test was ensuring that the handicapped children of my staff remain covered and I could hire any employee I wanted regardless of their health issues.
He concluded that he remains heads-down focused on his business and is no longer thinking about transition or succession. What a wonderful role model for every business owner!
Unfortunately, I cannot share the name or face of this small business hero. But as I left the meeting, I could only ask myself why can’t more businesses be heroes?
What can you implement in your business? Please share what you are doing in your business?
Defining Profitable Growth In The New Economy
Small business owner, how do you define profitable growth?
I believe that in this new normal, the new economy, profitable growth has a new definition. Watch my video to how I define profitable growth in the new economy.
How do you define profitable growth?
DIY, DIWM, DIFM: What Can You Do?
If it’s painful watching another small business struggle as the economy rebounds. It’s torture if it’s yours.
Why won’t your customers buy from you when they are increasing their spending with others?
When will they realize that imitating your value, products or services “in-house” is penny wise and pound foolish?
The economy may be recovering but not in the same way as in the past. Most of the buyers I’ve interviewed for my clients are buying again but with new criteria. Instead of reverting to their old ways they are pursuing total cost of any solution. And if they believe they can do it themselves, they will. So instead of fighting against the tide, why not accommodate your buyers and get them to pay you for doing so?
Here are three ways:
- Provide a Do It Yourself (DIY) Option.
Some of your customers have more time than money. Help them "DIY."
Now, more than ever, there is segment of customers who have more time than money. They want to do all the work themselves. They want to accept all the burden of learning and doing by trial and error.
QuickBooks Software is an excellent example of this. For less than $200 a business can keep its own accounting. What can you offer in your business that allows a customer to do it all?
One suggestion: Offer an entry-level service or product. Let your customers adopt your product or service in its simplest form. Then you can graduate them to a more robust version where they will need your help.
- Offer a Do It With Me (DIWM) Option.
If a customer really wants to do it themselves but can’t, they might be interested in your guidance as they produce your product or service. If you can teach someone to fish and feed themself, make it a money maker for you.One example is a Jo-Ann Fabrics sewing class. After purchasing a dress pattern, you can have a teacher guide you and your project, reducing errors on your road to success.One sign that your prospect may want the DIWM option is if they have an equal amount of money and time to invest in working with you. Don’t offer them your entry level DIY service here, but clearly one for those who are ready for slightly more. But save your advanced expertise for the next option. - Always offer the DIFM (Do It For Me) Option.
While DIFM is not as popular now as when credit was free-flowing, many businesses will once again realize that they should refocus on their Best and Highest Use® and leave everything else to experts. When customers realize that they have less time than money, they will outsource tasks to vendors whose clear value justifies spending the extra cash.An example of this would be how most firms still outsource all their transactional HR needs like payroll, drug testing and 401(K) reporting.Always keep this option open because as the economy improves there will be buyers that have more opportunities to outsource work sooner than others.
So here are your three ways to help your customers to spend money with you:
- DIY (Do it Yourself)
- DIWM (Do it With Me)
- DIFM (Do it For Me)
While, it will always be tough to run or watch a business lagging behind in profitable growth, now you have one more tool to offer to a prospect who respects your value.
So when are you going to start DIY, DIWM or DIFM in your business?
Feeling Like Oliver Twist In The New Economy
In talking to so many business owners, I can report that most feel like Charles Dickens’ young Oliver Twist with his nose pressed up against the dining room window filled with people and good food.
Do you feel like Oliver Twist in the new economy? Image from http://www.charlesdickenspage.com/illustrations-twist.html
“Can I have some more?” he asks, only to get pushed away.
While the economy is improving and a few owners are eating well again, most are still watching with envy.
But there is no question that phones are ringing, inquiries are coming in, and wallets are opening slowly. If you felt the recession earlier in the cycle, you should be coming out of it faster! Please realize that if the Gross National Product is growing and your business isn’t then someone else is eating your lunch.
So please, Ask For More!
What are you doing today to ask for more? Share with us.
