Values – Got ‘em?

The business news is a constant source of fascination.  Hardly a day passes without a story in the business news about some sort of illegal or unethical activity: an accounting scandal, embezzlement, an investment scam, theft of intellectual property, insider trading, or sexual harassment in a large company.  If it isn’t one thing it’s another.  There is probably some news of a business crime in your newspaper today.  

I’ll bet that every one of the companies mentioned in the news has a beautifully framed Values Statement hanging prominently in the lobby and proudly displayed in the Annual Report.  But does anyone ever read it?  Are the core values known throughout the rank and file of the company?  Are they referred to when discussing policy or competitive strategic moves?  Or are they just forgotten until it is time to dust the plaque or print the next Annual Report?

Don’t get me wrong.  Having a Values Statement is a very good thing.  It is a starting point to building a respected, ethical company; a company that treats its’ customers, staff, and vendors with respect.  But it can be much more than that.  It can be the basis for selecting new staff when adding to the workforce.  It can make the training period easier and less stressful because, if new hires understand the core values, they will understand that those values are the basis for policy.  It can make relationships with customers and vendors more cordial and less adversarial.  It can even be used as a marketing message if the company actually follows (and can show they follow) their Values Statement – giving foundational depth to the issues of how the company treats staff, customers, vendors, bankers, and stakeholders.

Few small companies have a formal, written Values Statement and many of those that do, never use it or refer to it.  If you do have one, take a moment and read it, then ask yourself whether it is a living document – one the company and the people within the company adhere to.  If you find you don’t have one, start the process of crafting one by asking, “What core values should be the foundation for this company and how should we implement them?”

Having a Values Statement and using it as part of the basis for company operations is useful in many ways because, keeping in compliance with it may keep your company from being in the news, in a bad way, and someone’s photo out of the newspaper doing a perp walk.

Question or comment to Larry:

Be like Bill – Think

Some time ago I read that twice a year, Bill Gates goes to a remote island hide-a-way for a week at a time.  No, he’s not going for a fishing vacation; instead of rods, reels, and lures, he takes market analyses, position reports, engineering reports, and opportunity papers.  In solitude, he reads and thinks and reads some more, writing notes in the margins and then composing questions, thoughts, and his own positions that will impact the future of Microsoft and the entire technology industry for years to come.

Getting away from the daily pressures for an extended period of careful thought and consideration in his “Think Weeks” are the way Bill Gates works on the vision of the company, determines which new projects to pursue, and plans for the future.  It is the same rigorous work and thought process that CEO’s of every business should pursue.  

Do you?  

Now, I’m not suggesting that you should take a “Think Week” twice a year.  Your business is much less complex than Microsoft.  But, if your business is to remain competitive in this constantly changing business environment and grow, you must take some think time.  Maybe you need to take a “Think Hour”, a “Think Afternoon”, a “Think Day”, or even a “Think Weekend” with no telephones, no people, and no distractions.  

Create your own virtual remote island (even if it is just behind your closed door with a “do not disturb” sign and a disconnected phone) to put the interruptions of the day-to-day far away.  Have an agenda.  Ask yourself some hard questions:  

“Is the business on track to fulfilling my vision?”
“Is the growth rate or profit rate on target?”
“If not – what can we do to improve it?”
“Where is my industry headed in the next five years and how do I position my business to take advantage of the changes?”
“What threats are looming on the horizon from competitors and marketplace dynamics?”
“What can we do to elevate productivity, morale, teamwork and cooperation?”
“How can we elevate our leaders to become inspiring, motivational leaders?”
“What changes in our company culture, policies, strategies, and tactics are necessary and how do we implement them?”

So, set aside an hour, an afternoon, a day in your virtual deserted island.  If Bill Gates can get away from his multi-billion dollar business for two “Think Weeks a year you should be able to do it for two “Think Afternoons.”  It will make a difference.

Question or comment to Larry:

Creative Metrification – How to Measure the “Soft” Issues

Some things in business are relatively easy to measure – these are the “hard” metrics such as sales volume and profit, production per man-hour, time without an accident, shipments without error, number of customers served, on-time delivery, etc.  “Soft” metrics such as customer satisfaction, employee engagement and satisfaction, conflict resolution, and are more difficult to quantify, but with a little creativity, measurement can be made of just about anything.

It is a process I call “Creative Metrification” but before I tell you more about it, I have to first issue a disclaimer.  It is important to note that “soft” metrics create approximate numbers, not exact measurements that would satisfy a scientist or an engineer however “soft metrics” are much more precise than a “gut” reaction or a “hunch”.  They work best if you first establish a baseline starting point to use as a basis for comparison and, from that point, new  data will show trends.

As an oversimplified example, let’s say the goal is to increase sales using a strategy of increasing “Customer Satisfaction.”  The logic is that, if we can make our customers happier with our products and services, we will increase sales to returning customers and / or decrease defections – about as “soft” a metric as there is.  Is “Customer Satisfaction” measurable? Yes!  It can be measured by taking a count of non-returning customer per month and / or a count of customers who return within a normal time period (this is dependent upon normal buying cycles of your industry).

We can measure “Customer Satisfaction” by creating a metric I’ll call “Customer Dissatisfaction Rate.” The measurement will be the number of complaints you receive each month.  We also keep track of the reason for complaint (product quality, errors in order picking, late delivery, staff attitude, price, etc.).  From this data we can create a prioritized action plan to eliminate or significantly reduce the number of complaints and therefore the number of dissatisfied customers.  If the action taken to reduce complaints is working, over time the number of complaints, and therefore dissatisfied customers will decrease.  All things being equal, sales revenue should then be increasing.  Other ways of measuring “Customer Satisfaction” are the number of referrals, responses to telephone or mail surveys, returning customers (and perhaps time between sales to returning customers also).

Is this an exact process?  No, but the final measurement is whether improvement is being made and the only way to measure improvement is by using Creative Metrification.

Question or comment to Larry:

Instead of a “Brand” think “Tattoo”

Cow with Company BrandsBack in the Old West, ranchers used to brand cattle to indicate ownership since cows look pretty much the same except to another cow.  The “brand” was the primary mark of differentiation.  Today we think of “branding” in much the same way, as a means of permanent identification.  

Now fast-forward 150 years and let’s update branding from the days of the Old West to the current era.  Companies brand themselves, their products, their services so their audience can easily and immediately identify them, remember them and what they stand for in graphic terms. 

Today it has become increasingly common for people to self-brand themselves by applying graphics, in the form of tattoos which has become the permanent identification technique for a generation.  Instead of cows being tied up and held down against their will while a painful hot iron is held against their skin, those who get tattoos do so by choice.

Many, if not most products are undistinguished (and are close to indistinguishable) from their competitors except for marketing techniques, such as branding, that are used to communicate virtues such as perceived value and quality.  I seriously doubt whether most people could distinguish the company that produces a sneaker if the logo (think Nike “Swoosh” or the New Balance “N”) were torn off or covered.  A product or service is branded to communicate those attributes and a great deal of effort, time, and money is invested in the process.   

Let’s update the branding process and make it more relevant to our century.  Companies that have a strong brand are able to get their customers to volunteer to be one of their advertising mediums using tee shirts, caps, bumper stickers, and yes, even tattoos to identify themselves with their favored product or company.  To a certain extent, the customer’s brain is tattooed with the self-identified cult status of the favored product.  This takes a strong and sustained effort to affect the tattoo on the brain, but once it’s done, like a skin tattoo, it is permanent and well worth the effort.  

Question or comment to Larry:

Think Outside the Cup and Saucer

There were four of us at dinner.  After the meal, the server delivered the dessert menu and, when ordering we also ordered coffee.  Three ordered “regular” coffee, the fourth requested “decaf.”  Desserts and coffee were served and enjoyed while our conversation continued.  Every so often a server, carrying two pitchers, refilled the coffee cups and knowingly poured three cups from one pitcher and one from the other.  He never asked who wanted which type of coffee.

As we were leaving, one of us asked the server how he knew which of us preferred “decaf.”  “Simple, the three of you drinking “regular” coffee have black cups with white saucers, we serve “decaf” in white cups with black saucers.”  Instead of “thinking outside t­­­­he box” these people have been “thinking outside the cup and saucer!”

As customers at restaurants, we experience this situation all the time.  Our conversation is interrupted so we can get a coffee refill.  It’s not annoying because it is so commonplace.  But, when our conversation is not interrupted because someone solves the problem, it seems like a small wonder and is an example of excellent, innovative management.

What an elegant, easy solution.  The server doesn’t have to interrupt the conversation to find who is having which coffee, there is no mix-up or confusion, and everyone gets what they want.  More importantly, it demonstrates how deeply the “customer satisfaction” thought process has gone in that particular establishment, and it is a lesson for everyone who manages a business.  

Imagine how many opportunities for little confusions exist in delivering any product or service, from not greeting a customer properly to forgetting to give back a credit card, and everything in-between.  Management that really wants to deliver a superior customer service experience systematically looks at every possible opportunity for confusion or error and attempts to eliminate these confusions as they are identified.  In the case of the cup and saucer solution, there was no cost expended to solve the problem, just a little time and creativity.  

Since that experience at the restaurant, I’ve been thinking about how I can make my actions more automated, more efficient, more customer-centric.

So I’d like to challenge you to identify a little confusion or opportunity for error in your business that can be overcome by thinking through the process and developing a low cost / no cost solution.  Instead of thinking outside the box, let’s call it “thinking outside the cup and saucer.”

Question or comment to Larry:

Right This Way Miss Alice

Remember reading “Alice in Wonderland” or reading it to young children?  

As I recall, Alice goes skipping down a path in Wonderland and comes to the proverbial fork in the road.  She stops, looks down both paths to see what lies ahead, and discovers she is in a quandary.  Suddenly she spots the Cheshire Cat who grins and inquires about her indecision.

“What’s the matter little girl?” the cat asks.
She tells the Cat, “I don’t know which way I ought to go from here?” 
“That depends a good deal on where you want to get to,” said the Cat.
“I don’t much care where,” said Alice.
“Then it doesn’t matter which way you go,” said the Cat.

Alice was floundering because she, like many in business management, have not defined what they want or where they need to go.  They don’t have firm short-term and long-term goals.  They don’t delegate, lead, or follow-up. Often, like Alice, who jumped down the Rabbit’s Hole, they jump at opportunities without considering whether those opportunities are appropriate, affordable or too risky and then have to deal with the results later.  

They manage like Alice does, relying on their gut reactions or intuition or whim.  Their strategies and tactics change so often, their staff feels whipsawed by starting and stopping projects with no discernible purpose or focus, which undermines morale and initiative.  It’s not a good way to run business, but all too often it is the way many businesses are managed. 

If you, unlike Alice, do care about where you and your business are going, “then it does matter which way you go.”  Businesspeople who know and understand their goals and ambitions write business plans, marketing plans, and action plans.  They develop projects that are appropriate to their plans.  They don’t find themselves turning and spinning like Alice at the Mad Hatter’s Tea Party.  

I’d love to tell you that, when you know where you want to go, the road is smooth and traffic flows.  Unfortunately, in the real world, even with a good roadmap (or business plan) the road is often bumpy and potholes abound, but without disciplined planning, that road will seem as crazy as “Wonderland.”  So, take the time and write your roadmap to success instead of jumping down that Rabbit’s Hole.

Don’t follow Alice’s example; know where you want to go, and you will stay on the proper path to long-term success.

Question or comment to Larry:

At First You Don’t Succeed… Try, Try Again

It’s a sorry and expensive fact that, for advertising to be effective, it takes multiple impressions over a period of time.  Results of survey after survey show that it takes six to ten “views” before the viewer is even aware of an advertiser’s existence, and unless the recipient is actively in the market and looking for the advertised product or service, it will take even more impressions to get them to be receptive to your offer.  

The average person is exposed to hundreds, even thousands of advertising messages every day and acts on a very, yet percentage, so most advertisers get discouraged if immediate results are not spectacular (or at least pretty darn good).  For advertising to be successful, one must consider their advertising to be a long-term investment and have the capability and the discipline to give an advertising campaign the time to work.

Before going further, it’s important to be aware of differences in media.  Each potential medium will have different factors for success. Social media, broadcast tv and radio, print advertising, direct mail, and billboards all have their advantages and disadvantages relative to costs, geographic reach, demographic selections, and lead time requirements.  Research is critical to success.

There is a four-step process for planning a successful campaign:

  1. Establish reasonable goals (example – the number of new customers or inquiries for an advertised product or service).
  2. Determine, using industry data or cash flow projections, how much of an advertising investment it will take to achieve the stated goals and whether that amount is reasonable and affordable for your business.
  3. Develop a small-budget “test” advertising campaign to see if the results indicate that a larger investment will meet the stated goals.
  4. If the “test” ads, after repeating them six to ten times, are not having the desired results, develop another offer.  If they do bring the desired results, expand the campaign into more markets and / or more media.

It is the testing of media selection, message, and offer against the goals that will establish a successful campaign.  Sure, you might get lucky and find success with your first test, but chances are you will need to try multiple tests to develop advertising that works.  If you approach advertising as a long-term commitment and budget for the long term, you will be minimizing risk and, when you hit upon the right message, reap the rewards of repetition.

Question or comment to Larry:

An Open and Shut Case… or Not

A couple weeks ago my wife and I went shopping.  We are thinking of upgrading something in our home and have been spending time getting ideas, checking out our options, and comparing style, price, and quality.

We drove up to the front door of one potential vendor.  The sign said, “CLOSED.”  I started backing the car out of the parking space muttering something about, “Gee they shouldn’t be closed on a Saturday morning.”  My alert wife noticed some lights inside and other cars in the parking lot, so I waited while she tried the door.  Sure enough, they were open.

We walked around, looking at some samples.  The salesperson showed us their products, nicely pointed out the features and benefits, and explained various options while explaining their services.  We were impressed by a well-presented, but not pushy, presentation.

Later, while leaving, I glanced at the “CLOSED” sign and went back to tell the salesperson.  “Wow! No wonder it’s been so slow today, you’re the first people that came in, and usually we’re pretty busy.”

It was obviously an oversight, as everything about this store was high quality.  The showroom was attractive and well maintained.  But how many people didn’t try the door that morning?  How much business did they lose?

Something little like flipping the sign to “OPEN” can mean so much to the ultimate success or failure of a business.

So, instead of rolling my eyes and making “tsk, tsk” noises, I’ve tried to use this experience as a learning moment, and I challenge you to try as well.  I asked myself, what obvious little details have I been missing?  I’m embarrassed to type further, but in the interest of full disclosure:

  • Forgetting to attach attachments to emails.
  • Overlooking an appointment in my calendar (luckily, I noticed it in the nick of time, but I could have very easily missed an important meeting.
  • Rushing through a task and not editing it properly, resulting in sending something out with a grammar error.

While any of these details could have resulted in the loss of business in one way or another, fortunately, I was able to correct them before there was a potential problem. But I can assure you, I’m taking a second look at everything to ensure I don’t miss the little details.

You should do it also; a customer is easily lost over little details, so don’t let it happen to you.  

Question or comment to Larry:

What’s the Difference Between a Hair Stylist, a Dental Hygienist, a Lawn Service and a Tax Accountant?

There is no difference – they all sell products their clients will need again on a regular basis.

Think about it, just as you are about to say “good-bye” to your hair stylist or as you take beautifully groomed Fido from the dog groomer, you get the question, “Shall we make our next appointment now?”  I’ll bet that, as long as you are satisfied with the quality of the work and value, you say, “yes” and make that appointment.  After all, you know that both you and Fido will need to be groomed again soon, and so you opt for convenience instead of waiting for that fateful day when you look in the mirror, or at Fido, and determine that it’s time to get it done.

Most businesses sell products or services that are cyclical in their “need” curve.  In other words, the client has need of your product or service at regular intervals of time.  Examples are a lawn service (at obvious intervals), a tax accountant (at least annually, often monthly or quarterly), a house painter (five to ten years), furnace and air conditioner services (seasonally), and the dental hygienist (semi-annually or annually) etc.  

The customer / client / patient, once finished with the transaction, knows that they will be in need of this service in the future.  The vendor, once finished with the transaction, expects or hopes that the customer will remember to come back when they next need the service, but why hope that they come back when it is so easy to just ask, “Shall we make our next appointment now?”.  That is the best possible moment to pre-sell the next purchase… right then, when the customer is the very happiest with their purchase. 

Yet, satisfied customers, even if they are happy with the product they purchased, are lost every day because:

  • They don’t remember who provided that service last time.
  • A competitor is able to capture your customer by promoting aggressively.
  • It was more convenient for them to go elsewhere.
  • The vendor did not pre-sell the next sale.

Companies that have a method of pre-selling their program and an easy way of offering it to customers at the best possible moment are able to retain their customers longer and grow their businesses faster.  It might be as simple as, like the hair stylist, just asking for the next appointment.

Question or comment to Larry:

Angry at “Blather-on-Hold?

I recently received a package that I ordered online, and when I opened it, I found that the product inside was defective.  There was a “Customer Service” phone number to call for return authorization and replacement, so I called, expecting to hear a recorded message asking me to select the department I wanted.  But then there I was, placed in “Hell-on-Hold,” listening to the same message about “sale” items, how great the company is, and how much the company appreciates me, while the annoying message repeated itself again and again and again.  I finally hit the button for my speaker phone and turned down the volume to “just loud enough to know when a live person answers the phone” while I sat there “Angry-on-Hold”.

I’m sure you’ve been there too, being “angry-on-hold” and getting angrier while holding the phone, waiting for the person you need to talk to to get on the line.  That annoying music begins to hurt, and the little hairs on your neck stand on end whenever when that cloyingly cheerful recorded voice comes back on the line to thank you for waiting, and then you have to listen to all their commercials again and again.  

If your company has an “on hold” message system, you certainly don’t want your valued customers and prospects to suffer that way, do you?  Better check your message today.

If you have a music / message-on-hold system, enlist a number of volunteers to listen and evaluate it from the perspective of a valued customer or prospect.  Do not have someone from your company do this – you want people who are aware enough of your company to phone you, but who are not intimately involved – you want a naïve opinion, not a preconceived opinion.  Ask if they feel your recording is: Enjoyable? Entertaining? Informative? Acceptable? Annoying?  

It doesn’t take much for a caller to form an opinion of the type of service they can expect to receive from your company by the smallest detail.  A well-designed recorded message can make the caller receptive, and they will wait “on-hold” longer.  An inappropriate, badly spoken, or annoying message can make the caller angry and hang up faster, and then you’ve lost a customer.

The product I was purchasing is pretty much a commodity, so, when “the next available operator” finally came on the line, I asked for a refund instead of a replacement and bought the same item somewhere else.  It was the only way I felt I could register my dissatisfaction for being forced to listen to their “Blather-on-Hold”.

Question or comment to Larry:

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