Three important people you want to be close to you

Why do birds suddenly appear
Every time you are near?
Just like me, they long to be
Close to you.

In 1970, the brother/sister act, The Carpenters, took these lyrics and the rest of the song, “Close To You” to the top of the charts. Velvet-voiced Karen sang lead, with brother Richard contributing lyrics and sweet harmony.

Out here on Main Street, small businesses should hum that tune every day to remind themselves about the three most important stakeholders they want to be close to.

Customers
Every business, large and small, longs to be close to its customers. But getting customers to return the favor is the challenge. Time was, when a business was a critical link to certain products and services for customers. Longing to be close to us, customers – and their loyalty – weren’t so illusive. Today, almost everything needed by customers can be purchased within a few miles of your business from competitors that didn’t exist when the Carpenters topped the charts. Throw in the Internet and e-commerce and what isn’t a commodity today?

The good news for Main Street is that small and nimble increasingly trumps big and strong. With few exceptions, we can’t compete with the big guys on price, selection, or brand intimidation. But we can make customers want to be close to us is by scratching an itch the big boxes can’t always reach: customization.

If you want customers to suddenly appear, find out what keeps them up at night. And don’t expect the answer to be a burning need for your product or service. If you deliver a customized solution, customers will long for your business because you added unique value they can use. And here’s the silver bullet of customer longing: Help your customers help their customers.

The other good news is that customization justifies higher margins than off-the-shelf offerings. If it’s truly focused on the customer’s solution, they’ll pay for it and come back for more.

Vendors
Once-upon-a-time, a vendor was a company from which you purchased inventory, raw materials, and operating supplies. Today, if a vendor isn’t longing to be your partner, you’ve got the wrong vendor.

Of course, we’re at once a customer to vendors and a vendor to customers. Consequently, we have to find vendor-partners as well as be one. In these roles, it’s important to understand a concept that has become part of the romance between 21st century vendors and customers: seamless.

In a world of outsourcing as a management strategy, the goal is not merely to reduce in-house staff. If outsourcing is to work, products and services MUST be delivered so seamlessly to us by our vendors, and by us to our customers, that operating efficiencies actually improve.

Small businesses have a greater opportunity today to accomplish the hand-in-glove level of closeness required for seamless delivery. And we can’t deliver seamlessly to customers unless vendors long to be seamlessly close to us.

Employees
Back when the Carpenters were belting out hits, the employer/employee relationship was based largely on the Dominator Management Model, which is to say, not much closeness. Employees longed for the perceived job security and benefits of a paternalistic employer. But in the 21st century, employees are drawn closer to leaders.

Today, employers must be able to show employees that we long for them. The best way to demonstrate our longing is to close the gap between what the company needs and what employees want. This means finding and keeping employees who become stakeholders.

If you want employees to long for you, you have to suddenly appear as a partner longing to support their professional and personal fulfillment. And no one can do this better than small business.

Write this on a rock … Find and keep customers, vendors, and employees who long to be close to you.

Six steps to grow your business with referrals

Do you have enough customers? Here’s a better question: Do you have enough of the right kind of customers?

Do you agonize and strategize over the marketing plan you’ve designed to position offerings in front of your profile prospect? What’s the right message, platform, frequency, etc.? And do you then pray that the precious cash you’ve commit to marketing crosses over that pivotal line from expense to investment?

Agony and prayer; not a great strategy, right? But if this sounds familiar, you’re in good company. Marketing legend, John Wanamaker (1838-1922) once lamented, “Half of my advertising budget is wasted; I just don’t know which half.” It’s true, marketing metrics have come a long way since Mr. Wanamaker’s time, but that emerging science has been somewhat marginalized by increasing pressure from the digital marketplace. Indeed, getting customers on the proverbial dotted line is still challenging in the 21st century, especially for small businesses.

Beyond marketing, perhaps the primary reason for our customer acquisition challenge can be attributed to a human trait that’s at once primordial and unfortunate: We make things harder than they have to be. There are many examples, but arguably one of the most dramatic is also one of the simplest to fix: failure to ask for referrals.

Business referrals are now, and have always been there for the picking. And they’re as old school fundamental as they are new school relevant. So why don’t more people take advantage of this low-hanging fruit? It’s that can’t-get-out-of-my-own-way thing. Too many salespeople and organizations don’t have a referral strategy and teach referral practices.

Even though getting referrals is fall-off-a-log easy, there are specific practices to follow. Here are six I recommend to help you get started with your strategy.

  1. Spend as much time developing a referral strategy as you do a marketing strategy. When you do, two things will happen very quickly: you’ll gain new customers you weren’t getting from marketing, which will take performance pressure off of your marketing plan.
  2. Identify existing customers who like what you do. Each one is that valuable asset called a center-of-influence (COI).
  3. Explain – in person – that you need their help and how they can help you. For example: “Mr. Smith, thank you for your business over the years. We’d like to have more customers like you. I’m sure you ask your customers for referrals, and would like to ask if I may do the same with you.”
  4. Ivan Misner, founder of Business Network International (BNI) furnishes the next critical question: “Who do you know who …has your high standards?” “…uses the products we offer?” “…you would like to help do business with good companies like ours?” (Your “Who do you who …” here.)
  5. When you get a referral, thank the COI profusely before, during and after the subsequent contact, especially if you get the business. One thing I always say to my COIs is, “If a referral is a friend (or customer) before I contact them, I promise they will still be after I talk with them.”
  6. For millennia, business referrers have been paying it forward. As Ivan Misner says, “Givers gain.” The best way to have a sustainable referral strategy is to be an active referrer yourself. It’s much easier to ask someone for a referral to whom you’ve just given a referral.

If you’re still not sold on referrals, look around and you’ll see many successful businesses that grow only by referrals – essentially no marketing. There’s one primal reason why referrals can be more productive than marketing: People are hard-wired to want to help other people when they’re asked.

Get out of your own way and make a full commitment to creating and executing a referral strategy.

Write this on a rock … Referrals are low-hanging fruit just waiting for you to harvest.

Defending your business against Big Boxes and Cyber-Boxes

Besides the traditional, local competitive landscape small business retailers must navigate every day, they also feel pressure from two other fronts to which they’re typically less adept at responding:

  1. The Big Boxes, anchored around the corner.
  2. Cyber-competitors, untethered in the Internet.

And pressure from the second one is increasing every day.

Here are a few ideas on how Main Street businesses can minimize the pressure from these two:

Big Box competitors
Let’s begin with these two truths:

  1. Unlike Big Boxes, a small business doesn’t have to conquer the world to be successful.
  2. The price war is over and you lost.

Your most qualified prospects and reliable customers are also the least likely to spend much time or money with a Big Box. The same feeling that attracts them to the customization and connection of your small business also causes them to be unimpressed by size and underwhelmed by poor service. Those who don’t fit this profile were never real prospects for you anyway; get over it – let them go. Your job is to re-enforce that “connection/customization” emotion by delivering value, not price, and quit trying to be something you’re not – big.

Online competitors
Those same customers just mentioned, who love your small business special sauce, still expect you to provide some level of online support. Your brick-and-mortar store doesn’t have to conquer the e-business world to keep customers happy, but you do have to show up online. Here’s what that means:

  1. Two words that reveal why you MUST have a professional presence online: local search. Prospects and customers use local search every day – especially on smart phones – to find companies and consider their offerings. Disregard the imperative of local search optimization at your peril. There are professionals who can help you with this – let them.
  2. Besides a regular website, yours must also be mobile-ready, including a hot phone link and directions. Nothing about your business’s past was mobile, but mobile will define your future.
  3. Prospects and customers increasingly expect businesses they like to connect with them with useful information, service announcements, and special offerings. There’s a reason the special offerings were listed last. “Connect” means by any means: email, text, Twitter, Facebook, etc. If you aren’t asking prospects and customers for their electronic contact information, which platform they prefer, and then connect with them there, your business will suffer the slow death of irrelevance. And remember, some will still just want face-to-face.

You can compete against the Big Boxes by merely not trying to be like them. And regarding traditional best practices and the virtual world, remember this: it’s not either/or, it’s both/and.

Write this on a rock … You don’t have to conquer the world; just show up and be yourself.

Face-to-Face: Old School fundamental and New School cool

For 172 years, communication technologies have sought relevance in an increasingly noisy universe.

Now, well into the 21st century, there is actual management pain from an embarrassment of riches of communication innovations. And this discomfort is especially keen when staying connecting with customers: Should you call? Email? Text? How about IM?

And when should you use social media platforms? I’ve had customers who want me to connect with them on Twitter. Others send me notes on LinkedIn.

But in an era where there’s an app for everything, there is one connection method we must never be guilty of minimizing. From Morse to Millennials, in-person connection has retained its relevance as Old School fundamental and New School cool.

Indeed, face-to-face is the original social media.

Today, social media euphoria is being tempered by ROI reality. And as useful as each new communication resource proves to be, they are, after all, merely tools to leverage our physical efforts, not eliminate the basic human need for human interaction. Consider this story:

A sales manager (whose gray hair was not premature) noticed the sales performance of one of his rookies was below budget for the third consecutive month. Of course, he questioned the numbers previously but had allowed his better judgment to be swayed by plausible explanations. Now the newbie’s sales was trending, but in the wrong direction.

Upon more pointed probing, the manager discovered the reason for loss of production: too much electronic and not enough in-person connections. The rookie was relying too heavily on virtual communication at the expense of opportunities to get in front of the customer.

It turns out lack of training, demographic reality and not enough “rubber-meets-the-road” experience left the young pup uncomfortable and unprepared to ask for and conduct meetings, like a proposal presentation. He wasn’t benefiting from how the success rate of growing customer relationships can increase when critical steps are conducted in person. Consequently, this manager immediately developed a training program that established standards for how and when to integrate all customer connection tools, including face-to-face.

If your sales performance isn’t trending the right way, perhaps your salespeople need help getting in front of customers, particularly at critical steps. Like the manager above, you may need to establish specific, measurable and non-negotiable standards for when face-to-face meetings should take place.

From telegraph to Twitter there is one connection option whose relevance has borne witness to every one of the others: in-person contact. Let’s remember John Naisbitt’s prophesy from his 1982 book, Megatrends: “The more high tech we have, the more high touch we will want.”

Write this on a rock … As the original social media, face-to-face will always be relevant.

Four marketplace truths about your customers

Spend time in the marketplace and you’ll have many close encounters of the third kind with the most interesting species in all of nature: the human being. And as we have learned, the nature of humans isn’t much different from other animals: All need to breathe, eat, drink, procreate and survive.

But there is something that clearly sets humans apart from other fauna: sentience. And one of the manifestations of being self-aware is that beyond what humans need, they also want.

Every human who owns an automobile will need to buy new tires. But what they want is to keep the family safe while not spending a Saturday buying tires. So if you’re in the tire business, should you advertise tires, which are commodities that the Big Boxes can sell cheaper than your cost? Or should you develop and market a customer loyalty program that combines peace of mind for your family with pick-up and delivery? How about this tag line:

Let us worry about when you need new tires and get your Saturday back.

Basically the hairless weenies of the family animalia, human beings need shelter, but we want a home. So if you’re a realtor, should you focus on the obligatory list of residential features, or how the physical setting and interior space fit what you’ve learned is your customer’s sense of a home?  Try this on:

Mrs. Johnson, countertops can be replaced. What I want to know is how much will you love seeing the sun rising over that ridge as you enjoy your first cup of coffee every morning?

Humans, like thousands of other warm-blooded species, need to eat every day, whether they get to or not. But unlike other animals, only humans want to dine. If you own a fine dining restaurant, do you emphasize the food, or the potential for a lasting memory? Check it out:

Long after you’ve forgotten how wonderful our food is, you’ll still remember that table for two in the corner or the booth next to the fireplace.

Small business success requires understanding these marketplace truths:

1. What customers need are commodities driven by price.

2. The price war is over, and small business lost.

3. What customers want is anywhere from a little bit more to everything.

4. Customers will pay more for what they want – charge them for delivering it.

As a small business success strategy, delivering what customers want or selling commodities they need, is as Mark Twain said, “like the difference between lightning and a lightning bug.”

Write this on a rock … Find out what humans want, deliver it, and charge for it.

What politicians, small business and mice have in common

maze-2Almost 20 years ago, Dr. Spencer Johnson wrote a legendary book titled, Who Moved My Cheese? It tells a story about four characters who ate only cheese.

Early in the story all four characters went to the same place in their world – a maze – to get cheese. The first two were not picky about their cheese or where they found it – it was just food. In fact, the current place in the maze where they found and ate cheese was literally just that. So when someone moved their cheese, they immediately started looking for the new place where cheese was being put.

For the second two characters in Johnson’s story, cheese represented more than food; they had allowed themselves to become defined by the specific cheese found in that specific place in the maze. To them, this cheese was more than nourishment, it also represented their esteem, success and happiness. You’ve heard of being hidebound. Well you might say these two were cheesebound (my term, not Johnson’s), which really wasn’t a problem until someone moved their cheese.

Twenty-five years ago, in his book (and film), Paradigms: The Business of Discovering the Future, futurist Joel Barker defined a paradigm as a set of rules that: 1) establishes/defines boundaries; and 2) tells you how to be successful within those boundaries. Barker says paradigms, both written and unwritten, can be useful until there’s a shift, which is what happened to the cheesebound characters in Johnson’s story. When someone moved their cheese, instead of looking for new cheese like their maze-mates, they whined and dithered so long in the old place – now devoid of cheese – that they put their survival in jeopardy.

Johnson’s cautionary tale – and the two sides of Barker’s paradigm coin – apply to all parts of life, especially politics and business.

For generations, the Democrat and Republican Parties each showed up at the same corner of their own political maze where they had always found the same cheese. Like the second characters in Johnson’s story, both parties had been nourished and defined by the cheese they found in that specific spot. But when someone moved their cheese, as the electorate is doing now, the cheesebound members whine and struggle to maintain their identity instead of taking action to find new cheese. In his book Johnson said: “Old beliefs do not lead you to new cheese.”

Meanwhile, Bernie Sanders and Donald Trump are like the first two characters in Johnson’s story. Neither define themselves by the old cheese in the old location. They went looking for and, to the surprise of their party leadership, found new cheese. Johnson says, “Movement in a new direction helps you find the new cheese.”

Small business owners should watch the clinic that the Democrats and Republicans are putting on this year on the wages of being cheesebound. Like the electorate, customers are moving cheese and shifting paradigms all over the marketplace . You cannot afford to become cheesebound.

Write this on a rock … Blasingame’s Law of Business Love: It’s okay to fall in love with what you do, but it’s not okay to fall in love with how you do it.

Are you asking the Outsourcing Power Question?

Biutou Doumbia lives in a tiny village in Mali, in western Africa. She and her family live in poverty, very close to the line between survival and, well, you know.

Oh, one more thing: Biutou is a small business owner. She makes and sells peanut butter.

In Mali, as reported in a Wall Street Journal article, peanut butter is made the same way African women have made other staples for millennia: by grinding the seeds on a rock with a wooden pestle.

You might say Biutou’s operation is vertically integrated: She grows the peanuts, then manufactures, sells and distributes her product.

Over two centuries ago, in The Wealth of Nations, Adam Smith explained how markets are made by the division of labor. And free markets created capitalism, which Ayn Rand called, “the Senegalonly system geared to the life of a rational being.”

Biutou doesn’t know Smith or Rand from a warthog – she’s illiterate. But she is one of Rand’s rational beings. And as such, she recognized the division-of-labor efficiencies offered by a diesel-powered grinder/blender when it became available. Now for 25¢ and a 10-minute wait, the sack of peanuts Biutou carries to the central grinding location turn into better peanut butter than she could make pounding all day with a pestle.

So Biutou now practices outsourcing, a division of labor process which is the employment of contractors to create efficiencies. Outsourcing is a valid business strategy, as is its opposite – you guessed it – insourcing, the process of removing vendor layers, usually to get closer to customers.

These two strategies are as different as chocolate and vanilla; but, like ice cream, choosing one doesn’t mean the other is wrong, just different. When Biutou practiced insourcing she didn’t have a choice. You have many choices; but are you choosing wisely?

One of the things every 21st century small business must do is focus on core competencies: what you do that makes your business valuable to customers.  Everything else, theoretically, can be performed by a specialist in your non-core activity.

Take a look at your own operation to see if – like Biutou – you can find efficiencies and recover time through outsourcing. Ask yourself and your staff Blasingame’s Outsourcing Power Question: Must this task be done in-house? The answer will come from these three questions:

• How much control do we lose, and can we live with it?

• What impact will our decision have on customers?

• How much of not using outsourcing is about ego?

Remember, any decision to employ outsourcing – or not – should be driven by the desire to seek efficiencies and improve customer service.

Write this on a rock … Blasingame’s Outsourcing Power Question: Must this task be done in-house?

The Age of the Customer Power Question: Ask it and then deliver

One hundred twenty years ago, lawyer Paul J. Harris moved his practice to Chicago. While he enjoyed the new opportunity his adopted city afforded, Harris missed the friendly relationships he knew growing up in a small Vermont town.

One fall day in 1900, while walking around the Windy City’s North Side with Bob Frank, Harris noticed the connections his friend had made with local shopkeepers and it made him long for this kind of interaction. He wondered if, like himself, other professionals who had emigrated from rural America to the big cities, might be experiencing the same feeling of loss.

2013-0504-Paul-Harris-DinnerOver the next few years, Harris couldn’t stop asking himself this question: Could such human connection activity be channeled into organized settings for professionals and business people? Today we know the answer to Harris’ question is civic groups, but at the dawn of the 20th century, this innovation had yet to be invented.

Then on February 23, 1905, Paul Harris put his connection question to the test when he and three friends founded the world’s first civic club. They named it Rotary because they planned to rotate weekly meetings between each member’s office.

Now an international success story, 33,000 Rotary clubs around the globe are still based on Harris’s founding principle of “Service above Self.” Harris’ original dream was to connect people for the benefit of all parties. He probably didn’t use this term, but his 1905 connecting formula is the modern definition of networking.

Three-quarters of a century later, Ivan Misner had a dream of creating a structured networking model when he founded Business Network International. Misner’s goal was very much like Harris’s but with the specific purpose of business people meeting regularly to help each other grow their businesses.

Though not a civic organization, the motto of BNI’s 7,400 chapters worldwide, “Givers gain,” is completely compatible with Rotary’s founding pledge. If you turned either one into an offer to someone else, you get what I call the Age of the Customer Power Question: “What can I do to help you?”

The significant international success of Rotary and BNI has revealed and reinforced two important truths: 1) networking is an essential professional discipline; and 2) putting others first is powerful.

This month Rotarians will celebrate the 111th anniversary of Paul Harris’ dream-come-true, and BNI celebrates International Networking Week. Whether you participate in a civic club, a BNI chapter, your local chamber of commerce or other group, become a more frequent, accomplished and selfless networker. Because face-to-face networking is the original social media and it’s still important.

Write this on a rock …In the Age of the Customer, you don’t have to join any group to ask and deliver on the Power Question.

Four factors that stopped the American Startup

As the financial crisis was being resolved in December 2008 I heard someone say, “Wait ’til the startups get going – they’ll end this recession and crank up the economy again.” Of course, this maxim had caught on previously because when you start a business, you create at least one job.

But as I thought about how that entrepreneurial expectation had been true in past recoveries, I considered the environment we were entering and concluded that this recovery was going to be different. Indeed, in my 2009 predictions I reckoned that there were going to be fewer startups in this recovery cycle than ever before based on two conditions I saw coming. Unfortunately, things got even worse due to two factors I didn’t forecast.

Typically, the founding of most Main Street startups are funded initially with access to the personal credit and home equity of the founders. I saw problems coming for both of these sourcesbecause:

1.   One morning in February 2008 – months before the financial crisis but with storm clouds on the horizon – millions of credit card holders woke up to discover their card issuers had withdrawn any available credit they had the day before.

2.   Then, over the next year, the bursting of the real estate/mortgage bubble – the prime cause of the 2008 financial crisis – resulted in wiping out or significantly reducing the home equity of millions of U.S. households.

The two factors I did not forecast are:

3.  The youngest – and largest – of marketplace participant groups, Gen Y and Gen X, age 20-44, apparently are not as entrepreneurial as their Baby Boomer parents were at that age. According to the Kauffman Foundation, since 2009 startup activity for those two demographics has been declining.

4.  In my half-century career, and my study of the history of the American marketplace, prospective founders of new businesses have never been subjected to the level of anti-business rhetoric and policies from the federal government as they have in the past seven years.

One of the seminal findings of the Global Entrepreneurship Monitor (GEM) is a direct connection between a country’s entrepreneurial vitality and its economic growth. The Great Recession ended in June 2009. But the subsequent U.S. recovery, now well into its sixth year of moribund performance (2% annual average GDP growth), has been stuck in a kind of circular reference: expansion-creating startups aren’t happening because of the four entrepreneurship-repressing factors.

Write this on a rock …Real economic expansion – more than 3% growth – will require a return to favorable entrepreneurial conditions lost since 2008.

Next week my column will reveal counter-intuitive ways the lack of startups since 2008 have been positive.

Replace worry and fear with business performance

In his book, Blue Highways, William “Least Heat Moon” Trogdon said his Osage Indian grandfather, William “Heat” Moon, taught him this about worry: “Some things don’t have to be remembered; they remember themselves.”

Owners are justified in worrying about their small businesses, but sometimes they waste emotional energy worrying about things over which they have little or no control, or aren’t likely to happen.

In the movie, Bowfinger, Eddie Murphy played Kit Ramsey, an action movie star also famous for being a pathological worrier. He leads a frightened and miserable life because he worries about strange things that would never happen.

Ramsey’s greatest worry was being captured, killed and eaten by space aliens. He also worried about being crushed by a gigantic foot, or that his body might burst into flames. Pretty silly, huh?!

Watching Murphy play this unstable character is hilarious. But it’s not funny or silly when you and I worry about things that, like Ramsey’s obsessions, probably will never happen.

·  Instead of aliens, how much do you stress out about your business being killed and eaten by the dreaded Internet competition?

Stop obsessing about online competitors. First, you should be an online competitor yourself. Second, without a fixed base, online-only competitors may have what customers need, but you have something more powerful: You know what customers want.

·  Instead of being stepped on by a giant foot, do you obsess about being squashed by one of the Big Boxes?

In The Age of the Customer, prospects often rule you in or out before they know how much you charge. You can establish a level of relevance with prospects and customers that no Big Box can, as they continue to focus first on being competitive.

·  Instead of bursting into flames, do you wake up in the night obsessing that your business might go up in smoke if customers abandon you?

In The Age of the Customer, you actually should obsess about customer expectations, otherwise they won’t really leave, you’ll just become irrelevant.

Instead of living a frightened and miserable life like Kit Ramsey, put that energy into performing so well that any competitor would be hard-pressed to take customers away. Build relationships with customers to the degree that when something they want pops into their heads, as Trogdon’s grandfather would say, your company remembers itself.

Write this on a rock – Don’t live a frightened and miserable life. Replace worry with action and performance.

Jim Blasingame is author of the award-winning book, The Age of the Customer: Prepare for the Moment of Relevance.