Blog | The Age of the Customer – by Jim Blasingame | Prepare For The Moment of Relevance

What kind of seller are you? Hidebound or Visionary?

March 31, 2014 8:00 am , admin

Since 1993, control of the three major elements of your customer relationships—product, information, and buying decision—has been shifting from business to customer. As you may remember, I’ve identified this shift as a marketplace transition from the original age to the new one—the 10,000 year-old Age of the Seller is being replaced by what I call The Age of the Customer®.

As this shift plays out, two types of businesses—Hidebound Sellers and Visionary Sellers—currently exist in parallel universes, but not for long. Which one are you?

Hidebound Sellers

These companies are so invested and entrenched in the old order of control that they deny the reality in front of them. They can be identified by the following markers:

• Misplaced frustration: As performance goals get harder to accomplish, frustration makes those who deny the new realities think their pain is caused by a failure to execute.

• Bad strategies: It is said that armies prepare for the next war by training for the last one. So it is with Hidebound Sellers. Not only do Age of the Customer influences make them think they’re being attacked, but they persist in using Age of the Seller countermeasures.

• Destructive pressure: Convinced of execution failure, pressure brought to bear by management results in an employee casualty list instead of a growing customer list.

• Equity erosion: Defiance in the face of overwhelming evidence sustains the deniers only until they run out of Customers with old expectations, and their equity and access to credit are depleted.

Visionary Sellers

These businesses are adjusting their plans to conform to the new reality of more control by customers. Visionary Sellers are identified by these markers:

• Acceptance: They accept that the customer is now in control and make relevance adjustments to this reality.

Modern sales force: They hire and train their sales force to serve increasingly informed and empowered customers.

• Technology adoption: They offer technology options that allow customers to find, connect, and do business using their preferences.

• Relevance over competitiveness: They recognize that while being competitive is still important, today it’s just table stakes, and is being replaced in customer priority by the new coin of the realm: relevance.

In The Age of the Customer, Hidebound Sellers are dinosaurs waiting for extinction. Visionary Sellers are finding success by orienting operations and strategies around a more informed and empowered customer.

So what’s the verdict? Are you Hidebound or Visionary?

Posted in: Sales

Some thoughts on certainty

March 28, 2014 8:00 am , admin

As we conduct the due diligence on what’s next for our business, we seek the information that will help us acquire knowledge and create conditions that minimize the risks and maximize the opportunity. After all, we want to be as certain as possible that our next step is the right one, don’t we?

That’s an interesting word, certain. Webster says it means fixed, settled, determined, not to be doubted. But it’s a word that isn’t often found in business plans.

The 19th century president of Harvard University, Charles W. Eliot, said, “All business proceeds onbeliefs, or judgment of probabilities, and not on certainties.”

What do you think the marketplace – indeed, the world – would look like if business had been built more on certainties than beliefs? I think we would probably be closer to holding a stone ax on our hand than a smartphone.

It’s important to understand that on the entrepreneurial scale, each of us resides somewhere between the foolhardy and seekers of certainty. The challenge for entrepreneurs is to know when to seek certainty and when to move forward with our beliefs.

No position on this scale is better than another – the world needs all kinds of entrepreneurs. But understanding where we reside on the entrepreneurial scale helps us make better business plans.

Posted in: Entrepreneurship, Future Thinking

A community bank is not a little big bank

March 26, 2014 8:00 am , admin

Wall Street’s too-big-to-fail banks were the parents of the 2008 financial crisis. But one-size-fits-all reform reaction to the crisis by Congress and regulators is turning Main Street banks into collateral damage, as if they were too-small-to-matter. Here’s why anything that unnecessarily burdens community banks should concern every small business owner.

At the end of 2012, there were 7,092 banks insured by FDIC, of which 6,201, or 87%, were community banks with less than $1 billion in assets. Banks are classified by asset size, and the average community bank has just over $200 million in assets. By comparison, two big banks – Citigroup and Wells Fargo – are each the size of all 6,201 community banks combined.

Small business owners don’t care much about a bank’s asset size. But they care very much about certain bank characteristics that manifest uniquely in a community bank as its special sauce – relationship banking. To a small business owner a community bank…

… is locally owned and managed.

… takes into account a business owner’s character when making loan decisions.

… decides small business loans by a local committee, not credit scoring by a computer.

This definition is important because, by definition, all small businesses are undercapitalized. How this translates out on Main Street is that sooner or later, and more often than not, small business owners will need to avail themselves of a community bank’s special sauce.

According to the Independent Community Bankers of America (ICBA), even though community banks have only 20% of all bank assets, and hold less than 20% of total deposits (FDIC), they make almost 60% of small business loans. This tracks closely with our own research. In a recent online poll we asked small business owners about their banking relationship and 53% told us their primary bank, including for loans, was a community bank.

A recent FDIC study confirmed that community banks serve all Main Streets: Of the more than 3,000 counties in the U.S., about 20% are represented only by community banks.

Bank loans are the largest source of growth capital for America’s small businesses, which just happen to create over half of the U.S. economy and employ over half of its workers. Consequently, regulating Main Street banks the same as Wall Street’s too-big-to-fail banks puts in jeopardy America’s small businesses and the economy.

Small businesses and community banks are the twin pillars of America’s Main Street economy.

Posted in: Banking

Managing the three clocks of small business

March 24, 2014 8:00 am , admin

“Time Is On My Side,” is the title of one of the classic rock ’n’ roll songs performed by Mick Jaggerand the legendary English band, The Rolling Stones.

This bold statement works in a song, but for small businesses … not so much. The reason is because of the complicated dynamic between time and our most precious asset, cash.

In the marketplace, there are actually three different clocks at work that every business uses: one for operating expenses, one for sales and one for cash. Let’s take a look at how these three clocks impact your small business.

Operating Expense Clock
Every month like clockwork, regardless of sales volume, cash collections or profitability, payroll must be met, rent must be paid, taxes must be remitted, plus phone, utilities, insurance bills, etc., must also be paid. The Operating Expense Clock is hardwired to Greenwich, England for accuracy within a nanosecond per millennium, and nothing stops it short of a global, thermonuclear holocaust coinciding with a direct hit from Haley’s comet.

The only way to influence this clock is through operating efficiencies – you won’t be billed for what you don’t buy.

Sales Clock
This clock is powered by the customer relationships you’ve created so sales result each month. You project when each sale will occur by qualifying prospects and attributing a clock to each potential transaction so that you can budget future sales volume and meet your cash requirements.

How the Sales Clock operates is completely logical and intuitive, but it only works in your favor when the purchase requirements of customers have been met.

Cash Clock
What is not logical or intuitive is the Cash Clock and its relationship with the other two. Think of it like this: Cash is to sales as snow is to cold: You can have cold without snow, but you can’t have snow without cold. You can have sales without cash receipts, but you can’t have cash receipts without sales. And expenses are like weather – you get some every day.

But what hits small business owners hard is that for every glitch in the mainspring of the Sales Clock, there are 1,000 potential sprocket failures that slow or stop the Cash Clock. Consequently, the Cash Clock requires constant maintenance.

Murphy’s Law lives inside the Cash and Sales Clocks, but the Operating Expense Clock is immune to this insidious law and rocks on just like The Rolling Stones.

Small business success requires understanding the three clocks of the marketplace.

Posted in: Entrepreneurship

Some thoughts on lifelong learning

March 21, 2014 8:00 am , admin

The life of a small business owner is hectic, to say the least. Multi-tasking is the norm. So much of our day is spent reacting to the crisis of the moment, conducting the business of the day, and initiating our plans for the future. And once we acquire a level of competence in this life we’ve chosen, it’s natural to want to relax, settle in, and seek the ease that can come with familiarity and repetition.

But the marketplace isn’t a comfortable, lumbering vessel anymore, rolling along like a single screw trawler. It’s become more like a vibrant starship capable of warp speed. Indeed, it takes a much more knowledgeable person to successfully operate a business in today’s marketplace than it did even 10 years ago.

The great American revolutionary and legendary wordsmith, Thomas Paine, said, “I have seldompassed five minutes of my life, however circumstanced, in which I did not acquire some knowledge.” This from a corset maker who dropped out of school at 13.

You can’t anticipate everything, so react when you must. The business of the day, obviously, must be attended to. And what will you have tomorrow if you don’t plan for it?

But however circumstanced, before you succumb to the human tendency to rest on your laurels, make it part of your daily tasks to acquire some knowledge.

Make it your daily intention to learn something new that might help you react more effectively, operate more profitably, and plan more intelligently.

###

My website www.SmallBusinessAdvocate.com was created for small business owners just like you. With daily articles and interviews with my Brain Trust members you are sure to find effective ways to help your small business grow.

Posted in: Future Thinking

Use the power of storytelling to grow your business

March 19, 2014 12:58 pm , admin

Cogito ergo sum. French philosopher Rene Descartes proposed this idea in 1637, which translates to “I think, therefore I am.” Certainly the power of abstract thought is what separates humans from other animals.

Anthropologists now believe Homo sapiens succeeded, unlike other members of the genus Homo, Neanderthals and Cro-Magnon for example, because our brains had a greater capacity for speech and language. Today Descartes might have modified his philosophy to “I think and speak, therefore I am.”

In “Wealth of Nations,” Adam Smith proposed the written word as one of the three great human inventions. But long before humans were writing we were telling stories. And these stories – told, memorized and retold over millennia – became the headwaters of human development. We humans love to tell stories almost as much as we love to listen to them.

Another thing that’s older than writing is the marketplace. Long before Madison Avenue ad copy, merchants were verbalizing the value and benefits of their wares. Surely early business storytelling was the origin of modern selling skills.

In 1965, Intel’s co-founder Gordon Moore made an observation that became Moore’s Law: “Computer processing power doubles every two years.” But in his 1982 watershed book “Megatrends,” futurist John Naisbitt posed this paradoxical prophecy: “The more high tech we create, the more high touch we will want.”

So what does all of this mean? It means that in a time of rapidly compounding technology generations, the most successful businesses will consistently deliver high touch to customers with one of our oldest traits – the telling of a story. Here is Blasingame’s Three Cs of Business Storytelling:

Connect – Use stories to connect with prospects and convert them into customers.

Convey – Use stories to convey your expertise, relevance, humanity and values.

Create – Use stories to create customer memories that compel them to come back.

Storytelling is humanity in words. And since small businesses are the face and voice of humanity in the marketplace, we have a great advantage in the Age of the Customer. No market sector can execute the Three Cs of Business Storytelling to evoke powerful human feelings more than small businesses.

And regardless of how they’re delivered, stories don’t have to be long. I just told you five different ones in the first half of this article.

The Holy Grail of storytelling is when someone else tells your business’s story to others.

Posted in: Business Ownership, Networking

It’s The Age of the Customer—the rules have changed

March 17, 2014 8:00 am , admin

For 10,000 years, customers refined their search for products and services down to a couple of semi-finalist sellers based almost entirely on the classic competitive value proposition: price, product, availability, service, etc. I’ve termed this period the Age of the Seller.

That was a nice trip down memory lane, wasn’t it?

The new, prime differentiator today is no longer the competitive model, but rather a customer’s appraisal of how relevant a seller is to them, often before they even know if a seller is competitive. So does this mean that sellers no longer have to be competitive?

Not at all—no one will pay you more for less. But consider three new marketplace truths:

With value now presumed, customers expect to find what they want, at a price they want to pay, from many sellers.
Before a seller’s competitive position has even been established, they are being ruled in or out by customers.
Differentiating by customers based on relevance is happening before prospective sellers even know the customer exists.

That last point is perhaps the most breathtakingly disruptive development in the shift from the Age of the Seller to what I’ve named The Age of the Customer®.

So what do you have to do to prove your relevance in order to be among the last to be considered and hopefully anointed as the Chosen One? Here are three important Age of the Customer relevance practices:

Technology matters. Your online capability must match the expectations of your profile customers, such as having a mobile-optimized website.
Contribute first, contract second. Now confident of acquiring value, customers are increasingly seeking and collecting trusted advisors and experts in their quest for relevance before they make a purchase decision.
Connect with credentials. Use new media to establish relevance credentials and connect with prospects and customers.

In his book Megatrends, John Naisbitt prophesied, “The more high-tech we have, the more high-touch we will want.” Here are three high-touch Age of the Seller practices still relevant in the new Age.

Remember the customer’s name and use it—often.
Make eye-contact and smile—early and often.
Be grateful and say “thank you”—a lot.

Find success in The Age of the Customer by doing the following absolutely in this order: be relevant, be useful, and then be competitive.

Your greatest danger is not being uncompetitive, but being irrelevant.

Posted in: Age of the Customer, Customer Care

Entrepreneurial patience = Success

March 14, 2014 8:00 am , admin

If you were to identify synonyms for the word entrepreneur, you would come up with things like, risk-taker, industrious, visionary, perhaps even capitalist. But one word that is definitely NOT synonymous with entrepreneur is patient.

It simply is not in an entrepreneur’s DNA to wait for the world to bring him or her things. Entrepreneurs bring things to the world.

But having said this, entrepreneurs who enjoy long-term success have learned entrepreneurial patience. Even the most impatient entrepreneurial farmer understands that a corn harvest doesn’t take place until after the seeds are planted, the plants nurtured and a certain amount of time has passed.

Having entrepreneurial patience means knowing the difference between wasting time and energy and investing time and energy. Successful entrepreneurs are impatient about steps in a process — getting the seed, planting the seed, cultivating the plants, etc. — but not about accomplishing the ultimate goal of harvesting the result of the process.

One of the most prominent guarantees of failure in business is not understanding the simple wisdom of Renaissance author and father of deductive reasoning, Sir Francis Bacon, who said, “In all negotiations of difficulty, a man may not look to sow and reap at once; but must prepare business and so ripen it by degrees.”

When you see someone trying to “sow and reap at once,” you’re witnessing failure waiting to happen. The only thing left to be determined is whether this failure will become a valuable lesson in entrepreneurial patience, or a bitter experience.

Whether in the field or in the marketplace, all endeavors are subject to natural laws, like the time it takes for a seed, or a project, to germinate and produce fruit. Successful entrepreneurs understand this and have learned how to employ their impatience prudently, as leverage for success.

Impatience is often synonymous with failure; entrepreneurial patience is usually synonymous with success.

Posted in: Entrepreneurship

Do you prefer achievement or success?

March 12, 2014 8:00 am , admin

What’s the difference between success and achieve? Webster is unable to define either word without the other.

If there’s no difference, why don’t we use achieve more to describe wealth, fame, status, credentials, etc.? Perhaps it’s because success is a noun and achieve is a verb, and nouns are handier than verbs.

But grammar isn’t the only reason success is more popular. Even achievement, the noun cousin of achieve, isn’t as preferred when describing accomplishment.

Perhaps early on, success just had better PR than achievement. Today success is synonymous with celebrating at the finish line, holding the trophy or the check, while achievement has more of a work and effort connotation. But don’t you have more memories of the journey of work and effort toward your goals than of the high fives at the end?

Legendary actress, Helen Hayes (1900-1993), said, “Always strive for achievement; forget about success.” But are there benefits to focusing more on the virtues of achievement? My friend, Dr. Gene Griessman says there are.

In his audiotape, “The Path to High Achievement,” Griessman identifies common characteristics of high achievement and how they’re in evidence long before anyone flourishes a checkered flag. Here are five of those characteristics, each followed by my thoughts.

1. The power of self-knowledge.
Knowing your strengths and weaknesses may be the most important characteristic to seeking excellence. High achievers regularly critique themselves and make adjustments.

2. Time consciousness.
Like soybeans or gold, time is a commodity. And although not traded in any market, any billionaire will tell you that time is more precious than gold. High achievers don’t waste time.

3. Persistence.
Stick-to-itiveness is a real word and a handy noun coined in 1884, meaning dogged perseverance. High achievers personify stick-to-itiveness.

4. The power of decision.
Indecision is the Kryptonite of achievement. History has shown that an army with a poor battle plan boldly executed can defeat a greater force tentatively deployed.

5. Learn from mistakes.
No one likes failure, but high achievers recognize the value of setbacks and actually leverage them in the quest for excellence. Failure is the abiding harness mate of achievement, and high-achievers expect to always be hitched to both.

No one lives their life in the winner’s circle. Strive for success, but focus on achievement.

Posted in: Entrepreneurship, Future Thinking

There is no handshake in “the cloud”

March 10, 2014 8:00 am , admin

“In the clouds” is an aviation term pilots use to describe flight conditions. Or you might have heard this term in a parent’s lament about where their teenager’s head is. Recently, it has found a place in the marketplace vernacular.

“Cloud computing” is the availability of incremental processing power that resides on an application provider’s servers, instead of your hard drive. For example, community-building technology resides “in the cloud,” like the social media platforms that have taken popular culture and the marketplace by storm—no pun intended.

But while cloud computing is another example of technology increasing business efficiencies and leverage, like all other high-tech tools, it still has not replicated one of the most elemental components of humanity—the handshake. There is no handshake in the cloud.

Successful businesses have learned how to profit from the speed and efficiencies of e-tools, including cloud computing. And those who initially discounted the notion of successful virtual relationships over the World Wide Web have been proven wrong. By now, most of us have met a prospect, delivered a proposal, closed a deal, delivered as promised, and maintained that relationship—perhaps for years—using nothing more than the virtual connection resources at our fingertips. But sometimes, there just is no substitute for face-to-face. Consider this story:

After a successful four-year relationship between a small business and a Fortune 100 business where all contact had been virtual, the small business owner wanted to deliver a proposal with a new idea for their relationship. The customer said, “Sure, I’ll take a look; just email it like the last one.”

But having never met the customer in-person, plus knowing the importance of this proposal to his business this entrepreneur asked for a meeting. “If you think it’s worth your time and expense, sure,” the customer agreed. The meeting was set, conducted, and the new sale was made, after which the customer said “I’m glad you came to see me. I probably wouldn’t have made this commitment without your presentation.”

This story is true—that was my customer and my sale.

As you leverage and profit from all of the efficient high-tech customer connection tools at the speed of light, don’t forget that the best choice might not always be found in the cloud. In the Age of the Customer it’s still a best practice to invest the time and resources to meet customers face-to-face, shake their hand, look them in the eye, ask them for their business, and especially to thank them.

There is no handshake in the cloud.

###

Be sure to check out my latest segment from The Small Business Advocate Show below. I talk about how to balance using the power and productivity of cloud computing with getting in face-to-face with customers when the time is right.