When trust is a best practice, profit margins increase

October 10, 2016 11:20 am ,

Few contemporary prophecies have stood the test of time better than this one by John Naisbitt, from his 1982 watershed book, Megatrends: “The more high-tech, the more high-touch.” I call that, “Naisbitt’s Razor.”

The reason for Naisbitt’s accuracy is simple: High tech, by definition, means digital. But you and I are not the least bit digital; we’re 100% analog. And our analog nature manifests as a desire to connect with – or as Naisbitt says, “touch” – other humans. So the value of touch increases proportionally with the increase in the velocity of our lives.

Digital is fast; analog is not. We may transport ourselves virtually at the speed of digital, but once there, we touch -eye, ear, hand – at the speed of analog. So how do we reconcile the fact that as high-tech consumers who desire and eagerly adopt each new generation of digital, we’re still, and will always be, analog beings? One word: trust.

Nothing is more capable of accelerating with high-tech while simultaneously governing down to high-touch than trust. Naisbitt didn’t directly address the concept of trust in his book. But I interviewed him twice on my radio program and I think he wouldn’t mind if I expanded his razor to: The more high-tech we have, the more imperative trust becomes.

In another of my favorite books, Built On Trust, by co-author and frequent guest on my radio program, Arky Ciancutti, M.D., I found this: “We are a society in search of trust. The less we find it, the more precious it becomes.” For millennia, customers did business with the same businesses because they wanted to deal with the same people. We trusted the people first and the company second. In an era where erosion of the high touch of trust is often lamented by customers and employees, there are still places where it not only exists, but was actually born. Where, in contrast to the rest of the contemporary marketplace, trust is still found in abundance. Those places are almost all on Main Street in the form of small businesses.

With trust now more precious than ever, build the foundation of your small business’s culture on it. And when you can deliver on trust as your North Star, you’ve earned the right to go to market with it. Here’s an example:  Reveal the combined industry tenures of your leadership team (101 years), or the average tenure of your staff (18 years). When prospects see those numbers, they hear T-R-U-S-T.

In one interview on my show, Arky said, “An organization in which people earn one another’s trust, and commands trust from customers, has an advantage.” Since contemplating that, I’ve maintained that being devoted to trust is not only the right thing to do, it’s a business best practice. Let me explain.

As the velocity of the digital marketplace increases, our business has to move faster, and our stakeholders – employees, vendors, etc. – have to keep up. As one of my vendors, if I can trust you to keep up, that’s a relevance value worth more to me than the competitive price of a low-bidder I don’t know. You just converted trust into higher margins.

In the greater marketplace, where devotion to trust is no longer ubiquitous, small businesses have been handed a rare gift. And all they have to do to claim it is create and leverage the relevance advantage Arky means when he says, “The advantage trust gives your organization is there for the taking, waiting to be harvested. It’s not even low-hanging fruit. It’s lying on the ground.”

You may have heard me say that the Price War is over and small business lost. Well, the Trust War is on, and small business is winning.

Write this on a rock … To claim that victory you must operate at the speed of trust.

Posted in: Customer Care, Management, Moment of Relevance, Trust

Four IP questions to tell if you get it

September 18, 2016 11:17 am ,

One of the most interesting aspects of the marketplace is the evolution of how businesses leverage assets. For most of history, business leverage came from these three categories in this order:

1. Muscle power (human or animal);

2. Tangible stuff (raw material, inventory, tools, etc.);

3. Information (intellectual property, or IP).

Historically, the strongest cavemen, the biggest horses, the fastest ships, the largest factories, all had an advantage over lesser competitors. We’ve all seen this: “Largest inventory in the region.”

But here’s the interesting part: As the marketplace has evolved, the order of importance and the value of assets has inverted. Studies show increasing emphasis is being placed on IP and the ability to leverage it with less emphasis on leveraging tangible assets.

And what about muscles? Increasingly in the global marketplace, human brawn is number four on a list of three.

The good news is small businesses are joining this global trend of leveraging IP more and tangible assets less. They’re increasingly using technology in exciting new ways, doing more virtual business and are as likely to develop a strategy for doing business across an ocean today as they did across town 20 years ago.

Regarding how essential IP is to a small business’s 21st century competitiveness, more and more small businesses get it.  The bad news is there still are far too many who don’t. As an example, incredibly, almost half of small businesses still don’t even have a website.

To see if you “get it,” consider these four questions:

1. If I gave you for free (a) a truckload of inventory or (b) a special technology that would help you serve customers better, which would you choose?

2. Do you spend more time (a) thinking about products and services or (b) finding technology to more effectively serve new customer expectations?

3. Do your employees (a) use the same technology in the direct performance of their jobs today that they did 5 years ago or (b) different technology (not just new machines)?

4. If you purchased another business, which would be more valuable to you: (a) the inventory and equipment, or (b) the digital records of their customers: names; contact info, including email; what they buy; when they want it; why they buy it; and how they use it?

If you chose (a) for any of these questions, it’s likely your business’s performance is on a declining trajectory. But if you chose the (b) options, congratulations, you get it about IP.

Write this on a rock … In the 21st century, leverage intellectual property more and tangible assets less.

Posted in: Business Ownership, Future Thinking, Intellectual Property, Management

Small business lessons from big business mistakes

August 30, 2016 11:16 am ,

Here is a true story from which several business lessons can be learned.

A while back, I needed to reach a friend who worked in the local office of a national company. Searching online, and yes, even the phone book, I found only a toll-free number that connected to an answering system for the entire company. That’s right – this business didn’t publish a number for the local office. And incredibly, the automated system did not offer an option to connect to any local branch or person. I’m not making this up!

Lesson 1: Don’t create barriers to customers. Even if you think you don’t have barriers, look anyway, because you might. Ask employees and customers to help you find them.

Undaunted, I finally acquired the local number (yes, they had one), but the person who answered said my friend, who was in sales, had been laid off. It turns out, this publicly-traded corporation was losing money, so in order for the CEO to impress Wall Street analysts, who influence the stock price, almost 2,000 employees across the company were told to hit the bricks.  Never mind how valuable these employees were or if those cuts would hurt the company’s long-term performance; the quickest way to increase profits was to cut payroll.

Lesson 2: Performance goals are important for planning, but customers don’t always buy on your schedule. Don’t let short-term expense pressures cost you sales, and worse, long-term customer relationships.

I learned that my friend had been a top producer, but since he was the last one hired he was the first to go. He’s no longer a payroll drain on his former employer, but one of their competitors quickly snapped up this winner.

Lesson 3: In the 21st century, seniority doesn’t trump performance.

So what if this big business CEO had simply installed a phone system that made sure customers could connect to his local offices? The answer is that my friend and several hundred others may not have been fired. And who knows? By simply eliminating one customer barrier, this company might actually have needed to hire more salespeople to handle all the business that would not have gone elsewhere.

Lesson 4: How you run your business – including people, systems, technology and policies – is not more important than the fast-evolving expectations of prospects and customers.

By the way, that big business that taught us these valuable lessons is no longer in business. Big surprise.

Write this on a rock … Think you don’t have customer barriers? Neither did that big business CEO.

Posted in: Customer Care, Entrepreneurship, Management

Six questions and answers on being a successful business owner

August 25, 2016 11:14 am ,

As many of you know, for almost 19 years I’ve conducted over 1,000 live interviews annually on my radio program, The Small Business Advocate Show. I get to ask four really smart people a lot of questions. But occasionally the tables are turned are turned on me, like when Alignable.com podcaster, Alan Belniak, asked me several questions about small business on his show. I thought you’d be interested in that interchange.

Belniak: What’s the biggest problem small business owners don’t know they have?

Blasingame: Too many business owners don’t realize that their customers’ expectations are changing faster than ever before.  If you want to find out what your business should be doing tomorrow or next year, that information is inside the heads of your prospects and customers. Ask them.

Belniak: What advice do you have for small business owners in order to make a successful new hire?

Blasingame: Focus on the 3Ps: Be more patient, professional and proactive. Don’t make a hiring mistake by rushing to fill a slot. Use professional methods and practices to increase your chances of making a successful hire. Be more proactive by grooming employees to step up to a key assignment, so that you’re hiring for the lower position.

Belniak: What advice can you give to those who are seeking funding?

Blasingame: Strategy and forecasting. Create a capitalization strategy that includes multiple capital sources and terms. Don’t use operating cash for long-term capital expenses. Don’t finance something you can lease. Don’t use investors when you should get a bank loan. Use an electronic spreadsheet to create a 12-month cash flow projection so you can forecast beginning and ending cash. This will make you smarter and your banker happier.

Belniak: What is one way that operating a business today is the same as 15 years ago, and one way it’s different?

Blasingame: It’s Old School fundamentals and New School tech. Old School: The fundamentals never change: you still have to buy low, sell high and keep good records; cash is still King; people still want to be treated well. New School is the digital elements, and most is good news: Small businesses have handy cool and affordable tools available, but it’s not good news if you’re not keeping up. You don’t have to win the digital race, but you do have to participate.

Belniak: What are some of the character traits common among successful entrepreneurs?

Blasingame: You have to have a high tolerance for risk. If you don’t, clock in tomorrow. You have to believe in yourself. Many days all other elements of your business will let you down. If you can’t believe in yourself, there will be days when you won’t come back. You have to love working. You’ll never work harder than when you own a business. If you don’t love working, clock in tomorrow.

Belniak: What’s one thing you see small business owners failing to do?

Blasingame: They fail to set aside time at least every week to stop being a manager and assume the role of the CEO. Fire yourself from jobs you no longer have to do and promote yourself to jobs that a growing company needs someone to perform, but that only you can do.

Write this on a rock … Being successful in small business isn’t complicated, but the degree of difficulty is hard to explain.

Posted in: Entrepreneurship, Management

Three new reasons to expand your market horizons

August 10, 2016 11:12 am ,

airliner with a globe and auto loader with boxes

More than ever, 21st century small businesses have reasons and resources to expand opportunities beyond local markets, including international trade, and specifically exporting. Yet even though 97% of all U.S. exporters are small companies, only a fraction of that sector are exporters.

But there’s good news that should cause the number of small exporters to increase. The convergence of new technology, a global “new economy” culture more inclusive of small businesses, and believe it or not, help from the government, are making it easier for small firms to expand their market reach. But easier doesn’t mean effortless, inexpensive or justified, which are three of the key factors of any export strategy.

Let’s take a look at the possibilities of creating a trade strategy by getting help with those three factors, with emphasis on help from the government.

Effort
For a long time, exporting was the domain of those large firms that could afford to have international professionals on payroll or contract. The education and prospecting process alone was daunting enough to dampen the ardor of even the most determined prospective small exporter, let alone the actual execution of doing business abroad.

But today, it’s hard to imagine something with so much potential being as easy as walking into one of the 100+ U.S. Commercial Service offices (a Department of Commerce division) around the U.S. and asking them to help you begin the education and prospecting process. They have the staff, information and resources to get you started, and will help you along your export strategy journey. And any associated costs are minimal.

Expense
It wasn’t so long ago that someone had to physically travel to foreign markets, establish relationships with agents and customers, and then demonstrate the goods in-country. For most small businesses, those steps were financially prohibitive.

Today, that same Commercial Service office will help you find foreign prospects, coordinate introductions and demonstrations, and bring the parties together in the early stages of a relationship without prohibitive expense. It’s all done by video conference meetings in the Commercial Service office, between you and a prospect they likely helped you find. So by the time you make a significant investment, it will be spent a lot closer to fulfilling a sale. And you’ll consider any associated fees a bargain.

Justification
How do you justify developing an international strategy? Why spend time and resources trying to sell your stuff on the other side of the planet when customers are right next door? Consider these reasons:

  1. More than 96% of the world’s consumers live outside the United States.
  2. This year millions of Earthlings will have a smartphone for the first time who’ve never before been on the Internet or owned a computer. Don’t wait until some of them find you online to begin your international export preparation.
  3. There are many examples of small businesses that minimized a downturn in the U.S. economy because their international strategy took up the slack.

New technology, new attitudes, new resources, and yes, help from the government, are bringing the world closer to your business’s door step. But you have to make the effort to meet the world halfway. Take your first step here – www.export.gov.

Write this on a rock … Education, expense, justification – check, check and check.

Posted in: Future Thinking, Mobile Strategy, Sales

Three important people you want to be close to you

August 1, 2016 11:09 am ,

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.

Posted in: Customer Care, Management

Six steps to grow your business with referrals

July 17, 2016 11:07 am ,

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.

Posted in: Referrals, Sales

Defending your business against Big Boxes and Cyber-Boxes

July 1, 2016 11:06 am ,

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.

Posted in: Management, Moment of Relevance, Sales

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

June 5, 2016 5:12 pm ,

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.

Posted in: Networking, Sales

Four marketplace truths about your customers

April 17, 2016 5:04 pm ,

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.

Posted in: Age of the Customer, Customer Care, Sales
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