Tuesday, April 17, 2012

Having a successful business: Who wins in horror movies?

In times like those that we are living in, in which continuously, minute by minute, and through all media outlets, people are talking about economic crisis, saying the worst is yet to come, with millions of unemployed people, budget cuts in education, and a very extensive list of situations that make it clear we’re not going through the best of times, it’s easy to let fear build up, whatever the way you want to name it.

And this has been the main subject on several conversations I've had with coworkers and business partners: How fear can become a positive or negative element in your business strategy depending on the way you handle it.

Searching online about what "fear" means, I’m going to stick to the following definition I found:

"Fear is an adaptive scheme, and provides a survival and defense mechanism which emerges to enable the individual to quickly and effectively respond to adverse situations. In that sense, it’s normal and beneficial for the individual and his species".

Of all that, what strikes me the most of such definition is when it states that fear arises to enable us to quickly and effectively respond to adverse situations. Simply love it!

Have you ever noticed who wins in horror movies?

Although I like better horror films the way they were done before, when special effects weren’t used in such a morbid manner as they’re used today, and killings were, being as bad as they are in nature, somehow normal, I found that in all horror movies I've seen so far, there is something that always happens: the person who runs away trying to escape, fleeing in terror from her attacker, is the one who wins.

And it's easy to see why that person wins: while running, she’s experiencing new places where she can get something to help her out to defeat her opponent gaining time before help arrives, or maybe the bad guy is not able to outrun her, or even, not to find her. In short, she’s giving herself an opportunity to get out of a very sticky situation.

We must respond quickly and effectively to adverse situations.

What happens to the person who doesn’t run, the one that freezes up and does nothing but close her eyes and desperately start praying for the bad guy not reach her? Well, that the bad guy not only reaches her but also... you know the ending. In addition, when staying frozen and paralyzed, the only tools at her disposal are the same at all times, they don’t change and, in addition, she’s easily discovered by the bad guy, not giving good guys time enough to arrive to the place and help her out.

In short, you can definitely say it’s still a quick response perhaps, but definitely not effective because the story doesn’t have a happy ending.

How all this applies to your business?

Obviously the situation we are going through must be creating inside you a degree of anxiety, which is going to be higher or not depending on how strongly the effects of the crisis and its related components are taking on your life. In fact, you’re probably aware of how stress is responsible for a huge percentage of all visits to the doctor, not to mention the many problems that stress can help develop and strengthen in your personal and family life.

Therefore, the crisis is an adverse situation that threatens you for real in your day to day life, as well as in your business possibilities and projections over the time, so you must (or should) respond to this situation quickly and effectively.

People all around the world and for the last few years, maybe even since the terrorist attack in New York or earlier, have been talking about hard times that were to come and a worldwide economic downturn. Therefore, we could say that our overall response to the crisis hasn’t been quick enough, especially if you are still paralyzed, with your eyes closed, not knowing what to do or where to run or, even worse, waiting for the crisis to be over and everything resorting back to the way they were before.

To succeed, your answer has to be not only quick but also effective.

Re-invent your business, look for new alternatives, improve your product, create and develop new opportunities for yourself, seek for alliances with other companies that may be mutually beneficial. In short, do something that allows you to move forward and not wait for the bad guy to find you.

Don’t stay paralyzed waiting for the crisis to be over or that the bad guy doesn’t realize you’re hidden beneath that piece of furniture. Make sure your response is effective and that your story has a happy ending.

If you look around you will notice not everything is as bad as most people think and there are companies and businesses that are moving forward. If you can’t see it, look at the case of many "start-ups" that are succeeding.

Remember in horror movies, the winner is the moving one, the seeker, the one who responds positively. If you don’t believe what I say, ask then Freddy Krueger :-D

Related Articles: Vision and planning - Are you adapting to the change?

Wednesday, April 11, 2012

Segmentation: One product for all? Or all for one?

Segmentation: Selling to everyone?
If when somebody asks you who your customer is, you don’t know what to say, don’t have it clear or you belong to those who says, "I would like to sell to anyone who can buy from me", this article is specially written for you.

I’ve had the opportunity to talk about this several times, when trying to define with a customer which is the market they’re interested in selling their products to. The answer is something like this: "I want to sell my product to everybody!"

And while it’s still a valid option, or at least a desirable one, to properly define a target audience is a fundamental aspect in planning a marketing strategy for any product or service, regardless of their specific features.

Wanting to sell to everyone could be nothing but a pipe dream.

Imagine for a moment the money you have to invest in reaching out to everyone in the world. Impossible, right? Segmentation is a necessary process for all business and allows you to effectively spend the money and focus your efforts to reach only the people who:

  • Have a need that your product fulfills.
  • Have the money to pay the price you’re asking for.
  • You’re interested in having them as your customers.

The first one is self-explanatory: If your product can’t meet the need the person has, the sale will not happen. There is no meeting point, the cycle will not be closed, regardless of what kind of need the person has: If your product doesn’t have what it takes to fill the gap, customers won’t buy.

The second one follows the same reasoning. Even if you offer the broadest financing / payment options for your customers, if they don’t have the money or the financial capacity to pay what your product is worth, even when it does fulfill their need on their entirety, buying won’t occur. And if the person has to make a superhuman effort to pay for your product, then you might be falling into number 3’s trap: It could be you aren’t so interested in having them as your customers.

But how could you "not be interested in having someone buying your product?"

Because not everyone is a interesting customer for you and I will explain myself, as usual, with an example: Do you think BMW or Porsche are interested in having me as a customer? Either one could be the vehicle of my dreams but, as much as I want it to happen, is a luxury item I can’t afford, at least as of now :-D

Surely both of them are interested in keeping me "dreaming about someday being able to buy their products," but as of this moment, I’m not the kind of prospect they’re going after or directly focusing their marketing efforts on because I can’t afford to do business with either one.

That I can do a huge effort to get the money, or funding, and buy the product? Sure I can but then it’s not about the car itself, but about something buried deep inside of me that is forcing me to do such a strong effort to buy something.

But still, do you think that either brand, BMW or Porshe, is truly interested in having each of their customers borrowing up to their neck just to buy their cars? Don’t you think it’s more interesting for both and for what they do represent, to have celebrities, wealthy and affluent people, artists, influential businessmen, public personalities as their customers?

Market segmentation and brand positioning go hand in hand.

In this case we’re talking about brand positioning. And it's what we started talking about at the beginning of this post: If you want to sell your product to everyone that simply has the money to pay for it, then your brand’s positioning is somehow diffuse, as you will only be aiming to the pocket and not to the customer. It’s more likely you’ll be interested in focusing your marketing efforts in those you are truly interested in having as customers, instead of reaching out to everybody.

Surely competition in the market becomes a strong temptation to desperately seek to sell to anyone showing some kind of an interest in your product. And while it’s normal in a situation like the one we’re living on nowadays, is not necessarily the best way to go. The consequences will surface on the long term.

If you focus your marketing efforts to reach audiences that meet the above three questions, you’ll then get better results. Wanting to sell to everyone is fine, but it’s impossible to achieve in the real world. Do as those who are seeking for gold: with a grid they filter every rock and pebble, to finally keep for themselves the shiny one piece of gold.

If you think of a question that can help us all to make a better segmentation of our market, share it with us in the comments section below.

Related article: Can a business exist without customers?

Tuesday, April 3, 2012

Working for Free: When? why? and for how long?

Working for free?
This post derives from a personal reflection after following a brief debate generated in a Facebook group in which I participate. Someone posted an offer for unpaid work through which the applicants would have an opportunity to gain hands-on experience in the field and promising that, once business had positively taken off, economic benefits would be divided between those who decided to take the offer.

As usual, an offer of this kind generated an interesting discussion. On one side were those who disagree with a proposal like this, and on the other side, those who, having taken an offer like this before, maybe even more than once, don’t consider such a proposal out of this world, and even think it does makes sense for the time being.

When can you say it’s worth working for free?

The only time in my life I had to work for free was when I did my internship at an advertising agency back in my country. My internship as an account executive for the agency lasted for several months and allowed me to gain very valuable experience in my department’s operation, meet other people who were working on different areas of the agency, put into practice the knowledge that I was acquiring in college and stretch my muscles starting to work in my professional field.

A few months after completing my internship, I got a job as a paid-employee and, since then, this has been my employment status: working for a third party which pays me a compensation for my time, experience and knowledge.

Working as an intern for free, when finishing my studies helped me get involved in the professional area in which I was to play upon completion of my career. At that time in my life, had its full justification and it was totally necessary for me. It was worth working for free!

Back then, I did it because it was necessary for acquiring a preliminary experience on my future work and it went on for as long as it was required to. Neither more nor less.

"Make sure at least you get paid enough to put new soles on your shoes"

One of the lessons my father taught me was on this sentence: "When you work for someone, at least make sure you get paid enough to put new soles on your shoes when they get worn out from walking"

And since then, unwittingly, it has been a position that I have attached to all the times I've had the chance.

When I have participated in staff selection processes, I’ve always advocated that the company commits to pay at least the minimum wage established by law and according to the company’s financial possibilities or, in the worst case, offer a compensation good enough as to cover basic expenses of the candidate, especially when it came to hiring sales people, as they were supposed to spend most of their time on the street, making phone calls, eating out, fuel, etc..

Why have I always advocated for it?

I do believe that every person working for a third party is bringing to the table, at least, two things: it’s time and knowledge.

Even in the case of a person without any kind of experience, or credential proving she can properly do the job, or without any academic preparation, is using her time to do the job, and that must be valued somehow. If anything, why would you want to hire someone like that?

And if it’s a person with academic training, previous experience (even if only in a related field), relationships, and other things, then the more reason to agree on a financial reward for their work. It’s evident.

Why would that person want to be your partner?

One thing I can’t keep myself from thinking, when I read about jobs that offer something like "if the business prospers, you will be paid a salary," is about a partnership: When two people come together to start a business, each one is  bringing what he or she has in the hopes that, when business grows, both will  enjoy the benefits. And many times it has worked extremely well, so much indeed that many large companies existing today were born in the same way. Facebook being one of them, for instance.

But there is a huge difference: That person you're hiring without paying a salary or remuneration is not (and won’t be) your partner. And when your business grows, that person will simply receive a salary, not a share of your company’s profits, as it would correspond if that person were indeed your partner. Therefore, the question you should ask yourself  is: "Why would that person want to be my partner?"

If you want to be demanding, you’ve to accept the other side being demanding too.

In my experience, if you bid to recruit staff for any area and do not offer anything in return, you will have very little or no right at all to claim or demand the best results, and even not to require from the person a specific time commitment or working schedule.

It's different if you offer some kind of compensation, no matter how small it might be, than if you don’t offer anything at all. When you offer a little something, you're saying that there is a commitment on your side and you’re really giving value to what that person can offer you, even if your company has some financial limitations, to some extent, understandable.

It would be easier to trust you when you say that "if business takes off, things will get better for you" because from the beginning, at least, you're doing an effort on your part.

The economic crisis has made room for many things.

On one hand, with the large number of jobless people, job seekers do need to (and sometimes are almost obliged to) accept whatever it is thrown at them, no matter what, even if it’s far from being the best or even something they wouldn’t accept on a different scenario. It’s a sad situation, but we are all living it day after day.

But on the other hand, companies making such offers are doing it for one of two things. It’s either because they really need to hire people and don’t have the money to pay for salaries, or they’re simply taking advantage of the situation and the opportunity the crisis offers to hire qualified personnel at minimal rates.

If you are an entrepreneur, try to show some commitment on your side and offer something that at least shows your confidence in the person you're hiring and the value that you give to their time and dedication. If you are a person looking for a job and are willing to do it for free, always think about those three questions: When? why? and for how long?

In any case, it’s a subject about which I would truly like to share your opinion with me.

Related articles: Company reputation and the salespeople responsibility.