Tuesday, June 26, 2012

A business plan’s flexibility: obstinacy or perseverance?

Are you stubborn or perseverant?
I begin this article with a question for you: Are you one of those who think that failure is the worst thing that can happen to your business? 

In many cases, I’m not sure if yours is one of them, it’s as if having a business plan involves relentlessly pursuing your goals.

A couple of weeks ago, I commented on this blog that pursuing your goals was a basic and fundamental drive to your business’ success, and I’m sticking to that thought.

Now, we have to realize that there are two attitudes that are often disguised under this “always-pursuing-your-goals” drive: stubbornness and perseverance.

It’s not the same to be stubborn than perseverant.

According to the Wordreference, obstinacy is:

Maintenance too strong of an idea, intention or opinion, usually unwise, without considering another possibility: "I cannot understand your obstinacy in opposing your daughter’s marriage." Stubbornness, obstinacy.

And the definition of perseverance, goes like this:

Firmness and consistency in implementing your mind’s resolutions and decisions. Permanent or continuous duration.

And having said that, I’m sure you can realize what I mean.

How many times have you been stubborn instead of perseverant?

If you've found yourself in those days in which you barely have the strength to move forward, can’t generate new ideas that allow you to achieve your goals or, at least, see the light at the end of the tunnel, you're probably being stubborn instead of perseverant.

It’s not the same to put 100% of your energy and time in achieving your goals, than to keep on doing it after it doesn’t make sense anymore.

When being perseverant stops making sense?

When you find yourself beginning to pursue your goals in a stubborn way, not listening or paying attention to the signs that indicate you that such goals aren’t for your business, it’s when being perseverant stops making sense.

Note that the definition of "obstinacy" contains the word "too (excessively)", so there is a time when you’re being so perseverant, that it becomes excessive, and that's when you’re just being stubborn.

That moment is when you begin not listening to the signs and symptoms that indicate your company or business is not going the right way, that something is missing, that you're making a mistake that’s not allowing you to move forward, or when you see that things don’t work as they should.

The importance of a business plan’s flexibility.

It’s at that moment, and maybe even a little bit earlier, when your business plan should - necessarily - be flexible and allow your business a change of route, a new direction, the rethinking of certain strategic objectives, and even the redesign of a complete strategy.

A business plan should never be written in stone, because there are many factors that influence how your company will reach its objectives. If all things were in your hands and under your control, we could see it that way, but obviously the reality is far from it.

How do you know when you have to be flexible?

So that you can see it clearly, I'll give you an example: Suppose you leave Alicante going to Madrid, on the highway. The distance is 426.5 km and should take you an estimated time of 4 hours 25 minutes, which means that every hour you should have advanced something like 100 kms. Good?

So. If at the end of the first hour, you’ve only advanced 60 kilometers, something isn’t going well. And while it’s not time to freak out (just yet), you may need to start thinking about alternatives. If by the second hour, you have only done 130 kms instead of 210 as you should, then it’s time to seriously assess the situation.
Having the flexibility to make changes to any plan, allows you to avoid serious headaches and wasted time. It's cool to be perseverant in achieving all the things you want in life, of course.

But if the time comes in which things around you, your environment, indicate that something is not going well, stop for a moment and assess the situation with objectivity enough as to make proper decisions that align with your business objectives.

If you don’t, you could be leaving the “perseverant” zone to dive into the “I’m a stubborn entrepreneur who isn’t paying attention to anybody. And that's not good.

Related article: Why do we need continuous professional education?

Tuesday, June 19, 2012

Advertising: The Power of a Testimonial.

The power of a testimonial.
You may have heard already through many sources that the goal of any marketing campaign these days is to develop deep relationships with your customer, concentrating your efforts on providing them with the best service before, during and after the sale, to create loyal customers, committed with your brand, who buy from you one and again, and frequently recommend you with friends, family and relatives.

If you Google on the subject you will find, for sure, thousands of blogs talking about this topic, including the one you are reading now, and spaces where, in a regular basis, interesting information is provided, with tips and recommended strategies that can be very valuable indeed and help you grow your business dramatically, helping you to create (or at least trying to create) loyal customers.

One tool that I find it funny not to see more people talking about and not even more regularly included on lists of recommendations and strategies, is the customer’s testimonial.

What is a customer’s testimonial?

It’s a unique and really valuable concept. The customer’s testimonial is just that: A customer who is so pleased with your products and services that has something positive to say about you and would be totally happy and eager to do so and even share it with others.

Even if you haven’t noticed it already, or that customer hasn’t talked directly with you, chances are that he’s already talked about you with his friends, relatives and co-workers, even if only to share one or two comments about how good it has been for him doing business or buying from you.

In fact, to your best benefit, you might have already been rewarded by this customer with a second or third visit to buy more from you.

How do you get a satisfied customer to share his testimony?

Whether your company is new on business with just a few customers, or if you already have been in business for a long time with hundreds of clients, if you've done your homework properly, you might already have a real inventory of customers who could become your best business card for bringing in new customers and, going a bit further, you could even develop with them your most powerful advertising campaigns yet.

The problem is, in many cases, how to get that customer to share his testimony without placing them on an embarrassing situation, or just feeling unnecessarily uncomfortable about doing it.

Often, the initial temptation is to offer them something in return, some kind of incentive, something special, and that's a mistake. If you offer your customer something tangible, it could be taken as a form of payment and the credibility of the testimony would be completely jeopardized!

Recognize the value of your customer and its testimony.

The easiest way to motivate a client to share his testimony with others is by first recognizing how valuable that customer is for you, and strengthen your commitment with him to continue offering many reasons to be happy with your product and brand.

If you fulfill your commitment, or have already done it over the time, your client will have no problem in sharing his testimony with others, because you’ve really honored your promises, your commitment and your client is happy.

You should also recognize the value of your customer’s testimony, inviting him to share his opinion with other customers. Show him his opinion is important to you and for others who can benefit from what he thinks. The tools to do this abound, especially with the extraordinary growth of the Internet and the already established presence of social networks in our lives.

Take care of opening spaces through which your happy customer can comment and participate in the dynamics of your business with others. Invite him to share his feelings, and even what he knows about your products and services with others, recognizing the value of his knowledge, turning him into an integral part of your business and your strategies.

A testimonial can have any format.

From a simple letter of recommendation to a speech in front of a group of customers or prospects, you can offer your satisfied customer many ways to share his opinion about your company.

If your client agrees, record a video of his testimony and use it as part of your advertising campaign. I personally think it’s the best tool on top of others and, for several reasons:

  • A written recommendation: People say paper takes everything, so a simple letter of recommendation may not contain all the emotional input your happy customer would like to share with others and lack of credibility.
  • A photograph: Well yes. It’s used a lot with famous people. "I like this product. Signed: Me, the celebrity. "And this is a good one, but again, it lacks the full emotional load even though its credibility is higher.

However, most people agree that a picture is worth a thousand words, and especially when those pictures are in motion. There's nothing like being able to see and feel the full emotional package with which a customer speaks his mind about a product, specially about a company when he’s really satisfied. It's contagious, which conveys sincerity, realism and, therefore, is powerful and effective.

CAUTION: Never use an actor for this, no matter how good and authentic it might feel. There have already been cases of companies that have used actors for testimonials and it has all gone wrong.

Whichever the platform and strategy that you design to sharing your happy customer’s testimonials, don’t forget to take advantage of this powerful tool.

In advertising, there is nothing more valuable than the natural and voluntary recommendation from a satisfied customer. Will you include it your next advertising campaigns?

Related article: The value of relationships: What can you expect from social media?

Tuesday, June 12, 2012

Why do we need continuous professional education?

The need for continuous training.
If you own your own business, surely your dream is to grow it, develop it beyond all borders you can possibly imagine, opening up additional offices, hire new staff, increase your client base, sell a lot more, and we could continue like this forever.

And all that is good. In order to move forward with your business, you need to have that drive, the illusion that always pushes you to continue growing, developing new things, promoting internal growth, look for new opportunities, and so on.

Indeed, we could safely say that if you didn't have such drive, your business wouldn't probably ever take off.

Growing up your business means to venture into new areas.

In any event, it means that your business growth will require you to operate new departments or functional areas, if you want to get a bit more formal.

Surely you will begin to hire people to help you manage all the paperwork you need to keep taxes, payments, bank statements and all office stuff up to date. Then you´ll probably move on to the sales department to add personnel to handle your actual sales volume and, definitely, increase your customer base and bring in more business.

You could probably need a receptionist as well, to answer the huge number of phone calls that your company receives daily. Or perhaps you need to hire the receptionist first? In any case, the growth of your business will necessarily require more people on your side to get the job properly done.

And with that, your business will require you to be adequately prepared to manage people.

Are you able to delegate tasks and work as a team? Your first challenge as an entrepreneur, will be to delegate on others the control of certain areas of your business and to be as confident as you can that they will do the job as well as you did or even better.

Is at that moment when you will begin to realize that you must be professionally prepared to delegate tasks and responsibilities. Let’s talk about the receptionist: Can you explain her fully and clearly what her duties will be and what performance you’ll  expect from her?

Of course you do! This is the easy part. The tricky one is what follows: Can you trust that she’ll make her work as you asked her to, or you will become one of those prosecutor chiefs that, when out of office, are continually calling their receptionist to ask who has called in?

And that's where you need to start your continuous professional training.

Even though you can be a specialist on your specific industry, a cum laude graduate, with a deep knowledge of all the details of your professional area, if you haven’t had training in specific areas such as HHRR management, leadership, or even how to relate to other people or speaking to an audience, you’re going to have a problem as your business grows.

That’s why regularly investing money in your professional development, is so important. Not just because your business needs it, but also because for you it’s an enriching process that allows you to grow professionally, and even as a person.

Why do we need continuous professional training?

Because if you do nothing, you’ll lose the ability to effectively manage each of the operational areas your business will demand as it grows. Caution: I don’t mean you’ve to get a college degree in each of the areas, but at least you must be able to handle basic terminology, fundamental concepts and have the required "know-how" to measure the performance of each area and if necessary, actively participate on them.

I'll share with you a case that happened to me recently with a client: The company urgently needed to get new clients through making cold call visits to local companies. What would you have done had it been your situation? Surely you’ll have hired an experienced sales guy and, if at all possible, with his own clientele.

However, this decision involves a monetary cost my client couldn’t afford, not to say increasing his payroll and, for the worst, he has never done the job before himself and doesn’t have any experience in doing cold-calling.

So I decided to put together a sales techniques training program for him, so that he could go out and begin to develop his customer base himself by doing cold calling,  while acquiring the necessary knowledge to manage his future sales team more efficiently.

If, from the very beginning of his business, more than twenty years, he had been aware of how important it was receiving continuous professional training on different areas, he would probably have taken the time to increase his knowledge and skills on different subjects, that now would have proven its effectiveness to help him grow his business.

And this is just one example of many that abound of entrepreneurs like you who have decided to start a business with only a business plan, much enthusiasm and, at best, some capital.

The continuous professional training is an investment not an expense.

All the money you invest in properly training yourself for managing each of the operational areas of your business, directly or indirectly, is an investment that has an outstanding importance on the medium and long term.

Not only prepares you to analyze your business beyond the numbers and financial reports, but also allows you to actively and effectively participate in its development and growth.

When was the last time you invested money in your professional development? What about a refresher course perhaps?

Related post: It´s time to grow: When it´s not good to wear too many hats?

Tuesday, June 5, 2012

Charging the Right Price: The Single Most Important Rule of Business

Charging the Right Price.
Last week I read one of the most interesting articles I've come across in recent weeks on the Internet. It was about an issue that is often hard to accept, but unfortunately it’s concrete-like real: Entrepreneurs are very good at meeting challenges with optimism - but sometimes optimism isn’t exactly what their business really needs.

Entrepreneurs are often too optimistic about sales and too pessimistic on prices. I mean, they have an enviable enthusiasm to develop a business proposal, a great idea, wonderful, with excellent potential, but when the time comes to develop a pricing policy, they make the most common mistake of all: charging too little.

Businesses must be guided by numbers, not emotions.

The article made reference to two women, Carey and Julia, who had opened an entertainment center for children called Frolic, which offers classes, birthday parties, a boutique, coffee shop and a playground area, all with a solid and impressive atmosphere, located in New York.

Since its inception, Frolic had done very well: They have managed to sign up a good number of members, have always been ready to developing new offerings, had gotten lots of great publicity. For most eyes, all things looked remarkably well.

However, when they sat down to talk with their advisor - the author of the article which I’m referring to - and took a look and revise business numbers, they realized they weren’t producing enough money to even cover operating costs, ie they were losing money every week.

Even when the girls felt they were succeeding, the reality check didn’t back them up: They were losing money. The problem was obvious. They were having a good volume of customers but the money generated by those was not enough to cover even their own payrolls. Which was the problem? The wrong pricing policy.

The price war is not always the best option.

Even having a business proposal which was truly exemplary, differentiated and with enormous potential in the environment in which they decided to settle, Carey and Julia set their prices the way many novice entrepreneurs do: Charging a little less than their competition to attract more customers, and then start to build it up from that point up.

But their business wasn’t comparable to their competition’s. They had many attributes that added value to and differentiated it from the rest. None of their competitors had a facility with an atmosphere as exciting or a creative design space as Frolic’s. Carey and Julia could certainly charge more for their services.

Your client is the one who wants and can afford to pay the right price for your product.

Although the idea of ​​charging more for the services your company offers can frighten you a little bit and make you think you will even lose customers if you do, you might consider as well that your product offering is really worth it and, ultimately, you want to earn money and have a profitable business. Charging a fair and reasonable price that suits your product is always the best strategy, even if not all of your customers can afford it.

It’s ok to be excited because you’ve many clients and that things seem to be working fine, but if those many customers aren’t producing enough money to cover even your operating expenses, it's time to make some changes, and usually the first change is simply to collect the right price for your product.

Wanting to sell to everyone is fine, but you must necessarily focus your efforts on those customers who can afford to pay for your product the money you’re expecting to receive for it.

Your business reality is written in blue or red, and this is true, whether you insist on seeing it otherwise. If blue, phenomenal. If red, you have problems.

If you would like to read the original post written by Norm Brodsky, here you’ve the link to it The Single Most Important Rule of Business

And this one, is a link to a related post on my blog: Segmentation: All products for one or one for all?

What do you think? Have you ever felt on the “war price” tramp? What have you done?