Sunday, February 15, 2009

# 1 Strategy for Generating Business in this Economy

Attention small business owner we are all in the same boat; down economy, new president, new promises, less consumer spending, uncertain future, and bills that just keep coming. So how do we manage to make it through these times without having to dip into that line of credit one more time? Better yet, how can we grow in an economy such as this?

The number one strategy for generating business in this economy is to create and deliver consistent communication to your current customers who in turn have a greater potential to increase the frequency of return and purchasing. Once your company has a customer base this becomes one of the most important areas of your business. The overall goal is to turn an existing customer into a repeat customer. According to Source, “Acquiring a customer costs five to ten times more than retaining one. Repeat customers spend, on average, 67% more. After 10 purchases a customer has referred as many as 7 other people.”

This statistic can be a wake up call to the small business owner. Small businesses, in general, connect more with their customers compared to large corporations. With this “customer connection” all we need is a system in place to reach out to them. It can be as easy as a phone call or more sophisticated such as an email newsletter. Either way we want to constantly connect with our customers so we will increase their likelihood of doing business with us again.

This is what is we refer to as Internal Marketing. Marketing that is focused solely on your current customer base. This type of marketing is key because it is inexpensive and you already have a captive audience who already knows you and has already done business with you. It’s a no-brainer! We know that money can be tough as a small business owner so using your current resources to produce revenue is a win-win; we spend less and gain more.

Friday, February 6, 2009

Preparing for the fight ahead

The economy is getting tough and everyone is starting to really watch how they spend their money. This means small business owners need to get dirty now. I am going to focus on the income producing ideas in this Blog verses the expense cutting ideas...for now.

If you continue to do business the way you have always done business, then you will continue to get the same results you have always produced. Make sense?

But if you shift you sales and marketing approach and rethink how to deliver it more creatively and in a less expensive way, then you may find you are getting more business in the door. Let's look at the basics:
1. Do you keep a database of your customers and their information (such as DOB, address, phone, email, any demographics, etc.)? If yes, then the data needs to be looked at carefully to discover who your customers are and what they are purchasing. If you do not collect this type of information I suggest starting now. Research should always be the starting point to marketing to increase your probability of targeting the correct audience, thus increasing your probability of a sale.
2. Change the game. Set 3 new strategies for how to get more customers in the door. These 3 strategies should be actions you have not taken before. Challenge your strategies before moving on to ensure you feel they have the most potential based on the research. Once you have put together 3 strategies create 3 ways to implement each strategy and then create 3 ways to implement those 3 processes. Your plan of strategy and execution should look like this;
* Strategy 1
*Process A
* Sub Process a
* Sub Process b
* Sub Process c
* Process B
* Sub Process a
* Sub Process b
* Sub Process c
* Process C
* Sub Process a
* Sub Process b
* Sub Process c
* Strategy 2
This is how you can create a plan to execute a strategy based on our 3x3 Model. Each element should have 4 things:
1. A person responsible for the task
2. A time and date the process or task needs to be completed to ensure the strategy does not go out longer than 12 months. we are working with shot term initiatives.
3. Performance measures. You need to see how things are progressing daily or weekly to ensure things stay on course.
4. Incentives. If an employee hits the target or goal they need to be rewarded.

Get out and implement the strategy and do not delay. Remember, if you do what you have always done, you will get what you have always gotten.

To greater success and please feel free to write in with you success stories.

Friday, January 30, 2009

“Feedback is the breakfast of champions.”

Mr. Ken Blanchard could not be more correct. The purpose for getting feedback is to find out what stakeholders (stakeholders refer to customers, employees, investors, etc...) really think about your business. Getting feedback, especially negative feedback can be tough to swallow but it can also help to change your business for the better. Feedback does not always give you the high five, pat on your back that says you are wonderful. Sometimes feedback gives you the realty smack in the face that most business owners need from time to time. No one likes to hear that their business is not doing what we set out to do but it can provide tremendous insight as to what may need to change.
Feedback can be as simple as asking your staff what they thought of the new format or as complex as surveying the public to find out if they have ever heard of you. We refer to feedback as “The Pulse” of your business. We want to get a feel for what is really happening at your company. This way we can ONLY get better! Feedback can be done in many format but we prefer surveys. Surveys can be done in multiple formats such as the following: email, mail, mail with paid return postage, in-person, phone, or newsletters.

The main place to start this feedback process is with your current customers. Immediately you can get into their minds and find out:
 Are they satisfied with our product or service
 What other services or products could I offer that they may be interested in
 How is our customer service
 Is our store user-friendly
 Do they know we have a website

For example, let’s say that you are a hair stylist who wants to improve your business. You are nervous but you want to get feedback from your customer base. You start by surveying customers who come in to get services and you perform the survey with a clipboard and pen. You find out the following:
 90% of the customers want reminder calls the day before their appointments
 25% of the customers would like to see you offer hours on Sunday
 80% want you to offer more services such as waxing
So you take this new information and start to make changes to see how this would impact your business. You start by implementing reminder calls and you immediately notice that your appointment show ratio (who shows up for an appointment vs. who does not) is much higher than normal.

You decided to ignore the Sunday hours because it was only 25% and the other 75% thought the hours were fine. You also start doing some research into adding other services such as the waxing. All this information was gained from your current customers who are telling you what would make their experience better, what you could change, and what you are doing right that they are happy with. This information is free and has a major impact on your business. It is easy…yet most small business owners never get customer feedback.

Surveying our customers is a great form of quality control for our products, services, employees, and procedures. As Michael J. Gelb states, “Champions know that success is inevitable; that there is no such thing as failure, only feedback. They know that the best way to forecast the future is to create it.”

Good Luck! Stay the course, your business depends on it!

Friday, January 23, 2009

Management - A Great Challenge

It is time to make management a positive word. Employee's love a great manager because it makes their job a more pleasant and inspiring part of their life. It is difficult to be a great manager. It is difficult to be a great manager. That was worth repeating to drive home the point that if you want to be your best you will need to commit to delivering your best.

Easier said then done. We can help with the following tips:
1. Lead by example. Yes you are the boss, but employee's will not respect you just because you bark orders. Respect must be earned.
2. Commit to following through on your word. This may be as simple as telling an employee you will meet with them at a specific time or as involved as forming a new partnership. People want to do business and be around those that honor their word and deliver.
3. Manage your time. As a manager you will have specific deliverables that lead to the success of your company or how you are measured and there are two helpful hints for making your work load more manageable: 1. Delegate - get staff and others around you-working for you 2. Do not over commit your time - you do not have unlimited time in your day so understand and know your capacity and do not be afraid to say "no I can not take on that task at this time".
4. Remove emotion from your decision making. Get statistical performance measures in place to evaluate how your employee's are doing. Be careful here because it may be your fault as a manager if your employee's are not doing well with their performance. Coaching may be required and should be exhausted before termination.
5. Have fun. Enjoy what you do and bring a positive attitude. You will be amazed at how others will feed off that.

There is no secret method to being a great manager, but the 5 things mentioned above are very effective. Be create and put your employee's ahead of yourself and it will pay dividends.

The Octopus Solution

Monday, December 22, 2008

What happens to small businesses after the Christmas Holiday???

Today's economy is a train wreck and unemployment is at unhealthy levels. To stack more bad news on-top of that, after Christmas and the holidays consumer spending will drop...Are you ready? February is usually one of the hardest hit months in the retail industry. So with that bad news you have two simple options as a small business owner: Fight or Flee.

If you are still reading this Blog you obviously have decided to FIGHT and that is the only option.

You are not alone in the fight. There are thousands of business owners facing the same threats, challenges and problems, but together we can overcome. We have power in numbers and can maneuver faster and react quicker than large corporations. This enables us to step up: deals, cross promotions, partnerships, grass-root marketing, etc a lot faster. To use an alpine climbing term: We are going to travel "Light and Fast". Light means to carry as little weight as possible and Fast is getting from bottom to the top of the mountain and back down as fast as possible with no fixed ropes or pre-established camps. The risk is higher because the margin for error is small. We are going to move light and fast as small businesses and our margin of error is tiny.

Here is some ideas for moving Light:
  • Look at your employee's and find out which ones are not producing. Employee's should be hired in a small business to produce a final product, which should be used as thier measurement and evaluation. The product does not have to relate to money, but we like it to as much as possible. For example: One of my employee's has the role, within marketing, to establish as many community connections as possible that will allow one of our businesses to promote itself on-site. Through metrics we track employee performance and determine if they make us money or lose us money based on the number of business alliances and return. Do not have employee's that clock in and clock out, you are wasting money...get them producing.
  • Another way to move light is to re-evaluate your vendor relationships. Several of the companies we have had the pleasure meeting had long-standing advertising relationships with magazines, radio, and other outlets. The relationships had been on auto-pilot for years and value was not being reciprocated by the vendor. In Marketing, always make sure when you sign an advertising deal that there is free benefits being added to the pot. Think very creatively about how to utilize the relationship to the absolute maximum and then negotiate an even better deal. Reevaluate all your relationships and shop around, you may saving big $$$$. Everyone is hurting in this economy and there are incredible deals to be made, you just need to ask.
  • Alpine climbers take cutting weight extremely serious and will go as far as removing all the tags from all their clothing they plan to wear and even the draw-strings. So with that in mind, now look at your expenses and keep only what you need to survive. Look at the reality of owning a small business and cut out the luxury spending or anything of non-value. Many owners are inclined to cut marketing first; well how can you increase income with out getting in front of customers and driving them to your business. Carefully consider cuts and make sure they will not be the ones helping to drive in potential customers.
Here is some ideas for moving Fast:
  • Leave your office once a day and visit 3 other businesses. Visit them to introduce yourself, put up fliers, establish relationships, etc. The point is, you need to get away from the confinement of your office walls and beat the streets. Get out an establish relationships that will lead to both parties making money. Is there a complimentary or cross-over business that you should be working with? Now is the time to act.
  • Create an event for your customers and ask them to bring there families and other colleagues that may be interested in your business. Referrals are a huge way to get business fast because there is trust in recommendations. Ask all your vendors or colleagues for 3 referrals.
  • Lastly, make phone calls. Call your current customers, just to check in and make sure they are happy with your products or service. Or cold call (that dirty word) new potential customers and try to establish relationships. The phone can be a highly effective communication tool and you need to learn to not be scared of picking it up. Call 3 new potentials and 3 existing customers per day. Should take 30 minutes at the most.
These are just a few of the things you can use to travel Fast and Light in the risky world of owning a small business. Here is one task for you after you are finished reading this Blog: Call one business and establish a system of cross promotion. You will be amazed at the success rate and willingness of other businesses needing to increase revenue too.

Wednesday, September 3, 2008

The reason you have bad employees is because of YOU!!!

Hiring our first group of employees was more or less a disaster. We as owners had a vague idea of what we thought needed to get done. How does an owner teach an employee how to do something when he is just learning the basics himself? It is difficult. The people we hired were smart, personable, and highly capable. However, there was a problem and it took us time to figure it out.

One of the biggest challenges in small business is the owner’s complete lack of understanding. They do not know what needs to happen on a daily, monthly, or quarterly basis in order for their business to thrive. We did not know all the things that needed to be done to create revenue. Over the years we figured out one thing that is constant. All positions in the company needed to produce something; a product, a report, a statistic, a spreadsheet—some material that represents work. Most small businesses hire just to fill spots. What is the point of hiring if that new employee will not benefit the production rate of your company? Every position must produce.

Basically, a great deal of thought must go into creating each task within the company and a way to measure that production. Once this variable is determined, it will be much easier to decide which candidate has the greatest potential in delivering that product with the least amount of supervision.

While Arm 2 - HR is one of the most important arms, it is also one of the toughest to manage because you are dealing directly with the employee body. You must quickly become adept at managing the social interactions between your employees and your customers. These relationships shape and mold the face of the company.

Once the business is up and running, it will succeed or fail on the strengths and weaknesses of the people within it. Your employees will embody the philosophy of you and your business, serving as a constant representation of all that you value in front of customers and vendors alike.

This Arm assembles and builds your in-house dream team of employees. While managers must organize and delegate responsibilities, staff members must be properly trained to perform their tasks. The HR Arm must have evaluation techniques, action plans, and proper feedback within the system in order to make personnel changes that will ultimately benefit the continued growth of the business.

There are six main topics to be covered when building an effective group of employees: hiring, training, communication, evaluation, motivation, and employee termination. No employee will ever run YOUR business the way you want 100% of the time! But what if you could get them as close to that 100% mark?

Tuesday, July 15, 2008

Lecturing at Harvard Business School

Recently, The Octopus Solution gave a lecture to a great group of international business students who attend the Harvard Business School. The lecture consisted of our background stories, the global impact on our businesses and successful strategies we have implemented. One of our key talking points was:

The Three Hearts

One of our main foundational systems of The Octopus Solution is The Three Hearts. Did you know that an octopus has three hearts? Each heart pumps bright blue blood to different parts of the body, constantly renewing oxygen and other nutrients vital to the survival of the octopus. In the same way, the three hearts within The Octopus Solution function together as one for the constant renewal of customers vital to the survival of the small business. These three hearts: the potential customer, the established customer, and the repeat customer, are responsible for pumping and renewing blood and oxygen through out the small business. Without a customer, regardless of location, funding, and staff, there is no business.

The Potential Customer: The first heart beats within External Marketing, where the potential customer is driven to the company through marketing efforts.

The Established Customer: The second heart beats within Sales, where the potential customer is turned into an established customer by closing them on your product or service.

The Repeat Customer: The third heart beats within Internal Marketing, where the established customer is turned into a repeat customer because he or she is highly satisfied.

These three hearts represent the source of life responsible for the survival and growth of your company. Therefore, your knowledge and understanding of customer flow must be mastered. Most business owners, as they should be, are fixated on driving customers in the door. Without a customer, as common sense would tell you, there is no sale and without a sale, you have no business. Unfortunately, most business owners forget that once they have a customer, they must focus the same amount of energy on keeping them as they did to initially attract them.

The better you are at creating repeat customers, the more successful your business will be in the long run. “Acquiring a customer costs five to ten times more than retaining one. Repeat customers spend, on average, 67% more. After 10 purchases a customer has referred as many as 7 other people.”

Bottom line: keeping customers satisfied will pay massive dividends in the end. Making sure customers come back means knowing exactly what they want. Consequently, the more you can profile the potential customer and established customer, the better chance you have at catering to the needs of a potential customer and maintaining the needs of a repeat customer.

Wednesday, July 2, 2008

Don't let running a business become a nightmare.

Starting a business can take you from zero to 180 miles per hour in the blink of an eye. Once you start speeding down the decision making path, it becomes more and more difficult to turn the wheel in another direction without time, money, and resources. Correcting a mistake wastes all three of these assets, which means making an effort to get things right the first time around is crucial. Whether you are starting a business or have owned one for 25 years and are now starting to implement The Octopus Solution, everything starts with planning and strategy. Making decisions that can make or break your company is one of the most challenging and exciting aspects of being a business owner; the freedom to do what you what!

Early in our careers as small business owners we ran our companies by the seat of our pants. When problems arose we dealt with them; when things didn’t work, we fixed them; and when money didn’t flow, we worked weeknights and weekends to boost revenue. Reacting to competition, customers, employees and all the other things that can jump out of the wood-work will get you no where fast. Instead of focusing on growth and expansion, you will be running from one problem to the next like a chicken with its head cut-off. If you have been through this frantic chase, you already know that it’s not fun. The Octopus Solution can help you avoid those nightmarish days that run swiftly into the deepest hours of the night.

Even thought we don’t prefer working seven days a week, we sometimes have no choice in the matter. Owning a small business is by no means a 9-5 job; it’s a lifestyle and one that you must be committed to in order to make it work—at least in the beginning stages. After you have our Success System dialed down, you will be able to remove yourself from running a reactionary business to running a business that more or less runs itself. We have removed ourselves and you can too.