Category Archives: Small businesses

Into the gap – five steps to improve your strategic planning and implementation

McKinsey’s published a great article – Managing the strategy journey

Its focus is on the large corporate market. But there are some valuable lessons and gems that can be used by smaller companies.

In terms of successful strategies, they found, rather alarmingly that of the 2000 companies they surveyed only 35% had strategies that passed more than three of what they consider to be the ten tests for the likely success of your strategy. The full article can be read here

I have taken the liberty of using the key topics in their article and translated them for small businesses.

1. Plan to find the gap
Time and again when I talk to owners of small businesses, they don’t have a plan or forecast or budget for the following year/years.

McKinsey’s suggest meeting two to four hours every week/two weeks to match the amount of time you spend on operational issues.
For a smaller company, particularly with smaller numbers of employees, once a month is probably adequate. But book it out and make it a regular and unmovable date.

2. Find the gap
What is your vision for the future? Where do you want to get to?  Why do you want to get there? Is it to exit, to retire and hand it on to the next generation, double in size, have enough to be comfortable, be acquired, acquire other companies, step back from the business and become the chairman?  Whatever you decide here will inform any further planning.

Find the gap

3. Close the gap
Work on strategic initiatives that get you from where you are now to where you want to be.
Do you know your market, who your customers are, what makes you different, what your customers value about you, what opportunities and trends there are that you can tap into?

4. Bridge the gap
Work out how you are going to deliver these strategic initiatives.  This needs to be tied in to your financial and operational planning phases.

Bridge the gap
You should only ever attempt to make two to three big changes at once to stand a chance of succeeding.  Otherwise you will be constantly fighting against day to day issues and there is only so much that you and your staff/fellow directors can do at any one time.  If you attempt to implement the 15-25 they recommend in their article, you will fail.

5. Mind the gap
Measure and review. This may need you to change how you budget and how you do your forecasts.
Identify the measures (KPIs or Key Performance Indicators) that are going to get you to where you want to get to and review against those.  Make sure you have lead measures as well as lag measures.

KPIs Einstein
The lag measure is the historical measure of change e.g. sales conversions.
The lead measure is the measure that predicts the lag measure. In this case the lead measure might be ‘Make more sales calls’. It is the activity that should hopefully result in the end (lag) measure. This article explains it well

Summary

The beauty of having regular meetings and reviews using your KPIs is that you can track trends – are things improving as they are, or is there a downward trajectory requiring some intervention to take place? Many people only find out at year end when their accountants go through the figures that things haven’t quite gone as planned. Don’t put your la-la ears on; far better to track frequently and see dark clouds appearing on the horizon and to take action rather than waiting for the full scale hurricane to hit.

I can't hear you

Smaller organisations have the advantage over the larger ones in that decisions can be made far more rapidly and with much more flexibility and they are less hampered by process. More of a speedboat vs a supertanker.  That’s not to say an appropriate amount of time, research and resource shouldn’t be put into it.  It absolutely should.  And it’s not an excuse for constantly changing the plan. Which is always a temptation.  Give it time for new initiatives to work and try not to get tempted by lots of lovely, shiny new things.  Review anything new against your existing plan at your regular meetings and make sure a proper business case is put together to assess its viability. And if it actually gets you to where you want to get to.  Always check back to your vision and aspirations (and values).  Do the activities help you get you there?  If not, then you should think seriously about whether or not they should be implemented.

If you want help on developing and implementing your strategy, please contact me for a free, no obligation meeting – karen@thechameleonguide.com

http://www.thechameleonguide.com

Eight factors that increase value in your business

For your company to be valuable or even sellable there’s a lot more to consider than just the bottom line such as will your customers continue buying or will a competitor start chipping away at your margins?

It’s important to understand what drives up or undermines your company value. And there’s a way to find out – using the Sellability Score.

‘The Sellability Score was created by a team of researchers led by John Warrillow, author of the international bestseller Built to Sell: Creating A Business That Can Thrive Without You. The book inspired a movement of entrepreneurs who recognize that the ultimate test of a business is not how big it is, but how valuable it can become’ http://www.thesellabilityscore.com/

They identified, through research on over 6,000 businesses, that there are eight factors that you can work on that will increase the value of your business

These eight factors are ways to help you evolve your business to give you freedom of choice – to sell, to be able to work sensible hours for the same or more revenue, or to stand back from it almost completely, or even as simple as to be able to go away for a two week holiday without worrying about whether the business is going to implode without you there.

ducks-in-a-Row

So what are these eight factors? I must emphasise that these aren’t magic wand/quick fix answers in the majority of cases. These are areas that you work on over time building value that way. Beware anyone who says they can wave a magic wand and give you overnight success.

1. Financial performance
This is particularly important if you are looking to sell. You will need to show any potential purchasers that your sales and profit projections for the future are based in sound historical fact. They will have in their minds what return they want on your business and also how risky they think it is. And not having comfort over your projections increases the risk to them and therefore decreases the value of your business and what they are prepared to pay.But it’s also incredibly valuable for you as a business to have budgets and forecasts and measuring performance against your budgeted figures.

Action: Create a budget and measure performance against it.One of my big mantras is – What gets measured gets done. If it’s written down and reviewed, then it’s far more likely you will hit your targets

2. Scalability

This is how scalable your business is or how easy is it for you to grow your business. This may sound an odd statement, but the secret to scaling is to sell less stuff to more people! Too many of us fall into the trap when starting out of trying to offer your services (vast) to everyone. It rarely works.Your ability to scale is dependent on you

– being able to teach others your skill
– having products or services that lead to recurring revenue
– aligning your products to your most valuable customers

Action: Review your products and services against these criteria. If they tick all three boxes focus on them and if they don’t tick the boxes, think about either how you can develop them so they do, or possibly contemplate not offering them.

3. The Switzerland structure
Maintaining neutrality. i.e. you shouldn’t be over dependent on a customer, supplier or employee.
You should not have a customer who makes up more than 15% of your revenue, and you should be able to switch supplier. The overreliance on an employee, could be you by the way!

Action: Review your customers, suppliers and employees to see if you need to take any action to reduce your dependence on them.

4. Valuation see-saw
Another equation – the more cash your business needs, the less value it has. If you are selling – if the person buying your company has to write out two cheques when they buy your business – one to buy the company and another to pay for working capital – it’s going to make you a less attractive purchase.

So this is all about cash management
– Not holding too much stock
– Having tight processes around invoicing and debt collection
– Getting the most favourable terms with your suppliers and so on

Action: Do all of the above!

5. Reliability/Repeatability
This is back to something I alluded to earlier on in Scalability. The more reliable your income streams are, the more value your business has. One off transactions are at the bottom of the scale, where you want to get to is a recurring revenue stream. Mobile phone companies are good at this with their two year contracts, then auto renewal products such as your antivirus on your laptop, other renewable memberships. Or selling one product, but then getting regular income off consumable products – printers and paper, nespresso etc.

Action: Think about any ways in which you can offer your services or products on a recurring basis.

6. The Wow factor
Getting you and your product differentiated. It’s too easy to think you have to offer everything to everyone. How do you get heard on that basis?Dinosaurs

 

 

 

Action: You want to have a niche – identify the thing(s) your most valuable customers value about your products/services and sell more of that to them and to others like them.

7. Customer satisfaction
This almost goes without saying. But what you need to be able to do, is to prove that your customers are happy. It’s not good enough to say that you pride yourself on excellent customer service without providing the facts to prove this.Action: One easy way is to implement the net promoter score system .
Or use online review sites such as Revoo and Trust Pilot amongst others.

8. Hub and SpokeThis is degree to which they business relies on you and it affects the value of your business. If everyone reports to you, or your customers and suppliers will only speak to you, you are at the centre of your business. You are the hub and your company – to be blunt – is worthless company if you are looking to sell.

Action: If you want a profitable business then this may work for you as you keep your overheads down, but if you are looking to sell, or take a step back, or even aim to take a two week holiday, then you will need to look at the structure of your business to see how you can shift the reliance on you to others

If you’d like to know more, let me know.

karen.espley@thechameleonguide.com

http://www.thechameleonguide.com

 

Piecing together the marketing jigsaw for start-up businesses

It’s taken a while, but I’ve recently come to realise that it takes a lot longer than you think to get your business up and running.

From a standing start of no customers to being able to pay the bills can take many months. That’s not to say that some businesses don’t get off the ground very quickly – picking up an early contract for example, but these are the exceptions rather than the rule.

Ignoring (for the sake of this blog) all the other things you need to do when starting up your business, generating sales has got to be the number one priority. If the right people don’t know about your products or services, having the slickest behind the scenes processes matters for naught.

Who we should target

I was rather naïve thinking I only needed a couple of marketing strands going. Which is pretty foolish from an ex marketing director! I thought that the model I’d been told would work, would work. Networking and seminars. That was all that was needed. And the odd attendance at exhibitions.

Phase one marketingMarketing stage 1

‘Know, like, trust’ – that statement beloved of networking groups, whilst somewhat clichéd, is so true. And that can take in excess of six months of dedication to start to bear any fruit. Certainly in my line of business where I work with companies on their strategies to help them achieve their business dream, people need to trust me to know I’m going to do a good job for them. People may well be more willing to take a risk on a lower cost item, but they are still going to have to be convinced before they part with their hard earned money.

The big challenge with both networking and seminars is finding the right people. There’s all this talk of being in the ‘right room’ and it’s so true. How many divorce lawyers would you find at a wedding fair? Now that really would be a case of blind optimism over reality!

But there’s networking and there’s networking.

There are loads of articles on how to network properly – have business cards, have a strong 60 seconds, do presentations, talk to lots of people, follow up, have one to ones. That’s pretty much networking in a nutshell. The challenge is finding the right place to network. That’s been my biggest revelation and toughest challenge so far. I always assumed I would work through the room i.e. even if the people at my networking meeting weren’t the right people, they would know the right people who they would refer to me.  This may well work over time, but it’s not a sure fire method early on.

It’s always good to ask people which networking groups they go to and which ones work best for them and why.  Remember though – what may work for them, may not work for you. Is their right room, your right room?

My challenge is finding the owners of small companies with three plus employees. They generally aren’t at the networking groups I go to.  Very busy running their businesses I should think.

I also run seminars. Which are well attended. I try to invite potential referral partners so they can see me in action and get a feel for my capabilities.

 Social media for small businesses

I then latched on to social media and wrote a whole content marketing strategy. Which has been a very useful exercise as it made me focus on who my key customers are, what their issues are and what sort of information would be useful for them.
Ideally your social media strategy should include your website, Twitter, LinkedIn, Google+, possibly Facebook and places where your (potential) customers may be lurking.

This is now up and running and I have in excess of 1,200 followers on Twitter now.  Which is great. The next challenge, having got all this exposure going, is to start converting it into business.

Phase two marketing

Marketing stage 3

Email marketing to businesses

There is a resurgence of email marketing in the world of B2B.  But it has to be good email marketing. Talk to an expert. There are some good blogs out there. Also check this organisation out – they run a very interesting webinar on the eight essentials you need for email marketing

Buying email lists for mailing

This is more difficult to do. There are lots of list sellers out there. It is important to do your research before you buy. See if they will let you buy a smaller amount first to trial before you go large.  Data gets out of date very quickly and you need to ensure that people have opted in to the list before you start contacting people.

B2B Telemarketing

As difficult, if not more difficult than buying lists. It is increasingly difficult to use telemarketing to get appointments. It’s not impossible, but you have to really research to get a good telemarketer. And then give them a really good brief. And tie them down to strict criteria as to what a successful appointment is. And only pay them on results.

As with list buying, I would suggest a trial run with them of getting them to get you five appointments, seeing how they go and dependent on that, either hone your brief or find someone else.

It’s not cheap, so you don’t want to waste your money unnecessarily. And a cold appointment is far harder to convert into a client as they have no context when you turn up. Expect a certain amount of frostiness and wariness when you arrive. But take heart in that they’ve agreed to see you – something must have piqued their interest…

Joining the dots

This was the big light bulb moment for me. I’d been doing lots of activities, largely in isolation from each other. When what I need to be doing is cross fertilising. This to me means ensuring that my blog is posted across the social media. And not just posted, but done so in a meaningful way so that it is of use and also moves people towards an action goal. The blog can have excerpts cut out of it and used multiple times in twitter. They can all tie in to an email marketing campaign which may be around getting people to a seminar – see my full picture below:

Phase three marketing

Marketing final picture

I pooh-poohed an article the other day that said 95% of sales people would make the first call, 50% would make the second follow up call and only 10% would make the third. But apparently 60% of buyers say yes after the fifth no. I pooh poohed it because how would they know?  If you’re down to 10% at the third call, who are these people making the fifth call and what is the pool of people they are talking to to come up with the 60% statistic. It didn’t seem a statistic that held up to good scrutiny. Well, my scrutiny anyway.  So at a networking meeting, I asked Nicci who runs Sales Coaching programmes and she said that it’s the five ‘touches’ that are important. Not five calls. This made more sense and which ties in with my joining the dot approach.  As long as you can add value in those five touches i.e. have a good reason to be in touch with the person you want to do business with at least five times, you stand a better chance of getting the business.

In summary:

  1. Be patient
    It takes time. Get to the end of your tether. And then keep going.
  2. Be clear about why you are doing what you are doing
    Sales appointments, getting people to seminars, getting them to sign up to newsletters. Whatever it is – make sure that’s the message that’s getting out there.
  3. Keep trying different activities and testing them.
    Drop the ones that aren’t working
  4. Make sure the different activities interlink
    You are building up a more cohesive picture with an overall drive to your objective – just coming at it from different angles.
  5. What works will become clearer over time
    As you can see from my build up, it’s only now that I’m finding out what is going to work for me. You will need to find a mix that works for you. And it will be a mix.
  6. Don’t beat yourself up
    It’s all a learning process and you wouldn’t have known what you know now back then.

If you want to know more – contact me karenespley@businessdoctors.co.uk

 

 

Think your way to success

With all the Valentines Day hype, I have allowed myself to be drawn into the let’s-talk-about-lurve vibe of this week.

I’m going to embrace it and talk about loving life and positivity as both will have a huge impact on your business. This article may be a bit ‘woo woo’ for some of you, but I’m not asking you to hop around on the pavement for me to identify your animal spirit, merely to adjust your mindset. And I’ve backed it up with some real life objective evidence…

How many times do we say ‘I can’t do that’, ‘I’m rubbish at…’, ‘Nothing ever seems to go my way’, ‘As usual, something went wrong’? And I’m sure you can add many, many more of your own to this short list.

We apparently have 70,000 thoughts a day, and of those 70% are negative. Which, if my sums are correct (quickly checks), is 49,000 negative thoughts a day.

No wonder we feel awful a lot of the time!

So, let’s stop it right there shall we?

Let’s look at a couple of examples of how belief impacted outcome. In both cases, in quite dramatic ways.

The first is the breaking of the four minute mile back in 1954 by Roger Bannister.  People had been trying to break this record for many years without success. In fact, it was believed that it was physically and physiologically impossible to do. Certain death would ensue if the time to do it was decreased any further as the body was incapable of managing such speed and surviving. So went the logic at the time.

History of course showed that Roger Bannister broke the record on the 6th May 1954 at 3 minutes and 59.4 seconds.

An amazing result. However, what is more incredible is what happened next.  Over the next two years the record was broken 43 times!  Not because they got better running tracks or better running shoes; they continued to run on cinder tracks with the same running gear as before. What changed was belief. People finally believed that a mile could be run in less than four minutes, ergo the mile could be run in less than four minutes.

The second example is an experiment carried out by Rosenthal, a American psychologist. He wanted to see what would happen to school performance when students and staff were streamed by ability. He took 10 classes of 14 year old students at a school and put the best ones in to the top three classes and then selected the best three teachers to teach those classes.

The results were dramatic. As each term went by, the top three classes outperformed the other classes as follows:

Time Improvement over other classes
End of first semester 18%
End of 2nd semester 39%
End of 3rd semester 52%

By the end of the school year, the top three classes were 52% ahead of the others.  The teachers were of course ecstatic with the result and delighted with how enthusiastic and diligent the students had been. Rosenthal then dropped a bombshell. He hadn’t actually streamed the children by ability at all, he’d allocated them randomly to the classes. Unfazed the teachers cried that surely it showed how good they were that they managed to get exceptional results from a mixed bag of students. At that point, he dropped his second bombshell; he hadn’t actually chosen the best three teachers, he’d also assigned them at random.

So, what had made the difference? That old belief thing again. The students and teachers had believed they were the best, ergo they were the best. By a considerable margin.

(I have greatly simplified the experiment here. An excerpt from his work can be found here )

Which all goes to prove that the only thing that holds us back is ourselves.

Can you imagine what you might achieve if you actually believed you could?

positive-thinking-far-side

Our mind is a wonderful thing – it will deliver what we ask it to. If we feed it negative thoughts, then guess what? Bad stuff happens and reinforces our belief that bad stuff happens.

I heard two great analogies last week about how malleable the mind is which I found very helpful.

Imagine a massive supertanker – plying its way between China and the UK. It’s controlled by the captain and crew – they plot the course and then navigate the tanker from A to B. Imagine now that the supertanker is your mind and you are the captain and crew. It’s up to you to plot that course and that supertanker (mind) will go wherever it’s told). Without the guidance of the captain and crew (you), it goes nowhere.

And the second is a farmer cultivating his land. The land will grow whatever it is the farmer decides to sow, whether it’s weeds or fields of corn. Again, the land is like our mind – it will deliver to us whatever we (the farmer) choose to plant in it.

We are the masters of our own destinies – we can choose to be positive and direct our actions that way, or we can choose to be negative and live our lives less abundantly.

“Each morning when I open my eyes I say to myself: I, not events, have the power to make me happy or unhappy today. I can choose which it shall be. Yesterday is dead, tomorrow hasn’t arrived yet. I have just one day, today, and I’m going to be happy in it.”  Groucho Marx

Here are some top tips on how to take action today to help change your mindset:

  1. Commit to doing this for 30 days
    This is the time it takes to change a habit
  2. Visualise what your vision for success is.
    This could be a number of things depending on how you define success. It could be financial success, it could be mastering a language, writing a book or being the best mother/father you can be. Whatever it is that is that will make you feel fulfilled and it’s the thing you were always meant to do.
  3. Write it down.
    Yes, write it down. And then read it several times a day. Keep it with you. Read it when you get up in the morning, when you’re having your mid-morning drink, at lunch time, in the afternoon and before you go to bed. And any other time you feel the urge. Keep reminding yourself of where you want to get to.
  4. Act as if you’re there now.
    Fake it ‘til you make it. If you act as if it’s real, it will become real. Think positively about all the different ways you can overcome any obstacles – come up with some different solutions.
  5. Take action
    What do you need to do to make your vision reality? Act as though it’s impossible to fail.
  6. Banish the negative thoughts
    If a pesky negative thought tries to worm its way in. Thank it – this is part of your brain trying to protect you – but tell it gently that it’s all good and you’re doing things a different way now. And bat it gently away. If you do get overwhelmed by negativity and it all goes horribly wrong. Don’t beat yourself up. Just reset the clock to 30 days and start again.
  7. Pay it forward
    Give the love out in all directions. Who else can you support and help along the way? It doesn’t have to be big stuff; smile at someone, let someone out in front of your when you’re in your car, give someone a great referral. It may not come back to you now, but it will do. And you’ll feel great whilst making someone else’s day.
  8. Ask for support and help
    It can be very hard to keep positive for 30 days. This is not an easy thing to do when we’re conditioned to think negative thoughts. I am particularly bad at asking others for help. I had a particularly trying week last week and was feeling utterly awful. There have been tears, I won’t lie. But the moment I reached out – to a friend, to a work colleague and to someone I’m working with on my personal development, things shifted. I had an email confirming a piece of work I thought was dead in the water and a phone call arranging to meet with the directors of a company which may lead to more business. Happy days.

I am not suggesting any of this is easy – it’s not. Trying to break any habit is really hard and deeply ingrained negative habits are particularly hard to break. And this isn’t about suggesting it’s all down to fate or having blind optimism which I’m guessing some of you may think I’m doing. This is about a developing a positive mindset, having a plan and acting on it. Not that different from running your business. However, If your vision is to have made a million pounds by the end of the week from a starting point of zero, you may need to have a bit of a rethink!

I am going to try this for 30 days – if anyone wants to join me, let me know and we can set up a power group of support for each other.

We have nothing to fear, but fear itself. And that’s the killer to all your dreams.

Nothing to fear but fear

A great friend of mine is living proof it works. She has turned her back on the comforting six figure contracts. Golden handcuffs are very hard to let go of if that’s what you’ve been brought up to do.  As I type, she is sitting in a villa in Bali having, in the space of two weeks, written her first book. I’ve never heard her sound happier or more that she feels she’s exactly where she needs to be. All through visualising exactly what it was she wanted to achieve and then making it happen.

I am going to finish with a request that you watch this video clip (that funnily enough appeared shortly after I asked for help too). This man is quite simply awe inspiring. Any time you think you can’t – watch this and realise you can!

Want to chat – email me – karen@thechameleonguide.com

http://www.thechameleonguide.com

Why selling on price is a bad thing (and why differentiation is a good thing)

Last year Apple revealed their profits had increased by 37% to $18billion.
Is this because they are the cheapest?  Far from it.

The new iPhone 6 is twice the price of other companys’ phones. Xiaomi’s Mi3 costs $320 compared with Apple’s iPhone 6 retailing at $649. That’s not to say that Xiaomi aren’t having great success – they are, but Apple can still sell its product successfully at that price point.

A common argument used by our clients is that they need to compete on cost. They feel they have to cut their prices to win business. At The Chameleon Guide we strongly encourage our clients to resist selling on price.

Here’s a cautionary tale on trying to win business based on cutting prices. A cupcake maker agreed a deal with Groupon (one of the discount voucher sites) and hadn’t done her sums properly. She was tied in to making up to 102,000 cupcakes as part of her offer at a 75% discount off her normal prices (and when she normally only made 100 cakes a month). She had to get in 25 agency staff to help her fulfil the deal, failed to deliver a good result to many and made a loss of £2.50 per box of 12 cupcakes.  That’s 8,500 boxes of cupcakes at £2.50 loss per box, totaling an overall loss of £21,250. She nearly went under.

5 good reasons not to sell on price

  1. It’s an easy thing to do and easy to copy, so your competitors can simply drop their prices to undercut yours
  2. You end up in a price war. Tesco’s profits have suffered from trying to compete with Aldi and Lidl
  3. Unless you have economies of scale allowing you to offer your product at the cheap end, it’s not really a sales strategy because you won’t be the cheapest
  4. You will be perceived as cheap and cheerful or worse. If that’s your strategy, go for it, but there is usually a suspicion that your product is likely to be of poor quality. You may get a sale, but if the product actually is poor quality, people are unlikely to buy from you again.
  5. For smaller companies it’s not a sustainable strategy – it won’t give you a long term competitive advantageGilbert cartoon on price

If you are going to reduce your prices for a one off push for example, make sure you do the sums.

Here are a couple of examples of the impact on profit reducing your prices may have. I’ve adapted the examples from this article

Example one – profit from selling the same number of products at a discounted price

Normal price Discounted price
Selling Price per item £100 £90
Cost per item £80 £80
Numbers sold 50 50
Total revenue £5000 £4,500
Total cost £4,000 £4,000
Profit £1000 £500

In this example, selling the same number of products at a 10% reduction has reduced the profit by half.

But of course you would be expecting there to be an increase in sales which would counteract the loss of profit.

Example two – How many more you need to sell to get the same profit as the non discounted price

Normal price Discounted price Discounted price
Selling Price per item £100 £90 £90
Cost per item £80 £80 £80
Numbers sold 50 60 100
Total revenue £5,000 £5,400 £9,000
Total cost £4,000 £4,800 £8,000
Profit £1,000 £600 £1,000

You would need to double the sales volume with a 10% discount in order to reach the same profit level as if you hadn’t introduced the discount.

This is a reasonably extreme example, because hopefully your costs wouldn’t be this high relative to the selling price. But it illustrates the point nicely.

There are of course times when it’s worth doing this. For example it’s end of line product and you’ve already broken even and you want to get rid of the stock. Or maybe there’s been a drop in the cost for some reason (drop in oil prices reducing transport costs for example) so you would be able to get a good margin still with the discounted price.

So, what does it look like when you don’t sell on price?

If we go back to look at Apple in a bit more detail…

They do not sell on price. They deem their products to be luxury items for which they can charge a premium.

This only works, because they do actually have a superior product. They create desirable products. The design quality is superb, it has an awesome brand, and it has the top Net Promoter Score in its industry across all three of its products. All three scores are in excess of 65 with their competitors trailing by at least 10 points. Given a cross industry average NPS of 15, this is an outstanding figure.

People who buy Apple do so because they buy into the Apple vision hence why each time a new version of a product comes out, there are massive queues to buy the new version, even if the old one is still functioning perfectly well.

Not all of us get the Apple phenomenon – I’m an Android/Windows lover through and through, but I can’t fail to be impressed with Apple. What’s not to be impressed about?

So how do you differentiate your product or service to attract buyers who will pay more for your product and stay loyal to you; buying from you time and again?

It’s about two things:

  • Finding your niche or point of differentiation
    and then
  • Finding the customers who value that niche or differentiation and will pay good money for it

7 differentiators

  1. Customer service
    As covered in a previous blog, many companies believe they offer superior customer service. Reality would say otherwise.
    But 8 out of 10 people said they would pay 25% more for a superior customer service (Source: Drum.com, 2013)
    So, if you can truly offer top customer service, you really will make a big difference and it will give you a sustainable competitive advantage because so few companies are able to deliver consistently high customer service. And it’s difficult to replicate.
  2. Unique product
    This is difficult to achieve unless you truly do have a unique product that no-one else has. But you may for example have the sole distribution UK rights to a product, or a pharmaceutical company brings out  a new wonder drug for a condition that will be on patent for anywhere between eight and 20 years before it can be replicated.
  3. Quality product
    Apple don’t make many things. But what they do make have superb design and work brilliantly. The number of colleagues and friends who tell me I should just give up get and AppleMac/Air/Whatever because ‘they just work’ is too many to be a coincidence.
    They are selling luxury.  But sell it in spades.
    Others such as Rolex not only sell luxury, but also exclusivity. How many of us could afford a minimum price tag of £3k for a bottom of the range Rolex?
    These products are about more than just quality – it’s a statement about the kind of person you are.
    Car sale
  4. Delivery/Reliability
    You deliver. On time, every time. This is of vital importance. A client provides safety products to the construction industry. And one of the key things their clients value is that they know if they place an order, it will be delivered in one piece at the timescale stated. And the clients are informed every step of the way. If a product isn’t available, they will be told, given alternatives and sometimes that even means pointing them in the direction of a competitor. Because it’s about delivering to the client.
  5. Information
    You are a source of knowledge about your product and act as advisers to your clients/customers. They will come to you because they know you will give them best advice, which sometimes means giving them something cheaper than they thought they might need because that’s what will work for them.
  6. Social/environmental
    Your products have a positive impact on the environment or supports social causes.
    Either directly or indirectly. For example you give x% of your profits to worthy causes, or you manufacture your products using recycled materials.
  7. Price
    Is a differentiator – but not for smaller companies (as covered above). This niche is strictly for the big boys who have purchasing power to keep their costs down so they can stack ‘em high and sell ‘em cheap.As a slight tangent – One could argue about the ethics/morals of this. For example, having clothes made offshore by piece workers who get paid subsistence wages and are forced to work in terrible conditions just so we can have cheap clothes. Who can forget the Rana Plaza disaster in Bangladesh in 2013 – when the building collapsed killing over 1,000 people and seriously injured a further 2,500. The added horror is that the employees said they didn’t want to go into the eight storey building because of the cracks that appeared, but were forced to go in or have their wages docked – not just for that day, but for the month. And it’s taking a lot of pressure to get some fashion houses to pay compensation…
  8. Add in your own…

What you need to do is identify from your top customers/clients what it is they value about you. It may be one or more of the above that are just what your customers want and are prepared to pay more for (other than the Price one obviously!). Having identified your magic ingredients and who your top customers are that pay for that recipe, you’re on your way. You now have a product/service offering that is based on value not price and you know what your perfect customers look like so you can go and find more of them.  Beware the – our product is for everyone – you’ll have a weak marketing message and are likely to end up falling between two stools. Far better to be brave, identify who those most valuable customers are and what they like about your product and laser focus on getting those customers.

And you never need to sell on price again.

If you’d like more information on how to identify your sustainable competitive advantage, drop me an email – karen@thechameleonguide.com

http://www.thechameleonguide.com

Ask not what your customer can do for you, ask what you can do for your customer

Why do organisations take us for granted?

In the light of my recent experience with Sony, (including yet another highly unsatisfactory call during which it became abundantly clear that hell will freeze over before they will give me a refund) I have decided to write about the differences between good and bad customer service.

Does this customer expect me to assist her

  • 86% of customers will stop doing business with you after a bad customer service experience
  • it takes 12 positive customer service experiences to make up for one poor one

The irony is that the majority of companies say they pride themselves on good customer service. A Forrester report from 2010 identified that:

  • 90% of (North American) firms view customer service as important or critical and
  • 80% would like to use customer experience as a differentiator.

I would say that the reality is how they believe they treat their customers is not how their customers feel like they’ve been treated and that there is an essential mismatch between what they think they are delivering against what we think we’re getting.  Just because people aren’t complaining, it doesn’t mean they aren’t happy:

For every one customer that complains, there are 26 who don’t (Lee Resource Inc.).

That means there are 26 customers you don’t know about who will go elsewhere because they perceive they have had poor customer service. That’s quite scary isn’t it?

Convinced yet?

So, let’s look at bad vs good examples on the journey through customer service

1. Ease of contact

In another Forrester report – 79% of people would prefer to use the telephone as their communication method of talking to an organization. This is far and away, the most popular method of contact. So customer call centres are here to stay!

So why is it so hard to call these companies?
There are many culprits here. Some don’t even have a phone number for you to contact them:

Skype are one such organisation – you have to go and use their forums to find an issue. And then make it almost impossible to post a query.

Sony (who may appear a few times in my bad examples, being as they are the most recent organisation to upset me) make you wade through several pages of their website and want you to put things like your product serial code in before you eventually get to a page where there is a number. Even then it’s not terribly clear if it’s the right number.This organisation apparently has a high NPS – how did that happen?
Vodafone – a telecoms company right? I’ve just gone onto their website to try and call them. It’s six clicks to get to a phone number.

There are of course some good examples out there. Those websites where the telephone number is on every page of the website and easily found.

Having said that, I’m actually having a bit of difficulty trying to track any down – certainly not in the large corporations. Bear with as I try and find some…

If you google Sky customer service – You can get to a telephone number in two clicks once you get to their website.

EDF – offers a live chat from their Help Centre page (which is where you go to if you type in EDF customer service) and a telephone number after a couple more clicks. Interestingly enough though, the sales numbers are shown before the customer numbers which you have to scroll down to reach.

Barclaycard win!
If you put in Barclaycard customer service this comes up on Google even before you’ve had to go to their website.  I’m impressed with that.Barclaycard customer service number

Three top tips for ease of contact

  • Have an easily accessible customer service number – if it’s not going to be on your home page, make it easy to find from wherever your customer is on your website
  • Don’t make it an 0845 or other premium rate telephone number – why should we have to pay for the pleasure of having our queries dealt with?
  • Do not try and fob your customers off with an FAQ section. I’m not saying don’t have one – a good FAQ section is very useful – as long as it’s easy to search and get the answer you’re after. But there is nothing more frustrating than trying to find an answer before you’re allowed to contact an organisation. And worse still, after you’ve typed in that the FAQs haven’t answered your question, there’s a final double check from them ‘Are you sure you haven’t found the answer in our FAQs?’ before you’re allowed to submit.

2. Having found a number

We dial the number, only to be faced with a barrage of options. Very few will offer, at this stage, an option of speaking to a human being. What’s more frustrating is if you go down the wrong decision tree of options and end up in a cul de sac from which there is no return. They may want something from you which you don’t have and all you get is ‘That is not the correct response, please re-enter your customer number/Invoice id/starsign of the CEO/whatever else it is that you couldn’t possibly know the answer to’ with no other alternative. Then you are disconnected or you have to hang up and start again with a different route.

Three top tips for ease of contact

  • Depending on your business, do not have an automated system, allow your customers to go straight through to a person. Beauty clinics and hairdressers come firmly into this category for example
  • Always ensure there is an option to speak to someone at every stage of the options
  • If you need the customer to put in a code or reference and they don’t have it, or they do it wrong, the default should be they get put through to a person
    And a bonus fourth:
  • If you offer a call back service. Make sure you call back within the service level time you have told the customer you will call them. Sony never bothered to call me back.

3. On-line chats as an alternative
These can be very useful if you have a quick query, or you want a log of your interaction with an organisation. I have used them to great effect to cancel policies or to get a refund (big hand to Norton for dealing with me so well – no fuss, no bother, a straightforward refund with no quibble).
But these can be managed badly too.
– If the service is offered, but you can’t get anyone to reply to you.
I was working with one client and their customer support staff had to manage four chats at a time. Which caused all sorts of problems as the product they were supporting was very technical. They would leave customers waiting – I saw screens full of ‘hello, hello’ and ‘is anyone there?’ , or they may respond with an answer that was for a different customer or even simply hang up on them. It was pretty poor!

Three top tips for ease of contact

  • If you’re going to offer on-line chat, ensure there is someone to manage the chats for the hours you say you offer the service for. There is nothing more frustrating than being told there is no service currently available.
  • Ensure your staff only deal with an appropriate number of customers at the same time. If it’s a technical service or product, then giving them four to manage is probably excessive.
  • Ensure your staff have the authority and access to the right systems to carry out the kinds of transactions that your customers may want to do, such as getting a refund, or wanting to know when a particular product is going to be in stock.
  1. Yay – you’re finally through to a human being!

But are you through to the right person?  How many times do you get pushed from pillar to post with no-one taking responsibility for dealing with your issue or query whilst your blood pressure and irritation levels steadily rise?

Vodafone used to be very good at this. I got passed round four people to whom I had to explain the issue each time, only to be passed on and eventually got passed back to the first person I spoke to with the issue still unresolved. Repeat the process…

The four biggest complaints customers have about call centres are rudeness, buck passing, taking too long to resolve an issue and being shoved around from one rep to another (American Express Global Customer Service Barometer survey, 2012). And 93% of the 1000 customers they surveyed believed that companies fail to achieve their customer service expectations.

As I mentioned above, Norton were excellent when I contacted them (admittedly by on-line chat). The lady I ‘spoke’ with, grasped my issue quickly, dealt with me politely, was able to issue me a refund and the whole process was over and done within five minutes.  I was suspicious. Could I really have resolved a matter that I suspected was going to take a lot of effort to sort out in five minutes flat? Wonderfully, yes.  But isn’t it a sad indictment of customer service that I was wary of when it went well?

Sony could learn a lot from them.

Where most companies fail is in the lack of empowerment of their frontline staff. They are stuck in a process from which they cannot deviate, pass go or collect £200. So unless they have an answer that’s on their list of things they can do and say, you’re in trouble.  And then the most infuriating thing of all – they will not pass you on to their manager.  ‘It’s not possible’, or ‘the manager is busy now’, or ‘if I can take your details, I will get them to call you back’.  I think it’s appalling that management hide behind the frontline staff who have to bear the brunt of their customers’ ire and yet are not given the tools to deal effectively with their customers.

And more often than not, the manager doesn’t call back. And if they do call back, quite often, they too are unable to take any responsibility to deal with the issue.

Top tips for dealing with your customers

  • Employ people who like talking to people and who understand the issues your customers face (having empathy)
  • Train your staff so they are able to fully understand your products and services and what your policies and processes are.
  • Give your staff access to sufficient information that they don’t have to pass your customers on to other departments, or if they do need to get information from elsewhere, they continue to deal with the customer and don’t pass them on to some new person
  • Empower your staff. Give them discretionary powers to perform certain actions (within guidelines of course). Allow them to delight their customers from time to time – there is a wonderful example of someone ordering and paying for a taxi for a customer who was having a spectacularly awful morning and needed to be somewhere urgently
  • Have a proper escalation process which enables your customer to be passed up the line if they are unable to sort out an issue at a lower level. Have that process documented and listed on your website, so people know how to complain.

In summary – Good customer service is not rocket science.

The saying ‘treat others how you would wish to be treated’ sums up good customer service to me.

  • Help customers to contact you – put details clearly on your website or paperwork
  • If you need an automated system, make sure there is a way to speak to a human easily.
  • Be responsive
  • Be nice to your customers
  • If you say you’re going to call them back, do so.
  • If they send an email request in, don’t take five days to get back to them.
  • Help them out if it’s clear you have let them down in some way, or even if they have made a mistake. They’ll love you even more if you help them out of their own errors.
  • Encourage your staff to walk in your customers’ shoes – get a bit of empathy going
  • Empower your staff to be able to deal with the customers
  • Find small ways to delight your customers
  • If someone complains, help them, don’t obstruct them
  • Learn from your customers – ask if there’s anything you could do better

All of which will result in far happier customers, who are more likely to buy more from you and tell their friends how wonderful you are. And it will definitely differentiate you from your competitors.

And the downsides of not treating your customers well? Also not rocket science. You will lose them and they will tell lots of other people too.

Want help improving how you manage your customers/clients – email me: karen@thechameleonguide.com

http://www.thechameleonguide.com