Archives for September 2011

Resolve To Make a Decision

Abraham Lincoln once described a general who was unwilling to make decisions under pressure as “acting like a duck that had been hit on the head.” I have never actually observed the behavior of waterfowl suffering from cranial trauma, although I once accidentally hit a duck with a stone skimmed across a frozen pond. But that was long ago and involved an entirely different part of the duck’s anatomy.

I have observed the behavior of managers making (or not making) decisions enough to conclude that the majority of problems in business are not because someone made the wrong decision, but because no one made any decision. Will Rogers summarized the risk of indecision with this, “Even if you are on the right track, you will get run over if you just sit there.”

To be sure, there are “mission critical” decisions that have the long-term potential to make or break any organization. Nevertheless, unless you are a heart surgeon or an airline pilot, most mistakes are to some extent correctable, at least within limited timeframes.

Decision making is a cognitive process involving logic, reasoning and problem solving skills. Unfortunately, each of us enters the process with preconceived biases and exhibits some degree of “decision inertia” or a reluctance to move off those biases when faced with new facts or circumstances. Business decisions can be reduced to a four-step process as illustrated in the following diagram.

The first step is to analyze the problem and identify solutions. This is largely a fact gathering exercise involving input from multiple sources and considering alternative courses of action.

It is important to differentiate between problem analysis and decision making. Although it may sound redundant, success requires the decision maker to do just that, make a decision. Theodore Roosevelt said, “In any moment of decision the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.”

While the dreaded “paralysis of analysis” may be seen as the cause, the reality is many people, perhaps including Mr. Lincoln’s general, simply find it safer not to make decisions, even in obvious situations.

As an example, I was once responsible for opening three new offices and hiring several hundred employees, including managers with company cars. The fleet manager came to me in a panic one day. Company policy allowed employees to select their own cars. This meant they would be without cars for several weeks. I calmly asked what the choices were, and immediately ordered 15 identical cars. She asked how I knew they would like the cars. The truth was I neither knew nor cared! Since a decision was needed, I made it. The managers arrived on their first day to find a fleet of new cars waiting on the front row. As expected, no one died.

Investment professionals report there is a tendency to “sell winners too quickly and hold on to losers too long.” The reason we hold on to losers is primarily a subconscious reluctance to admit mistakes. Your focus should be on early detection of challenges and the identification and implementation of appropriate corrective action. American author Arnold H. Glasow put it this way, “One of the tests of leadership is the ability to recognize a problem before it becomes an emergency.” Be willing to make changes if indicated by the monitoring process, even at the risk of exposing your mistakes. Tony Robbins put it this way, “Stay committed to your decisions; but stay flexible in your approach.”

Accountability is paramount to a successful decision making process. If you want credit for your accomplishments, be willing to take responsibility for mistakes. Have enough confidence to say, “I was wrong, now let’s fix it.” Remember, your goal is not to avoid all mistakes. Simply doing nothing would accomplish that. Your goal is to minimize the impact of missteps and learn from them.

I end with this comment by Peter Drucker, management consultant and author of 39 books. He said, “Whenever you see a successful business, someone once made a courageous decision.”

P.S. My apologies to PETA for the whole duck by the frozen pond rock skimming long time ago hit in the anatomy thing.

© 2011 by Dale R. Schmeltzle

Keep It Simple, Sweetie!

One of the pitfalls of marketing is to “over-think” your strategy. With over-thinking comes the risk of over-spending, a quandary sure to draw my attention.

One of today’s suggestions is so simple and inexpensive you may have overlooked it, even though you have seen it used hundreds of times.

Put a bowl or attractive container next to your cash registers and invite departing customers and guests to drop their business card in for a chance to win a free meal, store gift card or something else of value. This suggestion can be very effective in adding names to your mailing list. It obviously works only in situations where customers visit your physical location.

A modern-day variation of this time-tested marketing tool is to allow participants to post their contest entry on your Facebook Fan page. This addresses the situation of not having a business where customers visit your facilities. The catch is that to post on your wall, they must first “Like” your page.

Contests can also be used to encourage customers to return to claim prizes. Create a sense of excitement. Promote them in your email campaigns, blogs, social media, etc. by announcing winners, next month’s prizes, and so on. A slight variation of this simple marketing strategy is to select winners from customers who complete evaluation or survey forms.

Above all, conduct your contest with flair and elegance, or do not do it at all.

What Can Online PR Do for Your Small Business?

Today, I am pleased to have my very knowledgeable friend, Jim Bowman as a gust author. Regular readers to my blog will immediately recognize that his topic for today is near and dear to my heart.

Jim is a public relations expert. His 25-year career leading corporate communications departments included building one of the world’s top 10 global brands, and consultant to a national agency that launched the forerunner of the Blackberry. Jim was also a public affairs officer in the Secretary of the Air Force Office of Public Affairs, Eastern Region.

For the past decade, Jim has immersed himself in the ever-evolving world of online PR to serve clients ranging from startups to well-known publicly held corporations. Through that experience, he developed an approach that integrates the best of traditional and online public relations. Jim strongly believes that no PR professional can afford to ignore online PR or outsource it to specialists. It is an essential part of the skill set all PR professionals must have, as fundamental as writing, pitching and building relationships.

For more information on this subject, or to contact Jim Bowman, please visit http://www.theprdoc.com/.

Jim writes:

I subscribe to a number of online PR and marketing news alerts to track developments and trends. The quality is not uniformly good, and unfortunately, the feeds that consistently come up short are about small business marketing and public relations.

PR people spend considerable time debating how to charge and how to get others to appreciate them more, but few weigh in on how best to serve the needs of small businesses.

Considering the difficulty I have locating meaningful insights, I imagine small business owners find it at least equally difficult. It’s time to change that.

Make Your Image Big Online

Online PR offers small businesses a chance to look much bigger than they are, so they can compete more effectively with companies many times their own size.

If you own a small business and you’re not using any form of public relations in your marketing mix – especially online PR – you’re missing out on a great way promote your business.

I say that as a former small business owner who has done “traditional” public relations for global giants and pre-IPO start-ups. Now I help small businesses use public relations to do more business and make more money.

Public Relations Attributes

PR often is used interchangeably with publicity, but that’s a mistake. In some cases, good PR involves getting no publicity at all. Among other things, PR is:

  • Interacting with your constituencies – prospects, clients, vendors, employees, your community and the public at large – to build your brand, image and reputation;
  • Getting the benefit third-party credibility when others say good things about your products and services;
  • A long-term proposition – you must work at it consistently for months and years to get best results;

Online PR Is…

All of the above and more, using digital tools that include:

  • Keyword research;
  • Search engine optimized content – press releases, articles, videos, blog posts and informational web pages;
  • A variety of specialized websites;
  • Simultaneous outreach to prospects and customers, as well as journalists.

Public relations always has been a great way for small businesses to get known, usually at substantially less cost than advertising. The Internet magnifies and increases the effectiveness of online PR and makes it an essential tool for small businesses.

Today, small brick and mortar businesses that have flown under the radar of local newspapers are finding audiences online. PR pros who know how to serve them are doing well, as are business owners with the inclination and time to do their own public relations.

 

Thank you, Jim. I’m sure my readers have enjoyed this topic, and look forward to hearing from you again soon.

What do Football and Chicken Wings Have in Common?

Today’s title sounds suspiciously like the opening line of a bad joke. Maybe a little later. Actually, it was inspired by last night’s start of the 2011 – 2012 NFL season. Green Bay defeated the Saints in a 42 to 34 nail biter. Therefore, I thought it was appropriate to start today’s blog with a football reference. Here it is!

Did you ever wonder why GMC is the “official truck” of the National Football League? It is not as if they haul injured players off the field on Sierra Hybrids. If they did, can we assume the trucks would be using Castrol, the “official motor oil” of the NFL?

An even bigger question might be why Wingstop is the “official chicken wing” of the Dallas Cowboys. For that matter, do the Cowboys really need an official chicken wing and if so, do they taste better than unofficial wings? I am guessing the nutritional value is about the same. Wingstop is not wondering about those questions. Executive Vice President Andy Howard reported Sunday sales for the 2010 season were up 15 percent in spite of the Cowboys’ disappointing 6 and 10 record.

Endorsement marketing is common in the insurance industry. For example, Hartford Insurance Company teamed up with the AARP to become the endorsed auto and home insurer to the AARP’s reported 40 million members. The AARP also offers life insurance products through New York Life, and long-term care products through Genworth Financial Group.

I am not suggesting you attempt to negotiate a deal with the NFL or a million-member national organization. Start small, on a state or local level. Identify organizations whose members use your products or services. Associations are usually eager to earn income from sources other than their membership. For the cost of an associate membership, an advertisement in their quarterly newsletter or a booth at their annual convention, you can probably find trade associations and similar groups willing to designate your company as the official supplier for your product or service. That in turn provides access to their membership directory, and perhaps speaking engagements.

  • A rule of thumb in the insurance industry is these marketing costs should not exceed two percent of anticipated revenue.
  • The best place to find organizations is your state capital where many will be headquartered.
  • If you are not prepared to market on a statewide basis, find out if there are local or regional chapters.

Do not overlook educational institutions and fraternal organizations as a source of endorsement sales. I knew a small business that was the preferred supplier of screen-printed and embroidered shirts for 50,000 students at Texas A&M University. How much is that endorsement worth? For the 2010 “Maroon Out” football game against Nebraska, one of many annual events the tradition-loving Aggies commemorate with shirts (I have paid for a closet full of them in recent years), the University’s student body, alumni and supporters reportedly bought over 55,000 shirts. My unofficial source tells me the supplier was paid $3.50 apiece.

Again, start small. You are more likely to land a profitable endorsement from a local high school sports team or a Parent-Teacher Association than from a major university. I also knew a one-shop sporting goods store that sold letter jackets for several large high schools. If you have raised a teenager in recent years, you know how expensive these customized items can be.

Let me end with one last football story.

The Seven Dwarfs were marching through the forest one day when they fell in a deep, dark ravine. Snow White, who was following along, peered over the edge and called out to the dwarfs. From the depths of the dark hole a voice returned, “The Cleveland Browns are Super Bowl contenders.” 

Snow White said to herself, “Thank God! At least Dopey survived!”

Would You Like a Beer With That Latté?

Alan Zell, author and retail marketing expert said, “Every business needs more business. That is an accepted fact. The unaccepted fact is that most businesses don’t use all the opportunities available that will bring them additional business. When one looks for additional business, the primary goal should center around getting second sales. What are second sales and why are they important? Second sales are add-on sales, repeat sales and sale by referral. They are important because they are much less expensive to get than first sales.”

I wrote about second sales, or up selling as it is more commonly referred to, last week. Today I will present two more ways to squeeze additional revenue out of your existing customer base. Allow me to begin with an actual example.

If you are a pet owner, you are aware of a powerful strategy veterinary clinics employ to drive sales and increase profits. That strategy is boarding facilities. Think about your experiences boarding pets. Chances are you also have them washed and groomed, and probably address checkups, shots and other recurring medical needs. Of the $65 average daily bill when boarding our Rottweiler, over half is for services other than boarding. I willing pay the $65 because it meets another important need. It buys the added assurance that if anything happens to my 12-year-old dog, she will be well taken care of until I return.

The point is that in addition to being profit centers in their own right, boarding facilities attract customers and generate revenue for other areas of veterinary services.

Ask yourself, “What is an equivalent up selling strategy for my business?” To be successful, it should be either complementary or counter-cyclical to your primary business. Here is an example of each strategy.

Complementary strategy: Starbucks announced a textbook example of a complementary marketing strategy in 2010. They began test marketing beer and wine sales at several Seattle locations. Designed to supplement a product line that holds diminishing customer appeal after the morning rush hour, alcohol goes on sale at 4:00 PM. Starbucks also announced their Starbucks VIA® Ready Brew coffee in 2010. It comes in four flavors, and is available online and through grocery stores and other retail channels. Not surprisingly, it was widely reported in 2011 that Starbucks has replaced Burger King as the nation’s third largest restaurant chain, a major accomplishment for a “non-burger and fries” chain.

Counter-cyclical strategy: Installing holiday lighting is big business in my town. Contractors spend most of November and early December installing lights. They spend January removing, repairing and storing lights for the summer. What do the installers do the rest of the year? I frequently see their trucks around town. I have also met several installers over the years. Everyone had a lawn maintenance or landscaping business that not coincidentally keeps them busy from March through October.

Finally, consider the capital investment (inventory, new equipment, sales training etc.) required for your new products or services, and the payback period expected before the strategy generates a positive cash flow.

© 2011 by Dale R. Schmeltzle

Dear Diary, I Lost Another Customer Today

It is easy to tell when my car needs gas. There is a gauge on the dashboard. If I am not paying attention, a light comes on when the fuel level gets too low. Finally, the car will simply stop when the tank is completely empty.

However, my car (unlike more sophisticated models) gives no warning when I need an oil change. Even if your car displays remaining oil life, you must first remember to scroll through the display periodically to check it. Jiffy Lube, Kwik Kar and other oil change franchises solve that problem by putting a small transparent sticker on my windshield to remind me at what mileage I need to change oil.

Doctors, dentists and veterinary clinics have long sent reminders when annual checkups are due. Same principle!

Most consumer products that require periodic maintenance or replacement give no obvious warning. Filters on furnaces and air conditioners, and batteries in smoke detectors and watches all come to mind. Many things around the home and office including HVAC equipment, computers, alarms systems, pool equipment and so on all need periodic service for optimum efficiency.

If you sell replacement parts or service on products that fall into this category, create a diary system, a sticker or something to remind customers to schedule a service call.

Here are some additional thoughts to keep customers coming back to you for maintenance and service work.

  • Have the customer indicate how they want to be contacted for a reminder when they initially purchase the item or sign up for service. Provide several options such as email and phone calls. Both are cheaper and more likely to solicit a favorable response than mailing a card. Whatever diary system you choose, it is sure to improve customer retention.
  • Create a sense of urgency by including a limited-time special offer with the reminder. A 15% discount, a free month of service or other incentive will discourage customers from procrastinating or purchasing services elsewhere.
  • Everyone who subscribes to magazines has received next year’s renewal notice within a few months of renewing the current year. In some cases, the marketing strategy may be to hope the subscriber forgot they still have 10 months remaining on the current subscription. However, the publisher usually offers substantial discounts to renew early, especially if pre-authorized to charge your credit card at renewal.

The same idea applies to remind clients to renew annual contracts, maintenance agreements and so forth. Do not wait for the customer to contact you, and do not risk losing a sale simply because you forgot. Again, offer customers a discount or an extra month on the contract if they renew by a specified date.

Enjoy the long weekend as we celebrate the unofficial end to summer and our 118thannual Labor Day. Thank you to our Canadian neighbors who came up with the idea ten years before Grover Cleveland copied it!

© 2011 by Dale R. Schmeltzle

 

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