Leverage yourself and your resources

Effective people know to focus their attention and their resources on the small number of tasks that get the greatest results. It's called the eighty-twenty rule - eighty percent of the results produced by a person or a business are produced by twenty percent of the work. 

There's nothing magic about the "eighty percent" number. Just remember that smart people know to leverage themselves and their impact by putting their attention and their resources where they'll get the greatest results. 

The trick is in knowing which work and resources will get the results they want.

What are the driving forces in the business? That's where you put your attention.

What elements of value drive the customer's purchase decision? That's where you put your attention.

What business systems are the ones that get the most important results? That's where you put your attention.

What are the highest priorities for work to be done? That's where... well, you know.

This basic principle of business development asks you to figure out what "drives" your business, your customers, your employees, and to focus your attention on those drivers.

Your customers are by far the most important people interested in your business. They are more important than yourself, your investors and your employees.

Unless you serve your customers and fully satisfy their needs, your investors, employees, and even yourself, will not be served, because your business will be nothing without its customers.

Customers vote with their feet and their wallets. The primary goal of your business is to deliver an experience every time your customers visit so that they have no reason to move their affections elsewhere. The experience must be relevant, timely, suitably personal, of value to the customer, and meet or exceed expectations.

And that must be the number one goal of your business, or it wont survive and no-one will be satisfied.

One of the blogs that I follow with interest is Becky Carroll's Customers Rock! As a thank you to regular readers she has published an e-book with the title "Customers Rock!™ - How Businesses Can Make Sure Their Customer Experiences Rock".

The eBook is a compilation of five of Becky's favorite blog posts from the last 12 months.  she has also included the comments along with each post so readers can continue to follow the conversation; many of these were quite enlightening!

Topics include:

• Taking care of existing customers
• Customer or client?
• Tips for listening to customers
• Stories and the personal touch
• Measuring customer relationships

On the topic of "How to Take Care of Existing Customers", for example, she writes "We have to focus on two main areas when it comes to our customers: bringing new customers in and taking care of existing customers. The old idiom, “A bird in the hand is worth two in the bush,” comes to mind here.

"I like this definition from the New Dictionary of Cultural Literacy (Third Edition, 2002).

The things we already have are more valuable than the things we only hope to get."

This handy little book has some gems that are useful to any small business and is worth a read.  As the book is freely available for distribution you can download your own copy by clicking here.

So you want to grow sales in your business?

You have two main choices, sell more to the customers you already have, or find new customers to whom you can sell, or both.

Let's have a look at the second option. For the sake of this discussion we will assume for the moment that you have exhausted the possibilities for selling more to existing customers.

If you want more customers, where do you start? Let's start by looking at the customers you already have and ask the question, "how can I find more customers who are like my best customers?"

If your sales or accounting systems are able to provide you with the information, sort your list of "sales by customer" for the last year (say) in decending order from greatest to least sales.  You need to be careful here that the results are not skewed by a few large sales which are outside the norm of how you do business. 

Now look at the list and segment it into five equal groups by number of customers. This divides the number of customers into 20% segments. Total the value of sales for each 20% segment and analyse the results.  You may be surprised to learn that a sizeable proportion of you sales, maybe 70%-80% are delivered to your business by customers in the top 20% segment.

What about the next 20% segment? How are these customers different from the top 20%?  And the segment after that?

If you are able to segment your customers by trade or business type and sort sales by this type of segment, what can you discover here?  What about by type of product or service purchased? For people who are smart with spreadsheet software, sorting customer data with pivot tables can reveal some very interesting results, especially in a customer type/product type matrix. But let's not get too complicated.

Now it's time to ask some probing questions. Who are your best customers? What do you know about them? Where can they be found?  What similarities do they have? What do you know about their buying preferences?  How do I treat them that is different from how other customers are treated? What is it that makes them "best" customers for my business? Who else sells to customers like these?

There are many questions you can ask, and you need to ask them if you wish to discover the best approach to attracting them to your business. Some of those questions relate to demographic characteristics and other to psychographic charcteristics. Demographic characteristics are those that you can generally count, measure or observe such as genda, age, income, lifestyle choices etc. Psychographic characteristics are generally about behavoural observations such as emotions, likes and dislikes, choices and preferences, comfort and discomfort, and so on.

Using your new found knowledge about who your best customers are, you can now develop strategies to target other similar prospective customers in your trading area knowing more about what and how they buy, and what is important to them and the business relationship they want with you.

Its time to do some analysis and thinking now!

If you don't have the knowledge or resources to do this yourself, seek help from someone who does. "Cloning your Best Customers" is a foundational marketing topic in Full Spectrum Business Development coaching.

This posting by Carmine Coyote of the Slow Leadership Blog caught my attention. It neatly sums up attitudes to risk, which is very topical in light of the current credit squeeze resulting from the US sub-prime mortgage problems.

In her opening paragraphs Carmine says:

"Risk is one of the most misunderstood ideas in the world today—especially the business world. Despite all the time and effort devoted to risk evaluation and risk management, corporations constantly find themselves subject to far greater risks than they imagined.

The reason for this is rather simple: they confuse risk with probability and try to deal with it primarily by statistical or mathematical means.

Probability is, indeed, numerical. It’s the study of the likelihood that some event or outcome will happen—an attempt to understand the inner workings of chance.

Risk is something quite different. The easiest way to describe it is to say that risk is simply a substitute for knowledge."

Carmine argues that while risk can be assessed mathematically, the best way to minimise risk is to make business decisions based on knowledge - the more knowledge, the better the decision.

Risk can be assessed and amelierated as follows:

• knowledge - the more the better - that gives you as full a picture of facts, events, personalities, economics, politics, etc relating to the business decisions you make; supported by;
• mathematical risk probability calculations that attempt to rationalise the facts (knowlege) into numbers.

Relying on the numbers alone is not a safe option.

You can read the full article at http://slowleadership.org/blog/?p=186.

Quantification is a key process in Full Spectrum Business Development. Quantification includes both observation and calculation of key strategic and operational indicators.

Each year I try to take a skiing holiday with my wife. We have tried to make it an annual event for the past twenty five years.  In latter times, instead of buying new skis every couple of years we have rented so that we can keep up to date with the technology without the investment.  Not every ski rental company is the same however.

Fitting ski boots is a specialist task.  Many ski rental companies carry a limited range of boots for hire and try to sqeeze their customers into "nearest fit" or "one size fits all" boots. The consequence of this is sore feet and shins at the end of the day, and a miserable skiing experience by the end of the week.

Imagine the pleasure therefore, when after a break of four years from visiting out favourite ski resort, we visited our usual ski rental company to be greeted by friendly knowlegeable staff who were able to find our old records on their computer system with the exact fit and setting details for boots and skis for my wife and myself.  Nothing was too much trouble. Comfort was the key. Updates on new ski technology was offered and enquiries about whether skiing style or proficiency had changed. There was also an offer of ski or boot exhange if we were unhappy or wanted to try something different. Oh, and you could also pass your skis back in for any day you didn't want to ski and this would be deducted from your account.

You will realise of course that in ski resorts there are many companies trying to rent you equipment. We found this company ten years ago and keep going back to them. Why, because nothing is too much trouble. And they see hundreds of customers every day.

So the moral here is this:

Even though you may sell the same goods or services as your competitors, the thing that will differentiate your business above all others in your line of business is the experience you deliver to your customers. This experience doesn't just happen, it's designed to happen.  It happens through how your place of business is presented, how your staff are trained to deal with customers and their knowlege about what they sell, and much, much more. If you haven't done so for a while, take a step back from your business and look at it from the outside, from the customer's perspective, and ask yourself, "would I like to shop here?"

And by the way, the $20 voucher they gave me for renting went towards a very nice pair of ski gloves from their retail store that cost more than I intended to spend!

Johnothan Farrington always has something pertinent to say on his blog Leadership Turn.  Today's post is particularly worthy as it addresses an area that many businesses don't handle well - customer complaints.

The short summary at the end of the post reads as follows:

Complaints Are Opportunities:

Opportunities to do what?

• Evaluate how well you are doing
• Identify weak points in your system and processes and put them right
• See situations from the customer’s point of view
• Improve customer satisfaction
• Create long-term loyalty – handling disgruntled customers well often leaves them feeling more positive about your organisation than before.

What system do you have for handling customer complaints in your business?  Is it documented and easy to follow?  Do you have a person in your business dedicated to customer care?

Remember, a customer is not just a single transaction.  A customer is a lifetime of transactions if treated well. It costs less to keep an existing customer than it does to win a new one. 

To read the complete article click on the following link:

http://www.leadershipturn.com/complaints-are-opportunities/

This is very sound advice for all business owners.

If there's one thing that always irritates me its those extra charges that businesses put on their invoices to cover costs that should already be part of their pricing.  You know the sort of thing; statement charge, postage and packaging, cheque charge, and so on.

Think about it. If you add up all those charges that they collect from all their customers, you can get quite a healthy sum. And for what benefit to the customer?

Now I am as aware of the arguments offered for these charges as well as anyone.  For my sins I spent thirty something years in accountancy.  I also recognise that there are legitmate cases where these extra charge can be claimed, especially where the cost of delivery from store to customers is high, and the customer has the option of arranging their own pickup. But its those little extras that make me mad.

To me those small items are just part of the cost of running a business.  The business should therefore include these costs in their calculations when prices are set. 

In the case of the statement charge noted above, this was in addition to a healthy commission deduction for the collection of some rentals.  And those cheque charges.  I have seen customers offer a credit card instead, for which the cost to the business is higher and the charges are unable to passed on as an extra. The point here is this:

Each time a business annoys a customer by the addition of silly little extra charges which are for the benefit of the business only and not the customer, they are sending negative messages to customers that could cause them to take their business elsewhere.  It might seem a minor thing to the business, but it can cause a major reaction with customers.

Just think, if a twentyfive cent cheque charge can send a customer elsewhere, how much in future customer lifetime sales value could be lost to the business?