Be an Ethical Entrepreneur, Marketer, and Business Builder

The 3 Non-Leadership books every Leader, Teacher and Parent should read

I realize that might title is a bit redundant.

A great leader IS a great teacher and vice-versa.
In industries, like internet marketing, where the amount of information doubles every 8 months, the ability to teach your team may be the single most important aspect of leadership.

So with that in mind, if you want to be a leader on one of my teams, these are the 3 books you need to read and live.

Mindset: The New Psychology of Success by Carol Dweck

If there was a single book that taught you how to be a great teacher and thereby a great leader, this is it.

Each day we are all faced with success and failures and we respond in 1 of 2 ways:

  1. Fixed Mindset – Each mistake is validation that you aren’t smart, talented or good enough. Conversely, every success tells you that you are innately “gifted” which is very dangerous because then you stop looking for challenges where you might fail and therefore not validate your “gifted” status.
  2. Growth Mindset – Each failure and success are a means of learning. You either learned what you wanted (i.e. succeeded) or you didn’t (i.e. failed). Either way, you have more to learn, further to go and higher mountains to climb. Your mind is ever-expanding and intellect can always grow.

Our team has summarized this in our Culture Statements as:

Learning from other’s successes is extremely valuable however sometimes learning from our own mistakes is more memorable. We embrace our mistakes, learn not to repeat them, and therefore are constantly pushing the limits to get better.

If you only have time for one leadership or teaching book, Carol Dweck’s book is it!

The Talent Code: Greatness Isn’t Born. It’s Grown. Here’s How. by Daniel Coyle


It wasn’t blind luck that the greatest concentration of artists, sculptors and painters of all time just happened to live in the same area of Italy over a 60 year time frame in the 16th century.

It’s also not chance that the small, dingy school where Anna Kournikova learned to play tennis, at one time produced 4 of the top 50 greatest players in the world.

It’s by design that the Dominican Republic has an unmatched density of great baseball players and, amidst abject poverty, Brazil has produced some of the world’s greatest players and teams consistently for nearly 50 years.

There’s a system and a code to “talent”. It’s not merely innate and it’s not simply about working for 10,000 hours on something. It’s about mindset, commitment, and breaking down the skill or talent to it’s essentials.

Daniel Coyle tells you exactly how and it’s as inspiring a read as you may ever encounter.

Emotional Intelligence: Why It Can Matter More Than IQ by Daniel Goleman


Think for a second of the tests that you may have taken to measure your intelligence.

  • IQ Tests
  • SAT’s
  • ACT’s
  • College Exams
  • High School Exams

Of the tests listed above do you know which one most closely predicts success in life?
None of them. None can be correlated to job, income, happiness or any other measure of success.

But there is a test that can.

It’s called the marshmallow test.
Put a 3 year old in a room. Give her a marshmallow and say, “You may eat the marshmallow. Or you can wait a few minutes until I come back and I’ll give you 2.”

If she waits, she understands the value of delayed gratification – working hard and sacrificing now to receive something better in the future – and it will predict her future success more accurately than any other test.

That’s one of hundreds of examples that illustrate that Emotional Intelligence (EQ) is more important in our lives than IQ.

Goleman also provides great examples of how to teach 3 to 93 year olds how to improve their Emotional Intelligence and better empathize with those around us.

Those were listed in the order of importance so start at the top and work your way down.

To your success in becoming a great, teaching leader,
Bryan

All Great Businesses are Inherently Moral

This fact has been proven time and time again by modern business and human psychology experts.

No business that exists exclusively for profit, without the advantages of corporatism or cronyism, will ever be very successful and certainly not over the long-term.

This is not my opinion. This law of business is as well established as the laws of gravity.

By a great business I very simply mean a profitable enterprise that lasts for an extended period of time. An unethical business can fool people for a short time however it cannot fool them for very long, particularly in the age of social media.

Business experts from a few decades ago called this vision and mission. Brad Sugars in Instant Team Building insists on vision, mission, and culture points. Tony Hseih in Delivering Happiness calls on vision and culture statements. Mike Michalowicz in The Pumpkin Plan has his immutable laws. Sam Carpenter references his Rules of the Game in Work the System.

Jim Collins in Good to Great discusses the requirement of all great businesses to have a “Hedgehog concept.”

One of the primary findings in, Built to Last, that contradicted the teachings of many MBA programs, is that businesses that have survived and excelled over time were often the ones that were centered around a core business concept, not a great product.

Let me summarize a major portion of all of those books very succinctly…

The compass for lasting business success always points you in the same direction.

The compass for long-term business success will always point you in the same direction.

Every great business expert knows that a business MUST be motivated by something more than profit to inspire your team, stay focused and even maximize profits.

If you’re still not convinced, pick up a copy of The Loyalty Effect by Frederick F. Reichheld and read about the numerous studies that have shown that companies who downsize in the interest of short-term profits rarely ever recover and often their stock prices suffer for a very long time. Obviously there are necessary times to downsize and appropriate ways to do so, but to simply improve next quarter’s earnings is not one of those times. As a general rule, downsizing is best treated as a last resort.

In The Millionaire Mind, Thomas Stanley discovered that the #1 thing millionaires attribute to their success is “being honest with all people.” (And 88% of the millionaires he surveyed achieved their wealth through entrepreneurship.)

Marcus Buckingham’s research in First, Break All the Rules: What the World’s Greatest Managers Do Differently demonstrated that pay is not even in the top 5 reasons people stay at or leave a job. Through 20 years of research with 20,000 managers and over 80,000 interviews, he has developed 12 questions that do show what motivates people and pay doesn’t even make the list.

In other words, money is not the primary motivator for people and all businesses are run by people.

Dan Pink takes it a step further in the below video. Through extensive research in the psychology of motivation he shows that for someone to truly excel they need Autonomy, Mastery and Purpose. If your boss, the corporation, or the government is dictating what you should do, there goes Autonomy. If your “hedgehog concept” is to maximize profit, then you’ve thrown Purpose out the window.

A non-crony entity that exists primarily for profit will never be a very successful business and every great business leader knows this. The idea that companies should be immoral is as old as Machiavelli and it was as wrong then as it is now.

If you work for someone who runs an immoral business, start educating them that there is a better, more prosperous way. As a matter of fact, help every business leader and employee you know appreciate the long-term business benefits of running an ethical, moral business.

It’s truly the only path a business can take to succeed over the long-term.

To your ethical business building success,
Bryan

P.S. My team’s number one culture point is Love and we try to live it as best we can. It’s not easy and we don’t always succeed but it is our most core value. I highly recommend you infuse it into your culture.

The best way to grow your business without venture capital or outside investments

In our current internet economy, you can flesh out the viability of almost any idea for very little money.

These are the first steps. Get customers. Get revenue. Get profit.

Bill Gates sold DOS before he owned it in the Pirates of Silicon Valley.

Bill Gates sold DOS before he owned it in the Pirates of Silicon Valley.

Your best option is to sell something you don’t have. Yet.

Bill Gates did this in the movie Pirates of Silicon Valley when he sold DOS to IBM before he bought it. Watch the movie. It was brilliant.

When I started my Performance Engine Tuning business, I got my first client and check before I invested a penny in the $2500 oscilloscope I needed to troubleshoot engine sensors.

When I started business coaching, I got my first 2 clients before I had any coaching systems in place. I quickly made them from the systems I had developed at my previous business though, and 3 years later those clients are still with me.

When I launched my internet marketing business, I received my first check to build a website before I knew how to build a website (unless you count that one I built on GeoCities in 1996).

Are you seeing a pattern here?

In all of those instances, I delivered what I promised and more, even though I had nothing to provide for my clients when they first paid me.

The only way to know if you have a good idea is to find someone to pay for it.

Get cash without giving up ownership or taking on debt.

Raise capital without losing any ownership or starting your new business by taking on debt.

If you absolutely need capital to make your idea work, probably the best option for “selling” your idea and finding customers is CrowdSource Funding with websites like KickStarter.com.

CrowdSourcing is brilliant because people give you money before you have a product.

  1. You get money
  2. You prove your idea has a customer base
  3. You retain 100% ownership and control.
  4. You even get some free marketing in the process.

KickStarter lends itself more to product-based businesses where you can provide an easily replicated product to your KickStarter investors.

In some instances you do need cash. Let’s say you have a complicated software product that is hard to “sell” without showing people it’s available.

Then do what ZenPayroll.com did and write some blogs, get some articles written about you, market on Google Adwords and Facebook ads to send people to a landing page where they can opt-in to your email list to be kept up-to-date on your products.

ZenPayroll started doing this before they had a product to sell. I signed up for their email list months ago and look forward to when they have a product that works in the 4 states I employ team members.

Building an email list isn’t nearly as good as getting money out of people, however having an email list with thousands of names on it before launching your product is a huge advantage.

Even authors know that you build your crowd first, through blogging and social media, before you write your book. That way when your book comes out you know it will sell and publishers will be lining up to work with you.

With the cheap 3d printers, you can build, test and sell prototype parts one at a time without expensive manufacturing contracts.

The bottom line is, there are dozens of inexpensive ways to get customers or very interested prospects before you have a product.

The Scaling Trap

Like all of my businesses that I mentioned above, do everything manually first, then once you know their are people willing to pay you, start systematizing, automating, and streamlining so that you can eventually scale.

NEVER scale your business before you have paying customers.

Here are a few other great options for your first business.

  • Start in an incubator. There are hundreds if not thousands of colleges around the country with incubators. These often provide cheap rent and access to professors and other entrepreneurs who can provide you with good advice. It’s also a good way to network with other startups to find new clients.
  • Buy an existing business. Five years after buying an existing business, 80% of them are still around. The reason for this is pretty simple – no one buys unprofitable small businesses. So if you’re buying a business, all you should have to do is “fix” a few things in the business to increase its profitability. If possible, buy a franchise. It’s also easier to get funding to buy an existing business with SBA 7a loans.
  • Grow the business profitably. This is the route I’ve always taken and the one promoted in Rework by Jason Fried. Only grow as fast as you can maintain profitability. This forces you to bootstrap and quickly weed out inefficiencies. The fewer inefficiencies, the more profitable you become, and the easier it is to grow in an ever improving cycle of growth.

How to raise money for your startup

Debt is not inherently bad and, when well-planned, can be very useful.
One of my first businesses was a house I bought in college to rent out rooms to save on my own rent.

For that business, I had to take on debt to buy the home.
It was a great investment and the same can be true for a lot of business debt however not all sources of capital and debt are equal.

Preferred methods of obtaining capital in order of highest to lowest preference:

  1. CrowdSourcing – You get money, retain 100% ownership, have not debt and receive free marketing.
  2. Banks – They generally charge very reasonable interest rates, you still retain 100% ownership, and they don’t tell you how to run your business.
  3. Family and Friends – Be very careful with this as you don’t want to sacrifice valued relationships and you don’t want to invite your friends and family to “dictate” what you should do with your business. Ideally you won’t need this until your 3rd-4th business once you have a proven track record of success and you’ve made most of the dumb mistakes we all inevitably make.
  4. Employee Owned – Employee-owned businesses can provide a great source of cash as well as a highly-committed team.
  5. Venture Capitalists – Once you’ve proven to have a profitable business, have worked out most inefficiencies, and are ready to scale, this can actually be a reasonable option.
  6. Go Public in an IPO – You only do this when you need 10’s or hundreds of millions of dollars. The costs to meet SEC regulations alone will run well over 6 figures annually so this has to be your last resort.

Most people get hyper-focused on one or 2 common ways to grow a business. That tunnel vision comes from a lack of understanding all of your options.

Widen your gaze to put together the best growth and funding plan for your business.

To your business-funding success, Bryan

P.S. My last blog addressed some major downsides of Venture Capital however, I disdain people who point out problems without listing any solutions. Hopefully this article provided you ideas on some better alternatives.

photo by: Tanzen80

Easily give your Brand a Concrete definition and watch all of your Marketing explode

The Power of Branding Speedometer

To improve your marketing, define your Brand.

People seem to believe Direct Response marketers don’t like Brand marketing. That we’re somehow arch-enemies in the world of advertising.

That’s just not true.
We directs love great branding.

And there’s a simple reason for this.
It works.

Within a month or 2 of starting internet marketing for a new client, we can tell if a business has a strong local brand. The search volume relative to population, click-thru rates on those clicks, and even conversion rates of the website all give us clues to the strength of your business name in your local market.

Defining Branding

When you ask most people about branding they start thinking of broadcast media, logos, and slogans.

However…

Are your service trucks and the decals painted on them part of your branding?
Are your uniforms?
Is your website?
What about how you answer the phone?
Is the quality of your work?
Can your pricing be part of your brand?
How about your team culture?

Yes!
All of these are part of your brand.

So what is branding? Flint McLaughlin of MECLabs has the best definition around:

Brand is the aggregate experience of your value proposition.

I love branding because the data shows that it works. In other words, if you have a great business that delivers a truly unique product or service in a way that retains customers, then getting results from any form of advertising is a whole lot easier.

Recently a company came to my home to clean my carpets.

They cultivate their advertising by building up relationships with locally influential people, like my realtor friend who referred them to me. That’s great marketing.

They come to my home and about 45 minutes later I notice they are packing up so I go to check on things. They forgot about my area rugs that we discussed twice. They also never let me know they wouldn’t move anything. Not even the chair in my office (on wheels).

From my perspective as a marketer, their marketing DID work. I DID hire them, however their branding was very poor.

The worst part is, they did a great job, had a fair price and were very personable.

Just a few quick tweaks could transform this business…

Imagine how much more effective every dollar they spent on marketing would be if they:

  1. Introduce themselves and explain exactly what they are doing today and that they don’t want to move things that are valuable so if there is anything they need to clean under, please move those now.
  2. Double-check with you before wrapping up that everything is done to your satisfaction.
  3. Share a handout with their invoice that includes a list of all of their services. (I overheard them talking about a tile cleaning job, yet they never once offered to clean my tile.)

They did ask me how often I cleaned my carpets and then recommended I clean them every fall and spring.

Fat chance I’ll ever remember that.

Instead, they should have said, “You seem to be happy with your fresh, clean carpet and since you’re a new customer, in 6 months Bonnie in my office will give you a call, remind you it’s been 6 months and get you a 10% discount on your next cleaning. As long as we come out every 6 months you’ll always get your 10% discount.”

How many people get their carpets cleaned regularly every 6-months?

Imagine the impact on that business from offering this one service.

The lifetime value of each customer would sky-rocket which would allow the owner to spend more in marketing to acquire each new customer.

THAT is branding!

Branding is setting an expectation.
The strength of your brand is in how well you foster that expectation.

Branding cannot exist without a Value Proposition

Your Value Proposition

Great branding requires a unique value proposition.

If you want to improve your marketing and get better results, where do you start?

You could call me and I guarantee my team will get you better results online, however we will ask for your value proposition (also called a Unique Selling Proposition).

Most marketers will never ask you for this.
Most “brand experts” fail to understand that a brand cannot exist without a value proposition.

This is great news!

This means that 90% of your competitors are never going to define their value proposition and therefore will never be able to create a lasting brand.

MECLabs has developed a simple way to create your value proposition by answering 1 question:

If I’m your ideal customer, why I should do business with you rather than your competitors?

Can you answer that question?
If not, go to your calendar right now and schedule 2 hours this week to sit down, block out all interruptions, and figure that out.

Great Marketing Starts with a Great Brand

In the early 1900’s, legendary direct marketer and author of My Life in Advertising and Scientific Advertising, Claude Hopkins, took on Schlitz Brewery as a client.

Here’s what Claude had to say after visiting the brewery:

I saw plate-glass rooms where beer was dripping over pipes, and I asked the reason for them. They told me those rooms were filled with filtered air, so the beer could be cooled in purity. I saw great filters filled with white-wood pulp. They explained how that filtered the beer. They showed how they cleaned every pump and pipe, twice daily, to avoid contamination. How every bottle was cleaned four times by machinery.

I came back to the office amazed. I said: ‘Why don’t you tell people these things? Why do you merely try to cry louder than others that your beer is pure? Why don’t you tell the reasons?’ ‘Why,’ they said, ‘the processes we use are just the same as others use. No one can make good beer without them.’ ‘But,’ I replied, ‘others have never told this story. It amazes everyone who goes through your brewery. It will startle everyone in print.

So he put their story of quality control and purity in print and as a result they jumped from 5th to tied for 1st in market share.

Often your Value Proposition isn’t something completely unique. It’s just something that you communicate more clearly than your competitors.

Clarity always beats persuasion!

Branding isn’t fuzzy

I’m an engineer so I don’t do wishy-washy and touchy-feely very well.
Which is why I love great branding.

It’s precise.
It’s direct.
It’s crystal clear.
It’s measurable.
It can be tested.

When you understand that your brand is the aggregate experience of your value proposition and you have a great value proposition, you understand there are plenty of ways to test and measure the power of your value proposition.

It’s easy to measure the power of a value proposition in Google Adwords Click-Thru-Rates, A/B Split-tests on websites, email headline experiments and even in conversations with customers.

That, however, is the easy part.

The hard part is for your entire business to deliver on the expectation created by your advertising by living your brand.

To your branding success,
Bryan

93% of Word of Mouth happens on this Social Network… It’s not Facebook

Before I tell you the name of this social network, think for a second about your marketing budget.

Word of Mouth

How much are you investing in Facebook? Twitter? LinkedIn?
Don’t think just in terms of money.
How much time are you investing in each of those?

If you could get 93% of the results with a single social network, are you willing to invest your time and money where you can get the best results for the least amount of effort?

According to research by the Keller Fay Group, only 7 percent of word of mouth occurs online. The other 93% occurs offline.

You know… Face-to-face, people talking to other people.

In other words, if you want to grow your business with more referrals, you may need to start focusing your energy on getting your customers to start talking about you OFFLINE.

How to leverage the original social network

It comes down to this, how do you get your customers to talk about your business and tell their friends?

The book, Contagious: Why Things Catch On, by Jonah Berger lists out a 6 step process he calls STEPPS to make your ideas interesting so people want to talk more about them and tell others. It’s loaded with examples of contagious ideas like:

  • A “secret” bar in NYC that does no advertising and you enter through a secret door in a phone booth.
  • The book company that sends 2 copies of pre-print books to prominent figures whom it would like to receive an endorsement. The second book is for them to share with a colleague to get them used to recommending it.
  • The discount luxury goods website that ditched the standard online discount retailer and replaced it with a “members only” online discount luxury retailer that you have to be accepted into.
  • The gourmet Philadelphia restaurant that offered a $100 cheesesteak sandwich to get people talking about their new restaurant. They got featured in USA Today because of it.

These are all great ideas, however let me break it down with some simple actions you can take in any service-based business.

3-Step Process to get Your Customers Talking about You

  1. The Original Social NetworkAsk – Find out which customers LOVE you and which are just satisfied. Online survey’s are a great, low-cost way to do this with your customer base.
  2. Segment – Find out which customers have already recommended you and which would never recommend you.
  3. Develop Exclusivity – Give a limited number of special offers and services to your top customers for them to share with their friends and family.

Ask

In one Nebraska business, we sent out written surveys with self-addressed return envelopes to over 3,000 of their current customers. On it was also a link to complete the survey online. About 1/3 of respondents opted for the online survey. At last count, we had around 450 responses.

This provided a gold mine of information, however the most important question was:

  • How likely are you to recommend us to your friends and family? The answers ranged from, “I’d never recommend you.” to “I’ve already recommended you.”

This business had 97.4% of respondents say they would recommend them. The other 2.6% were neutral. No one said they would not recommend them!

Another part of this survey was to find out how each customer preferred for us to communicate with them.

  • Text
  • Email
  • Social Networks
  • Phone
  • Letter

For this particular business, not a single customer wanted us to communicate with them via Facebook or G+. However 49.6% preferred email with another 36% choosing a phone call and 12.8% requesting a text.

Your market and customers may be different which is why you need to ask. It’s not just about what you say, but how you get your message to them.

Segment

Now that you know who has already recommended you and who is very likely to recommend you, focus on those groups. These people are basically telling you, “I love your business and service and will gladly tell others if you make it easy for me.”

These are your Brand Lovers. All they need is a little friendly assistance and some easy ways to communicate to others what makes your business unique.

In the survey, 32% of respondents said they had already recommended the business. Another 47.2% said they are “extremely likely.”

Let me put this into perspective.

In a business with about 3,000 customers, 450 people responded to a survey in which almost HALF of those people, about 212 customers, are ready and willing to recommend their services but NEVER have.

That’s over 200 people who can be out “selling” their products and services if we just tell them how.

Develop Exclusivity

Now that you have your list of people who have recommended you and those “extremely likely” to recommend you but never have, your goal is to figure out how to get them talking about you.

Here are a few ideas:

  1. Offer Preferred Customer deals. Give your preferred customers 1 card per year to give to a friend with offers that no one else has. The only way to get this “secret” deal is by knowing a preferred customer. Since you’re only giving them 1 it makes it even more exclusive so they have to consider who they really want to tell about your business. Test with different quantities.
  2. Offer Insider Only landing pages. Picture this. John Smith is one of your customers who said he is extremely likely to recommend you. So you send him a couple of cards each year with his name and your business on it, a website with a landing page like http://mybusiness.com/john-smith, and a QR code. On it is an exclusive deal just for his friends. This deal isn’t advertised anywhere else. It’s John Smith’s deal to offer to a couple of friends per year. Scarcity is just as powerful as exclusivity to have people clambering to join and talk about you.
  3. Provide free, useful, interesting gifts. Most people entertain friends and family at their home. So what if you provided them with something to talk about? A unique mug with fun facts (think Snapple). An entertaining BBQ apron or spatula.  A cool brain teaser for their coffee table. If it can relate to the benefits of your services, even better. The goal is a conversation starter that may just lead into why that customer does business with you.

Try to offer the special offer cards without providing any gifts or benefits in return to your current customer. Actually tell them that.

“We don’t want to bribe you. If you’re happy with our services, then here’s an easy way to help your friends with some money-saving deals. If you’re not happy, then please tell us.”

People know a bribe when they see one.

However, if someone asks you if you know who can help them with a kitchen remodel, you have no reservations in telling them who to call and who to avoid. The same is true for your preferred mechanic, plumber, air conditioner repairman, insurance agent, dry cleaner or water treatment dealer.

Now imagine you follow that up with a sincere,

“Bryan’s Plumbing is the best. They’re always on time and charge a fair price. Because I’m a good customer, they gave me this card with a special deal on it to give to a friend. You can’t find this deal anywhere else and I don’t get anything in return for sharing this with you. I know you’ll be happy with them so you might as well use my deal and save yourself a few bucks.”

Helping a friend with an exclusive, scarce deal because they will honestly appreciate it, is often much more motivational than a $50 referral fee or credit.

You should have a record of your preferred customers so that the cards aren’t really necessary. If someone calls up and says, “John Smith said I need to talk to you,” then give them the John Smith Special.

Did a web expert just tell you to kick it old school?

It seems somewhat ironic and even counter-intuitive that the owner of an internet marketing business is telling you the opposite of what all the talking heads are.

If the message isn’t crystal clear yet, don’t waste your time and money with online social networks unless your ideal customers want you to.

For many small, service-based businesses your business is… uh… Boring. Your customers may not really care to like their plumber’s Facebook page. This isn’t an opinion. This is what hundreds of customers have told us so you need to Ask your customers how they want you to communicate with them.

In reality, the best way to determine which local service company to use is still the old fashioned method of asking your friends.

Face-to-face. Person-to-person.

You may just find out that 47% of your customers are “extremely likely to recommend you to friends and family” and just need a little reminder and guidance on how to do so.

 

To your success in developing better relationships with your customers, Bryan

P.S. If you want real, actionable ways to generate more leads online for your business, sign-up for my email news in the footer below.

Customer loyalty isn’t about your product – It’s about your PEOPLE…

When I work with small businesses nearly coast-to-coast one thing we do is collect and review testimonials from customers. What I’ve learned from this exercise is that your customers will become fiercely loyal and gladly recommend you primarily because of YOUR PEOPLE, not your products…

Here’s a quick sample of actual testimonials:

Our service guy goes above and beyond the call of duty.

The girl in the office makes me feel like she knows me.

Our rep doesn’t try to sell us stuff we don’t need.

Our service man is wonderful – wouldn’t change him ever!

Or how about, “We love their business because they have such great personalities.

I didn’t make that last one up! It’s a real testimonial that we received for a small business.

You mean people are choosing their vendors based on the personalities of that vendor? Yes! Believe it or not, people want to do business with other PEOPLE!  In case you haven’t noticed, these days in the USA we aren’t real fond of doing business with our government or big corporations.

Now keep in mind, if the product or service you promised to deliver is sub-par, then you have a problem. If the customer enjoyed working with your people, chances are very high they’ll give you the opportunity to fix the problem. If not, good luck.

However, if you deliver just what you told them you would, or a little more, then it’s your people who will turn those regular customers into raving fans. Once they have your product or service there’s virtually nothing else to set you apart from everyone else who provides a product or service for them. You said you would deliver X, you delivered X, and the transaction is over.

Let’s look at a dramatic example…

The banking industry has some of the highest retention rates of any industry bordering on 90% retention of customers. You’re much more likely to get divorced than to change banks once you get married.

But, believe it or not, it’s not the free checking, savings account interest rates, or debit card rebates that get people to stick with a bank…

My mother got married when she was 19 and moved 1500 miles across the country to do so. She was in a new area and didn’t know anyone aside from my father and his family. In those first 6 years of marriage she had 5 children and guess who were often some of the first people to meet her new babies?

The tellers at the bank!

Sounds crazy, right? But in the days before direct deposit, every 2 weeks she’d have to go to the bank to deposit a paycheck and every time she’d see the same ladies. They obviously would chit-chat about her current child or the one on the way and what women don’t love to see cute little babies?

The point is, to this day, nearly 30 years later, she couldn’t tell you a darn thing about the programs or services or interest rates of that bank, but she remembers the tellers AND the bank.

If your business has any sort of regular interaction with your customers (and it should if you have recurring revenue) then the same can be true for you.

Here’s how:

  1. Provide great service to YOUR team members – One of the keys to great employee productivity and retention is if they, “feel like someone at work cares about me as a person.” Call it touchy-feely, but I’m an engineer and if the science didn’t back it up, I wouldn’t point it out.
  2. Collect testimonials and reward people for doing so. Not only does that show how important happy customers are to you (actions speak louder than words) it’s actually very uplifting and exciting for the people gathering the testimonials. They’re also a great marketing tool.
  3. Track customer complaints. Review each one of them, immediately resolve the problem, and review with your team what happened and how we can prevent it from happening again. If you care about mistakes being made, they will too.
  4. Develop a great small-business culture. The advantage to your customer in dealing with a small business is that they get to deal with real, local people and not bureaucracy. The same needs to be true for your team. If they have an issue, question, or suggestion they need to feel comfortable talking to the head-honcho. To do so, each of your team leaders needs to have regular reviews with their team members at least twice a year but ideally every 90 days. Separate those reviews from pay. The goal is to build a relationship between the 2 parties, not to bash someone.

To truly develop a team culture that promotes great service, you need to do a bit more homework. You are welcome to contact me and I’ll show you how to transform your small business culture.

Or read the following books and try to implement the changes on your own:

To your success fostering loyal customers, Bryan

Small Business Marketing – Strategy/Clarity

My last marketing blog discussed the importance of your company vision, mission, and culture on both your marketing and overall business. Now you need to separate your business according to your 3-5 primary revenue streams. More streams then that and you’re probably diluting yourself and not effectively controlling each. Reference Good to Great: Why Some Companies Make the Leap… and Others Don’t by Jim Collins and Winning by Jack Welch for more reasons to keep focused on a few key revenue streams.

Separating revenue streams is relatively straight-forward, however developing your Strategy and Clarity for each stream is a bit more work. The reason for separating and developing a unique strategy for each is that, more often then not, each stream has a different type of customer. As quick and obvious proof of that fact, if your business caters to residential, commercial, and industrial clients, you’re well aware that the way you handle, communicate with, bill, and market is different for each one.

For each revenue stream, the Strategy/Clarity stage include 3 things:

  1. Target Customer – Who is your ideal client?
  2. Unique Selling Proposition – What separates you from all competition so you no longer can compete on price?
  3. Positioning Strategy – What position do you currently occupy in the consumer’s mind? How do they view your business?

Of the 3, defining your Target Customer is the easiest. To do this, go through your database, pick out your top 10, 20, or 40 best, most profitable clients, and figure out what they have in common. Even better yet, pay them (in goods and services or even cold hard cash) to answer a detailed survey to give you an excellent picture of who they are, what they do, and where else they spend their money. Once you have this information do 3 things:

  1. If a non-competitive business regularly pops up as a place where your top customers spend their money, approach that business owner and try to setup a partnership.
  2. Develop a simply, yet crystal clear “picture” of your perfect client similar to Trader Joe’s, “unemployed college professor who drives a very, very used Volvo.
  3. Empathize with and put yourself in that target person’s shoes before developing any marketing. Talk to him directly.

Once you have that picture of your target customer, gather information from all of your competitors via their websites, public marketing, and a mystery shopping service like teleXpertise. Gather all of that information and determine where the hole is… In other words, what do your perfect customer’s want that none of your competitors are offering? By now you see where this is going; this will be your Unique Selling Proposition. Simply put, your USP makes you so unique that you no longer have any businesses who can compete with you on price. You can often do this by offering additional services, warranties, products, guarantees, or features with your package that your competitors can’t match.

The final step is your Positioning Strategy and this one is the most challenging as we’re literally trying to read people’s minds. Right off the bat, you need to separate these (in addition to revenue stream) into people who are currently customers and people who are not. An existing customer should have a better picture of who you are and what you do and so have a more defined position in her mind than someone who has never purchased from you. In your customer survey of your top 10-40 customers, you need to ask questions about why they decided to work with your business and how they learned about it. Ask what they tell friends and family about your business. That’s the true picture of how they perceive you… Not by what they tell you, but by what they tell others. As for finding out what non-customers think about you, you have to ask them. That includes prospects and complete strangers you meet. When you meet someone new and they ask what you do for a living, once you tell them your business name, ask them what they’ve heard about it. Most people aren’t going to tell you anything negative so keep that in mind. To find the negative, search Twitter, Yelp, Ripoffreport.com, and Google for your business. Within the constraints of a small business marketing time and budget, we don’t really have the ability to get beyond those few pieces. However, if you’re interested in learning more about positioning check out Jack Trout and Al Ries’ book, Positioning: The Battle for Your Mind.

Now that you have an idea of what position you occupy in the minds of others, do 2 things:

  1. Determine if your Position Matches the needs of your target customer and your USP. In other words, if people see you as the low-cost solution and your USP is to be the best service provider, there’s a disconnect. Your options are to either revise your USP to match the position of your business (which is the far simpler and easier option and what I recommend) or start re-positioning yourself (which is complicated, costly, and takes a lot of time).
  2. Consider the position you occupy in your customer and potential customer’s mind when developing any new marketing. In other words, you know everything about your business and all of your competitors and you need to forget all of that. It’s called “the curse of knowledge” and you have it.

Here’s the bottom line… As a small business owner or leader, you don’t have a $100 million marketing budget or even a $1 million marketing budget so you need to make every dollar count. To get the most out of your marketing dollars, you first need to track everything, beyond that if you know and talk directly to your target customer, from the position you occupy in her mind, with a Unique Selling Proposition that will be important to her, you’ll be far ahead of your competitors.

To your Targeting, USP, and Positioning success, Bryan

Small Business Marketing System – Vision, Mission, and Culture

In my last blog I introduced the outline and game plan for your system for marketing in your small business – your Marketing Manual. Now we’re going to look at each of the 5 levels of your plan in more detail starting with your Vision, Mission, and Culture.

Your company vision, mission, and culture define not only WHAT, but WHO you are as a business. Every business decision you make should stem from these values. Your marketing is no different. One of the primary findings in, Built to Last: Successful Habits of Visionary Companies, that contradicted the teachings of almost every MBA program on the planet, is that the businesses that survived and excelled over time were often the ones that were centered around a core business concept, not a great product. That’s what your Vision and Mission are all about… That one core business concept that makes your business unique. Something behind which you can rally the troops and lead them.

In the early 1900’s Ford’s vision was to, “Democratize the automobile.” That’s very crisp, tangible, and conclusive. The engineers now had an overlying goal when designing new models; new designs must obviously have mass appeal, be easy to manufacture, and easy to service. It helps the marketing department define their target customer as the average family with approximately the median income looking for reliable, safe transportation. They know they’re not marketing to the ultra-rich or the homeless. It helped every independent dealer and salesman throughout the country understand what their company stood for in 3 simple words. Unfortunately, their vision today is, “To become the world’s leading Consumer Company for automotive products and services.” I say unfortunately because it just isn’t all that exciting and doesn’t really say anything… And who talks like that? For instance, how would you define “world’s leading”? Does that mean most profitable? Highest in sales? Least deaths per mile driven?

The trick, of course, is to have a vision that’s specific enough to have teeth, but broad enough to not limit you…  That being said, I’d rather be specific, achieve our Vision and then rewrite it instead of starting with such a broad vision that it’s meaningless.

Boeing did a similar thing with their vision in the 50’s by making it very concrete: “Become the dominant player in commercial aircraft and bring the world into the jet age.” They achieved their vision and created a new one: “People working together as one global enterprise for aerospace leadership.”  If you were an employee at Boeing, which one would me more helpful when making tough business decisions?

Your Vision is that underlying principle that dictates why you exist. Writing a company vision is one of the most difficult tasks for a business. After all, if multi-billion dollar organizations rarely do it well, how can you be expected to do any better? It has to be specific to your products and services and yet exciting enough to inspire people…  One company that I’ve always admired that I thought would have a tough time with a vision since they do so many different things is 3M. Even though their corporate Vision, Objectives, and Strategies page lists all kinds of different ideas, I think they’re Brand Identity sums it all up very well, “Practical and ingenious solutions that help customers succeed.” Now if I’m an engineer sitting in a lab working on some new inventions, that can certainly help guide my creativity.

One last example of a Vision is the one I created for my Small Business Engineering. It is, “Teaching Entrepreneurs how to Engineer a Business that Works Without Them.” In a single statement my goal is set myself apart but also concretely define how my business is different. I hope that statement does just that. What do you think?

Your Mission statement is an extension of your Vision. It’s generally a bit longer, maybe a few paragraphs, that talks directly about the values of your company.

The final piece is your culture. Your Culture Statements (as Brad Sugar’s calls them) or Operating Principles (as Sam Carpenter) refers to them, define the culture of your organization. It helps define how your team acts, interacts, dresses, eats, hangs out… Your culture can be like that of the blue suits and company songs at IBM or the shower sandals and bean bags at Facebook. Tony Hsheih, co-founder of Zappos.com, had a different approach to culture. In his book, Delivering Happiness: A Path to Profits, Passion, and Purpose, he describes how his culture developed naturally and, like most businesses, was molded roughly after his own personality. After they had grown to a few thousand employees he decided to more actively define and cultivate his culture. So he put out a company survey to ask his team what they felt Zappos culture was all about and came up with the Zappos Family Core Values.

Now this is starting to seem like an awful circuitous way of getting better at generating leads, isn’t it? After all, what does this have to do with my radio ad? Everything! You see, without a defined vision and goal in mind, you can’t accurately determine if any decision in your business is heading you in the right direction. That includes your marketing. Yes, of course, you can shoot from the hip with a vague, fluffy vision that’s floating around in your head… But if you want to create a business that runs without you, it needs to be in writing so that as you recruit the help of Ad Agencies, marketing experts, web designers, radio personalities, and sales people, they all know the big picture on Day 1. Do you think you might get better results from your Ad Agency when they have a more clearly defined picture of your entire business Vision? If so, just imagine how that can help your own team members and even you make better, more-targeted decisions.

To your visionary success, Bryan

 

Employee Performance reviews should be like a GOOD wedding anniversary

If you’ve ever been responsible for giving a performance review, my title doesn’t sound anything like what you picture or what you’ve ever done, right? After all, performance reviews are how we determine pay raises and you can’t exactly throw a celebration if their performance just isn’t up to par… Correct. However a performance review isn’t just about how well they’re doing… It’s about how well you, the manager or leader, is doing…

This is one of my longest, yet most powerful blogs so read all of it and offer your comments whether you agree or not. 🙂

Let’s start at the beginning. What are the goals of a performance review in most instances:

  1. Assess Performance
  2. Implement Raises according to number 1.
  3. Set goals for next year.

If those are your only goals, you may be missing the most important part… The primary goal of a performance review should be to determine if you’re getting the absolute best out of your team member and if not, what can be done to do so. That doesn’t mean you should ignore a performance assessment…

Before we get to the performance assessment, it’ crucial you, the leader, understand that according to First, Break All the Rules: What the World’s Greatest Managers Do Differently by Marcus Buckingham, the number one factor that affects employee satisfaction and performance is their relationship with their immediate supervisor. That’s significant enough that it needs to be repeated. The only way you will ever get the best from a team member is if they have a strong relationship with you, their boss. That’s number one. Keep that in mind when we review everything else in this blog. Your ability to foster a strong relationship is the key to this puzzle… Is your performance review designed with that in mind??? We’ll get back to that in a bit…

Let’s start with the performance assessment by considering how we measure success in school. Like it or not, all of your employees went to school at some point and were graded according to his or her performance with either letter grades or percentage grades. That’s how we teach our children to know if they are doing well or not… In sports we learn that points, wins, and stats for your position are the proof of doing well. And then we move into the “real world” and people like Michael Masterson suggest your top 7 people in a Stage 1 organization should have a job description of “taking care of customers”. Or something equally vague but in theory “empowering”. Even if you do have a job description, it’s loaded with vague descriptions like, “dress professionally”, “interact positively with coworkers”, “present our products in a positive manner”. So we teach our children (and every one of your employees were once grade school children) to grade and measure performance down to fraction of percentage results on tests and in youth sports and then we put them in the work force and tell them to do a good job. So you have 2 options… First, you can attempt to reform the schooling system to implement more fuzzy methods of measuring performance… OR, Secondly, you can develop more concrete ways of assessing performance with actual numbers and grades. Why do you need to do this? Because according to Buckingham, under-performing and unhappy employees are partially that way because, “they don’t know what’s expected of them at work.” In other words, when they leave work for the day, they have only a vague idea of whether they did a “good job” or not. “Well, I didn’t wreck my truck and the boss didn’t yell at me so I must be doing a good job.” In some form or another, that’s how the majority of the workers in America assess their days.

This blog doesn’t have the time to address how to develop these performance benchmarks and report cards since its focus is performance reviews, however I’ve discussed it a bit before in a previous blog.

So now that you have the Key Performance Indicators, this portion of the performance review becomes almost moot. Why? Well do you remember in school when you got your report card at the end of the quarter or semester? Were the results a surprise to you? Sure you might wonder if you were going to get an A or B since you were on the border, but you knew you weren’t getting an F. Well the same becomes true at work. When you go down the list during your annual review the results are mostly expected and so aren’t a negative even if they are negative. Moreover, if they’re failing in every important category then shame on you because you should have done them a favor and gotten rid of them a long time ago. If they’re failing in some areas but doing very well in others that gives you a great opportunity to be positive about their strengths and then positively ask (don’t tell) how they can do better in the other areas.  Or you can always readjust their job description so they’re only doing the things they are really good at and drop out the things they are struggling with. Review my blog on hiring based on the job description you write after the interview for more details.

Now it’s time to determine raises. Well do you think it’s going to be easier to create an incentive-based pay system AND accurately determine fair and reasonable raises if everything is outlined on a report card? Yes. So implementing raises also becomes a non-issue. This is almost too easy isn’t it?

The most important part, however, is getting the best out of your team member. I also mentioned that very long, detailed, and exhaustive studies show that the number one contributor to that is the team member’s relationship with their direct supervisor…  Which means, to get the most out of your performance review you need to know how your relationship stands AND you need to strengthen it! Are you starting to see how making it like a good wedding anniversary, in other words, an exciting celebration of a great relationship, is crucial. How do you improve this relationship?

  1. Focus on positive and not negative. Look, if this is an annual review and you’re bringing up a screw-up from 8 months ago, you just aren’t getting the point. When someone screws up, you address it IMMEDIATELY along with a way to prevent it from happening again and you forget it (of course you can keep it in their company file in case the relationship ends up in divorce later). Think of it this way, is your anniversary dinner going to be a lot of fun when you sit down and your spouse brings up all of your screw-ups from the last year? Of course not! So why would you do that in a review where you’re main goal is to build a relationship???
  2. Have quarterly performance reviews. Do you honestly think you can build a relationship with an annual assessment? That’s just silly so stop it.
  3. Use the 12 questions from First, Break All The Rules. You may be afraid once you read them because they have nothing to do with the employees performance… They have to do with how well YOU are doing at providing them with an environment in which they can excel. Hopefully by now you understand that that is exactly what we want.
  4. Call it a Quarterly Chat so people don’t fear it and actual look forward to receiving 20-30 minutes of undivided attention from their boss.

Think of this from a different angle… Think for a second about your favorite 3 teachers from grade school. Do you have a good mental image? Are you smiling just thinking about them? Great! Now tell me, what grade did they give you in the second quarter when you had them? Uh…. You don’t remember? Well they were your favorite teacher why wouldn’t you recall how well they taught you? Because that wasn’t how they built the relationship with you! Teachers build relationships with students in many ways, but grading is not one of them. We understood as children that the grading was a necessary evil however it wasn’t what made us love or hate a teacher (usually). Right now I can think of teachers I liked who didn’t necessarily give me the best grades and ones I hated and had no respect for who gave me straight A’s. Why? Because I EARNED my grades based on my own effort however my relationship with my teacher was something she EARNED with me separately. Granted, if she was a terrible teacher and never actually taught me anything useful, that might taint the relationship. Think that might be true of your direct-reports as well?

That’s the context in which you need to consider your performance reviews. Assessments and raises should be tied to such clear definitions of performance that it’s obvious before you ever have your review what the results will be and those results will have no affect on your relationship. That’s not entirely true… Your team member will respect and appreciate you more for your direct, simple honesty.

Let’s say you’re on the other side of the coin and you’re the employee who is stressed because your review is coming up and you have no idea what to expect or if they’re going to bring up screw-ups from your past year one-by-one. Before you start looking for another job here are a few things you can do:

  1. Buy your boss a copy of First, Break All the Rules and tell them you read the book and thought they’d really enjoy it. If you think your boss is going take it as a personal insult as if you were saying, “You don’t know how to do your job so you need this”, it may be time to look for a new boss. Simply say you read it, were super impressed, and know they’re always looking for great new ideas so thought they might enjoy it.
  2. They will have some sort of checklist or score sheet or something to review you “objectively” with. Ask for a copy. Look, if you don’t know how you’re being graded, how can you do your best to get good grades? And that’s exactly what you should say to your boss if they ask why you want a copy.
  3. Review your job description and make sure you can highlight how you’re doing really well on each point (with specific stories to illustrate if time permits) and point out that you did make a few mistakes, but you aren’t making the same mistakes twice. You’re making new mistakes and the company mission, culture, or you job description (hopefully) indicates that you’re supposed to be innovative and even take a few risks and try new ideas. In other words, turn your negatives into positives.
  4. Ask to have reviews quarterly so you know where you’re standing throughout the year and can work to get better without having to wait till the end of the year when your raise is on the line.

The bottom line is this, you want to do a great job and you may need some help from your boss to determine exactly how to do that. That should be the focus of your review particularly if you feel you’re being unfairly reviewed and held back from raises. If none of those suggestions make any difference, it may be time to look for a new job because you obviously don’t have a strong relationship with your boss.

So whether you are the reviewer or reviewee (yep, just made that word up), you need to focus on ways to improve your relationship and the system your company uses for evaluations.

To your performance-reviewing success, Bryan

P.S. I’m aware this is a rather unique idea… If you don’t like it (or absolutely love it) leave me a comment to tell me why.

You’re a business owner – you did not buy yourself a job!

This is it. This is the most important concept to grasp as a business owner… This colors and influences every decision you make in your business.

Brad Sugars has another way of saying this. His definition of a business is, “A commercial, profitable enterprise that works without me.” Did you read that last part? Without Me!

In other words, if your business requires you then it’s not a business… You have just bought or created a job for yourself. See the difference? Michael Gerber in The E-Myth Revisited refers to this as the owner being the Technician.

Why is it so crucial that your business can run without you? There are hundreds of reasons but I’ll give you 3.

  1. It’s worth more – A business that is sold including a trained, experienced manager is always worth more than one that doesn’t have one. Consider there are basically 2 types of people who buy business. Investors buy businesses to make a return on their cash investment and these guys REQUIRE a trained manager in place. Entrepreneurs often buy businesses to make a return on their money but to also give themselves something to do. In other words, they want to be the Team Leader or CEO. However, if you have one of these people looking to buy your business how hard do you think it’s going to be to convince them that they can buy the business, get the return they want, AND work on what they want when they want? Worst-case scenario they can easily remove the existing manager if they really want to, however most people won’t do that.
  2. You’ll enjoy it more – All business owners want the same thing – A business that predictably puts money in their bank account with the freedom to choose when they work and what they do. The only way that dream is possible is if you have a go-to guy or gal running the operations every day whether you’re there or not. Now if you like actually doing the plumbing for your plumbing business or tax returns for your accounting business who is going to tell you not to? No one. You’re the owner. You can still choose what you want to do when you have someone else in charge of putting out the fires.
  3. The business will be better for it – If your job and responsibility every day is to work ON your business and not IN it, what do you think is going to happen to your business? Let me tell you. It’s going to get better. When you can start spending your time working on improving your referral system, customer experience, team building and retention, and shopping for better vendors (you know, all those things you don’t have time for now) isn’t it obvious that the business is going to be better?

So if you’re the technician in your business and there’s is just no way you’ll be able to leave for 3 months on a European vacation and return to a healthy business what are you going to do?

You basically have 2 options:

  1. Teach yourself everything you possibly can about building a business to run without you. In other words, learn about business. Not your specific business or industry or niche. Just about building businesses in general. To do this, you’ll realistically need to read about a hundred books and put into action all the things you learn from them. Start with the books on my Entrepreneur Books list. You’ll also want to start learning from owners whose businesses do run without them and start attending seminars and webinars to help you learn how to maximize 3 essential parts to every successful business – Sales/Marketing, Finance/Accounting, and Service/Operations. If you’re this kind of hands-on, self-taught person, then by all means take this route. This is obviously what I have done and continue to do. It will literally take you several years and in the process you may realize that your business just isn’t capable of that vision and decide to sell it and look for one that can accomplish your goals.
  2. Work with a Business Engineer to help get you on the fast-track. Enlist the help of someone who has already done the items in number 1 with one or more businesses and who can quickly evaluate the status of your business and help you put together the plan to move it to the next level. If you’re located anywhere in the US or Canada and have Internet access and a phone line, we can help. Contact me to learn more about the process. You can also read my blog about why business coaches and consultants won’t work to get a better idea of what Business Engineering is all about.

So what are you doing to do today and this week to take that step from a job owner to a business owner? Don’t put it off. If nothing else, email me saying you enjoyed the read and would like to try either option 1 or 2 above and would like to know where to start.

To your business-owning success, Bryan