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5 Key Areas To Consider Early Each New Year

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5 Key Business Areas To Considerby Steve Houston

With last year now in the rearview mirror and a new year stretching ahead, it’s a good time to assess where you just came from – and decide where you want to go – with your business.  Here are 5 key issues to review right now:

Business Plan.  Last year, did you get to do everything you wanted to in your business?  What helped you make it happen – or what kept you from accomplishing it? Do your business objectives still align with the markets you compete in?  Will those goals still help you take your business where you want it to go? If you aren’t sure, start with a broad view of it, break it down into specific, measurable pieces, and then make the needed adjustments as you move forward with it through the year.

Marketing Strategy.  The lifeblood of every business is effective marketing. The results your business gets will only be as good as how much you invest in it and the strategies you use. More options exist now than ever before – both online and offline – and it can be confusing for the typically hyper-busy company owner.  Focus on implementing proven foundational strategies like reputation management and video marketing first. Build on top of those as you go and you should see the kind of returns you want from your valuable marketing spend.

Human Capital and Automation.  Your people are what make your business run on a daily basis so treat them accordingly.  Help them keep their skills sharp by encouraging an environment of constant learning.  Make your team strong and competitive by rewarding true achievers, and don’t be reluctant to prune under-achievers; that’s how championship teams are built. Change is the only constant in business, as the old cliché goes, so show your commitment to it by nurturing creativity and flexibility in your corporate culture. Automate or eliminate as many low-value, repetitive tasks as you can, and reward excellence when you find it.

Expense Management.  “A billion here, a billion there, pretty soon you’re talking about real money,” a politician once famously said. Well, your business may not be spending billions of dollars, but a few hundred here and a few thousand there in unnecessary expenses can ruin your bottom line. Actively search for and eliminate waste wherever possible. Challenge your team to behave as if they themselves owned the business and had to authorize every expenditure. Expense management is everyone’s responsibility.

Finding Competitive Advantages.  Did you know the first type of business to implement a customer drive-up window wasn’t a fast food company? It was City Center Bank in 1928 in St. Louis, yet it wasn’t long before that simple model started being adopted by restaurant operators and other businesses nationwide. Look around. What are other industries doing? Do any of their methods offer potential competitive breakthroughs for your type of business? Sometimes it’s an existing idea, re-applied in a different market, which can give a company a new edge over its local competitors.

Paying attention to these 5 key issues now will help you take your business to the next level as you get further into this new opportunity-rich year.

 

How Positive Thinking Can Kill Your Business

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By Steve Houston

EnronYou may remember Kenneth Lay, former chairman and CEO of Enron, the high-flying energy trading company that crashed and burned back in late 2001. 

That epic meltdown caused billions of dollars of investors’ money to disappear literally overnight and threw thousands of employees out on the street.  It led to the demise of the venerable 89 year-old accounting firm Arthur Andersen.  It also sent a serious shiver through our national economy just when it was trying to shake off the recession caused by the recent dot.com implosion.

Lay was famous during the glory days of Enron for being a fervent practitioner of the power of positive thinking ala Dr. Norman Vincent Peale, the leader of the positive thinking movement.  There was no problem so critical, no situation so dire that Ken couldn’t find the silver lining in it.

What he didn’t understand, though, was that no amount of positive (or wishful) thinking on his part could make all those questionable business decisions and illegal accounting practices sustainable for long.

Too many people today fall victim to the same siren song of the “power” of positive thinking.  Local bookstore shelves are crammed full with “feel good” books claiming that successful can be yours if you only dwell on positive thoughts and maintain a positive outlook.

Listen, I personally  believe in positive thinking.  Being positive is good for a number of reasons.  A positive attitude can provide much-needed encouragement.  Positive reinforcement is something we all need from time to time.  From a physiological standpoint, a positive frame of mind can even help release beneficial hormones called endorphins that lower blood pressure and act as natural painkillers.

The problem, though, is that an unwavering cheery outlook can prevent you from clearly seeing the truth.  Lay’s insistence on spinning everything in a positive light blinded him to the problems plaguing his company. 

In the end, his unfailing optimism became his undoing as reality finally outran optimism.  Convicted of conspiracy to commit securities and wire fraud in 2006, he died before he could be sentenced.

It’s a sad story but I think an instructive one.  We business owners and entrepreneurs can be particularly susceptible to the hucksters and con artists out there who prey on our sometimes starry-eyed optimism.  Even we can be our own worst enemies at times.

If you want your business to not only survive but thrive, here are some common-sense precautions you can take to prepare for the adversity that always lurks on our horizons:

  • Assume your best current source for new customers / clients / patients dries up and disappears without notice.  Take steps now to diversify your income streams and eliminate this fatal single point of failure.
  • Assume your customer’s / client’s / patient’s buying cycle is going to get longer, not shorter. Find creative ways to shorten it and make it frictionless for them to choose you to do business with.
  • Assume your top 3 business plans will fail, and have Plans D, E & F ready to implement at a moment’s notice.
  • Assume that a large unbudgeted capital expenditure, financial setback or legal challenge will unexpectedly pop up.
  • Assume that your operating cash flow will ebb more than flow and build in safeguards to keep the lights on and the employees paid.

Stop viewing sales and marketing expenses as a drain on your budget and focus on strategies that actually return a positive ROI.  View them instead as important investments a growing company must make.

Once you’ve anticipated these possibilities and made plans to handle them, only then can you feel comfortable looking forward, with true optimism, to achieving great success. 

How To Boost New Client Referral Rates For Your Business

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Use this simple system to boost new customer referral rates and watch your business take off!by Steve Houston

Do you know how many referrals per client you averaged over the last 12 months?

This is a really important number to know, but if you’re like most business owners or marketing executives, you have no earthly idea what it is.

Referrals are the lifeblood of many companies, so simply relying on whatever referrals happen to come your way is a haphazard and dangerous way to do business. You need an easy, manageable and repeatable process to help you get more referrals for your business.

One of the best sources for referrals is also one the most frequently overlooked, and it’s this –

If you want to continue attracting new customers, the fastest way to do it is to get each of your current or recent customers to give you a new referral.

Not only can this quickly boost your business but…

  • It can also help reduce your marketing expenses because referrals are free.
  • Referred prospects convert more easily because they’re coming to you from a source they already trust. They are motivated buyers and will frequently have a lower price resistance than others attracted to you through other methods.
  • A new referral client is more apt to refer new prospects to you than clients obtained through other types of marketing, so multiple referrals are not uncommon.

Want to boost your referral rate?  Remember these 2 things: Measure and Hold Yourself Accountable.

Measuring involves 2 statistics: the first is overall referrals expressed as a percentage of new monthly business, and the second statistic is the average number of referrals per client / customer / patient. You want to continue “averaging up” both of these.

You and your staff should review these 2 metrics regularly because they’re key performance benchmarks with a direct impact on your sales revenue.

Holding yourself and your staff accountable for actively and consistently generating referrals is the second key ingredient. Ask yourself:

  • Who have I spoken with today? Were any of those good opportunities to chat about referrals?
  • How many of today’s customers did I actually ask for referrals?
  • How else have I furthered my referral goals today?

Here’s why incorporating this thinking into your daily business activities is so important –

When you measure something, performance improves automatically, and performance inevitably tails off in the absence of quantifiable feedback. Just ask any pro athlete. However, when you do measure and hold people accountable, stability follows and, naturally, so do performance improvements.

In business, you must know your key metrics. You can’t effectively manage what you don’t measure, so here’s a simple method to help you achieve your “offline” referral goals.

Let’s assume you’re currently averaging 1 new referral for every ten times you actually speak to a client or patient about referrals. And you’ve set a goal to get ten referrals in the first half of the month. How many clients / customers / patients do you need to talk to?

You’ll need to talk to 100 people. Divide 100 by 15 (the # of days in the first half of the month) and you’ll get 7 discussions per day. Break this down even further and now your goal is to have 1 referral discussion per work hour each day.

Keep track, and when you find yourself regularly chatting with a client / customer / patient about referrals each of those hours, you’ll hit your target. Forget to do it one hour? No problem – just double up the next hour. It’s all about getting in the habit of doing it consistently.

It’s not complicated and it works. Set your staff’s and your own goals using a similar formula and process and watch your new client / customer / patient referral rates soar.

Bottom line: Simply holding yourself and your staff accountable for generating referrals – and measuring the results – can literally explode those new client referral rates your business depends on so heavily today.

What Business Are You Really In?

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Figure out what business you're REALLY in and watch your profits soar!by Steve Houston

This is an important question every business owner, principal, or marketing executive should ask themselves early in the game, and you should consider it carefully from two different perspectives before answering.  The two correct answers – first from your client’s point of view, and then from your own perspective as a principal in your business – will probably turn out not to be what you thought they would be. 

These answers are vitally important to the success of any business.  Owners who gain a true understanding of these two issues and approach them accordingly will greatly increase their chances of not only succeeding but prospering within their specific business verticals.

Let’s look first at how clients view your company’s products and services.  Years ago, when asked what business his company was in, this is how Charles Revlon (of Revlon cosmetics fame) responded:

“In the factories we make perfume, but in the stores we sell hope.”

Revlon’s simple statement reveals some fundamental truths about marketing – truths that many business owners, marketing departments, and product developers to this day still don’t realize.  These truths strike directly at the heart of why your clients come to you, and what those clients are really buying.

It’s far too easy and not all that unusual for executives to view things myopically…to be product or service obsessed…to overly self-identify with the products and services they sell.  Shortsightedness like this is common in every type of business sector.

When you boil it all down, it doesn’t make much difference what products and services you’re selling.  What you’re really selling to your clients are intangibles.

Charles Revlon knew this and he also understood some key truths about the people he chose – yes, he chose – to be his customers:

  • People want to improve things, to make things better.  That desire is always there, even though some people will work hard to do it and many other people won’t.
  • When given the choice between being optimistic and pessimistic, most people choose optimism.
  • People do many things based on the hope that they’ll become happier, healthier, more loved, more secure, gain peace of mind, etc.  They join clubs, churches, start their own businesses, go on diets, enter into relationships, and more as they invest in hope, time and time again.

When you look through this prism and truly understand what your clients actually need, want and desire, you now have the most important keys with which to effectively market your business to them. 

This is the correct answer to the first question.  Now let’s ask the same question from a different perspective.  Mr. or Ms. Owner, what business are you – personally – really in?

You’re in the marketing business!  In fact, everyone in your company – directly or indirectly – is in the marketing business!

Your primary focus needs to be on the strategic role of acquiring, retaining, and maximizing the lifetime value of your clients.  It’s all about changing your perspective from being a tactical “doer” – making or selling certain goods and/or services in exchange for getting people to pay you for them – and focus instead on the activities that are going to improve the profitability of your business and help it grow.

In today’s business culture, this mind shift can be difficult for some to accomplish.  Go to any trade show or industry conference and people will tell you that they’re in the “(fill in the blank) business”, or that they “make the best widget out there today”.  They think of – and define – themselves as being a maker or doer of something, rather than as a marketer of something. 

However, in the real world, this view you have about your role in the business has critical ramifications for it.  It influences how you allocate your valuable time, energy, and capital. 

The value of just doing things is much less than the value of actively managing your company’s relationship with your clients – and managing it effectively through the same perspective that your clients view you.  Just as Charles Revlon did, you have the best insight into your clients’ inner needs and desires, so it’s incumbent upon you to handle, or at least direct, the strategic marketing of your business.

There is, of course, no substitute for doing – someone has to create the product or service, sell or lease it, ship or deliver it, etc.  Doing, so to speak, is a necessary evil of business.  There are plenty of talented, capable people out there who are perfectly suited for that role, and it’s easy to delegate those functions to them.  Most anyone can be a doer, but few people have the skills to handle, or can be entrusted with, THE most critical role in any business – marketing it.

All too often, most business owners view marketing as an afterthought or as an unnecessary expense, something to do if they have some time, energy or money left over at the end of the work day.  However, by focusing more on becoming a more effective marketer for your business and delegating the doing to others, you radically increase your business’s chances for success, growth and increasing your own personal wealth.

Ask any highly successful businessperson what one activity they spend the vast majority of their working time on, and invariably you’ll get a response similar to “Marketing my company”.  Because of your close proximity to your clients and your clear insight into exactly what you’re selling to them, this makes you the most logical choice to handle this critically important business function for your company.

You, of all people, are in THE best position to not only understand exactly what it is you’re selling, but who you’re selling it to.  This is where your true value lies.  Make an effort to work more ON your business than IN it. For the sake of your company, try to become a better marketer – and less of a maker or doer.

The Marketing Strategy Small Businesses Need To Avoid Being “Carfaxed”

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by Steve Houston

How CarFax came to dominate the automobile industry is an amazing success story, and it’s particularly instructive since it also helps explain why this new marketing strategy small business must implement has become so critically important.  If you own or manage a company, read on because I’m going to tell you how to keep it from being “carfaxed” too…

When CarFax entered the auto market in 1984, they were very clever about how they did it.  Their business model was based on getting all the auto dealerships in the country to sign up for their monthly car-history tracking and reporting program.  But rather than market their service directly to the auto dealers, they positioned themselves as an expert in the market directly between the consumer and the auto dealer.

They spent hundreds of millions of dollars on advertising that taught auto shoppers to request a free CarFax report whenever they went shopping at a used automobile dealership.  Recognize their tagline?  “Just ask for the CarFax.”  You still hear it on TV today.  What they did, essentially, was establish a new standard for automobile buying in consumers’ minds – before you buy a vehicle, you need to get your free CarFax report on that vehicle from the dealer.  Consumers listened, learned, and embraced it, naturally, because it was a great service and it didn’t cost them a dime.

So when potential car customers started showing up at dealerships asking for their CarFax reports, auto dealers were confronted with a choice.  The dealers that didn’t subscribe to CarFax’s monthly service soon discovered that prospects coming to their dealerships didn’t trust them as much as the dealerships who did offer CarFax reports to potential buyers.

Guess which dealerships’ sales started to really soar?  That’s right – the ones who chose to give the free CarFax report to their prospects.

(Note: When your line of business is already widely viewed as being, shall we say, less than reputable, this really hits a nerve.)  Other auto dealers finally realized the deck was stacked against them and they started signing up in droves.  CarFax was officially born.

CarFax’s strategy allowed consumers to infer that dealerships who gave their customers CarFax reports were more reputable than those dealers who didn’t.

Today, Google, Yelp, Angie’s List, and hundreds of other online business directories are doing the same thing to you and your business, leveraging your customer reviews and online reputation instead.  This is the marketing strategy small business owners must understand.

A few years ago (and probably without your knowledge), each of these online business directories gave you a free webpage where anyone can go and write reviews about your company.  Good or bad, complimentary or critical, accurate or completely false, it doesn’t matter – your professional reputation is now being written online by your past customers.  Those reviews are also being seen by hundreds of prospects each month as they search online for companies like yours to do business with.

By encouraging customers to write reviews about businesses and publish them on their websites for everyone to read, Google attracts millions of visitors daily.  This serves two purposes – they provide a useful service that helps consumers choose between companies to either patronize or avoid, while earning billions of dollars each year from the advertising they sell on their webpages.  One unintended consequence of all this is that the demand for professional reputation marketing services also started to take off.

So what does this mean for your business? If you have any bad customer reviews posted about you online, hundreds of prospective customers every month see those reviews.  Most of them will choose not to give you their business and will instead give it to another company who has a better online reputation.

If your company has negative reviews written about it – or no reviews at all, and therefore has no reputation – you are not going to be viewed as trustworthy.  People will take their business elsewhere.

Business is based on trust and the marketing wizards at CarFax understood that almost 20 years ago.  Today, Google and a host of other online business directories are applying the same strategy to you, this time using only a slightly different twist.

And if you were like most business owners, you didn’t even know it is happening.

But now you do. Savvy business owners are beginning to realize they have to gain control of their online reputations.  To ignore the problem and simply leave it to chance is to invite disaster.  This is one marketing strategy small business owner can’t afford to ignore.

Managing your online reputation is not an easy thing to do, but when done correctly, it can be a particularly powerful form of marketing for your company.  “Reputation marketing” is a relatively new, highly specialized service that sprang up in response to this new requirement.  If business owners don’t have the technical knowledge, time, or inclination to do it themselves, an expert reputation marketing consultant can help clients:

  1. recover their tarnished reputation, if necessary
  2. build a 5-star online reputation that earns new customers’ trust and improves sales conversions
  3. market their business by leveraging the powerful “social proof” value of their 5-star reputation
  4. instill a “reputation-minded” culture within their organization to foster a high reputation “awareness”

Actively managing their companies’ online reputations is a new ballgame for most business owners, so you’re probably not the only one feeling overwhelmed by it all.  Reputation marketing solutions do exist but  you need to get started now before your competitors do.  Not next week.  Not tomorrow.

Now.

After all, there’s nothing more important to a business than having a trustworthy, rock-solid professional reputation.  Little CarFax taught the enormous used car industry this fundamental lesson.  Today, it’s Google, Angie’s List, Yelp and hundreds more business directories  that are, instead, defining the relationship between your business and thousands of prospective online customers.  The one marketing strategy small business needs to start working on is called reputation marketing, and the sooner they start, the better.

You’ve been warned.

(CarFax, Google, Yelp, and Angie’s List are all registered trademarks of their respective companies.)

 

Dealing With Negative Online Reviews

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by Steve Houston

The genie is definitely out of the bottle. Whether you like it or not, your company’s professional reputation has now become a very public thing, and before doing business with you, consumers Knowing how to respond appropriately to negative online customer reviews is important.are researching you online more actively than ever before. Below are 5 important tips you should follow to minimize the damage that even an occasional negative review does to your business.

1. Ask the review site for assistance.

Most review sites are reluctant to remove negative comments posted on them, some of them being more notorious than others in not wanting to help with these requests (in particular, Yelp). Your best justification for requesting a removal is that the review is factually incorrect, or if you can prove it was made by a competitor. In some cases, it’s certainly worth a try.

2. Promptly and professionally present your side of the story.

As soon as you become aware that a negative review has been posted about your business, it’s very important that you respond promptly to it. If you’re truly at fault, take your lumps and acknowledge the error. Customers who have been wronged can be very forgiving, even occasionally removing the negative review themselves (or softening their criticism in it) if you show some sincere contrition. (And remember – don’t be thin-skinned when receiving valid criticism. You should learn to welcome constructive criticism because your customer is going to the trouble of telling you how you can actually improve your business.)If you do it correctly, you can re-claim an unhappy customer and keep them for life.

If you believe you weren’t at fault, then briefly present your side of the story in a factual and non-defensive manner. The goal here is to leave readers with the impression that you are big enough to “agree to disagree” about the situation and that there can be two legitimate perspectives to any story.

3. Try to steer the conversation offline.

In your response, avoid turning the situation into an on-going public discussion. If you’re politely refuting their assertion, provide the complainant with a name and contact method for them to use to try to resolve the issue with you away from the review site. The last thing you want to do is to engage a disgruntled customer in a lengthy dialogue for the whole world – and new prospects – to see.

4. Bring the situation to an appropriate close.

Occasionally a resolution satisfactory to both parties just can’t be reached. When irate customers simply cannot be reasoned with, shut the situation down with a simple statement confirming your commitment to working with current and future customers in a professional and mutually respectful manner. Always leave on a high note.

5. Encourage your clients to leave positive reviews.

The increasingly social nature of the internet is affording people more and more ways to voice their opinions publicly and be heard. The proliferation of online business directories and review sites Actively building and marketing a 5-star reputation for your company is fast becoming a business imperative.that encourage leaving personal reviews is a prime example. Online customer reviews are what marketing professionals refer to as “social proof”, a form of social validation ranking second (at 70%) only to word-of-mouth referrals (92%) in the areas of believability and trustworthiness. (Nielsen’s Global Trust in Advertising Survey, 2012)

Every company’s reputation is now “out there” for everyone else to see – and shape – and you just can’t leave the development of your online reputation to chance. Ask your satisfied clients to take a moment or two and post a positive review about you online. The steady accumulation of sincere, praiseworthy feedback about your company is what will set you apart from your competitors, who are either uninformed or unwisely choose to take a more passive approach to this critical marketing strategy.

Remember, the professional reputation of your business is your most valuable marketing asset, so you should be actively doing everything you can to develop that rock-solid 5-star online rating. Prospective clients want to do business with only the most trustworthy and reliable companies. Following these five important tips will help show them that your company is worthy of their business.

(Download this .pdf)

 

“How Do I Get More Customers?”

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by Steve Houston

“How do I get more customers?” is easily the most common question I’m asked by business owners these days.  The sluggish economy has dampened earnings results for many small to medium sized businesses and there’s no real relief from external sources in sight.  As a result, it becomes even more imperative for businesses to re-commit themselves to investing in their marketing programs, particularly as their competitors choose not to – which is a very dangerous mistake for them to make.

There are many ways to market one’s products and services to potential new clients, but you can break them down generally into two categories – offline and online.  Each approach has its own merits and drawbacks, so it may make the most sense for the majority of business owners to look at implementing a balanced approach.  Since there really isn’t a one-size-fits-all solution when you want to attract new customers, it’s important that all options are looked at and evaluated from the perspective of what approaches best fit one’s overall sales cycle.

So-called “offline marketing” methods include direct mail advertising, radio and TV ad buys, Yellow Page book ads, and ads placed in printed newsletters, newspapers, magazines, and other hardcopy media. The reach of these traditional channels and their associated costs vary widely, as do their ultimate effectiveness.

Consumers are quite familiar with receiving advertising postcards in the mailbox, listening to companies hawk their wares on the radio, and watching 30-second commercials on their televisions.  These methods do work to varying degrees of effectiveness, so they’re all still viable options for many businesses who ask the age-old question “How do I get more customers?”

However, the world continues to change, as do buyers’ habits.  Since the internet’s emergence during the 1990s as the most impactful game-changer in the world of business, new “online marketing” channels and mechanisms have been developed to leverage the internet’s vast and pervasive reach.  It’s important for business owners who want to improve sales to recognize that their customers’ habits and preferences for engagement with them have changed, and that they need to exploit the marketing mediums that best resonate with their particular client base.

Online marketing tools and techniques include corporate websites, having a presence on social media sites, direct email and newsletter marketing, video marketing, mobile and SMS text marketing, search engine marketing, pay-per-click marketing, webinar and podcast marketing, and reputation marketing.  It’s easy to see that a whole new world – albeit one that can be confusing and difficult to keep pace with – has opened up for business owners who choose to embrace these highly effective and lower cost marketing alternatives.

So when I hear the question asked “How do I get more customers for my business?”, that becomes the starting point for a discussion with business owners to, first, help them closely identify their client base.  Armed with that understanding, it’s time to then start crafting an effective marketing program around them that includes all the appropriate channels, tools, and techniques that will best resonate with those potential clients.  When done correctly, good marketing not only pays for itself through the continuous acquisition of new customers, but also sets that business up on a solid foundation that paves the way for higher profitability and sustained growth.

Rachel Botsman – The currency of the new economy is trust

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Filmed Jun 2012 • Posted Sep 2012 • TEDGlobal 2012

There’s been an explosion of collaborative consumption — web-powered sharing of cars, apartments, skills.  Rachel Botsman explores the currency that makes systems like Airbnb and Taskrabbit work: trust, influence, and what she calls “reputation capital.”

Rachel Botsman writes and speaks on the power of collaboration and sharing through network technologies, and on how it will transform business, consumerism and the way we live.