Jul 18, 2013 | Management, Marketing, Small business
As I talk to small businesses, there is a very common set of things they should all be doing, remarkably common.
So here they are:
- Doing what they currently do 10% better. Even if what they are doing is sub-optimal, doing it cheaper, faster, better, must be of benefit, and is usually very low hanging fruit indeed.
- Get your digital house in order. Websites, blogs, social media, all consume resources, but worse, most SME’s treat them as one-off activities, items to be ticked off a list and left till next year, or left to the pimply faced intern to do in their spare time. Wrong. You need a strategy, allocated resources, and the capability to do all this stuff, it is after all the window to the world, and is not an optional expense, it is an investment in commercial longevity.
- Sort out who your current high performance customers are, and build relationship s with them. They will not necessarily be the biggest, they may be the least cost, highest gross margin %, have most potential, be the ones who are prepared to engage with you on more than a transactional level, whatever it is, engage, as it is far easier to extract another dollar of revenue from an existing customer that find and extract from a new one.
- Understand the market segments you work in, and which deliver you the best returns, and work the segment harder. This may be similar to the best customer list, but it may not. It is really all about understanding the characteristics of the type of customer to whom you can add the best value with your product and service offerings.
- Actively seek and work for referrals. The cheapest form of marketing is to have an existing customer refer someone to you, so be creative about seeking referrals, and reward the referrers. Oh, and ask for them, most do not ask, but if your customers are happy with you, 9 times in 10, they are happy to give you referrals, they just do not think of it on their own, and you have to make it worth their time.
- Create and leverage alliances. If you are running a shoe shop, it makes sense to be working with the dress shop around the corner to cross-refer, co-promote, and collaborate to build a customer base loyal to you both. Halves the marketing costs, and leverages the dollars you do spend.
- Create and leverage data bases. Capture every transaction, and do something with it, follow up, see if the buyer is happy with the purchase, send a “thank you for your business” card, ensure the product met expectations, provide an offer for the upcoming birthday, etc, etc, etc. It is now so cheap to build and leverage databases that it is insane for small businesses not to be doing it.
- Keep your eyes open for opportunities. Most small business operators are so engrossed in the day to day bun-fight that they do not take the time, or make the effort to look around, see what their competitors are doing, look at the trends in your market, and those adjacent to you, look at the evolving technologies that may impact, or be of use, see who is going well, and who is going broke, and understand why, etc, etc. Opportunities usually come from unexpected places, and you have to be ready for them when they do.
- Measure, measure, measure. Understand your costs, not just of your products, and the stuff clearly articulated by an invoice, but the often subtle or hidden ones, customer acquisition costs, wasted time in the office, using untrained staff, breakdowns in the factory, etc, etc. Some measures will be more enlightening that others, and you need to be cognizant of the costs of collecting and analyzing the data to give you the measures, but rather than not measuring, do it for a while and determine if there is a value to the continued measurement and leverage the data gives you, then continue, or leave it if the return is not worth the effort, or the opportunity cost is too high.
- Work on why you do stuff, rather than just what you do, and how you do it. I considered making this number one on the list, but it is a bit esoteric, so it is here, with a link to Simon Sinek’s presentation that in my view should be compulsory viewing for small business people. Watch it, think about it, and act on it.
- Do something different, now. Pick from the list, and do something about it. I could go on about planning, assembling resources and capabilities, and all the other consultant stuff, but for small businesses people, the primary task is to act, watch how it works, and be prepared to change direction quickly if necessary, and move ahead again.
Oh, and a last one, so important that it is on its own, WATCH THE CASH!
Jul 17, 2013 | Governance, Management, Marketing, Small business
Small business owners work harder, and often take home less than their employed peers. I see this all the time, again and again, in all sorts of contexts.
Ever wondered why?
In my experience, most go into business because they have great skill, contacts, and experience in the domain of their choice, which makes them great engineers, plumbers, food scientists, but does not necessarily suit them to be CEO.
The flip side is, do you need specific domain knowledge to be the CEO of an enterprise in that domain?, the answer clearly is no.
Most get confused about the purpose of their activity. Competent chefs try to run restaurants, simply because as a chef they can pay themselves only chef rates and remain solvent, but being a restaurant owner, perhaps a string of them, is where the money is.
Get your priorities right.
Want to be a rich chef, but love to be “cheffing” ? Probably can’t do both.
So many exchange the cooking for shuffling paper, suppliers, lease contracts, worrying about staffing, and doing the marketing, then wonder why the restaurant fails.
Fire yourself as the CEO, and hire a professional manager, while you do the cooking. After all, you would not even consider hiring an apprentice to replace you in the kitchen as you try to run the business, would you?
You can still own the business, and eap the benefits, you just do not have to run it day to day.
Jun 29, 2013 | Change, Innovation, Marketing, Small business
We have a Department of Innovation in Canberra, and similar departments or at least functions in every state jurisdiction, and piles of industry bodies and associations, all mouthing clichés about Innovation being the savior of the economy, and the way of the future. “Innovation leads to new industries, and more jobs” type of windbaggery. Whilst it is absolutely true as a headline, without the substance of an answer to the question: “How” it remains just a press release, and worse, a consumer of public resources with little real potential to add value, and ther promised jobs.
If innovation is step one, and jobs is step three, there must be something in the middle, a step two that enables the creation, growth and commercial sustainability of the enterprises that create the jobs.
This video of Steve Blank, one of the motivators of the Lean Start-up movement likens the efforts of government to innovate to the South Park episode where gnomes are collecting underpants in the expectation of profit.
I see this so often, a leap of faith which is really a failure of logic. To get to phase three, and profitability takes more than a good idea, available resources, and fast talking, you also have to have a process to deliver value to customers superior to their existing service or product.
Jun 25, 2013 | Change, Governance, Management, Marketing, Small business, Social Media
Governments and their regulation centric thought processes always lag the digital developments that are accelerating in our world. Typically, they are regulating to close the barn door well after the horse is across the paddock, and failing to consult those who understand the processes, so do a lousy job. Just look at the failed supermarket and petrol price “initiatives”, web site filtering, and utter failure to communicate the case supporting the NBN in anything other than clichés, amongst other failures.
Well, there is another revolution on our doorsteps, one that governments must be salivating about, if they recognise the opportunity to rope us in, as the Prism revelations in the US have demonstrated.
It is pretty obvious that recognition software is about to be a general reality, as it gets rolled out in various forms on mobile platforms. Voice, face, and biometric recognition are all technologies that are in existence, and when Apple, or Samsung stick it on a mobile platform, whooppee, off it will go, and with it, the opportunity to collect huge amounts of personal data beyond that which is collectable now. Facial recognition and digital trickery combined will enable every face (just double click anywhere in the linked photo) in a photo to be identified, by simply tying to a social media database.
Bingo!
What will be done with this capability?
The old “I have nothing to hide” argument is looking limp in the face of such absolute ability to identify the where, who, who with and when capabilities being delivered to just about anyone with a camera and computer. Where are the new barriers of “personal information”?
Clearly commercial uses abound, as do those for the administrative and legal tracking of individuals, but it is the nefarious uses this degree of identification can be put to that are scary.
Jun 21, 2013 | Branding, Marketing, Small business
We pay a fortune for lobster, it is a delicacy, but it is not long ago that lobster was poor peoples food. If you had nothing else to eat in New England in the 18th or 19th centuries, you would go to the beach and scrounge some lobster, and rules were in place to limit the amount of lobster masters could feed their indentured servants.
I remember as a kid that chicken was a delicacy, an occasional festive meal, Mum fed the Roberts tribe rabbit in a variety of ways as a cheap staple, bought from a bloke who went door to door down the street selling the previous nights haul.
How things have changed. Chicken is a commodity, flogged in supermarket specials, and rabbit is on the menus of the top end of town restaurants, attracting very high prices.
Marketing is all about managing the context and expectations a customer has of the value that can be delivered by your product offering. Preparing and consuming rabbit at home is now uncommon, but change the context to a restaurant, and suddenly the expectation changes, and rabbit is a sexy, modern dish that has attracted the chefs attention and skill, so is something very different to the skinned offering at the backdoor of my childhood.
Setting out to change expectations, often by changing the context as well, is at the core of the marketing challenge. Changing nothing, and competing on the existing commercial battlefield is just flogging stuff, and becomes a contest of price, not value.
Update: March 2015. This article from Entrepreneur magazine tells a similar story about lobster, and the way context and time changes perception, plus a very useful infographic.
Jun 10, 2013 | Branding, Customers, Marketing, Small business
Most customers could not give a rats arse about your vision, values, your customer value proposition, and all the other stuff highly paid consultants rant on about (obviously not me).
What they do care about are the little things, the ones that affect them.
I bank with the same bank I have since they were the only ones who would lend me money for a house 35 years ago, and have just not bothered to change, I usually buy the one brand or petrol, not because it makes the car run any better, but because they are around the corner, and the restaurant I go to most is a little suburban French place that does seasonal vegetables in an ever changing vinaigrette as a side. I love it.
I used to always buy my books (yes, I still buy real books) at the same bookshop where one of the staff seemed to be able to read everything that came through the door, and was able to steer me towards stuff I might like with considerable accuracy. Now however, the store owner is cutting costs, staff has been reduced, and the recommendations of the 15 year old casuals are just not up to the mark.
So, before you spend all that money on the marketing consultants with the new bag of clichés, and web enabled tricks, exercise a bit of common sense and consider the small things, why people come to you, why they choose you instead of the place down the road or over the web, how do you deliver value to them, and what keeps them coming back.
It helps to ask, most people are happy to answer honestly, and the simple fact that you care enough to ask is valued.
