Killing Customer Loyalty One Coupon at a Time

5 10 2011

Over the past week I have been working with a client on attracting new customers to his business.  The other day he contacted me to let me know he had been approached by a popular coupon site requesting that he participate in their service.  They recommended he offer one of his services at a 50% discount leaving him break even at best.  The sales person said he should be able to make up the difference through increased customer repeat business and offering other services.  As we discussed the implications of participating in such a program, the client pointed out that the service the coupon site wanted him to discount didn’t really offer the opportunity to sell other services as it was all inclusive.  In the end he realized the coupon site and the customer were the only ones to benefit by his participation.

In Apples to Apples I wrote about focusing on price and the dangers it creates for building loyalty.  Business leaders need to focus on one of two things: either being the best or being the cheapest.  There is nothing wrong with either strategy.  Either approach could help you grow your business, it’s just a matter of which one you want.  If you choose to compete on price, you have to make up for the difference on volume and efficiency.  Most businesses fall short because they are unable to generate the volume of sales to drive price down or they are unable (or unwilling) to become ultra-efficient.  Besides, you have to sell a lot of widgets to make the profit on volume.  On the other side, being the best provides its own challenges.  It requires a higher degree of discipline.  You have to be in tune with who your customers are and clearly understand their needs.  Service is critical to those who want to be the best because the emphasis is on the experience.

Many businesses find themselves in the middle which is where these coupon sites take advantage of their prospects.  By promising to generate traffic, they lure you in by getting customers into your doors.  But are they the right customers?  If they are, how is what you are offering going to be far and away different to get them to come back?  A recent NY Times article highlighted some of the challenges these coupon sites are facing and why they are waning in popularity (http://nyti.ms/coupon_loyalty).  While the sites manage to attract customers in, they will often not return because they will just go back to the site and get another coupon for somewhere else.  It’s hard to drive loyalty when you force your customers to focus on price.  In the end, everyone loses.

Want more customers?  Know the following:

  • Know who your customer really is.  Learn all you can about them.  Understand their needs, wants and desires.
  • Get focused.  Understand your purpose and how it serves your customers best.  Communicate that message to your target audience.
  • Target. Not everyone is your customer so place your energy with your target audience.  Go after them with pinpoint accuracy.
  • Solve their problem.  What issue do you solve with your client?  How is it quantified?  Focus on how your solution is the best.
  • Know why you are different.  The trap of being just like everybody else or trying to be all things to all people will lead you to sales mediocrity.  Focus less on what you do and concentrate your efforts on how you do it.  What experience do you create?  How is that different from what your competitors will do?
  • Tell a good story.  Relate to people through stories and analogies.  Share past experiences and successes.  Frame it in a way that your prospect could see themselves working with you or using your product to address their needs.

While coupons may be a tempting way to get more people through the door, they often just create more work for you without the profit.  The customer may benefit but the business does not.  Become more focused and purposeful about what you do.  Offer an experience like no one else and watch your sales grow.

Want to learn how?  Check out Apples to Apples: How to Stand Out From Your Competition.  Available now in hardcover and on Kindle!





You’re Dying From Cancer, But I Didn’t Tell You.

29 09 2011

Imagine not feeling well and going to the doctor to get things checked out.  The doctor looks you over and tells you there’s nothing to worry about.  The problem persists for several months, followed by several visits.  Each visit finishes with the same response until one day you are so sick and weak you now are taken by ambulance to the emergency room.  After a battery of tests the ER doctor comes into the room and tells you that you have been diagnosed with late stage cancer and you are probably weeks away from death.  Sad, fearful, and angry you call your regular physician and ask him why he didn’t catch this.  His response to you is shocking.  “I didn’t tell you because I was worried you couldn’t afford the treatment.”

Sounds like a lawsuit waiting to happen.  First of all, this is an example.  I know a lot of doctors and they would never put the welfare of their patients in jeopardy.  Nobody in their right minds could believe a doctor would do such a thing.  What about businesses?

I take a great deal of pride in the work I do for my clients as well as those contacts who aren’t.  I have the strong belief that my role is to do what is right for the people and the business.  Because of this I may tell people things they don’t want to hear.  Some cases I have lost projects because of it.  Yet in most situations that is what gets me hired.  I tell leaders what they need to know.  If I am not the right resource I refer them to the proper professionals that can help them out.  While I am conscious of the client’s situation, I recommend the action they need to take and leave it up to the referral to see if they can help.  After all, if someone has a cancer in their business, I do not want to be the one who didn’t warn them.

So why do I bring this up?  My rant begins with a conversation that took place with a service provider who was talking to me about referrals.  To be clear, this was not a situation where i was asking him for referrals, but more of a discussion about the practice.  He said he was often aware of needs that his clients had, but was reluctant to refer to outside professionals because of what they might think.  Like the analogy of the doctor, he knows his clients have issues that could prove costly, yet he fails to act out of fear that they will balk at the idea or that they are unwilling to pay for outside help.  The difference here is there is no perceived malpractice.

I do not say these things because I desire more regulations or outside intervention.  I merely wish to bring up a point.  As a professional, you owe it to your clients and colleagues to help them be successful.  If relationships are built on a foundation of trust, I believe your clients and others in your professional circle will value what you have to say.  If you are concerned about it you may need to do a gut check on how solid your relationship is.  My clients are successful because they are told things they don’t want to hear,  but NEED to hear.  Because of this, many of these people are experiencing substantial growth when other businesses are struggling to make ends meet.  They set goals and act deliberately while their competition worries and unfocused action.  Many of my clients are building and expanding while others are shrinking.  All of my clients are through referrals.  In other words, they came to me because someone had the courage to say there is help available.

Whether you are a banker, accountant, marketer or even a coach, your actions towards your clients speaks volumes about your values.  That is why as professionals we build relationships of trust with other service providers.  We may not be doctors, but we do need to hold ourselves to a higher standard.  It is how we will grow and innovate.  So go out and build those relationships, check backgrounds, research and build your circle of professionals.  When you help a business grow, not only do you help that business, you help create jobs, and strengthen our economy.  Not to mention you have strengthened a relationship that will pay you back ten fold over time.  Be courageous, build trust, and create growth.





Facebook Reminds Us How Difficult Change Can Be

22 09 2011

If you have been on Facebook in the last 24 hours you might have noticed some differences.  If you have not, I am sure many of your Facebook friends will inform you.  Yesterday, Facebook made some significant updates to their page and news feed causing many users to cry foul.  Facebook says the changes are to improve user experience and make it easier to stay connected.  The users, however, find the new layout confusing with the absence of some features they had grown accustomed to.

But this is not about Facebook’s change as much as it is an observation about change in general.  Though we are in a continually evolving world where change comes at us faster than ever before, we often wish things would remain as they have been.  I remember these experiences when I worked in the corporate world.  A change would be sent down by management and one of the following would happen:

  • Backlash – “That’s not part of my job!”, “This doesn’t make any sense!”, “I’m telling my boss this isn’t right!”
  • Sabotage – People will set out to make sure the new way will not work
  • Complacency – This is the “flavor of the month” and this too shall pass
  • Collusion – Water cooler huddles dissing management or anyone who agrees with the change
  • Resistance – Flat out refusal to try the new method
  • Acceptance – This is a rare bird.  Some think it is extinct
  • Embrace – Some actually see the benefits and not only look forward to the change, but may actually take the lead on making the change better (even rarer than acceptance)

As you can imagine most of our wiring around change is that it is negative.  I am sure there are many reasons for this, but the fact is we will go through countless changes in out life.  As leaders, we will ask others to be part of change.

There are things that can help make change a little easier in our organizations.  Here are a few things you might try:

  1. Inform and educate – Appeal to the reason why the change needs to happen.  Focus on outcomes, benefits and desired results
  2. Enroll staff – Change that happens behind closed doors and then sprung on its participants can lead to revolt.  Whenever possible, incorporate informal leaders into the process.  Find the people who can influence the change one way or another.  If they own it, they can help create a positive message.
  3. Deal with the emotional issues related to change – Fear is a powerful factor in any change process.  Often people’s minds go to the worst case scenario.  Address those concerns early on.  Get feedback.  Seek advice and if someone has a different idea, let them research it if possible.
  4. Whenever possible, be transparent – work people in to a new way of thinking by sharing information.  If you are holding back because you are worried what people will think, don’t be surprised if that is the outcome you create.
  5. Work on behaviors around change – Coaching and mentoring is involved here.  Help people develop the skills necessary to do and think differently.
  6. Create a change culture – Empowered leadership, empowered staff, a clear direction where to go, and focusing on the positives can go a long way to making change a regular part of your business model.  Get people thinking.  Teach creativity skills as much as you would technical  skills.  Tap into that entrepreneurial spirit that your organization had when it was young and everything was constantly different.  Make people the catalyst for moving forward!

The bottom line is change can be easy or difficult.  Often we choose to make it the latter.  Each of us have embraced quick and dramatic change in our lives yet we still adapt and move on.   In many cases that change wasn’t as bad as we originally thought.  So while I can’t change Facebook, I can change my attitude.  And if something as small as Facebook can throw you into a tizzy, how are you going to do against greater changes needed in your business or your life?





Sometimes the Best Way to Win is by Finishing Third

19 09 2011

I had the pleasure of hearing Malcolm Gladwell speak last week at a tech conference in Milwaukee.  You may be familiar with his books, which include The Tipping Point, Outliers, and What the Dog Saw.   Mr. Gladwell opened his discussion with the Bekaa Valley Air Battle which took place in 1982.  Considered one of the most lopsided battles in military history, the air battle represented the use of modern warfare which saw the Israelis decimate their Lebanese foes in just a few short days.  The mismatch was so bad that it has been labeled “The Bekaa Valley Turkey Shoot”.

What Mr. Gladwell recognized here was Israel didn’t use any technology they developed.  Instead they mastered what others had innovated.  For example, the Soviets were master strategists.  Their centralized power allowed them to bring great minds together to think of the best ways to fight in modern warfare.  However the Soviets did not possess the technology their strategy utilized.  The Americans are a different case.  Their fractioned yet highly entrepreneurial military had developed many of the technologies and weapons necessary to successfully lead the fight.  By combining the best of the two, the Israeli military was able to carry out an attack with such precision, they completely shut down the Lebanese.

We often place too much emphasis on our need to be first in the race.  Yet in many businesses where the business model may be new or evolving, it can actually be better to enter third.  Mr. Gladwell pointed out that Steve Jobs and Apple have been the best at this.  They weren’t really the first to develop anything.  What they did do was take the idea and make it better.

The most important phrase Mr. Gladwell shared was culture dictates innovation.  If you have the right culture, you can do great things.  What you need to do is create a culture that will allow you to be successful.  Yet cultures can be difficult to change.  As leaders, it is necessary to take the time to define what you want to become.  The direction you take your business is the choice of you and your culture.  What direction is it taking you?





A Laundry List to Accomplish Through Five Steps

15 09 2011

In a recent client meeting we were reviewing the business numbers and talking about the next steps for the growth of the operation when the subject of incentives came up. During our talk, the owner asked if the incentive package could be repeatable in another company. My answer: it depends. This led to an in depth talk about why some companies can be highly successful and others not.

My client, the owner of a very successful business as well as a grand inquisitor asked me to define what made his current revenue sharing so successful. I threw the question back at him. I said, “First, why don’t you tell me what has to happen in order for your plan to work?” Through this, an extensive list was built:

  • The current business has no debt
  • They have highly productive people working
  • There is a culture of empowerment to get things done
  • They are Mission/Vision centered
  • They developed a pattern of growth
  • The leadership character of the owner
  • No assumptions are made. Evidence supports the program.
  • Problems are dealt with immediately
  • Everyone in the organization is treated as important
  • Loyalty matters (to customers and also vendors)
  • Team will go above and beyond because they are respected
  • Communication is high
  • There is trust in the environment
  • Outside support through mentoring and coaching
  • Owner is willing to be coached
  • Owner knows his weakness
  • Owner knows his Vision for the business

We addressed that because there are a lot of things working right, his compensation is successful where in other places it might never pay out. This brought up a greater observation; there are a lot of things that make organizations successful and if it weren’t for several factors impacting all these outcomes, the business wouldn’t be where it is today.

Many business leaders focus on the laundry list that needs to be accomplished. Yet even with a large list such as this, it can all be running right with just a few simple practices.

  1. A Vision-centric culture. Everyone knows what the organization stands for, what they will accomplish and how their role plays into accomplishing that goal.
  2. Goal focused and communication driven. Each person knows what they need to achieve and there is ongoing communication to help them succeed.
  3. The right people. people matter. Period. When leadership has the right behavior and people work from a position of strength and empowerment, amazing things can be accomplished. The wrong people or even the right people doing the wrong things can be costly.
  4. Working process that is always a work in progress. In an environment of change where people are continually taught and updating best practices makes for a winning combination. By honoring systems for their consistency, but being willing to question everything for improvement, people are able to maintain a high level of productivity.
  5. Measures that mean something. Data is abundant. The right data is far more important. Knowing what to measure, how to measure it and empowering people to be accountable and track their data, team members are able to help reach their targets as well as the growth goals of the company.

By following these steps, business leaders are able to develop great performance along with happy, engaged employees. What is your laundry list and how will you be tackling it?





Why I Love What I Do. (And Why You Should Love What You Do Too!)

13 09 2011

I am pretty lucky. I have a business where I get to work with great people every day. As part of what I do, I am able to help my clients build wealth, grow their business into an appreciable asset, and reduce some of the stresses caused by various leadership challenges. The greatest blessing is doing what I love. Each day I get to utilize my talents to help make other people’s lives richer. But isn’t that what we all want?

Some of us get stuck in jobs that don’t make us happy. They can feel lost, trapped, or unmotivated. Their ability to shine with their true gifts are doused by the fear that doing anything different would lead to financial ruin. After all, we are all told how bad the economy is out there. What if you could put that fear aside for a moment? If you could do anything you wanted in life, what would you do? What is currently getting in your way?

These were all questions I faced over seven years ago before launching this company. That time was scary. After all, being on your own takes away any safety net that you have. To me, what was more important was doing what I wanted to do. What I could be the best at. I wanted to enjoy getting up every day and dealing with new challenges. This business has given me that opportunity and I am glad to have taken the risk. If you are in a position that is not fulfilling, there are things you can do to avoid feeling trapped. Making the effort and choosing your path can be the most rewarding thing, but only if you take the steps necessary to be successful.

  1. Do a talent inventory – Know what you are the best at.  Figure out what you enjoy doing.
  2. Make it profitable – Just because you are good at something doesn’t mean it will be profitable.  Figure out how to make money doing what you love.  There’s enough starving artists out there and you shouldn’t be one of them.
  3. Have your plan – Know how you are going to find customers and how you are going to grow your business.  Failure to have a plan can leave you as an employee in your own company.  Seek ways to build wealth so your efforts can be multiplied.  This is the biggest challenge most small business owners face.
  4. Pursue life-long learning – Educate yourself.  Seek knowledge.  Grow your mental strengths.  There is a lot of free information out there, but don’t be afraid to pay for the right knowledge.
  5. Surround yourself with successful people – There is no shortage of people who will shoot down your dreams.  Find those who will lift you up and support you.  Join entrepreneur groups, mastermind groups, leadership groups, or mentor programs.  Find someone to help keep you on track and focused on your goals.  Learn from them to avoid mistakes that could cause you hardship.

Taking these five steps can be very helpful in your career growth.  These skills will be necessary whether or not you are planning on going into business for yourself.  Do what you can to eliminate your fears and do what you love doing.  You will be happier for it





The Impact of September 11

12 09 2011

Yesterday marks 10 years since the terrorist attacks in New York, Washington DC, and the failed attempt which led to the crash of flight 93 in Pennsylvania. Over the past week, many of my friends and colleagues have reflected on this event and how it changed our world. Like many, I can remember exactly where I was and what I was doing when the news first broke. In the weeks following the incident, we became a unified nation committed to overcoming our differences and moving forward through our pain. Ten years later, life has moved on. The pain and grief are still there though more subdued compared to a decade ago.

Though our world changed, we still enjoy a good quality of life here and we owe much to those who have given their lives for the freedom we sometimes take for granted. Today we face new challenges with mounting debt and a sluggish economy. These too can be overcome if we commit to the same resolve we had on that fateful day. It involves each of us taking an active role in growing this nation. We must be accountable. We must be responsible and we must use our strengths to innovate and compete on a global scale. I hope we can learn how to come together to get things done much like our grandparents did in World War II. They sparked a growth in this nation that continued a generation of prosperity. We too have to tap into that work ethic and provide direction and leadership not only for this generation, but future ones as well. Remember September 11. Remember how it unified us towards a common cause and let’s apply that to the other challenges we now face.








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