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Small Business Revitalization Blog

Small Business Coaching: Revive Your Profits, Revitalise Your Perspectives, Reinvigorate Your People

The Mysteries of (Not) Delivering Value

WARNING:  I'm having a rant today... that's what happens when I put on my 'customer' cap instead of my coaching cap... luckily dear readers, it doesn't happen too often!  There's some valuable lessons in here for us all :)

In conversation with a real estate agent he mentioned they charge $990 + GST to upload a property for sale to 14 websites and put a sign out the front.  This was their cheapest advertising package for selling a home.  

I have an extensive marketing background and a pretty good working knowledge of marketing on the internet.  When I expressed my astonishment at the lack of value, all the fellow could say in response was “I’m the principal, this is our cheapest advertising package”.  It seems his job title was supposed to make this lack of value acceptable?    

He then proceeded to stutter and stammer that writing the copy takes him 2 – 3 hours… I know amazing copywriters who could get it sorted in less than an hour for a grand investment of around $80.  So what exactly are his clients paying for?  Someone to sell their home, or an incredibly expensive copywriter??

Big hint to business owners – you should never be doing work that you could outsource for way less than what you could be earning. You need to spend your time doing what you are best at!  If this guy spent those 2 – 3 hours getting new listings or selling properties his business would be infinitely more profitable.  

 Then there is the question of the 14 websites – at roughly 10 minutes each for uploading pictures and copy that’s just over 2 hours for an admin person – say $40/hr.  Of course, this also assumes it is of value to use those 14 sites.  Most real estate traffic goes through just a couple of main sites – those 14 sites are really awesome for his search engine optimization though!  And how wonderful that his clients pay for him to be “#1 on” as he proudly informed me.  Sounds very impressive… unless you understand what it really means!

Unfortunately, your brand being #1 won’t sell my house.  Most people search by suburb not agent.  Do you not understand your business or do you think your customers are stupid?  Either way that’s not a great value proposition for building a strong business in an industry that is facing tough times.

And lastly there’s the sign for about $150… In total, even my best estimates for marketing costs don’t get much past $350 if the agent is operating efficiently!  So at $990+ that is some profit margin.  Given the extortionate price of housing in our fair country, real estate agents also receive a very generous commission on sales as well.  I know a lot of business owners who would love margins like that!

Now at this point some of you are going ‘what’s wrong with that?’  Isn’t the point of business to make money?  Yes!  Absolutely!  But not in a way that offers no value to your customers or pretty much assumes they are stupid.  The playing field is levelling AND becoming more transparent.  Your business practices need to evolve!

When both you and the customer are satisfied with the deal you will build relationships that will create referrals, repeat business and ultimately business growth – you’ll be irresistible and desirable and you won’t need to charge for something that should be included in the service!  Imagine if that agent had said “we have a basic marketing package that is included free if we sell your house.”  That would have been much more attractive to a prospective seller than what he actually said: “If the client doesn’t pay for marketing up front the price for this service goes up to $1290 + GST.” WOW!  Knock me out… not even banks are getting interest rates like that!  I’m surprised he’s not receiving daily takeover bids!

The reality is if you are not delivering genuine value which is valued by your customers, you’re going to find you are facing more and more resistance.  The era of greed is good is over.  People are saving and considering their purchases much more carefully than ever before.

By the end of the conversation the real estate agent was half-heartedly suggesting he could negotiate on the marketing costs.  Unfortunately, from a client perspective, the preceding conversation had already cost him the listing. He failed to see that selling is no longer about money – it is all about value.  I am unclear as to whether this agent just doesn't get it or his BS sales pitch works on enough people to get by.  What you need to understand is that if you come across customers who see through your BS sales pitch, you look stupid and you are damaging the reputation of your business.

Most of us are no longer interested in working with people who either don’t know what they are doing or think its fine to overcharge.  We, as customers, have choice.  More and more business owners are creating true value for their clients.  Those businesses are building a solid platform for growth.  And therein lie the lessons for us all.

The New Energies of Business are here.  It is just not good business to overcharge your customers.  It’s time to start thinking about where you are not providing value in your business?  Where you are not efficient and need to find more effective approaches?  Where you are not valuing your customers? And where is what you are offering not even relevant to the value they are looking for?  

What can you change? Where there is a lack of value there is always a way to take advantage of that in the market. Look at where customers are pushing back about price and develop value propositions that create new paradigms and standards in your industry.  When you take a leadership position in creating and providing value, your competition becomes irrelevant!  (And if you don’t know what your customers are saying about your pricing, it’s time to get amongst it and talk to them!)

If you are going to have a successful business as we move forward into the new energies, now is the time to put your new platforms in place. 

Would you like to join us at our regular New Energies of Business events?  On August 29 at Peregian Beach we'll be discussing how to create value, how the energy of contribution plays out in business and how loving your work creates profits... if you can't be there you can order the videos.  Our presenters and facilitators are experienced business people who are already living the new energies and know what it takes to transform business.  How does it get better than that? 

What are you seeing with your business and the value it offers?  What value have you experienced in other businesses lately?  Comment below!!

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Overcoming the Downsides of Upselling

Right now you are probably thinking your business mentor has gone completely  mad – how can there possibly be a downside to upselling?  

Well here it is… the thoughtful and gracious Natalie Alaimo made a comment on Facebook this week about how unblissful it is for a client when they’ve just had a beautiful relaxing facial to have the beautician then do the full-on upsell  to the client on the products they have just used.  The Facebook discussion ran rife with the girls all commenting on how awful the process is and the blokes not seeing it as a problem…. Hmmmmm maybe the blokes need a little more nurturing!  

Upselling skincare products at the end of a nurturing experience is pretty much the fastest way to bring your client out of bliss and into a burdensome space where they need to say no to you (not easy for many people)!  

Day spas, is this really the way you want your clients to remember you?  So what do you do as a business owner when you are in the business of nurturing and your clients are resistant to the upsell?

My tip is to look at your entire sales process – is there a better place or a better way to upsell than how everyone in your industry does this?  

For example, I would be perfectly happy if a day spa asked me to rebook another appointment – more nurturing?  YES please!  More product?  NO thanks – I already have product I love and there is no joy for me in discussing and justifying my choices with you Ms Beautician!!  

I have also seen forward thinking day spas offer clients a short questionnaire at the start of the relationship where you can choose to identify that you are looking for new skincare products – that allows the sales process to be a natural part of the consultation instead of a clumsy afterthought that gets in the way of the clients bliss!!

What needs changing about your sales process?  Are there more intuitive places to upsell than you are using right now?  Go play with your sales experience from your customers perspective and see what gives… you may just open the door to a whole lot more sales!!

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Simple Rules or Stupid Rules? Which type is running your business?

All businesses have rules – some are simple, smart and understood by everyone; others are stupid, senseless and resisted by everyone.  Simple rules make you efficient, they make you money and they make your team and customers happy.  Stupid rules ensure you and your brand will be talked about for all of the wrong reasons…

Let me give you an example.  On the weekend I went to the Queensland Art Gallery. My sweetheart was carrying a bottle of water.  At the entrance we were informed that the water could not be carried around – it would have to be put into a bag.  Not only that, they would supply a bag if we didn’t have one!

Further discussion with the staff member revealed that you could not drink water whilst in the gallery – for reasons which are still mostly unclear, but seemed to relate to the risk of spillage.  Less than 20 metres away, inside the gallery is a lovely water feature that is easy to splash in if you feel like it… This ‘water in a bag’ rule is illogical, inconsiderate of visitors and makes the gallery look insane.

I’ve been to some of the best art galleries in the world, and never has anyone suggested I could not have a drink of water or carry around a water bottle. Australia is one of the hottest countries in the world. Does QAG really think that people will visit for hours on end without sustenance? (And no, don’t suggest the Café – sadly it was overpriced and the service underwhelming…)

I don’t know what their marketing cost of acquisition per visitor is, but it seems to me that the benefits arising from having a staff member mop up a spill if the unlikely was to occur would far outweigh the costs. Does this rule create a thirst for art or thirsty visitors?

What crazy rules are ruining your business? What written or unwritten rules are enforced in your business that annoy your customers or staff and create virtually no value except a sense of satisfaction for the bureaucratic bore who invented them?  What would happen if you expected the best of your customers and staff instead of the worst?

Today’s task is to go find a few stupid rules and get rid of them – it is so easy to create happiness in business… why do so many make it so difficult?

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Is Your Service ‘Entry Level’ or Extraordinary?

Has it ever occurred to you that what you think is great service is actually only the ‘entry level’ activities which allow your clients to put you on the list of possible suppliers? If not, you may be in for a rude shock!

Recently I listened to a senior manager from a large transport company talk about the new improvements to their tracking technology and delivery service. The transport company thought they had delivered an exciting groundbreaking service.  

My business coaching client who uses this company was scratching his head wondering what was so special – these were things he’d been requesting for years!   All they’d done was fix the bugs in their systems and provide service basics that should have already been available!

Sadly this amazing new service was at best the ‘point of entry’ from my client’s perspective – so instead of being ecstatic about this news, my client took it as ‘done, thanks, what’s next…’.  

Imagine if this transport company had taken a little time to talk to their clients and include some ‘extras’ which would offer their clients genuine and extraordinary value based on their knowledge of the transport industry and their clients businesses.

What if they invited the top 10 fastest growing clients (yes there are plenty out there even in the GFC!) and took them away for a business building weekend…   Any business owner who has double digit growth in this market would jump at the chance to meet others with similar experiences… who knows what business opportunities could arise from such an event! Most importantly, the transport company would be positioned as the really smart operators who created further growth in their clients business…

Think about this for one second.  If these businesses grow even faster, the transport company grows too -  each of these businesses rely on transport for customer deliveries… it is a total win-win! Why wouldn’t you do it?

What extraordinary experiences and ideas can you offer your clients for mutual benefit?  Take 10 minutes to think of 5 'A List' clients and 5 phenomenal ways to add value to both of your businesses.  Then action at least one and measure your results!  My business coaching tip for this post? You may want to work ON your business more often!!!

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Who do your customer service systems actually work for?

For most of us, dealing with unhappy customers is something we'd rather avoid.  Until the advent of social media, the ramifications of NOT 'doing the right thing' were relatively manageable. Not anymore!  In just ten days, Canadian band Sons of Maxwell have had more than 3 million people view their YouTube video "United Breaks Guitars" and 15000 people comment!!! And that's not counting the media coverage the song is getting... CNN, Fox News and more... 

What a customer service and public relations fiasco for United!  And what a great marketing opportunity for Sons of Maxwell!  After 50,000 YouTube views, United Airlines finally got the picture and started talking to the guy with the broken guitar.  Here's a few business lessons that any business owner can take away from United's very expensive mistake...

1. If a customer with a complaint has to talk to more than 2 people to resolve their issue, think about the wages you are paying out whilst they struggle to get a resolution.  Wouldn't you rather create goodwill with that money?  I'm pretty sure that United spent more on wages than the guitar repairs would have cost them...

2. Are your customer service systems designed to make your customers love your business or hate it?  Organise to have your business mystery shopped by 'customers' with complaints - you'll soon find the twitchy bits!  Solve problems before they become a problem - it's often cheaper!

3. Never underestimate the power of an unhappy customer... whether they can sing, gossip, pull strings, share on social media or are just very determined to get 'justice' whatever it takes, you cannot predict what an unhappy customer will do.  What can your staff do to ensure every situation is turned around in a way that is satisfactory for the customer?

Now, of course there are some people that will complain about anything, just to see what they can get.  I am certainly not suggesting that you give money back willy nilly without the situation being genuine and justifiable.  Design an effective customer service strategy which can:
  • Ascertain the real facts surrounding the situation.
  • Provide a timely and simple response from the customer perspective.
  • Minimise damage to your business - word of mouth is both the best publicity and the worst... which one is up to you!!

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Giving more than lip service is the key to exceeding client expectations!

On my desk is a small flyer from a local cleaning company.  I receive a promotional flyer in my letterbox every few weeks from the same company.  My prediction is that this business will never be particularly successful for one small but significant reason… the owner of the company leaves all responsibility for service delivery to the contract cleaning staff. Not only that, the owner does not respond in a meaningful way to customer complaints!  

How do I know this?  Until this week I was a regular client… at least I was trying to be… there seemed to be a small problem for the contractor in turning up at the prearranged time every fortnight.  It was a small problem for the contractor, unfortunately it was a big problem for me if they didn’t arrive – I see clients in my home and I don’t have time to clean if the cleaner doesn’t turn up! After the third ‘no show’ in less than 4 months, I found a new cleaner!!

Why couldn’t the business owner solve this problem?  It’s probably because of the way that business is (mis)managed…  Here’s three ways any service business owner can exceed client expectations and win a customer for life…

1.    Take responsibility for delivering what you promised… no matter what!  If you are unresponsive to a customer, then expect to lose that customer sooner rather than later… Take the time to understand WHY this customer needs your services so much – it will enable you to be creative and responsive in meeting and exceeding their expectations.

2.    Ask for feedback regularly and take genuine action to resolve any twitchy issues.  I had already raised the service issue with the cleaning company however it was clear they were not interested in resolving my problem effectively. A professional, responsive approach could have turned me into a long term (ie very profitable…) client instead of a lost client!  Knowing the ‘make or break’ issues from the clients perspective will ensure decisions go your way…

3.    Listen closely to the client requirements, ask lots of questions and then plan to exceed their expectations in one small area.  For example, I’d asked the cleaner to let me know when cleaning products were almost empty so that I could ensure a ready supply… instead of forgetting to tell me at all, she could have recommended an eco-friendly brand that works really well… sharing your ‘insider’ industry knowledge should never be underestimated as a way of building a relationship!!

Lastly, don't push your ideas of what constitutes  'exceeding expectations' onto your clients...I don't require a sexy cleaner... just one that turns up regularly and on time...  (of course there may be some clients who require an attractive cleaner... what would it take to make them happy too??)

What do you think?  Have you experienced service that has exceeded your expectations lately?  Tell us about what was so amazing (or so underwhelming!!)...

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