p2w2 blog just completed 6 months of it’s existence. I would
say, after 25 posts (this is 26th), we have a good hang of how to create a good blog. But what I am more worried about is whether we are writing about issues you face? Is the blog helpful to you? Is it creating the environment where you could or want to talk? Are the topics relevant?
I have created a little survey for you. I will be grateful if you could take the survey.
I think I am doing everything right, yet I am not successful…I wonder why?
If you have been bogged down by that query, you are not alone.
In the early 1900’s, Frank Bettger became the leading salesperson for the Fidelity Mutual Life Insurance Company. One of the ways Frank improved his performance was by measuring the results of his sales calls.
He discovered that 70% of his sales were closed on the first interview; while 7% got closed after the second interview. But do you know the most important discovery? He was spending nearly 70% of his time on calls after the second interview! That means he could cut down his tele-caller cost by 70% and still achieve same results! That resulted in enhancing the value of his calls by…. 725%! (from $2.30 to $19.00!) (Note the clear metrics he used to quantify his output).
Most business owners, including me, get so caught up in the flow, they don’t bother to track where they are going. Tell me how many times in the last few years have you stopped to analyze what is each customer worth to you in real monetary terms?
You’d be surprised at the discovery. At the end of this exercise you may learn that often the client you cherished as your best customer is, certainly not the best, but often, that customer turns out to be the worst. Measure it for yourself and check it out.
If you don’t have systems in place to identify the bad from others, you can’t understand who is good for your business and who is not. Similarly, if you have good traffic at your site, you must know what site features you can attribute this to, in order for you to build up on those strengths later and multiply your success quotient.
A machine shop started measuring waste by weighing a trailer where scrap was stored and relaying those figures to the team members. The scrap expense went down by $30,000. Later, when the owner decided to stop weighing the scrap, the scrap expense once again increased by $30,000!
If you don’t measure it, you can’t manage it. Get it?
In my opinion, it’s a mistake to measure your success only in pure financial terms. There can be certain aspects of your business such as customer loyalty, intellectual capital, employee skills and reputation that also have real worth and value. Measuring these non-financials is also critical as they help you market your services more effectively to your customers.
In their book Measure Up (Disclosure: This is an affiliate link)), Richard Lynch and Kelvin Cross suggest that following measures of success: quality, delivery, cycle time, and waste. By measuring activities in these areas, an entrepreneur can think of alternative approaches to bringing more value to his customers.
If you have data to take decisions, then you can be less political because data is apolitical. Your employees will love your company for that!
In short, it’s important to measure success for the following reasons:
• To facilitate corrective actions if there are any performance gaps
• To support strategic decisions and goal setting
• To track your progress towards those goals; and
• To improve accountability
I am not here to say that you should measure everything, unless you are a large company. Measure the most important metrics – revenue per month, gross and net profit per month, number of customers, repeat business, number of visitors on your website etc. that are really important to your business. What are the top 10 metrics you should be measuring for your company?
About the author: Chaitanya Sagar is an expert in small businesses and is the CEO of www.p2w2.com,
an online marketplace for services like writing, business consulting, research, software, online-tutoring etc. You can find good service providers and collaborate with them on p2w2. Picture credits: HBuzacott & Guillermо
In today’s competitive world, you get your differentiation from gaining trust – by exceeding expectations every time and having great customer relationships.
The relationship culture gets reflected in our lingo – nightclubs offer “a good time” not beer or other stuff. A jeweler promises: ‘We enhance your appearance,” while a real estate seller says “We create happy living environments for people” – not brick and mortar. 🙂
Making promises is easy. Delivering is not. When you make a promise, you set an expectation. When you deliver, there is a comparison between the expectation and what you delivered. If you deliver more than expected, the customer talks positively about you to some people. If not, they talk bad about you to many more.
The key to exceeding expectations is setting them right. You first figure out what the customer wants and then anchor your service promise at a little less than where you can deliver. Promise only what you can deliver. If you know you can’t deliver, or delivering that promise is improbable, don’t promise. Simple. I know it’s difficult. But if you would like to build relationships, this is where you start.
When it comes to promising something, then make sure you promise a little less than what you can realistically deliver. That does not mean low balling your targets. It only
means you assess what you can deliver and leave a little buffer for uncertainties and then promise that. E.g. A customer asks you if she can get a discount of 20% on the good she wants to purchase. You know that you can give a standard discount of 15%. But to give 20% discount, you have to take an approval from the company you bought the goods from so you can pass on the discount to it. In this case, you tell customer that you can’t give a discount, unless you talk to the company. After you know that you can pass on the discount, you promise the client and give the discount – not before.
My experience is that so long as a customer’s expectation are adequately managed (i.e., “you’ll receive a response from us within 24 hours” and you live up to that commitment) you can manage to meet expectations. But to exceed expectations, you have to do some extra work.
Take for instance a 24-hour after-sale service guaranteed by most automobile manufacturers. Suppose a customer finds a problem with the car stereo and takes it to the dealer. The dealer can, on inspection:
(a) Find no problem with it
(b) Find the problem, but fail to repair it
(c) Find the problem and repair it in the expected time
(d) Find the problem, repair well ahead of the expected time
(e) Performs (d) or replaces the entire audio system or finds a new problem that he fixes along with the audio system repair
In this example, the (c) response will merely meet a customer’s expectations, while a (d) response will exceed it and an (e) response is what will actually induce strong customer “delight.”
You have to go that extra mile in delighting a customer, even if you charge a premium for it. (Remember what we said about customers willing to pay a premium for good experience in one of our earlier posts?) In ‘e’ option, the customer would not mind paying an extra fee for getting the other problem fixed.
In case you are unable to meet a commitment, the best way out is to own up to the shortfall. The thumb rule is: make a clean breast of the bad news as fast as you receive it; while delaying good news delivery till it actually happens. Both will prove your sensitivity to the customer.
Exceeding customer expectations (not just meeting it) is one of the key ways to grow your business. If you just meet expectations, you just met them. If you exceed, you become someone your customers should take notice.
Picture credits: creo que soy yo fabya9
When you run a small business, you have myriad things to do. You could just be busy and doing things without knowing whether you covered the ground. You could, depending on your personality, focus on just a few areas (that you like) at the cost of others. And there are few, ok many things that never get done. Sometimes, you wonder if there is someone who can help you think through in a structured way what you have been doing and how you can improve.
That’s exactly what I came across. Smart Start Assessment tool (via) that helps you think through your business. This tool was made as a readiness assessment tool for those thinking of starting a business.
But even if you are running a small business, you could use this tool in a variety of ways. The tool asks you questions in four broad categories all of which are relevant, important and brief. The categories are:
1. Personality/social preparedness (the tool calls it Generic )
2. Marketing
3. Financial and Operational
4. Legal and Organizational
What I like about this tool is the quality and relevance of the questions. You can use the tool in the following ways:
1. Understand various questions you should be answering (e.g. Do you have a WRITTEN marketing plan?)
2. Understand the spectrum of answers possible so understand where you stand [e.g. How far along are you in your plans? (check all that
apply):
a. obtained a business license
b. registered for a tax id number
c. written a business plan
d. paid (or reported taxes)
e. opened a location
f. closed an actual sale
g. registered your business? (LLC, corporation, etc.)?
h. begun developing a marketing plan
i. researched my competition
j. hired workers]
3. Use it as check list so you can complete tasks (check out Marketing or Financial and Operational sections in the tool)
4. If you are about to start a small business, understand how your life will be after you start the business (e.g. are you prepared to lower your standard of living until your business is firmly established?)
5. Do a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of your business
6. Come up with an action plan (how to spend your time/money)
I hope this tool is useful to you. Enjoy it.
When you play Basketball, which game’s rules do you follow?
Sounds like a silly question. But do you know that in your small business, you could be playing by the rules that are no longer relevant? You know it when your revenue is stagnant; you feel stagnant.
If you are a small business, you have to morph as per the new rules or die. When you play by the old rules, you become irrelevant; customers and employees leave you; profits lag; people don’t scale. The rules of the game
change fast. Are you aware of the changing rules or are you busy in the routine of the day?
What do I mean by the ‘rules’? They could be:
1. Extent and the nature of marketing you do
2. Extent of work you delegate
3. Cash reserves and working capital required
4. Number of employees on bench
And when do these rules change? Some events happen that trigger off the change. E.g.
1. When you win a large contract
2. When your product goes beta
3. When you hire an employee; when you hire substantially large number of employees
4. When you get investment from someone otherthan yourself or immediate family
Obviously, these rules and the changes are not exhaustive.
Have you experienced the changing rules yourself? After you realized, what activities in your small business did you change?
Picture credit: Linnybinnypix
