Types of Innovation

Last week our article focused on the four types of innovation: standard, specialized, extraordinary and breakthrough innovation. This week we are going to examine some of the areas in which we can apply innovation.

 

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Process Innovation
Innovation isn’t always about changing the product or service itself. Innovation can and should occur in several different areas of business development. We can create innovation in processes as well as in product design. In fact today, this is softer but a far more powerful way to innovate. 

Internal Innovation
Many organizations have gained market advantage by innovating internal variables such as their production process, delivery, technical support or customer service elements. Look at how retailers like Home Depot, Wal-Mart, Ikea and Amazon have innovated the shopping process. All the very latest and coolest stuff, major brands priced with razor thin margins, all in one place and you can have it in seconds. 

External Innovation
External innovation includes building improvement into the selling process, the branding strategy or the marketing approach. In order to create a world class product, service or company we must build innovation into many areas of our business, that is the internal elements as well as the external ones. Because of the competitive nature of nearly every product or service category today, innovation is often a very effective force when applied to the areas of marketing and branding. Think of how Harley Davidson has innovated the image of a “biker.” Now bikers wearing denim and leather are more likely to be Federal Circuit Court Judges and brain surgeons than the wild hoodlums of just a decade ago.

Innovation Defined
Please don’t confuse innovation with invention. They sound similar but they are very different forces. It is a term of economics rather than technology. Webster's defines innovation as, “a new device or process created by study and experimentation.” It’s interesting that the word “experimentation” appears in the definition. Sometimes we need to experiment in order to discover the correct innovation. Peter Drucker, in his book, The Essential Drucker, says, “The most productive innovation is a different product or service creating the new potential of satisfaction, rather than an improvement.” He goes on to conclude, “In the organization of the business enterprise, innovation can no more be considered a separate function from marketing. It is not confined to engineering or research but extends across all parts of the business, all functions, all activities. Innovation is ultimately the task of endowing human and material resources with new and greater wealth.” Drucker obviously understood the concept of heart share back in 2001 when his book was published.

The Transformation of the Lowly Paper Clip
You may be saying, “Hey wait!  I’m in a price sensitive, commodity oriented industry. That kind of innovation won’t work for me.” Believe me I’ve heard that before - only about 1,000 times. While there may be very few commodity oriented businesses where innovation is impossible or unnecessary, every business can innovate to some degree. Think of the lowly paperclip. How innovative can you get with paper clips? That being said, even paper clip manufacturers are innovating these days. I have seen some pretty creative paper clips lately. I’ve seen colored paper clips, stripped paper clips, day-glow paper clips, uniquely shaped paper clips, magnetic paper clips and so on. Therefore I believe innovation applies to all industries and business categories. We should always be looking for ways to innovate. 

Innovative Bureaucrats
But what about monopolies? Who needs innovation when you own the entire market? You might not expect innovation from government agencies like the IRS or the post office. But have you called the IRS lately? They actually answer the phone and are knowledgeable, courteous and rather helpful. I found out the reason for this is the massive innovation program they are in the midst of. How about the postal service? I encourage you to visit their web site? You will be shocked at the level of attention that has gone into branding, communication and customer automation. Folks like Fedex and UPS have forced them to innovate for the sake of survival and now they are pushing the envelope and again becoming market leaders. If Bureaucrats can innovate so must you and I.

In what areas of your business are you creating innovation? What can you do to expand this effort? If you are achieving internal innovation, what can you do to apply innovation to the external functions? Creating innovation is no longer a luxury, it is a pre-requisite to continued existence in today’s lighting fast economy.

The Three Disciplines of Growth

I’ve worked with many entrepreneurs in my career and I notice that very few are able to grow their business in a significant way. Why is that? I think there are three major obstacles that stand in the way of entrepreneurs growing their business. They are the disciplines of innovation, delegation, and scalability. 

Innovation 
Some would say that small business operators can’t afford to innovate. They don’t have the resources of the Fortune 500 companies. They should leave that to the big boys. I think especially small businesses really can’t afford NOT to innovate. In fact today it’s easier than ever to create innovation. The Internet has leveled the playing field. Now small businesses have access to the same technology, processes and networks as the big boys. And they can innovate with greater speed. Innovation increases market share by overstepping the competition. It wins more mind share by making products or services more memorable. And it increases what I call heart share by achieving greater efficiency and a smoother customer experience. 

Delegation
Unfortunately entrepreneurs are “get it done kind of people.” Therefore they do too much themselves. They are often content with only making “good use” of their time rather than the “best use” use of their time. Super-achievers are of the opposite mindset. They are quick to recruit OUTSIDE resources. They realize it is the best way to expand THEIR limited resources. They ensure that they are ALWAYS making the best use of their resources including their time. Imagine that you owned a small piece of property in New York City but you’ve never made more that $20,000 a year from it. A convenience store chain comes along and offers you $50,000 per year for 50 years. A good deal right? You sign on the dotted line. The next day Donald Trump knocks on your door and offers you $1 million for the next 50 years. Unfortunately you already leased it. Your good use of that property robbed you of it’s “best use.” The same is true of our time. Like that property you only get to use it one way, one time. Time is our most valuable and limited resource. 

Scalability
Scalability is defined as how effective a solution will be when the size of the problem increases. Or, “how well your processes perform” when your enterprise expands. In the business growth strategies that I implement for my clients I use five strategies for creating scalable solutions. I don’t have time to discuss all 5 of these right now but the first is called “utilizing synergy.” What if I told you, that a paltry 10% change in your selling effort could result in more than a 33% increase in profit? You’d want to know how, right? Consider this: If we were to recruit 10% more clients, increase orders by 10%, and increase price by 10%, the net affect would be a 33% increase in profit. This works in any industry for any kind of business, 100% of the time.

Think about how you can use innovation, delegation and scalability to grow your business. For more great free resources download my Grow Your Business Program. It doesn’t cost a dime. Tell me what you think.

The Rich Get Richer?

Is it possible that just "thinking rich" can make you rich?

Now I'm not sure that I'm the best person to ask that question to. While I am fortunate enough to have no real money worries, I wouldn't exactly call myself rich.

However I do have some associates that have been able to literally go from rags to riches in just a few years. How did they do it? Inside tips on the stock market? Working 90 hour weeks? Discovering a legal recreational drug? Not quite.

For example take my friend, Christopher Howard. Chris was a member of my Dale Carnegie Sales Course about five years ago. He was an average guy. Had a fairly modest career in sales. His income was maybe $60,000 or $70,000 per year. But something was missing for Chris. He just wasn't happy being "average." So he changed all that. Now he has his own growing group of businesses with a million dollar plus income.

I had Chris on my radio show just this past Saturday and asked him how he did it. His answer is what most wealthy people say: "It was easy." Now like you I'm thinking, "yea right, easy for you, but what about me and the millions of others who drive next to us on the freeway every day grumbling on their way to at a job they loathe?" We need to change the way we THINK, Chris went on to tell me. He said, many people go through their lives under the illusion that they cannot change those elements of their personalities or aspects of their experience that they are not satisfied with.

He made it his life's work to study those that did make that change. He spoke about Donald Trump, Warren Buffet, Bill Gates, Michael Dell and a host of others. Chris decided to read their biographies, study their lives and understand the values they embraced and decisions they made which thrust them to success. Then he began modeling those behaviors. He took responsibility for his success. He stopped waiting for his big break and made it happen! And like magic, now he's one of them!

Let me ask you, what's stopping us from doing the very same thing? Nothing - only our own thoughts. By the way the transformation in Chris was so profound that he spends his days and nights telling other people about it and helping them to achieve the very same thing. You can check out Chris Howard's company at http://www.powerofinfluence.com/.

And listen to my interview with him at www.smallbusinesshour.com. Is it true that by simply changing your thoughts you can completely change what you have in life? How could it be that simple? It is, but first you have to believe. Most people want to see something happen, then believe in it. To be successful you have to do the opposite. Believe in it first, then you will see it.

Recently I interviewed Zig Ziglar on my show and I asked him the secret to success. He told me, you may have whatever you want in life... if you help enough people get what THEY want! Zig went on to tell me that if you see yourself as a successful person, in time you will become the person you see. However visualization and affirmations are not enough, you must have clearly defined goals. "With a plan we are geniuses, without a plan idiots," Napoleon Hill said in Think and Grow Rich nearly 70 years ago. It's all about changing our mindset. Whatever a man thinks himself to be; that is what he shall be.

Along these same lines I thought I'd share this great list that I found on the internet of why being Broke (or thinking poor) is a waste of life. Check it out at http://www.mentorsinmotion.com/html/rich_vs_broke.html.

1. The Broke think everything is too good to be true, while the rich think that getting a job sounds too bad to be true.

2. Broke people give up when things don't go their way; a few disappointments and they are onto something else, saying things like "it wasn't for me." The rich work harder and become more determined when things go bad, and understand that you have to take the bad with the good to make it.

3. Broke people always have an excuse. Rich people say "my fault" and refuse to make excuses.

4. Broke people think that not getting what they want is OK. Rich people are disgusted at the thought of not getting what they want and will do whatever it takes.

5. Broke people always have to talk it over with their broke friends to make sure no one will make fun of them if they make a decision. Rich people think for themselves and could care less what their broke friends think.

6. Broke people are never coachable and teachable. Rich people are always learning, even when the money starts coming in, they never stop learning from those who were there first.

7. Broke people are scared of others. Rich people entrust in others and know that other people are crucial for their success.

8. Broke people are always procrastinating; they would rather talk about it, read about it, think about it, but never seem to do anything. Rich people hate doing anything but getting it done.

9. Broke people are glad when the day is over. Rich people love when the day begins.

10. Broke people think rich people are lucky. Rich people put themselves into a position to be "lucky," and then work hard to make the "luck" show up.

11. Broke people work by the hour. Rich people work by the month. Broke people want to know that after 1 hour of work they have something to show for it. Rich people find broke people who think like that and make them their employees.

12. Broke people get excited they just got hired. Rich people think it is funny that someone could be fooled that easily; they are just making the rich person more rich.

13. Broke people complain a lot. Rich people are thankful that no one shot at them today, they didn't have to fight in a war, and that they don't have a job.

14. Broke people are too concerned about what other people are doing. Rich people are only concerned about what they can be doing to get more done. Broke people think that if no one is doing something, it must suck. Rich people think that if no one is doing something, it means more money for them. Broke people think that if everyone (all 200 people at the meeting in a city of 1 million) is doing something, it must be saturated. Rich people think that broke people aren't too bright.

15. Broke people think it is OK for other people to live where they want to live, drive what they want to drive, and do what they want to do. Broke people are OK with the fact that they can't do these things. Rich people get sick just thinking about being average. Broke people think that other people's opinions are worth more than their dreams. Rich people know that their dreams are worth more than other people's opinions.

"To be rich, you must learn from the broke and do not do what they do nor think how they think."

By the way if you want to find out how long it will take you to become a millionaire, check out this very cool little calculator at http://cgi.money.cnn.com/tools/millionaire/millionaire.html

I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mdeo@sbanetwork.org.

Mark Deo

Priorities, Priorities

How many of you reading or listening to this regularly attend trade shows in an attempt to get new business?  Right. That's what I thought. Just about everyone. It makes sense. That's where plenty of good prospective customers are gathering - at an industry trade show. I know several companies that use industry trade show as their primary means of attracting new business. They prepare for the show all year and NOTHING gets in the way of attending that event. In fact I heard a story recently that you might find entertaining (hopefully not too familiar though).

A company that specializes in logistics for importing perishable products was planning to attend the big industry trade show in Boston. This outfit packed up all their most talented sales pros, not to mention all their key executives and decision makers for what they hoped was their most profitable trade show ever. Hopefully they'd return to headquarters with a stack of new leads to follow-up on. Back at the ranch (their corporate headquarters) they received a telephone call from one of the largest packers of perishable products in the world (you'd know their name if I told you - but my liability insurance carrier wouldn't appreciate it). This prospect was referred by one of their current clients and needed some assistance and fast. Apparently their current logistics provider was unable to deliver the service they needed at this most critical time. Now what do you suppose they were told? Were they welcomed with open arms? Did headquarters think to track down the CEO or VP of Sales to take care of this most-in-demand prospect? After all they were on their way to a trade show with the EXPRESS purpose of finding a customer JUST LIKE THE ONE CALLING FOR HELP. No, not at all. As unbelievable as it might sound they were told, "sorry but all of our executives and sales staff are on their way to Boston and there's no one here to help you." And that's not the best part. When the prospect asked who could help them, headquarters in their omnipotent genius recommended that they call their best competitor.  Why is it businesses spend 80% of their marketing dollars going after new customers and clients rather than nurturing, retaining, and maintaining the customer relationships they already have? Repeat customers spend 33% more than new customers.  Few companies spend ANY time on creating referrals let alone have a strategy and plan for developing a steady stream of referrals.  Sales among repeat customers are 107% greater than non-customers. It costs six times more to sell something to a prospect than to sell that same thing to an existing customer. While a growing business needs to constantly capture new customers, the focus and priority should be on pleasing your existing customer base. Companies that fail to nurture and develop referrals from their customer base ultimately fail. They also end up spending twice as much to get new clients as they do in maintaining existing customers.  The bottom line is that one of the key components in marketing and business growth is to spend the majority of your time and effort nurturing customer relationships and generating referrals so that you get business from existing clients and customers. In our Attract More Business Program we teach a method of gaining referrals as part of your marketing strategy. If you are interested in finding out more about this strategy please feel free to contact me at mark@markdeo.com or visit www.attractmorebusiness.com Have a great week! I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com  Mark Deo

Paralyzed by Fear

Are You Waiting...

for someone to lead and inspire you?
for the boss to recognize you?
for clients to thank you?
for coworkers to help you?
for prospects to find you?
for the world to hail you?

Well here's a news flash.... They are all just sitting there waiting for you.

Someone recently asked me, what I felt was the biggest challenge for marketers today? My answer was complacency. Websters dictionary defines complacency as contentment and self satisfaction. You might say, "Hey hold on there Deo! Isn't that what we are striving for as entrepreneurs and small business owners? Shouldn't it be our ultimate goal to be content and satisfied with our business, finances, family and life?"

I say, NO.

When we become content and satisfied, we no longer have any motivation to get better.We drop our guard. We become OK with achieving the minimum. Unfortunately in today's competitive environment achieving the "minimum" in the short term may just not be good enough to "survive" in the long term. This can be very dangerous in the fast paced, high risk, volatile economy of the 21st century. You may be thinking, "that sounds a little scary, Mark."

It is.

Many people today are saying that fear is bad. I agree that too much fear can be debilitating, just as a complete lack of satisfaction can create disappointment and disillusionment. There are no absolutes. But if we completely eliminate fear from our lives, we lose some of our most base instincts. Think about when you first started your business or your first day on the job. Weren't you a bit apprehensive? Didn't you have some fear? You probably found yourself asking questions like, what if this doesn't work? What will I do if I fail? What if my coworkers or clients don't like me? Can I really compete? Do I really have the skills necessary to succeed at this?

I think you would agree that this is the GOOD kind of fear. The fear that drives us to greater levels of performance. Fear that motivates us. It's the kind of fear that makes us have more apprehension for things staying the way they are rather than bringing about change.

What does this have to do with marketing, you might ask. Successful marketing must allow us to significantly differentiate ourselves from our competition. We need to look different, sound different and be different. We need to go beyond the expectations of our clients and prospects. We must be willing to always be a bit uncomfortable with the way things ARE if we want to change. We can not be content with waiting for change. We can not be satisfied with the most comfortable option.

Here are some very specific things that you can do to make fear the friend that you consistently court, rather than the foe that you chronically avoid:

1. When things look bleak don't deny reality, accept it and begin to develop some options. Write them down and take action to change things rather than waiting for them to get better.

2. Don't allow yourself to be forced into change. Make the decision to bring about change BEFORE you are swept-up in the maelstrom.

3. Find someone that you can mentor. Taking this leadership role with even just one person will allow you to see the power of fear and change in another person. In the end, this will make it much easier for you to cope with fear and embrace change.

4. Look for situations where others are positively dealing with fear and change. Give them the recognition they deserve for coping with their changing environment. This will reinforce your own values.

5. Change the way you celebrate achievements.Typically, we set goals, we work hard at achieving them, we reach them and we celebrate. We are content and satisfied with a job well done. Hopefully when the party's over we set new goals and the cycle starts all over again. But shouldn't we be setting new goals BEFORE we pop the cork on the Champaign?

6. Be an evangelist for your company, product or service. Ask yourself, how YOU change peoples lives for the better. Focus on this. NOT features and benefits.

7. Be a catalyst for change with everyone that you meet. Look for ways that you can help them to cope with the fear and change in their lives.

8. Don't try to eliminate all stress in your life. Like my old boss, Sue Schneider used to say, "Stress is good, DISTRESS is bad." If we try to completely eliminate stress and fear in our lives we will be sadly disappointed. On the other hand if we find ways of coping with stress and fear, we will amass for ourselves resources of great value.

9. Be the first. Decide from this day forward that YOU will be the first to initiate change in your organization and even at home. You will lead and inspire. You will give compliments and provide recognition. You will thank your clients and vendors. You will lend a hand to help fellow workers. You will seek prospects whose businesses and lives can be improved by your company, product or service.

I hope this helps you to begin see fear as a friend and change as the precursor to growth.

More Than Just Luck

Or how to transform a few bucks into mega-millions!

I am more concerned about the return OF my money than the return ON my money.

-Will Rogers

Remember the movie Rain Man? Tom Cruise was fed up with his autistic brother Dustin Hoffman. Then out of the blue he discovered his brother's savant -numbers! He could perform complex calculations in his head at the speed of light. He could count cards like crazy (no pun intended). They ended up in Vegas winning thousands of dollars because Hoffman's character had an innate skill. Make Your Own Luck Many people dream of becoming instantly rich by winning in Vegas or hitting it big in the lottery. In that setting, most "winners" hit it big through total luck. The sad reality is that most people will never be lucky enough to win big at any game of chance, because winning such games almost always requires a series of highly random events to fall into a proper, unlikely order. Winning over the long term in these games requires something more than just luck. It requires specialized knowledge and a well practiced skill, which restricts the number of professional gamblers to a rare few. Even for those who do win by chance, studies show the vast majority--even those who have $100,000 or more dumped in their laps--have absolutely nothing to show for it twenty-four months later! It has vanished--spent or lost in speculative ventures.

Get Rich Slow So how do we get rich? Well we can work for it. Good luck there! Use some passive investment vehicles like the stock market and various business ventures. Those can be risky as we've seen. Or we can invest in the real estate market. Chances are if you are reading this article, you are likely one of the millions of property owners that are "equity rich." That means your primary residence or income properties have appreciated significantly. That's a good thing, right? Wrong! Not according to Douglas Andrew, author of the book, Missed Fortune. While most Americans are working like busy beavers trying to pay off their properties so they can own them free and clear, Andrew says doing so is more dangerous than we think. Debt Can Be Your Friend Today there's a lot of talk about eliminating debt. What is the biggest debt most of us have? Our mortgage of course. Most homeowners believe the most successful strategy to financial security is to eliminate the debt of their mortgage as quickly as possible. Many do this by sending extra payments to their lender to lower interest fees and reduce the principal. This makes sense if you operate under the assumption that debt is your enemy to be eliminated as quickly as possible. But what if we viewed debt as our friend? Some debt, when managed wisely can be very desirable. Let's look at debt. If you think about it you can only do four things with your money. You can spend it (I'm good at that one), give it away, lend it or own with it. When we put our money in a savings account we are putting it in a "lended position." The bank pays us an interest rate for loaning it that money. A bond or another kind of debt instrument works in the same way. When banks borrow your money by allowing you to open an account with them they are placing themselves in your "debt." This is not to say they are being unwise. On the contrary, they understand the difference between good debt and bad debt. They rely on the proper management of debt in order to make a profit for themselves and their stockholders. Equity Fails the Three Tests of Wise Financial Investing On the other hand, if we put our money in an equity or ownership position we incur greater investment risks but we also position ourselves to capture greater appreciation on that equity. This happens when we purchase stock or real estate. The downside to having too much of our assets tied-up in real estate equity is that our money is not liquid, yields no rate of return, and it is not safe. We can, however, accomplish both goals by using debt and equity to balance our assets so that we meet the three tests of wise financial investing:  1 - Lacking Liquidity Money tied-up in real estate equity does not pass the liquidity test because even though it's YOUR money and you paid it to the mortgage company, THEY get to decide IF they will loan some back to you, how much you deserve and what interest you should pay them for the privilege of using your own money! Having too much equity invested in our properties make us house-rich and cash poor. 2 - Yields No Rate of Return One of the greatest misconceptions that homeowners operate under today is that the equity in their home is generating a rate of return. Nothing could be further form the truth. While real estate DOES appreciate and this has the potential of creating a return on investment, it appreciates at the same rate regardless of whether it is mortgaged to the hilt or owned free and clear. A higher equity position does not make the property more attractive. In fact, a lower equity position can make some properties EASIER to sell. 3 - Unsafe Finally it is unsafe to have too much equity tied-up in a home be it a primary residence or an income property. The reason for this is that at anytime the mortgage company can decide to call the loan. This does not happen because we continue to pay our monthly or bi-weekly mortgage payments on time. What if something happened like a physical disability or catastrophic event that precluded you from paying your mortgage? Well the mortgage company would foreclose on your home and you would lose every penny of equity with it. Does this like a safe investment? I think not. These are the strategies which are outlined in the 560 pages of Missed Fortune. Intimidating as that might sound, the book is jammed full of easy to understand and practical money strategies. Andrew himself says, "This book will teach concepts and give insights that are contrary to popular belief. Now is the time to discover the best way to safely accumulate more money." I recommend the book to homeowners, investors, realtors and everyone interested in acquiring more wealth.  By using equity and debt wisely we can increase our ability to leverage our assets so that they are producing a significant return on investment. In this way we can make the best use of knowledge and practice street-smart financial strategies that help us to "make our own luck." Have a great week! I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com  Mark Deo

Goal Setting

Just the word goal has been overused and abused. It's gotten to the point where people just cringe when they hear it.

How many of us made new years resolutions this year that now, almost in May, we're trying to forget? How many of us set goals for ourselves that we have yet to achieve? Or how many of us keep setting the same goals over and over and over again? Or maybe you've given up on a goal? Hey, it can be disappointing, disheartening and down right depressing.

You might say "Oh come on Mark, I'm busy just trying to run the day-to-day business here, when do I have time for setting goals?" I know. That's why my fellow consultants and I here at marketingquestions.com decided to make this the lead article in our newsletter this month. We're going to discuss how you can achieve your goals faster, easier, more effectively and have a whole lot more fun. It doesn't have to be that hard! There ARE some sure-fire ways of achieving your goals. Let's take a look at what Jim Ball, the founder of the Goals Institute in Reston, Virginia has to say about achieving your goals. He recommends a five step approach:

 

1. Make a solid commitment to your goal - achieving a goal requires "kinetic exploratory discourse." That means you can't learn to ride a bicycle by reading a book you have got to fall off once or twice to get the feel of it and to really understand HOW to ride a bicycle. Make sure you're goals are laser-clear in your mind.

2. Outline a plan - the key to maintaining momentum is always knowing what to do next. Those steps will lineup like domino's as you achieve them, each leads to the next. Take one step toward your goal everyday, even if it's just making one call.

3. Act on your plan - every evening right down the four or five major things that you're going to accomplish the next day. Look at the list and find the item that relates to your big goal or vision and highlight it. If you can't highlight something every day, then you're not making progress. You are just fooling yourself. Use chunks of time. Say you're trying to finish a proposal. Set aside from 9 a.m. to 11 a.m. to work on it. Don't let the day take you. Take control of the day.

4. Learn from your progress - make sure you're following your plan then regularly measure what you are doing. Did you reach your goal? Keep checking and adjust your plan as needed.
 

5. Create systems - the difference between success and failure is habit. In business, habits are called systems. For example with sales, your habit might be calling five new prospects everyday.

Out of 10,000 people, maybe 20 percent have laser clear goals. Of those, maybe 20 percent have a plan in writing. Of those, maybe 20 percent implement the plan. Of those, maybe 20 percent learn from their progress. That's 16 people. Out of 10,000 people only 16 people will achieve their goals. That's less than 2/10 of one percent. You can be the minority.

Tips for Staying Focused on Your Vision

How can you learn to create a vision, stay focused on it, and make it work for you in more positive and powerful ways? Here are 10 tips to turn vision planning into concrete results:

1. Put it in writing. As simple as this may seem, it is often the difference between a vision that works and one that is never attained.

2. To challenge yourself. Your vision must be chosen honestly, and always be true to your yourself. But you also have to push beyond your previous limits to reach new heights.

3. Distinguish between your long-term vision and short-term goals. Remember, your vision is you ultimate destination. Goals are merely the steps along the way. There is a big difference between long-term and short-term goals, but they need to be interrelated in order to get you to where you want to go. Short-term goals are the building blocks for your long-term vision. Creating your long-term vision enables you to consciously focus your creativity in a specific direction.

4. Focus on the goal not how to get there. Keep your eye on the target at all times. Life doesn't just happened to you; you can make sure your daily choices are steps on the path to creating a successful vision.

5. Be flexible about the how. Right from the start you can rest assured that things are not going to turn out exactly as you plan. Does that mean you're vision is wrong, or your goals are meaningless or that you shouldn't bother to plan? Of course not. If you insist on knowing how it's going to happen, success can smack you write in the face and you won't even know it.

6. Visualize yourself in the future. Most people think in pictures. As you begin to right down your vision place yourself in the future and make it seem real. Record the date by which the vision will be accomplished. Then stop, close eyes and imagine that you are there. Visualize yourself as clearly as you can, what you are wearing, where you are, what you are doing. How does it feel to have already accomplished that vision?

7. Record your vision of your ideal life. This is your grandest vision of your life in your world, as you would live it at your highest purpose of potential. Let your imagination run wild and create the biggest picture possible for yourself.

8. Stop beating yourself up. We've all had goals that we failed to reach. As a result, people create enormous mental barriers when they think about goal setting. A failure is only a failure when you learn nothing from. Businesses fail; people don't. It's important to make the distinction.

9. Let your goals be changing. Life is changing, as such; your goals should constantly evolve. Make sure you review and refine your goals regularly. Today your goal might be to grow your business, but five years from now it could be something entirely different.

10. Have fun. If setting and achieving your goals isn't fun then why bother? Let your imagination carry you away to your greatest wildest dreams and don't limit your possibilities.

 

Vision Planning Goal Setting Program 
Like our other programs, we work with you to customize a plan to meet your specific needs. Includes course material, step-by-step instructions, and 6 one-on-one email consulting sessions held over a 6 week period. We guide you through each step of the process using an interactive format.

 

First Two Weeks:
Process planning - show you how to identify and achieve balance in each of the key areas of your life.
Vision development - we teach you how to visualize YOUR future and show you how to make it reality
Prioritizing - we help you to define precisely what is important to you 
Goal Formulation - we work with you to establish and document specific goals

 

Second Two Weeks:
Measurement - we show you how to test your goals and make course corrections
Action step planning - outline and execute a step-by-step logical plan for implementation and show you how to get feedback on your progress
Reporting - We MAKE you "put-it-in-writing" and we teach a system of remembering and reviewing

 

Next Two Weeks:
Delegation - how to get others to help you achieve your goals
Compliance - we help you to establish coaches in your life and to LEARN from your mistakes
Reduce stress and tension - we show you how to structure your plan so that you live a more "goal oriented" life daily with less worry

 

I hope this helps you to improve your ability to both set and achieve realistic goals.

Global Business

I want to make everyone aware of an upcoming radio show that we are doing this Friday at 4pm PST with one of the most interesting business authors I have spoken with in a while.

His name is James Hemerling and his book is called GLOBALITY: Competing with Everyone from Everywhere for Everything. Hemerling states that the old global business model (centralized, top-down, process-driven, with influence running from West to East) will recede, perhaps vanish. It is inadequate for a world in which every global company is forced to compete: in every market, with everyone, from everywhere, all the time, for resources and market share.

Unlike developed-market leaders, emerging-market challengers have evolved new management and governance structures that are ideally suited to this new competitive landscape. In addition, it has enabled them to undercut, outthink, outwork, out-innovate, and generally outfox some of the biggest, most powerful names in global industry. What are these upstart challengers doing? How are they winning?

Imagine companies that:

• Innovate at the rate of one new product development every 12 hours.
• Give up the notion of "headquarters" in a drive toward global expansion.
• Do away with titles and committees in an effort to improve staff development.
• Expand into 50 countries by satisfying global demand that no one else could see - at the lowest, cheapest end of the market.
• Hire thousands of people to staff assembly lines, instead of automating, to be more efficient, flexible, and profitable.
• Achieve such high efficiency that they can give away 60% of their services and still make a profit.
• Retrain workers by the tens of thousands to build a world-class capability, in less than a decade.

Again, listen to my interview with James Hemerling this Friday at 4pm PST. Just go towww.markdeo.com and turn-up the sound. Its that easy!

Give First

There is a communication breakdown in business today. Sellers are speaking but somehow buyers can't hear a thing. Ironically enough, these potential customers feel they are screaming, yearning, literally begging to have their needs met, but it seems sellers continue to go on their merry way hawking their wares.

All marketers like to believe they have a unique solution. They are confident that they are different from the competition. But when you get right down to it, most marketers are all saying the SAME thing. They talk about what they DO, the services they provide or the products they sell. At best, they may allude to some generic group of benefits that they THINK buyers are interested in. Sellers and marketers are busy working hard at finding more effective and creative ways to communicate what they do and why they are better than the competition. They invest millions in these efforts. Yet they rarely succeed.

Why?

Let's face it; all customers care about is "what's in it for THEM." Buyers are desperately attempting to discover how their problems will be solved by these products or services, how they will enhance their lives, make things easier or life more rewarding.

The four simple steps below can help in developing a marketing plan that is customer centered, informational oriented and in the end produces far greater returns:

Step 1: Create Interest
Develop the interest of the customer by first acknowledging their problems, empathizing with them, asking questions that bear on their need and suggesting some action that reverses their risk. Understand their challenges from an emotional viewpoint. Do a little work "for them" and discover how the experts deal with these problems. Speak with authority and from the viewpoint of the customer NOT as a vendor or supplier.

Try to depart from the traditional forms of communication such as brochures, mailers, print ads, radio, TV, and so on. This makes us look like everyone else... a salesperson or marketer. Opt rather for the educational and inspirational approach. This philosophy should also be adhered to when communicating in person. It is our responsibility that everyone in our organization communicate a consistent marketing message. This includes sales staff, customer service and all employees on the front lines with the customer.

Rules in creating interest:

• Acknowledge the customer's problem
• Empathize with them
• Ask questions bearing on their need
• Reverse their risk

Step 2: Give Something Away
This second step is where we bring the power of informational marketing to bear. We offer some valuable information to the customer that will help them to see how they can solve some of their problems on their own without our product or service. Notice I didn't say see the benefits of BUYING your product or service. They don't care about that. In fact the more you tell them about how fabulous your product or service is, the less they want it. The trick here is to get the prospect to think about their problems in terms of your solution WITHOUT telling them it's your solution. This approach opens their minds to possible solutions that they themselves haven't thought of before. Since you are the person to help through this process, it lowers their defenses. You can eventually position your solution as the only solution by creating a relationship with the customer even BEFORE they buy. Creating this kind of mindset cannot be forced. It must be earned. Be willing to GIVE first before pitching your wares.

Rules in giving something away:

• Remove yourself from their solution
• Educate, inform and inspire
• Deliver a consistent message in all forms
• Evangelize rather than sell
• GIVE first

Step 3: Get Them on Your List
This gives us the ability to maintain contact with the prospect on a continuing basis. In this way we can build a rapport as well as educate the customer. In order to effectively launch an information-based marketing program we must craft a NO cost, NO risk, HIGH benefit offer that provides prospects with an incentive to sign-up with you to receive this information. We also must maintain a reliable database management system and employ a cost effective and user-friendly list management system.

Rules in getting them on your list:

• NO cost, NO risk, HIGH benefit offer just to sign-up for information
• Reliable database and list management system
• Make it easy to cancel subscriptions

Step 4: Stay In Touch
In this step we must plan to consistently stay in touch with our prospect base. This involves providing information to our prospects on a regular basis. This could be monthly, weekly or even daily. The information must NOT be sales oriented. It must offer very clear benefits that are customized specifically for the target audience. It must educate and be emotionally supportive to them. When using the telephone, we must be creative in finding good reasons to contact prospects. Otherwise we run the risk of losing credibility. Merely calling and "just following-up" doesn't cut it anymore. It screams, "I'm desperate, got any business for me?" This of course is not in the interest of the customer and it will cause them to back away from you.

Rules in staying in touch:

• Make regular contact
• Information that is customized for the audience
• Provide information that is ONLY beneficial to the target audience NOT sales oriented information

The bottom-line is that traditional marketing just doesn't work anymore. It focuses on GETTING. It centers on YOU. It tells them what they ALREADY know. It blends in with all the other NOISE. And it PUSHES people away. Following the above steps can revolutionize any marketing campaign. They are key in winning the customer's trust and building a strong relationship. Practice and teach your people to be willing to first understand the customer's needs, provide valuable information that serves their needs, and to find customer-centered reasons for staying in-touch. In other words be willing to GIVE FIRST!

Give yourself every opportunity for success this year. Check out our web site for our next Entrepreneurial Workshop and get pre-registered. If nothing else I guarantee that it will be a great way to start the year with a positive first step.

Those of you that have attended any of my classes know that they are energy packed and you walk out motivated and cranked-up!

Getting in the Way of Growth

I was reading the Wall Street Journal recently and I stumbled across a statistic that I thought was interesting if not disconcerting. A recent survey they conducted indicated that more than 100 Fortune 500 CEOs confess that they are, at best, only able to realize 50% of their growth potential in the firms they lead.

Now I began think, if it's that hard for the country's top CEOs to achieve growth how must it be for the rest of us?

Certainly this is quite a performance gap. Why is it so difficult to overcome the barriers of growth? It seems these same CEOs are successful in bringing about efficiencies, reducing costs, reengineering business processes. Shouldn't these things translate into corporate growth?

I say NO, absolutely not! In fact these are the very things that may PREVENT consistent, long-term growth of any organization large or small. In fact evidence of this is visible wherever we look.

Consider the global leaders of the Dow Jones Industrial Average. There is no economic indicator that is more synonymous with growth in this country than the DOW.

Let's look at four of the most rock solid companies operating in completely different industries all of whom are flagship components of the DOW: Proctor & Gamble, IBM, Coca-Cola and Disney.

The giants of growth and success, right? WRONG.

What do you see when you look at these leaders? STAGNATION!

Hey I don't mind telling you I have stock in all three of these companies and over the years I've done OK, but I'm talking about GROWTH.

Proctor & Gamble considered to be the world' leader in product marketing and brand management grew at a rate of only 2.4% between 1997 and 2002. This is far slower than the growth of our economy. IBM engineered the most successful turnaround of any market leader and prospered during the tech boom and bust.

Yet they grew less than P&G's 2.4% rate for the same period. Despite the fact Coke is one of the largest equity holdings of the legendary Warren Buffett, they grew at a rate of only 3.3% for the same period. And finally Walt would roll over in his grave if he knew that his Disney had grown at a rate of only 0.7% for the same period.

Some may say well these are old companies Mark institutions really. Or they're past their heyday or it's been an uncertain economic environment as of late or any other of a host of excuses. But I believe there are some very good reasons that the powerhouses of our economy are slowing and unable to get back into a growth mode. This is relevant to small business because most small businesses pattern their growth strategy after the big boys and this is often why they just don't grow!

You see most of these larger concerns have tremendous momentum, top-of-the-mind awareness and consumer equity. Yet these organizations have sustained their market position without growing by alternately downsizing/cutting costs and latching onto some new technological fad and riding it out for a time. This is not consistent, sustainable but rather growth in short bursts.

Graeme Deans and Fritz Kroeger in their book, "Stretch! - How Great Companies Grow in Good and Bad Times," talk about the secret to long-term, sustainable growth. They say, there is no secret it is the result of implementing a growth strategy in four areas of the business: operations, organization, strategy and stretch.

1. Operations - This represents getting your operation in order, targeting dramatic improvements in internal processes such as product development, sourcing, quality, delivery, customer service, sales and pricing.

2. Organization - This represents finding the optimal organizational structure, culture issues, compensation, rewards and incentives, value chain reconfiguration and business unit accountability.

3. Strategy - Take a fresh, holistic look at the company's strategy and be willing to make wholesale changes. This may involve a higher risk tolerance.

4. Stretch - This refers to expanding the company's frontiers culturally, economically, geographically and strategically. Often times this involves breaking down old barriers and paradigms of doing business. This might include perhaps addressing new markets, customer bases, product categories.

All of these elements can be applied to a small business as well as a large. Great companies find a way to grow regardless of the economy. They focus on innovation and calculable risk. Don't let the economy or trends in your industry get in the way of your companies growth. Put together your own Stretch plan and start growing. Because remember if you're not growing you're actually shrinking.

I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mdeo@sbanetwork.org.

Mark Deo

Farewell, Old Guard

There is a revolution in business today. The old way of doing things is passing into the dark mist of history. It used to be that you… created a product or service that was needed or desired, obtained sufficient financing, recruited a great team, cranked-up your marketing machine and eventually you could grow to become a leader in your industry. That is until some smarter competitor produced a superior performing widget, secured better financing, stole some of your people or out-marketed you, thereby knocking you off your high horse.

Not anymore! 

Don’t believe me? Consider this. Yesterday, Bill Ford, president of Ford Motor Company said: "The business model that sustained us for decades is no longer sufficient to maintain profitability." Think about that for a minute. Here is the son of one of the "fathers of the industrial revolution" telling us that their business model no longer works! That’s kind of heavy. 

Product marketing, recruitment and financing are no longer the "sacred cows" of business success. 

Product Marketing
Just because a product or service is "better" in no way guarantees its success in the market. In fact our friend Seth Godin, author and marketing guru says in his book, The Purple Cow, "Very good products and services are very bad!" Why? Because while we are focusing on how marvelous our products have become, the market has changed and often so radically that your nifty little product has not only lost demand, it has quite likely become irrelevant! Marketers today must focus on creating the NEXT generation of products and services before their first generation ever hits the street. But often times we fall madly in love with our product line. This is a surefire approach to getting our clients to fall "out of love" with our company. Faster product and service turnover is a requirement of success in this blinding fast, whim sensitive culture.

Traditional Financing
While every enterprise must have some kind of basic financial foundation, today traditional financing is less important that ever before in history. Consider some of the recent start-ups that have grown into multi-million or billion dollar ventures with little or no traditional financing:

• Skype started with less that $10,000 in capital and recently sold to E-bay for 2.6 billion.

• Airborne Health with only18 employees, posted $150 million in sales for 4673% growth in the last 3 years.

• Digital Lifestyle Outfitters, makers of i-pod accessories reached $84 million in sales after having been in business only 26 months!

All of these companies took risks. They were funded by immediate and astronomically growth not by a bunch of bankers with purse-strings and their greedy hands in every pie. I believe that self-funding ventures will become the standard for business growth in the future. Traditional financing and budgeting leads to waste. Like the old guard concept of, "it’s in the budget, then we need to spend it or they will cut the budget next year." This is the kind of thinking that has created the 10 trillion dollar economic deficit that our generation faces.

Recruitment
Building a world class corporate team has always been the aim of every great company. Ford Motor Company, for years had one of the lowest employee turnovers in their industry. For decades loyal workers toiled for "mother company" in plants all over the Midwest. That is until the auto industry began to enter the world of collaboration and business alliances. Give a high five to the Japanese for this move. Today it would be difficult to count how many different automotive companies take part in the design and manufacturing of most Japanese automobiles. In fact many of those cars are designed and made in collaboration with competitors. That’s right competitors actually cooperating.

If this is so effective for the global auto maker why would it not work for small organizations like yours and mine? Because of FEAR! Many are afraid that their competitors will learn too much about us and use it to "beat us on the street." Many are afraid that our best EMPLOYEES will learn too much and defect to the competition. How foolish. When you think about it. What was stopping them from doing that very thing in the first place? Nothing at all. 

I remember people laughing at me 3 years ago when I said on live radio that our corporate world is dying and that in less than a decade over 70% of the workforce will be free agents. This is now very obviously happening.

The watchwords of sustained growth in business today has been transformed from better product marketing, recruitment and financing to collaboration, risk-taking and blind fast product turnover.

Do you think your business can continue do things the same way that you have in the past? 

Bill Ford doesn’t think he can! 

I wonder, how will you? 

Have a great week!

Compromising Situation

I will never forget the first time I went to Japan on business. I shudder to think that it was almost 20 years ago. I was excited as you can imagine. So excited in fact I forgot to get a travel visa. Sad, but true. I had to drive my car like a maniac to the Japanese embassy in Downtown Los Angeles and get the visa stamp on my passport then drive like a nut-head back to the airport where, unbelievably, I made my flight with just minutes to spare. 

Never the less when I arrived I was greeted by Mr. Uyama. He was friendly but rather stoic. I would learn much from him in the ensuing years but he said something that I will always remember. He said, "Mark," in his excellent but slightly broken English. "There is one thing that we just cannot do under any circumstances. I hate this more than anything. That is compromise. We must NEVER compromise." He spat out the word like it was the most disgusting, vulgar action on the planet. I was shocked. I had always thought that compromise was good.

I came to find out that what Mr. Uyama meant is that we wouldn't just give up on an initiative without exhaustive due diligence. This makes sense. But what I also found out was that this could be a pretty inflexible strategy. Despite our best efforts and careful planning we may, as leaders, find ourselves facing circumstances in which the path ahead is far from clear. At times we have to resort to improvisation and creativity to find the best possible solution. Often times looking for the solution is the very thing that stands in the way of resolution. In fact, we should more often than not spend more time and effort examining the causes of the problem.

Separating symptoms from causes is often times more art than science. It is critical that we understand the difference between a symptom that accompanies a circumstance and the root cause of a problem. This requires careful investigation and study. There is a relatively easy way to determine the difference between symptoms and causes. When we change the "cause" the problem, ceases to exist permanently. When we change a "symptom" chances are the problem will return. At times we can use compromise to root out the difference.

In his book, "Leading Quietly," Joseph Badaracco talks about how we can use compromise to allow the best solution to rise to the surface and to do so in a way that reduces risk. Compromise, not in the sense of immoral decision making like we've seen as of late with companies like Enron. As leaders we should do the right thing, not half of it. I am speaking rather about the kind of compromise that occurs in fruitful negotiation. This kind of compromise is rooted in ethical, well-informed decision-making. Fair compromise often rests on a leader's ability to motivate participants to see circumstances from a unique perspective. They present a new line of vision which redefines the problem in a different light and leads to a mutually beneficial compromise.

In many circumstances compromise is the beginning of wisdom in resolving difficult problems. King Solomon of the Bible was said to be the wisest man that ever lived. One day he had to decide which of two women was the true mother of a child. Both of the women claimed that the child was theirs and they came to Solomon for his wise judgment. They didn't have blood tests in those days and he had no way to determine which one was the true mother. So the king proposed a horrific alternative: "Cut the baby in two and give one half to each women." Of course the true mother cried out at this terrible proposition and gave the baby up to the imposter. This told Solomon all he needed to know and he reunited the child with her real mother.

Solomon was a powerful king. He could have "faked it" and guessed which was the real mother. But he would know it was fake and many others would suspect as much. Eventually this would undermine his authority and the system of justice in the land. He could have looked for some technicality or taken the child from both women which would have separated a family and perpetrated a greater injustice. But Solomon was truly a wise man. He went beyond the legal issues to the issues of the heart. As a result one women demonstrated her love and devotion and the other her bitterness and envy.

Are you facing a difficult decision? Does the road ahead look kind of murky? Think about how you can use ethical compromise to root out the cause of the problem and watch the solution rise to the surface.

Building Your Business Through Giving

A famous Chinese proverb reads, "An inch of time cannot be bought with an inch of gold."

Few would argue that "time" is our most valuable commodity. No amount of money can allow us to purchase a 25th hour in a day or even turn the clocks back one minute. That being said, we need to make the most of our time. I guess that’s why people run to and fro, traveling from place to place, faster and faster. They want to jam as much as possible into those 24 hours and increase their chances of financial success. Oftentimes people analyze how they are spending their time to discover their R.O.T. (Return on Time). That’s right - it’s kind of like R.O.I. (Return on Investment.) After all, you have to make every minute count! There’s no time for activities that fail to produce a monetary return. 

This weekly business report is usually about things that we can do to improve our performance and create a positive financial impact. Certainly, time management is one of them and we have discussed it before. Yet I would like to present something that does not involve managing our time.

The last thing I want to do is pontificate with a "holier than thou" attitude. Unfortunately, that’s the way this might come off to some, so let me set the record straight right from the start- I am the worst offender.

I know there are many people who are reading this that have given to charities this year. God knows we’ve had plenty of cause to give with hurricanes, tsunamis, earthquakes and floods! I’m talking, however, about a different kind of "giving." I’m talking about, "giving back." That is using your talents and abilities to help other to prosper and grow. Now this might fly in the face of the "manage-every-second-jam-as-much-into-a-day-as-possible" mentality yet I have found that an amazing thing happens when we give our time while expecting nothing in return – we literally reap ten times, fifty times or even a hundred times the benefit. I can’t tell you how many times this has happened to me. 

Yet giving back involves a certain amount of giving up. You may give up an hour or two a week, or a Saturday, or perhaps a weekend or even some vacation time. Regardless, when we do this we access some kind of power that creates an eventual, reciprocal benefit for ourselves. Call it karma, the power of God or just a force of natural.

The photo you see is of myself (I’m the OLD GUY!) with the board members of the American Marketing Association at California State University - Long Beach. I spent a few hours with their chapter of about 60 members and practiced some of the Rules of Attraction. Not only was this a very enjoyable and rewarding experience but it was gratifying for me to help these young people learn the practicalities of marketing. 

I want to take a moment to encourage you to use the 4th Rule of Attraction: "Give without Selling." When you do, I guarantee that it will return to you in multiples. You just might find it to be the best investment of time that you make all year!

Breakthrough Innovation

Last week I talked about my concept of "heartshare." Marketshare is about getting more clients; mindshare is about getting them to remember us. Heartshare is about becoming more influential by creating extraordinary customer experiences. We do this by leveraging our intangibles. One of the intangibles that we can leverage is innovation. The most productive innovation involves revolutionizing processes that create greater customer satisfaction, rather than merely product improvement.

Tired of reading already? Click here- LISTEN TO THIS ARTICLE.

Breakthrough Innovation
Innovation has become a mandatory objective for all businesses rather than the optional advantage it once was. Innovation offers numerous benefits that can help to win market share and mind share. True innovation also allows us to capture a greater share of heart:

Innovation:

• Increases market share by overstepping the competition.

• Increases mind share by making our products and services more memorable and attractive.

• Increases heart share by achieving greater efficiency and a smoother customer experience.

Levels of Innovation
Like anything else, there are different levels at which we can innovate. Over the years, I have identified four levels of innovation: Standard, Specialized, Extraordinary, and Breakthrough Innovation. What I do not address here are companies that are operating with a zero level of innovation. God help you if you are in this category. You need to move and move FAST to start developing an innovation strategy immediately. It behooves all of us to look at how we can innovate to win greater share of market mind and heart. Let's look at how we can accomplish this.

Standard Innovation
The first level of innovation (Standard Innovation) merely allows us to keep pace with the changes in our industry. I like to call this survival innovation. At this level, companies innovate their products and services only enough to survive. This is a kind of reactive rather than proactive innovation. These organizations are merely reacting to the competition's innovations. I guess you can say they're just keeping up with the Joneses. This is the level at which most organizations are performing.

Specialized Innovation
The next level of innovation traveling up the continuum is "specialized innovation." This typically occurs when an organization adapts their product or service to a specific marketplace or subgroup. For example, when I was in the consumer electronics business I did some consulting for a company called Bogen. They manufactured PA systems (public address systems). When this market went south, they literally saved their company from extinction by innovating all of the internal elements of their business to the marine marketplace. This was a very small but profitable and virtually untapped subgroup. The production, technical, and service innovations were relatively minor to accomplish this. Bogen quickly captured nearly 100% market share and mind share among the marine subgroup. Most importantly, they snagged a good deal of heart share since all of the other amplifier manufacturers had ignored the marine dealers and distributors.

Extraordinary Innovation
Just as it sounds, this innovation is out of the ordinary. This is where organizations can leverage their uniqueness in any combination of the processes to deliver a level of innovation that their competitors are not currently offering. Let me tell you about a client that we've worked with that has built some astounding innovation into their production and service guarantee. The company is Pelican Products. Their claim... "You break it. We replace it. Forever." This is not marketing hype. The company manufactures cases and flashlights that are virtually indestructible. The product is sold to the military, law enforcement, fire, and emergency agencies. This guarantee is unmatched in their industry and their competitors are stymied by their ability to continue to offer this year after year. Even more amazing, Pelican tells me their return rate is less than 1%! How do they do this? By innovating the guarantee right into the product. How big is the market for industrial cases and flashlights? The company will do almost $100,000,000 this year. It helps to have massive heart share.

Breakthrough Innovation
Breakthrough innovation occurs when an organization makes a revolutionary advancement in one or more of the innovation processes. In this case, a company will deliver a level of innovation that their competitors are NOT EVEN CAPABLE of offering. Many times these organizations literally create monopolies that admittedly have a half-life, yet permit them to rapidly capture huge market, mind, and heart share almost instantly. Can you say Microsoft? 

What level of innovation are you achieving in your own business? What can you do to CREATE innovation? If you're not at the "breakthrough level" in every area, don't despair, you're not alone. On the contrary, if you are achieving breakthrough innovation in even a SINGLE category, you are rather unique. 

In fact, I'm willing to offer a special gift to the reader with the most innovative breakthrough (an advance copy of our Attract More Business Program - valued at $499). Just email a description of your innovation and we will announce the winner on the Small Business Hour on 97.1 FM as well as in the Business Update.

Next week we will talk about the areas of innovation and the four steps to CREATING innovation. We will look at how we can innovate our sales approach, management strategy, marketing communications, products, services, production, systems, processes, and even the culture of our organizations.

About Risk

"Sometimes you have to do the wrong thing at the right time." -Robert Varkonyi , 2002 Word Series of Poker Champion

"All in," he declared, time and time again, pushing his entire stack of chips to the center of the table. If he guessed wrong, he would be eliminated, but if he guessed right, he would double his stake at the table.

One-by-one the professionals went down to the amateur, surrendering their chips to his ever growing stack. He entered the final table at the tournament with the fewest chips of anyone, and pulled off the biggest upset in poker history, winning the coveted platinum bracelet at the 2002 World Series of Poker.

His play throughout the tournament was risky, going heads-up with former champions and challenging them at their own game

"Who is this guy?" - the other players at the final table must have thought. And those are the thoughts of earlier players he knocked out, such as former champion Phil Helmuth who stated, "If Robert Varkonyi wins, I'll shave my head."

And win he did, becoming one of the most improbable World Series of Poker Champions ever, and picking up a two million dollar prize for his trouble.

How did an amateur player beat professionals who have been living and breathing poker for their entire adult lives?

Luck, you say? That's what most would think.

While an outside observer might say that poker is all luck, any experienced player or fan will tell you this is not the case. Over the course of a week long tournament the luck will even out amongst the players. The one who wins will be the player who best plays the cards they are dealt.

The truth is that what won Varkonyi the title was his bold play and willingness to take a risk.

Surely this is a lesson for all of us entrepreneurs.

Do you sometimes feel outgunned, out financed, and outmanned?

We can increase our chances of success as by doing specific things. When you think about it there are aspects of our business that we may not be able to change very easily. These include location, ability to locate needed employees, financing or additional initiatives. These can all be very costly and time consuming. What we must do, however, is most effectively play the cards that we have been dealt. We must accept those things that are fixed (much as a poker player must accept the cards they have in their hand), and figure out what the best "play" is with them. We can compensate by capitalizing on our strengths. This could be viral campaigns, networking, creative marketing, collaborative partnerships with other businesses, perhaps sourcing interns from local colleges and so on. The action will vary with the "hand" you've been dealt.

You must also pick and choose where you decide to wage your battles. In poker you can fold on hands that you know are losers so that you apply your chips towards hands that you have a better chance of winning. This strategy can be applied to your business as well. Perhaps going to a tradeshow isn’t the best move, or if you've never been, maybe it's worth trying. Selling only through distributors? Maybe adding a direct sales channel will be a good idea. Or if you only sell direct, resellers may be the way to go. These will vary from business to business and situation to situation, but you must decide where to spend your resources of time, money, and opportunity so that they give you the highest probability of success.

The game of poker appeals to me as a business consultant because there are many parallels with the world of business. You can't change the cards that you're dealt but you need to make the best of them. Often times, playing it safe isn't necessarily playing it smart - even in cautious times.

As is the mantra of Brian Tracy, author of "Create Your Own Future," you make your own luck. Those people we view as being lucky are people who did things to increase the chances that they would be able to take advantage of the opportunities that present themselves.

Go out and create some luck for yourself, as Mark Deo likes to say, "It's about increasing the chances of success while decreasing the probability of failure." Figure out what the best play is based on the chips and cards you have, and make them work for you.

Don't be afraid of risk. To not take a risk is to risk being ignored. "Destiny is not a matter of chance, it is a matter of choice. It's not a thing to be waited for, it's a thing to be achieved." Let's go from a "risk aversion" business culture to a risk sharing and reward innovation culture.

In short, risk-taking is as much a part of good management as smart product development, effective marketing and strong leadership.

I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mdeo@sbanetwork.org

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Stupid Bowl Commercials

Have you been watching TV commercials lately? How about Super Bowl commercials? They're right around the corner. I used to enjoy watching these but as of the last few years even they are a letdown. Think back to last year's commercials: Pepsi Twist and Diet Pepsi Twist featured Ozzy Osbourne in a nightmare. Can you say, "overdone?" Well you can't argue with success. That Pepsi Twist really took the country by Storm this year, huh? Not! Reebok featured linebacker Terry Tate helping managers of a fictional company improve their performance by tackling them and yelling like a drill sergeant. Oh yea it's really funny seeing office workers getting tackled. Duh? Can anybody tell me what that has to do with Reebok? Quiznos spotlighted one of their employees who only think about making the best sub sandwich, leaving his bird to die in a cage and making a sandwich without his pants on. Now do you really want a sandwich from a guy that forgot to put his pants on? He probably forgot to wash his hands too. Yuck! Remember, these are supposedly the best of the best in advertising today. These beauties cost a cool mil or more to air! Is this really the finest Madison Avenue has to offer? I don't know about you, but I'd rather have my 12 year old nephew put together my next batch of ads than these "hotshot" creative geniuses. The Problem with Marketing Materials Let's face it, most marketing or advertising, even professionally prepared ads, are poorly done. The message is rarely clear, concise, compelling, credible, relevant, interesting or unique. In addition, it miserably fails in four other key areas: Wrong Orientation - focused on what we do rather thanwhat they get Weak Content - Not enough information to persuade, contains poor or no evidence Tasteless Layout or Design - creates the wrong image and difficult to read Typos and Grammatical Errors - damages credibility Creating Headlines The first step is creating the headline. We establish our position with headlines in our marketing. Most marketing or advertising communications have a headline. The headline is typically designed to "get attention." In some cases, a compelling visual is used to get attention and the headline draws the reader into the copy text.  Approaches Problem - Focuses on the problem that the prospect is facing thereby increasing their pain. Solution - Focuses on the solutions or benefits that the company, product or service provides. Motive - Focuses on not so much what the customer wants but why they want it. Analogies - A clever or creative way of explaining the problem, solution, or motive which the marketing device is attempting to communicate. Combination - These headlines use a combination of strategies such as a problem/solution ad or an analogy that explains the problem or a motive that uses an analogy. Application Let's put aside the big budget wacko Super Bowl ads and focus on a typical ad for a small business. Say, a yellow page ad. The best way for me to demonstrate what works versus what doesn't is to actually show you two versions of the same ad. This one is for a day care center. It is a very compelling example of a yellow page ad that works as compared to one that is rather ineffective.  This ad adheres to none of the rules we've discussed. The focus of the ad is "Established in 1970." Who cares? It says day care center but I already know that since that's the section in which the ad appears. This ad clearly focuses on the solution to the biggest problem: "Will I be comfortable with my baby there?" It is targeted, compelling, obvious, concise and uses a striking visual that hits an emotional chord. What is most powerful about this re-design is that it certainly boosted response and it didn't cost one more penny to run! I hope this demonstrates the principles of effective marketing in a practical way for you. In my "Attract More Business" program I tear apart dozens of ads, brochures, commercials and other marketing and advertising. I show you how to critique them and re-assemble them in a powerful and compelling way. To read more about it, go to www.attractmorebusiness.com. Have a great week! I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com  Mark Deo

Something For Nothing

From time to time I will allow accomplished marketing or management experts to contribute an article that has value. This article was particularly beneficial to me and I hope it is for you as well. It was authored by David Frey, the senior editor of the Marketing Best Practices Newsletter, a free weekly newsletter featuring small business marketing techniques. If you feel you may have an article that is educational for small business owners and entrepreneurs please let me know.

"Something for Nothing" or "How to Get Free Publicity for Your Small Business"
By David Frey

The other day I picked up the newspaper and read the headline, "Ex-High School Teacher Helps Struggling Students Improve Their Grades." The headline immediately caught my eye because I recently developed a system for high school and college students to improve their academic performance.

In the article it talked about a Houston woman who retired from high school teaching and now holds study skills workshops around town for high school students that need academic help. It included her contact information and website address.

It was a quarter page article in the Houston Chronicle with over one million circulation. When I saw the article I wondered to myself how much that same article would have cost her if she had paid for it.

LOTS!

The Power of the Humble News Article

There are only two ways to land the name of your business in the local newspaper, by paying for an advertisement or by having a newsworthy event that is covered by the local press. Both can be very effective but the all-mighty news release can provide the level of credibility and respect that can spark on-the-spot sales for your business.

Advertisements contain information that people know are biased. Surveys have shown that the vast majority of people believe that all advertisements contain false or misleading information.

News articles, on the other hand, are written by third-party news organizations that have nothing to gain by endorsing your business. Hence, their believability is high. That's exactly why your print ads should use an editorial style format. People read editorial style (news article format) seven times more than an advertisement!

Why Are Some News Releases Chosen and Other Not?

Knowing how the press chooses one news release over another will give you an advantage in getting the coverage you're looking for. Most large pressrooms get hundreds of news releases a day. When yours comes in, it competes with all the others that come in with it.

Typically, an "Assignment Editor" is the person who has the responsibility to determine what is "news" and what isn't. This person is in charge of reviewing the incoming releases and either assigning them to editors or trashing them. Typically, an Assignment Editor will sift through press releases like you go through your mail…over a wastebasket.

If a news release doesn't catch their eye they immediately trash it. The first item on the press release that is read is the headline. If you don't have a catchy headline that grabs the editor's attention then it won't stand much of a chance making it to the next step, which is the first paragraph.

Your first paragraph should tell what your news is, whom it's about, where it will be, why it's important, and when it will be held. The opening paragraph needs to get to the point fast with no fluff. If it's as compelling as the headline, you have a good chance of having the entire release read.

What News Stories Get Covered?

To give your business the best chance of being covered by the local news media give them what they are looking for. Generally speaking, each of the different media is looking for specific types of news events.

Newspapers want information that is interesting and informative. Newspapers like to educate their readers with timely news and articles that people will find interesting and educational.

Radio is a bit more loose and has an "anything goes" type of style. Radio stations like information that is controversial, funny, or weird. One of the most popular five minutes of a local radio station here in Houston is the "Birthday Scam," in which the DJ's call up an unsuspecting person (on their birthday) and proceed to create a combative and hostile conversation full of accusations and lies. The sparks start to fly and so do the ratings.

Television gets excited about anything that can provide great visuals. Sponsoring a local high school reading contest in which the principal gets dunked in a tub of kool aid will get the T.V. station's attention.

All media love human-interest stories. They know that people like to know about other people. In fact, the number one topic of talk radio is relationships. If you have a good human-interest story that others would find interesting you're on your way to getting lots of free publicity.

Lastly, the biggest mistake that most PR novices make is to pitch an advertisement for their business. The media publishes news...they are not your personal marketing department! You must be newsworthy!

How Muhammad Ali Landed In Life Magazine (I love this story!)

Getting free publicity is more about making yourself newsworthy than being newsworthy. As George MacKenzie, a publicity expert, once told me, "There is no boring stories, just boring approaches to interesting stories." With creativity and a little effort you can make almost any situation newsworthy. The following story is a perfect example of what I mean. It's a story about how Muhammad Ali received massive amounts of free press in Life magazine, the biggest magazine in the country in those days.

After Muhammad Ali turned pro, Sports Illustrated did an editorial piece on him. During the photo shoot with the Sports Illustrated photographer, Ali asked whom else the photographer did work for. He replied, Life magazine. But quickly told Muhammad that he didn't have a chance of being covered in the popular magazine.

Muhammad knew that if he made himself stand out somehow, that the magazine might write him up. After a few minutes of consideration Ali asked the photographer what other kinds of photos he took? The photographer responded, "All kinds, but my specialty is underwater photography."

So the quick-thinking Muhammad Ali said, "Did you know that I'm the only fighter in the world who trains underwater?" The photographer immediately got interested. Ali then told him that he'd do an exclusive if Life wanted to do a story about him.

Before you knew it, Ali was in a pool up to his neck in water dancing and throwing punches with the photographer reeling off pictures. It wasn't long after that Life did a huge spread on Muhammad Ali. He gave the photographer and Life magazine what they wanted, and in turn, received massive free publicity.

20 Ways to Make Your Small Business Newsworthy

As I previously mentioned, the key to getting publicity for your business is to make yourself newsworthy. The Muhammad Ali story is a good example of how one man made his own publicity opportunity by being creative and interesting.

To get your creative juices flowing let me suggest 20 ways you can make your business newsworthy.

1. Do a customer survey and include controversial questions. Write articles about the results of the survey. The media loves survey results.
2. Create a top ten list about something in your business. If you're a beautician, write an article titled, "Top Ten Most Popular Hairstyles for Women." Top ten lists are very popular, just ask David Letterman.
3. Develop an annual award that you give out to someone in the community or a business in your industry. For instance, give an award to a local outstanding teacher that has gone above and beyond the call of duty. Or if you're a supplier you can give an award to the "Best" business (customer) in the industry your service.
4. Offer surprising facts about your industry or business. For instance, if you're a recruitment firm write an article titled, "The Average Starting Salary of An MBA Graduate is 40% Higher Than Their Pre-MBA Earnings."
5. Piggyback off a national story. For example, when the rumors of a recession hit one business wrote a story about how their business actually improved as a result of the recession (It was a utility expense auditing firm).
6. Tie your business in with holidays or special days. For example, tell the media how your massage therapy business helps to reduce stress during the Christmas season and provides gift certificates for welcome relief.
7. Give a rags-to-riches story about yourself as a high school nobody that starts her own business and becomes successful. Remember, the media loves human-interest stories.
8. Tie your business into something that took place in the past. Go to your local library and find articles from 50 years ago that may somehow tie into the product or services you provide.
9. Be first. Be the first to offer a 200% double your money back guarantee. Be the first to offer an on-site car wash with every sale. Be the first to give your employees ownership in your business. Think of something at which you can claim to be the first.
10. Host a "Kids are the Boss Day!" Hand your business over to your 14-year-old kid or one of your employee's young children for the day.
11. Run a "silliest thing" or "dumb mistakes" contest with your customers. For instance, if you're a shoe repair shop, ask your customers for the silliest things they've ever done with their shoes. If you're a sport goods retailer ask your customers for the dumbest mistakes they've made while camping. These are great human-interest stories that the press will love.
12. Sponsor a local community service project. For example, if you're a dry cleaner, clean the clothes for all the visitors of the local food shelter. If you're a fast food retailer, hold a free lunch day for disabled children. If you're a car repair shop, offer oil and lubes to the parents of boy scouts and donate all the proceeds to the Boy Scouts of America.
13. Throw a one-of-a-kind customer appreciation theme party such as a luau with Polynesian cultural dancers or a magical theme party in which customers can bring their children to watch a magician do incredible tricks.
14. Do you have a customer that uses your products in an unusual way or uses your product to become a high achiever? If you run a gym is one of your customers a bodybuilding champion? If you own a bike shop is one of your customers a champion trial racer? If you manage an electronics store do you have a customer who has invented a whiz-bang contraption?
15. Take on the sacred cows of your industry and challenge them. If you're a human resource consultant, give employee-of-the-month programs a severe drubbing. If you're a Taco Bell manager, tell consumers how "real" Mexican food actually tastes bland and boring. If you're a home-based businessperson, write about how corporate America is suffocating good people.
16. Close down your business for one day a year and have your entire staff do a day of charity work. Headlines would read, "Local Print Shop Closes Doors to Help the Needy!"
17. Recently I had a client whose business burnt down last year. He built it back up and is doing more business than ever. Has your business survived a tragic incident (like the recession) and made is through with flying colors?
18. Write a general interest story about the problem that your product or service solves. If you're a car detailer you could write about how oxidation and rust destroys the integrity of your car and makes it unsafe to drive. If you sell website services write about hosting problems or the effects of poor website design and how to solve it.
19. Why did you start your business? If you started your business because you were dissatisfied with the provider you were using (or the employer you worked for), let the press know. For instance, you went into the Italian restaurant business because the Italian food in the local area wasn't authentic. Maybe you started pool-cleaning service because of the lousy job service providers were doing on your own pool.
20. Prove a myth or stereotype in your industry wrong. For instance, if you're a hot tub dealer, show a man who sits in his hot tub every night and has 12 children (meaning the hot water really doesn't kill your sperm!).

How you make your business newsworthy is only limited by your creativity and ingenuity. Remember, there are no boring stories, just boring approaches to interesting stories.

Money can't buy what the press can give you.

# # #

David Frey is a collaborating member of the Small Business Advisory Network and is the President of Marketing Best Practices Inc., a Houston-based small business marketing consulting firm. David is the senior editor of the Marketing Best Practices Newsletter featuring small business marketing best practices. Contact him at:
http://www.MarketingBestPractices.com or David@MarketingBestPractices.com

Small Business Advertisements

Nobody can guarantee a winning ad. The only way to know for sure is to test it. But there are several elements that you can incorporate into your ad or sales letter to give it a better chance of being a winner. Use these elements as your own personal "winning ad checklist."

Element #1 - Smart Ad Placement 
The first step in positioning your ad for success is increasing its chance of being seen by your target market. Running the world's best radio ad for your retirement planning services on a local hip-hop station wouldn't be a good idea. Find out what your target market watches (i.e. sports, cooking, business), where they watch it (i.e. car, home, airport), and how they watch it (i.e. newspaper, magazine, radio). Until you know this information, you cannot make smart choices about ad placement and you'll likely end up wasting a lot of your hard-earned dollars on an ad that didn't even get seen by your target market.

Element #2 - Focus on Your Objective 
You'll never get what you want if you don't know what you want. This is true in your personal goals and also your advertising efforts. You must have a specific objective for your ad if you want people to act. Is it to call your office, come to your store, or go to your website? Whatever your objective is, gear all the elements of your ad to persuade consumers to fulfill your objective. Suppose you want readers to call your toll-free telephone number, then your call-to-action should be, "call our toll-free number now!" If you include a testimonial, have your endorser say something like, "when I made a call to your toll-free number..." or you might include copy that says, "one toll-free phone call can change your life forever." Multiple objectives will confuse your prospect and when people get confused, they usually do nothing.

Element #3 - Irresistible Offer 
If you have ever seen the ginsu knife infomercial you have witnessed the anatomy of an irresistible offer. Not only do you get the set of ginsu knives, but also you get the "magic shredder", the "never-dull chopper", and the "easy egg slicer." BUT that's not all - you also get the "2-in-1 blade sharpener" and if you order in the next 10 minutes you'll also receive a second set of ginsu knives! Now that's an irresistible offer. Who could resist all these bonuses for the price of one set of ginsu knives? The secret to constructing an irresistible offer is to add valuable bonuses and extend risk-free, easy-to-pay terms. Continue heaping valuable bonuses on your customer until they throw up their hands and say, "Okay, I give!" One last thought about your irresistible offer. Sometimes you can make your offer so irresistible that it appears to good to be true. Always tell the reason why you can make such a great offer. This will add credibility to an incredulous ad. For example, you might be having a sale that advertises 70% off retail price. When people see "70% off" many will think that all you have done is boost your price 50% just so that you can advertise a 70% off price. But if you tell them you can offer 70% off because the recent hailstorm caused some very slight damage to your product and you need to liquidate. People can now reconcile you great offer in their minds so that it makes sense and is believable. 

Element #4 - Unique Competitive Advantage 
Why should your prospect do business with you over any of your competitors. Even those that have lower prices! Do you have a "wider selection than anybody in the tri-county area" or do you "deliver within eight hours after the purchase"? Often your unique competitive advantage is the biggest benefit you can offer your prospects so consider including it in your headline, bulleted copy, or your guarantee. If by chance, you don't have a unique competitive advantage(s) then you better get one fast. Not having a unique competitive advantage with which to show value, results in competing solely on price - - and that's a losing proposition (unless you have a significant cost advantage).

Element #5 - Advertorial Style 
Studies have shown that consumers read new articles seven times more than they do advertisements. It is said that the average consumer is presented with over 3,500 ad impressions per day. We have become jaded to promotions and commercials. Cloaking your ad in a news style editorial format will not only pull more attention, but also instill credibility, which is one of the major roadblocks to consumer response. "Advertorial" (advertisement - editorial) type ads include compelling headlines, lots of informative, interesting text, quotes, and a judicious use of graphics. The reason advertorial ads are so compelling is that people are tired of in-your-face sales ads and would prefer the silent, soft sell of an authoritative news article.

Element #6 - Compelling Headline 
Your headline is the most important part of all the technical aspects of your ad. 80% of the success of the headline can be attributed to its headline. A powerful headline is either, (1) benefit driven, (2) news oriented, (3) curiosity driven, or (4) how-to oriented. The following is an example of each: Benefit Driven Example: "You Too Can Have a Slimmer Figure Without Dieting" News Oriented Example: "Amazing New Formula Cures Arthritis Pain" Curiosity Driven: "Are You Making These Deadly Hair Care Mistakes?" How-to Oriented: "How to Flood Your Business with New Customers for Under $50" It's a good practice to develop a minimum of 30 variations of your headline before you select the one you'll use. Readers satisfy their interests by scanning headlines. If your headline doesn't grab attention your ad will never be read, let alone noticed.

Element #7 - Sell the Benefits 
Your prospects don't care about you. They don't care about your awards, the name of your business, how much you sell, or how good you think you are. They only care about how you, and what you offer, can benefit them. So leave out all of "me" copy and sell the benefits. Ultimately people only want two things, to (1) gain pleasure, or to (2) avoid pain. Tell people how your offering will help them either gain pleasure or avoid pain by expressing them in the form of benefits. Don't confuse this with listing the features of your product or service. People aren't concerned as much with features as they are with what the features will do for them personally. To do this, list each of the features of your product and then determine the benefits, both the potential of gain or the avoidance of pain, your prospects will receive as a result of each feature. Hint: Studies have shown people respond better to the fear of loss (pain) then they do to the promise of gain.

Element #8 - Make it Risk-Free 
Consumers are naturally skeptical. With all the scams, rip-offs, and untruthful ads consumers have experienced, who knows what to believe anymore? You must make your ad credible and risk-free. The good news is that it's easy to do. Using a combination of these three strategies will provide a powerful risk-free offer.

1 - Use Testimonials 
Testimonials from real people are powerful. People don't like to be guinea pigs. If they've seen that someone else has received the promised benefits, it provides instant credibility. Hint: Including pictures of the endorser will double the effectiveness of your testimonial. 
 

2 - Offer a Strong Guarantee 
Provide as strong a guaranteed as absolutely possible. If you can't provide a strong guarantee for your product, perhaps you shouldn't be selling it. Unfortunately, too many small business people fear that customers will take them up on it. Let me ask you, when was the last time your took somebody up on their guarantee? Seldom do guarantees get exercised. Use a powerful guarantee.

3 - Include Facts and Statistics 
Use facts and statistics from reliable sources to bolster your claims. People find comfort in positive, scientific proof. Each of these strategies will build credibility and reduce the risk prospects naturally feel when contemplating an offer. Above all, be truthful and honest!

Element #9 - Call to Action 
When someone tells you that they don't like being told what to do - - don't believe it. People do want to be told what to do. In fact, people need to be told what to do and when to do it. Phrases such as, "call now", "come in today", "sign up right now" trigger emotional response mechanisms that get your prospect to take action on an offer that secretly you want to take advantage of anyway. Make your call-to-action explicit and clear, so your prospect knows exactly what to do.

Element #10 - Urgency 
Admit it, the vast majority of people are naturally lazy and like to procrastinate. Without a real or perceived sense of urgency your prospects will drag their feet. To compel your prospect to act immediately you must inject a feeling of "scarcity." Scarcity is felt when the supply of either time or product quantity is limited. For instance, placing a deadline on your offer makes your prospect feel as though they have to take advantage of your offer before they lose the opportunity. An example of this tactic could be rescinding a discount offer or a special additional bonus within a specified period of time. Another tactic is to limit the quantity available so that people will feel the need to take advantage of your offer before your product runs out. It's not unusual to see offers stating, "while supplies last", or "only 50 available, first come, first serve." If you use scarcity tactics (and you should), make sure that you hold true and keep your word by rescinding the offer when you say you will. If not, you will lose credibility and the tactic will backfire on you.

Element #11 - Simple to Respond 
Most people buy on impulse rather than logic. If your prospect finds it difficult to take advantage of your offer during their moment of impulse, you will lose the sale. Make it easy to do business with you. Many people communicate in different ways. Some like to call on the phone, others like to go to the Internet, and yet others will only fax you their order. It's important to offer multiple ways to be contacted such as telephone, fax, website, cell phone, pager, or any other communication method. Studies have shown that the vast majority of people take advantage of impulse buying using the telephone more than any other method. The same studies show that when you offer a toll-free number, response rates increase. Finally, if you offer a recorded message with a toll-free number in which people can hear a message and leave their contact information, response rates increase even more.

Element #12 - Graphics 
Using a graphic is the first step in a three-step system for getting your audience to read your ad. The first step is to attract your reader's attention with an exciting graphic, step two is to pull them into your ad with a gripping headline, and the third step is to persuade them to take action with your copy. A good graphic can attract the attention of your prospect and draw them in to your message. However, a common mistake advertisers make is to add graphics that overpower the copy, leaving little space to tell their story. Although a picture is worth a thousand words, it can also be interpreted a thousand different ways, sometimes causing confusion. Graphics should draw attention and add to your message. Exciting graphics showing action are always an eye pleaser. Including someone in your graphic from the target market you're trying to reach, actively using your product or service, is also a good choice that will add to your message.

Element #13 - Accountability 
Small businesses don't have a lot of money to spend on advertising and; therefore, must hold their advertising dollars accountable. Without knowing what ads are pulling better than others, you could be wasting a lot of money. To avoid this, you need to track the response rates of your ads. Instead of asking your customers where they heard about you, get definitive proof by implementing a process by which you can track your ads. For instance, using a separate phone line or extension number for specific ads can help you determine the source of the inquiry. Another tactic may be to use a unique landing page on your website for different promotions. If you're using lead generation by direct mail, tell the recipient that they need to bring the mailer in to take advantage of your offer. If you are using radio or television as your primary medium, offer the audience a special report whether it is a paper report, audiocassette, or a video. This not only helps you track your response rate but give your prospect a good reason to respond.

Conclusion 
As you track your ads, keep the best pulling ads as your "control" piece. Vary the different elements of the ad to determine if your new ad pulls better than your control ad. If it does, make that ad your new control ad. Although, none of these elements alone can guarantee a successful ad, the combination of these elements will increase the potential for your ad to be a solid winner.

Our thanks to David Frey for contributing this article. David is the senior editor of the Marketing Best Practices Newsletter, a free weekly newsletter featuring small business marketing best practices. Check out his stuff at http://www.MarketingBestPractices.com orDavid@MarketingBestPractices.com

Mystery Mailer

I recently received a mailer that was quite impressive. It contained 2 DVDs, 4 packages of material sealed in plastic with an “Evidence” tag on each of them and a brochure. It was obviously hand assembled. Great care went into putting all of these items into each of the plastic bags. Everything was beautifully designed with 4 color graphics. It was packed in a sturdy 9x12, padded shipping envelope. I also noticed that it had first class postage. The stamp showed that the sender had paid over $2.00 for the postage. Wow! I was impressed. This must be important. Strangely, it had an “evidence” tag affixed to the corner. I opened the package thinking this would be a great mailer and perhaps it would inspire us to do something creative for one of our clients.

I opened it and spread the contents out on my desk as I examined each item and read every word of the copy. My face screwed-up in confusion as I realized that it was very professionally prepared but there was only one problem. I had no idea of the purpose of the mailer. What were they trying to sell me? What was the meaning of this message? This was a great mystery. I examined each item carefully and read every word again. I had “no idea” what they were trying to communicate. Maybe it was just me. 

I decided to show it to our top designer. Surely, he would understand the purpose of this very expensive and professional mailer. Perhaps I was too “thick!” I showed it to Max. Now remember Max has 20 plus years of commercial design experience. He has written and designed thousands of advertisements and mailers during his career. Alas even Max could not decipher the mystery mailer. He did however agree that the package cost well over $15 each to assemble, print and mail even at a very high quantity! Too bad we couldn’t understand the message. It must be important! Clearly, someone spent a great deal of time and money on its development.

We decided to send it around the office to several of our designers, production and marketing staff members. Surely, someone would be able to solve this mystery. Yet not one person could figure out the meaning of this mailer! Now remember we are all “professional” advertising, design and marketing people! What was wrong with this picture? Suddenly, I had a brainstorm. Let’s contact the people that sent this to us and ask them to explain the meaning of the mailer! “Great idea,” Max said! We scoured the copy for more information. Maybe we could find a phone number or an address. No luck!

We got out our magnifying glass and finally discovered a web site written in 8-point type and buried in some obscure copy on the back of the brochure. We went to the site that looked very similar to the mailer and took several seconds to load. We read the home page to no avail. Just about ready to give-up we scrolled through the various pages and finally there it was – the meaning of the mystery! That’s it! That’s what this mailer is all about? What a disappointment!

Not only did we waste our time, but the marketer was wasting their money. Can you discover the meaning of the mailer? Check out the image below and e-mail me what you think it’s all about. If you're right, I’ll send you our CD set on how to develop “killer direct mail campaigns!”

The lesson for all of us?

Create your marketing material so that a 7-year-old can understand it. In addition, make sure people know what you want them to do. I have seen some great marketing messages that leave the customer hanging not knowing where or how to purchase the product or service but this one really wins the prize. Just because it’s expensive doesn’t mean it’s good. 

Have a great week!

More is NOT Better

There’s a lot to be said for simplicity, especially when it comes to advertising. Let’s face it- most people just don't pay attention to ads. I guess that’s because we are inundated with advertising. Wherever we go we encounter ads – complicated ads, tasteless ads, self-centered ads, ads that yammer on. So why should we pay attention? 

This just proves that most marketing materials, even professionally prepared materials, are very poorly done. The message is rarely clear, concise, compelling, credible, relevant, unique or even SIMPLE. Saying MORE in our ads and marketing does not make the message better. In fact the more information an ad tries to communicate the less effective it is. Most ads try so hard to state their competitive claims that they push more people away then they attract. 

Most ads fail miserably in four key areas:

1. Wrong Orientation – focused on what we do (the logical side) rather than what they get (the emotional side).

2. Weak Content – not enough relevant information to persuade and they contain poor or no evidence.

3. Tasteless Layout or Design – creates the wrong image, difficult to read and too cluttered to be effective.

4. Overstating or Overcomplicating the Message – damages credibility and impedes comprehension.

Here is a great example that demonstrates before and after yellow page ads for a veterinary hospital. The first ad focuses on all the LOGICAL reasons to buy and the second ad focuses on the EMOTIONAL reasons. Which do you think is more powerful?

This is a typical ad that demonstrates why MORE is NOT better. It communicates almost No benefits, yet it does not use negative space at all. And is that supposed to be an ark? Compare this with the ad below and it’s obvious why it doesn’t work. Additionally, this ad cost a fortune because it has 6 “spot” colors which are used very poorly. It’s only saving grace is the fact that the phone number is very apparent. Yet it does not give us a reason to dial it.

The “after ad” is simple and hits the motive of taking care of your pet on the nose. (No pun intended). The headline is so true because having a pet and talking care of it all about love. Even the images for this ad provoke a positive emotional response. The ad communicates a great deal of information and it makes great use of negative space to gain interest. They put the phone in red, but I think I’d make it bigger and more apparent, especially for the yellow pages. However they wisely designed this ad using 4 color-process which makes it more visually appealing and less costly than the 6 “spot” colors used in the first ad above.

 

How Can You Apply this to your Business?
Look at your marketing material and hold it side-by-side with your competitors. How different is it? Could you just change the name and logo and the message would be the same? If so, then you may want to spend some time revamping your ads and marketing communication material.

In our NEW “Generating Ad Response” learning program we show you dozens of ads for all types of businesses – professionals, retailers, distributors, manufacturers, financial institutions, service businesses, and more. We teach you a powerful method of creating headlines and subheadings using five different strategies (problem, solution, motive, analogy, and combination headlines). We demonstrate how to design ads that “get attention” with information on how and when to use testimonials, leverage endorsements, lended credibility and powerful call to action closings. We present the 12 rules of creating compelling visuals and look at how to use illustrations and royalty-free photos effectively. We also establish guidelines for color and layout and talk about a 5 step formula for writing benefit-oriented ad copy. We include a primer on layout and demonstrate with specific examples how to effectively use negative space. Finally we discuss how to make this work in all types of marketing materials like brochures, flyers, ads, web sites, and more by showing you dozens of samples and tearing them apart. There’s even a test at the end to ensure you fully understand the principles.

The “Generating Ad Response” program contains a 30 page manual, 2 audio CDs, interactive forms and email coaching for only $111.  E-mail Matt Walker for more information about this new program, and look for it to be available for sale on our website soon.

 

Attract More Business One Day Workshops 
By popular demand, we are now offering the Attract More Business one day workshop. This full day workshop incorporates content from our “Attract More Business” learning program and 8 week class. The workshop will be held from 9am to 5pm on June 11, 2005 in Long Beach, CAand August 25, 2005 in Pasadena, CA. Attendees of the workshop are eligible for 2 follow up 30 minute coaching sessions. As a special bonus when you attend the Attract More Business one day workshop, you will receive our audio CD on “Branding in the 21st Century.”

Sign-up at: Attract More Business One Day Workshop.

Market Sexmentation

Have you seen the recent Carl's Junior ad featuring the schoolteacher who does a dirty dance for the class?

I guarantee she would never pass for MY homeroom teacher. Apparently this is the burger chain's latest promotion for their new Patty Melt (a patty with two flat buns) featuring the rap song "I Like Flat Buns." This isn't the first racy exposure from Carl's. Remember Paris Hilton? If getting attention is the goal of this campaign, I'd have to give them a passing grade. The Tennessee Education Association demanded that they pull the ads and they have raised the ire of many in the advertising community.

Let's be honest, alienating the people outside of your target audience is a byproduct of controversial ads Often times campaigns such as these are aimed at highly profitable market segments such as teens. We may not realize it but teens spent $139 billion on consumer products just last year. So in essence this is just an ad campaign that is highly targeted to a very affluent, albeit young, audience. Carl's is just practicing well crafted market segmentation. Or is that market sexmentation?

Wikipedia defines "market segmentation" as the process in marketing of dividing a market into distinct subsets (segments) that behave in the same way or have similar needs. Because each segment is fairly homogeneous in their needs and attitudes, they are likely to respond similarly to a given marketing strategy. That is, they are likely to have similar feelings and ideas about a marketing mix comprised of a given product or service, sold at a given price, distributed in a certain way and promoted in a certain way.

Oh yes, these teens have similar feelings alright!

So what do you think? Did Carl's go too far with this ad? Should teachers be offended? Or is it just a funny commercial?

Take a look at the video here and give us your comments.

Listen to our LIVE radio show this Friday at 4 pm PST at: www.smallbusinesshour.com. Call in to speak with us at (323) 443-6878 code: 226287

Have a great week!

-Mark Deo

Making Direct Mail Work

If you're like most small businesses or entrepreneurs you may have already learned that typical marketing, particularly direct response advertising is a waste of time.   

You spend lots of time and money creating a marketing piece. Maybe you hire a designer to create the right message with creative photos, illustration, copy and layout. Or perhaps you do this yourself, investing many hours or even several days in developing the materials. Then you pay a fortune to deliver the message to your prospective clients. This could be through the mail, email, web site, print ad, signage or other media.   

You have high hopes for a great response. You are sure this will take your industry by storm. The phone is going to ring off the hook. Then, NOTHING . Not a peep. Suddenly a few calls trickle in. In short your campaign has, at best, ended in a break-even proposition. You say, "never again," only to find in a few months you rationalize and change a few things around, use a new media and give it a try again. Sadly this cycle repeats itself.  

Sound familiar?  

Or maybe you are doing great with your marketing efforts. You are getting double digit response. You have learned how to ATTRACT business rather than simply chasing it down. In either case there are some very specific things that we can do to significantly increase or chances of attracting business. I would like to cover these today with a special emphasis on direct mail.  

I think that many have become fed-up with direct mail and have abandoned it as a viable form of marketing. I can say by experience that nowhere are the rules of attraction more effective than they are in the direct mail arena. I know there are many that have tried using postcards via direct mail. It is a fact that 99% of these campaigns end in disgust and disillusionment. But I'd like to introduce three simple steps that will all but guarantee double digit response by properly using postcards. They are as follows:  

1. People hate to read so use design and color to SPEAK your message. 

2. Leverage emotions to focus on the problem rather than the solution. 

3. Create a simple, clear, no risk, compelling call to action.  

STEP 1: People hate to read so use design, imagery and color to SPEAK your message.  

If you have read this far you are in the minority. Less than 22% of all readers finish the article that they set out to read. Most say they "speed read" or "skim through" the article which basically translates to laziness. In addition we should note that 16% of the adult population has dyslexia which inhibits them from reading with complete comprehension. In any case most will say they just don't have time to read. So why not learn to speak with design and color. Let me practice what I preach and SHOW you what I mean. Check out post card at the right. It has one image and a four word headline. Not much to think about, yet the message is obvious. This one has a little humor also. Another note: don't take yourself too seriously. Also notice the use of negative space at the top left. This is a visual strategy to force the reader to actually read the headline. This image and headline also prompts the reader to do a "double take" and re-process the ad in order to ensure they understand the intent. This also is a tactic to ensure readership. 

STEP 2: Leverage emotions to focus on the problem rather than the solution.  

As I've said before, we have to raise the customer's level of curiosity and increase their attraction by aligning ourselves with their problems. Most marketing messages say the SAME thing. They talk about what the marketer does, the services they provide, and the products they sell. Most customers are interested in the question: "What's in it for ME?" Make sure your headline clearly addresses what's in it for them. I would in fact encourage you to tell them what pain or discomfort they will avoid by participating in your solution. You will note that is what both of these postcards do. Certainly you don't want to end up like an uninsured dear (road-kill). Nor do you want your children to be injured in an accident due to faulty brakes. In addition we need to create a way for customers to "try out" your solution. This lessens their risk and makes them more familiar with your solution. It also allows them some time to make the purchase decision. In this Internet age more people are spending time researching various options in order to make the smartest buying decision. In the postcard at the right I might change the call to action to read: "Call now for your FREE brake check-up."  

STEP 3: Create a simple, clear, no risk, compelling call to action.  

Make sure people know what you want them to do. I have seen some great marketing messages that leave the customer hanging not knowing where or how to purchase the product or service. This is a pretty simple one but it is effective. They want you to come in to their store. I might change the call to action to read something like: "Come in and get our FREE color test." Also make sure that you reverse their risk in some way. No one likes to be trapped. Often times customers fail to try alternative solutions or change suppliers because they thing that the "grass isn't always greener on the other side." I always recommend that we allow people to TRY our solution. This is why in marketing our Attract More Business Program we offer a FREE 5 day self study where customers can experience what the Attract More Business Program is all about. In addition we offer an unconditional money back guarantee with every program sold. By the way, we have NEVER had anyone ask for a refund. If you are confident in the value of your product or service don't be afraid to offer some type of risk-free guarantee.  

Here are some other postcards showing the rules of attraction in action:

These postcards are both aimed at soliciting home improvement but the one on the top focuses on the actual service and the other keys into the motive. Obviously more room for a "newcomer" to the family. You may be wondering if this same three step strategy can be applied to your business. The answer is absolutely, YES! In our Attract More Business Program I take you step-by-step through how to develop your own marketing strategy and advertising campaign. This includes a branding strategy, concept, copy, developing headlines, selecting media and much more. If any of this makes sense to you please enroll in our FREE Attract More Business Self Study program. Simply go to www.attractmorebusiness.com.   

For more information on direct marketing check out this article that I wrote a few years ago:http://www.sbanetwork.org/articles/articles_view.asp?id=29   

By the way thanks to Zairmail for letting me use their postcards as examples. Check them out. These guys have some great postcards. I've used them before. They are reliable, affordable and friendly. Call them at: 1-877-239-1253 or www.zairmail.com

Have a great week! 

I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com  

Mark Deo

Irresistible Direct Mail

Who says direct mail has to be boring? Who says direct mail has to produce 1 or 2% response at best? Who says direct mail is a medium of the past? I'll tell you who - those who are doing the same old, same old direct mail. We've all heard Ben Franklin's quote on the definition of insanity: to do the same thing over and over again, yet expect a different result. Let's face it, if you are doing the same kind of mailings that you did 3, 5 or even 10 years ago you can expect not just the same response but a significantly lower response. What can you do to make direct mail interesting? Direct mail is often viewed as a type of "push" marketing. Yet if it is performed creatively, direct mail can become a powerful "pull" marketing strategy. We can use direct mail to create "attraction" rather than as a means of "chasing" business. All this can be done without in your face, pushy tactics if we are willing to take a step back and focus on the customer's challenges rather than become embroiled in our solution. Direct mail is no different than any other marketing medium. If we can focus our communication efforts on not just what the customer wants but rather why they want it, we can align ourselves to the customer and thereby attract them to our solution.

Take the direct mall piece shown below. When it arrived on my doorstep, I had no idea what it was but the 8 x 10 inch envelope with the eye staring at me and the headline: "Ready for a SHOCK? Then open this" did have me wondering. I usually trash this kind of stuff but something about this had me curious. I guess the headlines were right up my alley:

"Jack Welch was wrong. Dead WRONG." "Next recession in 2011. BE READY."

"America's 3rd great MIGRATION has started: $1 trillion dollar opportunity."

That got me to open the envelope. When I did, I found this was an offer for Peter Drucker Institutes new on-line E report, "TRENDS." Also in the package was a CD and several inserts. One was a letter customized to me (host at CBS Radio). Also enclosed was a very well done interactive CD, a brochure discussing the problems I face as a radio show host finding accurate time information about business trends, a response card (pre-filled out!), and a discount coupon.

We talk a lot about the rules of attraction and how valuable they are in direct marketing. This mailer included several. Let me list them so that you can build them into your own campaign: Become a big fish in a smaller pond. It was aimed at business journalists and included information only valuable to them. The problem is more important than the solution. It focused on numerous problems that we will be facing in the coming decade. Many of the same things I talk about on my radio show and in my weekly articles. Give information away without selling. It included a FREE subscription for 1 month and the CD which was crammed with 20 excellent articles. Reverse people;s risk in changing. It had a discount coupon for $100 off. Don't be a better option, become the ONLY solution. I don't know of any organization offering this type of information. No one has time to read so let design and color speak. As you can see it included compelling graphics, a tasteful layout and colorful design. Traditional advertising is a HOPE business. This was not your typical mailer. I suspect it cost 2 or 3 times more in production costs than a typical mailer, but was sent to far fewer people, all of whom have a higher interest level in this kind of information. Learn the discipline of testing. It had a pre-numbered savings code so they could track the response to determine which offer was most successful. I assume they tested numerous solutions. This is a great example of a powerful, well-conceived marketing device. One particularly good thing about the piece was that it carried much of the message on the envelope itself, motivating me to open it. Think about ways that you can implement these strategies in your own direct marketing program. If you get stuck, give me a call or send an email and I will do my best to help. Also check out our new program, "Attract More Business" at www.attractmorebusiness.com for a step-by-sep approach on how to do this. The program includes dozens of examples, a 150 page manual and 9 CDs that you can listen to in your car, making it a practical learning tool.

Have a great week!   I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or emailmark@markdeo.com  Mark Deo   Print this article.

Giant Brand, Guerilla Tactics

Recognize that movie poster? It won critical acclaim from the design world for the Oscar winner "Walk the Line" last year. Designed by artist Shepard Fairey, it never would have happened were it not for the wrestler Andre the Giant. 

You've probably seen Shepard Fairey's "art". If you're under 35, you're likely very familiar with it, and if over, you've probably seen and ignored it all. Shepard Fairey began a remarkable branding campaign in 1989 in Rhode Island as a joke. As a student at the Rhode Island School of Design, he created a silhouette of the famed wrestler Andre the Giant to show a friend how silhouettes could be made of virtually any photo. As a joke, he decided to place the image on a sticker, with the text "7'4", 520 LB., Andre the Giant has a Posse". Intended to mock underground skateboarding culture, these stickers were placed all over Providence, Rhode Island- on the back of street signs, streetlights, traffic signals, buildings, etc.

Getting lots of feedback from friends in the skating community, Shepard took out an ad in a skateboarding magazine featuring the image and a P.O. Box, with a note urging people to send a Self Addressed Stamped Envelope for more information. He would send back a few stickers, a template to use for printing more, and a note urging the recipient to spread the message. 

I can recall personally seeing these stickers in Pittsburgh, PA in 1992, as well as in Los Angeles in the early 90s. Shepard Fairey then transitioned into a more stylized image, and created other silhouette styled images that were incorporated into posters that mock government propaganda with the word "Obey" featured prominently. 

The end result? His work has been seen in numerous films (including Batman Forever, 8 MM, and others), is now designing CD covers, movie posters, and t-shirts, and has built a visual brand among persons who were young adults from the late 80s until now.

What is most interesting is that Shepard Fairey created a brand without a product! When he started, he had nothing to sell. He's created a legion of fans who spread his message for him, and that has led to mainstream success. Whether you like or dislike his tactics (many view it as simple vandalism), the result cannot be denied- mainstream commercial success.

What can you do that will generate interest among your target audience? How can you encourage persons in your network to spread your message for you? What can you do to brand your company, products, or self to spread your message?

I'll get this started for the SBA Network. Please take this article (or any of ours) and share it with a friend. 5'9", 170 pounds. Mark Deo has a posse.

SBA Network Sales Technology Specialist Matt Walker wrote this article. To reach him, send him a note at mwalker@sbanetwork.org.

Have a great week!

-Mark Deo

Direct Marketing

Why is it that some people make BIG money with direct mail and others lose their shirts?

Is it the packaging, the postage, the copy content, the design or layout, the offer, the promise, the guarantee, the response device, the cost, the list, the database management or the timing?

It is all of these things and sometimes none of these things. Big help so far, huh?

Overview 
Like all types of marketing, your efforts are only as good as the weakest link. Remember there is no guaranteed formula for success with anything. Every situation demands a different approach. You wouldn't go about selling computers through the mail the same way you would toothpicks. Nor would you sell suntan lotion in Alaska the same way you sell parkas in Hawaii. The most important thing about a direct marketing program is to put yourself in the customer's shoes.

You may be saying to yourself, "Thanks Deo (that's me),I already know that." But you would be amazed at how many times I have seen "wishful thinking" replace logic in such situations. We must be willing to remove ourselves from the process when planning a marketing campaign, and truly take on the role of the prospect. This is why the perspective from an unbiased professional can be so valuable.

With this in mind let us begin to look at some of the variables that contribute to success or failure of a direct marketing program.

Packaging 
The direct mail packaging typically consists of an envelope. Although some direct mail packages utilize boxes, bags, tubes, and an assortment of odd packages, these may be great for getting attention but they are costly. In the proper circumstances, however they can be very effective. I can show you some very unique direct mail packages that have generated 5 to 10% response. Remember that the front of the envelope or package is your first opportunity to get the prospects attention. It is also an opportunity to target your prospect.

For example making a statement such as "FREE Seminar Information Enclosed" or if you are mailing to buyers of fishing equipment, making a statement on the envelope such as, "Great Deals on Fishing Gear and Tackle," would be appropriate. It is statistically proven by the Direct Marketing Association that personalized envelopes generates 20 to 30% better response than non-personalized envelopes. This also helps with tracking response and cleaning the list.

Content 
The direct marketing package should be prepared in such a way so as to engage the customer. By this we mean that it first demands attention, gets them interested and then gets them involved. It should include some type of compelling imagery (photo or illustration), as well as a powerful headline. The best headlines are no more than five to six words. The best words to use are simple, easy to understand preferably one, two or three syllable words. Write your copy or headline so that it could be understood by your average 10-year-old.

The content of the direct marketing package should clearly describe the product or service. It should also outline the benefits the prospect will receive once purchasing the product or service. Since people buy emotionally rather than logically, the best copy powerfully shows how the prospects life would change as a result of having the product or service. It satisfies the question of; WHY the prospect should own the product or subscribe to the service. Evidence is critical here.

Testimonies, endorsements, examples of success are all great ways to build credibility in the direct mail device. Many direct marketing experts claim that a long letter and more material included in the package produces a higher response. Certainly this costs more, both in postage as well as development. It seems that many people believe that more is better. However I have seen very successful direct marketing packages that include merely a one-page letter, one page product benefit sheet, and a response device addressing the critical information. If you follow the above checklist, you should do well, even if you don’t mail a ton of material.

Response Device 
The response device is a form that makes it simple for the customer purchased product or service. A good response device should include the space for information such as name, shipping and billing address, phone number, email, fax number, quantity purchased, unit cost and total cost. It should also include payment options. A good response device can be completed in less than 3 minutes and provides ALL the information necessary to ship the product or provide the service. It should also include a carrier (as it is known in the direct mail world). This is a return envelope so the customer can send in payment. It should be pre-addressed and postage pre-paid. I also suggest including a fax #, email address, and toll free number for order placement.

Product or Service Being Offered 
Products or services priced at more than $100 each typically are more difficult to sell via direct mail. They require a more sophisticated approach. This means building greater credibility, incorporating testimonies or endorsements, showing several photos of the product, and including compelling evidence that the product is worth the price.

Direct Mail and Telemarketing 
In many of these cases I recommend that my clients utilize a mail-call-mail type of direct marketing program. This mail-call-mail program involves placing a telephone call (See Telemarketing White Paper) following the initial mailing. This call should be placed seven to ten days following the mail drop, assuming that the mail is sent third class or Bulk mail.

Bulk mail typically requires three to five days to reach its destination however in some cases it can take as long as seven days. The telephone call following the mail piece allows the customer to be reminded of the offer. It also allows the customer the opportunity of getting their questions answered, and motivates them by communicating the benefits in an interactive way. This telephone call can add as much as 50 to 250% to the response.

Typical response rates for direct mail alone range from 0.5% to 2.5%. Response rates for direct mail WITH telemarketing typically range from 7% to 30%. The final mail piece allows the telemarketing salesperson to follow-up with the customer in writing. This, in itself builds credibility and permits the customer to receive any additional information that might culminate in the sale. This also helps to strengthen the accuracy of the database. And, in a mail-call-mail program it is critical to maintain an accurate database of prospects (See Database Management White Paper). This can be done with one of several inexpensive, off the shelf, contact management programs such as ACT!, Goldmine, Microsoft Outlook, or others.

The Purchasing Process 
I'm constantly amazed at how many people have attempted a direct marketing program without doing the slightest bit of research. How are your competitors selling your product or service? Is it typically purchased at a retail location? Does the customer typically negotiate price? How many stores do customers typically visit before purchasing the product or service? Answers to these questions are absolutely crucial in determining whether you're going to make money or lose money on your direct marketing program.

Results 
Evaluation of your direct marketing program should not be based on the number of sales or even the percentage response. It should be based on your return on investment. Return on investment is simply calculated by taking the total cost of the project (which should include cost of design, layout, printing the mail piece, postage, letter shop, any costs incurred by the mail house, telemarketing costs, even your time) and dividing this by the total profit generated as a result of the direct marketing efforts.

For example, if the total cost for direct marketing program is $5000 and profit is $1000, your return on investment would be 20% (1000 divided by 5000). Often times it will take two or three mail drops or telemarketing campaigns in order to generate profit from a particular list or geographic market segment. Typically the first drop and the first telemarketing campaign will generate zero return on investment, perhaps even a slight loss. The second and third attempts however should generate 25 to 50% return on investment. Successful long-term direct marketing programs can typically produce upwards of 200 to 300% return on investment. This often requires testing several solutions (See Testing White paper).

Controlling Cost 
The best way to the control cost of a direct mail program is to figure out what all of your costs will be and how many products you need to sell in order to achieve a specified return on investment. We call this the R.O.I. Pro-forma. This evaluative tool should be used PRIOR to the mailing to help determine how much to mail, how much to test, and how much to spend on the package and postage. By setting this budget you can predict the profit or loss at every point on the response curve. (We have many examples of these ROI Pro-formas that we can share with our members).

There are many other tricks of the trade in controlling costs with regards to direct marketing. For example, ever wonder if the mail house dropped ALL of your mail? Be sure to request U.S. Postal Service Form 3602-R Postage Statement. This is the standard form used by mail houses when delivering mail to the post office.

Another way to control costs is by getting the best deal on printing. Most customers have the mail house print their mailing material. It is best to contract with a printing company that is close to the mail house to print up your envelopes, carriers, letters, and brochures. They can then deliver them to the mail house, instead of having the mail house print this material. Since the printer specializes in printing they can provide the service at a lower cost than mail house. Your savings can be rather significant by doing it this way.

Cool Business Cards

What’s the most under-utilized of all marketing devices? Few people get this one…. Business Cards! 

Think about it. When someone is even remotely interested in your company, product or service, what is the first thing they ask for? That’s right, your business card. 

Often time, the impression a card makes on the receiver sets the stage for WHO the prospect believes you are. In fact, the prospect will many times categorize you based upon the type of business card you have. Are you a large company or small, conservative or liberal, arrow-straight or creative, high-priced or discount? It’s all on the face of the card! 

I thought I’d take a moment to share with our Business Update readers some of the things we covered at our “Attract More Business Workshop” last week. By the way, thanks to everyone who attended. We had a fabulous day working on improving our marketing skills. Everyone left with a specific action plan and I have heard from some of some participants who have already begun to reap the rewards of their new marketing initiatives. Congratulations to all. 

I have shown a few business cards below that follow the rules that we discussed in the seminar:
1. Become a bigger fish in a smaller pond – narrow your market by showing how you are more important to a smaller group of people
2. The problem is more important than the solution – customers are not interested in us they are more concerned about their problems
3. People don’t like to read so let design and color speak - Design the ad first using a single, compelling image
4. Don’t become a better solution become the only solution – Use powerful headline that expresses you exclusivity

This is a card developed by my associate Tom Vickers. Tom is an A and R man (that is, he is the Artist Relations person for music acts) In fact, Tom does work for ZZ Top, Brian Auger and other Classic Rock and Rollers. They remember him because his card is “literally” a beer coaster. And we all know that rockers MUST drink!

Max Parker, owner of the Dogs of Design is a designer and he has narrowed his market so that he specifically works with industrial and automotive product manufacturers. You will not forget his card nor mistake it when he hands it to you. You see, Max’s business card is made out of metal. It has all kinds of intricate embossments on it and it gets the point across that Max knows all about industrial fabrication.

There’s nothing more pedestrian than a real estate agent’s business card. They are all the same. Typically, they have a photo of the agent smiling showing off their pearly whites. BORING!! I love Rick Wilkinson's card. It’s all about his best friend… Jake the Irish setter. If you know anything about the market today, you know that it’s not easy finding a home let alone finding a great home. Well I kind of like the idea of Jake sniffing them out for me.

Business cards are critical in connecting with and communicating to your prospects and customers. Often times we are completely unaware of how our business cards have served us even in silence. 

We can accomplish great feats of networking with the right message on a business card. Our card can make a strong impression or relegate us to obscurity in the mind of the receiver.

If you would like to increase the effectiveness of your marketing, I am happy to tell you that you don’t have to spend a fortune on advertising or hire some self-proclaimed guru. You can do it yourself. That’s what our Attract More Business workshops and programs are all about.

In fact, I will be doing another full day workshop I Long Beach, CA in September. If you are interested let me know by registering here or emailing me at mark@markdeo.com. 

In addition, my Attract More Business program is now available with 9 CDs and the 150 page color manual. Check it out here.

Choosing the Right Media

I'll never forget when I was a fledgling Marketing Manager with Walker International, a top consulting firm. It was my first major presentation to the board of directors. 

"It's a HOPE business," our CEO bellowed in my direction. "You HOPE someone sees your ad, you HOPE they call you and then you HOPE they buy something." Cocky New Jersey Italian that I was (or am, I should say), I was REALLY afraid to give my presentation at that point. Here I was preparing to wax eloquent on the virtues of why our company should start advertising. A 28 year old junior executive in a billion dollar conglomerate about to take on the CEO at changing one of his long-held principles - NO TRADITIONAL ADVERTISING!

 

Tired of reading already? Click here- LISTEN TO THIS ARTICLE.

 

Well I lost that battle but learned a far more valuable lesson. Traditional advertising is not a viable long term marketing strategy. 

We all need to employ some kind of media to get the word out about our company. Yet selecting the most effective media can be a daunting task for most entrepreneurs. Marketing budget dollars are limited and every penny counts. Today the number of media choices through which we can market our company, products or services is staggering. It is difficult to know with any certainty which media will produce the best results. 

The Targeted Media Conundrum
It follows that the most targeted media happens to be the lowest reach media and the lowest cost media. This presents an opportunity and a challenge. The fact that the cost is low gives us the opportunity to test various different messages for a very small investment. Yet since the reach is small, that is the actual number of readers, viewers, listeners or visitors is smaller than broad media it greatly lessens the number of opportunities to create enough impressions and ostensibly enough response to pay for the media. This is the biggest challenge with targeted media.

Targeted Media Solution
So how can we create a successful targeted media campaign? While the audience is, admittedly, far smaller, they participate (read, listen, view, visit, etc) with far greater interest and intensity. On top of that the cost per impression or cost per audience member is far smaller than broad media. 

Example
Suppose you’re promoting a chain of cool new coffee shops in the LA area. You place a small three and one half inch square ad in the LA Times (actually this would be a 7 column inch ad because it is 2 columns wide by 3 ½” deep). This costs about $2,400 to run ONE TIME on any given Sunday. The good news is that you will reach 750,000 people yet your ad will be sandwiched in between a car dealer, a bank, an electronics retailer and an auto mechanic. And that’s if you’re lucky. If you’re like most, they’ll put your most powerful competitor, Starbucks or Pete’s right next to you! Now how many of those 750,000 will even NOTICE your ad let alone read it? - maybe 1%? That’s 7500 people. How many will read it? Let me be kind and say 5% - we’re down to 375 people. Now how many will visit your stores? Let’s say you’ve perfected the art of creative ad development and your ad knocks them dead with another 5% response - you have generated 18 potential visitors at a cost of $133 each. Could you EVER sell $133 worth of coffee to each of them? I don’t think so. Think my response numbers are too low? Double them. Triple them! You’re still losing your shirt. 

Find the Media that Appeals to the Sneezers
Now instead, let’s say you discover by completing your target profile that your best customers are workers from the large office complexes within a few blocks of your stores. You place ads in each of their company newsletters, on their bulletin boards and on their company intranets. All this costs you less than $600 and exposes you to 10,000 people. What’s better you’re the ONLY coffee shop and your ads have top billing. Instead of running ads for one day they run for a month or longer. 

Now because you have no visual competition, more like 20% notice your ads for 2,000 people. Because you are very close to them, the ad is relevant and has credibility and more like 30% read it for 600 people. Finally 10% take action for 60 visitors at a cost of $10 each. Starting to make sense? 

The best part though is that every visitor has a high intent to tell 2 or 3 other people about you. In all likelihood they will bring their associates. In fact they have an even higher capacity to become loyalists and make your shop their first stop before going to the office. The trick is reaching enough people at a low unit cost with a memorable, relevant and compelling message that motivates them to take action.

How to Increase Media Effectiveness

• Find the media that most closely addresses your target audience.

• Become the most dominant advertiser in the media.

• Eliminate any visual or auditory competition.

• Make a long term commitment to the media.

• Aim to reach the sneezers.

• Appeal to the loyalists.

• Back into your targeted cost per customer.

Attributes of highly targeted media

• Creates greater influence

• Communicates with more sneezers

• Allows you a bigger share of voice

• Costs less than broad media

• Lends itself to a message that educates and inspires

Just as with preparing our marketing message, the traditional approach; "using a media that sells as many people as possible on WHY we are the best choice," simply doesn't work. Instead we must look for media that exclusively and credibly addresses the most selective audience possible. In fact, contrary to popular belief, the smaller the audience, the better. By using highly targeted media we are able to reach the most influential prospects and to do so in a way that is valuable credible and memorable.

Cable TV Advertising

Cable and satellite TV is switching to the new digital technology. With the merger of Time Warner and AOL and the completion of new digital subscriber lines nationwide, television will never be the same.

Because of the added bandwidth, consumers will be able to interact with their TV's like never before. Within a year, cable TV systems in major cities will be offering more than 100 channels. In two years cable systems will jump to 500 channels! What will this mean for small and home-based businesses wanting to advertise on TV? They'll be able to do it. Advertise as much as they want, at unheard of low prices.

When asked who would be on TV next year, one media expert replied, "Everybody!" Watch for small bedroom TV studios to start popping up everywhere. People will be producing TV shows and commercials with some of the small, cheap cameras and editors now available. One man asked me if there would be a place for Multi-Level-Marketing in cable TV's future. You bet. I would imagine that major network marketing groups will have their own channels, complete with commercials, information, and seminars for their down line folks.

Do you have a specialty that would make a good cable show? Keep your ears to the ground for cable TV changes happening in your community. TV will no longer be only for the big boys with deep pockets, but for all of us to use, profit from, and enjoy.

Some of our suggestions when it comes to television advertising:

Target your market. Make sure that you know who your viewers will be. That means researching demographics, psychographics, and viewing habits.

Hire a professional broadcast production group rather than settle for what the local cable provider deems ACCEPTABLE.

Make sure that you clearly explain the product or service that you are providing in the first 10 seconds and follow-up with applications, testimonies and a call to action.

Tell your viewer how they can buy your product or service.
Offer a guarantee

Maintain a 24 hour incoming hotline so hat people can order your product or service or at least schedule a free consultation with you if you are a professional.

If you're interested in find out more about cable TV opportunities, contact us for examples of infomercials, and 30 second and 60 second TV commercials that have already achieved results for clients nationally.

Build Your Reputation

One of the most important assets a company has is its reputation. A firm with an above average reputation can achieve and sustain an above average return on assets...

A good reputation pays off in a number of ways. It can:

Add to the psychological value of products and services in terms of customer trust - when it is difficult to quantify the quality of a service, consumers rate the company with a good reputation higher than those with a poor reputation.
Increase employee job satisfaction - good company reputations have the knock-on effect of increasing the degree of employee job satisfaction.
Provide access to better quality employees when recruiting - after all, most people would rather work for a respected company than one with a shoddy reputation.
Support new product introductions by reducing the risk perceived in the eyes of customers.
Act as a powerful signal to your competitors. For example, companies gain a reputation by how they react to the actions of competitors.
Provide access to the best professional service providers - to boost their own reputations, the best retailers seek to stock the products of the best manufacturers.
Allow a second chance following a crisis. For example, thanks to its reputation, the market share of Arnott's Biscuits bounced back despite the product tampering crisis earlier this year.

Poor reputations on the other hand can be dangerous to business health:
Many bosses claim that bank managers don't like their company and overestimate its commercial risk. A lackluster reputation is often the cause.
Journalists tend to scrutinize companies with a poor reputation and remind readers of a history the company may prefer was forgotten even when a story is upbeat.
Customers are more anxious and price sensitive about products and services from less well-respected companies; poor (external) reputations tend to breed poor employee morale and so lead to the possibility of industrial dispute.
So there are good reasons, both operational and financial, for managers to enhance the reputations people hold of their companies.

Building blocks of image

What do we want to stand for? The answer to this question lies in three issues. The first involves analyzing what the product offers to customers and then communicating why it is unique and what it can deliver.

For example, the Swatch watch company hangs its image on providing "fashion that ticks", the Department Education is in the business of providing "education for life" (life skills and skills for the rest of your life) and computer giant Apple focuses on making personal computers which allow people to enhance their skills, captured in the famous slogan "the power to be your best".

Being able to clearly and succinctly distill the essence of your offer to customers is important. However, it is equally important to state exactly what it is you offer to employees - the second issue. Employees, like customers, listen to WII-FM radio - "what's in it for me?". Your organization's formal policies (performance appraisal scheme, pay levels, work practices), organizational culture (informal practices, fun and work rituals) and expectations (rewards for past behavior, vision statement) combine to form the package you offer to employees.

The third part of the question of company image involves ethical contribution. US editor Daniel Gross believes "the ethical heart of business is service to others". A good example of this is US-based chain Wal-Mart discount department stores. Wal-Mart founder Sam Walton offers low paid rural Americans more choice and quality for less cost than ever before. Do customers want this? Yes. Are employees proud to provide this service? Yes. Does the community value it? Yes. Can competitors easily match it? No.

Generally, the companies with the best reputations offer the best value (benefits minus the cost) to their internal and external stakeholders - it's that simple.

What drives corporate reputation?

There are two sets of factors which combine to create the reputation an organizations projects. But only one set is under the direct control of managers and can be considered as levers to engineer change. The other acts either as a constraint on or opportunity for achievement. The controllable factors are: vision; organizational culture; strategy; formal policies; products and services; employees; and advertising and promotion.

The uncontrollable factors are: competitors' actions and reputations; country and industry images; and media attitudes towards your industry and organization.

Many companies have a weak foundation from which to build a good corporate reputation because there is a poor match between their vision, strategy, organizational culture and formal policies. Human resource people sum up this problem in the saying "people do what is inspected, in preference to what is expected". For example, if your appraisal scheme for employee performance rewards cost-cutting and your vision statement applauds customer service, employees will always give cost-cutting preference, regardless of how important customer service is to a good image. And in such cases a policy rethink is inevitable.

A company's product and its promotion are also key drivers of corporate reputation. Both customers and employees are equally interested in the value of what is offered. This is especially true for advertising, where employees are increasingly being labeled as advertising's "second audience".

If we focus on customers, then at least four factors drive the perception of a company's reputation: the perceived value of the offering; customer perceptions of employees (for example, are they customer focused); what other people and the media say about the company; and whether the company is part of a respected industry, a factor which includes the reputations of its competitors. Research suggests the most important of these factors is the perceived value of your products and services.

Stamp out stupid practices

Nearly every company has some practices which needlessly upset customers and employees. Some classics include: using lawyers to talk to valued customers. For example, the application forms for both Qantas and Ansett's frequent-flyer schemes contain some heavy-handed terms and conditions. These leave the impression that the airlines don't trust their most valuable customers;
for the last few holiday periods, petrol companies have raised the price of a liter of petrol by up to five cents. And during any week the pump price may vary by over five cents per liter. This doesn't instill customer confidence in the petrol companies' pricing policies.

In the scramble to attract customers and employees, some companies offer newcomers a better deal than that received by existing, loyal employees and customers, with the obvious effect on morale. The point is that stakeholders quickly loose confidence in a company they think is either wasteful, greedy or stupid, or which they think discriminates among similar types of people, has power over them or simply doesn't trust them. The only way to identify these detrimental practices is to periodically sound the opinion of each group of important stakeholders.

Communicating stance with internal and external stakeholders

A critical element of a corporate reputation is positioning the company to stand for something important, deliverable and unique. Most companies fail the unique part. When this happens, both customers and employees tend to focus on price. If a company's offer is not significantly different from others, then why shouldn't customers buy the cheapest and employees be more concerned about wages?

The advertising slogans companies use and sometimes their name are often used to communicate their positioning:

3M - "innovation"

Ford - "a better idea"

Sharp - "sharp minds, sharp products"

Charmin - "squeezably soft"

And some slogans work as well with employees as customers. For example, while Nike's "just do it" campaign urges customers to buy the product and not be a couch potato, it promotes employees to be proactive.

Branding

"One of the most important assets any organization has is its reputation."

What does your company stand for? What do people think of when they think of your business, product or service? What do they think of when they think of you? When people think of Apple Computers, they: "Think Different." When they see Charmin, they think: "Squeezably Soft." BMW is, "The Ultimate Driving Machine." Pepsi is the "New Generation" and so on.

Entrepreneurs and small business owners can also differentiate themselves with this kind of branding strategy. In fact it is even MORE important for smaller organizations to set themselves apart. Particularly if they are competing with the BIG GUYS! Remember, your customer's perceptions of WHO you are is all the matters to them. Who you really are is quite meaningless!

Often times your reputation is wrapped up in what advertising guru, Bill Bernbach called the "unique selling proposition." What sets you apart from the crowd? What do you do that no one else does? For me it's "Providing answers for your small business."

How can I back that up?
We hold Small Biz seminars and classes in marketing for entrepreneurs and business owners.
Every Monday night I teach the Dales Carnegie Sales Advantage Class in Long Beach.
Marketingquestions.com (our web site) has over 300 pages of articles for the entrepreneur and small business owner.
I do a weekly radio show that focuses on educating small business owners.
We offer a free small business success manual that provides answers to small business challenges.
We email our "Small Biz Update" to over 1000 subscribers every month.
We provide answers to our clients and members in the form of coaching and consulting sessions
We consistently communicate our unique claim and branding message in every promotional message employed. It is in our web site, in our brochure, on our business cards and even in the conversations we have with people. I don't know anyone that offers the same combination of services that wrap around providing "answers for small business owners."

Now remember, this is not a Mark Deo commercial. The purpose of my yammering on about how spiffy I am (NOT!) is merely to demonstrate how YOU can develop your own branding message and unique selling proposition.

THINK..... How are you different? What is unique about your company, product or service? What do you do to support that uniqueness? How can you consistently communicate that branding strategy?

If you're interested in learning more about reputation, branding and the unique selling proposition go to the web site at www.sbanetwork.org.

Welcome to Paradise: Now Go Home

Imagine you are in a beautiful sun-drenched corner of the globe, thousands of miles from the rush of your home in Los Angeles. You’re blood pressure has dropped, your respiration is lower and you are downright RELAXED. This is paradise. You are spending your last few hours on a deserted beach enjoying the sun and tropical breezes. But your wonderful getaway is coming to an end. You head back with plenty of time to finish packing and vacate the room WELL before the check-out time.

What do find when you get there? Housekeeping getting ready for a new guest, and to your horror, all of your bags and EVERYTHING in your room… GONE!

Did someone steal them? Are they with the porter? Did your credit card bounce? None of the above. Actually the hotel decided to pack your bags, remove them from your room and send them to a place you AREN’T going. Hey it’s an honest mistake! Try to be understanding. It happens. What’s worse however is that you are standing with just a wet bathing suit in a foreign country, with your family’s passports, flight confirmations, all of your clothes, money, checks, credit cards even your toothbrush in your bags. And who knows where they are. Add to this, the fact that your flight leaves in a little more than two hours. What do you do?

No problem. You’re staying in a world class, six star resort. It is a member of the prestigious, “Leading Hotels of the World.” One call and they will spring into action recovering your bags and deliver them to your room like magic. After all that’s how your stay has been up until now: the entire staff was friendly anticipating your needs, every amenity at your fingertips, sumptuous meals, perfectly planned excursions, lush tropical environment, wonderful entertainment, fabulous pool and beach activities. But things are about to change.

You ask the staff at the front desk where the bags are stored. No idea. Who retrieved them from your room? No idea. How do we find out? Have a seat, we’re working on it. After 20 minutes of waiting, they still want you to sit and now you’re fit to be tied! Time was running out. You speak to several of the staff who tell you that it‘s normal course for the luggage to be packed and removed from rooms in order to get them ready for the next guest. Please don’t be offended. What?!

Obviously as you can guess by now, this circumstance happened to me. What was most distressing was not that they packed and removed our bags from the room but the way everyone acted like it was no big deal. It seemed like the staff was more upset than the managers. Yet no one was willing to take responsibility for being overly aggressive about clearing rooms for new guests. I expected this from the employees but not management. All the General Manager told me was that he would find out who did this and heads would roll. Yet I do not blame the porters, housekeepers, and supervisor who made the decision. I blame management! And I told him so. Of course he didn’t like this very much.

I suppose he was too embarrassed to confess that this was an occasional result of clearing rooms too fast. Yet if you think about this from a management standpoint it does make sense. It costs lots of money to keep an army of housekeepers ready to clean a room at a moments notice. Let’s face it, this is cost control issue. We all have them. But isn’t this cost control gone awry?

We are living in competitive times; every industry is facing price erosion and increased employee turnover. Customers just aren’t as loyal as they once were. When we place pressure on our staff to control costs, increase sales or create more output regardless of the consequences, this is the result we create.

I later found out that management, over the last few weeks has been harping on the staff to clear guest rooms faster. This particular resort, and believe me it is a remarkably beautiful and exquisite place, has recently been purchased and is under new management. Management that is clearly being compensated and evaluated based upon occupancy percentages.

What’s most ironic about this story is that as one of the most exclusive resorts in the world they have escaped the barriers that plague the competition: price erosion, lack of loyalty and escalating employee turnover yet they are still acting like a commodity-driven business! By changing their business model in favor of a commodity-based or volume concentric philosophy, they are investing more in advertising, turning over more guests yet running headlong into a the classical problems loyalty, turnover and eventual erosion. It’s like running from the oasis into the desert to find more water!

In the end, everything turned-out alright. Our bags were found at the airport on the mainland. They were sent by helicopter back to us on our private little island (which must have cost the hotel a pretty penny. I’d bet a lot more than they would pay to an extra housekeeper for the day.) Apologies were made and accepted and we made our flight on time (just barely).

The lesson here is that as managers we sometimes can push our people very hard to accomplish specific goals. This is certainly acceptable but not without consequences. Employees tend to want to please their managers and they might take license or go a bit overboard with unfortunate results.

Organizations that have installed a culture of empowerment among their staff tend to have far better results. Rather than blindly driving hard to meet that sales goal, or profitability percentile, or production number we should encourage, support and inspire team members to think for themselves. Operating with this kind of trust creates an environment where profitability can coexist with higher performance and superior customer service. It is the difference between leadership and merely management.

No Soup For You

Remember the classic Seinfeld episode with the "Soup Nazi"? He ran a soup shop that sold amazing soups, and if you didn't order exactly the way he wanted, he would simply say, "No soup for you," and you were banned from his shop. That's not exactly the type of personalized service we usually recommend.

We write often about personalizing your business. It's right in the Rules of Attraction, "Who you are is more important than what you do." With today's fast-paced business landscape, a personal connection is critical in appealing to potential customers. You can often dramatically increase your profitability byadding a personal touch. Customers and clients gladly pay more for personalized service, even if you're in a commodity business...most of the time.

We recently participated in the C-Suite Briefing with Morrie Shechtman of Fifth Wave Leadership. The event was videotaped, and we put together a DVD with the presentations of Mark Deo and Morrie Shechtman. In looking for a duplication company to make copies of this DVD, I found that most had tiered pricing models, plenty of options, and value added services that were included. Most companies I'd need to call and discuss all these options just to get a quote on my project. I'm savvy enough with media duplication to where I not only didn't need these features, I didn't want them. Personal service in this instance was more of a hassle for me than a convenience.

Enter Kunaki.com. This site offers media duplication, though not the way most companies do. You have two options- CDs or DVDs. That's it. There's no selection of pages on inserts, no slim line vs. standard cases, no custom cover design. There's also no customer service, and no phone number you can call. They even state on their website, "Kunaki does not wish to be viewed as a company. Kunaki prefers to be viewed as a machine." Even their pricing model reflects this- you pay a flat fee per disc that is the same regardless of the number of discs you order. You can order just one disc, a few, or even hundreds and pay the same price.

In this case, de-personalizing the business is exactly what appealed to me. I downloaded their software, designed my case and disc label to their specifications, and placed my order. It took LESS time for me to do this than to deal with a designer, or even review the choices that other companies have to offer. I found the Soup Nazi of DVD duplication. If I didn't want to order the way they liked, well, no DVDs for me.

I plan on using Kunaki for any client projects that requires media duplication. In fact, according to their website I believe we're already business partners. "Prospective business partners can use Kunaki as they would use any machine. If your planned activities makes sense to you, Kunaki suggests you simply do it. Kunaki is not actively interested in your plans and activities."

Like everything in life, there are no rules that work 100% of the time. If you're dealing with a customer base that ONLY looks at price, and isn't concerned about lots of choice in your products, de-personalizing your business can help you get an advantage over your competitors, while dramatically cutting costs.

This Business Update was written by SBA Network Business Advisor Matt Walker- for more information, please contact him at mwalker@sbanetwork.org. If you're interested in seeing the C-Suite Briefing and weren't able to attend, send Matt an e-mail for details on how to get a DVD of the event.

Lessons From Brendal

I am sorry that has been so long since the Business Update. Although we continue to get emails from our dedicated blog readers and visitors to our site, it's been a few weeks since our last article. The reason for this is that we recently returned from a trip to the Bahamas (yes, even I take vacations). First let me say that we are darn lucky that Katrina missed us while we were there. In fact we spent the majority of our time on a boat cruising between islands and I can't tell you how devastating it would have been if the hurricane decided to slam into the Abaco Cays where we were sailing. 

While we rented our own boat for the week, I thought it might be a good idea to go out on our first day with a local guide so we could see the islands and learn about the best areas. So prior to leaving I did a little research. I scoured the Internet to find out who knew the islands well and who could take us out on a private trip to visit the best dive sites and reefs for snorkeling. 

The name "Brendal" kept coming up. I made some calls to property owners in the area and still I was told that Brendal was really the only person that could help us. Now I know there is a market leader in every business, but this was ridiculous. There must be another option besides this "Brendal?" Apparently he had created such a high degree of attraction that in the Abaco islands he was not just another option he was the ONLY solution. 

We contacted Brendal's Dive Center (http://www.brendal.com/brendal/adventures.shtml) and found that this was quite an operation. Interestingly enough not only was Brendal just about the ONLY dive center among the islands, he was also a master chef and had been featured on the Discovery Channel, Emeril Live, the CNN Travel Show, Ming's Quest and other shows for his adventure specialty trips. 
The day of our trip with Brendal came and off we went to Green Turtle Island and met him for the first time. Now Brendal is an interesting guy. He is 55 years old but you would swear he was a 40 year-old bodybuilder and when he talks about his beloved islands his entire countenance changes. His face lights-up and he speaks with exuberance and enthusiasm. When we asked what he had in mind he told us it was going to be a long day filled with a lot of adventures. We thought to ourselves, "OK, whatever" but little did we know what we were in for. Now I have been on dive and snorkeling trips all over the world from Hawaii to Fiji to the Great Barrier Reef in Australia so I was going to be hard to impress. 
The first thing Brendal did was take us to what looked like a dead coral reef and set the boat to slowly troll. Then he threw out two tethered live preservers and told us to grab our masks and watch him. With that he jumped off the boat and disappeared under the water. Now you've got to picture this. Here we are in the middle of the ocean and the dive master leaves the boat running and does a "man overboard!" What choice did we have? So we get in the water and watch Brendal dive down 40 feet with NO TANK and in no more than 5 minutes he had retrieved four huge conches and two lobsters. It was almost like he planted them there but that would be inconceivable. 

Following this Brendal said we were going to visit with some sharks that he was friends with. When I asked how he would spot them? He said he would drive the boat with his foot and look carefully by standing on the roof! And he did just that! 
We also visited some of the most beautiful coral reefs I've ever seen, explored a sunken pirate ship, swam with a family of Bottlenose Dolphin and ended the day with Brendal taking us to deserted island in the middle of ocean where he opened the conch and prepared a cheviche that was unbelievably delicious right on the back of the boat! As we sat in three feet of water eating the chiviche and drinking rum punch he said let me introduce you to my garbage disposal. He threw the conch scraps into the water and up swam a family of gigantic manta rays, each of which had a name. We fed them as they swam around us and then Brendal rough-housed with them like they were his pet German Shepherds! 
Now the purpose of my story is not to brag about my vacation or even to pitch Brendal's services. It is to demonstrate that Brendal, through his passion, has managed to use successfully several rules of attraction to build his business. First he has literally become the biggest fish in the smallest pond, he has positioned himself as an exclusive solution and he has learned that winning heart share is far more important than mind or market share.

Think about what you can do to create passion in your business. What are some ways that you can become an exclusive solution to your specific market? And finally how can you win greater share of heart from you prospects and customers? I believe that these principles can be applied to ANY type of business. This is why I am again, by popular demand, holding another Attract More Business Workshop. At this full-day workshop you will learn how to apply the rules of attraction specifically to your business. We will be working on branding, viral marketing, creating effective buzz, targeting, headline development, Internet strategies and secrets of producing double-digit direct mail response. For more information go to http://www.sbanetwork.org/classes/upcoming_classes.asp to sign-up and download our workshop brochure.

Leave Me Alone

Remember the scene in Kubrick’s “A Clockwork Orange” when they strapped Malcolm McDowell into the theater seat, pried his eyes open and forced him to watch violent, sexual scenes in an attempt to destroy his craving for such things?

Well that’s exactly how I felt when flying from Sydney to LA recently. Here I was strapped into seat for 14 hours, forced to look at the commercials and ads for Quantas and their advertising partners. Now since I am a marketing guy, traveling to Australia to speak to hundreds of people about marketing I thought this would be a great chance to do a little “research.” Well not only were the number of ads overdone but they were horribly unremarkable in their context. I mean BORING!

Now don’t get me wrong. I’m not saying that the Aussie ads were bad. In fact most of the advertising was for American companies and they stunk. Badly.

How many of feel that sometimes the level of advertising is just too much?

Look at all those hands going up. 

If you’re like most when you get tired of seeing advertising you just “look away.” If it’s a TV or radio commercial we can change the channel. If it’s a print ad or direct mailer we can turn the page or toss it in the trash. But what if you’re a captive audience at 38,000 feet traveling at 600 miles per hour with nowhere to turn for 14 straight hours?

The airline installs these monitors in the back of every head rest so no matter where you turn it’s in your face. You can’t even turn it off because as soon as you do the screen saver pops on and you have to look at what amounts to a PowerPoint display of ads. So I came up with a solution. I’d put the barf bag over the screen. Great idea, right? Well get this; Quantas, not wanting to lose the opportunity to turn us off with yet more bad ads, even sells advertising on the barf bag! By the way this was also true in Business Class!

Let me ask you, do you think I remember the great service on Quantas? (By the way they wait on you hand and foot.)
Sorry, NO!

Do you think I will remember the great deal? (Less than $1200 per person non-stop!)
NO way!

How about the timely departure and landing? (We arrived early BOTH in LA and Sydney!) 
Wrong again. 

What I will remember for a long time to come is the constant assault of those unremarkable ads. It’s funny I can’t remember the ads just the fact that I had to work so hard to get away from them.

There are a number of lessons you can gain from this story:

1. If possible, fly first class on a transcontinental flight.

2. Always keep your barf bag handy, you never know what you might need it for.

3. Now you know why that little Koala always said, “I hate Quantas.”

4. When you create your advertising make sure it’s interesting, remarkable and appropriately delivered. Or you may be spending advertising dollars to drive away customers.

Hey Quantas, I hope you made enough money from all that advertising to make-up for all the customers you’re chasing away. I guess even big airlines need to learn to stop chasing and start attracting.

Have a great week.

Mark Deo

PS: Check out www.attractmorebusiness.com for more about how to create marketing that works for you, not against you!

Giving Customers Away

No one can take your customers from you. Not with a cheaper price. Not with better service. Not with better processes. Not even with more innovative products. 

You must first give them away. 

The first step in giving away customers is simply NOT communicating with them. Not asking them about the value of your product or service. As entrepreneurs and small business owners, it is important that we constantly encourage our customers to feel as though they can speak openly about experiences with our products and services. For me, the most exciting part of this process is discovering some possible dissatisfaction. This is what I like to call the "blind spot" of customer satisfaction. Let's face it, no one wants to tell us we're doing a mediocre job. This is a conversation both client and merchant want to avoid at all costs. As a result, customers often defect for unknown reasons. Or their defection is chalked up to that all encompassing "price" issue. The reality is that most customers defect because there is one or more service issues with which they are unhappy. When we can get our customers to share these service issues, we have a fabulous opportunity to create breakthrough innovation. 

I heard a funny story a while back. I don't know where it originated but it illustrates a powerful point about client communication:

A boy walks into a store and asks to use the phone. He then calls one of his neighbors. 
"I wanted to know if I could cut your lawn," he says. 
"No thanks, I already have someone that cuts my lawn," the man replies.
"I'll get all the grass clippings and sweep up real good."
"Well, I appreciate that young man, but I really am happy with the boy that is doing it now," says the neighbor. 
"Whatever you're paying, I'll cut it in half. Now can I cut your grass?"
"The young fellow I have now does a great job; thanks anyway. Okay, bye now." And they hang up.

The storeowner has been listening to the boy on the phone. "All that and you still didn't get the business, huh?"
"Oh, no," says the boy, "He's already my customer. I was just making sure he's happy."

Perhaps this method of ensuring customer satisfaction might be taking things a bit too far, but isn't better to understand what may need to improves rather than wondering what went wrong after customers defect?

I have talked about the importance of finding out the customer's perceptions. In fact, I have gone so far to say that reality is far less important than the perception of the customer. What can we do to obtain accurate, relevant customer feedback on a continuing basis?

I have listed some of the things that can be implemented by nearly any small business. Simply putting one or two of these strategies in place will automatically thrust you into the top 10% of companies focused on customer satisfaction. While these are reliable, proven methods, the sad fact is that few organizations, large or small, ever implement client communication programs:

Surveys
Structured questionnaires (with an incentive such as a prize or drawing) encourage feedback from customers. They can be analyzed and measured and the ensuing follow-up will surely make customers feel more valued. The incentives don't have to be exotic. Free movie passes, gift certificates or some type of convenience item usually work well. I do not recommend discounts or free trial services. This encourages customers to tell you that all is well simply to earn the prize rather than identify where things may need to improve. Make the survey brief. Include no more than five questions, preferably with multiple-choice answers. Perhaps the final question can be open-ended allowing customers a chance to put it in their own words. Also, do not make the survey a selling opportunity. This is not about YOU; it's about THEM!

Encourage Complaints
Complaints are particularly valuable performance indicators. If you do not receive many complaints do not assume that customers are satisfied with your business. Statistics show that most dissatisfied customers don't contact the business but simply switch to an alternative one. I have heard it said that we should multiply every complaint times a factor of 10 simply because few people like to complain. It is thus important to take seriously the complaints you do receive and address them as necessary. It is critical that complaints are addressed immediately and that relevant feedback is provided to the customer. I recommend sending a letter thanking the customer for making the complaint and outlining how it was handled and what the outcome was.

Rating Systems
Several of our clients have instituted a weekly or monthly rating system. This involves a simple telephone call or email to the key customer contact. They are asked to rate the service by giving an "A" for excellent (far better than any competitor), "B" for good (a little better than the competition), "C" for average (about the same as the competition) and "D" for poor (some things need improvement). We have made a specific person responsible for conducting this "Rating System." If the customer rates the service less than an "A" they receive a call from the appropriate department manager. This helps to ensure honesty and eliminates a bad grade simply because the customer might be having a "bad day." If a customer does give us an "A", we ask: "if there were one thing that you could change about our company, product, or service what would it be?" This primes the pump. It assumes the current offerings are not sufficient. It is amazing how many people give us "A's" yet would like something to change.

Mystery Shopping 
Mystery shopping is a revealing exercise. Put yourself in the customers' shoes (or pay somebody to do it for you) by calling your business, visiting your website, requesting literature, and seeing how well your organization responds. Do they follow the established processes? How long did it take to find the information you requested? How easy was it to buy the product or service? Were questions answered in a timely and polite manner? What impression did you come away with? It's also valuable to use mystery shopping to compare your customer service standards with those of your competitors.

Finally let me invite all of you to give us some feedback on our Weekly Business Update column. While you may not be investing dollars in our Update, you are investing your time. Please help us to make the Update even more valuable to you personally! It will take you no more than 90 seconds to complete the four multiple-choice questions. Everyone that does will receive my 10 minute Audio Lesson on "Why Most Marketing Fails" (and the 3 simple things that you can do to avoid it.) Get the "Why Most Marketing Fails" audio now!

Focusing on the Outcome

Sometimes I think we are kidding ourselves. 

We think we know what the customer wants or needs just become they have told us so. That seems reasonable, doesn’t it? But let me ask you this – how many times have you been told something only so find out that it wasn’t really true, or that you simply “misunderstood?” More often than not, if you’re like most.

Let’s face it, customers often do not know what they need or even want. Even the most sophisticated clients often have gross misunderstandings when it comes to their specific product or service needs. So why do we focus so much on customer needs and desires?
 

Nearly every sales presentation in every industry is centered on “what the client needs and wants.” It’s not surprising that most sales presentations either are ignored or are a blatant waste of time for both the salesperson as well as the client. Moreover, marketing material is even less effective. How many web sites get passed over? How many brochures are thrown in the trash? How many ads go unread? How many dials are flipped when a TV or radio commercial comes on?  I hate to be negative, but in order to bring about improvement we must discover where we are lacking.

 

In an effort to compensate for this, most ad agencies, marketing companies, and consumer brands go to great lengths to learn as much as they can about customer needs and wants. They hire research firms, hold focus groups and conduct needs-based analysis. In the end however, all they end-up with is a vision of what the customer “thinks” they might need or want under any given set of circumstances. Who can predict what the circumstances of the future may be. Certainly focusing on customer needs is not enough.

The bottom-line is that it is often difficult for clients to describe what they need or want. Often times they simply don’t know. Pride often prevents them from saying so. It is far easier for a client to describe a specific outcome under a given set of circumstances rather than articulate plain needs regarding a product or service. 

My advice is to get your clients to tell you the “outcomes” they are looking for. Spend most of you time talking about what the future should look like rather than how your product or service fits their needs. 

For more information on how you can leverage the Rules of Attraction to gain greater market advantage go to www.attractmorebusiness.com.  

Have a great week!

Customer Revolution

"The Value of Relationships in the New Economy"

There is a revolution going on all around us. It is a "customer revolution." Customers are demanding more than ever before. Successful businesses, large and small, must find ways of satisfying these demands.

In the past it was technology that transformed the marketplace. Today, customers are reshaping businesses and even industries. The value of your present customer relationships will determine the value of your company and it's products and services. The feeling that a customer has when they interact with your brand will determine their loyalty. Together these make up your net worth in the "new customer economy."

In January, 2000, an astounding thing happened. America Online purchased Time Warner for $165 billion. While Time Warner had $28 billion in revenue, America Online had only $5 billion. How do you explain that? Did AOL have better technology? No! Did they have more capital assets? Heck no! With 28 million subscribers, Time Warner's customers were "valued" at $3495 each. On the other hand AOL's customers were valued at $7455 each. More than double!

It is the quality of AOL's customer relationships that drove up the value of the company.

How do you join this revolution? 
Become customer centered in everything you do. Become familiar with what your customers like about their interaction with your company. Find out what frustrates them. Measure what matters to them. Give customers what they want, not what you think they want. Look at the world through their eyes.

Here's some specific things you can do to strengthen your customer relationships and revolutionize your service:

1. If at all possible, allow customers to try your product or service, BEFORE they buy. Today customers insist on freedom of choice. They don't want to make a purchasing mistake. If they are disappointed, they will resent you and tell the world about it. On the other hand if you let them try it out, they will place a far higher value on the relationship.

2. Offer your product or service-based solutions in more affordable, bite-size pieces. This gives customers the ability to experience the benefits without making a large investment or committing to an exclusive relationship.

3. Give them access to real time information like availability, inventories, account balances and purchase history. With the Internet this is easy to do and quite cost effective.

4. Offer various payment options like credit cards, automatic drafts, ACH, and Internet-based payment capabilities.

5. Build a personal relationship with as many of your customers as possible, not just the 20% generating the 80% of your business.

6. Conduct periodic (annual) client reviews. During these you should discuss benefits your company has provided during your relationship with the customer. Outline problems solved, issues for growth, and obstacles hindering progress. Also brainstorm with the customer how you can help them to achieve their goals and overcome their challenges.

7. Don't shy away from making commitments, but deliver what you promise. No questions asked!

8. Establish a unique brand identity and stick to your core strategy. (See our last two Marketing Minute Updates for more information on these)

9. Conduct surveys, perform focus groups and ask plenty of questions.

Creating Value

"Customers are never happy!"

That's what it often seems like. They have very short memories. One day they are praising us for saving their world, the next we might as well not exist.

Sound familiar?

I received a plea for help from one of our loyal readers this week. She described a circumstance where she was doing everything that the customer asked yet they were still unhappy. She said her customer wanted more.

I asked if the customer was receiving value from the relationship. She said they were but they just didn't realize it. I had to think about that for a moment.

Is such a thing possible? Doesn't the customer create the perception of value?

Value, like beauty, is in the eye of the beholder. Let's face it, only our customer can decide whether something is valuable to them. Not you. Not me. Not our company or employees. If a customer perceives something to be valuable, then it is.

Said another way by one of my very own clients, Ian Mitchell from First Capital: "value is created when responsibility is assumed, shifting the burden from client to service provider. All value is lost at any moment when perception of responsibility is altered and related agreements, spoken or unspoken are broken."

If you think about it, responsibility has a lot to do with value. When we as service providers act responsibly by meeting or, better yet, exceeding our customer's expectations, we are creating value. (Hope you feel that WE are creating value for you Ian.)

But the question remains, are we creating enough value for our clients? In today's new economy, unless you are creating value every single time you're with a customer, you're vulnerable to being replaced by another supplier or professional.

That's a pretty strong statement to make, but it's the most important concept for marketers to grasp in this new millennium. Since your success depends on value creation, you must understand exactly what the term "value" means -- and that can be a tough challenge since it's entirely relative.

Here are some things that you can do to increase your chances of creating exceptional value for your clients:

Anticipate their needs.
Even the most proficient, educated and well-informed clients are unaware precisely what they need in order to solve their problems. They may have a good idea but much of their perceived solution is guesswork. When we can help customers anticipate their needs we set ourselves apart. We become more than just solution providers. We become problem identifiers. This is what allows us to be the best possible solution providers at every step of the way.

Be willing to take the burden.
Today customers are looking for business partners that will assume the burden of implementation. Simply selling your product or providing your service just won't cut it anymore. It is our RESPONSIBILITY to ensure that our product or service is implemented correctly by the client. That sounds nice, you may be saying, but how can we ensure that the client will fulfill their role or do their part. There may be variables that are not under our control. Then I say, GET IN CONTROL. As the leader in the relationship it should be our role to always be in control. We can maintain control by taking a leadership position and accepting greater responsibility for implementation.

Know your client's motives.
In today's competitive, information rich environment simply having a better performing product or service is not enough. It's not about just giving our clients WHAT they want anymore. It's more about understanding WHY they want it. This is their motive. By matching our solution to their motives we differentiate ourselves and make our solution personal. How will your product or service change your client's business position or even their life? When we are in touch with this we have incredibly powerful leverage.

Be willing to take a risk.
With leadership comes responsibility. With responsibility comes risk. If you allow your clients to assume all the risk, then you relegate yourself to a commodity. You will be evaluated based on your price and price only. If you join your clients in taking some of the risk they will truly begin to see you as a partner.

In short the marketer that creates the most value will win the client's business and fuse a relationship that will stretch far into the future. Creating value for the client is about anticipating their needs, taking their burden, knowing their motives, and being willing to take a greater risk. This is not the easy path but the most responsible.

Client Loyalty

In this age of e-commerce, information overload and fast-paced communication it seems that loyalty is a rather quaint, old fashioned notion. Nothing can be further from the truth. Loyalty is at the hearty of every customer, employee and stakeholder interest . They place their loyalty in our company when they make a purchase, show up for work or invest their dollars.

According to author Fredrick F. Reichheld, who wrote the bestseller "The Loyalty Effect" the acid test of leadership is to build strong bonds of loyalty with customers, employees and shareholders. Leaders too often confuse profits with purpose. They take the low road to short-term gains at the expense of their partners.

Loyalty leaders TRANSFORM customer, employee and stakeholder loyalty into economic advantages. For example Harley Davidson recovered from near bankruptcy by building loyal relationships with all stakeholders. Southwest Airlines, which has never had a layoff, is the only consistently profitable airline in the United States every year since 1973. Enterprise Rent-a-Car is the largest car rental company in America by living their motto, "Put customers first and employees second."

The key to building loyalty is developing and LIVING to a set of consistent core goals. These encompass six basic principals:

1. Play to win/win
2. Be picky
3. Keep it simple
4. Reward the results
5. Listen hard, talk straight
6. Preach what you practice

1. Play to win/win
Loyalty isn't about frequent flier miles. It is about earning people's trust and enthusiastic commitment to a relationship over the long haul. When partners trust that you have the capability and desire to help build THEIR success, then they will do the same for you and your profits will soar. If you want to deliver superior customer service then you must refuse to be satisfied. Only by helping others to reach for the stars can a leader ensure that their company is taking the high road to success. It is also important that we play WHERE we can win. You cannot afford to waste time and energy with business and customers with which you don't have a legitimate opportunity to do the best work. Get rid of the distractions and focus on your core business. Make a commitment to grow from your position of strength. In 1994, Dell computers was selling directly to consumers as well as through retail chains such as Circuit City and CompUSA. They found however that their customer satisfaction level and profitability with retail based sales was considerably lower than through the direct sales model. The answer was to concentrate on their original model which proved to be brilliant for the company.

2. Be picky
Choose your partners carefully whether they be customers, employees or company stakeholders. Nothing speaks more clearly about your values and principles than your choice of associates and who you promote to positions of authority. Loyalty leaders will be the first to admit that they discriminate - not on the basis of race, religion or gender, but on the basis of capability, performance and attitude. Hire people not so much WHAT they can do but rather for WHO they are. Employee behaviors and attitudes communicate most directly to customers and suppliers just what the company stands for. Be as choosy with your customers as well. Don't lure butterflies, but rather collect barnacles. These are customers who are likely to stick around for a lifetime if they are treated right. Butterflies on the other hand tend to flit off to the sweetest deal of the day. They look nicer than barnacles but I'll take a crusty old barnacle any day.

3. Keep it simple
Complexity is the enemy of speed and flexibility. Like it or not the world today runs at Internet speed. Companies must have the capacity for rapid learning and rapid response. There is a link between loyalty and response time. Companies with a loyal customer base are highly adaptable to market needs and changes. We all know that the only constant is "change." As loyalty leaders we must convince everyone in our organization that the past will never be as good as the future. Those of us that have lived in a small town know that loyalty is very natural. People know each other and treat one another as neighbors. Companies need to think small if they want to build greater loyalty. Build a structure where people can work well in small teams. When a small team accepts ownership of a daunting challenge for change, a wonderful dynamic emerges. Everyone stops worrying about who will get credit or the political factors. They step up and collectively perform.

4. Reward the results
Few organizations, large or small have effective reward or incentive systems. They typically pay based on those variables which can most easily be measured rather than the right results. Are you measuring on the right things? What you decide to measure clearly identifies your values and priorities. You can talk all you want about loyalty and customer satisfaction, but if all of your rewards are based on profit rather than also including loyalty, service and satisfaction then you will paralyze growth. A classic example of poor reward systems exists in the cellular phone business. Most experience enormous customer churn. Yet they continue to abuse loyal customers by offering the best rates, discounts, new technology and free minutes to first-time customers and offer nothing to loyal existing ones. Share economic advantages with loyal customers first.

5. Listen hard, talk straight
Many call this the age of information but as I have said on many occasions on may radio show and in these Marketing Minutes; this is the age of relationships. People are looking for relationships with those that understand them and CARE about them most. If you want to build a business community of enduring relationships you must help everyone in your firm to become more effective communicators. Their most exceptional skill should be at communicating the benefits to constituents and winning them to their way of thinking. Everyone must be willing to LISTEN, LEARN, FOLLOW-THROUGH, EXPLAIN WHY.

6. Preach what you practice
Many have heard the maxim, "practice what you preach," but I like to say loyalty leaders "preach what they practice." Each of us are literally preaching a sermon with the lives that we lead. We can't go quietly about our business and presume our actions simply speak for themselves. We must preach the wisdom of loyalty to all the ranks in our relationship networks. We need to build a repertoire of teachable stories that illuminate the loyalty principals.

I hope this motivates you to develop better loyalty programs for customers, employees and stakeholders in your business.

Beyond Expectations

It’s hard enough to satisfy customers today. Going BEYOND their expectations seems unnecessary and even an unlikely goal. Nearly every industry and profession is becoming more competitive. This is particularly true for many professions such as physicians, attorneys and dentists. Interestingly enough this hasn’t resulted in a higher level of personal service but rather a commoditization of services. The focus has become lower price rather than higher value. I guess I’m showing my age, but I can still remember when doctors made house calls. Today this idea seems ridiculous. But imagine the kind of service and attraction physicians would create if they actually could again perform this service. This would truly be going “far beyond a patients expectations.”

I recently had an experience that demonstrates expectations at work. Just a few days ago I was flossing my teeth and “pop”, off came an old crown. Now this is an inconvenient and perhaps uncomfortable experience for anyone, but for me it was more of a problem because I noticed that the now fully exposed tooth was extremely sensitive to hot and cold making it nearly impossible to eat or drink just about anything. I knew I needed to see a dentist and fast! Worse however, in just a few days I would be sitting on a plane for 14 hours flying to Sydney, Australia! However even with this in mind, my EXPECTATION was that I would have to put everything aside for the next few days and focus on this emergency. That was going to cost a fortune and I would be waiting in a dentist’s office many hours. This is if I was lucky enough to even get an appointment. 

So I called my old friend Mike Schneider. Now Mike is a dentist right here in Manhattan Beach, CA. He has been practicing for over 30 years and has a very well-established patient pool. Being my friend for nearly 20 of those years he has heard me ramble on about the rules of attraction and he has applied many of the strategies that we discuss on this site. When Mike heard of my dilemma he sprang into action. Although it was his day off, he told me to meet him at his office. Of course that was a workday for me so Mike worked around my schedule. When I arrived at 12pm Mike told me he had already set-up an appointment at the periodontist. She had agreed to slide me in at 2pm. He told me to get in his car because was driving me there. But first he said you need to have lunch so let’s go, I’m buying. He took me to lunch, (which he picked up) and then chauffeured me to the periodontist for emergency surgery where he waited until it was completed. Within 50 minutes the procedure was complete and Mike was bringing me home.

All this proves that I’m lucky to have a friend like Mike Schneider. Right? WRONG!

I’m lucky to be a PATIENT of Mike Schneider. You see, this is not the first time Mike has come into the office on his day off for a patient. This is not the first time he has literally chauffeured patients to and from specialists. In fact I know of many patent’s that Mike has performed the exact same services for. And he doesn’t charge a dime for this! Do you think that’s going “Beyond the Customer’s expectations?” You bet.

This sounds like a commercial for the dentist, Mike Schneider. It’s not. I’m not even giving his number or website. It is example of how one entrepreneur is EXCEEDING customer’s expectations. What can you do exceed the expectations of your customer? If you are a carpenter, how about talking the client to the lumberyard with you to pick-out wood? If you are a gardener, how about planting a few extra flowers without being asked or even charging for them? I know a criminal lawyer that actually visits the families of convicted felons so that he can personally report to his client about their condition. 

Let’s face it, exceeding expectations is a lot easier than it looks if we are willing to give just a little. No matter what kind of business you are in, you can exceed the customer’s expectations by applying Rule #6 of Attraction and “Be willing to GIVE.”

Turning the Economy Around

This is an interesting time. The recent layoff of 80,000 American workers has resulted in all of the financial gurus spouting their drivel about the global economic crisis we are facing. I have even heard some say we are entering another depression. Just a few days ago, I appeared on FOX TV and discussed this with business expert Neil Cavuto. He asked me how I thought this was affecting small business owners and what they could do about it. My comments were that maybe we should put some of these gurus on the firing line of small businesses and see how they do. Their demise would be quick and final. Because as I told Mr. Cavuto, the most important asset that entrepreneurs have today is their attitude.

Without a positive attitude, we are doomed regardless of how well or how poorly the economy is doing. Many of us perhaps have heard the Serenity Prayer - "We must accept the things we cannot change, have the courage to change the things we can, and wisdom to know the difference." Surely, we cannot individually change the economy but collectively it is certainly possible. We can do this by focusing on the critical business issues at hand like, delivering a higher level of customer satisfaction, creative product development and line extensions, smart financial management, getting longer terms on payables, building customer loyalty programs and penetrating new markets. We do have the ability to turn this economy around but we must first look in the mirror and begin the change within. Do you have the courage to take that challenge? I sure hope so. All of our jobs might depend on it.

View my latest appearance below:

To Meet or Not to Meet

Yuk! It’s meeting time.

 

Don’t worry you’re not alone. A recent survey by the Harvard Business Review revealed that 92% of meeting participants in corporate America view meetings as a supreme waste of time!

 

Frank Robinson, CEO of Robison Helicopter says, “I’ve always felt that meetings are one of the most wasteful things in industry. We avoid having meetings as much as possible. Most decisions don’t have to have a meeting.”

 

I’m not sure I would agree with this but I certainly understand WHY many take this position when asked about meetings.

 

A meeting should be used to carry out communications, planning, setting policy, making decisions, or motivating a team. The most effective meetings are well planned and executed.   They should serve to bring forth the best in all team members – the best ideas, the best decisions, and the best follow-up.

 

Here’s some tips on how to make your meetings more valuable, effective and hopefully a pleasure for all that attend:

 

1. Always send an agenda to all the participants in advance. The agenda presented at the start of a meeting just doesn’t cut it. Attendees can not prepare for a meeting if they don’t know the content and purpose of a meeting ahead of time. If no agenda exists ahead of time it is highly possible that there is no plan for the meeting.

 

2. Always begin the meeting with a statement of the goal and get everyone’s agreement. End the meeting with a quick review of the action items that have been established and who will do what and when it will be accomplished.

 

3. Never hold a meeting to learn the “status” of various initiatives. This is accomplished far more effectively by reports from team members. This can be done via email, written memos or even by using voice mail. When 5, 10 or 20 people are gathered together at a meeting to hear the reports of others, very little is being accomplished.

 

4. Brainstorming ideas is a good use of a meeting as long as there is a plan so that attendees can prepare their ideas in advance. Those ideas can then be collected quickly and efficiently at the meeting. However, attempting to brainstorm the content of a document at a meeting is a terrible waste of time. If a group must all agree on the contents of a document I recommend providing a draft to participants several days in advance, collecting feedback and doing a summary presentation of the collaborated draft to the group.

 

5. Create a system so that all the participants can contribute. There’s nothing worse than having just one or two members dominate the meeting while others passively stand by just listening. Often times those who speak the least have the best ideas or are fearful of disagreeing with the most vocal participants. Many times I have found that it is these very participants who will raise the most critical issues that need to be resolved.

 

6. If you are a facilitator of a meeting – BE PREPARED or cancel the meeting, know the goals for the meeting in advance, have a start and a stop time and stick to it and be prepared to facilitate any conflict which, by-the-way is a good thing. Having constructive conflict within a meeting is moth healthy and necessary to creating the most valuable and cost effective solutions.

 

I hope this helps at your next meeting. Also I’d love to hear some meeting success or horror stories. Send them to: mark@markdeo.com. 

The Death of Corporate America

Remember the old days?

Our fathers and grandfathers worked for the same company for 20, 30 or even 40 years. Generations of sons and daughters toiling under the protective arms of the "COMPANY." 

Today it's more likely that we will outlive any organization that we work for. 

It has snuck up on us. We turned our head and all of a sudden Corporate America is dying. 

It is the result of a powerful force that has emerged in our society. Not a company or a new technology or even a new industry. It is the evolution of workers themselves. For the first time in history, there are more workers operating as "free agents" than there are people working for Corporate America. Fortune 500 companies no longer form the bedrock of our workforce. 

How Has This Happened?
This evolution has been rapid and decisive. It has occurred for a number of reasons. First, the social contract of job security has long been broken. Jobs are no longer sacrosanct at Fortune 500 companies. One day these firms are in expansion mode and the next they're "laying off" 35,000 workers. Second, e-commerce and automation technologies have leveled the playing field so that smaller companies with less people could provide the same benefits as larger multi-national firms. This resulted in corporate re-structuring and downsizing. And finally the loyalty/security pact of the previous five decades has been broken. This was evidenced in the mid nineties when IBM broke it's "full employment policy" by reducing it's payroll by a whopping 120,000 employees. In this century, being loyal to a company does not guarantee job security.

What Does The Future Hold?
Today the largest private employer in America is not Ford, General Motors, or even Microsoft. It's Milwaukee's Manpower Inc., a temporary help agency with over 1,100 office throughout the United States employing over a million workers. Temporary staffing has grown from a $1 billion industry to more than $80 billion while employing over ten million temps nationwide. It is estimated that there are over 33 million solo, self-employed workers. And there is an emergence of a new category called micro businesses. These are small businesses employing just 2 or 3 people to drive particular initiatives on either a full or part time basis. In fact, more than half of today's companies have fewer than 5 employees! Don't look to our government to reconcile this societal evolution. They're a full century behind. The Bureau of Labor and Statistics still divides all workers into two categories: farm and "non-farm." Figure that out. 

What Free Agents Love
The work ethic of free agent entrepreneurs is considerably different than corporate employees. These entrepreneurs crave, freedom, control, security, and loyalty. If you think about it, these are the very job benefits lacking in Corporate America. Today free agents come in a variety of forms, entrepreneurs, independent contractors, consultants, advisors, 1099ers, hired guns, nomads, etc. But their focus is on producing a measurable result for an organization rather than performing a specific role within it. Free agents tend to provide a higher return on investment for organizations because of their accountability to themselves rather than to a hierarchy.

Freedom
Freedom is the ability to exercise one's own will. Within the corporate cocoon freedom takes on the meaning that the company as a whole projects. Some companies smother their employees in affection others try to purchase individual freedom with stock options and incentives. Free agents can choose to follow their own work ethic. This extends not only to what they believe, what they do and where they do it but also WHEN they do it. Free agents have succeeded in melding work time with home time. Gone is the Monday through Friday 9am to 5pm ritual. Today they balance a full time home life with a full time work life.

Control
Life in Corporate America is about lining up behind the company culture and philosophy. Free agents can control their own destiny. Consequently they develop skills in areas which they desire to excel. They build relationships with those that match their business culture and paradigm. They focus on selling insight, talent, expertise, ideas, creativity and solutions rather than just performing tasks. They realize that what matters in the course of a day is what is accomplished not how many hours are worked.

Security
The last decade has been one of prosperity. Members of Corporate America had job security but that prospect is diminishing. While a high standard of living has reached deep into middle class many members of Corporate America do not feel that their lives have improved. This dichotomy has altered our expectations of comfort and prosperity. People are looking forward to more than just a comfortable retirement after four or five decades of "work." People are realizing that it's not good enough to work to make money and survive. They desire to work to make meaning for themselves and their families. 

Loyalty
With free agents loyalty does not run up and down an organizational chart. It runs from side-to-side in allegiance to clients, colleagues, teams, projects, vendors and industries. In this sense free agents are far more loyal than company men and women. Companies can also afford to be more loyal to free agents because they lack the overhead that employees bring. Both benefit from the free agent structure because whereas vertical loyalty within an organization depended on one connection (boss and employee) this new horizontal loyalty depends on many connections.

How It Impacts YOU!
In the end I believe that we will see the free agent philosophy infiltrate every industry, profession and area of expertise. Those that are most prepared for this transition will benefit the greatest. Think about your own business. How could you use the "free agent mentality" to bring efficiencies to your business? If you're an employer, how could you increase productivity and reduce overhead by employing free agents? If you're an employee, how could you deliver greater production to your employer and increase your earning capacity by utilizing the above free agent infrastructure?

Team Innovation

Today, businesses large and small like to say they are "team oriented" (whatever that means). I guess it means they work in teams. Big deal. Does that improve their performance? Does that mean that the quality of their product or service is better than the competition? Does that allow them to complete a project more timely, profitably or effectively? Is teamwork really a better way to go about solving problems than say the "hermit" approach? What about Thomas Edison or Leonardo DaVinci or Alexander Graham Bell?

If you've ever worked on a team you know there is one thing that can not be avoided: CONFLICT. At some point someone is going to disagree with somebody else and then, look out! Getting to a simple solution can take hours or days while these two "team-members" fight over minutia. Sound familiar?

Let's face it, often times, teams can hit roadblocks that can sabotage their success. There are a number of things that can be done to ensure good teamwork:

Conflict is Good

As team leaders we must not allow ourselves to think that we solely carry the burden of resolving conflict. I see so may managers, owners and team leaders rush to squish the most subtle sign of conflict within their team. Without conflict we can not reach the best solution. This also places us in a patronizing, parental position that encourages your team members to abdicate personal responsibility for resolving conflict. It keeps them from developing the skills to necessary to grow, mature and hold each other accountable. Allow the team to detect conflict and manage only those that escalate.

Guidelines for Managing Conflict

As leaders we need to model guidelines that set the tone for resolving conflict. In this way we will be educating our team members to take responsibility. These should include:

• No personal attacks
• No heated outbursts
• No backbiting
• No hostile assumptions

Establishing Expectations

Over the years I have noticed that communicating expectations to the team is paramount in achieving exceptional team performance. The following are areas that team leaders should develop clear expectations for members:

1. Work methods - Make sure your team knows the methods and procedures you expect them to follow when completing the job. If they do not they may frustrate themselves by taking the "long route" and end up disillusioned.

2. Deadlines - Make sure that the team fully understands the time frame for completion. This should include non-negotiable dates as opposed to to dates that can slip.

3. Responsibilities - Ensure that every team member understands their role in the team process. This should be communicated one-on-one with each team member prior to establishing the team. Also ensure that the team members responsibilities are consistent with the teams responsibilities.

4. Priorities - It is critical that team members know the proper priorities. What's to be done first, second and so on.

5. Performance - Paint a picture of the outcome for the team. Show them a vision of a "good" job vs. a "bad" job. Make sure they understand the degree of effort that you expect them to each contribute to the successful solution.

6. Measurement - Establish a system to measure performance in small increments.

7. Communication - Establish a format for consistent communication with the team. This forum will give you the ability to ask the right kind of questions to determine whether the team is "on-track." At this pint you can provide feedback to the team and make suggestions on course correction.

8. Resources - Make sure that your team members understand the resources that are available to them. This could include staff, facilities, technology, equipment, outside consultants and so on. Encourage them to use the resources to their best advantage but in a cost effective way in order to achieve their goals.

As leaders it's our job to foster innovation. Team members look to us for confidence, guidance, direction and innovation. What can you do to set the stage for creative thinking in the teams that you lead? How can you get your team to discover the best solutions in the most cost effective manner. Remember teams are not just resources, they are people. As I have said many times, we line in an age of relationships. How can you create relationships that go beyond just getting the job done. How can you create relationships that can produce the kind of Edison, Bell and DaVinci innovation.

Selflessness

Over the last few weeks I’ve been talking about some of the intangible traits that define “who we are” or “who our company is.” We’ve been looking at Rule #11 from my Rules of Attraction: Who we are is more important that what we do.

In my last few Business Updates I wrote about Integrity, Vision and Enthusiasm. Today I’d like to look at another trait that makes up “who” we are – selflessness.

Henry Stimson, Secretary of War during World War II once said, “no one who is thinking of himself can rise to great heights.” It sounds nice. It looks good in quotes. But the reality is that this statement runs counter to what most people truly believe and how we live our lives. In fact it is the opposite of what most of us are taught as children. That is, we must FIGHT for what is ours. Even in school we teach our children evolution. We beat into their little heads - the survival of the fittest. Only the very best make it to the top. We make no bones about the fact that we live in a dog-eat-dog world. Where is selflessness in all of this? Don’t get me wrong I am in no way saying that I live up to this trait. I am ashamed to say that I often fail miserably at being selfless. I do think it is necessary that we illuminate the fact that those who have molded their character to a selfless mindset ultimately create attraction and bring about change.

There has already been much written on the lives of those famous selfless individuals who have changed the world. People like Gandhi, Mother Teresa and Nelson Mandela. I will not dedicate extensive discussion to their accomplishments in this book but as point of illustration allow me to touch on them briefly. I think you will see that their selfless actions did in fact create massive attraction. I will attempt to demonstrate that this type of character-based attraction, like integrity, vision and enthusiasm can be implemented in a powerful and genuine way by regular folks like you and I.

In his youth Gandhi was a regular guy. In fact the name Gandhi means “grocer.” Educated as a lawyer in England he ultimately managed to lead his people to freedom from British rule by practicing nothing BUT selflessness. He never wavered in his unshakable belief in nonviolent protest and religious tolerance. When Muslim and Hindu compatriots committed acts of violence, whether against the British, or against each other, he fasted until the fighting ceased. Independence, when it came in 1947, was not a military victory, but a triumph of human will. 

Mother Teresa taught at St. Mary's High School in Calcutta from 1931 to 1948. However the suffering and poverty she saw outside the convent made a profound impression on her. She asked for permission from her superiors to leave the school and devote herself to working with the destitute and dying in the slums of Calcutta. Although she did not have a single penny, she relied on Divine Providence, and began the first school for slum children without even a building. Her selflessness attracted volunteers and eventually financial support. By the 1990s there were over one million Co-Workers in more than 40 countries.

While selflessness is indeed a rare commodity today, I think we can all give a bit of ourselves for someone else. We don’t have to be Gandhi or Mother Teresa to help another person. I think this is as relevant in business as it is in our personal lives. How often do we place our own interests before the clients? How often do we let our egos get in the way just because we can? If I had to answer that I’d have to say, TOO OFTEN!

What would happen if we took the long view, overlooking a confrontation in favor of a selfless approach? Do you think it would create attraction? I’d be willing to bet my bottom dollar on that. In a society that focuses on gratifying ourselves, imagine the impact we can create with our clients, shareholders and team members when we take our eyes off ourselves and look to a brighter future.

Selfish or Selfless?

Happy Holidays to all. I thought I'd take just a moment to look at a popular concept this time of year from a unique angle - the idea of giving. At Christmas we focus on giving, making others happy, showing our appreciation, blah, blah. Yet during the other 364 days of the year we focus on "getting" and make no bones about it. Its "dog eat dog, eat or be eaten, get it while the getting's good, and nice guys (or gals) finish last." Just look at our heroes: Donald Trump, Sam Walton, John D. Rockefeller and Warren Buffet - ruthless billionaires. We admire ruthlessness, tough-mindedness and persistence. In fact, we try to emulate these qualities. Hey, I don't exclude myself. I can be as self absorbed as the next person. Many have said that selfishness is in our blood. They say that as humans we have had to cultivate a form of selfishness in order to thrive. Many have drawn the correlation to Darwin's theory of evolution linking selfishness to the genetic evolution of a "selfish gene". After all, even a school child knows that only the strong survive. Surely this connects nicely with Darwin's theory of natural selection and the survival of the fittest. But our world is changing. Just ask Martha Stewart, WorldCom and Enron. Even the tobacco manufacturers are becoming altruistic today. You would be hard pressed to find a leader in business who isn't focused on some type of charitable endowment. Ethics is the watchword of the day. According to Amazon.com there have been over 122 books written about corporate responsibility in just the last 12 months. It's a shame we need such a wake-up call. For more about this, check out Richard Dawkins book, The Selfish Gene. But for now, how about this? Let's let it begin with you and me. I have found when I give it comes back to me 100 fold. In fact, it is the 14th rule of attraction: Be a giver. So let's make that read, "Be a giver...the other 364 days of the year too!" Happy Holidays to all. It is an honor to have you as my subscribers. Have a great week! I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com  Mark Deo

Personal Internal Vision

In 1961 John F. Kennedy put forth the idea of sending a man to the moon and bringing him back safely before the end of the decade. The American people were no doubt moved by this vision. But frankly he received much opposition from Congress due to the Cold War and the fear of technological failure.

A team of legislators were sent to Cape Canaveral to determine whether the funding should be allocated for the project. One day Florida Senator George Smathers, a member of this team, was touring the facility. He slipped away from the group of dignitaries for a moment to get a drink of water. Attempting to rejoin his group he became lost and found himself wandering the halls. The place was immaculate. It looked to be sanitized. Suddenly he came upon a woman sweeping-up and he explained his situation to her. She seemed to know her way around the complex and quickly told him how to rejoin his party. Smathers, impressed with the woman's knowledge asked her, "What is it that you do here?" He was astounded by what she told him: "Why sir, I am part of a team helping to put a man on the moon and bring him back safely."

Smathers went back to Washington with a renewed fervor in his heart for the lunar project. He told his colleagues, "If the janitor at Cape Canaveral has this kind of sense of mission, what might the scientists and astronauts be like?"

This simple cleaning women understood her humble job of sweeping-up to be far more than it appeared to an outsider. She was an important part of the Apollo project. Do you think that, as a result she was far more committed to her job? Do you think she went out of her way to do an extra great job of cleaning up? You bet she did. Her answer showed her deep understanding of her "personal internal vision."

Please understand I am not talking about a corporate vision or mission. Not that a corporate vision/mission is not necessary. On the contrary it is the first step in organizations developing their personal internal visions. But today many corporate visions or missions have become more like slogans than anything else. A PIV, or "Personal Internal Vision", is a one-on-one relationship between you and your job. For that cleaning women that might have meant having the floors shine, the porcelain gleam and the corridors sparkle. What is it for you? Or if you're a business owner or manager what does it mean for each one of your people?

The purpose of a PIV is to give people the freedom they need to succeed. It allows them to take full responsibility for their choices. This is really the only way to create an environment of accountability. When a company asks their people to develop their own personal internal visions, they also give them the freedom to break the bonds of authority and excel beyond what might be expected from management.

The fact is that accountability and responsibility lies with those closest to the task. Owning their job and future allows someone to let go of the idea that they need someone to look to for direction or control. It allows people to be responsible to the entire organization and the customers rather than their manager or supervisor. It takes the focus off of doing things right or by the book. It puts the focus on doing the RIGHT things. This improves decision making, performance and productivity.

Improved performance and increased productivity aren't the only benefits of a PIV program. Implementing PIV allows people to improve their skills by taking personal risks that will benefit the organization. They become more trustworthy and more trusting of others. They tend to hold themselves to higher standards and operate with greater integrity. They are often willing to put the interests of others above their own. This makes sense if you think about it. When their OWN success is at stake rather than some stranger's company, do you think they will make better decisions and operate with greater commitment? Of course.

In fact, in the coming economy, the only alternative to implementing a PIV program will be increased employee turnover, continuing resentment and ultimate stagnation. Don't take my word for it. Ask the folks at Southwest Airlines, Harley Davidson, Nordstrom, Dell Computers and the list goes on. The bottom-line is that having a PIV program can be the difference between achieving your company's goals in terms of financial growth, manpower development and customer satisfaction.

If not for that cleaning women's PIV, might there be a Russian flag on the moon today?

I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com

Mark Deo

Office Politics

Someone asked me the other day: "Mark what do think is the biggest challenge for small businesses today?"

I didn't have to think about this very long. I know they were expecting me to say something about: the affects of the economy or the stock market or the impact of technology or the lack of funding or resources or even the breakneck speed which we are expected to operate at.

But the reality is that these are relatively minor forces when compared with the most powerful force of all:

Office Politics!

If you could walk with my consultants and I, in and out of businesses we each see everyday you would see the obvious yet devastating result of office politics. I believe it is by far the biggest obstacle to change and growth for companies today. Not that this is new. Office politics has been with us for decades. But the changing financial, political and social landscape makes it more insidious than ever and literally threatens the survival of many small businesses and even larger organizations.

Why? Because of the exorbitant cost associated with office politics.

The cost of office politics is a kind of activity-based cost. It includes time lost, waste of resources, low staff morale and ineffective delegation. Some of these costs are tangible but not accountable. Often time this kind of loss is ignored or neglected. Since many political activities are cross-departmental, office politics can render an organization completely dysfunctional in a very short period of time. While it is usually unwise to let office politics freely develop, unfortunately many companies cannot tackle such a political problem and let it erode their productivity and profitability and sometimes even endanger their survival.

Office politics is about the application, distribution and negotiation of power and resources in an organization. This power includes authority (formal power) and influence (informal power). Politics is basically the application of that power. The desire for power is determined by one's personality. Leaders can affect this principal in every organization. Strong, ethical leadership regulates the application of informal power (i.e. influence) to avoid the overuse and abuse of authority. Abuse of authority will lead to a chain of negative effects such as low staff morale, conflict, bias, bad image, poor communication, dishonesty and social conflict.

When ethical leadership exists, office politics will abate. This is because ethical leadership is essentially self-management and self-control as an example for subordinates to follow. It is the strongest influence for change in any relationship. As I've said before, leaders act the way they want their team members to act. Cultural actions cannot be ordered or commanded. Most political office issues are symptoms of weakness at the senior management and organization level.

While every organization is different, most have some type of definable culture. Some call this the organization design. It is essentially referring to the general distribution and structure of authority, responsibilities and resources in the organization. Poor organizational design is a common cause of office politics because ineffective organizational structure allows too much room for the negotiation for authority and resources.

The organization chart in the business leader's mind is far more important than the official one. Ricky W.O. Lau, author of Politics in Business calls it the "hidden organization chart." Often times this means that the leader has bias and personal favor to individual members but does not act openly and his delegation is based on the hidden organizational chart rather than the official one. This is a common yet unfair and very detrimental management practice.

While delegation is the distribution of specific work, responsibilities and authority, in an effective organization, delegation must be based on the organizational structure. Otherwise, there would be structural overlap, confusion, conflict and politics. Conflict usually involves different interests of different people (especially in different departments). Conflict may be minimized if the focus is on the whole organization rather than individual department or individuals. Some management styles may easily lead to office politics because the focus is on the performance of individuals and departments rather than the organization as a whole.

Certainly interdepartmental conflict cannot be completely eliminated. Nor should we attempt to do so. It is important to remember that disagreement is not equivalent to conflict. People may disagree or criticize others if:

1. They view the matter from another viewpoint
2. They have misunderstood other's meaning
3. They want improvement
4. They want to challenge others' position or power.

Out of the above four motives of disagreement, only the last one is the result of conflict and is a political motive. However, when a manager is too politically sensitive, he may mistakenly treat the first three motives as political motives, and interpret the conflict as an intention to challenge his position or power.

Desire of power may be a strong motive to perform, but it may also lead to a negative and destructive result. An effective manager should apply his influential power rather than authority because abuse and overuse of authority can lead to poor relations, distrust, misunderstanding and disorganization.

Are office politics an issue in your business? If any of these symptoms are present in your business, its time to think about making some core changes to your business culture. At the Small Business Advisory Network we like to say that we influence decisions, improve performance and inspire change. That's what our consulting, workshops, web site, weekly articles and The Small Business Hour Radio Show are all about.

Love In Business

The biggest disease this day and age is that of people feeling unloved.--Author Unknown

 

The software engineer put on Nirvana's "In Utero" as he did every evening when he got home from work, took his gun out, loaded it, and tried to garner enough courage to put it in his mouth and squeeze the trigger.  This was a ritual he had played out every night or the past year.  While successful at work, he was miserable.  He felt no one cared about him as a person- he was just another programmer, doing what programmers did, living a solitary life with no friends.  Then one day, out of the blue, his boss sent him a personal e-mail- not related to code revisions, interface changes, or other work related items.  But one that expressed his thanks and sincere appreciation for the work he had accomplished in the time he had worked there, and how he was valuable to the team not as just a programmer, but as a person.  He told this employee that he was glad he knew him as a human being, not just as someone who typed away at his computer all day.  That night the software engineer went through his daily ritual of putting on Nirvana, loading his gun, and for the first time- he was scared that he might actually go through with it.  He sold the gun, and with the proceeds bought his boss a gift- and told him the story of how that simple gesture had saved his life.

 

This story was related to Mark Deo and I on the small business hour this week by Tim Sanders, author of Love is the Killer App.  He is at the forefront of a new wave of business thinking- not one focused on numbers, but one focused on people.  His philosophy is that one must share three things in order to have a successful business relationship: knowledge, networks and compassion.   By doing so you can not only help your business, but you can help others as human beings, much as in the story above.

 

How does one share their knowledge?  By staying informed reading about the latest trends in business reading about things that interest other people and then sharing that knowledge with people who are interested in it.  How do you know what you should be reading?  A great place to start is the list of books on our website www.smallbusinesshour.com.  Tim Sanders also maintains a reading list on his web site at www.timsanders.com.  Some publications that are excellent are business magazines such as Fast Company, Entrepreneur, Business Week, and Business 2.0.  By reading these books and publications you're making yourself valuable as a walking library to people that you speak with.  This allows you to become a personal resource to others- someone who they can trust and count on for information.  This in turn makes you as a person more valuable.

 

What do we mean by sharing your networks?  This is not some reference to computers and internet access- To share your networks you must take your personal contacts and instead of protecting them and hiding them in secrecy open them up to the world.  Share your contacts with others who might find them to be of use.  This can be a simple matter such as simply passing a phone number on to someone, or giving a referral.  Better still is personally introducing two people who can both gain some value from establishing a new relationship.  By doing so you become a business "matchmaker" of sorts- someone who helps others to achieve their goals through communication with people to which you introduce them. 

 

How does someone show compassion in business?  It comes back to one of Dale Carnegie's principles, "Become genuinely interested in other people." Only by being interested in someone and showing that interest can you demonstrate that you care about them as people and not just as tangible resources.  People respond to being cared for- you never know how making a small gesture can profoundly impact someone's life. 

 

I encourage you to think of someone in your business life who you can show your love to this week.  Become genuinely interested in them as a person- not to try and gain something from them, but to find common ground you share.  Then discover what it is that interests them, and find some information about that topic that you can share with them.  Find someone in your network of contacts who also has interest in the same topics, and introduce the two.  You will be amazed at how that will endear you to both contacts, turning them from business relationships into personal friends.  I'd love to hear your success stories at mwalker@sbanetwork.org.  Have a great week!

 

This Business Update was written by SBA Network Business Advisor Matthew Walker- for more information, please contact him at 310-320-8190 or mwalker@sbanetwork.org.

Interdependence Day

Small business represents more than 99 percent of all American employers, employs more than half of the American workforce, provides just a little less than half of this country's sales, and represents 96 percent of all U.S. exporters. Yet fewer than 5% of all small businesses survive to see their fifth birthday.

Why?

Some say its due to a lack of knowledge, a missing skill-set or hyper-specialization. I agree that skills and knowledge are critical but sometimes I think this huge failure rate has a bit to do with overconfidence.

Let's face it, making the transition from "employee" to "employer" is not as easy as it looks. As an employee we had it pretty good. The owners took all the risk. True, when business was good they bought themselves a new Mercedes but if business was bad, they took the hit and I still got my salary. I didn"t have to worry about workers comp, insurance, OSHA, labor laws, lawsuits, competition, soft-sales, rising expenses and a plethora of other issues.

As employees we were "dependent" on the owner to absorb the risk and compensate for any losses or downside. Some owners may feel this "dependence" translates to a form of employee entitlement. Yet the owner takes the risk and the owner enjoys the reward.

Many employees on the other hand have come to believe that they are owed more money, more health care, more retirement benefits-more of everything that is costly to the owner of a business. Business owners often feel as though they deserve to take as much out of their companies as they wish sometimes not fully funding initiatives which can create a difficult working environment for employees. How can this dichotomy be reconciled?

I think it is deeper than simply saying we all need to take responsibility. I think we need to change our mindset about independence and entitlement. And I think we need to teach our employees to think like owners. Some have gone so far as to actually make their employees owners.

ESOP (Employee Stock Ownership Plans)

In 1994 United Airlines became the largest employee majority-owned enterprise in the United States, with various groups of employees mostly represented by unions - having purchased 55% of its stock in exchange for various concessions. The employees accepted pay cuts and made other concessions, but were also granted representation on the company's board of directors. The case represents the potential of an Employee Stock Ownership Plan (ESOP), but not the full realization of that potential. It shows that an ESOP may be a necessary condition but certainly is not a sufficient condition for substantial changes in labor-management relations leading to improvements in company performance.

It requires more than just giving an employee some stock to get them to think like an owner. It all starts with the mindset of the owner themselves. For small businesses it is critical that they not allow overconfidence to overshadow their decision-making ability. This is the danger of becoming too independent. Becoming Too Independent Sure, I'm the first to admit that entrepreneurs have to make the move from dependence to independence. But Stephen Covey says in his book, The Seven Habits of Highly Effective People, that entrepreneurs "must move from dependence to independence and ultimately to interdependence." If you are one of these small business owners you might be saying, "Hey isn't it great? I'm finally independent! No more working for the MAN!" But independence is not enough. In fact, that "independent attitude" may be the very reason that many small businesses fail. When we feel we have all the answers we disempower others not to mention the fact that we can alienate them. When we become "interdependent" we allow ourselves to be seen as vulnerable and let others into our personal space. We give them a "fine reputation to live up to" as Dale Carnegie said. And we motivate them to think on our behalf. This isn't easy for hard-driving entrepreneurial types like me, but I have found that it is incredibly powerful. Often times this opens the door for greater collaboration with other business partners as well. I'm talking about alliances with non-competitive organizations and affiliate relationships. I also find that when entrepreneurs mature to the level of "interdependent leaders" they are also open to receiving coaching and consultation. Coaching Re-enforces Interdependence Business coaching has become one of the most effective ways to bring about organizational improvement both for self-employed entrepreneurs as well as leaders of larger organizations. Coaching has proven that it produces results in a variety of forums. For example, Fast Company magazine reported in a recent article that nearly 40% of Fortune 500 companies retained coaches to improve their business performance. In addition a study by the Manchester Review stated that the output of executives involved in coaching programs averaged nearly 5.7 times higher than the initial investment. There is strong evidence showing that external coaches can add substantial value in building new skills, conceiving new strategies, making better decisions as well as building a culture of interdependence. Growth for even the most successful organizations can be hindered by a resistance to change and an attitude of fierce independence. This can happen externally among customers as well as internally with employees. Business coaches help owners, managers and key team members to set specific goals and break them down into manageable pieces and to effectively collaborate. Coaches hold team members accountable but they also ensure that there is a high level of interdependence.  Interdependence Breeds Attraction In fact our Attract More Business Program incorporates an interdependent structure. Not only in the content that it provides but in the way the program is delivered. Every program includes a coaching element both in the form of our interactive email based "skill builders" as well as in the one-on-one tele-coaching that is included in every program. Now we've introduced the "Masters Version" of the Attract More Business Program which includes 12 weeks of one-on-one coaching as well as the 9CDs, 150 page manual and a complete evaluation of all of your marketing material. I'd love to hear how you've become more interdependent in your organization. Email me at mark@markdeo.com. And remember to make Tuesday morning, "Interdependence Day."

Have a great week! I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com  Mark Deo

Integrity

Rule #11 from my Rules of Attraction: Who we are is more important that what we do.

Last week we looked some of the intangible traits that define “who we are” or “who our company is.” We said the most critical are: Integrity, Vision, Enthusiasm, Selflessness and Identity. We spent some time examining the importance of genuine “Enthusiasm” and how it affects how we are perceived. Another trait that exemplifies who we are is “integrity.”

It has been said that our “character” is displayed by what we do when no one is looking. I believe that character is; “who we are – defined.” It is the values that we adhere to. Similarly the concept of “character” extends beyond a trait that defines a person’s temperament or disposition. What does character have to do with marketing, you may ask? I believe in this new era, character or “who we are” is more important than ever before in the marketing arena. In fact I would submit that character is far more important than what we actually do or say about our company, product or service. It is the evidence of our most persuasive claims. Who can deny that all types of products and services are becoming more homogeneous? Differentiating oneself is getting more and more difficult. Competition in every industry and profession is accelerating daily. Therefore “character” in many cases may be the deciding factor in attracting better clients, more committed team members and healthier relationships.

Integrity is at the core of our character or who we are. When we think of someone as having “integrity” we tend to think of them as being honest, loyal, fair-minded, trustworthy and respectful. Having integrity means that you do what you say you’re going to do, you try to do the RIGHT thing and you do it consistently.

When we think of the greatest military leaders of all time, we think of Patton, Eisenhower, and MacArthur. The name George C. Marshall has faded into the mist. Marshall, however, was the leader that made it possible for these men to dominate the history books. The fact is that Marshall was their boss! He was the Chief of Staff of the United States Armed Forces during World War II. He forfeited his chance to go down in history as the hero of the war and ultimately position himself as an almost certain a shoe-in for the White House top job. 

In late 1943, at the height of World War II, Marshall had convinced both President Roosevelt and Winston Churchill that the best way to turn the tide of the war was to plan a cross-channel attack on Germany via France. The only question was… Who would lead the operation? Roosevelt knew that Marshall wanted to be the commander of the D-Day invasion. It would virtually guarantee Marshall’s place in history. Yet just as Roosevelt knew that Marshall deserved this honor, he also was aware that the man was so humble he would never ask for the job. The President’s problem was that he felt that Marshall was more greatly needed as the high commander of the entire war effort than he was as leader of the D-Day invasion.

So what did the President do? Like any good politician he hedged his bet. He sent a message to Marshall telling him that if the general wanted the position then he just needed to ask for it. What was Marshall’s reply? He sent a one line message back to Roosevelt saying:

“I will serve wherever you order me, Mr. President.”

In the end, the Normandy invasion, a virtual guarantee of glory, slipped from the hands of Marshall into those of Eisenhower who used it to make his successful play for the Presidency. Marshall demonstrated his integrity by having the courage and conviction to make the “right decision” for the country. Marshall knew that in fact he WAS more greatly needed in the role of overseer for the entire war effort than he was as D-Day invasion commander. Later when asked why he made such a decision, he told the media, “The issue was just too great for personal feelings to be considered.”

This is the kind of integrity that creates attraction. While many of today’s business leaders are shifting blame, slamming competitors and whining about fair treatment, those with integrity are willing to tell the truth, make sacrifices, do the right thing and do it consistently. Imagine the reputation your company can build in a marketplace hungry for products, services, companies and people with integrity.

Failing to Fail

Are you doing the same things you did a year ago? Are you doing things the same WAY you did them a year ago? If so you're bound to fail. Not that failure is bad mind you. The sooner you fail in fact, the better off you'll be. So raise a glass with me and let's toast all of our failures past, present and future! Ahhhh drink deep. Now wasn't that thirst quenching? No?

Let's face it, our culture doesn't reward failure. We condemn it. Our condemnation is so prolific that most folks do whatever they can NOT to fail. They shudder to even speak of a failure to associates. They train themselves in fact to not even THINK about failing. It's not an option! We walk around telling everyone who will listen to us about all of the great successful things we have accomplished in our lives. We have convinced ourselves that we must continue to succeed and more so, that we must become innovators.

Innovate or Die 
In fact innovation has become kind of a buzz-word in our society. We hear, "innovate or die." What about "innovate AND die?" All the excitement about all things new has obscured the fact that most new ideas fail while most old ideas are still with us. With hundreds of breakfast cereals introduced every year how could it be that Cheerios and Wheaties still outsell them all? Why are Beanie Babies a faint memory yet Play-Doh is still a best seller? Evolution? Survival of the fittest? Maybe.

Is there a way to combine innovation with proven methods? We're all familiar with the old Rudyard Kipling quote: "the definition of insanity is doing the same thing the same way time after time and expecting a different result." In this shrinking economy, it stands to reason that we need to do things differently. We all know we have to get creative, but how? How can we harness our creativity to create success rather than failure? Or better yet how can we train ourselves to endure our failures yet remain focused on the hope of a successful outcome?

Not Creativity but Productivity 
The truth is that creativity is less about wild talent and more about productivity. To find a few ideas that work you need to try a lot that don't. Successful people don't have a higher success rate. They just do more and they do a range of DIFFERENT things. Research shows that the success of individual geniuses like Mozart, Shakespeare, Picasso, Einstein, and Darwin himself, is best understood from an evolutionary perspective, where excellence results from "a range of differences." These famous creators generated a wider range of ideas and completed more products than their contemporaries. They also followed proven methods in order to accomplish them. They didn't succeed at a higher rate than others. They simply did more. So they had both more successes and more failures.

An Example 
A similar philosophy helps explain the success of Capital One, which has been called the most innovative credit-card company in the world. Just a few years ago, all credit cards were pretty much the same; you could have whatever you wanted as long it cost $20 per year and had an interest rate of 19.8 percent! Capital One has been the leader in offering thousands of different credit cards, with varying rates, and limits, which are targeted at people with different beliefs, hobbies, and affiliations: "They tinkered with credit lines, mileage awards, with the design of the cards, and with the color of the envelopes of their mailings. They tried different ways of retaining customers and pursuing deadbeats. Essentially they made Capital One an endless experiment." The company tried about 45,000 experiments in the year 2000, for example. Capital One has succeeded by targeting smaller and smaller audiences for these experiments, like a "platinum MasterCard for middle-income hikers who drive Saturn automobiles." Most of these ideas fail, but the constant experimentation with one variant after another, and constant learning, are big reasons why Capital One has over 30 million credit-card accounts.

Repackaging the Old 
The other thing about innovation and creativity is that success is not usually the result of totally new ideas as it is the repackaging of old ideas in new ways, places and combinations. IDEO which is probably one of the most innovative companies in the world, has developed more than 4,000 products for firms in all kinds of industries. Their designers are constantly mixing and matching technologies to produce creative new solutions. One IDEO development group got the idea to create a "slit valve" for a bicycle water bottle out of a heart valve that was made for a medical products company. Henry David Thoreau said, "The question is not what you look at, but what you see." When you look at your product or service offerings what do you see? What do your customers see? Better yet what should they see?

Challenge Accepted Practices 
Often times ideas that are born from this kind of haphazard creativity are diametrically opposed to "accepted" practices. Entrepreneurs start new companies partly because they are purported to be more innovative, free from the pressures in established firms to follow ingrained precedents. Yet entrepreneurs can fall prey to ingrained habits just like managers in big firms. Don't be afraid to challenge accepted practices. I'm not talking about a free-for-all but rather controlled experimentation in order to cultivate innovation. Some of the greatest inventions in the world were a result of an extra component here and there pieced together. Thomas Edison said, "To invent, you need a good imagination and a pile of junk."

Here's some advice that will help to promote creativity and innovation:

1. Expose yourself to new ideas. Increase the variance of your available knowledge. Study other industries that face the kind of challenges you face.
2. See old things in new ways. Don't just get OUT of the box. Walk around it. Look at the top. Don't be afraid to pick it up and look at the bottom.
3. Break from the past. Stop talking about your past successes and hoping the history will repeat itself. We stand in a new place today a place we have never been and will never be again.
4. Understand that creativity as all about productivity. Be willing to turn the focus to more rather than better at times.
5. Embrace failures. Reward failures. Plan to fail - knowing that success in just one more failure away.
6. Challenge accepted practices. Become a tinkerer.

Play with these ideas in your mind and experiment with a few in your company. Treat them like toys that you might buy to mess around with: Try to break them, try to take apart the pieces to see how they work, try to improve them, and mix them (or parts of them) with your other toys. I offer these ideas not as immutable truths, but as methods that have helped other companies produce beautiful and profitable mutations, and that just might help your company as well.

Enthusiasm

One of the rules of Attraction is: “Who we are is more important than what we do.”

There are a number of intangible traits that define “who we are” or “who our company is.” Some of the most critical are: Enthusiasm, Integrity, Vision, Selflessness and Identity. When the perception of these intangible’s are regarded highly in the minds of others, we automatically become more attractive regardless of the quality or value of our product or service. Of course it goes without saying that our product has to have some value and perform with a reasonable degree of performance. However far more important are these intangible traits. In this Business Update I want to address one of those intangibles… Enthusiasm.

People are drawn to a person or a company with genuine enthusiasm. It allows us the luxury of NOT needing to chase clients or forcefully pursue relationships. Those displaying authentic enthusiasm seem to be able to magnetically draw to themselves the right circumstances, relationships and resources.

While enthusiasm is an important component of attraction it must be REAL. There’s nothing worse than forced or phony enthusiasm. Nothing will turn people off faster. Today Emeril Lagasse is probably the best-known chef in America, if not the world. How did it happen? “Emeril’s vision and genuine enthusiasm has accounted for the phenomenal growth of the company,” says Eric Linquest, Emeril’s vice president, general manager. “We started the first restaurant with about 40 employees, and now we have 20 times that number. Believe me, Emeril has always known how to take advantage of every opportunity.” The charismatic Emeril has been delighting audiences for years with his unrestrained approach to the joy of cooking on the Food Network show, Emeril Live. Even the dullest cooking chores can be exciting to watch when -- Bam! -- Emeril adds his personality. There is no doubt that Emeril‘s enthusiasm is REAL! He does what he likes to do best -- he gets his entire audience involved and excited about food and cooking. His bubbling enthusiasm is evident every time I watch him. Compare Emeril with other celebrity chefs like Wolfgang Puck, Nathalie Dupree and the late Julia Child and while they may have actually been “more accomplished” in the culinary arts, they were not nearly as compelling, interesting or attractive. Emeril is a great example of rule # 11 in action. Truly, who Emeril IS increases his level of attraction far more than what he DOES.

Sometimes it's not so much what we say but "how" we say it. And no one says it like Steve Irwin the Crocodile Hunter. You get pumped-up just watching Steve wander through the bush talking about a beak-billed platypus. I had the pleasure of meeting Steve and I can tell you that his enthusiasm is not only real and genuine it was born out of experiences in his youth with all types of animals. 

His enthusiasm is born out of a genuine caring for the plight of the world’s wildlife. Irwin says his love affair with the beasts of the bush began on his sixth birthday when he received the birthday present that he always wanted – his very own scrub python! It was twelve feet long and while most other children were opening cans of pet food for their cats or dogs, Steve was out catching fish and hunting rodents to feed to his crocodiles and snakes. 

Sometimes Steve’s enthusiasm is a little over the top. Recently there was a worldwide outcry which accompanied the release of TV footage showing Irwin holding his infant son in one arm while feeding a chicken carcass to a twelve foot saltwater crocodile named Murray with the other hand. His reply: “I was in complete control of the croc.” 

Crikey! That was close.

There is not a moment that Steve isn’t displaying his enthusiasm for these animals. On camera or off he is literally on-fire for their way of life. Even the photo-stills that we see of Steve in print ads, product endorsements and on web sites show him with a surprised and shocked look on his face as he wrestles with a croc or holds a python at bay. Now that’s enthusiasm!

Over the years there have been many imitators of Irwin’s paradigm. One only needs to tune into the Animal Planet to see the numerous shows that have been patterned after the Crocodile Hunter. There is no doubt that genuine enthusiasm has its rewards. Queensland Premier Peter Beattie’s government nominated Irwin for Australian of the Year and he has built a billion dollar industry out of absolutely nothing. He has created a product that is literally - HIMSELF. It’s not so much what he does that has us sitting at the edge of our chair, it is WHO HE IS that engages us. Despite the controversy swirling around Irwin, he demonstrates the power of enthusiasm in creating positive and continuing attraction. 

My advice to everyone reading this is to think about what you can do to add just a little more enthusiasm to what you do. You don’t have to be Steve Irwin or act like Emeril but in your own way try to incite just a touch more passion in those you meet.

Also if you want o discover a way to actually LEARN enthusiasm come visit my Dale Carnegie Sales Advantage Class. I’ll be starting a class in Monrovia in July and in Long Beach in August. We will be practicing ways to live more enthusiastically and infecting others with genuine enthusiasm as well. For more info call Dale Carnegie at 562-427-1040.

Dream Big

Today there's a lot of discussion about vision, mission and goals. In fact I see many companies investing loads of time, money and effort in coming up with their "mission statement." Usually this is a few inspiring sentences that are placed on plaques to hang on the wall or printed on the back of business cards or put on the company web site. Yet I've got to say with few exceptions this often amounts to a big waste of time!

 

The fact is few of these mission statements accomplish what they were intended to do. That is: "motivate employees to perform at a higher level." Ironically, however, after a month or so not even the CEO, let alone the employees can even remember one word of the mission statement.

 

So does this mean establishing a mission for your company is a useless task?

 

Not necessarily. Yet in order to understand how to make mission planning a valuable tool we must first understand WHAT a "mission" is. In short a mission is a course of action that a company decides to pursue. It is the road they will travel in order to ensure they arrive at their ultimate destination. It is their plan for achieving their vision. A mission is not something we say, it is something we do.

 

Leaders of companies often make the mistake of developing their mission in the wrong way. They try to figure out what their mission is before they decide WHERE it is they want to go. Imagine trying to do this when going on a trip. Can you really plan HOW you're going to get somewhere if you don't know WHERE it is you want to end up?

 

Remember the Cheshire cat in Lewis Carroll's Alice in Wonderland? Alice came to a fork in the road and asked the cat for his help.

 

"Would you tell me, please, which way I ought to go from here?" asked Alice.

 

"That depends a good deal on where you want to get to," said the Cat.

 

"I don't much care where," said Alice.

 

"Then it doesn't matter which way you go," said the Cat.

 

Isn't the same true for us? As leaders we see our employees going in different directions or we're just not able to maintain that consistent level of performance that others are achieving. Could it be because we are just a little unsure of precisely WHERE it is we want to get?

 

Developing a mission is quite impossible until we establish a vision. A destination. We must be able to see it, feel it, smell it and taste it.

 

This can NOT be accomplished by the employees or a consulting firm. While the vision should be shared by many, it MUST be totally owned by and burning in the heart of the leader of the company. Unless the CEO or UBC as I call them (Ultimate Big Cheese) is totally driven by their vision it will be meaningless in the arms of their employees.

 

On the positive side however, I have noticed one thing that all great leaders seem to have in common. That is the ability to dream big dreams and create a powerful vision of the future. They seem to have the ability to imagine an ideal future well in advance of creating it.

 

Your vision is an imaginary creation of the ideal life you would like to live, in every respect. You create it as an expression of the values you hold most dear. Brian Tracy says, "From the very day that you develop a clear vision for whom you are and where you are going in life, you begin to become a superior person, and soon you begin to accomplish superior results."

 

Here's some advice on how you can develop vision for your company that will help to drive a sense of mission, improve performance and

 

1. Let your mind float freely - One of the great secrets of success is to "dream big dreams." It is to let your mind float freely into the future and imagine that you have no limitations on what you can be, have or do. Imagine for the moment that you have all of the resources that you would ever need to achieve the highest goals to which you could ever aspire. Imagine you have all the time, money, people, contacts and intelligence that you could ask for to become everything that you could ever become. Martin Luther King, Jr. said, "I have a dream," and what followed was a vision that changed a nation. That famous speech is a dramatic example of the power that can be generated by a person who communicates a compelling vision of the future.

 

2. Create your ideal future - Make a dream list. Let yourself fantasize. What would you like to do? Where would you like to go? What would you like to accomplish? And most of all, what kind of a person would you like to become? Since you attract into your life people and situations that are in harmony with the person you really are, what kind of attributes and qualities would you like to develop in yourself so that you can life the very best life you can imagine, surrounded by the kind of people you would most enjoy? John F. Kennedy did not live to see the achievement of his vision for NASA, but he set it in motion when he said, "By the end of the decade, we will put a man on the moon." That night, when the moon came out, we could all look out the window and imagine. And when it came time to appropriate the enormous funds necessary to accomplish this vision, Congress did not hesitate. Why? Because this vision spoke powerfully to values Americans held dear: America as a pioneer and America as world leader.

 

3. Create a "shared vision" - “ I like to recommend a practical exercise to develop your organizational vision. By following this plan you may be better assured that the vision statement that is developed is a shared vision. Plan an uninterrupted time to work on the vision with your most key team members. At this meeting, take an hour to explore your vision. Agree on a rough time frame, say five to ten years. Ask people to think about the following questions: How do you want your community to be different? What role do you want your organization to play in your community? What will success look like? Then ask each group to come up with a metaphor for your organization, and to draw a picture of success: "Our organization is like a mariachi band - all playing the same music together, or like a train - pulling important cargo and laying the track as we go," The value of metaphors is that people get to stretch their minds and experiment with different ways of thinking about what success means to them. Finally, have everyone share their pictures of success with each other. One person should facilitate the discussion and help the group discuss what they mean and what they hope for. Look for areas of agreement, as well as different ideas that emerge. The goal is to find language and imagery that your organization's members can relate to as their vision for success.

 

4. Caution: Do not try to write a vision statement with a group. (Groups are great for many things, but writing is not one of them!). Ask one or two people to try drafting a vision statement based on the group's discussion, bring it back to the group, and revise it until you have something that your members can agree on and that your leaders share with enthusiasm.

 

Only when you have a clear vision of the future that everyone is excited about can you begin working on the mission or path that you will take. Following this will be the goals or steps along the way. A clear vision will allow you as a leader to propel your company forward. It will make daily decision making far easier for every member of the organization. It will allow the organization to move initiatives forward with greater speed and agility. It will motivate a higher level of performance and commitment among your team.

 

So don't be afraid to DREAM BIG because no big thing was ever accomplished without some small person dreaming it first!

DE-STRESS

Do you worry about the future? Have trouble falling asleep? Do you have too many things to do and not enough time to do them?

 

Tired of reading already? Listen to the audio file on this topic by clicking here.

 

There isn’t a person alive who does not suffer from stress. Some people don’t even know they are suffering from stress because they don’t take the time to notice how they are feeling. Such people often feel overwhelmed, burned out, or stressed out much of the time, no matter whether they are at work or at home. But it doesn’t have to be that way. Only you can control how you feel, but you can’t do that unless you are aware of how you feel.

 

Before I talk about what we can do to reduce stress it males some sense to look a little closer at what is and what isn’t stress. There are all kinds’ misconceptions about stress. Often people become so accustomed to stress that they become unaware of it. Many of us suffer the debilitating effects of stress even though we don't feel tense. Stress can change the way you treat others or damage your body even in the absence of feelings of frustration or anxiety.

 

Some people believe that stress is something which affects only those who have high-pressure lives. Many ordinary individuals experience the constant stress of worry, leading unfulfilled lives or of not being what they would like to be.

 

Others believe that the only way to lower stress is to change your surroundings or to take medication. Changing your outlook on life is the most reliable and effective way of reducing stress. Stress comes from the way we perceive the world, not from the way the world really is.

 

Stress is not really caused by events that happen to us. It is not events in themselves that cause our distress, but rather the views we take of events.

 

Emotions have a will of their own and cannot be controlled. We can change our feelings by first changing our behavior or by changing our thinking. For example, getting some work done can keep us from worrying about it. Creating a new understanding of a situation can make it less threatening or stressful.

 

Here are a few things we can do to lessen the stress in our lives and ultimately improve the performance of our business:

 

1. Learn to plan. Disorganization can breed stress. Having too many projects going simultaneously often leads to confusion, forgetfulness, and the sense that uncompleted projects are hanging over your head. When possible, take on projects one at a time and work on them until completed.

 

2.  Recognize and accept limits. Most of us set unreasonable and perfectionistic goals for ourselves. We can never be perfect, so we often have a sense of failure or inadequacy no matter how well we perform. Set achievable goals for yourself.

 

3.  Be a positive person. Avoid criticizing others. Learn to praise the things you like in others. Focus upon the good qualities those around you possess. Be sure to give yourself credit and appreciate your own good qualities, as well.

 

4. Learn to tolerate and forgive. Intolerance of others leads to frustration and anger. An attempt to really understand the way other people feel can make you more accepting of them. Accept and forgive yourself also.

 

5.  Get regular physical exercise. Check with your physician before beginning any exercise program. You will be more likely to stay with an exercise program if you choose one that you really enjoy rather than one that feels like pure hard work and drudgery.

 

6.  Talk out your troubles. Find a friend, member of the clergy, faculty member, counselor, or psycho-therapist you can be open with. Expressing your "bottled up" tension to a sympathetic ear can be incredibly helpful.

 

Stress can negatively impact our personal performance as well as the performance of our business. But you don’t have to be a victim if you make a conscious choice to focus on your feelings and choose what to do with those feelings. You don’t have to react to stress; you can choose how to respond to it.

 

For more information on this topic listen to the audio file “De-Stress” by clicking here.

 
I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com 

Mark Deo

Decisions, Decisions

It's no wonder decision making is so difficult for people today. We're inundated with overchoice.

I'm not a big cereal eater. In fact I rarely have cereal in the morning. I usually opt for egg whites and some turkey. But that has become a bit boring as you can imagine so this week I thought, what the heck I'll try some cereal. I went to the local market to get some and told my wife I'd be right back. I was shocked at what confronted me: an entire isle filled with different types of cereal. How could there be so many different types of cereal? Why? For what reason?

After staring open mouthed at the shelves filled with every type of cereal imaginable I thought, "OK I'll just stick with Tony the Tiger." You know the old standby, Kellogg's Frosted Flakes. I became numb when I discovered that there are actually three different types of Frosted Flakes. "You've got to be kidding me," I realized I said aloud to the dismay of a fellow shopper. "Come on is this necessary?"

After 15 minutes of weighing the nutritional daily allowance, fiber content and comparing the grams of NutraSweet, saccharine and fat for each, I opted for the box with the coolest looking cartoon and of course, the one with the prize (a throwback to my kindergarten days).

Sound familiar? And its not just cereal, its everything! Why do we have so many choices? Because we are barraged with so much information that it makes every choice more difficult than ever before. And more time consuming. Companies must respond to information by making choices and ultimately decisions. Yet time after time they freeze. Too often their choice is INDECISION.

Today making decisions is the most important skill for any entrepreneur and small business owner. Did I say SKILL? Is decision making really a skill? I think so. Can good decision making be learned? Yes! Decision making is a skill that can be acquired with practice.

There are some basic precepts to good decision making. I say follow the six basic rules of good decision making:

1. Get all the facts and weigh the assets and liabilities to each course
2. Get professional advise and opinions
3. Make decisions quickly
4. Don't make a habit out of reversing decisions
5. Accept the risk, stress and conflict that comes with making decisions
6. Make decisions that produce change

Why don't people like to make decisions? Most would say they DO make decisions. But ask them if they make decisions quickly and they would say, NO WAY! This is true. Most people are conditioned AGAINST making decisions quickly. They associate making a fast decision with a bad decision. They delay and the opportunity slips away.

Consider this... When you delay a decision you never have the same decision to make again because in this information-intensive culture, the facts are different the next day and the next week. But people often delude themselves into thinking that they can wait to make a decision and that nothing much will change. Time passes and so does the opportunity. Don't get me wrong I'm not talking about making snap decisions. I'm talking about getting all the facts, weighing the assets and liabilities to each decision, getting professional advise and opinions and then making a decision.

Good managers make decisions quickly and change slowly. We are all looking for the "risk-free" decision Let's face it all decisions involve risk. Most people, unfortunately are risk adverse. We want to wait until "all the data" is in. We want the decision to gently rise to the top in an unmistakable fashion. The problem is that we will never get all the data in. The decision simply will not rise to the top. The data is changing from minute to minute. "All the data" is a concept like infinity. You can approach it but never get there. Risk can no longer be eliminated from the decision making process.

Decision making needs to be redefined as an exercise of risk management. But how do you eliminate the stress that comes with change? You don't! When you make a decision you create change. When change happens people go into stress. It is undeniable. Unfortunately, however, people view stress today as a negative feeling and try to eliminate it from their lives. What we should all be working on is not eliminating stress but coping with the stress that change produces. If you think about it people NEED to be in stress.

We've all heard the stories about the poor guy that retires and within a month or two, he has a heart attack and dies or falls prey to depression. Why? Because he's removed all of the stress from his life. He's stopped changing, stopped being productive and consequently his lack of decisions, change and stress has cause a lack of meaning in his life.

The opposite of stress is not comfort and health, it's apathy and atrophy. Back in the old days when I was working for the man (or the woman in this case) I would often say to my boss, "Man, I'm stressed." And in her infinite wisdom, good old Sue Schneider would tell me, "Mark stress is good, distress is bad." Thanks Sue. Just look up the meaning of these words in the dictionary.

Distress - pain, suffering affliction, state of trouble.

Stress - mental or physical tension, urgency, a force that is exerted.

Which sounds healthy? Look at the stress that comes with change as a catalyst for growth. What can we do if our decisions produce conflict? This is a natural course. Our tendency is to second guess our decisions and quickly reverse them if they produce conflict. Unfortunately most people begin to regret their decisions and take steps at reversing them rather than deal with the conflict. Indecisiveness destroys credibility! Employees attitudes become, "this too shall pass" and view our decisions as just a wave that will roll back to shore. They become cynical and see no reason to adapt to change. Don't fall prey to this deadly sin.

Deal with the conflict that decisions ultimately will cause and watch change occur around you. This is precisely what I focus on in my consulting practice... bringing about change within small businesses by helping management make better decisions. I help business owners and managers to make a habit out of making good decisions. I also try to fold this strategy into my classes and workshops.

Give yourself every opportunity for success this year. Check out our web site for our next Entrepreneurial Workshop and get pre-registered. If nothing else I guarantee that it will be a great way to start the year with a positive first step.

Those of you that have attended any of my classes know that they are energy packed and you walk out motivated and cranked-up!

Can a Corporate Culture Change?

This business update I want to respond to a few questions submitted on our blog. Both questions have to do with corporate culture. The questions posed were:

1. Why is the corporate culture so important?

2. Can the culture be changed or does it simply evolve of its own volition?

While there are some slight differences in definitions of corporate culture, most experts agree that it is the shared "taken-for-granted" assumptions, beliefs, values, expectations and rules that members of a work team or organization hold. This is essentially the guiding light for team interaction, expectations and decision making. The culture is revealed by studying the relationships of the members.

Changing the corporate culture must emanate from the top. The leadership of an organization such as the CEO and the senior management team is the single most critical success factor in a culture change effort. Today corporate leaders have to invest significant amounts of time and energy into a culture change effort and they must personally live, and model the new cultural ethos. Members of the team CAN NOT change without the leadership first changing. Let me say that again: members of the team CAN NOT change without the leadership first changing. This is absolutely essential. In fact when leaders DO choose to "trade-up" their values and belief systems, change often magically occurs.

But in order for the cultural change to take hold within the organization, the members must be re-educated on what is important to the future of the company and how to make decisions that are consistent with that purpose. Therefore the change effort must be accompanied by clear vision, mission and value statements in providing direction and behavioral guidelines for the new culture. Again these must go beyond words cast into a plaque that is hung on a wall. It must be evidenced by daily actions which fall in line with the values espoused.

While working with companies to assist them in creating market growth we often find that the core issues of the company's value systems must be addressed. In these cases we will often bring in our associates from Fifth Wave Leadership. They have worked with organizations large and small to affect cultural change quickly and effectively. In fact the CEO of this organization, Morrie Shechtman is someone who often works with the leadership of our clients assisting them in evaluating and implementing change from the top. Morrie has graciously allowed us to offer to those in our network a greatly reduced rate in working with CEOs and their team. If this is something that interests you please contact me and I will arrange to get you in touch with Morrie directly.

Again, the corporate culture is critical to the growth and continued health of your organization. I urge you to invest your time and resources in discovering how you might create change and ensure growth and leadership in your industry.

Build A Healthy Corporate Culture

You've heard of the book, "Death of a Salesman." This article is about the death of a family. What does that have to do with running a small business, you ask? I'll get there in a moment. First, let me ask you a question: Is your business like a family?

I hear this all the time. "You know Mark our business is different, its just like a family." I know business owners and managers say this to communicate something positive about their company's culture. I think this is great! But I always smile when I hear this. I often want to ask, "Oh yea, what kind of family is it like?" But I don't, because I'm practicing my Dale Carnegie principal of "letting the other person save face." I smile because the relationships within a company CAN be just as screwed-up as the relationships within a family.

For example, consider how favoritism can cripple the relationships within a family. It happens, you know. Its happening right now. The results are far reaching and dramatic when one sibling is treated differently from another. The favored sibling feels that they are not as obligated to perform at a specific level in order to gain a specific reward. Since they are favored they know from experience that they will not be held as accountable as the next sibling. The rules can be flexed for them. Everyone in the family knows this. Consequently there is resentment, anger, hostility and conflict. The unfavored sibling is no longer motivated to perform. No matter what they do, they can not live up to the admiration of the parent. This causes frustration and embarrassment. It can even result in vengeance and criminal activity in order to "get even." The "I'll show them" attitude.

What makes favoritism so insidious is that it can be exercised in a very subtle manner. It may manifest itself in the WAY things are communicated. For example, imagine a circumstance where two siblings alternate weeks taking out the trash. When the unfavored sibling fails to take out the trash, the consequence may be for the parent to say, "I can't even depend on you to take out the trash." When the favored sibling fails to take out the trash, the consequence may be for the parent to say, "just make sure you get it done next week." The favored sibling gets another chance, while the unfavored sibling's wholesale capabilities have been diminished. This is rarely done in a purposeful way or even through subterfuge. It happens on a subconscious level. Before we know it the words are out and the damage is done.

This works precisely the same way for a business organization. As owners and managers our goal is to induce greater teamwork, a more harmonious workplace and improved productivity. One of the most important factors in building teamwork is the leaders ability to implement what I call "equitable response." Equitable response is the leaders ability to react to every team member in the same manner in any specified circumstance. In other words, their ability to treat people relatively the same under any given set of circumstances. For example, don't allow one employee to arrive at work late because she lives further away or because she has to pick up the kids at school. Credibility is lost when owners and managers are inconsistent in rewards and punishments.

Here's what I counsel my clients to do:

1. Consistently reward positive behavior and punish negative behavior. CONSISTENTLY!
2. Don't allow yourself to be manipulated by employees.
   
3. Don't allow your personal opinions to influence the way you respond to team members. The fact that you may like or dislike them should NOT play a role in the reward/punishment process.
4. Let the time you spend with team members become part of the reward. Conversely you should limit the time spent with those team members that fail to maintain performance. Tell them what is expected in no uncertain terms. No idle chit-chat.
5. Model competent behavior. They will do as you do, NOT as you say.
6. Provide consistent feedback and predictable consequences.
7. Set realistic and clear expectations.

In my consulting practice, I rarely see these things consistently being done in small companies. Often times owners and managers have a whole set of rules which apply to different people in the organization at different times. This causes confusion, stifles communication, hinders teamwork and creates fear. It usually ends up with excessive turnover and even anarchy. Sadly the result is the death of a company family.

Does this mean we shouldn't attempt to replicate the family atmosphere in our companies? Certainly not! We should replicate the model of the healthy family where everyone knows what is expected of them and everyone is rewarded and punished with equanimity.

I hope this helps you to learn some new ways to create a healthy corporate culture in your organization. If you are wondering what else you can do to implement a revolutionary change in your business, check out our web site at www.marketingquestions.com.

Ain't No Peddler!

I think we are all proud of our fathers at some point in our lives. Especially when you're hanging out with your third grade pals comparing notes on what kind of job your Dad has.

I'll never forget asking my father what kind of work he did when I was just a tyke. I knew he went to work everyday but I didn't have a clue (or a concern for that matter) what in the heck he did there. Not at least until my friends started telling me what their Dads did. 

I found out that my friend Nick's Dad drove a truck. Pretty cool job I thought. My friend Ricky's Dad was a cop. Even cooler! You can't imagine the disappointment when I asked my father what he did for a living. 

Dear old Dad casually told me, "I'M A PEDDLER".

Now I had visions of my Dad walking down the street with a pushcart yelling: "Get your rags. Fresh rags. Deo Rags here."

How could this be? What would I say to my friends? I wanted to hide in the closet and never come out. (People wonder why I have "issues" even today.)

Luckily, Dad noticed my ashen face, slackened jaw, and watery eyes as a sure signs that I was on the verge of breaking into tears. He sat me down and actually explained what it was that he peddled.

You see it turned out that my Dad was one of the founders of what turned out to be a $200 million conglomerate! Yet he saw himself as a peddler.

I'll never forget what he told me on that day too many years ago. He said, "Mark, no matter what you do in life you will need to get people behind you. A peddler is a very noble thing. They are anyone who peddles their ideas. They are people with vision and passion." That message was never far from my mind as I went through life. I have found that regardless of the role that I am playing, peddling or "selling skills" are critical to success. 

I have been fortunate to have the greatest minds in management and marketing as guests on my radio show. People like Zig Ziglar, Tom Hopkins, Jay Abraham, Jack Canfield, and Seth Godin. All of these gurus agree that selling skills are not just for salespeople.

Tom Peters said, "to put it bluntly: If you can't sell, you're dead. Yes, selling is essential - whether it's your newest consumer product or an idea to increase internal productivity."

Phil Guarascio, GM's vice-president for advertising and corporate marketing said, "I sell ideas and visions. The challenge is to help people see things that they may not be able to see for themselves. Now, I'm not a visionary from the blinding-flash-of-light school. Instead, I base my ideas on intuition, on facts, and on specific opportunities. The greatest resistance that I encounter from people whom I'm trying to sell to is grounded in discomfort -- which really comes from a lack of understanding. So a great salesperson, in effect, knows how to sell understanding."

David M. Ogilvy, founder, Ogilvy & Mather advertising said, "In the modern world of business it is useless to be a creative original thinker unless you can also sell what you create. Management cannot be expected to recognize a good idea unless it is presented to them using good salesmanship."

Regardless of the type of work that you do: management, administrative, clerical, production, quality control, finance, you name it; the most important thing is winning people to your way of thinking. I want to encourage you to find a way to sharpen your selling skills. Get tapes or CDs, attend a class or seminar, read books or magazines on the subject. 

I would also like to invite anyone reading this to attend my upcoming Dale Carnegie Sales Advantage Class in Long Beach, California every Monday night. This class will give you an advantage in your career regardless of whether you are in sales or not. To enroll please contact Dale Carnegie at 562-427-1040.

And remember, if you ARE a salesperson, you're in good company. As my Dad said, "there ain't nothing wrong with being a peddler!"

Who Wants What You Got?

I am honored to receive several emails every week from entrepreneurs looking for advice. Last week I received several from those looking to get their new products to market. What I found to be most interesting about all of these emails was the fact that while their products were all in and of themselves interesting and even technically brilliant, each of these entrepreneurs (I believe, far smarter than myself) seemed to be lost when it came to answering the question, "who could really benefit most from this innovation?"

Cart Before the Horse It really is a "cart before the horse" conundrum. Should you spend more time developing a great product and figure out a way to attract people or should you look to the marketplace for specific needs and develop your product accordingly?

Well both, of course. But I suppose it could be argued that you should spend even more time trying to understand the market for your product than actually designing it in the first place. If there is no market (or the market is too small) it is irrelevant whether the product works or not.

A Better Mousetrap The deadly combination of unbridled enthusiasm for technical innovation and inattention to market issues is so frequently a cause of product failure that some industry watchers have come up with an expression for the result: the better mousetrap that no one wanted.

The Value of Research There is no question that the ability to do a proper market assessment separates the better performers from the poorer ones. Market research is the ongoing process of analyzing customer needs, market size and composition, the competitive environment and industry trends. The goal is to thoroughly understand the marketplace to reduce risk and make better decisions. Market research can help reveal threats and uncover opportunities. A thorough market analysis can help companies avoid common pitfalls such as overestimating the number of potential customers, underestimating the strength of competitors, or pricing a product at a point where customers refuse to buy it.

Where to Start It is important that entrepreneurs start looking at market issues early on in the product development process to focus scarce development dollars effectively. Why waste money and time developing product features that customers aren't willing to pay for or perfecting a product that isn't sufficiently differentiated from competitors' offerings? At an even more fundamental level, why develop a product at all if the market isn't big enough?

Necessary for Funding What potential funders are looking for is not so much a great product or service but rather evidence that a product addresses a reasonably large and growing market. They also want confirmation that entrepreneurs have a solid understanding of the complexities of their intended markets and can answer questions like: "which competitors pose the greatest threat," or, "which customer segments hold the greatest promise?"

Competitive Intelligence It is critical that we take the time to fully understand our competition. Sun Tzu, the ancient Chinese warrior said, "Know thine enemy." In order to cost effectively compete in the marketplace you must "know your competition." I have devised a very simple way for you to gather intelligence about competitors. It is completely ethical and devastatingly effective.

Become Their Customer The best way to understand you competition is to "become their customers," at least for a bit. Few entrepreneurs or small business professionals do this, yet it is probably the most effective way to understand what your competition is all about. Call, visit and research on them. Ask them plenty of questions. Don't tell them you are a competitor but truly become a potential client for a moment and try to understand what makes them tick. I am constantly amazed at the number of organizations who launching new products that fail to do this. As a consultant I perform this task for all of my client's with regard to their competitors. And as I say, it works magnificently.

What Makes Them Different What makes this so effective is a tool that have have devised to systematically evaluate their product or service. I call the "Competitive Landscape Profile" (or the CLP). The CLP allows us to plot the proficiency of each of our competitors on a chart that gives us a very clear picture of who they are, what they do, where they fit and how they are different.

The C.L.P. The chart includes their position in the market, client strategy, distribution profile, pricing strategy, customer service rating, product differentiation, branding strategy, ect. The CLP is a graphical chart that allows everyone to see precisely how each competitor fits into the marketplace. I addition I also recommend that marketers obtain the following information from their competitors in order to fully complete the CLP:  Archive competitors ads. Take a month or two and track where and when they advertise as well as what they say in their advertising. Price list and shipping and return policies. Brochure and promotional material like POP, mailers, packaging, etc.  Analyze their web presence. Commit their names to memory. Research the names of their best clients.

In short it is through fully understanding your competition and the market that you plan to operate in which will dictate the ultimate success of your new venture. So I encourage all of you entrepreneurs to take some time to fully understand "who wants what you got" BEFORE you begin developing you even begin developing your product or service.

I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mdeo@sbanetwork.org.

Mark Deo

The Death of Corporate America

Remember the old days?

Our fathers and grandfathers worked for the same company for 20, 30 or even 40 years. Generations of sons and daughters toiling under the protective arms of the "COMPANY." 

Today it's more likely that we will outlive any organization that we work for. 

It has snuck up on us. We turned our head and all of a sudden Corporate America is dying. 

It is the result of a powerful force that has emerged in our society. Not a company or a new technology or even a new industry. It is the evolution of workers themselves. For the first time in history, there are more workers operating as "free agents" than there are people working for Corporate America. Fortune 500 companies no longer form the bedrock of our workforce. 

How Has This Happened?

This evolution has been rapid and decisive. It has occurred for a number of reasons. First, the social contract of job security has long been broken. Jobs are no longer sacrosanct at Fortune 500 companies. One day these firms are in expansion mode and the next they're "laying off" 35,000 workers. Second, e-commerce and automation technologies have leveled the playing field so that smaller companies with less people could provide the same benefits as larger multi-national firms. This resulted in corporate re-structuring and downsizing. And finally the loyalty/security pact of the previous five decades has been broken. This was evidenced in the mid nineties when IBM broke it's "full employment policy" by reducing it's payroll by a whopping 120,000 employees. In this century, being loyal to a company does not guarantee job security.

What Does The Future Hold?

Today the largest private employer in America is not Ford, General Motors, or even Microsoft. It's Milwaukee's Manpower Inc., a temporary help agency with over 1,100 office throughout the United States employing over a million workers. Temporary staffing has grown from a $1 billion industry to more than $80 billion while employing over ten million temps nationwide. It is estimated that there are over 33 million solo, self-employed workers. And there is an emergence of a new category called micro businesses. These are small businesses employing just 2 or 3 people to drive particular initiatives on either a full or part time basis. In fact, more than half of today's companies have fewer than 5 employees! Don't look to our government to reconcile this societal evolution. They're a full century behind. The Bureau of Labor and Statistics still divides all workers into two categories: farm and "non-farm." Figure that out. 

What Free Agents Love

The work ethic of free agent entrepreneurs is considerably different than corporate employees. These entrepreneurs crave, freedom, control, security, and loyalty. If you think about it, these are the very job benefits lacking in Corporate America. Today free agents come in a variety of forms, entrepreneurs, independent contractors, consultants, advisors, 1099ers, hired guns, nomads, etc. But their focus is on producing a measurable result for an organization rather than performing a specific role within it. Free agents tend to provide a higher return on investment for organizations because of their accountability to themselves rather than to a hierarchy.

Freedom

Freedom is the ability to exercise one's own will. Within the corporate cocoon freedom takes on the meaning that the company as a whole projects. Some companies smother their employees in affection others try to purchase individual freedom with stock options and incentives. Free agents can choose to follow their own work ethic. This extends not only to what they believe, what they do and where they do it but also WHEN they do it. Free agents have succeeded in melding work time with home time. Gone is the Monday through Friday 9am to 5pm ritual. Today they balance a full time home life with a full time work life.

Control

Life in Corporate America is about lining up behind the company culture and philosophy. Free agents can control their own destiny. Consequently they develop skills in areas which they desire to excel. They build relationships with those that match their business culture and paradigm. They focus on selling insight, talent, expertise, ideas, creativity and solutions rather than just performing tasks. They realize that what matters in the course of a day is what is accomplished not how many hours are worked.

Security

The last decade has been one of prosperity. Members of Corporate America had job security but that prospect is diminishing. While a high standard of living has reached deep into middle class many members of Corporate America do not feel that their lives have improved. This dichotomy has altered our expectations of comfort and prosperity. People are looking forward to more than just a comfortable retirement after four or five decades of "work." People are realizing that it's not good enough to work to make money and survive. They desire to work to make meaning for themselves and their families. 

Loyalty

With free agents loyalty does not run up and down an organizational chart. It runs from side-to-side in allegiance to clients, colleagues, teams, projects, vendors and industries. In this sense free agents are far more loyal than company men and women. Companies can also afford to be more loyal to free agents because they lack the overhead that employees bring. Both benefit from the free agent structure because whereas vertical loyalty within an organization depended on one connection (boss and employee) this new horizontal loyalty depends on many connections.

How It Impacts YOU!

In the end I believe that we will see the free agent philosophy infiltrate every industry, profession and area of expertise. Those that are most prepared for this transition will benefit the greatest. Think about your own business. How could you use the "free agent mentality" to bring efficiencies to your business? If you're an employer, how could you increase productivity and reduce overhead by employing free agents? If you're an employee, how could you deliver greater production to your employer and increase your earning capacity by utilizing the above free agent infrastructure?

STORYTELLING

Let me ask you a question. Where do you find inspiration from? Movies, music, books, magazines, seminars, friends, family, co-workers? - Maybe from all of those places.

Let's face it inspiration comes from stories that we hear from other people tell. How they beat the odds, achieved growth, or found a better way, it's all in the story.

You know storytelling has been around for hundreds of years. From the beginning of time, storytelling has been the means by which cultures and societies have preserved and celebrated their memories, passed on their values and belief systems, entertained, instructed and reported. Long before there were written records, storytellers taught through the oral tradition. It was true in the bush, it's true in the boardroom and it's true everywhere in between.

In fact I think true leadership is the effective communication of the story. Our American culture seems to underestimate the power of storytelling. But think about how powerful a story can be when you're in front of a client. Tom Peters says, stories are the red meat that meets our reasoning process. Stories give us permission to act, they are photographs of who we aspire to be, and they cause the most emotional responses. Stories are how we connect with people.

Remember the movie, Amistad by Steven Spielberg. In the movie there was a trial taking place over the status of rebellious slaves. Representing the slaves was a black abolitionist lawyer played by Morgan Freeman. However Morgan was being advised by Anthony Hopkins who was playing former U.S. president John Quincy Adams. Freeman went to Hopkins asking for advice on how to prepare this very critical case in defending the slaves. Hopkins turned to Freeman and said, "early in my career as an attorney, I found out that he who has the best story wins. What's your story?"

Here are some tips on how to move people through storytelling:

1. Don't worry about your communication ability. We are all storytellers. It's the way that humans communicate, store and pass on information. Each of us tells stories every day: about the horrible traffic jam on the way home; about the way the kids acted at the grocery last night; about the great movie we saw over the weekend.

2. It is not necessary to tell them at the level of a professional. In fact it's far more powerful to relate your story in a simple, down-to-earth manner.

3. Don't worry about memorizing a story. Storytelling isn't about exact words. It's about images, and emotions, and sharing those with your listeners. The trick to telling a story isn't knowing every word that is written on the page. Rather, it is the feelings of those in the story. Why they do what they do, and sharing that knowledge and understanding with your listeners.

4. And where should the content from these stories come from. Everywhere! Your experiences and relationships. They can be in the form of case studies, events that might have occurred with clients, employees, management, vendors or even the guy or gal on the street.

5. For more information about how to effectively use storytelling read one of our previous Business Updates, "What's Your Story" by going to http://www.sbanetwork.org/articles_view.asp?id=135

So what's your story? C'mon get involved, inspire your coworkers. Storytelling is a fun way to educate, influence and inspire one another. It's an opportunity for collaboration, and a great way to focus on professional development in a wholly interactive way.

Clothing truth in the form of a story is a powerful way to get people to open their minds to the truth you carry. As someone once told me, "the naked truth sometimes must be dressed up to be seen." New ideas need room to grow. Tell it like it is. But consider telling it in the form of a story.

I hope that this "Business Update" has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com

Mark Deo

Starting Your Business

Not a week goes by that I don't get an e-mail from a budding entrepreneur asking advice in starting a new business. So I thought it was time focus on some of the key elements that make a new business venture a success. By the way, if you currently have a business don't tune out because in the economic downturn such as we are experiencing today, many of these foundational basics can help to strengthen your business as well.

Too often people start a business with a good idea or product that they feel would be successful in the market place. A few succeed, but many invest so much time, effort and money in their product that they forget about the basics.

Consequently, a good product or service sits unused because insufficient planning has occurred prior to its launch. Here are seven areas that all new companies should consider before they start offering their products or services.

1) What are the needs of your customers, and how many customers do you expect to have?

Carefully consider your potential customers. In relation to the product or service that you are about to offer, what are the needs of your potential customers. For instance, when someone buys a shovel, his or her need is for a hole or ditch. The shovel is just the implement required to fulfill the need.

Try to get an idea of how many customers there are in the region that you expect to service. Try to find out as much as you can about them; where do they live; how old are they; what are their interests, what price are they prepared to pay for your product.

2) How will your product satisfy the need of your customers and how many other companies are offering the same product or service?

Having determined the need of the customer, and the size of your potential market, it is now time to look at your own product and others like it in the market.

It is important for you to consider what will be your 'unique selling proposition' or in simple terms the message that you will communicate to your customers.

How many other products are already in the market? If you are competing with several other similar products then it will increase the amount of effort required for you to enter the market effectively. Effort can also mean financial investment. It is important to remember that it will take time for you to capture a share of the market - later in this article we will look at how to maintain it.

From the answers to the first two questions you should be able to predict your market size. From this you should also be able to determine the number of sales that you will need (market share) in order for you to operate profitably. In order to determine this you will need to know your margins. Be realistic about your projected turnover. Often businesses think that they can sell a thousand units a month only to find they sell one hundred initially and only climb to a thousand after a year of trading.

3) What is the message that you want to tell your customer?

What makes you different from your competitors? Have a look at all the advertising and promotional material of your competitors and see what they are saying about themselves. What will make you different from them? Is it the product, location, customer service, price or some other aspect that will ensure you stand head and shoulders above the rest?

Your unique selling point will be a statement that you can use in all your marketing material. It should motivate your customer to buy from you rather than your competitor. It may be that you have more than one message that you want to tell your customers.

4) How are you going to deliver this message to the potential customer and how much will this cost?

Having determined the who, where and what (who your customer's are, where they are and what you are going to tell them) you are now in a position to decide how you are going to deliver the message. There are many choices including direct marketing, advertising, public relations, seminars, newsletters, etc.

There is no simple rule to help you decide which of the above to choose. The aim is to choose the right method that will generate the lowest cost per sale. For instance, if you spend $1,000 on an ad and got four responses but only one sale then the cost of that sale is $1,000. If you spend $4000 on a direct mail campaign which generated 40 responses and results in ten sales then it is a better alternative. It's all about value!

However, if you had placed a second or third advertisement, then your awareness may have gone up and by the forth ad you may have generated 40 responses and 10 sales. The only advice is to choose a strategy and stick to it. Don't spend little amounts in lots of different places. When choosing the right strategy, it is important to reach as many people as possible, but you must reach them in the right place at the right time. Editorial coverage can often be a very cost-effective method. A single news release can be sent to many publications.

5) What process do you have in place to take care of your customers when they come to purchase your product and after they have brought?

Think of all the money you have spent to get a potential customer to walk through the front door. Too often, the customer's experience during their first contact is not managed. They are left waiting, a quote is promised but not delivered on time, a promised meeting is not kept, or the receptionist just isn't friendly. The customer leaves, not wanting to return. Not only have you lost an immediate sale but you have also lost several future sales and probably a few referrals as well.

Managing the experience of a customer is crucial, and if you can't do this properly then the success of your business will always be an up-hill battle.

6) Keep a database so you can get to know you customer

An effective database is one of the most powerful tools that any business can possess. This configuration of names and details is a wealth of information that can be used to generate many additional sales. There are many very effective software programs available today such as ACT!, Goldmine, Outlook, and others.

The more you know about your customer the better your relationship with them can be. The better the relationship, the more likely you are to get repeat sales and referrals.

7) Finally, consolidate your marketing, production and service activities into a business plan.

This plan should reflect the realistic prospects for the business. It should be broken down into quarters (three month periods) and outline the activities that will take place, the anticipated resources required and the associated costs. Most experts recommend that you have funding for the activities for the first year. This means having some of your own financial resources and possibly a loan. There are some fantastic loan opportunities available through the SBA and other governmental agencies.

Standard of Care

For several years many small business owners have asked me the same questions:

"How can I grow my business without significant capital investment?"

"What can I do to stabilize the trends in my business?"

"How can I out-market my competition in the midst of price erosion?"

"How can I maintain a consistent level of revenue to ensure a consistent level of profit?"

"Why are my people loyal one day and turncoat the next?"

"What can I do to motivate my staff to invest more time and effort in effectively selling or delivering my product or service?"

"How can I eliminate excuses and inspire commitment?"

Because these are the most frequently asked questions, I have invested considerable time and effort in seeking out the EXPERTS and learning their methods in dealing with these challenges.

I have made it my mission to vigorously study the masters in management, sales and marketing. The philosophy that I espouse is an amalgamation of what I have learned DIRECTLY from the leaders in business, such as: Tom Peters, Jack Welsh, Stephen Covey, Peter Drucker, Zig Ziglar, Tom Hopkins, Jay Abraham, Tony Robins, Morris Shechtman and many others. I have found that while these business gurus have different approaches, they all seem to agree on six absolutes of successful business management in the 21st Century:

1. We are entering an age of uncertainty, expanding knowledge and unrelenting change.
For these reasons, what worked in the past will no longer work in the future. Even the most successful companies must commit to continuous improvement. Uncomfortable introspection must become a habit - -a willingness to eliminate dysfunctional behaviors, and a determination to model a culture that can tolerate unpredictability, uncertainty and vulnerability. Old methods must be torn down and new paradigms constructed.

2. "WHO we are" is far more important than WHAT we do.
The increase in knowledge and change has created an "Intra-personal Revolution." Individual performance and quality of life will reach new heights by focusing on the internal frontier within each person. A good product or service is no longer adequate. We must leverage relationships and personal values to gain cooperation and market share. Leaders must first change BEFORE they can expect their team-members to change.

3. Business leadership will be rendered impotent without deep commitment to a pre-defined, consistent value set.
This focus allows organizations to clarify and act on core values, which will ultimately serve to create a tangible and unified culture. Corporate mission or vision statements will be useless without clearly articulated and non-negotiable boundaries that are enforced and protected. Values without boundaries are merely platitudes. There also must be value consistency between decisions. Strong leaders never have two sets of values to choose from. It is more important to make "value-consistent decisions" than it is to make the "politically correct" decisions.

4. Accountability must precede profitability.
Accountability does not exist outside of a relationship. People must be accountable to "someone." No one can be accountable to himself or herself. This will produce conflict and confrontation but that is not bad. On the contrary conflict avoidance must be el