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Prospects Should Be Courteous

I invited a business owner to come and talk to me about where he wanted to go with his business. I thought from what he told me about his concept that I might be able to help with his business vision and provide strategy that would get him the sales he wanted.

He accepted and he and his partners came — or most of them did.

Within a few minutes of starting our meeting, one of his partners began to get cell phone calls all of which he took. I consider that rude.

I deal only with small business owners. I know that calls can be critical and that owners feel they have to wear all the hats at first and do everything. I don’t mind if they need to take a short call or deal with an emergency.

However, if they are expecting an important call, then it would be courteous to let me know when we begin. I also think if the call is important enough to interrupt our meeting for some time, they should be courteous of my time and just reschedule. Things happen. I respect that.

Did the prospect think he should do this? Maybe, but he was still rude. Photo courtesy of flickr.com/roland

This prospect took one particular call and without saying “excuse me” or anything to me or his partners, he left the room. Actually, he left the office for about 10 minutes. No one knew what was happening. I think that was rude to me and the others.

I continued to talk to the other partners while we waited for him to return. When he came back, there were no apologies, no nothing to me or his partners. That’s rude.

You know you’re rude when your partners apologize for you after you leave. That’s what happened. The biggest apology came from the man who asked for the meeting originally. That took a lot of guts from him and I appreciate the courtesy.

I wish this company success but I only want to work with owners who treat partners and vendors with respect. Prospects need to have good manners, too.

Has this ever happened to you?

4 Traits Make Sure You Have the Right Customers

Don't give your hard-earned pennies away to just ANY customer.

Everyone wants and needs sales to have a profitable and successful business. But, sales from the wrong customers can kill a business.  If you doubt me, read Angel Customers and Demon Customers by Larry Selden and Geoffrey Colvin.

What should you look for? Basically, there are two options:

  • Low hanging fruit — the most responsive, easiest sale, shortest sales cycle
  • High value  —  the most lucrative, harder sale, longer, requires more thorough sales process so longer sales cycle

How do you decide who is right and who is wrong? Focus on customers who are worth your sales staff’s time and efforts. The right customers have the following four traits. They:

  1. Add more value than just the dollars they spend.
  2. Contribute to the reputation of the company by their presence or referrals.
  3. Are enjoyable to work with.
  4. Match the culture of the business.

A penny saved attracts other benefits.

There are major benefits from concentrating on finding and keeping the right customers. If you have hired the right sales staff, they will close more new sales and better sales if they can point to and use what they learned from existing  “right” customers.  They can get upsell and get new sales from existing and even former customers when they are starting from the best.

If you are worried about reputation and the value of the company, the right customers are your best answer. With the right sales process and continued high touch attention and reinforcement, they bring in others like them. Why? Because, they can’t resist bragging or sharing their good fortune.

You will get customers who are not a good fit. If they are really a bad fit, even if money is tight, fire them. They take energy away that is not replaceable. They take time that you can’t afford to waste. They are not satisfied and they attract others like them.

A Case Study of Angel and Demon Customers is Still Relevant

New money can learn from experience. (This is the back of the new 2010 penny.)

Wall Street Journal staff reporter Gary McWilliams, in January 2005, wrote an article, The Customer Isn’t Always Right on Best Buy’s efforts to attract and keep the right customers. Its CEO Brad Anderson said he wanted to separate “angel” customers from the “devils”, the 20% that drove profits down.

To do this, its store clerks were given hours of training in how to identify desirable customers according to their shopping preferences and behavior. This was based on an examination of sales records and demographic data and sleuthing through computer databases to identify good and bad customers.

Other changes were also put in place. To lure the high-spenders, it stocked more merchandise and provided more appealing service. To deter the undesirables, it cut back on promotions and sales tactics that tend to draw them, trimmed them from marketing mailing lists, changed store policies based on the “bad behavior” of  “demon” customers that cost the stores time and money. The trickiest challenge was to deter bad customers without turning off good ones. But, the results were worth it, with sales gains running nearly double of what they were before this policy was put in place.

Older, wiser money

Certainly, the economic situation has changed. But the premise remains valid. In good times or bad, focus on the best and forget the rest. You may not be as big as Best Buy or think like a mass retailer but can you afford 20% losses from the wrong customers?

What can you add to this discussion?

See a penny, pick it up and all day long you'll have good luck.

What are you doing to protect your business from attracting the wrong prospects and keeping the wrong customers? Please share your successes so that we can all benefit from what you have learned. I would like to do a followup post based on reader input.

Photo credits: flickr.com/photos/sjsharktank,  /nrossi, /bad9brad, /opensourceway, /stevendepolo

Does Your Business Need Glasses? A RISE Austin 2010 Presentation

Proud to be green. Here’s my paperless slide presentation, “Does Your Business Need Glasses”,  from RISE Austin 2010 on a better way to get better sales by using niche marketing aimed at a platinum customer. It makes positioning, pricing, and sales procedures more approachable for independent businesses.

It also includes details on the Business Success Center’s sales process that customers go through: from their decision to look for something to meet their needs and desires to the point they buy and then rejoice or experience buyer’s remorse.

Small business owners and entrepreneurs will want to follow the prioritized action items  in order will help avoid mistakes and expand sales opportunities. This is primarily of value to those already in business although it has ideas that startups can incorporate.

Using these ideas result in better sales and lower costs. Collateral is more effective and the sales cycle is shorter.

Selective Marketing

Below is a presentation I gave at a local Austin meetup. It deals with how to use sales and marketing strategies and processes to save money and increase sales.

Podcast: State of Texas Business Today

How are we doing? Since there is no legislature in session, the Governor will not give a state of the state address this January. So Ben Philpott of KUT radio (90.5FM) asked some of us who are living through it to give our perceptions.

The interview, entitled “Their State of the State”,  is worth a listen. You’ll hear what I, the Comptroller’s representative RJ Desilva, and others have to say about how well Texas business is doing.

Basically, we all independently think that things are pretty static but teetering and could go either way. We do think that things will eventually break — just when is anyone’s guess — we’re hoping the log jam breaks in 2010 which would mean a good state of the state address in 2011.

Personally, I hope people who have not lived through a downturn keep positive and don’t make a “knee-jerk”, too quick response. It is not necessary to throw the baby out with the bathwater.

After you listen, tell me what you think. Do you agree with us or not? What are you experiencing in your business and what do you hear from your customers?

I am going to be putting your comments and current stats and trends in my own state of small business post coming soon.

Think Before You Buy

A message to my neighbors in Central Austin and to any community that has had to live with the fallout from having a big box store push its way in.

The first spade of dirt has been turned. The bulldozers are busy. The piles of broken asphalt and dry earth are mounting up.

When I try to make my normal walk from my office at the Chase Tower around the Northcross triangle, I can’t. There is a metal fence with a plain green cloth stretched from the middle of the parking lot all the way to Anderson. I can’t see what is happening except through holes where the cloth doesn’t fit quite tightly enough to exclude me.

I do see Sandy’s Shoes at its new location if I go around by Conn’s. I see some other businesses, like Go Dance, still going strong. I see a new look at Thundercloud Subs. I see continued growth in the Northcross IBIZ District that celebrates the uniqueness of our locally owned and operated businesses. There are new banners hung on light poles and a new feeling of pride. And, that is good.

I hear from some of the other neighbor businesses that the time has come – just like the Walrus said in Alice in Wonderland. WalMart is going in. We hope it will be a good business neighbor but we don’t know.

And, we wonder, will all the good relationships we developed with people from the neighborhoods continue?  We all hope so.

Will they continue to come in and buy? We need it or our “true center of Austin”, the Northcross IBIZ slogan, will just become a place to drive through as quickly as possible. Or worse, it’ll become just a place to get cheap stuff with no heart, no soul, and no identity.

Every neighbor can help. And the price and the people are right. So, think first, then buy.

Before you go to a big box store to have that key made or buy that battery or air filter, see what Zinger Hardware has to offer besides beautiful furniture and plants.

Before you buy a gift for your child or sweetheart online, look at the fun stuff at Kids-N- Cats and Terra Toys, or make something at Sea of Beads. You might even find just the right “house gift” at Lamps & Accessories, Urban Living, or Scandinavia Contemporary Design.

Before you sign up for that pre-portioned diet food, see what Body Business or Yoga Yoga can do to make 2010 a healthier year and a healthier you. Garbo, a salon, is another Northcross favorite. And don’t forget to relax at our own neighborhood theatre, Alamo Drafthouse, or skate your troubles away at Chapparal Ice.

Before you buy that computer or cord at a non-profit or national store, see what Discount Electronics has in stock and get great answers to tough tech questions. Tell them you appreciate their efforts to help us keep a neighbor-friendly atmosphere where driving is easier and walking or bicycling is safe.

Before you buy that cheap CD, go hear unique sounds at Encore Records & Video. Ask Charles to tell you about his early days in West Texas and all the music greats he rode to school with on their motorcycles. Keep the creative juices flowing, the inspiration going along with keeping the stories alive. You’ll learn a lot.

Before you buy that cup of coffee or soda at that chain, think how good local tastes and how much it matters to us all, not just the owners of Genuine Joe’s and Thunderbird.

Any purchase, every purchase is more than just the “thing” you bought – it has a life and a history and people behind it. The local stores and their owners and employees share your community. They have been here with you through the fight to get a WalMart more in size and perspective; to get a big box store that is also in keeping with our united community vision instead of an imposed superstore that reduces us to just any other residential area with few local stores to call our own. You gave your time and money and they gave just to make a difference. Don’t forget.

I know you will buy from chains and big boxes and other places outside our five neighborhood area. But, keep some of your money doing good at home. Shifting just 10% of your shopping from chain stores to locally owned businesses annually, adds $244 million to our local economy creating 2,855 new jobs. And supports a sustainable local economy for us all!

If you check out what is offered locally, you may not buy but you will have looked. You will have made an effort and surprise, surprise you will find local business that have better stuff at a better or comparable price than what you thought you could only get at a giant.

Give it a try. Download the Northcross map or any of maps of the other IBIZ Districts in Austin. (Currently there are six.) Then tell me what wonderful purchases you made by making the choice to buy local, not global. Be sure to name the store or business so we can support them and keep “buying local” a neighborly and economically smart thing to do.

I was the Chair of the Business Liaison Committee for Responsible Growth for Northcross, As a business owner, neighborhood resident and as one who got to know a lot of these owners, I just want to thank all those businesses who participated in our efforts. You made a difference for yourselves, for your customers, and for our future. You’ll be seeing me soon in your store or buying your service.

(You can follow the Northcross IBIZ District through  Twitter,  Facebook and the Austin Independent Business Alliance web site. To find more locally owned businesses all over Austin, see, IBuyAustin.com.)

3 Older Business Books That Inspire

Periodically, it’s good to go through your business library and freecycle what no longer inspires you. Passing them along to others means I don’t have to feel badly about getting rid of books. Instead I think of them as getting a new home.

Here are three that I would not part with no matter what year it is or how old they they are. So instead of giving them away, I want to encourage you to add them to your library or go to the library and check them out.

Because people matter

Small Is Beautiful: Economics as if People Mattered by E. F. Schumacher was originally published in 1989 but is based on a 1959 series of London University Lectures. He promoted sustainability and green before they were popular.

Schumacher was ahead of his time. And, although some of the book is dated, it focuses on what still could be a wonderful world. Theodore Roszak refers to his approach as “nobler economics that is not afraid to discuss spirit and conscience, moral purpose and the meaning of life.”

It is uplifting to read. A client, Sharon Sarles, asked me if I had read this because she thought she heard me voice many of Schumacher’s ideas. I had not. But once I had, I never wanted to let this book and its vision disappear. I was honored that she thought that I had read it. Now I try to tell everyone who will listen about him and this book.

Small truly is beautiful and it inspires me to focus on small businesses and their owners who truly care about their business, their families, their community and the world. If you want to be involved or learn more, there is an E.F. Schumacher Society which is located in Great Barrington, Massachusetts.

Believers, Rebels & Competitors

Neanderthals at Work: How People and Politics Can Drive You Crazy…and What You Can Do About Them by Albert Bernstein & Sydney Craft Rozen, 1992. They have some great ideas on how to keep sane when people and politics drive you crazy.

Bernstein, a clinical psychologist,  has a website and still explores “Neanderthals” and other creatures. No offense to all the Myers-Briggs and personality test stuff out there, I just like this better. It’s fun, witty, and very different as you would imagine from the title. Other people may find it too simple.

This book  helped me look at my past and current customers – not just employees. It helped me understand me. I am a Believer – as are most small business owners who are active in their business. It helped me help other owners because the traits they discuss, once you know them, are easy to spot. BTW, it is good to match what  kind of Neanderthal you are to who you sell to and who you hire. I find hiring a “Competitor” or having one as a client is usually not a terrific idea.

I do admit, as someone with the same business partner for 27 years, I have often wondered what happened to Rozen, the co-author. Looks like she has gone on to write some interesting books for families.

Why small business matters

Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for America’s Independent Businesses by Stacy Mitchell, 2006, shows why we should try to keep every community weird.

Mitchell is the inspiration for many Big Box Ordinances around the country including Austin’s which took TWO YEARS to get through City Council and almost did not make it. She came and spoke here a few years ago at an event sponsored by Austin Independent Business Alliance. She is terrific in person and in print.

Her research in Big Box Swindle on the impact on communities when mega stores move in is eye-opening, jaw-dropping and blood-boiling. She tells it like it is: the good, the bad, and the exceedingly ugly. For small businesses who try to sell to these companies like WalMart, the results can be devastating. For small businesses in the shadow of them location-wise, with some exceptions, it does not mean better sales or even more sales. It usually means a slow death.

She has a great website full of ideas of what to do when faced with this and a terrific newsletter to keep us all connected.

There is a story behind this book. I bought it from BookPeople, our independently owned bookstore in Austin. It was signed and autographed by Ms. Mitchell. I was proud to have it.

As the Business Liaison Chair for Responsible Growth for Northcross, I carried this book everywhere. When I went to speak on behalf of the Big Box Ordinance in Austin, I carried it. Our goal was to get Council and citizens to see that a huge Walmart Supercenter store placed on neighborhood streets, across from a school, was not good for community development or retention.

We lost in court but WalMart did decide to scale back to only 90K feet from about 200K sq feet. We will have to live with it but thanks to Mitchell we knew how to fight and not lie back and take it and how to protect our neighborhood and our businesses. We also know now what to watch for as the project goes forward and we have a strong network. Most importantly, I think, it brought five neighborhoods together with the area businesses and it pushed us to request the creation of  the Northcross IBIZ (Independent Business Investment Zone).

The tragedy for me is that somewhere along the line, someone picked up my book. I only hope they find it as inspiring as I did. Hopefully, I will get another copy and maybe Ms. Mitchell will sign it.

More of my book recommendations are  located in the “Worth Reading” widget on my blog. I update it periodically when I am inspired. Do you have a book I should add?

What “oldie goldies” are on your shelf? Have you told someone else about why they matter at least to you? Pass on the wisdom. We need all we can get.

Be sure to watch my Tweets for date and time of when I am freecycling some of my business library. I just hope they will inspire you and you will give them a good home until you pass them along.

15 Reasons to Change the Date of Thanksgiving

Thanksgiving in Canada is held on the 2nd Monday. Maybe we should, too.

I love Thanksgiving but it’s got to go. Let’s do something about it now while there is a full year to get organized.

Here’s why: there’s just not enough time between it and Christmas. If you don’t celebrate Christmas, Hanukkah or other religious holidays in December, there’s not enough time between it and the end of the year because of the time taken up by all those other people who are celebrating.

Do you find yourself  agonizing over what to do?

• Get work done for pay or get work done to keep connected to friends and family. Shopping, decorating, and card writing is work, too?

• Focus on fun, family and friends, giving donations of time or money or both to causes we support or be professional and concentrate on end of the year business stuff – closing out the books, preparing for next year, making final sales quotas, finishing projects or reports?

What are the benefits to moving Thanksgiving?

Lots — for retailers, drivers, teachers, students, the community, the US government, airlines, therapists, police, tax collectors, November birthday people, environmentalists, even turkeys. They have economic, social, educational, and environmental implications. These benefits save and create resources that a November Thanksgiving does not provide.

  1. Black Friday would be earlier and retailers would have longer to make the year happier and more profitable.
  2. Capitalism would increase because more customers could visit more stores more often.
  3. Cities and states would get more sales tax dollars.
  4. It might ease traffic and reduce accidents on the streets and in and out of parking lots because there would be more time to shop instead of everyone trying to get around town at the same time.
  5. Government offices and agencies would have more staff available since everyone would not be on vacation basically from November 20th or so onward. That means they could get more done, spend more locally, and make their vendors happier.
  6. We would save energy because Thanksgiving travel would be at a warmer time of the year. Less delays, nicer weather. Airlines, trains, and buses would see their cash flow even out and not need to make their profit in 4 weeks.
  7. Teachers could get a break earlier to catch their breath after all the rush of getting school started.
  8. Students would love getting two days off sooner.
  9. People born around in November would have a birthday that was just for them and not bracketed by another event. As one of those, I am all for that.
  10. People would be happier and less stressful so there should be less need for therapists at this time of year. This would free those hard working psychologists, psychiatrists and social workers to be with their friends and their family.  That way, they would be happier and less stressed, too.
  11. There would be less bad behavior and violence in November since there’s no need to hurry through Thanksgiving to have enough time for Christmas or other holidays. This would free up the police or at least give them a break before holiday break-ins, shoplifting and New Year’s DWI’s.
  12. Turkeys would live longer. (As a vegetarian this is not very meaningful to me but I am sure it is to them.)
  13. I would get all my work done.
  14. My staff would be happier because they would have more time to get things done, too.
  15. My staff and I would not have to choose between our jobs and our families and friends — and neither would all those other business owners out there and their employees.

Who would like to move Thanksgiving? We all should.

Look at all the advantages. We could even bill this as the new way to improve the economy.

Moving it was not my idea but I think it is a good one. My friend Anne suggested it originally. Her comment came out of high frustration – too much to do and too little time. She says Thanksgiving is a harvest celebration. Her argument is November is not harvest time in most places. And, that’s true.

Who wouldn’t like it? Purists.

We change other dates. I know it would take a mind change and a few other things. Moving Christmas is out of the question. It would have more benefits than changing daylight savings time which is a made-up thing anyway.

How would we do this?

I suggest we follow the Canadians and put it in October. They follow plenty of American traditions. Turn around is fair play. (My friend Chris G. says they hold Thanksgiving in October because it is too cold to hold it later.)

No matter why they do it, I think it would be great. We would be ok if we held it in October – still on a Thursday following US custom, say mid-month, then we wouldn’t run into that other major holiday, Halloween.

What I say is “Go Cannucks!” October Thanksgiving here we come.

What do you say? Would you vote to move Thanksgiving?

Thanks Anne for a wonderfully inspiring idea.

Before I start a petition, find a sponsor for a Constitutional amendment or set up a PAC, I want to hear your comments and opinions. I really do.

Do you have another suggestion on how to survive during this time of year and not start the new year exhausted?

Photo courtesy of ryanjunell.

Bloggers Helping Bloggers

secret-cabal-logo1I think I am pretty organized. I think I am disciplined. But, boy oh boy sometimes I need a little help from my friends.

Especially when it comes to blogs. I don’t know about you but I sometimes get writer’s block when it comes to blogs. Or I get started and then get pulled away to do other critical things. So I have several half done that I  really want to finish.

My friend Julie Gomoll and I decided to do something about that for others like me. We are co- hosting our first blogging party get together to “get one done and posted” this coming Tuesday, Dec. 21, 2-4pm at our BSC (Business Success Center) offices Chase Bank Blg 7600 Burnet Rd. We are located across from St. Louis Catholic Church/cross street is Northcross Blvd – go in the tower, not the bank.

The goal: to inspire each other and other fellow bloggers. The clublet is called The Secret Cabal of Bloggers. Click for more info and register at EventBrite.

Bring your laptop and we’ll provide munchies. Walk away with your next post and new friends.

No charge. Not a class. Only requirement is your willingness to share ideas, support and encourage others. “It can take a village of business owners to finish a blog.”

We hope to make blogging fun again.

Hope to see you there.

Here’s to our success!

Small Business IS an Economic Stimulus

TxFlag-1The most current LMCI numbers from Texas Workforce Commission for small business ownership in the Austin – Round Rock Metropolitan Statistical Area or MSA (which actually goes from Georgetown to San Marcos) are encouraging. As of the latest data (March 2009), these micro businesses, businesses under 20 employees, represent 86% or more than 29,500 firms and the number continues to grow. (BTW, there are only 169 firms with over 500 employees in this same area.)

This is not unusual. When people get laid off sometimes their only option is to create a job for themselves by starting a business. And the Austin area has been extremely supportive of this. As a matter of fact, it has been used as a major way we have been able to work ourselves out of recessions – six that I know of since we started in 1982.

Starting a business can be easy and tough. Easy because the person knows how to make the product or provide the service. Tough because that isn’t all they have to do now that this is their business. When they had a job, there were others to take care of all areas of the business that were not “their job”. As an owner, now they are responsible for everything including areas they may or may not have experience with or like to do. And, it can be rough going.

In tough times, existing small businesses can also have tough times because owners are not running them right either. They just go from project to project. They look at their check book to see if they made any money and they don’t fix the problems. They are too busy “making the donuts” to stop, really look at what is happening to them, and make adjustments. Or, maybe they are afraid to look because of what they might find.

The result for both startups and existing businesses can be missteps, missed opportunities or disasters. Failure rate (defined as closing the doors owing money to others) currently is running about 10-15%. Usually the causes are inadequate or incorrect financials and the negative impact  on marketing/sales. Not knowing the true total cost of overhead, not just the products and services you provide, means you under price and over promise. Or, worse you sell the wrong things to the wrong people. The last buggy-whip makers might have cornered the market when cars first became popular but they aren’t still around unless they watched and adjusted their financials as well as added other products or services.

Startups and existing small business owners must look at what they are doing and how. They must get and keep their financial house in order. Not just focus on getting more sales. Now more than ever, this is too important to let things go and just hope everything will turn out OK.

Seattle, WA Public Market began in 1907 is the oldest continuously operating market for small businesses

Seattle, WA Pike Public Market began in 1907 and is one of the oldest continually operated public farmers' markets in the United States. It is a place of business for many small farmers, craftspeople and merchants.

It is also too important to the entire community no matter where that business is located. Starting, retaining, and growing small businesses is the best economic stimulus for everyone.  Most new jobs come from those of us who own a small business. Most people returning to work or first time job seekers, start by getting a job with us. This is the way to create good wages for owners and employees. This is how yet undreamed of products and services are created. By the federal Small Business Administration‘s own research, small businesses are 10 times more innovative dollar per dollar than big business – why because we have to be. So, let’s get our act together. Our future depends on it.

Share your experience. What are you doing in your business to keep an eye on your true costs? What adjustments have you made or are you planning to make? What suggestions do you have for other owners?

Take Action: Keep up with current business trends by subscribing to LCMI. It’s free because your taxes have already paid for it. To receive their data on Texas and any MSA, send an email to lmci@twc.state.tx.us. It has terrific information on all sizes of business as well as employment numbers and trends.

Flag photo by: jstephenconn

Market photo by: kodama_atpl