Filling the Entrepreneur’s Skill Gap

In a past Blog, I have written about making sure that you surround yourself with a team that covers any areas that are not your strong point. As an entrepreneur, you have many skills and the drive to succeed, but rarely do you have it all. Therefore, is crucial to find people to help you with those areas. Many entrepreneurs find this difficult, for different reasons. One reason that is often cited is lack of funds to hire employees.

The reality is that you do not need full time employees to do everything that has to be done, and hiring contractors for critical elements of your business process can work, and often are less expensive than you might think. While it might be a challenge to come up with funds to pay the contractors, it is well worth the effort when you see the outcome.

For example, I am engaging in a sales campaign for another enterprise in which I am involved. We are doing it the old fashioned way, sending out letters with a real ink signature and following up with a telephone call. I do not engage a full time person to do sales for this particular company, at least not yet. How did I find my sales caller? In this case, I used the site Elance and found a person that had the skills that I needed. I then interviewed her by phone (a great test of someone’s phone skills), and finally had her do a few test calls. Based on the results, she has been making sales calls for 9 months now.

Another example would be using a service to make your work look professional. Last year, I conducted a survey in the same industry as the company mentioned above. The results were significant and very interesting, but the resulting white paper looked kind of blah. I then used a graphic artist who took the content and formatted it with typesetting and graphics that brought immediate attention to crucial information and conclusions of the report. I never could have done that on my own.

The lesson taken is that an entrepreneur/small business owner will never have the skills to do it all, so don’t be afraid to hire a contractor to fill in those skill gaps.

Question: do you have any examples of how you used outside help fill in skill gaps. Also, do you have any suggestions on where to find the help you need?

Great Customer Service is No Accident

Nothing brings out the bulldog in me more quickly than poor customer service. Recently, the bulldog has had too many occasions to come out! In one case, a company website where I was trying to pay a bill was not working. The site was quite rudimentary for a $6 billion dollar company, with no help function at all. When I called the only number listed on the site, I went through the “pass you on” routine, with lots of hold time during which I was told how important I was to their company.  Finally, I reached the office of the right person to talk to, but she was on vacation. I sincerely hoped that she would make it back from vacation else I might never be able to pay my bill online (or anyone else, for that matter).

In another instance, a well-known delivery company left me a form to sign to have a package delivered on the second attempt. I even called the company to let them know that they could leave the package in the foyer and that I would sign the form. The next day, I found a second form next to the first. When I called this time, the customer service person could not tell me what happened and passed me on to the local terminal.

After a couple of tries, and more messages about how important I was, I reached the terminal manager. The manager explained to me that company regulations did not allow them to leave the package in the foyer of my condo. To put a quick end to the story, about fifteen minutes later when I removed my teeth from his leg (figuratively, of course), he agreed to have the package left as I had requested.

Customer service should be in the DNA of every company, and it does not happen by accident. Based on my experience, both as a customer and as a service provider, here are some guidelines to great customer service:

  1. Every employee of a company is potentially a customer service agent. Even amid the myriad choices in a company’s voice response system many people get through to one employee or another. Therefore, all employees must be trained and ready to handle customer service at a triage level, that is, be able to understand the problem and get the customer to the right place the first time.
  2. There should never be a circumstance where the only person who can solve the problem is not there. When there is a technical problem, multiple experts must be on hand. For a small company, this may mean having experts on call. With today’s technology, reaching a person who can solve a problem should not be a problem.
  3. Customer service representatives must be given reasonable authority to solve a problem. Repeating company policy is not a solution. Nor is saying, “My supervisor is not here right now, he will call you back.”
  4. At the very least, customer service representatives, supervisors and managers must learn how to ask questions and listen, not only to understand the problem, but ascertain what the solution is that the customer wants.

Finally, a suggestion to all companies: please stop using the “your call is important to us” routine!

Sound Advice

I was at a networking group one time where a young entrepreneur made a presentation to a group of business owners and other savvy professionals. I was of the understanding that the entrepreneur was going to talk to us about how to attract people to an internet site. He did, but in the context of a sales presentation for his business, which I believe was generally not what the group in the room expected.

What followed was probably not what the entrepreneur expected either, as the group began to ask some very pointed questions as to what he was presenting us. Fortunately, the presenter was open to the questions, and proceeded to receive some extremely valuable lessons about business. Here are a few of the astute observations of the group.

“Name two ways that you are different from your competition?” A member of the group posed that question, and pointed out that most of the entrepreneur’s competitors would claim the same two differentiators. The lesson here is differentiation is more than just a few ideas. Differentiation is based on capabilities and knowledge that you possess that gives you an advantage in the marketplace. To understand how you are different than your competition requires careful research of your market and customers (actual and potential) and an in depth understanding of the capabilities needed to deliver to them.

“Who are your customers?” One of the very keen observations of a member of the group, was that, while the entrepreneur wished to expand on their customer base, was he really clear on what his current customer channels were, and why they were working? In particular, had he done enough to take advantage of this channel fully? One of the reasons why his current main channel was working so well was that his referrals were coming from people that were doing technical work. Would other channels less familiar with the technical nature of the entrepreneur’s work be as fruitful?

“Watch the technical language!” The young entrepreneur came from a technical background, and technical language rolled off his tongue easily. A number of members in the group pointed out that they did not understand what he was talking about. What the entrepreneur needed to do was talk about the benefits that the technology offered his clients, rather than talk about the technology itself.

“When speaking to a group, take charge of the room!” Sitting in a chair, the picture of laid back competence, the entrepreneur did not convey any energy to the group he was addressing. He got the point when one member of the group told him to stand up, now; and he did! Dispassionate speaking may work at a scientific conference, but you need to convey energy, confidence and emotion when you are selling. Your humble correspondent also brought up a few of the points about telling a story when speaking to a group, including a main character, conflict and resolution (see my Blog “Telling Your Story”).

After the session, I mentioned to another member of the group that perhaps we should send the entrepreneur an invoice for consulting for all the valuable information that he had received. If the young entrepreneur follows only a portion of the powerful information proffered, he should see an increase in his success as a business owner. Someday, he may even by one of the “savvy” members of that group!

Market Research on the Cheap

I am currently teaching a college course on Small Business Operations. As part of the course, each student is developing a business plan for a small business that they might like to start at some point. For the last several classes, we have been working on Market Research, with each student responsible for doing research for their particular business. Working on this exercise with my class reminded me that it is not necessary to spend a lot of money to do market research, in particular if you are going to start a local retail business.

There are a lot of questions that you can ask when conducting market research, but to simplify things for a small business, there are three subjects to focus on:

  • Industry
  • Competitors
  • Customers

 

And since we are focusing on a small retail business, these three subjects are studied in the context of a particular geography.

To start with, the students went to tools like Google and Yahoo, to get an idea of their chosen industry in a particular area. In addition, they are using the public library system to access online tools such as LexisNexis Corporate Affiliations and Reference USA without cost. The students also took advantage of such sites as the NAICS Association to further research businesses in their chosen locations.

Once the students have gotten a view of their industry and located competitors, they began doing the best type of research, using their cars or legs as primary research tools. As they walked and drove around their market and viewed or visited potential competitors, they asked question such as:

  • How many of your competitors are in a particular area?
  • How often does a typical customer use this type of business?
  • How far is the typical customer willing to walk (drive) to get there?
  • What is the typical customer going to buy?
  • How much will the average customer spend?
  • How do the competitors differ from each other?

 

One of the students in the class, who is working on a business plan for a retail clothing store, was quite perceptive in the differences between clothing stores in the chosen area. The new store would be competing with stores that sold three classes of goods: larger stores with a wide variety of clothing, smaller stores with exclusive lines and high prices and similarly sized small stores carrying less expensive “imitation” brands.

The student also noted how some varied in their presentation, some with narrow aisles and crowded displays, others were more wide-open. This student even studied how music and other factors were used to create an attractive “hip” atmosphere.

Another student in the class whose project is a tea room chose an area that has a mixed community, but close to two university campuses. There are a number of chain coffee shops in the area, and one independent coffee house, but none specializing in tea. This student has noticed that the neighborhood has a certain ambiance and would like to open a tea shop that encourages people to see drinking high quality teas from around the world as being part of their lifestyle.

A third student in the class is thinking of offering a service to people in her neighborhood. She is researching her idea using the same online tools as the other students, but is also passing out questionnaires and interviewing potential customers in person.

As you can see, some fundamental online tools and simply walking or driving around the market area are effective tools for developing a picture of a local market, one that students are using with much energy and enthusiasm. Come to think of it, you don’t need to be a student to take advantage of these tools yourself, entrepreneur!

“Why should I Consider Your Company to Work for Me?”

You always find what you are looking for! One of the points that I made in last week’s blog posting was that if you were going to get ahead, you had to be very specific about your value proposition. Sweeping general statements that amount to offering all things to all people simply do not work. As it turns out, a networking group that I participate in took up the subject in an interesting fashion.

The discussion, led by Jack Heyden (Performance Mentors LLC) was centered on several questions. Although each question Jack posed was concerning a different circumstance, the essence of each question came down to, “Why should I consider your company to work for me?” The circumstance in which you had to answer the question was that you were sitting in front of a decision maker and you were on the spot to answer, right now!

Jack himself made the point that in order to successfully answer that question you must present no more than three options about what you do; the three that would most likely correspond to a problem or situation that the decision maker most likely faced.

Len Bland, (Concept Equity Group) mentioned that answering the question presupposes that you have done your homework; you have researched the industry, company and the decision maker so that you can present the most likely service that the decision maker or someone knows might need. Len added that he tries his best to learn about the person he is speaking with before he talks about any of his services.  This may enable him to share a story that is similar to a problem they have.

Tom Lemanski (Vista Development) brought up an excellent point about selling in this type of situation. If you offer something valuable, and then pull it back, people tend to become more interested. Mention the ideal outcome of your services, and then add a phrase such as, “But I’m not sure that’s something you would be interested in.” Be careful to cultivate an attitude of selling that is something that you do “with” prospective customers, not “to” them.  “The best way to achieve that is to adopt an attitude of an assistant buyer as opposed to a typical seller. When you become the prospect’s advocate for the right buying decision, you gain a higher level of trust and rapport”.

Tom also pointed out that, as did many other members of the group, that developing a relationship is key, “People will never care how much you know, until they know how much you care.”

I would add that all of these suggestions for how to present your value proposition quickly and clearly is the necessity of being able to state your value proposition in terms of how your potential customer will benefit, not in terms of what you can do. The customer needs to understand how they will benefit from your intervention, so that they can decide why they should consider your company.

Return to the Cold (Call)

Most people dislike nothing more than the cold call that arrives at suppertime, or any other time for that matter. Often you will hear a computer generated voice asking you to wait, or a human who speaks so fast that you cannot understand a word that is being said.  The urge to slam the phone down can be overwhelming, though not really recommended with the tiny cell phones most of us use these days. However, having once earned my living doing cold calls as a Real Estate professional, I do try to be courteous, at least to the people. You could ask, why would anyone even bother these days?

I can’t speak to those that make cold calls directly to homes to sell a product or service, or collect for a charity, although the person who calls and makes as if they are my best buddy does annoy me! But there are other situations where calling someone that you don’t know may still be a viable option. The questions to answer are:

Why are you calling?

Who are you calling?

What are you going to say?

Why are you calling comes first. If you don’t know why you are calling someone, don’t pick up the phone! I say that half in jest; you generally have an idea of why you are calling someone, but have you really articulated the purpose of your call beyond a fuzzy idea? In particular, are you ready to talk to that person?

I almost always pick up the phone and I am often greeted by silence followed by a frenzy of words. When you are making calls, don’t get too comfortable with voice mail. Those of you who make the calls know what I mean; you sit there counting the rings praying for voice mail, and then someone answers! Tongue tied gibberish often is all that will come out of your mouth.

Who are you calling is determined by why you are calling. If you are unemployed, you may be calling someone that you were referred to or a person you have seen on LinkedIn that you feel might be able to help you, ore even a hiring manager. If you are a business person, you may be calling to make connections for your business, or better yet, to sell your product or service.

Finally, consider what you are going to say. You will have roughly 15 to 30 seconds to introduce yourself and state the purpose of your call! If you cannot do that clearly, you will most likely get the dreaded question “What’s the purpose of this call?” (title of a previous Blog posting. In order to express yourself clearly, I recommend having a printed list of bulleted words or short expression, no more than 3 or 4, to guide your opening phrases. Below that could be another series of bulleted words or phrases for the rest of your phone presentation.

Two things will increase the probabilities of success when you need to make cold calls; first, proper preparation and secondly, the knowledge that you are among the few who are actually trying!

Predictive Analytics; A Useful Marketing Tool?

Several days ago, based on an e-mail I received, I did a little research into Predictive Analytics. Among other things, I found an interesting and easy to read article by Eric Siegel, titled: Predictive Analytics with Data Mining: How It Works*. What follows is a brief summary of Predictive Analytics according to Siegel. I would like to ask my readers: do you use Predictive Analytics? If you use (or have used) this technique, could you please post your experiences of and comments about Predictive Analytics?

According to Siegel, Predictive Analytics is a technique that is based on discovering what he calls a Predictor, a value that you can measure about your client. He uses the example of a measure that he calls recency; a customer who has made a purchase recently will be more likely to make a purchase than a customer that purchased longer ago. The practical application of this understanding in a marketing campaign, according to the article’s author, is to contact clients who have made the more recent purchases first, as they will be more likely to purchase.

Siegel points out that combining predictors can make the technique more effective. Taking the already mentioned predictor, recency and combining it with personal income can make the predictor more accurate. He uses the following equation to show how it works:

recency + personal income

If recency carries more weight than personal income, he would alter the equation to:

2 x recency + personal income

Siegel calls the equations above linear models and goes on to point out that Predictive Analytics can take the form of models using what he calls business intelligence rules with the following example:

If the customer is rural, and her monthly usage is high,
then the customer will probably renew

Eric Siegel then goes on to explain how technology is used to apply Predictive Analytics, combining Data Mining of your customer data in order to find the models that are the most appropriate for you to use. I found the article to be quite instructive and encourage you to give it a read. Here is a link to the article: Predictive Analytics with Data Mining: How It Works. Again, if any of my readers have experience with Predictive Analytics, I would greatly appreciate it if you could post your experiences and comment.

* Originally Published in DM Review’s DM Direct, February 2005.

Cloud Computing and the Move to Variable Cost Business Models

This week I have a guest Blogger, Michael Hugos, a leading authority on Business Agility and Emerging Technologies. Michael recently completed speaking engagagements in Europe and Asia, and is currently on a tour of US cities. Here are his thought provoking ideas on Cloud Computing.

Economic prosperity in this high change and unpredictable real-time economy that we live in means companies need to free themselves from the constraints and risks of fixed cost operating models. In the last century business models were largely based on fixed cost operating models that employed capital investments to leverage economies of scale and produce incremental profits by turning out ever increasing volumes of standard products and spread operating expenses over larger and larger numbers of units sold.

This model worked as long as product demand was reasonably predictable and stable because it allowed companies to allocate labor and capital to optimize production and maximize return on investment. But when product life cycles are shortened to months instead of years and when the predictability of mass markets is replaced with the uncertainty of a global real-time economy and rapidly evolving consumer preferences, the capital intensive fixed cost business model is just too risky.

So how can companies reduce their risk and move toward a variable cost operating model? One of their best opportunities lies in the use of a technology known as “cloud computing”. Over the last 10 years information technology (IT) has moved from driving mostly back office functions to driving front office, customer-facing functions – IT is now mission critical to just about every function a company performs. And cloud computing delivers computing power and services to customers on a variable cost pay-as-you-go basis determined by the number of users and their volume of transactions.

Companies that understand how to leverage cloud computing and software-as-a-service (SaaS) offerings such as the popular Salesforce.com sales support software enabled by cloud computing will enjoy variable cost operating models that make them optimally suited to succeed in our present economy. Business operations and IT are so closely intertwined there is hardly any meaningful distinction left between the two, so companies using cloud computing will see operating costs rise as business grows, but just as importantly, they will see operating expenses drop automatically if their business declines. They will be free to enter new markets quickly and experiment with introducing new products without big investments in IT. They will not have the risk of being stuck with large sunk costs in technology if demand for their products and services does not meet expectations.

Some of the companies (and their stock symbols) providing cloud and SaaS offerings are: Amazon.com (AMZN); Cisco Systems (CSCO); Google (GOOG); Hewlett-Packard (HPQ); IBM (IBM); Microsoft (MSFT); and Salesforce.com (CRM). Cloud computing provides ubiquitous storing and processing of data just as public power grids provide ubiquitous availability of electric energy. And providers of cloud and SaaS offerings enjoy economies of scale that enable them to provide their services at lower price points than most companies can achieve if they try to do it on their own.

Universal access to low priced electric power delivered by electric utilities drove a wave of innovation in business operations and made possible the introduction of thousands of new products based on related technologies such as electric motors, transistors and electric lights. We have only begun to see the business innovations and new products that will be introduced based on universal access to low priced cloud computing services and related technologies. Cloud computing and the variable cost business models it supports will drive sustainable economic growth for many years to come.

[Michael Hugos, principal at Center for Systems Innovation [c4si], delivers seminars and executive briefings and mentors project teams in agile systems development. His newest book is Business in the Cloud: What Every Business Needs to Know about Cloud Computing.]

URLs:

Center for Systems Innovation
Amazon listing for Business in the Cloud

4 Tips for Good Marketing Strategy

At a recent networking group meeting, one member passed out an interesting article by Phil Krone, President of Productive Strategies, Inc. in Northfield, Illinois. Phil had written an article about what he called Micro-Marketing, the use of individual, personal contacts of different sorts, including hand-written notes, letters and postcards.

Phil mentioned in his article that a number of highly successful people contacted him enthusiastically about Micro Marketing. He also articulated 4 principles for Micro-Marketing. As I read them I realized that these for principles were good advice for any marketing campaign. Here they are!

Make it personal: One example that Phil used in his article was a person that mailed personal postcards from Moscow to potential clients. Given that they were personal and handwritten, they got past the gatekeeper. During the discussion about the article in the networking group, another person added that research, using Google, LinkedIn and other resources can also yield information that can help you make contacts. Now, just knowing that someone is interested in golf is not enough, what also counts is a sincere interest on your part (an old Dale Carnegie concept that is still valid) can help you make a contact.

Deliver Value: Phil’s point on this tip is to be sure that you offer something that is of value. His example was to respond to a senior executive’s article that expressed concerns with some answers to the senior executive’s concerns. When I have met people at networking or other events, I try to keep the discussion on their business. The discussion often leads to information for which I can give a quick tip or send an article or some other material that the person will find useful, leading to continued conversation and often a first meeting.

Be creative: For me, this is the toughest one. I tend to be a numbers person so my recommendation is to find ideas from colleagues, the internet and in particular, your happy clients. My most creative moment was probably the creation of my brand, the COO’s Bulldog, and that came from one of my clients.

Be memorable: Phil mentions a great example of how an accounting firm sent out stuffed monkeys with a message about getting the “Sarbanes Oxley Monkey” off their back. My granddaughter still plays with her talking “AFLAC” duck that I gave her several years ago. It doesn’t have to be a stuffed toy; the real knack to being memorable is creating an image in someone’s mind that won’t be forgotten.

To read Phil’s original article, click this link.

What’s the Purpose of This Call?

(Kevin Callahan, the COO’s Bulldog, is on vacation. This article was originally posted on Aptil 19, 2010)

I received a call last week from a local number that I did not recognize and decided to answer the call. It was a person who I had originally spoken to a couple of weeks ago that was building a new business as a financial advisor for a well known company. In the first call, this person had asked if he could send me some information. Although I was not looking for a financial advisor I did speak to him for two reasons: first, he and I share the same alma mater, and second because as a former Real Estate Agent and current consultant who uses the phone to find business, I understand what his experience is.

My interlocutor rapidly went through some information that was largely incomprehensible because he was speaking so fast. That was probably due to a bad case of nerves because I had actually answered the phone. He was most likely expecting another voice mail (they never call back!). I interrupted him and asked the dreaded question that anyone who makes calls for a living often hears, “What’s the purpose of this call?”

My purpose was not to cut him off, but to actually offer some guidance, if he would be willing to listen. He told me his purpose; to offer his services as a financial advisor. I then asked him whether or not he knew if I needed his services. He was a bit taken aback, and admitted that he did not. I then proposed to him that perhaps he should first find out if I did need those services, before offering them to me. This was a novel concept to him. It had not occurred to him that he needed to know anything about me at all in order to propose his services.

Many small business owners and entrepreneurs use the telephone to find business. Many more do not, because it is a difficult and time consuming activity. You must speak to a lot of people in order to find the few that might need your product or services. Given the prevalence of gatekeepers (voice mail being the greatest gatekeeper of all), if you are going to use the phone to find business, you want to maximize the potential of every conversation that you actually hold.

A bit of preparation about the person that you are calling can help. Granted, you cannot do a lot of research on every person, but if you know even a little bit of information (their industry, geographical location, or business size for example) then you can craft a good question to ask that might lead to a meaningful conversation. For example, in my case, I have more than a bit of gray hair attained through experience (and age). If all my caller knew about me was when I graduated from college, he could craft a question that might be appropriate. For a financial advisor the question you would ask a 2000 graduate would probably differ from one that you would ask a 1973 alumnus.

The point that I am trying to make is that in telephone solicitation, like any other sales avenue, you must open up a dialogue focused on the potential client’s need, not on what you do. If you cannot focus on the need of the person that you are talking to then you have no chance of success in making a call. From my own experience, it is a difficult way to find business, but not impossible. Keep in mind that a well-targeted question, and the persistence to make hundreds of calls can produce success.