Prom Night

The Holy Grail for business start-ups and mature organizations alike is customer procurement. Winning customers at a sufficient pace is critical to the survival of every company and especially for those at the fledgling stage. And yet I can’t tell you how many times I’ve seen entrepreneurs focus more on other aspects of their businesses rather than making sure they have enough customers to keep the doors open.

There’s no doubt that we must have a minimally viable product that our customers want to buy. And implementing a wide variety of systems and processes is also an important factor. But without the customers, everything else is moot. To find the customers and convince them to spend their money with us requires pulling out all of the stops. Top notch interactive websites, regular informational blogs, referral programs, social media, drip marketing, multi-media advertising and positive publicity are building blocks toward customer procurement. Yet, even with full implementation, the customers may not come in numbers or as quickly as are needed. What to do? Go back to the basics and fundamentals.

Think back to prom night – what was happening? Girls had their hair done. Guys were renting tuxedos. Corsages and boutonnieres were purchased; makeup was applied, and shoes were shined to a fine gloss. In other words, we were all trying to look our very best. Think about this with respect to our products or services. Have we done everything possible to look fantastic to those outside our company?

Do prospective customers clearly understand our value proposition? How strongly are we able to demonstrate that our product or service solves a problem and preferably one with which a lot of pain is associated? This is a major failure for a vast number of companies. Their product/service might be nice to have, but the customer can’t find a compelling reason to purchase it. Think Colgate Kitchen Entrees. Never heard of this? You’re not alone. The folks that make Colgate toothpaste thought it might be a good idea to launch a line of frozen dinners. Customers could eat a Colgate meal and then use Colgate toothpaste to brush their teeth. What kind of a value proposition is that?! If we can’t nail our value proposition then neither can our customers.

Customers have many choices when purchasing a product or service. Entrepreneurs sometimes become so enamored with their own ideas that they fail to objectively assess the competition. I’ve certainly been guilty of this myself in the past. I would pooh-pooh a competitor and rationalize that our approach was far more sophisticated and desirable. And yet, I didn’t ask the bottom-line question of what customers liked better about the competition. We may have a product or service that truly is twice as good as anything else on the market, but unless we can make a clear and concise case for differentiation, we’ll be stuck with the rest of the pack. Effectively communicating product or service differentiation means life or death in the business world.

A strong uptrend for customer procurement will happen if we practice the basics and fundamentals. This can be accomplished by presenting our product or service in as attractive a manner as possible; when we have a killer value proposition, and when we effectively communicate how we’re different. Doing all of this will ensure that we’ll be the hit of the party.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

prom night

To Proposition or Not To Proposition

The other day I was talking with an entrepreneur about his company. For a number of years he had achieved a reasonable level of success with the manufacture and sale of a particular product. But more recently his sales had trailed off and he was becoming worried. He made very telling statement, “the product is the same as it has been for the past 15 years – I don’t understand why people aren’t buying it in the quantities they once did.” Framed in this manner, the problem is obvious. But how often do we march on oblivious to the changes that are occurring around us?

I asked the entrepreneur to explain his value proposition, a question that was followed by silence. He admitted that he really hadn’t thought about it for quite some time (actually it had been several years). The bottom line was that his customers no longer saw the value in his product the same way as they had in the past. Tastes change. Competition is fierce. Customers can sometimes feel like they are being taken for granted. Unless we make an effort to continually understand why our customers buy our products or services, we aren’t in a position to make the tiny tweaks or major overhauls that are necessary to maintain our winning streak.

Conventional wisdom says that a value proposition is a promise of value to be delivered. Obviously there’s a lot more to it. A restaurant where we eat sometimes seems to be having a bit of a struggle with its value proposition. I suppose that the proprietor could say to me the customer, “You pay me money and I’ll cook your dinner.” Technically that’s a value proposition – but a pretty bad one. The website for this restaurant references “a special dining experience.” There are some other superlatives in the “About” section of the website, but nothing that would really grab you. There are a lot of little things about this place that demonstrate a lack of focus on a strong value proposition. The prime rib is fatty and gristly; the wait staff isn’t trained to make sure that a diner’s glass of tea or water is always full – even if it’s not their assigned table; likewise, empty plates aren’t cleared by the bus staff while guests are at the table (only by the primary server), and finally, service can be a bit slow at times.

A value proposition needs to reflect the culture of the organization. In the case of the restaurant previously mentioned, there doesn’t seem to be a culture of attention to detail. This restaurant probably gets 95% of the dining experience right, but doesn’t seem to care enough to nail that last 5%. If I owned the restaurant, I would re-tool the culture and become fastidious about the little things. My ultimate value proposition would be something like this: “Most restaurants can cook you a meal. We focus on that last 5% to make your dining experience 100% perfect.” Then I’d follow that with a further explanation – “your drink glass will never be empty; we select only the highest quality beef, pork, poultry and fish; our wait staff will always be looking for ways to serve you – regardless of whether or not it’s their assigned table.” Not only does this clearly state what value we’ll be delivering, but it also defines the points of differentiation with competing venues.

A good value proposition is clear, inspiring and differentiating. To avoid becoming irrelevant, entrepreneurs must continually review and refine their value propositions.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

old diner

The Enemy?

Evil, dirty, underhanded, devious, conniving, despicable, dishonest, cutthroat, backstabbing, snobbish, arrogant, lying and cheating. These are terms I’ve heard applied to competitors over the last 40 years. Without a doubt I’ve missed some. What emotions are evoked when you think about your competitors? Some entrepreneurs I know have pure hatred for the competition and others display a great deal of fear. Why do we associate such negativity to our competition?

The amateur psychologist in me believes it has something to do with our childhood (don’t all of our issues?). On the playground we engaged in competitive duels involving kickball, dodge ball, four-square and other gladiator-like activities. Losers were vanquished with taunts and teasing. When we were older, competition for relationships with the opposite sex was intense. When a sought-after girl or boy chose someone else, we were crushed and dejected. Fast forward to today and it’s no wonder that we often see our competition as the enemy.

But do we really benefit from viewing our competitors in this manner? Competition is actually a wonderful thing. Let’s look at several of the reasons why.

  • Competition stimulates creativity and innovation. Every day we know that our competitors are working overtime to develop new products or services. To keep from being left behind we do the same. New discoveries are made out of this process that may generate greater profits and capture a larger market share.
  • Best practices emanate from a competitive environment. Let’s face it; we don’t have all the answers. So, observing how others do things and testing our approach accordingly can lead us to implement better systems and processes. Without competition what would be the incentive to improve?
  • An inefficient market is the byproduct of competition. Some competitors are stronger and some are weaker. If every competitor was equally strong how would anyone win? The concept of winners and losers is critical to a healthy yet inefficient market.
  • Hand-in-hand with the inefficient market theory is the opportunity for differentiation. This is good for the consumer and it’s outstanding for the entrepreneur. Why? Because we have the opportunity to create a level of variety that may appeal to more customers. It’s not just about “better;” it’s also about “different.” If every boutique sold the same black dress, doesn’t it stand to reason that a boutique selling a purple skirt might win a few more customers than the black dress sellers?
  • Competition helps to broaden the talent pool. It provides career paths for the workforce into which we as entrepreneurs can tap. We can create cultures where people want to work, giving them the chance to grow and advance their careers. And in the process we get to attract the best and the brightest.

For years we’ve enjoyed good relationships with our competitors. We view them with respect and in some cases, admiration. Other terms come to mind as well; friendship, collaboration, empathy and gratitude. Collaboration you say? Yes, we’ve often referred customers to our competitors when we couldn’t meet their needs and they’ve done the same for us. In 2008 a Maine portable restroom business owned by Jeff Bellino burned to the ground. Who came to the rescue? Bellino’s competitors! They provided portable restrooms, toilet tissue and chemicals so that he could keep going while he rebuilt his operation. Competition is at its healthiest when competitors have each other’s backs in a time of need.

When we embrace the notion of strong and healthy competition we enhance our chances for success. There’s no doubt that competition makes us better entrepreneurs in every respect.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

gladiators

Worldly Serious Lessons

Indulge me with this blog posting. The 2014 World Series has just concluded and was one of the most exciting I’ve ever seen. It truly kept us on the edge of our seats until the last out in the bottom of the ninth inning with a Kansas City runner on third base who could have tied the game. Even though my Kansas City Royals did not prevail there are some excellent baseball metaphors that translate into some wonderful entrepreneurial lessons.

The MVP of the World Series was the Giants ace pitcher, Madison Bumgarner. Even though I’m a Royals fan I marveled at this cool, calm and collected 25-year old phenom. He pitched in three games during the Series and limited the Royals to nine hits, one run and one walk in 21 innings. Folks, this is called differentiation. There is no doubt that Bumgarner was the difference maker in the World Series for San Francisco. As entrepreneurs we increase our odds for success the more significantly we can differentiate our products or services.

The 2014 Kansas City Royals are a young team. There are no superstars in this bunch. The Royals didn’t even win their division, making the playoffs instead as a Wild Card entrant. They beat the Oakland Athletics in the Wild Card game; then swept the Los Angeles Angels and Baltimore Orioles to win the American League pennant. A lack of superstars also meant a lack of big egos and prima donnas. The result was a group of young men bonding together as a real team. This was most evident when one of the top hitters took it upon himself to lay down a sacrifice bunt to advance a runner when the Giants least expected it, rather than trying to hit it out of the park. Entrepreneurs succeed more often when we function in a true team fashion rather than as lone wolves.

While I’m gushing about my Royals, let me add another dimension about this team. It was evident that these guys were having fun. Game after game we saw scenes of players laughing, joking and genuinely enjoying themselves. Some of the players Tweeted where they were going to party after the games and bought thousands of dollars of drinks for their fans. What is the point of being an entrepreneur if we can’t have fun doing what we do? I’ve talked to a number of entrepreneurs who appear to be successful but are miserable. This is a dangerous “crash-and-burn” formula.

Finally, it was fascinating to observe the focus displayed by Giants and Royals players alike. When the focus was lost there were strikeouts, errors and walks. When the focus was maintained it was a thing of beauty. There were spectacular catches all over the field. Tough pitches were turned into base hits. Base running was exquisite. In the entrepreneurial world we know the importance of focus. If we “scatter our fire” we strike out more often than not. But when we focus, we create a special energy that serves to deliver the results we want.

Baseball is a sport. Entrepreneurs play for keeps. At the intersection of the two is differentiation, functioning as a true team, having fun and maintaining focus. Play ball!

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

baseball

It Only Cost a Buck

Question: Recently I read an online customer review about my business and it was pretty mediocre. We delivered the service we were supposed to. Why would someone give us such average marks?

Answer: Maybe the service was mediocre. It’s my theory that people generally expect average which is a pretty low bar. That’s also why it’s so easy to wow customers with a little bit extra. There just aren’t a lot of companies that consistently deliver the wow factor.

While vacationing recently I had the opportunity to eat in the same restaurant while driving to our destination and again when driving back. Apparently the general policy at this restaurant is for the server to leave the ticket at the end of the meal and the customer pays at the cash register. During my first visit, our server saw me take out my credit card and asked me if she could take the ticket and my credit card and handle the payment without my having to go to the register. This was a small but friendly touch that resulted in my rounding up the bill to the nearest five-dollar amount and calculating her tip on that basis. My visit on the return trip was, well . . . average. Our server was friendly enough but when the time came to settle up, I put my credit card on the table with the ticket and it sat there. She came back twice to clear dishes but never made a move to pick up the credit card. I finally paid at the register and guess what I did? I rounded down to the nearest five-dollar amount to calculate her tip. It only cost her a buck, but imagine what that could add up to over the course of a year.

In my second encounter the server didn’t do anything wrong. In fact she was undoubtedly following restaurant policy. Thus she met my expectations. But it wouldn’t have taken much for her to exceed my expectations as her colleague had done a couple of weeks earlier. This minor incident highlights the fact that it doesn’t take much in this average society of ours to really stand out. As entrepreneurs we’re always looking for ways to differentiate ourselves and our businesses. We don’t need to get fancy about it. Just understand what average is and find simple and friendly ways to beat average.

The same lesson applies to life in general. Do we want to have average relationships? In my book, life to a great extent is about the people that pass through it. I’d like to think that the people in my life get more than “average” from me. Having the mindset of always giving a little extra effort will make this so.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

dollar bill

All Else Being Equal . . .

Question: Competition is tougher than ever. What is the most effective way to be different?

Answer: You have certainly asked the right question. Whether we are selling a product, a service or looking for a job, the key is differentiation. Think for a moment about great companies in America today and how they are different. Walmart is known for huge selection and low prices. Nordstrom is a champion of customer service but sells at a higher price point. TOMS Shoes donates one pair of shoes to a needy person for every pair of shoes a customer purchases.

Identify your niche and figure out how you can be the absolute master of that niche. But don’t stop there. Make sure that everything about your company, your product/service and about you – is reflective of this mastery. Allow me to share an example. One of our companies acquires, owns and operates apartment communities across the country. Buying apartments is a very competitive business these days. We have chosen to focus on purchasing properties that were initially developed using affordable housing tax credits. There aren’t as many buyers for this type of property due to the complexity of the tax credit program. We have become known as a buyer that understands the program and will pay a fair price.

We’ve taken the niche a step further. We market extensively to prospective apartment sellers and have attempted to be just as unique about the way we go about doing this. We don’t use e-mail – everyone does that now. Instead we send personally addressed high-quality marketing materials via snail mail. Our kick-off piece was a gold cardboard tube that contained a cover letter and a black velvet bag. Inside the bag was a gold dollar coin with a message saying, “Consider this to be a down payment on a profitable relationship.” Every three weeks an announcement of an apartment acquisition is sent to our prospective sellers. And one of our associates makes follow-up phone calls every 60 days. Believe me it is having the desired effect.

Here’s the takeaway. Do your homework and find that area in which you can specialize. Get creative and devise unique ways to deliver your message. Remember that those who win are able to convey a value proposition that resonates with their customers (or prospective employers). Above all remember that life is about making a difference in the lives of others. From an entrepreneurial perspective, those who follow through and truly make a difference will prosper.