Why Should I Be Your Customer?

I often ask my clients to answer, “Why should I be your customer (client or patient) (CCP)?” from the point of view and value proposition of their ideal CCP’s, not their point of view.  That question is also featured in many of my seminars and workshops.  In fact, I posted a blog in October 2015 entitled “What is Your Product or Service?” which expanded on that very important question.  I just finished an article in the December 2018 edition of Builder magazine entitled “Closing The New vs. Existing Divide” by Vincent Salandro which offers another very practical take on this subject. While focusing in on the factors that lead home buyers to buy newly constructed homes rather than existing homes, the article presents a statistical approach to understand home buyer preferences and how a builder might increase their market penetration.  The article quotes data from the Zillow Group New Construction Consumer Housing Trends Report 2018 to make a strong case for developing a very deep understanding of the value proposition of the ideal customers of new home builders. The Zillow Group report found that while 38% of potential home buyers considered buying a newly constructed home in 2017, only 11% purchased one.  In delving deeper into the data, the author expands on many of the factors that would be useful in refining a builder’s definition of their ideal customer.  Some of the factors included where:

  • Age – new home buyers tend to be older
  • Ethnicity – 74% of new home buyers self-identified as Caucasian/White
  • First-Time buyers vs. Moving Up or Downsizing buyers
  • Geography

The article goes on to look at the top fourteen reasons buyers purchase new homes.  Such factors as:

  • Everything is new/never used – 48%
  • Ability to customize features of the home – 23%
  • Ability to have smart home features – 6%

These were a great look at new home builder’s customer value proposition. Finally, the article looked at how new construction home buyers shop for their home.  Most who purchase newly constructed homes relied on technology, 68% using a laptop or desktop and 46% using mobile devices to shop for their home.  Only one-third of new home buyers used mobile, much less than buyers who purchased existing homes. What does this have to do with your business?  To answer that, I have a homework assignment for you.  I suggest you ask yourself the following questions:

  • How well do you understand your ideal Customer, Client or Patient? – When is the last time you gathered any market statistics that might be used to refine who your ideal CCP is?
  • How well do you understand ALL the various factors that make up your ideal CCP values? – Have you asked your CCPs why they buy from your company?
  • How well do you understand how your ideal CCPs found you? – Are you “hanging out” in all the places you should?

My colleagues and I are well equipped to assist you to better define, understand and find your ideal customers, clients or patients.  The better you are at serving them, the more successful you will be.

2017 Business Excellence Forum – Blinding Flashes of The Obvious Part 1

I said it last year, and I must say it again, the Business Excellence Forum (BEF) gets better each year.  There were more than 500 business owners, executives, team members and business coaches in attendance in Houston, Texas.  With that many attendees, there was an abundance of formal and informal exchanges of ideas, strategies, success stories and best practices. This year’s forum had an extensive list of keynote speakers whose presentations yielded many Blinding Flashes of the Obvious (BFOs) and new ways of looking at things.  The following are some of the BFOs that struck a chord with me, most of which will enhance the value I bring to my clients.  I am sure that some of these will have a similar effect on you. During the opening session, Brad Sugars, founder and Chairman of ActionCOACH shared the following:
  • We often present the concept of Learn More to Earn More. Brad added Serve More to Earn More.  Serve More to Earn more became one of the major themes of this year’s Forum.
  • To serve more, you must set an expanded vision (more about that later) and then you must grow into it.
  • Brad highlighted the difference between a Leader and a Coordinator. Leadership is all about the Vision.
  • During a discussion of referral strategies, Brad challenged everyone to develop a pre-gifting strategy. For example, give a book relevant to your product or service to ten of your top customers and encourage them to pass the books along to people who would benefit from your offering.
Our first keynote speaker was Keith Cunningham, author of “The Ultimate Blueprint for an Insanely Successful Business” and creator of the CFO Scoreboard.  (keystothevault.com) Mr. Cunningham, while explaining financial reports in very plain, simple language, slips in many gems about business.  Following are some of the most important:
  • For most in business, the universal answer to business problems or issues is growth – most of the time, that is a fallacy. It is often more effective to consolidate your business and address the problems directly before resuming your growth.  After all, your problems may grow bigger as your business grows.
  • “To play the game of business you’ve got to speak the language.” The language is knowing how to read and understand your financial statements and KPIs.
  • You need two things; Language and Scoreboard:
    • Language (Report Card) = Financials
    • Scoreboard (Dashboard) = Optics which leads to strategy
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  • To make more money, get better at business
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  • M+D+A=N – Management -> Decisions -> Activities -> Numbers.  The numbers on your Report Card (Financials) influence your Activities and your activities determine your Report Card.
  • What activities need to change to change your numbers? When you stand on the bathroom scale and are unhappy with the number you see, what are you going to change to eventually see a happier number?
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  • We have too many goals, we need more standards (non-negotiable goals).
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  • Running your business with un-read or improperly formatted financial reports is like playing pin the tail on the donkey.
  • You give what you tolerate – every management failure is caused by a lack of courage.
  • PROFIT is a Theory – Cash is a FACT
  • “It is not about getting big, it’s about getting rich (generating cash).” Too many businesses lately are focused on getting very big.  Many of them are burning cash along the way.
  • The only reason to spend money is to get or keep customers.
All the BFOs above were from before the morning break!  There is much more to come from Keith and other speakers in the next blog post.

Going That Extra Mile

I recently used eBay to sell a file cabinet that I no longer need.  Oh, the benefits of more and more of my business being conducted online.  Because of its size and weight, the file cabinet was listed as local pickup only.  When the auction was completed, the buyer paid immediately and contacted me to arrange a time to pick the cabinet up.  When I met Leo, the buyer, at my storage facility I was surprised to be introduced to a Chinese man in full business attire, three-piece suit, beautiful silk foulard tie, the works.  The buyer was accompanied by another Chinese gentleman, John, who was dressed in business very casual attire, khakis, polo shirt, sneakers, you get the picture. While John maneuvered the van into one of the loading bays, Leo and I took a dolly up to my storage unit to retrieve the file cabinet.  By now you are thinking what does this have to do with business? While in the elevator Leo explained that he was on his lunch break from Bank of America, and John is his client.  John, he told me, is in the process of opening a daycare center and mentioned that he needed a file cabinet.  When he asked Leo for advice on where to purchase a used file cabinet, Leo suggested eBay.  John had never used eBay so Leo went the extra mile, logged into his eBay account, placed the winning bid, completed the transaction, and accompanied John to pick up the cabinet and to translate.  For me, that was a WOW moment, I was quite impressed by Leo’s dedication to his clients. So, here are three business related questions I want you to consider:
  1. When was the last time a banker, especially from one of the giants, demonstrated that level client focused service? Or for that matter, what is the service level of many of the large businesses you regularly business do with?
  2. What is the service level you routinely offer to your customers? Do you WOW them on a regular basis?
  3. What would be the resulting increase to your bottom line if you separated your business from your competitors by raising your level of service to WOW?
As Brad Sugars, the Founder and Chairman of ActionCOACH said at our 2017 Business Excellence Forum last month, “Serve more to Earn more.”  Leo is certainly doing just that.  If you would like to make more by serving more, my colleagues and I at ActionCOACH will be happy to assist you.

2016 Business Excellence Forum – Blinding Flashes of the Obvious Part 2

More BFOs from Day 1 of the 2016 BEF, Troy Hazard continued. Troy told a story about car salesman who had sold him a luxury car in Australia where he lived before moving to the USA a few years ago. The salesman asked how often he traded cars in, Troy answered about every 4 years. The salesman began contacting Troy about every 6 to 8 weeks, by mail, email, telephone, you name it – when Troy moved to USA permanently the salesman continued kept in touch.  After about 4 years the salesman called to say it’s time for a new car.  Troy told the salesman that he permanently moved to US and salesman continued to stay in touch.  On a family visit back to AU, Troy dropped into the dealer and asked the salesman why he continued to stay in touch, answer … “I sold more than 100 cars to your friends.”  The business question to ask yourself is; How is my business staying in touch with our customers, members, advocates and raving fans? (See the following section – day one BFOs from Brad Sugars – The Ladder of Customer Loyalty). Next, Troy urged us to always have absolute clarity of where the money/profit comes from.  His example was an electrician who repositioned to being a Total Energy Solution. Troy also told us about one of his companies that had five salesmen.  Following a typical bell curve, at one end of the curve was a salesman who was only doing about $60,000 in commissions and was way below quota.  In the middle were three salesmen at or slightly above quota, earning $100,000 to $125,000 in commission income.  At the other end of the bell curve was a salesman who was pulling in about $275,000 in commissions.  Troy then threw a trick question at us, asking who he fired.  Most guessed the $60K salesman.  In fact he fired the $275K salesman, explaining that he was disruptive, not a team player, stealing leads from the others, didn’t embrace the company culture, etc.  The business question here is who on your team is not fully engaged with the mission/vision/culture of your business?  By the way, he also fired the 60K salesman. The final BFO from Troy Hazard was very simple; Change or Die, one change at a time!   Our next speaker was Brad Sugars, the founder and chairman of ActionCOACH.  Brad opened with the statement that “Profit comes from REPEAT BUSINESS.” Next Brad presented the ActionCOACH Ladder of Customer Loyalty. IMG_7935 small The first rung of the ladder is Suspect – a target or an ideal customer.

Suspects are moved up the ladder to Prospect via marketing.  Prospects have taken some action; responded to an ad, visited your store, called to ask buying questions, etc.  The BFO here relates to the ActionCOACH 5 Way Formula, “if the Conversion Rate is low, the Target is WRONG!”Prospects are moved up the ladder via sales to Shopper. Shoppers have made their first purchase.  The BFO that Brad mentioned here is “the 2nd purchase is 10 times more important than subsequent purchases.”

Shoppers become Customers when they make that all important second purchase.  This is where you begin to build a relationship with your customer.  Have a consistent point of contact and establish genuine know-like-trust in the relationship.

As you develop stronger and stronger relationships with Customers they can become Members.  Members will develop a sense of belonging.  The sense of belonging must be enhanced by superior, personalized customer service and continued relationship building.  The BFO here is Great Customer Service starts with doing business with those you want to do business with (see Target above).

Continued relationship building and consistent superior customer service will result in your Members moving up to Advocates.  A major BFO here is every customer defines customer service differently, that is why building strong relationships is the KEY.  Advocates will refer their friends and network to your business.

If you consistently deliver exceptional customer service and continue to build relationships, your Advocates will become Raving Fans.  Raving fans will refer all of their friends and their networks to your business.

Whew, this wraps up my BFOs from only the first day of the 2016 BEF.  Stay tuned, there is much more to come.

What is Your Product or Service?

As promised in my last Blog “Is Your Business Commodity or Value Based?” I would like to discuss the definition of your product, the total definition of your product, the real definition of your product.  First, a little background.  I have too often encountered business owners and professionals who stop at the obvious definition of their product, “I’m a pediatrician, I provide medical care to kids,” never either consciously or unconsciously going deeper.  And if the owner doesn’t fully understand what his or her company is delivering, what are the chances that their team consistently delivers the complete product?  That is why I consider understanding of the complete definition the product or service of a business one of the fundamentals of having an exceptional business. In my last Blog, I said “Once you have determined your clients, customers or patients (CCPs) definition of value, you must marry it to your product or service in order to have your UVP (Unique Value Proposition).”  Without a genuine UVP, you are doomed to playing the features leap frog game with your competitors.  So how do we marry our CCPs definition of value with our product or service? The answer is simple, but not easy.  You and your team must answer “Why should I be your customer?” from the customer’s point of view.  One way to accomplish this is to try this exercise that I use with my clients; make a list of 100 reasons someone who fits the profile of your ideal, not your only, customer should do business with you.  The easy part is putting the first five or six on the list.  After that it gets progressively more difficult.  I must be honest and tell you that only one client has gotten to 100.  After eliminating the duplicates, we got down to a list of more than 80 value elements, each of which were part of their Total Product Definition (TPD). Returning to the pediatrician, in addition to providing medical care to kids, her TPD includes such factors as; ease of parking, short wait times for appointments and in the waiting room, waiting room decor and activities, how friendly is the team, is the office child and parent friendly, to list just a few of the more obvious examples.  Note that the list should include both tangible and intangible items.  The tangible items, such as very short wait time, are easier to copy than intangible items such as having a friendly office atmosphere. Once you have determined your TPD, you must constantly communicate it both internally and to your CCPs.  That means you and your team must live it, breath it, understand it and consistently deliver the TPD to your market.  Your TPD is your competitive advantage, the deeper and more detailed it is, the harder it is for your competition to duplicate. My ActionCOACH colleagues and I will be happy to assist you in developing your Total Product Definition.

Is Your Business Commodity or Value Based?

While reading Architectural Record the other evening, (Yes, I still keep up with my original profession) I was struck by an article entitled “How to Make Money” with the sub-title of “Firms improve the bottom line by expanding the definition of architectural practice” by Martin C. Pedersen.  What struck a chord with me is the fact that you could substitute any profession, service or product in place of architecture and the core message of the article would still be applicable. So what is the core message of this article?  Basically, your product or service will fall into one or the other of the two (and in reality, the only two) business models based upon the perception of your clients, customers or patients (CCP).  The first and most common model is the commodity model.  When your service or product is perceived to be a commodity, you are forced to compete primarily on price.  In the long run this is a very dangerous game.  There is always someone or some company who will find a way to offer a lower price than you and your business. In that situation, how can you make a profit?  You must build the proverbial better mousetrap.  You must find ways to operate more efficiently than your competitors.  In the short to medium term, this is possible.  However, sooner or later, a competitor will figure out a way to operate more efficiently than you.  Welcome to a game of business leap-frog. To quote Mr. Pedersen’s article, “So how do firms escape the commodity trap and achieve what management consultants call “value pricing,” a fancy term for something fairly basic: a profitable fee? It helps to understand the needs of your clients and speak a common language.”  (Emphasis added)  The alternate business model, based upon offering value has many advantages and one significant disadvantage compared to the commodity model.  On the plus side, your Unique Value Proposition (UVP) is yours.  Your competitors may attempt to copy it, but they will find it very difficult to capture the underlying essence and complete definition of your UVP.  Also, you will not be competing solely on price, or playing business leap-frog.  Obviously, if you are not competing on price, your profit margin will be much higher than that of your competition. So what is the disadvantage?  “It helps to understand the needs of your clients and speak a common language.” – This is not easy to achieve and consistently deliver.  Why is this hard?  Because to design your UVP you must determine your CCPs definition of value, not necessarily the same as your definition of value.  For example many physicians value where they went to medical school, numerous studies have shown that patients view this a being near the bottom of their lists of factors they consider when choosing a doctor.  Once you have determined your CCPs definition of value, you must marry it to your product or service (the total definition of your product or service, the subject of my next Blog) in order to have your UVP. If you can design your offering to deliver true value to your CCP, and do it consistently, you will establish a very long term competitive advantage.  If you are looking for assistance in determining your UVP, please contact me or any of my ActionCOACH colleagues.  We will be happy to help you grow your profitability.

We Are Human, We Make Mistakes

I just returned from a family vacation to the Caribbean.  My entire family had a great time, lots of fun, beach, pool, golf and meals.  In addition there were many great conversations about life, family, the state of the world and business, with the family as well as friends, both old and new. Near the end of the vacation, the subject of customer service was brought up after a round of golf with my wife and grandson.  Upon arriving at the clubhouse we were delayed for more than 30 minutes waiting for both my grandson’s and my golf clubs.  It seems that both golf bags were misplaced after our round of golf two days prior. After the delay, we were offered loaner clubs and a couple of balls.  When I mentioned that I had no golf golf glove to the person behind the counter in the pro shop, I was answered with a blank stare.  We started our round of golf and after a few holes the very apologetic starter delivered our clubs.  He explained that they had some new employees who were putting golf bags anywhere they felt like, rather than the bins assigned to them.  Did this golf club miss an opportunity to wow me?  Did they fail to gain positive comments from me when my friends, associates and clients ask me how my trip was?  You bet they did!  They could have offered to credit my round of golf, but they didn’t.  They could have offered me a golf glove in addition to the two balls I was given, but they didn’t.  Any of these offers would have had much more perceived value to me than they would have cost the club to provide.  Instead, they offered me lame excuses and demonstrated that they do not properly train their employees.  More importantly, they failed to give me a reason to recommend their facility to my golfing community.  Simply put, they do not understand how to deliver true customer service. We are all human.  We all make mistakes, as individuals and as organizations.  It is how we respond to our mistakes that distinguishes us from our competition.

Afraid To Take A Vacation?

This week’s edition of my local business weekly quoted a ADT Small Business Getaway Survey.  The survey about small business owners’ attitudes toward taking vacation found that:
  • 55% Never travel without their cellphone
  • 45% Find it hard to “check out” while away
  • 25% Feel nervous about the business while away
  • 21% Feel guilty about leaving their business unsupervised
Pretty chilling, to say the least.  Actually, I found these survey results to be quite distressing.  Why?  For several reasons, including:
  • Most of the business owners who responded are not getting the full benefits of business ownership.
  • The results reflect things that are almost completely avoidable by successful business owners.
  • The survey indicates that these business owners are not planning their businesses.
At ActionCOACH we define a successful business as A Commercial Profitable Enterprise That Works Without The Owner.  We coach our clients to invest a significant amount of their time toward working on their business, rather than working in their business.  This includes planning the growth of their business.  Without a business growth plan, a road map for the business, businesses grow organically and quite often go too far down a road that is unproductive, hitting the “Oh S**t” moment.  That is one of the prime reasons that the failure rate for new businesses is as high as it is. In order to increase your odds of success, your growth plan must include:
  • An organizational chart, now (even if your name is in every box), 1 year and 5 years in the future.
  • The complete definition of your Products and/or Services. (see my post of 8/15/2014 http://actioncoachmichaelbreitman.com/?p=182)
  • Your Mission/Vision/Culture statements
  • And many of the elements of a classic business plan, such as marketing plans, budgets, etc.
Granted, all of these items are dynamic.  However, without starting points your ability to build your business, to have the right team, to create economic growth for yourself and community will be limited. Don’t be one who is afraid to take a vacation.  Start working on your business NOW, before it is too late.  If you would like assistance with working on your business or you wish to accelerate your progress toward your business goals, contact me or the ActionCOACH business coach in your area.

What Can We Learn From Our “Almost” Competitors?

Last week, while coaching one of my medical industry clients, I had a major, multi-part Blinding Flash of the Obvious (BFO).  This client’s medical practice has many competitors, both medically and geographically.  One competitor (called LuxDocs in this blog) in particular, has positioned themselves to be “high-end”, charging an annual fee for access to their doctors. Initially, my client did not consider LuxDocs to be a direct competitor even though they address the same area of medicine.  However, as we went down the list of LuxDocs’ actual and perceived value points and benefits, 24/7 doctor access for example, it became obvious that my client offered, or could offer, many of the same perceived high value services and benefits as their “almost” competitor. Our discussion progressed into two areas:
  1. Which of the services and benefits that my client already offers are valued by their patients but are not currently emphasized within their internal perception  or external marketing?
  2. What services and/or benefits could they add that are of perceived high value by patients, but could be offered with low additional cost?
BFO Part 1 – This concept isn’t only applicable to medical practices – substitute the word Customer or Client for Patient and re-read 1 and 2 above.  Now look at your product or service through the lens of what is already included, or could be included, in your offering that are perceived as high value/benefit, but that you haven’t emphasized? BFO Part 2 – Remember, look at product or service aspects that are of high value to your clients, customers, patients or whoever makes up your target market.  This is not necessarily about what you and your team value, it is about what your market values.  In other words, work to understand the entire, complete definition of your product, not just the obvious. BFO Part 3 – This is closely related to the concepts presented in the book “Blue Ocean Strategy” by W. Chan Kim and Renee Mauborgne.  Add high value items to the design of your product or service while eliminating high cost low value items. Action Steps – As many of my current clients have already done:
  • Completely define your product or service.
  • Make a list of as many; reasons to become your customer, ways you add value to your customer, and benefits, both small and large, of being your customer as you can.  Remember, from their point of view, not yours.  Shoot for 100.
  • Your complete product definition and the list of your value points form a major part of your Unique Value Proposition (UVP). Make sure you constantly and consistently communicate all of these aspects of your UVP both externally and internally.
  • Read Blue Ocean Strategy.
  If you would like assistance with the process implied above or you wish to accelerate your progress toward your business goals, contact me or the ActionCOACH business coach in your area.

How To Grow My Business And Not Lose My Edge?

During many coaching sessions with my clients one theme that constantly reappears is how to grow a business in balance.  For growing businesses, losing sight of their culture, their mission, their excellence, or their operational consistency is a constant concern.  The faster the rate of growth, the greater the danger. I recently read a great article by Leigh Buchanan in the March 2014 issue of Inc Magazine that addresses exactly this important concern (http://www.inc.com/magazine/201403/leigh-buchanan/how-to-scale-your-company.html).  I am sure you will garner a few useful insights that will help you grow your business in balance.