Posted by Kyle on 20th, 2008
I’ve been reading Carl Sewell’s Customers for Life, which focuses on the value of a customer over the course of a lifetime. Sewell runs a chain of car dealerships in the southwest. His philosophy is that you can either sell a customer a Lexus for $40,000, or you can go out of your way to completely satisfy that customer, ensuring that he’ll keep coming back to you in the future. Sewell has calculated that the average customer for life is worth over $500,000, more than 10 times the value of any single, one-time customer (in some industries, customer lifetime value can be closer to 1000 times a single purchase price). Full Story →
Posted by Kyle on 7th, 2008
The Kaizen Concept
The Japanese term “Kaizen,” which translates as “Improvement,” is part business management system and part deeply-rooted philosophy in Japanese culture. Popularized by Toyota, Kaizen stresses that continuous, incremental improvement is at least as critical for a business as periodic, large-scale innovation. Full Story →
Posted by Kyle on 20th, 2008
I just saw Will Smith’s The Pursuit of Happyness for the second time this week, and I had forgotten what a powerful movie it was. Or maybe I just wasn’t in a position to truly appreciate it when it first came out. It’s like studying Shakespeare in high school: at the age of fourteen you can’t even begin to appreciate the language or relate to the feelings in his plays (years later, that hasn’t improved much). But with time comes perspective, and I saw this movie in a completely different light.
Hey. Don’t ever let somebody tell you… You can’t do something. Not even me. All right? You got a dream… You gotta protect it. People can’t do somethin’ themselves, they wanna tell you you can’t do it. If you want somethin’, go get it. Period. - Chris Gardner, The Pursuit of Happyness
Full Story →
Posted by Kyle on 11th, 2008
“Success comes to those who dare to dream dreams and are foolish enough to try and make them come true.” - Vinod Khosla: Venture capitalist, co-founder of Sun Microsystems, and avid hang-glider.
How do you manage risk in your business? Are you foolish enough to try to make your dreams come true? What good is a life littered with unfulfilled dreams? Maybe we’d all be better off if we did a little hang-gliding…
“Man cannot discover new oceans unless he has the courage to lose sight of the shore.” - Andre Gide, French writer, humanist, and Nobel Prize winner
Posted by Kyle on 8th, 2008
“Water shapes it course according to the nature of the ground over which it flows; the soldier works out his victory in relation to the foe whom he is facing. Therefore, just as water retains no constant shape, so in warfare there are no constant conditions. He who can modify his tactics in relation to his opponent and thereby succeed in winning, may be called a heaven-born captain.” - Sun Tzu, The Art of War
Learn Good Business Sense from Water
It might sound a little crazy at first, but we could all learn a few lessons from water. How much time and energy do we waste in an uphill battle with ineffective marketing, poor CRM, and ineffective information systems? How many of the tedious chores in your business could be automated and integrated? Isn’t it time to stop fighting the current and look for an easier way? When the water of a river runs into a boulder, it adapts, changes course, and finds a way to its ultimate goal no worse for wear.
Sun Tzu wasn’t the only one who felt we could all learn from the properties of water. A few weeks ago, Harrison at MenWithPens discussed the Book of Water in The Book of Five Rings, an ancient Japanese sword fighting guide. The author, Miyamoto Musashi says “Fixation is the way to death, fluidity is the way to life.”
Bruce Lee, one of the great martial artists of our time had this to say: “Empty your mind, be formless, shapeless–like water. Now you put water into a cup, it becomes the cup. You put water into a bottle, it becomes the bottle. You put it in a teapot, it becomes the teapot. Now water can *flow* or it can *crash*! Be water, my friend.”
Of course, they were talking about deadly combat, but the same clearly applies to businesses in today’s economy. Consumer needs and expectations are changing so quickly that being anything other than fluid and adaptive is suicide. Technology has changed everything. Old industries like traditional newspapers are facing extinction unless they can find a new place in the digital world.
How Can We Adapt?
Fortunately, small businesses have a real advantage in this area. As I’ve mentioned before, big businesses are choked by their own bureaucracy. American car makers have faced recent criticism for their inability to innovate and adapt to changing consumer demands. As a small business owner, however, there are probably only a few stakeholders for you to consult with on any decision. You may run it by your partners, employees or spouse, but ultimately decisions are likely up to you. YOU have the power to drive change, to keep your company responsive to your customers’ changing needs and tastes. Here’s how:
Keep Learning
No matter what business you’re in, there are always people you can learn from. First, there are tons of great books out there on managing your business. Pick up a few of these and learn some things you didn’t know that you didn’t know. Or maybe you could teach yourself how to use a new technology, or some of the more obscure features in Microsoft Office. I came across a company called VTC that offers awesome online training videos. I think I’ve even got a 30-day free trial coupon around here somewhere… drop me a note if you’re interested. The web’s full of great resources, just look around!
Watch the Trends
Subscribe to magazines or blogs specific to your industry. Keep an eye on the trends as they develop and ask yourself how you can position your business to take advantage of them. For example, I read an article about the growing impact the blogosphere was having on small businesses and decided soon after to launch OnYourBusiness. With tens of thousands of new blogs starting every day, there’s definitely a trend in that direction. If you’re keeping track of experts’ opinions in your industry, you’ll be ready to meet those changes as they happen. There won’t be any big surprise when consumers start demanding something else, and you’ll be able to react before your competitors.
Talk to your Customers
No one knows how consumer needs are changing quite like the consumers. Ask them what their needs are, how your product or service fits those needs, and what you could do to make things better. Better yet, survey them about the trends you’ve been reading about in your industry and see how they really feel. If their needs are heading in new directions, perhaps your business should too. Or maybe they’re just not in your target market anymore, in which case there’s no sense fighting against the current. Just go with the flow…
What’s next?
The end of the series! I’m getting a little Sun Tzu’ed out.
Sun Tzu on Leadership - Part 6 of 6
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Posted by Kyle on 1st, 2008
“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.” - Sun Tzu, The Art of War
A Shot in the Dark
Let’s face facts. These days, if you don’t have a clearly defined target market, your business is in trouble. How are you going to reach the people most likely to buy your product if you’re not even sure who they are? Naomi from IttyBiz says it better than I could:
Imagine the target is, um, a target. And you’re the dude with the gun or the bow and arrow or whatever. If you hit the target right in the middle, you get 50 points. If you hit the outside circle, you get 10. If you aim at 50, you might get 50 or you might get 10. If you aim at 10, you might get 10 or you might get nothing.
So why are you aiming at 10?
Your target demographic is your version of perfection. These are the people who are begging for your product or service. They have money to spend and they want to spend it on you. Maybe they don’t know it yet, but you do, and that’s all that counts.
It’s time to start developing some tactics to start bringing in more bulls-eyes and stop wasting energy on shots you take with a hope and a prayer that they’ll hit something.
Know Your Target Demographics
Start by breaking your clients down into demographic groups. Web Marketing Resources defines demographics and psychographics like this: “Demographics refer to statistics like age, income and location. Psychographics refers to preferences, interests and personality characteristics.” It was recently revealed that Best Buy takes this approach to an extreme. They actually create personas for each of their demographics:
Source: The Consumerist
While Best Buy’s methods may be a bit overkill, imagine what having this sort of data could do for your business. Is your marketing plan tailored to each demographic, or is it a One-Size-Fits-Some approach?
Making no mistakes is what establishes the certainty of victory, for it means conquering the enemy that is already defeated.
- Sun Tzu
If you know what motivates your customers, what they want and need, you’re well ahead of the game.
Know Yourself
Clearly defining your target market and demographics is a good start. You’ve defined what your ideal customer looks like to you. Now ask yourself, “What does my business look like to my target customer?”
Understanding your business and the way it’s perceived will go a long way. Just understanding isn’t enough though. A successful business is built on continuous improvement. A good owner also knows what they don’t know, creating partnerships and learning opportunities to improve their limitations.
Measurement and Calculation
Here comes the hard part. How do you accurately forecast sales as a new business? As a growing business? As a service business? There’s always going to be an excuse to put off market forecasting. Why? Because it’s hard. It forces you to take a serious look at your business and set some quantifiable goals. For some great advice on this topic, pick up a copy of On Target : The Book on Marketing Plans. It offers some great tips on how to generate those initial sales forecasts. For instance:
- Use census data to determine the number of people in your target market.
- Find out what data is available in similar markets, or what has been gathered by your competitors.
- Build on whatever past data you have available, and go with your gut instinct.
- Most importantly: GET STARTED! Next year you’ll be able to look back on the data you’ve gathered this year.
Set some expectations for your business. Make sure they’re clear, quantifiable, and have a well-defined due date. “I’m going to lose weight” is not a clear goal. How much are you going to lose, and by when? “We’re going to increase sales” is just as useless. Instead, try “We’re going to increase online sales by 20% in the next 18 months by advertising through channels X, Y and Z.”
See how much more clear that is? 18 months from now it will be very clear whether or not you met your goal. By now this should be easy. You should know your customers better than they know themselves. You should know their demographics and their psychographics. You know what makes them tick. Your business is structured to give them exactly what they need in the best possible environment. You’ve set measurable goals, forecasted sales, and you revisit the numbers regularly. With that kind of preparation, you’ve got a tremendous advantage over the competition.
If you know your customer and you know your business, your success will not stand in doubt.
What’s next?
Sun Tzu on Leveraging Advantage - Part 4 of 6
What an inspiration! Go Kyle Go! Buckets and buckets of blessings on your...