Building a Web Business: Introducing SnowConditions.com

Let me start with a little background info. My family has been vacationing in Eagle River, Wisconsin for four generations, since roughly the time of the Great Depression. It’s the most peaceful place I’ve ever been  (sorry Florida, Switzerland, New York City, it’s true), and if I ever get around to having kids I’ll be bringing a fifth generation up there with me. We do a lot of boating and skiing in the summer and recently started snowmobiling there in the winter (it’s the snowmobile capital of the world… true story).

It was through snowmobiling that I first stumbled across SnowConditions, a site that tracked the conditions of snowmobile trails in Eagle River, provided trail maps and had a few webcams. It also happened that the site was for sale. I thought it could be a fun hobby and would give me an excuse to snowmobile and write it off as a business expense (note to the IRS: just kidding… sorta). Someone’s gotta report the conditions of the trails, right?

To Buy or Not to Buy

I started doing a little research and decided the site might be worth more than just a hobby after all. The domain name was a good one, and I had been reading more and more about flipping websites for serious profits and snowconditions.com seemed like a good place to give this concept a try.

I’ve never been one to rush into things, and I’m definitely not one to throw my money around. I decided to take it slow, develop a plan, research the market, the competition, and set some goals. If I felt, after all the research, that I could make a good return on my money (without it consuming my life), I’d buy the site.

Building a Business

After doing the research, I decided the site was worth buying and moved on to negotiating a price and a contract.I started to draw up the makings of a business plan, a marketing plan, and various other plans.

At the same time I started thinking about the design: logo, website, business cards, and whatever else I thought I might need. With an internet business (or any business, really), particularly in marketing, you’re sellilng an image. If your image sucks, so will your sales.

There will be plenty more to come as I get deeper into this venture, so this is just the introduction to the Building a Web Business series. Here’s what’s coming up (links to these posts will be added as they’re completed:

• Researching the Business (How to Tell If a Business is Worth Buying)
• Developing a Plan (Deciding What Exactly You’re Doing)
• Designing Your Business (Looking Legit Even if You Don’t Feel Legit Yet)
• Marketing Your Site (Telling the World What You’re Doing)

A quick disclaimer: I don’t consider myself an expert on any of these topics. I’m just describing everything I do as it happens, and sharing the advice and resources I come across in the process. I’ll share the opinions of actual experts as I come across them. Then, if I make a boatload of money, I’ll call myself an expert and charge you for my advice. Until then, we’ll just have to wait and see…

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What’s Your Customer’s Time Worth?

Wasting My Time

Last weekend I had the pleasure of traveling to the San Francisco area to work with a few clients. I absolutely love that part of the country, but getting there and back from Chicago is a real pain. Very few carriers seem to offer direct flights, so I always seem to get stuck in LA or San Diego with a layover. This time, I flew Frontier Airlines, so I had to pass through Denver. We had 30-40 minute delays going both ways, which no one bothered to explain or justify.

Ordinarily getting by with just a 40 minute delay would be a blessing. Not so when you only have 30 minutes to make a connecting flight. The connecting flight, of course, left on time. Without me. So I found myself at the Denver airport at 9:30 Friday night not sure how I’d be getting home. I was also scheduled to leave for vacation at 8:00 the next morning. From Chicago.

After confirming that I had missed my connection, the gate rep referred me to the Frontier customer service counter, which had a line of 20 other angry looking travelers waiting in front of me. I decided to try to book another flight through their 800 number while I was waiting in line. Fifteen minutes later I spoke with a rep on the phone who informed me that rescheduling a missed flight (regardless of fault) by phone carried a $100 surcharge. I promptly hung up on her and decided to wait it out in line.

Making Up for the Inconvenience

Frontier knew they had screwed up and had seriously inconvenienced those of us trying to make tight connecting flights. They probably also knew that first-time Frontier flyers (like myself) may be inclined to fly with another company in the future.

so what does Frontier think its customers’ time is worth?

• A free hotel room for the night at the Crystal Inn (one of the nicer hotels I’ve stayed in - I kept the Bath & Body Works soaps and shampoos…)
• A $9 meal voucher for dinner that night
• A $5 meal voucher for breakfast in the morning
• A $150 flight voucher to be used toward future flights
• A sincere apology from the service rep who booked my 6:00 flight to Chicago the next morning

Was I still mad? Sure. It set my vacation back by about four hours, I was only able to get 3 hours of sleep that night, and I was cranky as hell all day. But will I fly Frontier again? Yes. Once more at least, since I’ve got a $150 voucher to use. But if they screw me over on the next trip, that’s it for me.

A Lesson in All This

Airlines are particularly good at calculating the value of customers’ time. The 25 minute delay of that flight cost them over $200 for each customer that missed a connecting flight - and there were dozens of us. They could have simply said “sorry about that” and sent us on our way, but the effects of that approach would have cost them far more than $200 per person in the long run (see my post on customer lifetime value). They’d rather pay to make it up to you and hope you come back and have a better experience next time.

This is a lesson airlines have learned better than many other businesses: if you inconvenience your customer or your product or service doesn’t meet their expectations, you’d better find a way to make it up to them. How you do that depends on how badly you screwed up and how much you value your client’s business. At the very least, you have to set things right and fix whatever went wrong. And for god’s sake, apologize, and mean it! If that’s still not enough, offer a free product or service upgrade that will convince your customer that you’re worth continuing to do business with after all.

It’s a whole lot cheaper to keep an existing customer (even a disgruntled one) than it is to find a new one. Keep yours happy.

Learning to Take My Own Advice

I was just reading a post on IttyBiz about those days where, for whatever reason, you just don’t want to deal with the customer. Maybe you didn’t get much sleep the night before, or maybe one of your customers just rubs you the wrong way. Whatever the reason, sometimes we all slip and forget who’s paying our bills.

I’ve certainly been there.

What Was I Thinking?

I was working with a client to put some of their company training online. After I had finished the project, I got a call from my client, which went something like this:

Client: “I was reviewing the training and found typos and errors on these five pages.”

Me: “Okay, well we can fix that. It’ll probably cost about $X to get it taken care of.”

Client:  “You’re charging us to fix your typos?”

Me: “No, I’m charging to fix your typos. What you see online is copied and pasted directly from what you provided us. We don’t proofread your content - that’s up to you. If you want us to proofread your work, that would cost $X.”

I never heard from him again. As far as I know, their training content remains unchanged, typos and all. When I think back on that conversation now, several years later, I think “Wow, what a colossally stupid thing to say.” I was busy. I had other projects to worry about. Bigger clients. Bigger problems. SO WHAT? This is someone who had come to me and said “I need to do this, and I’m willing to pay you to do it.” Even if they’re not a top priority, I should treat them like one.

If I Could Travel Back In Time…

What I should have done is pretty clear. It would have taken me (at most) 30 minutes to make the requested changes. I should have told my client I’d be happy to make those changes, free of charge, but informed my client that, for future reference, it is our policy to take content and put it online exactly as it is submitted to us.

In fact, even before that I should have run a basic spelling and grammar check on the entire document. Then I should have informed my client that I made these 10 changes (free of charge) and wanted to verify that they were in fact errors that needed to be fixed. That would have allowed me to subtly show my client that I’ve got his best interests in mind. A little goodwill goes a long way. Since then, this has become our standard policy.

As a business owner sometimes you have to step back and remind yourself that it’s not about you, what you think, what makes your life easier. You have to look at every part of your operation and say “Is this in my best interest, or the customer’s?” Ideally, it will be both, but when a conflict arises, your operations need to favor the customer.

Ever had a day like this, where your frustration spilled over onto a customer? How’d you make it right? Or was the damage already done?

Hollywood, the Constitution, and Your Future

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 →

IDEO on Following Your Passion

I’ve recently done a lot of reading about IDEO, Inc., a Palo Alto, California based industrial design firm. Let me give you a little background info on the company… Full Story →

What do You do When Your Schedule Conspires Against You?

You may have noticed that this blog as been completely dormant for nearly a week now. It has been one of those weeks where every client or potential client or potential client I have ever had decided they need something from me immediately, if not sooner. It’s the sort of problem you wish for when things are slow, but dread when it actually happens.

I’ve been living my life this week by the advice outlined in the Million Dollar Leverage post on What to Do When Your Schedule Blows Up, and putting in my share of very, very late nights. Still, there are only so many hours in a day. Chris Guillebeau offers some more great advice in a recent post at The Art of Nonconformity:

Problems:

• Your friends and family members who work at traditional jobs won’t understand.
• The crises are all yours for the managing.

Solutions:

• Simply decide to stop doing stuff.
• Improve your personal productivity skills, including planning and implementation.
• Delegate or outsource

Thanks Chris for the great advice. Really, check out his blog, which is full of great stuff.

The question remains though… how do you handle a sudden major influx of work? Outsourcing is great if you have something lined up or tasks that don’t require much training, but that’s not always the case. Hiring is risky because the fever pitch of work may not last, and then when things die down you end up overstaffed. Granted, it’s a good problem to have, but it’s a problem nevertheless.

Sun Tzu on Adaptability - Part 5 of 6

“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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Sun Tzu on Business Tactics - Part 3 of 6

“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?”

• Is your shop/restaurant/office clean and inviting?
• Does your website look professional, up-to-date, and provide the right information?
• Take a good look at your business’s weaknesses and see if there’s some way to turn them into strengths.
• Are you offering goods or services your target market values? How do you express this to each demographic?
• Do people even know your business exists?

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

Sun Tzu, The Art of War and Your Business - Part 1 of 6

“Opportunities multiply as they are seized.” - Sun Tzu, The Art of War

I was inspired by a recent post by Harry over at Men With Pens. His post was a study of The Book of Five Rings, “A classic text on the Japanese Way of the Sword,” as it applies to writing and working as a freelancer. He discusses the five elements of swordplay and how they are equally relevant to writing and, I would argue, all aspects of running a business. I won’t try to summarize the entire post, because you should really check it out for yourself, but here are the five elements: Ground (Building your foundation - discipline and stability), Water (Adaptability - staying calm in the face of adversity and change), Fire (Taking Action - putting your passion to good use), Wind (Style - finding the best approach), and The Void (Attitude - what binds it all together). Seriously, go read the whole post, it’s well worth your time.

Harry’s post reminded me of something I had long since forgotten. When I was 15 I started a neighborhood lawn mowing business, and one of my clients (AKA neighbors) gave me a copy of Sun Tzu’s The Art of War and told me I could learn everything I needed to know about business from that book. I thought he was crazy at the time, but years later, after running a business, I get it.

Corporate America - Our Battlefield

Sun Tzu was a Chinese general and military strategist in the sixth century BC. His book, The Art of War, consists of 13 chapters, each devoted to one of the aspects of warfare. Even though the book was written 2500 years ago, the concepts are still applicable today. Because the free market is governed by the interplay of competing businesses, many of Sun Tzu’s lessons have withstood the test of time. Historians have claimed that Napoleon, one of history’s greatest strategists, studied The Art of War. More recently, executives at corporations like Google and Microsft have begun to apply its lessons in the corporate world.

While I definitely think the book is worth checking out, some parts are more relevant than others. Take, for instance, Sun Tzu’s theories on the use of fire to destroy an enemy’s camp. I could give you a very creative interpretation of its application, but it would either be complete BS or it would give you the impression that I support arson. Instead, let me break down what I think are the most relevant of his teachings:

Managing Your Troops: The art of discipline, accountability, respect and admiration.

Tactics, Measurement and Calculation: The art of planning so that you have ensured victory before you’ve begun.

Leveraging Advantage: The art of avoiding strength and attacking weakness.

Adaptation: The art of reacting to circumstance, changing tactics, and constantly innovating.

Leadership: The art of balancing responsibilities, doing what’s right, and inspiring loyalty.

*Coming Soon, why not subscribe and make sure you catch the rest of the series?

As Sun Tzu said,

“If you know the enemy and know yourself, your victory will not stand in doubt; if you know Heaven and know Earth, you may make your victory complete.”

Never underestimate the power of planning. Develop a solid business plan and revisit it regularly to see how things are progressing. Do the same for marketing with a comprehensive marketing strategy. Analyze your market and your competition. Train your staff and reward them for a job well done. Apply these concepts to your business and it will grow.

I’ll see you on the battlefield.

Customer Service: Is it Dead?

Crappy Service - An Epidemic

Last week I walked into a sandwich shop and the woman at the counter, without even making eye contact, asked “What are you havin’?” in the most uninterested way possible. It took me a second to respond because I was so taken aback. I thought “If I’m going to be treated like this, maybe I should take my money to the restaurant next door.” What’s really sad though is that most people don’t even think twice when they are treated this way as customers. Is anyone else bothered by this?

The Cost of Poor Service

Do companies realize how detrimental poor service can be to their bottom line? Consider these statistics:

• Acquiring new customers can cost five times more than satisfying and retaining current customers.
• A 2% increase in customer retention has the same effect on profits as cutting costs by 10%.
• The average company loses 10% of its customers each year
  • Source - Living on the Edge of Chaos: Leading Schools into the Global Age

• 68% of lost customers are turned away by the negative attitude or indifference of a service provider.
  • Source - Survey conducted by the American Society for Quality

Can your business afford to lose 10% of its customers every year? How can you keep even your most demanding customers satisfied?

Forget About Satisfying Your Customers

Several years ago my company decided to forget about satisfying our customers. You heard me. We decided that any business could satisfy their customers. Customer expectations are so low these days that as long as they get what they came for without being verbally abused, they’ll be satisfied. What we wanted were Raving Fans. (Do yourself a favor and pick up a copy of this book… It’s a quick read and it’ll totally change the way you approach your business).

How do you get raving fans? I remember a conversation i had with Michael Giarrizzo Sr. on my very first business trip. His family has virtually owned the collision repair market in Ohio for decades. Their company, DCR Systems, routinely receives 100% Customer Satisfaction ratings because they believe in creating raving fans. Michael told us about a customer who left his garage door opener in his car, when he was supposed to put it in his rental. Giarrizzo called him, asked for his work address, and delivered the door opener to the man at his office. The customer didn’t have to ask, didn’t have to pick it up, and wasn’t inconvenienced by not having the door opener that night when he got home. With that simple action, Giarrizzo earned a customer for life.

Creating “Wow” Moments

The Ritz-Carlton is well known for their exceptional customer service. Bellmen are trained to look for name tags on luggage as guests arrive. They then use hidden radios to inform the desk clerks of the guests’ names, and the guests are then mysteriously addressed by name. Wow!

It’s a simple concept: if your service makes a customer stop and say “Wow!”, they’re going to come back the next time they need your product or service. They’re going to tell friends and family about their experience and recommend you to everyone they know. Examples are everywhere…

Stephen from Freakonomics writes about his Wow moment with Zappos, a popular shoe retailer:

My wife had ordered a pair of sandals from Zappos. When they arrived, she found that they didn’t fit. She tried to order the right size, but Zappos was sold out of her size. So here’s what the company offered: she could return the sandals (for free), Zappos would refund the purchase price and they’d send her a $25 coupon toward her next purchase.

But wait — there’s more! Zappos also offered to try to locate a pair of the sandals in her size from another vendor. (Hah! Sure, they will!) Fifteen minutes later, the company called my wife and told her they’d found her sandals, in her size, at another online merchant — “and,” the Zappos clerk told her, “they’re even cheaper at this other site!”

Another blogger, Zaz LaMar, wrote a post called “I Heart Zappos” after a particularly heartwarming encounter with the company.

Just search Google for “blog great customer service” and you’ll find countless links to happy bloggers telling the world about the experiences they’ve had with companies that made them say “Wow!” These raving fans are providing businesses with free advertising and testimonials simply because they were so impressed. What could be better??

How do you wow your customers? How do you keep them from taking their business elsewhere? As a consumer, have you ever had a “Wow” Moment? Tell us about it!