Make Money By Serving Needs

In business, we make money by providing value to our customers.  Value is actually a very wide term, which can mean something as simple as helping the person lose weight by providing them with an easy way to lose weight or it could mean the service we provide to our customers; for example, finding them what they want no matter how hard it is to find.  People are willing to pay for value, but it must be value worth paying for.

Mainly, it is the way we are better than everyone else that sets us apart.  The things that give us competitive advantage.  We can offer a better product, better service, better price, or better customer service than our competitors.  Many of these are hard to do, there are so many competitors out there with great products or services, many are selling at rock-bottom prices, but one thing that many companies forget is how to truly serve the customer.  By serving, I mean putting the customers’ needs ahead of the needs of the company.  For instance, I had a customer that wanted a particular item that I could not get at wholesale, so I ordered it from drugstore.com and shipped it to them free of charge.  Why would I do such a silly thing?  Because the customer will remember it and go out of there way to buy from us in the future.

It can be a difficult concept to wrap your mind around.  Providing heroic customer service just so the customer comes back to you in the future.  There’s no guarantee by the way, it is possible that they will go elsewhere in the future, so your effort may or may not be rewarded.  You may just be giving away the store.  However, most customers recognize great service when they see it and go out of their way to use companies with great service, depending on the price.

And what about price?  If you can give your customers great service, you typically can charge a bit more than your competitors and get away with it.  If you are competitive but slightly higher, but you give far better service, customers will definitely seek you out.

It’s not always easy to give the best service.  At times it can be time consuming and costly, but if 99% of your customer interactions are fairly normal but 1% require heroics, you will make plenty of money and impress your customers.  You really do have to be perfect though.  Any problems whatsoever will tarnish your reputation.  Any mistakes should be cause for lavishing your customer with service and gifts.

Giving great service is an investment in your long-term business, so you may spend a bit more short term for great service.  But long term your investment will pay huge dividends.

Small Changes With Big Results

Sometimes being a business person is similar to being a painter of paintings.  It’s the smallest details that make the biggest differences.  And you have to pay attention to all of those details, at least at first when you are just getting started.  The customer’s perception of your company and your product are at stake… so what kinds of things should you worry about?

The internet is a tale of two cities.  One dark and desolate, and one bright and populated.  What is the difference between the two places?  The most minor of minor things.  And it may not be anything you’re thinking about.  Is it design?  Is it speed?  Is it wonder?  Is it usefulness?  The answers: Maybe, maybe, maybe, and maybe.  It seriously depends on what your target visitor wants and what your target visitor expects.  And then, you have to give them even more than they expect.

So then it all comes back to marketing right?  Well… yes, and no.  It is very important to know what your customer’s (or visitor’s) requirements are.  Then you must really get into their mind.  Deliver innovation where innovation is not possible.  Smooth out the jagged lines or fill in the gaps of the customer’s requirements with what they really want, before they know they want it.  This is really where the art in business comes in, knowing the unknowable, doing the unthinkable, being the best in a catagory of no equals.

It all comes down to creating something that draws in visitors and customers like a magnet.  They can’t help themselves, they are drawn to your business.  They may not even be sure why.  It’s all of those little details that mean so much.

Make sure to check out other business leaders and their obsession with detail.  People like Howard Hughes, Sam Walton, and Bill Gates.  They built their obsessions into empires.

It’s All About The Product

When you go into business, it’s all about the product.  Because no matter which marketing method you use, ultimately the customer will either buy the product or not.  That’s why, if you are considering multi-level marketing, you must seriously consider the desirability of the product.  Would you buy the company’s product at retail?  If not, it may be too hard to sell your customer or sell yourself, and somebody has to buy the product in order for you to make money.

When you look at opportunities, you really need to do the math.  You are looking for a 20%+ rate of return for your time, materials, and cash investment.  For instance, if you spend $100 a month and at the end of the year have a $20 per month commission check, you are right on a 20% return.  So how do you do the math?  Try the following on for size:

cr / ci = ri

cr is what you expect for commission or profit for an individual customer in a year

ci is what you spend in dollars to get a customer.  You should include time, materials, advertising, and other expenses.

ri is your return on investment.  .20 would be a 20% return.

For your customer, you may sell to end consumers or other distributors.  You might want to figure out your return in both ways to see which gives you the most immediate return.  Traditionally this is going to be your customers.  Distributors get a break on the product so you get less of a profit on the volume.

The thing we are not figuring on is when your direct distributor gets another distributor.  You do get a cut on the sales to your second-level distributor, but it’s not usually as much as your first-level distributor.  What I would do about the multi-level aspect of your business is to ignore, for financial purposes, that you will ever get beyond your first level.  You might want to allow for a smaller initial return on investment to compensate for the multi-level effect, that’s up to you.

Again, product sales is the most important thing so you should always be selling the product, even when you’re recruiting.  In fact, sponsoring sales people, people who will sell the product to consumers, is usually the best way to go.  Some of you may say that selling the dream works best.  However, the dream gets people sponsored into the business, not selling product.  It also produces unrealistic expectations and unhappy distributors.  You may also get a look from the FTC.  So we sponsor sales people to get product volume, and we can generally bank on the fact that we’re only going to get first level distributors unless we train our great sales people to be good recruiters.

The downside to multi-level marketing is what the MLM company can do to you.  You are pretty much at their whim.  You advertise their way, you sell their way, and at a moment’s notice they could decide not to use distributors any more.  So be careful out there.

We are starting to be really active with a multi-level marketing company again.  We joined the company in 1992 and they have been very consistent. I believe they produce a very good return on investment for recruiting and have an exceptional product line that customers love.  Check them out.

Marketing Blah, Blah, Blah

I have been working on a marketing project lately and what is the deliverable for marketing ultimately?  A nice little report that details the problem the company is facing, case studies of other companies, options to pursue, and the option selected with an implementation plan.  Unlike a technology project though, there really isn’t a hard and visible product of the marketing project.  It is research and strategy, both of which don’t sound like a whole lot.  They are software for the business though, and sometimes software is more important than hardware.

New companies often avoid marketing.  Or they see sales as marketing, or advertising as marketing.  I hear many people talk about internet marketing, which is actually advertising.  They are getting their message out to a mass audience hoping to get a few leads that they can sell to.  Internet marketing often encompasses marketing and sales directly to the customer, without much effort from the company beyond creating the web presence.  Individuals and companies often sell on the internet without really doing any marketing at all.  I call this brute force selling, not really having a marketing strategy (or having one that came from the top of your head) and just getting a message out there that may sell your product to people.  You might get some feedback from friends about your selling method and make changes based on that feedback.  The feedback is a shallow kind of research but can be very helpful to improving you message.

So you can create a company and do brute force advertising and sales, and you might get lucky.  Or you can learn a lot about the kind of product you sell, the types of people who may be interested, and the messages they will be looking for.  There is a ton of free secondary information on the internet that can really help, but it will take time to wade through it all.  Better than google searching for information is using an article database that specializes in business information.  I typically use the one that I have access to via the University of Phoenix, but I believe you can also pay for access to these article engines.  A couple that I use are EBSCOhost and ProQuest.

Secondary information is articles and research papers, which often refers to primary information.  Primary information is when somebody does direct research with consumers to get a good idea of their preferences.  Primary information often tries to prove or disprove a theory, leading to a confirmation (or not) of a belief.  Primary information can be acquired but is costly, but secondary information is plentiful on the internet.  And the more different articles you get that say the same thing, the more you can feel comfortable that the information is accurate.

All of this information and research can give us good ideas about our marketing strategy, but we have to test this information against our company mission and values and make sure it makes sense.  Assuming it does, we can make sure our advertising and sales processes agree with our marketing strategy.  We may also want to change other things about our company based on what we find out.  For instance, if the kind of customer we sell to expect exceptional customer service by telephone, we need to make sure we are prepared to help our customers in this way.  All of our company processes should be customer-centric, and our marketing research and strategy can be the test to make sure they are.

Now marketing may be blah, blah, blah to you… but it really can help create a focus for a company to make sure the customer comes first, last, and always.  Then sales just start rolling in, and it all seems easy.  Rather that the constant beating your head against a brick wall to make the sale.  Marketing makes a huge difference.

Isn’t Marketing And Sales The Same Thing?

Well no… marketing and sales are not really the same thing.  They provide two different functions.  With sales, a salesperson with technical skills attempts to sell something to somebody.  Well managed companies will have a well-defined sales process so that the few variables that remain are handled by the sales person’s skill at selling.  For instance, a company may advertise to get leads that the sales person will attempt to convert into sales, using a standard process.

The standard process is usually defined by marketing.  Marketing’s job is to gather information and create a strategy.  Marketing can have an impact on everything, from the company’s mission statement down to the way orders are fulfilled.  Marketing’s job is to understand the customer: what they are most interested in, how they are likely to buy, what features are most appealing, what they look for in a vendor, and what kinds of services they expect with a purchase.  Marketing studies the customer from every angle and makes suggestions to management on how to change to get more customers and keep existing ones.  Marketing doesn’t reach out and touch the customer, except when gathering data, so marketing doesn’t directly create sales.

I usually say that marketing is a soft discipline where sales is a hard discipline, meaning that marketing is a management type of skill that is sometimes hard to quantify.  Sales shows direct results of effort… however, sales can be more or less effective based on how good the marketing is.

Ethics plays a role in both marketing and sales.  For instance, you don’t want to cheat your customers by promising one thing and delivering another.  Marketing can play a role in deception by delivering the product in a way that causes more to be consumed, such as making the measuring cap of detergent a color that blends with the detergent, causing the consumer to use more of the product than needed.  I am sure you have heard many stories of evil marketing people or horrible sales people, but in both cases the function of sales and marketing is to meet the needs of the customer in a way the benefits both the company and the customer.  Cheating the customer is not part of this equation.

If you sell stuff to a customer, you are not a marketer, you are a sales person.  If you study your customer for clues to how you can serve them better, you are marketer.  What do you think?

What To Do About An Unhappy Customer

With unhappy customers, you can take the attitude that not everyone is going to be happy or you can do something about it.  An unhappy customer may be just somebody trying to take advantage of you or could be the symptom of a problem, and your job is to first determine which it is.

Listen and try to understand the problem

Many disgruntled customers will be hostile and you want to calm them down a bit so that they explain their problem.  Don’t get in a shouting war or get personal, just listen and try to make sense out of the customer’s problem.  When you think you have it, repeat the problem back to the customer so that they can acknowledge that you have it right.

Try to make it right with the customer

Rather than suggesting remedies for the individual customer’s problem, ask them what you can do to make it right with them.  If they are unable or unwilling to give any suggestions, make a suggestion but give them the opportunity first.  Often their suggested remedy will be reasonable and something you can easily do, as customers just want things to be even.  If you do get a pie-in-the-sky suggestion from the customer, you can tell them that you are unable to do what they are asking and make a counter offer.  Try to get an agreement to make the problem right.

You may get an indication during this step that the customer is just trying to take advantage of you.  If this is the case, you may want to stand firm.  Generally though you have to assume the customer is honest and dealing in good faith.

Ask the customer how you could have avoided the problem

See if the customer has any suggestions about how the problem could have been avoided.  If the customer has constructive ideas, make sure to take notes.

If you have employees, work with them to improve the business processes

Rather than implement process changes based on the customer’s suggestions, consult with employees or business partners about the problem and see if they have any suggestions that might help.  Often employees will have good ideas that can help and you want to get their input.  You also want them to buy in to the solution so that they will execute the changes, rather than being resentful that another stupid change was forced down their throat.

Unhappy customers are typically not caused by bad employees

Unhappy customers are typically a management problem, not an employee problem.  You may have a story of a bad employee, but most employees want to do their job well and often they are prevented by management policy from doing so.  That is why it is so important to work with employees to improve things rather than blame employees for problems.  Create policies that empower employees to do their jobs well rather than restricting them.

Above all, learn from and avoid repeating customer problems

Nothing is more agravating than having a customer problem that happens over and over again.  It wastes time and resources to deal with unhappy customers, and often loses valuable customers that you worked hard to attain.  Make sure that these problems do not happen more than once.

What Can You Do With Marketing?

Marketing is a soft discipline so many small business owners don’t understand what it is and how it can benefit them. Other areas of business are more understandable: Sales and customer service, for instance, have tasks that you can easily identify and implement. Marketing isn’t quite so strait forward and it is not always so easy to come up with the answers you want. For instance: How can we make the sales process more effective? I could sit here and give you a few answers but it really depends on the customer. You have to truly understand your customer and their needs and desires in order to provide them a solution that makes sense.

Research and strategy is what marketing is really all about. We research to find out if our market is growing or shrinking, if there are niches that make sense to pursue, if our customer fits into a certain income bracket, how the customer is best reached, and so forth. We can also do marketing research to make our accounts receivable and customer service functions more effective, as certain kinds of customers are more responsive to certain actions. So marketing really can define the activities of the whole company, and mostly should, because the customer should be the focus of every department.

Once we know enough about our customer, we can create strategies and define business processes to mold to our customers’ needs. For instance, we may find that selling kitchen mixers is a declining marketing, but selling high-end mixers is a growing market with a higher profit margin. Our company may be seen by the market as selling cheaper products so we can create a new division to sell premium housewares to the high end market. Everything about the new division should appeal to this segment. We can create business processes within the new division to cater to the particular customer: where we advertise, how we sell the product, what kind of warranty is provided, and how customer service is handled.

Marketing really is the software that defines the hardware that is our business. Marketing is not sales, operations, or customer service but marketing can help all areas of the business be more effective for the particular customer group. If you have specific questions please feel free to reply and I will do my best to answer.

5 Things Not To Do When You’re In Business

Here are the top 5 things not to do when you’re running a business:

1. Let your ego run away with you

They say that power corrupts, and absolute power corrupts absolutely.  If you’re making $10,000 a month and your business is growing, you feel quite a bit of power.  That can lead to an inflated ego.  If your ego gets too big, you can make some bad business decisions.

So, if you are presented with a problem and you need to come up with a solution, best to put away your ego and evaluate the problem in the full light of day, unclouded by emotions.  If you let your ego or emotions rule your decisions, that can lead to some very bad places.

2. Piss off your only vendor

Ah, sometimes you just want to tell it like it is. Your vendor sucks. They deliver the product when they want to. Sometimes they lose your order. They can demand that you sell their product in certain ways. They can be impossible when you want advertising approval. Ok, they suck and you just want to tell them to go to hell. Then what?  If this is your only vendor and they are the only vendor of a best-selling product, well you have to play the game their way because you have no other choice.  Go out and find a new vendor of the product, or find another great product, but in the mean time the best policy is to be as nice as possible to this one.

3. Piss off your biggest customer

Nothing can put you out of business faster than by losing a customer that makes up more than 50% of your business. The best policy, in fact, is to not piss off any customer because customers are expensive to acquire. I have to admit, sometimes there are situations that you can do nothing about, but if you can do something you should do it.

4. Piss off the people you depend on

Are you busy, I mean really busy?  You need the people that work for you and you should do everything you can for them.  Otherwise, you are going to take on a boatload of new work that you hired them to help you with.  If they are doing a really good job, reward them in some way.  If they are lazy, cut them loose.  But don’t make their life a living hell.  This is not fair for them or you.  You either need them or you don’t, choose.

5. Do other stupid things that lead to expensive mistakes

Mistakes are expensive so decisions are best made methodically rather than hastily.  Sometimes you need to make quick decisions but most of the time you can take a few hours or days to evaluate the situation.  Best to do this than to make a quick decision that costs tons.  Oh, and by the way, cheap goods and services sometimes have high costs, so evaluate well.  Better to pay a few dollars more for quality.

So what would you add to this list?

Using Sex To Sell – Do Nerds Really Love Hot Blondes?

I am a computer guy, so I’ll start there. I am not the nerd I used to be, but I still love a good technical solution. And I do love GoDaddy. They have been an excellent company to do business with, much better than the domain/hosting company we had in the past. Still, I have to wonder about their commercials… If you are selling domain names, hosting, and other online services, does using sex to sell them really leap out as a marketing ploy? Well… yes. I gotta admit, their commercials are goofy but entertaining.

Sex has been used to sell all kinds of products over the years from shaving cream to lingerie to Harley Davidson Motorcycles. Men often want to believe that using a certain product will make them the envy of cute girls, if even only subconsciously. So domains by GoDaddy are the envy of really cute girls, NOT. But hey, a guy can dream.

That’s what these commercials do, they put us in the middle of a really bad porno and make us expect that the rest of life is going to be similar. Even the mundane web site, domain name, hosting, etc. products are more exciting with sex. Does it really take much creativity to think these things up? Probably not, but putting them together, sex and technology, is really a stretch… that works. The commercials and controversy worked guys. So should we do the same?

I liked GoDaddy because of their business. But I noticed GoDaddy because of their commercials. You really do need a good business model or the marketing dollars really will not pay off. Sex or no sex. And could you get the attention without the sex? Probably not, but if you put some creativity into it, who knows?

Check out the following resources:

Are You Providing Your Customers With Value?

You may look at this headline and think “I am giving my customers a good bargain”.  Value doesn’t always mean the best price.  Best price is a value, but it is not the only kind of value you can offer a customer.  You might give them extra service, like a guarantee or gift wrapping.  Your company may be the only one selling a product that is needed by many people, like a drug to cure cancer.  You might have a local distribution center or quick delivery.

Please note that if you are offering your customer or prospect no value or no additional value over other competitors, your customer will have other options and may choose to exercise those options.  So it really is important to provide value, know what value you provide, educate your customer about the value you provide, and sell your value to your prospects.

In multi-level marketing, this is exceptionally important because you have so many competitors.  In fact, you are probably recruiting for your upline without even knowing it.  For instance, if you tell a prospective distributor what your upline can do for them, you are recruiting for your upline.  You should be selling your prospect on what you can do for them, what values you offer them.  If you do not know, it is time to sit down with pencil and paper and make a list.  What skills do you have?  What services can you provide?  What kind of training do you have available?  What can you add to your list of offerings?

Here are some resources that may help:

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