A Bowl Of Learning

This week’s Foodie Friday Fun was inspired by a salad I had for lunch yesterday. Business thinking from a salad? You bet! As I keep reminding you, we can learn from everything. So what was so special and businesslike about this particular bowl of greens?

Salad with balsamic vinegar, olive oil, salt a...

(Photo credit: Wikipedia)

The salad in question was a chef’s salad of sorts, even though it went by another name. It was basically a pile of greens – some frisée, some watercress, a couple of various lettuces – topped by turkey, various salumi, chopped bacon, and a hard boiled egg. Not exactly the sort of thing that a cook would have to spend years in culinary school to develop. There was a dressing on the salad too – a white balsamic dressing that was a simple vinaigrette made with white balsamic. So what can we learn from this?

The salad was delicious. Every element was carefully chosen. The mortadella was not too fatty to throw off the balance, the bacon was nicely cooked, slightly smoky and not greasy. The egg was hard-boiled perfectly – not overly cooked so the white was rubbery. Even the salami and turkey were cut into perfectly bite-sized pieces, and they were terrific on their own. So where is the business lesson in all this goodness?

Even the simplest product or service can be great if it’s executed properly with the highest-quality materials. A kid could put this salad together (although you might want to cut the meats up for them) but an expert had to choose each ingredient. The cooked elements – again, very simple – were done to perfection. There wasn’t too much dressing and the salad had been carefully tossed to coat the greens without a pool of vinaigrette in the bottom of the plate.

We have a tendency in business to forget how important the ingredients are. Those are the people we hire, the simple but clear plans and presentations we deliver, and the objectivity we bring to every business decision. Every one of those ingredients needs to be the best quality we can find, since inferior ingredients mean an inferior product, even if the execution is perfect. On the other hand, imperfect execution can ruin even the best ingredients.

Simple doesn’t mean easy.  This salad reminded me of that. You?

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Beyond The Data

If you’ve been reading along this week, it must seem as if I’m obsessing with data. While my inner nerd is peeking through a bit, that’s not my real obsession. The data I’ve been writing about is only one aspect of what is a primary business obsession of mine: customer retention. It ought to be one of yours too.

Simply put, the only two things that should be a primary focus of your business thinking are making great products (or services) and providing great service to customers. Why? Because those are the two keys to customer retention and customer retention is the key to a successful business.

There is lots of research on the value of keeping a customer versus acquiring a new one. According to research by Market Metrics, your success rate selling something to an existing customer is around 65 percent. The probability of converting a new prospect, on the other hand, is only 5 percent to 20 percent. If you’ve been servicing those customers well and providing great products, that’s a very believable finding since the folks that know you, love you. They spend more too: research says about a third more.

So why aren’t you spending more time thinking about customer retention and about how to cut down the churn rate? Probably because the data points you’re reporting as KPI’s are emphasizing customer base growth. There is a place in the dataset for acquisition information and an important one at that. But, for example. when Google reports that 25% of new app users leave after the first day they install an app, obviously new users can only take you so far. Are you looking at retention rates by acquisition channel? Didn’t think so.

Data is a tool, not a crutch.  The business is about growing and retaining customers.  There are lots of ways to do that but at the core of every one of them are a great product and even better service.  Is that what you can honestly say you have?

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Blinded By The Light

Yesterday I wrote about using data as a flashlight. There is, of course, a problem inherent in flashlights that is also true about data. If you look at a flashlight the wrong way, you become temporarily blinded. Let someone shine one into your eyes in a dark room and you’ll understand. Data can be blinding too.  

For example, it’s great to have big ears and to listen carefully to what is transpiring with respect to your company or brand in the social sphere. The problem is that we all know those with the loudest mouths tend to be the least satisfied. Some are just chronic complainers; others are trying to get something for nothing. Taking their buzz as gospel can drive you insane as well as point you in the wrong direction. Obviously they can’t be ignored, but that’s a beam of light we need to be sure is aiming in the right direction.

Ratings and reviews are other sources of excellent information, but be sure that as you’re researching (both those of your own brand and those of your competitors) that you’re not falling prey to fake information. There are companies that hire scammers to write them, as this piece explains in detail.  Place what’s out there publicly in the context of your own customer service data and support emails.  Are there large differences?  Complaints that are never made privately but seem to be a steady drumbeat publicly?

I like this quote:

The paradigm has historically been to do some qualitative studies to develop hypotheses for testing, then validate and measure through quantitative studies. The only difference now is that, in addition to intimate panel-based research, we also have the ability to get much more input from a panel of millions.

So as you’re using those million beams of light, don’t forget context and source.  Make your data set as comprehensive as possible before drawing conclusions.  Failing to do so means blindness rather than illumination.

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The Flashlight You Need

No one likes to wander around in the dark, tripping over furniture and the odd, misplaced shoe.  It’s why every phone comes with a flashlight app, right? On that note, I’ve ranted a number of times in this space about the need for every business to use a flashlight – the need to measure. “Measure what?” you ask? Like any good consultant, I’ll tell you that there is no one right answer to that. I can, however, tell you how to go about figuring it out.  

It’s more than answering “what’s important.” Obviously, growing revenue and profit is the standard answer. It’s the next layer – what makes those things happen – where we begin to figure out our Key Performance Indicators (KPI’s). I like to start with current customers. How many of them are we retaining? What’s our churn rate? How do you reduce the attrition rate, and what percentage of the customers that have left have we contacted? What are their reasons for leaving? Among the people who stay, what’s their purchase frequency and average order value? Are those numbers growing?

Then maybe we need to fill up the bucket some more. How do we attract new customers? What are our conversion rates on whatever marketing we’re doing? What channels are performing, and which are performing better than others? What’s our ROI on marketing spend? How many prospects are we turning into leads? How many of those are we converting?

Finally, there are some KPI’s that are like chicken soup: they might not help, but they can’t hurt. What is our level of social engagement? Is our brand and/or content being shared? What are our general awareness levels? What is our brand image vs. those of our competitors?

You probably have every one of the pieces of data I mentioned above.  You have a lot more too, although it’s imperative to remember that if it’s not actionable it’s probably not worth bothering about.  Good questions and the data that answer them are the flashlights that help your business find its way in the dark.  Without them, it’s way too easy to get lost.

Is that helpful?

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It’s The Solution, Stupid

One of the great meme/clichés since 1992 has been the form based on James Carville‘s famous slogan for the Clinton presidential run:  The Economy, Stupid.  The popular version always adds “It’s” upfront, as I have done above.  The point of his slogan was to keep Clinton campaign workers focused on the main points the campaign was trying to make (it was one of three).  My point is to keep you focused on the marketing you should be doing. That introduction out of the way, let us address my point – it’s the solution.

The first point on all three lines L 1–3...

 (Photo credit: Wikipedia)

I can’t tell you how many times I’ve sat with clients and listened to their spiels to potential investors or customers and come away not understanding why either of those groups would give the client any money.  I used to wonder the same thing from the other side of the desk when I was listening to people pitch me new partnerships or technologies when I was at the NHL.  In both cases the person speaking would explain the features of their product or company but they’d miss the most important point: how what they had solved a problem.  Actually, how it solved MY problem.

If you’re a marketer, you can’t assume your audience has any clue what your product does or what problem it solves.  I’m amused by the brands that go straight to paid search marketing or other immediate calls to action, never having done any brand building.  The classic framework for marketing (AIDA) begins with “attention.”  Branding campaigns get that attention and build awareness.  That’s the time to educate the audience on one thing: how the product solves a problem and why that solution is the best one for the audience.

So it’s the solution, stupid.  Identify the problem you’re solving, make sure it’s a big enough problem (one that a large number of people have, even if they don’t know it yet) and then market the solution. Advertising the product, not the solution, is a recipe for disaster.  Make sense?


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Old Food

Our Foodie Friday Fun this week is centered on aging. I realize that the topic of “old food” might not seem very appealing, but the reality is that you want some things to be old. OK, I guess “aged” seems a nicer way to put that.

Very few red wines, for example, are meant to be consumed “young.” Spare me the lecture on how winemakers these days can regulate the tannins to make reds drinkable not long after vintage. Really good reds need some time to mellow and develop flavor.

English: A glass of red wine.

(Photo credit: Wikipedia)

You’d rather eat “old” (read aged) beef. Most great steakhouse dry-age beef. They expose big cuts to air so dehydration can further concentrate the meat’s flavor. It’s expensive: the meat loses weight from dehydration, and it also must be trimmed of its completely dried exterior before cooking. The process develops flavor and allows enzymes naturally present in the meat to break down the muscle tissue.

We eat “new” cheese – there is nothing better than fresh mozzarella di buffala. That said, one cheese place I go asks you what you’re doing with the mozzarella (eating it as is or cooking with it) so he can give you the cheese of the correct age. Older, drier mozzarella is better for cooking, after all.  You wouldn’t want to eat most other great cheeses right after they’re made.

So why all the thinking about old food? Because there is something to be learned from it that can be applied to business. We live in a time when things happen really quickly.  There are tons of new ideas that become new businesses.  There is a lot to be said for letting those ideas age a bit before acting on them.  I realize that sometimes there is a limited window of opportunity, but think about how often we put out version 1.0 of something (and I mean that in a broader sense than software) only to realize we could have made it better or found more bugs.  Had we let the product age, it probably would have been better.

We do that with people too.  We cherish the new (read young). Speaking as a veteran (aged!) executive, we tend to have broader perspectives that have been formed through both success and failure.  While it’s often said that one business or another is a young person’s business, most of those young people have older advisors, especially in their early and mid stages.

I know that foods have expiration dates and that they become unpalatable if not inedible.  A little aging – a little time – does, however, seem to help most foods and ideas.  Let that thought age a bit…

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Rusty Tanks And Being Ripped Off

20 or so years ago, we installed two large propane tanks to power our cooktop and a new furnace. Since they have an expected lifespan of about 15 years, we asked someone from our propane company to come take a look at them. We had noticed they were rusting a little, so better safe than sorry, right? Sure enough, they need replacing. How this leads to us replacing the propane supplier as well is a tale from which any business can learn.

English: 2 larger propane tanks, one with a re...

(Photo credit: Wikipedia)

We have been very happy with this company. Service has always been prompt, they deliver on a regular schedule and we’ve never run out of propane. That was the case when we called this time to come have a look at the tanks – they were there the next day and came back to us with a proposal to replace the tanks. We made an appointment for later this week to have the work done.

Just out of curiosity, we made a couple of phone calls to other suppliers. What we found out enraged us. Not only was what our supplier proposing to charge us to remove and dispose of the tanks way out of line with the market, but what they had been charging us for propane over the last decade was substantially higher as well. I’m talking about higher to the tune of over $1 a gallon, and when you’re using several hundred gallons a year, that’s a big difference.

In addition, these guys never offered us the ability to “lock in” a price for a heating season. Our oil supplier, as an example, sends us a letter every year with three different lock in options. It shouldn’t surprise you that when our supplier called to confirm the appointment, we cancelled it, informing them that we’re talking to other suppliers and had discovered that we were being ripped off for years.

10 minutes later, the phone rang. Suddenly, the cost to remove the tanks had vanished. Our rate for propane had dropped a lot, and we could lock it in for the year if we so chose.  While we still might stay with them, our opinion of them has changed substantially.  Customer service isn’t just about answering the phone and handling issues when they arise.  It is caring for your customer even when they don’t know that they need care.  Would we pay a little more for great service?  Probably.  The propane is a commodity so the difference is service.  That needs to have transparency, and now that we see what that service has been costing us, we are angry.

There are no secrets anymore.  Yes, it’s our fault for not asking about pricing and plans, I suppose.  That, however, demonstrates the value in keeping customers happy.  We didn’t ask because we were happy with them.  Now that we have asked and have realized that this has meant the overpayment of thousands of dollars over the years, we are far less content.  If you’re keeping customers happy by keeping them in the dark, you had better be damn sure there isn’t a rusty tank out there waiting to expose the issue.  Is there?

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