Monthly Archives: October 2019

Something For Nothing

I went to one of the warehouse club stores yesterday to make some bulk purchases. If you’ve ever been in one of them – Costco, BJ’s, Sam’s Club, etc. – you know that one feature of walking around the place is that there are usually free samples. You can taste the latest and greatest in meats, cheeses, and frozen things to cook while you’re too busy to make something yourself. That got me thinking about the fact that you really don’t see a lot of sampling elsewhere.

I’m a fan of the free trial. It gets customers walking through your door and using your product. What I don’t particularly like are those “free” trials that require you to fork over your credit card. Free means without strings, right? In particular, if you’re a business that is built around what I think is the gold standard – recurring revenues – you ought to be spending a good chunk of your marketing dollars on free trials.

It’s relatively simple math, right? What’s the lifetime value of a customer? What does it cost you to offer up a free trial – a visit, a free month, whatever? What is the conversion rate of those freebies – how many of the trials become regular customers? Recurring revenues are predictable and generally pretty stable. I bet you’ve signed up for subscriptions of some sort and forgotten you’ve done so or don’t use them as often as you thought you would. For a business, that’s a customer without costs, and that’s a nice margin!

When I talk to people who are looking at franchise opportunities and who don’t have a particular brand or industry in mind, I usually talk to them about the businesses with recurring revenue models. Things like cleaning services. Not a sexy business, but very profitable and that, in part, is because of the recurring revenues. Same thing with spa businesses or some hair salons that feature memberships. Are those businesses that can offer a free trial? Maybe if you’re an out-of-the-box thinker. Giving a converted customer the ability to give away a free trial to a friend is another great way to expand your base at very little cost.

Here is the thing about free trials leading to recurring revenues. As with any business, you have to maintain a high level of customer service. After all, when someone’s credit card is getting dinged each month and your business appears on their statement, it’s an opportunity for them to reconsider.  If they walk away, no amount of free sampling will get them back most of the time. Everyone loves something for nothing. The opposite – nothing for something – is very much NOT true!

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Filed under Consulting, Franchises

Harder Than It Is

Happy Foodie Friday! I was menu-planning the other day (an absolute must before the weekly trip to the grocery store) and I came across a dish that I know to be pretty easy to make yet which appears way more difficult. I’ve served it before and people are always all “oh, that must have taken hours” about it when it’s really about a 15-minute prep. As an aside, there are many other dishes I know – really good Bolognese sauce, for example – that take way more time than you’d think even using a pressure cooker to speed things up.

Seeing that dish got me to thinking, in a roundabout way, that we humans have a tendency to think things are way more difficult than they are in many cases. In fact, I think some of us go to great lengths to make it that way. I’m not talking about a particular type of person I’d run across in business every so often. You know the one – they create problems so that they can solve them and be the hero. No, what I’m talking about is that we love to make things harder than they actually are.

Think about it. What things did you do today that purposefully made your life more difficult ? It was probably so small a thing, or something so ingrained in you, that you didn’t even notice that you did it. Maybe you didn’t set your alarm to allow for enough time to be someplace. Maybe you sat on a task until right before a deadline and you couldn’t get it done on time because something unforeseen happened.  Or maybe you just enjoy the drama. It’s sort of the same thrill as riding a roller-coaster, right? You put yourself in danger and when you survive, you feel a thrill.

Here’s my take. Life can be like some seemingly-fancy dishes – much easier to pull together than meets the eye IF – and it’s a big if – you have the skills required, leave adequate time to complete the task, and don’t make it harder than it has to be. All of us make our lives both in and out of business harder than they have to be at times and unless and until we recognize the times that we’re doing it, nothing much will change.

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Learning From Leads

Like many businesses, I purchase leads to drive revenue. Leads are everything in the business I’m in now and without them, you starve. When I went to our consultants’ convention last July, nearly every conversation I had with one of my peers eventually turned to the subject of where we were sourcing leads and how productive those sources were. As an aside I’m having Glengarry Glen Ross flashbacks as I’m writing this:

These are the new leads. These are the Glengarry leads. To you, these are gold; you do not get these. Because to give them to you would be throwing them away.

In any event, following the convention, I tried out a couple of new lead sources and one of them has proven to be quite good. The reason I’m writing about them today, however, isn’t so much the quality of their leads as it is the quality of their customer experience. They do some things that are instructive for any business that has customers (and find me one that doesn’t!). If you don’t think it’s important, remember that Oracle found that 86 percent of consumers will pay more for a better customer experience.

First, although they sell packages of a fixed number of leads, they let me put together my own package as a test case. They were flexible and focused on my needs rather than on “this is how we do things.”

Second, they are generous with “freebies.” Sometimes the leads are actually not real people – the phone number is bad and the email bounces. Sometimes someone is playing a prank on someone else by sending their information in without their knowledge. Not only have I never had an issue getting the company to refund a lead because of that but they will sometimes throw me an extra couple of leads because I had a less than optimal experience. Let’s face it – who doesn’t love something for nothing?

Third, they follow-up. I get asked regularly if I’m happy with what I’m getting and if they can improve my experience in any way. That’s big because I know they’re listening and that they care. Of course, it’s imperative that if the customer does come up with a suggestion that you communicate back to that customer how you’ve handled it (and just tossing it in a drawer isn’t acceptible!).

That leads to another thought. We should always go overboard when correcting mistakes. Yes, they happen, but if you’re transparent about it and more than makeup for the error, people can be quite forgiving and what was a negative can become a positive.

It’s really about being customer-centric and showing those customers some love, isn’t it?

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The Sides

This Foodie Friday, I want to discuss what is a sometimes-overlooked ingredient in a successful meal – the sides. I’ve got a friend who shows up for dinner every so often and the question is never “what are you making?” but “what are the sides?” That got me to thinking.

You probably haven’t given much thought to the role that side dishes play. First of all, they can help balance out the nutrition of your meal. I’ll plead guilty to being very “main” focused (you can read that as “protein”). Making a smart choice about serving a seasonal veggie or a salad or a roasted root puree of some sort can support the main dish in a way that actually improves it. Think mashed potatoes and meatloaf, for example. Many really good sides require very little work and can be prepped and assembled while the main is cooking.

There is actually research that bears out the importance of side dishes to restaurant diners. A research company published a report in 2013 called…

The Starters, Small Plates & Sides Consumer Trend Report, which details the importance of side dishes in the consumer’s choice of entree. 36% of consumers stated they selected an entree based upon the accompanying sides, and 46% stated they were less likely to order an entree if it came with an accompanying side they disliked. In addition, about 45% of consumers prefer familiar sides over unfamiliar sides. Sides can make or break an entree.

So there you go. Of course, the same is very true in business. Every team has its “mains” but every team also needs its sides. I have rarely found any star manager in business who also didn’t surround him- or herself with a phenomenal bunch of people that might not have been stars themselves but served to make the entire team better. These folks – analysts, accountants, and others – are the ones who usually aren’t front and center but who make the business successful, just as the sides make the main shine and the meal a success.

Our job as managers, much like that of a skilled chef, is to figure out the accompanying sides. I’ve sat with many clients who point out after some business development star has come to pitch them that the “star” isn’t going to work on their business day to day. It will be the “sides”. The smart clients always asked about that, often wanting to meet the people who would be on the account day to day. I know I usually asked about that as well when I got pitched by an outside firm. If the sides weren’t very good, I’d usually pass on the rest of the “meal.”

Don’t ignore your team’s sides. You’re only as good as they are!

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The Right Questions

I was watching the Dems’ debate last night. I’m pretty much a political junkie and this has been an interesting few months as the Democratic candidates sort themselves out en route to a nominee.

As I was watching, I was reminded that the next year is really a very long job interview for a very big job. Watching the debate in that context made me realize that the moderators weren’t approaching it that way at all. They were asking the wrong kind of questions, at least right up until the last one about “someone we’d be surprised you’re friends with.” Let me explain because if you manage a business, hiring is one of the most important tasks you have.

If you’re still asking lame questions such as “tell me about yourself” or “where will you be in five years,” you really should leave the interviewing to someone else. The purpose of an interview is to find out things that aren’t on a resume but which have a huge impact on a candidate’s ultimate success or failure. In my mind, “smart” is the main thing I’m looking for along with intellectual curiosity. I spend my time trying to get answers that demonstrate a candidate’s possession of those qualities or lack thereof. To you, some other things might be important. You need to hone your questions to shine a light on the areas that are critical to you.

Don’t ask “yes/no” questions. Do ask hypothetical questions that reflect the reality of what will be the candidate’s day to day job. I used to test the candidate’s knowledge of my company to see if they really wanted to work there or if they were just looking for a job. “What did you find in your research about us that surprised you?” “As you were finding out about us, what questions came up that I might be able to help answer for you?” If the answers are vague or focused on things like salary or benefits, this is a person who wants a job and not a career. That’s fine, but it’s not what I want.

Asking the right questions can make all the difference in assembling a team for the long-term or constantly having to replace people who either leave for a better gig or who aren’t really qualified in the first place. The right questions get you the right people. You with me?

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Filed under Helpful Hints, Thinking Aloud

The Dead Of Dining

I came up with today’s Foodie Friday topic this past week as I was dining out. Which of course leads to The Grateful Dead. If any of you are Deadheads, one thing you know is that when the band was on and in full flight they were magnificent. They could take you with them as they soared musically. Unfortunately, the odds of that happening on any given night were not close to 100%.

It’s the thing that frustrates most of us who listened to The Dead. You could go to a show never knowing if you were going to walk away uplifted or disappointed. The experience was inconsistent. They were the musical personification of the old Mother Goose nursery rhyme:

There was a little girl who had a little curl
Right in the middle of her forehead;
When she was good, she was very, very good,
And when she was bad she was horrid.

OK, back to food. I took a little mini-vacation this week to an island just off the North Carolina coast. It was lovely but because it is a relatively small island, there are limited dining options. One of these options was a place that serves Mexican food. The first time I dined there I had a lovely skirt steak but what struck me was how good the accompanying rice and black beans were. The beans were perfectly textured with a little smokiness coming from a piece of smoked pork tossed in the pot. The rice was billowy. I made it a point to return on another night.

The second night I dined there, the beans were bland and tough, as was the rice. In fact, the rice had a crunch to it, not like the lovely socarrat that forms in paella but from being undercooked and raw. Everything from the drinks to the entrees seems to have been tossed together with a minimum of care and thought.

It reminded me that one thing we need in business is consistency. Whether we’re serving food or figures, customers need to know that they can count on our product meeting a high standard each and every time. Employees and our team need to know that everyone is treated fairly and using the same standards. Unlike The Dead or this restaurant, we can’t miss the mark as often as we hit it. The only times we miss the standards we set should be those occasions when we move those standards up a notch. Make sense?

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Filed under food, Helpful Hints, Music

Teshuva 2018 Again

Yes, I’m aware it’s 2019 but this is what I posted last year on Yom Kippur and it represents my best take. Enjoy!

It’s Yom Kippur, the holiest day of the Jewish year.  This was a post from several years ago.  As I read it over, looking for inspiration for something to write on the subject of change and business based on the holiday, I realized that I had expressed my thinking pretty well in the earlier post.  Those of you who celebrate the holiday are probably not reading this until sundown (I scheduled this yesterday in keeping with the spirit of not working on the day). Whether you do or don’t celebrate, I hope you’ll take a moment to reflect.

Yesterday was Yom Kippur, the holiest day of the Jewish year. For those of you unfamiliar with the holiday, it concludes the 10 day period at the start of the Jewish calendarRosh Hashanah – head of the year – during which all Jews are supposed to reflect upon the past year and examine how they’re going to change their lives going forward. One also seeks forgiveness from those against whom he has transgressed – both those of this earth and higher powers. There is a lot of other imagery connected with the period – inscription in the Book of Life being a big one – but I think there’s something each of us can take as a business lesson in a non-denominational way.

We all get off track.  Sometimes it’s in little ways like eating badly or drinking too much.  Sometimes it’s in big ways like alienating our families or hurting friends who love us.  The concept in Judaism of repentance is called Teshuva which means “return”.  I love the notion of coming back to one’s self as well as to the basic human tenets that are common to all religions and peoples.

We can take a period of reflection and “return” in our business lives as well.  The most obvious way is for us as individuals. Who have we alienated this year?  What client have we taken for granted?  But it a bigger opportunity.  How has the business diverged from the mission?  Why have we stopped getting better and are just marching in place?  What can we be doing to grow our people but are ignoring?

We ask those kinds of questions from time to time, but I guess I’m suggesting that it become a more formal process.  Set aside a period every year for “return” thinking.  A period of repentance?  Maybe, in some cases.  But in all cases a chance to change.  A chance to regret past bad actions and to vow not to repeat them.  Most importantly (this is true in the religious sense as well), to correct the transgression.  To apologize.   To make restitution.  Whatever is right and lets everyone move forward with a clear conscious and a vow to do better.

Sound like a plan?

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