October 12, 2015 · 9:18 am

Discovering Columbus

In celebration of the Columbus Day holiday, I’m reposting my screed about the day and its namesake.  If you’ve got the day off, it’s fair that you appreciate why.  Enjoy!

It’s Columbus Day here in the US.  While in many places (generally those with large Italian populations) the day is celebrated in a larger public way, it goes unnoticed in many communities.  Too bad since I think we need to pay a lot more attention to the things Columbus teaches us about business.  First, a little history.

Christopher Columbus, the subject of the book,...

(Photo credit: Wikipedia)

Cristoforo Colombo was born in Genoa and is generally credited as having “discovered” America.  We know, of course, that he wasn’t the first European to set foot on this continent (that would have been Leif Ericson) though he certainly did it more publicly and more often than anyone else and he succeeded in bringing the Americas to the attention of the European powers.  He’d been a sailor nearly his entire life.  Though he lacked much formal education he read a great deal including some very sophisticated (for the time) books about astronomy, geography, and history written in multiple languages.  Through them and his world experience at sea, he came up with the notion that the distance between Europe and Japan would be considerably shorter if one went West rather than East.  The Americas were a kind of happy accident that turned up en route.

To be able to make that voyage, Columbus had to raise a great deal of money and spent almost a decade after he developed his theory finding investors.  That was made difficult because many of those advising the investors were dead certain Columbus was wrong and passed on the opportunity.  Any of this sound familiar?

A curious mind hungers for information and actively seeks it out.  That leads to innovative thinking that’s years ahead of anyone else’s.  From that thinking, a business plan is developed and it takes a long time to get others to believe in the notion (and to put their money where their belief is).  The plan, once it moves forward, encounters an unplanned opportunity (he wasn’t looking for natives in the various Caribbean islands when he started!) and pivots to take advantage of it.   I suspect you could use those few sentences to describe any number of successful businesses or products.  That would make them all pretty good things for us to celebrate this Columbus Day as business folks, wouldn’t you agree?

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October 9, 2015 · 9:07 am

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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October 8, 2015 · 9:31 am

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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