Tag Archives: Strategic management

The Choice You’re Really Making

Have you ever been in a situation where you have to make a decision and have done what research you can but realize that you really don’t know enough to make a knowledgeable choice?

Jumping off the cliff at Cape Greco

(Photo credit: Paul Skeie)

For example, you might get asked by the auto mechanic if you want some work done and your knowledge of cars is limited to filling the gas tank. A doctor might give you choices about treatment options and while you might understand the plusses and minuses of each, in the back of your mind is a lingering thought that there must be some medical differences you don’t quite get.

When we’re in those situations, my thinking is that we wind up making one simple choice that’s the same in each case: do I trust the person with whom I’m dealing?  Do I trust that the mechanic isn’t lying about the need to replace a valve spring since I can’t tell a good one from a bad one?  Do I believe this dentist when he says I need to replace an old filling before it become a problem?  In those cases we’re not buying the service – we’re buying the seller.  We’re choosing to believe both that they have understood a problem you’re having and that they have the specific knowledge to solve it in the manner they’re describing.  It’s a leap of faith.

That’s a critical business point that we often forget.  When someone show up late to a meeting I trust them less.  When their materials contain typos or hyperbole, I’m less willing to leap with them.  Being successful in earning trust is a significant factor in a businesses overall success.  That trust is what permits an occasional error (think of a restaurant you frequent that’s having a bad night due to missing servers, etc.).  When your potential customers or clients or partners feel as if you have your own interest at heart and not theirs, you’re toast.

People buy the seller as much as they do the product.  The more complex the decision, the more that holds true.  What we need to do is to ask ourselves if we’re earning that trust or if we’re just pushing a product.  What’s your answer?

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Executing The Staff

Foodie Friday, and although the title of today’s rant sounds as if it involves improving the bottom line by drastically reducing overhead, nothing could be further from the truth.  Since we’re food-related today, the topic is how restaurants that do daily deals manage to do them well.  If you’re like me you’ve probably had the experience of buying a deal from GroupOn, Living Social, or even Amazon and having a so-so experience.  That might be due to the fact that a great number of restaurants that do these deals regret having done so (about half of them, depending on whose research you believe).  So why do they seem so popular?

Image representing LivingSocial as depicted in...

via CrunchBase

The ability of daily deals to generate new customers remains the primary reason for featuring a daily deal for a majority (53%) of restaurateurs that use them.  Bringing in new customers is one thing; getting them to return is another.  In addition, if all the deal does is bring in existing customers who dine at a discount, the promotion has done very little to grow the business.

So what makes some restaurant deals work while others fail?  GroupOn commissioned a study on that and found:

unsuccessful daily deals promoters struggle with many of these same goals – especially the goal of getting customers to return. The key to using daily deals effectively seems to lie in implementing the right steps before, during, and after to better assure success. To be successful with daily deals, companies need to first-and-foremost prepare their staff for the promotion. This one factor, alone, is the strongest differentiator between successful and unsuccessful daily deals users.

In other words, the staff needs to execute, and what that means is instructive for any type of business.  After all, many of the places using these deals are not busy enough. What business ever thinks it is?  But that leads to chronic understaffing.  For these restaurants making sure that they have enough staff to serve the new customers during the deal is critical.   I mean, would you go back to a crowded place where you couldn’t get a server’s attention?

It’s important as well to have a staff meeting to explain the promotion and set objectives for the deal campaign.  Again, better communication with the team means everyone is aware of the goals.  In addition, it’s a chance to remind them that many of the customers will be visiting the restaurant for the first time and to make a great first impression to keep customers coming back.  They also need training on the mechanics of the deal – how to enter codes, how to track spending, etc.  For the deals to work well, the customer needs to spend beyond what they get in the deal – buying wine that’s not included or maybe a dessert.  Training the staff to upsell those thing s can make a big difference in the margin these deals provide.

All of those things remind us that being successful is a team effort and that an informed team that understands what you’re doing, why you’re doing it, and how success can be determined increases the likelihood that they will execute well.  Deal?

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Newsflash: They’re Alive! Newspapers Are Alive!

The folks at comScore released some information about newspaper readership the other day that might just be of interest.

Newspaper colour

(Photo credit: NS Newsflash)

The interwebs are filled from time to time with headlines blaring about the death of newspapers.  As it turns out, not so much.  As Media Post reported:

September was the busiest month ever for newspapers in terms of digital traffic, with 141 million U.S. adults visiting a newspaper Web site or using a newspaper mobile app.That figure is up 11% over June and represents 71% of the country’s total online adult population, defined as the total number of adults accessing any type of digital content.

I’m a believer in the “content is king” theory.  Great newspapers are content generation machines.  Besides developing their own reports on events of the day they commission other content – reviews, feature stories, etc. – that can be what’s lovingly called linkbait here in cyberspace.  That content is often circulated beyond and by the initial audience, furthering the reach.  What crappy newspapers do is cut and paste wire copy after gutting their content-generating capabilities.  I don’t know that those sort of newspapers are dying; it sees more like suicide.

What’s also suicidal is an insistence by any business on preserving a business model that is ceasing to work.  We saw it in the record industry and in many cases we’re seeing it with newspapers.  Smart newspapers jumped into digital with both feet.  Admittedly, many of those are still struggling with the appropriate business model: subscription vs. metered pay wall vs. ad-supported vs. some hybrid.  The formation and implementation of whatever the right model is get slowed down by the constant shift of technology and platforms.  As content consumption shifts to mobile – and the total mobile audience for U.S. newspapers was 77 million U.S. adults in September, or 55% of the total audience – the model needs to be thought out again.

What this research demonstrates again is that we need to emphasize business over tools.  Newspapers do an excellent job of using all the latest tools.  The best ones continue to produce great content, the core of their business.  What still needs work is the business model, which was stable for almost 200 years and has changed forever.  They’re not alone:  it could happen to your business in a relative instant.  Are you ready?

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