OK, no one can say the world economy is booming. While I won’t discuss the factors that created the situation, I will give you some ideas about how to think about it and more importantly, what you can do about it.

First off, slow is slow, not stopped. You may think your business has stopped. No new orders or canceled orders may be hard to deal with. You may think that the gig is up and that your business is bleeding cash without any income. If you have adopted that mindset it may already be too late.

Take Control

Take control of the situation. Is there still a need for your product or service? If so there is hope. All we have to do is identify who has the need and go after their business. So how do we go about identifying who needs your product or service? I say we start who we already know. Reach out to those who already have done business with your company. They needed you in the past. If you serviced them well and delivered the benefit you promised when they first bought from you, then they are already familiar with the value you company provides. To maximize your existing relationships you need to communicate directly with the decision makers.

Talk to them about their situation. They are likely to be in the same situation as your business. Ask directly what you can do, with your expertise and resources, to help them improve their business. If they say for example, that they would buy more if your price were lowered, study the feasibility of accommodating them in the short term for concessions in the long run. This could look like a 10% discount if they will contract for certain volume over three, four or five years. The key is to be creative. The number of tactics you can use to build sales is limitless.

Helping your customers build their business will help you build yours. Keep this in mind when talking with your current client base.

Keep up your Marketing Efforts

When Penton Research Services, Coopers & Lybrand and Business Science International studied the 1990-91 recession, they found that all the higher performing business they surveyed conducted a strong marketing program during the period under study. They concluded that those businesses were able to solidify their customer base, take market share away from less aggressive competitors and position themselves for future growth when the economy improved.

This study is corroborated by McGraw-Hill Research who analyzed 600 companies in 16 different SIC industries between 1980 and 1985. Their study showed that companies that maintained or increased their advertising budgets during the 1981 - 1982 recession averaged significantly higher sales growth during the recessionary period and for the three years following it. In fact those that were the most aggressive advertisers during the recession experienced sales increases over 2.5 times those who failed to maintain their advertising efforts.

New Leads

If you are investing in your marketing efforts you will generate new leads. The problem is, during economically difficult times, it will take longer and require more effort to close the sale. It’s natural that your potential clients will weigh all their options carefully and do more and deeper research when every penny they spend counts. Help them by providing them with pertinent information and relevant news about the product or service they have inquired about. Here testimonials are invaluable. Have your clients talk about the benefits of doing business with your company. Engage you new prospects slowly, politely and unobtrusively and help them in their quest.

Develop a system to evaluate your new leads. rate them on their level of interest and nurture them along the path from suspect to prospect to purchase. Remember that your advertising will only bring them to your door with their needs. It is up to you to followup in manner that will bring them through the door and build a strong, enduring and profitable relationship.

It certainly helps if you can find the prospects that are ready to buy now. You need to make sure that they find you and you find them. One way to get your message across is to offer free advice or consulting. Focus your advertising on things that will draw out those ready to buy prospects like free reports, whitepapers, buying guides and checklists. Offer the time of an in-house analyst or expert. One client of mine even said “We will help find you the right solution to your compressed air needs, even if it comes from our competitors!” Of course during the discussion they showed as many of their competitors systems as their own and clearly spelled out the features and benefits of their equipment over their competitors.

The Road Ahead

I enjoy bicycling. Where I live there are lots of hills. If I want to ride I have to go up as many hills as I go down. Naturally it is much more difficult to climb the hills then to zoom down. The point here is that an economic downturn is just another hill to climb. Get in shape, redouble your efforts and don’t give up. Even the highest hills have a top. You can rest a little on the way down but don’t stop pedaling! You marketing effort is just like that. Shift into a lower gear, push harder and climb to the top. Your effort will pay off.

Now when was the last time you evaluated you business assets as to their ‘Highest and Best Use?’ Are your business assets working for you in the best way possible? What could you be doing differently with those same assets to earn a greater return from them? Unfortunately most business owners never ask those questions and are not earning the potential of their investment in their business.

You may be familiar with the tangible assets of your business. Things such as real estate, inventory and equipment. each of these must be carefully examined to discover if the money you have invested in them is returning the maximum possible. For example, if you own and maintain your building, is that building the best location for your business or do you remain there simply because you own the property? Could a better location help increase sales, lower transportation costs or taxes? Could you rent or lease your building and have a nice positive cash flow? Of course this is much simplified. The point is only can you justify, from an asset performance stand point, staying where you are now.

The same is true for your operations. Is the equipment you own be used in the most profitable way? It may be that your equipment has been fully depreciated. You may believe, many have even told me, that operating it is 100% profit. That is never the case. Cost of maintenance, cost of down time and limited capacity and technological innovations of newer equipment make actually make your older machines more of a liability than an asset. Spend some time to build your awareness of what your capital equipment is capable of and whether it really is producing.

Intangible assets such as copyrights, trademarks, patents and intellectual property may also be under performing. Often these assets are the most overlooked. Your business may own patents or other intellectual property that could be licensed to others to use. When a patent or other process is valuable, you may be able to earn substantial income from it without using any of your physical assets.

As an example, a company has developed a compressed gases recovery system for use in their plant. This unique process has saved them millions of dollars since it was first installed and refined and to protect their competition from using such a system they patented it. They believed that they were protected and cost advantage and that was the value of the patent. The VP of sales saw an opportunity since many business could benefit from the recovery of expensive specialty gases. He suggested they sell such a system. Great idea but the company was not in the gas recovery business. Instead, by licensing the technology they spent well over $2 million developing to a gas handling company based in Europe with plants on several continents, they receive a revenue stream that may soon become outstrip what they earn from their main business and which they may spin off. They are no longer concerned with protecting this from their competitors. It just doesn’t matter anymore.

So what is the most overlooked asset? The one that if you utilize to it’s fullest potential you willing have no choice but to become more profitable? Your people. Let’s face it. If you consider payroll an expense or overhead you are ignoring an amazing and profitable asset. We are accustomed to calling our employee relation part of our business ‘Human Resources.’ I don’t really agree with this name but it does hit on the fact that people are a resource. The challenge in viewing your people as an asset is that you may have considered them a necessary evil. you can’t produce your product without them yet they are expensive to maintain, are unreliable, disloyal and may even cheat steal or embezzle!

If that is your perception, look at a business model that relies almost solely on the expertise, agility and creativity of it’s people and pays them accordingly: professional sports. Look, without players there would be no sports! No basketball, baseball or puck would move. No race cars would drive. No skis would race downhill. Sports players are paid for not only the value they bring in terms of talent or natural ability, but for their ability to fill stadium seats and generate ad revenue. Moreover, they must cooperate and work together with their team members and coaches to be of any value. And for some, their personal value rivals, in terms of compensation, the earning of many medium sized businesses.

Now I know you’re saying you don’t run a sports team. That’s alright. Let’s pretend you do. Let’s say your business is a level playing field. All you competition has the same resources you do. Same building, same location, same equipment, same everything except your people. What would you do to gain a competitive advantage? I suggest that you begin building your team. Discover which of your players contribute what. Which could do more or would do more if they could. Which can play together, which are creative which are enthusiastic and which are non-producers. Just like in pro sports you have to cut the dead wood, buy sell and trade the talent and build a strong, cohesive team.

But simply having the talent is not enough. Every winning team has a winning coach. If you lack the motivational power of a Vince Lombardi, Joe Paterno or Bear Bryant, HIRE ONE. Without a leader your team, no matter how talented, will never have the focus and the drive to make your business excel.

These strategies don’t build success overnight. They are long term projects that will only pay off with perseverance. Some teams and coaches spend many seasons acquiring the talent and molding their teams to an championship level. You must have that dedication as well and be clear about your goals.

Remember, we choose our assets by how they perform. Constant evaluation is essential to maximize your return on investment. By making staying on course, finding and making the Highest and Best use of your assets, you will guide your business to the highest levels in your market.

Of course you would like to paid first. Your business is probably feeling the crunch as much as your clients. So what can you do to ensure that you will get paid without alienating your clients? Even better, how can you work with your troubled clients that can make them raving fans and a referrers of new, well paying business?

Before we get to that I want you to read a real letter sent to a the collections department at a large Brazilian department store chain - Casas Bahia for those that care to know. The translation is mine and the original author is a woman. Her approach to debt service is quite unique. I think you will enjoy it.

Dear sirs,
This is the eighth collection letter I received from you. I know that I am behind in my payments. It so happens that I have bills with other stores and all are waiting for me to pay them. Never the less, my monthly earnings only allow me to make two payments at the end of each month. The remainder must wait to the following month.

They are aware that I am not unjust, the type of person that prefers to pay this or that company to the detriment of all the others, NO!

Every month when I receive my bills I write the name of each of my creditors on small pieces of paper that I roll up and put in a little box. Then I turn my head and pick out two slips; they are the “lucky” ones that will receive my bit of riches. All others, please have patience! You will remain for the following month. I affirm to you gentlemen, with all certainty, that your firm is in my little box every month. If I don’t pay you this month it is because you have been unlucky.

Finally, be advised: if you continue to with this penchant of sending menacing and insolent letters every month, like the last one I received, I will be obliged to EXCLUDE the name of your company from my monthly lottery…

Yes indeed, your company may be the unlucky one. So what can you do to increase the cash coming in from your clients that are strapped for cash? A little advance work goes a long way.

I am assuming that before you extend credit you are doing your homework by checking the credit worthiness of your client and that you have established clear guidelines on what risks your business is willing to take before advancing goods and services. I will also assume that work credit policy has been clearly explained and understood by your clients you will extend credit to. You do have a contract?

Aside from the obvious sometimes events cause unforeseen trouble. Like the woman in the letter perhaps there is more month than money for your clients. What can you do to be assured of payment?

The first most important step is communication. For debtors, let your creditors that you are in an uncomfortable situation. We never can know what the future will bring. It could be that your client’s had a large order cancelled or their business has dropped considerably and they must make a choice between rent and servicing their debt to you. Never assume that those that you do business with are just ‘out to screw’ you. What does that say about your judgement in doing business with them in the first place? Instead talk.

One good strategy that I espouse is to start you collection process in a nice way well before there is ever a problem. Its starts with billing. After your original invoice goes out, wait a few days for you client to receive it. Then have someone in your service department - if you have one - call to make sure everything is alright with the order. Find out now if there is any dissatisfaction with your product or service. Be thorough and talk to everyone you can at your client to make sure there is nothing wrong in the client’s mind about what you delivered. Write down or record these conversations. If there are any problems address them immediately. Even the smallest detail has been used as a reason to put your bill back in the little box for the next ‘drawing.’

If the customer is satisfied have your AR department - again, if you have one - call ask the customer and ask if they have received and understand the invoice. If you offer any discounts for early payment, have them emphasize that during the call. Most importantly have them ask “when can we expect your payment?” Again write down or record the call.

So what we have done is taken away the excuse of dissatisfaction as a reason to withhold payment. we have also gotten a verbal commitment of when we can expect payment. These actions go a long way to putting your bill at the top of the stack.

So what if the client says they have a financial problem and will not be able to pay your bill. Whatever you do, don’t become indignant or threatening. Show compassion and concern for the client’s unfortunate situation. Tell them you know they would never withhold payment unless their situation was desperate. Ask what you can do to help them through their hard financial times. Remember, if you’re talking to a large client with a receivables and billing department you may have to go to the CFO or VP of finance but because they are beholden to you it can be easier to get hold of them and they are the only person you can deal with anyway. For a small business go directly to the owner.

Tell them of you concern about the situation and offer assistance. Write down every concession they would like you to make. Just listen and make no offers during that conversation. wne they are done thank them for being open and forthcoming and and tell them you will get back to them. You are now in an excellent position since you know what they want. Here’s where you can get creative.Thanink about what your comany may if getting your cash upfront is not a possiblilty. Just to give you an idea of what is possible here are some things I have seen work.

A debtor company gave their creditors the right to collect directly from their customers. The deal was structured so that if the debtor was able to collect the entire debt to creditor they would get to keep the entire amount in excess of their original debt.

A debtor company arranged financing for part of their original debt by factoring their receivables at 20% discount to cash. The remaining original debt was financed over 5 years at a reasonable rate by the creditor and 5% of the original debt was forgiven.

A trucking company allowed a creditor, a fleet leasing company, the right to resell their transportation services and collect the revenue.

One company heavily in debt to a long time supplier traded their debt for a 15% stake in the business and an appointment of the controller as the CFO of the debtor company. In the long run this helped both firms as the new CFO helped turn the business around, a process that over four years, and earned the a whopping 1200% return on the original debt.

Look, anything is possible if communication is open and honest. I know your situation may not be like the ones I’ve cited but always think about what you want and need that is not cash. Would you like a great testimonial? How about having your debtors as a new sales force? Why not excuse part of their debt for each new client they bring you that makes a purchase? Can you company use or resell any of the debtors inventory? Does your debtor have large advertising contracts that are holding them back? May your company can use that advertising instead. Always look carefully at you debtors assets and think how they can help your company. You may surprised at what you find.

Be open.
Be compassionate.
Be creative.

Find a common ground where there are benefits to you and your client. Remember the worst thing you can do is to drive you debtor in bankruptcy. In that situation no one wins expect the lawyers.

Of course this is just the tip of the proverbial iceberg. If your company is beginning to experience collections problems, call me today so we can work on strategies that keep your company thriving even in these difficult times.

Phil
888 823 2620

]]> http://www.framsystems.com/blog/collections-no-laughing-matter/feed/ http://www.framsystems.com/blog/religious-crisis/ http://www.framsystems.com/blog/religious-crisis/#comments Fri, 26 Dec 2008 21:33:38 +0000 Phil Cogan http://www.framsystems.com/blog/?p=124 Pundits everywhere are spewing out sentiments and speculation about the causes of the current economic crisis. As we begin to feel the impact on our own individual conditions and to see the effects on businesses and people around us we are asking why? What fault, what flaw allowed this to happen? Haven’t we learned anything from the past about how to avert such a disaster? Some of us are even introspective enough to ask ourselves, what did I do to contribute to the situation?

So let me put something out there, something for you to think about and perspective I haven’t as yet heard in the press. Maybe this is a religious problem. Now just hold on a minute. What do I mean about religion? No, not Christianity, Judaism, Islam, Buddhism, Jainism or any of the other world religions but the religions called laissez-faire capitalism, profit and growth.

Our adherence to the belief that markets are self regulating and are able to correct all our errors is perhaps all too true. Just as the collapse of Soviet Communism caused great hardship and despair for those who were staunch supporters of that system, so too will the collapse of the market economy hold great hardships in store for those that most sincerely believed in that religion. Indeed, if history has taught us anything it is that religious fanaticism and fundamentalism often leads to great conflict, destruction and disaster. What is worse is that such disasters consume many innocent victims as well.

So as our religious fervor spurred us on to accumulating greater financial wealth, we remained blissfully ignorant to the inevitable consequences of our actions. We lacked the foresight to see the need for significant controls over our financial markets that let our economy become over-leverage, overspent and hopelessly in debt. Almost everyone appeared to win. So when the wave finally broke as indeed every wave must, it smashed many to the ground.

If only we had been less hopeful, fervent and reckless in our pursuit of wealth, if only we had leaders who had foreseen the end of game would we have been spared the coming hardships? Moreover would we have even allowed them to spoil our party?

So what about values allowed someone like Bernie Madoff to go become a high priest of capitalist culture? Was it our belief, our desire to believe that growth would go on forever? Did we not want to look at the man behind the curtain?

I believe that our lack of values resulted in a true destruction of value in our economy. So perhaps then our crisis is not an economic one but one of values. As we dig our way out of the economic mess we’ve created we should also be thinking about what the core values of country and our culture should be. Perhaps we should reshape our religion of laissez-faire capitalism into one introspection and self control. After all, isn’t that what the religions of the world attempt to do?

By quality, I mean a measure of excellence; what the quality conscious client is looking for and how they measure it from their perspective. Therefore quality of service is determined by the client on what they believe is the most important aspect of your product or service.

Service, like any intangible, is as much expectation as it is reality. It is certainly worth the effort to to analyze quality from the point of view of our clients and to ask ourselves, what do they want? When do they want it? At what price? Has our competition done a better job of filling their perceived wants, needs and desires?

From the client’s point of view it is easy to make the distinction between objective quality, that which can be precisely and technically measured, and subjective quality, or that which is client perceives.

Technical quality is easily measured. Seeing if a product or service meets some established industry standard or reading the ingredients of a packaged food product or the horsepower ratings for a vacuum cleaner motor give us an idea of technical quality. Subjective quality however is not so easily measured yet is is the true and perhaps only standard our clients use to judge us by. Indeed the technical measurements of quality actually may never come into play for our clients. Instead the measure our quality as perceived by the appearance of our offices or stores, how our product is packaged or presented, if our delivery trucks are clean, our personnel uniformed, clean and well mannered and if their orders are filled completely and on time. The list goes on and on, but it is one you had better consider if your company is to be perceived as delivery quality and service.

Yet the fact that subjective quality is based almost solely on perception does not mean that it cannot be measured or that it exists only in our client’s minds. To be able to compete quality and service we must actively manage both quality and service by keeping in mind how our clients actually perceive them and by asking our current and perspective clients what is important to them. We must test and retest what our clients consider important.

To accomplish this we can ask our clients directly through surveys and focus groups, from monitoring calls to our support desks and posts on social networking and review sites. We can also design our marketing and advertising to stress different aspects of what we believe is important to our clients and see how they respond to those messages. And while the former is important, the latter will reveal in terms of real sales, just what is a deciding factor for our clients. Keep in mind these factors can change from area to area and product to product within your marketing areas and offering.

Undoubtedly there are a few areas that are always considered important: the human aspect. Speedy and attentive service, knowledgeable and courteous staff, usefulness and practicality. After all does your product and service actually meet the wants, needs and desires of your clients and deliver on what it promises?

Stick to the basics. Strive to learn just how your clients perceive your company, your product and service and your people. Ask and observe exactly how your products are used and work tireless to improve them. Give more and make sure you communicate exactly what makes your product and service better, in every venue your clients pay attention to.

Let’s take a look at another aspect of the result: what happens when the desired effect or outcome of the purchase is not what the buyer expected? What happens when it all goes wrong? How you handle that can be more important than just about anything else you do. Even though your company may have invested massively in engineering or design creating a product that is the best of it’s kind or a service without peer in the marketplace doesn’t automatically mean you will be successful.

Remember the old adage about building a better mousetrap. That goes a long way toward teaching us that we need to market and advertise our product or service if we want people to know about and buy it. However, when things go wrong with it, who will be blamed? Who will be perceived as at fault? Without going too deeply into the discussion about why people like to blame instead of solving problems themselves, it will probably you the manufacturer or seller of the product or service that will receive the blame. It’s how you handle it that counts.

Are you only selling half?

So you have a killer product. You’ve also done your job letting the world know about it. Sales are good and are growing. Then it happens. Your product falls down on the job. It doesn’t matter how or why, it just fails. What happens to you customer then? If the product is inexpensive or trivial they may just trash it and buy another. Will the next one they buy be your’s or your competitor’s? How can you be assured that they will: turn to you first and buy from you again?

That’s called customer service. In a survey of over 1,000 Canadian retail, banking and telco customers, Acumen Research Group determined of customers that that were considered loyal, 73 percent actually defected from the companies they were loyal to. 43 left because of a negative experience with a staff person, 30 percent because they felt that they were not being treated as valued customers. How do your costumers stand up?

So your great product or service is maybe only half of what you sell. The other half is how you relate to your customers after the sale, especially when there is a problem and there will always be problems. What can you do to avoid losing more than 70 percent of your loyal customers?

Human relationships

I’ll say this again and again, all business is done between people. It is how you treat people that makes the difference. H. Ross Perot was right on target when he said “Business is a cobweb of human relationships.” What can you do to ensure that the great majority of relationship your business has are strong and enduring? Here are some questions to ask.

What do my customers want? What are they actually paying for?

Results. Do they want the hole? What problem are they solving by giving you money? What other expectations do they have about your product? For example, if you sell cell phone service, do they expect all their calls to go through? Do they expect calls not to be dropped? Do they expect to have voicemail? The ability to have easily send and receive text messages? Do they appreciate dealing with unresponsive or clueless service reps? What about waiting on hold for more than 10 minutes to speak with someone?

Have you ever asked your customers what they want and they expect from your product or service or did you ‘build a better mousetrap’ and wait for them to come knocking? They only way to know is by asking. Talk to your customers and prospects about what they want, need, desire and expect. You are free to also envision what you can do to make their experience with you special. What can you do to set your product or service apart after the sale? What can you do that competition does not?

Take your ideas and your customer’s ideas and study which will be of the most value. Which are feasible and which are not and why? Take those ideas that you can make work 100 percent of the time, in a systematic fashion, and incorporate them in your business.

Do your employees know who they are?

Everyone in your business, from you, if your are the CEO or President, down to the janitor or truck driver is the personification of your business. How they appear and behave? Have they been trained in your systems? Do they know how to do the right thing every time or where to turn for help? Do you have systems in place that help them know and understand their role goes beyond their job? Are you serious about acknowledging and rewarding their behavior toward the business and more importantly toward your customers? Remember why over 70 percent of ‘loyal’ customer’s defected: a poor interaction with an employee.

Your ambassadors

Your employees are your ambassadors. Have you empowered them with the ability to make reasonable commitments on behalf of your company when it comes to keeping your customers satisfied? When employees know not only what the right thing to do is, but that they are empowered to make it happen, they are free to act in way that will build your business. When they are limited and perceive that the only people they need satisfy are their superiors they are severely handicapped and devalued. When they are empowered how do you think they will feel about your customers? When they feel mistreated or devalued, how do you think they will feel toward your customers?

Engineering

When your commitment to customer service is as strong as your commitment to engineering, marketing and sales, then your product is complete. Engineer your business and your product to build customer service into everything and watch how the world perceives of your business. Watch also as your competitor’s customers become aware of it. They will be the more than 70 percent that are looking for a new relationship.

No business can be all things to all people. It’s neither possible or desirable. What we can do is be an important and valued part of our customer’s or client’s lives, filling needs and desires in such a way that our businesses become a part of their lives. This goes somewhat beyond the lines of traditional customer loyalty and into an area of customer relationships. How to mold your business into one in which your customer’s feel they value the relationship is key. With each passing day the need to forge these kinds of relationships is becoming more important to our success or failure.

Intelligence

A conversation I had the other day stimulated to think some more on the subject what information is the most important and valuable to a business. Most data we collect is information about the state of things past. There are many relevant and meaningful insights that can be gained by careful analysis of past events. The analogy was that looking at information about the past is like driving your car forward by looking only in the rear view mirror. The rear view mirror is a great tool in traffic because it lets you see who is coming up behind you and what others may be positioned to pass you or worse collide with you. By looking at data solely about our business we are in a position where all the other traffic is in our blind spot. Wouldn’t it be better if we could see not only the road ahead but the traffic we will encounter beyond the range of our vision and the shortcuts or alternatives to avoid it?

Some ways we used to look at our data, in particular data and information about our customers let us see and make distinctions about our customers.

We can determine who are our best customers?
Who contribute the most to our bottom line.
Who are spending more this year than last.
Who has more inquiries, more purchases and are they larger or smaller?

We can then survey our customers to determine if they are buying from your competitors as well. Are they being lured away by competitors offers? Are they dissatisfied with your business? Are they irritated by your marketing efforts?

While these are all important things to know and understand about your client base, are they good enough to steer your business with? Do they point out a clear direction for your business? Do they reveal new opportunities?

What I’d like to know is…

To be able to see the road ahead we need some new metrics, new information. When looking at your customer base can you identify which ones have the greatest potential for growth? Can you tell what they expect, need and sire from their relationship with your business or if there are impediments your business has created that keep them from realizing their full potential with your bushiness?

Can you tell which group of customers you have now that you are wasting your marketing efforts on right now? Is there some key ingredient you’re missing that can transform their relationship with you? Is there some way you can turn the tables to let them have more control of the relationship that will reduce your expenses in pursuing them while at the same time giving them more satisfaction from the relationship?

Have you created a profile of the customer or client that is most likely to recommend or refer your business? What about their relationship with your business makes them such proponents? Are you able to easily engage that customer type in a meaningful dialog?

Just as importantly can you recognize which of your current customers are ready to jump ship and take their business elsewhere? Is there something you can or should be doing about that?

Who has the information you need?

Your customers do. According to the research firm Message Factors, (http://www.messagefactors.com), an average company has customers that can be classified as Loyalist, Content and At Risk.

So what makes the difference between those customers that are Loyalists those that are ‘At Risk’? Message Factors reveals four issues that areas where the difference is made. They identify them as: basics, value, irritations and relevance. On their website they define the like this:

Basics: I expect you to have mastered the basics of whatever you are in business to do.
Value: I expect you to go beyond the basics and provide me with something I value.
Irritations: Some things you do irritate me, but these things aren’t important enough to drive me away.
Relevance: Some things you do are unimportant to me.

So, what is it that your business does that is just expected? A bakery must be clean and their breads and cakes tasty and safe to eat, a gas station must have gas. What value does your company provide that goes beyond the basics? Nordstrom’s sells the same merchandise as other department stores but does so at a premium because of their high level of customer service. I can be noted that value is what makes you different in the market place and loyalty is gained by the perception on the part of the customer that they are receiving more that what they paid for and more than what they could get elsewhere.

Do you know what you do that irritates your customers? A friend of mine would constantly bite her fingernails. This drove me crazy and although I mentioned this to her numerous times, she continued with the habit and, more importantly as my friend (hypnosis finally helped her ‘kick the habit’). What does your business do thats like biting your nails? Could it be a draconian IVR system that makes it difficult for customers to communicate with you? Is it constant unwanted advertising emails? More importantly, what do you about others in your business that annoy everyone and how can your eliminate those annoyances in your business?

What do you do that you think is important but your customers could care less about? Does that special additive gasoline companies tout in their ads mean anything to the consumer? Would they have added it anyway because it makes their refining or transporting job easier? Did anyone care that “Rolaids consumes 47 times its weight in excess stomach acid” or did they just want relief? Remember how their ad campaign changed? How do you spell relief?

Opportunities revealed

Thinking about the answers to these question can reveal great opportunities. Examine all the areas. Even the unimportant things can help you reduce wasteful activities and expenses that your customers don’t value. Not targeting those customers that will be unlikely to spend with your or are annoyed but your advertising will also cut costs.

Try to discover those clients that are loyalists and turn them into advocates and referral generators. Increase their annual expenditures and hold onto them longer. Bring your content customers up the ladder to loyalty. Concentrate your effort on building relationship with those customers that offer the greatest growth potential for your business. Don;t waste time and money satisfying customers that you’re unlikely to have a prosperous relationship with.

Getting to know your customers is a wonderful thing. Giving them a voice in how their relationship with you works is golden.

It’s not only who know or what you know, it’s what you about whom and how you relay it that makes a good referral.

Let’s face it, everyone likes getting referrals, especially those that lead to profitable relationships, but how many know what makes a good referral? Moreover, how many have a system in place that is constantly generating good referrals?

Coming from an IT and business background, I understand that the more data you have and the more critical ways you have of examining that data you employ, the more meaningful and revealing information you may gather. Often, simply by analyzing figures something startling may be discovered.

In a 2005 study of Census Bureau data, geographers Mark Ellis of the University of Washington and Richard Wright of Dartmouth College looked at immigrant populations by the households in which they live, rather than individually on the traditional basis of census tract, neighborhood, metropolitan area or state. What they learned is that there are about 17 million third-generation or more Americans living in households with immigrants or children of immigrants. This has had profound significance for marketers that focus or ethnic or nationality based campaigns and virtually open a whole new realm for them to target.

In the case of referrals, knowledge is power. If you are giving a referral, what information to you have about the client or customer you are referring? Here, more is better. The more information about the prospect you can convey, the easier it is for the person making the call to focus in on the wants and needs of the prospect.

Compare these two referrals. Jack, a forklift truck salesman gives the Shirley, a Third Party Logistics rep this referral. “Shirley, I just went to see Ed McKinley at Movementum about their Jacksonville facility. He mentioned that they were not satisfied with the times their logistics provider was taking to clear their docks. I thought he would be a good referral for you. Here’s his number”.
Looks like a good referral right? Shirley now knows who to talk to and what concerns and needs they have. Specific enough? Not really.

Consider this. “Shirley, I just went to see Ed McKinley at Movementum. They’re concerned about some efficiencies of their TPL provider, MarxTrux. Ed feels his whole operation is bogged down by goods not moving efficiently off their docks. He complained that schedules are hard to coordinate with MarxTrux and even though they invested in a computerized system, it isn’t paying off for them like they were led to believe. In know this is good opportunity for you so I told him about you and he seems interested in talking to you.”

OK, that’s better already. The Jack adds the real information. ” Before you talk to Ed, here’s somethings you should know. When Ed got promoted to VP of Operations last year its was because of tight ship he ran at the Atlanta operation. In fact it took him 5 years to turn things around there. As VP the President and the Board are looking to him for some quick results for operations overall. I sensed that Ed is under a lot of pressure to produce some positive results rather quickly.” Even better, Shirley now knows Ed’s pain. Jack goes on “Ed and his wife Beth have three children, Mark who just started business school at Duke, Carol, a sophomore at Sarah Lawrence and Joey who plays on the Cougars, his high school basket ball team. Ed is very proud of his kids so be sure to ask about them. Ed and Beth live in Bethel on a small farm which they keep for the farm tax assessment. Beth was a school teacher before they married and she loves taking care of their few animals and sharing them with the neighborhood kids who help with the chores. Ed loves to play tennis and complained to me about how his new travel schedule makes it hard for him to play as much as he used to and he really hates it when he has to miss one of Joey’s games. Ed and Beth really want to be involved with Joey before he goes off to college in two years.”

Great, Shirley now has a load of information that will ease her into positive conversation with Ed. Foremost she is aware of Ed’s most pressing concern: showing immediate results in operational efficiency. She also knows about Ed’s wife, kids, his likes and dislikes. Surely Shirley can use that information to find some common ground on which to start a conversation with Ed that she can turn to a conversation how Ed can use her TPL firm to create the results he is under pressure to produce.

Now the master’s touch. “I have to go see Ed sometime in the next two weeks. If you’d like, I will arrange a lunch after our meeting and introduce you to Ed. I told him about you, your company and about the success you had with CHH. He seems very interested in meeting you. I’ll get you acquainted and beg off the lunch if it seems to be going well, that way you can have his undivided attention” That’s a referral.

So how can you give referrals like that? Be attentive and constantly be gathering information about the people you do business with. We all make small talk. It helps us feel out the person we are dealing with. The great Dale Carnegie taught that it is better to engage a person to speak about themselves than it is to speak about yourself. When you ask questions, take notes if you must, but learn as much about the people you meet. They will think highly of your for it.

So how can we make a system of this? Financial planner Bill Bachrach has created a formula he calls MISC: meaningful, important, significant and compelling information. You could simply note the facts about your contacts and have areas titled Meaningful, Important, Significant and Compelling. Jot down the key words about these aspects of your contact. They will help you and those you refer.

So let’s say you receive a sparse referral like the one in the first example. What can you do? First, ask questions and take notes. If I’m near a computer I use a form like the MISC one I described but if not I take notes on whatever is available and transfer them to the computer THAT DAY. Ask about what is meaningful, important, significant and compelling about the referral you’ve just been given. Ask questions like “based on your relationship with Tom, what makes you think he is a good prospect for me?”, “do you know what specifically Tom would like from me? What are his concerns?” and ” has Tom ever mentioned other things about himself and his family that you could share to help get the conversation going with him?” Try to find out as much as possible, even things like how do they like to dress, what kind of car do they drive, are they into exercise and diet or are they social and involved with community projects. The more information you have, the more you know, the common ground there is to build the foundations of your personal bridge.

Asking questions like these accomplishes two important things: it helps you to understand the prospect and it makes the person giving the referral think about that person as well. Do this enough times and with that person and he will automatically include that information in his next referral without needing to be asked. And of course, share this system with anyone who will gives you a referral.

When giving a referral always try to go the extra mile like Jack did in the second example. Personal introductions go a long way, especially when the introduction is from someone trusted.

Do these things and fill your information with significant and important information about your contacts and they will payoff for you and others. And remember, there is no better place to use your contact system than where you are now. Makes notes about everyone you meet, you never know when they will pay off.

Sales, like the B2B one can be direct or through channels like the gas station or newsstand. Where channel sales are appear simple they can be quite complex. In this article however, we will examine B2B sales and how sales partnerships can open new doors, create new opportunities and increase your bottom. The path of sales partnerships however, like any partnership, can be a difficult and thorny one.

Let’s Dance

Some companies, especially those in the technology fields like software and medical equipment have both horizontal (technology centric) sales teams and vertical (industry centric) sales teams within a single company. The reps on both sides must work together in mutual support to cultivate new business. Sometimes this causes some turf wars inside sales organizations. The road becomes more difficult when the sales teams for different companies in different industries need to come together in mutual support to make a complex sale that will benefit one or more organizations. For example when one company can’t supply everything that is needed to create a unified solution their potential customer. Machine builders need to rely on engineering firms, sub Assembly manufacturers, plant designers, production planners, compliance experts and the like in order to make a credible end-to-end solution presentation to the end user of the equipment. Sales alliances with such expertise all aligned to accomplish the goal of selling their service together can be extremely effective yet enormously tricky.

Finding such partners may be critical for you to make a sale. Yet there are many obstacles that need to be overcome before any presentation is made to ensure that things work a smoothly as possible. First off, when meeting with potential partners make sure they know that your relationship will be a contractual one. Every detail of the selling relationship must be spelled out clearly: compensation, costs, responsibilities, leadership and logistics must be thought out and assigned and agreed upon before making any presentation. Lines of communication must be established and tested. All matters must be transparent and in the open, no aspect can me made occult, no information, and thereby power, can be withheld. Trust must also be established for things to work as planned.

Human Nature

It seems unnatural for experienced sales reps to have to share control of a project. It is in the nature of every rep to want to be in control of the situation, especially if there is some disagreement about the direction of the sale is headed. While reps from one company may have an established sales team where every player knows their roles and performs them well, reps from different firms and different industries have no experience of working together as team. Ultimately they will need some guidance from executives or managers to help them forge a unified team; left to their own devices it is almost certain that a degree of territorialism will creep in leading to a breakdown in the sale process.

Keep Focused

Partners must learn to keep focused on a target that when hit will benefit them all. The benefits must be clear and equitable and it is the sales managers that must make sure they are communicated and understood. The basis for the relationship must be clear to all involved, if only for one sales or an alliance intended to make many.

Do the Right Thing

OK, credit to Spike Lee. You will read these words many times from me. Do the right thing. Be flexible and tolerant of your partners differences and their mistakes or missteps. You will undoubtedly have your own. Do not find fault in your partners processes or culture. Corporate cultures are like religions and have brought many companies huge successes. Remember you religion or corporate culture may seem just as wacky to your partners as theirs does to you. Treat you partners right, keep your front unified and your alliance strong. In the face of temptation, do not cheat your partners. Sorry if this sounds like a sermon.

Putting It All Together

When looking for partners that bring skills your firm needs to the game, look beyond their specific skill set to their ability to be able to play well with you firm. While they maybe true experts in an area where you are not, you must assess whether their sales team is sound and if they can are ready and willing to share their methods as well as their expertise with you and vica versa.

This requires that you and your sales force have a firm understanding for strengths and weaknesses. You may know your field very well but not have a firm grasp of what businesses in your clients industry what, need and expect but your partner does. Be clear with yourself, your sales team and your potential partners about what you bring to the table and what you expect from them.

Put together a plan of action that has specific milestones and responsibilities assigned. Make it part of your signed contract. Make your commitment and stick to it. Keep careful track as to how things are progressing on both sides of the partnership and work like mad not disappoint your partners. Keep in mind that although this is like a slow and maddening seduction, the marriage that results can bear luscious fruits and fragrant roses for years to come.

Green. The color of grass, Kermit the Frog and money. With the rising awareness of the impact of human industrial endeavor on the ecology of our planet, awareness is also rising about the impact on the world economy. Let’s face it, we as a species have been takers for far too long. We take coal and oil from the ground and convert them into energy to power our standard of living and spew millions of tons sulfur, carbon monoxide, carbon dioxide and other metals into the air we must breathe. We decimate forest and farms for wood and agriculture to sustain us and kill entire species of plants and animals. We bury our waste products in the land and dump it in our oceans. We over fish those same waters and wonder why our catches are ever smaller and sicker. We’ve been selfish and we’ve been bad and we’ve been ignorant. But we are waking up to the fact that our behavior has consequences and that we must act decisively and soon to avert the crisis that looms in the near future or suffer the consequences of our actions.

To look at it another way, our actions as a species are no different than the actions of one individual. If a person is selfish, ignorant and uncaring he or she may behave in an abhorrent manner and destroy themselves and others: crime, drug abuse and alcoholism and are a few destructive and selfish behaviors. However if a person is selfless, aware and caring they will behave in a manner that that builds builds up others and the community: altruism, volunteerism, philanthropy are such behaviors. Clearly there is a great dichotomy between of forces that act in people and in the human race.

Then the Possibility

So, as awareness of our bad behavior grows, we recognize as well the need to modify our thinking and our actions so that we may grow as people, as corporations, as companies, social groups, nations and a species.

How then does this impact our bottom line, our businesses? We have been seeing evidence of the ‘Green Revolution’ for quite a while. It started with the environmental movement in the 1950′ and 1960’s with the wave crashing ashore on the first Earth Day in 1970. Since that time, bit by bit, we have been presented with clear evidence of the consequences of our lifestyles: depleting ozone layer, global warming, lead poising from fuels, acid rain and extinction of species are all clear clues that the world is changing. Today this evidence is in our faces in all media at all times.

If we want to use this growing awareness to our economic advantage in terms of marketing we certainly can. In the effort we will not only grow awareness, reduce waste and our environmental impact, we will grow our businesses and our bottom line profits.

The Plan

We all know that marketing and advertising are mostly words and images. In the case of green, as in many others like customer service, we can’t just talk the talk, we must walk the walk. Consumers are savvy. They will immediately recognize your ingenuity and pickup on where your actions and your message diverge and inform the world. Make your actions conform to message that will also be noticed and will build your reputation and your business. Don’t be a ‘Greenwasher’. Make green as much a part of you and your business as it is of Kermit the Frog: inescapable.

Let’s look at what other businesses are embracing Green, what it costs and most importantly, what it returns.

Crate and Barrel

Barbara Turf, became CEO of Crate and Barrel in May 2007. One major change Turf, no coincidence that her names is a s green as grass, has made is toward reducing the environmental impact of Crate and Barrel’s operations and it’s product offering. According to the Chicago Tribune, Crate and Barrel’s corporate offices reflect this shift, “Walk through the reception area and you will discover Crate’s interpretation of what is happening in American culture today: a bamboo nightstand, cotton organic towels, eco-friendly upholstered chairs.”

“We have prioritized developing thoughtful new products, manufacturing processes and programs to expand the responsible choices we offer our customers” says Turf. Indeed, Crate and Barrel stopped using Styrofoam packing peanuts and is producing more ’sustainable furniture’ using soy and corn-based foam for cushions, offering recycled glass items and launching many products made from renewable bamboo.

The really good news here is that no matter the cost and shift in corporate culture and citizenship Crate and Barrel’s sales reportedly rose about 8.5 percent for the fiscal year that ended in January 2007, despite the economic slowdown.

Closer to Home

Of course Crate and Barrel is just one example. Companies such as IBM, UPS and Bank of America have instituted real green systems in their businesses, their product offering and their marketing and advertising all of which are having a positive impact on their bottom lines.

Great, those are all big businesses, Fortune 100 businesses. What can a small business do? Closer to home let’s look at my Landlords and friends at Country Side Inc., builders of homes and offices. They have been taking the green challenge for years in the homes and offices they build making sure each one complies with all the most strident energy efficiency requirements and that all fixture and appliances they install are Energy Star certified.

Recently they invested over $70,000 converting my building to solar power with a shiny new array of solar panels on the roof. With a combination of tax credits, reduced energy costs and revenue provided by the system from surplus power generation, they expect that their invest will be returned in 2 to 3 years. Beyond that, they are fanatical about only using the minimal amount of energy possible by use of computer controlled environmental systems to a culture of turning off unused lights in their offices and homes. It’s obvious that they are serious about saving the environment and their actions speak louder than their words as they don’t market their environmental impact as much as they should.

What can I do?

1. Turn it off! Turn off equipment that’s not in use. Lights, computers, diesel engines, whatever. Just doing this can reduce the energy used by 25 percent or more. Turning off your computers at the end of the day will save even more.

2. Recycle your Fax Machine! I suggest you eliminate your fax machine altogether. Fax wastes paper, electricity and time. The fax machine is obsolete. If you think you must fax, use a fax-modem and software that create a cover sheet. Of course you should also encourage the recipient to use a fax modem, fax server or email as well.

2. Use email! Read email messages onscreen to determine whether it’s necessary to print them. If it’s not, don’t!

4. Buy a duplex printer and use it for everything. Every sheet of paper has two sides, so why print on only one? Cut your paper use in half.

5. Fix that leaky faucet. Always close your taps tightly after use. (One drop wasted per second wastes 10,000 liters per year.)

6. Install a low flush toilet. IF you can’t do that at least install displacement toilet dams in toilet reservoirs. Placing one or two plastic containers filled with stones in a toilet’s reservoir will displace about 4 liters of water per flush. Also check out envirolet (http://www.envirolet.com), an amazing ecologically sound toilet.

7. Buy paper with maximum available recycled content.

8. Look for minimally packaged products. Find suppliers who take back packaging for reuse.

9. Identify suppliers closer to home. The further your supplies or service providers have to travel, the more energy will be used to get them to you.

10. Be choosy. Before making any business purchase have a system in place to evaluate it’s environmental impact. When you make a choice, let others know about it.

When you start to think about it there are thousands of little steps you can take to change how you live, work and do business that aren’t difficult or painful and can be well, just plain profitable.

I encourage you to be good corporate citizens and good community citizens.