Passion is infectious! It makes you believe that you can change the world, and people too. Whilst the former is possible, the latter is unfortunately a fallacy.
The Case of Jack and His Business
Jack walked into my office, eager to meet for our consultation. He was brimming with energy and excitement. My receptionist offered him a seat and he distractedly flipped through a few magazines trying to speed up the time.
He was escorted into our meeting room and offered tea. He has a coffee instead. A double shot cappuccino. He needs more energy? I ponder.
Immediately he broke into a soliloquy of woe and wonder. Woe at the state of the furniture industry in South Africa; wonder at the fact that he’d found the antidote to the problems in the industry. He had the silver bullet, the final solution if only he could get people to work with him.
Jack began with very little behind him his whole life. Everything he has today he had to fight for. He has the gift of the gab, and can sell anything. He entered into the commercial furniture industry 15 years ago and excelled as a salesman.
Six years back he began his own business after falling out with his former boss. Very quickly he established himself in the trade as a dealmaker and broker of furniture, matching customers like restaurateurs, hoteliers and business owners to suppliers. He struck deals with a voracity that was astounding.
Jack told me that he’s succeeded by sticking to certain principles in the manner with which he conducts his business. The customer always, always comes first; don’t leave any money on the table since the selling effort should maximise returns; and innovate continuously.
Applying these principles relentlessly has gotten Jack to where he is today, operating a business with 32 staff on an annual turnover in excess of R36 million. Two months back he employed a new partner with design and décor skills and he had begun selling consulting services in this area. He did this in response to customer demands and it went to the core of his principles.
He needed funding to make two acquisitions. The first was his biggest supplier, a manufacturing business making wooden furniture and the second was a plastic furniture importer who had a number of agencies between Europe and the East. His frustration was that in a recent bid to get a funder on board, the deal collapsed at the 11th hour. It was the fifth time in six months that this had happened.
The Critical Questions To Answer
Forty five minutes had passed and I insisted that Jack let me ask a few questions.
1. Who is your customer and why do they care about you?
Jack lit up. From restaurants to retailers to any other business that operates out of an office. They cared about Jack because he offered the best customer service, innovated all the time and left nothing on the table. Put differently he was a one stop shop. Customers first, he reminded me.
2. Who operates your business and who grows your business?
He does both he answered. His day begins at 7am and finishes anywhere from 6pm to 9pm. He works every weekend to catch up the admin. He doesn’t mind this as he is passionate about his business and in any event, he is the lead sales person too, requiring him to grow the business whilst operating it.
3. When last did you take a holiday?
Jack said he didn’t need a holiday as he loved what he did. His work was actually not really work but his hobby.
He added that he didn’t need holidays as even if he takes time off all he thinks about is his business. Finally he said the last holiday he took was a disaster; things went pear-shaped on a customer delivery and it created more stress than the holiday was worth.
Let’s See Your Numbers…
Now the excuses and apologies began to flow. His numbers were in a mess but this is not unusual. Very few entrepreneurs begin a business to do administration and compliance back-office work. As I looked through the numbers, the revenue numbers over the last four years showed impressive growth. The big problem was the thin, very thin, profit numbers. Jack’s business was in trouble.
As I looked at Jack I could see that he was burnt out. Beneath his exuberance and excitement about what he does, how he does it and his enthusiasm about the furniture sector, Jack looked 15 years older than he was.
His excessive energy levels belied an undercurrent of panic which was indicated by an overzealous and insistent notion that everything will come right if he simply gets the funding he is looking for. I disagreed and after making contact with the funders he had spoken to, I realised that the issues in the business were far more fundamental.
No Strategy, No Business
The single greatest fear of each funder is that Jack has no strategy. His desperation to please every customer he engages with and the variety of customer segments that he markets and sells to create far too much risk in Jack’s business. Without him there, Jack has no business.
The extreme complexity and noise arising from a business that is trying to be all things to all people has resulted in Jack being everything to everyone. This includes his staff. No Jack meant no business.
Jack had not created a business asset that a funder could invest in. Rather, he had created a job for himself and no funder can lend into that. If a funder won’t lend, for the same reasons it’s unlikely that any smart money out there would buy the business either; something Jack had considered before coming to see me.
Today we are at work to redirect and more importantly reprioritise Jack. It has nothing to do with his business and everything to do with his mind-set, focus and priorities.
Passion is the fuel that is absolutely necessary to start, build and grow your business. Without passion for what you do, you will struggle to get beyond the first few months or few years in this long process. Yet, passion is not enough.
Purpose is equally, if not more important. If your purpose is not single mindedly to build an asset of value, you will land up as one of the 94% of business owners who never sell their businesses. They cannot sell their businesses because nobody wants to buy an entrepreneur.
An asset of value promises three broad possibilities:
- Your business is positioned in a niche defined by a customer experience
- Your business is run by a system of delivery and not you
- Your business has the ability to diversify its cash flow risk across a number of customer segments that are very closely aligned
- You can take holidays and your business still runs successfully
- Your business is… simple.
Whatever your reasons for starting your own business, be it necessity or opportunity, ensuring that your purpose is to build an asset of value is critical to your success as an entrepreneur.
Building our businesses driven by passion alone does not ensure this. For this reason, passion is important but not enough. Don’t realise this too late.
Who Are Your Real Competitors?
Do you know who your real competitors are, and why they’re winning business you could get?
When entrepreneurs talk about their competitors, the talk is usually disparaging rather than admiring. The competitor gives bad service, they cheat, they only get business because of bribes or political connections, they deliver inferior products and do not pay taxes to reduce their prices. We seldom hear that their technology is great, their service levels enviable and their legendary efficiency allows them to sell at great prices. Yet many competitors must be as good or better than you; they are making sales while competing with you.
We want to see ourselves as better than our competitors, so we focus on their faults. Instead, rather develop your own value proposition, one that really does offer something special and preferably unique to the market. Then see how your value proposition stacks up against theirs. Doing this can be a sobering experience, you may find that you are not the greatest after all.
You then have the opportunity of improving your products, customer service, pricing, communications and customer relations to become competitive.
So far, I have talked about traditional competitors selling similar products and solutions to yours. Prof. Michael Porter produced a neat model, the Five Forces of Competitive Position, showing that aside from traditional competitors there were competitive forces in the power of buyers, the power of suppliers, the threat of new entrants and the threat of substitutes.
In many industries the buyer-seller relationship is a very unequal one, especially if the buyer is a large organisation and the supplier is an SME. The buyer may allocate delivery slots, dictate pricing and terms and generally be in a position to give advantage to certain suppliers and make life difficult for others. Equally, where the supplier is extremely powerful they may dictate to their resellers.
Typically, the franchisor or supplier tells you how and where you may trade, forbids you to sell other goods and influences your pricing. In both these cases the imbalance of power means the rules may change adversely at any time.
Related: Competitor Analysis Example
The really serious competitive threats are of new entrants and substitutes, and these two threats are sometimes combined. Large local and international operations looking for growth could see the sector you occupy as an attractive opportunity. New disruptive technologies can change the rules and immediately capture large shares of the market. We may think that these trends will not affect our SME but there are numerous examples to show that is not true.
Simple ‘mom’s taxi’ school transport operations have been badly affected by Uber in wealthier areas. Precision engineers find themselves in hot competition with nerds equipped with 3D printers, legal and medical advice is dispensed online and even long-standing NGOs find themselves in competition with international apps. No one is immune from all the changes coming.
It’s a good idea to figure out a competitive strategy in advance. Business conditions are tough, and competitors will do everything in their power to take business away from you. Research and make notes about current competitors. Look for the things they boast about, their unique values, their strengths and weaknesses.
Place them on a position map so you can see which competitors are strong on experience, which boast about technology or customer service, and what type of customers they have. Then work out where you want to be seen in comparison to them. What do you have to do or fix to get to that position? Look for new technologies and trends that could affect your industry.
Examine big international players operating in the same product space in other parts of the world, and keep an eye on their expansion plans. Update your product and customer strategies to cater for what you have found. This is actually easy; almost everything is available on the Internet. The hard part is making your company less vulnerable to competitors.
How Excellent Customer Service Affects Your Business’ Bottom Line
Business owners say great customer service is important. In fact, it’s so important it can make or break your bottom line. Here’s how to make it work for you.
Business owners say great customer service is important. In fact, it’s so important it can make or break your bottom line. Learning how this works will help you make improvements to your customer service that will bring more in to your business.
Why Customer Service Matters So Much
Bizness Apps says there are several reasons why your customer service matter so much, including:
- This is how your customers remember you. Having a positive reputation is great, but customers tend to remember negative customer interactions more. Research shows that you’ll need 12 positive experiences to make up for one bad one.
- Your customer service says a lot about your business. Customers often base the quality of your product on this interaction. This is why you should spend as much time and money on your customer service as you do on your products or services.
- Customers want to feel like you care about them. By playing to their emotions and treating them with genuine courtesy and respect, they’re far more likely to invest their faith in your business. Pause for just a moment to think about how they pay your bills and that should help you genuinely appreciate them.
- Good customer service honestly makes everyone’s lives easier. When it’s easy for your customers to contact you, it’s also easier for them to buy your products or services. This is why you should add contact forms and a FAQ page on your website and include customer service tools in your custom-built app. While offering other forms of contact are great, you don’t want to make it impossible to find your phone number.
- Offering great customer service is a profitable marketing strategy. Word-of-mouth marketing does more than most A+ marketing teams can. Start by getting your customers raving about your company’s customer satisfaction standards then include customer testimonials and happiness ratings to show potential customers how much you’re there for them. When you tap into this and have your customers start your praises of their own accord, you’re tapping into a gold mine.
- Don’t undervalue customer service because your clients always have alternatives available. It’s relatively easy for them to go to a competitor who’s offering them what you’re not. In fact, studies show that about 78% of consumers have backed out of transactions or failed to make an intended purchase simply because they received sub-par customer service. In today’s global marketplace, businesses that don’t have the tools to make it easier for their customers to do business with them get left behind.
- Maintaining your customer base will cost you significantly less money than you’ll spend trying to attract new customers. Loyal customers are typically worth as much as ten times more than their first purchase. However, you won’t cash in here if you don’t prioritise customer success. If you’re wondering what the value here is personally for your company, stop and consider the money, time, and other investments you place in onboarding new clients. You’re guaranteed to save in all these areas by having your clients stick around.
- While it’s important to drive traffic to your business, if you can’t transform this traffic into leads then the sales really aren’t much use. This requires a careful balancing act that you’ll grow better at as time goes on.
To Improve Your Customer Service, Choose the Right Phone System for you and Your Customers
Forbes says a cloud-based phone system helps with improving communication. In many cases this will help fix any problems you’ll experience in providing great customer service because now you can also provide over-the-internet support services. This is beneficial for your customers in several ways, including:
- Maintaining consistency in customer interactions and minimising the number of touch-points or different contacts that are involved in each customer’s interaction with your company will improve both their satisfaction and their loyalty because fewer transitions between customer service providers means there’s fewer opportunities for an error to occur. Not only is this something research shows, but the same research also shows that each touchpoint in your customer chain must be held accountable for the end result of your customer’s interaction with your business.
- You need to simplify and clarify any support text that’s on your website. If you can’t do this, they you should get rid of it altogether. These small changes can help your customers help themselves so they won’t send in as many support requests. If you choose to get rid of your support text altogether, make sure you instruct your customers to email you for help. This may make it easier for you to keep track of your customers’ issues so you make changes that eliminate them in the future.
- Listen to what’s being said about you on social media then respond appropriately. Every complaint or concern that’s raised online is an opportunity for you to win over additional customers while also solving your customer’s problem and increasing their satisfaction and loyalty.
- Show your customers that you always put them first by checking with them throughout the onboarding process. Sending an email or a handwritten note expressing your appreciation goes a long way.
Forbes continues on to say you never know when a complication with your product or service may arise. When it does you’ll want to work quickly to solve your customer’s problem. Even if they simply don’t understand how to use your product or service, it’s still up to you to fix this issue. Unfortunately, there isn’t always a simple solution available. Many times, you can fix it by offering exceptional over-the-phone or over-the-internet support though.
One Last Thing…
While you may feel like there’s a lot of information here to remember, Talkdesk says the most important thing to remember about this topic is it’s really hard to make up for a bad customer experience. Sure, we all make mistakes, but when it comes to customer support you really can’t afford to make them. Remember, it’ll take 12 good experiences for your business to make up for one lousy experience, which means you could lose out on a lot of money.
How You Can Over-Deliver To Gain The Advantage
Go over and above for the people you serve, and you will enjoy the benefits of an abundant relationship.
Wise, established entrepreneurs know that over-delivering value — which simply means going above and beyond for the people we serve to deliver more satisfaction for our service and thus exceed expectations — is crucial to a business’s survival, growth and future. It represents the core of a company’s foundation. And without a solid foundation, a business is always vulnerable to a person or company that does over-deliver.
To ensure you don’t ever forget the importance of over-delivering value, here are three ways it will give you and your company a distinct competitive advantage:
1. Creates abundance
Success comes most to those who are surrounded by people who want their success to continue. When you over-deliver value, people may be sceptical at first, thinking that you are expecting something in return, but when you are consistent and genuine with your intentions, they begin to trust and appreciate that you are just thinking of them.
You never know the value of the value you are delivering. But I’ve learnt that if you are consistently delivering greater value to people, your value becomes more and more aligned with the immediate needs of the people and companies you are serving — and abundance in the relationship is created. This is what over-delivering value is all about.
2. Earns respect
Entrepreneurs who take the time to over-deliver value are the ones who earn respect. Typically early-stage entrepreneurs tend to find ways to be the recipient of someone else’s value in a search for momentum.
You never know which transactional seed is going to grow, but when adding value to others, this type of seed is never forgotten.
For example, every quarter, I deliver a white paper to clients with the intention to challenge their thinking. My goal is for them to know that regardless of whether I am conducting business with them or not, I am thinking of them and thus strengthening our long-term relationship. And since my white papers focus on predicting future leadership trends and business strategies, when a related topic arises in one of their strategy meetings, they don’t hesitate to call me to discuss an opportunity for us to engage.
3. Enables distinction
Entrepreneurs who add value to others create and sustain a distinction in the minds and hearts of those they are serving. After all, most people are simply doing what they’re told to do inside the box they are given. Entrepreneurs can’t afford to do that.
We are the originators, the innovators and the opportunity seekers. We live our lives constantly in search of ways to add value to make things better. We disrupt the status quo. We are not in the business of fixing the old ways of doing things. We create new ways of doing things. If entrepreneurs are technically the experts at adding value through our products, services and brands, why can’t we add value through the people we depend upon most for our success?
Over-delivering value is the key not only to being a successful entrepreneur but also to the entrepreneurial mindset we must continually cultivate in ourselves and others. No one is successful alone. We must see the value in over-delivering value by being other-directed and connecting dots of opportunity with focus and purpose to become smarter and wiser, while making ourselves invaluable to the people and businesses we serve.