Business Advice

When you are faced with business challenges it is important to get good advice from good advisers.

I'm not saying that because all of my advice should be taken, but as a suggestion to you to find good advisers, whether it is my advice or someone else's. To succeed in business, you need great advisers.

I've had 18 business advisers over the years that were my front line of defense against bad thinking. They helped me solve marketing, sales, management, leadership, financing, hiring, training,... challenges that came along. I certainly could have attempted to solve them all myself but would have taken many more years to reach the same level my advisers attained. These 18 advisers had over 600 years of combined business experience, generating 100 of billions of dollars.

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02.19.2009

The Difference Between a Good Prospect and a Great Prospect

Have you noticed how everything seems to go so smoothly with certain customers while others seem to have problems with your product or service from the very beginning?

It is not that one prospect is nice and the other is horrible. It is not that their background, their education or even their industry has anything wrong with it.

Why do some clients get extraordinary results?

Much of this has to do with how the customer is wired.

Let’s say you are offering programming services to a company.

If the customer:

  • Is already using custom created solutions
  • Already understands the need to be specific when describing what is needed
  • Understands the outcome of working cooperatively with the developers
  • Have a commitment to make the project successful
  • Realize finger pointing doesn’t solve anything

The results will be fantastic.

On the other hand if the client:

  • Thinks your staff should be able to read their minds
  • Sees software as kind of a magical thing that can do anything somehow
  • Are reluctant to respond to clarification questions
  • Are always focused on the cost of things and not the value

The results will be must less spectacular.

How to find ideal customers when prospecting?

Think through what your ideal customer looks like.

  • What industry are they in?
  • How many employees do they have?
  • Have they already spent money trying to solve this problem?
  • Where are they located?

Too often I hear, “everyone is a prospect, everyone needs this.”

There is a great marketing saying, if you call out to everybody, you call out to nobody.

Ten years ago I started a business with a few of my friends. We decided to offer online video training to associations.
There are over 150,000 associations in the United States alone.

We had to set up criteria to identify which ones were better prospects than others, because when we told our sales staff to land customers, they spent quite a bit of time pursuing associations that produced no sales.

We finally sat down together and came up with a list of the most important criteria for a qualified association:

  • They had to have a certain number of members
  • They had to charge at least $X per year in membership fees
  • They had to have a certification program requiring continuing education
  • The majority of their members needed to have Internet access
  • Etc.

Once we identified the criteria, we were able to be much more selective and started landing customers.

One important criteria that often gets overlooked, is they need to have money…especially in today’s economy. There are lots of people and businesses who need certain products and services but they don’t have the money for them. Don’t waste your time or theirs trying to sell to them.


When business slows down

When business or the economy slows down, it is particularly tempting to start believing everyone is a prospect again.
Just the opposite is needed. Instead of broadening who is a qualified prospect, you need to be even more selective.

Many will pretend to be able to afford your product or service, but can’t. You are not in the charity business, so don’t waste your time trying to convince someone who doesn’t have the money right then to buy.

Conclusion

  • Write down the characteristics of your ideal customer(s)
  • Create qualification questions that would help you determine if an individual company or person is a top prospect
  • Focus on selling to your top prospects
01.2.2009

Creativity: the Lifeblood of Business

Businesses need to continually create or die.

Way too many business leaders compartmentalize creativity to small areas of their business: product development, advertising and coming up with excuses as to why they missed a customer deadline.

As a result, a start-up or existing competitor comes along and applies creativity on a regular basis to not only continually improving their products and services but also in applying creativity to other areas of their business, regularly. The result, the creative company wins market share, customer loyalty and develops a reputation for innovation and being an industry leader.

Several years after graduating from college I started studying creativity.

The first thing that struck me was that was a crime that creativity wasn’t taught in schools, especially in my electrical engineering major, we are supposed to know how to create new products.

The second thing that struck me is you actually don’t need to have a college degree or a high school diploma to be creative.

Over the years I noticed those who practiced creativity:

  • Had more fun
  • Created more products and services
  • Kept improving their existing products and services
  • Made more money
  • Received more patents
  • Had happier customers
  • Were able to attract better partners and employees
  • Gained more respect in the industry
  • Created a huge amount of customer loyalty

How do you learn creativity?

The best thing to do it so start simple. One of the most popular techniques for stimulating creativity is to use the acronym SCAMPER. It stands for:

  • Substitute - What can you substitute? What materials can be used instead? Who else could do it for you? What other location? What other approach?
  • Combine - What can you combine? What can you blend? Combine: ingredients, systems, markets, products, services, steps, …
  • Adapt - What can you adapt to this situation? What element of the product can be adapted? What other industries, products, processes can be adapted to work with your product or service?
  • Modify / Magnify / Minify - What can you modify? What can you magnify or make larger? What can you minimize or shrink? Things like: size, color, shape, weight, packaging, markets, …
  • Put to other uses - How can you put this to other uses?  What other markets would want this? What other applications could use this?
  • Eliminate - What can you eliminate? Things like: weight, materials, components, features, time to create, labor, …
  • Rearrange / Reverse - What can be rearranged? Rearrange how it is made, how it is assembled, how it is laid out… What can you reverse? What can you do the opposite?

Some examples of creativity in business

  • Substitute - A classic example was the railroad industry substituting steam power for locomotives with diesel power. Diesel was cheaper, easier to maintain, more reliable and more powerful. In my own career I created a workstation to substitute for the one Nortel was selling. They wanted $40,000 per operator workstation…we knew we were going to need a large number of them. I cam up with an alternative that cost us $3,500 for parts and about $50,000 in one time software costs. As we grew we needed 1,000 of them. This substitution saved us over $35 million in capital.
  • Combine - The most common example given for this is the clock radio, combining the alarm clock function with a radio. While consulting for Texas Instrument we combined their speech technology with the telephone. We then used it to replace time cards for one of their manufacturing facilities. It reduced the number of bookkeepers required to process time cards from 24 down to one. This saved them over $500,000 per year in labor…it was used for the next 20 years.
  • Adapt - There are lots of great uses for adaptation. One of the most striking is how spreadsheets have been adapted from handling calculations for accountants, to handling Christmas lists for individuals, inventory for small businesses, or the poor-man’s database. In marketing we adapt other successful campaigns whenever we need a new one. Great copywriters have a “swipefile” of successful sales letters, emails, web pages that can be adapted to a new promotion. It saves a lot of time and effort. Just to be clear, don’t copy other people’s work, adapt it to your particular situation.
  • Modify / Magnify / Minify - This is the basic element of innovation…modifying something. Magnify, making something larger has so many examples including the famous one on how competitors arose in the early days of Ford. Henry Ford used to say you could get the Model-T in any color you wanted as long as it was black. Competitors enlarged the selection by offering other colors, other options…magnify the number of choices a customer can have. Minify is just the opposite, reducing a feature. Sony exploded their growth when they miniturized the tape recorder and introduced the Walkman. ITI, the company I helped go from $0 in revenue to over $1 million per day in revenue was built primarily upon one modification of the company that had a monopoly on the operator services business for over 100 years. When a payphone owner sent a call to AT&T to be handled by their operators, the payphone owner received none of the revenue. We decided to pay the payphone owner 50 cents for each call that was successfully completed. This was such a successful modification we had 25% market share a few years after starting the business, handling 600,000 phone calls per day.
  • Put to other uses - This happens all of the time. Computers were first developed to perform the ballistic calculations for cannons. They then from primarily focusing on their calculation ability to managing and manipulating data giving birth do databases. Now they handle things like video, music, controling cars, missiles and artificial intelligence. Nearly 20 years ago, I helped a company take wireless technology that was primarily used for communicating in warehouses and put them in locations like hotels, airports and Starbucks. The convenience of not having to be wired to communicate was ideal for travelers and now wireless hotspots are everywhere.
  • Eliminate - Eliminating time is a great idea, how to shorten the time it takes for something to happen. Getting messages one one place to another has dramatically improved from Roman couriers, to pony express, to trains, planes and electronical with faxes and email. Nearly 10 years ago, two friends and I started an elearning company. I was able to elminate over 90% of the time it took to develop online training materials. As a result we went from new kid on the block to the number one competitor in 6 months.
  • Rearrange / Reverse - I remember reading a great example of this when IBM analyzed the time it took to get financing approved for their large computer systems. It generally took 2 plus weeks. When they took a typical application and just walked it through the steps, it only took 4 hours. By rearranging how they handled it over 90% of the applications could be processed in less than a day. On one project the process was taking 8 hours every day on a mainframe computer, requiring a time consuming transfer to and from the mainframe in addition to the expense of the computer time on the third party mainframe. I rearranged how the data was stored, moving it from one structure to a different structure. The result was it took less than 30 minutes on PC to process the one million orders that needed to be processed saving over $2,500 per week in computer time and nearly 160 hour per week in expensive labor.

Start practicing creativity in everything you do, from solving problems around the house to improving products, services and processes at work.

You will get better by practicing creativity every day.