Category: Blog

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Last Thursday, was the two-year anniversary of putting in my resignation at my last ‘real’ job. While reflecting on that event, I celebrated by taking my wife out to lunch and thought of a few take aways.

#1. Bring the boat closer to the dock.

One of the most valuable pieces of advice I can give to someone who wants to start their own business is to bring the boat closer to the dock. What do I mean by that? Two things:

1. Test the market: Will someone really pay you for your business idea? Lots of people will say, “That’s a good idea!” or “I would buy one”, and never follow through. Start selling before you quit any current incoming producing activity. And sell to people you do not know. In so doing you can help prove the concept and make sure that you have pricing right.
2. Build up business: I am a pretty fiscally conservative person, so I encourage people to work like crazy and build up their side business a lot and get it close to replacing your income before you make the jump. I was not able to do this because the situation at my previous employment had become so toxic. Ideally, I would have dedicated the next few months of my free time to building up the business then making the jump. Instead, we had to dig into our emergency fund to keep things afloat while the business started generating revenue. Though we knew before Christmas that this would be successful, it really took about 6 months to cross that line for my business.

#2. The dip is real.

This is a phrase made famous by Seth Godin. The dip is the time period between excitement and success. On StartUp, previously one of my favorite podcasts, (season one is the best) they call it the “trough of sorrows”. This is a real phenomenon. The excitement of starting a business or even a giant new business deal can quickly be replaced by the reality of needing another deal to maintain that success. Some businesses like mine ebb and flow. The flow is easy to keep motivated and stay productive, but the flow times can be a more challenging. My advice, know this is coming and be ready to share those feelings with other entrepreneurs you know.

#3. “The answer is Yes”

One of my favorite quotes I kept harping to myself as I started this journey, and still do today, is my Leonard Bernstein.

“I’m no longer quite sure what the question is, but I do know that the answer is Yes.”

As an early state entrepreneur, the answer is always ‘Yes’ to your clients. Can you do this? Yes. Can you do that? Yes. Unless something is morally questionable, which has been asked of me, the answer is yes. Make yourself indispensable to your clients and you will also find more ways to make money. Sometimes you don’t know what will come of those projects. Video was something I did not anticipate being as big of a revenue generator for me as it has been. I am sure glad I said yes when those projects started coming!

Are you looking to get started with your business, lets chat.

I recently read a book called FREE by Chris Anderson. 

This book is a summary of the marketing technique and economic force of FREE! Chris believes so much in the concept of free that he in fact has offer his book for free online, you can view it here.

Chris starts with a history of free and then goes into how free is becoming more and more prevalent in our society today.  Chris breaks down free and how it works for companies like Google and their free gmail and google docs.

Here are some of the key thoughts:

1. Somethings are too cheap to matter. As society progresses, many things like technology become cheaper and cheaper. Moore’s Law  shows that technology doubles every two years. As technology moves closer and closer to costing nothing, giving away a free Ebook or an email account costs almost nothing. It costs a small amount of electricity and data, but that amount is so small, its too cheap to matter.
2. The Freemium model of mostly free users is something that will become more prevalent. What is Freemium? Its a model where many of the users, maybe even as much as 80% use the product for free. The 20% of users who are paid, pay enough to develop the product. This is possible becuase the cost of a user using an app is almost zero. This creates a huge marketing funnel.
3. Real world models of free. One of the fun things about this book is that throughout the book, there are examples of how a free model might work out. One of my favorite examples is of how a text book might be free.  The model allows for a free digital copy of the book, but then charging for printed copies, or printable copies. This also allows authors to make updates over time without having a huge capital costs. While the upfront profit is not as great, at the six year point, one companies authors starting making more money. It increases the lifespan of the income. Here is a picture of the revenue model:
   
   This book is worth the read for no other reason than it helps you get a grasp on how the economy is developing. But other reason would be to help you think through new concepts on how to help your business develop using Free.

During the last episode of the AskBizShow someone asked: How do you know what your lifetime customer value is? This was a great question and one I needed to look deeper into.

But first, why do you need to know what your customer lifetime value is? The biggest reason is to know how much to invest into the average customer. The higher the value of the customer, the more time and attention is worth spending on them. But your customer value could differ greatly from business to business.

Here is a simple formula for coming up with the lifetime value of your customer:

 

(Average Value of the Sale)X(Average number of repeat transactions)X(Lifespan of customers).

 

Now to come up with all of these numbers will take some time and research. Look at your sales reports or your CRM tools to see how many customers you are working with and what the average transaction price is. This value may vary based on the products they buy from your company.

For example, someone who orders some laser cut products from me is a much smaller transaction value or someone who buys a website. But there are fewer websites sold becuase they are an investment. Spend some time investigating this number, interview some customers to find out about their habits.

 

The more you know the more accurate a number you can come up with. When you have that number, you can then look at ways of either scaling up or scaling down the things you do to retain customers. Retaining customers is almost always cheaper than finding new ones. You may also reveal a need to increase your prices to make sure you are profitable. More information is valuable to your business!

 

 

 

https://www.entrepreneur.com/article/224153

This is the best book I have read on customer service.

One of the things I stress with my client is the importance of customer service in their organization. I have repeatedly blogged about it, here and here. Great customer service allows you to increase the lifetime value of a customer to your organization. So when I was in Texas and had a great customer service experience, I found that the founder of that organization had written a book. Customers for Life by Carl Sewell is a great book about customer service and how to use it to build a business.

This book cuts out all of the fluff and gets right to the message. Short chapters with pithy points and checklists to help you implement it make this a quick and informative read.

A few of the points worth nothing:

1. Ten Commandments of Customer Service: Lists make things easier to remember. With items like: Systems not smiles, and Fire your inspectors and consumer relations department, Carl turns typical thoughts about customer service on their head. The idea that people want a smile and that makes everything better is false. People want a good product(with a smiling face, but that is a secondary desire). Build systems to improve their customer experience and then incentivise and empower all of your employees to take care of the customers.
2. Treat your employees better than the customers. Sewell makes several points about treating your employees well. This is something lost of many companies, but happy employees will treat customers better. It also allows you to attract top talent. Top talent pays off in a variety of ways from retention, to innovation, and of course, sales!
3. Amazing Customer service is the right thing to do, but it is also profitable. Carl Sewell points out that the ultimate motivation about working this hard for the customers is that it grows the business. No one would go out to unlock a car for free in the middle of the night for free, but if you take care of your customers well, they will buy from you again. The bigger picture of each great customer interaction is a growth in business.

I am also a fan of Dave Ramsey who advocates for incentivising employees. Carl Sewell advocates for that as well. Each employee is measured on different performance areas and are incentivized to do well. This puts your money where your mouth is!

This book is now up there with Entreleadership in my, most important books to read for business, category. You can get Customers for Life by Carl Sewell on Amazon. 

 

 

I have another Free Marketing Idea for you! And if your businesses are not in these areas, maybe it will spark some ideas for your next marketing partnership. This idea came up recently while speaking with a friend who works at a flower shop.

Gender reveal parties or announcements have almost become as big as the baby announcement itself. There are lots of videos on youtube about gender reveal parties and funny reactions to kids who are disappointed with their new siblings gender. As this trend grows, I think it provides an opportunity for some local businesses across the country.

My friend who worked at the flower shop was telling us about preparing some balloons for a gender reveal party. This along with cakes, or confetti, or other surprise tools to tell the world what your baby’s gender will be are suppose to help create suspense and allow for a surprise when revealed.

My current understanding of the process is that once the gender is determined by the doctor, it is written on a slip of paper and handed over to the lucky couple to plan. That couple hands it over to a relative or close friend who then has the surprise ruined and is responsible for keeping the secret and planning the party.

Well humans are prone to error. What if the couple slips up and looks (or not by accident decides to look becuase they can’t contain themselves) or the relative/friend missteps with their words and reveals it accidently?

How can a service be provided to ensure the surprise and make the party wonderful? Enter in the bakery or the flower or gift shop. Instead of handing over the sensitive information to the family, they could send it to a local shop they have a relationship with. Then the family could purchase specific services from that shop and then the surprise is a surprise to everyone at the party!

This benefits the clinic by helping make a special event even more special for a family. This could lead to more business. The shop gets a referral and is able to make a few extra sales and could develop a reputation for making the best gender reveal surprises in town. Sounds like a win-win marketing partnership to me!

 

 

 

One of the most valuable forms or marketing is partnerships with other businesses. Mutually beneficial partnerships can lead to lots of leads and new business for almost no cost. We see this in different industries.

Sometimes bodyshops establish informal relationships with insurance agencies. The benefit for the bodyshop is clear, they receive referrals after people have wrecks. The benefit for the insurance agency is a little less clear becuase it would not be a referral check, that could look unseemly or unethical. The insurance agency’s primary benefit would be knowing that their customers would be well taken care of, which is very valuable to the insurance agent. Additionally there could be some stationary or snacks that the body shop brings by.

For a successful marketing partnership, formal or informal, there are a few prerequisites:

1. A Relationship- Relationships are important in business. Maybe not as important as they use to be, but they are still important. Forming a relationship with businesses that you could work with is a critical step in the business to business world. People will not do a marketing partnership with people they do not know. They may do business with people they don’t know but to refer someone they are putting their reputation on the line with yours. To do this most people must have a personal relationship.
2. Mutual Benefit- For a marketing partnership to work, there must be a mutual benefit. Maybe that is a cash transaction, maybe that is cookies brought by, peace of mind for their customers, or  free press. When approaching someone about a partnership make sure that you clearly layout these benefits. You are selling the person on the deal because ultimately this is business.
3. Consistent Quality Work- As mentioned above, one business is putting their reputation on the line with yours when they refer someone to you. If you do not produce quality results then you are endangering your partnership and the benefit to your business. Before you approach someone about a partnership, make sure that you are performing your service well and so are they. This will help headaches in the long run.
4. Similar Customer Type- The type of customer that someone attracts is important to the success of a business partnership. If you are a low end restaurant partnering with a 5 star hotel, that might not workout so well. If you are a old established law firm, partnering with a local radio station targeting younger demographics might not be the best partnership. This may sound like a subsection under the mutual benefit category but it is different. You may still make money off the transactions from a partnership with different customer types but they might not be the kind of client you are able to retain for the long term or make as high of a profit margin off of. Additionally they might be the kind of client who expects too much from their businesses and your business might not be able to meet these needy clients where they are.

I hope this article helps you think of some creative marketing partnerships to help grow your business to the next level! If you want help coming up with some, send me an email and we can work on that!