Your customers’ sense of belonging

 

A friendly place

A smiling face

I had occasion to go into my local bank branch yesterday. As I walked to the service till, the cashier (teller) said with a smile “Good morning, Mr. Stow”. How did that make me feel? Well, immediately it wasn’t just a simple transaction. The service was personal because the lady had recognised me and remembered my name. I felt wanted. Whatever I say about my bank and banks in general, which can be quite a lot, I had a sense of belonging and a reinforcement of loyalty to my local bank’s staff.

 

Just cheap

We can all learn from that, or at least be reminded that an individual or personalised service at whatever level helps us to keep our clients and customers. Of course it depends on the business you are in. Both in retail and in services, some people just want the cheapest they can get, regardless of the service, so they will look for the lowest priced option without any brand loyalty. They buy the cheapest washing powder or the cheapest services.

In business services we might see the offer to complete a tax return for as little as £50, or $80. You don’t get much for your money and you do not get any advice as to whether you are claiming the right allowances and deductions. What you get is a cheap production line product without a guarantee except that they produce the tax return according to your instructions.

Cheap and value for money

Of course one can get a more rounded product with a good service which would also be cheap in terms of being a very reasonable price for the service provided, but that would cost a bit more. You get what you pay for. Then you would probably have some customer loyalty. If you are really happy with what you get including advice and support you will recommend the provider and stay with them.

Cheers!

At whatever level it is important to talk to our clients and customers individually, and to remember their particular issues. It makes them feel valued, wanted and belonging as I do in my local bank and as people did in that bar where everyone knew their name.

Don’t you believe in the personal touch?

And remember this?

Customer service and that nice warm feeling

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Business, family and friends

Rust Craft, circa 1950

Rust Craft, circa 1950 (Photo credit: Wikipedia)

This is a business blog, and I do not write much about family issues. Yet we cannot run a business easily without the support of our families and unless we are mostly happy. If we do not have these two essentials in place than we will struggle and our hard efforts in our work will be soul-destroying and destructive, rather than uplifting as they should be.

However, we cannot control all family matters and especially not when we have lost someone dear to us, as our family has done. That is why On Our Bikes has been quieter than usual, and also why my wife and I have not sent more than the few Christmas cards we wrote early on. It is a very sad time for us, and especially hard for my wife.

We need to think of our families and our special friends at this particular special time of Christmas, because they are the platform our lives are built on, including our businesses, and we need to give them our loving support, and benefit from theirs to us.

I do hope you all have a happy and peaceful time over Christmas and I wish everyone, including ourselves, a bright and successful 2013.

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The decline and fall of a successful business

 

Shut up shop?

Sun roofs

Once upon a time there was an entrepreneur (except they weren’t called entrepreneurs in those days) who had a brilliant idea for a business model. He put it into action, offering a type of franchise and took lots of money up front with promises of good and even very large income.

The money just rolled in, year after year. Those were heady days in the eighties bubble with everyone making their mark in fashion with those shoulder pads, and having sun roofs cut into their runabout cars. The profits of the franchisees were not so huge, but in pre-internet days it was easy to keep from prospective new recruits that life wasn’t quite so rosy within the organisation as they might have been led to believe.

The web they wove

Then, gradually at first, the internet enabled people to talk to each other. Those who had bought in found that they were not alone in not making the large amounts of money they had been promised. After a while, everybody was talking and those who might have been potential recruits in the wider marketplace found that the road within the organisation was not paved with gold.

The sign-up income of the erstwhile entrepreneur dried up. He still many of his recruited members, but perhaps had lost the energy to plan. He hadn’t counted on everyone being able to communicate and be so well-informed. In a foolish moment he had decided to do away with the basic annual subscription and without new recruits buying their way in, he had no income.

He decided to sell, but unsurprisingly with no income coming in, there were no takers. You cannot sell a model that doesn’t work.

The Empire crumbles

Our owner had never listened to advice. He had always known best in the past. His was one of those autocracy businesses, with him at the top of the pyramid.

So the business started to crumble away. The owner tried to reintroduce a subscription to keep the basic infrastructure in place to allow the members to communicate with each other. Many of them laughed at this, having seen little return on their investment even in the organisation’s heyday.

Necessity is the mother of invention

What was a great business model 25 years ago might well be a poor one in the age of the internet. There are other ways and, yes, very many ways of making money if we are adaptable.

That is the point. We must be adaptable. We need to change. We need to use the new tools to the best of our ability.

What will become of our autocrat? He will probably retire and is handing over the remnants of his business to his son who is far more experienced in information technology.

What do we take from this? The answer is that the business environment is always changing, and even if we think we know best, we must seek advice as soon as we have a problem we cannot handle. You know when you need help, don’t you?

If a tree falls on your business…

Are you on top of your business finances, managing your cash flow, your sales takings ratio to money going out?

Are your orders coming in well? Are you attracting new business?

Do your staff have any issues? Are they happy? Have you asked them recently?

The strange thing is that some business owners are so focussed on the sharp end of their business, their enthusiasm and what drove them to start in the first place that they don’t realise when things are going wrong. It may be that the product is going out of fashion, or that someone else is selling a better one, or that that the whole marketplace has changed, or that they should be competing more on-line.

Because the product is fun, and the business is fun doesn’t mean that it is still successful. Just now and again, we, by which I mean you and I, need to check on the mechanics. Money makes the world go round, and money and our workers make our business wheels go round.

An extension of the Copenhagen interpretation in quantum physics suggests that if a tree falls in a forest it hasn’t really happened until someone notices (measures the event). Unfortunately your business and mine could fail without our noticing until it is too late, so we need to check regularly on the nuts and bolts of our businesses.

I don’t much like the Copenhagen interpretation in quantum mechanics and it certainly does not make sense when we could easily go bust without noticing if we take our eye of the ball.

Is your business safe from falling trees?

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More time-sheet follies

We are not all the same

Hammering home my point about time sheets, remember how much we are selling in terms of our know-how. For those hung up on charging for time spent on each job, if you must think about time, remember how much of that you spent learning to do what you do.

What counts is always what value both in comfort and in money we give to our clients. I remember once upon a time when I was with a large firm we sold a product which saved a particular client £500,000 every year, for which we charged £50,000 just once. The staff time doing it in terms of salary and overheads cost no more than £15,000. The client was happy to pay, still being ahead £450,000 in the first year, and the whole £500,000 per annum for several years afterwards.

Not long before I “left” my last job I was beaten over the head along with the team for having hardly any time down to clients on my time sheet. Those who were upset were stuck in the Dark Ages. Most of my time was spent on research with a little marketing and selling. As I said , selling was not my best attribute, but of the one-in-four (let’s be conservative) products I sold, the price was £6,000 to £10,000, and I had just done one for £30K for a couple of weeks work, because that was what it was worth to the client.

You have worked hard. Your knowledge has cost a great deal of money and a lot of your time. Always remember what you are worth and don’t sell yourself short. You will, won’t you?

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Dealing with yesterday’s men and women

 

Harold Wilson, UK Labour leader, at a meeting ...

Harold Wilson, UK Labour leader, (Photo credit: Wikipedia)

Old times

In 1970 the Labour Party published a poster during the General Election describing the Tory opposition as “Yesterday’s Men”. It was a short-lived element of the campaign and was withdrawn very quickly. The Labour Party lost that the election, but we can understand the thrust that the Tory old guard had not moved with the times. Prime Minister Harold Wilson had some years earlier talked about “”burning with the white heat of technology,” which he saw as something in which the country should be involved. He believed in modernity or at least thought it was a good theme for winning elections.

As an aside I hope I can say that Wilson was not a conviction politician. He wanted to be Prime Minister, achieved that objective, and thought that was enough.

Modern times

Perhaps that was not so much of an aside though when we see people in larger businesses promoted beyond their appropriate level in accordance with the Peter Principle. They are often yesterday’s men and women with yesterday’s ideas, just happy to be where they are. In the modern world, we have to adapt in business or our business dies.

Time sheets

Yesterday’s people stick with yesterday’s ideas. I have nothing against time sheets for seeing what directors, partners and employees do with their work time. I do have an issue with charging out clients according to how much work time is spent on them.

  • It ignores the value of the work done for the client; perhaps a lot more than some arbitrary charge-out rate.
  • It gives the client no certainty as to the bill they will receive, and
  • the client might believe that your people will string out the time to charge more than your business deserves.

Because you’re worth it

I believe that as far as practical and especially in professional services, your client deserves a fixed price. That price should reflect the value of what you are doing. The knowledge you are selling is worth a significant sum. It may be saving your client a large amount of money and the value of that is what the client is buying.

After all, how much does an iPhone cost to make? The answer is a small fraction of what it is sold for. The customer is buying the experience, comfort she is in safe hands, and the valuable and probably money-saving service you offer. This means you can pitch your price at a level that makes a good profit.

You deserve it, don’t you?

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