I am sorry that has been so long since the Business Update. Although we continue to get emails from our dedicated blog readers and visitors to our site, it’s been a few weeks since our last article. The reason for this is that we recently returned from a trip to the Bahamas (yes, even I take vacations). First let me say that we are darn lucky that Katrina missed us while we were there. In fact we spent the majority of our time on a boat cruising between islands and I can’t tell you how devastating it would have been if the hurricane decided to slam into the Abaco Cays where we were sailing. 

While we rented our own boat for the week, I thought it might be a good idea to go out on our first day with a local guide so we could see the islands and learn about the best areas. So prior to leaving I did a little research. I scoured the Internet to find out who knew the islands well and who could take us out on a private trip to visit the best dive sites and reefs for snorkeling. 

The name “Brendal” kept coming up. I made some calls to property owners in the area and still I was told that Brendal was really the only person that could help us. Now I know there is a market leader in every business, but this was ridiculous. There must be another option besides this “Brendal?” Apparently he had created such a high degree of attraction that in the Abaco islands he was not just another option he was the ONLY solution. 

We contacted Brendal’s Dive Center (http://www.brendal.com/brendal/adventures.shtml) and found that this was quite an operation. Interestingly enough not only was Brendal just about the ONLY dive center among the islands, he was also a master chef and had been featured on the Discovery Channel, Emeril Live, the CNN Travel Show, Ming’s Quest and other shows for his adventure specialty trips. 
The day of our trip with Brendal came and off we went to Green Turtle Island and met him for the first time. Now Brendal is an interesting guy. He is 55 years old but you would swear he was a 40 year-old bodybuilder and when he talks about his beloved islands his entire countenance changes. His face lights-up and he speaks with exuberance and enthusiasm. When we asked what he had in mind he told us it was going to be a long day filled with a lot of adventures. We thought to ourselves, “OK, whatever” but little did we know what we were in for. Now I have been on dive and snorkeling trips all over the world from Hawaii to Fiji to the Great Barrier Reef in Australia so I was going to be hard to impress. 
The first thing Brendal did was take us to what looked like a dead coral reef and set the boat to slowly troll. Then he threw out two tethered live preservers and told us to grab our masks and watch him. With that he jumped off the boat and disappeared under the water. Now you’ve got to picture this. Here we are in the middle of the ocean and the dive master leaves the boat running and does a “man overboard!” What choice did we have? So we get in the water and watch Brendal dive down 40 feet with NO TANK and in no more than 5 minutes he had retrieved four huge conches and two lobsters. It was almost like he planted them there but that would be inconceivable. 

Following this Brendal said we were going to visit with some sharks that he was friends with. When I asked how he would spot them? He said he would drive the boat with his foot and look carefully by standing on the roof! And he did just that! 
We also visited some of the most beautiful coral reefs I’ve ever seen, explored a sunken pirate ship, swam with a family of Bottlenose Dolphin and ended the day with Brendal taking us to deserted island in the middle of ocean where he opened the conch and prepared a cheviche that was unbelievably delicious right on the back of the boat! As we sat in three feet of water eating the chiviche and drinking rum punch he said let me introduce you to my garbage disposal. He threw the conch scraps into the water and up swam a family of gigantic manta rays, each of which had a name. We fed them as they swam around us and then Brendal rough-housed with them like they were his pet German Shepherds! 
Now the purpose of my story is not to brag about my vacation or even to pitch Brendal’s services. It is to demonstrate that Brendal, through his passion, has managed to use successfully several rules of attraction to build his business. First he has literally become the biggest fish in the smallest pond, he has positioned himself as an exclusive solution and he has learned that winning heart share is far more important than mind or market share.

Think about what you can do to create passion in your business. What are some ways that you can become an exclusive solution to your specific market? And finally how can you win greater share of heart from you prospects and customers? I believe that these principles can be applied to ANY type of business. This is why I am again, by popular demand, holding another Attract More Business Workshop. At this full-day workshop you will learn how to apply the rules of attraction specifically to your business. We will be working on branding, viral marketing, creating effective buzz, targeting, headline development, Internet strategies and secrets of producing double-digit direct mail response. For more information go to http://www.sbanetwork.org/classes/upcoming_classes.asp to sign-up and download our workshop brochure.

Remember the scene in Kubrick’s “A Clockwork Orange” when they strapped Malcolm McDowell into the theater seat, pried his eyes open and forced him to watch violent, sexual scenes in an attempt to destroy his craving for such things?

Well that’s exactly how I felt when flying from Sydney to LA recently. Here I was strapped into seat for 14 hours, forced to look at the commercials and ads for Quantas and their advertising partners. Now since I am a marketing guy, traveling to Australia to speak to hundreds of people about marketing I thought this would be a great chance to do a little “research.” Well not only were the number of ads overdone but they were horribly unremarkable in their context. I mean BORING!

No one can take your customers from you. Not with a cheaper price. Not with better service. Not with better processes. Not even with more innovative products. 

You must first give them away. 

The first step in giving away customers is simply NOT communicating with them. Not asking them about the value of your product or service. As entrepreneurs and small business owners, it is important that we constantly encourage our customers to feel as though they can speak openly about experiences with our products and services. For me, the most exciting part of this process is discovering some possible dissatisfaction. This is what I like to call the “blind spot” of customer satisfaction. Let’s face it, no one wants to tell us we’re doing a mediocre job. This is a conversation both client and merchant want to avoid at all costs. As a result, customers often defect for unknown reasons. Or their defection is chalked up to that all encompassing “price” issue. The reality is that most customers defect because there is one or more service issues with which they are unhappy. When we can get our customers to share these service issues, we have a fabulous opportunity to create breakthrough innovation. 

I heard a funny story a while back. I don’t know where it originated but it illustrates a powerful point about client communication:
A boy walks into a store and asks to use the phone. He then calls one of his neighbors. 
“I wanted to know if I could cut your lawn,” he says. 
“No thanks, I already have someone that cuts my lawn,” the man replies.
“I’ll get all the grass clippings and sweep up real good.”
“Well, I appreciate that young man, but I really am happy with the boy that is doing it now,” says the neighbor. 
“Whatever you’re paying, I’ll cut it in half. Now can I cut your grass?”
“The young fellow I have now does a great job; thanks anyway. Okay, bye now.” And they hang up.

The storeowner has been listening to the boy on the phone. “All that and you still didn’t get the business, huh?”
“Oh, no,” says the boy, “He’s already my customer. I was just making sure he’s happy.”

Perhaps this method of ensuring customer satisfaction might be taking things a bit too far, but isn’t better to understand what may need to improves rather than wondering what went wrong after customers defect?

I have talked about the importance of finding out the customer’s perceptions. In fact, I have gone so far to say that reality is far less important than the perception of the customer. What can we do to obtain accurate, relevant customer feedback on a continuing basis?

I have listed some of the things that can be implemented by nearly any small business. Simply putting one or two of these strategies in place will automatically thrust you into the top 10% of companies focused on customer satisfaction. While these are reliable, proven methods, the sad fact is that few organizations, large or small, ever implement client communication programs:

Surveys
Structured questionnaires (with an incentive such as a prize or drawing) encourage feedback from customers. They can be analyzed and measured and the ensuing follow-up will surely make customers feel more valued. The incentives don’t have to be exotic. Free movie passes, gift certificates or some type of convenience item usually work well. I do not recommend discounts or free trial services. This encourages customers to tell you that all is well simply to earn the prize rather than identify where things may need to improve. Make the survey brief. Include no more than five questions, preferably with multiple-choice answers. Perhaps the final question can be open-ended allowing customers a chance to put it in their own words. Also, do not make the survey a selling opportunity. This is not about YOU; it’s about THEM!

Encourage Complaints
Complaints are particularly valuable performance indicators. If you do not receive many complaints do not assume that customers are satisfied with your business. Statistics show that most dissatisfied customers don’t contact the business but simply switch to an alternative one. I have heard it said that we should multiply every complaint times a factor of 10 simply because few people like to complain. It is thus important to take seriously the complaints you do receive and address them as necessary. It is critical that complaints are addressed immediately and that relevant feedback is provided to the customer. I recommend sending a letter thanking the customer for making the complaint and outlining how it was handled and what the outcome was.

Rating Systems
Several of our clients have instituted a weekly or monthly rating system. This involves a simple telephone call or email to the key customer contact. They are asked to rate the service by giving an “A” for excellent (far better than any competitor), “B” for good (a little better than the competition), “C” for average (about the same as the competition) and “D” for poor (some things need improvement). We have made a specific person responsible for conducting this “Rating System.” If the customer rates the service less than an “A” they receive a call from the appropriate department manager. This helps to ensure honesty and eliminates a bad grade simply because the customer might be having a “bad day.” If a customer does give us an “A”, we ask: “if there were one thing that you could change about our company, product, or service what would it be?” This primes the pump. It assumes the current offerings are not sufficient. It is amazing how many people give us “A’s” yet would like something to change.

Mystery Shopping 
Mystery shopping is a revealing exercise. Put yourself in the customers’ shoes (or pay somebody to do it for you) by calling your business, visiting your website, requesting literature, and seeing how well your organization responds. Do they follow the established processes? How long did it take to find the information you requested? How easy was it to buy the product or service? Were questions answered in a timely and polite manner? What impression did you come away with? It’s also valuable to use mystery shopping to compare your customer service standards with those of your competitors.

Finally let me invite all of you to give us some feedback on our Weekly Business Update column. While you may not be investing dollars in our Update, you are investing your time. Please help us to make the Update even more valuable to you personally! It will take you no more than 90 seconds to complete the four multiple-choice questions. Everyone that does will receive my 10 minute Audio Lesson on “Why Most Marketing Fails” (and the 3 simple things that you can do to avoid it.) Get the “Why Most Marketing Fails” audio now!

Sometimes I think we are kidding ourselves. 

We think we know what the customer wants or needs just become they have told us so. That seems reasonable, doesn’t it? But let me ask you this – how many times have you been told something only so find out that it wasn’t really true, or that you simply “misunderstood?” More often than not, if you’re like most.

Let’s face it, customers often do not know what they need or even want. Even the most sophisticated clients often have gross misunderstandings when it comes to their specific product or service needs. So why do we focus so much on customer needs and desires?
 Nearly every sales presentation in every industry is centered on “what the client needs and wants.” It’s not surprising that most sales presentations either are ignored or are a blatant waste of time for both the salesperson as well as the client. Moreover, marketing material is even less effective. How many web sites get passed over? How many brochures are thrown in the trash? How many ads go unread? How many dials are flipped when a TV or radio commercial comes on?  I hate to be negative, but in order to bring about improvement we must discover where we are lacking. In an effort to compensate for this, most ad agencies, marketing companies, and consumer brands go to great lengths to learn as much as they can about customer needs and wants. They hire research firms, hold focus groups and conduct needs-based analysis. In the end however, all they end-up with is a vision of what the customer “thinks” they might need or want under any given set of circumstances. Who can predict what the circumstances of the future may be. Certainly focusing on customer needs is not enough.

The bottom-line is that it is often difficult for clients to describe what they need or want. Often times they simply don’t know. Pride often prevents them from saying so. It is far easier for a client to describe a specific outcome under a given set of circumstances rather than articulate plain needs regarding a product or service. 

My advice is to get your clients to tell you the “outcomes” they are looking for. Spend most of you time talking about what the future should look like rather than how your product or service fits their needs. 

For more information on how you can leverage the Rules of Attraction to gain greater market advantage go to www.attractmorebusiness.com.  

Have a great week!

“The Value of Relationships in the New Economy”

There is a revolution going on all around us. It is a “customer revolution.” Customers are demanding more than ever before. Successful businesses, large and small, must find ways of satisfying these demands.In the past it was technology that transformed the marketplace. Today, customers are reshaping businesses and even industries. The value of your present customer relationships will determine the value of your company and it’s products and services. The feeling that a customer has when they interact with your brand will determine their loyalty. Together these make up your net worth in the “new customer economy.”In January, 2000, an astounding thing happened. America Online purchased Time Warner for $165 billion. While Time Warner had $28 billion in revenue, America Online had only $5 billion. How do you explain that? Did AOL have better technology? No! Did they have more capital assets? Heck no! With 28 million subscribers, Time Warner’s customers were “valued” at $3495 each. On the other hand AOL’s customers were valued at $7455 each. More than double!It is the quality of AOL’s customer relationships that drove up the value of the company.How do you join this revolution? 
Become customer centered in everything you do. Become familiar with what your customers like about their interaction with your company. Find out what frustrates them. Measure what matters to them. Give customers what they want, not what you think they want. Look at the world through their eyes.Here’s some specific things you can do to strengthen your customer relationships and revolutionize your service:1. If at all possible, allow customers to try your product or service, BEFORE they buy. Today customers insist on freedom of choice. They don’t want to make a purchasing mistake. If they are disappointed, they will resent you and tell the world about it. On the other hand if you let them try it out, they will place a far higher value on the relationship.2. Offer your product or service-based solutions in more affordable, bite-size pieces. This gives customers the ability to experience the benefits without making a large investment or committing to an exclusive relationship.3. Give them access to real time information like availability, inventories, account balances and purchase history. With the Internet this is easy to do and quite cost effective.4. Offer various payment options like credit cards, automatic drafts, ACH, and Internet-based payment capabilities.5. Build a personal relationship with as many of your customers as possible, not just the 20% generating the 80% of your business.6. Conduct periodic (annual) client reviews. During these you should discuss benefits your company has provided during your relationship with the customer. Outline problems solved, issues for growth, and obstacles hindering progress. Also brainstorm with the customer how you can help them to achieve their goals and overcome their challenges.7. Don’t shy away from making commitments, but deliver what you promise. No questions asked!8. Establish a unique brand identity and stick to your core strategy. (See our last two Marketing Minute Updates for more information on these)9. Conduct surveys, perform focus groups and ask plenty of questions.

In this age of e-commerce, information overload and fast-paced communication it seems that loyalty is a rather quaint, old fashioned notion. Nothing can be further from the truth. Loyalty is at the hearty of every customer, employee and stakeholder interest . They place their loyalty in our company when they make a purchase, show up for work or invest their dollars.

According to author Fredrick F. Reichheld, who wrote the bestseller “The Loyalty Effect” the acid test of leadership is to build strong bonds of loyalty with customers, employees and shareholders. Leaders too often confuse profits with purpose. They take the low road to short-term gains at the expense of their partners.Loyalty leaders TRANSFORM customer, employee and stakeholder loyalty into economic advantages. For example Harley Davidson recovered from near bankruptcy by building loyal relationships with all stakeholders. Southwest Airlines, which has never had a layoff, is the only consistently profitable airline in the United States every year since 1973. Enterprise Rent-a-Car is the largest car rental company in America by living their motto, “Put customers first and employees second.”The key to building loyalty is developing and LIVING to a set of consistent core goals. These encompass six basic principals:

1. Play to win/win
2. Be picky
3. Keep it simple
4. Reward the results
5. Listen hard, talk straight
6. Preach what you practice

1. Play to win/win
Loyalty isn’t about frequent flier miles. It is about earning people’s trust and enthusiastic commitment to a relationship over the long haul. When partners trust that you have the capability and desire to help build THEIR success, then they will do the same for you and your profits will soar. If you want to deliver superior customer service then you must refuse to be satisfied. Only by helping others to reach for the stars can a leader ensure that their company is taking the high road to success. It is also important that we play WHERE we can win. You cannot afford to waste time and energy with business and customers with which you don’t have a legitimate opportunity to do the best work. Get rid of the distractions and focus on your core business. Make a commitment to grow from your position of strength. In 1994, Dell computers was selling directly to consumers as well as through retail chains such as Circuit City and CompUSA. They found however that their customer satisfaction level and profitability with retail based sales was considerably lower than through the direct sales model. The answer was to concentrate on their original model which proved to be brilliant for the company.2. Be picky
Choose your partners carefully whether they be customers, employees or company stakeholders. Nothing speaks more clearly about your values and principles than your choice of associates and who you promote to positions of authority. Loyalty leaders will be the first to admit that they discriminate – not on the basis of race, religion or gender, but on the basis of capability, performance and attitude. Hire people not so much WHAT they can do but rather for WHO they are. Employee behaviors and attitudes communicate most directly to customers and suppliers just what the company stands for. Be as choosy with your customers as well. Don’t lure butterflies, but rather collect barnacles. These are customers who are likely to stick around for a lifetime if they are treated right. Butterflies on the other hand tend to flit off to the sweetest deal of the day. They look nicer than barnacles but I’ll take a crusty old barnacle any day.3. Keep it simple
Complexity is the enemy of speed and flexibility. Like it or not the world today runs at Internet speed. Companies must have the capacity for rapid learning and rapid response. There is a link between loyalty and response time. Companies with a loyal customer base are highly adaptable to market needs and changes. We all know that the only constant is “change.” As loyalty leaders we must convince everyone in our organization that the past will never be as good as the future. Those of us that have lived in a small town know that loyalty is very natural. People know each other and treat one another as neighbors. Companies need to think small if they want to build greater loyalty. Build a structure where people can work well in small teams. When a small team accepts ownership of a daunting challenge for change, a wonderful dynamic emerges. Everyone stops worrying about who will get credit or the political factors. They step up and collectively perform.4. Reward the results
Few organizations, large or small have effective reward or incentive systems. They typically pay based on those variables which can most easily be measured rather than the right results. Are you measuring on the right things? What you decide to measure clearly identifies your values and priorities. You can talk all you want about loyalty and customer satisfaction, but if all of your rewards are based on profit rather than also including loyalty, service and satisfaction then you will paralyze growth. A classic example of poor reward systems exists in the cellular phone business. Most experience enormous customer churn. Yet they continue to abuse loyal customers by offering the best rates, discounts, new technology and free minutes to first-time customers and offer nothing to loyal existing ones. Share economic advantages with loyal customers first.5. Listen hard, talk straight
Many call this the age of information but as I have said on many occasions on may radio show and in these Marketing Minutes; this is the age of relationships. People are looking for relationships with those that understand them and CARE about them most. If you want to build a business community of enduring relationships you must help everyone in your firm to become more effective communicators. Their most exceptional skill should be at communicating the benefits to constituents and winning them to their way of thinking. Everyone must be willing to LISTEN, LEARN, FOLLOW-THROUGH, EXPLAIN WHY.6. Preach what you practice
Many have heard the maxim, “practice what you preach,” but I like to say loyalty leaders “preach what they practice.” Each of us are literally preaching a sermon with the lives that we lead. We can’t go quietly about our business and presume our actions simply speak for themselves. We must preach the wisdom of loyalty to all the ranks in our relationship networks. We need to build a repertoire of teachable stories that illuminate the loyalty principals.I hope this motivates you to develop better loyalty programs for customers, employees and stakeholders in your business.

It’s hard enough to satisfy customers today. Going BEYOND their expectations seems unnecessary and even an unlikely goal. Nearly every industry and profession is becoming more competitive. This is particularly true for many professions such as physicians, attorneys and dentists. Interestingly enough this hasn’t resulted in a higher level of personal service but rather a commoditization of services. The focus has become lower price rather than higher value. I guess I’m showing my age, but I can still remember when doctors made house calls. Today this idea seems ridiculous. But imagine the kind of service and attraction physicians would create if they actually could again perform this service. This would truly be going “far beyond a patients expectations.”

I recently had an experience that demonstrates expectations at work. Just a few days ago I was flossing my teeth and “pop”, off came an old crown. Now this is an inconvenient and perhaps uncomfortable experience for anyone, but for me it was more of a problem because I noticed that the now fully exposed tooth was extremely sensitive to hot and cold making it nearly impossible to eat or drink just about anything. I knew I needed to see a dentist and fast! Worse however, in just a few days I would be sitting on a plane for 14 hours flying to Sydney, Australia! However even with this in mind, my EXPECTATION was that I would have to put everything aside for the next few days and focus on this emergency. That was going to cost a fortune and I would be waiting in a dentist’s office many hours. This is if I was lucky enough to even get an appointment. 

So I called my old friend Mike Schneider. Now Mike is a dentist right here in Manhattan Beach, CA. He has been practicing for over 30 years and has a very well-established patient pool. Being my friend for nearly 20 of those years he has heard me ramble on about the rules of attraction and he has applied many of the strategies that we discuss on this site. When Mike heard of my dilemma he sprang into action. Although it was his day off, he told me to meet him at his office. Of course that was a workday for me so Mike worked around my schedule. When I arrived at 12pm Mike told me he had already set-up an appointment at the periodontist. She had agreed to slide me in at 2pm. He told me to get in his car because was driving me there. But first he said you need to have lunch so let’s go, I’m buying. He took me to lunch, (which he picked up) and then chauffeured me to the periodontist for emergency surgery where he waited until it was completed. Within 50 minutes the procedure was complete and Mike was bringing me home.

All this proves that I’m lucky to have a friend like Mike Schneider. Right? WRONG!

I’m lucky to be a PATIENT of Mike Schneider. You see, this is not the first time Mike has come into the office on his day off for a patient. This is not the first time he has literally chauffeured patients to and from specialists. In fact I know of many patent’s that Mike has performed the exact same services for. And he doesn’t charge a dime for this! Do you think that’s going “Beyond the Customer’s expectations?” You bet.

This sounds like a commercial for the dentist, Mike Schneider. It’s not. I’m not even giving his number or website. It is example of how one entrepreneur is EXCEEDING customer’s expectations. What can you do exceed the expectations of your customer? If you are a carpenter, how about talking the client to the lumberyard with you to pick-out wood? If you are a gardener, how about planting a few extra flowers without being asked or even charging for them? I know a criminal lawyer that actually visits the families of convicted felons so that he can personally report to his client about their condition. 

Let’s face it, exceeding expectations is a lot easier than it looks if we are willing to give just a little. No matter what kind of business you are in, you can exceed the customer’s expectations by applying Rule #6 of Attraction and “Be willing to GIVE.”