Is it more important to have a great business idea or great execution?

by: Thomas

August 17th, 2010

great executionHere’s my take.

99% of success relies on execution.

A great idea for a business is just an anchor for one or more hardworking, enthusiastic people to get together and start solving a bunch of problems.

If, through a little bit of luck and a lot of hard work, you manage to solve enough of the right problems, you’ve got a business.

Even the person that invented the Cat’s Eye had to find a way to test, produce, market and scale the product.

I take comfort in this view point because it means you don’t have to be simply lucky or unrealistically smart to have a chance of becoming successful.

What you need is a hard work ethic, and the ability to pick (and not hide from) which problems you solve as your business progresses.

I do agree with the concept that the quality (or nature) of the idea will ultimately dictate the potential scale of the success, and this is an important consideration to any business owner. Success for me, within this context, is more about relative industry performance than a literal profit figure.

The article on which this blog post is based can be read in full here, and is well worth a read.

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Finding the right balance between promises and delivery

by: Thomas

August 10th, 2010

promises versus delivery

Sadly the closest picture I could find to represent Pinocchio!

Have you ever had a problem with your phone line or broadband and gone on to discover that the (major) service providers are about the worst you will ever deal with?

Annoying isn’t it.

If they spent just a small percentage of their marketing budgets on providing a more supportive infrastructure, they’d be a pleasure to deal with.

But they don’t. They choose promises (marketing) over delivery.

These firms compete in an industry where the standard is to unrealistically develop our expectations in order to acquire our business and they are all as bad as each other.

In reality we have no choice but to accept a poor level of service (coupled with glossy promises) from telecoms companies, but I bet your customers have a choice.

You have to very carefully offset your desire to win business, with your desire to exceed your customers expectations.

We could all lie our pants off to win business (and sadly some people do), but at some point you are going to have to deliver.

In reality though, most (small business) over-promising happens not because business owners are devious thieves, but because we want to impress potential customers. We imagine the perfect delivery scenario and start to build an expectation that can only be met one time in ten.

As soon as you over promise, it doesn’t matter how good a job you do, you have lost your opportunity to impress your customers when it matters.

The first exchange with a customer may get a signature, but the last exchange will determine your reputation.

A few signatures will help pay the bills, but your reputation will make you rich.

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How can I provide excellent customer service?

by: Thomas

July 7th, 2010

how can i provide excellent customer serviceIf a customer has a bad experience, they will tell 10 people their entire online social network which could be more than 500 people. This means it has never been more important to protect the reputation of your brand and retain a happy and loyal customer base. More than ever your customer service is essential to the long term survival and growth of your business.

I’ve broken these tips down into two sections, tips for business owners and tips for customer service providers. The point being that the responsibility to provide excellent customer service often requires input from both groups.

Tips for managers and business owners

You wouldn’t teach a baby to swim by throwing it in a canal, and you can’t teach your staff to provide excellent customer services by waving a “top 5 customer care tips” reference sheet in front of them. If you are truly serious about providing excellent customer care, you need to think about your organisation from the top down. You can only expect your staff to provide excellent customer service if you provide an environment and framework where this is possible.

  1. Reduce the need for customer service
    Customer service is not just the bit where people call you up and complain. Customer service is intrinsically linked with your brand, the quality of your products / service, the effectiveness of your communications and your meeting (exceeding) of expectations. The job of your customer services team is not to minimise sum of the money you spend on refunds, replacements or apologies, that’s the job of the people that deliver the service or make the products.
  2. Create a culture of care and respect
    Excellent customer service cannot be faked. If your staff care about the customer, care about their own reputation, the reputation of their colleagues and that of the company, they are going to be more willing to work towards providing excellent customer service. Making staff care is not just about paying them more money, far from it. You create a culture of care by:

    • Demonstrating care yourself
      You change your children’s nappies because you care about them. Do you care enough about your business to get your hands dirty there too? The owners or management set the tone for the entire business.
    • Share the failures and successes
      Share the adventures of your business with your team. Tell them about the wins, the losses and the opportunities. Let your staff be a part of the development of the business and you’ll be amazed how much they really care.
    • Acknowledge the importance and contribution of everybody
      If your staff feel valued and respected, they will be in a better frame of mind to represent the company in a positive way.
    • Never criticise customers
      Not when you’ve just put the phone down. Not at lunch time. Not in the bar after work. It leads to a terrible culture of “stupid customers”. If it’s ok to mock some, why not mock every customer? Allowing a culture of criticising customers says “you only have to pretend to care”.
  3. Unshackle your staff
    There is nothing worse than spending 45 minutes on the phone to somebody that “understands” your problem but unfortunately their “hands are tied”. What would happen if you put no limit on the action a member of your team could authorise to satisfy a customer? Do you trust your staff so little you don’t trust them to authorise an appropriate refund or replacement?
  4. Generosity and competence
    The job of your customer service team is to ensure unhappy customers:

    • Become happy again
    • Spend money with you in the future
    • Don’t tell 500 friends not to do business with you
  5. Companies spend thousands (even millions) on marketing. They pay for endorsements, adverts, fancy packaging and stationary, plush offices / stores, and then they spend minimum wage on customer services. Total lunacy. Even the smallest companies should allocate a significant amount of their marketing budget to customer retention, and in most instances, this starts with customer services.

  6. Use technology to your advantage
    Avoid automation. When I phone, you get one opportunity to let me choose between 3 options. Any more than that and I start to hate you.
    If you have an answer machine, make sure it gets listened to.
    If you have an email address, make sure it is somebody’s job to monitor it regularly
    If you have a phone, make sure it is answered straight away
  7. Make it easy for your customers to get in touch
    Who should I call, when are you open, what’s the number??? Make it obvious in all your communications.

Tips for customer service providers

  1. Understand that customer service is an opportunity
    People don’t mind (reasonable) mistakes. They may approach you in an aggressive manner, but that’s often because they have received poor customer service too many times in the past. The best relationships are often formed when a customer gets to see how serious your business is about pleasing them. They are certainly the most memorable encounters and often inspire more confidence than flawless transactions.
  2. Try to see things from the customers perspective
    Empathy is the most powerful tool at your disposal. Once you can put yourself in the customers shoes, their anger may seem more reasonable. A late delivery may be little more than a minor inconvenience to some customers, where it may have damaged the reputation of another customer.
  3. Be sincere
    There is nothing worse than an insincere apology. If you truly care about your customers and your reputation, you will become sincere rather than just act sincere.
  4. Remain calm and professional at all times
    Losing your temper means you have lost control. Once you lose control you are not acting in the best interests of yourself, your business or your customer. We all feel stupid after losing our temper, particularly when we find we are behaving irrationally with somebody who is calm and friendly. Let your customers do the “feeling stupid”.
  5. You only “win” when the customer does
    The only victory to be gained is one where the customer feels satisfied. Avoiding a refund or compensation is often false economy.
  6. Be confident
    If a customer makes a complaint, they have probably lost confidence in your company. Your job is to restore that confidence, and that process begins with establishing the customers trust and confidence in you. It’s hard to fake confidence, and you can’t become confident simply because somebody suggests you do, but there are things that will assist. If you take time to understand the business and the products or services you supply, you are well positioned to provide sound confident advice. You should also work on your eye contact and body language (beyond the scope of this article).
  7. Be personal
    Use the name of your customer and try to build rapport. Let the customer know you are treating them as an individual and let them also see that the business has a human face. It’s much harder to be cross with people you like.
  8. Give the person your complete and undivided attention
    No surfing the internet, reading a magazine, playing with blu-tak or answering “quick questions”. Let the customer know they have your complete and undivided attention.
  9. Be honest and accurate
    Manage your customers’ expectations fairly. If you’ve screwed up once, the last thing you need to do is screw up again. If there is bad news, just give it to the customer straight. It will only come back to haunt you with vengeance if you create expectations that you fail to meet a second time.
  10. Take responsibility and become accountable
    Always give your name, number and any other details that will enable the customer to come back to you to resolve this issue. Don’t make the customer repeatedly explain their circumstances to other people, and don’t palm people off. If you are not the person to fix this issue, then let it be YOUR job to act as the customer’s representative.
  11. Make firm commitments and follow through
    When you put down the phone, or when the customer leaves, get to work delivering on any promises you make. If you can’t act straight away, put them in your calendar and write down everything you have agreed to do.
  12. Be positive
    An angry customer may be pretty focussed on all the things that are wrong with your business, and your job is to counteract this with positivity. Try to concentrate on (and make clear) what you can do for the customer. A conversation about possibilities will take you forward much more quickly.

Of course not every business has a big customer service department, and the resource to answer the phone after 1 ring and provide large refunds. But every business can know what “excellent” customer services like, and can develop a culture that makes it possible.

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What would you teach your potential customers?

by: Thomas

June 16th, 2010

what would you teach your potential customersWhen you seek out a specialist to provide a service, there is a reasonable chances that you do not know much about that product or service in the first place (other than that you need it). So the job of choosing a specialist to provide that service can be a total minefield.

This is true of building work, car repair, accountancy, hairdressing, singing tuition…of course I could go on for several pages.

Wearing my Edge of the Web hat today (Duport’s web design business) here are 5 things I wish all potential customers (of any web design business) considered before they picked a company to work with:

  1. DON’T SCRIMP (part 1)
    Save money on coffee, biscuits, watches and fountain pens. These are things to please you. Do not scrimp on your website; nearly all of your customers (and potential customers) will check you out online. If your website looks rubbish, so does your company.
  2. DON’T SCRIMP (part 2)
    A break down in the relationship between client and web designer is not uncommon. If you seek out the cheapest website design option available, you don’t get to be fussy about finish and functionality. Building websites takes time and skill, and if your web designer is working on unfeasibly low margins, you will often find the phone stops getting answered and emails get ignored. Saving a hundred pounds always seems like a good idea, until it isn’t. Seriously, we hear about this ALL THE TIME.
  3. DON’T BELIEVE EVERYTHING YOU READ
    It’s easy for web design companies to make salacious claims about their service and commitment on their website (in fact it’s as easy as tapping a few keys on a keyboard), but it’s a very different kettle of fish when it comes to delivery. Ask questions like:

    • How many people are involved in the business,
    • What happens if somebody gets sick,
    • What happens if a more profitable web design opportunity than yours comes along,
    • When will the website be finished (what guarantees apply?),
    • What if you can’t agree on a final design?
  4. WILL YOUR WEBSITE BE COMMERCIAL?
    There is a very (very) big difference between a website that looks nice and one that is designed to be ruthlessly commercial. The difference being that one of them looks nice AND helps you stay in business, dare I say even make a profit.
  5. WHAT AM I BUYING?
    A brilliant website is a equal combination of:

    • Brilliant design
    • Brilliant wording
    • Brilliant coding
    • Brilliant marketing

    Which of these are you paying for? You can be sure that at least one of your competitors has all of these.

So there you have my 5, what do you wish you could teach people about your industry?

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What’s the next big thing?

by: Thomas

June 2nd, 2010

what's the next big thing“When we do X the business will be amazing”

I find myself saying this quite a lot.

Partially that’s because we get through a lot of X’s.

Partially it’s the instinctive desire to develop and progress as quickly as possible.

X’s include:

  • New offices
  • New staff
  • New marketing campaigns
  • New hardware / software
  • New products / prices

In a recent moment of clarity (ironically involving a modest quantity of alcohol) I realised that the next big thing is today.

I realised that I needed to stop thinking about what the businesses will be, and think about what they are.

That doesn’t mean abandoning the concept of working on the business and start working in the business (extra cheese please).

I think it just means that sometimes it’s important to view something as it is, not as it will be. This is called reality.

When you accept reality, you can share it confidently with the world (and to your staff, and to yourself).

When is it time to start marketing, discussing, delivering, promising and embracing?

It’s today. And it doesn’t matter if the business cards haven’t arrived yet.

If I were to use an analogy (I am famous for rubbish analogies) I’d say this:

Building a business is a bit like designing a racing car. There is always a way to make it faster, or more aerodynamic, but one day you just need to get in it and drive. That day is today.

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Should I Take On A Business Partner?

by: Thomas

May 25th, 2010

should I take on a business partner

Two brains are better than one … or two many cooks spoil the broth?

Yesterday evening I finished work at around 10pm, and went for a well deserved beer with one of my business partners. My wife and children would already be sound asleep at this point. That’s another night I didn’t get home to see my 2 year old daughter and 6 week old son.

Our website design business is still in its infancy in many ways, but it has come a very long way since its rebirth last autumn.

  • We worked hard in the formative stages on producing a product that was a “no brainer” for our customers, but also one that would be viable for us.
  • The next stage was to prove we could deliver the web packages we designed.
  • The next stage was to work on building the volume of enquiries we got.
  • Then suddenly beyond our wildest expectations, the number of enquiries grew exponentially.
  • We had to increase our capacity to handle those enquiries, and the subsequent business. This meant recruitment and training.
  • We had to work on a strategy to manage our relationships with our existing customers amidst the madness. This meant careful prioritisation and basically working longer hours.
  • We had to work on a way to filter and share the enquiries that were coming through, so that everybody got a call back. We opted for Salesforce.com.
  • We had to implement a system to manage the accounts and billing. We opted for sage.
  • All the time we had to keep getting the job done, and dealing with the usual business administration.

Here’s the point:

The above developments have all occurred in an 8 month period, and there’s just no way I would have progressed the business this quickly alone.

Had I taken the view that I wanted a larger share of the profits and more control, it would have come at a cost to the development of the business, the number of times I get to put the children to bed and my enjoyment of what is now a very fun, energetic and exciting business.

I have been lucky. My business partners to date have included: My dad, a good friend and somebody who originally came to work for me.  Important qualities in your relationship with the person you choose are:

  • You have to be prepared to give honest criticism and to hear it.
  • Your relationship should be built on trust and respect, such that if things do go wrong, you can keep a clear head and act fairly at all times.
  • You have to learn that blame and praise is irrelevant. It’s all about making the business work.
  • You have to know the person that you are partnering is as committed as you, and similarly they will demonstrate it in different ways at different times. Everybody has good days and bad days.

I don’t have experience of starting a venture with somebody I didn’t know because to me it feels like too big a risk.

  • What if they aren’t as smart as you initially thought?
  • What if their commitment/interest/focus/attention shifts?
  • What happens if they don’t hold up their end of the deal (I guess that you become resentful about holding up yours)

Seth Godin wrote a nice article about finding a way to divide up a business with partners. Essentially you allocate a percentage of the business against deliverable (measurable) tasks or results.

i.e.

  • designing / implementing the product is worth 20% stake
  • getting the first 5 key accounts is worth 35% stake
  • task x is worth 15 % etc

If you figure out who is responsible for what at the beginning, and the value of that contribution in relation to the ownership of the business, it creates an environment where everybody is allocated a stake fairly according to effort and results. This can save resentment and disappointment further down the line.

So to summarise, there is no linear answer. Every business is different, every person is different. Your answer should boil down to:

  • What skills/input can your partner provide that you can’t
  • Can you find a share allocation you can be happy with (or a plan to distribute it based on contribution)
  • Can you find a partner you can trust?
  • What is the benefit of growing the business quickly vs. greater ownership of a slow-burner?
  • How valuable is your free time? (Much harder when you have children)
  • Are you the sort of person that can collaborate and share?

For me, I would always look to work a solution with a partner first. Share the risk, share the load, share the rewards, share the enjoyment and most importantly, share the inevitable headaches.

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Avoid negative marketing

by: Thomas

April 27th, 2010

negative marketingA particular bug bear of mine is negative marketing.

Negative marketing is about building a case for your product or service by belittling the competition. A little bit like playground bullying, it’s using the concept of belittling someone else to make yourself seem more impressive. And like playground bullying, there is usually something a bit unhappy and empty behind it, and it smacks of inadequacy.

I certainly wouldn’t say I’ve never engaged in negative marketing myself, but over the past 12 months or so, I’ve tried very hard not to provide a negative comment on my competition in any of the businesses I am involved in. Where I do have to pass comment, I try really hard to provide a balanced and respectful view.

Sometimes your competition will charge a bit more to deliver a better service. Sometimes they’ll compromise on end product so they can keep the price down. Either way, it’s very easy to pick fault in a competitor if you don’t understand their business model. Ultimately most business owners are hard working, honest people trying to deliver a fair service for a fair price and develop a positive reputation. I take the view that if I (and all of the competition) are busy criticising each other, we are collectively building a negative reputation for our respective industry as a whole.

I am invovled in web design, company formation, immigration and online marketing. In each of these companies I hear lots of criticism and get the chance to deliver it too. I can honestly say that during the last year my more positive approach to sales has made me focus more on the benefits and strengths of my own business. As a result, I’ve found that I now concentrate solely on explaining the benefits of my own businesses and making each encounter with a potential customer a positive one.

I don’t beleive that complimenting (or being neutral) about any of my competitors has cost me a single sale, and my customers appear to be happier than ever.

With the general election pending, never has the macrocosm of negative marketing been so prevalent. To my mind, the campaign strategies of the big 3 seem to be built on “That party is rubbish” as opposed to “My party is good”. The reputation of politics and politicians would appear to be at an all time low, and when I ask people who they are going to vote for, they only seem to know who they aren’t going to vote for.

I’m not turning this into a political rant, I’m just highlighting that I, and my customers, prefer to operate in industries and with companies that concentrate on outperforming each other, not beating one another down.

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Who is the cheapest?

by: Thomas

April 7th, 2010

who's the cheapest?

cheap cheap cheap cheap

In nearly all industries, there’s a big group of consumers looking for the cheapest option.

Often these consumers are:

  • more demanding
  • unappreciative of the product

As a new business owner, often your instinct may be to compete on price. It feels like the right thing to do and it’s an “easy to define” differentiator.

Some of the problem associated with competing on price are these:

  • You may have to compromise on quality
  • You may have to compromise on support
  • You may have to compromise on aftercare
  • You may have to compromise on customer satisfaction

What does this mean? It means you may have to compromise on the reputation of your brand.

Here are some more reasons not to simply compete on price:

  • You have to sell high volume to make money
  • The majority of your (unimaginative) competitors will be looking for ways to undercut you
  • It will be hard to attract the best staff

Here are some alternatives to being the “cheapest”

  • Offer the best customer experience (my favourite)
    Once you get the first sale, people will start talking about you
  • Use the best materials
    Plenty of people are willing to pay for quality
  • Provide your service the fastest
    We are conditioned to understand that if we want a service quickly, we can expect to pay more
  • Be the most versatile
    Could you work weekends, evenings, holidays?
  • Be the most ethical or environmental
    Lots of socially responsible folks out there.
  • Be the friendliest / most respectful / courteous / best dressed
    Good old fashioned values make customers feel respected and safe
  • Offer the most personal service
    Small companies can adapt their services very quickly and easily to fit the customer
  • Be the safest option
    Lots of people spending other peoples money out there (corporate budgets etc). Criteria number 1? Don’t make them look stupid.
  • Be the most expensive
    There’s a reason you spend so much money on fashion, glasses, cars (or whatever your vice)…people like to show off.

It is of course a nonsense to think you can be the “best” in all areas, but if you pick cheapest, it’s going to be pretty hard to develop your brand reputation in other ways.

My advice is this:

Look at your own strengths (i.e. personality, quality, ethics, speed, etc), and consider “will a small slice of my market sector want it this way”. If the answer is maybe…go for it. Remember, a tiny percentage of most markets will make you a millionaire.

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What makes a good business?

by: Thomas

March 23rd, 2010

find a way to differentiate yourself

Value is that warm glow someone feels after a transaction. I’ll re-hash a good Seth Godin analogy to help define this. Is a £150 pair of shoes good value? Well, yes it is if you get £150 worth of joy from the purchase. If they make you feel confident, smart, successful, fashionable, and happy then yes. If you felt like royalty (or a friend) in the place where you purchased them, they were good value. If 5 people comment how lovely your shoes are, they were good value.

Me? I tend not to spend much on shoes, because they aren’t very important to me, but you should see my golf trolley! My wife (incorrectly) thinks it was a waste of money, but I could see the value.

So what do you sell, and how can you deliver great value?

I have a web design business, and we made fundamental decisions early on that the value we were going to provide was low prices and a very high quality product.

That’s because our core market is start-ups (see the Duport connection?). But to provide this sort of value we have to make compromises in other areas. We have to ask our customers to work to a very tight and efficient schedule, and in nearly all cases, they are happy to do that, because for start-ups the product and price is essential to their perception of value.

I also have an immigration business, and we made fundamental decisions early on that the value we were going to provide was all about quality and personality. That’s because you can’t afford to rush (or mess up) somebody’s visa application, it’s too important. To do this we head-hunted amazing staff from the most prestigious names in the industry. We have to charge more, but our clients know they can trust us with their future. Some of the largest companies in the world also trust us.

For every business, there is an opportunity to provide great value in some way. Find a way to differentiate your business and become the best in some way. Not everyone will view your differentiator as value, but you shouldn’t try and market yourself to everyone. A slice of any market is enough for most companies.

It’s very rare that you can be the supplier that offers the best quality, offers the best customer service, and sells at the lowest price etc. If you try and sit in the middle in all areas of value, you’ll just be another generic competitor.

How you deliver value becomes your unique selling point. It becomes the personality of your business, and it becomes the reason somebody purchases from you rather than a competitor.

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Common mistakes start-up businesses make

by: Thomas

March 15th, 2010

We all make mistakes. There’s nothing wrong with admitting that. It’s a way of learning stuff when you don’t already know the answers. You can also try and learn stuff by listening to others who have already made mistakes.

common business mistakes

Sue's jacket potato stand is open for business

Here’s my list of the most common small business mistakes I make and see others make:

  1. Pretending to be “big”
    Definitely my number 1 pet hate. I’ve done it, and I bet you have too. The problem with pretending to be big, is that you can’t embrace who or what you are. There’s nothing wrong with being a small business. People don’t mind dealing with small businesses. Some even prefer it. No more pictures of skyscrapers on your websites please.
  2. Micro Analysis
    Mon: “We got 2 hot leads today, let’s start recruiting.”
    Tue: “No leads today, let’s think about firing people.”
    Wed: “3 leads today, screw it I’m going to order that conservatory.”
    Thu: “Somebody just cancelled; I’m going to hang myself.”
    You get the idea anyway. Micro Analysis is not good for the fingernails or the heart.
  3. “Working in the business, not working on the business”
    Yes it’s a stinky cliché, but incredibly meaningful.
    Working in the business pays the mortgage.
    Working on the business pays off the mortgage.
    Working in the business is easy because you feel productive, useful and like you’ve done a days work.
    Working on the business is hard because results can take a long time to come. You can easily end up feeling lazy, useless and stupid because you didn’t make anything today.
  4. Being lazy with recruitment
    It takes time and effort and a bit of money to find the right people, however basic the job role. The right people will make your business a success; the wrong people will drag you under. It’s that simple. Get some help, get some advice, it’s one of the best ways to spend your precious start-up pennies. I eventually discovered this because my wife works in HR, and one day I decided to listen.
  5. Listening to the negative voices
    Anybody can criticise. It’s easy. We can criticise social workers, MP’s, professional athletes, Aid organisations; in fact all people who do incredibly difficult jobs and get things wrong sometimes. Not everybody will agree with your business model, initiative, marketing plan, etc. Creative thinking is difficult. Criticising creative thinking is easy, and makes you sound disproportionately credible. Don’t let them (you probably know who they are) drag you down (unless it really is a truly cr*p idea!).

So those are my 5. What are the biggest mistakes that you have made, or you see others making?

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