Merry and Happy!

Merry Christmas, Happy Hanukkah, whatever warms your heart and demonstrates the joy of man and our hope for the future – I wish it for you.

Somehow, Christmas Eve has arrived (again) without me taking the time to relax and appreciate all that it means. With everything that is evolving with business and the economy, days have become a bit of a blur for me. This year (more than ever) new contracts, new and existing projects, Christmas cards, shopping, running from one party to another, clients, family, friends - these have all appeared as items on my task list. Time for me to step back and take a breath, put on some Christmas music and reflect on the true joy of this season and the blessings that are my family and friends.

So, Feliz Navidad my friends. May the true joy of this season fuel the hope and build the love that sustains us and makes us whole.

Ken

Optimize your Business

The time is now. Every business owner/manager is seeking ways to improve their operational efficiency, customer service, and ultimately their bottom line. I am going to use the next couple of posts to discuss the strategy I feel you need to be following - not only to stay in business during this correction, but to be prepared for when things turn around.

Today’s post is a bit long but it’s an overview of the strategy I feel is crucial for businesses in this economic correction. I don’t view these 5 tactics as a cafeteria menu of options but rather a required battle plan in the overall strategy. Your goals should be easy to articulate – survive and be ready for when the correction is over. Over the next couple weeks, I will expand on a few of these in greater detail.

1. Focus on your core competencies, period - Right now, you and your team need to be doing what you know best to make your company the most money (manifested as cash flow). This is not the time to be distracted by anything that keeps you from that goal. As a business owner or manager, look at what you spend parts of your day on that are NOT directly making you money. Do something to push those tasks or issues off your plate. If you get tied up in the mechanics of trying to generate payroll, manage email/computers/phones, write financial/sales reports, or deal with a myriad of other headaches, look at outsourcing it.

Outsourcing doesn’t have to mean going offshore. There are hundreds of thousands of people and companies right down the street that you can hire to manage your non-core competency distractions at a very reasonable rate. Heck, that’s what I do every day for clients. You get an expert at whatever function you outsourced at a consistent, reasonable cost. More importantly, you (and your team) get to focus all your energy on driving your business.

2. Reconnect with every customer you did business with last year – It’s generally accepted that the cost of getting new customers to the cost of keeping customers you already have is a 5-1 ratio. This is a powerful business multiplier that can’t be ignored. Now is the time to redouble your efforts to build, rebuild, or improve your relationships with your customers. Of course, for some of your customers, it will always be about getting the best price regardless of the relationship. If you can offer that, great! If not, it is the solid relationships you nurture now that will drive your company later.

Unfortunately, for the companies out there that don’t currently have or maintain good relationships with their customers, it’s probably too late. Companies that offer mediocre or poor customer service are usually the first ones cut in a correction. All you can do is change your focus now to begin building for the future.

3. Be obsessive about your operational data - I am never surprised when I talk with clients and they say they really don’t have a grasp on their operational data. That data for any business is a constantly moving target that needs to be managed with good organizational process. Prospects, customers, inventory, what sells, what it costs to make a sale, even receivables and payables – these are the key data points that can crush a business if they are not properly managed.

When I ask a client “what’s your best seller (or best customer)?” they can usually tell me. But when I ask them “what does it cost to prospect, nurture and close the sale, not the margin on the item (or service) but on the sales process?” they have a hard time answering. When we break it down, we often find that the effort to get the sale exceeds the margin. Fix the process, the margin, or product. Not your core competency? Outsource it.

4. Communicate your ideas and plans with your staff and key (strategic) customers - I have seen, time and time again, that rumors are always much worse than reality. Everybody is worried and a little freaked out right now. Your staff is concerned about their jobs; your customers are concerned about their business (and trying to do business with the right companies); your suppliers are concerned about keeping your business and getting paid.

I am always flabbergasted by companies that don’t communicate with their employees and then are surprised with the outcome, complaining that turnover is so high or their staff isn’t motivated or loyal. Wake up people! You can’t run a business in a vacuum, if you got lucky enough to hire quality people, involve them!

5. Don’t scrimp on Marketing, be selective but go at it as hard as you can - It is an unfortunate statistic that when faced with a downturn (or correction), many businesses cut their Marketing budget first. This is a great article about Marketing in a Downturn that says it better than I could. The only thing I would add to this article is to leverage a good business process that allows you to QUANTIFY expenditures and results.

How about creating a customer referral program? You may be surprised at how many of your customers know other companies that could use your services or products. Reward them for bringing you business; you already reward your staff – don’t you? If you are taking good care of your customers, this can be an easy Marketing win and a profitable source of new customers.

Batten down the hatches, circle the wagons, focus! Are the tactics and overall strategy a bit overwhelming? Let me help you focus on your core competencies. Contact me at info@KenFarmerConsulting.com.

When Technology Works

Even now, I get excited when technology works the way it should. I guess I shouldn’t be surprised anymore since I am in the business of leveraging that technology. But having seen so many failed efforts (not my own of course), I still “love it when a plan comes together“.

One of my favorite examples is Best Buy. Shop online, buy the item online, choose to pick it up in a store and it’s ready for you when you get there. I even had to return something I purchased that way once – and got an email from customer service about it while I was still in the store. Sure, it improves their operational efficiencies but as the consumer, it translates into better customer service and keeps me coming back.

Another, smaller, example is my local Carlsbad library. From their website, I can see if a book I want is on the shelf, reserve it and then go pick it up at the branch I choose. They use RFID to speed the checkout process at one of several self-serve kiosks and send me an email a couple days before books are due. Multiple due dates? No problem as each book is tracked separately and you know exactly when each is due. I can log into their website and see what I have checked out, when it is due and even extend the due date if I need to. Improved operations, more productive staff and volunteers, and a great customer service experience.

You don’t have to be a big company with millions of dollars to spend to make your technology work for you and your customers. With today’s economic challenges, every business needs to improve their bottom line through productivity increases and better customer service. A Customer Relationship Management program (such as Microsoft Dynamics CRM) allows you to better track operational data that can help you improve not only your customer experience but your bottom line as well.

A recent Dynamics CRM project of mine entailed using automated workflow to identify those people most likely to purchase additional products and services, connect with them automatically, track the purchase and delivery process, and then survey the customer at the end of the cycle. The end result was an increase in sales – using fewer operational resources and improving overall margins.

Another project utilized the customization and query features of CRM to assist the HR team in tracking employee industry certifications and renewal dates – sending an automated email to each team member who had a certification expiring in the next 60 days.

I love it when a plan comes together!

These are inexpensive ways to allow a business of any size to leverage technology and improve operational efficiencies. A company can utilize Dynamics CRM through a hosted version – paying only for the licenses you need on a monthly basis. As you grow, add more licenses. As you have to tighten costs, reduce the number.

Contact me and let me help you leverage today’s technology to grow your business!