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!

Losing any sleep yet?

What a crazy time to own or run a business. We have banks failing, stock markets on a rollercoaster ride, credit tightening, homes all around you with mortgages in default – wow. Hey, let’s toss in a Presidential election just for a little comic relief. “I can see Russia from my house.” So funny in a sinking, mortifying kinda’ way…

Even if you aren’t personally wrestling with those specific financial issues, everyone will be impacted. From CEOs to Small Business Owners to pipe fitters to pool cleaners to consultants, we will all feel the effects of the financial morass that we are digging out of. The question business owners are asking themselves all across the country (across the world) is “what do I do now?” 

Smarter people than me are providing advice daily in this crazy mixed up world we have inherited\created. All I can do is look at my situation and that of my friends, family, and clients and base my decisions on that. Can I predict what the impact of bail outs, credit swaps, or the selling of derivatives might be on the global economy? Yea, sure I can – I’m a rocket scientist in my spare time.  

“I can calculate the movement of the stars, but not the madness of men.” – Sir Isaac Newton

 What I can do is not hide under a rock. I can remember that my investments are supposed to be long term and the long term outlook for them is still good. I can be thankful that my wife and I don’t need the money from our house and portfolio right now. I can remind myself that I am working and providing value to my clients. And I can help those around me find level ground – and the time to take a breath.

Lift your head up, take a deep breath and remember – you have employees and customers that need you. They have some of the same questions and need your guidance. Protect your business, do what needs to be done, and prepare for the ride back up when the economy begins to recovery.

“I’d like to use one of my lifelines Katie…”  And don’t forget to laugh once in a while!

Landline Blues

I was reading an article online about the upcoming election and recent poll results (don’t worry, this isn’t a political post). It was just another in a series of endless articles spewing numbers that we are supposed to cling to. I also read a couple of posted comments and found an interesting thread that discussed a question I hadn’t considered.

“…hardly anyone in my age bracket (18 to 30) has or uses a landline. What does that say about the accuracy of these phone polls?”

Of course, as too often happens, the posters went on and began arguing how the poll doesn’t reflect this or that and quickly degenerated into a flame war but it aroused my curiosity. I know several people that no longer use a landline and not all of them are members of that elusive 18 to 30 demographic.

Since this thread started with statistics here are some from a recent CDC study:

• More than 32 million American adults, about 16 percent or nearly one out of every six homes, have now ditched their landlines for cell phones, up from 5 percent in 2004, according to a recent study from the Centers for Disease Control (CDC). Article
• The trend is strongest among young adults: 34.5% of people 25-29 years old lived in households with only wireless phones. For those 30-44, the rate drops to 15.5%. It’s 2.2% for those 65 and over.

This trend strikes me as another tipping point in the way our customers and market are changing. As recently as 10 years ago, if you wanted to market to people you mailed (snail mail) them something, called them at home or at work, advertised in the paper, or put up a billboard. The information you collected on people was focused and not complicated.

Today we have the internet, email, SMS, social networking sites, blogs, do not call lists, spam filters, privacy rules and hundreds of new ways (and rules as to how) we interact with our customers and prospects. These touch points and rules all fundamentally change the way we have to capture data, store data, and interact with it.

How are you handling this change within your business? Have you adjusted your business process to accommodate these challenges? Or are you and your team still working from outdated information stored in multiple spreadsheets, applications, and restaurant napkins?

BlackBerry Speak

Let me start by saying – I am a huge BlackBerry (or Smart Phone) proponent. Many years ago, the President of a previous employer and I tested an early BlackBerry unit. It was a 2 week trial and we would decide at the end whether to roll them out to our consultants and sales team.

During the test, coincidentally, we were both on the tarmac at the same time getting ready to fly somewhere (him coming back west and me flying east) when an angry customer email came through. Because we both had a BlackBerry, we were able to defuse a huge potential issue with our biggest customer in minutes – before our flights took off. Needless to say, we rolled out the units to our team immediately and I have been a fan ever since.

The addition of all those extra hours in the work day and the “always connected” paradigm is a two-edged sword. From a business and customer service standpoint there are few rivals to improved process and rapid response. From a management and personal time aspect, there is a new headache to control. (My wife has a collection of pictures of me in vacation spots checking my BlackBerry - Italy, London, DC. Thank God she understands me well enough to only bring it up once in a while!)

There is another downside to BlackBerry and PDA use – “BlackBerry speak”. Those of us with these addictive gadgets become so used to dealing with emails and responding on the fly that we fall into a shorthand of sorts and don’t always give BlackBerry email responses the measured thought and “fullness of words” they deserve.

There is a time to be quick and direct – and a time to provide a careful, thoughtful response. Customers appreciate a rapid response but not when it might be short to the point of sounding rude. Same thing applies with your internal team. A shoot-from-the-hip answer may meet some speed requirement but cause more problems due to its perceived tone, confusing answer, or lack of focus.

Lastly, we often find ourselves so focused on the email and response process that we forget that what might be best is a good, old-fashioned phone call. Instead of trading multiple emails and creating confusion, a quick call can go a long way to a great customer service experience.

Pick up the phone, call your best customer – or your favorite consultant – and ask them to lunch.

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