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Kiefer Sutherland, star of 24 is currently serving a 48 day jail sentence for a DUI. His popularity with fans has apparently not suffered. Kief is receiving boatloads of fan mail in jail.
Fess up. Acknowledge your mistake and work to make it right. Whether you are dealing with one irate customer or a major recall, “We were wrong, we’ll fix it” goes a long way.
Recently a writing colleague posted an article on the Elance water cooler. The article written by Ron Lindeboom, highlighted the three different buyer types. The article is several years old, but the principles still hold true.
Lindeboom discusses the three marketing types and groups them into top tier, middle market and low end. The top tier clients representing about 15% of your client base are those that value quality and relationship. The middle tier represents about 70% of the market and they want good but fair pricing. The low end wants high end service for cut rate prices. Lindeboom calls the low end segment “Grinders.”
As a business owner, why would you ever want Grinders? Yet, far too many businesses, particularly small businesses fight for this client type. Understanding the psychology of the client segments is important but it’s equally important to understand what type of business you are.
Many small business owners are standing in the welfare line and not sure how they got there. They work hard. In fact they may be working longer hours than CEOs of Fortune 500 companies. They deliver high quality work. Yet, they are barely making ends meet. These businesses are well intentioned but are not appropriately targeting their market or pricing their services.
Other small businesses are locked into a mentality that says they can only compete on price. To win against the “more established,” or “the “larger competitors” they have to compete on price. Does this sound like you?
Still others believe that volume makes up for low pricing. These business owners proclaim “yes our pricing is low but our volume supports it.” These same business owners would like to convince you to work at a fraction of your normal fees because they’re going to give you a large amount of work.
Although I’m humiliated to admit it for a long time I too had a business that was on welfare. My company was turning out high quality work and a sucker for every sob story that justified someone negotiating our rates lower. We wanted to help and by golly help we did to the detriment of our own profit margin. In fact our margins were negative!
I’m here to tell you “Don’t try this at home! You’ll go broke!” I am a big believer in volunteering, giving back and charitable giving. However, when running a business you must realize you exist to make a profit. You can set a fixed amount of time aside to donate business services (and I advocate doing so) but your day to day operations should be generating income.
Let’s look at this from another angle. In corporate America, did your employer negotiate your salary daily? When you showed up for work, did HR say, “Gee you know right now our budget is stretched, so can you work 3 extra hours for half your salary?” Of course not! Yes, companies get into budget trouble and they often solve it by doing lay-offs or salary freezes but no company negotiates your pay (or value) on a daily basis. So why are you doing this in your own business?
Negotiation is a natural part of doing business. Negotiation however is an exchange and not the seller simply giving everything away. It is an exchange to work toward a mutual win where the critical needs of BOTH parties are satisfied. Great negotiations end with all parties feeling like a winner and it sets the stage for a good long term relationship.
However, you are not obligated to negotiate price with every potential client. When you walk into the grocery store to buy a gallon of milk, there is a price you will be required to pay. Do you get to the register and ask to pay a different price? Do you ask them to give you more milk for the same price?
Yes, I realize milk is a commodity and service businesses operate a little differently, but do you negotiate price with your doctor, dentist or hair dresser at every visit? We ask for lower pricing when we beleive the price does not reflect the value but more often than not we simply pay what is asked or we don’t buy.
So, how do you begin turning things around? The first step is to examine what you have to offer. What does it cost you to provide the service? What is the value of that service to your ideal client (ideal being key here as you are not targeting grinders)? Set a fair price and stick to it. Your ideal client will pay you for the value. Grinders will not buy from you.
You may end up with fewer clients, but that’s a great thing. You want fewer clients that pay you what you’re worth. Unless of course you really do want to spend your time killing yourself for the pennies that grinders are willing to pay.
I’ve learned the hard way that clients will only value what I have to offer if I first realize that value myself. This means getting off welfare and saying No to the people who really can’t afford my services. Am I missing out on a large segment of the market? Yes, I am but it’s a segment that does not represent my ideal client anyway.
I hope you won’t mind a departure from business as usual today but I’m excited! After agonizing, writing, rewriting and trashing a number of websites I finally launched the new site. It’s funny how procrastination often leads back to the road of simplicity. I had toyed with complexities that I never would have been able to manage, flash images and flying objects but in the end decided on a simple, clean Web 2.0 design. The whole website experience reminded me of a few valuable lessons that I’d like to share.
Do not be paralyzed by perfection. So often we’re so focused on perfection that we lose sight of the big picture – getting it done. There are times that perfection is required (like in plastic surgery) but there are other times when good enough is really good enough. Spend your time and resources accordingly and saved yourself some anxiety in the process.
Good help is to be celebrated. Greg Ogorek, of Global Internet Services (globalinternet.net) was just the kick in the rear I needed. His expert guidance made the process so easy. I had tried and failed to accomplish this on my own for 10 months, but one good expert was exactly what was needed.
Just do it already. Sometimes we just need to take action. I was so afraid of doing, writing, designing the wrong thing that I had my cruddy old site up for almost a year. As a result I never promoted it or made it work for me. So, I’m taking my own advice and just doing it.
So, please check out the new site at www.wordsforhirellc.com. I will be adding new resources throughout the year and always sharing with you what I learn from my failures and successes.
Until next time,
Karen
I’ve been out sick and am now finally catching up. Before I post the low cost marketing tip, I have to share this great post that I read over on the Media Post blog (http://blogs.mediapost.com/spin/?p=1134#comments):
Tom Cunniff from Combe Incorporated says:
September 27th, 2007 at 7:59 am
“Businesspeople run in herds, for safety. Many of us run in the Formula Herd; our heads down, ritualistically reciting our formulas like a prayer. We desperately hope that we can get rich before our formula loses its mojo. Others of us run in the Silver Bullet Herd; eyes constantly scanning the horizon for Deus Ex Machina. We desperately hope that our Silver Bullet will make us rich before anyone realizes it’s really just a little man behind the curtain.
A few crazies split off from the herd and form their own small groups. We desperately hope that logic and reason will win the day, and that our superior survival skills will make us rich in spite of the insanity of business. Usually the most successful crazies can be found at conferences peddling Formulas and Silver Bullets to members of the other herds.
And, there you have it 
”
I seriously laughed out loud when I read this thoughtful, dead on comment. So kudos to Tom Cunniff! Tom’s comment is a perfect lead in to a discussion of business marketing. Too often people are joining the herd rather than being brave enough to be different and do what works for their business. I read today of an internet marketer who hired a copywriter to write optimized blog posts. Unfortunately the marketer was neither a blogger or SEO expert so had no idea how to evaluate the final product! I applauded the marketer’s honesty and felt bad for the situation. It’s likely that he/she got some advice from the gurus in the herd and eager to achieve success followed along.
Okay, enough of the soapbox. There are so many great low cost marketing ideas that have proven the test of time. Remember it’s critical to evaluate your own market and use only the ideas that align with your overall plan. So the first low cost tip, use your business cards. What? Yep, that little card is marketing gold. You can have really nice business cards printed and still not break the bank. Rather than stick them in your business card holder or wallet, use them. Resolve to pass out ten cards per day. Strike up conversations wherever you go and pass out that card. Drop a few in the thank you notes you send to clients (you are sending thank you notes, aren’t you?). We miss so many opportunities in our day to day life to talk about our business and how we can help people.
You will be surprised at the number of contacts and leads you can develop with that tiny little card. Happy Marketing!
In the past few months, I have watched several businesses open and close in my community. The latest to bite the dust was a New York style deli around the corner. Was it to be my fate to welcome a new place only to have it close it’s doors in a couple of months. In the span of a few months, a coffee shop, Mexican restaurant, grocery store and drycleaners had all shut down. Here in Michigan where unemployment is among the highest in the country, it would be easy to place the blame on the economy. While the economy certainly played a role these business failures can be traced to fundamental errors made by the owners.
Nosiness is a professional hazard, so I talk to everyone, and ask lots of questions. I had chatted with the owners of the businesses on many of my visits so in every case had gotten to know their story. Many of the businesses had opened and closed in less than 6 months. In every case the owners had been filled with enthusiasm and hope only to close up shop a few months later. So, what happened?
The economy does impact spending. But let’s be clear consumers do not stop spending money they simply become picky about where those dollars go. This means that businesses have to work a little harder to attract their customers. Each of these businesses had failed miserably at attracting customers. They opened their doors and hoped for the best. None had a solid marketing plan (I asked) and apparently all were severely under capitalized. The owners all mistakenly believed that they could not afford to market so their efforts were a couple of fliers and coupon offers in local papers. Yeah, that worked out real well.
It may surprise you but these owners are not unlike many business owners. So for all of you out there allow me to share this: Consumers do not have a crystal ball that will direct them to your business. You have to TELL them not only that you exist but WHY they need you. You have taken the time to develop a business idea, raise enough capital to get started so isn’t it worth it to close the deal. Without customers, you don’t have a business so shouldn’t the acquisition of customers play a central role in your planning? Consumers are not psychic and the mere presence of a building (or website) will not guarantee you business. In fact as a business owner, the majority of your time should be spent on acquiring business and creating systems to improve the customer experience. Again – no customers, no business.
Marketing does not require a million dollar budget. There are many creative, low cost ways to acquire customers. The key is to understand your target market and find the most cost efficient and effective way to reach them. Who is your market? (Here’s a clue, your answer should not be “everyone.”) How and where does your market make decisions? How does your product/service help them solve a pain point, or avoid pain? Here’s a great example. The Mexican Restaurant that was briefly open did a fair share of take-out business. They had a small dining area which was perfect for the lunch crowd but most of their business was take out. Yet they did nothing to market or cater to this business segment. What could they have done? Local delivery service could have helped to grow this market. Fax and express phone service are other low cost ideas that could have worked. Dominos Pizza built an empire by filling a customer need and marketing it to death. By the way, they were not the best tasting pizza but they certainly were savvy in their marketing.
Marketing is not a nice to do task, it is essential to the life of your business. You cared enough to start your business so share that passion with your target market by telling them what you can do for them! Stay with me in coming weeks as we look at low cost ideas and methods to get you the recognition you deserve.
Whether you are a football fan or not, you have certainly heard the ugly details of the charges brought against Atlanta Falcons Quarterback, Michael Vick. The case has dominated headlines for several weeks and sparked nationwide anger against Vick.
Vick and co-defendants allegedly operated an illegal dog fighing ring and are been charged with various charges including federal conspiracy. The illegal activity occurred on a property owned by Vick but lived in by his cousin (who has been charged and pleaded guility). According to Vick he was unaware of the activity and rarely visited the property. In spite of his profession of “ignorance” he has lost several endorsement deals and is temporarily suspended from Falcons Training Camp. More importantly he faces five years in jail if found guilty.
I am not sure what the final outcome will be for Vick but the case is a cautionary tale for everyone. Lately, it seems that we could fill a book with tales of “celebrites gone wild,” but at the heart of many of the outrageous headlines is the basic concept of choices.
Every choice we make has a consequence. Vick chose to entrust his home and reputation to his cousin. If in fact Vick did not know what was going on in a home he owned, that too was a choice…and it was a very wrong choice.
We learn from Vick that ignorance is not bliss but it is a choice that can carry serious consequences. As business owners we too make choices. While we cannot avoid mistakes or failure (in fact both are key elements in our growth) we can make better choices. If your choices are driven by knowledge and active decision making and you fail that’s okay. You made a choice and it did not work out but you have an opportunity to learn from the stumble and move forward. However, if you were not aware of what was going on in your company or chose to associate your business with questionable relationships and as a result you fail…well, you have to take responsibility for that and hopefully you can recover.
Successful people guard their inner circle. Not everyone is allowed in to that precious space, related or not. The successful understand that your associations are a choice and can reap negative or positive consequences. They are not willing to damage their earnings or reputation by poor choices and neither should you.
Today take stock of your own moral compass and guiding values. Are your choices aligned with those values? Next, take stock of the people in your inner circle. Are those relationships aligned with your values and vision? Finally, as you seek to erect that fortress around your vision and reputation, where are your blind spots? While it is not necessary to micro manage every area of your life, it is up to you to know what’s going on and understand the choices that others are making which will directly impact you.
As an animal lover I am horrifed by the Vick case. But as a human being I am heartbroken for Michael Vick. It is not easy to watch another person’s life fall apart and in doing so it is impossible not to shine the light back on myself and think there but for the grace of God….