It All Goes Back Into The Box

Ken Blanchard, author of “The One Minute Manager and other business books,”  told the story about the little boy who really wanted to beat his grandmother at Monopoly.  He studied.  He practiced.  He learned.   Until one day, he beat her at the game and told her, “Finally!  I beat you.”

She smiled as she picked up the pieces and put them back into the monopoly box.

She then told the child, “Yes, you did.  But let me tell you another lesson that I’ve learned about playing the game of life.  You can work hard, study, practice and become whatever kind of person you want to me.  But when the game of life is over, it all goes back into the box.  The only thing that’s left behind is what you’ve created or done for others.”

I’ve heard the phrase “You have to give to get,” and have also heard results of how people have been blessed as a direct result of what they have given to others.

But I have a different philosophy.  I don’t think you have to give to get.  I think you give, not because of what you will receive in return, but because your giving is from the heart.

There’s a country-western song that tells the tale about a young man who stopped to help an elderly lady stopped on the highway with a problem with her car.  The young man was broke but instead of taking payment for his help, he told the lady to “Pass it On!”  The song goes on to tell of a waitress, who was pregnant, tired, and discouraged.  An elderly lady left a $100 tip.  That night the waitress laid in bed beside the young man who had helped the elderly woman with her car and told him about the woman who had left the $100 tip.  And the song ends with the magical words of “Just Pass It On.”

I am a business coach for a County Business Empowerment Class in my community.  Last week, a local entrepreneur, who has become very successful, spoke about how he started his business hoping to make lots of money.  He said that he was in the business for the money–not just because it enables him to live well and do things he’s always wanted to do–but because he can use that money to help others as well.  I remember the author of “Everything I needed to Know About Life I learned in Kindergarden” say basically the same thing.

Successful entrepreneurs have to be interested in money if they hope to be successful.  You can’t just forget the financial parts of a business and operate it any way you feel like.  How you treat your customers, your investors, and even your vendors go a long way towards determining how financially successful you will be.

There are, of course, those like Ken Lay of Enron fame and Mr Matoff of Ponzi scheme fame, who cheat others to make their millions and then use it to live like kings.  Then there are those entrepreneurs who achieve their business goals while practicing the principal of “Pass It On!”

When the game of life is all over, and it all goes back into the box, the Ken Lays and Matoffs of the world will leave behind people who have been hurt or destroyed.

The “Pass It On” entrepreneurs will leave a legacy that may not even be known by most but will be appreciated and remembered by those they helped.

We are in the midst of changes in the world.  Changes bring opportunities.  What will you do with them?  Share your comments!

Customers Are Your Business!

Most businesses accept loss of customers as a fact of life — a cost of doing business. But it costs much more to obtain a new customer than to keep an existing one.  If you can increase your customer-keeping rate by as little as 10%, you can increase your long-term revenues by more than 50%.  An amazing increase in income, if you think about it.

One of the reasons for this is that it costs five to 10 times as much to acquire a new customer as it does to sell products and services to an existing customer.  Once you’ve acquired a customer, you no longer have to convince them that you’re the company to buy from.  Your primary goal is to let them know how much you appreciate their business.

I read somewhere that a jeweler once said, “If I lose the diamonds, the insurance company will pay for them.  But if I lose my customers, I’m out of business.”

Something to always keep in the front of your mind is:   A business only has two functions: to serve its customers better than anyone else and to make a profit. If your business fails in either function for any length of time, it will fail.  This is true in boom times and in depressed times.

Why do customers leave or buy once and never again?

A consumer Services Institute study showed that:

  • 1% die
  • 3% move away
  • 5% buy from friends instead of from you
  • 9% prefer the competition
  • 14% judge your business by a bad encounter
  • 68% leave not because of anything you did.  They’re not angry or dissatisfied with you.  They left because they thought you didn’t care about them.  You didn’t make them feel special.

The solution is simple — Treat all of your customers like they’re special.  This is called Relationship Marketing and is something we’ll discuss in more detail in later posts.  But basically the secret to Relationship Marketing is simply having  Regard
Respect
Admiration
And Appreciation for your customers
And, most important of all, letting them know that you do!

Keep Your Business Nimble

Jack is Nimble - Jack is quick!
Jack is Nimble – Jack is quick!

One of the biggest benefits that we, as micro business owners, have over large businesses is the ability to be flexible and to change quickly.  We can respond to market changes and trends.

We can change something, test it to see if it works, and if it doesn’t, change it again.

If you’re an online business, as I am, you can make changes daily on your webpages.  If you get a great price on something or a new item comes in, you can tell your customers about it immediately on your website or by sending out an email message.

Michael Gerber, author of The E-Myth tells us that “the difference between great people and everyone else is that great people create their lives actively, while everyone else is created by their lives, passively waiting to see where life takes them next.  The difference between the two is the difference between living fully and just existing.”

The same statement can be applied to our businesses.  We can wait as the economy and our customers determine where we’ll go next or we can get off our duff and take charge.  We can exist or grow our business to its maximum capacity.

Regardless of what kind of business you’re in, there are only four ways to grow that business:

  1. Get new customers
  2. Increase the dollar amount per transaction
  3. Increase the number of transactions per customer
  4. Increase the length of time your customer stays loyal to you.

One of the biggest mistakes that entrepreneurs make is focusing their entire energy on getting new customers.  Not only does this cost more than keeping existing customers, but it takes more effort because you have to be constantly looking for new ones to replace the ones you lose.

The other three options depend on your staying in touch with your customers on a regular basis and ALSO on continuing to think of reasons for that customer to buy from you either more often or spend more when they do buy.  Creating systems (something I’ll discuss in a later post) makes it much easier to stay on top of this and make it work effectively for you.

For example, you sell a baby gift.  Contact the sender 11 months later and suggest sending a one-year-birthday gift.  Your Realtor customer orders a closing gift.  Suggest that they stay in touch with their customers (and get those listings and referrals) by sending a six-months gift and a one-year-anniversary gift.

Add-on gifts can increase the dollar amount for a transaction.  Think outside the box and look for new and different products that they “simply can’t resist.”  Or how about creating a Costumed Delivery for an extra charge.  A jolly leprecon could deliver a St. Patty’s gift.  Santa or one of his elves could make those Christmas deliveries.  Or, if you’re one of the fortunate few who can carry a tune (and that’s not me!), provide a singing delivery service.

Being a micro-business is what enables us to be Creative Gift Entrepreneurs.  So put on your creative thinking cap and think of some ideas that would enable you to be nimble and test some new and different marketing ideas.  And while you’re at it, share some of those ideas with us.  Just click on “comment” below and share.

Concerned about your customer’s budget?

llbeancatalogOne of the most valuable things that I have learned through the years is to study what other industries are doing and see how their successes can be applied to my industry.  Today’s tip isn’t from the gift basket industry.  It’s from L.L. Bean.  Now, just in case you are one of the few that aren’t familiar with this company, it is one of the leading catalog companies that sell outdoor clothing and gifts.

Now most of us, as small micro businesses, don’t have the funds to print full-color slick catalogs of the L.L. Bean quality but we can perhaps swipe an idea that the company used in a letter from the company’s President/CEO to its customers.

The letter begins “Today while many familes are looking for ways to stretch their budget, they’re often challenged to make the difficult decision between quality and price.  At L.L. Bean, we’ve never offered a choice — we’ve always insisted on both.”  He then refers to what he calls “Bean Value” items — many of which are customer favorites–whose prices haven’t gone up in price in years.  In some cases, the prices have actually gone down.  “We’ve never played games with prices — in good times or bad,” he continues.

I’m not suggesting that you copy this letter but to use the basic idea to reassure your own customers that you are concerned about their budget and to tell them what you are doing about it.

Add your comment telling us what you are doing to reassure your own customers.