This is no Joke!
Perception can be the downfall of all great ideas. So your business is suffering lately. Ask yourself how that has come about? Is your answer something like “Well, because of the Recession, of course! Doh (Homer Simpson style)”
Now ask yourself this question – “Am I doing anything different today than I was two years ago?” – If the answer is No, then you are not adapting and being flexible in your business and your approach to your clients. Do you think their needs have changed over the past 2 years? Of course they have. They are looking for more value for their less attainable cash.
Below, I reveal the 16 point process to better business, so read on…
A business in recession is similar to a business at start up stage, according to Brad Sugars, the owner of the leading Coaching Franchise worldwide, ActionCOACH. Sugars gave a talk last night at Thomond Park in Limerick (that’s in Ireland, by the way) labelled “The Recession ends HERE”. His aim was to challenge all 400+ attendees to quit procrastinating and whinging and TAKE ACTION. I was looking forward to the presentation and to learn about his presentation style and sales tactics as he wasn’t there for the good of Ireland, but I truly believe he was there for the good of Business Owners in Ireland.
Brad Sugars is a personality type 3 – The Achiever, and this permeates throughout his very being. An Australian, he gave himself permission to make jokes about the English, Football and Cricket. A very amicable man with a great sense of humour and loaded with his 16 step “Chassis of Business”. This type of person, at the age of 8, sells his Christmas Presents to his brothers, so has been an entrepreneur since 8 years of age. In hindsight, he now realises he should have leased the presents, get paid but still get the presents back!
He based his theories around the seasons of the year – so we have just come out of Summer season, and have passed through the Fall, heading into Winter. Now, being a historically agricultural nation, we understand that we must make hay while the sun shines, for the coming winter when feed is not as abundant. His challenge to us was this – did we put resources aside as the summer progressed, in preparation for the “Fall”, and the leaner times of Winter? A lot of people in the room last night freely admitted that NO, they did not put resources aside during the boom, so they could fall back on them in recession times.
He mentioned that a lot of our client base is in hibernation during these hard times and again challenged if we are doing anything different to coax them out of hibernation during lean times. I was thinking maybe there are a few ostriches, me included, and we need to wake up and smell the challenges ahead.
2 things we need to focus on during these times are FIRST Cash Flow and THEN Capital (investing in assets)
Sugars’ “Chassis of business”, which I am sure is trademarked, basically provided a formula to become more aware of our final profit. It looks something like this:
(Leads) X (Conversion Rate) = No. of Customers
(No. of Customers) X (No. of transactions) X (Average Sale €) = Revenue
Revenue – Margins = PROFIT
One point that was clear from this – MOST people in the room did not know their no. of leads. (Know your no. of leads – don’t try and manage something you cant measure!!!)
His advice was to work on the 5 areas mentioned above together, not one by one. He mentioned you wouldn’t go to the gym and decide “today I am going to exercise my right arm, next week I will exercise my left leg”.
If NOTHING else, decide to endeavour to increase the first two by 10% and that will improve your profits hugely. He mentioned we should be concentrating on profits and not just revenue. Create better margins BUT cutting costs is not always the answer. I personally believe by cutting costs, you are cutting service and value, so rather improve value for your customers and they will more than likely stay with you.
“Never agree with an Idiot – all you do is create two idiots!”
Grade your customers into A,B,C,D – we all know the 20/80 rule – get rid of the Grade C and D Cusomters (let someone else have them) and concentrate on retaining your better profit-enhancing customers, and reward them is what Sugars suggests.
Everything is now cheaper – Advertising, leasing, rents, and materials. So realistically we are spending less. Be wary of letting go good people – they probably pay their own salary, and more.
Brochure disease is the fastest killer of sales. The analogy he used here was a Travel Agent. When we ring up to find out about the price of a holiday, we are told that we will be sent out brochures. END of possible sale. Sugars suggests instead, when the phone call arrives try “Thank you for your call, just so I can help you best, would it be OK if I asked you a couple of questions?” Your customer is all ears, and you can really find out their needs, and then satisfy those needs. Turn your “PRICE” shopper into a “VALUE” shopper.
He emphasises how important it is to manage your business. Running a business is not managing a business. If you are running your business, you are in the thick of it, and not managing it from the peripherals. Now is time to manage your business, and time to manage yourself. He suggests we put more investment into ourselves than our business. And now is the time for that investment. We have more time than ever before Spring starts again to upskill and retrain, educate and broaden our horizons. “If you think education is too expensive, try ignorance!!!” he declares, “Trial and Error wastes time and money – get yourself a Business Coach and get there fast”. At this moment I realised the presentation was coming to a close, as it is now time for the hard sell.
Aside from selling us courses and coaching, this man KNOWS business worldwide – he trades in 47 countries. He makes it his business to know his business (at this moment, I had a vague flash of his bedtime reading).
So, the 16 points are in the order that he gave them:
- CUSTOMER RETENTION – grade your customers, time to get rid of the profit sucking time wasters
- PEOPLE RETENTION – hold on to your good people – they will pay themselves
- RECRUIT STARS – take on 1-man operators locally – give them a job, they will bring customers with them
- ADVERTISE – cheaper than ever, but manage your campaign well
- NO DISCOUNTS – discounting kills business, and you are attracting cheap clients, not quality clients
- ADD VALUE – learn all the objections of your leads, and have your answers ready
- GIVE AWAY – give away a low cost product to you, that seems to have a big value
- KNOW YOUR NUMBERS – boring I know, but if you don’t know your business, how can you manage it
- ADD OR REMOVE SERVICES/PRODUCTS – remove what is NOT selling, research what is, and add it
- EDUCATE 100% – make sure your existing customers know ALL that you sell/provide
- BE FLEXIBLE – kill the sacred cow, make changes if they work
- BE DIFFERENT – do something different, rather than cut price or claim “better service”. Just do something different to your competitors
- LEARN & TRAIN – up-skill, learn, read and train yourself
- HAVE FUN – if you are not having fun, you are not enjoying your business. Business goals should meet your personal goals
- MEASURE EVERYTHING – productivity, performance etc.
- GIVE MORE – UNDER-promise and OVER-deliver! – Do more than your customer expects – reward with surprises, gifts
He also mentioned GET A COACH, and I very nearly did!
Final thought of the evening was – “Never wish your life were easier, wish that you were better!”
The networking possibilities were difficult with 400+ attendees but I had met up with Adrian and Ellen of peoplehunt before the event and had great fun discussing Sugars style. Adrian Avendano has been chatting to over 400 strangers over the past 7 months to learn about interactions between humans and gave a very good talk on “Human psychology and social interaction” at Bizcamp Limerick on March 21st, 2009.
I would have to admit, despite Sugars’ intentions to drum up business last evening, everything he and his coaches did last night was in line with what he spoke about so not only is he talking the talk, he is walking the talk.
So if you make claims about your business, make sure you are walking the talk. If you are a small business owner, and don’t want to commit to a long-term coaching contract; get in touch and we can look at improving your business goals and profits.
The recession wont last, just as the boom didn’t last. Prepare now for Spring – plant your seeds and nurture them. And remember that news of recessions and booms take 18 months to filtrate through economies, so get prepared NOW for good times ahead.