R is for Recession...

It is unfortunate that when business is good we believe that it is due to our knowledge, passion and entrepreneurial skills, however, when business is not so good we blame the recession, the government or our customers.  On an incoming tide,  all boats rise and so it is with companies in a strong market; whatever we do will probably work, and sometimes a business can be successful in spite of the owners knowledge passion and skills…

When business is tough we realise that what we used to do simply doesn’t work, the tide is flowing against us and we have to find “new” ways of attracting customers and growing our sales. In reality we don’t need to find any “new” ways at all – we just need to go back the basic principles that the levels of our previous success had afforded us the luxury of ignoring.

R is for Results – there are 5 Principles to follow to get Results…

1.       Philosophy – be clear on your goals, standards and values. Your business will be a reflection of you and it may be that you need to change, learn new skills or think differently.

2.       Product – is your product or service truly excellent? Is what you do attractive and valuable to your clients, is it unique and different from your competition?

3.       Process – does your business only run when you are there? Remember, it is not what you supply but the context in which you supply it that makes the difference – is excellence systemised, or is it a lucky random occurrence?

4.       Promotion – are you marketing your business effectively? Are you sending compelling messages to your defined target market and can you measure the results you are achieving?

5.       Profit – is not your objective. Profit is a symptom of everything else that happens in your business, the outcome of the first 4 Principles. If your profit is not where you need it to be, simply look at your Philosophy, Product, Process or Promotion to find the solution.

The 5 Principles should be approached in sequence – it is no good having great Promotional activity if your Product and Process is not up to scratch for example. In my experience, we must start with ourselves – challenge ourselves to learn adapt and change at the same pace as the environment changes around us; only then will everything else fall into place.

It's the Recession Stupid...

One of the most frequent questions I get asked by business people, whether it is when I’m on stage, with a client or at an event is – “how can we grow in a recession..?”

Even when I reached out to my network and asked for ideas for a title of a new event, EBook or workshop – the instant response was the same – “how can we grow in a recession..?”

So this Blog is a prelude to an EBook a Workshop and a Business Master Class event that will seek to answer this very question. If you’d like more details on these events, see the contact information on our website – or simply email me on davidholland@resultsrulesok.com

First, there are two harsh realities of business, the people that manage them and the environment in which they operate – I will explain both realities by telling a couple stories that I hope will bring clarity…

Harsh Reality # 1 – It’s not about the Recession it’s all about You.

When the market is buoyant, cash is available, companies are expanding and recruiting, confidence is up and life is good – businesses do well. In fact under those conditions, just about any business will do well regardless of how it is built, run and managed. All boats rise on the incoming tide…

When business is good there is a tendency (and I know this won’t apply to you) for some other business people to associate the business success with them; it’s their ideas, direction, inspiration and business intellect.

When business dips and the results stagnate or decline, it is these same other business people who blame the market (recession is such a convenient term), the Banks, the Government, Customers, Employees – in fact anything is blamed rather than the unfortunate Harsh Reality that they simply do not know what they are doing. More to the point, they never did – they were successful in spite of themselves, the historic strength of the market simply masked over the cracks in their ability and lulled them into a false sense of security; their self-belief and ego being massaged by the returns on the balance sheet.

So the first Harsh Reality is to recognise, or of course for others to recognise, that the Recession is just an excuse and that the results in any business are a direct reflection of the ability, knowledge, passion and skills of the people who run it – if you want better results, get better ability, knowledge, passion and skills.

The challenge here is that this is a potentially huge slap in the face to the ego of these other business people. Admitting that we need more knowledge and passion suggest that we are not as clever or grand as we thought we were and have to adapt our identity from being the “know it all guru..” to become the eager student…

Harsh Reality # 2 – It’s not about the Recession and it’s not about anyone else.

In the USA a business owner who happened to be a reasonably recent immigrant there was being interviewed about the success he had achieved in developing a chain of Coffee shops in a large east coast city. From humble beginnings, in spite of English not being his first language, and with little money he had built a successful and thriving business that was the envy of others in the sector.

The interviewer introduced him onto the radio show and the first question was.

“so tell us, how you built this thriving business in the middle of the deepest recession since the 1930’s..?”

His answer was perfect and in my view should be printed on not only the mind but the business cards and store fronts of every business owner. 

“I didn’t know there was a recession, no one told me…”

This simple story explains exactly why some people have struggling businesses – they are told that things are tough, they focus on it and guess what; things get tough…

Harsh Reality #2 is that you absolutely must keep focussed on your business, not listening to the news, reading the headlines, or having pity parties with the poor souls who read the Daily Mail, Express, Mirror etc. There is only one page in a newspaper that is factual – and it is at the back, it reports the actual scores recorded in the football.

It could also be argued that the statistics on page 3 of The Sun are accurate but that is a different discussion…

Remove from your network all negativity, speculation and hearsay – this may involve not talking to certain people – and you know who they are; yes you do..!.

Put into your network bright intelligent enthusiastic people who believe in you, will help support and guide you. Build clarity of your vision, focus on you customer and the experience they have when the trade with you – focus on simply being the best there is and then it doesn’t matter what the market is doing, you will be doing great…

Sometimes ignorance is indeed bliss…

Strength in Numbers...

A Brand is one of the most valuable, intangible and indefinite assets that a compancan have. Organisations such as McDonalds, Coca Cola, Nike, Google, and Virgin have spent millions building up their reputation and branding through images, logo’s and strap lines.

Having a brand removes the uncertainty from the buying process – the more certainty surrounding a purchase the less the resistance will be to making it. Conversely, the more uncertainty surrounding a buying decision, the higher the levels of resistance that will have to be overcome in order for the purchase to be completed.

Branding makes the invisible more visible; the intangible more tangible and the uncertain more certain. All a brand essentially does is allow us to make emotional or instinctive decisions based on perceptions of quality, value and service represented by the Brand such that we don’t need to logically justify the emotional decisions we make. IBM famously used the advertising slogan – “no one gets fired for buying IBM...”

If in doubt and in the absence of other information we will tend to be attracted to a recognised brand rather than take the “risk” buying something that is unknown to us and or potentially of lower quality, reliability or levels of consistency. I have used the example of McDonalds for demonstration purposes in the image, but the same concept can be applied to Hilton, The Wynn Las Vegas, Gucci or BMW. 

The higher the levels of Brand Recognition; the lower the resistance to purchase. 

Rule # 1 – consistent, predictable and branded mediocrity will beat occasional uncertain excellence.

In the absence of a recognised brand, buyers will tend to be more cautious – looking for evidence to support their buying process. In the medium size business sector we are not in the business of building a brand – we are in the business of building reputation and it is the transmission and perception of our reputation that attracts prospective clients to us whilst the consistent delivery of experiences that exceed expectations, keeps customers returning to us on a regular basis.

Remember that we have to replace the power of a brand; we are selling what is essentially an invisible, intangible service (at least until it is experienced for the first time...) and we have a number of strategies available that will enable us to achieve this. 

Rule # 2 – in the absence of a Brand – other evidence is needed in order to make a buying decision.

In his book “Influence” Dr Robert Cialdini explains the Psychology of getting customers to say “yes” and proposes six keys of influence that conspire either with us or against us when we are marketing and presenting information about our services – this is where we can win when we come up against bigger or more easily recognised brands. 

a.   Reciprocation 

i.    Explanation – we are obliged to respond to the experiences we have. If I buy you a drink at the bar, you have a natural obligation to return the favour. This works in the positive and the negative, remember an eye for an eye and a tooth for a tooth.

ii.    Application – people will spread the word about the experiences they have when they buy from us. A mediocre experience may not generate any feedback at all and a bad experience is likely to trigger a negative response of some sort, however, it usually takes an amazing experience to elicit a positive comment. It is the generation of these positive responses that must be our objective. We need to exceed the expectations of our clients, such that not only the service they receive, but the context in which it is provided, triggers a positive reciprocation of testimonials, referrals and reputation development. 

b.   Consistency 

i.    Explanation – people generally don’t want high levels of uncertainty or perceived risk when it comes to making a buying decision. They will look for signs of consistency and trust such that they have the belief that we not only deliver on our promises, but deliver on them consistently and predictably every time. 

ii.    Application – having systems in place that ensure excellence is the standard, is the surest way of achieving this. There are numerous ways that organisations have achieved this from the well known Franchise organisations to Zappos, Cirque Du Soleil, Ritz Carlton Group, Apple and Nordstroms. 

c.    Social Proof 

i.    Explanation - people will look to other independent people for opinions about our services. People like to have certainty when making any decision and a contributory factor to developing this certainty is what other people say about us. 

ii.    Application – testimonials and customer feedback is critical here, as is “collective evidence” or the power associated with being part of an organisation or group. If as the business owner you say something positive about your venue; it’s sales and marketing. If a client says something positive about your venue; it’s the truth – in the eyes of your prospects. Social Proof is how we can enable our prospects not only to emotionally engage with our business, making the invisible visible and the intangible tangible; but it limits the need for logic i.e. price comparisons and discount discussions to enter into the process.

Rule # 3 – People do not buy on price – unless we let them. 

d.   Authority 

i.    Explanation – we automatically trust those who either are or appear to be experts in their field. If someone who looks like a dentist prepares you for root canal treatment you believe that they know what they are doing; have you ever asked to see the qualifications or certificates that your Doctor or Dentist have..? 

ii.    Application – this is the first instance where the power of the group comes into force. Being associated with a recognised group or collective, automatically suggests that you have “qualified” to be included and are therefore better, of higher quality and standards than those who do not qualify to be part of the group. Maintaining high standards and having specific objectives towards excellence, that can be measured, will enable the power and perception of authority suggested by inclusion within the group or association to be kept high – membership is a privilege.  

e.   Liking 

i.    Explanation – we tend to buy from people we like and are like. The same goes for organisations, we will buy from them when they resonate with us and we like, not just the people within them but the Philosophy and Values that an organisation demonstrates.   

ii.    Application – being public with the Philosophy and Values of your organisation, letting people connect with your team with images and even video is a great way to build rapport with your clients even before they have bought. It is the degree of liking that will also determine the extent to which they come back and buy from you in the future. Training and passionate evangelical commitment to excellence, standards and the entire customer experience are key here. 

f.    Scarcity 

i.    Explanation – simply put we want what we can’t have, and attribute higher value to that which is scarce or appears to be scarce.   

ii.    Application – this again is where exclusivity and the power and perceived value of the group can be used to our advantage. It is unlikely that any of us can actually define what our market share or market penetration is in terms of the total UK market, and if we can our shares will be so low that they are almost meaningless. Let’s say you have 1% of the total Market for Venues and Conference events in the UK – you cannot possibly cope with all of it so by definition you are a niche player, customers are abundant and you are the scarce resource – providing of course you standards and performance are exceptional.

Being part of an exclusive group means that the standards and reputation that the group stands for are only available through members of that group – that in itself is highly attractive and establishes scarcity simply through membership and association with the group 

Rule # 4 – A Quality Niche business must beat their more recognised branded competitors in terms of quality, service, uniqueness and consistency; gather together in groups and shout loud so that they don’t have to also beat them on price.  

     The Ultimate Question 

Accepting that we need to overcome any potential resistance in the absence of strong branding – we clearly need to achieve our competitive advantage through service and quality differentiation and not price.
     
Holding ourselves accountable to the highest standards and measuring our performance against them whilst challenging is in reality the only option we have either individually or even more powerfully; as part of a powerful, strong and recognised collective or group. 

Traditionally, customer feedback was based on subjective matters, scored over a range of 1 to 5 or based on comments and “feedback” even nominating individuals for praise. In reality and to truly get an objective measure of performance, accepting that clients buy emotionally, we need to assess their levels of emotional engagement with the service that we provide. Emotional purchases need emotional measures not logical ones, otherwise there is an incongruence in the process.

In the book “The Ultimate Question” Fred Riechheld defines a revolutionary system of engaging clients in an emotionally driven response process that simply requires them to answer a simple question. 

     “On a scale of 0 to 10 where 0 measn “not at all likely” and 10 means “extremely likely” how likely is it that you would recommend XXXXXXXX to a friend or colleague.

Whilst this sounds very simple it is the scoring method that forces us to raise the bar of quality, service and uniqueness. Under traditional conditions, when asking survey questions involving a scale of 1 to 10 we would have been satisfied with an average score of say 80% - on the face of it this looks good.
     
    The Net Promoter Score is different, the scoring is heavily weighted such that it represents a very harsh and what may at first sight appear to be somewhat unfair.

     The scoring system works like this;

0    1     2     3     4     5     6     7     8     9    10

Scoring between 0 and 6 results in a score of -1          Scoring a 7 or 8 results in a score of 0          Scoring a 9 or 10 results in a score of +1

What this means that is in order to score a maximum 100 from 100 questions the scores have to be either 9 or 10; as soon as the scores start to drop to 8 or 7 or even lower the scores drop dramatically – if everyone scored our business at 8 out 10,instead of being happy and satisfied with 80% under the traditional methods of rating performance, under the Net Promoter Scoring system – we achieve a score of 0 

What this means that is that in order to achieve high scores under these conditions 

we need to be truly excellent and deliver remarkable service on a consistent basis – this is a tough rule and holds us accountable to the highest of standards.

       See Rule # 4 for the reason this is so important...

The benefits of this process are amplified when there is a group or association of companies that combine and compare scores under this system. Being part of the group allows best practice to be shared, standards and performance to be monitored, with collective targets for improvement being agreed between the members – the collective strength of the group is stronger than the strength of an individual.

Are you a Leader or a Manager..?

No one truly understands Leadership – that is why so many books are written about it, with each author giving their own “formula” for success.  I have read dozens of them and although the titles often include the term “Leadership” – what they are essentially talking about is how to get other people to do something they wouldn’t otherwise do in exchange for money or reward.

This is not Leadership – this is Management.

I have seen plenty of “Leaders” who hide behind the veil of Management in the belief that their position within a corporate structure somehow transforms them into gurus and experts that should be listened to and copied at every opportunity. Take away their position in the company and they crumble, very few will actually admit that they became good Managers and anointed Leaders simply because of the elevated positions they were promoted to in someone else’s organisation; they believe it was them all along…

It is relatively easy to be a great leader when you pay salaries to everyone so that they follow you, and if they don’t follow you; they get fired…

So what is Leadership..?

First, Managers do not need to be Leaders – they have authority given to them; they have rules, regulations and procedures to use to control people in order to produce a specific result. If a Manager is a Leader as well – then they will be truly effective and it will show in their results and in the spirit and culture of their company.

Second, Leaders do not need to be good Managers – they lead by example with the consent of their teams and those associated with their cause or vision. Leaders don’t pay people to follow them; they attract and inspire them to.

In business we have to be Leaders in our own respective fields, whether that is thought, technology, service, product or quality. Our clients have a choice, and only those who are capable of leading and inspiring their teams and their clients will be truly successful.  A great Leader will hire great Managers and attract people, clients and associates to achieve the Vision. 

So a question for you – who is following you without being paid to do so…?

How would you have to behave, what value would you need to add and how inspiring and attractive would you need to become such that you were truly a Leader in your field..?

Leadership is about Vision, Passion and Commitment to a cause or objective – this will encourage people to follow you or decide not to – most leaders are loved and despised equally; mediocrity is not an effective Leadership position.

To be great Leader become evangelical about whom you really are, what you do, why you do it and your purpose in life – it’s time to stand for something and go public. Then take action to achieve your visions and dreams; the right people will follow you and the Leader will emerge.

Remember, Managers get Qualified – Leaders get Identified