Business Practices: Who’s your best customer?

This seems like a simple question and most of our companies have a database full of figures that could tell us within seconds who spent the most money with our company last year, last month, or even last week.

But who pumped the most amount of revenue into your business last year is often not your best customer. This customer might have cost you in other ways. We all know who this customer is: the one who always has a custom order, the one who spends more time on the phone with your support team than they do working, the one who has the same billing question every month.

So how can you calculate the value your customers bring to your business? Continue reading

Thought Leadership: Admitting you have a problem is the hardest step

Let’s be honest, there is absolutely nothing worse than when something goes wrong and it affects your customers. The angry emails start rolling in, the phone begins to ring and the support cases begin to pile up.

Well, there is one thing that’s worse: when it’s your fault. I don’t mean ‘you’ personally (although that is definitely the worst-worst-WORST case scenario); I mean ‘you’ as in your company, your technology, your product, your vendors that support any of the aforementioned…you get it. Unforeseen problems that cause your customers pain are the pits and figuring out how to deal with them publically can be even more excruciating.

So, what can you do? Admit it, own it and fix it. Oh, and communicate every single step.

Example of Failing at Damage Control
A vendor of ours (who shall remain nameless for obvious reasons) completely dropped the ball on this about a month ago. Their technology went through a major upgrade and bit it hard. The release was not well communicated ahead of time, their technology was down for about a week as the release was launched (luckily, this only affected our use of the technology and not our customers’ use of it), and then the unthinkable happened. The release broke the technology.

As a technology company, we understand these things. Releases, no matter how well planned and deployed, can be nerve-wracking as you push new code and hope you checked every box. I’d say we were actually pretty understanding about the whole thing, seeing as we realize exacty what can happen and how you have to prepare for every possible outcome. Our vendor, however, did not seem to understand these things. Unlike us, they apparently had no backup plan, no roll-back plan and, worst of all, no communication plan.

I know I don’t have to go into detail about how annoying and frustrating a situation like this can be. Let’s just say I spent a lot of time angrily telling their online support center how hopping mad I was and weeks later I still start to blow smoke out of my ears when I think back on the whole thing.

Example of Winning at Damage Control
The other week I got an email from J. Crew. I’m a huge fan of the company in general and I do a lot of online shopping there, although I hadn’t perused the selection online or in person in a while when I got said email.

The email was very simple. The subject line said “With our apologies…” and the succinct email simply apologized for recent support issues they’ve had with the website and call center. (They put the same note up right on the homepage of their site.) They didn’t blame a vendor and they didn’t pretend it wasn’t frustrating; they just admitted it, owned it and said they were fixing it.

As a loyal customer of theirs, I probably wasn’t going to defect after one bad online experience. That said, I wasn’t even affected by the issues and I’m grateful for their acknowledgement. Not only have they retained my good graces, but the first thing I did was come here and tell you how much I appreciated it. Neat, huh?

Moral of the tale of two companies: honesty really is the best policy.

Laura

Industry Thoughts: Let the hard times roll

I love recessions.

Unlike the good times, recessions produce real winners and real losers. The stakes are incredibly high. Like a proverbial hanging in the morning, recessions focus your mind. And your business.

The winners always figure out how to get ahead during a down cycle. Most of the time, they do this by changing the rules of the game. And they do this by changing the essence of their game. While the winners are doing this, losers are whining about how hard it is to land a new sale or keep good people or come up with an innovative solution to their customers’ problems. Winners spend time trying to figure out stuff that’s never been figured out before. Losers spend time doing the same old stuff and complaining that it doesn’t work “like in the good old days.”

A lot of folks in business are saying it’s tough sledding today. And, no doubt, market conditions are hard.

But, is “hard” a bad thing? Or is it really opportunity dressed up in a terrific outfit few notice?

Take print distribution for a minute. This has to be one of the economy’s more sensitive sectors. You have all sorts of commodity inputs soaring higher. You generally see every customer and prospect looking for ways to crush expenses. You even have the relentless march from print molecules toward digital electrons.

Can there possibly be an uglier segment than this? (OK, I’ll give you the airline industry…that one is probably hopeless!).

If you are a print distributor, you have to be asking yourself: “What am I doing and what purpose am I serving and why is it so hard?”

As the executive vice president for looking out the window for a high-tech web-software firm that helps a lot of distributors in the print business, I spent a few hours one morning recently (looking out the window) imagining myself as a print distributor, wondering what would I do.

Here are some thoughts that occurred to me:
1. Once the recession is over, I wondered if my print distribution business could be in a different business, what might that be?

2. And then I wondered, “What if I transformed my business and its abilities to manage products, suppliers, programs and e-commerce technology, etc. into an execution firm instead of a distribution business?”

3. And, “What if I called on a bunch of marketing executives in my area and asked them to have a conversation over coffee with me about how they plan to execute their branding and messaging programs in an increasingly competitive and cost-conscious and climate-challenged environment? Do they have the execution resources, people and technology to pull it off?”

4. And then I wondered if there are any marketing execution firms in my area that know how to do this as well as my firm? I even looked up marketing execution firms in the yellow pages and couldn’t find anything listed. And then on Google I found a lot of usual ad agency suspects but very little out there in the form of competition that offers a blend of production know-how to supplier management to program/logistics execution to e-commerce technology savvy.

5. Finally, I wondered what if I took all that know-how, packaged it up and positioned my business as a leading marketing execution firm (or agency) intent on saving my customers money; helping them more effectively execute their brand promise and message, driving greener programs for them and letting them utilize really good e-commerce technology for free in their businesses. If I could deliver all of this, would my business (formerly known as a print distributor) be a winner?

My answer to that last question isn’t important. But yours is. It’d be great to hear your thoughts.

Meantime, here’s to your successful search for answers that set you apart as a winner. And recognizing, like a lot of other winners, that a recession is a terrible thing to waste.

-Tim

Radio Four51: Making your Business More Valuable

Today’s Radio Four51 segment is made up of highlights from our May Salon Four51 session that featured guest host Dave Latzke, a financial expert at Cherry Tree.

Making and keeping your business as valuable as it can be is important at every stage of growth–even in times of merging or closing. Dave has extensive experience in corporate finance and joined us to discuss some easy–and essential–ways you can maximize the value of your business, no matter what stage your business is in. Have a listen and learn what more you can be doing to make your business more valuable.

Laura

Client Growth Corner: The Right People in the Right Positions

The Client Growth Corner is an ongoing column from our Client Growth Coordinator.

Hi All,

As Four51 continues to evolve and grow, we seek to bring you new ideas to help you grow your business. I thought Thursday’s session of Salon Four51, “Maximizing the Value of Your Business” with David Latzke, was an excellent example of the kind of thought leadership we are trying to impart.

The book Good to Great by Jim Collins has been referenced frequently by Four51 during Salon presentations and in sessions of University Four51. David Latzke referenced it when discussing the Hedgehog concept. However, the point that really hit home for me, and is also discussed in Good to Great, was David’s point regarding how having the right people in the right positions greatly affects the value of your business.

Now that you have connected to the Four51 network, you have expanded your capabilities and changed the direction of your business. Unless you are a start-up company, this differs from your past mentality. This change needs to come hand in hand with a re-evaluation of your resources. With expanded capabilities come new marketing strategies, new messaging, new sales processes, and an overall new style. Are the people you have in place today going to help drive the growth of your business by rallying around and participating in this new style? Now is the time to make sure you have the right people in the right positions to help you grow your business.

~Maren

Thought Leadership: A word from David Latzke

Hello everyone,
I am looking forward to our May 17 Salon Four51 presentation, “Maximizing the Value of Your Business” as I believe this will be a good opportunity for Business Owners, as well as anyone interested in maximizing the value of the business they are entrusted with. This of course would include CEOs, CFOs, GMs and other executive officers.

We will cover topics such as (1) Getting your internal operations in order (2) Looking outside your organization for strategic advantages (3) Day-to-day tactical points to focus on, and (4) How best to take advantage of external resources.

I will draw on my 25 years of experience serving as a financial advisor and executive across many industries to lead this discussion.

We will conclude the session with a Q&A period which will allow us to address specific concerns or questions of the group.

You can register here to join us. See you on the 17th!

David Latzke

Thought Leadership: Writing a Great Sales Letter

On the Graphic Arts Monthly website I found a fun and insightful article by Bill Farquharson entitled “The Perfect VDP Letter.” The article discusses the lost art of letter writing and the power a great personalized letter can have as a sales tool. He offers an example that he finds “solid and professional…commands attention.”

We at Four51 use sales letters (and even gave some examples in our last semester of University Four51) and I wonder if you do, too. What are your tips for writing a great sales letter? Or, do you think letters are too antiquated to be useful in a tech-savvy world?

Tim Morin

Industry News: Small Business News

Here’s a great article from Hoovers, a D&B Company, entitled “Fastest Growing Small Business Industries” that we thought you might find interesting. The article, available here, discusses that “today’s fastest-growing small business industries are taking advantage of improved technology and niche-market opportunities.”

The second section of the article, “Top Technology Trends for Small Businesses in 2007,” states: “Today’s most successful small businesses are using technology to solve administrative, security or technical challenges, using marketing partnerships to help generate new business, and using consultants to ease the accounting burden, thus enabling the core business to remain more focused on serving the needs of its customers and growing revenue.” This is certainly a sentiment Four51 agrees with!

Finally, the article glosses some key tips for 2007: (1) using search engines is a great way to attract new business, (2) close attention should be paid to the costs of organizational growth and the costs of generating new business, and (3) corporate security is a must, “Small businesses cannot afford to be naïve when it comes to protecting their intellectual property and proprietary databases from former employees and competitors. Businesses must ensure the best possible informational safety and operational contingencies are in place and tested.”

Check out the article, there’s a lot more great information.

Tim Morin