Entrepid

If brevity is the soul of wit, I can think of no better example than Pick Two.  This little tool is as powerful as it is underused, so I’m doing my part correct that oversight.

Who Knew Software Geeks Were So Smart

Way back in the mists of time, maybe 30 years ago or so, software developers then, like today, were struggling with the unreasonable demands of their customers - both internal and external.  The customers wanted a solution tomorrow, that was bug-free, and didn’t cost an arm-and-a-leg.

Someone very smart came up with a simple solution to communicating the problem to customers and getting them to make tough choices.  It was called “Pick Two”, and did more to crystallize the problem than any lengthy whitepaper could dream of.

• You can have it Good.
• You can have it Fast.
• You can have it Cheap.

          Pick Two.

Just 17 words.  Even shorter than the Gettysburg Address, and just as effective.

Pick Two Applied to Healthcare

Not too long ago, Arnold Kling of EconLog posted his version of a “Pick Two” on healthcare:

• You can have the best quality healthcare.
• You can have unrestricted access to healthcare.
• You can have someone else pay for it.

          Pick Two.

I think this does a great job of summarizing the debate on healthcare in just 23 words.

Delegation and the Business Owner

So, in the spirit of experimentation, I am going to attempt an occasional series of Pick Twos.  Maybe we can create a new Meme together.

Today’s inaugural contribution:

• You can grow your business.
• You can do everything yourself.
• You can have a life.

          Pick Two! 

(To be honest, if you pick the second option, you’re probably stuck with Pick One.)

Think about it.  Agree? Disagree?  If you think you can have all three, prove it.

Have any Pick Twos you’d like to share?  Comments are open.

Joe Pulizzi of Junta42 and Newt Barrett of Content Marketing Today have teamed up to write "Get Content.  Get Customers.", a guide for content marketing.

They’ve put up a companion blog for the book and will give you a free sample.  Check it out.

Next, Conversation Starter has advice on How to Reward (and Retain) People When Money Is Tight.  Here’s a snippet:

• Responsibility along with empowerment is the best motivator
• Recognition inspires, not only the recipient but also others
• Different people see value in different things, so one should strive to understand what is important to individuals working for you. This is especially critical when working in an unfamiliar cultural environment.

Lastly, Jeff Cornwall of The Entrepreneurial Mind says: "Turn Your Competitors into Your Sales Force."

What seems like crumbs to them can become your feast.

Read the whole thing to see what he means.

Seth Godin asks: Do You Own Trees?  He uses the example of Newspapers being stuck on the idea that their value is in the physical form (i.e. Dead Trees) rather than the information. 

Of course, it’s easy in hind-sight to see the mistakes that the newspaper industry is making, but what about you?

Of course, there are trees in your business too. There are trees in the photography business (chemicals) and in the music business (plastic) and even in the personal computer business (computers). They may not be called trees, but they’re there.

This idea is worthy of some discussion.  Have any trees in your business you’d care to share?

The MarketingProfs give us Five Inexpensive Direct Mail Tools to Generate Sales Leads Fast.

My favorite counter-intuitive Tool: Special Delivery.  You’ll have to read the article to see how this can be inexpensive - and effective.

Finally, John Jantsch of Duct Tape Marketing advises Creative Emulation as a means to innovation.

Some of the best marketing innovations I have witnessed came about by some smart marketer emulating a concept long established in one industry and brining it over to another.

Happy Hours for florists?  How ’bout Ladies’ Night for dentists?

I came across an article on Forbes.com about the role serendipity plays in careers called "A Pinch of Luck," and it got me thinking about how luck influences business success.  Often, maybe even most of the time, it is a vital ingredient in creating those successes we read about in business publications.

To illustrate my point, here’s a classic thought experiment, with a twist, using a two-sided coin with a 50/50 chance of landing on heads or tails on any one flip.

Imagine that 2,097,152 people "invest" $1,000 each to enter a coin flipping contest.  The rules are simple: on each round of flipping, those who flip heads get to continue and those who flip tails are out of the contest.  This continues until one person is left - the person who has flipped all heads, however many in a row it takes. (It will take 21 rounds.)

All that money that was invested by the participants becomes the prize pool and it is awarded thusly:

• 9th through 64th place finishers receive $10,000,000 each.
• 2nd through 8th place finishers receive $100,000,000 each.
• The sole survivor, and winner, receives the balance of $837,152,000.

Because of the size of the prizes, this contest would receive a great deal of publicity.  Everyone would comment on how lucky the winners were, because everyone knows that you can’t control which way a flipped coin lands.

However, let’s change the scenario from flipping coins to starting up a business. 

Read the rest of this entry »

Sam Decker has posted his unpublished book 193 Creative Marketing Ideas for everyone to read for free.  With 193 ideas, not everything will work for everyone, but everyone can find several very good ideas to market their businesses for not a whole lot of money.

Seth Godin says that when customers complain, your response should be: "You’re Right."  He is NOT saying the customer is always right - read the whole thing to see what he means.

Finally, MarketingProfs gives us a simple way to use flowcharting to increase the effectiveness of our lead-generation efforts in Lead Generation Blueprints.  Spending a half-hour or so thinking about HOW you generate leads and WHAT you’re going to do with them will increase your return on investment of time and money.

Firstly, Michael Roberto in Conversation Starter gives his take on Growth During a Recession.

He has 4 dead-on points, and here’s one I didn’t think of for my series on Surviving and Thriving in a Recession:

…identify your most critical suppliers and distributors, and determine if any face the possibility of severe impairment to their business due to the economic downturn.

Next, Peter Paul Roosen and Tatsuya Nakagawa offer us "Give Yourself a Productivity Boost: Learn from Kodak’s Transformation" in Lifehack.

They interviewed Jeff Hayzlett and David Lanzillo of Kodak about their F.A.S.T program.  "A" is for Accountability and "S" is for Simplicity - and in my view Simplicity makes Accountability a whole lot easier.  It’s to easy to dodge responsibility when you can hide behind complexity.

Finally, BusinessPundit tells us how entrepreneurs can use social media in The Entrepreneur’s Guide to Social Media.  The post has links to a number of resources, so you might want to save a copy to your desktop.

The beginning of the series can be found here.

This post is about marketing in a recession.

Don’t Be Timid

Businesses that survive and thrive during slow-downs, and become even stronger during recoveries, are the ones who aren’t afraid to go after growth when their competitors are hunkering down.

Preserving profits and cash flow is important, and cost management (see Part 2) is an integral part of your recession-proofing strategy, but sustainable long-term financial health can only come by increasing revenues.

Identify Ideal Customers

Every business has an ideal customer type and you probably already have some on board, although you could use more.  Take a look at your customers and see who is profitable, who improves your cash flow by paying on time and who doesn’t take up your valuable time by making unreasonable demands on your customer service infrastructure.

After examining your customers for the above, look for common characteristics. 

• Are they large volume buyers or small? - a large group of small buyers can be very profitable because they don’t expect volume discounts.
• Are they repeat buyers?  - why or why not?
• Do they have similar demographics?  - age, gender, income level, etc. for consumers;  industry, revenue size, geography, etc. for businesses.
• How did they come to be your customers? - referral, advertisement, walk-in, etc. (more on this below)
• Do they tend to buy the same product or service?
• {insert your particulars here}

Fire The Bad Customers

This may seem contradictory - firing customers at the same time you’re trying to grow revenue.  However, bad customers can not only suck up profits, but they can put stress on your business that you don’t need at this time.

Would you rather have a $1 million business with $100k in profits, work 80 hours a week and have stressed-out employees…or…a $900k business with $150k in profits, happy employees and time to spend with your family?

Take the extra time, money and energy you’ll get by firing bad customers and go find some good ones.

Find Out What Works For Your Business

Just about every business, from the smallest to the largest, has some marketing techniques that are effective and some not so much.  The trick, however, is to know which are which.

Start with the information you gathered about your ideal customers and see if you can determine which marketing efforts brought you the best customers.  Since you want more of these kind of customers, this would be the logical place to expand your efforts.

Test.  And Test Some More 

Gathering information and looking for patterns is just hypothesis forming.  You have an educated guess, but not real evidence. 

If you think an ad in a particular publication is pulling in customers, run it one week and not the next.  Rinse and repeat. 

The same can be done with online pay-per-click advertising.  And search-engine-optimization.  And…just about anything you can think of.  The key is to start out with an educated guess and then test to see if you’re right.

Ruthlessly Eliminate Ineffective Marketing

If you have marketing efforts that aren’t bringing in enough of the right kind of customers, STOP.  Why would you spend the time and money on activities that don’t bring in customers, or worse, bring in the wrong ones?

Chances are, you’re doing it because you don’t know which marketing activities bring in the good customers and which don’t.  If you do your testing, you’ll no longer be marketing in the dark.

See Make Your Marketing Budget Work—Halve It  for some more ideas on  eliminating ineffective marketing.

Use Guerrilla Techniques

Marketing doesn’t have to be expensive.  Jay Conrad Levinson coined the term and created the system called Guerrilla Marketing and has a wealth of advice on his site to help you create smart marketing on a tight budget.  I recommend signing up for his newsletter.

What’s nice about GM is that it works well in a testing methodology - you can experiment with several different ideas without spending a lot of money.

Here’s the wikipedia page for Guerrilla Marketing.  And here’s the official Guerrilla Marketing website with easy sign-up for the newsletter.

Now, go forth and market…smartly!

This is the first of what I plan to be weekly links of interest - posted every Tuesday.  So, for our inaugural Tuesday links…

Jeff Cornwall, of Belmont University’s Center for Entrepreneurship and blogger at The Entrepreneurial Mind, posts on the importance of microbusinesses in the American economy.

Don’t misunderstand my point. I like high growth. high potential businesses. We get a few coming through our program and they are challenging, interesting, and fun to watch. I hope we get more.

But, they are not the heroes of our entrepreneurial economy. That title belongs to the average entrepreneur who will never get a dollar from a venture capitalist — who builds a successful business seemingly out of almost nothing.

Next, Dawn Rivers Baker of The Journal Blog points out the phenomenon of microbusinesses with big revenue. 

Now, here is my question: now that people are starting to notice that it really is no longer necessary to enlarge your organization in order to make a lot of money, will they stop sneering at microbusinesses for long enough to support the microbusiness way of growth?

Be sure to follow the link to the Information Week article as well.

Lastly, Ben Yoskovitz of Instigator Blog offer us How to Use Perks and Rewards in Startups to Get the Best Talent.

And for the most part what this really means is that it’s very difficult to motivate people.

It’s very hard to truly motivate employees. Yes, working at startups can be hugely rewarding. But ultimately, most of the motivation has to come from within.

But all is not lost!  Read the rest for some good ideas from Ben.

Part 1 of the series can be found here.

An impeding recession is a good time for a well-managed business to make gains against the competition or to shore up its foundation for quickly capitalizing on the economic recovery to come.

This is the time to look at your cost structure and do some judicious cost management.  Effective cost management can entail cost cutting, but can also mean taking the opportunity to get some good deals now while vendors are feeling nervous about their futures.  This is just one of a number of good reasons to be as financially strong as possible - if demand is down, the customer with the cash can negotiate the best deals.

Renegotiate Leases

If your commercial lease is nearing it’s end, and you are fairly sure you want to continue in the same location, now would be an excellent time to approach your landlord and negotiate a new lease. 

Recessions are almost always difficult times for commercial landlords and they want need to keep occupancy rates as high as possible.  You might be able to get a reduction in your rent or some other financial concessions such as reductions of CAM’s (common area maintenance) or elimination of annual rent escalators. 

It doesn’t cost you anything to ask, and if your current landlord isn’t willing to negotiate, some other landlord will. 

Even if you have as much as a year left on your current lease, don’t be shy about approaching your current landlord or a potential new landlord about your wishes.  If we’re going to have several (or more) tough months ahead, securing a tenant in advance is valuable to a commercial property owner.  Use it to your advantage.

Ask for Discounts from Vendors

As with landlords, your suppliers and other vendors will place a premium on acquiring and keeping good customers.  This is a good time to approach them about discounts and/or more favorable payment terms.  Remember, paying the same price, but paying later, is the same as getting a price cut.

And if your current vendors won’t reward your loyalty, find some who will.

You, however, should hesitate to do the same with your customers.  If you’ve done what you should to keep cash flow and profits strong in a recession, you have much less of a need to offer discounts and extended payment terms.

Keep Headcount to a Minimum

When times are good, like they’ve been for the last several years, headcount tends to creep up.  In the hurly-burly of trying to keep up with growth, the fastest and easiest-to-implement solution is often to hire new people. 

In addition, we often staff our organizations for our future needs and not so much for current conditions.  Even if you think your business is going to stay relatively level (or even grow slightly) during the next several months, chances are you’re over-staffed.

Spend some time thinking about what your real needs are to get what you need to get done.  Determine the roles that need to filled and match up your needs with your current roster.  Chances are you’ll find roles that are under-staffed and a whole lot more that are over-staffed.  I know it’s a cliche, but "right-sizing" is a valid approach.

Also, take this opportunity to assess the what’s and why’s of the things you do.  Unnecessary tasks tend to accumulate during the good times, and if you hear any of your people say (or, if you ever say) "That’s just the way we do things.", it’s time to dig deeper and see if you can eliminate unnecessary processes in your business.

Put Off Big Ticket Purchases

Even if you’ve identified a need for a significant big ticket purchase, it maybe better to put it off for awhile and conserve your cash.  Especially now when the next several months appear to be problematic.  You’d be better off waiting until the recession (or flat-growth period) is almost over.  Not only will you be able to negotiate a better deal when the economy looks bleakest, but you’ll hold onto your cash until just before a recovery.

How will you know when a recession is almost over?  That’s easy.  When every newspaper headline, TV news report and financial pundit is bemoaning the "worst economy since the Great Depression," the worst of it is probably over.  The convention wisdom has a consistent track record of being late.

Unless You Get an Irresistible Deal

Sometimes you’ll be presented with a deal that makes so much sense you can’t turn it down.  If you’ve stayed financially strong you’ll be able to take advantage of these opportunities.  If the deal is that good - take it!

Cut Your Salary

You may think that your personal compensation is a secret, but I can almost guarantee your employees have a fairly accurate picture of how much you make.  If you’re going to ask your people to make some sacrifices, you can too.

Although, it’s not really that much of a sacrifice.  OK, it’s not a sacrifice at all.  If your business is a pass-through entity (S Corp, LLC, partnership or un-incorporated sole proprietorship) any salary cut you take is just going to flow to the bottom line.  And, if you’re an S Corp, cutting your salary, and taking the additional profit, will reduce your payroll taxes - it’s actually a reverse sacrifice!

Coming up in Part 3 - What to do about marketing in a recession.

From Seth,

“If you work in an urgent-only culture, the only solution is to make the right things urgent.”

Amen!