Tuesday, December 18, 2007

The Random Journey to Somewhere

I have a TiVo, well actually two which I love. This thought crossed my mind today as I sat staring at the white background of Microsoft Word. A background I might add that should have been covered with words. So, I thought of the dreaded “blue screen of death” feared by TiVo users. Of course thankfully my TiVo has never been broken which then made me think of things that had been broken. This is the random thought process in which I often engage when words fail me.

At one time I would have chided myself for engaging in pointless head chatter. I have learned, however, that allowing my mind to wander and roam free often actually leads somewhere. It leads to a place, a thought , an idea that never would have been allowed to form in my otherwise structured, deadline driven day. So often in doing nothing I accomplish a great deal.

Everyone can find value in allowing time to drift along with their thoughts being carried wherever they may lead. Seemingly unrelated threads can sometimes form the basis of true innovation. Far too often in business we focus so much on structure that we miss the opportunity to dream, plan, visualize and create.

Engaging in random thought is different than brainstorming. With brainstorming you are still focused on a specific problem or concept. You simply free yourself from censoring any idea or solution. Random thought is wholly unstructured in every way. You take a back seat and allow your thoughts to do all the driving. Random thoughts have a number of benefits including:

· They can help you overcome a challenge or problem. Giving your mind a break from mulling over something can often lead you right to a solution.

· They can reveal underlying issues that you have been avoiding.

· They can reignite your creative spark.

· They open the dam and allow a release of fresh thinking and new ideas.

· They help you to recover lost memories.

The next time you find your mind drifting along don’t try to harness your thoughts. Unless of course you’re behind the wheel of a car in rush hour traffic! Otherwise, give yourself the freedom to drift along on a sea of random thoughts. You may be happily surprised where those thoughts take you.

This post was inspired by the awesome writer, Joanna Young who wrote a post on Random Facts which got me thinking….

Friday, December 14, 2007

What you can Learn from Kiefer Sutherland

Kiefer Sutherland, star of 24 is currently serving a 48 day jail sentence for a DUI. His popularity with fans has apparently not suffered. Kief is receiving boatloads of fan mail in jail.

Surviving a setback is not limited to celebrities. Many companies have not only made it though a crisis or bad publicity but emerged better and stronger. What’s the secret?

Fess up. Acknowledge your mistake and work to make it right. Whether you are dealing with one irate customer or a major recall, “We were wrong, we’ll fix it” goes a long way.

Learn from it. Adversity has a way of making us stronger. Take the time to assess what went wrong and why. What systems can be put in place to prevent the error from happening again? Don’t fix a problem one time, fix it for all time. If a customer brings something to your attention, standardize the solution.

Actions speak louder than words. Kiefer Sutherland admitted his mistake, apologized to his bosses and quietly made arrangements to serve his time. He did not make the talk show rounds with a tearful apology and public plan for redemption. Once you’ve acknowledged your error and set about fixing it. Let your actions continue to speak for you.

Bad things happen – in business and life. How you handle the tough times can show your customers (and competitors) what you’re really made of.

Saturday, December 08, 2007

Is Your Business on Welfare?

Recently a writing colleague posted an article on the Elance water cooler. The article written by Ron Lindeboom, highlighted the three different buyer types. The article is several years old, but the principles still hold true.

Lindeboom discusses the three marketing types and groups them into top tier, middle market and low end. The top tier clients representing about 15% of your client base are those that value quality and relationship. The middle tier represents about 70% of the market and they want good but fair pricing. The low end wants high end service for cut rate prices. Lindeboom calls the low end segment “Grinders.”

As a business owner, why would you ever want Grinders? Yet, far too many businesses, particularly small businesses fight for this client type. Understanding the psychology of the client segments is important but it’s equally important to understand what type of business you are.

Many small business owners are standing in the welfare line and not sure how they got there. They work hard. In fact they may be working longer hours than CEOs of Fortune 500 companies. They deliver high quality work. Yet, they are barely making ends meet. These businesses are well intentioned but are not appropriately targeting their market or pricing their services.

Other small businesses are locked into a mentality that says they can only compete on price. To win against the “more established,” or “the “larger competitors” they have to compete on price. Does this sound like you?

Still others believe that volume makes up for low pricing. These business owners proclaim “yes our pricing is low but our volume supports it.” These same business owners would like to convince you to work at a fraction of your normal fees because they’re going to give you a large amount of work.

Although I’m humiliated to admit it for a long time I too had a business that was on welfare. My company was turning out high quality work and a sucker for every sob story that justified someone negotiating our rates lower. We wanted to help and by golly help we did to the detriment of our own profit margin. In fact our margins were negative!

I’m here to tell you “Don’t try this at home! You’ll go broke!” I am a big believer in volunteering, giving back and charitable giving. However, when running a business you must realize you exist to make a profit. You can set a fixed amount of time aside to donate business services (and I advocate doing so) but your day to day operations should be generating income.

Let’s look at this from another angle. In corporate America, did your employer negotiate your salary daily? When you showed up for work, did HR say, “Gee you know right now our budget is stretched, so can you work 3 extra hours for half your salary?” Of course not! Yes, companies get into budget trouble and they often solve it by doing lay-offs or salary freezes but no company negotiates your pay (or value) on a daily basis. So why are you doing this in your own business?

Negotiation is a natural part of doing business. Negotiation however is an exchange and not the seller simply giving everything away. It is an exchange to work toward a mutual win where the critical needs of BOTH parties are satisfied. Great negotiations end with all parties feeling like a winner and it sets the stage for a good long term relationship.

However, you are not obligated to negotiate price with every potential client. When you walk into the grocery store to buy a gallon of milk, there is a price you will be required to pay. Do you get to the register and ask to pay a different price? Do you ask them to give you more milk for the same price?

Yes, I realize milk is a commodity and service businesses operate a little differently, but do you negotiate price with your doctor, dentist or hair dresser at every visit? We ask for lower pricing when we beleive the price does not reflect the value but more often than not we simply pay what is asked or we don't buy.

So, how do you begin turning things around? The first step is to examine what you have to offer. What does it cost you to provide the service? What is the value of that service to your ideal client (ideal being key here as you are not targeting grinders)? Set a fair price and stick to it. Your ideal client will pay you for the value. Grinders will not buy from you.

You may end up with fewer clients, but that’s a great thing. You want fewer clients that pay you what you’re worth. Unless of course you really do want to spend your time killing yourself for the pennies that grinders are willing to pay.

I’ve learned the hard way that clients will only value what I have to offer if I first realize that value myself. This means getting off welfare and saying No to the people who really can’t afford my services. Am I missing out on a large segment of the market? Yes, I am but it’s a segment that does not represent my ideal client anyway.