Be Different or be dead

August 23, 2018

How should startup entrepreneurs manage their business finances?

Cash flow rules

A highly effective CEO concentrates on creating a convincing product, employing the services of a proficient team, boosting sales, and making his clients satisfied and happy.
However, many leaders are engrossed in managing so many other issues, they do not pay attention to the most critical aspect of their startup; making sure that the organization is constantly raising funds at higher valuations.

The startup entrepreneur must:
— Know when cash is going to run out
— Understand the precise milestones and objectives to be attained in ways to receive an ever-increasing valuation
— Create the most effective plan for fulfilling those milestones in a suitable timeframe

Here are some important ways to effectively manage your business finances if you are a startup owner.

Manage cash flow carefully

Most startups actually do not succeed because of a host of reasons but the most common cause of a startup failure is running out of funds. You need to be very meticulous about all your calculations and know exactly how much money is coming in and where every dollar is being spent.
If you do not keep track of your transactions and cash flow, your business will be in jeopardy. Nobody will care about how fantastic your idea if you have no funds to feed it. It is vital to chalk out the right budget and firmly stick to it.

Constantly monitor all expenses

Once you start operating your business you will be tempted to incur more expenses than you need. It may be impractical for you to hire a full-time accounting professional right at the beginning.

So consider using a competent accounting software package to remain on top of your expenses and stay organized.
This will help “smooth” cash flows over the year in order to accommodate annual expense obligations such as taxes. However, as your operations expand, consider employing the services of a qualified and experienced accounting professional.

Be transparent & honest with lenders & investors

Nothing could be more hazardous to your business than dishonesty and sheer lack of communication.
Startups must necessarily be open and truthful while raising money or taking out loans. If you behave in a secretive and shady manner, nobody will trust you.
Similarly, if you are reluctant about revealing the important numbers such as demand forecasts, you could easily lose the opportunity and trust of capital sources.
Often at the beginning of your business venture, you rely on your friends and family for fundraising. In that case, to establish credibility you must be open to them regarding the organization’s financial condition. If you are relying on investors, you must be as precise as you can about the assumptions behind your forecasts on sales, operating and capital expenses.

Restrict your fixed expenses in the initial stages

At the start of your venture, keep your expenses to a minimum — you don’t need a plush office or catered meals. You must consider operating thin so that you can divert more funds toward the growth of your business.
Many startups fail due to spending lavishly on state-of-the-art amenities; they forget that their top priority is generating more and more revenue. Once your revenues start growing, you can consider incurring more overhead expenses. Until then, you need to be patient and wise.

Be prepared for failures but stay optimistic

When you start a new business you must be prepared to face the possible outcome that your personal finances could be jeopardized. If you have current employment, stay with it until your startup is in a position to effectively replace that income.
Create and keep reserves in some emergency savings account as a preparation for financial crisis situations.
Make the best use of micro-investing opportunities and consider allocating funds to a reliable online platform every month.

Concentrate on getting new customers

Customer acquisition must be your top priority. Remember your business would be a flop-show without customers. Once you are able to take on various acquisition channels, consider optimization the mix to lower your overall costs.
At the outset of your journey, it is obviously not possible for you to examine the pros and cons and reliability of all possible acquisition channels. Your resources are limited so focus on those channel opportunities with the greatest financial potential.

Establish financial objectives

Instead of being mesmerized about building a huge company, set realistic and specific measurable financial goals and objectives. You can set weekly, monthly and even daily revenue objectives and be sure to keep track of your results.
And be prepared to tweak your goals to achieve constant growth. It is essential to constantly keep attaining little goals to keep your morale high and enable you to move forward and achieve the major goals necessary for your success.

Remember: time is money

If you are working hard to achieve all the financial goals of your startup, these financial tips will definitely help.

And remember, time is as precious as money so don’t squander it by, for example, attending pointless meetings that have no relevance to your business.
Time is the most precious asset that startup entrepreneurs have so use it wisely by focusing only on activities that are directly linked to your new business idea.

— Marina Thomas is a marketing and communication expert. She also serves as content developer with many years of experience. She helps clients to develop their long term wealth plans. She covers an extensive range of topics in her posts, including business debt consolidation and start-ups.

• Posted 8.23.18 at 04:38 am by Roy Osing
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July 30, 2018

6 common customer service mistakes that will make you sick

Source: Unsplash

6 common service mistakes that will make you sick.

Most organizations are trying to use service as a key component of their competitive strategy yet my observation is that few actually deliver what I would call out-of-the-ordinary service.

Quite frankly, service generally is abysmal despite the rhetoric provided by leadership — it’s a dream with no practical way to make it come true.

These mistakes are at the root of the problem that, for most, the words and the music don’t match.

1. Putting cost before care

The only purpose of ‘customer service’… is to change feelings. – Seth Godin

After the aspiration — “our goal is to deliver service beyond expectations” — fades, reality sets in and the monthly income statement dictated the agenda.
What does the business case look like to deliver service goals? What will it cost to delight our customers, and how do we translate this into additional revenue?
At the end of the day, a proposal to outsource the service call center to a remote location with lower wages (and questionable English language skills) gets approved — the care factor is ignored.

Don’t talk about service excellence when you’re not prepared to invest to deliver it. You can’t creature memorable moments when costs are the primary concern.

2. Treating the frontline as bottom dwellers

Who in the organization delivers the service brand? It sure the hell isn’t the CEO or the Executive Leadership Team.
The irony is that the people who own the brand are relegated to the bottom of the chart. These are people who are “only” receptionists, service reps, credit reps and sales assistants. People who perform “junior” roles but who breathe life — or not — into the aspirational goal of superlative customer service.
It’s about time organizations honour the people who wear the badge of service every moment of every day.

3. Focusing on the abuser

Policies and procedures are typically used as mechanisms of control. They control the customer engagement process. They control the criteria for treating customers who have been wronged by the organization.
They are constructed to deal with the person who wants to ”abuse” standard protocol.

The customer who is assumed to be dishonest — “Before I serve you a drink I need your credit card (because others who came before you took off without paying and I assume you will do the same).
Here’s a novel idea: why not create rules and policies to make it easy for people to do business with you rather than punish them for what a minority number of people in the crowd has been known to do in the past?

4. Not saying “I’m sorry”

Your most unhappy customers are your greatest source of learning. – Bill Gates

Mistakes happen because organizations have two resources that go wrong from time to time — people and technology. As it turns out, however, mistakes that are handled the right way actually build stronger customer loyalty than if the OOPS! never happened at all.

A successful service recovery is fix it fast + do the unexpected. To have an amazing service outcome, the mistake must be quickly remedied — after 24 hours you have lost any possibility of building loyalty — AND a surprise element must be added — something the customer doesn’t expect.

And it begins with the apology. “I’m sorry” opens the gates for a delightful service finale when things get screwed up regardless of whose fault you think it is. Quote company policy at your peril, because people don’t give a damn about your rules and policies.

5. Getting it right the first time

The essence of service quality teaching is to conform to customer requirements the first time. To avoid mistakes that will require you to redo your work to get it right, thus increasing the costs of supply. Repeat work = higher costs.

So the majority of attention and investment goes into this purpose with little acknowledgement that it MIGHT not get done right the first time. That mistakes might rear their ugly head and present an opportunity to actually come out of it all in a stronger position — read last point again.

Successful organizations plan for screw ups — how do we intend to deal with situations where we DON’T get it right the first time? Don’t fall into the trap of relying on achieving perfection with every customer engagement. Big mistake; it won’t happen.

6. Meeting expectations

The key is to set realistic customer expectations, and then not to just meet them, but to exceed them — preferably in unexpected and helpful ways. – Richard Branson

Doing what the customer expects is merely part of the answer to delivering brilliant service. It’s the basic action that must be taken in order to “play the service game” — you’re in the game if you do it but you don’t excel at it if that’s all you do.

Standout organizations try to anticipate what could be provided beyond what is expected; they set their sights at delivering more. They look for opportunities to add something extra to the customer engagement process — a bit of fun, some unique advice, a number to call for help if needed — small things that leave a memorable impression.

Stopping at what people expect defines you as a member of the service herd, indistinguishable from everyone else. Big mistake; limiting move.

If you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the internet, they can each tell 6,000. –  Jeff Bezos

The cost of a service mistake is HUGE yet the rhetoric in many organizations continues with insufficient action to make any significant difference.

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

• Posted 7.30.18 at 04:13 am by Roy Osing
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July 23, 2018

The traditional sales model is dead for these 6 simple reasons

Source: Unsplash

The traditional sales model is dead for these 6 simple reasons.

Adapt or die —we have seen this consequence play out for centuries.

Particularly now, in this post COVID-19 era, it’s a matter of survival for sales to pay attention to the changes in the environment that demand a change in the way sales has been practiced prior to the pandemic; many of current sales fundamentals are not sustainable in the new normal.

If sales is to maintain relevance in today’s world, a transformation of the way it is practiced is required. Not just incremental change, but a completely new approach. Blowing up the old model; building a new discipline.

This is why traditional sales practices are no longer relevant:

1. Customer choice

People have virtually unlimited choice today from a variety of suppliers whose numbers that grow daily. In particular, COVID-19 has caused a completely unexpected increase in the online business.

During lockdowns and in an effort to maintain physical distancing, consumers are turning to the internet to buy what they need. And businesses have literally stopped buying as their customer base is drying up while everyone is forced or stay as close to home as possible and governments try to figure out how to open up the economy safely.

The expansion of the selling market to include more players — including DIY — increases the competitive pressures on traditional sales to attract and keep customers.

Customers wield much more power now than they did mere months ago and traditional sales will have to discover how to successfully play in this much different world.

And with the proliferation of competitors comes the need for sales to be much clearer on why people should buy from their organization as opposed to the competition; unique selling propositions in the old sales world have been woefully inadequate and confusing to potential customers.

And they need to talk to value and not continue to flog the “buy from me because our prices are cheaper than anyone else” message which is tiring and quite frankly untrue in the majority of instances.

Reasons to buy must be much clearer and specific otherwise sales will falter and die.

2. Individuals not crowds

Personal markets where the wants and desires of the individual are taking a dominant place in the demand for goods and services, replacing products which are positioned for mass markets based on the average common needs of people in a crowded market segment.

People want their cravings taken care of; they are turned off by the assumption that they are like the crowd in any way.

Crowd-based mass market messaging is therefore becoming less effective and is returning less as a communications investment. Targeted personalized sales communication to individuals is required to ensure customers get the precise value they want.

3. Switching suppliers

Customers are becoming more fickle and are able to switch suppliers with ease. Barriers that once existed are disappearing as switching costs approach zero.
Customers use this opportunity to hop from one organization to another much more frequently than in the past.

The only defence against this is for sales to create strong barriers to customer exit, an imperative that has never been given a high sales priority in the past. This involves paying more attention to loyalty considerations in the sales process than simply trying to push product.

And because of high market churn, acquiring new customers relies more than ever on obtaining referrals from the existing customer base, again stressing the need to build strong customer relationships.

4. Teamwork

Sales is less of an island in the organization. It is only one element an organization has to deliver as part of the organization’s value proposition. The sales identity is rapidly blending with marketing and customer service to respond to the holistic needs of a customer.
Customers are forcing sales itself to provide better customer service.

Customer loyalty has to be earned at every touch point be it personal contact, an organization’s web site, communications media and social media.
All customer interfaces must work together seamlessly and synergistically and must carry the same message and engage the customer in the same way.

Sales will be challenged to give up their traditional narcissistic view and adopt more of a team view of what they must contribute.
Sales gunslingers which were saluted in the past will be admonished in the future.

5. Customer ideals

People are buying more and more from organizations that align with their values and belief system — social responsibilities, environmental-friendliness, philanthropic intent and so on.

If sales can’t (or won’t) take the time to discover the ideals held by each and every one of their clients, they will seriously damage the relationships they have with their customers and jeopardize future sales opportunities.

6. Flogging is passé

No longer is it acceptable for the salesperson to flog products and services at people; people hate the process and simply won’t buy.
Sales must move from this approach and rely on creating an engagement approach that people actually enjoy and not feel pressured into a purchase.

People are buying experiences now rather than product functionality and technology. They take for granted that the technology is state of the art and that the product will deliver what it says it will. What makes someone buy from one salesperson and not another is how they feel about the sales individual as a person — are they likeable? — and the sales process they are being put through.

The product flogger is obsolete as will be the organization that continues to try and use it as the sales role.

The insightful ones are quickly moving to a world flogging fan relationships and customer intimacy is the new normal for sales.

New sales muscle is required to address these new realities.

Are you re-inventing your sales machine?

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

• Posted 7.23.18 at 04:33 am by Roy Osing
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July 9, 2018

Why a marketing bundle really sucks like a dirty martini

Source: Unsplash

Why a marketing bundle really sucks like a dirty martini.

Many like a dirty martini; I don’t.

I love martinis but please keep them clean and uncontaminated by dirty fluids that violate the clear pristine gin and vermouth mixture. I don’t mind if you put 4 symmetrically organized olives on a skewer in it because they are gone before any real contamination can occur — I love olives but hate the juice.

I feel the same way about bundling and the way it is practised in the marketing world today.

Bundling — add a number of products together and give the customer a discount.
Combine two products and get 10% off the total price for both; take 3 products and the discount goes up to 15%. The more you buy, the more you save. A pretty simple idea.

To me, however, bundling practised in this manner is like mixing a dirty martini.

It contaminates and dilutes the basic marketing tenet that says price should be a direct function of value; the greater the value, the higher the price.
And, conversely, the lower the value, the lower the price.

I’m not aware of any marketing principle that advocates increasing the value of an offering and then reducing the price.
Even if economies of scale and scope were in play, the right thing to do would be to maintain price levels and reflect the benefits of the lower costs in increased margins.

But rarely does merely selling two products together materially drive cost down; bundling isn’t physical integration.
Combine long distance service and internet service on a customer’s bill, and the telecom company doesn’t realize any measurable cost savings as a result of the combination yet the customer gets a discount for signing up to two communications products.

It’s an illusion

And it’s a pipe dream to believe that lower bundle prices stimulate long term demand and increase revenues. Combined billing for long distance plus internet service doesn’t stimulate usage of either.
I’ve had home phone, long distance, internet and TV services bundled together for years, but still treat each one separate and distinct from a consumption point of view — my usage hasn’t changed for any one of them.

The customer loves getting the discounts but no real value is created for the organization. In my former CMO days, I was skeptical to the point of a non-believer of bundling activity — I viewed it as lazy marketing and slight of hand.

Bundling drives marketing creativity to zero

It’s a no brainer — it doesn’t take a marketing graduate — to add and bill two services together and apply a discount.
What talent does it take to do that? What value proposition does the addition produce other than a lower price?
When long distance and internet service are sold together, what unique communications value is created by the synergy between the two services other than a price discount? Right. Nada.

Marketing professionals should be motivated to create new packaged solutions that seamlessly integrate a number of product elements and apply premium — not discounted — prices that reflect the added value created by the package.

Bundling ignores basic pricing principles

The function of price is to value the exchange between an individual and an organization that satisfies each party to the transaction. A successful value exchange leaves the customer happy with the money they have spent for the benefits they have received ; the company is better off because they realize an acceptable margin.

It’s easy to offer volume discounts but it completely ignores the impact it has on profitability. You can’t sell a martini if it doesn’t make money.
Do you really think a discount should be offered if you buy two drinks? Never seen a two-fer on martinis.

Bundling gains no competitive advantage

All marketing teams think by offering bundles they create customer loyalty; that by offering reduced prices for volume, customers will decide to stay with the organization forever.
Not true. People are fickle when it comes to price and will go wherever the lowest price is offered.

The reality is that most competitors offer bundles and therefore competitive advantage is conferred on no one. All the banks use bundling, all the telecom companies offer them — every sector is represented in the bundling dysfunction.

Bundling gives customers the wrong message

Increase the number of products provided and get a price savings is exactly the wrong message that should be given to the market.
In life the more value you receive the higher price you expect to pay. In martinis, the better the gin, the higher price for the martini — bar stock gin is sold at a lower price than Brockmans.

Bundling screws them over

Customers deserve more value that satisfies their overall wants and desires and we should be doing it at prices that reflect the value they perceive they’re receiving.
This preoccupation with discount bundling is a distraction to the marketing profession from what they should be practising.

Bundling is a red herring; it’s the olive juice that screws up a perfectly good martini.

What people really want are integrated packages that satisfy a broad range of what they covet. Packages that reflect their lifestyle, for example, that might seamlessly integrate elements like a vacation, meal, wine, snuba and a car rental or if it’s a business, elements like sales training, CRM apps and logistics assistance.

Bundling is marketing’s dirty martini; it muddies the waters of good marketing

Let’s get back to the basics — create more value for customers and charge premium prices that reflect it.

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

• Posted 7.9.18 at 03:43 am by Roy Osing
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