Lawrence Fine

Often we spend so much time working on strategies and processes that we forget that even more important than the strategies are the people who are being asked to carry out these strategies.

You might have the best game plan in the world (for your team, business or organization) but if you don’t have the right people working for/with you, you are destined to fail.

Rather than spending too much time on the X’s and the O’s, make sure you have the right personnel to do what needs to be done

Have a great day!

Lawrence

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When looking to increase business (whether it’s new customers, more campers, more members etc), it’s important to understand your target markets are most likely three distinctly different groups. Unfortunately, most people look at marketing as something you do to everyone and it’s one of the many reasons many marketing campaigns fail.

The three groups to market to would be as follows:

Your current customers
Your competitors customers
New potential customers.

Sadly, the group we frequently ignore the most are the current customers. For example, if you own a restaurant, it’s great to try to get new customers but it’s easier, and more effective, to keep your current customers happy and encourage them to return. What good does an extensive marketing campaign do if you get a lot of new customers and they never return? Once you get a customer in your door, make sure they have a positive experience and work to keep them coming back. Also, as was discussed last week, if you are doing a good job, your current customers will also become your best salespeople, making referrals, bringing friends etc.. This is the last group you should ever ignore.

Your competitors customers are another group you would market to. If you are a Realtor you know there are people looking to buy and sell houses. If they don’t go to you, they are going to go to a competitor. This is a win/lose situation in that if you gain a customer, they lose a customer and if you lose a customer, they gain one. In looking at the Apple TV commercials for the Mac, they are targeting Microsoft customers in order to increase their market share. In order to target your competitors customers, you must know what the competitors are doing well and what they are doing poorly. This is where mystery shoppers, market research etc comes into play. Most marketing is geared toward this group.

The third group is the hardest group to market to. Rather than trying to take a customer from the current market base, it’s trying to increase the market base. Using the Realtor as an example, instead of marketing to people who want to buy houses, it’s marketing to current renters and showing them the advantage of home ownership over renting. If you run an educational convention, it’s trying to bring in people to the convention who aren’t choosing between your convention and the other one, but rather had never considered attending a convention in the first place. The great thing about this type of marketing is, if done properly, it not only helps you but probably helps your competition as well. If you own a hotel and can increase the number of visitors to your area, you will sell more rooms, so will your competition and in the long run, all will benefit from even more traffic. The difficulty with marketing to this group is it doesn’t get done with a 30 second TV commercial. It doesn’t get done with a classified ad. It takes time to educate the new group, encourage them etc.

As an example of this type of marketing, look at the athletic shoe industry. Many of the smaller brands are trying to take market share away from Nike. Nike is spending many millions of dollars trying to increase the overall market (whether it’s adding new sports or bringing in more of the fashion side).

When looking to increase your business, make sure you address all three groups. If you can only address one of them, choose group 1. Your current customers can make you or break you

Have a great day!

Lawrence

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One of the reasons organizations look to expand is to experience economies of scale. This simply means taking advantage of the cost advantages due to expansion.

While utilizing economies of scale can be the difference between two somewhat successful organizations (or even two somewhat unsuccessful organizations) and one, larger very successful organization, it’s important to understand, it doesn’t work in all industries or for all organizations.

An example of two businesses that might benefit by economies of scale would be two grocery chains. If they combine into one organization, they can most likely take advantage of better purchasing power (companies that purchase larger quantities can frequently negotiate better prices), combined HR, IT, Finance departments etc. To use somewhat random numbers, if each chain has HR departments of 10 people, most likely, when they combine, they can get by with only needing 15 people all together so that would be a savings of 5 salaries plus all other expenses associated with those 5 people (computers, office space, benefits, training). Through economies of scale, they would be able to reduce costs, increase efficiencies and increase profitability (in theory).

On the other hand, if these two grocery chains come together and continue to operate as completely separate businesses, they lose the economy of scale and most likely will increase expenses because while they are running as separate businesses, there would still be a few people overseeing both and that would result in greater costs.

General Motors, for years, operated each of their divisions (Buick, Cadillac, Pontiac etc) as completely separate entities and as such didn’t get to benefit from the economies of scale.

A school can benefit from economies of scale by expanding their current offerings. For example, a business school could expand and start to offer international business, entrepreneurial training etc. Costs would increase but, if done properly, they could still benefit from economies of scale by utilizing the same back end staff. On the other hand, if, instead of expanding their businesses school they decide to add a new medical school, while it might be successful, it most likely will not be utilizing their economies of scale.

When looking to expand, try to do it in a way that doesn’t force you to duplicate work (or workers) and see if you can find ways to make things more efficient rather than bigger for the sake of being bigger.

Have a great day!

Lawrence

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If you want to increase your business, you can go out and hire new salespeople, increase your marketing and advertising and hope for the best.

When you combine the cost of the salespeople, the cost of the advertising, the cost of the marketing, the cost of training and all other opportunity costs, the cost of doing this can be huge.

The alternative is to realize your best salespeople, and most loyal ones are your customers.

If you treat your customers well, deliver what you promise, sometimes over deliver, provide proper support, stay in contact and generally do what you should (as opposed to the absolute minimum) your customers/clients will tell more people than your salespeople can ever hope to contact.

If you aren’t getting a regular stream of referrals from your current clients, rather than going and spending a lot of time and money to acquire new clients, figure out what you are doing wrong with your current clients/

Have a great day!

Lawrence

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We frequently assume that everyone uses the same tools to communicate that we do. If we prefer to communicate via email, we assume everyone does. If we prefer to tweet, we assume everyone does. Like to text? Everyone must! Prefer posting on Facebook walls, that must be everyones preference as well.

The reality is, if you choose to communicate using a tool that the intended recipient doesn’t use, your message (which might be brilliant) will be missed.

As an example, I have a twitter account. If someone sends me a tweet on twitter, I will most likely never see it as I don’t check that very often. If someone chooses to send me a text message, if I am away from my computer I will most likely receive the message since I usually have my cell phone with me. However, since my phone indicates an email is received the same way that texts are, if I’m at my computer and cell phone vibrates, I just assume it’s one of the many emails that come in and ignore it.

One of the people I respect more than anyone in the world doesn’t have an email account. His wife has one and checks it every couple of weeks so if I want to communicate with them and choose to send an email, they might not see it for a month. On the other hand, I can call them or send them a regular letter and they will get it much quicker. Even though email is my preferred means of communicating, I have to remember who the intended audience is.

Make the wrong choice and you will never know if the problem was the tool or the message.

Have a great day!

Lawrence

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I love art. I have 9 pieces of original art in my home (and interestingly, some of the artists are subscribers to this blog) and it’s interesting that different people will look at some of the abstract art and see completely different things. It’s easy to say “well it’s art, people will always interpret art differently” but if you think about it, people see different things differently.

When we realize that different people will see different situations differently, it makes it that much more important to understand that we need to do a better job communicating using different methods to make sure people get the message we want them to get.

As an example, an educational institution might introduce a new curriculum and assume prospective students will see this as an upgrade on something already successful. However, students might see it as a desperate move to try to save a dying program.

Another example would be that ESPN.com changed their design a few months ago. I’m sure they saw it as an upgrade but to me, it made the site less aesthetically pleasing, more difficult to navigate and I now to go SI.com for my online sports information

It’s important to realize that what you see and what someone else might see, when looking at the same thing, might be very different. If you want to make sure they see the same thing as you, make sure to not only show them, but also describe it, demonstrate it and then you MIGHT increase the likelihood of them seeing what you are seeing.

Assuming everyone sees things the same way you do will result in you missing a lot of opportunities. Realize different people see things differently and sometimes, it might be worth seeing things through someone else’s eyes as well

Have a great day!

Lawrence

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The Green Bay Packers won the first NFL Super Bowl, do you know who finished second?

The Wright brothers flew the first airplane, who flew the second one?

Roger Bannister was the first person to run one mile under four minutes, who was the second?

Alexander Graham Bell made the first telephone call, who made the second?

Chances are, you don’t know who was second in any of the above mentioned questions. The reason is that finishing first vs finishing second is frequently a HUGE difference. Despite this, we frequently follow the leader and do the same thing they do even though it means at best, we will be number two.

If you can’t be number one in what you are competing in, see if you can change the competition. If you are an author, you might not make it to number one on the best seller list, but you might be able to be number one in your specific niche.

Look to be number one and good things will frequently follow

Have a great day!

Lawrence

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