“Good Enough” Products (& Services) are Kicking Butt

A Company with only a GOOD product but GREAT sales, marketing & service will be more financially successful than a competitor with a GREAT product and GOOD sales, marketing & service almost every time. On the surface, it doesn’t seem right, does it? You would think that buyers, over time, would prefer superior technical performance. But there is no question that   “Good Enough” Products are kicking butt.

WHY does this happen? Simple, the great marketers first of all make greater investments in time, money and resources to ensure that prospective buyers are aware that they exist. They Plan to spend appropriately to achieve the sales results they want. Then, they HOOK buyers with a superior brand promise, competitive positioning and key messages that resonate well by tapping a strong need, desire, fear, uncertainty or doubt (FUD) and then RETAIN them with superior Customer experience by caring, communicating, working proactively and responding nimbly to solve problems as they occur. Your product or service is better? Well, the Customer won’t easily let go because they’re reasonably happy or at least not seriously dissatisfied enough to do something about it. If you’re 10-20% better, yawn. 40-60% or more? Maybe…

A Lucky Strike cigarette commercial from the 1960′s said it well:

“I’d rather fight than switch.” The law of Inertia (as applied to human buying behavior) means unless it’s really important, I’m not gonna switch!

What actionable steps for entrepreneurs does this imply?

• Make a Strategic Decision: you have a dramatically superior product and will live or die by that OR you have a really good product and need to dramatically improve your marketing, sales and service. Which is it? Your resources are limited.  Don’t sit in the middle – CHOOSE!
• If you choose to be a “best product” play, then your highest priority is to locate and start a conversation with buyers whose #1 criteria for purchase is already technical superiority, provide data that “proves” your superiority and capture external validation/testimonials from technical experts whose opinions matter to the target market
• If you choose to be “Good Enough Product” play, then you want to find a niche where you can dominate or you’ll never go far
  • Research your Competition so that you know what they are promising and to whom so that you can create a messaging platform that is superior to your competitors for a specific niche (subset) of prospective Clients. Don’t go head to head against an 800 pound gorilla unless you have high confidence that your “counter offer” to the niche they dominate will resonate well
• Determine the essential Marketing and Sales activities that you must invest in to meet the Goals you’ve determined… and then make those investments.
  • This may mean diverting funds away from product development to capturing sales
  • This may mean investing in a salesperson or outside business development resource even knowing that it could be a year before you break-even on that investment

Singer Sheryl Crowe posed a question in one of her ballads: “Are You Strong Enough to be my Man?”

My question is: “Are you Good Enough to be my Product?”

Monkey Man

This weekend we had to put my favorite cat of all time to sleep. Sam, who I affectionately referred to as “Monkey Man” and “Sammy Boy”, has been my personal Yoda for almost 10 years. We knew that he was having difficulty breathing but thought it was just a bad cold. Turned out to be a tumor.  A hopeful visit to the Vet deteriorated rapidly into a quick goodbye to ease his suffering.

Driven and determined, year after year, I would sit down in my office at the computer and start pounding away at business plans, phone calls, emails, preparing a presentation or thinking about how to help a Client overcome a sticky situation and within minutes of “getting in gear” Sam would jump up on my lap and demand attention. Slow down, he seemed to say. Lighten up. Take your time. Let’s spend a few minutes together and chill. Deep in thought, I’d ignore him for a few minutes, then hug him then relax my breathing and smile.

Sam never met a lap he didn’t love. He would jump up on stranger’s laps and curl up and fall asleep. And he could purr the entire first quarter of a football game. I consider myself a pretty happy person but he was in an almost constant state of contentment. We’ve given him a great home but this guy was like Steve Martin all the time “the phone book is here, the phone book is here.”

Oh he could be demanding. When it was time to eat dinner or breakfast, Sam could bug you with the best of them. He transformed into “the devil made me do it” when hunger struck. Attacking your feet until you got up and fed him. Dive bombing your legs at 5am to get you up. Once fed, he would become very peaceful again. Stretch out and treat you like a warm, safe bed.

I buried him outside the breakfast nook under the bird feeder he loved to watch from the window so I can see him every morning. Still hurts like hell, I’m shell-shocked and the grief comes in waves.

There’s a lot of research that pets are really good for us. People with animals live longer, are healthier and less stressed. It’s been incredible for me. Still have a great dog who thinks she owns the place (she does), a 14 year old anti-social cat and a bird that’s supposed to be able to articulate half the English language but prefers chirping.

Sam was a stocky, furry little creature who gave so much joy and served as a constant reminder to enjoy life every  day. Think I’ll do some pushups, then some sun salutations and take a brisk walk around the neighborhood.

Love you Monkey Man.

You Can Pay Me Now

Every now and then a Client doesn’t pay their bills and deciding how to handle that is a challenge for every entrepreneur. The 3 key variables in this process are: the amount to be paid, the timing of payment(s) and how you move forward. Here is how I do it in my business consulting practice:

• Establish the amount due: provide written documentation to the Client and ask for confirmation that the amount is correct
• If they agree to the amount, negotiate a payment schedule, send them notices in advance of due dates (requesting read receipts), call them right away if they are late or miss a payment – staying in touch with them throughout this process is key as you want to hold them as close as possible to their commitment. You are relying on their ethics. It’s easy to get fatigued and stop paying attention but don’t let that happen – stay vigilant!
• If the Client does not acknowledge the amount, engage them in a discussion to understand their point of view and consider the legitimacy of their claims. Try to find out very specifically the points of agreement and disagreement. Based upon a dispassionate consideration of their statements, was your Company’s performance worthy of the invoiced amount? Are you willing to accept a smaller amount either because they have a legitimate point or simply in order to move on?
• If you are not willing to negotiate, tell them so in writing with a request for payment. If they do not respond to this in a reasonable timeframe, ask your attorney to send them a demand letter – this will often do the trick and its money well spent.
• If you are willing to negotiate the amount and the timing of payments, tell them so. You may want to estimate your expected legal fees and the value of your time. Generally speaking, small claims are not worth pursuing from an economic and opportunity cost perspective. Large claims may be worth your time and money.
• Ultimately, if they won’t pay and the amount owed is large enough to justify your time and investment, you may have to pursue them via legal means.  Unfortunately, in our legal system, it is very unlikely that you will recover your legal costs, and the process may take 1-2 years to complete so make sure you have the stamina and wherewithal to go through it.

A year ago, a business advisory Client did not pay the final amount due on a business plan because he had cash flow problems in his business. It was disheartening because I had gone the extra mile on the Plan and really enjoyed working together. He was never willing to commit to a payment schedule despite my numerous repeated attempts but the amount was not large enough to justify taking him to court. So, I stayed very constructive in our communications – though I was tempted to not be civil – and a year and a half later he stopped by and made his first payment and handed me a note that said “This is a very small part of what I still owe you. You will have the balance in full soon.” Conducting yourself as a professional craftsman sometimes pays unusual dividends.

A Drop in the Bucket

Since 1859, 1.2 trillion barrels of oil have been consumed according to Paul Roberts in his article “The Last Drops” in the July 2011 issue of Popular Science magazine. Other critical information from the article:

• Oil is a very high ROI fuel: 1 barrel generates 30 barrels for use. 30:1!
• Daily consumption is now 800 million barrels per day (MBD)
• 1.2 trillion barrels have been consumed since 1859
• At least 2 trillion more barrels will be consumed before our reliance on oil is significantly lower
• There are 8 trillion more barrels of oil available in the earth
• Reserves of 1 trillion barrels have been identified
• The other 1 trillion barrels needed to move to reduced dependency will be more difficult to source

Feel like an expert yet? That’s the clarifying feeling we get when somebody provides us with a clear picture of a situation and supports it with useful information.

So, while great minds reflect upon our energy future, think about key issues in your business that would benefit from gathering and synthesizing critical data so that a clear, crisp picture emerges. When the right data comes together, better decisions can be made.

Entrepreneurs sometimes don’t want to acknowledge the facts as they hear them. They sometimes think they can “power” their way through to the promised land, changing the game, even in environments which don’t bend or give. Business advisors have a responsibility to relate the “facts of business life” so that Clients can make responsible decisions… well, that’s another story…

For example, if you want to raise equity capital, should you consider approaching venture capitalists or angel investors? You don’t know? Does it help to know that you are 40 times more likely to raise money from an angel investor than from a venture capital firm? Or, that venture capitalists are very unlikely to invest less than $1 million so if your need is for $500,000, you are probably excluded. Oh, and venture capitalists will only bet on what they perceive to be potential homeruns while angels would love homeruns but frequently bet on singles, doubles and triples. Do you see how collecting certain information practically guides you to an answer?

Don’t waste your valuable energy reserves. Improve your Company’s MPG (Miles per Goal)© by collecting, analyzing and putting important data to use. How’s that for an energy policy?

Born to Run

Business owners and Bruce Springsteen fans, check out the book “Born to Run: A Hidden Tribe, Superathletes and the Greatest Race the World has never seen” by Christopher McDougall. It will stretch your imagination, improve your stamina, help you sprint past obstacles, increase your appreciation for different running (your business) styles and remind you of just how glorious it can be to achieve great things.

This story of Mexico’s Tarahumara Indians, whose lifelong activity of ultra-running (more than 100 miles at a time, sometimes as long as 48 straight hours) in perilous conditions, will amaze you. And their climactic interaction with some of the most elite ultra runners in the U.S. will really have you huffing and puffing… with sheer joy.

This story reveals scientific evidence that the human race was meant to run – to outlast prey through superior endurance and despite inferior speed and that the introduction of the running shoe by Nike in the 1960s has led to a staggering injury rate for the reason that the supposed protection these shoes offer actually condition runners to not follow nature and do harmful things to themselves.

Business success is not a marathon but an ultra-marathon. You can survive on a minimum diet if it’s the right food (the right team, the right products, the right strategies). You can overcome great obstacles such as heat stroke (intense competition), dehydration (running out of cash) and getting lost (lack of a good business road map).

The camaraderie and shared values of the elite US ultra-runners with these tribal people makes me think of the value of a strong industry – competitors yes but with a healthy regard for the rights of others and an underlying knowing that a strong industry is better for all.

Your ultra-success can be found when you commit yourself to finding the hidden trails, learning the smooth motion of the Tarahumara runners and enjoying the journey.

Business owners like us, baby we were born to run!

Art Jacoby’s Business Allergies

I’m allergic to:

• Losing money
• Long sales cycles
• Low productivity
• Unreasonable expectations
• Lack of effort
• Poor listening
• Not learning from mistakes
• Processes that get in the way of customer service
• Negativity

What are your business allergies?

World War C™

Robin Williams made us chuckle in the movie when he enthusiastically yelled “Good morning Vietnam!” into the microphone at his Armed Forces radio station spot to grab the attention of the troops stationed in the war zone.

Well, Robin, we need you now to help wake up America! World War C (Cyber) has arrived on our shores, or more accurately to our computer infrastructure. It isn’t the British this time. And it isn’t visible, it’s digital. But it is serious in terms of the risk of economic damage and destruction.

Computers have changed our lives in wonderful ways but our move toward transparency has other consequences – opening the “computer door” to bad guys. The Intelligence Community is reasonably well prepared but make no mistake, despite billions of dollars already spent, vast portions of the U.S. government, State and local government and most of the commercial market are highly vulnerable.

Our key infrastructure industries pose the greatest concern – financial and utilities- as any disruption there can cause severe economic repercussions but every industry, every commercial business faces threats never faced before.

America’s physical infrastructure has suffered for years because, as a culture, we like to spend money on new, sexy things rather than on essentials.

Cyber security  IS sexy – spies, war, secret code, danger….  Got your attention?

There is a wealth of information available on how to protect your business. One good starting place is the National Cyber Security Alliance www.staysafeonline.org where a great deal of free information is available to start your own journey to better security.

Maryland Cyber Investment Partners www.marylandcyber.com is here to help. We can connect you with the very best resources, experts in cyber security, to protect your business.

Good Morning America!

Baking a Big Pi (π)

Profit that is. The reason others purchase from you (to bake their own Pi). The reason your business exists. Your charter is to help others earn a bigger slice so that your Company gets more too.

You want your Company to be valuable?  Then you must generate a stream of consistent earnings growth over a period of years with performance better than most of your competitors.

There are exceptions to this but they are few: you may have assets i.e. intellectual property, products, land/building which are more valuable than your earnings stream or you may be in a hot market where, for a period of time at least, buyers will pay a multiple of sales to absorb your customer base and reputation. But, these are the exceptions. 98% of the time prospective buyers will value your business on expected earnings and they will base this largely on actual results.

So, business chefs, it’s all about Pi.

Here are some key ingredients:

• High retention rate of profitable Customers
• Selling more to existing Customers
• Steady addition of new Customers (efficient/effective marketing and sales)
• Maximize Gross Profit dollars (the right price/quantity balance)
• Minimize expenses (increase high ROI spending, limit low ROI spending)

Fire up the oven, it’s time to bake Pi!

Building & Turbo Charging Your Sales Team

Frustrated with your Sales team or lackluster results? Are you constantly thinking about sales training in your local region? Stop settling for sales performance that isn’t generating significant earnings.

You CAN set a higher bar, strengthen your sales team, your sales processes and drive higher sales in a matter of months! This straightforward PowerPoint presentation,“Build & Turbo-Charge Your Sales Team”, gives you a practical step by step checklist on what to do to make it happen.

Rank your current status A, B or C on each item. If you score an “A,” keep up the good work, if you score a “B,” focus on it & figure out how to do better. If you score a “C,” get some help re-engineering it or out-source it. Sell more right NOW! I’m allergic to long sales cycles… and you should be as well.’

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Business Consultant Prices & How Much You Should Be Willing To Pay

Business consultant prices are something that come up a lot in my line of work, and they are important. But what’s more important than the price you pay is what you will be getting in return.

Investing in the assistance of outside advisors is a key decision for you. Your time is very valuable and you want to make sure that you get a high ROI.

The most important decision you’ll make is WHO to engage. And to make that best decision work for you, you want to approach it with a good understanding of business consultant prices and how to assess how much you should be willing to pay.

What determines the price?

As in most industries, business prices are determined by a number of factors, none more important than the reputation and track record of the consultant.

Generally speaking, if the track record is there and can be verified by satisfied customers who have been the recipient of tangible results, your ROI will be secure. If they’ve performed before in similar situations, there is a much higher probability that they can perform for you.

Other factors besides reputation and track record weigh heavily as well. Rates vary by

• Size of customer,
• Markets served,
• The degree of specialization,
• The potential value of the work and
• The marketability of the consultant.

Let’s take these factors determining business consultant prices one at a time.

Larger companies tend to pay higher consulting fees than smaller companies. The consulting firms that serve them have high marketing costs and overhead and therefore have a higher rate structure.

Certain markets allow higher rates and this is closely tied to the level of specialization. For example, heavily regulated industries such as financial institutions and technology generally prefer to work with consultants who have specialized in understanding their issues.

Specialization can also be a differentiator that rationalizes the price you should pay for business consulting services. For example, there is a strong demand for intergenerational consultants to help companies understand their multigenerational workers better in order to motivate and retain them.

The potential value of the work is a key determinant of price. If your potential gain from every additional sale is $100,000 profit, you will pay more for consulting advice that wins that business than another company who gains $100 from an additional customer.

Unfortunately, the ability of the consultant to market themselves is another key variable in determining price. I say unfortunately because ultimately what you care about is getting results, not in being wowed. Unless they are a pure genius who stands out dramatically from the crowd, consulting fees will be higher for those who market themselves well.

So, how much should you pay?

The key to making a good decision is to calculate the ROI on each consultant you interview and choose the one that delivers the highest ROI. You’ll have to make some assumptions to do this but that is the rigorous thought process that gets you the best result. Its not the business consultant prices in isolation that matters, it’s the RETURN on them that’s the key!

With a now thorough understanding of how prices are determined, ask the consultant to provide you with an ROI projection. A simple ROI calculation would be to take the total incremental earnings you will receive because of the assistance of the consultant and divide it by the total cost of the consultant.

A better calculation is to time-adjust and risk-adjust the rewards and the cost using a net present value calculation.

So, calculate your ROI on your consulting options, choose wisely and prosper!

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