Monday, February 16, 2009

Out of Touch Means Out of Business

(Source: Rieva Lesonoski)

"I am a positive person, an optimist, almost a Pollyanna. I generally see the upside of most situations and keep the light at the end of the tunnel in my sights. However, even I have my limits.

Things are bad out there. Robert Reich, the former Secretary of Labor under Bill Clinton and current professor at University of California at Berkeley, said Tuesday morning that we are rapidly heading from a recession to a depression. Hopefully we won't get there, but does this really surprise anybody? From November 2007 to November 2008, 2.5 million Americans lost their jobs. Just last week the Wall Street Journal reported that an additional 45,000 people were about to lose their jobs. And we all know it's not going to end there. Bankruptcies and foreclosures are up and it's anyone's guess what big name retailer or manufacturer is going to shut down next.

A few weeks ago I asked if you were a lion or a mouse. So how do you feel after reading that last paragraph? Do you lions take all this bad news as a challenge, inviting you to be more creative, innovative and, well, thrifty? Or are you a mouse, scurrying for a corner and waiting for the storm to pass? Or perhaps worse (and this is what has my dander up) you are an ostrich, burying your head in the sand, refusing to listen to or even be aware of what's going on in our world.

Apparently, there are a growing number of people out there who think that this will all go away if they don't think about it. Seriously. I won't name names, but there's a well-known, feel-good author/speaker who's telling people to stop listening to the mainstream media for 30 days. That way they can stop hearing all the negative things being reported and just focus on the positive. I was trolling around Twitter the other day and someone wrote how she told a journalist at her local newspaper to stop "being so negative." And she blamed the paper's falling circulation on all that negative reporting!

Get real, people. The media, mainstream or not, is not making the bad news up. Nor is writing about it the reason they're losing circulation (could it be the Internet?). Not paying attention to the bad stuff doesn't make it go away. When you open your eyes in a month, it's still going to be bad out there and you'll just be more ignorant than you were 30 days earlier. And while a few of you may believe that "ignorance is bliss," believe me, it's not. Ignorance is, well, ignorant. And you can't start, grow, or even maintain a business if you are out of touch with reality.

Don't get me wrong. I am a big believer in the power of positive thinking. But in business, positive thinking is more than learning the "secret" of willing yourself a great parking space. Everything you do needs to be put in context. Your customers and clients are changing their behaviors based on today's economy. You need to know what's going on, so you can tweak your offerings to appeal to their new mentality.


I don't want to sound unsympathetic, but someone else's bad news can be good news for you. If you don't know that Circuit City is closing its doors, you're going to miss out on some great deals. Or if you sell electronics, wouldn't you want to know that one of your biggest competitors is gone and their customers are now up for grabs?

Tuesday's New York Times reported that the transition industry is booming right now. These are the companies that prepare and train laid-off workers for future employment. Is it possible someone reading this article will decide to start a transition company and join the ranks of successful business owners?

In the long-running musical The Fantasticks the young heroine is encouraged to put on a mask every time she spots something bad to block out the reality. But she only finds true love and happiness when she sees the world as it really is (warts and all) and makes the decision to live her life with her eyes wide open.

In the closing lines of his inaugural address President Barack Obama told us "with [our] eyes fixed on the horizon" we can get through "this winter of our hardship." That doesn't mean bury your head and hide from reality. It means keep your head up and focus on the better times ahead.

Business Tips: Tom Smith on the change of social media

Here is a great video on business tips using social media:

Is 2009 the Year to Buy a Franchise?

"Almost every day the majority of Americans (and an increasing number of people around the world) spend money at a franchise. Whether we're buying donuts, hamburgers, or sporting goods, whether we're getting our taxes done, our carpets cleaned, or a package mailed, chances are the business owner we're doing business with is a franchisee.

So, when you're standing in line at Dunkin' Donuts or sitting in the drive-thru lane at McDonald's, do you dream about being on the other end of the action? Have you ever thought about what it would be like to own a franchise? Well, you're certainly not alone. In fact, according to the Franchised Business Economic Outlook for 2009, prepared by PricewaterhouseCoopers for the International Franchise Association (IFA), there are over 850,000 franchised outlets in the U.S. alone, earning a total of $835 billion. Franchising dominates some industries -- well over half of all quick-service (industry term for fast food) restaurants are franchises.

Buying a franchise is not for everyone, but if you're considering starting a business this year, you should at least take a look at the franchise option. There are inherent advantages and disadvantages to being a franchisee. Let's look at the positive side first. If you buy a franchise from an established company, you are essentially investing in a proven business concept. There's no experimenting with recipes or figuring out where to source products or how much cat food people buy in a month. You don't need to come up with a catchy company name or design an eye-catching logo. The franchisor has already done all that for you.

Franchisors recognize that every outlet carries their name, not yours. So with their reputation on the line, they do their best to make sure you are fully trained, equipped, and ready to run the business. In many cases, help is but a phone call away. You get to take advantage of their name recognition, the power of a bigger marketing budget, and the know-how that can take years to learn on your own.

You pay for this, of course, in the fee you pay when you purchase the franchise and the ongoing royalty fee that's collected from you, which is generally a percentage of your gross sales. Your initial investment will vary greatly depending on the industry and type of business you're interested in. These startup costs can be relatively low (less than $20,000) or fairly pricey (over $1 million). According to the IFA, the average investment is between $350,000 and $400,000.

Is it worth the money to buy a franchise? Well, that depends. Buying a franchise gives you, in most cases, instant familiarity in the market. In established industries, this can make a big difference. Say you've always wanted to own an ice cream store. Opening a Dairy Queen is going to initially bring you more instant recognition in your market than , say, a Dairy Princess.

On the other hand, if the franchise you're thinking about buying has little name value, you want to make sure what you're getting is worth what you're paying. For instance, if you want to start a business in a field you know nothing about, then buying a franchise might make more sense, since they'll show you everything you need to know to run that business.

Before you buy a franchise, you need to fully investigate the franchisor. By law, the franchisor must give you their FDD (Franchise Disclosure Document) before you sign a deal. Read it over carefully. It gives you the inside scoop on what you can expect from the franchisor in return for your fees: the level of training and ongoing support you're going to get, the background of the people who run the company, and the franchisor's financials.

Perhaps the easiest way to start researching a franchise is to find and speak with existing franchisees. Sure, a list of franchise outlets is listed in the FDD, but why wait for the document? Call franchisees in your community and across the country. Since franchisees all use the same company name, they're easy to locate. Ask the franchisee about their experiences with the franchisor. Did they get adequate training? How's the support from headquarters? Ask about their challenges and concerns. And most important, ask if they were buying into the system today, would they still do it? Why or why not? Franchisees, happy or unhappy, love to share their experiences.

Franchising is not recession proof. PricewaterhouseCoopers (PwC) is predicting the number of franchised units to decline somewhat in 2009 (except for fast-food and full-service restaurants), but franchising is a fairly resilient industry. From 2001 to 2005, PwC reports that franchising grew at a faster pace than many other sectors of the economy, expanding by more than 18 percent.

Franchisors are optimistic. According to an IFA Franchise Business Leader Survey, more than 85 percent of them expect to see unit growth in 2009. And almost half believe their companies will do better this year than last.

As I've said, franchising is not for everyone. If you yearn to be an entrepreneur because you can set your own hours, not have to follow orders, and march to the beat of your own drum, you are likely to not be a good fit, since as a franchisee you must follow the system the franchisor has set up. On the other hand, as a franchisee, you're still responsible for your own unit's success. You're likely to be responsible for hiring, local marketing and advertising, attracting customers and clients, and being involved in your community.

Buying a franchise is not a decision to be made lightly. Before you join the hundreds of thousands of happy franchisees, make sure you do your research and weigh your options carefully. In fact, we've already done some of your initial homework for you. Take a look at our new AllBusiness AllStar Franchises for 2009, a list of the 300 franchises we feel are the strongest and best opportunities out there. Happy hunting."

(Source: Rieva Lesonoski - small business blog)

More on Business Tips

Monday, February 9, 2009

Mike Tafoya's New Blog

For anyone out there interested in business consulting or business coaching, Mike Tafoya is one of Denver's leading business coaches. He has helped business owners of all different sizes and is ready to help you with your business needs today.

Mr. Tafoya has created a new blog with weekly video business tips along with his submitted articles. There is also a detailed biography, a list of his future speaking engagements and a place to sign up for Tafoya's Executive Briefing.

Check out his new blog at www.denversbestbusinesscoach.com

Client Retention: What Keeps Your Customers Coming Back?

Written by: Mike Tafoya

What keeps your customers coming back? An important aspect of Customer Service (CS) that all successful companies address is Client Retention. Remember, client retention is growth, and without it, you are forever replacing customers. A well-thought-out plan that defines how to keep your customer’s business is vital to the long-term success of your business.

Discipline: Client Retention
You may offer excellent products, but if the process of dealing with your business is an unpleasant one, your clients are likely to begin looking elsewhere. This is especially true if you are in a highly competitive field, and who isn’t these days. If you have a competitor whose product is equal to yours and the CS experience clients have with your company is a poor one, what’s to keep them from checking out the competition? Not much!

Creating a high quality customer experience

CEO Rule #1: “Customers remember the experience, not the product.”

That’s why good companies place a great deal of emphasis on making sure that their CS representatives provide clients with a high quality customer experience that covers these important areas:
1. New/Existing customer expectations/orientation. Do you know what your new and existing customers expect from your business, and does your CS staff properly orient them to know what to expect from you?
2. New order verification. Does your company have a clear process to verify orders for your products, especially from new clients?
3. Communication. When it comes to this important (and oft’ neglected) subject, your CS department needs to be pro-active, initiating frequent, open and honest contact. Sometimes they need to just call a client to ask how they’re doing!
4. Customer contact. A warm greeting, genuine friendliness and an intimate knowledge of their history with your company should characterize every interaction a client has with your business. 5. Timeframes for order fulfillment. Do your customers know all the steps required when ordering a product from your business, as well as the timelines involved for shipping, delivery and payment? Keep these matters as simple and clear as possible.
6. Knowledge of the customer—the company and the person. Don’t require your CS reps to merely know about the company they’re dealing with, insist that they get to know your clients on a personal level in order to build a strong relationship with them.

Assessing Your Company’s Performance
To begin assessing your business in terms of Client Retention, make a list of the things your Customer Service department currently does well, particularly in the above-mentioned categories.
1. When greeting prospective clients, does your staff connect on a personal level? This is very important when building trust with new contacts.
2. During client meetings, does your staff listen and record what the prospect is really saying: their wants and needs?
3. During the order process, does your staff acknowledge the order formally in writing? This is very important. Clients often feel forgotten once the order is placed. Order acknowledgement should be done in writing and in person or over the phone.
4. Once the order is acknowledged, does your staff explain the process for order fulfillment? The process review meeting will help the client to understand the procedure and manage expectations. If you don’t explain the process, the client sets all the rules for engagement—and you might not be able to satisfy them.
5. Once the order is filled, does your staff make contact to identify any problems with the order or the product? Order follow-up creates an avenue for the client to express their satisfaction or lack there of. Remember, a client’s unspoken complaint leads to a lost client.
6. When there is a problem, does your staff take care of the problem, or do they avoid the issue? Don’t ask the client if they are satisfied if you are not willing to fix the problem.
7. After the order is completed, and the client is satisfied, does your staff stay in touch with the client? Occasional messages sent to your clients keeps you at the forefront of their minds. When they need more of your service or product, you will be the one they call.

Some Practical Examples
Now, let’s take a look at a three CS scenarios for your consideration:
1. We once worked with a mortgage company that was fielding up to 30 calls per day from potential new customers. The business was losing many of these prospects simply due to the length of time it took to process the application and obtain approval. Their receptionist (CS rep) was spending a tremendous amount of time taking calls, forwarding messages from customers to other company personnel and ultimately having to deal with unhappy customers, complaining about the same issue multiple times. Upon investigation, we determined that there were three key contributors to the customer’s frustration: 1) The customer was not providing the necessary information to complete the process. In other words, they weren’t oriented well enough to the business to know the process, and weren’t being prompted by the CS rep to provide the required info. 2) The customer did not know the timeframes needed to move through the process. Again, the company was failing to provide this vital information to their clients. 3) The mortgage business was not keeping the customer informed about their loan status. Another failure of communication. Imagine the feelings (experience) you would have, if you didn’t know that status of your loan when attempting to purchase a house or other property!

CEO Rule #2: “An unfulfilled request is an unspoken complaint.”

2. We once worked with a company in the service industry that had over 3,000 active customers. One client had four full-time CS employees who spent 100% of their time taking incoming calls. We discovered that this business was losing 32% of their client base annually, and that the entire CS department was blaming the industry for their losses. Upon close analysis, we discovered the following three issues: 1) Each CS rep was fielding 25 customer request calls per day. There was greater emphasis on speed than providing a quality client experience. 2) 65% of all the calls were customer “call backs” on previous inquires—i.e., the subject of their original call had not been addressed, and/or no one was calling them back. 3) 100% of customer inquiries were sent to a Sale Representative to handle, when only 10% of them were sales related—a majority of the calls were about billing, production, service or general information.

CEO Rule #3: “Responding to a request is as important as fulfilling the request.”

3. A company had 32% to 35% customer losses per year. The owner committed to decreasing their losses to less than 5% over a two-year period. In an effort to do so, the owner implemented good CS systems, A/R systems and was working on implementing client appreciation systems. However, his efforts were undermined by the fact that his department managers all blamed each other for the client losses, and could not see (or admit) how the failures in their particular department contributed to the company’s losses. While it is, of course, primarily the CS rep’s job to ensure that a firm’s customers have a positive experience that leads to their continuing business, everyone in the company needs to contribute to the process.

CEO Rule #4: “Client retention is EVERYONE’S job.”

Retaining clients is a vital part of any business. It is far less about the product(s) you offer than it is about producing a positive and high quality customer experience with your company. The way that everyone in your organization—especially your Customer Service people—communicates with those who purchase your merchandise is especially important to keeping them coming back to you, instead of a competitor. Regularly assessing your business’s performance in this area is a wise practice. It is also useful to think about the good and bad customer service experiences you have had. What impressed you, and what didn’t? In many ways it comes down to the Golden Rule: Do unto others, as you would have them do to you. It’s really about building a strong relationship with those with whom you do business. So, how is your company doing when it comes to client retention?

Friday, February 6, 2009

Who Holds You Accountable?

Working for yourself is great, but how do you know if you are doing the best job you can possibly do? What if there is a better way to complete the task(s) you've set for yourself. Are you really making the best use of your time?

Having a Business Coach who takes the time to understand you and your business, and can help in holding you accountable for the task you have set for yourself can make all the difference in continued growth or stagnation.

Estrada Strategies invites you to sharpen your business skills and devise a working strategy for success. Register today and see what Estrada Strategies is all about "YOUR NEXT MOVE"

Find out more or register to attend:

Sincerely,

Mike Tafoya
Estrada Strategies-DTC
Phone: 303-524-1270

Tuesday, February 3, 2009

Business Leadership Training

(Source: Thomas Morva)



Today's businesses operate in a uniquely competitive world. Not only is there cut-throat competition among companies, but there is also an acute shortage of people with the right business leadership training to take business outside the clutter of the competition. Most of the people who hold the top positions have gotten by hard work and by learning from their experiences. However, in a fast-paced business environment, learning by experience and mistakes is indeed a very slow and unsatisfying process for many. The best way then to acquire business leadership skills is by attending business leadership training programs that are now being offered by a lot of institutes and universities across the country.

Business training is held in an organization in order to equip and develop successful executives and managers. These trainings help to redefine people's visions and broaden their horizons. In turn, those who have received the training are able to help boost the profits of the company. Such training has also proved to be quite successful in lowering people's stress levels and enable them to manage stress effectively and to avoid panic. There are many types of business leadership training programs available in the country. While the most obvious ones are classroom seminars on imparting skills, there are others that have gone beyond this age-old method and now offer books, tapes, audio newsletters, and even telephonic consultation and training.

The main idea of such a seminar is to provide information about the changing market scenario, what needs to be done individually and at the organizational level to keep pace with it, boost market share, compress sales cycles, and build dependable and successful leaders. Thus, these seminars motivate people to manage the company irrespective of the unfavorable factors and enable them to deal with crisis. The idea behind such business training is to give concrete ideas and workable plans that individuals and organizations can implement.

Many people undergoing such business leadership training often express surprise and delight at the things that they have learned and how their new knowledge has enlightened them and helped them to see things with a new perspective. They are now more determined and optimistic than ever and carefully plan out their every move.