Category Archives: Business Strategies

Viable Options

Which direction to go may not be obvious.

In our last blog, we wrote about the importance of feasibility studies. They can be critical in deciding whether your business idea is viable or not.

One aspect of a feasibility study that comes up is the various options it often exposes if the original subject loses luster. When a study is commissioned and a consulting firm such as Brand Irons is engaged, the business owner or entrepreneur has a fairly clear concept of what they want to accomplish. They may have a business location and other variables in mind for establishing their operations. While those may represent the ideal, the business owner needs to be receptive to what the study’s findings reveal, however.

The study may, and often does, uncover that while the concept may be a good one, the short- and long-term economic viability is less than desirable.

In the course of a study, however, new and often better options arise from the research. More economical and durable equipment options may be discovered, for example. A more reasonably priced piece of property a block away on the other side of the street may actually be more advantageous for consumer accessibility, and be more affordable. An entirely different, yet potentially more profitable, market segment may be identified. The study may also reveal that an entirely different product line may be the better way to proceed. These are completely unforeseen developments that are revealed in the course of a feasibility study.

That’s why we encourage business owners to keep an open mind and embrace the potential that another option may crop up and be better in the long run. They should avoid locking in on one, and only one, option. Different vendors and investors or financial partners may also be discovered when the entrepreneur is amenable to suggestions.

The purpose of the feasibility study is not to tell the person with the idea whether to go forward with their business concept or not. It is intended to provide the decision maker with reliable information on which to base their choice. That information, when thoroughly digested and evaluated, forms the knowledge base that gives justification for whatever decision is made.

The beauty of this process is that it reduces the risk of throwing boatloads of money at a project that fizzles before it turns a profit. Yes, there is a cost to conducting the study, but if you can save hundreds of thousands of dollars by sending a few thousand instead, it is worth the effort. And, if the decision is made to move forward, it’s money well spent.

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Business Viability

Is your business concept feasible?

Will it make money at some point?

More often than not, we find business owners starting their endeavor without a clue as to its success potential. Success potential is a realistic consideration of whether the idea has a chance of earning a profit, and at what point in its existence.

Far too often, the person with an idea for a product or service has little experience operating a business. They’ve got what they believe is a great concept, and they become emotionally invested in moving forward. They probably invest some financial capital as well, but are unsure of how much more they may have to invest to make the project viable. They need to take the time to think things through.

Conducting a feasibility study involves taking a step back to evaluate the idea from several points of view, removing the emotional element (there’s a place to bring that back in), and assessing the business from a rational perspective. Among the considerations are financial projections – obviously – along with management, market demand, production, distribution, licensing and legal concerns, product definition, and a host of other business elements.

Financial projections need to be as realistic as possible. It’s easy to project an optimistic forecast for sales, but the pie-in-the-sky numbers can convey a false sense of short- and long-term profitability. The cost of goods sold (COGS), expenses, labor costs, and cash flow are among the down-to-earth considerations that can provide realistic numbers.

Realistic projections are also critical if the business owner needs financing. We’ve seen potential loans turned down because the borrower, when asked, told the banker the numbers were just “plug ins” and was unable to explain why they were in the projections.

An independent third party like Brand Irons can review the financial projections in a business plan and do the research to verify their accuracy. They can also look at the other elements, such as the strength of the management team, to provide a prospective lender with the information it needs to make a decision. Lenders often want to know if the management team is capable of making tough decisions when necessary, and the business owner completing a plan for financing is rarely objective on that issue.

One of the most difficult parts of conducting a feasibility study is removing the owner’s emotional attachment to the concept. Although it may be the best idea since the invention of the bread slicing machine, we advise business owners that they must be able to walk away from a project if all indications are that profitability is fleeting. Where emotion comes back into play is once the idea looks viable and the owner elects to move forward, their emotion becomes the foundation of the marketing strategy that convinces prospective customers to purchase.

Keep in mind that some people may have great ideas but lack the skills necessary to carry them through. Yes, a feasibility study can cost thousands of dollars and months to complete, depending on the concept and its variables.

It is well worth the investment if, in the long run, it saves the heartache of risking one’s personal wealth to realize they’ve lost it all. And, if it proves feasible, the study becomes the foundation of the business plan and marketing strategy. More next time.

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If Management Is The Problem

Your business seems to be doing well, but customer service continues to fall short of expectations. You’ve brought in specialists to provide consumer-oriented training for your front-line employees. That shows slight improvement before slipping back to before training levels. You’ve analyzed products and systems and virtually everything else you can think of to evaluate, but nothing changes.

What if management is the problem?

The answer lies in being able to step back and view your operation from an outside, third party perspective. The hard part of doing this is removing any emotional attachment you may have to the members of your team. You need to analyze your management staff from the viewpoint of a potential buyer for your business, and be critical.

Whom would you keep? Which management staff would you let go if you knew everything a prospective buyer sees?

Management can get complacent. Team members may believe they have so much tenure that they’re beyond getting fired. They may be family or think of themselves as your friend, and bosses don’t fire friends, do they?

Management, like most employees, tend to resist change. Remember the adage: The only thing that’s permanent is change. The economy, consumer buying trends, market conditions, product features, disposable income levels, and virtually everything else in life changes. Evaluate how your management team has changed with the times. Has it?

Let’s look at an example pertaining to customer service. Assume your heating and cooling company employees are required to wear uniforms with the company logo, shirts tucked in, and a name badge to identify themselves to a customer. They are also supposed to put on shoe covers before they enter a consumer’s home. That’s the protocol.

Now assume a supervisor tags along on a home repair visit and tells the technician to skip the shoe covers because “we need to get in, get the job done, and get out quickly.” On subsequent calls, the technician foregoes the shoe covers on the assumption management thinks it’s okay. It’s acceptable behavior now. Then a customer complains about their soiled carpet.

Is it the technician’s fault? Or the supervisor’s? Or is it the company’s?

If you have all the facts, you begin to look at other short cuts the supervisor is taking. You wonder if his reports are accurate. Is he padding his expense report?

The protocol in this example was in place for a reason: Keeping customers happy. Deviating from it is unacceptable from a manager if the company expects front line employees to adhere to it.

The level of responsibility starts at the top. You, if you are the business owner, have the ultimate responsibility for every decision that’s made in your company. Yes, you need to delegate as much as you can to people you can trust, but the weight always comes down on your shoulders.

Always be willing, and able, to step back and take a hard look at your business. Do you have the right people in place? Can they be trusted to follow through and make the right decisions?

If you have a hard time separating yourself from your operations, that’s an excellent reason to bring in a professional business consulting firm such as Brand Irons. Consultants can often address issues by talking things over in a phone conversation. The key is to be open and honest with your consultant, lest they give you bad advice.

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Handling Customer Complaints

We often find that training to help employees deal with customer complaints falls short of expectations. The result is dissatisfied customers, discouraged staff members, loss of brand loyalty … and profitability.

We’ve expanded on these eight steps from Associated Bank as a tool to improve your business, your customer service, and strengthen customer loyalty:

Train for the worst. When your employees, associates, customer service associates or whatever you call them are prepared for the worst possible scenario, such as the potential for an active shooter, they are ready to handle those situations. It makes handling the more simple problems much easier.
Listen. Customers are emotional when they complain. They want to be heard and give you information that is, indeed, helpful for operating your business. Provide your employees with the training they need to be able to listen and, most important, understand what is being said.
Assume the truth. You may get an occasional customer who tries to milk the system, but most are honest and should be assumed to be telling the truth. By assuming it’s true, your employees can focus on fixing the problem, which should be the desired outcome.
Apologize. An apology is more sincere than saying “I’m sorry” for something that may or may not be the employee’s fault. The apology is for the fact the customer had to experience the problem. It should be sincere – and count – so it can diffuse a potentially tense situation with an irate customer. Tread carefully for legalities so the apology doesn’t end up in court as a “Well, he said …”
Act Immediately. Staff should be trained to take care of the problem right away, and to keep the customer apprised of what’s been done. We asked someone registering us for an event to correct a misspelled name and it was done immediately. That instills confidence that the company does care about its customers.
Ask what they want. Be straight forward and ask what can resolve the problem to their satisfaction. They may not actually want anything other than to apprise you of a problem or potential issue. Use this as an opportunity to find a solution – for the client and for the prevention of future problems.
Make it easy to complain. Provide a phone number on invoices or your website. Give out an E-mail address for customers to express their concerns. A word of caution, however: Avoid letting those concerns reside and linger in a voice mail message system or in box for days on end. Take care of the complaints promptly.
Follow-up. If nothing else is accomplished, follow-up. Make sure your customers are pleased with your service, your products and/or services, and your company/brand.

Brand Irons can provide your company with an in-service workshop on customer service. You can find out more with a phone call to (920) 366-6334.

In our next blog, we’ll cover whether management may be the problem.

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F-2-F Marketing

What seems to be a dying art – being face-to-face with someone – is still relevant for marketing your business. For those of us who enjoy interaction with other people, the trend toward faces down with eyes glued to the small screen is annoying.

Sure, texting and the other tasks you can accomplish on your smart phone seem to increase efficiency and enable us to do more, but does the fascination with being connected all the time detract from reality? How often do you see people in restaurants on their mobile devices when there’s a live, breathing person seated across from them?

Who is more important than the person you’re with at the moment?

There, we’ve exposed the secret to face-to-face (F-2-F) marketing: Be in the moment with the person you’re with!

If that person is someone you’ve never met before, you should get to know them for a number of reasons:

Are they a potential customer?
Do they have valuable connections?
Are they someone you can trust with your business?
Could they refer people to you?
Are they a reliable resource?

If the person you’re face-to-face with is someone you already know, how well do you know them? Do you know what they like to read? Where they live? How they earn a living? What they enjoy doing in their leisure time? Why they do what they do?

We can learn so much by being open to F-2-F discussions with other people. It may be awkward at first, but you begin by approaching someone and introducing yourself. Remember: They may be as bashful as you are when they’re approached.

Ask them their name, and try to remember it. A technique that we’ve found to work well is to repeat their name several times in the first few minutes of your conversation.

Ask where they work and what they do. Be genuinely interested in their answers. Pay attention and avoid distractions, such as looking for someone you’ve been dying to meet. That’s rude.

Ask why they do what they do, how long they’ve been doing it, and maybe even how they got into doing what they do. You may discover a rather fascinating story that leads you into a deeper relationship and potential friendship. You may share a favorite cuisine or vacation destination.

We struck up a conversation with a couple on a flight and showed interest in them going to help their son open a new restaurant on the east coast. Before the flight was over, they had pulled out the business plan and financial statements for us to look at!

The point of a F-2-F meeting may be to get acquainted, conduct business, close a sale, or to share camaraderie. Avoid being in a rush as much as you can. Take the time to enjoy the conversation. Assume you will learn something new. Crave knowledge.

If you’re face-to-face with a customer or prospect, concentrate on the individual and what his/her needs seem to be. If you’re unclear, ask clarifying questions. Get down to what they want and you’ll enjoy far greater success with higher closing ratios.

In our next blog we’ll cover the topic of Handling Customer Complaints. Stay tuned.

Practice the 3-foot rule: If someone is within three feet of you, they should know what you do. If they’re beyond three feet, get closer.

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The Trust Factor

Credit must be given when credit is due. The trust factor is a concept we learned about word-of-mouth (WOM) marketing from the networking guru, Dr. Ivan Misner, founder of BNI (Business Network International). The concept is worth elaboration since it applies to more than WOM marketing for your business.

Graphic designed by Brand Irons.

The process of building trust begins with Visibility. From the networking perspective, you must make yourself visible in order for people to begin building some trust. That often means attending networking events on a consistent basis, whether it’s a BNI meeting or a Chamber After Hours event.

From the business and marketing perspective, visibility is important because your consumers and potential customers need to know you exist. In this case, visibility is how your place of business is perceived, how your products and/or services are viewed, how visible you and your employees are, and how well you advertise and promote your business. Perception needs to reflect reality. You need to be seen and recognized!

In networking, you also establish trust by building Credibility. You have to say what you mean and mean what you say.

The same principle holds when it comes to marketing your business. If you promise to deliver within 24 hours and it takes 36, your credibility is damaged. If your advertising offers a “wide selection” and the consumer discovers they have two choices, your credibility is suspect. If you post certain hours and are closed during those times, it has an impact on your credibility.

Credibility, like visibility, must be maintained on a consistent basis to build the trust you want your customers to have in you and your business. Our last two blogs have harped on consistency because it is so vital to continuously growing your business.

When it comes to networking, and we have found this to be true in more than a dozen years of being involved in BNI, your Profitability comes from the trust that’s established when you are visible and credible in your business dealings.

From the business and marketing side, establishing the profitability of your company is also built on the other two sides of the trust triangle. When your products hit the market and gain visibility, they hopefully become credible and desirable in the eyes of your consumers. This establishes the trust in you, your company, and your products and/or services that leads to the profitability you desire.

Trust is at the center of building customer loyalty to your brand. Trust must be established and maintained with your clients. Remember, too, that trust is easily destroyed. It requires honesty and hard work, as well as consistency throughout your organization. It is also worth protecting when you achieve it.

One service that a consulting firm, like Brand Irons, can offer is an evaluation of the trust factor for your business, your products and/or services.

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Lessons In Consistency – Part 2

Here’s another perspective on the importance of consistency in business, albeit from a different angle than our last post.

Is she your avatar? Part of your ideal market segment?

Your sales process – part of your company’s over-arching marketing strategy – should be consistent from one end to the other, top to bottom. It starts with a constant known as your ideal customer. Can you describe that individual?

Are they male or female? What is their age? How do they live? What do they like to do? How much do they use their cell or smart phone? Do they listen to the radio? Watch TV? How do they feel about your products and/or services? How do you want them to feel? What gives them pleasure? What causes them pain?

The more narrowly you can define your specific target by answering these questions, the closer you can come to arriving at a sales process and effective marketing strategy that addresses their needs, wants, and desires … and gets them to want (demand) what you offer at whatever price you want to charge or that the market will bear.

When you have a solid idea of what motivates your customer to purchase your products or services, you can devise a consistent message that inspires them to be loyal to your company. The key is to be consistent with the message and every aspect of your business that’s related to it. Varying from that consistency costs you money!

For example, if you have customers purchasing your service at $60 per hour and they pay it without hesitation, what do you open your company up to by offering a “special” rate of $50 an hour for “a limited time”? In a word, trouble!

By lowering your normal rate, you devalue your standards, especially if you continue to provide the same level of quality service. Do you want to offer lesser quality because you’ve lowered your rate? Not a good idea. How do your customers who have paid $60 an hour feel about the discounted rate when they find out about it? Not happy.

Sure, you have to justify that the service you provide is valued fairly at the rate you offer, but we have discovered that companies tend to under-value their products or services. The reason they do is the fear they won’t have any business if they’re too high priced but, again, it comes back to the value provided. This is where companies become their own competition. You need a clear understanding of the value you provide, and stay consistent with your offer. Another reason you can engage professional help to keep you on course.

While we don’t advocate raising prices “just because,” it is important to assess your product or service in the light of market conditions. If the consumer perceives the value is there, they will pay the price. If not, they won’t. Simple.

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How Critical Is Consistency?

We all like to try different things. In business, however, being consistent is important … unless you don’t care if customers come back.

Think about a pizza joint as an example. Assume you order your favorite toppings and crust for delivery. When it shows up, within the promised time frame, it is hot and prepared to perfection. Your expectation has been established for the next time. The bar is set.

Two weeks later, you order the same pizza from the same establishment. It shows up hot and on time, but the crust is a bit overdone and the taste is different somehow. Maybe they forgot to spice it the same way. Okay, you can tolerate that, but now your expectations have been altered, maybe even reduced. You may even call the pizza parlor to ask the manager why there’s a difference.

The next few pizzas you order are tolerable but still not as good as the first. The joint seems to be having a hard time with consistency but still within a tolerable range fro delivered food. Then the bomb drops.

You order again and the person answering the phone is rude, asks you to hold, and rather than wait, you hang up and have someone else call it in. Same thing happens to them, and it takes five minutes to get back to you. If you are emotionally tied to ordering from that pizza place, you wait and place your order.

Thirty minutes after your pizza should have arrived, you call to find out if the driver got lost or what’s going on with it. No apology, just some line about being backed up and your pie is just coming out of the oven, so it should be there within a few minutes.

You expect a fresh, hot pizza that meets your standard for this pizza parlor. You’re hungrier than ever since you were ready to eat when it was due to be delivered. Instead, it arrives cold, the whole pie looks burnt – especially the crispy crust, and it tastes horrible. This is unequivocally not acceptable. Yet you’ve still paid good money for your dinner.

As the owner of this business, what would you anticipate the customer would do if you were them? Shut up and eat the pizza without complaining? Eat it but call to complain? Bring it back and demand a refund? Or the more likely scenario: Never order pizza from you again and tell everyone they know how horrible your pizza was?

The lesson for any business owner: What does it take to deliver a consistent product or service to your customers? In this case, making a pizza should be relatively simple: make a crust using your signature ingredients, put it in a cooking pan, add your signature sauce, top it with consistent ingredients and spices, and cook it in an oven set to the right temperature for the specified amount of time. Then box it up and get it delivered within the promised time frame.

Walk through that exercise with whatever product or service you offer to consumers. Assess what it takes to be consistent. The steps should be relatively simple and easy to identify. Those steps should be your normal and your staff should clearly understand that “normal” is the minimal standard to achieve. Nothing less than that should be tolerated.

What goes along with delivering a consistent product or service is the customer service side of the process. Back to the pizza example: How difficult would it be for someone in the business, preferably a manager, to call a customer back, apologize, and let them know the pizza is going to be delivered later than previously stated? Find the order slip, pick up the phone, and call the client. The point is to retain customer loyalty if possible. Unless you have enough business that you can afford to have only one-time customers.

For some business owners, it may be essential to have a business consultant come in and analyze what’s going on when it comes to processes and consistency. The solutions are often simple but may involve changing a company’s existing culture. There are firms, Brand Irons comes to mind, that can help assess those challenges and create options.

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Consumer Oriented Marketing

Rule #1 – The customer is always right.

Rule #2 – When in doubt, see rule #1.

Sound familiar? As a business owner, you know rule #1 may be false but that the customer’s perception is that they are always right.

In either case, the consumer is the lifeblood of your business. The more focused you can be on exceeding the needs of your customers, the more profitability you enjoy. You will build brand loyalty and have repeat customers as well as solid referrals for years to come. Think about what you would have without any customers.

Here are some steps to consider in becoming more consumer oriented in marketing your business and your products and/or services:

Know what you’re selling. You may believe you sell insurance, but your customers are buying peace of mind and the ability to sleep well at night. Think about what your customers are purchasing.
Know your customers’ buying motivation. This relates to #1, but goes further by analyzing whether they’re purchasing on price, convenience, satisfaction, previous experience or some other factor. Think about why they buy from you.
Know your customers. How often do they come to you? What other demographic information do you have about your market segments? Do you know where they live, or what they do for a living? Can you address them on a first name basis?
Know how to reach your customers. Traditional advertising methods such as radio, TV, or newspaper ads may fail to get their attention. You need to know what appeals to them and how you can best get your message through to them.
Know what you want. If you want loyal customers, treat them like they want to be treated. That’s the platinum rule. If you want referrals, ask for them. If you want volume and traffic, that’s a different call to action. Ask them to do what you want.

In many cases, your consumers want you to listen to them. That is the foundation of the rule about the customer being right. They may expect that you will refund their money or take back the merchandise or hear their complaint, and those all relate back to them knowing you will listen to them.

Some of the most innovative new products and services have originated from listening to consumers and their suggestions. Keep an open mind and listen!

At Brand Irons, we walk business owners through a proprietary process that helps them identify their products, markets, value propositions, and viable distribution channels.

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Brand & Business Review

You should review the status of your business every six months, if not more often. This includes an analysis of your brand and the products or services you offer to consumers.

This review can be a simple process of taking a step back and looking at your business from a couple points of view, or a rather lengthy evaluation with a professional consultant.

If you’re going to do a self-evaluation, the hardest but most important thing to do is to remove any emotional attachment you have to your business. Think rationally. Emotion is what you bring back when it’s time to market your business and advertise your products. Look at everything from an objective, independent perspective, just like a consultant would do:

Evaluate your cash flow situation
Assess actual sales vs. projections
Consider how far out are your receivables
Rate your advertising return on investment (ROI)
Look at employee turnover rates
Where is your company in terms of the industry standard

These are a few of the areas to evaluate on your own. Take the time to get the information you need to make intelligent decisions, and think through what the cold, hard facts are telling you. Look at it as if you were someone on the outside looking in.

You need to know the value of your company … and the value you provide to your market segments.

If you’re honest and open with your consulting firm, a six-month assessment may not be as critical with them as doing it by yourself. Your consultants should know where you are on a monthly or quarterly basis. The idea is to help you take corrective action while it can have a positive impact and before it becomes a huge risk or serious problem.

Looking at your business impartially enables you to discover if certain employees need to be released or divisions need to be trimmed or modified. Your investors and shareholders have to know you can make the tough decisions when they need to be made. Removing yourself from the urgent demands of daily activities to review your status reduces the risk of making fatal mistakes and reveals the validity of your company.

As the owner or CEO of your business, the responsibility for making hard choices falls on your shoulders. It may be your chief bookkeeper who is engaged in fraudulent activity and needs to be prosecuted. It could be that your closest friend and VP of sales is stealing clients and collaborating with your competition. You may have an obsolete product line that needs to be terminated. It’s difficult to make a decision unless you have the correct information, and your job is to make sure you have all the right information.

Let us know if you would like help.

Brand Your Work – Work Your Brand