The Alternative to Firing Your Clients: Better Screening

In my earlier post Firing Customers: Why and How,  I referenced Collapse of Distinction: Stand Out and Move Up While Your Competition Fails. This is a book by Scott McKain and although I haven’t read it yet, he has published an informative article on MarketingProfs.com: Why You Should Fire (Some of) Your Customers.  Herein, he recommends who to keep and who to discard by category (very helpful!) and  smartly states: “We spend more time than we really have to give pleasing a customer we never should have solicited in the first place.” (Emphasis mine.)

This last bit by Mr. McKain leads me to the crux of this post: Better screening.  I admit that I have fallen victim to a big name, a glowing referral from a colleague, and a market underdog with potential (if only they’d been open to change), but I am trying—and encouraging my marketing strategy clients to try—to do a better job of what I call “selective engagement.” 

With a little process development and strategic thinking, small businesses can establish criteria for selectively engaging clients who are well-suited to their business models and financial goals. This includes ideal client persona development as well as the means to attract them and the process of identifying them.  With this type of planning and supporting processes in place, you can prevent the firing mentality or  “culling phase” and instead be more exclusive with building your client base upfront.  Yes, this takes great effort, bravery, and budget, but given the alternative—having to gracefully back out of an engagement—it might just be worth it. 

Today I came across an excellent example from a marketing person I respect, Allan Starr. In his Marketing Monthly newsletter,  he states his criteria, including this specific requirement, “If a client doesn't at least believe they are better than their competitors, we don't take them on (we are opportunity agents, not turnaround artists).”  Starr makes a bold statement about what his company does and what they need from potential clients, which will allow prospects to identify or walk away.  (Bravo Marketing Partners, and feel free to refer those who need more confidence to Tracy Diziere & Associates.)

As many marketing colleagues acknowledge, it can be hard to walk away from prospective business, especially when you know you can help them and see how much they need help—and given this economy. But you will SPEND more money in terms of  time and energy trying to please them than you will MAKE. 

Not only should small businesses have a defined process in place (as well as the means to communicate that to the market), they should also seek to improve upon it.  I have a process for lead qualification, but it is constantly being refined based on experience.  Practicing continuous improvement is key, not only in manufacturing but also in your sales cycle.  I advise clients to create and refine their lead generation and client acquisition strategies (as well as client education efforts).   In my experience, it is easier to do this for others than to do it for one’s self—due to perspective-taking abilities, the need for thick skin, and the ever-illusive time for  working on the business as opposed to delivering client results. 

Here’s another supporting tidbit from the 1to1 Media Blog which asks the question “When Is It OK to Fire Your Customers?”  Ginger Conlon notes, “Others say: Don't acquire potentially unprofitable customers in the first place.” That’s what TDA helps micro and small service businesses do—with the process and tools to support such a customer acquisition strategy. 

Lean Services Marketing

Just a quick post here for small businesses in B-to-B services.  Regardless of your knowledge of (or initial interest in) Lean, you can use some key questions to tighten up your service delivery. Why is this important? On-target marketing and delivery of services translates to less costs, increased revenue via more focus on the customer, and more fulfilled employees.  That’s what I’ll help you with here.

First, a brief intro to the concept of waste.  Waste is defined as “any activity that uses resources, but creates no value for the customer” by Natalie J. Sayer and Bruce Williams* in Lean for Dummies.  There are 7 ways that waste manifests in manufacturing companies: transportation, waiting, overproduction, defects, inventory, movement, and extra processing.  Here, we’ll just look at preventing the types of waste that relate to marketing and delivering  services, primarily overproduction, extra processing, and inventory.

To deliver and market B-to-B services efficiently, the small business owner should ask the following questions to reduce waste:

1. Am I producing more (volume) or more options than my clients want? (Even at the proposal stage.)

2. Am I producing deliverables sooner than they need them?

3. What quality levels are required by the clients/customers?

4. What quantity of deliverables/materials do they require? 

5. What materials/deliverables can be re-purposed into something that clients value?

6. Is there anything that needs packaging/promoting to create value in the clients’ minds? 

With the answers to these questions, you can begin to plan with greater efficiency and make better use of your time and resources while ensuring you are meeting client needs.   That, after all, is the benefit and goal of eliminating waste.   

 

*Bruce spoke last month at an ABPMP-Phoenix event.  This link contains his bio and information about Business Transformation Through IT, co-sponsored by ASU’s WP Carey School of Business’ MSIM Department.  To learn more about our local chapter of the Association for Business Process Management Professionals, visit our website.

What are your thoughts on social media for companies and their brands?

This question was posed by my colleague Jen. Before I launch into the answer, a few words about blogging on this subject:

1. I’m going to respond within the context of micro and small businesses. My assumptions are that the brand is undefined, formative, or MIA.

2. I could write a whole article/white paper on this subject (and I might just do that!) but for today I am going to shoot from the hip and also try to keep it brief.

3. For brevity, and because you’ve introduced the B word, I’m going to limit my discussion of “social media” to what’s available and typically undertaken by this audience—not custom platform development or integrated marketing campaigns. Also, my comments will be highly generalized. And I will use sentence fragments.

Now, my thoughts on social media for companies and their brands.

If your company does not have an established brand or brand guidelines, does not have a brand strategy, or has not organized internal branding efforts, whatever you do/say “socially” will build your brand for you. It sounds simple and a given, right? Without a brand to align communications with or to test your tone against, you are not doing much to “shape” the impressions of your intended audience.

SIDEBAR: We assume that this is possible or we would not invest in any marketing, packaging, advertising, research, etc. (although not necessarily in that order) and yours truly along with 167,463 other people with the title Marketing Manager in the U.S. plus who knows how many others would not have a job (U.S. Bureau of Labor Statistics Office of Occupational Statistics and Employment Projections, 2006).

But it’s easier to go off and do the social media thing, jump on the bandwagon and just participate, than it is to do the hard work of creating a brand. It’s seemingly cheaper, too—a fact that is not lost on small business owners. It’s when we ask questions of effectiveness that social media, when conducted in this manner, falls apart. That’s why I say “seemingly.” Building on Econ 101, if there’s no such thing as a free lunch, how much does a cheap lunch actually cost? Which leads to the question of who’s managing those impressions at what hourly rate. Or at least monitoring.

At the heart of social media is a conversation, and someone has to take the pulse. We have to listen and speak. We have to do both to connect with people, although some marketers will insist that you be a spokesperson. I think there are important usage decisions to be made. It will depend on your business and your relationships with others (and how that gets played out). I like to put it this way: Are you a megaphone, a two-way radio, or an antenna?

If you’re a megaphone, you’d better be (a) pointing in the right direction and (b) saying something worth listening to—as defined by your listeners, which really means you have to do some sort of listening, even if it’s not via social media channels. There are too many broken records, especially on Twitter. If u tweet about the same thing over & over & I don’t care about it, reverse marketing happens: Unfollow & boycott. (That’s 116 characters, BTW, and you can RT @tracydiziere.)

If you’re a two-way radio, you have to be comfortable with whatever comes back. And gracious. And accepting. When you open up the discussion for feedback, and readers use the opportunity to knock your service or product, you have to be able to respond positively. Unfortunately for micro or small business owners, who feel like they ARE the product/service, this isn’t easy. In the best case scenario, you have a process in place for capturing that valuable feedback, which would otherwise be very costly to obtain. Of course, it may not be representative of the entire market and it will trickle in vs. be conveniently culled, but it’s your data and you know how to use it to your advantage, thanks to your process. If you don’t have a process, don’t bother with social media. Community members, consumers, and would-be customers can (a) spot a faker a mile away and (b) will be even more disappointed if you don’t have an honest response that attempts to fix the problem.

If you’re an antenna, you’re picking up on what’s being said in social media circles that apply to your business, but you’re not contributing or launching anything. This is a good place to start. Listening can make your marketing efforts uber-effective, not to mention make you a more tuned-in friend, family member, boss, co-worker, consumer, voter, etc. Even as an antenna, you can acknowledge you’re receiving a signal on occasion. What you do with the information is important too. Use it to spark internal discussions, to understand consumer views, to track the competition, etc. Again, have a process for what you’re doing and a way of transforming content into data.

Finally, the question most people want to have an answer to: Should we do it at my company? Some marketers convince every client that they all have to be megaphones in all the usual suspects of social media—Facebook, LinkedIn, MySpace, Twitter, blogs, Ning, YouTube, etc.—and create their own communities or be left behind to die in the desert of traditional media. There is no question that mainstream media is freaking out, is in trouble, is still too silo’ed, lacks freshness, and has to change. To tell you to ignore that and go ahead with business as usual would be beyond foolish. But social media efforts are not one size fits all and I’m not selling you some elaborate plan for social media domination either (as if it were possible, duh, it’s democratic). I’m just saying small businesses need to consider all the factors that come into play when designing (that means professionally constructing an organized and creative effort) their communications strategy—regardless of media. Those factors include not only larger issues of who are we trying to reach and WWMBD (MB=my brand) but also who is going to do what, how often, how long, at what expense, and the most important considerations of all: What if, what if, and what if?

If you need an extra head to think those things through, mine is for rent. If you’ve made it this far, thanks for reading. And why not post a comment acknowledging your feat, calling me out, or lending your support for something I’ve said? Tracy Diziere & Associates is a two-way radio, but it’s awful quiet out there! Feel free to post your burning marketing questions as response to this or my previous post "Can We Talk?"

Increasing Sales Article Launching Tomorrow

Tomorrow I am sending out the Q2 newsletter article (yes, on the last day of the quarter!) on how small businesses and start-ups can increase sales. To read it, sign up to be on the distribution list at http://tinyurl.com/tdiziere.

A Client's Pricing Issues

I just saw a very funny--or is it sad?--YouTube video on how client pricing issues would get played out in real-world scenarios. My apologies in advance to those clients who understand the difference between a taco-stand taco and a filet mignon vs. those who believe they are paying for beef.

It should be said, these issues are more likely to happen with large agencies and when clients are unfamiliar with pricing structures, have not been educated appropriately about the services they are buying, or in general lack the experience or humility to succinctly acknowledge differences in expectations. This can be exacerbated when a marketing firm is too busy to develop the relationship or believes the account is too small to act as a trusted advisor.

It would be interesting to see the client-side version of this video.

See for yourself: http://www.youtube.com/watch?v=R2a8TRSgzZY

Section 1.4.2 from The Value-Based Fee Manifesto

"While the hourly fee allows the client to receive an estimate based on the amount of time the marketer will spend, the number is not written in stone. Furthermore, it is a variable that has the semblance of being an even exchange--hours for a task being completed--without respect to the importance of the task or how successfully the result meets the client need. In fact, if the results are off the mark, and more time must be spent to complete the project to the client's satisfaction, that time is billable. When a client selects a project fee, (s)he is not charged for additional time."

This is one reason why I create a custom proposal for each client that includes a project fee, not an estimate of how long it will take multiplied by an hourly rate.

What is your take on the subject?