Seeds of Growth - Business Opportunity

The Cannonball Business Plan

Dave Free — Fri, 30 Nov 2007 12:47:23 -0700

Remember that old Burt Reynold’s movie Cannonball Run? It was probably just my age but at the time I thought it was pretty cool--an illegal race across the country in some very nice cars. It turns out the Cannonball Run is not just fictional. Wired Magazine recently ran a story about a guy named Alex Roy whose passion has been to break the 32 hour and 7 minute record for a coast to coast drive.

This is of course completely illegal and let me clearly state that I am not encouraging participation in this kind of activity—though it sounds kinda fun. Having said that, I think we can learn something from their experience.

Their challenge was not unlike that of every small business owner—they needed to accomplish something complex with limited resources (Their limited resource was time. Most of us are limited by funds which of course limit our time). The "Driveplan" they created impressed me. On it they listed every key milestone, targeted time of arrival, potential hazards, weather forecasts etc. Because they had this plan and knew where they were supposed to be every moment, they could immediately tell if they were in trouble and if they needed to make adjustments—including backing out.

Now compare that to your business plan. When was the last time you took it out and checked where you are against it? If you are anything like me, your business plan was something you forced yourself to put together to raise funds. Once that task was done the document went in the drawer to gather dust. Maybe that is due to the way we write the things—all that useless wordiness (kind of like this post). What if we created business plans that looked more like Alex Roy’s driveplan? Imagine clear milestones, expected results, time required, potential hazards each step of the way. Seems like if we created something like that we'd be much more likely to use it and reach our destination.

A disgruntled customer is 5 times more likely to tell their friend than you. On average they'll tell 4 friends. Wouldn't you like to be in the loop? Learn more

Have You Tried Turning it Upside Down?

Dave Free — Mon, 21 Aug 2006 11:12:52 -0700

Do a search on innovation over at Amazon.com. 11,859 results! Innovation is good. Unfortunately in that search you won't find (at least not in the first 100 results) what I think is one of the best "how to" books on innovation. It's called "The New Drawing on the Right Side of the Brain" by Betty Edwards. Betty does a great job of explaining how the brain works with regards to creativity and includes exercises that can help anyone tap the right side of the brain to come up with creative solutions to business problems.

Here is a quick one to try. Get out a piece of paper and a pencil and draw the upside down picture above. Now print out the picture, turn it right side up and try drawing again. Which of your efforts look more like the original?

If you are like most people, the upside down version will look the best. Why is that?

It is because the left side of our brain is very good at what it does and is in charge most of the time. One of the things the left side is good at is assigning symbols to common objects which makes them quick and easy to reference. For example, a wheel is always round, an eye is almond shaped, etc. The left side is also very good at being abstract--taking a small bit of information and using it to represent the whole. Both are very powerful and useful skills for quickly dealing with most obstacles we face. Here is an example. The following letters in the following paragraph are all mixed up but I doubt you have any problem understanding it:

Aoccdrnig to a rscheearch at an Elingsh uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoetnt tihng is taht frist and lsat ltteer is at the rghit pclae. The rset can be a toatl mses and youcan sitll raed it wouthit porbelm. Tihs is bcuseae we do not raed erveylteter by it slef but the wrod as a wlohe.

Let's hear it for the left side of the brain! It quickly solves thousands of puzzles a day without us even thinking about it. So why do we need the right side?

The very things that make the left side of the brain such a powerful problem solver, limit our ability to see creative solutions. Because it is quick to make assumptions and jump to conclusions, we are not even aware of the assumptions that are limiting us. In addition, symbols and names that it assigns have meanings attached that we don’t question.

Back to the upside down drawing exercise. When most of us draw, the left side of our brain uses its common symbols to help speed the process. If we're drawing an eye, it is almond shaped with a little circle in the middle. If we're drawing a wheel it is always round. Two arms are always the same length etc. Trouble is, once perspective gets involved (which it always does), rarely is a wheel in a picture round nor are eyes almond shaped. I know, I know--your left brain is telling you that is a lie. But it's not. Look at these pictures.

The men are all the same height, the tables both have the same size tops. Go ahead, get out your ruler and measure. In fact, measuring is one great way to shift from your left brain over to your right when you are looking for creative solutions. If you can invalidate assumptions that your left brain is operating on, new possibilities open up. That is one of the reasons real customer feedback is so important--leave nothing to assumption when it comes to the happiness of your customers.

Other ways to shift over to the right side? When you are trying to describe or solve a problem avoid using name references. Instead of saying draw a fingernail, say draw the hard thing on the end of your finger. Or instead of saying, "we need a new advertising campaign" say "how can we attract more new customers?" Anything you can do to avoid using terms that your left brain has assigned symbols to will help you avoid making assumptions and missing possible opportunities.

Turning things upside down is another way to get the right side of your brain involved. For some reason, the left side of the brain doesn't do upside down symbols. That is why most people are able to draw better when looking at an upside down picture--no left brain symbols involved.

Here is a final business example. When you hear the word restaurant what do you think of? Chances are you think of a building or facility where they serve food and you pay money. True enough. But what if you turn it upside down, or least take a different perspective. The symbol or definition that most of us have for restaurant includes a physical facility, but does it have to be that way? Historically it had to be because that was the only way people would know how to find you, but with today's communication devices that is no longer a requirement. What if the restaurant wasn't food in one specific place but great food in any number of many great places? Join their email list and you would be notified when and where they are serving food this week. The local zoo, middle of a football field, top of building--the possibilities are limitless. Talk about delivering unique dining experiences! At least a few entrepreneurs are already doing it.

Hpapy Iianonvntg !

You work hard to make sure your customers are happy. Don't waste happy customers. How easy is it for your customers to share with their friends? Learn more

Will Your Customers Carry a Cello?

Dave Free — Thu, 06 Jul 2006 15:59:20 -0700

I read recently about a musician--a cello player to be exact--that moved to New York City. She didn't know anyone in the city and was looking for opportunities to play her cello. Her solution? She carried her cello around the streets of New York with her wherever she went--whether she needed it or not. It didn't take long before other musicians introduced themselves and she was given opportunities to play.

That got me to thinking, what could I carry around to let people know what I do? Even more powerful, what would my promoting customers be willing to carry around to let others know how they feel about my business?

More happy customers. More repeat sales. More referrals. Learn more

Come to the Carnival this summer and win 12 free months of PromoterZ™!

Dave Free — Mon, 26 Jun 2006 15:52:20 -0700

What says summer more than traveling carnivals? Cotton candy, hot dogs, rides that go around and around until you puke! Does life get any better than that? I submit that it cannot!

The blog world has a few traveling carnivals of their own and over the next few months we've been asked to host several. We haven't figured out how to deliver cotton candy online yet, but to make it interesting we're going to include a chance to win--remember the baseball throw, the ring toss, and the shooting gallery? So step right up Ladies and Gentleman! A winner at every carnival!

Here's how it works. Each time we host a carnival (see schedule below) we will choose a visitor to win 12 free months of PromoterZ™ service ($600 value). To participate, click on this link and then come to the carnival. We'll announce the PromoterZ™ winner along with the posts chosen to be in the carnival.

Don't know what a blog carnival is? It's like a traveling roadshow. The host chooses what they consider to be the best posts of the week from the blogs that submit posts and include a few editorial remarks. For the reader it is a great way to see the latest and greatest without having to hit every blog. For bloggers, it is a good way to increase exposure. Here are the Carnivals we've been asked to host:

Carnival of Entrepreneurship July 6th
Carnival of Business July 24th
Carnival of Marketing August 6th and 13th

Don't forget to sign up and submit your posts. Bring your friends and remember it is BYOCF.

Find your happy customers and put a megaphone in their hand. Learn more

The Power of Staying in Touch

Dave Free — Thu, 22 Jun 2006 12:45:07 -0700

In the cluttered marketplace we compete in, I don't think the power (and necessity) of staying in touch can be overemphasized. I learned the lesson again last week--thankfully in a good way. It had been a while since I had heard from one of our clients at PromoterZ and so I sent him an email and invited him to go to lunch. We had a nice chat, I asked for feedback on our service and he had a few suggestions (I'm happy to note that we followed through on them). I ran a new idea we're working on past him. He liked the idea and agreed to let us test it with his customers. Then he mentioned that their franchising operation is taking off (looking for a good franchise opportunity? Check out Entrees Made Easy) and there might be an opportunity for me to tell some of their new franchisees about PromoterZ. Turns out the timing was perfect, and I'm scheduled to present to some of their new franchisees next week on how to turn customers into promoters.

So what did I get for my $30? Our product, PromoterZ, is now better thanks to his feedback, we have a place to test our new concept (more on that in future posts), and I have the opportunity to tell new franchise owners how much PromoterZ has helped Entrees Made Easy. Where else could I have got that kind of return on my money? Thanks Brandon!

They say it costs 5 to 10 times more to sell to new customers than it does to sell more to current customers, and yet what percent of our effort is spent looking for new customers vs. pleasing and staying in touch with our current customers? I was able to take Brandon to lunch, but that is not always geographically possible. A phone call works great. It can be as simple as, "how are things going?" Use technology where you can. Without exception, each time we send out our newsletter we get one or two phone calls from customers--they had been meaning to call but never got around to it until the newsletter arrived in their inbox. Here are a few other ideas:

• Send 1st timer customers a special thank you
• Send birthday greetings
• Send a newsletter
• Send Holiday greetings (Did you know today is Chocolate Eclair Day?)
• Send thank you notes

Finding new customers is tough and expensive. Once you've got a customer, hold on to them by staying in touch. I can guarantee you if you don't, somebody else will.

Promoterz is the hands-free, word-of-mouth marketing service that takes care of the details so you can focus on business. Learn more

Are You Holding Your Bathroom for Ransom?

Dave Free — Mon, 12 Jun 2006 13:38:35 -0700

I was on the road over the weekend and found the stupid business idea of the week--no make that century. Driving on the interstate to Flagstaff, Arizona (beautiful place if you have never been there) and needed to stop for a bio break. Sign on the business establishment's front door: "Our Bathrooms are for Paying Customers Only!"

Now I know exactly where that sign came from. An employee, maybe the manager, maybe even the owner got tired of trying to keep the bathroom clean and seeing people walk in and out without buying anything. Simple conclusion and solution: "No more free loaders! The bathroom is a benefit reserved only for those people that buy! Toilet paper doesn't grow on trees! Let's get a sign up, that will save us some money and some time!" So up goes the sign telling potential customers that they are an annoyance and if they want relief, they've got to pay.

I would love to compete with the guy that made that decision. I'd make my bathrooms glisten and smell of sweet things. I'd hire a teenager to stand outside the bathroom door and hand road-weary travelers a warm towelette to refresh themselves. I'd invest in some big signs on the interstate that say "Come use our sweet smelling bathrooms--absolutely free!" Then I'd sit back and watch my suppliers try to keep up with the demand.

Would some travelers come and go without buying anything? Sure, but I would smile and thank them for using my bathroom. Why? Because I know there is no way they are going to be able to keep my remarkable bathroom a secret. When a person asks how their trip went, they are going to say, "It was long, but we found the greatest place to stop. They actually give you a warm towlette and then they thanked us for using their bathroom--and we didn't even buy anything!" And when it is time to make the return trip, where do you think they are going to stop? At my remarkable sweet-smelling bathroom and chances are this time they are going to buy a tank of gas, a bag of jerky, and a 32 oz soda!

Here is the point, whether your business is on the interstate, the internet or any location in between, the name of the game is traffic. The more people that walk through your door, the more you are going to sell. The best way to build traffic is not to hold free services for ransom. Have you ever seen anyone happy after paying a ransom--even if they get what was promised? No! More likely they feel violated and manipulated. So don't do it! Be the good guy and make more money at the same time. If you've got something free and remarkable you can offer, don't hold it ransom, get it out in front and use it to get more customers to walk through your door then make sure they have a remarkable experience. Soon your sweet-smelling bathroom will be world famous...

Find your happy customers and put a megaphone in their hand. Learn more

Listen and Grow!

Dave Free — Wed, 07 Jun 2006 13:57:05 -0700

Jackie Huba from Church of the Customer, cites a study that concludes that customers that feel listened to are more likely to spread positive and unsolicited word of mouth. The study was done by Communispace, a company that creates and manages online communities. Key findings:

•82% of community members said they were more likely to recommend the company's product's than before joining the community.

•54% said they were more inclined to purchase the company's products since joining the community.

Though we've done no studies to prove it, we find the same thing to be true with our PromoterZ clients. Those companies that use the service to ask for customer feedback consistently generate more referrals than those that don't.

So do your customers feel like you are listening? Asking is certainly the first step, but I have personally completed a number of customer surveys and never felt like anyone was listening.

In my mind, the critical step to show you are listening is to respond. Simply acknowledging that you have received their feedback and are considering it will let your customers know that someone really is listening--and they in turn will start talking to others....

More happy customers. More repeat sales. More referrals. Learn more

A Better Mousetrap?

Dave Free — Tue, 30 May 2006 14:22:58 -0700

The Wall Street Journal recently reported on a couple of entrepreneurs that apparently came up with a better mousetrap--make that pen. For how many hundreds of years have we as human kind been using writing utensils that are straight like a stick? Been a few at least and before that the quill. Then in 1987 Colin Roche, a high school student at the time, gets sent to detention and dreams up a new design for a pen to relieve his writer's cramp (any guesses as to what he was writing 500 times?).

The first prototype was built in his dad's garage (see picture-first prototype on far left) and the company, called PenAgain, did nearly $2 million in sales last year. Now, according to the article, they've been given a shot at the big time--thirty days to prove it will sell in Wal-Mart. If 85% of the 48,000 pens ordered by Wal-Mart and placed in 500 test stores sell during the first thirty days, they are in. If not, they may stay on in some of the trial stores or be completely dropped.

Getting into Wal-Mart is a big deal. They have 138 million customers every week! Competition to get a product into that channel is stiff. According to the chain they see about 10,000 new suppliers every year. Of those only about 2% make it to the trial run stage and that is just the beginning. Suppliers to Wal-Mart have to adhere to strict packaging and shipping requirements, monitor the sales of the product in each store, and drive customers into Wal-Mart to buy the product.

So what is PenAgain planning to do to drive customers into Wal-Mart to buy their pen? Unable to afford print or TV ads they plan to do viral marketing. Over the past several years they have collected an email list of 10,000 customers who regularly buy their pens. Mr. Roche describes them as "people who really want to know what the heck is going on with us."

I hope they succeed. Next time I'm in Wal-Mart I'll look for one of their end caps and drop $3.76 to see how it works both because I'm curious but also because I learned a few things from them:

It is possible to improve everyday things that we take for granted. I'll never look at a pen again the same way. A good paradigm shift.
Though it would be easy to summarize this story by saying, "A kid came up with a new kind of pen while in high school detention and now it is selling in Wal-Mart," the fact is a lot more than just a better mousetrap has gone into their success so far. The article doesn't say how many small retailers they work with, but $2 million in sales is a lot of pens and I'm betting a lot of retailers. That's a lot of selling to get to this point.
It doesn't matter what kind of business you are in, building a database or list of customers that want to know "what the heck is going on" with your business is vitally important. The world may not beat a path to your door if you build a better mousetrap, but your loyal customers will if you have a way to let them know. I checked out PenAgain's website, you can join their mailing list right on their front page.
Public relations efforts do work. PenAgain is doing something right as far as PR goes. I was impressed they were in the Wall Street Journal, then I took a look at their site. They've been in Newsweek, Wired, Entrepreneur, and San Jose Mercury News just to name a few. Whatever they are doing, it works and their odds of selling 48,000 in the next 30 days is going up.

The average American consumer discusses brands 56 times a week. Are they discussing yours? Learn more

Innovation 101

Dave Free — Mon, 22 May 2006 12:17:47 -0700

I've been doing some house repairs lately and faced one particular challenge that I think illustrates how the innovation process works, see what you think.

The Problem: Figure out a way to reduce the dust storms generated when sanding drywall "mud." This problem is especially frustrating when the mud guy (that would be me) lacks any recognizable skill, resulting in a process that must be repeated several times before arriving at an acceptable level of quality.

Constraints: This is strictly a do-it-yourself, teach-your-sons-how-to-work, project. Hiring professionals is not an option.

Any ideas? Here is what we came up with.

Idea #1: Contain the dust. Plastic sheeting is pretty cheap and we reasoned we could use it for a ground cover on future camping trips, so we bought plastic and hung it from the ceiling around the area we were preparing to sand. Remember the movie ET after the government guys moved into the house? It looked something like that.

Results: A whole lot of dust trapped in a very small space. Because the space was limited but the dust generated was not, it very quickly became impossible to even see the surface to be worked on. This, of course, added to our quality problems. Also, despite the use of breathing masks, our lungs are probably still coated with white stuff.

Idea #2: Instead of using an electric sander which generates a lot of dust and tends to "launch" the dust into the air, return to the old fashioned way and do it by hand. In theory, at least, the dust would gently fall to the ground and not coat surrounding areas.

Results: Depending on how you look at it, this is either a "wimp out" solution or a "muscle building" exercise. Either way, time commitment went way up and son involvement tended to drop off. Also, it didn't really solve the problem. Dust still settled everywhere just not at the volume or rate that the electric sander generated.

Idea #3: This idea came in the shower while attempting to wash the white dust from my hair. I tell you that only because that is where the best ideas seem to come. Here is the thought: what if you could connect the output of the electric sander to the hose of a shop vac? The dust would be whisked away before it could float or settle on anything.

Results: With the concept of attaching the sander to the shop vac in mind, the next challenge became figuring out how to hook the two together. It turns out the hose of the vacuum was of a much wider diameter than the output of the sander. We also wanted the attachment to be flexible enough so that it could handle various angles, but strong enough to keep the two firmly joined throughout the back and forth motion of sanding. Duct tape immediately came to mind. Unfortunately, my sons had recently made wallets out of duct tape and none could be found. So we settled for a masking tape prototype.

The masking tape prototype worked admirably and proved the concept. We did have to use two hands to keep the two together because the tape wasn't strong enough on its own, but the dust was immediately whisked away completely solving the original problem.

As we waited for yet another layer of mud to dry, we hit upon the idea of using an old bicycle tube to join the two together. What if we cut off a piece of the tube, attached one end to the vacuum hose and the other to the sander? Initially, we left the tube long for added reach and flexibility. But we quickly discovered that the inner tube kinked easily and blocked the air flow. We solved that problem by shortening the tube so that it was just long enough to go over the end of the vacuum hose and the output of the sander.

Eureka! The thing works like a dream. No dust launched in the air, no dust settling on the counter top. Everything goes straight in the vacuum.

Did we invent something new? Depends on how you look at it. After we got our sanding done we did a quick search and discovered several dust free sanders on the market. Everything from a hand sander that attaches to your vacuum for $17.89 to professional "systems" that cost up to $1,000. One thing we haven't found is anything that let's you hook up the electric sander you already have in your garage to the vacuum cleaner in your closet.

So how does this apply to your business? Innovation is an absolute necessity for growing a successful business, but it can be difficult to turn into a repeatable process. Here are some principles of innovation that, if applied consistently, will deliver breakthrough innovations:

Identify the need clearly and in a specific way. Defining the problem may seem like a no-brainer, but it is in fact the most important step. It is best if you and the others working on the problem can experience it yourself. For example, be your own customer. See what it feels like.
Identify and question your constraints. No sense wasting your time and resources on solutions that aren't an option. Having said that, don't allow assumptions to become constraints. List what you think are your constraints and then question every one of them to make sure they are real.
Find as many perspectives as you can. If you think you, or anyone else in your organization, is the only source of all ideas worth pursuing you are doomed for failure. Involve everyone you can in your problem solving/brainstorming sessions and listen to what they have to say. Different perspectives combined is where the creative fireworks start.
Prototype, prototype, prototype. The quicker you can try things out, the quicker you will learn and get on the right path. Many grand solutions have been planned and worked on for months or years only to find out that they will never work. The quicker you can test, the more likely you will get to a real solution quickly.
Think about something different. Once you have identified the problem and spent some time trying to solve, don't be afraid to take a break. In fact, make it a point to take a break and think about something different. Our brains are amazing things. Some of the best ideas come when we're not focused directly on a problem but have thought about it and then stored it away for consideration. So go play with some toys, go for a run, take a shower, wash the dishes, mow the lawn, go for a drive. I've found routine activities that don't require my full attention provide the most fertile ground for new ideas.
Have fun. As humans we do our most creative work when we are happy. Buy some toys, use crayons to doodle, do what ever it takes to remind yourself to relax and let the right side of your brain do it's work.

Oh, I almost forgot. To get your Amazing Dust-Free Sanding Coupler, send a check for $9.99 made out to Dave Free to P.O. Box....

The average American consumer discusses brands 56 times a week. Are they discussing yours? Learn more

Taking Care of the Golden Goose

Dave Free — Fri, 12 May 2006 14:47:41 -0700

Came upon an interesting post in the Life Insurance Agent Blog. The title of the entry is The Lie About Leads. Buying and selling leads is big business in the insurance industry. Do a Google search on "Insurance Leads" and you will see what I mean. Just like any other business, finding new customers can be an expensive and time consuming process. Here is a quick primer on lead terminology from the Life Insurance Agent blog:

Cold lead—this is worthless—it’s a name from a mailing list broker. The person may meet certain criteria—e.g., age, income or household value. Above that, it’s just a name, like a name from a phone book.

Warm lead—the person has requested information by completing a card, an Internet form or expressed interest with no coaxing. Your best prospects will always be the ones that take action on their own, with no one convincing, no coaxing, no call from a telemarketer.

Telemarketed lead. This is supposedly a warm lead with interest in meeting—they tell you that the prospect is waiting for your call. I doubt it. Few people have the time and inclination to talk to telemarketers on the phone and sales people.

Set appointment—this can be a very valuable lead but ask how the appointment was made. Did the prospect first call from an ad or direct mail offer and then a telemarketer set an appointment? That’s good because this prospect took the initiative.

I think he makes some great points but may have left off the most important lead of all: a referral from a happy customer. Even the most qualified lead listed above has no clue about you--your honesty, your integrity, your ability to deliver great service. On the other hand, a lead that comes from a happy customer, that lead comes with your customer's reputation attached. That is, your customer likes you enough that they are willing to put their reputation on the line with their friend on behalf of you and your business. Countless surveys have shown that referrals are without a doubt the most powerful influence on just about any purchasing decision.

Does that mean that there is no place for buying leads? No, not at all. Especially when you are getting started. You have to keep your funnel full. What it does mean, is that every lead that you successfully turn into a customer is a golden goose. Your highest priority should be to take care of that goose so that it continues to lay the golden eggs of referrals well into the future.

Think it doesn't work? Tyler Slade of Canyon Lands Insurance, one of our PromoterZ™ customers, gets a 9 or 10 from 95% of his clients when asked how likely it is they would recommend him to a friend. Not surprisingly, he has received referrals from 60% of his clients. It works.

So here is my blatant PromoterZ plug: Apply some modern technology to your client care tools to make sure your geese are being well tended. PromoterZ™ will make sure they are happy, send information to them regularly, send them a birthday greeting, and collect referrals. Check it out: www.promoterz.com. End of blantant plug.

The average American consumer discusses brands 56 times a week. Are they discussing yours? Learn more

Best Place to Advertise?

Dave Free — Tue, 09 May 2006 12:25:42 -0700

Very interesting article in the Wall Street Journalabout where small local businesses are advertising. According to the article, yellow pages still dominate but the internet is opening up some promising new opportunities. The article talks about three:

Local Television. An online company called Spot Runner will make you semi-custom ad for less than $500 and then place it for you with local stations. A pet boarding service paid $299 for an ad plus $1,400 for placement and saw their calls increase 20%

Online Search Ads. Hook up with Yahoo and or Google and for $250 to $300 a month they will host a detailed web page and provide ad listings on their search engines. A salon tried it and says they now get 80% of their new customer through the internet.

Craigslist. Craigslist is an online classified ad system that is free and growing like crazy. A carpet cleaner in New York quit using newspaper ads and gets 90% of his business from Craigslist.

Some of these ideas seem pretty good and may be worth trying depending on what kind of business you are in. What it highlights for me once again is that it is tough to get new customers in the door. In fact, it costs 5 to 10 times more to attract new customers than it does to sell more to your current customers. So once you get them, don't ever let them go. How do you do that? Give them a remarkable experience, ask them what they think, get their email address, and stay in touch with them. Not only will they come back, they will bring their friends.

More happy customers. More repeat sales. More referrals. Learn more

Keep an Eye on Your Tail

Dave Free — Mon, 08 May 2006 13:34:54 -0700

It is hard to overemphasize the importance and long lasting effect of reputation. As humans we seem to have a natural belief that things don't change. Once we've developed a perception of something, it is pretty hard to shift our perspective. Here is a quick quiz from a recent post in Tom Guarriello's blog:

Which has more crime, San Diego or New York?
Which country has the highest per capita income?

If you answered New York and the U.S. you would be wrong. New York used to have more crime but not any more. Now it just has the reputation.

And where does the U.S. rank on per capita income? We're number 5 now behind Bermuda, Luxembourg, Equitorial Guinea and Norway. We used to have the highest.

So what does this have to do with our businesses? Well ask yourself what reputation does your business have and, perhaps even more important, what kind of reputation are we building every day? When a customer has a problem, how do you find out about it? Are you proactively asking? And when you do become aware of a problem, do you solve it or avoid it?

Your tail is growing--make sure it is the one you want.

Find your happy customers and put a megaphone in their hand. Learn more

Gas $2.55 a Gallon!

Dave Free — Thu, 04 May 2006 09:51:09 -0700

That's right, you can still buy gas for $2.55 a gallon. Only drawback? You have to drive to Evanston, Wyoming to get it. Nothing against Evanston, I've been through there several times. Problem is that it is a long way from most places people live. Why is gas so cheap there? There appear to be two reasons. First, Wyoming fuel levies are the cheapest in the country and second a family of entrepreneurs by the name of Call.

Ruel Call started in 1937 with a small gas station and then in 1960 launched his own gasoline brand, Maverik, which now has about 175 stations. They helped pioneer self-service pumps and gas station convenience stores. In the mid sixties O. Jay Call launched another discount fuel retailer called Flying J. It did $7.3 billion in sales last year at 160 truck stops.

In 2003, Kristen Call, 36, a daughter of one of the Maverick Calls decided she could apply internet technology to cut more costs and keep prices even lower. The concept: pay for your gas online or at an unmanned kiosk at an unmanned station. The company is called iFuel.

According to a recent article in the Wall Street Journal, iFuel didn't stay open long. It opened in Evanston offering fuel at 10 cents per gallon less than Maverick, but it didn't catch on with the locals. Many weren't on the internet yet and seemed confused by the concept. In addition iFuel used indoor key pads for their kiosks but didn't install them indoors. Ever been to Evanston in the winter? The key pads froze up and wouldn't work. Kristen is now focused on selling the internet payment software to big box chains with gas pumps.

So what is the take away? First, let's hear it for entrepreneurs! Want a real solution to gas prices? Turn a bunch of entrepreneurs loose on the problem--not congress.

Second, timing may be everything on a concept like this. I could be wrong, but I think if a chain of gas stations offered a 5 to 10 cent discount on pre-paid fuel purchased online they could do very well. Where do I join?

The growth of your business will be determined by what your customers say about it. Do you know what they are saying? Learn more

Give Your Business a Quick Physical

Dave Free — Wed, 03 May 2006 15:11:06 -0700

What are the three most important things to look at to determine the health of any business? Is it income? Return on Investment? Book value? Revenue? If you could only look at three measurements what would they be?

Jack Welch, former CEO of General Electric, was recently asked that question. These are his top 3 which he says apply to any size organization:

1. How satisfied are the customers?

Do the customers want to come back? Do they like my stuff? Are they willing to refer me. Learn by doing surveys and get out of your office to talk with your customers. Become known as the person that always wants to know.

2. How satisfied are the employees?

Is my message getting through--is it in their blood? I need the most engaged energized people in the world.

3. How much free cash flow is available?

It's simple. You need more cash coming in than cash going out. Net income is for accountants, it is full of assumptions. Cash has no assumptions. It gives you true flexibility and is the one thing that frees you.

I really like Jack's list. I've been involved in organizations that have lacked one or more of the three. They didn't last long. If your employees aren't satisfied, it is doubtful that your customers will be. And if your customers aren't satisfied, the free cash flow can't be positive for long.

The real question is do you know the answer to each of the three? I'm betting you are very familiar with your cash flow situation. Every month those bills come due and you have to pay them some how. But what about employee satisfaction and customer satisfaction? Are you systematically and regularly getting a read on how your customers and employees feel?

You can listen to Jack's comments on the topic by downloading a podcast he and his wife (former editor-in-chief of the Harvard Business Review) produce called "The Welch Way." It is free and available on iTunes.

Find your happy customers and put a megaphone in their hand. Learn more

Building Trust Instead of Selling

Dave Free — Fri, 28 Apr 2006 18:17:17 -0700

John Jantsch of Duct Tape Marketing fame was recently interviewed by a BusinessWeek editor. A few of the tidbits:

It appears to me that advertising itself is at an all time low for effectiveness, and businesses that really succeed are focusing on the idea of building trust and educating as opposed to selling.

When asked for the short list of what small businesses should absolutely be doing to market themselves, Mr. Jantsch responded with the following three:

One: Absolutely differentiate yourself from everyone. You have to find a way [to make] people say you're something different, whether that's to focus on a narrowly targeted market or [through] packaging. Otherwise you're just competing on price. And the line I use all of the time is that price is a really bad place to compete because there's always someone willing to go out of business faster than you.  
Two: It's more important than ever, and easier and cheaper, to embrace technology, and specifically the Internet, as a tool to educate, market, and generate leads. It offers a tremendous way to automate the whole process and is a great tool for customer service and project management -- things that add value with clients. If a small business isn't taking advantage of these tools, they're giving up a great way to level the playing field with much larger companies.  
Three: I always ask people how they got to where they are now. Amazingly, it's mostly through word of mouth referrals. The follow up question is: What do you do to systematically take advantage of that? One of the most powerful tactical aspects of marketing is referrals, and when it's done right, there could be zero cost.

Differentiate, use the Internet, and systematically generate word of mouth referrals. What a great list! I couldn't agree more. And you know the easiest way to do it? (shameless plug coming) PromoterZ is the easiest, quickest and most inexpensive way to do all three of those things. If you haven't already checked it out do it now at www.promoterz.com. (end of shameless plug)

Find your happy customers and put a megaphone in their hand. Learn more