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Winning new customers is always harder and more expensive than selling to existing customers. There are many ways in which you can keep customers and sell to them time and time again. But there are also things you can inadvertently do that drive your customers away. Could you be driving customers away without realising it?
My wife and I recently visited an old favourite historic site and went for lunch at the restaurant. The staff appeared to ignore us as we entered. We waited ten minutes for them to take our order and at one minute past three in the afternoon they told us that there was no hot food now because they stop serving at 3pm. We never saw one of them smile. They clearly weren’t happy to be there, and so we didn’t enjoy being there either. When we left we agreed that it would be a long time before we returned.
The way that you and your team act toward customers is hugely influential on your long-term profitability. Imagine a customer spends £50 in an interaction and that they buy three times per year, so a customer is worth £150 per year. If your team were so welcoming and friendly and helpful that they came back one extra time per year, you increase revenue 33%! And if you train your team to ask the right questions and identify something extra that the customer wants to buy, you could increase it even further.
Often when I work with a business owner to increase their average sale value or average number of transactions they are resistant. Although they would like extra profit, they hate the idea of pushy selling and trying to squeeze extra sales out of their customers. So I take them to buy a sandwich for lunch and then review the experience so that they can reverse roles and be reminded of how it is to be a customer.
I recently went to the excellent sandwich shop with clients. When I say ‘excellent’ I mean from the point of view of food quality and choice, but I suspect their profitability is less excellent! Four of us queued to order our sandwiches that were made exactly to order. At no stage did anyone recommend any extra fillings, a different bread roll, nor did they smile and have a laugh. Sure, they were busy, it was lunch time. At the checkout we were told the price. Then someone remembered maybe we should buy some cold drinks. We hurriedly decided what we wanted with no suggestions from them. As we left I realised they had a large coffee machine but never mentioned the possibility of us having one.
When we’re on the receiving end it’s easy to see the difference between good service versus bad service or excellent service. But when we’re dealing with customers it’s very easy to forget all the basics. Don’t look at it as extracting more money, think of it as helping customers to buy what they might not realise they want. Smile, compliment them, make suggestions of what they might like. Set a goal that every customer walks away smiling. They will come back more often, and not only will they spend more money, more often, but they’ll be happy to do so. And they’ll recommend other customers to you as well.
By: Rob Pickering
A key to success is to surround yourself with people who are excellent - positive, supportive, intelligent, motivated, diligent - helping you achieve success. With these type of people it’s still a challenge to run a successful business, but without them it’s really tough.
So why is it that whenever I meet a business owner and ask about the people around them, they’re quick to talk about the ‘problem people’? The phase that often springs to mind is “Better the devil you know… than the devil you don’t know!”, meaning that this person’s bad, but a replacement could be even worse! Stop! With thinking like that, you’re destined to be surrounded by walking disasters.
In other blogs I’ve discussed two related topics - “You get what you tolerate” - highlighting that you really mustn’t tolerate bad behaviour or you’ll get more of it. And “Do your team really know what you want?” - stressing the need to give absolute clarity about what you want from your team, in terms of both actions and attitudes. If you’ve arrived here for advice on dealing with problem people, I suggest you read those two first. They’re all about taking responsibility and understanding if maybe part of the problem is actually you and your management?
If you can’t change your team, you’ll need to change your team! Confused? The starting point with problem people should always be an attempt to retrain them to think and act the way you need them to. I honestly believe that anyone can change IF they want to, and if you’re willing to invest the time, energy and money. But unless the answer to both of those is a clear “yes”, then you need to go the other route to change them… meaning replace them with someone who does have the right attitude and behaviour.
I regularly see job descriptions that describe a team member’s responsibilities and even the required standards of work, but rarely do they include requirements about behaviour. I highly recommend including points such as:
"You will have a positive and supportive attitude toward the company, staff, customers and suppliers at all times"
Hold staff to this, don’t tolerate anything less. If someone has a bad attitude, take them aside and ask them what their job description says about attitude? If they don’t know, give them another copy and ask them to read the sentence. Ask them what that would mean in practice? Ask them if they feel they’ve been demonstrating this? Keep asking questions, getting into specific examples if necessary, and ultimately make it clear that this IS the requirement to work in your business.
After a clear discussion like that, they should be in no doubt about what’s expected. If they walk away muttering and go and tell their co-workers what an idiot you are, take them aside again and address their attitude once again and, this time, you need to go down the disciplinary route. Yes, seriously, you need to ensure team members have the right attitude and if they can’t or won’t adapt, they need to go. Keep them and the bad attitude will spread, morale will be low, performance will be lower than it should be, your profits will be low, and you’ll probably hate going to work! The costs of tolerating poor attitude are high.
You do of course need to operate fairly and within the bounds of employment law. If you don’t have a qualified HR person to guide you, I highly recommend using an outsourced HR expert on a monthly retainer. They can help you get documentation in place. However, ensure that the wording is friendly, helpful, and includes attitude - not just legalistic jargon. Ensure there are “Rules of the game” for all the team members and put them on the wall.
If you can’t change your team, change your team.
By: Rob Pickering
After you’ve recruited a really good new team member, you need to ensure that they perform well and stay in your business. There are a few things that you should ensure are in place for every employee:
A Clear job description and list of responsibilities Every employee needs to have a written job description and a list of things for which they’re responsible. I would also include in this, or provide separately, a list of expected attitudes and behaviours, such as an attitude of teamwork - cover for people when they’re absent, work in proactive cooperation, etc. It’s important that ‘obvious’ things like this are stated clearly in writing.
Performance measures It’s often surprising how few employees know what they need to do, in measurable ways, to be doing a good job. Ask your team members “what do you think you’d have to be doing, consistently, for me to say you were performing really well?”. Or you could ask “What would you have to do for me to WANT to give you a per rise?”. If anyone hesitates on either answer, they don’t know and are therefore not focused on performing well. Be specific on all their responsibilities. How quickly do you want the phone answered, how early do you want them in the office, how should they speak to customers, and so on. Make it clear and encourage them to perform well.
Measurable goals for the quarter and year Most jobs break down into things that have to be done on-going - like answering the phone perhaps - and things which are shorter term objectives - like “get ten new clients this month” or “reduce delivery errors to under 1% by year end”. Everyone should have about one to five specific objectives to work on in a quarter, in addition to their regular work. Set agreed goals with measures and dates to report progress and a completion date, then review completion afterwards. Everyone responds to this kind of clarity and it provides more job satisfaction than just doing the regular job.
A Personal Development Plan (PDP) Make it clear right from the start that you expect every team member to me working on developing their own knowledge and skills all the time. Be clear it’s their responsibility, although you will support them. Personally I wouldn’t even consider giving an annual pay rise to someone who can’t demonstrate any significant personal growth from year to year. Remember that it’s actually really difficult for a company to grow much faster than it’s team’s knowledge and ability. A PDP is a written document that usually identifies areas of improvement for a team member, lists actions to be taken and target dates, and records what development actually takes place.
Regular appraisals This is one of the greatest failures of managers - they don’t hold reliable regular appraisals with their team members. As a result everyone plods along doing ‘stuff’ but the company and the team progress in an uncoordinated way with unclear goals and the company profits suffer. Be sure to hold appraisals with each team member on a weekly basis. Initially it could take an hour each, but after a few months it should be possible to achieve everything necessary within 15-30 minutes and skipping a week every now and again is fine. The things to be discussed are all the list above: Attitude and behaviour, measurable performance, progress on goals, and personal development.
Annual review Every team member deserves a personal review once a year to let them know how they’re doing - ideally versus the goals they were set a year before - and to set new goals for the coming year. Most companies do an annual review and annual pay review at the same time. I recommend splitting these so that the appraisal is all about performance and goal setting. If a salary review is combined - all they want to hear is “how much”. By all means hold an annual pay review a month or two after and link it to performance, but keep them separate.
By: Rob Pickering
I was recently asked “How can I ensure I build a great team?”. After a bit of thought I summed it up as the following: Recruit great people, train them well, set clear goals, motivate and lead them. A great team with great leadership will achieve great things. No company with a poor team of people will achieve as much as one with a high performance team. In the next article I’ll focus on how to maximise the performance of your team, but first let’s look at recruiting them in the first place. However, the two are very much linked - new employees look at what it’s like to work in your business.
Your ideal employee should have a great attitude, be eager to learn, eager to impress, tenacious, and competent. They also need to be reasonably confident in themselves, so that they’re willing to stretch and learn and improve without having to be pushed. Read “Recruit Based on Attitude and Behaviour” for a more detailed description.
Now put yourselves in the mind of your ideal employee. Where are they, what do they want, why do they want it, and how can you reach them. I’d suggest that few of them will be unemployed because the best people don’t stay unemployed for long, but it’s possible. Chances are they’re employed and being paid rather well - because they’re good. So first of all it stands to reason that they’re not looking for a pay cut - if you offer a job that looks as if it pays a lower salary, you won’t hear from them and you’ll think no one’s out there. But money isn’t everything. A great employee probably wants to work for a great company. Does your job advert, website, twitter, facebook page and LinkedIn page look like a great company? If not, why would they consider even getting in contact if their current company is pretty good?
I’d suggest that your ideal employee will also want to be treated well, to have a decent set of benefits on offer, a nice work environment, interesting people in your team and an interesting charismatic leader. They might check LinkedIn and read about you, look at your company page, look at who else works for you, and see how motivated they appear to be. They’ll definitely look at your company website. Do you have a section about what a wonderful team you have, with pictures of everyone and profiles of the key players? If you looked at your website and LinkedIn and any other sources - would you want to work for your company? If not, start fixing the image (and the reality!).
Probably your ideal employee wants to work for a business that provides a good and meaningful service. They want to be part of a company that is growing and going places and talks about their successes and ambitions. Face it, no one leaves a decent job to join a company that looks boring, complacent, pointless or even desperate! Actually that’s not true - you’d attract the employees who are even more desperate! To attract the best people, you need to look like an exciting place to work with good career prospects, and that means growth ambition. It’s great if you have an ambitious five year plan, but it needs to be visible - prospective employees need to see some evidence. So as you’re advertising for your ideal employee, or better still using a great recruitment company to find them, be sure to make it clear why your ideal employee should want to work for you.
By: Rob Pickering
One of the biggest hurdles in a start-up business is recruiting a team, especially the first team member. Often it starts with one person doing everything and responsible at the same time for generating all the income. Once their weeks are full, they need to build their capacity to handle the finance, marketing and perhaps sales. Once those foundations are in place, it’s time to add people who generate income for the business.
Often it goes wrong with recruitment of the first team member, usually to handle admin. The Business owner knows they spend too much time on invoicing, chasing payments, placing orders, paying suppliers, doing marketing, handling enquiries and so on. But it’s hard to give up hard-earned cash to start paying someone, so they go cheap! They get someone who lacks experience or accuracy or motivation, and the owner ends up spending so much time managing that they might as well not have the employee. Added to that, frustration levels go sky high, as does the stress level, and sometimes that results in upset clients.
There are two other, better, alternatives. One is to employ someone who’s really good. Whatever the going rate for the job - look for someone who is earning at least 20% more and recruit them with 25% more, or the same money but a better opportunity. Think about why someone really good would work for you. If you offer minimum wage to work in a broom cupboard and motivation from the school of shouting loud... you won’t attract a good team. But economics do come into it, and if the best admin person can’t save enough of your time that you can pay their salary, it’s probably the wrong solution.
A good solution that is low-risk, low-cost, and can generate high results is to outsource or to use virtual employees. Just to be clear, what I mean by virtual employees is basically someone who can provide the skill and capability you need while working remotely as an occasional service. They aren’t on your payroll and they don’t need your office space, desk, computer, NI contribution, and so on. When you need a bit of what they do... you pay them to do just as much as you need. Sometimes as I’m telling someone this they now ask “Do such people exist?” - yes. And most of them are really good. Many are people who are top quality, but don’t want to work full-time in an office for one employer. They charge more per hour than they would get as an employee, but it’s still cheaper for you to pay for a few hours of someone brilliant than pay for all the hours of an employee that you don’t need full-time.
Whether your business is one person or a team of 20, you could probably benefit from using an external expert. We often employ the first virtual staff without even realising it. No start-up business needs a full-time accountant, so we appoint one who does an occasional hour’s work and a few hours at the end of the year. They’re a virtual accountant - they provide a valuable skill and they’re mostly available as and when we need them. It may be a little controversial, but I include bank managers in this same bracket - provided you have a good one. I often refer to them as the ‘extended team’, because they can help you best if they also know your common goal and buy in to your success.
As a Business Coach, I recommend you look at which important tasks you can outsource to a virtual team. Not only does it free-up your time to do what you are most valuable doing, it also stops you feeling dragged down by tasks you don’t enjoy or do poorly in comparison to an expert. The kind of things I’d look at outsourcing would be bookkeeping, marketing - especially social media, annual accounts, business development (eg telemarketing), IT support, and more obvious things like cleaning. Financially these should all be profitable decisions for all but the lowest value businesses. In the majority of cases you can earn more from selling the time you save than it costs to get an expert doing the job.
Even if you think you charge less per hour than a person you’d outsource to, you’ll very likely find that it takes them less time! When I outsourced most of my marketing to an excellent Virtual Assistant, I was thinking I was swapping an hour of my time for a paid hour of her time. But despite my years of marketing experience, she was actually considerably quicker than me - so what took me an hour of procrastination and fiddling only took her half an hour! Choose well, have very clear and measurable objectives and standards, then outsource whatever you can. Monitor the return on investment (ROI) and as long as it costs less or generates more than doing it personally or in-house - keep going! If it doesn’t give the right ROI, change to a better virtual provider. It’s a fast way to reduce inefficiency and grow your business.
By: Rob Pickering
Some businesses have a fundamental model that means they end up working hard all the time, often for relatively little money. This typically involves getting paid by the hour: No matter how hard they work, they can’t earn any more because they don’t have any more hours in the day.
The concept of leverage is about multiplying the effort you put in, to get a greater amount out. For example, if you spent a hundred hours writing an e-book and publishing it, the number of times you get paid for those hours could be many thousand. If you invent something and then keep selling it, again you get paid many times over for the original time and effort. But businesses can’t see how to leverage in that way, so the alternative is to create leverage through a team.
Many self-employed businesses grow by taking on more clients then increase their prices. They start out charging £20 per hour for their service and eventually they’re booked solid every month. So they put up their prices and lose some of the customers that aren’t prepared to pay the higher price, but quickly replace them with some who want the quality and reliability. So they increase their prices again and that cycle can continue successfully until the price is at a level where others offer the same quality for less, and growth stagnates.
Once a business owner is charging as much as they can for their own time, leverage starts by employing people. Often they employ someone to handle admin and free up more of their own hours to sell. (A Virtual Assistant is usually a better solution, but that’s another story!). There’s less profit because the employee is now an added overhead. Eventually they employ someone to do what they’re doing, but pay them less than clients are charged for the service - that’s the gross profit. If this stage is left too long, the business owner is already so busy servicing clients that they don’t have time to train and manage the employee(s) and the business performance is poor. Or more often they just haven’t developed the knowledge and practiced the skills of leading and managing staff, so much of their time and the employee’s time is wasted.
In a business where the leverage is about people, the profitability depends upon good leadership and management. Suddenly the self-employed person doing the work has taken on the role of leader and manager, but often fail to realise how different their role should now be. They feel frustrated with their staff and with the business they created. They need to get some training and support, in planning, leadership, delegation and general management.
The purpose is all about leveraging their own time through their employees: Training a team and then getting paid over and over again for the work that the team does. The successful business owner recognises that the way to grow is through their team. It’s about recruiting the right people, training them (and continuing to train them regularly), and putting in place the systems and structures.
They understand that if they have an hour to spare, it’s better to use that hour to motivate and manage an employee and send them off to generate ten hours of valuable work - not to do an hour’s work themselves. Leverage through a team means making that team better and better so that they continue to multiply the business owner’s input. As a business owner, the job should increasingly be about setting the direction, setting clear goals, hiring and training good people, and motivating them to achieve the goals. The more effectively this is done, the more successful and profitable the business.
In fact once this is working well enough it can actually work without the business owner having to be there. That’s when they’ve successfully created a leveraged business through a team. And that’s what a Business Coach guides a business owner to do.
By: Rob Pickering
Many people who believe they own a business are in reality self-employed. Now, if you’re self-employed by choice it’s fine by me. However, make sure you fully realise the risks and negatives:
If you have all the above covered and choose to stay self-employed that’s great! It’s good to be doing exactly what you want to with a secure future.
But if you’re working alone and don’t have all the above covered, you might want to build a business. Our definition of a Business is a profitable commercial enterprise that can work without you.
If you’ve set up a limited company and call yourself a Business Owner, just consider whether you really own a business or you’re actually self-employed with a business name. The vast majority of ‘businesses’ consist of one person and don’t meet our definition, don’t have all the above points covered, and the owner runs in circles trying to do everything. Many tell me confidently that they don’t ever want employees. The reason they don’t want employees is because either they can’t afford them yet, or they don’t want the responsibility. Isn’t that interesting? If you employed someone and, as a result, the business made less additional profit than was being spent on the employee... it would be a bad choice of employee! Let me be clear - the reason you employ staff is so that the business makes more money.
Say you spend £25,000 per year on a new employee, you’re going to want to see the business generating £50,000 or more additional profit per year as a result. This might seem obvious, but I continually speak to people who haven’t got their head around this and think that an employee is a cost they can’t afford. In terms of employees being an extra responsibility or hassle, I understand, but it’s often a feeling or a fear that comes out of a bad experience or misunderstanding. Someone recently commented “I’m not sure I could generate enough extra business to cover the cost of one employee, let alone a team!”. My question in response was “would they be working for you, or would you be working for them?”. I admit there are plenty of bad employees around who will sit and do nothing unless you’re hassling them. But if that describes someone who works for you - why did you employ them and why do you continue to? Deal with it, you get what you tolerate. When you think of employing someone, consider whether there is potentially enough business out there that your company can gain to more than cover their cost?
Next, consider who’s going to get that extra business. Do you need to prioritise employing a salesperson or marketing person to get more business before or at the same time as an employee that will generate more work or handle more admin? Then, when you’re interviewing and certainly when you recruit someone, make certain that among other goals they know exactly what they need to be generating to keep their job and maybe to achieve a pay rise or promotion. If you have work that isn't yet or never will require a full-time employee, consider the alternatives.
You could employ someone part-time, or you could use a Virtual Assistant (VA). Using a good VA can be an excellent solution because you can contract as little as an hour at a time as needed, and get the specific skills you need at the time. What takes you three hours might take a good VA only an hour, so the saving potential is excellent. The necessary skills to manage employees are relatively easily learnt - there are hundreds or probably thousands of books on the subject and endless training courses. But first you need to start with a clear understanding and belief that you employ people to generate more profit for the company and that you don’t do the work for them. If someone has to work late... it’s the staff. If someone needs to get more money in to pay the bills... the staff need to do it. Your job is to set the direction, employ the team, make sure they know what they have to achieve, then make sure they’re constantly motivated and achieving the goals.
By: Rob Pickering
Have you ever noticed that most recruitment is based upon skills and experience, but that people are fired due to poor attitude and behaviour? Think about really great employees that have worked for you… and then consider whether you’re reflecting on their level of skill, experience, knowledge, even intelligence? Or is it more about their attitude? In most cases you’ll find it’s very much the latter. I would suggest that the things that make a great employee include:
Now consider typical job adverts and interviews. They’re full of “Must have…” requirements for specific skills and “Minimum three years experience of…”. Having observed the process managers go through when writing a job recruitment spec, they sit and think really hard about these skills and amounts of experience and create a shopping list. It’s way too formulaic.
Experience is always a criteria that I find somewhat questionable. By all means take it into account, especially as evidence that someone can actually do a particular job and will stick at it. But just remember that experience means they know exactly how to do things, without even having to think about it… someone else’s ‘right way’. Chances are that you’re going to spend months getting them to un-learn old habits (“We always did it THIS way at me previous company”). And also remember that ten years of experience might in reality be one year that they repeated ten times without ever getting better or learning anything new!
So what’s the alternative? Identify what are the absolute minimum you could accept in terms of knowledge, skills and experience. Yes, there’s usually going to be a minimum or they can’t actually do the job on day one or even day twenty-one. But be honest, the minimum is often not that much unless you’re hiring into truly professional roles.
Focus on good behaviours and attitude. The most important one is an eagerness to learn - if someone is eager to learn and proactive about it, they’re going to progress rapidly. Make sure they can and will follow instructions (or you’ll regret it when they’re working for you!). The way to attitudes is to ask good open-ended questions and then listen to what they say AND what they mean. When prompted with the right questions, will they complain about their old boss, about their co-workers, about how their company didn’t do this or that… When they list hobbies and interests, ask about those “so what was the most recent book you read?”, “When did you last play that sport”, “Your creative writing sounds interesting, where can I look at some examples?”. You’ll soon see a picture of the real person emerge. That’s the person you could have in your organisation - will you be thinking in years to come how lucky you are to have them in your business? Or regretting the day you hired just on skills and experience?
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