The CREAM Rises to the TOP – Part Six

“The TOP” = Targeted Opportunity Planning

CMVCore Market Value. What does your target market value above all else? What values form the foundation, the unifying theme which unites the diverse people who make up your target market?

This is directly related to your Unique Value Proposition: the closer your UVP lines up with your target market’s CMV, the greater the chance that your offer will appear as an OPPORTUNITY to your prospective buyers.

At every interaction, show you customers that you KNOW them, APPRECIATE them, and VALUE their desires and requirements – the things that matter to them. It must be as if we’ve read their minds, and wrote the perfect script to engage them.

“Selling” is a conversation in which the value of what I’m offering becomes obvious to the potential customer or client. Not why I should get paid, but how they will get what they want and need that’s of greater value, to them, than the fee I’m charging for the goods or services which provide that value. It should occur not as an attempt for me to take money from them, but as an OPPORTUNITY for them to acquire VALUE, regardless of price.

After centuries of being trained and conditioned to view sales as the intention of the seller to get your money, it may be hard to turn things around in your head and view sales from the perspective of the buyer. “Wouldn’t that be… buying then?” you might ask. But that’s only because we’re still looking at sales as the transaction, and not the exchange. Sales, at least the way we define it, is not a one-sided affair, but a true interaction. Only when we’ve clearly identified what each party gets – and gives – can we create an effective sales process, where we do more than just hold our breath and hope the buyer doesn’t say “no”.

Too often, the seller is in some way trying to “trick” the buyer, or come up with some sort of gimmick to finagle the buyer into giving up their money before they’ve had a chance to really think things through. “Take the money and RUN” is a well-established phrase for just that reason. And while we discussed “Persuasion” in the “Engagement” article, if I hear one more so-called sales expert droning on about “overcoming objections“, I swear I’m gonna lose it! If you have to train that hard to convince anybody that their “no” doesn’t really mean no, you are definitely doing it wrong.

Even a solid prospect may hesitate, but as we mentioned that’s usually because YOU haven’t clearly communicated the value of the offer – in other words, in their mind your Proposal does not occur as an OPPORTUNITY. It shouldn’t be about “overcoming objections“, but about understanding hesitation. We don’t believe in taking money from people who don’t actually want to give it to you – that’s where buyer’s remorse and refund demand begins.

Learn to think like your customer. It shouldn’t be that difficult – you are, after all, often times a customer yourself. Don’t forget about that just because you’ve now got your “seller” hat on. You’re still a human being, dealing with another human being in what should ideally be a mutually beneficial exchange. In fact, we submit that until you can look at your own offer and identify how it works out to the benefit of both you and your customer, you’re not ready to make the sale. This is not about being selfless, or making a sacrifice; it’s about understanding human nature, and being honest.

When your offer is truly a good deal, an opportunity for your prospect, you won’t feel anxious, awkward or weird discussing it at length with the buyer and answering any questions they may have about your proposition. Targeted Opportunity Planning is designing your Marketing Campaigns and Sales Proposals to do just that – to position and present your offer such that it occurs as a tremendous gain for your potential customer, and they feel eager and anxious to seize the opportunity while they have the chance.

When Targeted Opportunity Planning is the guiding concept that coordinates all of your online activity and customer interactions, your Marketing efforts becomes less confusing, and what you need to do to effectively acquire new customers becomes clear. Focusing on offering value will actually make the “making money” part of the customer relationship much easier. And that adds up to profit on any balance sheet…

The CREAM Rises to the TOP – Part Five

Customer Monetization

In most circles, “CRM” stands for “Customer Relationship Management”. As we pointed out in the first part of this series, that sounds to us like sitting in a circle, holding hands and talking about our feelings.

While we are human beings and not robots, and we do strive for pleasant, personable interactions with our customers, we also acknowledge that “All Business Is Sales“, and sales is about making money. Enough money to be profitable, but let’s not get ahead of ourselves.

For most entrepreneurs, this is the “dirty little secret” – they’re in it FOR THE MONEY. The fact that this might be mildly disturbing to read may be part of why doing business well occurs as a struggle. There’s nothing wrong, shameful or unseemly about making money – therefore, there’s nothing bad about “monetizing” our customer interactions.

That is, after all, what makes them customers in the first place. We can (and should) be friendly with them. Some of them may even actually be friends of ours. But if we’re not focused on monetizing these connections, we will forever struggle.

Now, as we begin, let’s understand that “monetizing the connection” is NOT the same as “making money OFF OF“. In fact, by our reckoning the two concepts have little overlap. Here’s how that makes sense.

It’s Value, Not Money

Although we use the term “monetization“, we’re not actually talking about money. Remember the fundamental precept that “All Business is Sales”, and that Sales is a conversation about the exchange of value for money. This means that customers are not people that give you money, or that you are striving to get money from. Customers are those people who agree to exchange money with you for the value they receive in return.

In other words, it’s not about the ask, but the offer. Stop talking about price, and stop focusing on how much you want (or need) to make. Talk to your customers about the value they will receive in the monetized exchange. It’s not that you aren’t ultimately talking about money: it’s that you’re not emphasizing money in the conversation. That’s the real difference between a pitch and a proposal, and the reason we avoid the pitch altogether, concentrating exclusive on the proposal process.

It may seem weird, awkward or forced – at first. That’s because for centuries, sales has been about price, cost, and manipulating the buyer to give up the cash. Only recently has the sales process even considered the customer as anything other than a source of revenue – thus the famous phrase “there’s a sucker born every minute“. Nowadays, in the age of Google, Facebook, Twitter and Yelp, that old mindset simply doesn’t yield maximum results. It’s not that you can’t “get over” with the old-fashioned “catch ’em, con ’em and split once the check clears” – it’s that you can no longer build a sustainable business on that model of behavior.

We’re All Connected

As mentioned above, we are all firmly in the plugged in, always-on Social Media Age. It seems folks spend more time face-planted in their mobile screens than they do interacting with the people in their actual, physical world. In the 20th Century, “customer capture” was a thing. Once acquired, it was difficult for customers to switch vendors  and providers and, even if it wasn’t, customers were conditioned to the “we’ve always done business with [INSERT COMPANY NAME HERE]” way of thinking.

Terms such as “Even in this discussion of monetization – especially so, actually – we would all do well to remember that “business” is a relationship that exists between people. “Companies” are abstract concepts – there may be buildings, logos, equipment and such but, in the end, without human beings there’s nothing actually there. You do not negotiate a sale or close a deal with a “business” – that all occurs as the result of conversations with people.

Be patient in your conversations. Don’t deal with your customers as if they’re only the payment on the other end of an invoice – believe me, that a surefire way to gain an ex-customer. Remember that people buy what they want: stay aware of your customers dreams and desires, and always ask yourself “how else can I help them fulfill those dreams?” Create opportunities for them to review these offers of fulfillment, and many of them will take you up on your offer.

The CREAM Rises to the TOP – Part Four

Customer Acquisition

Acquisition doesn’t follow Retention and Engagement just so we can spell the word “Don’t overdo it to the point of gimmickry, hype or chasing after the latest “flavor of the month” fad. DO pay attention to quality, consistency, craft and detail. Spellcheck. Proofread. Get people who aren’t in your field to review your presentation and give you honest feedback. It’s not important that it looks good to YOU – it’s extremely important that it looks interesting to someone who’s shopping for the value you have to offer.

Proposal

You’ve positioned your brand. You’ve presented your value. The prospective customer has shown interest in your product or service. Now, you must make an offer – or, in other words, you propose that they purchase your product or hire your services. If business is indeed a relationship (it IS), then consider the point in a romantic relationship at which a proposal is made.

One person announces to the other their desire to take things to the next level. This doesn’t just come out of nowhere – it’s usually the result of several discussions between both parties, in which they’ve considered taking that next step, and after they talk about the conditions that would apply if they actually did. A business proposal is pretty much like that – minus the romance, of course.

Just as you wouldn’t propose on the second date in a romantic relationship, you risk chasing a potential client away by making a business proposal too soon, without clear agreement and understanding from all parties involved. It’s tempting to rush to the proposal phase at the first evidence that your prospect appears willing to buy, but please – wait. Just like romance, the time to make your proposal should be obvious. And when the time is right, you should encounter almost no resistance from your prospect. 

Persuasion

In a perfect world, you make your proposal at just the right moment, your prospect accepts without hesitation and “voila!”, the deal is closed and you make the sale. We all know, however, that the world is not perfect and things don’t usually work out that effortlessly. You can have the perfect positioning, flawless presentation and top notch proposal… and still encounter objections.

Saying “no” is a natural impulse, so it pays to be prepared for this response. Put yourself in your prospect’s shoes: what would cause them to stall or reconsider after going through your pitch and presentation, agreeing with you every step of the way and even asking you to prepare and deliver a proposal? There are several obvious reasons, right off the bat:

  • Your proposal wasn’t as clear on value as your position and presentation were
  • The prospect is not the only decision maker – or perhaps not the decision maker at all
  • You were gun shy, and didn’t mention the price until the proposal phase
  • The prospect projected business to go better for them than it actually has, and now they have cash flow woes
  • The prospect was actually just gathering options for their short list, which you mistook for them being ready to buy

Most objections from a properly qualified prospective buyer (who is the only person you should make a proposal to) tend to fall into a situation similar to the ones above. All of these boil down to problems of communication. Either

  • They didn’t understand you
  • You didn’t understand them
  • Things have changed between the Presentation and the Proposal

In any case, your job is not to try to convince your prospective customer of anything. You may have heard of “overcoming objections” in discussions about the sales process, but to us that’s 20th Century thinking. If, as we suggest, the 21st Century sales conversation is about value, then Persuasion is about identifying where the value conversation broke down, and getting things back on track.

Don’t be afraid to ask your prospect directly “what has changed since we discussed this proposal?” Remember: they should already have agreed to accept and review your proposal. If not, then you probably just took it upon yourself to decide “things look like they’re going well, so let me hit them with something that’s going to look like a request for money instead of an offer of value.” The key difference is whether the prospect is actively involved in the proposal process.

Assuming you did make sure to get a positive request from the prospective customer before sending them your proposal, then something has changed in the time it took them to say “yes” and when the proposal arrived at their office or in their INBOX. Are they struck with sticker shock? Then you either never discussed the actual price, and just sprung it on them in the proposal, or your proposal doesn’t lay out the value so that it clearly equals or exceeds the price you’re asking.

You might have done everything right, but things may have changed in the prospect’s world. Don’t just take a sudden “no” for an answer. Politely inquire if any issues have come up since you both discussed the proposal. Be patient, and be mindful that it can be embarrassing for a potential customer to admit they’re unexpectedly short of cash… especially if they were really enthusiastic about your offer. We don’t recommend reducing your price, but you could either let them know that you’ll hold the offer – and the price – until they’re ready to buy. Or, you could offer them a payment plan that breaks the cost into smaller chunks and spreads them out over time.

Be mindful of your own cash flow, though. Don’t make so generous an offer that your business suffers for it. Sometimes, you’ll have to say “no” to that prospect – sometimes for a short while but, on occasion, it’s just not a proper fit. Remember: the point is not to “make money” or merely to “do business”. Your goal is to acquire a good, solid customer – the kind of customer that you can do lots of business with.

Business that will benefit both your company and theirs…

The CREAM Rises to the TOP – Part Three

Customer Engagement

Last week we discussed Customer Retention – next week, we’ll consider Customer Acquisition. This week, we’ll take a look at an aspect of the Customer Lifecycle Model rarely discussed when dealing with Small Business development: Customer Engagement.

Before you can retain them, and even before you acquire them, you must encounter individuals and transform them from random strangers into people who would consider doing business with you. This tends to be the challenging part , and the reason why so many of us shudder and cringe when faced with the stark reality that “All Business Is Sales“.

Where The Customers At?

Before we can convert a stranger into a paying customer, we have to meet them for the first time. We can either wait where we are, and hope they stumble upon us (this actually works, sort of, for “brick and mortar” retail operations), or we can go out and actively seek them. This second option is what we mean when we use the term “engagement“. Typically customer engagement refers to the channels of communication: the means by which a company communicates their brand value and brand message to prospects and clients. In this series, we expand the meaning of engagement to include:

Getting The Message Out

Meet ups. Networking events. Landing pages. Lead capture forms. Outbound email campaigns. Blog posts. Facebook posts and ads. Twitter feeds. Instagram posts. Snapchat, Pinterest, guest blogging and so on and so forth. This is what’s usually thought of as engagement: who did we meet, how many phone calls or emails did we get, how many messages did we send out, how many ads did we place, who read them, how many times were they viewed, and who click the “call to action” links.  But to us, engagement is not so much about the method, but the message. The point should be to “get the word out”… the question is – what exactly IS “the word”?

Too often our business communication consists of either straight up sales pitches, or pitches disguised as genuine conversation. If sales is a conversation about the exchange of value for money, shouldn’t we be talking about, well… value? In this context, when we talk about value we mean benefit to the customer – the desires or requirements satisfied or fulfilled by our product or service.

NOT a conversation about price, or features. Talk about what the customer will get out of doing business with you instead of what YOU have to give them or want to sell them. We can’t repeat this often enough: your customers DO NOT CARE ABOUT YOU. They’re not angry – they’re just not interested. You may be a nice person, respected in your field and uniquely qualified… so what? None of that has much to do with what your customer wants or needs.

Get into their world. What’s interesting to them, beyond the features and price of your product? What are they up to in their lives? Trust me: they’re not waking up thinking about your goods or services today. There’s an essential concept in marketing called your “brand message“. This is NOT the history of your brand, or how you rank compared to your competitors, nor is it a product list or your service catalog. It’s the answer to the customer’s question “What’s In It For ME?

Consider McDonalds’ brand message: “I’m Lovin’ It“. Lovin’ what, exactly – Big Macs and shakes that contain no dairy products? No – lovin’ the experience of McDonalds itself. And while I’m completely at a loss to tell you what that experience is supposed to be, clearly their brand messaging is effective communication. McDonalds holds more market share than any other restaurant chain, including Starbucks, and crushes it’s direct competitors, owning more than half of the fast food market.

No surprise then that their commercials flood all media despite the fact that no American over the age of six months is unfamiliar with their brand. Most of that communication is NOT about advertising their product – it’s about repeating their brand value messaging. McDonalds = FUN! Think about it: their children’s food package is not called a “kid’s meal” – it’s called a “Happy Meal™”.

Keeping In Touch

Do you keep in touch with the people that you meet or contact on the Internet? If you’re like me, you have what I call “The Stack™” – a pile of business cards, collected at various events. Most of us entrepreneurs have a “stack” – sadly, all they do is gather dust. We collect them with the best of intentions, often as the result of – wait for it – an engaging conversation. Both you and the card donor are very enthusiastic, and they either gladly surrender custody of their cardboard signifier or are the one to thrust it upon you, eagerly requesting that you contact them and keep in touch.

Which… you usually don’t, despite your best intentions. Want to know why? Two reasons, really:

  1. Within 72 hours, you will have forgotten who this person is, and why you took their card
  2. If you can’t immediately hustle them for a sale, you don’t really have anything much to say to them

In all honesty, most of us go to meet ups and networking events trawling for sales. The conversations tend to be like speed dating: if there’s no immediate opportunity, we’re off to the next target. Just like dating, though, customers don’t happen immediately and tend to take a bit more finesse than a blunt come-on. Only a select few people are interested in a relationship with you, and that’s true of business as well as romance.

Two suggestions we have for turning the stack into a power pack are the Sharpie™ and the brand message elevator pitch. The first is quite simple – always carry a fine point Sharpie marker with you at live events. When someone gives you their business card, IMMEDIATELY write the following on the card

  • WHERE you met them
  • WHEN you met them
  • WHY you are taking their card

Within 72 hours, call them or send them an email. This leads to the second suggestion – the brand message elevator pitch. You’re probably familiar with the basic elevator pitch – the less-than-sixty-second summation of who you are, what you do and what your business is all about. The brand message version is just a slight variation on that concept. Where the elevator pitch is you talking about yourself and your business, the brand message variant speaks in terms of the potential customer.

Who are they? What do they value? What’s important to them, and what are they looking  get out of business, work and life in general? Remember – we’re trying to dial into theirBrand Message Elevator Pitch” class=”glossaryLink”>BMEP:

You seem to be a business person who seeks to thrive and prosper in the 21st Century economy. You know that an online presence and the effective use of social media can give you a strategic advantage… but you’re still trying to figure out HOW. If this is you – let’s talk.

Simple and to the point. Notice that only once did we use a first-person pronoun, and even that was only implied (the “US” in the contraction “let’s”). Otherwise, all second-person – “YOU”. Every thing stated was aspirational. “Seeks to thrive and prosper”, not “looking to make money/be profitable”. “You know” what the solution is (“online presence”, “social media”) AND what the solution can provide (“strategic advantage”). Observe that we don’t end in a pitch, but an invitation: YOU are the one seeking a solution, we’re just requesting a conversation.

Nowhere in this Do It Yourself” class=”glossaryLink”>DIY, YouTube and Google fix-it type? There’s no point even going on about our bona fides if all they’re looking for is to chat with a peer and compare notes.

This is why the brand message elevator pitch is useful. It gives us a first conversation to have without being “sales pitch-y” at all, and it helps US filter out the window shoppers and tire kickers from the true potential customers. Now, we’re prepared to have that first conversation in a timely manner, because we know what to say and how to say in — dare I say it — an engaging manner. Of course, this is just the first step. Hopefully we will winnow away the browsers from the buyers, and it will be time to take the next step. THAT step is Acquisition. And that’s next week’s post. Stay tuned…

The CREAM Rises to the TOP – Part Two

Customer Retention

Last week, we introduced the term previous post, we also defined the terms “Client” and “Customer“, and explained why “Customer Retention” is our goal.

So what do we mean by “Customer Retention”? And why does Retention come before Engagement and Acquisition? The reason is quite simple actually – if your Small Business is already up and running, you already have customers.

You probably don’t actually know how you got them, or how to deliberately get more: you might not have developed an engagement strategy, or any particular customer acquisition methods. While you’re working these things out, it’s your existing customers that pay your bills and keep the lights on.

Retaining existing customers happens to be MUCH cheaper than acquiring new ones. Thus, unlike many other books and articles on CRM, we focus on retention *first*. Once you understand the customers you already have, and how you got them, it’ll be much easier to figure out how to engage and acquire new ones.

Begin at the End – Fulfillment

When we first launch our new business and start working for ourselves, we’re grateful to make any sales at all. The journey from that first conversation to that first paid invoice feels like a thousand mile journey on foot, and the tendency is to immediately focus on the next customer, the next sale… often, forgetting to properly finish the job of completing the work for the customer who just paid us.

There’s a reason the term for this is “fulfillment”. Remember – buying is an impulse. People buy what they want first, then what they need, and emotions – not logic – are usually what compels them to finally say “yes”. So they’re not just paying you to do a job: they’re expecting you to satisfy a need, an urge, a desire. Once paid, you are responsible for fulfilling their expectations, not just complying with the “letter of the law”, or the terms of agreement in the signed contract.

Misunderstanding this is why so many startups flounder and fail, despite making steady sales, closing deals and delivering products. Superior customer service, promptly replying to emails, text and voice messages will make the difference between a one-time client and a loyal customer when there’s not much difference between you and your competition.

While fulfillment usually refers exclusively to delivering hard goods in a timely and cost-effective manner, we expand the definition to “soft” goods and services as well. Did you just do the least that was expected of you, or did you go “above and beyond”, proving to your customer that the relationship didn’t end once the money from the sale was in your account? It’s too easy to become almost disinterested in your customer once the deal is closed; this leaves them feeling like a neglected date once you’ve “had your fun”.

Always remember: sales is a transaction – fulfillment is part of the relationship. Marginally satisfied customers won’t complain, but will shop around. Satisfied customers – those that feel truly fulfilled – stay with you, and are the ones who will recommend you without you having to ask. Because the thought of their connection with you leaves them happy, and we all want to share happiness with people we love and respect.

TOMA – Top Of Mind Awareness

Know your market. Clearly state your Unique Value Proposition. Close the deal, make the sale, get paid. Fulfill the purchase beyond your customers wildest expectations. Then… you’re done, right? This should be enough to retain your customers until the next sales cycle… shouldn’t it?

In a word, NO. Your customers are not concerned with the fact that you need to make money, and most certainly do not wake up thinking “how can I do more business with [your company]?” That’s YOUR concern… so how do you keep them on board, simmering and sizzling and ready for the next round? Well, quite simply, the same way you did it the last time.

Sales, as we see it, is a conversation about the exchange of value for money – take a look at the sentence in the upper left of the graphic below:

Business Fundamentals Pyramid - 21st Century Sales Conversation.jpg

If sales is a conversation and, as this series proposes, business is a relationship, then as with any relationship we “keep the flame lit” by maintaining an ongoing conversation. Too often, we forget all about the series of exchanges which took us from initial contact to closed deal with a  paying customer. Face to face meeting, phone calls and emails, text messages and maybe even social media interaction. Once the sale is made, for most of us all that goes out the window, and we treat our customers like a discarded lover.

Whether we have an immediate upsell or cross sell offer – and especially if we don’t – we want to stay “top of mind” with our (hopefully) highly satisfied and emotionally fulfilled existing customers. One of the easiest ways to accomplish this is using one of the oldest Internet technologies – email. Without getting fancy or using any tool or program whatsoever, how about simply dropping your customers a “hey, what’s up” email every now and then.

NOT a sales letter. NOT a hustle or pitch masquerading as a friendly note: I hate those, you can’t stand them and you KNOW your customers most likely delete them and mutter This type of tool is referred to as an “autoresponder”, and is the best way to maintain the ongoing conversation with your customers. You write a series of emails in advance, insert the modifiers that will add each customer’s (first) name and other personal information, and then just add them to the email list or create a form where they can add themselves. The software does the rest, sending out the next email with a frequency you determine – weekly, monthly or whatever – and they’re automatically sent to each person’s INBOX. Thus the term “autoresponders”.

This is a great way to send off an informal “just keeping in touch” message rather than they typical “haven’t been thinking about you, but now I need more money” email usually sent by these tools. And you don’t have to limit yourself to just emails, although we all but insist that you DO send a series of emails this way. So few businesses send out genuine, “just thinking of you/thought I’d say hello” messages that it will definitely be a pleasant surprise, and will surely help distinguish you from your competition.

Newsletters, of course, are the types of communication distributed by automated email campaign software. Sadly, they are often so unfocused they’re useless and confusing. Just consider the term most people use when preparing to send them out: “time for another email BLAST”. A blast – really? Does that sound like a concentrated, focused kind of anything? Ugh – no thank you! You should never send ANY communication if you don’t know why you’re sending it out, and what you hope to accomplish.

Ideally, newsletters should not be used for “hustling sales”, but for building and maintaining ongoing, long-term relationships. Let your customers know what you’re doing that might benefit them, and not just what you’re trying to SELL them. Give them a glimpse “behind the scenes”: instead of words like “quality” and “value” merely being sales jargon, let them see how these traits are “baked in” to your business’ operations.

Feature customer testimonials. Case studies. Results of online surveys you’ve conducted, complete with a review of your goal in doing the survey, who participated and what they and the newsletter readers might get out of it. In a feature rich newsletter like this, it’s much less “sales pitch-y” to include a link to a targeted “landing page” on your website where it would be more appropriate for you to make an offer, rather than a blunt, out of nowhere money grab.

Be Fair, Play Square

Your customers know you’re in business to make money, and they know you make money by offering things you hope they’ll buy. There’s no need to pretend otherwise, but this doesn’t mean you can’t be subtle, and approach it with a bit of sophistication. The point and purpose of retaining a customer IS so that you can do business with them again. Just as you’d court a sweetheart you hope someday will be your spouse by showing them how special they are to you, nurturing the ongoing relationship with your existing customers is the surest way to ensure a profitable relationship with them, hopefully for years to come…

The CREAM Rises to the TOP – Part One

Customer vs Client

If you’ve been in business for any length of time, you’ve probably come across the term “CRM”. Even if you don’t know what it means, you’ve heard it mentioned, seen ads for products and services offering to provide “CRM” for you, and webinars and workshops promising to teach you how to master “CRM”. But what does it mean and, more importantly, what does it mean to you and to your business?

CRM stands for Customer Relationship Management, a simple enough phrase to decipher even without any further explanation. Managing the Relationship between you and your customer. Seems simple enough until you ask the obvious questions – “how am I supposed to do that?” and “why do I need a separate program/service/consultant just to manage these relationships?”  And what aspects of the relationships are we supposed to be managing, anyway? And how does any of this relate to me running my business better, more efficiently or more profitably.

Honestly, we at CommunIT Solutions have never liked the term “Customer Relationship Management”. It’s always seemed… too casual, too vague and not distinctly business-related. We’re about business, not social services or match making. So “Customer Relationship” has always struck us as an odd thing to focus on. Sure: we want aim to be pleasant, personable, honest and well-behaved — all that good stuff. Business is, after all, about relationships, and these traits and qualities certainly make relating to people much easier.

What we strive for and focus on when dealing with our customers is offering them superior value, and GETTING PAID for it. And, of course, once we’ve done that we want to KEEP doing that. With the same customers… because now we know HOW to, and we know that we CAN. Thus we have, internally, redefined “CRM” to mean “Client Retention and Monetization“.

In addition, we’ve gone a step further and defined an expanded acronym – Customer Retention, Engagement, Acquisition & Monetization” class=”glossaryLink”>CREAM, than go through that whole bit. In this new post series we will explore what this all means, and why we created an entirely new term.

Customer

Back when I first started CommunIT Solutions I used to use the term “customer” and “client” interchangeably. To me, they both meant “people who pay you money to do things”, so it was all good. Once I started blogging again, I figured I should have a better idea of what I’m talking about, if I’m going to presume to offer any kind of advice and guidance to others. So, of course, I Google-d both terms, and here’s what I discovered.

Client: The term client is derived from Latin clientem or clinare meaning “to incline” or “to bend,” and is related to the emotive idea of closure. It is widely believed that people only change their habits when motivated by greed and fear[3] Winning a client is therefore a singular event, which is why professional specialists who deal with particular problems tend to attract one-time clients rather than regular customer

CustomerClients who habitually return to a seller develop customs that allow for regular, sustained commerce that allows the seller to develop statistical models to optimize production processes (which change the nature or form of goods or services) and supply chains (which changes the location or formalizes the changes of ownership or entitlement transactions).

So, for purposes of this series, a client is someone who is inclined to do business with you, usually in a “one and done” fashion, while a customer is one who becomes accustomed to doing business with you on an ongoing basis. And before you get started – yes; I realize that there are many places where you will see these terms defined to be the exact opposite. In other cases, a client is taken to be someone who hires the services of a professional, while a customer purchases hard goods from a store or organization.

We’re not going to argue with those definitions – I’ve chosen the meanings above because they fit with my overall model of client and customer relations, nothing more. The first time you do business with someone, they’re your client. Your goal in many (if not most) cases – and the point of this series – is to convert that client into a customer. So the first obvious question is “how do I do that?”

Well… that’s the reason I’m writing this series, and breaking it down by examining each aspect of the term Customer Retention, Engagement, Acquisition & Monetization” class=”glossaryLink”>CREAM…

See you next week.

Money Matters – Part Five

Selling it to Your Buyers

Time to wrap things up. We’ve considered the mindset adjustments required to overcome the “asking for money” resistance. Identified the good and bad customers, and plotted strategies for eliminating the freeloaders – or avoiding them altogether. So that leaves us with the good customers, and how to overcome their tendencies to resist our efforts to get paid FASTER.

Yes: you are going to meet resistance, especially if you have existing customers, and you’ve made the professional mistake of allowing them to pay you HOW they want, WHEN they want. People are creatures of habit, and tend to get set in their ways – which may be to pay by check, or cash, and pay on whatever schedule they prefer.  And the “hassle” of dealing with invoices may seem like an unnecessary procedure to them. “Can’t we just do it the way we’ve always done it/the way I’d rather do it/the way that works best for ME?”

If you’ve been reading this series of articles from the beginning, you know the answer to that is simply “no”. How do we get this to go over with our customers, and not become another bunch of stress and headaches? Here’s how:

Blame “Your Accountant”

Or your “bookkeeper”. Even if you work alone. Always create a straw man (straw *person*?) to play the “bad cop”: explain that this is out of your hands, and to improve efficiency, comply with Uncle Sam, blah blah blah, that you’ve been advised by the person/people who handle your financials that it simply has to be done this way going forward.

Much of this will be true, even if the implacable bureaucratic type you’re talking about is just a phantom version of yourself. You have made the decisions/changes to improve your company. It IS a better way to manage your financials. And it IS non-negotiable. By inventing a “fall guy” (fall person?), you avoid having to tell someone you’re trying to convince to pay you “it’s my way or the highway”. Because you don’t want them to chose the highway… and you probably want to continue doing business with them. Good customers are not that easy to find, and steady customers are worth more than new ones.

It’s a feature, not a bug

That precious section helps you explain why YOU have chosen/are “obligated” to handle invoicing and payment this way… but where’s the “WII.FM” for the person who has to do the paying?

Explain to your customers and clients that your professional service are a tax write-off (most are – check with the experts to be sure you know what you’re talking about); but ONLY if things are properly documented. Nothing inspires people to put up with a new procedure more than the phrase “it will save you money”.

It’s for their protection

You may not want to raise the subject of refund or dissatisfaction, but with certain customers this can be a selling point. Payment by cash is invisible and hard to dispute, even with a hand written receipt, which is kind of flimsy evidence for small claims court. Checks aren’t much better. A digitally signed professional service agreement and PDF invoices recording electronic payments are better than the paper they’re printed on. They’re binding and enforceable. You of course intend to deliver outstanding services and leave every customer and client ecstatically satisfied, but showing the professional consideration may actually help overcome that reluctant person (who may be trying to balk over price) by showing them how seriously you’ve thought out – and operate – Your Small Business.

Money Matters – Part Four

Show Me the MONEY!

In the previous entries of this series, we talked about some fundamental Small Business money issues:

Ok – so we’ve covered the basics, and laid down a pretty good foundation for dealing with important Small Business financial issues and, hopefully, getting past those doubts and inhibitions which make it difficult to “ask for the money”. Now, we move on to the fun part: Let’s Get PAID!

No Checks. PERIOD!

It’s 2017, and the year is almost over. We’re well past the point of accepting personal checks for payment. Constantly checking the mailbox or having to take a trip to collect a piece of paper which then has to be depositing in a bank, then waiting several days to finally get paid – or get stiffed with a bounced check – is simply ridiculous.

Stop letting your customers determine how and when – and IF – you get paid. Everybody has at least a debit card – nobody books an airline flight, reserves a hotel or rents a car with a check or cash. Anyone who does not have plastic simply isn’t your customer. End of story; move on. You not only get to choose who your customers are; you, and you ONLY, determine how you will receive payment. This point is not negotiable. You’re not in business for anyone’s convenience – you’re doing business to make a profit… which cannot happen until you get paid, and get paid as quickly as possible.

No Cash, either

You’re a BUSINESS, not a *hobbyist*. Off the books is off the grid: you can’t build net worth or credit worthiness with unclaimed, untraceable financial transactions. Also, electronic payments automatically record and categorize each transaction, which among other advantages is an incredible time saver come tax season.

And for those of you who think you’re “getting over on the Uncle Sam“, or somehow operating “smarter” if you hide income from the government, consider this: your business is only worth what is shown on the record. Why does this matter? Try going to a bank for a business loan, or a line of credit, when you’ve been hidden 30 – 40% of your revenue. What you’ve done is made yourself only 60 – 70% as credit-worthy as you could have been.

On the record

Don’t write a book, but DO give a detailed account of what the invoice is for. Memories are slippery, especially when it comes to money. The more you remind them of why they agreed to engage your services (remember: they are NOT HIRING YOU!), the more easily they will pony up the cash… electronically, of course.

Your (signed) written agreement and your detailed invoice are the bookends of your work record. Many Small Businesses, especially service-based ones, exist for years with no history or audit trail of what they’ve actually done during the time they’ve existed. Have you just been grinding out work, or have you actually accomplished anything? If you’re looking for partners, or seeking investment from non-traditional financing like venture capitalists, “angel investors” or family and friends, they’ll want to look at more than just your bank balance.

It not just how much you’ve made – it’s HOW you made it. That’s important even if it’s just for tracking your progress… or determining if there’s been any progress at all. And it’s always simply nice to be able to look back over a month, a quarter or a year and see what you’ve done; memory fades quickly, as you’re always focusing on the task at hand, the next task, the next client.

An Invoice is NOT A BILL

A detailed invoice is a request for payment for SERVICES RENDERED. They’re not lending you money: they’re paying you for the work you’ve ALREADY DONE.

It’s also a service record – the profitable activity performed by your business. Much of what you do “as a business” is behind the scenes. You are preparing to do the work, gathering the skills and materiel required to perform the work and getting to and from the work (even if it’s just a trip from your bedroom to your workspace at home). NOE of this is what your customers and clients are paying you for… they don’t even really pay you for the actions and effort which directly contributes to “work being done”.

They pay you for the RESULTS. As my first business coach always says “Remember that everyone’s favorite radio station is money has a short shelf life – so does the memory of a satisfied customer. The more time that passes between the end of the job and the payment of the invoice, the more likely even the most satisfied customer will be to question what their paying for, and why.

So when we advise you to submit a detailed invoice, we mean detailed in terms of the RESULTS DELIVERED, not a punch list of what it took to get the work done. In other words, it’s notwhat you did“, it’s “what you did FOR THEM“. Nobody cares how hard you worked, but how well – your invoice details should make them think “oh yeah: THAT’S why I hired them”.

That’s the reason that seasoned project managers and contract professionals talk aboutdeliverables” and not “outcomes”: it’s got to be from the customer’s perspective. They don’t want to know how you did it, although this may be quite important to you. This is a mistake I made at the beginning of my consultancy. I felt it was important to show that I had “worked real hard“, as if I had to impress them. To be honest, I think I also wanted to impress upon them how complicated this IT stuff was, as if to prove I was worth my fee.

NOBODY CARED. It didn’t stop me from getting paid (thankfully), but I found that when I began to put things in terms of results and not effort, not only did the invoices get paid faster and with less pushback, but I would sometimes get feedback about this or that detail, either requests for clarification or positive comments like “oh, you did that TOO?

Not “good for you; lookit how hard you worked”, but “gee thanks – you did more (for US) than we even thought we’d asked for“. THAT’S the result that matters most to YOU; a satisfied customer. They’re the ones most likely to work with you again, and to make unsolicited referrals because they’re just that happy with the work.

Always say “Thank You”

This is something nobody mentions in Small Business financial discussion: the importance of gratitude. It’s also the flip side of “avoid the bad customers” – REWARD the good ones.

Just as you don’t have to work with the bad customers, the good customers don’t have to work with you. They choose to. ALWAYS let them know that you understand this, and that you appreciate it. Not just in conversation, but on your invoices. EVERY time.

I use the “notes” section of my invoices for this purpose. I say something to the effect of “Thank you for the opportunity of providing quality service for you and your business”. It seems like a small thing, and nobody’s going to refuse payment because it isn’t there. Also, nobody has ever mentioned this in the hundreds of invoices I’ve submitted and had paid in the nearly ten years I’ve been working for myself.

That’s not the point. Just as you shouldn’t do charitable things to bring praise or attention to yourself, don’t express your gratitude seeking an “attaboy” or a pat on the head. Do it because it’s part of the sales conversation. They may not ever say anything, but they WILL notice it. And, subconsciously perhaps, they’ll notice that you’re the only one who says it, explicitly, every time.

You show them you don’t take them for granted, that they’re not just a cash machine for your personal benefit. When it comes to deciding to engage your services again – or choosing between you and a competitor trying to win them on price or other benefits – it may be the subtle difference that tips the balance in your favor.

You may never know… do it anyway. Because that’s the way YOU do business. Because, at the end of the day, that’s the person you are. And that, after all, is what really matters.

Money Matters – Part Three

Freeloaders Need Not Apply

This will be a pretty short post, compared to the previous entries in this series.

Last week, we mentioned that there are such things as bad money and, particularly, bad customers. The worst kind of customers we call “freeloaders“. These are the type who will engage your services knowing full well they can’t – or won’tpay you or, if they do pay, it’s usually late and after they’ve been very demanding and aggravating.

Shut these bums down at the door! It’s best not to let these jokers get past the proposal stage… once they’re on your customer list, they’re not only annoying, they can actually lose you money and business. Learn to spot and filter out this type of client, who will have you chasing them for your payment and pulling out your hair.

It’s payment for services rendered

Make sure you set the terms of agreement clearly, right from the start. That would be before you do anything other than have a meeting or a phone call to consider doing business with them; well before you even consider preparing a written proposal, or sending them an estimate. You’ve got to be sure you make it absolutely clear: you are a professional, providing value and quality service.

When it comes time for you to get paid, it’s not negotiable – you’re not asking for a loan, requesting a favor or “imposing on them “. Don’t let them guilt you into accepting excuses for delayed payment, or start throwing shade on your work in an attempt to justify reduced payment. Be in constant communication with your customers and clients as the work is being performed. Always check in to “take the temperature“, and whenever possible, get it in writing – emails and text messages are best for this.

Keep it light and cordial, but always remember: you’re preparing a “paper trail” of acceptance and satisfaction with the work in progress to shut down any sudden complaints and criticism after the work is done… the sudden appearance of these quibbles is one sure sign that you’ve got a freeloader on your hands

Get it in writing

Anyone not willing to sign a binding agreement in advance is the one you walk away from – FAST! The surest “freeloader litmus test” is somebody that won’t formally commit to doing business.

These types always want a handshake deal and a verbal agreement. And watch out for these grifters — they’ll usually come at you with charm and charisma, insisting that you’re just “little guys, all in it together“, all “looking out for each other“. Meanwhile, they’re just looking out for themselves, trying to create weasel-room so they can hide in the shadows of “well, I don’t remember it that way” and “it’s your word against mine“.

As we mentioned in part one of this series, you MUST get a signed agreement before you commit to doing ANY work. With a good customer, a contract eliminates uncertainty, defines responsibility and establishes the schedule of payment. With these freeloaders, the mention of signing a contract is like citronella to a mosquito – Bye, Felicia!

Get a down payment

This is the second part of the “no-pest strip one-two punch” freeloader eliminator. The huckster, the hustler, the shyster, the scammer will NOT put up any cash before attempting to scam you of your hard work and effort. In fact, the very same flim-flam, back pedaling and excuses that you will here when it comes time to get paid – if you allow these freeloaders through the door – will show up here. You’ll be amazed at how quickly they transform from boasting, strutting, confident mavens to stammering, flummoxed, simpering dolts once you mention “the down payment for that will be…

As mentioned in part one of this series, by the time you’ve met, evaluated the situation and submitted a proposal, you’ve ALREADY DONE WORK. If they aren’t willing to put some skin in the game, they’re not serious about engaging your services (always remember: they are NOT HIRING YOU ), and are likely going to try to haggle your price down, or beat you for payment entirely.

Be polite, but firm. Let them know that this is the way you do business – they can choose or refuse to do business with you, but those are the only options available. YOU set the terms, NOT your customers.

Don’t be afraid to show freeloaders the door… the little bit of money you think you’ll lose is nothing compared to the time and effort you’ll waste dealing with them. And in the long run, it’s better that you watch a freeloader walking out the door than watching the marshals put a padlock ON your door… as they shut down your business due to freeloader overload…!

Money Matters – Part Two

DTMFA – Dump the Major Failures Already!

Given all the challenges that come with doing business and daring to take the first steps in the entrepreneurial journey, we often feel we have to take every job, every customer, every opportunity to “make money”. It’s all about getting paid, and there’s no such thing as bad money, right?

If you’ve been in business for more than a year or two, you know that there is bad money, bad customers, and opportunities that end up costing more than they profit. A key aspect of “real” business success is recognizing the difference between good and bad opportunities, and avoiding the bad ones.

As a business owner, you get to choose who to do business with. This isn’t the conventional view of business, but it’s true. In the first few years of the entrepreneurial journey, one of the biggest challenges for most of us is realizing that we are not employees. The people we work for do not hire us – they contract our services. When we’re on the desperate search for customer #2 this may seem pretty presumptuous, but as our businesses mature we must develop a more mature and nuanced attitude about customers, business and money.

Let’s take a look at a few of the aspects of this “more mature” approach toward customer relations and financial management:

Everybody is not your customer: don’t take every job that’s offered to you

You’ve formed your company, printed up business cards, and launched a five-page website. Now, to find some customers! When we’re newly launched, any customers seems like a good thing. After all, it means money coming in, and emotionally it’s reassuring that “somebody out there likes me“. While this isn’t a bad thing – especially when it’s an uptick from zero revenue – if we’re not careful we can develop bad habits that will be hard to overcome.

Most importantly, all businesses must learn to distinguish their target market from just “available customers”. Who will be the source of repeat business? Who can we upsell and cross sell to? Who will be the best source of quality referrals? Before we get to whether they are pleasant or demanding, good-natured or foul-tempered, we must always remember that the purpose of business is consistently getting paid and making a profit.

Taking on all comers can have us wasting time with clients who want to bargain for price, demand more than they pay for – or both! Bargain shoppers are usually “one-and-done” types – not much repeat business there, and it’s quite possible to have what seems like a windfall one month, only to be faced with a dry spell because we were chasing the available customer, rather than being selective, and building a quality customer base.

It’s not an audition, it’s an interview

You don’t have to do business with anyone. In fact, you’re not obligated to do business at all – it’s a choice. So make sure when you do choose to do business, that you’re checking out your potential clients AT LEAST as rigorously as they are checking you out.

As soon as possible, lose the “employee mentality“. You are not working for their payment: they are hiring YOU to provide value and quality. This may seem strange when you’re still at the stage where you’re uncomfortable “asking people for money”, but they have to be worthy of being your customer. They’re not doing you a favor – you’re doing them a service.

Don’t be shy about letting difficult customers go, or breaking off conversations with hagglers. When faced with someone who tries to get you to lower your price or take on more work than you’re bargaining for by telling you “I know someone who can do this for less” – by all means, inform them (politely) that they are of course free to do business with that person or company. Here’s the dirty little secret that should make this sort of thing easier: if that person were really such a bargain, that’s who they would be talking with instead of you. Don’t be fooled – be firm.

Know your Value

Part of why it’s so difficult for newbie entrepreneurs and startup business owners to overcome “asking for the money” difficulties is that they are not confident that they are worth the price they are asking. If you don’t know what you’re charging them for, and why. you’ll always choke when it comes to asking for the money.

I always use the example of a lawyer that charges $500 an hour. If you ask that lawyer “what can I get for $300?”, they’ll tell you “not an hour of my time!”  They know the value of the service they provide, and they know they don’t have to justify it. They will probably be accused of being overpriced… so be it. The sooner they let that complaining prospect go, the faster they’ll get to the client that appreciates the value they offer, and won’t flinch at the point that price is mentioned.

Let’s not get it twisted though: “knowing your value” is not the same as just picking a price out of the air because you’re in a rush to get rich. This is where market and competitor analysis are essential. You can’t be a novice in your field and charge 3x what experienced pros are asking even if you get one or two suckers… er, unsuspecting prospects to pay that price, word will quickly get out, and once you’re branded as gouging the market, you’ll soon go down in flames based on negative word of mouth… not to mention being hit with demands for refunds, or threats of legal action.

Go slow and play fair, but don’t underbid yourself either. Pricing is an art and a science, and it takes time to get it right. Examine your financials regularly, constantly evaluate your market and, most importantly, remember that once you’re established, you’ve got to raise your fees every few years. The cost of living and all expenses constantly increase — don’t put yourself out of business out of fear that you may drive customers away with a price hike.

Prepare your customers, explain things clear and justify your increase without appearing defensive. You good customers will stay – the bad ones are just as well done without. And you should always be working on increasing your customer base; that’s typically where you should apply you new fee schedule anyway.

Don’t back down!

You can bargain for services, or value offered, but NEVER bargain for price. Your price is your price: if they want to PAY less, they GET less – it’s that simple. Bargaining on price too easily and too often makes you appear unskilled and uncertain.

You don’t go into a restaurant and insist that they charge you 20% less than the price on the menu. You don’t haggle with your doctor or dentist. You are a professional – your prices are not negotiable. This isn’t a hobby; don’t let anyone ever treat you like an amateur just because you work for yourself, or you’re just starting out. Remember: they can always choose to walk away and find somebody else at a cheaper rate if that’s really the deal-breaker. But once you’ve established your pricing, stick to your guns.

Those same hagglers may end up coming back with a sheepish expression, tail tucked between their legs. That “cheaper deal” ended up being a nightmare instead of a bargain. And now, rather than appearing “difficult”, you now occur to them as a professional that’s worth the price you ask. So don’t gloat – just stay (reasonably) humble and, by all means, TAKE THEIR MONEY. That is, if you decide that THEY are worthy of YOUR time and effort.

Remember: customers and clients must also provide value…