entrepreneurship

Today's blog is actually a podcast — a 16-minute extract from a presentation I recently made on getting the most out of your sales and sales organization. In this section, I share my 10 rules for working tradeshows, and why each rule has an impact on your success.

The Rules

Here's the short list of rules. Listen to the podcast to hear the reasons for them and what you gain by following them:

1. Always prepare for a tradeshow by researching your top prospects in the event you see them.

2. Never sit in the booth.

3. You're not selling shoes.

4. Take scheduled breaks from the booth.

5. Hire a booth buddy.

6. Never eat in the booth.

7. Capture every possible lead - that's what the tradeshow is for.

8. Keep alcohol and late nights to a bare minimum.

9. Make each subsequent day better than the day before.

10. Never ever close up shop early.

Transcript Below

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Transcript

[00:00:01.020]
I recently spoke at a conference for senior sales executives and sales managers, and I was talking in general about trade shows and some of you guys have already watched my presentation or read my blog on how to get your ROIC from trade shows. But this next section, which I pulled from the speech recording, is about my rules for working trade shows, and I haven't really shared that on my blog before. The sound quality is a little bit tinny because it was a large room without professional recording equipment.

[00:00:34.200]
But I think you'll get the gist and I hope it's useful for you as so many of you prepare to go work some really big trade shows in the next few weeks. I often talk with my clients about preparing for trade shows and. Being very productive and getting their return on investment from trade shows, it's sort of a joke now that people will say, well, OK, it sounds like you have some rules for trade shows and what are they? So I thought I'd just take a moment to share Australia's rules for working a trade show and explain the thinking behind them.

[00:01:10.040]
For 20 years, I did run businesses that were present at multiple trade shows every year, and I thought it was very important that I be on the floor selling and experiencing the trade show and the customer interactions because I don't think you can run a business without really knowing what the customers want, what they talk about it, that whole experience of selling to them directly. So here are my rules of trade shows. The first rule is be prepared with your prospecting list before you ever go to the show.

[00:01:38.580]
If you show up at a trade show and you don't know which customers you're specifically looking for or hoping we'll stop by if you haven't done some research on those customers so that you can talk with them intelligently about their business, if and when they do show up, then you're not prepared to be at the trade show. Now, of course, if you can get meetings with people, that's easier to prepare for because you know who is going to be coming in at what time.

[00:02:05.070]
And you do your research and you're all prepared. But trade shows are easy and you often can't get meetings. And that means you're going to be doing a certain amount of customer research on spec, on the hope or the prayer that they will actually come by your booth. But if you have high value targets and you are prepared with information about them when they show up to your booth unexpectedly, how impressive is that? So the first rule of trade shows is before you ever go to the trade show, have a full dossier on the customers that you hope to sell to and be prepared to have an intelligent conversation with them if they arrive at your booth.

[00:02:45.180]
The second rule of trade shows is nobody sits at a trade show. In fact, at most of the companies I've run, we didn't even allow for any chairs to be in the booth except for chairs that were available for customers. And there are two reasons for this. The first is if you're sitting down and then you suddenly jump up when a customer walks by in order to catch their attention. That is very intimidating. The customer suddenly feels as if you want something from them.

[00:03:12.600]
And even though they're at a trade show to buy, there's this human tendency that kicks in. It says, you don't sell to me, don't sell to me. So if you're sitting down and then stand up at the approach of a customer, that's usually bad energy, it'll send the customer running. On the other hand, if you're sitting down and you say sitting down with a customer walks by, that's dismissive. It's like I'm comfortable and I'm just sitting here and I'm doing my own thing and so I'm not here for you.

[00:03:42.000]
So sitting down in the customer approaches doesn't work and jumping up with a customer doesn't work. So what works when the customer walks up that you're standing all ready and you're prepared to make eye contact with them and smile at them and invite them to engage with you? The second reason there's no sitting down at trade shows is because trade shows are exhausting, and when you're standing all day, it's exhausting. But something really bad happens in terms of energy. When you sit down at a trade show, all of the energy that you have left, which may not be very much, drains out through your rear end and into the chair.

[00:04:18.510]
And the next thing you know, it's very hard to stand back up. If you want to keep your energy up at a trade show, the best thing you can do is stay on your feet and keep moving and keep engaging and save the butt draining energy moment for the end of the day when there are no more customers to engage with. This brings us to my third rule about trade shows, which is you're not selling shoes, so don't wear shoes for the attention.

[00:04:46.150]
They get you lots and lots.

[00:04:48.820]
This is particularly a women thing because men are pretty good about buying shoes that feel good and they're expected to wear shoes that feel good. The shoes that feel good actually look good for men. For women, it's a little more challenging. But I can't tell you how many women I know find that their ability to think and communicate and negotiate and keep high energy at a trade show is severely damaged by the fact that they're wearing shoes that will not support being on your feet all day long.

[00:05:17.740]
And there's a certain amount of pressure to wear beautiful shoes with your beautiful clothing look beautiful. But again, you're not there to sell shoes and you're not there to look beautiful. You're there to be intelligent and engaging and to sell. So wear shoes that are designed to be stood up all day long. The good news is for women, there are a lot more shoes that do a good job of that today while still being quite attractive. They're not going to be as beautiful as the shoes that you spend a fortune on at Neiman Marcus, but they are great shoes that will allow you to be an effective human being while being on your feet for 10 hours a day for three, four, five and six days in a row.

[00:06:00.400]
That's my third rule of trade shows. By fourth rule of trade shows is take breaks from the booth, but I say that with a caveat because I know a lot of particularly young entrepreneurs, young designers, they tend to go work trade shows by themselves. And this is very difficult to do. And I'll talk about that in my fifth role. But in my fourth role, it's get breaks from the booth and try to do it just the way we would encourage hourly employees to work.

[00:06:30.740]
15 minutes in the morning, half hour for lunch, 15 minutes in the afternoon. In fact, if you walk away from the booth and you sit down and you know you've got 15 minutes to do it. It doesn't have the same bizarre energy effect that it does if you sit down in a chair that's already at your booth and you don't want to stand back up again. You've walked away from the booth psychologically. You know, you have to go back to the booth.

[00:06:54.760]
And for some reason, sitting down is not as hard on energy. Maintenance is also good to clear your head. You walk away, you get some water, you eat some lunch. That relates to rule six, which is no eating in the booth. So all for is get away from the booth three times a day, half hour for lunch, 15 minutes of the morning, 15 minutes of the afternoon. So what's rule five that facilitates this?

[00:07:22.180]
Get a booth, buddy. A booth buddy is a really important that you may not know if you have staff or if you've got a bunch of coworkers, then you're going to be booth buddies to each other and you're going to make sure that each of you get your breaks in your lunches. You're going to be thoughtful about it, because that's the only way to keep the energy high for the customers all day long. But if you're by yourself and what you want to do is work with other exhibitors at that show who are also by themselves.

[00:07:47.730]
And together, you hire a booth buddy and that booth buddy is somebody that moves around and covers the different booths. You do a little math, you figure out how many booth to Booth Buddy can cover and still get their own 15 minute break, morning and afternoon and a half hour lunch. But a booth buddy helps you maintain your energy and your effectiveness by giving you the breaks. And you can afford the booth, buddy, by sharing them with other solo exhibitors of a six.

[00:08:19.350]
No eating in the booth. First of all, it's bad for your digestion, your scarfing food down to your customers. Second of all, it's bad for your presentation. I don't know anyone who has a brand that says we chew in other people's faces. It's just not part of anybody's brand statements. You've got to eat away from the booth, which reinforces that you need a booth, buddy, and you need to take those breaks. But nobody eats the booth other than a breath mint.

[00:08:43.710]
I don't even like dove in a booth because you just keep chewing it. And Victor, terrible presentation. My seventh rule of trade shows is that you're there to get leads. Yes, of course. You should be setting appointments before you go and meeting with customers as much as you can and be prepared for sales pitches. But a very, very, very important part about trade shows is connecting with people that you didn't even know existed and becoming a presence to people that you knew existed but they didn't know you existed.

[00:09:14.550]
And so the seventh rule is about collecting every customer's information that comes by your books. If there is a scanner opportunity at the trade show to scan badges as they come by, it's worth investing in. If there's not a scanner opportunity, make sure you're doing something to collect everybody's business card. Even if they tell you that they're almost out of business cards, they only have one left. Take a picture of it, take a picture of their patch. If the show will allow you to do so, do something in the booth that allows you to entice people to leave a business card like a give away.

[00:09:50.610]
But your job at the trade show is to collect every possible you can collect, because following up on those leads is what's going to help you get your ROIC from the trade show after the show is over. So that's the seventh rule of trade shows. Collect, collect, collect the leads.

[00:10:08.670]
The eighth rule of trade shows is always an a popular one with my employees when we were exhibiting, which is you're not on vacation, you're there to sell and that early nights, very low alcohol intake, get to bed, get rested. You're spending a fortune to be at that trade show. You're spending a fortune in cash. You're spending a fortune on energy. You're spending time that you could be spending doing something else that is a huge investment. You could probably get away with going out night one with all your friends that you haven't seen since the last version of that trade show.

[00:10:42.240]
And you stay out late. You drink too much to get up in the morning and you're fine. But day two, you're not going to be as productive as day one. Guess what? You're not as productive day to is your day one anyway because you're tired from day one when you add to a trade show and it's inherent, exhausting nature, late nights and alcohol and every subsequent day you are less of a professional. You are less successful than before the day before.

[00:11:07.920]
So the eighth rule of trade shows is absolutely do not drink too much, do not stay out till late, do get to bed and be fresh for the next day.

[00:11:21.870]
The ninth rule of trade is to make sure you're doing some things better each day than you did the day before, and this means that you have to end each day with a reflection on what worked, what did, what you could do better, and you start the subsequent day with improvements that you have planned. So that's good night. Rule of trade shows get better every day. And now for my last 10 through live trade shows, never, never, never pack up, close your booth before the day has closed or before the show has closed.

[00:11:59.020]
Nothing drives me crazy here than to see a group of people pack up and leave their booth at the end of the day, 20 minutes before the show's closed, because they're in a hurry to get ahead of all the other people that are heading to the vault or to the restaurants or wherever they think they're heading off to. And it's absolutely crushing to me to see somebody pack up a booth and say the shows closes on the last day at three o'clock and they start packing up their booth to the customer that you've been waiting for.

[00:12:28.480]
The customer that can pay for the whole event could be the one that shows up at six o'clock when you packed up and left at five forty or who shows up in the last 10 minutes of the show on the very last day. You're there to sell. You're there to make money. And to be unavailable for that to happen is just leaving money on the table. In addition, it makes a terrible brand statement. What it says to people walking by is we're lazy, we take shortcuts, we're in a hurry.

[00:13:02.200]
Some things more important to us than being here for you. And you never want your friend to say that I don't care what your brand is, it doesn't include telling people you're lazy and that you take shortcuts. So those are my 10 rules of trade shows. And they might be a little stiff for most people, but I have found that they help make trade show value increase in every place that I've ever. Rule number one. Be prepared before you go to the show with all your customer information, particularly for the top prospect you'd like to sell to number two sitting in the booth.

[00:13:39.040]
Number three, it's not about the shoes, it's about the sales. Number four, make sure you take breaks from the booth to maintain your energy. Number five, get a buddy. Even if that means sharing the expense of your booth. Buddy with other people, work the show. No. Six, no eating in the booth for seven. It's all about the prospect. Make sure that you're capturing every lead you can capture. Number eight, you're not on vacation.

[00:14:08.480]
You spend money to be there and you expect to make money by being there. So get your rest. Don't drink too much and make sure that you have energy for the following day. Number nine, make sure you do some things better each day than you did the day before by reviewing each day and making plans for the new day and continuously improving your trade, your presence. And for Ted. Never close up early. That at the end of the day, not at the end of the show.

[00:14:39.380]
Work up to the very last moment of the show time so that you're always conveying to customers that you are professionals, that you are there for them, that there's nothing more important to you than your obligations at that show. And also because you don't want to miss that opportunity for the perfect customer to walk in your booth with you shut down or left early. I hope that by applying these rules, you can have a better trade show experience and make more money from your trade shows because for Pete's sake, trade shows are difficult.

[00:15:12.600]
Why would you go to the effort of a trade show if it was to produce as much financial return as possible for all that work? I wish I could have captured the Q&A from that event, because people have their own rules for working trade shows, and I'm curious if you have your own rules for working trade shows as well. Anyway, this has been a podcast from the works blog by me, Andrea Hill. And thanks for hanging with me for a few minutes.

[00:15:41.670]
Have a great day.

I enjoy bird watching. We have created a bird sanctuary of sorts on our land in Wisconsin, and we pay attention to how to attract a variety of birds and how to keep them healthy.

Business Lessons from Birds

One of the things we learned early on is that birds are opportunistic feeders. We were constantly worried that we would fail to provide enough food or put out the wrong food, and that as a result our little friends would suffer. But that is not what happens. When a food supply dwindles, birds don't sit around waiting for it to reappear. They move on - quickly - in search of a new food source.

Your customers are also opportunistic feeders. If you fail to attend to the reasons they do business with you, they will move along quickly in search of another source.

We also learned that we could attract the kinds of birds we wanted to observe by putting out the right types of food in the right places. We studied and planned, because we love being surrounded by colorful birds, playful birds, and song birds. By defining the birds we wanted to attract and then studying their preferences, we created an environment that delivers birdwatching pleasure every day.

You must also define the specific customer you wish to attract. If you don't, the results will not please you. Early on we attracted too many sparrows - which annoy the birds we wanted to attract - and raptors, which ate them. Bad planning or no planning can have miserable consequences.

Finally, remember that birds are evolved from some of the oldest species on our planet. They clearly have staying power. This is due to many factors, but being opportunistic feeders is one of their strengths. Opportunistic means more than just taking advantage of opportunities as they present themselves. It also means being on the constant lookout for opportunities. When food sources dry up, birds waste no time feeling sorry for themselves. Because even when times are good and food is bountiful, they scout for other nearby food sources constantly.

Apparently, success is for the birds. Let's learn from them.

Are You Competitive?

One of the most important elements of business success is competitiveness. Business thinkers write about it, business owners talk about it, and entrepreneurs worry about it. I have received more than one phone call from new business owners worried that they are not competitive enough to launch a successful business. Which is simply confirmation that, despite all the discussion about competitiveness, very few people really understand what it means.

For most people, our exposure to competitiveness is related to childhood sports or academics. We grow up thinking that the people who train the most or study the hardest or are the most relentless are the most competitive. While there's no doubt that drive is a part of competition, the true definition of competitiveness is the differentiation. The person who can run the fastest is the most competitive in a footrace - whether she trained for years, or just slipped out of her high heels on a whim and took off.  While drive, discipline, or even aggression can sometimes be contributors to success, these attributes only matter if your end result delivers the desired prize.

Plan Your Race Carefully

Runners self-select into different aspects of the sport. Some are sprinters, some are jumpers, and some are long-distance. Most will excel at a few of these, but rarely are the sprinters also the cross-country warriors. You don't have to be competitive in every type of running to win a Gold Medal - you just have to be competitive in your chosen heats. The same is true with business competitiveness.

To be competitive in business, you must match your talents (services, products, identity) to your potential markets. If your talent is to create extremely high-end, scrumptious, gold and diamond jewelry, you know that your market will not be high school girls. But your target is not the "32 to 48-year-old female self-purchaser with a professional career" demographic either.  Even though that category is likely a closer match to your offering, it's still very broad, and made up of many many different types of women with different aspirations, values, and purchasing behaviors. You have to figure out which heat is yours to win.

And what does winning the race look like in this example? The Gold Medal is to achieve your sales and profitability objectives and to create a sustainable business with tangible market value. To be competitive, you have to identify the group of people to whom your product or service matters, and give them a reason to buy from you instead of from someone else. This is the heart of competitiveness.

Train Train Train

Here's where the discipline and determination that are powerful contributors to competitiveness come in. You can't just set your market target and then forget about it. Being competitive - i.e., winning the results you want - requires constant attention, correction, refinement, and practice.

I was speaking with a potential new client today, a luxury retailer in a very high rent market. I asked a lot of questions about his business performance, and he was able to answer each one with accuracy and confidence. When I asked about his customer profile he said, "That's where I think we need your help. Our customer profile feels less focused than it used to." This is an example of someone who is in it to win it. He is so aware of his own business that he can feel when he's off. He approaches every day as full-on training.

Your Race is Your Own - Don't Copy Anyone Else's

Another competitive mis-step is to copy what other businesses are doing. If another business in your competitive space is already doing something, the market doesn't need you to do it too. You have to do something else. Just remember, when you're playing follow-the-leader, the leader will always cross the finish line before you.

You Can't Win a Race Looking Over Your Shoulder

Some business-owners are so terrified that a competitor is gaining on them that they can't stop looking over their own shoulder. They vigilantly patrol their market space for copy-cats and encroachers, and they waste precious energy and business focus looking at the wrong things. Of course, if someone egregiously infringes on your business, you need to deal with it, but in most cases these caboose-fixated folks are trolling for the mere threat of competition. If you try to run while looking backward you're bound to fall on your face, and that's virtually what happens to business owners with this competitive problem.

If You're Not Having Fun, You're Not Doing it Right

The best athletes in the world compete for the love of their sport. No amount of money or prestige can make all that practice and sacrifice worth it. They may not feel like practicing every single day, but nine out of ten days they are doing what they love to do.  When I tell people they need to have more fun at work, a common impulse is to start doing Friday pot lucks or monthly pizza parties. Hey, food is fun, but that's not really what I mean. You need to love what you do to show up every day in your game clothes.

So to all of you out there who aren't particularly competitive (in the generally accepted sense), who don't feel the thrill of cutting throat, who are more likely to shed tears than shake your fists at defeat, worry not. Being competitive is about differentiating, practicing practicing practicing, and never looking over your shoulder. It's OK if you still let your older sister win at Monopoly. Follow these concepts, and you can still win at the competition of business.

I'm having a lot of fun again. For a little while I had stopped following my own advice - the advice I always give about staying true to and clear about your business strategy and your own path. Oh, I was having fun at first when I went off my path. I was indulging my personal passion for learning new things and learning them very deeply. When I stumble onto something that requires deep, deep investigation to learn, I find that very stimulating.

In this particular case, I was able to (sort of) rationalize that it was beneficial to my customers and my business to dig into it.

But the whole adventure was (very) peripheral to my own business strategy. This happens fairly often to entrepreneurs. We are interested in many things, and we can get a little ADHD about our varied interests and passions. We can fall off our path. Often, falling off our path involves falling onto - or in the way of - someone else's path. For instance, a designer may change her design aesthetic to satisfy the pricing concerns of the 'wrong' group of customers. At first, coming up with new designs is a lot of fun, until you realize that you're gradually not appealing to the customers that really matter to you. A jewelry retailer may get caught up in the fun and excitement of event planning or social media, only to realize months later that she stopped paying the kind of attention needed to her nuts-and-bolts merchandising strategy.

Luckily, we do get clues that we are off track. For me, the clue is when the fun of the diversion is no longer fun. You see, my long-term path and strategy are based on my deepest convictions and life-time goals. Your strategy should be based on those things as well. Whether you want to sell your business for a lot of money, build a brilliant brand with staying power, or create a business that your family can inherit and run, matching your life goals to your business strategy will keep the business satisfying - fun - for you.

Diversions from your strategy are like vacations. It's fun to go new places and see new things, but typically the vacations we take are a refreshing break from what should be a deeply satisfying life. When we lose sight of that and move to the beach and start sleeping in a tent, we quickly realize that the vacation is not the real thing.

Are You Having Fun?

Sometimes the clue is that you realize you are engaged daily with people you don't want to be working with, or you find your ethics compromised or at risk of being compromised. Sometimes the clue is that whatever you are off-track on is not working, or the initial excitement of it can't be sustained and now it's a slog, or you suddenly find yourself with customers who don't get you, that you wouldn't have chosen if you hadn't gotten off track.

Some people argue with my idea that work is supposed to be fun. But this isn't some fluffy girl thing, an emotional thing. It's a real thing. We do our best work when we're having fun. We blow our competitors out of the water when we are having fun. When we are having fun, we are fun to work with, and that means our customer relationships are infused with our energy and our customers have fun. I have always found the money just flows when I am having fun. So the question "are you having fun" is a strategic question. I am dead serious about having fun.

Once I realized I was off-track, I did take some time to review my original strategy and make sure I was still happy with it. I recommend that anyone who has experienced a temporary diversion do the same, just in case there is an opportunity waiting in the wings that you hadn't considered.  I asked:

1. Is my original strategy still the key to my lifetime goals?
2. Do I see more potential in this diversion than I see in my strategy?
3. Do I want to serve the customers I would serve if I pursued this diversion?
4. Do I want to do the work I would have to do - long term - if I pursued this diversion?

In some cases, you may realize that you want to go a new direction. You'll know it when you see it. In most cases - and at least this time, in my case - you can use the diversion as a powerful reminder of how important your own strategy is to you, and you get back on track.

One of the keys to staying on your strategy is to keep it front-and-center in your daily business life. My visual strategic plan (goals, objectives, timelines, all on one page) is once again taped to the top of my desk, reminding me every step of the way of what I want to accomplish in the long term. But the emotional cue is definitely most powerful. I am having a lot of fun again, and it feels right. That is a good place to be.

One of the most important things you can do as a product designer is include customer feedback in your business thinking. I’m not talking about customer satisfaction surveys (though those are important too). I’m talking about impressions of your brand and your product. You can solicit that feedback through conversations, questionnaires and surveys, and by sifting through online comments and discussions.

Of course, you must know the difference between your core customers and the rest of the customers! If your core customers come to you because of your design vision, your brilliant use of materials, and your extremely high craftsmanship, then they probably don’t worry so much about your price. So what do you about price complaints? As long as your core customers demonstrate satisfaction with your value, complaints about price go in the interesting-but-not-allowed-to-change-my-strategy pile.  Likewise, if you design using unusual materials or quirky craft methods and you’ve found a client base that loves your approach, then when you get suggestions from customers to make your look more mainstream, you’ll let those comments slide on by.

Once you’ve clarified who your core client is, what types of questions can you ask them? Which questions will elicit the type of feedback that helps you learn more, refine your brand messages, and intensify your customer relationships? Here are a few questions to help you get those creative juices flowing. Once you get the feel for asking customer questions, you’ll come up with plenty more of your own!

The first approach is to ask direct questions. These include:

1. What do you think of our product value?
2. How would you describe our products?
3. Why do you buy our products?
4. What other products would you like to see from us?
5. How do you feel about our product quality?
6. What do you think our brand is about?
7. How would you describe our company?
8. How would you describe our service?
9. How would you describe the personality of our company based on your experiences?

Asking direct questions can yield terrific, specific responses, but you’ll find that only the customers most familiar with and attached to your brand will be giving those answers. If you want to get more insight from the people you want to sell to, but with whom you have not yet formed a strong attachment, you may need to ask questions that provide more guidance and structure. Here are some multiple choice examples to consider.

Product Value

If you had to describe the value of my (products), which phrase below would best describe it? Even if you want to choose more than one, force yourself to choose the best!

1. This (product) makes me feel beautiful
2. This (product) makes me feel unique
3. This (product) makes me feel special
4. This (product) makes me feel virtuous
5. This (product) makes me feel rich
6. (this list can include any adjectives, so fit the adjectives to the likely range of feelings evoked by your product offering)

How would you describe the pricing of my products?

1. Just about right
2. A little high, but worth it
3. A little high, so I have to really think about it
4. High, so I avoid it
5. You could probably charge more and I’d still buy it (don’t be shocked – some customers will actually choose this answer!)

Why do you buy our products? (allow them to choose more than one of these)

1. Actually, I’ve only bought one thing, because it just caught my eye
2. Your product always seems to be in the right place at the right time
3. I like to have more than one item from designers I like
4. Your product just suits my personality
5. Your product suits my style
6. I like the status I get from wearing/buying your product

Company/Brand

How would you describe my brand?

1. I don’t really notice a brand. I just notice the styles
2. Your brand is all over the place - I'm not sure what to think
3. Sometimes I think your brand stands for something, but then it shifts or changes
4. I think your brand is about (fill in the blank here – for whatever your brand REALLY stands for)
5. I think your brand is about (fill in the blank here – something similar to what you want your brand to stand for but not quite right)
6. I think your brand is about (fill in the blank here – something that really isn’t your brand)

How would you describe the personality of our company based on your experiences so far? Choose as many as you think fit.

That’s a lot of questions, right? Now how do you ask them?

Unless you’re buying your customer an expensive meal and you have advance agreement that you will be asking for input about your company, you’re not going to get away with asking these all at once. Rather, look for opportunities to ask them one-at-a-time. You can do this as a social media post, a pop-up on your website, or as a one-question-survey email follow-up to a purchase. And as I mentioned earlier, your social media conversations and comments are a treasure-trove of insights. Comb through them looking specifically for clues to how your customers would answer these questions based on the things they say.

If you are very, very curious about the way your customers view your company and your product offering, you will gain important insights into whether (or not) you are making the impressions you want to make.

This blog post is one in a series of eight articles that explore the most important characteristics of a strong leader. These articles are linked to a Prezi visual presentation, which you can view here.

You - the Primary Brand Builder

Strong brands are a direct reflection of strong leadership. Just like your physical health and outward appearance are a direct reflection of what you eat, how you care for yourself, and your state of mind, so is your brand a direct reflection of your culture, your investment in your people and your customers, and the disciplines you follow to maintain a healthy, positive, innovative company. So your role as the primary brand builder for your business is one of your most important responsibilities.

I like to refer to brand (as a concept) as a promise, but more importantly, it’s a promise kept.  A brand is the shorthand for an identity.  We can't completely control our identity, because we can't control the customer’s perception of the brand. But we can greatly control perceptions through consistency.  If everything you do in your business - from the way you speak to one another to the way you put tape on your shipments or bows on your bags - is consistent with your brand identity, then your customers will learn to trust your brand.

The type of consistency that leads to brand trust comes from being consistent from person to person and from message to message within your organization.  This can only be achieved when it is cultivated, fostered, and modeled by strong leaders. The leader's job is to set the vision and constantly reinforce the understanding of and attachment to that vision throughout the organization. The more clarity your organization shares about your vision and goals, the better your people - and therefore your operations, marketing, sales, training, manufacturing, and planning - will align themselves to achieve that vision. Clarity leads to alignment, alignment leads to consistency, consistency leads to trust, and trust equals brand.

Take some time to reflect on the things you do to strengthen your brand. Identify areas in which you are undermining your brand or simply not paying attention to it. Your company is making promises every day - in the form of behaviors, messages, visuals, and services, and in every type of communication from face-to-face interactions to social media. The importance of your role as brand builder cannot be overstated.

This blog post is one in a series of eight articles that explore the most important characteristics of better leaders. These articles are linked to a Prezi visual presentation, which you can view here.

Be the Chief Customer Finder

If you think about it, the words Chief Executive Officer don't have a lot of practical meaning. But tell people you're the Chief Customer Finder, and they'll understand your role in an instant!

Unless you're a born salesperson, chances are good that sales are the first thing you were delighted to give up - maybe even with your first hire. You don't have to be the primary salesperson to be a better leader, but you do have to maintain a primary role in the finding and serving of customers.

What does this mean? To begin with, it means that you put emphasis on finding and training the best salespeople for your organization. You maintain close communication with them, and let them know their insight is vital to the growth and well-being of the company. You support them, motivate them, and take their advocacy for their customers very, very seriously.

It's a funny thing about that. Salespeople often suffer from shoot-the-messenger syndrome. After all, who is most likely to rub the shortcomings of your beloved company in your nose? The customers. And who are those customers entrusting with that information? Your sales people. Don't shoot the messenger!

Seek Personal Contact with Customers and Potential Customers

Look for opportunities to spend time with your customers - even if you're not directly involved in serving them. Take them out for a meal, or to an entertainment event, or just call them on the phone to ask "how are we doing?" Your customers will tell you things about your company (and possibly your competitors!) that they wouldn't think to tell your staff.

Help Integrate Sales and Marketing

Sales and Marketing are two of the most co-dependent departments of any company, yet the larger a company gets, the more likely the two departments are to be at odds with one another. Be the integrator of the two departments. Help them understand each other and their interdependence.  Keeping communication open and flowing (and competition between them to the merest whisper) between Sales and Marketing is one of the most important things you can do to ensure the right things happen to find new customers.

And, OK, Keep Selling

You don't have to be the primary salesperson for your company, but you never get to stop selling.  After all, if you can't target the right customer, listen to his needs, and tell the story of how you can meet those needs in a compelling way, how can you expect more from the rest of your organization?  Always keep your sales skills sharp and effective, because becoming a better leader means taking the lead on representing your organization's compelling benefit and attributes.

I hope you're enjoying this series on becoming a Better Leader! Stay tuned for the next installment in a day or two.

This blog post is one in a series of eight articles that explore the most important characteristics of a strong leader. These articles are linked to a Prezi visual presentation, which you can view here.

Be a Student of Business

Well, that's assuming you're in business. If you're reading this leadership series and you're in some other field, be a student of whatever it is you do! To be a better leader, you must continue learning and investing in yourself.

But let's talk in terms of business, because that's what I know best. What does it mean to be a student of business? It means being interested in the broader world of business thought beyond your own company and beyond your industry. In the broad world of business, the general categories (or disciplines) include management, marketing, sales & distribution, human resources, operations (like warehousing, transportation, distribution, manufacturing), accounting, information technology, finance & planning.  Within each of these disciplines every business must deploy training, process improvement, integration of new technologies, and performance measurement.

All these disciplines continuously evolve due to new customer demands, new technology, and competitive innovation. A true student of business never stops thinking about the way business can be improved.

What are some of the ways you can become a lifelong Student of Business?

1. Read read read. Fast Company, Inc. Magazine, Harvard Business Review, Forbes, Wired, and Entrepreneur are all fantastic publications devoted to bringing you the latest and greatest in business thinking and achievement.

2. Join a business development group, like TEC, Vistage, or  YPO (Young President's Organization). Membership in one of these organizations will give you a network of other business leaders who are working to improve their skills and performance, and your group will consist of business leaders in many different industries.

3. Subscribe to this blog! Seriously. We give terrific information, and if you're a subscriber you won't ever miss out.

4. Take StrategyWerx classes. StrategyWerx (a business I own) is entirely focused on providing answers and services to small business owners. Our webinars, seminars, and videos will make a meaningful contribution to your business knowledge.

5. Hang out in the business book section at your nearest book store.Build your business book library!

Whatever you choose to do, know that finding a passion for and interest in ongoing business knowledge is sure to make you a better leader.

Watch for our next installment in this 8 part series, coming in the next day or two!

This is the second of a two-part post. To read the first installation, click here.

I'm not suggesting collaboration is new - I'm suggesting we need more of it. Here are some examples of collaboration from which we can draw inspiration and fuel new ideas.

Ethical Metalsmiths

This group has existed for a long time, quietly gathering a membership in the hundreds. Like many small non-profits, it has suffered from diffusion of its mission. Recently, with a dynamic new board in place, the group has focused on its role in the larger universe of social justice, social responsibility, and environmental protection groups as one of collaboration. Rather than trying to be and do all the things that much larger (and better funded) organizations have tackled, the Ethical Metalsmiths group has decided on a collaborative approach.

Working as an advocate for its own membership, Ethical Metalsmiths will provide a framework to support its members on a journey of better practices. EM will reach out to organizations like Association for Responsible Mining and the Responsible Jewellery Council, and bring back practices and knowledge from them for the EM community. EM members sit on committees for the Jewelry Industry Summit, creating cross-pollination with other groups concerned about the same issues.

This approach will facilitate the growth of EM, and also helps promote the overall goal of sustainability and responsibility by spreading the love around through collaboration.

MJSA Collaborations

The MJSA (Manufacturing Jewelers and Suppliers of America) is always looking for ways to build collaborations among its members to better all the members. Their BEaJEWELER program* is a great example of this. BEaJEWELER seeks to entice new people to the profession of jewelry. It provides a website with extensive resources to direct interested visitors to schools, training programs, and information to help them make a good decision and set out on their path. BEaJEWELER also invites its jeweler members to share their own stories and insights, because it’s that human element that makes a career choice come alive. Of course, this benefits all of the participants, because we all know the struggle of finding qualified help in the jewelry production studio!

Now, MJSA is introducing a new initiative – the Studio Jeweler outreach program. Again, collaborating with members, MJSA will reach out directly to consumers to connect them with the satisfying experience of buying jewelry made locally and traditionally. Both MJSA initiatives are funded in part by a JCK Industry Grant – itself another form of collaboration.

ANZA Gems

Monica Stephenson, known by many in the jewelry industry for the long-running iDazzle blog, offers another example of powerful collaboration. After traveling to Africa as part of the team that participated in the making of the gem documentary Sharing the Rough, Monica became very committed to helping making a difference on the ground in artisanal mining communities. She started ANZA Gem. ANZA Gem takes gem rough from artisanal miners, collaborates with designers and consumers to make and sell finished jewelry, and returns a significant portion of that value back to the original mining community. This effort recognizes in practice what Sharing the Rough demonstrated in film: that the materials we take from the ground form a chain from the person who digs in the dirt for it to the person who ultimately wears it. Monica’s goal is to make sure every piece of that chain also benefits from it, and she chose collaboration as the way to do her part.

Endorsements and Influence

Before the term influencer came to mean a previously anonymous person with 50,000 social media followers, influencer marketing was also a form of collaboration (OK, in truth, it still is). When people with a following endorse specific products, theoretically the sales go up. This works best when it is apparent that the endorser clearly believes in the product and the exchange is not purely financial. So, athletes endorsing shoes they’ve been wearing all along (prior to the endorsement) have more influence than Cindy Lauper being paid to endorse a pharmaceutical.

Are there ways to create stronger collaboration of the influence sort? Sure there are – that’s exactly what social proof is. If you’re not using product reviews and testimonials from customers to persuade prospects, you’re not taking advantage of this potent source of marketing collaboration. And the collaboration isn’t just about you and your customers – it’s also peer collaboration, as consumers rely on friends, acquaintances, or just people who seem like them to give them advice regarding the products they are considering.

Co-Branding

Many retail jewelers have dabbled in collaborations with other local businesses. Most of the time, it doesn’t go beyond basic co-branding for a promotion or event. But what if it did? What if several businesses banded together to create an omnichannel experience for customers that went way beyond one store?

Big corporations can achieve the benefits of collaboration (more minds to tackle tricky problems) just by virtue of their employment pool. And even then, smart corporate leaders often look to collaborate with other corporations to gain competitive advantage. We are all self-limiting to some extent (if not inherently, at least practically), and the way to combat that is by inviting in the wisdom and experience of others. Small business owners need collaborations to compete.

The future of retail hasn’t been invented yet – it’s still being conceived of. The questions are: are you part of that conceptualization, or are you waiting for others to do it? Are you going it alone, or are you looking for the advantages that come from smart people putting their heads together? My money is on the outcomes of strong collaborations, and the smart people who decide to engage in them.

I was just on a conference call with three experts in digital design. We are preparing for a panel discussion at the Gold Conference in New York at the end of April (you really should join us! Here’s a link to learn more about the conference). We were discussing the transformative aspect of digital design and manufacture, and whether or not the jewelry industry has actually embraced that yet.

Many of us are talking about the struggles in the jewelry industry.  Here are just a few of the more comprehensive writings on this topic:

• What Will Become of Jewelry Retail Stores? Peter Smith (4/12/2016)
• Everything You Know About Luxury Has Changed. Andrea Hill (5/27/2015)
• The Jewelry Industry and Millennials: What do they want? Rob Bates (5/18/2015)
• Past Time for Change: A Post to the Jewelry Industry. Andrea Hill (6/2/2014)
• You Need to Attract the New Consumer.  Andrea Hill (3/17/2014)

And yet, the store closures (~750 last year) keep happening, specialty retail stores are stagnating, and the industry mood is a bit grim.

Digital Design has Already Transformed Industries

So let’s look at what’s happening elsewhere. One of the guys on my call this morning (Harry Abramson, Direct Dimensions) shared a story about his brother (brother-in-law?) who is in the custom t-shirt business. Whereas at one time, if you wanted a custom t-shirt, you had to produce or select a design, then order and stock it by the dozens in each size and color; today you can order one custom t-shirt at a time with virtually the same delivery time. The individual t-shirt may cost a bit more than the cost of each t-shirt in bulk, but there’s nowhere near the risk or inventory cost associated with the old way of doing things. To a certain extent this type of design customization is available today in jewelry stores using Stuller's Gemvision system.

I experience this in my own business as well. Often I receive calls from people asking if we sell any of my business quotes (the benefits of social media, I guess) on mugs, mousepads, desk art, etc. We can and do, one piece at a time, to order.

In the fashion industry, the CFDA has embarked on a significant mission to study how to remain relevant in the age of fast-fashion. In the “old” way of doing things, the fashion industry produced big shows in the spring and fall, showing fashions that will be available for sale at retail six months later. Today, consumers are snapping up those same design concepts at retail almost as soon as the shows are done. How? Fast fashion operations are producing their own versions of what’s hot during Fashion Week very quickly, delivering to demanding consumers the style concepts they saw almost immediately after they saw them.

Paint manufacturers figured out the benefits of fast, digital design long before the rest of us. Instead of stocking 100 colors of paint, your local hardware store stocks a few base colors, and dozens — even hundreds —of colors, all of which can be mixed on demand for each customer.

Publishing, music, printing, television, automobiles, vacation packages, the list goes on-and-on — all have been transformed by incorporating consumer-driven digital design into the process. And by “consumer-driven” I don’t mean consumers doing the design (though in some cases that has happened). By consumer-driven I mean taking into account the real needs and desires of consumers – expressed and yet-to-be expressed – and designing to meet those needs.

There's a difference between "embracing CAD" and  "using digital design for transformation"

I’ve written and spoken at length about how the industry needs to embrace the digital world and incorporate it comprehensively into the bricks-and-mortar world. This is still true. But internet marketing and selling aren't the only digital transformations we need to embrace. How can we bring to consumers the jewelry designs that turn them on — designs that are extremely well conceived, vibrant, contemporary — at retail? How can we achieve what the luxury automobile manufacturers are doing, bringing forward impeccable design and consumer-focused innovation at lower production and marketing costs than in the past?

The tools are there. CAD, 3D growers and digital manufacturing on the design and inventory production side; and advanced CRM systems on the sales and promotion side. But what we’ve focused on in CAD for the past 10-15 years is just getting people to pick up the tools and learn them.

Now that time has passed. It’s no longer sufficient to use the digital tools available to us to simply do the things we are already doing, only faster and cheaper. We need to be innovating new ways, more ways to apply digital tools in our businesses. We need to be so adept at using the digital tools available to us that we start coming up with big new ideas. It’s time to use the digital tools to transform our businesses and our industry. Either that, or let the new world of design, production, and retailing move on without us.

PS. There is still a very important place for hand craft. There always will be. And there should be more hand craft - not less - in jewelry stores. But hand craft alone will not solve the problems the industry is facing. Digital design must also be a big part of the equation.

Much of my time is spent working with entrepreneurs, and I have discovered that many, if not most, are uncomfortable with the role and responsibility of leadership. The typical entrepreneur is someone who has a desire to be financially self-determined, who has enough confidence to try something on their own, and who is willing to take some risks. Most of them are comfortable with the idea of being someone else’s boss. But they would prefer to be a boss without being a leader.

What is it about being a leader that is so daunting? Part of the problem may be that we’ve taken the concept of leader and attached it to larger-than-life personalities like Jack Welch, making anyone else who aspires to leadership look like a pallid wanna-be.

Part of the problem may be that our national personality is largely influenced by populism, the idea that the rank and file have greater value than their leaders because of, their, um superior realness (read on to discover the glorious contradiction of this idea). This populist tendency leads to a rather toxic practice of boss-bashing and fault finding. Any intelligent person who wishes to pursue a position of leadership must first consider their own ability to deal with constant criticism. One of the first pieces of management advice I ever received, delivered from a mentor I revered, was “the higher you fly the more you get shot at.” I have often encountered talented workers who were unwilling to break ranks with their fellow workers and train for management because they didn’t want to upset the social applecart.

Another reason some people eschew leadership is because it’s so damned responsible. Myriad scientific and social studies demonstrate that the wildly successful aren’t those who make less mistakes – they are the ones who make more mistakes, because it requires much more action and risk-taking to achieve big wins. Leaders are by their nature flawed. Truly great leaders air all their flaws in public in pursuit of great accomplishments. The responsibility of driving an organization forward is the responsibility of constantly trying to be educated, informed, forward-thinking, and strategic thinking enough to make more decisions than anyone else has to make – frequently at breakneck speed and always at the risk of being wrong. The armchair leadership critique squads get to sit on the sideline and comment on everything from the leader’s personality to their character to their subject knowledge to their style. They are sometimes correct, rarely kind.

No wonder many entrepreneurs would rather be a garden-variety boss than a leader. It’s safer. You get to keep/make more friends. You get to make the vast majority of your mistakes in private.

The problem for entrepreneurs who do not wish to be leaders is that it doesn’t work. People crave leadership, even as they criticize it, even as they resist it. We all want to know where we’re going, how we’re going to get there, what risks we’re going to face, and what our chances are of making it. If nobody takes a leadership role, the result is the social equivalent of sheep milling around in a barnyard. The contradiction of our social populism is our equally great craving for accomplishment, a sense of purpose.

Can a business survive without a leader? Absolutely – I hear about and encounter businesses without leadership every day. Business owners who are described as wishy-washy by their employees, who avoid making difficult decisions, who move the business so incrementally that the evolution is nearly indiscernible (or nonexistent), who push tough decisions off to people like the human resource manager, the operations manager, and the accounting department. They are frequently well-liked, even admired, people. But do their businesses grow and thrive? No, they do not.

When an entrepreneur takes the responsibility for hiring others, they take on a responsibility for other people’s lives. If you’re self-employed and it all falls apart, you’re only damaging yourself and your family. When an employer goes down the drain they take many others with them – employees, vendors, and even customers. 

Many entrepreneurs believe that by being very conservative – by not making mistakes – they will preserve their business. But case-study after case-study demonstrates that the typical business failure isn’t made of one bad decision (or even several bad decisions), but of failure to evolve, to chart new territory, to end things that have lost their value (or never had value), to seek new customers in new markets or to invent new ways to create value. Failure is typically the result of stasis.

The practice of leadership is demanding; demanding of skills, knowledge, ability to grow, and ability to maintain self-confidence. Jim Collins asserts that to be a great leader one must first be a great manager. Leadership isn’t about charisma. It’s about having tremendous knowledge about the work (all the work), how to do the work, and what could improve the work. At the same time a leader is looking inside with tremendous insight, understanding, and contribution, they are also looking outside with foresight, a passion for learning, and an eagerness to evolve. The competent leader is assessing all the variables, recognizing that each option presents both pros and cons, and driving in the direction of the greatest pros while working to offset or eliminate the cons.

And great leaders? Jim Collins says that a great leader goes beyond those characteristics to combine a blend of intense personal will with great humility. And there it is. The biggest risk. One does not become a great leader without having first been a not-great leader. Humility is learned on-the-job. The risks of leadership aren’t just technical, strategic, financial. They are personal. Intensely personal. The emerging leader must make peace with a very difficult idea. He (or she) must accept that demands and complaints from the rank and file are part of his growth, because a leader must strive to be more capable, more effective, a better decision-maker than the people they aspire to lead. And he does all this in public, being the flawed human being he is, and holding himself to a higher standard than his critics will ever be held to themselves. More daunting is the fact that this goes on for a long time, because great humility is rarely achieved in one’s 30s or 40s. Great humility is typically pursued over a lifetime, which means someone who aspires to be a great leader is aspiring to decades of humility lessons. 

Is it fair? Well, as I often ask my children, “what’s fair anyway?” The more appropriate question is “what do you want to achieve?”  If what you wish to achieve is a thriving business that grows and evolves and is capable of producing the retirement income or legacy you desire, you will need to either accept the role of leadership or fully entrust that role to someone else who will. If you choose to learn to be a leader – then a great leader – the financial, intellectual, and psychic rewards can be great, but as with every great reward, you will pay the price every day. You will have to be a striving, mistake-making, earnest, struggling, imperfect human on a public stage. The ultimate risk. And perhaps the greatest reward of all. 

© 2009. Andrea M. Hill

I’m giving myself a subscription to Code4 Startup this year. Why? Because I need to learn a new programming language. Of course, I employ excellent programmers, and I don’t need to personally perform any coding for my job. So why am I doing it? For the same reason I learned to make patterns and sew when I ran an apparel company, and why I pursued goldsmith training when I ran a large jewelry manufacturer; because understanding the customer (business customer and end consumer) experience of any business is essential to business success, and I am very curious.

More than 70% of small businesses fail within the first five years, and that staggering statistic owes a lot to the failure to understand what customers need, how they need it, and why they want it. In other words, our economy loses a massive amount of capital due to a dreadful lack of curiosity.

I recently interviewed a fellow who had purchased a Seven Eleven franchise in a hot urban market, only to have the store taken back by Seven Eleven corporate after two years. I certainly felt bad for the guy, but there was no doubt he suffered from a significant customer-awareness failure. His reason for the business failure was that a QuikTrip had opened down the street and the competition killed him. But in that densely populated urban area there was more than enough market share for both businesses. The real reason for the failure was that the QuikTrip was new, bright, clean, and felt better to the shoppers. The Seven Eleven owner had failed to shop the competitor, see the difference through the eyes of his customers, feel the difference for himself, and take the simple – and relatively inexpensive – measures to brighten and freshen up his store.

What can we in the jewelry industry do to vigilantly pursue awareness of what our customers experience relative to our products and services? Fortunately, quite a bit!

The first level of awareness – usage of our own products – the jewelry industry excels at. Designers and manufacturers wear their own jewelry and retail store staff put on goods from the cases each day when they arrive at work.

An area that could benefit from more curiosity, however, is how the consumer feels and what the consumer needs from the buying experience. The last time this aspect of consumer awareness was explored at an industry level was nearly a half century ago when DeBeers initiated the 4Cs movement. For the most part, all jewelry industry consumer awareness training since that time has focused on some derivative of 4Cs knowledge.

But consumers need much more than diamond knowledge when buying fine jewelry. I regularly observe consumers in jewelry retail stores. They tend to be slightly intimidated, they are unable to experience the jewelry without help, and they lack visual cues to help them interpret the different things they are seeing. One of the reasons fashion magazines are so popular with consumers is that the vast majority of women feel insecure about their ability to put together a fashionable outfit without some guidance. That fashion magazine guidance is carried through to the clothing stores with mannequins and posters. In contrast, the jewelry store experience provides static displays of jewelry in a sterile environment. No wonder so many jewelry buyers end up at Macy’s or Kohl’s with all their department-store prowess at merchandising display! If you are in the business of putting jewelry into retail stores, you might want to consider ways to supplement your jewelry with in-case display elements that support the buying decision. Do things that inspire curiosity and engagement in your customers. I know this isn’t easy – retail store display requirements can be pretty rigid – but the manufacturers and designers who find ways to mitigate this problem are most likely to win at the sales register.

Speaking of putting jewelry into jewelry stores, if you are a designer, how much curiosity do you have about what it means to work in the retail store? Have you worked behind a counter? Have you set up and torn down display cases each day? Have you spent hours answering customer questions and helping consumers find meaningful jewelry? Working a trunk show doesn’t count; if you want to build awareness of the retail store staff’s experience, you need to get in there and do it yourself. Ask one of your retail clients to let you shadow their sales staff for a few days. You’ll be surprised at all the important things you learn that will help you do a better job providing marketing collateral, training materials, and display elements to your retail clients. Are you worried that nobody will let you shadow? Well, some won’t. When I first wanted to learn about jewelry retail I had to ask eight or nine different store owners before someone said yes. Just keep asking.

Learning the building blocks of jewelry business is a never-ending pursuit. To date I have learned every aspect of jewelry business from rough diamonds to retail selling. In my consulting role, technology is one of the essential building blocks of all modern business, and JAVA is a technology I haven’t added to my knowledge base. I won’t become a master in it any more than my goldsmith training made me into a master goldsmith. But I will have a clearer understanding of how to deliver the tools my customers need and greater empathy for my employees engaged in delivering it, and that deeper knowledge will continue to distinguish me from my competitors. Now it’s your turn to figure out how to do the same for your business.

I’m sitting in a Starbucks getting some work done between appointments. At the table across from me sits a 70ish woman. She’s reading a magazine and she has a Daytimer and pen on the table. From all appearances, she is a non-digital person, and that seems rational given her age.

But then she takes out her smart phone for a moment, and it’s not to make a call. I think, “Oh, she’s texting someone. Maybe I was wrong.” She puts the phone back down on the table (can you tell I’m more in observation mode than work mode?). A few minutes later the barista calls out a name, and the 70ish not-so-predictable woman gets up and retrieves the order that she clearly placed and paid for from her phone moments before.

It’s not just millennials who are comfortable with living in a digital world. People of every age and type have rapidly adjusted to the full range of opportunities available to them from their smartphones, tablets, and desktops. And the most significant factor in helping them become comfortable with the digital age has been companies like Starbucks leading the way with an increasingly digital customer experience.

People have learned to expect more from the places they shop and eat, because those have been the places that adopted an integrated digital-within-real-life experience. What does this mean for you if you sell goods to consumers? It means that they have higher expectations of you than they once did.

This is because the things that retailers have focused on first – more than coupons or discounts or kitchy promotions – have been customer service improvements.

Don’t want to wait in line at Panda Express? Order from your phone and pay before you leave the house, then pick it up either in the drive-through or at the counter. Not sure if you should buy that blender at Home Depot? Need more information on that vacuum cleaner than the box provides? Scan the QR  code on the shelf and do your research. Price compare right from your phone while you’re still in the store. Just realized you have time to make that matinee of Kinky Boots? Order your tickets from the cab and have them waiting when you get there. Love the song you’re listening to in the coffee shop? Download it to your phone immediately. Or place an order for a new cup of coffee without the risk of losing your table.

What does this mean for retail? It means that customer expectations have taken another leap  forward. Customers want to receive products faster. They want to self-serve information. They want the check-out experience at the register to be completely painless. They don’t want to wait in lines. They want to find things very specific to their interests, body types, and budgets – and they know those products are out there, even if they’re not available locally. Customers know enough not to have the same expectations of every type of seller; but still, they have greater expectations over all.

It has always been true that to be successful you had to find a way to establish a reason to buy from you rather than your competitors. Back when the nearest competitor was 25 miles away and the only transportation was a horse-drawn wagon, location alone provided competitive advantage. Today digital consumers shop the nooks and crannies of the globe – easily and cost-effectively – looking for the specific things they want. If the thing they want is a luxury rather than a necessity, they are more dedicated than ever to finding just the right thing. Oh - and it’s not just millennials. It’s everyone.

So the question is, what are you doing to create a reason to shop from you instead of from your competitors? What are you offering this brave new world of savvy digital consumers looking for solutions to very specific needs – from product needs to experience needs? If you’re not figuring this out, if you’re not exploring beyond the margins of what you thought your business was to find new answers, you may be running out of time to catch up.

originally posted on LinkedIn

The nature of business is competition. There can be collaboration – where businesses team up to compete together. There can be good will, and there should always be ethics and character. There can be tremendous respect among competitors, and in the strongest industries there is. But competition is at the core of business. And yet sometimes I wonder – do we understand the nature of competition well enough in the jewelry industry?

Competition isn’t about putting another company out of business. Smart companies know that strong competitors make them better, smarter, faster, more profitable. About six years ago a new company called Flourish and Thrive Academy jumped into my competitive space and started doing smart things on the internet that I wished I’d done first. But I hadn’t. So what did I do? I got better, thanking the owners of F&T (Tracy Matthews and Robin Kramer) every step of the way. Why? Because a business segment is only healthy if the players in it are growing it. When the automobile industry became complacent, overall auto sales got soft, because consumers were not excited. Once the big auto makers got their groove back, people started buying more cars more often. Sometimes Ford is on top, sometimes it’s Toyota, and the competition keeps it all fresh for consumers. Good competition means everyone makes more money.

As my favorite competitiveness guru Michael Porter likes to point out; in war, or the Superbowl, there’s only one winner. In business competition, there can – and should be – many.

When Blue Nile hit the scene, we had a bit of an industry freak-out. What we should have done is paid more attention, learned from them, and competed with them. Not with prices (which is what happened), but with value. Not with one kind of value, but with many different kinds of value. Because Blue Nile is the right diamond seller for some kinds of diamond buyers, but certainly not for all kinds of buyers. Many people said this very thing, but it was rarer to find companies who went out and made their case to consumers with compelling and persuasive marketing and messaging.

We had a similar reaction to the ‘Big Boxes' cutting in on our turf. In commerce there is no turf. There are just customers, and customers don’t care about your perception of your turf. Customers have needs, and the companies that think hard and fast and jump in and meet those needs win their business. This is exciting, because customers don’t share the same set of needs. So to be competitive, you identify a group of customers with a specific set of needs, and you get ambitious about meeting them. Good competitors know that you don’t need all the customers – you just need the right customers.

Competition isn’t about doing what the company next to you is doing. It’s about turning your attention to the customers you serve, and challenging yourself to find new ways to give them what they want the way they want it. It’s about finding ways to meet needs that your customers haven’t even articulated yet. And while you’re at it, go find some new customers and turn them on to what you do.

Competition isn’t comfortable. Competition is about innovating and taking risks, and those things are inherently uncomfortable. Competition makes you sweat, makes you train, makes you dig deep and come up with new ideas and new skills. It's not about coming up with new ideas once every few months or a few times a year. It's about trying new things every week — every day. Competition favors the curious, the smart, the hungry, the enthused, the finishers. Without competition we wouldn’t be closing in on a cure for Alzheimer’s or driving affordable electric cars.

Competitors welcome the disruption that is always and forever coming their way. Good competitors create the disruption. I was told recently when speaking at a jewelry industry event that we weren’t supposed to use the word disruptive, because that word scares people. Consumer needs change and our businesses must change with them — and ideally, a step or two ahead of them. Change is inherently disruptive. Go be disruptive.

So sometimes, I worry that we are an industry that fears competition instead of embracing it. Closed systems tend to shrink, and any system that fights to keep innovation and competition out is closed. Systems that work hard to protect territory instead of working hard to expand it are playing a zero-sum game. Our industry requires people with a drive to create new kinds of value and find new customers. People who don’t want to do things the way they’ve always been done, but instead, have a powerful urge to carve new paths and discover new opportunities. People who understand that serial failure precedes most success. We have some businesses like that. Retailers that are quietly pursuing ambitious agendas. Designers finding new ways to reach consumers. Manufacturers thinking more like aeronautics companies than jewelry workshops. But not enough. Not yet.

Competition can be tiring. It doesn’t care if you’re overwhelmed, or sick, or out of ideas. It’s not personal. Competition isn’t personal. It’s just people, with needs, directing themselves toward the businesses that do the best job meeting those needs. That’s probably why entrepreneurship isn’t for everyone. Because for every beautiful thing we make, there has to be an even bigger effort to connect that thing with a consumer, and that part is competition. Competition doesn’t care how hard you worked to make that thing. It cares if that thing – and the way you deliver it and service it – fits the customers' needs and interests.

We are not entitled to market share. Customers don’t owe us any loyalty. But we owe it to each other to keep raising the bar, invite in new voices, learn from other industries, try new things and fail, try again, and again. We owe it to each other to learn faster and better and make new things happen. We owe it to each other to challenge each other and accept those challenges. We owe each other an industry charged with the energy of competition. We owe each other an industry with a competitive mindset. Why do we owe all this to each other? Because that’s how we’ll once again expand the jewelry industry and create more opportunity for everyone. That saying “may the best person win” . . . that’s not a threat. That’s an invitation.

Most business owners approach their P&L (profit & loss statement, often called operating statement) as a zero sum game. They want to know where they can trim spending to have more money left at the end of the month.

I call this the getting-blood-from-a-stone approach. Because for most small business owners, there just isn't enough cash to begin with, and moving the money around isn't going to change much.

I evaluate as many as 10 P&Ls each week for small business owners desperate for different results. And 95 times out of 100 my primary advice is, "Sell more," which is not what people want to hear.

A big part of the problem with increasing sales is that most business owners don't really understand what selling is. So let's start with what it is not:

• Selling is not PR or a press kit.
• Selling is not a Facebook page that posts pictures of new products and comments or discussion about them.
• Selling is not a Twitter feed
• Selling is not an national ad - not even if you spent $80,000 for the placement.
• Selling is not training

All those things are important, and they certainly support the selling function, but they have their own purposes to fulfill. Selling is the process of understanding what a customer needs, then helping her see a solution to her needs through something you can provide. A good sales effort tells the customer what to decide, because most people (and therefore most buyers) have a hard time making decisions.

One of my favorite examples of good selling without a salesperson present comes home once each year with school-age children. It's the school pictures order form. The bulk of that promotional device shows you how to buy.

• Package A has two 8"X10"s, four 5"X7"s, eight over-sized wallets, and 16 mini-wallets
• Package B has one 8"X10", three 5"X7"s, eight over-sized wallets, and 8 mini-wallets.
• After describing the remaining packages C through F, there is a list of the "add-on" items you can buy to increase your number of 8"X10"s, 5"X7"s, other sizes, CD disks with digital images, etc.

If you have ever experienced an end consumer or potential dealer saying they love your product but then walking away, you have seen what happens when someone can make the decision that they want to buy but can't progress to the decisions of what to buy or how to buy.  The buyer often doesn't understand himself why he is walking away - he may think he's making sure there isn't something better out there, he may think he needs to 'think about it', he may think he needs to consult his cash-flow, but all of that is short-hand for the underlying problem that he doesn't know how to make a decision he feels good about.

That's why Facebook, Twitter, PR kits, and training sessions are not selling. Selling is the thing that will tell the customer how to make a decision he feels good about. Selling is interactive, selling tailors itself to the needs of each potential customer, selling makes solutions obvious and achievable.

It's time for you to remove yourself from the zero sum game of cost-cutting and austerity. Instead, sit down and re-imagine what selling should be for your products (or services) and your target customers.

Then get out there and sell. It's 95% sure to solve the cash problems you face.

Four years ago I attended a Chamber of Commerce luncheon in Albuquerque honoring new and expanding area businesses. The honorees were generally represented by their chief executive and the head of human resources. They sat together at a table in the center of the room, and as the MC shared each honoree’s accomplishments, they would stand and receive applause. This all seems fairly reasonable, until you consider what each honoree was being honored for. Their accomplishments were related to how many people they had hired and how many people they planned to hire in the coming year. To make things a little more surreal, at some point each of the honorees took the mic to say a personal thank-you, and it turned into a jousting match to see which honoree company could get the most people in the room to apply to them for a job – because at that time Albuquerque’s unemployment rate was near 4%, and none of us were able to find as many candidates as we needed to staff our businesses.

What’s wrong with hiring, you might be wondering. Nothing, if the business is growing revenue and profits at a reasonable rate, a rate higher than the rate of increasing employment. In the ballroom that day were a number of companies who had not produced a dime of revenue – let alone profit – yet. At the time I was particularly concerned about a company called Eclipse, a light jet manufacturer who had acquired a lot of venture capital and state inducements, who had a neat but unproven product concept, and who was building their reputation on hype, hype, and more hype. Their business model seemed unsustainable to me, and they were jacking up local employment costs and enticing employees with high pay and excitement (we lost quite a few to them). Eclipse is just one example of the companies in the room that day – but they were all behaving the same way. They were treating number of people hired as if that were a viable business metric.

When an organization focuses on the wrong metrics bad things happen. This is complicated by the reality that what is a bad metric for one organization may be a good metric for another. For instance, a very good metric for municipalities is the measurement – and increase - of overall employment. So when they want to attract business to the area, municipalities focus on the overall hiring potential of the business and frequently attach financial incentives to hiring performance. However, this is a bad metric for the business to try to increase. Business needs to track employment relative to other important factors, and the goal is to achieve optimum employment to make customers happy while decreasing employment cost as a percentage of operating cost. When businesses do the metric dance with municipalities, they must take great care not to get confused about their primary objective, which is to make money.

Many years prior to that lunch I was the president of another firm, and the owners of that company had approached the state for IRBs (industrial revenue bonds). The IRBs were granted based on the company’s commitment to training adult workers. For each worker the company would receive a certain amount of money from the state, given that we proved each worker had received valuable training. That doesn’t sound so bad, right? But here is how that metric conflict played out:

Owner:      “How many people have we trained this month?”

Me:            “35.”

Owner:      “Only 35? We get paid just for training them! Why aren’t we training more?”

Me:           “Because we only needed 28 people and on average we would have lost only 7, so we trained 35.”

Owner:      “Gee, let me help you do the math. We pay trainees $6.50/hour. The state pays us $7.25. We have a full-time trainer either way. Get it? Why don’t you train a lot more people and keep only the ones we need?”

Um, well, yeah. I didn’t really have a math challenge. But I didn’t want to run a training mill either. Beyond the ethical problems inherent in that proposal (I did leave that company a few months later, when I realized that everything they wanted to do would have ethical problems), there were a number of business problems. The constant advertising, interviewing, training, and turnover would take a financial, focus, and psychological toll on the company that would prevent it from focusing on its main task, which was to increase sales and profits doing legitimate business. Two-and-a-half years after I left, the company went bankrupt, putting over 1,000 people out of jobs and giving the state a sucker-punch in the gut.

These are big examples of metric conflict, but there are lots of little metric conflicts that could be interfering with your business success.

• If a company wants to promote teamwork, but rewards incentive pay strictly on the merit of individual performance, competitive individuals quickly see there is no value in sharing information with a team.
• If a company wants to promote productivity, but rewards annual raises based on how many training classes an employee has taken, employees quickly learn to focus their energy on getting to class.
• If a company wants to increase average order value per customer, but increases shipping costs significantly as the order gets larger, customers will not be motivated to order more than they absolutely need.
• If a company wants to increase loyalty among existing customers, but does not measure and encourage the behaviors and promotions that create customer loyalty, employees will focus on a lot of other things.
• If a company wants to increase customer satisfaction, but measures their sales people on how fast they complete each call . . . well, you see my point.

Do two things for your company right away. First, make a list of the three or four things you absolutely must accomplish in the next year. Next to each one, list the primary measurement you are monitoring to ensure you stay on track. These are your most important strategic measurements. Second, on a separate piece of paper make a list of all the things you monitor and measure or that you ask your employees to monitor and measure. This second list should include the full range of business concerns, such as how you decide how much you pay each person, customer response times, order processing times, growth rates, customer acquisition rates – the list could be extensive. If you have an ongoing relationship with your banker or with investors, it should include the measurements they ask you to provide. This second list can also include ad hoc measurements, such as how often the bathroom gets cleaned (though if you have a lot of customer traffic, this should not be a casual measurement!).

Once you have completed both lists, place them side by side and consider, for each item on the first list, if any of the items on the second list directly undermine, steal resources from, or otherwise divert focus from the strategic measurements. If they do, figure out how to correct that.

Finally, using only your first list, make a new list (this is starting to feel like Dr. Suess – let’s call this List 3) of all the things you could be monitoring and measuring that would directly lead to achieving the items on the first list. Once List 3 is complete, rank the ideas from strongest to weakest. Take the 3 - 5 strongest ideas, and begin monitoring them immediately.

If this seems like busy-work to you, remember that the best executives in the world have been known to lose sight of their primary objectives and responsibilities. The difference between small and large business is a difference of scale. All the same things need to be done, from sales to service, from information management to product development, from ordering supplies to cleaning the bathroom. And don’t forget the taxman. It is no surprise that business owners find themselves far far from the activities that drive revenue and profits – and they don’t know how they got there. This small exercise could mean the difference between a day well spent, and a day sent down the well. 

PS. Last week Eclipse laid off their entire workforce, telling them that unless they could successfully negotiate a deal with a buyer, they had no more work for their employees to do. 

© 2009. Andrea M. Hill

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I had a friend only a few years older than me who was so devoted to being comfortable that it killed him. He was diagnosed with Type two diabetes in his 40s. And shortly after that, with congestive heart failure, he needed to change his lifestyle, but he didn't want to give up the foods he loved. And he didn't like the aches and pains in his back and legs when he exercised. So he indulged himself. He didn't make himself uncomfortable.

[00:00:25.290]
And he died several years ago, barely into his 60s. I was going to say that's an extreme example. But is it really don't we all do things that put comfort over well-being? I know I do. This drive for comfort is an impulse we need to resist. And it's particularly true for business owners. The Chinese have a saying wealth will not last beyond the third generation. The idea is that the first generation builds the wealth, the second generation maintains the wealth, and the third generation spends it.

[00:00:59.250]
There may be some truth to that, but what I want to reflect on today is generations one and two. Those motivated to build wealth want something better than what they already have. So there is discomfort present and building wealth requires risk, which also involves discomfort. Entrepreneurs aren't just crazy ideas people. There are people who are comfortable with taking risk. They are comfortable with being uncomfortable. Maintaining wealth typically involves the opposite. Maintenance suggests risk avoidance and staying within comfort zones.

[00:01:34.890]
What if the third generation isn't inherently a bunch of wastrels? What if third generations are simply the ones left with? What happens when too much comfort has been indulged because too much status quo leads to decline? It's scary to learn new things, not because new things are fundamentally scary, but because we have to get uncomfortable, work new muscles and develop new neural pathways. It's scary to change our businesses. What if we're wrong? What if we don't succeed?

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What will other people think? These are all very uncomfortable thoughts. So even though we know that staying the same won't bring improvement, we do it because it's more comfortable than changing. Business is changing rapidly and dramatically. Business owners must learn new skills, new technologies, new operating behaviors and new ways of advertising and marketing. Retail must find new ways to engage and keep customers. And all this learning is uncomfortable. But indulging the need to be comfortable could lead to the demise of your business.

[00:02:38.610]
And that's not very comfortable at all, is it?

When you run a business, your job is to produce and sell value. It is both as simple and as complicated as that. When I see businesses getting value wrong, I have a physical reaction to it – it’s like watching a starving person eat cardboard. So that’s what we’re going to focus on today: Getting value right. Because if you can do that, you can make money.

Let’s start with a few examples.

Getting Value Wrong

I was recently in a family-owned jewelry store, consulting with them about how to make improvements to their business. Their traffic is down to almost nothing, sales have declined for five years in a row, and the staff morale is abysmal. When I asked the buyer and store owner to explain their merchandising strategy to me, they focused entirely on price. Or, specifically, low prices.

“The big boxes and online retailers are kicking our behinds on jewelry prices,” they said. We’ve done everything we can do to lower our prices, but we just can’t compete at that level. They’re obviously buying a lot better than us.”

Of course, when you drop prices and your traffic drops, the only predictable result is that your revenue goes down. Even if your traffic stays the same, if you drop prices and do nothing to increase the number of purchases, your revenue goes down.

In this store, the merchandise looked very similar to what the merchandise would have looked like 15, 20, even 30 years ago. Lots of classics, lots of bread-and-butter. Nothing new, nothing exciting.

This is a classic example of getting value wrong. The assumption this store owner made was that the only “value” his buyers wanted was low prices. He didn't ask the customers. He was reluctant to invest in new products that are more exciting, fresher, and unlike what is offered at the discount jewelry outlets. Low prices aren’t the only value customers want, and had he discovered a different value proposition to offer, he could actually grow his business. So we’ll work on that now.

Getting Value Right

One of my very first jobs was at a major advertising agency, and I’m pretty sure this was the experience that taught me about value. I was in a meeting with my project team discussing an unhappy customer. The project manager was leading the meeting, and our VP was attending. The project manager kept talking about how to “showcase the numbers.” He spoke of using the most positive data, reflecting the highest possible viewer statistics, and painting the rosiest picture we could to help the customer see how much impact we were having.

The VP – a guy who never spoke very much – finally asked, “What does this customer really want?”

The project manager said, “Great service and great advertising!”

“No,” the VP said. “He wants sales. And all the inflated statistics in the world won’t make sales happen. What we need to do is give him a campaign that drives sales. Then he will be happy.”

It’s easy to get lost in the details of our businesses, but value comes down to a few simple things:

1. Know what your customers actually want and need from you.
2. Give it to them - in the right way and at the right (which isn't necessarily low) price.

Of course, these two concepts are simple, but their execution is not. What people want and how to deliver it can be very nuanced, and it is ever-changing. But if you keep these two points top-of-mind at all times, you will find they guide your work in new – and possibly unexpected – ways.

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The topic of mindset has come up repeatedly the last few days, and I take that as a sign that we all need to be reminded about it. There was a book called Mindset The New Psychology of Success by Carol Dweck, and it was published in 2006. I read it when it first came out and I was completely energized by it. The core message of the book is that there are two types of mindsets a fixed mindset and a growth mindset. A fixed mindset believes that one has predetermined abilities or aptitudes or talents.

[00:00:33.840]
And whatever you've achieved, that's what you can achieve. A growth mindset believes that traits are not fixed but can be cultivated and learned and changed. And many people ask, well, which one is accurate or true? And the answer is both are if you believe your potential is capped than it is if you believe your potential is limited only by your effort, then it is so mindsets, a self-fulfilling prophecy. If your emphasis is primarily on performance or results and you see all efforts as either successful or not successful, you probably have a fixed mindset.

[00:01:08.760]
If your emphasis is primarily on preparation and you see effort as learning and progress, then you probably have a growth mindset, fixed mindset. People can certainly be successful, but they tend to hit a ceiling above which they don't seem to float growth mindset. People tend to show up more in the population of people who experience serial success. The good news is your mindset can change. If you want to learn more about this concept, I highly recommend the book.

[00:01:35.700]
In the meantime, take a look at the way you're thinking about work, family life, even love. If you would embrace the idea that every step is a good step, even if it didn't land you where you want to land yet, then your life will become immeasurably better anyway. That's what I'm thinking about today. So now go grow your mindset.

Shopping on sale in the midst of a recession is akin to indulging in a delicious vice. You know you want to do it, indeed, you’re going to do it. But you also know it’s wrong.

OK, maybe you don’t think that shopping on sale is wrong. But from my perspective, it’s like smoking a cigarette or having an affair. Why? Because every business that drops its prices to get customers in the door is doing so at the expense of their business safety and future. Who among us would decide to go into the sugar, flour, facial tissue, or copy paper business? Yet that’s what we do when we reduce our business premise to offering the best price. Price sensitivity is the nature of a commodity business.

Margin is essential to survival. Without margin you can’t pay the vendors, pay the rent, pay the taxes, pay your employees, or pay yourself. Every sale price you mark comes at the expense of margin. This is not to say that there’s never a good reason to have a sale. To score big wins, business owners must take regular measured risks, and those risks frequently result in excess inventory. Eliminating such inventory while making customers happy is smart, and sales based on those conditions are wise.

But the sale prices we see today are the desperation moves of companies that have run out of ideas for getting customers in the door. Margins are essential to survival. Always.

There are two ways to maintain margin. If a company wishes to compete on price and still maintain margin (note: if a company wishes to compete on price and NOT maintain margin, that company is out of business), it must reduce costs sufficiently to protect margin while reducing the selling price. Make sure you know how to reduce those costs before you reduce the selling price! One of the most common business mistakes is to assume that once a company has additional volume, the costs will come down accordingly. They drop the selling price to build the volume. Voila! They shrink the business. Make sure you have purchase commitments from customers and cost reduction commitments from suppliers prior to making that move. Even if you have figured out a failsafe way to play the price-reduction-with-margins-game, learn what Wal-Mart already knows: cost reduction is ultimately a zero-sum game.

The second way to maintain margin is to (drumroll here) maintain your prices. What? Not reduce them? But everybody’s reducing prices! How are we supposed to compete if we can’t get the customers to consider us because we’re not as cheap as everyone else. 

The only way to maintain prices is to offer something that makes not only your products, but your business, worth more to your customers. The phrase, “you cost more, but you’re worth it” has always been music to my ears. It is the ultimate compliment, an endorsement of a company’s value and a commitment to help the company stay in business.

The biggest impediment to achieving that valuable customer endorsement is the ubiquitous industry trend. Actually, the trends aren’t the problem. If all your competitors get caught up in the trends – and you successfully avoid them – it would be good. For you. Which industry trends are a problem? All of them. Product trends and service trends represent ideas that are being offered simultaneously by everyone in the industry, and when something is offered simultaneously by everybody, it leads to price trends. Instant commoditization.

Bucking industry trends is not easy. It requires an understanding of the concept minimum standard necessary to compete. As each industry develops, standards evolve over time. These standards relate to customer service levels, speed and quality of delivery, and quality of products. Every business must operate at the minimum standard necessary to compete. A good example of this is shipping times. In the early 1980s it was common for direct marketing businesses to offer 6-8 weeks for delivery. Within a few short years, same week delivery was the standard, and any company that could not offer the new standard lost market share. 

Every company must honor its industry’s minimum standards necessary to compete. To buck the trends and maintain margin, it is essential to offer something unique, something beyond the minimum standards. Each business must analyze its strengths, consider unmet or poorly met customer needs, theorize on emerging market conditions, and find a way to set itself apart. At one time, product differentiation was synonymous with corporate differentiation. Today, differentiation depends increasingly upon creative ways of building relationship value with customers.

The biggest danger to a business owner is lack of originality – generally demonstrated by virtue of getting trapped in his or her industry’s trends. Industry trend following simply turns your business into a commodity business. Avoid the trap and maintain your margins. When you do it well, your customers will gladly trade the guilty pleasures of sales prices for a superior offering.

© 2009. Andrea M. Hill

It’s one thing to have a bad job experience; it’s another thing entirely to watch one’s children go through one. Yet, that’s what they must do. When young people enter the workforce, they are typically subjected to a series of bad managers with poor training and insufficient communication skills. For years I had to watch my children live through a series of crappy jobs. It's part of the learning experience, but it isn't fun to watch!Now my oldest child is a nurse, and at 29 she is finally in her dream job. It’s not just that she loves the work, she loves everything about her manager, the corporate structure, and the company philosophy. The result is that she is completely dedicated and motivated.

There are a few reliable things that good managers and management organizations do that make them rewarding to work for, and my daughter’s new employer appears to do all of them.

1. Good managers have a clear purpose. This is true if the manager is the business owner and set the purpose himself, or if the manager is several rungs down the ladder and had to learn the purpose from his own managers. A good manager always takes the time to understand and share the company’s purpose and how his team can best fulfill it. This vision and direction enables a team to come together and work with one another for common goals.

2. Good managers hire good people. You can tell a good manager from the quality of employees that surrounded him. A good manager always looks for the brightest, most ambitious, most capable people he can find. Weak managers avoid any employee that could potentially take his job or outshine him.

3. Good managers are team players. A good manager knows how to let his employees take the lead, and encourages employees to practice leadership skills frequently. Leading from the middle is a powerful way to build a strong team by strengthening each person’s leadership skills, and it builds team confidence in their manager, as it demonstrates that he is willing to be a member of the team and not just the boss.

4. Good managers motivate with reasons and benefits. People don’t want to just be told what to do, they want to understand why they are doing it. A good manager has reasons and benefits for everything he requests, and he facilitates discussions around those reasons and benefits when necessary. I’ll never forget a manager I once had when I was younger; a Vice President in a large corporation. He had to ask our team to do something that was stupid. Not unethical, just misguided. But he didn’t duck it. He said, “Look, we all know this isn’t the best thing for us to do, and I’ve already tried to argue our position with my boss. But this is a good company, and we’re all going to make a bad judgment call from time to time. So let’s do this enthusiastically, and figure that it’s a good learning experience for everyone, including my boss!” We stayed motivated and even developed a sense of humor about it.

5. Good managers respect that people work for more than just money. A good manager takes the time to know and appreciate each individual employee. Every person has something that makes him or her tick, and a good manager wants to know what that thing is. It may be pride in a good job, a sense of responsibility, coming to work with people they enjoy, or learning new skills on the road to a more challenging career. Whatever it is, the good manager figures it out and then finds ways to keep the employee motivated by appealing to those values.

6. Good managers really notice their employees. They take the time to observe and learn each employee’s strengths and weaknesses, and they find ways to play to the strengths. When a good manager plays to an employee’s strengths, the employee experiences greater success and growth. Then, the really good manager specifically recognizes his employees’ successes, both publicly and privately.

7. Good managers don’t mix positive and negative feedback. Feedback should always be specific and timely, and in the case of negative feedback, should include some information about what is desired. When you mix positive and negative feedback, both areas suffer. Let positive feedback be a cause for unhampered happiness, and let negative feedback serve its purpose by allowing the employee to reflect on it and improve.

8. Good managers set clear goals with and for their employees. These goals must be directly related to the purpose that was discussed in Step 1. Having clear goals motivates employees, helps them stay focused, and enables them to measure their progress and celebrate achievement.

9. Good managers delegate. This isn’t simply to spread the work around (though that is important). When done correctly, delegation helps employees stretch and learn. When employees accomplish new challenges, their confidence and their value to the team and company grow.

10. Good managers are accountable. They share the glory when the team has accomplished something, and they accept responsibility for team or individual failures. This level of responsibility is essential to building a culture of trust and safety. There is no innovation without mistakes, so a culture that punishes mistakes won’t have any innovation. When a manager is accountable for the team, team members learn from their mistakes and grow, and innovation thrives.

11. Good managers treat each employee with dignity and respect. They listen carefully, speak honestly and thoughtfully, and always work from the premise that people may have different skills but never have different value.

I would love to write an article called “How to be a Terrific Manager Without Really Trying.” Great title, right? Unfortunately, that article cannot be written. There’s simply no way to be a terrific manager without making an effort. However, if you regularly practice these 11 points, you will become a better manager every day.

From my earliest days as a business leader, I understood that a business had to have a clear, unified purpose in order to be successful. It was drilled into me – in school, by business thought leaders, by my Boards of Directors, that the ultimate purpose of a business had to be profit. I believed it. No – I accepted and embraced it. At my last business, we articulated our purpose as “to make more money now and in the future.”

I was wrong.

It always felt a little hollow, to be working for profit above all else. Yet it also made sense. After all, why have a business that doesn’t make a profit? But had I stopped to think deeply about it, I would have realized much sooner that profit and a higher purpose are not mutually exclusive.

The first real challenge to my profit-purpose-assumption came when I started my current company. As I began the strategy process, I started from the top down. “The ultimate purpose of this business is to make more money now and in the future.” But it didn’t sit right with me. Without partners to negotiate with or a Board of Directors to appease, I kept recoiling at the idea of being primarily focused on “making more money now and in the future.”

So I threw that purpose out and began to list the reasons I was opening this business. Some were very personal, such as the freedom to always put my family first, the desire to put into action business concepts that I have long pondered but which met with resistance, and working within an ethical framework from which I never felt pressure to deviate.

Other reasons were more philanthropic. I wanted to create a very human, uplifting and creative employment experience. I wanted to further refine the practice of collaborative management. I wanted to pay a meaningful wage for meaningful work. I wanted to serve a specific community of customers with services they needed, and I wanted to see that community become increasingly successful.

What I realized is that a business must have a bigger purpose than profit. That instead, the purpose of profit was to serve the higher purpose of the business. It was like I had been wearing my slacks inside-out for 20 years. Suddenly, with the pockets and buttons on the outside, they felt better. Everything fit better.

Does this make me a granola-eating-Birkenstock-wearing-naïve-excuse-for-a-business-owner? Well, I am some of those things, but I don’t believe I am naïve. What I am is more motivated. More motivated to have my business produce a profit so I can remain committed to our higher purpose, which is:

To create a fulfilling, enriching, and life-balanced work experience for my employees and myself while making significant contributions to the success and well-being of small business owners and entrepreneurs.

Eight years later, this purpose continues to serve my company well. When we have discussions about wage increases, we discuss them in terms of creating the profit to support them. When we discuss creating new services or products for our customers, we talk about them in terms of the profit we must generate with them to make them widely available. Over and over again, profit serves purpose.

More importantly, the stakeholders in this company understand that this company exists for them and for the customers to whom they have become committed. If the purpose was merely profit, how could they possibly feel as committed, even if a portion of that profit was set aside for them?

I’m sure there are people for whom money as a purpose is very exciting. But I suspect that far more people are motivated by the things that money can do, can create, can cause. Now that I understand that profit is the means to an end, and not the end in itself, I will never look at business purpose the same way again.

What’s your business purpose?

You'd pretty much have to live in a burrow to have missed that Apple was suing Samsung, or that they won a billion-dollar judgment for their efforts (pending appeal, of course). I have a lot of reservations about our 18th century intellectual property laws and their ability to serve today's technology community well, but that's a subject we won't dig into right now. Rather, this whole experience does offer important insight into the disciplines of innovation and differentiation.

This weekend Cassidy James wrote an excellent article in The Verge on how Google avoided Apple's trade dress in its Android devices (read the article here). What struck me most about the article (other than the fun and well-written history therein) is the important lesson for strategy that serves all of us, whether or not we are interested in technology.

Google is so knowledgeable about Apple's patents that they were able to willfully, creatively, innovatively avoid imitating Apple's products, and in the process, they created interesting, different, highly useful devices for the community of tech users for whom Apple just doesn't do it.

This is what all product developers are challenged to accomplish. To know the competition so well that they know what not to do, and then to bring so much creativity and intelligence to the table that they are able to create something entirely different. Whether your product is a designer good, a service, a retail store experience,  a taste or scent, or a software product, this is the work of differentiation.

Remember - you don't need all the customers, you need the right customers. And genuine innovation is one sure way to reach an audience that is currently not being well-served.

As the jewelry industry heads into its biggest American show of the year, designers are questioning the best way to price their lines. What follows is a reflection on some important considerations when establishing a pricing strategy for a designer jewelry label.

Designer and brand jewelry lines must be very careful to avoid commoditization. Whereas non-differentiated manufacturing concerns price based on the current precious metal market, to do so as a brand or designer will reduce the design aspect of the jewelry to the equivalent of ‘labor’, which can only precipitate a race to the bottom. This is tantamount to saying that two paintings that required 22 hours, oil paints, and 17 brushes to produce hold the same value, though one was painted by Gustav Klimt and the other by a technically competent reproducer of others’ original works.

Designer and brand jewelry executives must consider a number of concerns – some of them conflicting – when establishing pricing strategy. This topic can hardly be covered in the space of a blog, but I will address the high points in the hopes of launching a meaningful discussion within the jewelry design community.

On Avoiding Commoditization

The only defense against price competition is differentiation. Though it is difficult to differentiate on design – and I strongly encourage designers to include elements of differentiation in addition to design – differentiate you must. Let Cindy Edelstein’s be the voice in your head on this point: Cindy preaches that all the designers in an aisle at a tradeshow should be able to commingle their jewelry in the aisle, and she should be able to tell from design characteristics alone to which designer each item belongs. Without a distinctive voice the buyer will ultimately force you to differentiate on price because you will have given them nothing else to work with.

At the risk of seeming like I am downplaying the difficulty of finding good retail accounts, remember that you don’t need all the customers, you need the right customers. A retailer who only focuses on the price of your product based on the metal and gemstone content is not an ideal target. If he can’t see the design value for himself, what is the likelihood he has trained store staff to see and sell design to jewelry consumers? But once you are pulled into the retailer’s non-design-focused pricing strategy, it is nearly impossible to charge the right price when you encounter the right sort of retailer. You will do better working your tail off to find designer-focused retailers than to try to convince generic jewelry retailers to pay the right price. Sound difficult? It most certainly is. But that is the challenge of going into a designer business. If you had decided to be a high-volume producing manufacturing business, your big need would be the capital to invest in the production techniques and technologies necessary to produce in volume. The challenge for a designer business is the creative strategy, brand identity, intensive marketing research and analysis, promotion, and sales activities necessary to find the right customers.

On Variable Costs

You must know your variable costs to protect your margins. Variable costs include the raw materials and labor to produce each piece. Obviously, the first time you produce an item will take longer than subsequent production efforts, so you want base the labor on standard production. Estimating variable costs is, well, a big no-no. If your estimates are off and you negotiate a large order at the wrong price, you may run completely out of cash before you discover your error. Know your exact variable costs.

Metals are the big worry right now. Should you price gold at a $1300 market or $1500? Everyone has heard a horror story of $2000 or worse. Here are a few thoughts to consider when deciding what market to base your pricing strategy on:

• Investment demand for gold continues to hold at fairly high levels, bolstered by concerns about inflation and investor worries about the European economy. On 5/17/10 Kitco projected that gold could go up to $1700 this year, and most forecasts are eyeing the $1350 - $1500 range.
• Johnson Matthey is projecting platinum prices in the $1600 - $2000 range for the balance of the year.
• Silver has been experiencing market resistance in the $19 range, but if it manages to break through that resistance it could track up sharply and take many people by surprise.
• You must be aware of how other designers are pricing their lines. If you are at an $1800 gold market and everyone else is at $1300, you’ll likely be priced out of the market. Watch Cindy Edelstein’s blog this week for her report regarding current designer market bets.

Some will argue that it is better to be safe than sorry, and will price their lines at a specific market and tell retailers that orders will ship at the actual metal market the day of shipment. This may be fine for commodity-level manufacturers and distributors, but I advise against it for designers. As I said before, once you train the retailer to think about your line as a commodity + labor offering, you have thrown your design value out the window. I recommend a harder – but ultimately more sustainable – road for brands and designer lines.

Pricing for Margin and Value

So what’s a non-financial-analyst designer to do? Start by considering what price your target consumer is willing to pay for your line, and what margin your target (i.e., ideal) retailer wants to get. This involves market research. Trade shows are a terrible place to do consumer market research, because you can’t assume your competitors have done their consumer research. Pay attention to what your competitors are doing, but don’t fool yourself into thinking this is a replacement for consumer awareness. Listen to actual consumers, study what they are buying, find comparable items to your designer line, and learn what consumers are willing to support with their debit cards. This is where the real value of social media exists by the way. At any given moment hundreds of thousands of conversations are taking place, and many of those people are talking about what they buy, how much they spent, and where they bought it. These conversations are yours for the eavesdropping. Learn to listen in and you’ll begin to understand what consumers really think.

Once you have a sense of what consumers are willing to pay for jewelry like yours, subtract the target margin of the retailer. Now cost your line at a $1350, $1500, and $1700 gold market. Answer the following questions:

1. Can you meet your financial obligations and generate organic cash flow to cover your growth requirements at each of those margins?
2. If the answer to #1 is ‘no’, do you have outside financing available (already committed) to you?
3. If the answer to #2 is ‘no’, how will you fund the metal purchases, labor, and operational costs necessary to keep filling orders?

To generate organic cash flow, you must have margin. If you give up significant margin, you must generate so much additional volume that you can produce the number of dollars necessary to fund growth. If you can’t support the demand operationally once you get those additional orders – or if the number of dollars you need remains persistently out of reach - you’re out of business. Landing a few choice accounts won’t keep you in business. The key to remaining in business is producing more dollars. So giving up margin to snag a few choice accounts is rarely the road to success.

Look, if you’re going to put yourself out of business anyway, it’s probably worth your time and effort to get on the phone and call every retailer in the country yourself, just to find the 15 or 20 retailers who get it about designer jewelry and understand that it is not a commodity. There are more than 20,000 retail doors in this country, and most of them (sadly) are treating jewelry as a commodity these days. But not all.

Enlightened retailers exist. There are (dare I say it) more than 15 or 20 of them. There are at least several hundred retailers who understand that the key to turning consumers on about jewelry is being turned on about jewelry themselves, and training their sales and purchasing staff to be turned on about jewelry. They are using this advantage (yes, differentiation) to put their retail competition out of business, and because they understand love-of-margin, they are charging the right prices and doing the hard work necessary to find the right customers and encourage those customers to pay those prices.

Does this mean that when you find those retailers you will automatically solve your price problems? No, it doesn’t. You still must have tremendous control over your production, you need to know – not estimate – your variable costs, and you need to do everything in your control to keep your costs down so you can enjoy healthy margins after some reasonable negotiation with your retail partners.

You already know being in business for yourself is hard work. But working this hard for no money? That’s just not worth it. So don’t take your need for margin off the table. Differentiate. Do your variable cost homework. Do your consumer research. Price according to consumer demand and make sure you turn a profit. Strategize, brand, market, promote. Find the right retail partners. Sell your intrinsic value and differentiation (not your materials + labor!).

Make some money. You’re worth it.

(c) 2010. Andrea M. Hill

I've been doing something for the past year that is really working for me. Like you, I run a business. And like you, I often get caught up in the details of that business. So I have to be very intentional about maintaining my focus on the bigger picture.

Of course, I have my big picture established. I have a strategic plan, a clearly defined brand, and the operating plans (marketing strategy, sales & marketing plan, operating plan, budgets & cash flow plans) for each of my business divisions. And I review each of those plans monthly to make sure we are staying on track, achieving our goals.

But still. It's that daily focus that makes or breaks you. Without even noticing it, several days can slip away without any strategic focus at all! I don't know about you, but that makes me crazy. I like ending each day feeling like I did the things that matter. Achieving goals motivates me.

So here’s what I did. During my monthly review of my strategic and operating plans, I started selecting the most important goals to achieve that month from each plan – I usually end up with between four and six significant monthly goals. Just doing this brought my long-term goals into clearer focus. Then, I memorized them. Why? So I could write them down each morning.

That’s right — every day, before I open a single email (but after retrieving my cup of coffee), I write down those goals. I happen to use a business journal for all my notes during the day, but it doesn’t really matter where you write them, as long as you write them. Every single day I take the time to write my business goals for the month, pen to paper, completely focused, fully intentional.

And something interesting has happened. The most important thing is that my achievement of goals has significantly improved. But you mostly see that in retrospect. What I’ve noticed in real time is that when I write my monthly goals each day, my thoughts are more likely to turn to the specific daily activities that I must accomplish to achieve those goals. Before I get sucked into customer questions, writing proposals, helping employees solve problems, or mindless administrative work, before I go off on a tangent doing something that feels rewarding but isn’t in alignment with my goals, before all of that — I visualize my day in terms of important accomplishments. And when I do that, the next 8-12 hours is infused with awareness of the big picture. Sure, I still fight some fires and do some administrative work. But I also get big picture things done. The number of days that slip away without strategic accomplishment has dwindled down to almost none.

I am sure this daily focus is what improved my business goals achievement. And now that I’ve been doing this for a year with good results, I am wholeheartedly recommending this approach to you. Start today! It’s never too soon to start a good thing.

Clear Expectations Help You Release Control

One of the things I like to write about is how to get out of our own way, and how most people get in their own way by fearing change and trying new things. But what if you like change, you embrace learning new things, and you’re still stuck? Then it’s possible you’re suffering from one or both of the other two reasons we get in our own way: a need to control everything, or sacrificing good for the perfect.

I know a business owner who is quite the Renaissance Man. His ability to come up with w ideas, to imagine how things could be made, and to create innovative manufacturing techniques to make them is inspiring. Unfortunately, his need to control everything stands in his way of success. The business is too big to be run by one person, yet he won’t let the employees he has contribute in meaningful ways. He manages their activities to such a degree that the entire company is in a state of rigor mortis – unable to move until the owner puts his stamp of approval on the tiniest of details. Whatever creativity and intelligence the employees did or could bring to the table has been undermined, because the organization has been trained not to think or make decisions without the boss.

I can tell stories of dozens of business owners who are one-person shops long past the point when they should have expanded, simply because they don’t want to let go of the control they enjoy when they do everything themselves.

If you’re a small business and you’re making the amount of money you want to make and getting the amount of free time you need to be a balanced human, you’re just fine the way you are. But if you’re feeling stuck, needing to grow but afraid to trust anyone else with your details, here are a few tips for getting out of your own way.

Assess Yourself

Start by making a brutally honest list of your skills. This list must be based entirely on the here-and-now. No “If I took a day and really worked on it I could be great at it” thinking. Just hard, cold facts. Take a piece of paper, and make three columns. At the top of the columns write the headings “Fantastic Skills,” “Average Skills,” and “I stink at this.”  It looks like this:

A genuine control freak will look at this list and immediately make plans for perfecting everything in the Average Skills and I Stink at This columns. But that’s not rational. Don’t get me wrong – self-improvement is one of the most exciting parts of living. But here’s a business fact that you must accept:

No business has unlimited resources. Your resources will always fall short of being sufficient to accomplish everything your business needs and wants to do.

This is true whether you are a one-person operation or General Electric. Attempts to become the master of every possible business skill will only steal time and attention from doing the things that are already your strengths. So what you must do is learn to set clear expectations - of yourself and others - and learn to delegate (which could include outsourcing).

Which Skills are Strategic?

Once you have completed your personal skills list, take out a red pen. Circle the elements that are the most important to your business strategic success. Everything on our example list is important for a business to do well, but which are the most strategic? The most tied with your special value to your customers, your secret-sauce of strategic differentiation? Imagine for a moment that the example business is a design firm that:

• Offers jewelry with a very unique metal finish
• Uses unique and difficult-to-set gemstones
• Works closely with retailers to attract customers and sell through event-based marketing.

The essential strategic skills for that company might look like this:

Unless you happen to have a lot of free time on your hands, you could probably choose to perfect one of the three things you aren’t fantastic at. But what about the other two?

Here’s an interesting little paradox. Many times, the tasks and responsibilities we won’t let go of are the ones that we don’t do well ourselves. Why? I’m not sure it’s ever been studied, but I have my guesses based on decades of observation. I think the reason is that it’s hard to delegate – and even harder to manage – something that we are not good at ourselves. We’d rather muddle through in an attempt to control the mistakes. But by setting clear expectations, it's possible to eliminate the mistakes and hand off the things you're not good at and/or which are not strategic.

But controlling for mistakes is a zero-sum game. You can’t soar when you’re spending all your time trying not to fall. So here is a method you can use to get control – and then let go of it.

1. If you feel the need to move one of your strategic skills into your “fantastic” column, choose it and commit to it. You only get one, so choose wisely based on your innate capabilities and talents and your level of interest.
2. For each of the remaining strategic skills, make a list of the required outcomes, the things that absolutely must be accomplished to satisfy the business need from that element. Let’s use “Planning Production” for our example

What must be accomplished in the area of Planning Production?

• All initial orders from retailers must be completed in 4 weeks
• All reorders from retailers must be completed in 1 week
• We must know the status of every order at all times
• We must maintain a quality approval rate (final quality) of 99% or higher

This simple act of defining outcomes for an aspect of your business places the control where it should be – at the beginning, at the level of expectations. Once you have established these expectations, you will feel freer to trust someone else to do the work, whether it is an employee or an outsource partner.

In fact, this is the key to success in all business functions. If you take the time to define precisely what you want from each function in your business, you can manage to expectations rather than micromanaging the work itself.

This is ultimately the work of a business owner. To define what is important in every area of your business, make those expectations clear to all employees and service providers, then monitor the results. Doing this work will provide tremendous clarity. It will also free you to focus on the things you are really really good at, which are most likely also the things you love to do.

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The fourth quarter is nearly here, and your head is probably in go-go-go-for-the-holidays mode. That's good - you're supposed to make hay while the sun shines, right? But the risk is that you'll wake up one day soon, the holidays behind you, and immediately become stressed over everything you’ve failed to do for your business while you were focused on production and sales.

Don’t go there! Life is a series of recommitments, and those times of recommitment are critical to our continued growth. September is an excellent time to review your business progress and recommit to your strategic goals. Pull out your calendar right now and look for one day in the month of September to focus entirely on business planning, goals for next year, and projects you're ready to take on. Making time to plan is one of the most important things you can do as a business owner.

It’s Scheduled . . . Now What?

To begin, decide if your planning day will be a day for just you or if you want key members of your team or important advisors to join you.  In most cases it is useful to include others for at least part of your planning. It’s easy to get stuck in our own assumptions or perspectives. Inviting others to participate can present new ideas and challenge old ones.

Assemble key information about your previous year. At a minimum you need:

• Sales Revenue by Month
• Cost of Goods by Month
• A report showing customer performance, including how much business each customer did with you the past year, which customers you lost (did not purchase in the past 12 months) and which customers you gained.
• Detailed expense report
• Summary expense report showing total expenses for labor (salaries and benefits), sales and marketing (including non-employee commissions, trade shows, photography, promotions, advertising, etc.) and facilities (rent, security, etc.).
• If you had goals for 2013, list all goals and your accomplishments for each.

Prior to your planning day, decide where you will work. If you can’t work in your office without constant distractions, plan to work somewhere else. Your planning is too important to sacrifice it to perforated attention.

The Planning Day

Spend your first two hours examining the reports you assembled. Ask, and answer, the following questions:

1. How has my revenue been in 2016 compared to 2015?
2. What have I done differently (if anything) to change my revenue in 2016 (positively or negatively)?
3. Did my Cost of Goods go up, stay the same, or go down? Why?
4. Did I gain more customers than I lost?
5. Why did I lose the customers I lost? Were the losses intentional or unintentional?
6. Am I spending my money on the right things?
7. Did I spend enough money on marketing and promotion (including Trade Shows) to generate the amount of business I planned to do?

Now set your financial goals for 2017. These goals include:

• Revenue goals for 2017
• Cost of Goods goals for 2017
• Net profit goals for 2017

Spend your next hour or two contemplating your customers. Your customer mix determines your success, so it is essential that you consider whether or not you are serving the right customers. How do you know if you have the right customers? The right customers want more of what you are comfortable giving. The wrong customers constantly ask for things that feel off-track to you. For example, if you are Neiman Marcus, customers that hound you for lower prices aren’t a good fit. But if you are Wal-Mart, you expect (and feel comfortable with) customers demanding lower prices. All customers want more of something from you; the question is, are the things they want the things that are right for your business?

Create a visual model that will help you cultivate more of the right customers and less of the wrong ones in the year to come. Draw a vertical line down the center of a piece of paper. On the left side, write the names of your very best customers. On the right side, write the names of troublesome customers who are expensive to serve or just aren’t a good fit. Once you have listed the customer names, draw a horizontal line under them. In the space below, write the common attributes of your “good” customers and your “bad” customers. Look for patterns and similarities within the two groups. Now create your Customer goals for 2017. These goals include:

• Total number of customers (existing and new) by end of year in 2017
• Total number of new customers in 2014, and the specific attributes you will seek in those customers
• A specific list of the customers that you want to (gently) let go in 2017

Once you know the types of customers you want to add in the coming year, consider where to look for them. What media (magazines, internet, social media, events, etc.) do your “good” customers respond to best? Chances are, the customers you seek pay attention to those channels as well. Create a list of all the marketing promotions, advertising, and events you did in 2016. Circle the ones that did not perform as you expected. For each marketing activity you circled, consider why it wasn’t successful. Was it the wrong venue with the wrong type of customers? Did you fail to prepare properly for it? Did you learn something from it that will make you more successful if you try it again?

Do a similar activity with your successful marketing promotions. Why were they successful, and what can you do to increase the success in the following year and find more opportunities like them? Once you have analyzed your past marketing efforts, it is time to review your sales and marketing goals for 2017. I say review, because you have likely already committed to some trade shows and advertisements already. Your review and goals should include:

• Total dollars you intend to spend on marketing in 2017. Revise if, after analyzing your customer and marketing plans, you think the number should be changed.
• A list of the marketing activities you plan to participate in. Be prepared to cut plans you have made for marketing activities that you no longer believe will be successful, or to add marketing activities you hadn’t previously considered.

After setting your customer goals, it’s time to move on to operations. Review the goals you have already set and the thought processes that got you there. Then answer this question: What operations must I excel at in 2014 in order to achieve my marketing, sales, customer, and financial goals? Your final goals will include a list of each operational improvement you must invest in in 2017.

If you take the time to plan for 2017 in this way, you will start your year focused and recommitted to business success. You will also reclaim the excitement and energy that come with feeling prepared.

Once you are armed with insights about your customers' behavior both as shoppers and as online participants you can flesh out your marketing strategy.

Look backward to look forward.

Get the list of every marketing activity you did last year: trade shows, retail shows, print ads, digital ads, billboards, press releases, radio spots, Facebook promotions, website promotions, events . . . and consider how well each promotion did for you.

What determines a successful promotion? A successful promotion is one that achieves the goals you set for it. If your goal for an event was to get 200 new customers to visit your establishment, then 210 non-employee guests at your party is probably a success. Some marketing efforts are easier to measure than others, but you must take a stab at measuring each one, deeming them successful, unsuccessful, or somewhere in-between.

For those efforts that you deemed successful, do you have reason to believe that repeating them this year will generate a similar level of success? Some marketing plans are terrific . . . but only once. Others should become regularly scheduled efforts.

For efforts that you deemed unsuccessful, can you identify what went wrong or what you could have done better? Determine what, if anything, you could have done to change the outcome, and decide whether or not to try again with new insights.

Set goals for next year

Success and failure can only be determined in relation to goals. So set goals for sales next year and make them as measurable as possible: Total sales in dollars, total sales in units, total new dealers opened, total new customers, profitability in either dollars or percentage points, growth percent, total new customers, X% increased volume from existing customers - these are the types of goals that drive a marketing strategy.

Once you've set your goals, you're ready to determine your messages. You should focus on one or two messages that you want to get across to your customers and potential customers over the course of the year. These are your core messages, and are geared to helping your customers recognize your big difference, the reason they should buy from you and not someone else. Once you have a firm handle on those one or two (max) messages, you're ready to decide which marketing efforts will help you deliver your message(s) and achieve your goals.

Look at your marketing options by category

Your plan should include a healthy mix of different marketing elements: paid advertising - both print and digital, social media, public relations, email and direct mail, and events. I like to lay this out month by month like a giant editorial calendar. In each month we visualize which marketing elements we will use, how much they will cost, and how we will be conveying the core message(s).

Don't worry about planning out every social media post - that would drive all the spontaneity out of your social media campaign. For your Facebook and Twitter feeds, come up with a significant element each week that you will use to convey your core message(s), and then let the rest flow as it usually does.

Once you've laid it all out, taking into consideration your current customer behavior, how you want to influence or modify that behavior, and which marketing efforts worked and did not work in the past year, you can add all the dollars up and there's your marketing strategy.

Is this all there is to marketing strategy?

No, of course not. A superbly executed marketing strategy has many more elements to it. But if every small business owner would just do the activities of this and the previous two blog posts, it would significantly improve the efficacy of his or her marketing. By a lot. And the benefits gained will help pay for a more sophisticated marketing effort in the years to come.

We business folk are in love with the idea of innovation. It's a noun! It's a verb! It's something that only the best companies know how to do! Read the book!

No, I don't believe innovation is unimportant. I do think the word is over-used, and I think people would rather attend expensive seminars in San Francisco to learn about it than actually engage in it. But I think it's important. I also think it is woefully misunderstood. And I think the primary reason for our ongoing misunderstanding is our failure to recognize the importance of relevance.

Simple question. What matters more? Giving your customers something new, exciting, never-seen-before at a great price, or giving them something relevant to their needs? Ideally you don't have to choose between the two, but if you do, you should bet the bank on relevant every time. That's right. Every single time. Because an innovation that is award-winning but irrelevant will never turn a profit. Sure, there have been innovators who developed something entirely irrelevant to one market, and then stumbled into another market that scooped their invention up with glee. But their luck was based on finding someone to whom their product (or service) was ultimately relevant. And yes, there are some customers who will buy something completely irrelevant just for the sake of being the first, or the only, person to acquire it. But there aren't enough of those people around to make essentially irrelevant ideas into commercial success.

This is advice your grandfather could have given you. Yet one only has to do research for three or four minutes to uncover a treasure trove of innovative products that died due to unsatisfactory (or entirely absent) ROIs. Products like Digiscents/iSmell (no kidding – digital smell synthesizers and software applications that transmit scents over the web), Flexplay (self-destructive DVDs?), and Microsoft Bob come to mind.

I'm not suggesting relevance is easy to discern. An important starting point is to listen carefully to what customers have to say, pay attention to how they work, play, and care for their families, or to how and why they are using your and your competitors' products. The next critical step is to listen carefully to your sales, service, customer support people, vendors, and service providers. Surveys, focus groups, and other forms of customer research can be of great benefit. Ideally you are able to develop a strong sense of relevance to your customer because you are your customer. But even with all of those tools at your disposal, it can be difficult to determine relevance. Many people were working in computing in the decades leading up to the 1980s, but only a handful were able to see how incredibly relevant the personal computer would ultimately be.

The failure to innovate with relevance isn't just limited to new products and services. Sometimes perfectly relevant new products and services are doomed by completely irrelevant marketing. You know the kind I mean. Marketing that is superficially sexy, glossy, purports to be edgy, and is resolutely mundane. No amount of information regarding the intended customer's needs, wants, or perspectives influenced the marketing department's creation. Customer awareness was not their concern.

Most of my readers are already familiar with my Great-aunt Carrie. Another of her excellent sayings – which I have thought about on numerous occasions lately – was pretty is as pretty does. As I child I used to say "but what does that mean Aunt Carrie?" The only answer she would ever give me was that I should think about it.

Well, I did think about it then, and I continue to think about it now. I'm inviting you to think about it with me. Innovate? Yes, of course. But don't just make it pretty. Make sure it has manners too.

(c) 2008. Andrea M. Hill

What's your Network IQ?

If you're an entrepreneur, then you know what it's like to receive unsolicited advice. Your family, customers, friends, vendors, and the guy next to you in the grocery store line are all willing to offer you advice regarding what you could be/should be/shouldn't be doing with your business and investments. They're all willing, but are they all able? To learn how to benefit from advice, you have to learn to assess and access your Network IQ.

Every entrepreneur has had the experience of receiving advice from someone they respect and admire very much, but then feeling - indeed, fearing - that the advice is the wrong advice.  It's important to remember that advice comes from assumptions, and assumptions come from experience, or lack thereof.  So the best way to filter advice is to consider the assumptions and experience of the person giving it.

For instance, if your mother has never had any experience running a business, and she makes a statement about what you should be doing with your product offering, take a moment to consider what experience she has that might apply. If your product is jewelry and she has always been known to be stylish, she may have something to offer. If your product is software, and she has never turned on a computer, then unless she's offering advice on how to reach people who are terrified of computers, the advice is not likely to be helpful. If she offers advice on keeping yourself balanced and sane while trying to run a business, then perhaps you should listen.

Everyone in your personal network probably has something to offer, but you must be proficient at filtering the offerings to get at the truly useful nuggets.

Differentiate between Opinions and Facts

I love this quote: "Everyone is entitled to their own opinions, but not their own facts." I have no idea who originally said it, so I can't credit it. But I love it, because people have a tendency to accept as fact ideas that just pop into their heads. Maybe the idea popped in decades ago and was never challenged, and maybe that idea popped into their head moments ago, but if it was never challenged and confirmed, it's just an idea. What's worse, people offer these ideas/opinions as advice - which is generally taken by the advisee to be a fact. In an ideal world every person would analyze his or her own ideas and find out if they were fact, untested hypothesis, or fiction. But apparently, that's not a reasonable expectation.

You have to do the assumption-checking for them.  How do you do this without hurting someone's feelings? One approach is to do the assumption-checking without them knowing. But maybe they really do have experience to back up that idea. In that case, saying "That's a really interesting idea - one that I've not heard of or thought of before. What experience did you have that led you to that suggestion?"

Analyze your Network IQ to improve it.

You need a network of support and advice to make it in business. So analyze your needs for advice against your current network. Compare advisory needs (financial, strategic, product selection and merchandising, human resource challenges, organizational management and design, marketing and branding strategy and execution) against the people in your network. Identify each person who has experience you require. This doesn't buffer you from receiving bad advice, but it does help you learn how to quickly assess the advice you receive and decide how much of it to take.

And what about the areas for which you have no good advisers?  This is your opportunity to improve your Network IQ. Seek the advice you need, whether it's through an educational experience to improve your own ability to advise yourself, a paid adviser,  or someone in your social network who is willing to offer support on an ad-hoc basis.

Managing Network IQ: The Business Owner's Responsibility

Nobody can know everything necessary to  be successful in business. This is the primary disadvantage small businesses have when compared with large businesses. Large businesses can afford to hire specialists with a track record to manage discreet areas of the business. Small business owners can compete for knowledge, but you must be very savvy about how you do it. It's not incumbent on you to know everything, but it is incumbent on you to manage your Network IQ and access the best, most relevant advice from the most qualified people. Small business owners who do this well don't stay small for long.

When you're seated at a restaurant, hungry, enthusiastic about eating, you don't turn away the wait staff, right? You might ask for a few minutes to decide, but you don't put them off indefinitely.

When you go to the salon for a haircut or a blow-out, and they call your
name, you don't tell them to wait a while so you can finish a few tasks on your phone, do you?

When your pipes have burst and you've been waiting for the plumber for 36 hours, and he finally shows up at the door, do you send him away because you were just getting ready to serve dinner? No. You welcome him in.

Know Your Needs

Of course each of these examples is obvious. When we have a strong need, we don't ignore, put off, or avoid the provider of the goods or services who will fulfill that need. We schedule the time, we keep the appointment, or we clear the schedule to make sure these needs are met.

By definition, a retailer is a merchant who sells goods at retail.  Unless that retailer makes all the goods he sells, he needs to acquire them from somewhere. One can not merchandise with nothing, right? Of course, the retailer also must have someone to sell those goods to; the consumer. What I have observed is that most retailers in the jewelry specialty retail space are far more focused on who they sell the goods to than on from whom they acquire goods, and this leads to a serious lack of balance in the business.

The partnership between retailer and manufacturer/designer/distributor is one of the most important partnerships a retailer can have. Together the retailer and supplier create opportunities for the retailer to merchandise goods that consumers want to buy. Furthermore, the retailer should always be cultivating relationships and opportunities to learn about new, different, unique goods, because that is how the retailer can differentiate himself from other retailers and create ongoing excitement for his customers.

In too many situations, the retailer views the supplier as a nuisance, an interruption, or even an adversary, and not as the partner the supplier can and should be. There is a tendency to think in terms of "managing" vendor relationships and not "cultivating" vendor relationships.  But the best retailers - the most effective merchants with the most devoted clientele and the strongest growth trajectories - are building strong vendor relationships with current suppliers and actively seeking new vendors. When a vendor shows up unannounced, these successful retailers take at least a few minutes to see what is on offer. The small risk is wasting the 10 minutes it takes to recognize the products don't fit with the retailer's Merchandising Point of View. The huge risk is missing out on a merchandise opportunity that could have been dynamite.

Weak retailers feel relieved when merchandise sells, simply glad that it is gone. Successful retailers remain in contact with their vendors, placing immediate reorders to replace sold goods, but also responding to inquiries about current inventory positions and collaborating with their vendor partners to keep the merchandise offering fresh and balanced.

We all understand that the designers and manufacturers of jewelry need the retailers to carry the lion's share of the consumer sales. But I'm not sure we're all as clear that the retailers need the vendors just as much.  When the vendor relationship is undervalued, the result is the same as sending the waiter away instead of ordering, sitting in the waiting room of the salon instead of heading to the stylist's station, or sending the plumber away when he finally arrives.

Take a moment to evaluate your relationships with your vendors. If they are not as strong as they could be, invest in them personally or - if they're not the right partners to work with - find vendors with whom you can have a more productive, more profitable relationship. Stronger vendor relationships will help you meet the product needs of your business. This is vital, because those needs are very real and will ultimately determine your success.

I am fixated lately on the topic of outstanding customer service. As a road-warrior and constant consumer of restaurant, hotel, car rental, coffee shop, salon, apparel, and convenience store services domestically and abroad, in community sizes ranging from tiny Iowa towns to London, I suspect I encounter a reasonable approximation of what customer service means today. What I have encountered is a strange dichotomy.

Customer Service Out, Customer Service Culture In

On the one hand, excellent customer service is no longer treated as a differentiator by consumers. Twenty years ago, a business could set itself apart by touting its fantastic service. Advertising one’s customer service prowess or awards for customer service meant something to consumers, and it was often excellent service that businesses chose to feature in taglines. Today, excellent service is a minimum standard necessary to compete. Boasting about or branding with excellent customer service is like advertising an automobile and saying, "It runs! It goes up to 75 mph!"

On the other hand, excellent customer service can be very difficult to find, even in the luxury sector. At a time when consumer expectations regarding service are higher than ever, why aren’t businesses stepping up and delivering?

Because excellent – no, outstanding – customer service is one of the hardest things to do. You can’t automate it. You can’t script it or cookie-cutter it. You can’t ensure it with policy or rules. Excellent customer service is about people, and people run on motivation.

When I refer to customer service, I’m not just talking about direct personal interactions. Think of all the people in non-customer facing roles that have significant influence over how the customer feels about the company:

• The web developer that cares about customer experience creates shopping interfaces that are simple, fast, and efficient and filter or search functions that quickly provide the right answers.
• The systems person that creates strong data warehouse tools helps customer-facing team-members quickly find and deliver information to interested customers.
• The purchasing staffer who does such thoughtful forecasting and planning that the right products are in the right places at the right times – so customers can find them.
• The CFO who supports the creation of simple, easy return policies to ensure customer satisfaction.
• The marketing team member who thoughtfully manages customer lists to ensure that the most relevant email campaigns go to each list subscriber.
• The production worker who looks for the tiniest errors to ensure a customer never finds one.
• The shipping clerk who packs every box as if the contents are fragile and going to his own mother.

To deliver outstanding customer service, a company must motivate every single employee in every single role to think about how his or her work will affect the customer.

Outstanding Customer Service Starts with the Right Ingredients

I do not believe in the adage you can’t teach an old dog new tricks. But I do believe that our essential ingredients – personality, character, and self-discipline – are fairly set by the time we reach adulthood. The truth is, some people are wired to deliver an outstanding customer experience because they are empathetic, interested in others, and motivated to serve. If the people you hire don’t start with those essential characteristics, no amount of training, cajoling, or threatening will induce them to become passionate service people.

But it’s more complicated than that, isn’t it? Because those aren’t the only ingredients you need. When you hire a sales person who must deliver outstanding customer service, they must combine empathy and service-orientation with self-confidence and the ability to influence someone to part with their cash. On the other hand, if you are hiring a nurse, you need a person who combines empathy and service orientation with the ability to handle tremendous pressure, mete out pain, and deliver difficult news with pragmatic calm, all while keeping the patients from becoming frightened. An airline attendant must combine empathy and service orientation with vigilance. These are three very different recipes.

The Human Resource function has evolved to do a much better job of finding the best ingredients and matching them with roles and teams, and many new business tools and practices are available to support best practices in hiring, onboarding, and training. But are most businesses using these tools? Unscientific research (i.e., observation) would suggest that they are not. If you invest in one area of improvement for your service-dependent business this year, do a better job of matching the right people with the right teams and jobs.

Pre-Employment Assessments that Help You Build a Customer Service Culture

First You Solve the Processes . . .

The full saying goes, first you solve the process, then you solve the people. The source of most people-problems at work is process problems. If your processes are unnecessarily complex, cumbersome, inconsistent or – worse! – nonexistent, your people cannot give consistent – let alone outstanding – service. Make sure that your business processes are simple, effective, complete (which means no opportunities to drop the ball), documented, and trained. In that order. Let’s do that again:

1. Simple
2. Effective
3. Complete (this means that each process design is complete, from beginning to completion and monitoring)
4. Documented
5. Trained

Walk into any company that delivers consistently outstanding customer service, and you’ll find excellent process management. Why? Because the end result – outstanding customer service – is dependent on each company defining what service means according to its own brand and standards, defining the services that deliver the required level of care, and being able to train all employees involved in each service area to deliver the same services in the same ways.

Outstanding Service Comes from Effective Management

Good management is essential to business success. Too many businesses approach management as a personality trait, or the thing we do when we’re creating schedules, granting time off, or creating reports. In fact, great management comes from two terms that are not terribly in vogue these days, concepts that seem related to old, hierarchical models of business: command and control. But when you break these concepts down and examine the details, you see how important they are.

Command

I use the term command because it’s still the term that is taught in business schools and recognized as one of the pillars of management. Other effective terms would be influence, motivate, and inspire. In fact, “lead” is the concept we’re going after, but in management theory terms, leadership is more than just this element. So, what is a manager supposed to be doing in this regard? Command is about having a clear vision, communicating it to the team, and ensuring that the team achieves its objectives. Communication skill is critical, because constant, effective communication helps a group of people embrace and share a common set of goals. A manager with a grasp on command creates an environment where people understand what is expected, have enough information to buy into the goals and objectives, are excited about the pursuit of excellence, and are clear that failure to deliver on the team’s goals will result in consequences.

Control

Control is not about controlling people – it’s about controlling the way in which the work is done and whether or not the work is done correctly. Processes, procedures, efficiency, and structure are the domain of control. Good managers not only communicate expectations and motivate people to do as required (command), they also create project plans, delegate activities, evaluate, monitor, measure, and share progress with their teams.

If you’re not being successful in the management areas of command and control, then it is unlikely that your team is capable of delivering outstanding customer service.

Culture is the Binding Agent

A company’s culture is the glue that binds all the important elements of the company together. A strong, positive business culture reinforces the brand, and in the best examples, defines it. The culture of a workplace determines and reflects employee commitment. To create a company culture that will nurture and serve customers, you must have a culture that nurtures and serves employees. Please don’t confuse nurturing with coddling – they are not the same. Employees want to be treated as professionals, with dignity and respect. Study after study demonstrates that employees who are trusted and expected to perform admirably will rise to the occasion.

A strong, positive business culture is created by thoughtful leadership, the right people in the right roles, good processes, strong management, and positive, goal-oriented behavior.

Every business culture is different, but all should include these ingredients. Without a strong culture, you cannot achieve outstanding customer service.

I’ve heard people blame today’s lack of customer service on the continued automation of service, reduced congeniality in society, or on an angrier, more demanding workforce. There may be particles of truth in all that, but I don't think those are the core reasons. Rather, what I observe in both the businesses I patronize and those I consult, is that the frantic pace of business combined with frequent economic and social uncertainty causes business owners and executives to work in a very tactical manner. This leaves little time for thinking about and managing the basics, and does not lend itself to long-term thinking and planning. Which, among other problems, erodes the company’s ability to deliver outstanding customer service.

Delivering outstanding customer service is one of the most critical things a business must do, particularly at a time when consumers expect nothing less. The good news is that dedication to known management fundamentals is half the battle. What will be harder for many companies is the creation of a strong, positive business culture. In fact, strong, positive business culture may be the differentiator of the future. A worthy, rewarding goal to shoot for.

Ready to hire outstanding customer service people? Use Andrea Hill's highly informative, immediately useful handbook, "The How-to-Hire-Handbook for Small Business Owners," and make better hiring decisions today!

We humans aren't particularly fond of change. The status quo feels safe, and it allows us to operate on auto-pilot. But while auto-pilot is excellent for basic functions like breathing and walking, it's generally not a terrific way to navigate one's life.

On a personal level, living too much on auto-pilot means we miss out on living in-the-moment and enjoying the beauty, enlightenment, and humor that comes from experiencing (and not just passing through) the every-day. On a business level, living too much on auto-pilot is more dire; at some point, a business on auto-pilot simply dies of its own apathy.

Some businesses can't avoid change. If you own an electronics store, if you are a software developer, if you own an apparel boutique - you've had no choice but to embrace change. For one thing, the products keep changing. For another, the customers have demanded new sales channels. But somehow the jewelry industry has successfully insulated itself against change - not all of it, but too much of it - and it's now time to come late to the party or to fade out like dinosaurs. It's past time for change.

There are many reasons why jewelry stores have rationalized change avoidance. The inventory is expensive! But can you imagine walking into a Lexus dealer and not finding the new models, colors, and options? Their inventory is certainly expensive. Our security requirements are high! But Apple products have a high street-value, and still they found a way to make their products completely interactive in the store. It takes a long time to become an expert in selling jewelry! Though one doesn't learn to sell cars, complex software, or computers overnight either.

I think the worst thing that ever happened to the jewelry industry was that it was an island for so long. Lack of competition makes one complacent. And when competition started becoming more of an issue, the jewelry industry reacted by carving out regions for exclusives, demanding that suppliers not sell on their own websites, and competing on price. All recipes for a deferred disaster.

If I have totally irritated you by now, then I am not writing this column for you. If I have scared but energized you, then there is tremendous potential for your business.

I have spent the past week in Las Vegas, at the JCK and Couture shows. I have had dozens of meetings with clients and prospective clients, walked the floor, hung out at booths, and observed from corners. One thing is abundantly clear. The time for change is past.

If you're curious about what must happen now, in order to maintain an industry that has an independent retail core and continues to define what makes fine jewelry fine jewelry, here are a few things for you to consider implementing and embracing:

1. Stop commoditizing! We've turned jewelry into the sum of its parts, and that's tragic. If you took a pile of metal, leather, plastic, and electronics to a Mercedes dealer and asked them to make you a Mercedes for the cost of the labor, it would never happen. That paragraph probably barely makes sense to you! Yet we do that every day with jewelry.  The entire industry is complicit in this activity. How did we get to the point of competing on price? Because we didn't effectively execute the next 5 points, so price was all that was left.

2. Respect Brands. Your own, and those of your vendors. There was a time when a jewelry store could take in loads of generic merchandise and play it like it was all the store's brand, but the store's brand may have been weak to begin with, and anyway, that doesn't fly any more. Consumers look for and want to engage with brands. Build a brand for your store that is one part sales and service, two parts merchandise, three parts stories, and four parts character and identity. Your merchandising strategy needs to celebrate the brands and designers you have available to you, and you need to be energetic and creative enough to build a brand for your  store that goes beyond the basics.

3. Leverage technology. In the shop (CAD/CAM, Laser Welders, growing models, and soon - powdered metals!), in your marketing department, in your merchandising, in your management, and on the sales floor. You are no longer competing with the jewelry store on the other side of town. You are competing with jewelry stores across the country. And yes, you are competing with your own vendors. Jewelry is everywhere! You can fight a losing battle to hold onto exclusive products and territory, or you can jump into the action and find out how to be your target customers' preferred supplier no matter what. You need technology to do this. If you are just focused on a narrow, local market you can probably (possibly?) get away with antiquated systems. But remember that even if you don't feel like competing with the rest of the world, the rest of the world feels like competing with you.

4. Get educated. For generations it has been possible to DIY small business. But not any more. Small business owners are increasingly the products of large corporate management environments with MBAs, exiting corporate life to pursue their own dreams of business success. So you're not just competing against big businesses, you're competing against ever-more-sophisticated small businesses. It's never too late to get business training or formal education in business. If your business is heading into a second, third, or fourth generation, make sure your successors are getting terrific educations, and encourage them to work for demanding corporate environments and get rigorous training (from someone who is not a parent) before they step back into the family business.

5. Be a Merchant. Retail has always been about building a shopping experience, and the products are a defining part of that experience. Merchandise selection must be exciting, constantly changing, fueling the perception of the brand, and compelling. Is that difficult? Sure it is. But if you wanted easy you'd be doing a 9-to-5 in a cubicle somewhere. Is it challenging? Yup. You'll have to get creative about turning inventory, just like auto dealers and high-end luxury environments have to do (all retailers, really).

6. Be a Marketer. If you're spending less than 6% of your retail sales volume on marketing and sales efforts (not including salaries and commissions), then you're underspending. Truthfully, if you want to just maintain your current volume and visibility, the spend should be more like 6% - 9%. Do you want to expand your market and grow? Plan on 10% - 13%. That means you must have a brand that creates desire and mitigates price competition (see #2 above), you must have an exciting merchandise perspective (see #5 above), and you must have decent margins (see #1, #2, #3, #4, and #5 above). Marketing is expensive, yes, but so is going out of business.

I was part of the video industry from the very beginning when it was filled with Ma & Pa retailers. I participated in opening the first two Blockbuster stores. I watched the independent video owners disappear, largely due to similar conditions we see in the jewelry industry today. Over a decade later, I was part of a group that was brought to Blockbuster to help it figure out its next thing (which looked a lot like Netflix), but they passed on that. Apathy, failure to market, failure to differentiate, failure to brand, and failure to embrace and use technology (and keep changing with it) all played a role in that industry's rapid changes.

But that's not the change we want. The change we want is the opportunity to define our future as a jewelry industry. And we can. Let's get to it.

It's not what you sell . . . it's how you sell it

This question came to our StrategyWerx Facebook page this week:

I opened my business a year ago and I'm really proud of my work. I have done everything myself - website, marketing - but I know something is missing and I don't know what? I know my business is growing but I want more and faster but I don't have the budget. I need like a little advice.

Hey – I love getting paid for advice, but before you spend any consulting dollars, let’s make sure you have covered all your basics.

This small business owner asking this question is in the service industry, and the advice offered here is suitable for any small business with a physical presence in a community. If your business has a local retail component and a wholesale component, much of the advice will apply as well. So let’s get started!

Your Goals

Make sure you have set a clear goal for three things:

• Total revenue
• Total customers
• Revenue per customer

One or two of these three goals is insufficient. In order to reach your revenue goal (which is typically the only goal new business owners set), you'll need to manage two metrics carefully: the number of new customers you acquire and the amount of revenue you are generating from each customer.

Once you have set these three goals, break them down by month for the next 12 months. Then by week! Why? Because monitoring monthly lets too much time go by. What you want to do is measure your progress on each goal on a daily and weekly basis. Start each morning focused on how many new customers you plan to acquire that day and how many sales you plan to make each day.

Special note here to service providers. You probably think in terms of orders, which leads to waiting for the phone to ring. Don’t wait! Check in with customers to see if they need your service. Make sure you are thinking in terms of selling and not just in terms of taking orders – it will transform your business!

Your Promotion

You must set aside time and dollars to promote your new business. Here’s a checklist of things to do and media to consider:

• Create your ads. That’s right – start this process before you contract with any advertiser or print a single postcard. Too often small business owners find an opportunity to run an ad, and they just slap something together to meet the deadline. Great promotion starts with great messages and graphics. Here’s your to-do list:

Work with an advertising professional (unless you are one). This person will help you create messages and images that effectively convey your brand and product or service offering.

Create two or three strong messages. Do all at the same time. Each message should be an excellent representation of your brand and value proposition. What does that mean? It means that when someone reads any one of your messages, they will say, “Yes! I know what they do and how they apply to me!”

Using those two or three messages, create an ad for each. Your goal is for the ads to look like a set, like a grouping that goes together. Colors, graphics, and voice should be entirely consistent. Think of a stylish person dressed up in three different outfits. Most people don’t go from grunge to preppy to faddish – they maintain a certain look even though the outfits themselves change. Your ads must too.

Once you have three ads that you are thrilled with, have them prepared in two different formats – a square format and a rectangular format. This will give you layout direction, because layouts can change dramatically when you change the geometry of an ad.

Finally, and this is very important, get the original art files that were used to create those ads. You paid for their creation, and you need all the original art. It will likely be in an Adobe AI or PSD format. Don’t settle for a “picture” of your ad (like a JPG, TIFF, or PNG). Get the artwork. Why? Because in some cases you can get layout assistance from the media you are advertising in, and sending them a copy of the art file is the best way to do it. Or at some point you may want to work with a different graphic designer, and you don’t want to pay them to start from scratch. Always ask for your original art files.

• Business Card. Your business card is a marketing device, and you should hand one to every person you encounter who is a reasonable target for your business (or who serves/knows reasonable targets of your business). Think of your business card as a mini-postcard. Make sure one side has your contact information – including an email address and website (and forget the This email address is being protected from spambots. You need JavaScript enabled to view it. email address! Your email address needs to be personal in order to be effective. Nobody wants to send email to a generic recipient). The other side should be one of your messages – clear, visually appealing, and immediately motivating.

• • Local Newspaper. Yes, people still read the newspaper, and advertising rates in most markets are extremely reasonable. The trick is to place an ad that’s large enough to be noticeable on the page, in a section of the paper that’s most likely to be read. If your paper has a local news or arts & entertainment section, these tend to get good readership because that information is not as readily available on the web, and their insertion rates tend to be a bit lower than the main section.

• • Fliers. Put fliers everywhere you think your target customers may be shopping or visiting. Of course, fliers require permission from local governments or from private property owners, so take care of the details. Then, think about what you have to offer. Want to flier cars in a grocery store parking lot? Ask the grocery store if they will give permission in exchange for you putting their sale fliers in your packages or at your store in exchange. A less-annoying option for slightly more expense is a little car-handle door hanger. Of course, there’s no guarantee that some angry guy with a Mercedes won’t throw a fit, but don’t let that objection keep you from doing a legitimate flier program. Fliers have a very high ROI, so make sure your activity is legitimate and go take a walk.

• • Postcards. Postcards are terrific for both mailing and handing out. I generally prefer postcards to brochures. People are very likely to read a postcard – particularly if it’s visually interesting and professionally printed. A brochure often gets dropped in a purse, only to be retrieved later with the crumpled tissues and gum wrappers. Your goal is to get that postcard back out of the purse and onto the desk, refrigerator, handed to the secretary, or saved in the menu drawer of your recipient.

• • Social Media. Do not put your entire promotional fate in the hands of social media. You do need to use social media, but you don’t need to use every channel, nor do you use them all the same way. Social Media is a big topic. If you want to explore it in greater depth, I offer a video called “Change the Way You Think about Social Media.” 

• • Radio. Radio is still a terrific medium that is affordable in most markets. Even better, radio tends to be pretty targeted. Work with a media specialist in your market to determine the best station or mix of stations for your desired customers. Most radio stations will offer you assistance with writing your spot. Show them your advertising and core messages and work together to create something compelling.

• • Yelp. If you haven’t already, claim or add your business on Yelp (https://biz.yelp.com). Ask your customers to please go and review you on Yelp. Yes, we’ve all read articles about bad experiences with bad reviews, but Yelp has a huge following and the news stories about negative reviews are overblown. Consumers have grown to trust Yelp, so get out there, earn your great reviews and start winning some new customers.

• • Website: Make sure your website is up-to-date, professional, and filled with the kind of information that helps you gain trust: local public relations reports, testimonials from happy customers, specific information about who you are and where you are located. A website is an absolute necessity today, and customers judge you by the quality of your presentation. Are you thinking, “but I’m a retail store! They just need to come in anyway!” No matter. Today’s consumer wants to research you first on the web. Your website is now your first, most important impression, so manage it. Make sure you have an email opt-in prominently featured on your website! Because . . .

• • Email Marketing. Email marketing continues to offer one of the highest ROIs in advertising and promotion. Yes, there’s a lot of SPAM out there, but there are also many legitimate, thoughtful business owners sending out information via email that is both wanted by and read by their target audience. Set up a database for managing customer contact information (or better yet, a CRM for managing all your customer data), and use email thoughtfully and effectively to build your business.

• • Network network network! Join the local chamber of commerce, join a women/Latino/African Americans/under 40/or other special-interest-in-business group, a professional group, or a community service club. Get out there and meet people. Yes, it’s time-consuming, but the best way to become known locally is to get to know other business owners and community leaders. (Entrepreneur Magazine offers great advice for business networking in this article - http://www.entrepreneur.com/article/58210) .

• • Collaborative Marketing. Consider other businesses in your area that serve the customers you serve. Approach business owners and, when you find one that is receptive, brainstorm ways to promote each-other’s business – it’s a win/win.

• • Referral Incentives. Don’t just hope for referrals – motivate them! This calls for its own special handout (a postcard is good . . .) with details about what you offer when you get a referral. Offer a discount, points, or a small gift – just make it clear and compelling, and make the rewards immediate.

Did you notice that I said to reward when you get a referral - not just when you make a sale? You want to generate as many prospects as you can in order to eventually close new customers. 

• • Billboard Advertising. Billboards can be very effective – particularly for those who come up with an interesting and memorable message that can be absorbed while driving past at 60 mph.

• • Car Magnets. Yes, I’m serious. For any business category but luxury (where this would backfire, pardon the pun), a promotion on your car tells a story everywhere you drive. Make sure your message can be absorbed in about 1 second though – because that’s all the time you may have!

• • Phone Calls. Don’t be afraid to jump on that phone and promote your business! Nobody likes getting cold calls – and I don’t personally think they’re very effective unless you have a target audience of millions and a response rate of 1% will be meaningful. But call interested prospects and touch base with your customers. A phone call is one of the most personal ways to reach out and sell.

Now here’s the tricky part: You need to be doing (nearly) all these things, all the time. The process of building business awareness is slow, and you must layer on as many impressions as you can in as many places as your target customers are likely to see or hear them.Once you’re doing a bang-up job of promoting your business in these ways, you can consider other things, such as:

Google Ad Words

Starting a Blog

Creating a Groupon

Participating in a trade show

Or even . . . hiring a consultant

The majority of small business failures come down to a lack of sales related to lack of exposure. When people tell me they want to start a business, the first thing I ask is “what’s your sales and marketing plan?” They’re surprised, because they expect me to ask “what are you going to sell?”

Hey. We live in a world where Pet Rocks were once a phenomena. It’s not really about what you sell. It’s all about how you sell it.

Today we’re going to talk about how to think. Wait. Before you reject this post immediately, consider this: You’re probably not very good at thinking. Most people aren’t.

Here’s what most of us are good at: Reacting, daydreaming, denying, endorsing, commiserating, fortifying, arguing, wishing, and sometimes even wondering. But thinking? That’s an entirely different category of brain activity.

It all starts when we’re very young. If you’ve recently watched a toddler play, you know that many of their ideas involve physical risk. They spend a lot of time thinking, and much of that thinking leads to being told “no!” When that’s not happening, well-meaning adults are stepping in to show them how things are done, or discouraging them from trying to put round parts in square holes. Fast-forward to elementary school. Children aren’t taught to think so much as they are taught to memorize and follow instructions. In fact, children who are active thinkers are often viewed as disruptive or disrespectful; thinking leads to questioning, and questioning takes time away from planned curriculum. If a young adult pursues a liberal arts degree and takes some classes like comparative literature, comparative religion, or philosophy, there’s a good chance they learn about thinking in those classes. But unless the professor knows to put vocabulary to what they are doing (the mechanics of thinking), students often find these experiences confusing and even frustrating. After all, they’ve spent the previous 18 years doing rather than thinking. Then they graduate and get a job, where in all likelihood they are told what to do and how it will be measured. Unless management is particularly secure or enlightened, thinking isn’t exactly promoted.

But now you own a business, and you must be able to think. You need to reach into your own brain and conjure up insights, ideas, and solutions that you did not know were there. How do you do that?

There are as many ways to think as there are thinking individuals (which is, not as many as the world would presumably benefit from). But we can apply a loose framework to thinking, a framework you can adapt to your own particular style.

Let’s start with remembering to think. This may sound silly, but most people leap from thought to action without any analysis in-between.

• When you hear a new piece of information, do you question it?
• When you realize you may not be able to keep up with orders in the next few months and think, “I better hire someone fast!” do you then challenge yourself by asking, “Before I run that want ad – why do I assume that’s the right action to take?”
• Do you schedule time to test the way you do things and see if there is a better way?

On the one hand, using past experience and muscle memory are good things; if we had to start every task by rethinking it we would never get anything done. On the other hand, our thoughts are made up of a hearty stew of good, bad, and mis- information. The most effective people spend their lives trying to achieve a good balance of move-along and think-about-it. What is your balance?

In addition to the need to remember to think, how’s your confidence in your thinking?

• When you encounter a business problem, do you make time in your schedule to dissect the problem and develop potential solutions? Or do you go straight for avoidance, hoping the problem will solve itself?
• Do you recognize that your own thoughts can build on themselves - creating something entirely new and even outside your usual expertise - if you just give them some space and a bit of a workout?

The reason it’s so difficult to create true computer artificial intelligence is that the human brain is so good at taking past experiences, exposures, and emotions; adding in several doses of new information; rapidly working through the potential repercussions of a variety of scenarios; and creating solutions. Not just Einstein’s brain, or the kids’ at MIT’s brains. Your brain. Your brain was made for this, though most people don’t remember to use it this way.

Now let’s talk about why we think. We think to analyze something, learn something new, create something, or solve problems. If you didn’t read my article from LinkedIn/Pulse on activity versus intention, take a moment to read it. One of the biggest mistakes we make is that we favor activity over thinking – and only thinking can solve problems at the root and create new opportunities.

So. How do you think? This has been the subject of innumerable books, classes, and arguments throughout human history. I submit this simple approach to jumpstart a more consistent and effective thinking regimen.

Framing

You start by identifying what you want to accomplish with your thinking. I like to write it on a piece of paper. In fact, I nearly always think with a pen in my hand. Perhaps you write, “I need to accomplish more with my marketing this year.” Let’s call this framing the issue. You’re not going to try to solve your bookkeeping issues, your Aunt Enid’s bigotry, and your teenage son’s resistance to showering all at the same time. Right now, you’re just working on marketing (if, in the middle of this process, you start thinking about Aunt Enid, you’re not thinking – you’re drifting. Put her aside and get back to work).

Current Reality

Next, conduct a comprehensive review of what is. This could include a list of everything you did related to marketing in the past year, how each marketing effort performed, things you believe you could have done better, how much you spent, and anything that surprised you, delighted you, or disappointed you. A word of advice: don’t start by diving into your marketing records and files. That will slow you down and tangle you in the weeds. Start with brainstorming, writing everything you can think of rapidly until you run out of memories regarding what is. In some cases, this brainstorming may be sufficient to move on to the next step. In other cases, you may want to supplement with specific research to fill in a few gaps or details.

Once your review of what is is complete, separate your list into “things that performed well/met/exceeded expectations” and “things that did not meet expectations.”

Identify and Challenge Assumptions

Now it’s time to focus on the things that did not meet expectations. Take each one, one at a time, and make a list of all your assumptions about it. For instance, let’s pretend that one of your failed-to-meet-expectations items was social media promotion. Your work may look like this:

Social Media Promotion Did Not Increase Sales

My Assumptions:

• Just Facebook and Instagram are sufficient
• I can post 1-2 times each day on both
• I can skip weekends
• I can do my posts on Instagram and simply share them to Facebook for my Facebook post
• I can limit my posts to only items I make/sell
• People will follow the links on interesting products to my website
• People will buy once they reach my website

You may need to think hard to get to the heart of your assumptions. Using a technique called "The Five Whys" can be useful. Here's how it works:

Assumption: My business doesn't have to do social media posts on the weekend.

Why do I think my business doesn't have to do social media posts on the weekend?

Because people don't expect me to post business posts on the weekend.

Why do I think people don't expect me to post business posts on the weekend?

Because people are doing other, more important things than social media.

Why do I think people are doing things other than social media on the weekend?

Because I don't really use social media on the weekend.

Core assumption: Because I don't use social media on the weekend, I assume that others don't either.

The concept of the Five Whys is that you can get to the heart of a problem or assumption if you drill down five times. In this case, peeling back three layers of assumption was all it took to get to the core assumption.

Once you create your list of assumptions, it’s time to challenge each one. This is where you will likely introduce new information – outside information – into your thinking. You may realize you need to take an upcoming class on social media. You may reach out to an expert for an hour or two of Q&A. You may search for specific insights in Google or Bing, such as:

• How many social media platforms must I be on?
• How many times each day should I post on social media?
• Does a business need to be on social media on the weekends?
• How do I get people from my social media posts to my website?

The process of identifying and challenging assumptions is a powerful way to take your thinking to the next level. As you do this work, write next to each assumption whether or not it was correct. If it was incorrect, jot a few notes about what you have learned.

What Ifs

Using the information you have compiled so far, create a list of things you could do differently in the upcoming year. Once again, you’re brainstorming. Don’t try to build a plan for each idea immediately. Instead, create a list, writing down ideas as rapidly as they come to you until the idea flow dries up.

Once you complete your What Ifs list, organize them from best ideas to least-best ideas (there are no worst ideas in a brainstorming).

From Thinking to Doing

It is at this point that most thinkers cross the threshold from thinking to doing. At the point of developing your What Ifs, you are ready to create a plan.

Is this a simplified look at thinking? Yes, but not simplistic. These basic steps: framing an issue, establishing your current reality, challenging and correcting assumptions, and generating new ideas are the fundamental steps of thinking. These steps never even happen if you don’t remember to stop and think, and you gain confidence in your ability to come up with new and better ideas as you practice them.

So this is Resolution 2 for a New Year. Remember to think. Think. Get better at thinking. Your business will thank you.

I tend to have very vivid dreams, and when I wake up they’re still with me. But have you ever had a dream and tried to explain it to someone else? It’s difficult to do, because dreams rarely have a clear beginning, middle, or end, and the storylines tend to be chaotic. No matter how much vivid detail you recall from your dreams, it is extremely difficult to explain them in waking life.

I have noticed that many small business owners have more of a dream for their business than a story.

That dream may be something that is clear in their own minds, but it’s very difficult to convey to anyone else. Even if you are a solopreneur, your business vision needs to be more story and less dream. Why? Because business strategy depends on a clear business vision, and you cannot create a vision without a well articulated brand story.

For 2016, resolve to figure out your business story. Unlike a dream, a story always has a destination – an end result that is clear to you (the storyteller) from the beginning. Every step of your story is a building block leading to that conclusion. Your story should include interesting, unique elements that draw in the listener and make them want to know what happens next. Perhaps most important of all, your story should be so exciting and motivating to you, that during those times when the action in your story feels like it’s lagging, you can step back and remember where you’re going with it and remain enthusiastic and committed.

If you know your story, you have a vision. If you have a vision, you can create a strategy. Resolve to wrap your mind around your story now, so you can spend the rest of the year telling it.

I'm a big fan of consultants, and not just because I launched a consulting firm this year. I've hired consultants often throughout my years as a chief executive at several large firms, and have found their assistance to be invaluable. I start with the premise "If you're the smartest person in the room, you're in the wrong room," and go from there.

I had to figure out how to use consultants. Nobody taught me, and I used them incorrectly several times before I learned my lessons. Interestingly, the consultants themselves were rarely willing to tell me what I needed to know to benefit from them the most. So this column is for all those willing learners out there who may wish to hire a consultant and want to know how to extract every dollar of value.

Hire the Right Consultant

This sounds crazy simple, but it's not. It seems like every laid-off executive from one coast to the next is a consultant. Many consultants claim to have skills they cannot actually demonstrate in real life. Just because a person has ideas about marketing doesn't mean they've actually tested those ideas on their own budget. And just because someone worked directly for a CEO, say, as an HR Executive, doesn't mean they know beans about how to lay out a business strategy.

Vet your consultants carefully. Make sure the consultant has actually had a job directly in the area of expertise for which you are seeking their advice. Ask them to tell you about their biggest mistakes in those roles. One of the things you are paying for with a consultant is the opportunity to learn from the consultant's mistakes and possibly avoid making some of your own. If they haven't made any noteworthy mistakes, they either weren't doing much or they weren't doing it for long.

Do your due diligence. Interview carefully and check references. While it is much easier to cut the cord with a consultant than an employee, you risk spending a lot of money on inadequate consulting services before you realize it. Hire a consultant with the same care you would hire an employee.

Ensure potential consultants enjoy the highest level of professional respect for their integrity and business ethics. This person will be in a position to suggest that you do certain things with your business. You don't want to be at the starting gate wondering if you are about to do something shady.

Ask potential consultants how they would approach specific issues in your business. If they are reluctant to discuss their methodology, either they don't have one or they are paranoid that you will take their idea and run with it. A good consultant isn't just selling a great methodology - she is also selling her thought process and her ability to analyze issues and grasp nuances. A confident professional will happily discuss actual business issues and give you lots of ideas about how you could resolve them - with or without her.

A Consultant is Not a Contractor

This is an area that is often confusing. A consultant is someone who advises you on your business or a segment of your business. The consultant participates in reviewing history, analyzing performance, and making recommendations about how to proceed. Typically this work is done with the expectation that people within the organization will be taught to do the work the consultant is spearheading. A good consultant is an excellent teacher, handing off business knowledge with each recommendation, analysis, and suggestion.

Consultants are often confused with contractors. A contractor may be hired to manage a specific project or do specific jobs. This person sets his own schedule and bills by the project or by the hour. The contractor may or may not set direction (he may take direction from the consultant).

When the Consultant is Doing Nothing

Beware any professional who blazes through your doors with suggestions flying. Sometimes the most important work a consultant can do is observe. Every business that is still in business is doing many things right. A good consultant doesn't wish to undo those things - she wants to supplement and refine them. So if she tells you she needs time to observe, ask questions of your staff, and observe some more, trust that.

A Consultant is Not a Magician

Just because your consultant knows how to do something that you don't doesn't mean she can make it happen tomorrow. Are you looking for cultural change? Give it two years. A major shift in your brand perception? Minimum 10 months. Implement a new selling strategy? Same. Implementing new operating systems? Six months to plan, 4 months to implement/go-live, 2 more months before people stop complaining, a year to true benefits. A consultant's superior knowledge and experience in an area of change can make the process go smoother, but some things take as long as they take, and many things are dependent on your organization's acceptance and participation style.

A Consultant is Not a Genie

If a person tells you he or she can guide you through a major business initiative without making mistakes, run for the exits. You aren't paying for the benefit of someone who never makes mistakes - that doesn't exist. You are paying for the benefit of someone who makes more sophisticated mistakes because the dumb mistakes are behind her. You are paying for the benefit of someone who knows her craft well enough to suggest something new and possibly groundbreaking with reasonable expectation of success. You are paying for the opportunity to take it up a notch, not play it safe. If you just want to play it safe you can do that without consulting expense.

You May Not Always Understand - or Agree With - Your Consultant

If you already knew everything you wouldn't need a consultant (remember the saying "If you're the smartest person in the room, you're in the wrong room"). If your consultant is truly an expert, she will talk about things you don't understand. Ask her to break it down for you, explain where she is coming from and to help you understand it. That's an appropriate role for the consultant-as-teacher.  But if you're arguing with your consultant about whether or not she is right, take a step back. You may actually be arguing about your fear of taking a risk or your need to understand something better before you proceed - and those arguments are understandable. But if you're arguing about something you don't know as if you know it, what's the point?

Your Consultant is Not Your Employee

Your consultant is not your employee. Your consultant should be a challenger, ruffle your feathers, and tell you want you need to hear (versus what you want to hear).  Your consultant should be unwaveringly direct.

Your consultant will not drop everything when you need her. If she's good (and remember, that's what you need), she has lots of other customers.

Good consultants aren't cheap. You want a consultant with the skills and experience to be paid at the top of her field, and her hourly rate will reflect that.  Think of it as rent-an-executive for business owners who otherwise couldn't afford that skillset.

Still Want to Hire a Consultant?

Does this sound daunting?

Well, business is demanding. It makes us take risks, spend money we don't want to spend, and put our identities and self-worth on the line. We hire consultants to help us take those risks and make necessary changes.  An excellent consultant can make a huge difference to your bottom line and your optimism for your business. Once you find the right one, remember that she is not a magician, a contractor, a genie, or an employee. Plan it right, and you'll have engaged an expert, a business partner, and a support system.

If it were true that the only thing consumers care about is price, then the arrival of a Wal-Mart would automatically kill every other business in a town. And though popular opinion suggests that this is the effect of Wal-Mart, studies (Artz & Stone 2006; AAEA 2006) have found that although the introduction of a Wal-Mart Super Store has a negative effect on rural retail initially, after two years the Wal-Mart effect dissipates. One of the lasting results of the Wal-Mart effect seems to be generally lower prices in a market, but it is difficult to discern to what extent lower prices are driven by Wal-Mart versus by a trend toward lower prices in general.

Of course, consumers do care about price. Ask them what influences their buying behavior, and they’ll tell you that price is the thing they care about most. Follow them around and study what they do, however, and you’ll discover that price is just one decision-driver, and generally not the most important. Why do consumers say price matters most when their buying behavior does not support this? No one is quite sure, but market research professionals suspect two factors: 1) consumers feel guilty about the amount of money they spend, and so report heightened virtuousness relative to price consciousness; and 2) faced with a sea of sameness across all consumer product categories, the only differentiator consumers experience in most cases is price, so price stands out.

I won’t even attempt to address consumer guilt, but I find the second issue to be of significant importance to small business owners – particularly those competing in luxury markets.

When a company fails to establish compelling reasons to buy its products, it is reduced to competing on price. This is market reactivity as a form of strategy, and it’s an excellent formula for going out of business. The only time competing on price is effective occurs when competing on price is the strategy. Wal-Mart’s strategy is price. Part 1 of the price game looks at all product competitors within a particular market and prices against them. That’s the easy part. Part 2 of the price game develops strategies for reducing the costs of operations and products to protect margins once prices are dropped. To build an organization that can successfully compete on price, a company must focus all energy, resources, and capital on creating systems and supply chains with maximum efficiency – all costs must be rigorously controlled and the rate at which products and cash move through the system must be very high. This strategy is out of reach for most – if not all – small business owners. Unfortunately, most small business owners play Part 1 of the price game, but lack knowledge or capital to play Part 2. The result is reduced cash flow and a fight for survival. So what’s a small business owner to do?

Consider playing a new game, a game that also has two parts.

Part 1: Develop a strategy that does not depend on price to attract customers. A good strategy considers multiple elements. Most business owners focus on the what I have to sell element exclusively, but that element is too limiting. What other compelling reasons to buy can you offer?

• Do you have specific knowledge of your customers, knowledge that significantly improves the customer experience?
• Do you eliminate any undesirable effects, making your company or product perform better than competitors?
• Does your product or shopping experience save your customer time, improve his or her ability to make a decision, reduce your customer’s risk, or contribute positively to his or her self-image?
• Can you sell your product in a way that solves a problem, creates new opportunities, or improves the shopping experience for your customers?
• Can you offer any exclusive benefits?
• Do you offer complementary products or services that enhance your overall value?

The process of determining three or four distinct strategic elements around which you will build your brand, on which you will base your selling and marketing strategy, and through which you will differentiate your company in the mind of your customer is the process of strategy. Good strategy is the first defense against mindless price competition.

Part 2: Look beyond the usual competitors. Business owners tend to assume that consumers are choosing between two similar products from two direct competitors. Let’s meddle with the sacred cow of the jewelry industry for a moment – the diamond engagement ring. When a young man prices a diamond engagement ring at Blue Nile, JC Penney, and the local independent jewelry store, is he creating a competitive space among diamond engagement ring sellers? Yes, he is. But are Blue Nile, JC Penney, and the independent retailer the only competitors in the arena? Definitely not. The other competitors are the florist, the cake baker, the wedding dress maker, the travel agent, the tourism promoters of a variety of potentially interesting honeymoon destinations, and (perhaps most important) the buyer’s self-image.

But wait! That’s not all! The diamond engagement ring seller is also competing against the restaurants the young man may choose not to eat at, the movies he may choose not to go to, the stereo equipment he will defer, the real estate agent showing him apartments or houses, and the iPad he wanted for his birthday. Most independent jewelers accept that selling on service is the alternative to selling on price, but after that, they run out of creative ideas for how to sell that idea. Part 2 of this game is NOT about trying to compete against all of these interests with every sale because that will just drive you crazy. Part 2 is about recognizing the full range of potential competitors, then crafting a compelling offer and image that sets your business apart in the mind of your potential customers.

This new game requires creative thinking, knowledge of strategic planning, the ability to project how various ideas will play out in the market, and ultimately, the willingness to make a choice about strategy and brand and then stick with it. The reward for a well-managed strategic process is the ability to run a business that is largely impervious to price competition. You’ll still have to price for value because consumers will always care about whether or not they are getting good value for their money. But pricing for value is a game you can win. And ultimately, that’s the only kind of game you really want to play.

© 2010. Andrea M. Hill

I was working with a client yesterday and she expressed a fear that is common to many people these days. This woman is extremely intelligent, highly successful, and well disciplined, yet she has the fear of being professionally and technically left behind.

It’s a reasonable fear. The world is changing quickly, driven largely by the pace of technology innovation. Twenty years ago everyone was aware that computers were changing the face of business, but the general perception was that computers were the domain of ‘computer people.’ 15 years ago business sociologists were telling us that the big chasm between Baby Boomers and Generation Y would be a difference in work ethic. Today it is apparent that Boomers are alienated by technology that their Gen Y counterparts take for granted.

Emerging manufacturing technology highlights the insufficiency of tool and die skills without computer aided design skills. Marketers who can’t navigate high end software and challenging database environments fall behind. Warehouse workers interact at a high level with automation tools such as mini-computers strapped to their wrists. Artists and craftspeople must master the demands of having their own websites – or at least be capable of providing direction to a website developer and manager. And the business executive who can’t independently navigate the myriad of internet and wireless protocols can get shut out of their business for days on end (or drive some poor IT support person crazy at all hours).

The challenges go beyond computerized workstations. Defined benefits and company-provided pension plans have given way to individual structuring of retirement strategies – leading to a requirement that all individuals understand markets and economics and investment strategies – which themselves  become more complex every year. Competition is constantly changing as the barriers to entry for new business continue to shrink. Even our communication is evolving rapidly as language becomes more technical.

Some people have opted out of the whole problem by declining to develop computer or technical skills. I don’t consider this an option. Anyone reading this blog would agree that the inability to read or write is a guarantee of economic deprivation. I believe computer illiteracy will contribute to a similar result in the near future (and to a certain extent, already is). If you moved to a non-English speaking country, you could not expect to gain successful employment or integrate into society without speaking the language. In the case of computers and technology, the other language has moved here, and everyone must be proficient. When a normally intelligent person “can’t” learn a new skill, resistance – not aptitude – is generally the culprit. Ending residual computer resistance will open the door to new competencies quickly for most people.

But what about my client, the very smart executive who is worried about keeping up? In her case, we discussed what she is afraid of keeping up with or in. She has broad business responsibilities, but they are not all-encompassing. So we made a list of the general areas of knowledge in which she can’t afford to fall behind, and then we identified a few key resources to help her stay on top of her game. After evaluating the field of possibilities, she decided she will need to incorporate two new monthly magazines, one weekly magazine, and 4-6 training classes (online or live) each year to sufficiently supplement her knowledge. In addition, she will enhance her project and decision-making work by including more research, particularly research of a peer-reviewed or academic nature. I could almost see her cortisol levels drop as she realized she could design a strategy for staying ahead of her game.

For anyone who plans to work past the age of 60, making a plan for staying au courant in the important developments of their chosen profession is a wise move. The knowledge that sort of stumbles onto us is a gift from the universe. But the knowledge we planfully acquire is an important gift we give ourselves.

(c) 2007, Andrea M. Hill

I am of a split mind when it comes to  comparison between the jewelry industry and the fashion industry. On the one hand, jewelry is definitely part of a woman’s wardrobe and it plays an important role in her expression of her fashion sense (this is true for men too, but to a lesser extent). On the other hand, jewelry is more enduring than fashion, lasting far longer than for one or a few seasons.

Of course, there is the whole category of fashion jewelry, which is more trend oriented and typically at lower price points than fine jewelry.  Fashion jewelry should be getting a lot of our attention, as social and economic trends show that consumers (outside the 1%) are spending less money less often on luxury goods. In fact, fashion jewelry is where department stores, internet sellers, and boutiques are stealing the independent retail jeweler’s lunch.

These observations cause me to ask two questions:

1. Why do the independent retail jewelers not focus more attention on well-made, well-designed fashion jewelry?
2. Why does the jewelry industry not have more industry-sponsored consumer-focused promotion, similar to the fashion industry’s various fashion weeks and design councils?

I suspect the answer to the first question lies in two issues: First, the jewelry industry tends to be very inwardly focused, which has resulted in it becoming further and further detached from the consumer. Second, the independent retail jewelers are still sitting on far too much inventory - and much of the reason for that could be due to the first issue.  So let's talk about the fact that the industry is not sufficiently consumer-focused.

The Jewelry Industry Isn't Focused on the Consumer

To be fair, there is one organization in the industry that is focused on taking-it-to-the consumer: JA’s Jewelry Information Center (JIC). In my observation, that group, led by Amanda Gizzi, does way more with paltry resources than one would think possible, and does more to keep the industry’s interests on the radar of consumer editors than any other organization or even combination of organizations. Without JIC, the consumer press would form its perspectives of jewelry entirely outside the influence of the jewelry industry. Think about that for a moment. Think about how much sway the fashion industry itself has on fashion publications. Consumers form their opinions of fashion based on what the fashion industry tells them to think, through fashion shows, fashion editorial, and what shows up in retail store windows.

But with all due respect to what JIC can accomplish with its limited resources, it’s not enough. Why? One concern is that the industry sends out information to the consumer world in the form of editorial, but it doesn’t receive any feedback, or certainly not feedback that is consolidated enough to consider the implications. Another concern is that consumer-focused promotion is not addressed adequately (in fact, barely at all) at the manufacturer and industry levels.

We Must Learn from Other Industries

Fashion shows not only provide information to the marketplace, they deliver almost immediate feedback from the marketplace. Not only do the buyers for all the major department stores show up, but so does the press and a large contingent of influential consumers. At, during, and after each fashion show, there is immediate feedback. The fashions are dissected in the fashion press, the fashion press and business press publish both business and consumer reactions to the styles, and the buying behavior of the department store buyers (well-informed by constant and aggressive consumer research) is a direct line of feedback regarding what will be hot-or-not for that season.

This is also how the Consumer Electronics Shows work for the gadgets industry, how Cannes and Sundance work for the film industry, and how the Tokyo Motor Show and the North American International Auto Show work for the automobile industry.

Of course, these industries are significantly larger in dollars than the jewelry industry.*

But jewelry requires more early and ongoing feedback from consumers than other relatively sized industries such as cosmetics or footwear, where lower price points make experimentation at retail more palatable and in which sports stars, movie stars, and the fashion industry have significant influence. Consolidation of retail in footwear and cosmetics means that individual retail companies have larger advertising and promotion budgets, and it’s noteworthy that the manufacturers of those products speak directly to the consumer in major, ongoing promotional campaigns.

Perhaps a better comparison of a similar-sized industry would be the leisure products industry, which sells high-priced goods like RVs, camping equipment, boats, and 4-wheelers. Through publications aimed at enthusiasts and regional sporting goods shows, the leisure products industry introduces consumers to new features and styles. This gets consumers excited about heading out to retail to buy new toys. Large retailers like Cabelas may have significant advertising budgets, but smaller retailers also benefit from the shows and the promotional support of manufacturers.

What got me thinking about this? An article in today’s Luxury Daily that talks about how the Council of Fashion Designers of America (CFDA) is looking for ways to improve New York’s Fashion Week. According to Steven Kolb, president and CEO of CFDA, “Fashion Week has evolved over the years with the influence of technology, but the format and function of fashion week have stayed the same.” CFDA has commissioned a study to discover how they can “use technology to its fullest advantage, and how designers can best maximize their resources to engage the customer.”

I think the jewelry industry should take this advice to heart as well. A tremendous amount of energy has gone into demanding that DeBeers support the industry (again) with a(nother) consumer advertising campaign, and DeBeers has responded with a half-hearted re-do of its former A Diamond is Forever message. Not only do I suspect this message’s time has come and gone, I also believe that our expectation that DeBeers bail out the industry is misplaced.

Closed Systems Do Not Evolve

The jewelry industry has become a closed system. The majority of its energy is focused on generating income within the industry, with little attention paid to the consumers we require to keep us in business. What is the answer? I’m not exactly sure, though I have some ideas. But here’s what I do know: As an industry, we must talk about this problem. It’s bigger than sustainability, it’s bigger than sourcing, it’s bigger than low-cost manufacturing from other countries, or Blue Nile or Sam’s Club or Costco. In fact, if the industry doesn’t resolve this major disconnect between the consumer and those of us who make and sell jewelry, we could solve all those other problems and still become entirely irrelevant in the next 10 years.

Let’s discuss.

* (US Film Industry: $679 billion; US Automotive Industry: $524 billion; US Fashion Industry: $225 billion; US Consumer Electronics Industry: $208 billion; US Jewelry Industry: $63.3 billion)

Everyone wants to know:

• What is the future of retail?
• Who will tell us what it looks like?
• What do consumers really want?
• How do we remain relevant?

These are urgent questions. How we get products to consumers has changed dramatically and forever, and a big chunk of our economy hinges on how well we respond to the changes. I think we can all agree that a retail future consisting entirely of Amazon, Walmart, and eBay wouldn’t be healthy.

In the meantime, our supply chain structures are wobbling. In the blink of an eye, consumers saw and embraced the opportunity to acquire what they want, when they want it, from the comfort of their own home, in their cubicle, or while watching the kids play soccer. The industry has primarily tried to address the problem with lower prices and price competition (“Beat the Internet” anyone?), but all that has accomplished is to strip economic value out of the supply chain.

The stress of technology-driven business change is so intense, that perhaps we don’t realize that other people in other times have gone through the same issues. Different technologies, but the stakes were surely the same to them, as were the challenges.

I can almost imagine how it felt to be alive when Guttenberg’s printing press came online. Printing presses democratized knowledge and changed the way we learn, educate, write, and think. The parallels to the way computers have changed our world are very strong, even though this happened nearly 600 years ago. Guttenberg’s invention came in the middle of the Renaissance, a time most people think of as being the cultural bridge between the Middle Ages and modern history. But we also know that the Renaissance was a time of deep nostalgia for the past, accompanied by a feeling of ennui about the future and the advances of humanity. Sound familiar?

Beyond the printing press, the Renaissance was a time of absorbing new knowledge – primarily mathematics (until then the purview of Arabic peoples). Mathematics and logic transformed thought and behavior, much like modern computing has changed thought and behavior (and without which, modern computing could not have happened). The philosophy of humanism was developed during this time, as people shifted from thinking merely about survival to what it meant to live well. There was an explosion of new techniques in architecture and art, and writing was completely transformed. While some bemoaned the death of poetry, others saw brand new figurative horizons opening before them. Again, sound familiar?

Renaissance history is a favorite study of mine, but it’s also an appropriate analogy for today. For one thing, it reminds us that history has been fraught with dramatic changes, and that humanity continues to plow forward; learning, prospering, and evolving (often despite ourselves). But another comparison is also apt: At its heart, the Renaissance was a period of rich and productive collaboration between thinkers of every discipline. Artists, mathematicians, philosophers, writers, and scientists shared ideas across disciplines, which led to an explosion of human knowledge. Each person, immersed in his individual discipline, was unable to see the bigger picture. The potential for progress emerged as they threw their ideas and questions and insights into the middle of the table and put them up for discovery and debate.

Today we are confronted with multiple challenges to business-as-usual. Technology hasn’t just changed the way we shop; it’s changed the way we think, learn, write, communicate, and socialize. Just as the introduction of math disrupted and changed all the other disciplines 600 years ago, technology has done the same for us (not to us) today. And I believe the way to address that change is to embrace it – with heaping helpings of collaboration.

Just last week, a retailer said to me, “You’re saying that marketing today requires extensive knowledge of how to do online marketing. I’m already too busy. How can I learn to do all this too?”

To which I said, “You’re asking the wrong question. Don’t ask ‘how do I learn to do all this too?’  Ask, ‘how do I find the right people to collaborate with?’”

Small business owners fence themselves in with the idea that they must do everything themselves. Instead, we should be seeking every possible collaboration. Collaboration allows us to focus on what we’re good at, while tapping into what others are good at. In the process, we all learn, and that learning happens more gracefully because it’s not overshadowed by the intense pressure of time and expense (or risk).

In some respects, this is already occurring. Significant numbers of workers have shifted from being employees to being contractors – in essence, providing their collaboration for a fee to companies who need their talents. The ubiquitous cloud is another form of mass collaboration; instead of companies housing and managing their own servers and software, they contract for portions of servers and subscriptions to software, leaving it to the service companies to manage their own software, hardware, and the constant advances of technology.

How can the jewelry industry embrace more collaboration? One obvious way is to create more marketing and selling synergies between individuals, organizations, and parts of the supply chain. The emergence of omni-channel strategies will further disrupt the notion of the traditional supply chain, forcing our current distribution networks to innovate or fail.

The retail store as we know it is almost entirely a construct of the 20th Century. Something else will be next. The word Renaissance literally means rebirth. The outstanding contribution of the Renaissance was the leap forward in human understanding, the mechanism was collaboration. It’s time for our own Renaissance, and I think the nexus, this time, will be rooted in collaboration as well.

Part II of this article: Collaborations to Watch

Remember a time when different jewelry producers could place their collections in retail stores, and rely on retail stores to bring in traffic? The numbers game back then was one of local customers. Retailers who were on a busy street, in a mall with good traffic, or who had achieved destination retailer status could bring in the numbers.

So what happens when the foot traffic isn’t there and most malls are ghosts of their former selves?

The destination retailer route is still alive and well, and retailers who do a good job promoting themselves to an ample consumer population – either by being located in an area with sufficient population density or by being savvy online retailers – are still a good bet. Unfortunately, that retailer is the exception in the specialty jewelry retailer world at this time. It could change, but if it’s going to, it needs to happen quickly.

That leaves designers with the option of selling direct, and the numbers game becomes an entirely different animal. Let’s look at two different types of numbers games:

The All-in-One Numbers Game

If you’re a company like Stuller or Rio Grande, you stock 30,000 – 35,000 different products from hundreds of different vendors. The mere fact that they do this means that a relatively small population – people who make jewelry – will end up at their doorstep for the things they can’t find from smaller wholesalers in their local market. The numbers game they are playing is basically a product numbers game, and they compete for the same roughly 20,000 – 30,000 customers. One can make a nice business out of that.

But what if you’re a designer that carries 50 – 200 products, or a retailer who carries 500 – 1,800 products? Without “superstore” status, what do you have to offer? Even if you sell your products in a dense population area, you can’t be sure you’ll sell those products in sufficient quantities to make a profit. Not when you’re competing with other people who do the same thing you do all over the country and even around the world.

No, your numbers game becomes the consumer numbers game, and for that you need the internet.

The Find-the-Consumers-and-Help-Them-Find-You Numbers Game

How many sales would you need each year to create the profits you want? 300? 3,000? There are probably 300-3,000 people who would be willing to buy your products at your prices, but you have to find them and you have to make it easy for them to find you. To do this, you must learn how to do digital marketing.

Are you excited about your 1,800 Twitter followers? You probably need closer to 20,000 to generate meaningful web traffic. And your 3,000 Facebook followers? You’ll need to at least triple that. Social Media is about far more than talking to an audience and hoping they talk back. It’s about finding new prospects, of the right attributes to ensure interest in your products, in significant enough numbers to generate sales traffic.

Do you make prudent use of the social media advertising opportunities available to you? Do you know when to boost a post, how to target your potential audience, how to write compelling headlines and which images to show? Social media advertising is not an art nor a hobby – it’s a discipline with plenty of data behind it. It should be approached with the same seriousness and intention that you use when buying television or radio time.

Are you sending email to your customer base? Weekly? Sending a quarterly email is entirely insufficient to generate the kind of top-of-mind awareness your business requires. And how many new email addresses are you adding to your email list? If you’re only collecting the email addresses of people who actually purchase, you’re missing an entire prospecting universe. Your digital marketing strategy must include active pursuit of the email addresses of people likely to be interested in buying from you. Your email marketing strategy should feel like a serial novel, thoughtfully telling the story of your brand through a selection of product offers, interesting information, events, reflections, and images.

Do you have a website that not only tells your story, but actively lists all your products and provides excellent descriptions of each product – complete with the search terms consumers are likely to use when looking for something just like that? Search is one of the most compelling ways to find consumers today, and maximizing the value of your website and product descriptions can bring you consumers you would never have known to target. Once the searching consumer finds your product, does your website inspire the confidence needed to make an online purchase?

These are just some of the things your business must do well in order to find the 300 – 3,000 consumers who will buy your goods this year, and next, and the one after. And here’s the good news: digital marketing isn’t rocket science. You can learn it yourself, or you can hire someone to do it for you. Either way, you need to find those consumers. And you need to help them find you.

If I had to run a distance of five miles faster than a relatively fit attacker, I would probably die. No, I’m sure I would die. In fact, less than two miles into running my fastest, I would probably turn around and beg the attacker to kill me.

Why? Because I am not fit enough to run at top speed for five miles, and adrenaline alone can only take one so far before muscles and oxygen give out.

If I was told I had until next week to prepare myself to run five miles at top speed or die, I would pull in every favor I am owed and go into deep hiding. I know for a fact that I could not prepare myself for that in a week. Willingness, optimism, and even deep determination are ultimately no replacement for fitness developed with disciplined practice over time.

If I was told I had until next month to prepare myself to run five miles at top speed or die, I would start to train. I would train as many hours a day as the best trainer I could hire would allow me to train and I would follow his or her every instruction to the letter. I would beg, borrow, and sell my favorite belongings in order to afford that trainer. Yet even as I worked with incredible focus and intent, I would wonder if my muscles, bones, circulation, and respiratory system could possibly strengthen as much as necessary in the very short time I had. And every night before passing out I would curse myself for being so out of shape in the first place.

I don’t particularly expect a death threat any time soon, and if I do experience one, it’s unlikely to come from someone who is angry enough to chase me for five miles. So I probably won’t start training as if my life depends on it. I’ll keep up my somewhat desultory exercise regimen and continue to eat healthy food, but I’m just not motivated to train for a mini-marathon.

But if you are a small business owner, the chances that someone (you, your partner, your unprepared staff, an ill-chosen advisor, or a competitor) will run your business down and kill it are remarkably high. The statistics say your business has more than a 74% chance of being killed within five years of start-up. If statistics showed that I had a 74% or greater chance of having to run five miles for my life in the next five years, there would be nothing desultory about my exercise regimen right now.

It takes time, good training, discipline, and practice practice practice to prepare your business for the run of its life. Trying on various sales strategies for size, dabbling in one technology idea after another, launching a website, deciding to play in social media, sending out an eNewsletter – these are all parts and pieces of a strategy, and then only if the strategy itself warrants those activities. If your business fitness approach is to stick your toe in the water here and there to see if anything works, you’re just delaying the inevitable.

Personally (quite personally – I’m a small business owner just like you), I take these odds very seriously. Though I can be a bit of a slacker on my personal fitness, I started training to beat the business odds from day one. This includes a carefully crafted strategy, a sales and marketing plan designed to achieve the strategy, a talent plan that identified which types of skills we would need at each phase of our growth, a technology plan that included trying to conceive of which technology would make us most competitive five and ten years in the future, and contingency plans for each type of aggressor that might pop out of a dark alley and try to run us down. We follow our training regimen every day, and if we sometimes fall off the wagon, we have metrics and other types of alert in place to sound the alarm and firmly place us back on track.

You don’t have to be a betting man to appreciate these odds, and you won’t want to wait until you feel the breath on your neck. Commit to the strategy, plans, and training regimen your business needs right now; you’ll run faster than ever before, you won’t waste energy looking over your shoulder, and you will be able to sprint –with relative ease – each time conditions tell you it’s time to run.

© 2010. Andrea M. Hill

Sometimes I listen to parents complain bitterly about things their toddlers – or teenagers – are doing; things which are totally age-appropriate. If you’re like me, you think to yourself, “as long as you're a parent, you would have a better time if you learned about the developmental stages of children.”

I had a friend who once decided to ride his bike from Albuquerque to Santa Fe – a 65-mile trip. Half way through his journey – and in the middle of nowhere – his bike broke down and he didn’t know how to fix it. If you’re just riding your bike around the neighborhood, you can get away with not knowing any repair skills. But if you’re going to start making long treks in sparsely populated areas, you need to learn how to fix your bike and own the proper tools.

There are probably many things you wouldn’t do without learning a lot about them and practicing first: true wilderness camping without survival skills, throwing a huge self-cooked dinner party without cooking skills, sailing a boat in the ocean without navigational and boating skills.

Are you running a small business without small business success skills? If you are, it’s going to cost you.

As a small business – or even a micro-business – owner, you must do all the things the CEO of any company does; decide what to sell and how to sell it, whether and when to hire help, manage customer service, operations, and finances, make decisions. Even if you don’t have formal investors, you are managing a huge investment – your own. Your investment is the time you spend, the money you put in, and the profits you roll back in. You are responsible for all the same things as any CEO, but without the qualified support staff to fill in the gaps in your knowledge.

I was the CEO/President of several corporations over the past 30 years, from a $2million/year marketing agency to a $100million+ jewelry company and a $600million+ apparel company, and now I own a multi-brand consulting agency. The skills I needed between the $2 million level and the $600+million level were remarkably similar. I didn’t need to “be” an accountant, but I had to know how to discuss finances intelligently with my accountants. I didn’t need to “be” a production manager, but I needed to understand what my production managers were doing and how to help them be more successful. I didn’t need to “be” the computer network manager, but I needed to be competent enough to weigh the suggestions my network managers made and make good decisions.

When I first took over the apparel company, I realized that my accounting skills were lacking to do the analysis at that level. Did I go back to school to become an accountant? Absolutely not. But I did go take a class called “Financial Management for Non-Financial Managers” offered at a local community college. That, plus a lot of attention and practice, turned me into a strong financial manager capable of not driving my accounting staff crazy, and more importantly, of being the CEO my company deserved. Every year of my career I have added more business skills to my portfolio, and I continue to do so today. You must do this too.

You probably already know how to make and/or acquire the products and services you sell. This is the starting point for most entrepreneurs. But there are several business skills you must cultivate in order to ensure the survival and profitability of your company. These small business success skills include:

• Basic understanding of financials and financial management. You don’t need to become an accountant (in fact, paying a good accountant is one of the most important things any small business owner can do). But you must understand your role in financial matters, how to work with your accountant, and how to steer your company in the right direction.
• How to not just make a strategic business plan, but use it for ongoing business development and improvement.
• How to express your business strategy as a Brand, and how to imbue your whole organization – from product idea to post-sales satisfaction – with Brand elements that stick with customers and keep them coming back for more.
• How to hire, train, discipline, fire, and motivate employees. Even if you have only one employee, you need these skills. Otherwise, you risk paying someone to work for you without getting the full value of that pay.
• How to set up the necessary business systems to manage your customers, sales, inventory, marketing, operations, and accounting. By systems I don’t necessarily mean expensive computer software – the solutions can be anything from KanBan cards to computers. But you need to know which systems you need and how to set them up.
• How to manage your inventory to ensure high service levels, solid margins, happy customers, and no excess taxes. Inventory is about way more than just buying goods and making them. You must understand the role inventory plays in your company, and how to manage that role carefully.
• How to create and manage a sales and marketing plan.
• How to set up sales and customer service programs that drive volume and profits, whether you’re selling to business clients, through retail stores, or directly to end consumers (or any combination thereof).
• How to not only create and sell products, but manage product and product line profitability.
• How to prospect for new customers –from finding new potential sources for sales to keeping them interested, and learning how long it takes to convert a prospect to a loyal customer.
• How to decide which operations to keep in-house, which to outsource, and how to manage both types.

Being a business owner is a big task, and I’m not going to pretend that list is a quick or easy thing to master. But if you start learning these skills right away and keep picking them off one-by-one, you’ll become a better CEO from the moment you start . . . and the time is going to go by either way.

This is a link to a chart of these skills. It is structured as a pledge; a pledge to yourself to pursue and cultivate the skills you need to succeed. I encourage you to print it out, post it in a highly (and daily) visible spot, and check each one off as you tackle it. And here’s to you, on the road to becoming a highly competent – and vastly more satisfied – CEO.