Author: Tim Luscombe

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Know your customers

In banking and financial services there’s a set of regulations called Know Your Customer or KYC for short. If you’ve opened an account in another country in the past few years you will have experienced the process which can be administratively complex!

One of my clients was opening an account in Hong Kong and the standard procedure of “Please call into the branch with your passport” was not very helpful. The ultimate owner is the person whose identity must be verified – and in this case that was a Silicon Valley entrepreneur who had no plans to visit Asia soon!

Knowing your customers and knowing your market is vitally important for any business. It’s not a compliance issue (as it is in banking) but a tool to help you win more customers and do more business.

I was reminded of this when I heard Lord Karan Bilimoria describing the early days of Cobra beer. He and his partner marketed the beer to independent Asian restaurants and their efforts laid the foundations for the success of Cobra.

He knew his market; he knew his customers and he had created a product to fit with their offerings and their customers.

Had he tried the same approach with many (most) of the restaurants on the high street it would have failed, as they are not usually independent and the manager on the site has little authority to purchase anything!
Had he tried the same approach in another country it might not have worked. In the US, where there are plenty of independent restaurants, the majority (in my experience) do not serve alcohol at all.
If you don’t have a really good connection to your market and a thorough understanding of why your customers choose you, the chances are that your marketing efforts will misfire.

Don’t assume that you know why they buy – assumptions are dangerous and they may be buying for a reason you don’t consider important.

Ask your customers why they buy; ask the ones who have left why they are leaving. You might be surprised by what you learn.

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Are you living up to your promises?

Dig out your mission & vision statements and re-read them, would you?

They are promises you made to yourself and the team.

Are you following the dream, or doing just enough to get by?

It’s all too easy to get dragged into the trenches of dealing with the day to day hassle and that can easily take you way from the path you set out to follow. That happens to all of us!

Getting back on track starts with the recognition that you were off track to begin with. Review your plan / budget against the mission and vision – are your actions in the short term taking you towards the long-term goal, just holding your ground or at worst taking you away from your goal?

I’m a great fan of a rolling four quarterly plan and budget.

It’s a methodology that requires you to review the plan at least once a quarter and update it – so you can’t create the annual plan and just leave it in the drawer until the year is done!

It prevents you from saying “Oh well, that was our estimate 9 months ago so it doesn’t matter” as you have reviewed an updated that forecast at least 3 times.

It avoids the cliff, where something is happening just after year end. The annual plan finishes at year end; this event is a moth or so later but it’s not in the plan – and won’t be recognised until the new planning cycle kicks off.  One business I worked with had a royalty payment due in the January; the plans and forecasts finished in Dec and it was not until we started the plan for the new year that it became apparent our cashflow was insufficient!

It avoids a massive planning session that everyone hates. You are planning once a quarter – updating the next 9 months and adding on another 3 – so that it becomes routine.

In the quarterly review sessions, have the mission & vision to hand. That will help keep them in mind and make sure you are staying on track.

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Here is your personal time machine

How often do you hear the phrase “I don’t have time to do XYZ?”

I hear it all the time.

I often hear someone being praised for working hard, and usually, that’s connected to the number of hours they put in.

What is much more interesting is how productive someone is – how much do they get done.

How productive are you?

To become more productive, focus on the things that are distracting you and minimise them.

Do you need to be in every meeting?
If you are not driving the meeting, trust your team to discuss issues without you and move things forward. The team will appreciate the opportunity to expand their knowledge, the trust that you are showing them and will probably come to the same conclusions even if you are not there.

How often do you need to check your emails?
Email is one of the big distractions in today’s world. It’s so easy when the email alert pings for you stop writing that proposal (or newsletter, or report) and go read the latest email.
How often do you get an email that requires an instant reply? Never! If you checked your email only once a day would the world fall apart? Why not try that – set a time each day and don’t read emails in between.

Could you turn off the phone for a couple of hours?
When you are in that important meeting that you are driving, you will have your phone turned off or at the very least on silent. What happens if someone calls during the meeting? If it’s important, they will leave a message – and it will probably be “Can you call me when you are free?”

Facebook, LinkedIn and Twitter can be valuable business tools but they don’t require your attention every minute or every hour of every day – unless they are your business!

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Consider the intentions

Treat others as you would wish to be treated is a mantra that you often hear. It’s something that is worth applying in many aspects of life and I suggest worth applying in the office.

I recently had to intervene in a discussion that was becoming rather heated.

The background was that one member of the sales team had (in good faith) offered additional technical information to a customer.  His belief was that this information was readily available, when in fact it was unproven (but very probably accurate) assumption.

Recovering the situation required the technical department to undertake additional work to prove the theory and provide further details to the customer.

Understandably, the technical team leader was somewhat upset!

The heated discussion was along the lines of “You shouldn’t have said that!” responded with “you should have had the info available”

There’s no way to take back what has been said.

Had the sales team realised this was an unproven theory they would not have made the offer.

Express your frustration, but then let’s move on to a solution.

You can’t change history so stop trying. Learn from the mistake, so that you can avoid it in future, but then focus on what you can change.

Part of the problem in this situation (and in many others) was the failure of either party to consider the intentions of the other.

The very last thing the sales team wanted was to mislead the customer or set an expectation that can’t be met.

The very last thing the technical department wanted was to share an unproven theory as if it were fact.

Pausing for a moment to consider the intentions will often take the heat out of the situation and allow you to accept what has happened. You can’t change it, but at least if you understand why it happened you can accept it and move on.

How would you want to be treated if you’d made the mistake?

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Are you adding value?

I was in a management meeting not very long ago where everyone had something to say on almost every subject. The meeting went on, and on, and on….!

I was reminded of the quotation

“If I Had More Time, I Would Have Written a Shorter Letter”

The source of which is most probably Blaise Pascal – but of course the original was in French so it is not a direct translation.

I was also reminded of a talk given by my colleague in the Speakers’ Association, Peter Milligan, where he referred to some guidance he was given early in his career. I could summarise that as don’t speak unless you have something to add.

I’ve had the delights of doing business all over the world, often with companies and individuals where their first language is not English. Sometimes communication from these clients and prospects requires a level of interpretation – it is difficult to determine exactly what they mean – and it can be made far worse when they try to be polite and use elaborate language.

Even in the same office, unnecessary communication is an ever increasing time waster. I remember years ago taking a call from a colleague who was repeating some information he had previously send me in an email! One or the other, please not both!

How many emails do you get that you don’t need to respond to? How many that are copied to you for information only?

I heard some time ago of a manager who instructed his team not to send him emails unless they wanted him to take action. I am not sure I would go that far.

If you can make each business communication direct and to the point (still polite, of course) and each interjection in a meeting something that adds real value and moves the meeting forward, you will be much more productive and efficient.

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Perception vs Reality

Many years ago I worked for a very high growth technology business and we were always in need of funding because we were growing so fast.

One of my English colleagues, Jonathan, took over from me as Finance Director for the Americas region whilst I went out to Hong Kong to set up Asia Pacific.

He decided to fulfil his dream by getting a Porsche, but the only car available was pink. He bought it anyway and was the subject of much hilarity in the office as a result.

The time came when we needed extra working capital so Jonathan and Mike, our treasury director, went to the bank in Silicon Valley to try and arrange this.

The bank manager looked out of the window, saw the car, and told them he would not be lending money to any business where the Finance Director drove a pink Porsche!

I am sure that was a tongue in cheek comment, but there’s a valid point here. Perception counts and what your customers, suppliers and your team perceive is all that matters.

So when you look at your business try to see it as a stranger would see it. What message does the tired reception area send, what message do the weeds in the carpark give?

If you review your website, and the last update was 9 months ago, what message are you sending?

If your team see you having a bad day and grumbling about something, what message do they get – and what message do they pass on to the customer?

Imagine for a moment that you wanted to perpetrate a fraud. How far would you go to project the best possible image so that your target would part with their money? You would not leave anything to chance.

In business, we overlook the perception because we think the reality will counter it – we think that reality counts, but that’s not true. Perception counts.

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Put the right team together

Jim Collins, in his classic business book Good to Great, identifies getting the right people on the bus in the right seats as a fundamental step to business success.

That is a principle you can apply when you are looking at your internal teams and working parties, not just the top team than runs the whole business.

Teams and working parties can be a very powerful way of resolving problems, dealing with projects and enhancing business processes but only if the right people are in the team.

If the team doesn’t have the right composition it won’t be as successful.

A useful analogy may be that of rowing. Mark de Rond studied the rowers at Cambridge preparing for the university boat race and in particular the selection process.

It’s not just a case of choosing the 8 fastest oarsmen, but one of selecting the best combination of rowers even if some of those left out are faster as individuals.

In business, it may well be prudent to select potentially less able or less knowledgeable candidates for their ability to work together rather than creating a team all of whom are high achievers but who will not get on with each other.

For teams to be really effective there are several other factors to consider but right at the top of the list is communication. Everyone on the team has to be fully aware of the objectives of the team, but also to understand and accept their role within the team. The team will review progress and everyone affected will know what is happening and what the milestones are – so this is all about communication.

Teams can be a fantastic environment for individuals to develop new skills and experience but that requires the right ethos from the team and its leader. A no-blame learning environment, where mistakes are just an opportunity to get it right next time, is a great place to develop.

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You need to give before you get

One of my colleagues shared an excellent video about networking just the other day. Mark E. Sackett describes how so many of us collect business cards, but then just fail to follow up or build any kind of relationship.

I have heard so many clients and colleagues tell me that networking just doesn’t work, yet that’s how I get the vast majority of my business – through referrals from my network.

That doesn’t mean that I go to a networking meeting, meet somebody there and they engage my services. I wish!

First of all, would you do that? Engage the services of someone you’ve only just met? That would be pretty rash.

I have a couple of points to make about networking:

We all know that people do business with people that they know, like and trust, so why expect someone to engage with you on the basis of the first meeting over a cup of coffee? How can you know, let alone like and trust someone on that basis?

The second point is that it is not about the people in the room. It’s about the people they know and the people they know. This is the “six degrees of separation” where everyone is connected to everyone else through just six connections.

So, for me the keys to effective networking are

To be interesting to the people you meet – and the easy way to do that is to be interested in them.

They have to know what you can do for them – and for their clients – but you don’t have to ram it down their throats at the first meeting.

Give before you get. Help others to help you – if you help someone, there’s a very good chance they will try to help you.

Stay in touch – whatever tool you use. I was referred recently by someone who was referred to me 9 years ago. I engaged with him for some tax advice (unpaid, just exploring an option) and 9 years later, he referred a client of one of his contacts looking for some strategic advice. He remembered me thanks to LinkedIn

 

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Do you treat your colleagues as your customers?

Everything you do in your work will probably have a knock-on effect on someone else in the business. If you do your job perfectly, it will help others do their job and in the end, the customer benefits from great service.

If you are well removed from the customer, operating in one of the vital back-office roles, it is really easy to think that what you do doesn’t really matter to the customer. There may be no direct effect, but if what you do runs really smoothly your colleagues in the next department don’t have to spend time and effort dealing with your output – they can just get on with the job.

This is something you can picture really well if you think of a production line. If the previous operation has put all the holes in the right place and they are the right size, completing your operation is really easy. If the hole is in the wrong place or is the wrong size, that requires you to take extra time to fix before you can carry on with your “real” job.

The same principles apply in an environment that isn’t a production line.

In one company, the customer services team handled order administration and were responsible for quoting the customer order number on our invoices. They would archive the customer orders without a copy of the invoice, and with no reference to the invoice number.

The credit control team, trying to get payment for these invoices, found that some of them had incorrect purchase order numbers. The customer would not (could not) pay us.

Finding the right order number and re-issuing the invoice with the correct details was a laborious time-consuming job.

We changed the system so that the cross-referencing was captured. The customer service team didn’t treat credit control as a customer, yet credit control were reliant upon the output from customer services.

When you look at your department, who are your customers and are you meeting their needs?

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Make happy those who are near and those who are far will come

That’s a Chinese proverb that you can apply to many aspects of your business.

It’s pretty obvious in its application to customer service. If you can’t make your existing customers happy, they are not going to refer new clients or customers to you – and a “satisfied” customer is only ever one step away from becoming a past customer.

You can equally apply it to the team in the business. If you can make them happy, there’s good chance they will make the extra effort to ensure the customer is happy.  That may sound a bit simplistic, but it is one of the foundations of success for SouthWest airlines in the USA.

It’s also the case that the team will help you with recruitment. They think they are working in a great place, so they will tell their friends and family. When you have a vacancy they will recommend someone. Suddenly you’ve not only saved a recruitment fee, you’ve got a new member of the team who is really delighted and enthusiastic to join and you’ve got an existing team member who is going to go all out to make sure the newbie succeeds.

If you wanted to raise more money for the business, just imagine how much harder that is if your existing investors (or your bank) have lost interest or been disappointed.  It will be a lot easier to get that overdraft extended or the credit arranged for that new piece of kit if the bank manager is on your side, but even more crucial if you wanted to raise additional equity one of the first questions from any new investor would concern what role your existing investors will play. If they are not risking their money (and they know you) why should I take that risk?

You can apply this to your supply chain. If you’ve looked after them and you have a problem, your suppliers will try to help you. If you’ve always been a pain to deal with that’s less likely to be true.

When you come to sell the business, good due diligence will uncover your reputation, not just with your customers.