Tag Archives: strategy

11 ways to build credibility for your business

By Aaron Hoos on May 17, 2013 in Business

Prospects are more likely going to turn into customers when they feel that they will be buying from a company that is credible. The more credible you are — the more trust and authority that prospects ascribe to you — the more likely you are going to win their hard-earned dollars when they are ready to buy.

So how do you build credibility for your business? Some entrepreneurs are fooled into believing that any marketing builds credibility but this isn’t the case. Many businesses market but only a few build credibility.

Here are 11 ways you can build credibility for your business. Mix and match them to build your own unique credibility (even if your competition is already doing some of these).

#1. CRITIQUE OR EVALUATE SOME ASPECT OF THE INDUSTRY

Every industry has its popular aspects and its shadowy underbelly. Your competition is trying to shine the light on the best parts but you can build credibility by being honest and up-front and showing quantitative comparisons or frank critique about the industry.

One example is a grocery store near my house: They usually have a couple of shopping carts by the front door, loaded with products, showing how much you’d pay at their store compared to a couple of the other major chains. It’s an effective way to position themselves as the low cost option.

#2. SHATTER MYTHS AND MISCONCEPTIONS

Consumers are outsiders. They only encounter your industry and your business when they need your product or service. Therefore, they develop myths and misconceptions. You can build credibility by educating them about these myths and misconceptions.

A good example here, in my opinion, is Chris Brogan. Brogan does a great job of shattering the misconceptions of social media by coming back to the ideas of listening, building trust, and connecting to your network rather than focusing on the number of followers or how to explicitly sell on social media.

#3. REVEAL SECRETS OF THE INDUSTRY AND YOUR BUSINESS

This is similar to the above idea, I guess, but it’s different enough that I wanted to include it separately. Every business and industry has secrets. They aren’t always bad, they just haven’t been explained to customers. Pricing is one secret. Ingredients is another common secret. And while you may want to keep some parts of your business a secret for competitive reasons, you might gain credibility with your prospects by revealing some secrets.

One example is from McDonalds. In this video posted on Mcdonald’s Canada’s YouTube site, the McDonald’s Executive Chef explains how to make a Big Mac, and he reveals the ingredients that go into the “secret” sauce (which, he points out, isn’t really a secret at all).

#4. CREATE INNOVATIVE SOLUTIONS

Many industries suffer from “same-as” syndrome, where all the competitors offer examples the same product or service as every other competitor. I have been very critical of the real estate industry for this very reason but I could list a number of industries that suffer from this problem: Financial advisors, dentists, chiropractors, optometrists, locksmiths, roofers, mechanics, and I could go on and on. You’ll build credibility if you break out of the mold and offer something different. It doesn’t have to be massively different — even just slightly different is good. (The Business Model Canvas and Blue Ocean Strategy are both good ways to innovate your business model). And click here to read my best advice on innovation.

I’m going to piss some people off by mentioning this example: Property Guys is providing a very innovative solution in the real estate industry. (Note to my real estate friends and clients: Don’t let their growing success annoy you. Rather, let it spur you on to further differentiation in your business).

#5. SHARE CANDIDLY

Many businesses maintain a barrier between themselves and their customers. I think there are a number of reasons that this happens (depending on the business, I’d guess that profitability, receivable-collection, competitiveness, privacy, and safety are all potential reasons). But customers want to connect with the businesses they buy from, and they are more likely going to buy from people they know, like, and trust. And when things go wrong, customers feel like they can reach out to a person instead of a faceless corporation. You can build credibility by being yourself. Or, if you have a large company, you can build credibility by having a representative be the face of your company. But as you’ll see in a moment, it doesn’t have to a specific person. The point is to share.

One example of a business that shared candidly and built credibility with their sharing is Domino’s Pizza. They have had an amazing transformation since their pizza turnaround commercial. That’s just an example of how one company used sharing in a one-off way. I think Twitter and Facebook give businesses the opportunity the share on an ongoing basis.

#6. SURPRISE WITH MORE INSIGHT THAN YOUR COMPETITION

Businesses put a barrier around what they know. There is a very distinct scope of information in a business’ marketing and a very distinct scope of information in their deliverable. The internet has really challenged many businesses to rethink how much they share before they deliver their deliverable. Some businesses share, for free, as much as 90% of the value they provide customers for free, leaving the 10% as their monetized value. This is smart but it’s not widespread, which means that many businesses can build credibility by educating their market and providing further insight.

One example was given by Perry Marshall a couple of years ago. (I’d like to it directly but I can’t find it). Perry described a local home repair company that produced a book — a beautifully bound, full-color book with pictures and how-to instructions. Perry rightly suggested that any home maintenance/renovation company could produce a similar book for their type of work — a plumber could produce a book about basic household plumbing; an electrician could produce a book about basic household electricity; and so on. They wouldn’t even have to give away the “secret sauce” of their business but rather just establish credibility by showing people how to care for that part of their home. You may be able to do the same thing in your business.

#7. DEMONSTRATE YOUR SOLUTION

I have a secret fascination with product demonstrators. They’re like carnies. They entice people to their booths and show them how sharp their knives are or how absorbent their shammy is. They need to do this because these products sell well when they are demonstrated. We have gotten away from demonstrations in our infoproduct world but products are still being demonstrated. Can you demonstrate some aspect of your product? You’ll build more credibility if you do.

I recently heard a consultant who demonstrated his methodology on a recorded call with a client. He got their permission first (of course), and then performed his consulting process on them while recording the call. Then he used the call to help sell the consulting service he was selling. This is a brilliant way for a service-based business to demonstrate a solution to build credibility.

#8. CREATE BEST PRACTICES

As industries grow, old businesses exit and new businesses enter. The growth is organic and messy. Years later, industries become complicated and fuzzy and even sometimes difficult to understand. You can build credibility by creating industry best practices. Even if other businesses don’t follow them, you’ll still position yourself as a pioneer. Your best practices don’t have to be all-encompassing or industry-wide. You just need to pick one thing and establish best practices. Codify them and establish yourself as an industry leader.

Many of today’s “gurus” in the world of B2B services have done just that. Seth Godin created what is ultimately a set of best practices around permission marketing. Dan Kennedy created what is ultimately a set of best practices around direct mail. Chris Brogan created what is ultimately a set of best practices around social media. I just wrote a report for a client who is building a certification process in an industry that has none.

(Note: It’s easy to overlap this idea with the “create an innovative solution” idea, above. But in this example, you’re not actually doing something new, necessarily; you’re just codifying it for others).

#9. PROVIDE DEEP ANALYSIS OF YOUR PROSPECT’S SITUATION

Successful sales people understand their prospect’s problems and use that knowledge to sell more effectively. The more you know about your prospect, the better. But often, that knowledge of the prospect’s situation is gained and then used to sell. But you can build credibility by gaining that knowledge and then feeding it back to your prospect. You’re not telling them that they feel a certain way. Rather, you’re telling them why they feel a certain way, and you’re listing and quantifying the many, many, many factors that contribute to their problem.

One example of a company that does this well is SAP. They’re a huge software company and they write a lot of whitepapers and reports. Those reports focus on the problem their customers have; not just the problem but the deeper, underlying reasons for that problem, along with the “cost” of the problem. They gain credibility by exploring the problem in-depth and, of course, positioning their software solutions as the answer to their customers’ problems.

#10. EMPATHIZE WITH YOUR PROSPECTS

Your target market doesn’t want to buy from you. And, in fact, they don’t even care about what you’re selling. They’re thinking of themselves and their problems or needs and how those problems can be solved or those needs fulfilled… not only that, they’re focused on themselves and they have much bigger lives than the problem that your product solves. They’re also thinking about how they’ll pay for their kid’s braces and they’re trying to remember to pick up milk on the way home from work. They don’t want to buy from you. They want to solve a problem with the help of someone who understands. You can build credibility by understanding — activity listening and seeking to see through their eyes.

I hate to say this but I’m having trouble thinking of an example here. I see it happening a bit… but not nearly to the degree that it could happen.

#11. BORROW YOUR CREDIBILITY FROM OTHERS

All of the examples I’ve given so far are credibility-builders that come from you. But your credibility doesn’t have to come from you. There are many ways that you can build credibility by “borrowing” it from others. For example, you should collect testimonials, write case studies, take before and after pictures, encourage customers to provide reviews and to tweet about you and provide a backlink to you on their site. If you’re an author, get a foreword written by someone famous. If you own a restaurant, get a food critic to visit. If you have awards, credentials, and degrees, these can all help with your credibility.

We see this in the film industry all the time: When a movie is about to be released, the trailer is full of accolades by critiques and film festivals, and it will list actors and actresses who have won (or even been nominated) or major awards.

Customers buy from businesses that are credible. Mix and match from these credibility-builders to help you establish authority and trust with your target market!

The power of free: Why you should give stuff away for free in your business

By Aaron Hoos on May 7, 2013 in Business

Free has always been a useful way to get more business. Thanks to the web, free is even more important today.

I love “free” because it is so powerful and valuable and I really believe that all businesses should adopt some kind of free incentive in their business. Check out some of my thoughts about the concept of free at the following blog posts: Free and 5 levels of content monetization.

So it’s no surprise that when a friend sent me the following video — The Power of Free — I watched it and took a lot of notes. And I think you should, too.

This video is from Pat Flynn of Smart Passive Income who gave a presentation at New Media Expo 2013 on the power of free and why you should have free offers in your business. His video is almost an hour long but worth every minute!

Small business strategy question: If you had to get rid of 90 percent of your customers, which 10 percent would you keep?

By Aaron Hoos on April 25, 2013 in Business

Entrepreneurs use my 100 Small Business Strategy Questions as a way to regularly review their businesses and identify opportunities to grow. From this list of 100 questions, I occasionally take a question and blog about it in greater detail.

The Small Business Strategy Question I’m looking at today is: If you had to get rid of 90% of your customers, what 10% would you keep?.

At first glance, this is a simple question: “My best customers” is the easiest answer. But let’s dig deeper. How do you define your “best” customers?

Consider all of your customers in a giant list. We can slice and dice that list all day long, sorting them into different groups by using different categories and metrics to sort. With each category or metric, we end up with a different group of customers in that top 10%.

Perhaps you might keep the top 10% of your most profitable customers. Early in my career, profitability was a key metric for me to take on new customers and “fire” old customers. But profitability isn’t necessarily the best metric. A customer who is highly profitable might not necessarily be a customer who purchases the most, or the most frequently, or pays on time, or provides the most consistent cash flow, or refers people, (etc., etc., etc.). Perhaps the most profitable customers today might be bankrupt tomorrow, or they might replace your offering with some alternate offering that does the job better.

See what I mean? Profitability is a good quality to have a in a customer (obviously!!!) but it’s not necessarily the only quality or even the best quality. A profitable customer today might be a good customer today but over the long-term, it might not be the only metric you should use. There needs to be other factors and you need to combine several factors that are important to you when sorting out your customers.

In my business, I sort my customers into that 90/10 list in this way: I want a customer who is profitable… but I also want a customer who works in the financial and real estate industries, provides ongoing, consistent cash flow, is easy and fun to work with, will work with me on an ongoing basis (i.e. several projects over several months or years), who is the key decision-maker and (preferably) has budget control, who refers other people to me, and who is an enthusiastic and positive idea-generator.

Once you’ve sorted your customers and identified the top 10%, you then need to consider tweaking your business just a bit to deepen your relationship with those customers, earn more money from them, and try to get more customers like them. For the other customers (the bottom 90%), you might consider bumping them up to fit within that category (by selling more services to them and in general by encouraging them to commit further). Or, you might fulfill whatever you’ve agreed to do and then simply not market or sell to them again. Or, you might fire your customers.

Sorting customers by using multiple sorting categories isn’t easy or an exact science (unless each sorting category is a measurable metric, which they don’t have to be). But the exercise is an important one for a few reasons:

  • You’ll figure out what’s important to you in a customer. Believe me, you’ll end up feel so good when you get rid of customers who don’t fit this “ideal customer” model.
  • You’ll start to see how your customers can contribute to the future of your business (or how some of your customers — like the bottom 10% — are actually holding you back).
  • You’ll improve your marketing by honing your message to connect even more deeply with your best market.

Of course you can serve other people besides that top 10%. In practice, I find that I prefer working with that top 10% — they’re the best for the long-term success of my business — but the top 25% (even up to the top 50% of my customers) are awesome but I like the variety (and challenge) of working with a group of customers that might be defined within the top 25%. But I build my business on that top 10%.

Act fast to grow your business

By Aaron Hoos on February 17, 2013 in Business, Portfolio

Entrepreneurs are busy people and sometimes they are so busy doing the tactical stuff that they miss the opportunity to do the strategic stuff. (Yeah, there are some business gurus who don’t like you doing the tactical stuff but it needs to get done and there aren’t always other people around to do it for you).

So if you’re so busy working on the day-to-day stuff, and you just can’t quite squeeze in the time to work on the bigger picture stuff that will help to grow your business beyond tomorrow, how do you ensure your survival?

In a recent article posted on a business information website, I list 5 things you can do in the next 5 minutes to help grow your business. These quick actions help to break you out of the tactical cycle that you’re running in and give you fast ways to do a bit of strategic work easily (without risking all the other important stuff that needs to get done).

Check out the article here:

5 Business Growing Tips You Can Do In The Next 5 Minutes

(The above link opens in a new window and sends you to the article on EvanCarmichael.com)

 
 
 

Small business strategy question: Where are your business blindspots?

By Aaron Hoos on February 13, 2013 in Business

Small business owners can sometimes get too close to their business — so close, in fact, that they struggle to do anything other than focus on the day-to-day operations and fail to work on the big picture strategy. (And many small business owners don’t know how to work on strategy because they are moonlighting or building their business organically from a hobby they have monetized, for example).

So I published a resource called 100 Small Business Strategy Questions. It’s a list of questions that any entrepreneur or small business owner can go through to help them take a deeper look at their business and figure out how to run it more strategically.

After I published that list of questions, I’ve been periodically taking each question and writing a blog post about specific steps or ideas that they the small business owner can use to work through that question.

SMALL BUSINESS STRATEGY QUESTION: WHERE ARE YOUR BUSINESS’ BLINDSPOTS?

I love the imagery of a business as a car and the business owner as the driver of that car. It perfectly captures the idea of what a business is all about: Heading toward a destination as safely and efficiently as possible, and making constant small and large adjustments along the way.

Continuing with the car imagery for a moment, is the idea of blindspots — those nasty sections around our car where we simply cannot see. (On most cars, they are typically an invisible triangle that extends out of the back left and right quarterpanels). There are also smaller blindspots elsewhere on some cars, depending on their design: Larger posts between the door and front window are blindspots in some cars. And a lot of cars (until recent design changes) had blindspots around the front and front right quarterpanel. These blindspots can hide hidden dangers that might suddenly leap out to damage your car and keep you from completing your journey.

If your business is like a car and you are like a driver, the idea of blindspots is just as relevant and just as dangerous. Business blindspots are those unexpected things that you simply didn’t see coming.

When driving, smart drivers check their blindspots and anticipate potential dangers based on the driving environment. In business, smart entrepreneurs likewise try to figure out what blindspots there might be and they do something about them. I think it’s impossible to completely and comprehensively handle every possible blindspot but the more you work on identifying your blindspots, the better.

One example of a blindspot is the newspaper industry. Frankly, they didn’t see the web coming and, when it was there, they didn’t realize soon enough the ability it gave people to share quickly and informally. Not surprisingly, the newspaper industry is struggling.

Another example of a blindspot took place in the automotive industry in the 1970′s and 1980′s. The American automotive industry boldly designed gigantic cars with enough sheet metal that you could run a hobby farm in the trunk of your car. In their blindspot was the social changes that took place as a result of the economy and the oil crisis and changing ideas about vehicles and that was enough of a foothold for Asian car manufacturers to enter the market.

Another example of a blindspot is in the finance industry. In the early and mid 2000′s, banks were flush with cash and happy to give out low interest, adjustable rate mortgages with (sometimes) aggressive or unclear marketing. They simply didn’t see what could (and did) end up happening when the rates adjusted and people could suddenly no longer afford their homes. (This wasn’t just a blindspot to the individual players in the finance industry but also to the whole industry and the organizations tha provide oversight).

Another example of a blindspot is with Blackberry. They led the market for years in portable email technology and then smartphone technology. But they became so confident in what they could see that they didn’t see the rise in consumer demand for smartphones, as well as the various functions people were buying phones for. Soon, Blackberrys became “corporate-only” devices… and then uncool altogether.

We see blindspots happening all the time in many industries and companies; and businesses of every size are impacted by blindspots.

But if you can identify as many blindspots as possible and prepare for them, you’ll be prepared.

Permit me one more example, this time from my own business: I was hired on a big contract for a company and it was drawing to a close. I knew there was talk about renewing my contract but that was still up in the air due to several factors. So at first glance, it looked like I would have two options: Either to renew my contract and continue with my client or to not renew my contract and stop working for the client.

But I wanted to be prepared for blindspots. So I sat down one day and tried to think of all of the other possibilities that could happen — including an offer to continue contracting, but at a lower rate, and an offer to become a full-time employee of the company. (There were others as well but those are the two I remember right now). I listed them and gave some thought to my choices and decisions based on all of those possibilities as well. Guess what happened: When it came time to talk about the contract, the first discussion centered around one of the blindspots I had identified! I countered it effectively, but I could only do that because I had prepared. Then the second conversation centered around another blindspot I had identified. Again, I countered it, only because I had prepared.

Blindspots can happen to any business, in any aspect of business, and at any time. The more you can anticipate them, the better.

So how do you anticipate them? Here are some ideas for you:

  1. Create a structure first, just to give yourself something to work with. Two good structures to use (I would use both) is the Business Model Canvas or the sales funnel. My Business Diamond Framework or McKinsey’s 7S model are also good tools to use. You can also mindmap all the different parts of your business (perhaps by activity — sales, marketing, etc.).
  2. Your structure might not be entirely comprehensive but if you pick a couple of these, you’ll have a good starting point. Once you have a structure to work with, think about what you currently do in that section. For example, maybe your marketing consists of activities like “online content”, “blogging”, “social media”, “face-to-face networking”, etc. It might not be easy to list them all but the more you list, the better. Yeah, it’s a big job but if it saves your business then all the better.
  3. Think about what would happen if any of these pieces was suddenly no longer available to you. You can get more specific than that (“what if technology changed so that I couldn’t use this anymore?”; “what if there was a better replacement?”; “what if clients didn’t interact with this anymore?”; etc.) but now you’re starting to think of nearly unlimited possibilities and who has the time for that!?! So start somewhat more generically by just thinking about what would happen if that one particular aspect of your business was something you could no longer do or use.
  4. Another really useful tool is Porter’s Five Forces, a strategic tool created by Harvard Business School professor Michael Porter. The Five Forces are the things that threaten the survival of your business and they include changes in industry competitors, changes in buyers, changes in suppliers, new entrants to the marketplace, and potential substitutes that your buyers might choose. In each case, think about how changes in these factors can impact your business.
  5. Don’t forget to think in the same way at the industry level, as well as the local level. How might your business be affected if your industry was suddenly irrelevant? Or, what would happen if your local marketplace suddenly stopped needing your services?
  6. Confession: I feel like I’m being a bit vague here, but that’s only because there are so many things you could do and sometimes it depends on the business. (And they’re called “blindspots” for a reason. How do you talk about something you don’t know?). But ultimately what you are trying to do is break your mind of the habit of thinking “the current way is the only way” and train yourself to start seeing the possibility of watershed changes that can shatter current systems. You’re trying to see what can’t be seen. It’s hard to imagine specifics but you can think about the possibilities in general and prepare.
  7. Once you have thought about potential blindspots, you can start to prepare. In my experience, preparing for blindspots often means spending more time innovating, diversifying various efforts, seeking more clients and clients in new areas (who might use your product or service in different ways) and trying to stabilize your finances. Obviously this won’t solve every problem but it’s a good start.

Small business strategy question: What causes you to lose a sale?

By Aaron Hoos on January 9, 2013 in Business

This blog post is part of a series on 100 small business strategy questions that an entrepreneur can ask themselves to help them grow their business profitably. Click the link above for the master list of 100 questions and find the growing series of blog posts discussing each question.

WHY IS A SALES LOST?

When a sale is made, you can break out the champagne and celebrate! Money has come into the business to pay for its operation (and hopefully to put a little into your pocket too). And wise businesses dissect those sales successes over and over to help understand the elements that came together to make it successful.

But not every prospect interaction ends in a sale. Many (perhaps most!) end up without a sale. The smartest businesses take time to dissect THOSE “failures” as well. (I use the term “failures” here very loosely because not every lost sale is a failure. I just used it to mean the times when a sale doesn’t occur).

Here are some ways you can dissect why sales weren’t made:

  1. Take a sampling of prospective buyers from a previous period of time. For example, examine all lost sales in the last month or examine the last 10 prospective buyers who didn’t buy. You need to either do this on an ongoing basis and handle just a few at a time (which is good if you are a sole proprietor or a freelancer or something) or you need to grab a batch and do them all at once in a big “fail-fest”. This sample should be of anyone who interacted with your business but definitively chose not to buy from you (as opposed to people who are in your sales funnel who haven’t bought yet). It’s not a perfect science to find these people because there are some slow pokes that you should take a closer look at… they’re the ones who keep claiming that they’ll buy but never do. I’m being someone general here because every business is different so you’ll have to find the definition of a lost sale that works best for you.
  2. With this list of people in hand, figure out where they were in the sales funnel when they chose not to buy. Usually, this will be people who were your leads who asked not to be contacted anymore and it will be prospects who were presented with your offering and said “no” and couldn’t have their objections overcome.
  3. Hopefully you recorded the reason they gave to not buy from you. (If you don’t record the reason, start doing so immediately!) Examine them carefully. and look for patterns over a period of time.
  4. Next, look at different factors like: How long were they in your sales funnel for? How did they interact? With whom did they interact? What information did they receive?
  5. Also, compare their progress through your sales funnel with the progress of your successful sales. Many times, you’ll find that there are a lot of clues here. The people eventually say no, for example, might bring up price earlier than anyone else or they might take longer to progress than the ones who became buyers, or they interacted in a certain way with certain staff members.
  6. Look for patterns. Try to find what is similar about people dropping out at these earlier stages and how is it different from people who progress through your sales funnel and end up buying from you. Look for common questions; common phrases, common pathways; skipped steps, etc.

You will eventually find some common factors. You might not discover all of them immediately. But with each time you do this, you’ll learn more and you’ll become more adept at spotting a “non-buyer” long before they even know they are non-buyers!

As you do this exercise over and over, you’ll discover that you can quickly and easily divide people into two groups: People who never should have been in your sales funnel in the first place and people who should have been there (because they are part of your target market) and just didn’t go through with the sale. When you divide people into those groups, it becomes even easier to find the problem areas.

Once you have identified the problem areas (which probably won’t happen the first couple of times you do this exercise), you can create a game plan to fix them.

Lessons from Buffett about success. (Not Warren Buffett… Jimmy Buffett).

By Aaron Hoos on January 3, 2013 in Business

I’m a Jimmy Buffett fan. The dude is a showman. He’s a brand. He knows what his message is and he is relentless about sharing it. He offers a glimpse into a life that many of us wish we could live 24/7. I’ve seen him a few times in concert and he always delivered.

(Here’s a video of his most famous song — and one of my favorite songs — Margaritaville)….

But Buffett is not just booze and sandals and pirates and pencil-thin mustaches and cheeseburgers in Paradise.

Jimmy Buffett is also a business genius. When I saw this article about Buffett the other day, I read it avidly and thought I’d share it with you. Read the article for yourself but I’ll summarize some of the key points here…

Buffett has a big following and although he hasn’t had a lot of radio play in the past 30 years, his net worth is estimated at about $400 million. Sure, some of that is going to come from album sales. But only a fraction.

Most of it, it seems, comes from income generated by some of his organizations — restaurants, stores, nightclubs, hotels, casinos, food products, clothes, and books. Buffett has enough of a “lock” on his brand, and a big enough following, that struggling companies are switching their names to his brand while his novels achieve Best Seller status even though they aren’t up there with Ernest Hemingway or F. Scott Fitzgerald.

Here’s his secret: He first built a brand that focused on a particular lifestyle/feeling/attitude. Once he had that brand established, he leveraged it into other things. BIG things! What’s more, this is all passive income (because it’s scalable without Buffett having to spend more time in the office and less time on the beach). With every concert Buffett gives, he promotes his brand and thus, he promotes all of the various income-generating channels he has.

Buffett’s beach bum facade is compelling but he’s secretly hiding a very a very smart business brain in that sunburnt, margarita-addled head. And the lesson for us business owners is to focus first on a strong, clear, simple, compelling brand and then turn that brand into bigger things.

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