Chapter 29 Figuring out when it's time to fire customers

Have you ever done business with someone who was more of a problem than they were worth? Wouldn't you like to tell some customers to shop with your competition?

Some customers are never happy, no matter what you do for them. Fortunately, this is usually a rare occurrence and you probably love most of your customers, as I do.

My dentist, a life-long friend since we were 5 years old, told me that he tells patients who repeatedly ignore his dental advice to consider going elsewhere because he can no longer help them. Is this too harsh? You be the judge.

I have turned down business that I perceived would not be worthwhile. I refer to these as "the best customer I never had." Unfortunately, I have also accepted business that turned out to be a big loser.

Some customers take up too much time, are never happy and are always complaining about something.

When you consider all the variables, you can definitely lose time and money doing bad business. When time is lost, you can never get it back, and you are left thinking, "If only I had realized this was not going to be a beneficial relationship, I could have nipped it in the bud."

Live and learn, that's the key.

Learn from your experiences and, in this case, your mistakes. Taking this newfound knowledge to the next step can have some promising outcomes.

Here are some thoughts and strategies for you to consider for your business.

Do you know which business is profitable and which is not, by customer? Here's how to find out and what you can do about it. Rank your customers from most profitable to least profitable (quarterly or annually). This should prove to be an eye-opening exercise. It may be best to use percentages instead of dollars. To do this, you have to know your costs. (If you regularly read my column, then you already know how to do this.) Perhaps you should draw a line in the sand, or on your ledger or Excel spreadsheet.

Where black ink turns to red ink, consider doing the following:

Examine why certain customers are not profitable and try to come up with a solution. Perhaps you need to raise rates or sell additional products or services. If returns and restocking are creating a problem, consider charging a restocking fee. Is the client paying its bill on time, within their agreed upon terms? Perhaps you should ask for payment terms more favorable for you, maybe 15 days or COD.

Talk to your customers and be honest. Tell unprofitable or low-profit customers that you are not making money with their account and you cannot continue to lose money. Take emotion out of the equation. If the relationship is valued, and depending upon how badly your customer needs you, they may agree. This is especially true if your customer will not be able to get a better deal elsewhere.

Often, it is not about the money. The customer may just be a pain, and you may be over-servicing them.

Attempt to salvage the business, if possible, but be prepared to lose a loser. In a professional way, of course, advise the customer that you no longer want to do business with them because they are costing you money (or that the aggravation is affecting your health). Shed this business. At first, this may sound strange. Certainly it will be uncomfortable. But shedding your worst customer or two may let you add several new and profitable ones.

Consider what you could do with the extra time if you don't have to waste it on problem clients. Could you sell to new, profitable accounts instead? Perhaps you just need to take some time off to relieve some stress.

If you have product lines or services that are weak, examine these as well. Unless carrying the product or service is critical to other key business transactions, consider dumping them and adding something that will strengthen your company. Now is the time -- just do it!

The bottom line: Ask yourself if this should have been the best customer you never had. Go with your gut.

Don't be afraid to say no. Don't cut price to the point where it just doesn't pay. Look at ways to replace unprofitable or troublesome customers and marginal products and services.

Your business should always be improving. No loss leaders here. The only exception would be to influencer-type accounts or products and services that will help you get other, more profitable business.

Chapter 30

Small-business owners must know branding

Published: Monday, September 22, 2014 at 1:00 a.m.

Brand and branding strategy are complicated topics. Here are some tips you should know as a small business.

The American Marketing Association defines a brand as "a name, term, sign, symbol or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers." Simple enough, right?

Your brand resides within the minds of consumers, customers and prospects in a hierarchy (you are positioned first, second, etc., when your company/product is thought of). Your brand is composed of exposure to, perceptions of and personal experiences with your company, product or service. You can influence the public's attitude and behavior toward your brand through advertising, word of mouth and other means.

Having a strong, recognizable brand is invaluable and should be the cornerstone of your marketing communications. Brand messages should be clear, credible, confirming, and connecting, while motivating buyer loyalty.

Your branding strategy is present at every point of public contact. Some of your considerations and components should be:

Name development -- It should be memorable, evocative and differentiating. Beware of cultural differences if exporting.

Logo development -- Logos should be used consistently. Develop a style guide to help define how to use, where to use, colors to use, size, proportion and placement.

Trademark™ or Register® your mark (please refer to my Herald-Tribune column on intellectual property and the small business, dated June 16, 2014).

Taglines -- "Please don't squeeze the Charmin," "Just do it," "The quicker picker upper," "Google it," "It Works!" Use memorable product attributes and benefits.

Corporate identity -- Everything you do helps build or detract from your identity. Use social channels to help in brand building.

Packaging -- Your packaging says a lot about your company. Think of Amazon and its smiling logo on its boxes, or how Apple products are packaged. Everything matters with your branding strategy.

Website design -- Do the most you can with the budget you have. Look at websites you like and copy their use of design elements with your message. You can use free templates offered by WordPress.

Your branding strategy should seek to increase awareness, build trust, position your product first in the mind of the consumer, continually build your brand and drive conversions (sales).

In a well-defined approach, market research (budget allowing) should focus on perceived value of your brand, surveys of customer awareness, attitudes, intentions to purchase and actual buying behavior.

Keep in mind what the competition is doing, as you will be measured against other similar choices. Your goal is to carve out a messaging niche that resonates with your target audience.

Name development -- I love creating names out of thin air. In Orlando, I started a magazine called Orbus™. The name was a combination of Orlando and Business. My tagline was "Bringing Orlando and Business together." Orbus was a great success and was sold for seven figures within two years. Not too shabby.

But at first it sounded funny. What's an Orbus? After a short while, however, the business community would say, have you seen that article in Orbus about such and such? It really caught on -- it was unique and easily identifiable. There was no doubt that Orbus was positioned as "the" business magazine in Orlando.

Brand architecture and extension -- In the '80s, I published a group of magazines called Office Guides. These publications were real estate directories listing available commercial office space. The publications were supported by commercial developers (office and industrial) and product- and service-related advertising.

The first magazine was Office Guide To Tampa. In scaling this brand, the series was rolled out to Orlando, Miami and Broward and Palm Beach counties, the state of Florida, Denver, Colorado, and Phoenix, Arizona.

The branding was kept consistent for the logo and the layout. The publication was given a $10 cover price, because nobody throws out a $10 magazine. The circulation was primarily controlled and targeted to company presidents and relocation professionals.

The Manasota SCORE podcast series, Been There, Done That! with Dennis Zink, is available on iTunes, Stitcher Radio, at Manasota.SCORE.org and now at SCORE.org (our national website), which receives over 250,000 unique monthly visitors -- great exposure.

The name Been There, Done That! effectively positions our podcast series by conducting feature interviews with business executives and thought leaders discussing their experience and knowledge on a particular business topic. These podcasts are also available at centreofinfluence.org.

Finally, where should you place your message for branding? Depending on your business, product or service, you should consider using print, TV, radio, outdoor, direct response, digital, mobile, social media, email, podcasts, YouTube and other methods to get your message out to the public.

Target your message to customers who will buy and then influence others to also buy your brand.

Many years ago, I was asked to write my own obituary.

My initial reaction was: I feel healthy, I hope that I have more time left, and why should I do this anyway? It turned out to be one of the better exercises I have ever done. This exercise forces you to think about the big picture of your life. How do you want to be remembered? What have you accomplished, and more importantly, what do you want to do with your remaining time? Go ahead and try it.

Here is a template you can follow:

(Your name) ____________, age __, died today from ______. He/She was a member of ____. He/She is survived by ______.

At the time of his/her death, he/she was working on becoming ___________. He/She will be remembered for ________. He/She will be mourned by __________ because ________. The world will suffer the loss of his/her contributions in the areas of _________, __________ and ________. He/She always wanted but never got___________. The body will be __________. Flowers may be sent to ____________. In lieu of flowers send ___________.

Some more help for thinking this through:

Historical: Make a list of what you have done (accomplished) that you are proud of. What have you enjoyed most that are your best-remembered occasions? Reflect on your successes, and celebrate them as near as possible to the accomplishment.

Future: What is on your bucket list? (The term "bucket list" was coined by screenwriter Justin Zackham, who wrote the screenplay for the 2007 film "The Bucket List" about two terminally ill men who went on a road trip to accomplish a wish list of things they wanted to do before they "kicked the bucket.") List those things that you still want to do during your life. If your bucket list is not in writing, perhaps it is time to write it down. Put accomplish-by dates for each item.

Desirable but not existing: List the things that are desirable but do not now exist in your life. These are the basis for your goals.

Non-desirable and existing: List those things that exist in your life that you don't desire. These are your obstacles. Write them down and start thinking about how to remove them. Work towards making these changes. Start today.

Complications: List the complications that would arise if you died suddenly. Determine what you would need to do to avoid those complications, and then develop a plan to eliminate them. For example: What if you have a business with partners and there is a sudden death? Hopefully there is a buy-sell agreement that is funded with the insurance proceeds of the decedent. A buy-sell, properly structured, will require the surviving owner to buy and the heirs to sell the shares, thus preventing a surviving owner from ending up in business with a partner's spouse or children.

Goal setting: This is where your bucket list lives. A goal is a dream with a deadline. Goals should align with your life. Think of your goals as the "pot of gold" at the end of the rainbow. Goals must be specific, measurable and attainable with a time horizon. Express your goals in a positive and personal way.

How to set your goals: Goals need three dates -- the date you set your goal, your target date to achieve your goal, and the date your goal is achieved.

Write down how you will benefit from achieving your goals. List possible obstacles and your strategy for overcoming these obstacles. What specific tasks or action items are necessary for your goal attainment? For each task, you will list a projected start and target date for completion and indicate when you have completed each item.

Use affirmations as to why this is a worthy goal and the value of accomplishing it. The mind is very powerful. The more you think about and visualize positive results, the more likely it is that you will achieve these goals. If you have been realistic with your timelines, then you should succeed close to these dates.

Track your progress. You must know when you have reached your goals.

Decades ago, I came across a terrific goal-setting form which I still use for the goal-setting process. It is one page, two sides, and I will gladly email it to you upon request. Write to me at centreofinfluence@gmail.com and ask for the goal-setting form. At link to it is with this story online at http://bit.ly/bizwkly.

I sincerely hope that you achieve all of your goals, including all those on your bucket list, before you kick the bucket!

Chapter 32

Culture: it's not in ledger, but it affects the bottom line

Published: Monday, October 6, 2014 at 1:00 a.m.

Culture is an invisible force running through your organization. It's an unwritten set of rules for working together.

Good organizational culture can breed harmony; poor culture can be disastrous. Culture can change, but usually that change is slow, evolving over time. Culture affects all stakeholders, including owners, investors, employees, customers and vendors.

In the beginning, a company's founder establishes its culture as an extension of personal style, beliefs and values. Early hires likely have an effect in the formative stages and help set the cultural tone.

Every employee has the potential to change the culture, for better or worse.

Culture is a significant factor in the success of a business. It is important that the culture and the behavior it engenders are aligned with the company's values, mission and goals. But it also must be able to adapt.

A good example is CVS Health Corp. CVS recently re-aligned its mission, values and product mix by deciding to no longer carry tobacco products. After all, CVS is a pharmacy, providing drugs to heal the ills and make people well. Selling tobacco products was inconsistent with the company's mission. I suspect the hit they took in sales was more than compensated for by their positive public relations exposure.

Do you know what your company's culture is? What would you like it to be? How can you move it from what it is to what you'd like it to be?

Perhaps you should ask these questions and try this exercise:

1. What do you think your culture should be?

2. What is your company known for?

3. How do your employees behave?

4. What is your company's persona?

5. Circle as many of the following that apply to your business and feel free to add your own attributes: effective leadership, integrity, trust, empowerment, commitment, caring, open communications, teamwork, accountability, adaptability, effective processes, customer- focused, skills development, effective recruiting, effective retention, supportive of innovation, loyalty, non-discrimination, performance-based pay, fair.

6. Now give this list to your employees and ask them to (anonymously) circle the attributes the company has and to add any words that describe the culture as they see it.

Are there differences in your perception and theirs? I bet there are, and you need to learn why.

When employees talk to each other, are they generally happy or complaining, talking about the company in a good light or negatively? Are they enthusiastic?

Do you truly listen to your employees and consider their input? Is your culture traditional, like McDonalds, or non-traditional, like Zappos?

Are company communications collaborative or dictatorial (as in, my way or the highway)? Is agreement the order of the day or is it permitted to challenge assumptions and offer solutions?

Consider variables such as your company policy for overtime, lunch time, vacation time, promotions, health insurance, profit sharing, 401(k) matching contributions, car allowance and other perquisites.

Walk around your office and observe what is important to your employees. Their desks and walls are telling. Do they have photos of their family, vacation pictures, sports memorabilia, framed letters, trophies or plaques? This may reveal information about employee values. Even the Wizard of Oz needs to look behind the curtain from time to time to see what's really there.

Is your culture inclusive or exclusive? Employee cliques are both inclusive for those in the clique and exclusive for those not in the group.

How is your company structured? Is there harmony among departments or are competing interests causing World War III?

Sub-cultures, small groups that surface within larger groups, may have their own cultural attributes. Different departments often develop their own sub-cultures with conflicting goals within them.

How about your customers' expectations? How well do you service them? Think of businesses that service you impressively and those that don't.

And then there's cultural collision, what happens when companies merge and cultures collide. One of the more difficult aspects of a merger happens when everyone is physically together in the same building. The result is a cultural collision.

You now have two distinct groups trying to behave as one. Culture is a stubborn thing and resistant to change. Will one culture become dominant? Will a blend of cultures lead to inconsistencies in values for one group or the other? Will everyone get along and play nice in the new sand box?

This culture stuff is very tricky and critical to a successful merger. Seek help from business-culture experts when attempting a merger.

Job satisfaction often has a lot to do with the type of company employees work for. How are employees and their contributions valued? Pay is one thing, but benefits such as sick leave, group insurance, retirement benefits, vacations and profit sharing go a long way. Employees will often work for a company for less pay if the culture is meaningful and relates to their values, behavior and beliefs.

Culture may not show up as a line item on your balance sheet, but it certainly affects your bottom line.

Because last week was National Customer Service Week, here are a few tips on how to improve yours.

Your ability to satisfy your customers is crucial for many reasons, chief among them that, without customers, you are not in business. A satisfied customer is your greatest ally and will most likely continue to do business with you. They can be proponents of your business and provide referrals.

A dissatisfied customer, on the other hand, may be a detractor and is likely to switch service and tell others about their poor experience with your company.

What can you do to improve your customer service?

1. Listen to your customers. They will tell you what they want. Identify customer needs by asking the right questions.

2. Provide solutions. Customers buy solutions to their problems, not products and services. Often, needs are emotional.

3. Care about them. Nobody cares how much you know, until they know how much you care -- about them.

4. Use the customer's name. Offer sincere praise or compliments, thank them for their business, and mean it.

5. "Yes," should be your favorite answer. If you can help a customer within reason, just do it.

6. UPOD. Under Promise and Over Deliver. Do more than is expected.

7. Always respect their time. Be on time to appointments. Call if you are running late. Reasonable people understand that things can come up, as "life happens."

8. Request feedback. Ask what you can do to improve.

9. Properly train your employees. Employees are often your direct link to your customer and your first line of service. Train them well and treat them well. Customer service starts at the top.

10. Knowledge base. Does your staff know your products and the services you offer? Teach them to answer the customer's questions and not show off or confuse the customer. Tell the customer what they need and want to know. Show the customer the next step, as applicable.

11. Solve their problem. Make it easy for the customer to buy.

12. Develop a dependable supply chain and delivery process.

13. Answer your phone. Ask if you may place the customer on hold. Do not place the customer on hold for long periods. Take their phone number and call them back promptly after you have the answers to their questions.

14. Deal with complaints. Handle complaints promptly and courteously. Don't say "no problem." Giving the customer with something of value that is unexpected goes a long way toward building continued loyalty.

15. Go the extra mile. As Home Depot often does, walk customers to the product that solves their problem.

Rating your business

Where does your business fall on the customer-service continuum?

Most people have no clue as to what constitutes excellent customer service. The customer-service experts at the DiJulius Group, broke companies down by the following levels of customer service.

Level I Unacceptable12%

Level II Below average29%

Level III Average38%

Level IV Above average18%

Level V World class3%

The customer service

10 commandments

What does world-class customer service look like?

According to DiJulius, "You have to be excellent for five consecutive years. Everything counts: Is your messaging positive or negative?

This level of customer service embodies the 10 Commandments of world-class service:

I. Have an incredibly strong, inspirational service vision -- a service-brand promise that instills the service passion in all your employees.

II. Service culture -- find, attract and only hire people who have the service DNA.

III. The company is world class in team/guest/community/home -- walk the talk in all areas of one's life.

IV. Master the norm factor -- profiling guest (customer) and sharing that information so all employees can make them feel like VIPs, distinguishing new from returning customers.

V. Are zero-risk to deal with -- no hassle problem solving.

VI. Non-negotiable service systems -- minimum service standards everyone must follow.

VII. Anticipate service defects and above-and-beyond opportunities -- company-wide awareness of what to avoid and how to be a hero.

VIII. Daily pre-shift huddles -- mandatory five-minute daily communication meetings to ensure common and clear vision and goals.

IX. Train, train, train current staff and the next generation -- standardized training for new and existing employees.

X. Have an above-and-beyond legacy -- constant awareness by recognizing and celebrating your stories.

According to the DiJulius Group: Most organizations are in the dark about the quality of their customer service. Out of 300 organizations, 80 percent thought they had superior customer service, but only 8 percent of 3,000 customers thought they had superior customer service.

Customer service done right results in higher sales growth, more profits, brand loyalty, more referrals, less price sensitivity, higher employee morale and less turnover. The better the customer experience, the less price is an issue.

Please write me about your best or worst customer-service experience for a possible follow-up column in the future. It is always rewarding to hear from you.