Build Your Business With Standards and Rules

He has a Destination, What is yours?

Aren’t successful businesses built with good rules?  Shouldn’t every business have rules and standards for everything to succeed?   Pilots use rules to fly, the big burger chains like McDonalds and Burger King use rules to make burgers and the government is loaded with rules.  Last I heard Pilots were doing a pretty good job getting people where they wanted to go, the burger chains were making good money because the rules create a product that people are comfortable with.  As for the government, ok I’ll skip that one.

As a commercial rated pilot for over a quarter of a century, it is pretty rare that I go flying without a purpose, reason or direction.  Even as a student pilot, I had a purpose when I went flying.  All the while I considered my flying career a success.  When I fly, there is always someplace to go, something to see, or something to do in the airplane.  Isn’t that a lot like business? When a pilot starts out, he has a destination or an aim point, a plan to get there and a few thoughts in case the plan doesn’t work out.  The rules are simply guidelines to stay in.

Who Is Your Perfect Customer? You?

Knowing your customer is critically important for a business to grow and prosper.  I work with my clients and students on this all the time.  In my book, So, Now What, I had dedicated a chapter and worksheet to helping business owners like you figure out exactly who the perfect customer is.  Every once in a while someone approaches me and they show me how they did the work, filled out the worksheet and it didn’t help them in their business.  When that happens, like any good business owner, writer or teacher, I start by looking in the mirror to see what I did wrong.  And in this case, as in most cases, it was something I did wrong.

Not Quite a Theater, a Great Media Room

When Mr. R called and went over everything happening in his business, and I could tell nothing had changed in three months, I went back and re-read the chapter in the book.  Everything looked ok there.  I revisited my notes from past conversations with Mr. R, nothing there.  Finally I looked at Mr. R’s notes on his perfect customer and I couldn’t help but laugh out loud.  My wife came running in to ask what was so funny, and even my dogs where worried.  I had her read the information on the guy’s perfect customer.  We both immediately knew what I did wrong in teaching and in the book. 

What Is Your Customer Really Worth?

Lately I have had more than one discussion on the lifetime value of a customer.  While there a few businesses that are one shot programs like wrongful death attorney’s, most other businesses have a long term value and benefit if they can maintain a customer relationship.  Every owner I talked to wanted more customers, and agreed that the customers they have are the most profitable.  So when I wanted to add a customer relationship program to the mix, why do they hesitate?

It is a very interesting phenomenon and attitude among business owners.  All of them will track how many customers are added to their “list” but they rarely track how many leave.  Online marketing is an interesting field because the total list is always a moving target.  If we forget about the existing customers for even a minute, they fall off the list faster than we can hit the refresh key.

So why is it that an owner will spend a small fortune on online advertising and not a penny to engage the existing list and make sure they don’t go anywhere else?  I don’t know.  The Harvard Business School has a pretty cool calculator to estimate the lifetime value of a customer. 

Where Are You Going?

There are some great lessons in life that everyone can learn from taking flying lessons, shooting lessons or learning how to drive a race car on the track.  All of these lessons apply to business as well.  Paul Newman was a great actor and race car driver.  John Travolta, a great pilot and actor.  Many business owners that are very successful race cars, fly airplanes or hunt.  Is there a connection here?

I think there is.  All of these skills, running a business, acting, flying, shooting and racing require planning and practice.  In the end they all have a target of some sort.  The actor wants to make you think it is really happening to him, whatever it is.  The pilot has a plan of where he is going before he ever gets in the airplane.  The race car driver knows every corner of the track and the fastest way around them.

So how does this relate to the business owner?  There is an often over looked or mis-applied rule of success.  Successful people have a direction and an aim point.  When was the last time you saw someone you thought was successful and said "he can do anything?"  I would guess never.  The best heart surgeon is a heart surgeon, not a podiatrist that does heart surgery on Saturdays.

The businesses that are the most profitable with the least effort are those that have a definite direction and aim point.  Look at any major business.  Dominoes Pizza for example.  No live music, no bar, just pizza, hot and fast.  It doesn't matter if you make the worlds best pizza if everyone thinks that you are running a bar.  And if you are running a bar, you better have some really cold beer and don't worry too much about the pizza.

So what is your direction?  If you aren't sure, I got a deal for you, I just dropped the price of my book on the Kindle to $2.99.  I wrote it to help more people figure it out, and with the economy the way it is, I figured I can reach more people at $2.99 than $16.99.  Find your direction, pick an aim point and go find success!

Can You Succeed Without Failure?

Failure.  Just looking at the word can make some people stop reading.  Fear of failure is what stops most people from succeeding.  Failure means you pushed beyond some limit.  The problem is if you don’t fail, you never learn the limits.

I can tell you about failure first hand.  I pushed the limits of USAF pilot training and lost an F-16 job.  I learned quick enough that I was able to get back in the limits and still fly for 15 more years. 

In business if you don’t fail once in a while, you aren’t pushing your business to be it’s absolute best. 

I can spend a lot more time on this but Honda has been kind enough to post a great video on failure I think is worth watching.  Here is the link http://dreams.honda.com/#/video_fa

Keep Your Eye On Your Targets for Your success

One of the smartest things I ever did was move into a neighborhood I couldn’t afford.  On the surface this sounds stupid, so please let me explain why it wasn't.  This wasn’t a neighborhood of new fancy tract homes that all of the other couples my age were moving into.  This was a neighborhood full of what my friends called “old people and junky homes”.  My wife and I both liked the neighborhood because you had to pass by a winery while cruising down a road lined with old walnut trees to get there.  The area just had a great romantic feel and was very close to both of our offices at the time.  There was also a private country club featuring a championship golf course.

Years earlier I had discovered this little area of about 100 homes while out on a Sunday drive.  My wife and I later set our sights on living in that area at any cost.  We would scrimp and save and just about when we thought we could afford a house out there, the prices would go up.  We drove the neighborhood at least twice a month.  We thought we knew every street and every house in the area cold.  We went to every open house, and knew all the real estate agents.

Eventually we were the last of our friends in our old neighborhood.  Everyone had moved away into some “cool” area.  Some new tract of houses with a neighborhood pool, or that was closer to shopping would attract our friend’s attention.  I knew it wasn’t right for me to move into one of those neighborhoods so I stood my ground and waited. 

Is A Business Strategy Important to Building a Business?

Recently I have been working with a couple of business owners who are stuck on the whole strategy thing. These owners want me and my company to take over their internet marketing, you know SEO, pay per click and all of that kind of stuff. The problems is they can't clarify their strategy for us. My rules are pretty simple, no strategy, no marketing. The simple reason is I want to keep clients for a long time.

What I have learned in 20 years of owning and building businesses is that anyone can grab an opportunity, throw money at it and fail. I don't want these clients because I am lazy. Not lazy because their business is too hard to market, but lazy because I don't like chasing down new clients if I lose one.

Before we had the strategy requirement in place, clients would last anywhere from six months to about a year and a half. The few that have been with us over five years all have two things in common. First they have a strategy. While the strategy has changed a little over time, we have been involved with the changes so we could change the marketing to meet the needs of the client and their market.

The clients that we took on who were opportunists and didn't have a strategy would not see the progress they expected and jump on the next opportunity. Every six months we had to completely revamp their marketing. In the world of the internet, consistency is a critical component of success. The first month of any campaign is the most expensive, and we usually lose money getting a client set up. In fact most of the time, you don't see real progress for two or three months.

When a client jumped from opportunity to opportunity it was like getting an entirely new client. None of them would pay the higher fees of the first month, so each time they "re-invented" their business we lost money. The clients with a strategy are all still in business, still clients and still profitable.