Saturday
Jan262019

Real Business with Alan Wick


The "Real Business with Alan Wick" show is broadcast on the last Sunday of every month.

Running your own business can look and sound exciting; watching TV shows like The Apprentice and Dragons Den, or hearing about entrepreneurs who seem to have made millions overnight, can easily give a misleading impression.
  
The reality is that there are around 400,000 businesses started in the UK every year, but, only 43% are still trading after five years. In other words the majority of start-ups fail.
  
For reasons you can find on my website, I’d like to contribute to increasing the success rate of wannapreneurs and early stage businesses, and if I can help well-established companies with a few tips, so much the better.
  
In my monthly shows, I’ll be interviewing experienced entrepreneurs who are not only happy to share their success stories, but are also willing to talk about their mistakes, what they’ve learned from them and are still learning as they continue along their journey. Plus there’s a Reflections Section at the end, where I link their experiences with learnings you can apply to your business.
  
Some years ago, the late Steve Jobs, who as you probably know founded Apple, gave a wonderful speech to students at Stanford University at the end of their studies. In it, he advised them to “Stay Hungry. Stay Foolish.”
  
Inspired by this, I like to say “Stay Hungry. Stay Learning.”
  
If you have a question or a comment, do please call my 24 hour hotline 01342 889488. Or you can email realbusiness@alanwick.com. 
  
If you end up missing part of the show, or you want to listen to it again, then go to the Listen Again page on this website.
   

I hope you enjoy the show, and more importantly, that you learn something from it that's useful for your own business.

Sunday
Jan202019

The Power of Positioning #48b

During the Global Financial Crisis, I noticed that some companies suffering from declining revenues decided to go for almost any business from anyone in order to survive. This approach usually produced short-term relief but hurt them later.
For example, a premium software development company that suddenly lost its largest client made no cost reductions, discounted its fees, and ended up in a vicious circle leading to its eventual demise.

On the other hand, companies which doubled down on their core offer, reduced costs (including making redundancies), often weathered the storm and survived.

I remember one company particularly well that took the second approach.

A well-established family owned business that recycled corporates’ unwanted IT equipment, it had a dedicated team with a positive culture. They cared greatly about their environmental policy and their ethical values: when I asked what they were proudest of, they said “the year we sent the most containers of revived IT equipment to Africa for free”.
The company’s positioning and branding reflected this perfectly. But by 2009 orders were thinning and they were heading for trouble. During a workshop I asked them to articulate as succinctly as possible why their clients chose their company over their competitors.

It turned out that their positioning, which had served them perfectly well during the good times, focused on the environmentally-friendly nature of their services, whereas the main reason their clients chose them was they received more money from them for their unwanted IT equipment than from their competitors. Their environmentally-friendly processes were a “nice to have” not a “must have”.

During the workshop they came up with a new positioning strategy which focussed on the “must have” part of their offer. This was a painful process for them, as the founders had started the business to do their bit for the environment, with the commercial side supporting it (which I get might sound strange to some people). But they realised they had to adapt or die.

From that point, it was a relatively short journey to creating a new brand that articulated their repositioning strategy. When I say a new brand, in this case I’m not referring to new corporate colours or a new logo. They changed the trading name of the company that “did what it said on the tin”.

There was no need to change their operations or processes. They changed their marketing messages across all channels, and they commissioned training for their sales team to focus on the commercial rather than the environmental benefits of choosing them.

In a matter of months, the company’s revenues started to climb. Their sharp, straight to-the-point message landed with their target market in a language they could relate to, in other words they focussed on their clients' agenda rather than their own.
At the end of the project, I wondered whether, when the GFC ended, they’d revert to their previous positioning and associated brand.

They didn’t.

So, my question to you is: looking at it from the outside in, does your company’s positioning suit your agenda or your clients’ agenda? If the former, why?
Thursday
Dec202018

How to gain customers even if you make a pig's ear of it.

Many years ago, I worked with a client who ran a five-star hotel in an exclusive part of London. Running a business in that area was very competitive. One of my client's key metrics was measuring the percentage of guests who returned. So, he decided to focus on what he could do to give the best quality service. He did all the usual things you’d expect: getting the phones answered quickly, delivering room service in good time, staff polite and well-presented — all that type of stuff.
Over a number of months of measuring the results, the hotelier began to notice a very strange trend. When something had gone wrong during the guest’s stay, for example a missing bar of soap or a missing remote control, if the hotel went above and beyond what was expected – those guests were more likely to return, than if something hadn’t gone wrong in the first place.
The hotelier found this discovery weird — counterintuitive — and that made him curious to put it to the test.
Over the following months, he started playing around with various scenarios. One scenario would be to get his staff to deliberately remove one remote control from a suite but not the other, so when the guest arrived, they would call housekeeping.
Housekeeping would come to the suite, apologise for the mistake and provide the missing remote control. On one occasion (and this is a true story) the hotel arranged for a chauffeur-driven car to take the guests to and from the theatre they'd booked through the concierge.
Naturally the guests were super-delighted with this. They went on to return to his hotel over and over again, told their friends what had happened, who in turn booked rooms there.
The hotelier continued these experiments over a year or two, training the hotel staff that when things go wrong, they should do more than apologise and put it right. He gradually introduced a budget for housekeeping, which staff could allocate for this purpose, giving them authority to use their best judgement. The results were undeniable: the hotel developed the highest occupancy rates in the area, with a loyal following of returning guests who chose to stay at his hotel year after year.
Thus the hotelier learned to increase customer loyalty by doing more than is expected to put something right. This concept even has a name: "Service Recovery".

 

 

Tuesday
Nov202018

So you think your customer rewards program is great? Big deal!

I’ve just filled in a customer satisfaction survey for my mobile service provider. It was all going well until there were questions about rating their “rewards and benefits”.

They listed some examples of what they mean by “rewards and benefits”. The thing is every single one of them is part of the reason I choose this company. It's what I pay for.

I’m not aware they've ever offered me any rewards, even though I’ve been a customer for decades, through several brand and ownership changes.

I can’t believe a household name company can get this so wrong.

Benefits are expected as part of the deal, whereas rewards, by their very nature, are unexpected, or, if you like, “extras”.
I started the survey feeling positive about the company, but I ended it feeling annoyed with them for conflating benefits with rewards.

In your business, have you defined precisely what benefits your customers can expect as standard vs. rewards they don’t expect? How about for your management and staff? And for your key partners and suppliers?

 

 

Saturday
Oct202018

Premium means Premium.

My beloved Bowers & Wilkins headphones - the bees knees - finally gave out after three years' sterling service.

I phoned the factory, got through to a helpful young woman within a few minutes, "No problem, sir, we're sorry to hear that, we'll post you a box to return them to us for service."

Two days later a small cardboard box arrived containing what they call a "beauty box" - seriously. The cardboard box itself was sealed with carefully-positioned and cut tape, and had shipping labels that were stuck on absolutely straight. It looked like someone really cared what it looked like before shipping it. The "beauty box" is the same box the headphones had originally shipped in: white, branded, with a soft insert shaped to fit the headphones. Beautiful indeed (if you're into this sort of stuff!).

Off it went back to the factory. I received an email saying they'd arrived safely.

A few days later another email arrived saying they'd inspected the headphones, but due to the type of fault, they recommended replacing them with the latest model for a few pounds more - would that be OK? Yes, I replied.

A few days after that I received a pair of brand new headphones (in another beauty box!), with a note apologising for the inconvenience.

Will I buy from them again? Will I recommend this company? You bet I will, with bells on (disclaimer - I have no interest in Bowers & Wilkins other than as a customer).

If you're positioning your brand as Premium, make sure that every aspect of what your company delivers is what it says on the tin, down to the tiniest detail, every day. No exceptions.

Premium means Premium.