Archive for March, 2011

A Lost Customer

Tuesday, March 29, 2011 by:David Zahn
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Connecticut has much to preen about with a beautiful shoreline, rolling verdant hills, and the state’s pride and joy – UConn sports. One thing that is not particularly strong in the state is the differentiation between grocers. If one were blindfolded and could not remove it until they were in aisle 5 of nearly any grocery store – it would take a fair amount of time or cheating before it would be apparent which store one was in.

Sure, there is the exception of Stew Leonard’s. Love it or not, the shopping experience is so vastly different there than in other grocers that it is immediately identifiable. The same cannot be said for Big Y, Stop & Shop, Shaw’s, or ShopRite. Unless the shopper looks at the store brand products on the shelf or happens to see the flyer in the shopping wagon that was left over from the previous shopper; mot of us would not be able to identify which store we were in.

The New Kid

So, it was with great excitement and a fair amount of expectation that a trip to Stamford’s newest entry into the food and household goods was made.  Fairway Markets had been praised as THE place to go and the one that was finally going to turn the competitive market upside down.

New kid on the block tries, but fails.

The initial impression the store makes is impressive.  Produce stacked as high as one can reach and the variety, presentation, and layout of the row up0n row of fresh fruits and vegetables invites one to browse and make purchases on impulse.  From there, the prepared foods call out to the shopper. Soups, pastas, and other foods are packaged and attractively presented. 

It is easy to pick up a few things that look and sound delicious, that is, until you check the prices.  The euphoria of shopping with one’s eyes and one’s stomach is quickly overruled by the wallet.  This is not the place to go to save money.  While it resembles the environment of a Warehouse club like Costco or Sam’s, it surely is not.

Gets Worse

As someone who shops Stew Leonard’s, Whole Foods, and independent retailers, a high price does not scare me off or out of the store.  However, it must be coupled with service, variety, or something that allows me to calculate how there is a justification to pay more than I would pay elsewhere.  Fairway scores on this account with some of their unique offerings.  The variety available to the shopper is sufficiently different than other retailers that it does provide a unique shopping adventure feeling.  The branded products, the hot foods, the counter service food, etc. DO offer something that is not commonly found elsewhere and certainly not as comprehensively.  Stew’s has some, Whole Foods offers some, but Fairway seems to have what they have and more.  Unfortunately, they also have “less” of a very important ingredient – Customer Service.

Remember Me – the Customer

The deli counter has a selection of hams, salamis, imported meats of one kind or another that all seem to demand that the shopper try them.  Signage explains many of the better options and gently prod the shopper to try.  Unfortunately, it also requires dealing with the clerk behind the counter.  It is there that Fairway crumbles like the bleu cheese they sell.

The line to be served at the Deli was perhaps 6 people long and like is standard at most retailers, the shopper takes a number and waits for it to be called.  In the five (5) minutes it took to have my number called, there were no less than three (3) times when a shopper had an argument with an employee for an issue regarding customer service.  That continued when one went to check out of the store and in the amount of time it takes for two (2) shoppers ahead of me to be checked out, I overheard another person who had NOT been at the Deli counter while I was there also complaining about how rude the service was in the store.

There is just no excuse for this.  Fairway Markets has great products, is beautifully merchandised, and markets itself as a premium offering if one looks at the perimeter departments (fish, meats, prepared foods, etc.) – but treats customers as impediments and not the purpose of their efforts.  As much as I wanted to like it and embrace their arrival onto the scene, I left the store with my purchase happy to have done it, seen it, experienced, it – and headed up Route 1 to never again return to the store.  Stew Leonard’s, Whole Foods, and even Stop & Shop will get my business over any business that chooses to be rude to shoppers. 

While this store does show that there is potential to shake things up locally, it does not ultimately deliver on the promise it has to draw me in and keep me as a shopper.  Close, but not nearly good enough to shake loose my grocery money from those that may do less, but do it right.

Failure Happens – Now What?

Friday, March 18, 2011 by:David Zahn
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The statistics are sobering.  Start-ups have a high failure rate.  According to an article written in Harvard Business Review (http://hbswk.hbs.edu/item/6591.html) that addressed failures of start-up businesses, failure occurs between 30 and 40% of the time if it is defined as losing all assets and 90-95% of the time if defined as not receiving the expected ROI  or payback on any individual or discrete project.  Entrepreneurs obviously start businesses with the idea of it succeeding.  Every start-up is expected to meet a market need, reach a level of performance that creates a profit within an established period of time, achieve results, and contribute income for the owner/entrepreneur.  With the exception of the Broadway show’s version of “The Producers,” no business is started with the idea of failing. 

Starting a business with the intention of failing is only done in Broadway shows.

And Yet

However, failure does occur and understanding why it happened and how it is used to determine the entrepreneur’s next steps is worth considering.  The autopsy of the failed enterprise can provide great insight into what went wrong and how to prevent it from re0occurring in future endeavors.  According to Shikhar Ghosh, a lecturer at Harvard Business School, there is much that can be learned by examining the failure.

The Reasons for Failure

•Most start-ups fail due to lack of foresight, lack of wiggle room in the business plan, bad timing, or lack of funding.
•However, counter-intuitively, large sums of funding for an unstable business model can take what would have been a small failure and turn it into a huge one.
•Ghosh maintains that running a doomed company can actually help a career, yielding experience and networking opportunities with venture capitalists and other entrepreneurs.
•Ghosh does caution that, “While failure of a business or project is a learning experience, personal lapses in ethical or moral behavior can damn a career.” 

In fact, Ghosh maintains that failure is the norm and that very few companies achieve the initial projections of the founder/entrepreneur.  In part, the failures are often avoidable and could have been prevented if the entrepreneur had done the due diligence of testing the base assumptions of the business plan (assuming there is a business plan created).  One interesting insight that Ghosh provides is that entrepreneurs will sometimes believe that they can predict the future instead of working collaboratively with customers to create a future with them.  The over-reliance on their own insights, perspectives, beliefs in technology, service models, or products can blind them to the realities of the marketplace. 

Leave Room to Change

While the best of intentions and beliefs were used in creating the initial business model, plan, and organization; there should always be room to “wiggle” or modify things once the business has been launched and has had time to interact with the marketplace to pilot or test itself against competitors, engage with prospects, and operationally execute against expectations.  If the business model is so rigid that it cannot be corrected “mid-stream,” the initial plan had better be right, because there is no going back and trying something new.  Ghosh uses the example of Webvan to prove the point by recognizing that the company purchased warehouse space across the United States in anticipation of demand for grocery delivery service.  However, once launched, they discovered that the demand was not sufficient to warrant such a high fixed cost in property costs.

The internet boom is legendary for including many venture capitalist-backed businesses that seemed to have nothing more substantial than a PowerPoint presentation of a weak idea to support it.  Those businesses that had enough financial resources behind it could take the time to find a viable business model (before the money ran out).  Netscape is one example of a company that floundered until it could settle on a business model that worked.

In the HBR article, Ghosh maintains that, ”The predominant cause of big failures versus small failures is too much funding,” Ghosh, further is quoted as saying “What funding does is cover up all the problems that a company has. It covers up all the mistakes, it enables the company and management to focus on things that aren’t important to the company’s success and ignore the things that are important.”

Learn From It

Well prepared business owners understand that a company may fail and that it does not have to spell the end of a career (or of a business idea). Even failed businesses yield future networking opportunities with venture capitalists and relationships with other entrepreneurs whose companies are succeeding. 

Individual failures within a company can be viewed as learning experiences. but only if the executives are willing to view failure as an indicator of the need for, or as potential for improvement. For instance, if the company’s best salesperson is unable to sign a key customer, then the management ordinarily would seek to blame, chastise, or hold the salesperson accountable for the failure.  However, there is another way to view it.  They could recognize that if the top talent has trouble with the sell, then maybe there is something wrong with the product. Small failures can provide the raw material for improvement.

Taking the lessons of what did NOT work previously to the next assignment can be a real experience-building asset.  A well understood failure can often be more illuminating in preventing a repeat than a lucky or happenstance success.

It Isn’t that Complicated

Thursday, March 10, 2011 by:David Zahn
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When asked to choose between detail and complexity versus simplicity and clarity, most of us choose the route of the simple.  Perhaps it is our short attention spans, our sense of being time-impoverished, or our feeling of being overwhelmed by the increasing number of tasks or commitments we all juggle in the span of teh day.  Whatever the cause, we often just want to tell others to”

  • Cut to the chase
  • Get to the point
  • Strip out the fluff and talk brass tacks with me!

 

Sales is more than just a firm handshake

What is your goal?

I often speak with salespeople and sales managers and assist them in putting their business plans together.  Invariably, the effort morphs into a multi-paged presentation, with  numerous clauses and caveats to cover every conceivable possibility. What tends to be contained in the document is confusion, uncertainty, and inability to focus on the “what counts” factors. 

What I have done is asked sales people to highlight in one sentence what it is they do/why they were hired/how they should be measured.  That is it.  One sentence. 

What I will see is some variation on one or more of these:

  • “My job is to provide a comfortable lifestyle for me and my family.”
  • “Uncover customer  needs.”
  • “Offer solutions to prospects and escort them through the sales cycle.” 

Well, those are all good intentions, but they are not exactly why the person is in the role they are in.  There role is real simple and very easily measured – increase sales.

So What?

Taking that as the mission, the sales person can then recognize that any activity that does not contribute to that outcome should be looked at with suspicion.  Further, recognizing that level of clarity in one’s own role helps the sales person distill their purpose, product or service, and offer to the prospect or customer similarly. 

The customer or prospect is not interested in being distracted with a presentation, has no desire to discern how to use whatever it is being sold to them, and could fill the time taken to participate in a sales call and used it productively to move their own business and interests forward.  So, you had better be providing them with a real clear mental picture of what is at stake for them to take a phone call, attend a meeting, or engage with you on any level.

Surely, nearly everyone wants to make money, but that does not happen until a sale occurs.  Focusing on getting the sale is the highest priority and the riches one receives may be the motivation, but it is not the goal of the transaction.  Similarly, meeting a prospect’s needs, but not making a sale may be emotionally satisfying, but it will not allow a business to thrive long-term.

The “How-To”

So, if that is the goal (to increase sales), then there are two steps that wil naturally follow:

  1. Prioritize – One will look at time, tasks, and efforts very differently.  Does the current activity hinder or contribute to the desired outcome?  Are the right tasks being undertaken to best accomplish the increasing of sales? Are distractions allowed to take time, energy, and efforts away from more productive tasks?
  2. Measure – Are the actions undertaken effective?  Is it a Sales Revenue Generating Activity?  Very directly, does it bring the sale closer to happening, or put distance between the seller’s organization and the prospect? Is it helping to increase sales or not?

Cystallizing one’s Focus

When you identify what you are trying to accomplish in such a direct and simple way, it is like the difference in watching an HDTV vs. looking at something through a kaleidescope.   It brings it all into sharp relief and it is not all about colors.  Goals become easier to identify, your time becomes easier to manage, your tasks and activities are easier to prioritize, and you will be able to maximize your efforts. 

As Mark Neerema commented in his blog:

As sales people you hear it all the time. You have to manage your time, be focused, work on the right things etc. Well, it doesn’t start or change by focusing on those specific things. If you just focus on say being better with your time, but you still haven’t given yourself the clarity, you might as well go skip stones in the lake. In order to make them better you must focus on what is driving them! THE driver behind your priorities, goals, and time is how clear your understanding is of what you are there to do.

Resilience is a Group Exercise

Friday, March 4, 2011 by:David Zahn
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Every business owner has heard the mantra that there is nothing constant but change itself.  A quick review of the last two decades points out one very salient example; in the 1990′s, books were sold in Mass Merchandising stores (Kmart, Wal-mart, and others).  That entire department of products then became the domain of book retailers like, Borders, Barnes & Noble, Books-A-Million, etc.  Within the last month, Borders has declared bankruptcy. 

 Another example can be found in the movie rental business.  Remember a time when movies were only available in theaters? Then, Blockbuster created a business model that allowed people to watch movies at home after a time of theater release.  In short order, there seemed to be one of their retail stores selling or renting videos in every town.  Then, cable television included movies for rental through their service, online downloads, Redbox kiosks, and Netflix allowed for immediate or more convenient forms of movie watching.  Blockbuster is now viewed as irrelevant and has closed the majority of their stores.  Businesses that are not able to react to the fast-moving changes and surprises in the marketplace are quickly passed by and either fail, or are significantly compromised.

Expect Surprises and Be Reslient

Harvard’s Rosabeth Moss Kanter has five lessons to pass on to business owners that are worth heeding.  Of the most important points made by Kanter, the recognition that surprise and change are the new norma is the one worth focusing on for both businesses and individuals. Therefore, the resilience for individuals is the new skill. By definition, resilience is the ability to bounce back successfully when facing stressful or even traumatic experiences.

According to Kanter, “experience suggests that most of us are not very reliable at predicting how we’ll behave when facing difficult situations.”  For some, that may mean how to deal with Divorce, for others it may mean the loss of a major client or perhaps having to close an office or store location.  Those that have undergone a significant life-altering event will often feel that they were naive to think that they could continue forward without addressing the impact of the change.  One commentator  said upon his own experience with a spouse’s Alzheimer’s Disease, “I can tell you now that I should have multiplied my expectations by 8 to 10. My training in stress management didn’t improve my predictive ability, although it was a great help in managing much of the stress.”

The Right Stuff

When looking within ourselves, each individual will have to determine if they have within themselves the ability to remain; resolute, tenacious, creative, opportunistic, and focused enough to stay competitive in the face of so many challenges.  In short, do we have the “right stuff” or are the forces that seemingly conspire against us just too much, the hills too steep, and the rivers too deep.

One’s attitude is often the giverning factor in how one approaches challenges (those identified and unforeseen). Resilience is not a matter of personality, genes or even the nature of our stresses and traumas. Rather, it can be viewed as each negative event a person faces leads to a coping attempt.  That event forces each of us to introspectively assess own capabilities,and evaluate our network of support (personal and professional). By determining just how substantial or reliable one’s resources are, a more insightful determination can be made about one’s ability to address change and coping with it.

WARNING

However, there is a practical limit that exists. If one has too much stress (frequency and/or level), the human mind and body can not withstand it and will suffer.  On the other hand, if one has too little experience with trauma, stress, change, etc.,then any introduction of stress will be seen as a knock-out blow.

A study by Linda Hartling of Wellesley College demonstrated that overcoming hardship and adversity is based more strongly on one’s relationships than on one’s indivdual make-up or individual toughness.  Resilience is strenghtened by the network of relationships one keeps and that sustain the individual.

So, if you are confronting a tough time at work, be sure to kiss your spouse, hug the kids, and talk to friends.  Going it alone may actually harm more than help your business.