What are your Guiding Principles?

Guiding Principles are the core values, laws and rules we each live by. They define who you are, how you make decisions and they define your business.

In business, just as in life, eventually you will come up against a lot of people and situations that challenge your principles and core values. It’s vital to your success and emotional sanity that you never lose sight of who you are.

Guiding Principles are a blend of your personal ethics, core values and the personal rules of success we have defined for ourselves, on what is right and what is wrong. What is acceptable and what is not. What makes you happy, and what doesn’t. Your Guiding Principles hardly ever change. They are the “voice” that guides your every decision for life.

Guiding Principles trigger that nagging voice in your head that punishes you when you break them and give you the reassuring pat on the back when you follow their guidance. It is the conscience that keeps you on the straight-and-narrow path to right decision and becomes the very soul of your business.

If you want to leverage their power, make them part of your daily conscious thought. Start paying attention to your emotions in different situations. Every time something triggers strong negative emotions (like anger), ignore what triggered it for a moment and think about what Guiding Principle of yours has been broken. Similarly, when you feel strong positive emotion (like giddiness) think about why that incident made you feel good. Those inner thoughts and feelings are your Guiding Principles.

Some examples of Guiding Principles are: [note how each is written out and clear to understand; no one word platitudes!]

  • Honor all Commitments – both the spoken and unspoken ones. If you say you are going to do something and 30 seconds later you realize it is going to cost you more in time, effort or money than you thought, tough! Do it anyway. There are few things more valuable than your own reputation and integrity. (Note: One of the easiest ways to Honor every commitment you make is to Under Promise/Over Deliver).
  • Compatible: Do not spend an inordinate amount of time trying to convince someone who does not want what you have to offer. Life is all about relationships – the right relationships. Surround yourself with people who support you, support what you are doing, and root for your success.
  • Be Honest and Transparent – Clarify Expectations (make sure everyone fully understands including yourself) Avoid platitudes like the plague.
  • Win-win or No Deal thinking: This is why I implemented One Best Price. Life’s too short to deal with a ding dong. I don’t mind honest negotiators but I have no time for win-lose negotiators.  That is someone who not only feels it’s okay to leave nothing on the table for the other side but thinks they have to take the table as well.
  • Under Promise/Over Deliver: Go the Extra Mile.  Always do more than is expected of you. 

    You want people like you, to like you.  So, create and nourish relationships who have your same “Speed of Trust”.

    Choose to work only with the 20%!!

    Your best customers share your same worldview and Guiding Principles

    Write down your own principles. Over time, as you get to know them better, refine them. Make them concise. Make them conscious. Your Guiding Principles will keep you on track.

 

3 Steps to Your 80/20 Sweet Spot

Businesses that operate from their 80/20 Sweet Spot have the best chance to grow and expand.

Here are the three things you must know:

  1. Identify your Ideal/Top Clients
  2. Identify and Articulate your USP [Unique Selling Proposition]
  3. Create Systems to Under-Promise and Over-Deliver to Your Top Clients

If you truly are a business owner who wants to not just get by, not just exist on the flow of the market-but who wants to dominate their market…and when I say dominate, I mean be a recognized leader in all aspects; have great customers, great employees, systems that deliver consistent results under the umbrella of Under-Promise/Over-Deliver and have increasing revenue and cash flow, then you need to read on.

Are you experiencing any of these symptoms? 

  •  You feel as if you are doing all the right things, but your marketing is falling on deaf ears.
  • You are feeling the pressure from your customers, prospects and competitors to lower your prices.
  • You can’t take on any more business because you have no more hours to give. You are feeling burned out and unsure how to continue to grow and expand.
  • You are always understaffed and/or have the wrong people in the wrong slots.
  • Your cash flow is inconsistent or uncertain.

 If any of these symptoms resonate with you, then you are not operating from your 80/20 Sweet Spot.

Businesses that are operating in their 80/20 Sweet Spot:

  1. Easily attract the ideal target audience for their business – both customers and employees.
  2. Never experience pressure to compete on price. In fact, their customers gladly pay a premium for the value they are receiving.
  3. Can easily grow and expand their business without requiring extra hours of work from the owner/entrepreneur.
  4. Have consistent and certain cash flow – month in and month out.

It’s easy to fall for the “shiny ball” syndrome and get caught up in the latest marketing, selling or time management tactic or trend.

If your business does not have a solid 80/20 Sweet Spot Strategy, at some point, you are going to hit that growth plateau. ☹

Your 80/20 Sweet Spot is where your Top/Ideal customers [the 20%’ers], your Unique Selling Proposition [USP] and your Under-promise/Over-Deliver Systems all intersect.

In order to thrive, grow and expand, you need all three.

Why?

  • If you don’t know who your best, easiest to work with, easiest to communicate with, most profitable clients are, and what they need and want from you, then you can’t possibly create marketing that will attract them.
  • If you don’t know or can’t adequately express what makes you different from your competition [in a way your Ideal/Top clients actually care about], then price will be the only thing you have to compete on.
  • If you don’t have the systems and process that deliver Under-Promise/Over-Deliver Results, consistently without you, then you are stuck trading dollars for hours. You will never be able to grow beyond the number of hours, you the owner are willing and able to contribute.

Would you like help identifying and implementing your 80/20 Sweet Spot strategy?

Symptoms of Working with Everyone or How to Avoid a Slow Miserable Death

The most common symptoms of an ailing company are:

  • Lack of time.
  • Uncertain or inconsistent cash flow.
  • Not enough of the “right” employees.
  • Not enough of the “right” customers.

“Most ailing organizations are not suffering because they cannot resolve their problems but because they cannot see their problems.” – John Gardner

Most struggling entrepreneurs scramble for money and time and almost always it is due to saying “yes” to working with almost everyone.

Inconsistent or inadequate cash flow is the most devastating of the four most common problems most businesses have.

Does this sound familiar?

  • “We’re just one project, one client away. Once I sign this deal, we’ll be good.”
  • Borrowing money to meet payroll.
  • Not paying yourself.
  • Asking a key employee, usually a trusted manager, to hold off cashing his check until “Monday”

The say yes to everyone strategy is not sustainable.

Our 80/20 Assessment Analysis will identify, with absolute “black & white” clarity, who you should be working with and who you need to fire.

80/20 Assessment is about first identifying the customers who you are losing money on, who you are stocking inventory for that you don’t need, who make you cringe when you see their number on caller ID, who demoralize your staff, who pay late, who beat you down to the very last penny, etc. etc. etc.

When you have eliminated the deadwood you now have breathing space.

Could you cut back on staff? With the money you freed up in unnecessary inventory, where could you invest that more wisely?

You now have time to innovate and systematize your business.

Once we’ve helped you clear out the bad, the second step is to identify the very top clients and then implement knock-their-socks-off service and products for these select clients.

Through targeted marketing you now can nurture them and strengthen the relationship.

You can now start serving them so extraordinarily well, that they start to come in more often, purchase more when they do come in and become your private army of outside salespeople and refer more like them.

Every time you clean house you make room for more of your ideal clients.

More clients is not the answer. More of the right clients is the answer.

This is how you grow and expand your business the 80/20 way and eliminate the symptoms of an ailing business.

 

How to Get Your Ideal Customers to Raise Their Hand and Beg You to Sell Them More

The real key to success is not having better answers…it is rather in having better questions.

One of the most effective 80/20 strategies you can utilize is to interview your TOP clients and find out what they wish you could change about your industry, what they wish you could provide them or sell them, what they wish someone, anyone could solve for them, what would make their lives so much easier, what would help them grow and expand their business.

Then, do your very best to fulfill every wish. It isn’t that you disregard everyone else, it’s just that you create your systems and solutions based on what your 20%’ers want and don’t want.

Your other “average” clients will benefit as well due to the trickle-down effect.

If you are going to be the business in your marketplace that dominates, you have to come to the realization that you can’t be all things to all people.

First, you need to go back to your 80/20 Assessment Analysis and pay special attention only with your ideal, top clients.

If you have 1,000 customers, it is likely that as few as 10 or maybe as many as 200 qualify as your ideal, top clients.

You interview these people and you talk to them, ask them smart probing questions and you LISTEN to them.

Ask them why they do business with you?

Ask them if there are any other products or services they would like to see you offer?

Ask them what they like least about your industry in general and you in particular?

Ask them what you do well that really, really pleases them?

Ask them what they hate most about other types of businesses – like restaurants, cleaners, auto dealers, shopping in general?

Ask them about their aspirations, challenges, short and long-term goals?

Our 80/20 Assessment Analysis consists of anywhere from 12 to 15 different qualifiers.   Contact me to learn more.

Never waste your time, staff or resources providing what your top, ideal customers don’t want or don’t care about.

Even Though the Economy is Good Don’t Make These Mistakes

Great news – the economy is on a roll. 

For most businesses and owners, it seems like they can do no wrong.  There are more opportunities than many can handle.

Therein lies the “rub”.

Everyone who has been in business for more than 5 years knows this won’t last. In fact, the rumblings on the street are that we have maybe 6 months to 18 months left in this good economy, and then the sloppy and the lazy are going to get killed.

We have all experienced the sloppiness and laziness anytime we walk into too many businesses or call on the phone.  Too many businesses are beginning to believe they are “gods” and can do no wrong.

Yikes! The reckoning is a-coming folks.

One of the first places bad business practices raises their ugly head and we see the first signs of “slop”, is on the phone and it’s the easiest to fix.  Poor communications skills, no follow-up and follow-through, less than stellar attitude, poorly educated on the culture, immutable principles, and Unique Selling Proposition [USP] of the business are all the first places to look.

Another area of slop that is getting overlooked is marketing. Cultivating and nurturing relationships with existing customers and especially with your best ones – the 20% that are generating 80% of your revenue, profits and cash flow.

When the economy is good and it appears you have more customers than you can handle, it can be hard to focus on the Wildly Important.

Your existing clients are your very, very best source of growing and stabilizing your business.

Those who are going to not only survive the next downturn but actually grow, expand and take market share, are the ones who are proactive now in creating and nurturing trusting relationships with their very best, ideal clients.

There are 3 main ways to increase sales and profits in any business:

  1. Acquire more new customers to buy from you.
  2. Increase the amount of money your customers spend each time they buy from you.
  3. Get you customers to buy from you more often.

Most businesses, small and large, spend the majority of their time, effort and money focused on number 1:  getting more customers.

Just adding more customers is rarely the best strategy.

But by implementing 80/20 sales and marketing you will avoid the mistakes your competitors are making in this great economy and besides there is far more money to be made with far less time, effort and expense by focusing on numbers 2 & 3: increasing the amount of money your customers spend and getting them to buy more often and the best and easiest way is with your existing BEST clients.

Grow Your Business Based on a Favorite Clients plan

Are you focusing all of your energy, time, money and marketing efforts on out-playing, under-pricing or out-shouting your competition, when instead you should be playing an entirely different game than everyone else by focusing only on your favorite clients?

When you’re rebuilding or growing your business, there’s a sequence of steps you must follow.

Here are the first two critical steps:

First, relabel yourself. What is it that makes you unique – your Unique Selling Proposition [USP].  You have to set yourself apart from your competition.

A unique selling proposition (USP) is your unique answer to these questions:
• What does your product or service do that your competitors doesn’t?
• Why should I buy from you instead of anybody else?
• What guarantee can you make that nobody else can make?

Here’s an Example of a USP:
When Domino’s Pizza first came on the scene, they had a game changing proposition – “hot, juicy, delicious pizza – delivered to your door in 30 minutes or less – or it’s absolutely free.”

They were specific, 30 minutes or less and they gave a Risk-Free Guarantee.

AVOID platitudes like the plague.
Like they could have said:  “Best pizza in town delivered to your door.”

“Best pizza”…anybody could say that.

“delivered to your door”…good, but how many questions does that raise?
How long will it take?  Will it be cold and soggy when I get it?… What happens if it isn’t?

Look around your market and see how many businesses say similar things to what you say.

Platitudes mean nothing!

Second, is to identify your ideal audience, AKA: your favorite customers & clients – the 20% that generates 80% of your revenue, profit and cash flow. During this same phase, you are identifying the diseased clients in your midst that you have to stop serving. Only by identifying and firing the deadwood will you ever free up the time, resources and staff to under-promise and over-deliver through innovative systematization.

Here is the criteria to use to help you identify your ideal customers and clients:

1st: rank by their monetary value to your business – revenue and/or profitability.

2nd: Now cross out those who make you cringe (character, attitude, likable…). These are the people that when you see their number on caller ID, your stomach churns.

3rd: We identify and rank for each of the following qualifiers:

  • Cash-is-King: Do they pay on time or better yet early?
  • Frequency: Do they purchase on a regular basis?
  • Potential: Could they generate a significant amount of revenue for you in the future?
  • Communication Skills: Do they communicate with you well?
  • EBA: Is your Emotional Bank Account high enough that if/when you make a   mistake they give you chance to fix and forgive?

4th Now we rank by secondary qualifiers – here are some ideas. Each business owner is unique and may have their own criteria to add as well.

  • Opportunity: Does working with them give you opportunities you would not otherwise have?
  • Referrals: Do they refer others to you?
  • History: Do you have a long history of working with this client making you feel confident you clearly understand how they will behave in all situations?
  • Add a blank column for your own personal unique qualifiers

5TH: Finally, we help you identify your personal Immutable Principles. These are the principles you WILL NOT compromise.

When you hire us, we start with our 80/20 Assessment Analysis and have a unique way of grading each of these so that you know, beyond a show of a doubt, who to keep and who to let go and clearly why you should do so.

We get you only the right people, your favorite clients – the 20%’ers who generate 80% of your profits by creating marketing, strategies and systems so that your business works for you instead of you working for it.

Do You Mind If I Show You Why Your Strategy Is Wrong?

Unless you have used the 80/20 Principle to create your strategy I am fairly confident that strategy is badly flawed.

For sure you most certainly have an incomplete and inaccurate view of where you make and lose the most money.

It is almost certain that you are wasting far too much time, effort and resources on the wrong people, products, and/or services and not enough on the right people, products and/or services.

You are focusing on the broad part of the pyramid instead of the narrow one.

To create a highly effective business strategy, you need to take a close look at the different pieces of your business that generate your profits and cash flow.

Unless you are a very small business, you make at least 80% of your profits and cash flow from 20% of your customers, 20% of your employees and 20% of your products and/or services.

The real trick is to identify which 20%.

Where are you making the most money and where are you losing the most?

In order to clearly identify which parts of your business are making very high returns, which are just getting by and which are complete catastrophes, an 80/20 Analysis has to be performed of your people and profit-centers for each of these different categories:

  • by product/service or product/service group
  • by customer or customer group
  • by employee or employee group
  • and possibly by any other category of your business that appears to be relevant that you have pertinent data for; things like competitive market segment, department, geographic area, etc.

80/20 Analysis is a task for a “smart” human. It can’t be outsourced simply to a computer.

Numbers always tell a story, but because every business is unique, the story is many times different for each business.

Just knowing the 20% that generates 80% of your results by product/services, customers and employees, gives you a tremendous advantage over your competitors because we now know what, who and where to focus all of our marketing and selling time, energies and resources.

The real low-hanging strength of 80/20 is showing you where you are losing money.

We tend to think that our business is doing the best it can and that the competitiveness of the market has reached its equilibrium and now we need to win market share by sheer force.

Nothing could be further from the truth or more destructive in thought.

By changing our thinking to 80/20 we begin to transform the way we do business at every entry-point, every segment, category and every level.

We begin to eliminate waste. Our inventory costs go down, which improves cash flow.

We need fewer employees because the employee we now have generate more and better results with far less management on our part and you can afford to reward them better thus creating a culture where people actually look at their jobs as a career.

We watch our customer loyalty increase, the frequency of purchases increases and because we are catering to the 20%, when they do purchase, the ticket sale is much higher thus the profit and cash flow increases.

80/20 is Your Guide to Developing Your Business into an Innovative Animal.

The 80/20 Principle is of enormous value in identifying the next big innovative leaps forward for your business.

80/20 is all about simplifying your life.  Getting more and better results with less – less time, less effort, less customers, less inventory, etc. etc.

The 80/20 Principle suggests you turn your business upside down and concentrate all of your time, effort and resources on multiplying the small but Wildly Important Parts [WIP’s] to your strategy.

80/20 Email Marketing Strategy

There are 4 ways of using Email marketing as an essential part of your marketing mix.

  1. Lead generation. Getting low-cost exposure for your products and services is the first vital element to a highly successful 80/20 marketing process.
  2. Your sales process. An 80/20 sales process educates your customers and prospects on why they should buy from you and why they should continue to buy from you over and over and over.
  3. Your follow-up process. If you want a stable, thriving and growing business you need to keep educating your customers and prospects and following up after the sale.
  4. Getting referrals. The ultimate reward you get for educating your customers and prospects and over-delivering with service and value is having your own private outside army of very happy people who will be thrilled to refer you to others.

Email marketing starts with a well-maintained customer database that includes your customers and prospects Email address.

One of the most valuable assets you can have in any business is a well-maintained list of prospects and customers who trust you and are willing to purchase from you repeatedly and recommend you to their family, friends and associates.

Unfortunately, almost every brick and mortar business I visit ignores this asset.

Ask yourself this: How many businesses that you visit in the course of a week never make any attempt to capture your name, Email address, phone number or mailing address?

It costs a lot of money [actually a lot more than most businesses realize, but that will be a subject for another article] in advertising and expense to get a prospect or customer to walk into your place of business, to call you or visit your website.

You need to capture these leads and follow-up with them otherwise the value of theses leads is wasted.

Plus, by setting up an autoresponder, any small business can send an email to every prospect and customer automatically.

And by utilizing 80/20 Marketing and Sales you enter all the contact details you want into your autoresponder and it can follow-up with your prospects and customers with 80/20 targeted messages automatically for weeks, months and even years.

IMPORTANT POINT: This method should not be confused with spamming. Every one of your prospects and customers will choose to be on your email list and can get off at any time simply by clicking on an “unsubscribe” button in every email you send.

The Exponential Effect of Combining 8020 Online and Offline Marketing

 

Adding 8020 online marketing and selling to your brick & mortar business has to simply be a part of any marketing and sales process.

Regardless of the business, making sales and providing real service are two of the most vital measurements of any 8020 business.

Yet, the vast majority of small business owners don’t adequately use their online presence (website, social media, Email marketing) to complement and enhance their offline marketing and sales process.

Implementing 8020 online business strategies and tactics is fun, highly leveraged and can be outrageously profitable.

In fact, adding 8020 online sales and marketing strategies, systems and tactics to your brick and mortar business is probably the easiest way to increase your cash flow fast without the aid of a mask and a gun.

Best of all, it is moral, ethical and the easiest way to ensure you never break the laws of God or man.

8020 online marketing helps and serves your prospects and customers while adding extra profits and cash to your bank account while at the same time bringing stability to your business.

Too many small business owners make the mistake of thinking they can make a fortune in their brick and mortar business selling products and services without integrating solid 8020 online marketing methods.

When you combine various elements of 8020 online and offline marketing and sales into your prospecting, sales, and follow-up process the potential to increase your profits and cash flow grows exponentially.

And that can be multiplied by increasing the amount of money each customer spends every time they purchase and increases the likelihood of them referring like-minded new prospects.

There are 3 main ways to increase sales and profits in any business:

  1. Acquire more new customers to buy from you.
  2. Increase the amount of money your customers spend each time they buy from you.
  3. Get your customers to buy from you more often.

Most businesses, small and large, spend the majority of their time, effort and money focused on number 1:  getting more customers.

But by implementing 8020 sales and marketing there is far more money to be made with far less time, effort and expense by focusing on numbers 2 & 3: increasing the amount of money your customers spend and getting them to buy more often.

Also, which I’ll share with you at a later time, when you really take time to build trusting relationships with the 20% that generate 80% of your sales, profits and cash flow, through education and exceptional service, you build a steady stream of high quality 8020 referrals.

The Big Secret to Selling more.

The very first foundational principle of 80/20 marketing and selling is: Seek First to Understand…and I’ll add: with a Servitude Heart.

Until you completely understand what your market as a whole or individual customer wants you can’t help them.

Almost 100 years ago, Dale Carnegie taught us that selling and persuasion was as simple as finding out what people want and then give it to them.

Simple back then but so much today.  Why?

Because it is extremely difficult for most people to articulate what they want, so today you have to become a little bit counterintuitive in your methods, an expert at asking the right questions, of the right people, at the right time.

There are two questions everyone can answer accurately:

  1. What they don’t want, and…
  2. Questions about their past behaviors. 

When it comes to figuring out what their market wants, most business owners and sales people make the same costly mistake: They either assume they know or they simply ask people what they want and then sit back and think they’ll tell them and then wait for the money to roll in.

Henry Ford once said, “If I had asked people what they wanted, they would have said ‘faster horses’”.

And Steve Jobs said “A lot of times people don’t know what they want until you show it to them.”

So, if you want to know what your market wants, stop asking them…or at least you have stop asking them directly.

Being an 80/20 marketer and seller is a lot like being a doctor.  

There are five stages: Discovery, Diagnose, Prescribe, Create and Implement.

The first stage is the Discovery stage.

Think about the last time you visited your doctor’s office. When I check in the first question they ask me is “Have you traveled outside of the country in the last 6 months.”

That’s the beginning of getting to know me. 

Once I sit down with my doctor, he’ll start asking me questions about what are the symptoms that motivated me to come see him, when did they start, under what circumstances do they occur, how often, etc. etc..

As an 80/20 marketer or sales person, the better I know my market, their pain points, their motivation, what “language” do they speak… I’m not talking about English or Spanish or Croatian…, I’m talking about how to I speak to them so they understand and can wrap their head around what I’m saying. When I truly know them like a friend, the better I’m going to be able to help them get what they want.

I first learned this truth 30 years ago when I was selling cars.

It helped take me from a 10 car a month salesman to a 25-30 car a month salesman.

The most effective questions were the ones I asked about what they didn’t like about their current vehicle and how the way they used their vehicle in the past no longer was suitable today.

The salespeople I trained in this method and implemented it, also dramatically improved their sales.

So if you want to know what your market wants and get better at selling more, you have to become counterintuitive and find out what they don’t like and extrapolate from there.