Business Coaching

Why do your customers buy from you?

If you don’t know the answer to that question, you may one day lose them, as has happened recently with Netflix.

A big reason Netflix was able to grow as quickly as they did was the low cost of their product and the convenience of both purchase and payment. For less than $10 per month, customers got unlimited streaming video or DVDs. It was such a great value that Netflix became an industry leader and its stock grew exponentially, topping out at nearly $300 per share in mid-July.

The company had found a terrific niche. They were affordable and convenient and for one low price you could get both DVDs and streaming video. But then the company changed its pricing structure and things changed radically for the worse.

So what did Netflix miss? Why were their customers so willing to cancel their memberships?

If there’s one thing that Netflix clearly didn’t understand, it was why customers bought from it. They didn’t understand the need they filled and overestimated customer loyalty in a very crowded industry.

It’s important to remember that Netflix’ product range isn’t ideal. While their library is extensive, there are limitations but even with those limitations, at a low price and one monthly bill, it was a service that most could justify. You may not be able to see every movie or television show you want, but the ones you could see for the convenience was worth it.

But once prices were raised and there were two services, one for DVDs and a separate one for streaming videos, to be paid individually, customers balked because that convenience and ease of purchase was gone.

By not understanding why their customers bought from them they sent themselves into a downward spiral that has frustrated investors and put the company on a path from which it may not be able to recover.

Shares started the year around $180 and rallied in the spring thanks to a growing subscriber base, reaching that peak of nearly $300 per share in July. As of the last week of October, shares were trading near $78 and their U.S. customer base is shrinking to 23.8 million total U.S. subscribers as of Sept. 30, down from 24.6 million three months earlier.

By the end of the last quarter of 2011, Netflix expects to lose even more subscribers, estimating that it will have 20 million to 21.5 million streaming customers.

It’s clear from what has happened that Netflix didn’t understand why its customers used its service and they moved too quickly to change, which turned off a large portion of its base.

Netflix has learned this the hard way, but how can we learn from its mistake?

You have to truly understand why your customers buy from you. Is it convenience, is it price or is it the value they get just from buying from your business? What need does your business fill?

If you aren’t sure, ask. And most importantly, if you already know why they buy from you, be sure not to antagonize your customers by taking it away from them.

Are you the leader of your business or just a business owner who is really a glorified manager?

You may ask, what’s the difference?

Managers should concentrate on the technical side of any business, directing people, making sure tasks are completed on time and deadlines are met.

The role of a leader is very different.

A leader isn’t a technician.

Instead, a leader is a generalist who needs to be able to see the entire business for what it is.

It’s important that a leader isn’t focused on day to day tasks because a leader is responsible for the overall health of the company and it’s very difficult to concentrate on a company’s long term health when you are dealing with its day to day activities.

The leader’s role is to understand what can help the company grow and delegate those responsibilities to others, including managers who are tasked with getting things done.

If the leader’s role comes down too far on the side of a technician, the business will suffer because no one is focused on the company’s long-term viability.

In this situation, the business’ growth and long-term prosperity are neglected.

That’s why owners of small and medium sized businesses have to stop thinking like managers and start thinking like leaders.

This change in mindset doesn’t come easy.

The owner that manages the day to day activities of the business has to make some changes to what they do and how they think about their role in the business, including hiring someone to look over the everyday activities of the business.

In other words, these business owners have to learn to let go and trust someone else to run the technical side of the business, so they can concentrate on the bigger picture and build the business they’ve always dreamed of.

Every day in 39 countries around the world, ActionCOACH Business Coaches work with small and medium sized business owners. The impact these coaches make is massive and can often be the difference between a company surviving and thriving and a company closing its doors for good.

While independent studies and testimonials make it clear the impact that ActionCOACH has, winning an award that thousands of people voted on is another reminder of the good work ActionCOACH Business Coaches do every day, with both small and medium sized businesses and their communities.

The latest honor for ActionCOACH, the leader in the Business Coaching industry, is this year’s People’s Choice Stevie Award for Favorite Company in the Business Services category.

While every award is important, this award is particularly significant because it is earned by public voting.

More than 35,000 votes were cast from July 28 through September 9 and ActionCOACH was the clear winner in the Business Services category, with the award to be given on October 11 in Abu Dhabi.

“This is a huge win for our company. I want to give a big thanks to all our clients who voted for us. After winning the American Stevie for Company of the Year earlier in the year, it’s very exciting that we earned both the judge’s award and the People’s Choice,” ActionCOACH Founder and Chairman Brad Sugars said.

With more than 1000 Business Coaches working with more than 15,000 businesses around the world every week, it’s easy to see why the company was able to garner so many votes.

Without the outstanding results that ActionCOACH provides for its clients, the company couldn’t have earned this award, so congratulations to everyone in the ActionCOACH system and thanks to everyone who voted for ActionCOACH.

A recent independent study on the value and effectiveness of business coaching conducted by the UK-based Cogent Research has provided some interesting data about the overall impact of business coaching and its effect on business.

The UK research comes on the heels of a recent U.S. study of coached companies in South Florida that showed that, despite the recession, these companies had grown revenues by more than $12 million over the last year.

That study also showed coached businesses saw a return on investment (ROI) of 7.5-to-1, or $7.50 in return for every $1 invested in coaching. Some of the more interesting numbers discovered by Cogent in the U.K. included:

•    74 percent of ActionCOACH coached businesses increased sales last year compared to only 43 percent of non-coached businesses

•    There was a 30 percent average annual sales growth in ActionCOACH coached businesses compared to only 13 percent in non-coached businesses

•    53 percent of ActionCOACH coached businesses increased profits last year compared to only 35 percent of non-coached businesses

•    77 percent of ActionCOACH coached businesses forecast growth in profit in next 12 months

•    30 percent of ActionCOACH coached businesses increased their profits in the last 12 months by more than £50,000

•    56 percent of ActionCOACH coached businesses increased their workforce compared to only 14 percent of non-coached businesses

•    91 percent of ActionCOACH coached businesses have a plan for the next quarter compared to only 37 percent in non-coached businesses

•    97 percent  of coached businesses would recommend coaching to other small and medium enterprises.

In their report, Cogent also noted that, “Businesses generally who had adopted formalised procedures such as those recommended by ActionCOACH appeared to not only have weathered the adverse trading conditions of the previous twelve months but have actually increased sales, profits and workforce.”

So what’s the key to continued business success in this difficult economic environment? There are 15,000 businesses coached every week around the world that will tell you the key is working with an ActionCOACH.

When you hear “Disney” what do you think of?

If you’re like most of the people on the face of the earth, Mickey Mouse, Donald Duck, Walt Disney World, Snow White, Cinderella and the rest probably come to mind.

But if you’re one of the people in China who study at Disney English or an executive who has been trained at Disney Institute, you may have a different idea.

Yes, Disney, one of the biggest and most successful companies in the world has a lot more irons in the fire than one might think.

They don’t only sell movies, toys and games. They are now in the business of teaching and training.

Today, there are more than 20 Disney English schools in China. Disney has received a lot of criticism since opening the first school early in 2008 because, to many, these schools are simply an obvious attempt from Disney to market their products to Chinese youth.

Indeed, the names of some of the rooms in the “flagship” school make that pretty obvious.

Students may learn while enjoying the Snow White Room, the Peter Pan Room or even the Toy Story Room, among others.

According to Disney executives, the schools are just an attempt to make it easier for Chinese Children to learn English. But if they also learn a little bit about “The Lion King” along the way, it certainly can’t hurt Disney.

Meanwhile, back on American shores, the Disney Institute is a completely different kind of school.

The Institute is really an executive training school where executives from any type of business can come and learn how to become a better executive and leader.

The Disney Institute has been around since 1986, and uses the company’s theme parks as a “living laboratory” to teach executives the “Disney” ideal of business building.

It’s hard to argue with a company that has been around for so long and remains one of the most powerful entities in the corporate world. Obviously Disney is doing something right and the Institute is a great way to teach other companies that same mindset.

It’s also a great way to develop a corporate symbiosis between the company and the people who attend.

So what are the Disney English Center and the Disney Institute?

If you look closely enough you’ll see they are terrific marketing tools for Disney’s bigger brands.

In many ways they are loss leaders that aren’t necessarily designed to make money for the company, but to generate leads that will pay a massive return on investment in the future.

This couldn’t be clearer, especially in regard to the English Center, as Disney teaches millions of Chinese to speak English by quoting “The Little Mermaid.”

According to recent studies, businesses coached by an ActionCOACH Business Coach have a return of $7.50 for every dollar spent. At the same time, 74 percent of ActionCOACH coached businesses increased sales over the last year compared to only 43% of non-coached businesses.

The powerful return on investment evidenced in these studies is a major reason that, every week, 15,000 businesses around the world are coached by an ActionCOACH Business Coach.

Clearly, business owners that hire an ActionCOACH get results.

Those results, along with the satisfaction of our clients are major factors in our being nominated for our latest honor, the People’s Choice Stevie.

There isn’t a business in the world that can survive, let alone thrive, without building a database of “Raving Fans” and we want to thank our “Raving Fans” from all over the world for this nomination.

Of course, the nomination was just the first step.

The next step is actually winning the award and to do this we need everyone who reads this blog voting for ActionCOACH in the “Business Services” category. Only with your vote and support can we win this coveted award.

You can vote for ActionCOACH by visiting the “People’s Choice Awards” page by clicking on the button at the top of this blog. Once you’re directed to the voting page, click on “Business Services” and then vote for ActionCOACH.

Winners of the “People’s Choice” Stevie Award will be announced the week of September 12 and presented their awards at the International Business Awards event in Abu Dhabi on October 11.

We hope we will get the chance to be there and accept the award in person, but we can’t do it without you, so click on the link provided and vote for the entire ActionCOACH team today!

No matter where you go, despite cultural differences, certain things just resonate with people. Take situation comedies like Everybody Loves Raymond for instance.

There are versions of many popular American shows being made around the world these days, and while there may be some differences, these shows speak to the similarities we all share, even if we live in very different cultures or environments.

Cross-culture television is not a new innovation. Shows have crossed cultures for years.

Some American classics, like “All In The Family” and “Three’s Company”, were re-purposed from British shows and even contemporary hits like The Office was originally a British series before coming to America.

The trend is growing on an almost daily basis and while the country’s manufacturing base is eroding, America is one of the biggest exporters of television ideas to the rest of the world.

Shows as varied as “Married… With Children”, “The Jeffersons”, “Who’s The Boss” and even “I Dream of Jeannie” have been farmed out to other nations, years after they are no longer on the air.

Keep in mind we aren’t talking about simply issuing rights to show repeats. Each of these shows is unique unto itself. The characters and jokes are uniquely that of the home country, with plotlines taken from the original, American version.

So every culture loves television comedy, but not each television comedy is funny to each country.

Often American humor doesn’t translate into laughter in other countries, so production companies are taking the ideas and storylines of a given show and re-issuing them in the style of the nation they are in.

Hence, Everybody Loves Kostya.

So how does this relate to the challenges business people face every day?

Thanks to all the options around us, the world is a smaller place than it’s ever been and businesses that want to be truly successful have to have a global vision.

A key to achieving global success is understanding as much as some things are universal, there are small, seemingly minor variances between cultures that can make the difference between a business’ success and failure.

This is clearly on display for those that travel around the world and might be stuck in a hotel room watching the Chilean version of “Mad About You” or “The Nanny”.

The jokes might not be the same as the ones you remember, but the concepts translate, making the shows very familiar, while at the same time, unique to its homeland.

It’s that familiarity, combined with local flavor that has led to success for this concept. And that idea should stick with you as you try to build your business from a local institution, to a global power.

Everybody’s online these days, right?

It sure seems that way, but there are still a shocking number of businesses that aren’t taking advantage of the online world to grow.

In fact, almost 40 percent of small businesses in the United States have no online presence at all.

It’s easy to blame uncontrollable factors on failures, but a business that has no online presence and fails has no excuse. There is help for any business if they know where to look.

The economy may be bad, taxes may be high and the economy may be uncertain, but none of those factors mean anything if you aren’t taking full advantage of the opportunities around you and the internet is as powerful a marketing tool as we have ever seen.

People don’t look for the products and services they need in the Yellow Pages anymore.

In fact, many communities have done away with distributing phone books because most people search for what they want online these days and having a massive tome with everyone’s contact information was simply too expensive to produce every year.

For business owners that haven’t gone online with their message yet and then wonder why they aren’t finding enough customers, it’s time to move to the 21st century.  If a business isn’t marketing, it’s dying.

Developing your presence isn’t hard and it shouldn’t take up too much time, but it’s vital to your success.

If a small business doesn’t have an online presence, whether it’s a Facebook fan page or a dedicated, multi-page website, they are missing out on hundreds if not thousands of potential customers.

Online you can build a following of your best customers, interact with them and find easy, cost-effective ways to market your business.

An on-line presence is, arguably, the most important marketing tool available these days, so get online today and don’t lose any more business to your competition.

One of the indicators that tell about the growth and health of a franchise is franchisee satisfaction.

It comes down to one simple factor.  If franchisees are happy, then things within the entire franchise system are probably running smoothly. When this is the situation, the systems within the franchise make sense and, more importantly, they do what they are supposed to do.

That’s why it was such an honor that ActionCOACH was ranked 31st in the latest Franchise Business Review in the large systems category for the most recent poll.

“This is an award we strive for every year. We are proud to be recognized by the Franchise Business Review,” ActionCOACH CEO Jodie Shaw said. “No matter how great your company is, if your franchisees aren’t happy, growth simply isn’t possible. Our franchisees are our business partners, so the fact that they are happy speaks volumes.”

To review the entire list of businesses that ranked on the list, just click here.

Hiring a Business Coach is a big step for any business and should not be entered into lightly. You have to find out if they would be a good fit with your business by asking some questions.

First, find out about their background. Are they a generalist or a specialist?

What is their background? Have they been trained to handle any eventuality your business may face?

Have they had success?

Don’t be afraid to ask for references from other businesses they have worked with.

Business Coaches often use referrals to find new customers, so they should want you to talk to businesses they’ve worked with in the past. In this way, you can understand just how valuable their services are.

Next, ask them about the issues they see in your business.

It’s important that you and your Business Coach are properly aligned and moving toward the same goals. Make sure you’re on the same page and they see the same issues you do.

Finally, get to know them a bit. Your Business Coach will play a big part in the growth of your business and, hopefully, an increased balance in your life.

Remember, your Business Coach is going to be your confidant, your sounding board and an invaluable resource.

At the same time they will challenge you and force you face the real problems in your business, so if you don’t have a mutual respect, the relationship probably won’t work as well as it could.