Business Coaching

Thanks to social media, the rules of marketing have changed. Every celebrity, athlete, political figure, and business is using social media to their advantage (and sometimes to their disadvantage). Yes, used incorrectly, it can burn you, but it is a potential goldmine, so if your business isn’t using it, what are you waiting for?

You may have a profile setup for your business on Facebook, but are you using real time social media like Twitter? Twitter can be a powerful ally for your business, so here are some rules you can use to get the most out of your Twitter account.

1.    Determine your goals
You can’t start without the end in mind, so you need to figure out what you want to get out of using Twitter. Some companies are using it to sell products or as a customer service tool. Some use it as a lead generator. Like anything else you do in your business, you need to make a plan with benchmarks so you can test and measure your success. Your goals should be based on what type of business you have and what type of customers you want to attract.

2.    Do you research
Research is one key to finding out what the trends are in the world of Twitter. Research what the major brands and your compactors are doing and then mimic with a twist by adding your own personal touch to your tweets.

Also, research to find what your specific customer wants to see. If you work in a retail shop ask customers directly what they want to see from your brand. Don’t assume you already know, go straight to the point-of-contact and get the real information.

3.    Personalize your profile
Each business is unique and so the face of your Twitter should be as well. You should have a specific look to fit your brand that will leave an impression on your customers. If the look and feel matches your tweets it gives your customer a more personal touch, creating a connection between your business and them.

This means that the point of your profile shouldn’t be to simply push promotional material. If your customer feels like you are a robot then they will reject you and the brand, so keep it fun and informative.

4.    Follow your followers
Twitter is different than other social media in that, to get followers you must follow. Follow the people you would want to follow your brand. Then and only then can your brand go viral.

So are you using Twitter in your business and what are you doing with it?

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.

For any business to be successful, you have to find your niche, that space that no other business occupies but yours. But not every niche is the same.

Some are smaller than others and some are bigger, but can any niche be a business?

From adult kickball leagues to dog-waste pickup and dart-league franchises, there are business opportunities that are extremely niche-oriented.

But, the question is, do these kinds of businesses really have a big enough niche to make money?

Some of these businesses are clearly part time, like the Dart Leagues. You can own a franchise for a one-time fee of $500 and are only obligated to spend six hours per week on the business.

There is very little risk in a venture like that, but what’s the payoff?

But if you investigate WAKA, the World Adult Kickball Association, you’ll find that the buy-in for a franchise can cost as much as $50,000 and any franchisees are required to work full-time in the kickball business.

That’s quite an investment, both in resources and time, and it remains to be seen how successful their franchising model will be, considering they’ve only been franchising since early 2011.

The fact is WAKA has been around since 1998. It is currently in 35 states with about 4000 teams participating, so, obviously, the company is doing something right.

But are the fees paid by players and teams and the sponsorship of local bars enough to make this a legitimately good franchising deal for prospective entrepreneurs?

Once you’ve invested your $50,000 or so (depending on market) how long will it take you to recoup your investment?

And what are they doing differently that any person could do, without buying into a franchise? After all, couldn’t anyone organize a league without buying a franchise?

And finally, what proprietary advantages does the company have that individual operators wouldn’t?

These niche businesses, like WAKA, have managed to generate revenue and grow by focusing on a small, “hungry” segment of population. But does that translate into real cashflow and profits?

Time will tell.

The main lesson is to really investigate your narrow niche.

Is it really enough to support sustainable growth, cashflow and profit?

Is it something people already buy and is the niche a unique segment of a larger proven segment?

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.

We have all heard read the reports. Our world is in an economic downturn. Many say it’s a severe recession while others use the word depression but regardless of the label, business owners are only concerned with how their numbers look.

For some, such as those in discretionary industries like apparel and travel, you are among the hardest hit.  We all know that eventually customers will purchase and profits will return but what can we do right now to preserve customers and profits?

There are two actions to take right now to ride out the tough economic times.

First, businesses must find the value in their current customer base.

In other words, business owners need to understand that the greatest asset of their business is their current customer base.

It costs upwards of six to eight times more to acquire a new customer than to sell an existing product to an existing customer, so in our current “economic winter,” it is vital to treat current customers well and find ways to add value to your current product and/or service line.

While some companies would have us believe that they are customer centered, in reality that may not be the case.  When the phones are ringing wildly with sales, customers are crowding showrooms and battling over the last item on the shelf, some owners forget that their customer’s money was earned by hours of hard work and because of that they are going to maximize the value they receive for the money they spend.

A great customer experience is the key to creating and maintaining a business relationship. As Dale Carnegie said, having a genuine interest in somebody is the first step to that person feeling valued.

Second, businesses must streamline. While it seems logical to think that having a larger range of products which appeal to the widest of range of people would be the best way to increase sales, some successful business owners to think differently.

Diversity doesn’t mean that you have a great business. It may be more profitable to sell lower volume items at higher price points and higher profit margins.

While product diversity may be important if you are a large scale retail establishment who is known for being the one place that customers can shop for just about everything, the specialty business owner may have a different focus.

In this case, selling the highest profit margin products may make more sense.  Product bundling and customer appreciation days may increase the perceived value while preserving a high profit margin.  Businesses rarely survive over the long term by focusing on low prices.

Finally, keep in mind, downturns force companies to pare marginal products and services, and focus on what they do best.

This is one of those times.

There is no denying that when the economic climate is challenging, streamlining operations is pivotal to the bottom line but remember that those customers who have believed in your business in the past are the best assets you have.

Don’t offer more, but, instead, optimize the value of our current offerings.

You can buy the cheaper office supplies but don’t discount the customer’s experience.

One of the keys to running a successful business is making it easy for customers to buy from you, which is why most businesses accept credit and debit cards.

Since many people don’t even carry cash these days, the proliferation of plastic payment has cut into revenues and profits for businesses, making it harder and harder for some smaller businesses to even accept credit or debit cards.

The amount that businesses pay in fees on purchases made with cards can cost a business thousands, if not millions of dollars, depending on the business. Credit card fees can be particularly onerous with rates of anywhere from two to more than four percent paid by merchants on every transaction. For small business owners, that can make a real difference in the bottom line.

But the issues with debit card payments can be even bigger with many small businesses.

Today debit cards are the number one form of non-cash payment in the United States and from 2006 through 2009, debit card transactions rose from 25 to 38 billion. In 2009 those transactions accounted for $16 billion in transaction fees that went to the issuing banks.

Obviously businesses are losing a ton of revenue and profits in these transactions, but many businesses don’t have any other option. They have to make it easy for customers to buy from them in an increasingly cash-free world.

Legislation will be taking affect on October 1st that will lower the rates that businesses pay on debit and credit card purchases, but will those changes be enough to help small businesses grow?

Right now, businesses pay an average of 44 cents for each debit card payment they accept. On October 1st that amount will go down considerably, to just 21 cents per transaction thanks to new legislation.

But while that drop may seem like a lot, it’s actually a compromise.

Originally the Federal Reserve was going to knock down these fees to an average of about 12 cents per transaction, but the banks that issue debit cards cried foul so the Fed decided to come up with a compromise cost: 21 cents per debit card transaction.

For small business owners, it’s still a large fee and it’s important to remember that while 21 cents is the average charge, many debit card transactions are small, everyday purchases.

The problem this leads to is two-fold.

Businesses have to pass the cost of these charges to their customers, even customers that buy with cash. And because everything is more expensive, the costs weigh on the entire business, making it less likely that small businesses can hire workers or reinvest in themselves.

The irony is that in this particular case big business joined with small business to lobby against the banks keeping rates high.

The large lesson we can learn is to make sure you know all of your numbers and have systems in place to ensure the rates you have to pay are more than covered by your company’s growth.

Is the metric of sales per square foot really the “magic” that so many retailers make it out to be?

For big businesses, the metric of sales per square foot is a great way to understand how different shops perform. If the Best Buy in Las Vegas isn’t performing at the same level as a Best Buy in Phoenix, sales per square foot is a fantastic tool to begin to understand why.

If we take a look at some numbers, we can see that some well-known retail giants do very well per square foot. For instance, Apple does a great job of utilizing every inch of their retail stores. They record incredible sales of nearly $6000 per square feet while other high end retailers can’t even approach those numbers. Such big names lag behind, including Tiffany’s, whose sales per square foot metric is just over $3000, Coach is at a very patriotic $1776 per square feet and even Best Buy is at just $880 per square feet.

But there is another metric you can use to measure your sales, average sales per customer.

Among those four companies, Apple clearly does the best job in generating repeat business and accentuating their average sale per customer thanks to those repeat purchases.

In other words, they increase their average sale per customer and that, in turn, boosts their sales per square foot.

This is even more important for small and medium sized businesses that have just one or maybe a handful of stores.

Of course small business owners want to know what works and what doesn’t in the layout and approach of their store, but by figuring out the average dollar sale is for each and every customer, you can begin to figure out how much profit you make on each of them and, taking it a step further, you can build marketing and advertising campaigns that are profitable both in the short and long term.

Mark Twain once said, “There are lies, damn lies and statistics,” and most business owners know there is still some truth to that phrase.

If you take your numbers out of context, then yes, sales per square feet can become the important metric for retailers. But there are better ways to figure out the strength of your sales numbers and putting more value into average sale per customer is a great way to start.

Owners of small or medium sized businesses are often on an island, with no one to turn to when they need some help. The ones that most easily navigate those troubled waters are business owners who have learned what’s important and what isn’t when running a business and more often than not, they learn this information by working with some type of mentor.

Many people can take on the role of a mentor. A mentor can be a good friend who is willing to tell you the truth, not what you want to hear. A mentor can be another business owner who has faced those challenges in the past or even be a Business Coach who is, by definition an unreasonable friend who will always have your business’ best interests at heart.

So no matter who your mentor is, whether they’re just a friend, a family member of even a Business Coach, here are five things they should be able to do for you.

A mentor should hold you accountable:

Business owners may neglect the management and marketing of their business by postponing certain tasks and putting the non-essential ahead of the essential. This is a great way to doom a business.

When you work with a mentor, failing to complete your goals and having your business lapse is simply unacceptable. Your mentor won’t tell you what you want to hear, but what you need to hear to get your business moving in the right direction and keep you accountable for everything that happens in regard to your business.

A mentor will help you refine your ideas into practice:

You may have great ideas, but how will you see them through to implementation? There may be some ideas you can put into practice easily, but others will be raw and need to be refined before you implement them.

Working with a mentor, gives you access to their vast knowledge and wealth of experience. That alone will help you make the changes you need to make in an easier fashion.

A mentor will have a wealth of ideas to grow your business:

Your mentor has seen it and been there before. Through your relationship with your mentor, you will learn and understand principles of business you may not have known before.

Most importantly, you can use the lessons learned from your mentor and can apply them for the rest of your business life.

Mentors have the contacts you need:

Ideally, you should choose a mentor who has been in business and not only knows the basics of running one, but also has a good reputation with the community at large. In this way, you can use your mentor as a networking tool to grow your business.

Your mentor has contacts and knows where to find the information that can help you and your business. They are a valuable resource, so use them as much as possible.

A mentor is someone outside of your business, looking in:

You may be caught up in the day to day of your business, but the right mentor or even Business Coach takes a fresh look at you and your business.

A mentor or coach knows what to look for when it comes to the issues plaguing your business because they can see what your customers see. With this knowledge and vision, your mentor will always give you feedback that will help you build the strongest business possible.

So who are you working with to grow your business? Do you have a mentor or coach that is helping you along the path to success? If you don’t, what are you waiting for?

Every business, whether big or small, needs a social media presence but you have to remember that, while you want to keep it interesting, you don’t want to offend anybody and there can be a fine line.

You don’t want to have a social media presence that is all drunken pictures and stripper poles, but at the same time you also don’t want to bore potential and existing customers to death.

Neither of these will help your business, so how do you walk the line to give customers something interesting, while remaining professional?

You want to keep your customers coming back,  so you should have a social media presence that is professional, engaging and solidifies the message you want to spread about your business.

Keep in mind that, as opposed to some other forms of marketing, social media isn’t a one-time thing.

You want your customers to follow you, watch what you do and give you feedback through platforms like Twitter and Facebook. Ideally your customers are an active part of your social media presence and the only way to create that is to keep your presence interesting and relevant.

The personal touch is often enough to build your presence because if people think they are talking to an actual person on the other end of the social media line, they are more inclined to keep the conversation going, just remember to not make it too personal. In other words, engage but always be professional and remember your company’s Facebook page isn’t the same as your personal page.

When building a professional presence, the person engaging customers has to be someone that customers like and want to interact with. One of the best ways to do this is by showing the team having fun at work.

You might post pictures of your team having fun, interesting things that happen during the workday or anything interactive and interesting that customers and leads might want to know about.

Also remember that today people use applications, better known as apps, to navigate the web so the days of internet browsing are long in the past, another reason to keep your online presence fun and vibrant.

Just remember to keep the pictures of your late night at the bars exclusively for your personal social media accounts.