Friday, January 23, 2009

"Touching" the Customer


How many times do you "touch" or inteact with your customers? Your customer loyalty is correllated with how often you interact with them. Think of each 'touch' as a discrete interaction. So for example, at a gas station - the customer visits (1), comes inside (2), purchases gas and a soda (3) and leaves (4). Each time, you have a chance to make it a good experience. For example, if the station is spotless, the workers greet you as you enter - but the actual transaction is terrible - the customer won't remember the rest.

If you increase the number of touches, whether by a newsletter, or a call or even visiting the customer site, you can increase the possiblity of creating a loyal customer.

Of course the opposite holds as well - each touch is a chance to screw up. People often say they don't penalize a waitress's tip if the food tastes bad - but I'd like to hear from waitresses on whether that is true or not!

As a entrepreneur, you can have all the enthusiasm in the world for what you do, but you can't control every touch point. You can increase the number - but be sure you watch the quality. Nothing comes off more fake as the hold message that says "we are sorry for the inconvenience, thank you for waiting" (why not solve your concern for me by having more staff available?).

Finally, by breaking down the touch points between you and your customer, it allows you to better manage and track how well you are doing.

Tuesday, January 13, 2009

"Startups we don't Need"?


In a recent article entitled "The Startups we don't Need" Shane argues intriguingly that policies that assist the formation of small businesses are generally misguided.

He writes, "The typical start-up is a company capitalized with about $25,000 of the founder’s savings that operates in retail or personal services. Odds are pretty good that it is a home-based business, and the founder aspires to generate around $100,000 in revenue in five years."

His argument is that this type of business is not one that is going to add sufficiently to the community to offset the costs of the programs. Instead he argues that we need to "think like venture capitalists and concentrate time and money on extraordinary entrepreneurs, and to worry less about the typical ones."

It is an intriguing argument - are we making a bad policy decision when we try to help small businesses? Here at the Center for Business Development, we take a two pronged approach. For those businesses which show high growth potential, we offer space and services as resident tenants. For businesses that are smaller and or in retail or personal services, we offer our virtual tenancy, which allows them to meet with us and discuss their business and develop a good plan of action.

Read the article, then come back and comment: "What do you think?"

Thursday, January 8, 2009

Changes at the CBD


I wanted to annouce that we have a new Director here at the Center for Business Development, Ron Duggins. Ron comes from the business incubator from Enid, Oklahoma, and will take over starting February.

Here is his bio sketch -

Dr. Ron Duggins is putting his background and experiences to work for local entrepreneurs. Just as many entrepreneurs have diverse work backgrounds, Dr. Duggins professional background includes entrepreneurship development and research, economic development work, export assistance, vocational training in developing countries, pest control, and publishing.

Prior to employment at Meridian, Dr. Duggins was the initial Coordinator for the James W. Strate Center for Business Development at Autry Technology Center in Enid, Oklahoma. During his time in Enid, Dr. Duggins was involved in the planning and construction of a new 18,000 sq. foot incubator facility and was responsible for managing a total of nearly 28,000 sq. feet of incubator space. Dr. Duggins had also previously worked in Stillwater at the Oklahoma Department of Career and Technology Education in multiple roles included activity in the Business and Industry Services Division as well as the Curriculum and Instructional Materials Center (CIMC).

His wife, Jane, is a native of Brazil and they have a 3 year old daughter named Lilian. Dr. Duggins volunteers his time working with Christian based non-profits that seek to provide technical and logistical assistance to organizations and individuals seeking self-sufficiency through spiritual, education, agriculture, and entrepreneurship programs.

Dr. Duggins holds an English degree and an MBA Oklahoma Baptist University, a Master’s degree in Education from the University of Central Oklahoma and a Doctorate in Occupational and Adult Education as well as a Graduate Certificate in International Studies from Oklahoma State University.

Ron strengthens our offerings in a number of areas, including international trade, particularly in Brazil. As one of the key "BRIC" member states [Brazil, Russia, India, China] this is a huge market that could be opened to your products. (We will have to ask him about the 'pest control' part!)

Monday, January 5, 2009

New Year's Resolutions


You may have some personal new year's resolutions; do you have any resolutions for your business?

One item I'd wish every business owner would resolve is to take a bit of time each month and work out some basic statistics for the business: cost of goods, monthly gross sales, gross margin. These are the fundementals you have to know as long as you run your business. Thinking of taking on a new account? How will it affect your stats? (it could cost you more to obtain and service a large, low margin account than you can make on it...but how would you know if you don't track those types of numbers?)

When you resolve to do something, don't just say it: have a plan to achieve it. And by plan I don't mean like the business plan you worked up when you opened the business (and then stuck in a drawer the day you received a loan)...

If you want to track monthly sales, I would hope that is at hand. But since it is so easy to work day-to-day, you might not look at them. Worse, you might be asking yourself "How did I sell $X and still have no money in my pocket?" If you are not watching those numbers, no one else will also.