Monday, July 27, 2009
The thing is, they are going to want features, additional items or changes to your product or services - requests you may be loathe to fill. Since they are your first customers, you might feel you have to satisfy all those requests. But what if those requests conflict with your vision of where your company is going and what your customers will look like.
So you find yourself in a quandary: either make the changes the first customers request, or risk losing their business (sticking to your view of what should be the business) and losing those first customers.
How to respond?
Make the customer feel they are part part of your business. We all want to be the person who knows of the little known shop or great new restaurant. You can inculcate this behavior by creating a great experience to your early customers (even if you say no to their requests). Even if you can't add their new feature request, or change your product mix immediately in your shop, try to get them to participate in the process.
Grocery stores used to do this on occasion. They would have a form to request a special order or special product. If it was available, they could add it to the grocery shelf. I remember our local grocery store used to do that, and then all the special order products would be stuck in the same area. It was very interesting to see what people had requested. But each in a small way created a connection to that customer. Even if they were unable to get it, the participation of the customer itself had value.
Making the first customers count (meaning 'do something for you') can create the relationship you need to get your business rolling.
Monday, July 20, 2009
STILLWATER, Okla. The Meridian Technology Center for Business Development is pleased to announce that National Learning Systems (NLS), a resident of the business incubator, has graduated and will move into another location in Stillwater in July.I am really pleased when we get to graduate a company from our incubator. Yet when I tell people a company graduated from our incubator, they often ask me what I mean by that. Do I just kick them out after a set period of time?
National Learning Systems partners with schools and the Oklahoma State Department of Education to provide high-quality, research-based educational courseware supported with sustained professional staff development proven to increase student achievement. Since their move into the incubator in September 2006, NLS has grown to 8 employees.
Charlcie Cumming, Director and owner of NLS, remarked "Being a resident of the Center for Business Development has been important for our growth at NLS. We have been able to obtain assistance in hiring new employees and have benefited from being able to host training sessions in their conference areas. We've enjoyed the benefits of the business incubator and appreciate all the support and encouragement provided by their staff."
Ron Duggins, Director of the Center, said "NLS has been a great client and we appreciate all their dedication and hard work which has made them successful. By being able to have the facilities to develop companies such as NLS, North-central Oklahoma and Stillwater are able to keep businesses in the area, creating jobs and further opportunities for our community and region."
When a company becomes a resident in a business incubator, there is supposed to be more going on than just renting space; we incubate a new company by adding value to their development.
Each client has different needs. NLS already had a pretty experienced management team, so they had little need in developing a business plan or figuring out their business concept. Instead, for example, we were able to help NLS hire additional staff by making sure they had a good job description, were doing a good search, and by being available to their staff to discuss candidates.
But NLS is now at the point they don't need us, though they will continue to have our support: NLS can and should contact me if there is some assistance I can provide. That means it is time to graduate from the program.
Roughly, I've found it takes about two to three years for a company to know if it is going to stand on its own or not. I use roughly since every company is different and circumstances vary. But if the first year is spent getting a product out the door, the second year starting to sell the product, the third year making some profit...and the company is not moving along that progression at all, then we have to consider the viaibility of the company.
In a way graduation is less about the clients' needs, than ours. As a company becomes more successful, the cost of our incubator services becomes a smaller and smaller part of their budget. They don't need our help to stay in business, but it is nice to have someone there to help whenever you need it. I am sure many clients would love to stay in an incubator permanently. But how would we work with new clients if the old ones never moved out?
Graduation is really about the client no longer needing the services I provide, and I taking those services and offering them to the next prospect. Just like graduating college, it is about the company moving from adolescence to adulthood. And while that transition may be disruptive to both the client and us, it is important for growth.
Congradulations NLS on your graduation!
Tuesday, July 14, 2009
Being (physically) close to your competition seems to be wrong: wouldn't you want to be as far away from competition as possible?
For many types of businesses, it is better for prospective customers to know where they can find a wide variety of something, than for them to locate each individual business. For example, consider the diamond district in New York City. In a few blocks are many businesses all selling diamonds. Or car dealerships that tend to cluster together.
By being close to the competition, you make it easier for customers to find you, and also allows you to distinguish yourself from the competition...and keep your eyes on how they are doing. If a customer is dissatisfied with your competition it is much more likely he would visit you next door than if you were ten miles away. It also creates loyalty for your business over those 'other people' who go to the competition.
As you consider where to locate your business, take a good look at being close to your competition.
Monday, July 13, 2009
A couple weeks ago, there was a great cartoon by Leigh Rubin in my local paper -
Now I only know a little about dairies; the cows have to be milked twice a day every day. The dairyman sells his milk to a distributor/co-op, at a price largely set outside of his control.
I like this cartoon because the dairyman is dealing with his circumstances in at least three innovative ways:
- He is getting out of having to milk this cow, since it looks as though the customer would get the milk themselves - saving him time.
- He is selling direct to the customer.
- He is selling the benefit of the milk bath, rather than selling the milk itself.
Each of these can also be applied to you as an entrepreneur:
- Can you turn something you have to do, into something valuable to someone else that they would do themselves?
- Can you avoid the middleman and sell direct to customers?
- Can you sell your product to a different market altogether, using benefits ancillary to your primary market?
My guess is that dairymen have had to be very innovative to stay in business, so how about you?
Tuesday, July 7, 2009
Just in the last week or so, I have had two stories told me which touch on the importance of marketing and taking care of customers close to you.
1. My barber has his shop in a strip center off a relatively busy street. Recently a new chinese takeout restaurant has moved into the center. He said since the restaurant is but a few doors down he and the other barbers might drift down there for a quick bite. Twice they have mischarged him and other barbers - or tried to charge for a dinner meal rather than a lunch (and he had some other stories about the cost of soda, etc).
2. My collegue had his glasses broken by his child over the weekend. When he called his optometrist about a replacement set, he was told they would not just refill the current prescription since he is due for a checkup, and by the way, they cannot take any appointments until July 16th (it being July 6th).
There is a lot wrong with both of these stories, but I want to focus on the importance of taking care of those customers close to you.
In the case of the chinese takeout, let's think about their market. Being new, they want to increase the number of customers. And two doors down from them is a hair salon, with 6 people cutting hair. Now wouldn't it first be a good idea to keep the barbers happy about your business? Not only do they spend their days talking to people (and the new restaurant might well come up in conversation), but also they are probably busiest around lunch and dinner time - times when someone might think "hmm, maybe I will pick up chinese for tonight." Instead, the restaurant seems to be making a habit of annoying the workers at the hair salon.
In the case of the optometrist, I understand he wants his customers to keep their glasses up to date with regular checkups. And maybe my collegue is due - but he needs glasses (today). He can drive down to Oklahoma City and get some glasses in an hour at a mall store. So his cost is 3 hours (one hour down, one hour glasses and one hour back), and the cost of basic frames and glasses. Instead of helping out a customer in need, the optometrist has decided to drive away his customer to another location or business - precisely when he could have bound his loyalty even higher!
In both cases, the customer close to the business (whether physically or as an existing customer) is being treated worse than if they were a stranger, and they are precisely the customers who would most be willing to recommend (or not) the place of business.
Seth Godin makes an analogous point, when he describes how to handle special requests, "the problem with treating all customers the same is that customers aren't the same."
Take the time and opportunity to strengthen your customers who are already closest to you - don't drive them away from you.