You should Have Charged Us More!

This was what a client said to us at a recent workshop conducted in Vietnam, Ho Chi Minh City.

And frankly, we love such feedback. Don’t you too? This is the favorite feedback for every business in the world.

Now, how did we achieve that? It certainly did not happen suddenly or overnight. It was a carefully planned strategy. But at the core of the strategy is one very important and fundamental key:

The CORE CUSTOMER

What is the core customer? And how does it differ from market segmenting?

Firstly, the core customer analysis goes deeper than understanding the market segment. Market segments only tell us the demographics, but a thorough core customer analysis delves deeper than that – it looks into the wants, needs and fears of our core customers. The heart of the core customer analysis is our customer is human – and humans buy irrationally.

Consider this:

Every time I visit Ho Chi Minh City, I visit the same tailor. I had countless suits and shirts made there. Is it because he is the cheapest? Or the best? Rationally speaking, I doubt it, so why do I keep going back?

It is because I am irrational. The human buyer buys on emotions because needs and fears are emotional. For a traveller like me, my fears of going to a tailor:

1. I go home and find that the clothes do not fit.

2. The tailor can’t finish in time for me to collect before I go to the airport. (This is a real fear because it happened to my wife when she went to Bangkok. The tailor could not deliver her suit in time and we left Bangkok without the suit and with an angry wife.)

So this tailor has consistenly met these 2 fears. And that is why I don’t bother to find a cheaper/better tailor. But wait, aren’t there tailors in Ho Chi Minh City who could meet the criteria I set? Isn’t what i am doing Irrational?

You bet! Irrational, but human. Humans are strange beings.

3 things to note, if you want to have a killer strategy for 2015.

The first – Find out your core customer’s needs and fears, and align your company’s purpose to fulfilling it. There is no better way to touch a client’s heart than by giving them the feeling that the reason why your company exists is to meet those irrational fears and needs your customer has.

This requires serious thought, because a company’s purpose is not something most company’s pay attention to. It is like Mission and Vision, two concepts that are critical, but often neglected in the rush of daily life. These two vital parts of the company are left on the wall as posters, but not as a critical part of the strategy to align and meet those needs and fears that will drive your customer to you.

The second – When your value exceeds their perception of price. What does this mean? Let me illustrate with a point  I used in my workshop. Imagine you have a headache, and you went to see a doctor. One doctor charges $100 and the other $10, who will you go to? Even if the doctor who charges $100 is the best doctor in town, you will not go to him simply because the value of a headache treatment does not exceed the perception of the price!

But if you have a heart attack, when your life is endangered, you will pay $100 000 if you can afford it to get the best doctor, right? Why? Because his value to you exceeds the perception of what is a fair price.

Is headache treatment a need or a want? is heart attack treatment a need or a fear?

The greater you understand the fear and need of a customer, the better you can position your product’s value to address their perception of price.

And the last – Be different. How do you be different in a way that is significant to your client when everyone of your competitor claims to be different?

You must be different in a way that matters to your client. And that is again, your uniqueness must address the needs and fears of the customer. Joe Girard, the world’s greatest salesman once said that his customers’ greatest fear is the lost of income arising from a broken-down car. He addresses this fear by providing a personal guarantee for immediate servicing versus his colleagues who only offered a car manufacturer’s warranty.Joe Girard made himself different by offering something of high value to his core customer – peace of mind when one goes to earn a living!

Being a seminar and education business, we did all these 3 things:

1. We emphasized that our purpose is to transform lives and thereby transform the world. We reflect that in our training programs by constantly finding programs and trainers who could change the way our participants think and act for the better.

2. We bring in the latest and best content from internationally known speakers and teachers to an audience who has little access to such content and experience.

3. And last but not least, we have fun while learning through authentic experiences. There are seminars and there are seminars – some are content driven while others are experience driven. For the same price, our participants could have gone to a workshop and sit like zombies for 2 days having content downloaded into them or they could engage in life-changing experiences that make the lessons applicable and real so that they know how to use the knowledge they gained – all while having fun!

We know our core customers hate to waste time and money (especially on a weekend), so we do these three things to make them enjoy learning and to remember and apply what they learnt.

The Core Customer is really the most important piece of information your company needs. Without it, strategy is useless. With it, you can become a company where your clients come to you and declare:

You should have charged us more!

You can do a Core Customer Analysis for 2015 if you are not clear what strategy you need. Just ask! Gazelles International coaching has an entire exercise just to determine who your core customer is!

Tis the Season for Strategic Planning…and Why It Might Fail

With the end of 2014 coming, I have been busy working with companies to plan for 2015. Working with them closely and observing how they craft their strategies to move forward and put execution plans in place, I admire their grit to survive and excel in their industries. I applaud their efforts and I am committed to help them succeed. Yet as I observe more and more companies, I would also like to highlight the common problems faced by companies in crafting their strategies, so that we can avoid them altogether.

Bad Habits

some bad habits masquerade as good practices, and this inhabits strategic thinking. Strategic thinking is first and foremost about how to differentiate your business from others. It is about identifying your core customer and then asking what can you do to meet the needs and the fears of this core customer, and then aligning every resource you have, and developing new ones, to meet these needs better than your competitors are able to. But inevitably, this runs counter to a lot of old practices like trying to satisfy your customer’s every wants. Like chasing fads and not focusing on your core strengths.

What got you here, won’t get you where you want to go – because as businesses grow, it becomes complex. Competitors notice you. Others see you succeed and think they can join in the bandwagon. Organisational complexities increase. You need systems and processes, a new way of thinking, a fresh understanding of who your client really is, and build new processes and competencies to take your company to the next level.

Yet, while leaders know all these, they invariably fall to practices they are used too. Leaders do not act on strategy, but do what they are used to do. For example, even though a company I work with had identified three core competencies to develop for 2015, it invariably forgot about its commitment to develop these competencies and focused on doing what it used to do – try to be good in everything! However, one may be forgiven if strategy is made into something too complex to follow, which makes it therefore easier to fall back to old habits of running the business.

What you can do to avoid falling into the trap of old habits:

1. Find a simpler way to formulate your strategic plan.

I am unreservedly for the One-page strategic plan developed by Gazelles International. The plan is simple enough to follow once it has been crafted together with a certified coach. Business operations are already complex, we don’t want to add to it with a plan that nobody understands. Some of my clients, before they implemented the Rockefeller Habits and the One-Page Plan could spend 10-12 hours on management meetings, which are inevitably ineffective and confusing. Simplify the whole process!

2. Revisit your plan regularly

I find myself reminding the business leaders who I work with what was the strategy they had decided on. i also asked them to commit to one particular aspect of strategy they want to see come through in the following year, and to constantly work on that one aspect. if not, it is easy to forget, or to feel overwhelmed by their strategic plan and revert to old habits. If business leaders can focus on one strategy every year and do it well, the impact on the business would be great. Having a coach in this aspect helps, because having a third party to remind you of what needs to be done, and not what you feel like doing will keep you away from bad habits.

Wrong Understanding of Strategy

This is a common problem for most business leaders. They fail to understand that strategy is about trade-offs. They also don’t understand that strategy is about alignment. And most importantly, they think that strategy is a magic bullet. Strategy requires discipline, discipline, and more discipline. I recall a scene from the movie Braveheart, where the Scots had laid an ambush for the English cavalry. They had long pikes that could stop the English charge, but for the plan to work, they had to hold off revealing their weapons until the last minute. A break in discipline would have resulted in either the collapse of their formation, which would lead to being slaughtered by the English cavalry, or the enemy not taking the bait and falling into the trap. The Scots held on to the last minute against the pressure to do what was natural – to run or to fight in ways they were familiar with. But they stuck on to their strategy – and won.

Key points:

1. Strategy cannot be formulated without an understanding of core customer, and what your competitors can or cannot do, what they hate to do and love to do.

2. You can’t have it all, so you need to focus. Focus requires discipline.

3. Strategy is only as good as its execution. And execution is again about discipline.

4. Smart strategy is about trade-offs because we don’t have infinite amount of resources and time. Trade-offs require discipline in thought and action. If not, it is easy to try and have it all, which is the fastest way to lose the game.

 

Wrong Practices

Every company has a system of meeting – the only problem is that meetings tend to take on a life of its own and meander like a river to nowhere. As a result, meetings do not result in clarity, focus and accountability. Every meeting should have these 3 words in mind:

1. Clarity – does the meeting help to clarify what the targets are, and what everyone must do?

2. Focus – does the meeting align everyone to do the right thing for that week/month/quarter, and lead to action being taken?

3. Accountability – does the meeting help everyone be accountable for actions and results?

To develop a new understanding of meetings that work, master the Rockefeller Habits. The habits include a system of meetings called the rhythm, and it helps keep everyone on track. the rhythm helps maintain execution discipline. But what is most important is the agenda of the rhythm: it does not allow the meeting to go off-course, but focuses on Clarity, Focus and Accountability.

Too often, i see companies embark on the journey of developing strategy only to give up, writing it off as a waste of time because they go back to old habits. They claim that strategy is too abstract to work, or it is too academic etc etc, and the result is they get jaded by it. The problem does not lie in strategy, but it lies in the way companies execute it. It is important to keep in mind that strategy is only as good as its execution, and pay attention to its execution, that strategy will work.

And when it works, it will make all the hard work worth it!

Have a fruitful strategy for 2015!

PS: If you need help, it is just a message away.