Josh Richards "jrichard"

I was recently pondering how effective an attempt at differentiation like this would work:

"You should choose us because we aren't like everybody else: we have terrible customer service."

Hey, at least there's an attempt to create a compelling differentiation in that statement. It certainly has a greater impact on the prospect then: "We're different because we have excellent quality and superb customer service." Oh really?

This problem, an inability to have a compelling message for the prospect, is rampant throughout the business world.

Here's an example from Dan McNicholl, CIO of General Motors, referring to IT VARs:

Don't attempt to offer every kind of solution to his organization or sound like any other solution provider, McNicholl says. Like most other CIOs, McNicholl says he's heard the same lines time and again. "We have the most innovative people; we have the most dependable methodologies; we have the most competitive prices. It's like a record after a while," he says. "None of them have created a reason, other than price, for me to choose them. Pick a dimension you want to compete on, and build your brand and focus on it. Otherwise, I'm going to pick you on price."

P.S. While my opener was meant as tongue-in-cheek, there is a restaurant, which sadly I can't track down the name of at the moment (yes, even via Google), that I recall reading about a bit back and is known for good food and absolutely horrendous service. It has turned the latter into their badge of honor (and which inspires word-of-mouth I'm sure). They intentionally make the service as horrible as possible because customers actually come to see if the stories are true (to be treated poorly). Customers would actually be disappointed if they didn't leave with a waiter telling them to "piss off", etc.

The point: The important part is that, whatever your compelling differentiation is, it ought not be half-ass or you risk diluting (and maybe even destroying) its effectiveness. It also needs to be congruent with what you actually are (and are not). It matters less what it actually is and more that it is real, noticeable, and intriguing.

-jr

Sometimes we tell ourselves (or hear someone else say):

"I've tried everything. I just can't do it."

(With some variation of the second sentence.) The only problem is: it is hardly ever true.

It's important to recognize there is a difference between trying everything possible versus trying everything we can think of. This comes up daily, for all of us, while in the search for solutions to problems (ex: getting new business, finding a job, etc.) , tackling projects at work, and personal goals.

Sometimes we even convince ourselves we've been "working our ass off", where the real problem isn't that we're not motivated but that we've been floundering around doing seemingly useful "busy work" because we lack a clear idea what we should be doing next to move forward towards our goal. (An aside: Copying what others are doing, who may be not be all that better off, often isn't a good shortcut either).

I usually get into these ruts when I'm feeling one or more of:

• tired
• overworked
• too focused
• overwhelmed
• unfocused
  

The best cure for me is some combination of:

• taking a walk
• studying something unrelated
• reading a good, intellectual and perspective stimulating, newspaper (ex: NY Times, Washington Post, Wall Street Journal, etc.) in print (hard copy, old school, not on-line)
• grabbing a letter or legal pad and writing down all the to do, worrisome, and upcoming items, goals, ideas, etc. I have sloshing around in my head (and also in my sub-conscious as a result)
• watching a favorite or engaging fictional TV show
• breaking the priorities/goals/to do items down into smaller blocks, chunks, to do lists
  
• sleeping on it
• clearing my calendar of outside appointments
• taking a long drive (sometimes with the commitment to not come back until I've figured out a next step)
• kicking the idea around with my wife, a partner, or a close friend or colleague
• getting out, often to a coffeehouse to do some people watching
• re-prioritizing my top 5 items (and adding anything else that comes to mind to the "6+ item", not bothering to prioritize it specifically since there's little point in worrying about the specific order of anything other than the top 3 to 5 at any given point in time)
• cleaning my work area, home office, or the even some area of the house
  

You get the gist.

It's just too easy to get stuck. It is inevitable. There's no profit in worrying or trying to prevent it. The only two things worth spending some time coming up with solutions to are:

1. How to recognize when you are stuck, as early and often as possible
2. Things to do to cure it
   

We have to develop personalized ways to get unstuck. There's no point in fighting or trying to avoid these situations outright -- they are bound to occur despite our best intentions.

This post was (in part) inspired by this excerpt from an excellent book I'm reading by Jay Abraham called "The Sticking Point Solution: 9 Ways to Move Your Business from Stagnation to Stunning Growth in Touch Economic Times":

Usually when people claim to have "tried it all," they haven't. They're stuck thinking within the same old mindset. And I've seen this revealed--firsthand.

At a Tony Robbins seminar I ounce attended, a man came up on stage, in front of thousands of people, and asked for advice. "Tony I've tried everything to make more money. I can't do it."

Tony was skeptical. "Name the last twenty-five to thirty new tactics you've tried in the last six or seven months and describe how each performed."

The man was speechless. He couldn't name a single one. Tony didn't give up. "Okay, name just ten." The man could only mutter unintelligibly before Tony finally drove the point home: "Just what have you done?"

The man's response shocked me: "I've looked in the want ads, and I've gone to a few franchise shows." Those two attempts hardly amounted to the "everything" he claimed to have tried. With his creative process stuck, the man was simply unable to see beyond the traditional methods he knew.

Usually, when I'm working with clients or myself, and start to feel "stuck" it's not due to a lack of intelligence, capability, confidence, or ambition. It's just a loss of perspective. When these times hit, it may be good to remember this post. We could all use a little perspective every once in a while.

Sometimes I (we) get stuck and don't even realize it. That has me thinking that we should build some of the cures for being stuck into our routines, even when we think we're on top of things. Because, even under the best of circumstances and when we're making lots of progress towards our goals, there are always others ways to look at things.

So, in conclusion, I'm suggesting this philosophy (for myself and perhaps for you too): Don't lose sleep over it, just keep your eyes wide open and keep moving forward. Go out of your way every day, to use some of the cures that you know keep you from getting stuck, so that you can be confident you're keeping your eyes wide open.

When I started this post it was, initially, entitled my THREE biggest business mistakes. Then it got longer, more occurring to me as I typed. There are many more but I decided to limit it to the six that stayed top of mind, figuring they were probably the most important (thus far), and that I view as also being highly relevant to other folks.

So here they are:

1. Assuming that what others are doing, who are seemingly successful, is the best way. Studying the competition is one thing. But the best path to take is usually based on a mixture of creative ideas of your own and those stolen from other completely unrelated industries. Study the competition to be different from them and to spot the gaps.
2. Listening to and considering advice from folks who, while well meaning, have absolutely no idea, credentials, or background in where I was headed. Even those in the same business do not warrant serious consideration unless they are on the same plane that you aspire too. For example, if you desire to be wealthy don't take advice from those who are not wealthy, even if they have your best interests at heart and sound savvy. This also means most talking heads on the television and reporters in general are not the best sources of wisdom. (Though they, or rather those they report on, may be good leads as to who to actually to listen to, talk to, read about, etc. yourself). Ultimately you have to make your own judgments regarding sources of advice. I spend a lot of time figuring out how to discover who to listen to on particular topics so that I can spend less time listening to noise from others who aren't truly helpful or, worse, are spouting B.S.
   
3. Not focusing. Once I had narrowed down who I was going to draw inspiration from, there came a point where I should have stopped looking for external inspiration and started applying my new found capabilities and knowledge gleaned from all that studying of other successful folks. Yes, the additional study of systems that had worked for others was beneficial (and continues to be, as I keep up that studying every day). There is no clear "starting line" but at some point I realized that for all the good stuff I was learning for the future I was also to a point where I could do plenty with what I had if only I got to work applying it.
   
4. Thinking that marketing (mostly) meant advertising (and also, in part, being cynical about advertising and sales). Marketing IS the business. And I don't mean that statement in the way I might have interpreted it before I knew what I know now. Combined with cynicism I might have written that statement off. But marketing is about everything: the features, the products, the service, the positioning, pricing, every interaction, etc. In fact, there is not one thing that you could name in any organization that isn't about marketing. Nada.
   
5. Not studying direct response marketing earlier. Holy crap. If you think good marketing and advertising is about pleasing and artistic advertisements, headlines that are a "play on words" in an attempt to sound cute, and winning awards than you are, worst case, a sitting duck waiting for competition to stomp you. Best case: you are spending money on marketing without any idea what is working and what isn't... and thus no measurable ROI or means to improve it over time (which still means you're a sitting duck: for a savvy competitor who understands direct response to blow you out of the water even as you boost your marketing spending). Effective advertising and promotion does not flow from the hands of graphics designers anymore than a professional baseball player's home run is the result of the guy who mows the grass at the stadium. You may argue it plays a role, and that may technically be true, but there are far bigger factors at work that should be focused on first.
   
6. Under-appreciating the importance of mindset. I am not just talking about positive thinking here. I'm talking about feelings about money, success, being wealth, not following the herd, questioning the status-quo, etc. And things like who you hang around with, focusing on results/outcomes over tasks, etc.. A lot of this stuff is sub-conscious or invisible until you start really learning about it so you can recognize it. It's even more difficult to spot because the majority of folks are oblivious to it. You can be ambitious as hell and still fail to reach your goals if your mindset is off-base.
   

That's all for now. I'm sure there will be to discuss another day. Perhaps a few folks out there will find this post helpful.

-jr

The economy can only take so much blame for the woes of many of us before a bubble of a different sort bursts: our own. Especially for those of us who are business owners, we need to remember that we're in business for ourselves.

Business owners are rarely innocent victims of circumstances. Sure we can't anticipate every possible thing, but no one forced us down any particular path either. We business owners, especially those of us in the developed world, have far more opportunities, protections, and levers at our disposal.

We suffer from the same weaknesses as anyone else such as complacency, fear of uncertainty, and the need for positive cash flow. But we are not entitled to being handed solutions to these needs and problems. They are our own and and we must seek solutions that are empowering.

First though we need to be honest with ourselves:

• How much credit do we really deserve for our growth during boom times? Was it strategic or more the result of the pie growing around us? (i.e. did business fall into our lap... as well as our competitors... or did we attract it systematically and through compelling positioning?)
• How much is our blame on the nebulous "economy" our way of deflecting from our own weaknesses, mistakes, and oversights while putting off the nitty gritty work of tackling them?
  
• What's the profit in continuing to blame things that are outside our control while ignoring the things that are?
  

As a blogger Brandon Boyd recently said:

This economy is 'thinning the herd' of weak business practices. Its affect will be a benefit to the customer in the long run - as businesses that truly 'deliver' will remain.

I'd add that it'll benefit business owners in the long run too. Those that manage to do more than simply coast through economic downturns will build stronger businesses. They will be the leaders, regardless of economic cycles. Those that go away, well, they were lucky to begin with.

The truth may hurt but that doesn't mean it can't be helpful. The first step is admitting it, right?

-jr

I have mixed feelings about Kiva's recent experiments with lending to U.S. based entrepreneurs. I'm going to let that concept roll around in my head and read more about Kiva's own reasoning for the foray before making up my own mind (Prosper.com, Lending Club, Pertuity Direct, and others already seemed to cover that space... and do so as commercial businesses).

However, something else immediately intrigues me: Of the $34,576,235 of loans with completed loan terms to folks in third-world countries, the default rate is 1.6%. Pretty good. While it's not apples to apples (for one, Kiva individuals don't have credit score categories to map into for comparison; secondly, Prosper and Lending Club lend don't loan solely to entrepreneurs), that's actually better than the across-the-board peer-to-peer lending statistics at both Prosper.com (stats) and Lending Club (stats).

What interests me most is how the statistics will look several years: will the U.S. based borrowers have as good a record as the ones from impoverished third world countries?

Another interesting tidbit, which I realize can be partially explained by cost-of-living differences, is that the U.S. based borrowers have far larger loan requests in nearly all cases. Usually $5,000 to $10,000 (though there are some outliers that are $1,000-ish).

The only loans this large from non-U.S. borrowers (which are most of the sample base so this is a pretty accurate set of statistics) are actually from large groups of entrepreneurs who are only borrowing $200-$300 individually in most cases (this group lending is common practice in micro-lending in these types of communities -- it reduces lending risk since peer pressure combined with the other members covering when someone comes up short ensures repayment).

It may be an unpopular, uncomfortable viewpoint, or simply cynical but my gut tells me that a higher percentage of the U.S. based loans will default over several years. Not because they don't mean well but because even the poor in the U.S. take a lot of things for granted. Lots of low-income folks pay for cable television, overpriced hyped cell phones like the iPhone, manage to go to Starbucks everyday, etc.

Don't get me wrong -- I support micro-lending, even domestically. I'll be curious to see the data though. While third-world countries may suffer from the risk of political instability and lack of resource availability, developed nations suffer from taking things for granted and curious personal money management practices. Even our worst off citizens have it better than much of the world's population. That doesn't make either okay but it does provide some context and, I believe, a catalyst for different mindsets when it comes to money management, suffering, and learning from our mistakes.

Micro-lending continues to fascinate me in any case. Especially when it can be done with less overhead using smart software and the Internet. Too much overhead (background checks, interviewing borrowers, checking in regularly to encourage prompt repayment, following up on late payments, etc) relative to the loan amounts has traditionally been one of its main hurdles. One which Kiva.org has tried to break through and commercial peer-to-peer lenders have tried to make viable on-line.

-jr

The single greatest opportunity for your business to prosper (yes, even now) awaits... are you blowing it?

Dramatic changes in economic sentiment and wholesale rewrites of entire industry structures leave a lot of chaos in their wake. That chaos is, for most of us, uncomfortable. For some it is very negative, dramatically changing the course of their lives, while for others it only leaves them confused and uncertain but otherwise relatively unscathed (when viewed objectively).

The gravest mistake I see, in businesses which are otherwise perfectly reasonable ones to be in still, is too much of an inward focus. Businesses do not exist to and will never prosper when they focus on themselves. Your business exists to create value for your customers. In both good times and bad there are customers for all manner of products and services.

You may need to tweak your present offerings. Or reach out to your customers in ways that you have not had to in the past. You may need to connect with them in ways that are relevant to the conversations they are already having in their minds.

In some cases, depending on what your value add to the world is, that may mean reminding them about what's going on while giving them a different perspective on the situation. In other cases your job may actually be to save them from all the doom and gloom.... by helping them escape from it even if it is just for a brief bit of time. Only your own capabilities intersecting with your chosen customers can determine where on the spectrum your positioning should fall.

The single greatest corollary of the above also presents business owners with a tremendous opportunity. It is one of the most ubiquitous yet largely untapped opportunities to be seen in a long time. It spans across industries, has nothing to do with technology, and hits at the core of what successful businesses should already - and always - be doing anyhow: connecting with and adding value to their customers lives.

This is always a goal, of any business. Yet, especially in so-called "good times", it is easy to get complacent and simply focus on what is in front of you, what is handed to you -- on the customers that just seem to fall into your lap.

But there are always more customers out there. In good times you are leaving a lot on the table but just don't realize it. And in bad times you want a larger share of what is normally left behind.

The key is to get your marketing, relationship building, product, service, and offer development efforts, and other keys to value adding aligned. By doing this in good times as well as bad times, natural business cycles flatten out more and even under very poor economic conditions things are bearable.

The point being that those who are able to not be paralyzed by recent economic turmoil and use it as an opportunity to build a stronger foundation for their businesses will also be more profitable in good times. Survival is important and prospering remains possible with the right foundation.

The world has not ended. It has simply changed albeit dramatically (at least on the short time spans most of us view things under).

Get moving. But hurry... you're running out of time to capitalize on this opportunity!

-jr

Brian Cuban, who happens to be the brother of Mark Cuban (the owner of the Dallas Mavericks but which is irrelevant to the topic...mostly), has a good thought piece in Worth magazine entitled Celebrity Cash Crunch - We may secretly enjoy it when celebrities go belly-up—but would we do any different in their shoes?

Indeed... Heck -- with far less money to throw away -- most folks make the exact same financial mistakes. I suggest you read it here.

-jr

1. Getting their marketing systems in order. When the economy is rocking often business owners get lazy about marketing systems used to bring in new clients, boost business from existing clients, and build strong moats around their businesses.
2. If they have employees, identifying the top talent out there and re-approaching them. They are more likely to be available and amiable between restructurings, underwater stock options, and employer uncertainty, etc.
3. With competitors and complimentary businesses hurting and credit markets tightened up, both public and private business valuations are low. Acquisitions made now will be far cheaper and, if astutely approached, achieve greater returns over the long run. In some cases, significant returns can be achieved even in the near-term simply by bringing the clarity of more mature marketing systems to a target that did well when the economy was gangbusters but lacked systems useful when things got tougher.
4. Re-evaluating their unique selling proposition, value proposition, and positioning. Going back to basics and reconsidering what sets them apart and how they communicate this (both in words and in actions).
5. Taking market share from weaker, distracted, and confused competitors
6. Boosting direct marketing activities with provable ROIs and cutting vague "branding" activities with less provable ROI (branding can still be a part of the direct marketing activities but it should be a secondary goal).
   
7. Reaching out to clients, experimenting with new offers, packaging, and positioning. Also talking to clients, prospects, and others about their concerns, wants, and desires. Even in downturns we all still have needs and wants that we'll pay to get addressed.
   
8. Cutting unprofitable relationships (clients, vendors, partners). Good times make us fat, stupid, and lazy. Nothing like necessity to force us to get back into shape.
9. Stay focused. On what? That's for each one of us to decide. But it's important it be done deliberately or it won't be done at all. There are always distractions but when combined with strong emotions and widespread uncertainty it's even more difficult to decide where we want to go and then keep our eye on it.

Are you doing some of these things? Can you think of others? Drop me a line josh.t.richards@gmail.com.