Best Books for Small Business Owners Series: The Innovator’s Dilemma

As a small business owner, do you consider how exploring new ideas can lead to future success? If making time for continuous learning isn’t at the top of your priorities, you’re not alone. And we want to help. Reading or listening to business books can offer new perspectives and help you understand classic business lessons. So, follow our Monthly Must-Reads series! In this series, we share the best books for small business owners. We’ll save you time by helping you determine whether each book is worth your attention. For each featured book we:

  • Identify exactly which types of business owners will benefit from reading it
  • Summarize the main points
  • Share key take-aways and reader reviews

This month, we cover The Innovator’s Dilemma by Clayton M. Christensen. Check out the end of this article for our past must-reads.

Business Book:

The Innovator’s Dilemma, by Clayton M. Christensen

Focus:

To uncover two innovation types and to understand the purpose of and necessity for each of them.

Main Idea:

When companies disregard opportunities for disruptive innovation, they risk going into the shadows of more inventive start-ups.

Great for Small Business Owners Who:

Develop innovative solutions for niche markets, or have long-standing businesses and want to protect themselves from dissipating.

Synopsis:

The Innovator’s Dilemma identifies and explains two types of innovation: sustaining innovation and disruptive innovation. Sustaining innovation is the ongoing effort of listening to and improving from customer feedback. In this way, it satisfies customer’s current needs. Disruptive innovation helps companies evolve, to meet customers’ needs–often in an underserved market. Examples include the transition from digital to smartphone cameras, GPSs to navigation apps.

Christensen goes on to explain which types of companies typically focus on disruptive innovation and which ones lag behind—and why. He offers strategies for how both long-standing companies and new start-ups can successfully explore and benefit from disruptive innovation.

Key Take-Aways:

Large, well-resourced companies are more likely to ignore disruptive innovation and suffer because of it. They may not even notice niche markets. They might think that these markets aren’t offering enough rewards to compensate for the lack of credibility. These companies should continue their sustainable innovation efforts. They should also start paying attention to how niche markets want to use their products.

For start-ups and small businesses, disruptive innovation offers huge opportunities. They’re often first to market. Targeting small niche markets offers a more forgiving, cooperative and engaged customer base. Disruptive innovators don’t directly compete with larger, better-funded market leaders for customers. This means they have a higher chance of growing surprisingly quickly and unchecked.

Pursuing disruptive innovation can help companies take–or keep–their place as market leaders of the future.

Reviewers Say:

“Clayton Christensen’s The Innovator’s Dilemma…remains one of the most important business leadership books on the market… The pace of technological innovation has increased drastically… [but] the foundational principles remain the same—when companies are doing everything right, they can still lose their position of leadership in the market. Companies are incentivized to act in accordance with what their customers want, and if they are not careful, that mentality can preclude them from taking advantage of disruptive opportunities that their current customers are not yet interested in. Christensen’s warnings should be heeded by leaders and managers at all levels of the organization…. I look forward to reading about how the Innovator’s Dilemma can be addressed in this age of near-constant innovation and rapid technological advancement.”

“I’ve been involved in innovation most of my career, and now wish I’d read this book much earlier. The simple but powerful thesis of the book is backed up by data and case studies from disparate industries. Like many business books it is a bit repetitive at the end… But the ideas and usefulness are five stars.”

Monthly Best Books for Small Business Owners:

August, 2019 – Blitzscaling

September, 2019 – The E-Myth Revisited

October, 2019 – Influence: The Psychology of Persuasion

November, 2019 – Built to Last

December, 2019 – Multipliers

January, 2020 – Start with Why

February, 2020 – The Five Dysfunctions of a Team


Preventative Measures for Small Businesses To Take During COVID-19

With COVID-19 having broad impacts on the global economy, you might be wondering if there are preventative measures for small businesses to take to protect themselves and their customers during these uncertain times.

Indeed there are. Below you’ll find actionable steps that businesses operating in a wide array of industries can take to secure services, put customers at ease, and stay nimble as new information becomes available.

Bolster Inventory

One of the most important preventative measures small businesses can take during these earlier stages of the COVID-19 disruption is to bolster their inventory.

It’s time to examine your current purchasing practices. Pay special attention to your overseas suppliers that may be impacted by export delays. You’ll likely want to increase orders from a typical 30-day supply to a 60- or 90-day supply, especially for your most popular inventory. If you find suppliers challenged to meet your increased quantities, don’t be shy about exploring alternative suppliers. At the very least, you’ll establish new supplier relationships and lay the groundwork for securing operations during current and future market disruptions.

You’ll also want to take steps to bolster your internal inventory for things like office and cleaning supplies. Consider increasing your orders for your daily consumables. Purchases like copier/printer paper, shipping supplies, and in-office consumables like paper towels and toilet paper can all be stored. Whether supply chains get disrupted for these items or not, you’ll use them regardless.

Establish In-Office Protocols

Major consumer-facing businesses have made a proactive practice out of sharing their preventative measures with the public. Whether it’s an airline sharing aircraft disinfectant procedures or your local fitness club letting customers in on their cleaning methods, your customers and employees will appreciate your procedural transparency.

Let the people you rely on most to keep your business running know that you’re taking their health and safety seriously. Here are some tips for safety measures small businesses like yours can take to reassure your team and customers:

  • Office/store cleaning: Consider an email or in-store signage letting customers know your daily and overnight disinfectant procedures. Offer hand sanitizer pumps or wipes if you have shopping baskets or carts. Add additional wipes at checkout/customer service areas. Place paper towels instead of reusable fabric hand towels in all public restrooms.
  • Examine return policies: Explore whether you need to make adjustments to return timelines to accommodate a customer’s desire to limit public exposure. Also, examine how you’ll process returned items and sanitation procedures for returns if necessary.
  • Employee measures: If you haven’t already, now’s a perfect time for an all-hands meeting to discuss COVID-19, its impacts, and safety measures your company is taking. Ensure employees have a plentiful supply of disinfectant products like wipes, soap, and hand sanitizer. Establish a firm sick policy and consider a permanent adjustment to your paid sick leave time.
  • Leverage technology: Consider limiting employee travel (even out and about in town) to avoid unnecessary exposure. Implement digital meeting tools like videoconferencing to continue collaboration during times of limited mobility.

Using the tips above, you can both reassure customers and employees as well as continue business operations responsibly.

Stay Up-To-Date

New information comes out each day about the impacts of COVID-19. One of the most important preventative measures for small businesses is an ongoing commitment to awareness.

Establish a point person or team within your company to stay up-to-date on the latest news. This includes information about new cases, travel recommendations, safety suggestions, and more. The following sites can provide reliable, authoritative information on COVID-19:

Depending on how COVID-19 affects your region, you might consider closing your business for some time to prevent disease transmission. While not an easy decision, it could be a necessary one for safety. Always consider whether a temporary closure of your physical location(s) could benefit public health and make contingency plans for key employees to work remotely during times of potential closure.

With so much news coming out each day about COVID-19, it’s natural to feel a bit flummoxed. However, a bit of planning, a generous amount of communication, and some common-sense safety measures can make your team and customers feel more secure during unsettling times.


How Customer Service Can Help Small Businesses Survive A Potential Slowdown

Could customer service be the key to helping your business survive a slowdown? With the cancelation of global events like the annual SXSW Festival in Austin, TX, companies could be wondering how they’ll survive if this virus continues to thrive. Amidst the COVID-19 turmoil, focusing on customers could both bring in revenue and help retain business–even with supply chains slowed.

Tim Hayden, the President and Managing Partner of Brain+Trust Partners, shares his thoughts below on the intersection of service and wide-reaching COVID-19 slowdowns. If you’re ready to consider customer strategy as more than just a survival strategy, you might find your business better for it for the long haul.

How COVID-19 and other slowdowns might impact SMBs

Direct-to-consumer powerhouse suppliers are already squeezing SMBs. “The hysteria around COVID-19 is causing consumer paranoia of public places and strangers, in general,” says Hayden. “Compounding challenges will come from disrupted services and logistics that help SMBs operate.”

Disruptions mean: as customers make panic purchases, inventory will deplete on an accelerated timeline. This timeline puts additional pressure on supply chains and, ultimately, businesses–to meet customer demand for their regular sales volume.

Why customer-centric strategy can help in tense times

“Customer patience is at an all-time low, as convenience services like grocery delivery and ride-sharing have our expectations set to ‘immediate’ and ‘frictionless,'” Hayden says. “With supply chain and distribution networks being disrupted or at best, delayed, customer service and support must be on point.”

Hayden recommends that businesses commit to ensuring they have the most updated information on both their customers and the entirety of their inventory. With this information in hand, companies will be better prepared to speak to multiple aspects of the customer relationship. For instance, sales reps can perform outreach sales opportunities that aren’t dependent on delayed inventory. Customer care reps can also offer more realistic timelines for out-of-stock items and speak to any alternative sourcing efforts the company might be pursuing.

“Having empathy and accurate details on the state of a transaction, and empowering everyone in a frontline customer-facing role to offer consolations, is paramount in modern times, not just in epidemic moments,” says Hayden.

Five tips to drill down into customer service strategy

Hayden has five tips for using customer service as a potential bridge to help your business weather any slowdown. These strategies will help mobilize your customer service efforts to the front line at any time, not just during downturns:

  • Focus on data integrity. Make sure your database is de-duped, and disparate information on customers can be accessed in one place.
  • Focus on facts. Delivering a personalized and empathetic experience to your customers is only possible when you have all the facts. This can include information about the customer and your inventory.
  • Invest in role-playing. Use role-plays across all levels of operations weekly. This can help to present new customer concerns to the team and workshop solutions and responses.
  • Try out secret shopping. This is for brick and mortar locations or those that rely heavily on internet or phone-based service. Invest in secret shoppers to test your new service protocols. Share them with your team in a constructive way to improve future performance.
  • Be the brands you love. Emulate what you love about the brands you buy from most. The little things like common courtesy and first name salutations are often the difference for returning customers. You can show you’re grateful for their continued business during a slowdown.

Why customer service is the play today

For the most part, the strategies Hayden outlined above require no additional budget. They simply require your time and a commitment to open communication and teamwork. “Investing in getting to know your customers and their contextually relevant needs and ensuring every team member representing your business has that knowledge can lift sales and reduce friction across operations, marketing, and customer experience efforts,” he says.

Hayden adds that market disruptions at the top of 2020 aren’t an anomaly by any means. “Markets will continue to shift every week, and everything from retail to travel to sports and healthcare is being reshaped by this volatility, emerging technologies, and competition,” he says. “Delivering what customers need and want, without friction and free of burden on them, is what allows sales and margins to grow, ultimately.”


Supply Chain Disruption: Managing Impact from COVID-19

U.S.-based SMBs account for roughly one-third of all imports into the country. Supply chain disruption during the COVID-19 era proves to be a critical threat to operations and profitability.

However, means do exist for businesses to mitigate the impact of these market disruptions. Simultaneously, businesses can create improved supply chain protocols to manage such disruptions.

Below, you’ll find insights from Suuchi Ramesh, founder and CEO at Suuchi Inc. and Albert Goldson, Executive Director at The Cerulean Council. Their tips can help your business navigate the current landscape. They can help you chart a path forward to improve you and your business’ resilience in any market.

Immediate Impacts of COVID-19 on Supply Chain

What can SMBs expect to experience as COVID-19 extends its reach across the globe? “The immediate impact will be robust customer demand for current inventory,” says Goldson. Businesses will stockpile inventory, which means suppliers could experience accelerated inventory sell-through. While the initial cash flow could be considerable, there are impending downsides.

Increased demand will cascade into multiple supply chain disruptions. Businesses might find themselves caught between depleted inventory and extensive replenishment delays due to indefinite lead times from overseas suppliers. Goldson states that companies could experience a cash flow squeeze due to uncertain lead times.

Ramesh anticipates that U.S.-based businesses will turn an eye toward risk and shift to an emphasis on local-for-local supply chains. “With more local control, businesses will have a better way to combat macro-economic variables.” Businesses are beginning to consider the impact COVID-19 might have on different areas of their supply chain. Ramesh advises companies to hedge their risks against disruptions from all suppliers.

“Today, it’s the east, but it really could be anywhere across the globe,” she says.

Four Tips for Managing Supply Chain Disruption

The following tips can help businesses to hedge risks and mitigate cash flow disruptions due to COVID-related delays.

Focus on Digital Systems

A supply chain is only as good as its communication protocols. That’s why Ramesh says businesses should consider investing in digital systems to improve communication in their supply chains.

“For companies who are primarily communicating by email or phone calls, when things like COVID-19 happen, communication comes to a halt,” says Ramesh. “If you have a system that connects your entire supply chain, it provides continued communication when something like this happens.”

Diversify Your Supply Chain

Now’s the time to diversify suppliers and initiate outreach to other potential suppliers. When businesses can develop a base of multiple supplier countries, they can still course-correct when one global supply center is affected. While new suppliers might seem to be a short-term solution, Ramesh considers alternative sourcing to ultimately be a long-term play.

“For brands that are lethargic or just don’t have the resources to think about multiple sourcing partners, it’s natural to procrastinate if there are no immediate risks,” she says. “When you’re forced to search for a short-term alternative, if successful, it can turn into a long-term opportunity.”

Goldson advocates for businesses using this time to establish multiple alternative suppliers.

“Even if you already have a secondary source, establish a third source,” says Goldson. “The world economy is entering a period of high risk and uncertainty, and the more options you have, the better you can weather the storm.”

“Stress Test” New Suppliers

Businesses can identify new suppliers and engage in entry-level transactions. Therefore, it’s critical to ensure new partners can meet demands under extreme conditions. Goldson advises that companies occasionally “stress test” suppliers by giving secondary suppliers a larger than usual order to see if they can handle the demand.

“It’s counter-intuitive, but think of how you test your car’s air-conditioner in the winter to make sure it’s running okay after months of non-use,” he says. These stress tests can help businesses identify maximum orders per supplier and create fulfillment strategies for a wide array of supply chain disruptions.

Focus on Compliance and Sustainability

As you put stress test protocols in place, Ramesh advocates for businesses to find a newfound focus on compliance and sustainability. “A disaster like COVID-19 is one thing, but you want to ensure that if any type of similar issue has impacted a partner, they have the procedures, resources, and steps in place to combat the issue and a digital system to record it all,” she says.

Have open and frank conversations with suppliers about current market disruptions. Ask them how their businesses are making adjustments to prevent future slowdowns on their end. Communicating about compliance and sustainable business practices across varied market conditions will ultimately strengthen the relationship between customer and supplier for the long term.

You now have four tips to help you shore-up supply chain disruption in the wake of COVID-19.

By diversifying your supply chain and investing in better communication across the board, you’ll be prepared to withstand market variances both now and in the future.


Identifying a Niche Market that Works for You

Identifying a niche market is a more profitable strategy for small businesses, rather than trying to sell products and services to all “potential” customers. As we have noted before, “the most successful enterprises work hard to target specific groups of customers to whom their offerings are most attractive.” Those specific groups comprise a niche market where focused branding and marketing messages often have the greatest impact – because those groups are made up of prospective customers most likely to be drawn to what a business has to offer.

Finding a niche also serves as an excellent way to stand out from the crowd. Broadly speaking, a niche business “is a specialized or focused area of a broader market that businesses can serve to differentiate themselves from the competition,” according to Business News Daily.

Anything that differentiates your business from a crowd of competitors has the potential to trigger fast and large-scale growth – the goal of many small business. Key benefits include:

  • A bank of loyal customers who belong to this niche market and gratefully purchase the products or services delivered by an enterprising small business
  • Reduced competition because this niche market has been largely overlooked

That’s why: It makes sense to pursue a specialized group of customers, rather than attempting to sell to everyone.

Identify your target audience

How does a business go about identifying the right niche market?

Start the process by “closely analyzing the current state of the market and determining if a significant enough portion of that customer base is receiving the special attention it wants and demands.” If that customer segment isn’t receiving special attention, it’s a golden opportunity for your business to gain a valuable foothold.

Other strategies include:

  • Checking out Google Trends to determine the level of potential interest in a product or service aimed at an underserved audience.
  • Seeing what’s going on on social media. Are consumers looking for a product or service close to what you offer?
  • Researching the range of products offered by the big online sellers, such as Amazon.

Is your proposed niche product or service already offered by other small businesses? That might not be a bad thing, notes Constant Contact, since “finding a large amount of products that already exist for your niche … indicates a strong market,” particularly if you focus your efforts on creating a product “that’s unique and stands out.”

Conducting research takes time and resources. But if you land upon an underserved niche market, it’s well worth the effort.

Assess the level of your own commitment

Taking on the challenge of locating and profiting from a niche market requires a certain mindset. It starts with having the necessary passion and energy to go after this market. Without that energy, you can easily lose interest in doing the hard work involved.

Consult friends and colleagues in your professional networks. Use these individuals as sounding boards to evaluate the potential of your niche product or service. Does it strike others as a great idea and worth pursuing, or do you encounter mostly lukewarm levels of interest?

Don’t think you have to reinvent the wheel. To appeal to a niche audience, you may only need to tweak an existing product or service. Maybe a minor upgrade will do the trick, as opposed to creating an entirely new offering.

Focusing your energy on this specialized market can be hugely profitable, as long as you have the right level of commitment.

Gauge the degree of interest in your product

Appealing to a niche market doesn’t have to depend upon guesswork. Once you have a viable product to share with prospective customers, it’s time to test it out.

One effective means of assessing interest among consumers is: offering them the chance to “test-drive” your niche product. Offer samples with sufficient features that provide a reasonable way for people to try out the product. This can be in your bricks-and-mortar store, through free online deliveries, at trade shows and other industry-related venues.

The feedback you get can give you a fairly clear idea about how well the offering is regarded by potential buyers.

Another option is distributing surveys among those who try out your new product. Create brief surveys focusing on whether or not this product genuinely addresses an overlooked consumer need, if it’s easy to use, what other benefits might be gained, etc. Surveys can occur via email, through on-the-spot questionnaires at tradeshows, or in small focus groups.

Again, this will help you determine whether or not to move forward to larger-scale production and distribution.

Identifying and reaching out to a niche customer market requires time, resources and focus. The potential for growth, is huge.


Joseph Hoelscher: Using Creative Marketing To Help Customers Avoid Your Services

If your marketing helps people avoid needing your products/services, it seems like you might be going in the wrong direction. After all, isn’t the whole point to land more customers? In the right situation, though, this counterintuitive approach can lead to terrific results. Joseph Hoelscher, a DWI lawyer and partner at Hoelscher Gebbia Cepeda, built his marketing campaign on one key concept. They want to stop people from driving drunk so they don’t need services in the first place.

Finding a Legal Specialty

Hoelscher has been practicing law for about 14 years and specialized in DWI for several reasons. “I was good at it, it pays well and unfortunately it happens a lot. Anyone can accidentally have too much to drink.”

After working in this field, Hoelscher has seen plenty of the horrible results from DWI. “I’ve had vehicle manslaughter cases where the outcomes have been just horrific. Clients with serious injuries, losing their kids to CPS, and of course seeing the harm done to victims.”

Even though Hoelscher makes his living from DWI law, he longs to see the day when this is no longer an issue. If it meant him practicing another form of law, he’d do it.

Taking a Different Marketing Approach

Hoelscher felt uncomfortable with how the typical DWI firm handles marketing. “I’d see a lot of ads where the behavior seemed almost encouraged: hire us and you won’t get in-trouble.”

He wanted to try something different while potentially helping with this troubling issue. Hoelscher and his representatives attend events where people are partying and drinking, like San Antonio’s version of Mardi Gras, the Fiesta Festival.

At the event, they’d hand people cards with a code for a free Uber ride. “We’d put our info on the back along with a slogan, “we’d much rather you pay for an Uber than our retainer.” Hoelscher would also give these cards to parents at college events so they could pass along to their children.

Building Loyalty

Hoelscher said the response was overwhelmingly positive. “People would get a laugh and make sure to hold onto our cards.” He noted that humor was a good way to bring up the topic. “At these events, people are out to have a good time. We weren’t trying to judge them.”

Even though Hoelscher tried to cut down on DWI with the free rides, he’d still end up getting clients. “People would call, “ah I should have used your free ride.” Or they’d refer a friend, a family member who got in-trouble.”

Ultimately, Joseph Hoelscher finds clients by showing he cares and it shows how you can drive business by leveraging community engagement.

Seeing Cost-Effective Results

“We’ve also run radio, print, TV, and social media ads. The ROI was better on this targeted, personal outreach.” Hoelscher said they pick events where people are going to be drinking, their target audience, and that definitely helps their ROI versus print, radio and TV where they’re hitting a broader audience.

He also commented that his contrarian approach remains affordable. “We’ve had good success with social media, but the cost per lead had quadrupled over the past few years whereas the cost per lead is still the same for our rideshare campaign.” That’s another benefit of trying something unique, you aren’t fighting for resources with the competition.

Finally, he points out that the rideshare campaign helps get more out of his other marketing. “People take pictures of themselves getting into rideshares and link to our social media. When people see our other ads, they remember ‘oh that’s the guy who helped me avoid drinking and driving.'”

joseph hoelscher

Advice for Other Business Owners

If you’d like to try a similar campaign, Joseph Hoelscher says put yourself in the customer’s shoes. “Where are your customers coming from and what’s getting them in trouble?” In his case, he finds that people often drink and drive not on purpose, but because they didn’t plan on how to get home. His firm gives them that ride home they need.

When customers create problems for themselves, he recommends pointing out the issue, but doing so with humor. “If you engage in nonjudgmental outreach, people appreciate it. You aren’t trying to sell on fear.”

Above all, this style of marketing works. It shows customers you care about them. “I’ve had so many clients say they hired me because I was looking out before they had a problem, not like everyone else who only came knocking after they needed a lawyer.”

 


Customer Acquisition or Retention–Which is Better for Your Business?

Which aspect of business growth is more important–customer acquisition or retention? It’s an age-old question for small business owners. They must constantly decide where to put their precious funds and resources.

Focusing on retention means paying close attention to the needs and pain points of an existing customer base. On the other hand, customer acquisition involves the constant effort to boost brand awareness. It requires you to entice new customers to “take a chance” on your business. You have to find innovative ways to connect with prospects. This is the case, even if the business doesn’t know exactly who they are, or what specifically they want.

Here’s an in-depth look at both of these essential components of business growth.

Customer Retention

Any business that builds a reliable pool of repeat customers is doing something right. Whether their focus is on providing outstanding customer service, continuously testing the quality of their products or services, or simply making it easy for customers to purchase what they sell, their strategy to retain these loyal customers is often a successful one.

As the marketing platform Fivestars puts it, retention “is usually cheaper and it’s the lower hanging fruit.” Generally speaking, these marketing efforts are less costly and more successful. This is because “customers who are already familiar with your business, and presumably have a positive impression of you are easier to convert.” This is compared to a customer who knows little or nothing about your business.

Repeat customers are more open to a company’s marketing and sales efforts; they did business with that company in the past and, presumably, value their products or services. As Constant Contact notes, the following benefits might accrue:

  • It’s considerably less expensive to keep the customers you have than to acquire new customers.
  • Loyal customers require less time and resources to sell to, as opposed to new customers who–despite a costly marketing outreach program–may end up choosing not to purchase anything at all.
  • Focusing on repeat business means you “create a group of loyal customers that will happily … promote your business” and “refer 50 percent more people than one-time buyers.”

Maintaining ties with an established target base makes all the difference in the world between struggling to survive and anticipating a bright future.

Customer Acquisition

Acknowledging the virtues of emphasizing retention shouldn’t obscure an equally compelling fact of business life: without acquiring new customers, you don’t have a base of current customers to retain. Growth requires acquiring new customers, and even more so if a company is executing an aggressive expansion plan.

Of course, a lot of work goes into the acquisition process. A company determines who potential new customers are, evaluates different marketing and messaging strategies, decides the best approach that’ll resonate with the target audience the most, conducts a successful sales process, and participates in related activities.

Therefore, the costs associated with customer acquisition are significantly higher than that around retention. According to Agile CRM, “As your customer base grows and you increase your brand awareness,” the acquiring of new customers “becomes exponentially easier.” The key is leveraging the acquisition of new customers “to solidify their trust in your ability to support them and make them successful.”

How to Boost Customer Retention

Unfortunately, businesses don’t always work as hard to retain customers as they do in attempting to gain new ones. But, successful retention efforts cost less and demand less time and effort than the acquisition process. Consider the following action steps to keep a focus on loyal customers:

  • Always make certain new customers get the support and guidance they need from the moment of the sale and beyond.
  • Generate “how-to” and other related content addressing the constant needs of the new customers.
  • Check in with customers to determine their satisfaction level(s) with the products or services they purchased. Provide answers to any and all questions ASAP.
  • Let these customers know of product upgrades, repairs to computer glitches and other changes in the business that might affect them.
  • Establish a state-of-the-art customer response and support system. Keep in mind: One negative experience with your business can turn a trusted customer into someone who never buys from you again. Do everything you can to provide support and guidance for any problem a customer encounters.

These action steps require additional funds and resources. But if they aid in boosting retention, they are worth every penny.

The Key to Acquiring New Customers

For “new customer acquisition in 2020, business owners should balance past tactics with new strategies.” A focus on specific strategies can help businesses achieve this vital objective. These include:

Refocus efforts on target customers.

Clearly identify specific groups of customers to whom your product or service is most attractive. Avoid wasting time and resources where the chances of generating new customers are slim.

Embark on social media campaigns.

Leverage social media to attract new business. This can result in higher brand awareness through the distribution of free, value-added content. Paid social media efforts can be equally effective in increasing brand visibility within your target audience.

Try a focused product or service giveaway initiative.

Giving prospects a chance to experience your offering on their own terms (and at no charge) can result in a favorable experience that leads to the next step of the purchasing journey. Free product trials and/or no-cost software downloads can go a long way towards demonstrating the benefits of your offering.

 

In the end, every business has to find its own balance between acquisition or retention. A lot depends on the stage of growth a business is in, and the particular growth strategy to which it commits. Without new customers, a business can’t grow. Without a base of loyal customers, growth is equally problematic. Find the right balance and you have the potential for unprecedented expansion in 2020 and beyond.


4 Ways You Can Turn Excess Inventory Into Extra Revenue

Are you looking for a way to give your business revenue a boost? Your inventory may hold the answer. If your excess inventory is collecting dust on shelves or in a warehouse, moving it around can inject new life into your revenue numbers. Here are four ways to help reinvent your excess inventory.

1. Bundle it

One option is to bundle your inventory and sell multiple items together at a singular price. This can get products that have been gathering dust off the shelf and out the door–all while generating a profit. There are several ways to approach bundling, including:

  • Combining older or slower-selling products with newer or faster-moving ones
  • Bundling multiple units of the same items
  • Grouping items that are commonly used together

Here’s an example: If you run a salon, and have a hot-selling brand of styling gel, you could package it with the overstock of shampoo and conditioner you’re struggling to get rid of.

To make a bundle enticing–generally speaking, the total price of the bundle needs to be lower than the cost to buy each item individually. Just remember: Keep profit margins in mind so you’re not unnecessarily sacrificing revenue.

2. Offer it as an incentive

Upselling can be a simple and effective way to increase revenue. The idea of an upsell incentive is to use one item to convince your customers to buy a second, more expensive item. In an upsell, you can use the extra inventory to offer products as a bonus–or as a “gift with purchase” when a customer meets a certain requirement. For instance, the customer(s) may need to spend $50 or $100 to get the freebie. This way, you get the revenue benefit from the sale–and you get to move more inventory in the process.

Upselling with incentive works best when customers feel like they’re getting a high-value freebie or bonus. When you create an incentive campaign, remember to weigh the value of what you’re giving against what you’re asking customers to spend.

3. Create a timeline

Marking items down can attract bargain-hunting customers. But, it helps to have a plan if you want to run a sale with maximum impact. Just sticking items on a clearance shelf may not cut it–especially if you have a lot of inventory to move. A better option might be to hold a “flash sale” online or door-buster sale in-store. These kinds of events can create a sense of urgency among customers who don’t want to miss out.

Remember: Timing matters for sales. Have them too often and they might lose their impact.

4. Change up your marketing

Sometimes, sprucing up how you promote excess inventory can boost sales. Simple techniques to vary how you market your inventory may include but aren’t limited to:

  • Relocating items to a different part of your store
  • Redesigning product displays
  • Updating product photos in your online store
  • Adding new keywords or descriptions for products sold online
  • Placing them somewhere new on your site
  • Writing a post about it on your business blog

These are all ways to showcase excess inventory in a new light. The payoff can be a healthy revenue boost if repositioning inventory results in a sales comeback.


Shift Financial Insights: Using Unconventional Humor to Stand Out

It’s tempting to play it safe when it comes to small business marketing. After all, you could risk upsetting potential customers if you try something a little silly or different. But then, every ad starts to look similar to the last, and people will continue to ignore them. That’s why Spencer Sheinin, CEO of Shift Financial Insights, uses a different approach. His accounting firm sees fantastic results from using unconventional humor in their marketing strategy.

Coming in with a different perspective

Sheinin wasn’t an accountant in the beginning. First, he was a serial entrepreneur. Over the years, he ran a contract manufacturer of skin cream products, a construction business and a cold storage business. During this time, he realized accountants and business owners look at the same information, just from very different perspectives.

“Accountants and entrepreneurs are basically speaking two different languages. That’s one of the reasons the typical entrepreneur hates dealing with their books.” It’s no wonder 23% of small business owners feel anxious about their accounting, according to Intuit.

Sheinin launched his firm to help entrepreneurs with their bookkeeping and accounting. But he also wanted to present financial insights in understandable and digestible ways.

Using humor to stand out

Sheinin’s entrepreneurial experience adds extra insight into his target customer persona. He felt that his target audience would appreciate a different style of marketing. Rather than sending out traditionally dry accounting brochures, he weaves in his sense of humor and sarcasm, whenever he can.

In a recent campaign, they sent marketing agency owners a Shift-branded metal straw along with their business card saying, “Some things have to suck. Accounting isn’t one of them.” Sheinin found that a humorous approach works for several reasons.

“The straw-shaped package created a mysterious surprise arriving in the mail. Who could resist opening? Second, it’s designed to make prospects laugh and there’s an immediate connection.”

Creating fun and unique campaigns

Sheinin explains a few of his other ideas that show off his humor. To create buzz for his upcoming book, Entreprenumbers, Sheinin sent copies to influencers along with a pair of socks saying, “For when your socks get blown off.” He’s also sent out yoga mats to prospects with the catchphrase, “We’ll bend over backwards for you.”

In the end, Shift Financial Insights gets more attention when they go against the grain. “Every business sends out Christmas cards and they all get ignored. We don’t and instead send a Valentine card telling our clients how much we love working with them.” Rather than reaching out during traditional holidays, your business may get more attention embracing non-holidays like Festivus, or the Summer Solstice.

Seeing results versus traditional marketing

Sheinin told us that the results from his humorous campaigns have been overwhelmingly positive. “We’ve sent out about 100 straws so far. The conversion rate is around 3-5%, with more still coming in. Even agencies that didn’t need our services called back to say how much they enjoyed the laugh.”

We asked if there were any complaints or negative results, and he said not at all. “Worst case is we just never heard back from a prospect. I’m sure a few packages ended up in the garbage, but no one ever got angry.”

In the past, Sheinin tried traditional marketing, but the results weren’t impressive. “We tried sending out a typical cold message to business owners through LinkedIn asking whether they wanted to talk. We ended up with zero results.”

Shift Financial Insights prefers humor and it seems as though so does their target market. “Assuming that the quality of the work is the same, people would rather deal with a company they can have a laugh with.”

Advice for your own marketing

When it comes to humorous marketing, Sheinin says it’s all about practice. “Every week I try to come up with 10 marketing ideas. I once read if you can’t come up with one good idea, come up with 10 bad ones. You’re searching for the one piece of gold amongst the rubble.” Keep experimenting with humorous ideas and you’ll eventually find one that works.

He also reminds readers that you’re just trying to make the experience more enjoyable for people on the other end. “It’s easy to get too stiff, traditional and wooden, especially with B2B outreach. Don’t forget your ads are being read by people who work at the business.”

Above all, he says don’t be scared to get creative. “If you can approach marketing from a surprise and delight perspective, especially for something that is kind of boring, you can really stand out.” By adding some humor to your marketing, you can improve your results while having some fun at the same time.


Best Books for Small Business Owners: Start with Why

January Monthly Must-Reads: Best Books for Small Business Owners

It’s easier to say you’ll make time to learn new things that really doing it, especially when you own and operate your own business. But research has shown that continuous learning is essential to business and career success. So, how do you make time in your busy schedule to think about new ideas and how you might apply them at work? Read—or listen—to great business books. With our pick of the best books for small business owners, you’re sure to find the inspiration you need to succeed.

To help you choose the best business books for your situation, we’ve created our Monthly Must-Reads Series. This series highlights helpful books for small business owners and also save you time. How? For each featured book, we share the main focus, key take-aways, and even reader reviews, so you can quickly determine whether the book is worth your valuable time. We hope this makes it easier for you to keep up with current innovation, management and workforce trends.

To kick off 2020, we’re sharing Start with Why by Simon Sinek. For a list of past Monthly Must-Reads, like December’s Multipliers: How the Best Leaders Make Everyone Smarter, check out the bottom of this article.

Business Book:

Start with Why: How Great Leaders Inspire Everyone to Take Action, by Simon Sinek

Focus:

Identifying how the most influential leaders think about, act on, and communicate their why.

Main Idea:

Understanding the underlying purpose–the why— behind an idea, product or service inspires people to make positive changes in their lives.

Great for Small Business Owners Who:

Want to innovate and inspire by discovering their true mission and operating from it.

Synopsis:

Simon Sinek’s 2009 TED talk, How Great Leaders Inspire Action, is the third most-viewed TED talk of all time. In it, he urges all leaders to start asking, “Why?”

“Why do I get out of bed in the morning?”

“Why does my company exist?”

“And why should anyone care?”

And he named his book with that in mind. Start with Why delves deeper into his central idea, offering real world examples that illustrate what happens when companies successfully communicate their why.

Key Take-Aways:

  • Too many companies start with, focus on, and talk about their what: the product or service they sell.
  • When companies understand their why’ (i.e. their mission and the values that support it; the reason they’re in business), they can better identify appropriate audiences and more effectively market to them, creating a loyal customer base in the process.
  • A company’s why should also influence its culture, its hiring decisions, and its teambuilding strategies. Employees, not just customers, should understand and buy into your company’s why.
  • When you organize everything from your operations to your marketing efforts keeping your why in mind, you build a loyal customer base and an engaged, motivated team.

Reviewers Say:

“[Wow.] I cannot rate this book highly enough to take a different, positive approach to life and work. Like others, I have watched Sinek’s TED Talk on this, and questioned whether the book would add anything more, and, boy, yes it did. Imagine the TED Talk expanded to two hours, with more depth, intrigue and examples. What I like most about the book compared to the TED Talk is that it delves more in to how Starting With Why can influence home life, not just work. [It definitely makes you think], and I’m even finding myself taking a different approach around my team at work. I agree, a lot of the examples are repeated (a lot) throughout the book, in particular Apple. I’m not against Apple and found it useful how the different topics are explained using the same companies as examples. It helps provide the fuller picture. However, let me assure any potential readers that there are also plenty of new examples given too.”

“The author’s TED talk is one of the most-viewed ever; and it’s really quite good. In fact, it’s so good that you don’t need to read this book! He takes a very, very simple concept and expands, and expands, and repeats, and seemingly never edits, and then repeats, and expands, and — well, you get the idea. The whole thing could’ve been done in 50 pages or less. Example: Yes, there’s a difference between WHAT one does in business and WHY one does it. And sometimes they diverge. He calls this the “Split” and has a graphic and whole chapter on it. Really?? Not needed.”

Monthly Must-Read Business Books:

August, 2019 – Blitzscaling

September, 2019 – The E-Myth Revisited

October, 2019 – Influence: The Psychology of Persuasion

November, 2019 – Built to Last

December, 2019 – Multipliers


Why A Customer Persona is Essential to Your Business

What is a customer persona? And, why does your business need one?

It’s important to challenge a view held by some business owners that everyone out there is–or, should be–a potential customer. It’s understandable. You strongly believe your product or service offers great value and benefits. So, why shouldn’t it be marketed to every possible target audience?

The simple answer is, this isn’t an effective way to do business. The people you want to serve are bombarded every day by marketing messages in every conceivable form. There’s a lot of “noise” out there. If your brand message doesn’t address a particular market with particular needs, it won’t be heard. There’s no such thing as “everyone.” Consumers have a very wide range of likes, dislikes, buying patterns, pain points, and so on.

By identifying and reaching out to a more targeted group of customers, you can save a vast amount of time and resources. Plus, your chances of connecting with these individuals or businesses are much better. This means that could not just close a sale, but you could make customers for life.

Crafting a profile of your ideal buyer

A customer persona (also called a “buyer persona”) is a fictional characterization of what your ideal customer looks like. This persona will give you “a deep understanding of your buyer persona(s),” notes Hubspot–an approach that’s critical “to driving content creation, product development, sales follow up, and really anything that relates to customer acquisition and retention.”

Elements that make up a comprehensive customer persona include:

  • Behavior and preferences
  • Demographics
  • Attitudes and values
  • Challenges and pain points
  • How your product or service meets their needs
  • Channels and platforms used for media consumption and buying patterns

Going deeper, look at these factors with your team when assembling a customer profile:

  • Age and marital status
  • Level of education and professional background
  • Where customers go for news and product research
  • The factors influencing their decision to purchase a product or service
  • The challenges they want to overcome
  • Their personal and professional goals

This information helps you put together a strong working model of what your ideal buyer looks like. As a result, notes Business.com, your marketing message targets a specific audience, “ensuring that it speaks to their needs, their goals and their preferred channels for content consumption.”

How to gather the right data

Surprisingly, gathering and analyzing this information isn’t difficult. Thanks to the digital resources at your disposal, the information is already out there.

First, consider starting the process through one of these steps:

  • Talk to customers. Go over a list of your most loyal customers and approach them about having an in-depth conversation about their needs, desires, and buying preferences.
  • Ask your sales team. It’s likely members of your sales team already possess a strong working knowledge of your customers, from which certain persona-building data can be assembled.
  • Survey by email. Put together a handful of key questions and do an email survey with customers. (Note: Offering an incentive like a discount on their next purchase can help boost response rates.)

Second, as noted, look to online sources for key data. Google Analytics is a no-fee service provided by Google. It offers rich insights into how people locate your business online. In addition, it shows you what they do after the fact.

Facebook and LinkedIn have a wealth of data on the individuals and businesses that follow your posts and related content. Look closely at who these people and businesses are (by checking out their social media profiles). You’ll have access to their professional backgrounds, affiliations, job functions, etc. All of this data can be mined to help build your ideal buyer profile.

The customer persona on the page

Now , it’s time to create your “ideal” persona. Generally speaking, the most effective approach involves giving a name to the fictional customer. Ideally, this is followed by a description of their age, gender, personal and professional backgrounds, and so on.

The objective is to humanize the customer. Pick them from a mountain of statistics. Give them an identity you and your employees can relate to.

Regardless of your business and industry, certain types of customers are the best audience for your product or service. Attempting to sell to “everyone out there” won’t help a business survive and grow.

Know who your customers are. Know what they like. And definitely know don’t like. Know what they hope to gain from purchasing your offering. Your knowledge of your customer base makes all the difference for 2020 and beyond.


With Clarity creative marketing – rethinking a tried and true industry

It can be hard to get attention as a small business. It’s especially difficult when you’re competing against larger, established firms with much deeper advertising budgets. But, these established companies are set in their ways. They don’t have the same flexibility that you do. This is one way for your business to stand out. With Clarity, an online retailer of engagement rings, is shaking up the traditional jewelry industry. Their business uses 3D printing to create samples of engagement rings. This way, people shopping online can try them on at home before buying.

We spoke with Slisha Kankariya, co-founder and CMO, to see how they were able to rethink such a tried and true industry.

Spotting an Opportunity

Kankariya launched With Clarity with her husband Anubh. “His family had worked in the diamond and jewelry industry for three generations, so we decided to delve back into that space. However, we didn’t want to go the traditional route and run With Clarity just like every other jewelry store in the country.”

They noticed that while people shop online for many other products, it’s still quite rare for high-end jewelry. “90 percent of people look for engagement rings online, but only 10 percent of sales actually happen online. This is a missed opportunity for customers because there is more variety on the internet plus prices are typically 30 to 40 percent lower.”

Before opening, they spent time speaking with their customer base to find out why they were reluctant to shop online. “We realized that people have this fear of commitment for such a major purchase. They aren’t confident buying something they haven’t touched, haven’t seen sparkle.” They realized then that 3D printing could be the answer.

Benefiting from a Unique Business Model

Through 3D printing, With Clarity offers a home preview option for their online shoppers. People can pick out their two favorite options from the website and With Clarity will create sample rings for both, using simulated diamonds and a metal alloy that looks just like gold/silver. “The timing was perfect to launch this new model as 3D printing has gotten more affordable and effective.”

Kankariya noted that there are many benefits to her customers as well. “It gives them more options, especially people living in an area without many stores nearby. Plus, they don’t have to meet face-to-face with a pushy salesperson.”

With Clarity’s unique approach has gotten them plenty of attention as well. They were able to land investors and mentors through a New York technology accelerator plus their business has been featured in media outlets like Inc., Entrepreneur and Fox Business. If they had gone the traditional route, it would have been more difficult to get this kind of press, especially while competing in a saturated market.

Rethinking Your Own Industry

We asked Kankariya how other business owners could shake up their own industries. She believes it starts with a customer-based focus. “Try to look at the World through the lens of your customer, not your perspective as a business owner. Ideally, you should find a unique way to solve one of their problems.”

Whether it’s better pricing, more variety, supply chain transparency or a more convenient sales system, you need only one element that’s truly different from your established competitors. When you find it, make it the focal point of your business.

Kankariya pointed out that it’s ok to be niche as well. “Since we launched, the market share of people buying rings online has grown from 10% to 14%.” Despite the sizable jump, the majority still shop in-person. However, those that use With Clarity are pleased with their experience. With Clarity is building a loyal and growing customer base. A successful small business doesn’t need to capture the entire market so long as they do well in their niche market.

Rethinking a tried and true industry isn’t easy, but With Clarity shows it definitely helps you stand out. By adjusting your business model, you could receive plenty of marketing attention even without paying for advertising. This is just one more way you can do more with less.


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