Transcript:
Greg Corombos: Welcome to BizFilings, Expert Insights. Hi, I'm Greg Corombos. Our guest in this edition of Expert Insights is small business expert Barry Moltz, who helps to get your business unstuck. You can find him at barrymoltz.com. He is also the author of several books, most recently ChangeMasters: How to Actually Make the Changes You Already Know You Need to Make. But today, we're going to be examining one of Barry's recent blog posts, The Top 10 Questions that Small Business Owners Ask. And he of course has the answers. And Barry, thanks so much for being with us.
Barry Moltz: Thanks for having me.
Greg Corombos: Well, these 10 questions largely deal with the many of the areas that keep most small business owners awake. But for so many business owners, they remain big challenges. So let's start right at the top and discuss how to attract new customers. First of all, you say business owners need to avoid what you call the double helix trap. What is that?
Barry Moltz: So many times, especially for small business owners, they're either in one of two modes. Either they're going out looking for business, or they're servicing the customers they already have business with. So when they don't have any business, they go out and they try to find customers. But as soon as they land those customers, they stop looking for new customers and service the ones they have until that revenue ends, and then they go looking for new customers. So they're unable to grow their business. The key here is to put together an ongoing marketing campaign that really runs without you doing much with it. That's the important part. So any type of outreach that you do, either on social media or advertising, you want to make sure, Greg, that there's a constant campaign of identifying new prospects, so you never run out of your funnel being full.
Greg Corombos: Elaborate on that last point a little bit, how do you set your marketing campaign where you don't even have to pay that close of attention to it?
Barry Moltz: Well, I mean, let's say you put together a content calendar, right? And you say you're going to post these blogs in the next six months. You can get them all written and just post them once a month automatically through whatever software, right? Or you can set up email marketing many, many months in advance. Or you can even pre-schedule social media posts. Again, you have to pay attention to the people that raise their hand or comment, because those people are identifying themselves as prospects. But you can set up automatically so it initiates the campaign throughout the year.
Greg Corombos: You also point out on this question, Barry, that it's a good idea oftentimes to refine your niche. So people can see that you have a specific solution to their specific problem. So how do you determine exactly what that ought to be in terms of attracting the maximum number of people?
Barry Moltz: You know, the biggest problem, Greg, is that when small businesses are first starting out, what they like to do is go broad, because they want to get any kind of business. But by going broad, you really don't differentiate yourself from the other competitors that are out there. And the other thing is, if you go too broad, it's hard to make money because you're kind of redefining your solution. Every single time you go sell something to a customer, if you can niche down, if you can really be focused on what the customer wants. Let's face it, in my opinion, people buy when they're in pain, and have money to solve that pain. So you have to figure out what pain are you actually solving, and for which customers or prospects are you solving it for. And, Greg, do they have the money to actually pay to solve that pain? Because if they don’t have the money, then it's kind of a non-profit?
Greg Corombos: Yeah, that's not the niche you want at that point. But let's talk then about the challenge of retaining customers. First, you have to attract them, then you have to retain them. People, as you say, are looking for a lot more than just a good product or service these days. They want to feel good about the experience and specifically about dealing with you. And so what are the keys to leaving that impression?
Barry Moltz: You know, I always say that a great customer experience is really the new marketing. Because if you think about it, whatever product or service you're selling, it really is not unique. What can be unique is the experience the customer has either buying your product or interacting with your service. So that's what you have to focus in on. Too many of us spend a lot of time chasing customers. But as soon as we get the customer, we don't focus on the experience they're having with our product or service. And we certainly don't focus on retaining them. And as we all know, it's a lot easier to get more business from the customer you have than to try to find a new customer. We really have to focus on the customer experience, because that is really what makes you unique. Think about the favorite brands that you buy. It's usually related with some kind of experience you have with that product or service and the consistency of that delivery of that product or service.
Greg Corombos: I see this every day because in the community where I live, there's a community Facebook page and all the time I see people saying, “oh I need a plumber, I need a contractor. I need this, or I need a guy to build my deck.” And every time, the people come in with, not only they did a great job, but they were great to work with, super personable. It really is more now than just being able to get the job done,
Barry Moltz: Right, because you know… for example, we're going out to Rome. There are a zillion really nice hotels we can stay in Rome. But which one is really going to give us the best service when we need something or we have a problem? That's why a lot of these review sites are great.
Greg Corombos: Well, let's skip ahead a little bit right here, because I think number nine ties into this well, and that's how to improve customer service. So those people do come back and maybe even tell others about you. You say that business owners need a customer service manifesto. What should that look like?
Barry Moltz: A lot of people say that customer service is common sense. But I don't believe it's common sense. I think we have to teach our employees, what does an excellent customer experience really look like? And there should be three or four things that they sift all of their actions through. Or when you try to decide how they can help the customer, [and it] doesn't really fall in line with these three, four, or five principles, right? For example, some people have manifestos like, well, the customer may not always be right, but the customer is the customer. And I'm going to do whatever I can to make sure they have a good experience. Or I'm going to make sure the customer has a good experience even if it goes against one of our policies. Or, you know, I don't have to go to my boss to satisfy a customer. Those kinds of things. There's all sorts of manifestos that are really out there. It's the core principles of serving the customer. Make sure they have a great experience, and that they come back, and they become an evangelist for your organization. And I see so many times that a lot of organizations do that. And unfortunately, too many organizations, especially American companies, the people on the front lines, they just want to follow the rules. Or say, “hey, I didn't make up that rule.” That's what you have to do.
Greg Corombos: Obviously, you don't want there to be a problem when you're dealing with a customer, whether it's a new one or an existing one. But there will be problems. What do they want to see when there is a problem? Because if you handle it, well, they probably will be back. And it could actually improve their opinion of you depending on how you deal with it.
Barry Moltz: And this is really why when I look at feedback from, like on TripAdvisor, what people have said about a hotel or restaurant, I'm not looking for the people that had a great experience off the bat. I'm looking for people who had a bad experience. And what did the people at the hotel or restaurant do to turn it around? Because I figure that if I have a bad experience, they'll take care of me. What people really want is to be listened to. And for you to say “yes, I understand”. That's a concern. From your point of view. They just want to be known that they've been heard, and try to come up with a solution that can at least get them part of the way back. Sometimes there isn't a solution. But if someone can be heard, if they feel they're being heard, that really takes us most of the way
Greg Corombos: We're talking with Barry Moltz. He helps get your business unstuck. You can find him at barrymoltz.com. His most recent book is ChangeMasters. And Barry, let's get back to marketing a little bit because you have two more questions that deal with that. We talked about how to kind of make that as low time consuming as possible back when we were talking about attracting customers. One of the questions you get a lot though, is how much to spend on marketing? Because there's a lot of different ways you can do it. Every business is different. But how do you maximize time and money in this area?
Barry Moltz: Well, what you really need to do is test things out. One of the good things about digital marketing [is] you can figure out whether it worked or didn't work. So what you want to do is you want to test out a handful of strategies. The ones that work, you want to put more money behind. The ones that didn't work, stop doing that and go do something else. What you're really trying to do in marketing, remember is, convert people from suspects to prospects. A suspect is someone that should have the pain that you solve. Prospects are people [who] actually raise their hands and say “yeah, I have that pain”. We have to understand that we actually can't sell anything to anybody. We have to be there when people are ready to buy. That's why there's got to be consistent marketing going on. So when you have a pain, and you're looking for a solution, you actually find it. It's out there, right? You're one of two or three people that the customer identifies that they might buy from. Or someone sees it, and they refer to the person that has the pain. That's really the way that it's done. You have to have consistent marketing. Because if you're not out there, when the customer actually has the pain [and] is ready to buy, you're never gonna get found or chosen.
Greg Corombos: Let's talk about the online and social media type of marketing now. What's a good pace? And I guess that that varies as well. I buy one thing online, and I get inundated every day with emails for other things, and I just delete them without even opening them. So what's a good frequency? Are you talking about your offers more? Are you just offering commentary that's valuable on the topic at hand? What's the best way to give someone something online that they actually want?
Barry Moltz: You know, just because you don't open things up, [it] doesn't mean the marketing has been successful. It's a reinforcement, right? You thought about that product or service for a split second, so it goes into your memory. What most companies do now is they don't do product marketing, they do content marketing. They're trying to show that they're an expert in a given field. So when you have a pain in that field, you think of them as someone that's really able to solve it. So for example, you see, you know, advertisements from Patagonia or North Face, and they're not necessarily always trying to sell you their products. They're talking about the great explorers, right, because they do a lot in hiking and camping and things of that nature. If you get a newsletter from Travelex , which is a travel insurance company, they're not talking necessarily about travel insurance. They're talking about what's the best places to go this summer, or what's the most risky places to travel this summer, those kinds of things, to show that they're an expert.
Greg Corombos: Barry, the next couple of questions deal with being a good boss. First of all, finding good people to hire. Lots of online sites now where you can do that. But what are the keys, once you go through those resumes, to finding the gems and sifting out the weaker applicants?
Barry Moltz: Two of the most important things are, first of all, you have to see if they’re a cultural fit. There's a lot of people that have the skills that can probably do the job. But do they fit into the culture of your company? And I don't necessarily mean they're like everyone else in your company. But are they complementary with an “e”. Because what's really important is you really can't teach someone to be part of a culture. So for example, when I live in Chicago, I live in a high rise building, and we have doormen. And sometimes the doormen aren't the best. But as the property manager says, I can't teach nice. That's the cultural fit I'm looking for is for someone to be able to be nice. Anything else, any of the other skills, we can actually teach them. The second thing a lot of people are doing is they're going out, and they're actually testing people before they hire them. Whether that's a writing test, or a technical test, or something like that. I would also get other people in the organization involved in interviewing these people. Because if they think these people are a good hire, once you hire them, they feel somewhat responsible for those people’s success. So [it] usually works out better, and they get more support in that first month they’re there.
Greg Corombos: And then once you hire them, of course, you need to manage them well. So the good ones want to stay. And that makes you more attractive to other prospects down the line. So how do you get them performing at the best possible level and keep them consistently excited to be part of the team?
Barry Moltz: I think that for most, what's considered white-collar workers, you should set the objective, the mission. This is what we really need to accomplish, right? And then have them figure out, of course, with your help and support, how to accomplish that goal. The more control you can give people in actually accomplishing their goal and not micromanaging them, the more they're likely to stay and enjoy their job. Rather than, you know, you're just constantly waiting over them. And I think one of the problems we face today is, does that employee need to be in the office in person? And we have so much of a production mindset that if the person is not at their desk, we don't think they're doing things. But can they accomplish their job working from home? Some jobs lend themselves really well to this, some people lend themselves real well to this, and others just don't.
Greg Corombos: And lastly, on this topic, I think this is reflective of our more modern culture, as opposed to maybe a generation or two ago. You stress that your employees, you should not look at them as your friends. You might become friends with them. But in the business setting, that can be a dangerous mindset.
Barry Moltz: I think it really can. Because I think we do certain things with our friends, with our peers, and people that work for us. Because when you need to have that… I think you can be friendly, but you shouldn't be friends. You should never forget that you're an employee, and this person is the boss. Because I think that during difficult times, if you're their friend, it's gonna set up not a very good dynamic. I remember…this goes back to when I was a teenager, and I was head of my Boy Scout troop, that I had to kick out my best friend who was a patrol leader for smoking cigarettes during one of the camp outs. It was really hard. So I think it's good to be friendly, but don't assume that they're friends. Now one of the problems is, is that a lot of bosses think their employees are their friends because they're nice to them, right? Because they support them. And you have to understand, part of the reason they're doing that is because you're their boss. So you really don't know why they're being friendly to you.
Greg Corombos: Alright, let's move on to the money now and the question of business loans, both when to pursue a loan and then where to get it when the time is right. Little bit dicier right now because of interest rates on the rise. So what's your advice there these days?
Barry Moltz: Well, before you get a loan, you’ve got to really know how you're going to pay it back. And why are you getting that loan? If you're just getting that loan because you're losing money right now and you want to fill a cash gap, that's not really a good reason to get one, unless you really have a path to profitability. A good reason to get the loan is that you're going to make an investment now for something that's going to cause value later on. So for example, let's say you want to hire a salesperson. It's going to take six months for that salesperson to produce results. Maybe you get a loan to hire that salesperson. Or it's Christmas time. You need to buy inventory ahead of selling it. That's a really good time to get a loan. But you have to understand how are you going to pay that loan back, if you're gonna get it now. Where do you get the loan these days? There's no shortage of people willing to give you a loan for 25% or 50% interest. But you gotta be really careful because unless you're making [a] 90% profit margin, it's really hard to pay money back that has a cost of 50% to it. What I always say is create relationships with banks and other financial sources before you actually need it. And so when you do need the loan, you already have a relationship with someone. Because in the end, people lend money at reasonable rates to people that they know and they trust. Again, I can always get a loan for 25% or 50% from someone who doesn't know me. But these days, if I want to get a loan at even 8% or 9%, it's probably going to be from someone that I already have a relationship with.
Greg Corombos: You mentioned the profits. And obviously, that's a big part of why you're in business. You say you need to figure out what type of business you have and proceed from there. So what do you mean by that? And then how do you maximize profit? Once you've identified that?
Barry Moltz: Well, I think you have to understand, where do you make your money in any kind of business? So for example, there's intellectual property businesses, where you spent a lot of time creating this product, right? Kind of like a video game. And then you sell it over and over again and have a very high margin. And it used to be [that] the only thing that [it] costs you was a DVD. Now people just download it. So it's almost 100% profit. So if you have an intellectual property sale, you're gonna put a lot of money up front in developing it, and then have very, very high margins. If you're a service-oriented business, let's say you're a lawn mowing company. What you're going to do is you're going to charge the customer a certain price, and then you're going to pay someone extra to perform that service. And you've got to make sure that any person you pay to perform that service, it only costs you 40% to 50% of whatever you charge the customer. And then the third kind of business is really a distribution business. And it's similar to the people services business. It's the distributor, right? I buy a product for, you know, $40, and I bring it into inventory, and then I sell it for $100. So you have to really understand where you make your money. If you have higher gross profits, you'll have much more of a chance to have good cash flow and make money in the end than if you had very, very small gross profits.
Greg Corombos: Last question deals with improving personal productivity, Barry. And every small business owner I think, feels this. So many different responsibilities on a day-to-day basis. But you say multitasking just makes more things get done poorly. So how should we organize our time more effectively?
Barry Moltz: Yeah, I think for me, it causes brain damage. It's not really about time. We don't have a shortage of time, we have a shortage of being able to focus on one thing at a time and to weed out the distractions. So what I always do, one of the tips that I have, is the night before I decide what are the two things that I have to get done first the next day, that if I don't accomplish anything else that day will have been productive. If you can prioritize the tasks, the things that really make it important in your business that you’ve got to get done. And at least for an hour a day, you can filter out all distractions. Turn off the interruptions from your cell phone or your computer or whatever it is. You will be more productive. The problem is we live in an interruption-based culture. And if we don't get interrupted after five or six minutes, we actually go looking for interruptions. You’ve got to remain focused and tune out distractions, and you'll get a lot more done.
Greg Corombos: Well, Barry, these are all critical areas that a business owner [would] either want reassurance on or desperately wants some advice on. I think we've gotten both of those today from you. So thanks very much for your insights, and thank you also for your time today. We appreciate it.
Barry Moltz: Thank you so much.
Greg Corombos: Barry Moltz helps your business get unstuck. You can find him at barrymoltz.com. He's also the author of several books, most recently ChangeMasters: How to Actually Make the Changes You Already Know You Need to Make. I'm Greg Corombos reporting for Expert Insights. For more information on these subjects, please visit BizFilings.
