Turbocharging Your Online Business

Thomas Harpointner is a seasoned business executive with over 20 years of sales, marketing, and
management experience. He’s a speaker, author, business strategist and successful entrepreneur.

In 1997, Thomas co-founded AIS Media, Inc., today, an award-winning interactive media and web services company, where he serves as the Chairman and CEO.  Under his leadership, the company has emerged as a recognized leader in its field, serving hundreds business clients world wide
ranging from small retailers to Fortune 500 corporations.

Mr. Thomas is frequently interviewed and has made guest appearances on numerous local and national television networks and radio stations including, CNBC, Fox Business News, Bloomberg, The Today Show, and CNN Radio. He’s been published in The Wall Street Journal, Entrepreneur Magazine, Wired Magazine, Forbes, Fortune, and dozens of newspapers, trade publications and web portals.

AIS Media, Inc. develops, deploys and manages world-class applications and services that harness the power of the Internet to help companies successfully drive revenues, cut operating expenses and increase productivity.

www.aismedia.com

Making Winning Business Decisions: Podcast

Michael McGrath is recognized as an expert in decision making. He created Decide Better! in September 2008, a company dedicated to helping companies and individuals make better decisions. The Decide Better series of books was launched with Decide Better! for a Better Life in August 2008 followed by Decide Better for College in March, 2009.

His newest book, Business Decisions, is the culmination of more than 25 years of advising executive globally, managing one of the most successful consulting firms in the world, launching new businesses, and doing a successful turnaround at i2 Technologies. Released in the beginning of October 2009, it has already received critical acclaim.

Michael has appeared as a decisions expert for CNN International, ABC, and Fox Business. In addition he has done more than 100 radio interviews, presented speeches around the world and been quoted in many articles.

Website:  www.decidebetter.com

Landing Big Sales with Tom Searcy: Podcast

Listen to this podcast of a previous show on the Dirks On Strategy Radio show.

Tom Searcy, author or “RFPs Suck!” and co-author of “Whale Hunting,” is a national speaker, trusted authority on large account sales and founder of Hunt Big Sales, a fast growth sales consultancy and thought leadership organization. Searcy’s primary expertise is working directly with companies and sales teams throughout their big sales “hunts,” helping them to compete and win disproportionately large sales in highly competitive markets. His philosophy and process have resulted in over $3 billion in new sales for his company and its clients.

Before entering the national stage, Searcy headed four corporations, each of which he was able to take from annual revenues of less than $15 million to over $100 million–all before the age of 40. Since then, Searcy has helped more than 100 companies grow exponentially with his proven process for fast growth and company-wide transformation.

In his newest book RFPs Suck!, Searcy shares his rich understanding of the RFP process with companies across the board to help them conquer the RFP system once and for all to win corporate and government contracts.

Searcy’s first book with co-author Barbara Weaver Smith, “Whale Hunting: How to Land Big Deals and Transform Your Company,” was published by Wiley in 2008.

Contact him at: www.huntbigsales.com

Lessons from a New Business Launch: Podcast

Listen to this podcast of a previous show on the Dirks On Strategy Radio show.

Inc. Magazine’s Newpreneur of the Year semi-finalist Jacqui Rosshandler her new venture insights since launching her new start-up company, Jacquean Products, LLC.

Jacqui Rosshandler turned an idea she had one New Year’s Day into a reality and a career. She makes and sells a product that is fast becoming the ultimate “must–have” purse item.
A native of Australia, Jacqui Rosshandler now calls New York City home. Trained as a lawyer, she never felt at home in the structured corporate world and in 2007 took the entrepreneurial leap to give “eatwhatever” a whirl.

Her idea was unique, an all-natural breath freshener that would really eliminate your garlic laden breath and not simply mask it temporarily like so many other products on the market.

Book Publishing and the Digital Age

In the 10/22/09 issue of the Wall Street Journal was a short article on Steven King’s latest novel, Under the Dome.  His publisher, Simon & Schuster has decided not to release the e-book edition until the day before Christmas, 2009.  That’s six weeks after they release the hardcover edition, which retails for $35.  The strategy here is to give bookstores both online and brick & mortar a chance to sell the more expensive hardcover edition well before the inexpensive (estimated retail for the e-book version is 9.99) digital edition.

At the same time, a price war between Amazon, Walmart, and Target has erupted.  All three retailers are pursuing a loss-leader strategy of dramatic cost cutting on highly anticipated new hardcover books, which is designed to attract shoppers to their online sites.

Consumers are thrilled with the ability to buy first edition books from great authors at a dramatically reduced prices.  However, publishers are chagrined at the long term effect of two trends that will not be going away:  1) loss-leader discounting of key book titles and 2) the emergence of the digital e-book reader.  Under attack is the traditional publishing model of printing hardcover & softcover editions and selling them in bookstores and online retailers like Amazon.  In the ‘old’ days, this model worked well and publishers made their money from the sales of high profile authors.

Truth be told, book publishers made money on the 80/20 model: 80 percent of their revenues came from 20 percent of their books.  The percentages might vary a bit but I’m pretty close.  The other 80% of their published titles during a year either broke even or lost money.  So it’s a very tough business model from the get go.

For the moment, publishers are trying different distribution models like waiting a decent interval before releasing the cheaper e-book version.

My question for publishers:  Why fight the digital age?  Instead, grab a hold of it and look at the possibilities.  How much do you think it costs a publisher to provide a hardcopy of a book versus an e-book version?  Yes, it’s much more expensive to print a book than to distribute the e-book version, which we all know.

If it were up to me, I’d pursue a different strategy:

1)  Print less hardcover books than usually required based on sales estimates.  If you want a hard copy edition, you’ll have to be quick because there won’t be many of them.  Instead of flooding the market with stacks of high-profile books, keep the supply limited.  By limiting the supply of hardcover books, you create a different dynamic in the market.  Of course, publishers are looking to sell as many copies as they can in order to cover the costs of the author advances paid and all the other costs associated with being a publisher.  However, by purposely limiting the publishing production, you create an ability to keep hardcover book prices higher…and that’s where the second part of this strategy picks up.

2)  Start moving your distribution fully into e-book versions sold on any and all e-book readers (by Amazon, Sony, etc).  The advantages and quality of e-book readers will now begin to accelerate faster and faster as more competitors provide their own versions of e-book readers.  Already, retailers like Barnes & Noble are introducing their own e-book readers.  The idea is to  switch the sales dynamic to 80% of books sales coming from e-book reader sales and 20% from ‘limited edition’ hardcover sales.

Think about it.  You might make less total revenue but your margins are improved when you factor in the cost of providing an e-book version versus printing a hardcover version.  Then factor in higher volume sales of the e-book version and you have a much improved and digitally supported business model.

I’m willing to bet that the trend over the next 5 years is a larger migration from hardcover dependence to e-book version flexibility.  Will there be a market for hardcover books?  Yes, but by making them in shorter supply, you reduce your overall costs and keep the margins on hardcover books stable.  If you want a hardcover version, you’re gonna pay more.   I’m willing to bet that the secondary market for books will become much more dynamic than it is today because of limited printed hardcover

Now, what impact would this model of embracing digital book publishing have on the heavy discounting, loss-leader wars conducted by Amazon, Walmart, and Target?  In the long run, I think it makes their discounting less viable since we want the e-reader versions to become the larger volume of sales.  If they want to discount the hardcover edition of a book, go for it.  As a publisher, I’d rather rely on selling higher margin, high volume e-book versions as time goes on.

So, instead of trying to save the existing model of printing hardcover books in quantities that puts tremendous pressure on their ability to maintain margins, publishers should grasp the e-book revolution fully.  Publishers should drive and lead the e-book business instead of following it.

Shifting Your Business Strategy – 6

There are plenty of times when changes within your industry justify a shift in your core business strategy.  Industry changes like new product or service innovation, pricing, manufacturing processes, delivery mechanisms and such can create an opportunity for the business that is able to detect and executive on such changes.

Hewlett-Packard is just such a company that has recognized some major changes within the personal computer industry and is striking hard to take advantage of them.  In the September 9, 2009 issue of the Wall Street Journal,  writer Justin Scheck wrote that, “Hewlett-Packard Co. is using the dismal technology market to  bolster its position as the world’s largest personal-computer maker.  How it’s doing so is evident from a $298 laptop it sold at Wal-Mart Store Inc. in July.”

H-P has long been a big player in mid-and upper priced personal computers.  You could call it a ‘premium player’ in the non-Apple world if you compare it to the low-priced gang of Dell and Acer in particular.  Like Apple, H-P has positioned it’s brand as a higher quality, premium priced PC maker.  The folks that I  know who own H-P sound very similar in their praise and brand loyalty to people like me who are just nuts about iMacs and Macbooks.

So let’s review the changes in the PC market that led H-P to make a shift in its core strategy of positioning itself as a premium PC brand (still much less in price than Apple but higher than Dell or Acer) and shifting some emphasis on low-cost PC’s.

1.  H-P demanded cheaper rates from both suppliers and contract manufacturers using the leverage from its huge sales volume to drive prices down.

2.  According to the Wall Street Journal, it has “taken advantage of an improved supply chain to quickly design and deliver new, less expensive PC’s.”  H-P is working closer with retailers like Wal-Mart to improve sales forecasting for PC demand.  They are focused on maintaining a competitive edge based on large efficiencies in their entire design-to-ship process.

3.  H-P is also taking advantage of a weaker competitor in Dell.  With Dell not willing to match H-P with discounting of its own, H-P has been able to increase market share by almost 20% in the second quarter of 2009 (global shipments of PC’s).

While H-P has lowered it’s margins on PC’s, it is faring better than it’s other competitors and the additional marketing share (meaning more volume!) helps to keep the profit margins moving in the right direction.

What does the H-P experience mean for you?  Here are just a few top-line points to consider for your own business:

1.  H-P has demonstrated that it can take in the changes going on around it and move quickly with a strategy to take advantage of it and trounce competitors.  Lot’s of businesses note changes in their industry, the economy, global shifts, competition, and consumer preferences but how many are willing to act on those changes?  Are you prepared to take in the changes in your business & industry and create ways to take advantage of them for your business?

2.  H-P is willing to make a shift from its core strategy in order to increase market share and keep profits moving in the right direction…up.  Many businesses, comfortable with strategies that have worked very well in the past (or recent past), are reluctant to change or shift strategy and risk ‘killing the golden goose’.

3.  Outside of external changes, H-P continues to find ways to make their PC’s cheaper by constantly improving its own internal operations.  H-P demonstrates that sometimes it takes a two-pronged approach to get the results you need instead of relying on one factor alone to help you grow your business.  In their case, the combination of leveraging a changing PC industry landscape and creating greater operations efficiencies from within is the perfect duo for increasing market share and keep profits stable.

Shifting Your Business Strategy – 5

Shifting a business strategy doesn’t always mean that it will be successful.  However, business is about risk and making investments in strategy options that seemed to show the most promise.  Often times the need to shift business strategy is driven by events outside the span of control that a company normally exercises.  Then again, prior business strategy decisions that didn’t pan out with the necessary results will require you to re-adjust.

IBM has long been known for its huge investment and consistent commitment to research & development, the incubator for innovative products and services the feed revenues and profitability.  In the September 7 issue of BusinessWeek, there was a story on how IBM is making some significant changes in how it manages its R & D process.  One change that is particularly eye-opening is how IBM is shifting how it shares and partners with others in R & D efforts.

Traditionally, IBM research was in locked-down mode; a closely guarded and very secretive organization.  Now, IBM is cutting deals with corporations and research universities across the globe to collaborate on research.  Intellectual property issues aside (and that is no small issue by the way), this shift in business strategy gives IBM several key advantages:

1.  By sharing the cost of R & D with key partners, IBM gets more bang for its research budget than ever before.

2.  The collaborative process allows IBM to get viewpoints and insights to research that it normally wouldn’t get access to and thereby exposes its researchers to potentially more ideas.

3.  Globalization of IBM research by collaborating with foreign governments and major research universities gives IBM a leg-up on competitors when it comes time to start selling products and services.  If you have a critical relationship with someone like IBM that is working, why wouldn’t you consider buying their products and services?  This strategy allows IBM to develop key customer relationships in places that it had not considered before in the context of sharing research.

Will this R & D strategy shift work?  The jury is still out on that and it will take some time to see the full measure and benefit of the new open collaboration on research.  IBM is willing to make a real investment in this strategy primarily because it has so many positive outcomes for the company if it executes it effectively.

Shifting Your Business Strategy – 4

There is a point when the definition of shifting business strategies gets a bit muddled.  In general, there are two types of business strategy shifts.  The first is when you make adjustments or shifts within your core business.  For example, a local dry cleaner may want to expand revenues by adding a pick-up & delivery service.  That adjustment is relevant to their core business of providing dry cleaning services to the public.  It’s a shift from relying on just the brick & mortar building where people bring their garments to them.

The second shift is when you make an adjustment to your business strategy that is outside the core business.  Using our dry cleaning example, if the dry cleaner decided to utilize some extra space and open a cafe within his/her shop, that would be considered an out-of-core strategy.

In our current economic times, not a day goes by without another large corporation declaring that it is shedding ‘non-core’ operations and ‘re-focusing  efforts on our core business of (you  fill in the blank)’.  This is all neatly packaged as a ‘retrenchment’.  It’s more aptly called a ‘retreat’.

Why is that?  The answer is rather simple.  In a roaring economy, it’s far easier to justify shifting business strategy outside of your core business in the name of more revenues and profitability.  That old cliche, ‘a rising tide floats all boats’ comes to mind.

When the economic tide finally goes out something bad happens.  Those non-core business strategy shifts can sometimes become sink holes for cash or they require greater and greater internal investment to keep them moving forward…all at a time when capital is scarce.  Or capital is all of a sudden guarded like Fort Knox (unlike the free wheeling days of the booming economy).

When this happens, everyone heads for the hills.  The golden geese of last year suddenly have no supporters that want to keep them.  One of the main issues is that when a non-core business hits the skids, it’s much tougher to nurse it back to health.  Why?  Mostly because the intellectual capital of the company is not well invested in the non-core strategies.  There’s another saying is appropriate here:  Times of high profitability and growth can hide a lot of mistakes.  When the music stops, all of a sudden things are much more complicated and there isn’t enough talent available to fix it.  Again, it’s outside their core knowledge base.

A lot of times these non-core strategies get sold off to the companies that should have had them in the first place.  Now they can pick these assets up for song because the seller can’t get rid of them fast enough.

I know what you’re thinking.  Isn’t Berkshire Hathaway, Warren Buffets conglomerate, an example of shifting business strategy out of your core business?  In a word, no.  While Buffet buys and owns many different kinds of businesses, each runs independently and sticks to its core business strategy.  Geico, for example, was primarily known for car insurance but has expanded it’s core strategy to include other insurance lines like homeowners insurance.  Geico doesn’t own anything outside of that core business strategy of providing insurance.

So for now, we’ll continue to hear about businesses of all sizes and shapes starting to declare that they’re going back to their core business once again.  In many cases, refocusing on the core strategies makes sense.  However, when the next economic boom hits, they’ll be a migration once again to chasing profits by adding non-core business strategies to the mix.

The relentless drive for increasing shareholder value and profits will once again find executives scrambling to acquire or develop cash cows outside of their core business strategy.

Shifting Your Business Strategy – 3

Waiting for things to ‘get better’ is not a strategy.  Or least, it’s not a winning strategy.  Waiting for things to ‘get back to normal’ is just an opportunity for someone else to eat your lunch.  I hear too often from business owners who echo those sentiments.  Whatever the outcome of any economic cycle, the high performing Big Dogz who grow through them are the ones who win longevity.

It’s quite natural for a business owner to want to hunker down, close the hatches, and wait the economic storm out.  Some businesses will survive and others will not.  Let me ask you: who wants to be just a ’survivor’ when you can do better?

How many do you know that own a business that are using the ‘wait and see’ approach as an excuse to hide in the bunker until the shelling stops?  Probably more than you and I know of.

The good news is that you can take advantage of this or any other times of great uncertainty by looking for opportunities that you can leverage to grow your business.  I’m just scratching the surface here but some things to consider:

• Work harder to find ways to free up cash that can be deployed to expand your business.  The common response in tougher times is to free up cash and then hoard it until the good times come again.  Obviously not entirely out of order to keep some cash in reserve but many businesses just hoard it.  By the time anyone realizes the good times are back again, it’s too late for you to find opportunities to invest some of that hoard.

What to invest in during tough business climates?

• Upgrade to more efficient and powerful equipment.   The right investments could reduce your costs on a product or service line is one possibility if it makes your business provide services faster, better, and cheaper.
• You could take advantage of a weak competitor in a nearby geography that you currently don’t serve and hire additional sales firepower to build business there.
• Buying a competitor when it makes sense and the price is right.
• Develop & expand your product and services lines.  We’re often quick to prune the losers (or at least we should be) and much too slow to replace with products/services that could keep revenues moving forward.
• Upgrading customer services.  Too often this is left in place or cut back.  High performing companies make sure that any customer touchpoints are responsive and best-in-class.
• Establish a strategic partnership(s) with other businesses that are complimentary and have high potential to drive revenue growth.  Hunkering down can blind us to opportunities that are staring us right in the face if you only took the time to look.

None of this is easy to do.  That said, what it does take to do this well is 1) constant and deep scanning of our business environment to find and connect with opportunities and 2) the internal ability to move on those opportunities that won’t be there if you wait for the ‘good times’ to come back again.

Shifting Your Business Strategy – 2

It would be the understatement of the year to say that the auto industry has been literally crushed under the weight of too much production for too little demand.  The auto industry problems are not just isolated to demand issues.  Despite being the worst car buying market than we’ve seen in a few decades, there is one car company that seems to be profiting from the ravaged auto market.  It’s also a car company that few would have thought would make it and it’s called Hyundai.

My first introduction to Hyundai was back in the early 1990’s when Hyundai was still a brash newcomer to the American buyers.  It’s appeal to me back then was the same appeal it has today:  cars available at a great price.  There was only one problem.  I saw the problem first hand at a Hyundai dealership when the salesman started the engine and smoke began pouring out the the engine.  The salesman wasn’t fazed but my wife and I were aghast.  Where is the smoke coming from and why?  Without missing a beat, the salesman told us that there was some paint from the factory that had to sometimes burn itself off the engine block.  Yeah, right.  We left and never looked at a Hyundai since then.  That was a long time ago.

Since then and now more than ever, Hyundai has been growing its market share here and in Europe.  How did they do that?  How did they come from laughing stock of the auto world to respected car manufacturer?  How did they manage to introduce a luxury car, Genesis, that actually won the Car of the Year award?

They did it by shifting their business strategies.  Notice the emphasis on ’strategies’ in the plural.  Over the years, Hyundai recognized that it needed to be more than a car company that built & sold cars at low price points.

The first issue they attacked was quality.  Their manufacturing processes caused them a huge amount of grief and consumer distrust of the their brand.  Over time, they dramatically improved quality in their manufacturing processes.  Then, to attract buyers back to their showrooms, Hyundai did the unthinkable at the time: offering a 10-year, bumper-to-bumper warranty on every car they sold.  In effect, they basically guaranteed the quality of their cars for the life of the car.  This when the industry standard was 36,000 miles.  This strategy went a long way towards getting their customers back into the showrooms and buying cars again.

More recently, to encourage buyers back into their showrooms during the worst economic conditions since the Great Depression, Hyundai brought out another big gun and shift in strategy.  Many took the Hyundai Assurance Program as a marketing gimmick but that soon proved to be untrue.  By assuring buyers that it would take back a leased or purchased vehicle in the event of the customers job loss, Hyundai took another big step towards growing marketing share.

Here are some of my takeaways based this continuing success story:

1.  Acknowledge your weaknesses and actually fix them.  Hyundai suffered initially with awful quality problems that make their cars the butt end of late-night comic routines.  While offering cars at some of the lowest price points in the market was their basic strategy, they had to shift emphasis on quality.  That meant shifting large amounts of resources within Hyundai to insure that quality was more than job #1.  Hyundai gets great credit for recognizing a key weakness in their strategy and fixed it.

2. Create market differentiation by communicating your strategy shift clearly and loudly.  Hyundai introduced its ground breaking ‘10 year, 100,000 miles’ warranty to insure people understood it was serious about quality.  It set a new bar on auto quality and Hyundai wasn’t afraid to put serious marketing muscle behind it.

3. Business strategies can always be fine-tuned.  Staying true to its mantra of offering lower priced cars versus almost any other manufacturer, it entered the luxury market with it’s now highly acclaimed Genesis.  The Genesis is a true luxury automobile but offered at one of the lowest price points on the market compared to similar luxury models from competitors.

4. Do more than your competitors to differentiate and strengthen your market position.  When economic hard times hit, Hyundai hit back with its Hyundai Assurance Program.  That kind of groundbreaking marketing strategy was just what the Doctor ordered to bring more buyers into the showroom.

Hyundai stayed the course on its purpose to build cars and sell them at low price points.  It shifted it’s business strategy to insure that it could deliver on that promise and sell cars to satisfied customers.  That’s a long way from its charred introduction more than 20 years ago here in the U.S.