The Business Value of Integrity September 12, 2011Posted by David Dirks in Management.
Tags: business strategy, David Dirks, differentiation, dirks on strategy, increasing profits
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You can have the best business model in the world but if it isn’t backed with impeccable integrity, it’s a business model that isn’t worth much. The common dictionary definition of integrity is “the quality of being honest and having strong moral principles.” One thing I know is that there is no strategy for having integrity. You either have it or you don’t. Integrity is learned at a very early age and by the time we’re teenagers, we either have it or we don’t.
The business value of integrity is worth far more than gold. Integrity in business has another name and a distinct, definable value: goodwill. Goodwill is defined as “the established reputation of a business regarded as a quantifiable asset.” So, if you have a business that is engineered on a great business model that rest on a solid foundation of integrity, you win two ways. Your first reward is a business that is growing and profitable. Your second reward is a business that is worth far more than what your accountant would call “fair market value”.
What I personally like about integrity and the resulting goodwill that it produces over time is that there is no ‘formula’ for it. There’s no ” 5 Steps to Integrity” or some other swill. You either possess it now or you don’t. That’s refreshing.
Beating a Recession – 9 January 28, 2009Posted by David Dirks in business strategy, Increasing Your Profitability, Recession: How to Beat It!, Solving Business Problems.
Tags: chief revenue officer, creating new products, growing revenues, increasing profits, newspaper business model, raising revenues
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I think I’ve found my dream job. In the last several years, you might have heard this title being flaunted around and wondered what it meant. Chief Revenue Officer. When I first heard this title I’ll admit I thought it was a bit over the top. Over time, with a bit more insight and study, I see this relatively newcomer position in a different light. I think it actually makes sense!
Most organizations are run with functional silos like sales, marketing, customer service, product development, research & development, and on and on. In a smaller business you’ll surely have less silos like these (as you may be wearing all the hats!), but the ‘division of function’ is usually there in one form or another.
The issue can be summed up in one word: inefficiency. No matter how well your organization does, it suffers to one degree or another from the inefficiencies caused by functional roles. The sales people are responsible for driving sales. The marketing people are responsible for driving consumer interest in your products/services. The customer service people take care of things after the sale. Great people within great functions but the difference is that they generally see into the forest but not over the trees. Everyone is focused on making sure they do their part in the most optimized way but not necessarily able to see the big picture.
Even if all these functions run well, you can bet there are plenty of missed opportunities to drive revenues and profits higher. Enter the Chief Revenue Officer whose job it is to find opportunities for increasing revenues by leveraging existing resources that are underutilized today.
Let me give you a great example using the newspaper industry. Traditional newspapers are struggling mightily to figure out how to stay alive, let alone grow revenues. Everyone is trying to bridge the gap between the printed paper and the digital paper and figure out how to make money at it.
With all that focus on trying to figure out what the business model for traditional newsprint media should be, little has become of it. Instead, we see more newspapers and other publishers going out of business or into bankruptcy re-organization. It’s a dire state of affairs not made any bit easier by this current economic downturn.
The print media is exactly where I’d want to be the CRO. Journalists focus on the great work of producing excellent journalism, as they should. Hiring a CRO who is NOT married to the sterotypes of traditional publishing is who you want. Why? Simply because you need someone who can look over and into the entire organization and be able to QUESTION EVERYTHING.
Why? What? When? Where? How?
If I was a CRO of a newspaper publisher, my task would be to question everything. I would look deep for resources that were underutilized across the organization, not just in one department. I would look to connect the dots on processes that are unconnected and less effective at generating revenue.
As a publishing CRO, here are some places I’d start in an effort to improve and grow revenues for a traditional print media publisher:
Follow the People magazine and Harvard examples. People magazine popularized the concept of creating special ‘Year in Review’ issues are to this day one of their best selling issues even though it’s more of a soft cover book than magazine. Did I mention that it’s very profitable too? Their secret sauce? They take the best and most exciting content pieces written during the year and re-package them into a ‘new’ content piece.
Harvard University has a extremely talented group of professors who are required to publish as a part of their teaching role. Harvard Publishing takes those many content articles produced over the years and creates special edition books that focus one speciality area such as innovation or venture management. What did they do? They re-packaged content and distribute it on a wider and broader basis. Very profitable business for them.
What does a newspaper produce every day? Content. Tons of content primarily sold only in one way: through the daily or weekly paper. Then it’s offered for free on their website the same day (with few ads either). The content that most people like to see is local coverage of newsworthy events or top local issues of the day. What are the most read sections of the paper? Primarily the business section and the sports section.
Here’s the game: How about re-packaging local sports highlights during the year and make it available to readers? What parent wouldn’t want a copy of that to see a photo of their son or see their local team in print? What about a special community ‘Year in Review 200X’ that was composed of some of the best local stories of the year? Why not? If you publish 365 days a year, you’re bound to have excellent content that people will have long forgotten except for a nicely bound softcover magazine that capture those fascinating highlights forever? What about a series of business guides based on stories and columns written on a variety of business subjects during the year?
You get the picture.
I like the idea of hiring an unbiased, objective, question-everything Chief Revenue Officer. What an opportunity to really be held accountable for producing new sources of revenue and increasing the profits from revenue streams already in hand!
More on this in an upcoming post. Stay tuned.
Retailing Winners: Deep Discounters and Used Re-Sellers January 23, 2009Posted by David Dirks in Building Foot Traffic, business strategy, Increasing Your Profitability, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics, Sales Tactics.
Tags: beating a recession, business strategy, buzz marketing, differentiation, fighting a recession, increasing profits, increasing revenues, market differentiation, recession strategies, retail sales, revenues, sales, sales strategy, Sales Tactics, small business sales
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We should have seen this one coming. While most of retailing struggles, there are those who are doing just fine, thank you. I noted a recent cnbc.com report that told the story of Family Dollar Stores with quarterly profits jumping 14% in the 4th quarter of 2008. Deep discount stores have for a long time been the butt end of business jokes but no more. If every dog has its day, then this dog is having a good one. Mind you, stores like Family Dollar and 99cent Power have always done well and only just increase their sales and profit tempo by several fold in tough times like this.
Gamestop is another interesting retailing story. They sell both gaming hardware and software but with a twist: they also re-sell used gaming equipment and gaming software. Just think of it. When some people move up to the next system or change systems, they are often stuck with a substantial inventory of gaming hardware and game cartridges. However, they realized that there is a very vibrant and growing secondary market for this stuff. So they buy it outright and re-sell it at good profit. So far, the kids can’t get enough of this stuff and keep buying and selling. Gamestop also offers a discount off of new games if you bring one in for trade. Either way, they make a good profit.
You might be familiar with a franchise called “Play It Again Sports” that buys and then re-sells used sporting good equipment of all kinds. What an idea! Take the stuff that we who have kids seem to accumulate in droves, buy it on cheap (we just want to get rid of it not realize an ROI!), and re-sell it to folks who are smarter than we are (because they can buy sports equipment in excellent condition for a fraction of the cost we paid for it). It’s a great play but especially in times like these where every dollar spent is measured carefully.
What can we learn from these retailers? Here are a few questions I’d be asking myself:
- What part of my business could take advantage of this concept of offering deeply discounted or re-selling high quality, slightly used products? For example, if I owned a retail shop that sold hi-tech equipment (think like a Best Buy but on a smaller scale), I might seriously consider buying slightly used, ‘late-model’, high-quality equipment from folks who are looking to unload it for cash.
I’m not suggesting here that you sell junk. Leave that to the yard sales to move. Instead, you are creating another source of incremental sales revenue and profits by way of offering a less expensive alternative to ‘new’. Don’t worry about selling the new product as there will always be those who will only buy new…however, in these times there are a lot less of them.
- Don’t get hung up on the concept of selling slightly used products. Don’t let your pride get in the way of your ability to DRIVE TRAFFIC TO YOUR STORE. This is about creating another level of differentiation that customers will value.
- Set up a distinct area of your store or website that offers the re-sale product and promote the heck out of it. Nine times out of ten if it doesn’t work, it’s because it wasn’t promoted every way possible. You can build it but if they don’t know about it, they won’t come.
- You have to let folks know you are a buyer of product. You have to market to the people who own the product you want to resell. If you promote to sell product, you also have to do the same to buy it.
- Buy low, sell high. Establish an idea of what the used product goes for on the market given different levels or grades of quality. Ebay is a great place to start. Look there to see what used items in that category are going for.
- Set high quality standards for the used products you buy. The good news is that you don’t have to buy anything that you deem junk. Set standards for quality (and safety) that anyone could use to measure whether a used product is worthy of you buying.
This concept of re-selling slightly used product or deeply discounted new product doesn’t fit every business model. Remember, this is about giving customers and potential customers a reason to come to your store (or retail website).
Increasing Revenues & Profits: Podcast May 23, 2008Posted by David Dirks in Big Dogz Podcasts.
Tags: increasing profits, increasing revenues, increasing sales, revenues, sales
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This is our first BigDogz Podcast! In this podcast, Dave discusses the marketing/sales concept of less is more. It’s all about narrowing your marketing and sales efforts on focusing only on attracting your most profitable customer groups to help you stabilize and grow your revenues and profits.
Delivering Superior Customer Service: The Grand Hyatt of Tampa December 14, 2007Posted by David Dirks in Buzz Marketing: Lowest Cost/Highest Payoff, Increasing Your Profitability, Keeping Your Customers, Uncategorized.
Tags: , buzz marketing, customer service, grand hyatt, hyatt, increasing profits, increasing revenues
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I’ve just witnessed/experienced a text book example of delivering on superior customer service. At the moment, I’m in Tampa awaiting a flight back home, wrapping up a three day business trip. I’ve been staying at the Grand Hyatt in Tampa during this time. The hotel is a living & working model of creating and delivering consistent superior customer service. By the way, ‘superior’ customer service is defined in my book as that level of customer service that is so obvious that you’d have to be dead to miss it. It’s a level of customer service that you recognize the moment you’re picked up at the airport to the hotel until the time you check out.
Any business, large or small, intent on delivering superior customer service quickly recognizes that it’s your ability to pay attention to the ‘small things’ that makes the difference. It’s the ability to continuously aggregate small but significant ‘moments of truth’ that build on one another during a customers experience with you.
Here are a few examples of the Grand Hyatt in Tampa delivering on superior customer service:
1. Every, repeat, every interaction with any level of Hyatt employees in this hotel was delivered in a consistent fashion. The always friendly smiles, personal & friendly banter, and the constant scanning for opportunities to serve are just a few examples of superior customer service. On the last point of scanning for opportunities to serve, everyone on the staff is trained to find ways to help hotel guests enjoy their moments there. Hotel employee’s are not hiding from guests. Some are even strategically posted around the common areas of the hotel and are constantly scanning the area for opportunities to help customers.
2. The Grand Hyatt has figured out how to insure that all employees are trained effectively to deliver customers service when they are in the line of duty. That’s not an easy thing to do but the Big Dogz do it all the time and invest in it deeply. You can’t create a superior customer service experience by skimping on constant training.
3. It’s clear to me, as a guest of the Grand Hyatt, that they have figured out how to monitor customer service levels constantly. They have to be great at spotting team members who could become the weak link in the customer service chain. Their response to less than superior customer service performance is probably two things: a) retraining the team member and/or b) showing them the door.
4. There were no lulls in the delivery of superior customer service. I noted that no matter what the time of day, early morning or late at night. They, like many of the Big Dogz who are best at this game, have built into their people, culture and business processes, the ability to deliver superior customer service CONSTANTLY, 24/7.
We have choices in our business models:
– deliver awful customer service all the time
– deliver mediocre customer service all the time
– deliver inconsistent customer service all the time
– deliver superior customer service inconsistently
– deliver superior customer service all the time
I could go on and on but you get the idea. There are no ‘secrets’ to consistently superior customer service. It takes a coordinated, dedicated, and well invested focus on the part of everyone in your business, no matter how big or small. By the way, superior customer service has many advantages. Here are a few:
– Creates a ‘buzz’ around your business. The Big Dogz who execute on this are able to create such a high level of service that their customers are a key part of their marketing and sales process. Built in. No extra cost other than your investment of time, money, and intellectual capital on keeping your customer service ‘superior’.
– Allows you to keep your pricing at higher levels. Your customers will come back again and again for the experience. They won’t generally take the next lowest cost provider. They value the customer service experience they get. It’s a loss to them when they can’t get it, for any price.
– Attracts the best and the brightest. No one wants to work with a second rate provider of customer service. Who wants to work for a business who doesn’t care about providing superior customers service? Answer: People who don’t get hired by places like the Grand Hyatt in Tampa.
Is it easy to create superior customer service? No. However, if you want to build a business that will stand the test of time and profitability, you have no choice. Do it.