Q: Goals, strategy, plans and all these terms are overrated. Our family business doesn’t have any of that and we’ve been in business for 23 years. When will teachers and consultants stop talking theories?
So what’s the problem with lack of focus as long as you’re profitable? If your joy comes purely from seeing your bank account getting fatter, then it’s fine for you. Your employees and customers, on the hand, will have a different story to tell. When your single focus is on the bottom line regardless, you won’t invest in your employees that much and you won’t make business decisions based on what’s best for customers. This strategy leads to high turnover of employees and customers’ defection. The only way that some companies don’t feel the negative impact of such a strategy is when they hold a monopoly over certain desirable brands. In this case, the profit comes from the strength of the brand with not much credit to the importer. Can anyone look back 50 years later and genuinely feel proud? Not in my book.
Anita Roddick, Founder of The Body Shop, once said in an interview with Jane Brainbridge, “Profit is not the objective of my business, it is providing a product and a service that’s good enough that people give you a profit for providing it.” Wanting more money just for the sake of it won’t build a business empire. Great entrepreneurs are passionate about a certain product or industry. They’re not in it just to make money, but also to add to it. Such entrepreneurs make life better. One more thing, when you want more money by selling anything that’s a goal; when your focus is to aggressively cut corners in every way to achieve your goal that’s a strategy; and when you’re again delaying renovating the worn-out customer reception area that’s a plan; nothing theoretical here…and that’s just my two cents.
Q: No matter what tasks I get done there’s always more. It’s like I’m swimming in an endless ocean. On top of that, my employees are asking for attention. I know it’s their right, but I don’t have the time. Is there an easier way to manage?
Here’s a typical manager’s daily schedule: After handling yesterday’s emails a couple of internal meetings take place and just like that it’s midday. Now it’s time to give some updates by phone, to chase feedback from colleagues, and to answer other departments’ questions and of course the CEO’s quick inquiry that somehow always drags to a 25-minute phone call. The day is gone and lunch was a quick bite on the way out of the office, if any. That’s assuming there was no disaster that requires staying till the evening. Sound familiar? This manager is a saint, right? Wrong.
The devastating fact is that most people are too busy to manage. The word ‘manager’ refers to two responsibilities: projects and people. The schedule we reviewed above was filled with project-related activities. So this person was a good project manager but not people manager. Part of your time needs to go to projects and the other part needs to go to developing your team. Bottom line, either hire more employees and trust your team better so you can delegate, or strip down the things you do to the bare essentials so you don’t manage too many people…and that’s just my two cents.
Q: Most customers keep jumping from one business to another. Very few stay for the long term. When can a business claim that this or that customer is truly loyal to the brand and how long should we wait before that happens?
Customer loyalty comes from continuous purchasing, promotion of the business to others, and defending the business when needed. Except the defending part, all of these behaviors are quantifiable and can and should be measured. Your ultimate brand success is when it has become almost invisible to your customers’ conscious mind and an organic element in their subconscious mind so much so that they buy your product/service as a habit. You become second nature to your customers that the concept of buying from you is not something they have to question, debate or even consider before every purchase. It’s like you have a monopoly over their purchase decision when it comes to your product/service category.
It takes roughly anywhere from 10 to 20 years to achieve this invisible status. Rarely, you may start a new company with a knock out business model, product or service that’s brilliantly thought of and overwhelmingly executed to a point where you accelerate your journey to invisibility in the minds of your customers. Tools to consider for measuring loyal customers behaviors are Net Promoter Score – or System as it’s called nowadays – for loyalty, sales records to analyze buying frequency, volume, and range of past purchases; and likelihood of repurchase questions to gage future commitments or uncover hidden concerns. Many companies are after waves of trends. While it’s a valid strategy, trends come and go. Long-term customer commitments, however, need time and attention to grow solid…and that’s just my two cents.
For Loaay Ahmed’s advice on business or work matters, send a short email to [email protected]. Regrettably, only the questions chosen for publishing will be answered.
Loaay Ahmed is a management adviser and strategic expert. To learn more about Loaay and his consulting service, strategic business therapy, visit www.knightscapital.com.