Is there possibly a bigger buzz word concept in marketing right now than social media marketing? If there is, it is brand management. What in the hell is a brand and why would you manage it? A company's brand is your mental image of that company. What do you associate with the Chevrolet's name? Old people, like me, think of “baseball, hot dogs, apple pie, and Chevrolet.” What do you associate with the GEICO name? I think of the gecko, woodchucks, and Mary Todd Lincoln's fat ass in a dress. I feel sorry for our sixteenth president. I have just described brand management created by advertising campaigns. Marketing experts tell me that there is no more important marketing activity than brand management. They tell me brand management is about creating an image in your customer's eye, and the path to creating that image is effective advertising – either the old school way using print media, television, and radio or the new media way using Facebook, Twitter, and YouTube.
I don't have a problem with placing great importance on your company's image in potential customers' minds. I just don't believe small businesses build brands through advertising. In fact, I don't believe most large businesses build brands through advertising.
Microsoft is a fine example of brand management. Let's play the word association game. What words come to mind when you think of Microsoft? If you are an average Windows user, you probably think, “Oh shit, I have to reboot again.” Until Microsoft, who knew you needed CTRL, ALT, and DEL keys on a keyboard? And – why would you need to press all three of them at once? We just thought about letters and numbers and the content we were trying to convey. I think I am at least a little more technical than the average user. When I think Microsoft, I think, “Will the END TASK button ever work?”
Their engineers tell me, “Frank you stupid bastard, when you hit the END TASK button, we don't let you end the task ,because that would make the system unstable.”
To which I reply, “Dumb ass engineer, the system is already unstable. That is why I am trying to end the task.” I have been told END TASK will work by Windows, version 2,174 expected to be released just after the second coming of Jesus Christ. It will be part of the version currently code named “Rapture.” I am looking forward to the full support for long file names – no more faking it. It is literally taking the second coming of Christ to get this. What will it take to get rid of lazy programmer bullshit like the system tray and the registry?
The problem with brand management is that brand defies management. Your brand is what you are, not what you want people to think you are. Brand is behavior. Microsoft advertises that the features of Windows 7 were put together by users. Obviously not. Nobody wanted a new user interface – at least nobody I know. There is no reason to favor the user interface of Windows 7 over Win 3.0. To sell the new release of each Windows version, Microsoft needed a marketing message other than, “This time we promise it works.” Thus, we are privileged to struggle with a new and improved interface each time a new version of Windows is released. We ceased begin fooled a long time ago.
The marketing people of Microsoft are so in love with the brand they believe they have created that they have infected products they have acquired with the Microsoft brand. Beginning in the mid 1990's, Microsoft began buying accounting software products. They purchased a number of companies with well established reputations like Great Plains and Navision. In the early 1990's, when someone in the accounting software industry talked about Great Plains, all of us in the industry knew what it did well – ditto for Navision. Microsoft marketers, in love with their beloved brand, took those well known products and created at least a half dozen nondescript versions with no established reputations. Not only that, but the names seem to randomly change each year.
Lest anyone accuse me of being in the Sage software camp – by way of full disclosure, we have been resellers of Sage products since before Sage owned any of them. Sage is a UK company whose US operations have largely been established by acquiring successful US accounting software products. After acquiring a number of successful accounting software products like Peachtree and MAS90, Sage began an expensive campaign of re-branding these products as “Sage”. Unfortunately, Sage lost a legal trademark battle for the Sage name in the US. Oops, what's a few million marketing dollars? They then took one of their acquisitions, Best Software, and attempted a rebuild of the brand around the Best name. Then they purchased back the rights to the name Sage in the US and went back to re-branding all of their products as Sage. Yes, this is a true story. I can't make this shit up. I'm not that imaginative.
When I play word association with Sage, I think, “Don't buy a house.” If you are a top executive with Sage, you will likely have your position for less than two years. Over the past four years, the Sage story of executive purges could rival anything Stalin did in Russia in the 1950's on a percentage turnover basis. Hopefully no torture was involved – other than watching a painful waste of money trying to build a brand. This was brand building in the old Soviet Union. “No, General Secretary Stalin, you don't look fat in that uniform.” This is the same approach successful Sage executives use to advance their careers.
What's the problem with a good corporate house cleaning once in awhile? Nothing until it becomes standard operating procedure. Then you have to wonder if the house needs cleaned or if the house cleaners need to be changed.
Here is a joke for you – how many Sage executives does it take to build a brand?
Answer – It's a trick question. No Sage executive has ever built a brand. To this day, after millions of branding dollars, few people in the accounting business know who or what Sage is. A lot of CPA's remember Peachtree and MAS90. That is the problem. Concentrating on the Sage brand diminished the well established brands they already had like Peachtree, MAS90, Timeslips, and Master Builder among others. Nonetheless, I am still on the Peachtree bandwagon. I just wish some more Sage executives were riding it with me. At least with Peachtree, they backed off the Sage branding a little. Peachtree comes before Sage in the name.
What do competitors like Microsoft and Sage have in common? Not much at first glance. However, they both have the same mistaken ideas about brand building. Brand isn't about marketing. Brand is about behavior. Your brand is the real you, not who you want to be. If you want a better brand, be a better you.
You may be curious how I intend to build the Aniston Outfitters brand and how I am doing raising money to open the first store. I predict that the first store will open before the END TASK button works in Windows. I have been in contact with a number of top flight money people, Any day now, I expect to have the first round of financing in place. Warren Buffet turned me down, but what the hell does he know about money? Jimmy Buffet made more money singing about Margarita-ville. Steve Jobs turned me down as well. In my opinion, he has never been that much of a visionary. Bill Gates said no – but he can't even produce an operating system where the END TASK button works.
So I am turning to you, my dear readers – at least that's what I call you to your face. I need a whole bunch of money really fast. My dear Jen doesn't deserve some crap store like Wal-mart. She is a Tiffany type gal. I need some real bucks. If you are interested, I have a web site set up to aggregate the money, http://www.africanrelief.org/ . Mention “Aniston Outfitters” and you get an extra 1% ownership in the first store. Yes, if I am going to steal from you like Bernie Madoff, I am going to do it for a good cause. To be completely above board, I am on the board of directors of Christian Relief Services (CRS). Bread and Water for Africa is a CRS organization. We CPA's have to be completely above board – don't we? Just like Bernie Madoff's CPA.
Thursday, 24 February 2011
Tuesday, 15 February 2011
Treat Your Customers Like Fools – The Golden Rule of Billing
Last week our washing machine broke. It washed clothes just fine, but it wouldn't spin. Those of you ,who know me, know I am not exactly a domestic God. I don't and can't do squadoosh around the house. If you need a guy to patch your drywall, I ain't that guy. Call a real man. I disclosed this fact to my wife, Laura, early on when we were dating. I told her I do a few things very well, like tax returns, but I am utterly worthless around the house. I describe myself as a thoroughbred. In reality, around the house, I am more like teats (the polite spelling) on a boar hog. No, I have no idea what a boar hog is, but people in Pennsylvania, from whence I come, use this phrase annoyingly often.
We called an appliance repair company to fix the washing machine. Since I don't have any clients, who do appliance repair, Laura found someone on the internet. Google knows all. The repair guy, obviously more of a real man than I, showed up on time and fixed the washer. The problem was a door sensor. It took about an hour and a half to fix it. The bill totaled $369. For that amount we got a fixed washing machine and some snarky advice to Laura to not slam the washing machine door anymore.
Looking at the washing machine door / sensor, I am guessing the part cost about $50 at the most. That means we paid $310 for an hour and a half of labor. Based on my vast knowledge of the appliance repair business, I am guessing $155 per hour is a bit steep. Here is something you should know about Laura and I. We live in a nice house in one of the Belmont communities in Ashburn. We have a half acre lot, which is extremely rare in the suburban utopia of Ashburn. One of the things Laura learned not long after we bought the house is that people assume we are very well off, based on our house. We are pretty well off, but that's not the point. When we call someone for service, which we do quite often since I am useless, they normally try to give us the highest price possible, since they believe we can afford it. It's like we owe them extra money, because they really deserve more from life and we are the people to give it to them. The price isn't based on the job. The price is based on what they perceive we can afford. Sometimes this is done out of outright malice and sometimes it is done from good intentions. Some people assume, incorrectly, that we are always looking for the Cadillac job and won't settle for the Honda Accord. Believe me, I will settle for the Accord. I have a number of clients, who have the same issue.
In our CPA firm, I sometimes run into this problem with new staff. We bill for personal income tax returns by the form completed. There is a minimum charge for the basic 1040 federal form and one state return. Beyond that every form has an additional price associated with it. Very few of our clients have really simple returns. People with very simple returns can do just fine using Turbotax or visiting one of the national franchised tax preparation firms. Most of our clients, at the very least, own rental properties or have small side businesses. On the more complex side, many of our clients own multiple successful corporations and partnerships. They literally can't prepare their own tax returns and most are better off doing what they do in their businesses and not wasting time doing something they aren't very good at – preparing tax returns. We charge about $500 on average for personal tax returns. For a regional CPA firm, this is a very competitive price.
Sometimes, we prepare returns that are really pretty simple but have a lot of forms involved. For most of these forms, there is very little work involved on our part. Our price schedule will show that we should bill $500 or $600 for these returns. That doesn't mean that is what we automatically charge. Paul and I look at the time we have spent on each return and frequently determine that the $500 charge isn't really justified. We may charge $350 or $400 instead.
New staff members find this difficult to accept. If we can get $500 for a tax return, why should we charge only $400? You might justifiably ask why they even care. They care because our staff tax preparers earn monthly bonuses based on their billings. The amount of their billings directly and immediately affects their compensation. They care and they should. You might also be curious why we charge $400 for a tax return when we could collect $500.
The explanation involves my Golden Rule of Billing. I should trademark this phrase. Consider it done. The Golden Rule of Billing states that you should charge only what you would be willing to pay yourself. If I wouldn't pay $500 for a tax return, I won't bill $500. This seems damn generous of me, doesn't it? Well, not really. I do it for very selfish business reasons.
If I charge $500 for a service with a going market rate of $400 what happens? I lose the client either immediately or pretty quickly. What would I rather have, $500 this year or $400 per year for at least the next five years if I treat the client well? The last time I checked $2,000 is more than $500. Nonetheless, this concept seems to elude some of our staff at the start. They soon learn from experience, however. The client they charged $500 either complains, which is the best case, or he / she quietly leaves, which is the worst case since there is nothing we can do to save him / her as a client for the future.
The Golden Rule of Billing may at first seem altruistic, but it is firmly grounded in economic incentives. Laura and I didn't enjoy paying an outrageous amount for our washing machine repair. Our CPA firm clients don't enjoy being overcharged either. If I hate one situation, I have to hate the other. The fastest way to lose customers, other than providing poor service, is to overcharge them. Do you think we will be using the appliance repair company that overcharged us again? Does anybody know a good appliance repair shop?
Thanks for reading. Our main S&K web site is http://www.skcpas.com. My blog there is considerably less snarky and primarily covers important tax topics. Please take a look.
We called an appliance repair company to fix the washing machine. Since I don't have any clients, who do appliance repair, Laura found someone on the internet. Google knows all. The repair guy, obviously more of a real man than I, showed up on time and fixed the washer. The problem was a door sensor. It took about an hour and a half to fix it. The bill totaled $369. For that amount we got a fixed washing machine and some snarky advice to Laura to not slam the washing machine door anymore.
Looking at the washing machine door / sensor, I am guessing the part cost about $50 at the most. That means we paid $310 for an hour and a half of labor. Based on my vast knowledge of the appliance repair business, I am guessing $155 per hour is a bit steep. Here is something you should know about Laura and I. We live in a nice house in one of the Belmont communities in Ashburn. We have a half acre lot, which is extremely rare in the suburban utopia of Ashburn. One of the things Laura learned not long after we bought the house is that people assume we are very well off, based on our house. We are pretty well off, but that's not the point. When we call someone for service, which we do quite often since I am useless, they normally try to give us the highest price possible, since they believe we can afford it. It's like we owe them extra money, because they really deserve more from life and we are the people to give it to them. The price isn't based on the job. The price is based on what they perceive we can afford. Sometimes this is done out of outright malice and sometimes it is done from good intentions. Some people assume, incorrectly, that we are always looking for the Cadillac job and won't settle for the Honda Accord. Believe me, I will settle for the Accord. I have a number of clients, who have the same issue.
In our CPA firm, I sometimes run into this problem with new staff. We bill for personal income tax returns by the form completed. There is a minimum charge for the basic 1040 federal form and one state return. Beyond that every form has an additional price associated with it. Very few of our clients have really simple returns. People with very simple returns can do just fine using Turbotax or visiting one of the national franchised tax preparation firms. Most of our clients, at the very least, own rental properties or have small side businesses. On the more complex side, many of our clients own multiple successful corporations and partnerships. They literally can't prepare their own tax returns and most are better off doing what they do in their businesses and not wasting time doing something they aren't very good at – preparing tax returns. We charge about $500 on average for personal tax returns. For a regional CPA firm, this is a very competitive price.
Sometimes, we prepare returns that are really pretty simple but have a lot of forms involved. For most of these forms, there is very little work involved on our part. Our price schedule will show that we should bill $500 or $600 for these returns. That doesn't mean that is what we automatically charge. Paul and I look at the time we have spent on each return and frequently determine that the $500 charge isn't really justified. We may charge $350 or $400 instead.
New staff members find this difficult to accept. If we can get $500 for a tax return, why should we charge only $400? You might justifiably ask why they even care. They care because our staff tax preparers earn monthly bonuses based on their billings. The amount of their billings directly and immediately affects their compensation. They care and they should. You might also be curious why we charge $400 for a tax return when we could collect $500.
The explanation involves my Golden Rule of Billing. I should trademark this phrase. Consider it done. The Golden Rule of Billing states that you should charge only what you would be willing to pay yourself. If I wouldn't pay $500 for a tax return, I won't bill $500. This seems damn generous of me, doesn't it? Well, not really. I do it for very selfish business reasons.
If I charge $500 for a service with a going market rate of $400 what happens? I lose the client either immediately or pretty quickly. What would I rather have, $500 this year or $400 per year for at least the next five years if I treat the client well? The last time I checked $2,000 is more than $500. Nonetheless, this concept seems to elude some of our staff at the start. They soon learn from experience, however. The client they charged $500 either complains, which is the best case, or he / she quietly leaves, which is the worst case since there is nothing we can do to save him / her as a client for the future.
The Golden Rule of Billing may at first seem altruistic, but it is firmly grounded in economic incentives. Laura and I didn't enjoy paying an outrageous amount for our washing machine repair. Our CPA firm clients don't enjoy being overcharged either. If I hate one situation, I have to hate the other. The fastest way to lose customers, other than providing poor service, is to overcharge them. Do you think we will be using the appliance repair company that overcharged us again? Does anybody know a good appliance repair shop?
Thanks for reading. Our main S&K web site is http://www.skcpas.com. My blog there is considerably less snarky and primarily covers important tax topics. Please take a look.
Monday, 7 February 2011
Interviewing and choosing good salesmen
Finding a good salesman is a tricky business - but getting it right is worth all of the effort. The problem is that there isn't a formal qualification that says: "This person is a fully trained fully qualified salesman". The only thing you have to go on is their track record. This post does not describe a comprehensive selection process, but having recruited many sales people over twenty years it gives some useful tips that I have learned through experience:
- Interview lots of people at first interview stage and just go on gut feel. Are they nice people, do you get along, do you find them interesting, engaging or funny? Don't get too hung up on sales stuff just yet. After all people buy from people so the first thing you want is someone who gets along with people.
- Use the first interview process to build a short list of three - then task each of them with doing a short presentation to you and a couple of colleagues. Give them a simple brief like: "Please tell us in no more than 10 minutes why we should hire you and what you are going to do in your first 3 months to be successful". What you are doing is putting them in a sales situation - seeing if they can sell. Think of it as being a bit like test driving a car.
- In the Q&A ask them this question: "Rank the following 5 attributes of this role in order of importance to you - 1) career prospects 2) job title 3) job satisfaction 4) money 5) good working environment. You are only interested in one thing - that the answer in money! A salesman who is interested in any of these attributes ahead of money isn't a salesman. You want your sales guy foaming at the mouth at the prospect of making a big commission cheque - not worrying about his status in the company or his next career move.
- Finally when you have chosen your man take up references. Don't use his - insist on your own criteria. I recommend you get a minimum of three 1) His last boss 2) A current customer and 3) A current work colleague. Spend time on these conversations. What was he like, was he punctual, was he easy to get on with, was he sociable, did his customers like him, did he make his targets? You can find out a lot from innocuous question. Always ask if they would re-engage with your candidate - i.e. would you hire him again, would you buy from him again. Listen to how much conviction is in the answer. They will all say yes - but how they say yes is what you are listening for.
- If your candidates previous company say they don't give reference you should smell a rat. That may be a company saying we may give a bad reference and don't want to do that.
How can I help?
I am lucky enough to have been successful several times with start-up and early stage businesses (there's a topic - was it really luck?).
I aim to put something back by offering advice of any description to today's entrepreneurs and small business leaders. This blog is designed to oil the wheels of that process by discussing the issues that I think were important to me in building my businesses and that are important to the current generation of entrepreneurs.
So please ask, post comments or follow me on Twitter @theclearhead.
I aim to put something back by offering advice of any description to today's entrepreneurs and small business leaders. This blog is designed to oil the wheels of that process by discussing the issues that I think were important to me in building my businesses and that are important to the current generation of entrepreneurs.
So please ask, post comments or follow me on Twitter @theclearhead.
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