Newsletter March 2003B
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Version in Newsletter Format March 2003B

BIG-PICTURE SOLUTIONS:
Growing Business In A Down Economy

A glimpse at your financials shows sales are down 10% from last year. Your first impulse: light a fire under the sales staff. That's because sales are simple to measure. Pushing sales is the easy way out. It's also myopic and often wrong. Look at the big picture. What's going on with the rest of your organization? Marketing could be drawing buyers. Sales could be closing deals. And other departments could be dropping the ball and driving away business. Before you point a finger at sales, investigate other possibilities. Your company will be stronger for it.

The most visible area is not always the cause of problems. Imagine that your company was so good that it never lost a customer. Your products were exceptional, prices competitive, service superior. Since your firm probably has lost customers, every area has room for improvement. When your financial statements are ugly, it could be that the CEO is a jerk, IT didn't fix a glitch that inconveniences customers, or HR hired inept employees.

An upscale Nevada hotel runs their routine computer maintenance and upgrades at noon! During maintenance, computers are down for 45 minutes. So for 45 minutes, no one can check in to the hotel. Annoyed patrons are told they have to wait around in the lobby until the computers are back up…this is in the middle of the day! They have luggage, many of them are tired, and the hotel doesn't even offer a complimentary drink or snack. You don't have to be brain surgeon to figure out that midnight would be a better time. Wouldn't call this a sales problem.

Deb Warner of the Greater Syracuse Chamber of Commerce says the Chamber's most popular and highly attended educational programs are those offered on sales and marketing. But if operational problems cause sales attrition, shouldn't people learn more about operations? Off the top of your head, you could name three firms who have lost your business. The reasons probably have nothing to do with sales.

For example, a replacement-cartridge company, offers huge discounts on name-brand printer refills. The company is easy to order from. The prices are exceptionally low. The range of products is vast. Yet their 2-3 day shipping promise is a lie; you're lucky if they ship in three weeks. They don't call (or email) and inform customers of the "delay," which apparently is their true delivery time. This forces some printers to run dry: a real inconvenience in the office. When customers call to track their order, they're left on hold until they surrender and hang up the phone. Sales gets the orders. Operations loses the customers.

An auto dealership's sales department sells a $40,000 vehicle. The incompetent director of the service department fails to repair items while they're under warrantee. When the customer turns to the salesperson for restitution, the service director's take is "sales should stay out of service." The customer takes future business elsewhere. A non-sales problem has axed repeat business.

The sales staff of a media firm generated new business. Unfortunately, the art department failed to deliver PDF files by the deadline. Accounting made the situation worse when they put a hold on the order due to a missing resale-tax form. The messenger of the sales-tax issue didn't inform the customer. A 3-day production cycle extended to a month. "Company procedure" disconnects sales to customer contact after the order hits the order department. The customer felt disconnected from the firm and won't go back. The problem was a procedural and systemic one: not entirely a sales issue.

Here are some ways to pinpoint the real causes of sales declines:

1. Structure the sales process beyond sales personnel. If you can automate, even better. Include order processing, production, customer service, accounting, and any other entity that touches the sales process.

2. When the occasional, inevitable delay occurs, have a system in place to inform customers. Offer alternative products or solutions. Again, automating is best. A family in New York ordered a baby gift to be shipped directly from Amazon.com to California. The item was on back hold. Within 2 days, Amazon notified the NY family of the delay via email, asking if they wished to continue or cancel the order. Click…accept delay. Order remained in progress.

3. Be honest…about delivery times, product features, and service. If possible, use software to tie inventory to delivery schedules, and post shipping capability online. When sales outsells operational capacity, make internal adjustments fast. For some customers, the changes won't come fast enough. You'll lose them. But you'll keep a lot more customers if you keep them informed while you work through the growth spurt. AOL initially oversold its capacity to subscribers, losing many customers. But AOL didn't fold. It survived the growing pains.

4. Educate yourself and your people about project management. With PM tools, you can stay on target-time, money, objectives-making for happier customers. Satisfied customers come back and tell their friends to buy from you.

5. DELIVER VALUE. THE OVERNIGHT PACKAGE THAT DOESN'T ARRIVE COULD COST YOUR CLIENT THOUSANDS. RETURNING THE $10 DELIVERY FEE WON'T CUT IT!

It's easy to be disillusioned about why sales decline. Sometimes you're snowed because you don't have the skills to recognize the origins of lost business. Other times, you may just don't want to face the mountain of work it will take to fix the real problem. However, if you think the cost of an overhaul is too high, think about the price you pay for INEFFICIENCY. In the end, it's much easier to do things right. Look company wide to pinpoint the cause of lagging sales. Talk to exiting or dormant customers. Then methodically fix the customer killers one at a time. When you do, you'll be much happier with your sales department. After all, it's easier to service repeat customers and have referral business come to you than to chase after new business.
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TECHNOCHANGES:
Making it Good for Customers and Employees

Don't use technology for the sake of using technology. If the use of technology improves your customers' or employees' positions, then technology brings solutions. But the existence of technology doesn't mean it's always the best way to solve problems, save money, or improve efficiency. In fact, when the use of technology is one-sided, vendors lose customers, and employers sabotage employee performance. Sometimes we get so caught up with bells and whistles that it's easy to ignore common sense. When that happens, take a step back, reassess, and redefine how you're delivering VALUE to others.

Sometimes a technology is good for customers and employees, but it needs a little time to get everyone on board. For example, some banks issue a 50-cent credit to account holders who use the ATM for deposit transactions. Initially, ATMs were not trusted. Patrons needed a time of transition to discover the convenience of this technology. Now that the idea has taken hold, electronic banking via ATMs works for the patron and the bank. That's because the vendor is offering value and convenience in exchange for cost efficiency. But what about companies who want to slash waste at the expense of customers?

If you have to cram technology down someone's throat, reassess. Amex charges commercial establishments a monthly fee of $4.50 to receive paper statements. If your business accepts Amex from customers, you'll lose $4.50 unless you agree to get monthly statements online. Talk about holding your customers hostage. Amex never asked each merchant client if they wanted the option; the decision was thrust it upon their customers. To retrieve digital statements may be inconvenient for some firms. To have to print those same statements, using your own time, your own paper, your own ink cartridges, is even more inconvenient. Remember, win-win?

When you implement a new measure, everybody should come out better for it. Telephone companies say, "Sign up for digital billing and we'll give you a credit on your monthly bill." Too bad for customers who have to print their digital bill. The time and cost to print an 11-page statement every month seems to exceed the measly few cents offered by the telephone service provider. Companies like this expect customers to do the extra work and foot the bill. Sounds less like customer service and more like self service.

If you want to reduce expenses using technology, provide value to others at the same time. You can be sure one of your competitors will. Give value whether you're offering a new online system to customers or implementing a new computer network internally to employees. And never cut value when you're asking for more money. You don't want customers or key employees to jump ship. To transition simultaneously to lower operating costs and equal or greater value, keep these tips in mind:

1. Service the customer first. The already-hurt airline industry is pushing harder to charge more for normalcy and mediocrity. Yet airlines Southwest and JetBlue are discounting, offering good (to great) service, and winning business.

2. Adopt the "both/and" perspective (from TechnoTrends author, Dan Burrus). You may be ready for the change, but customers may not. Amex didn't consider customers who don't have an auto-print feature. Their customers may have to go online or face a procedure that doesn't fit their current system. Remember that some people may have technology and tools to convert and others may not. Just as Dan Burrus says, in the future, there will be BOTH paperless offices AND offices with paper. It's not an all or nothing perspective; it's a both/and perspective.

3. Give options and tools to make the transition easier. Don't "strong arm" customers. It ticks them off, then they buy from your competitor. Keep old options available, and offer discounts and greater value to those who save you money by accepting new options.

4. Be patient and account for the time lapse. It could take customers or employees a year to reach where you want them to be "yesterday."

5. Make them feel good about doing business with you. New technological services should make people happy, not irritated or afraid. A large ISP (Internet Service Provider) released a cheaper and better server program for web designers, but then threw a curve ball. The ISP changed billing from monthly payments to every six months. Worse, customers had to pay for the six months in advance due to high product demand! Some people were angry, and some were just unable to afford the switch.

Technology should improve one's condition, not deliver burden. When you want to make improvements in products, services, and operations, make sure that parties on both sides get more value. Business isn't always easy to come by, especially when consumer confidence is low. Employee turnover is expensive. The smartest approach to technology-based solutions is with an eye on the bottom line and a goal of delivering value all around. Then everyone's happy.

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David and Lorrie Goldsmith are managing partners of MetaMatrix Consulting Group, LLC. Their firm offers consulting and speaking services, as well as conducts seminars for senior level management. They can be reached at (315) 476-0510 or email to Offering a "30,000 feet view of business management with hand-to-hand combat." MetaMatrix Consulting Group, LLC. specializes in business management offering consulting, seminars and speaking services internationally. Managing partners, David A. Goldsmith and Lorrie Goldsmith can be reached at (315) 476-0510 or email to david@davidgoldsmith.com

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