Some of the younger readers might not know what a paperboy is and barely know what a newspaper is. Those who were around when paperboys were commonplace you can skip a head a couple of sentences. Back before Al Gore was kind enough to invent the internet for us commoners, a human being typically less than 16 years old would deliver the newspaper to your door by either walking or perhaps using a bicycle. I kid you not this really happened.
What lessons can we possibly learn from such an out of date media form and delivery method? We can learn plenty, in my opinion. It will be my job in the next 400 words or so to explain. The paperboy can teach us at least three things.
- Use of technology
- Customer service
- Keeping bad debts to a minimum
Let me begin with technology. The smart paper boys who wanted to have the largest route and most efficient delivery method would utilize a bicycle. You may think that a bicycle is very low tech but compared to walking it was very advanced. What we can learn is that employing some technologies even if not on the “bleeding edge” can yield results. Fine, don’t be an early adopter but by now you should be using things like social media to replace traditional advertising like yellow pages or, dare I say, a newspaper advertisement. Get rid of your dedicated fax line and use a scanner to send and receive pdf files over the internet at a much lower cost.
What does a 12-year-old paperboy know about customer service? If he is a good paperboy he will not fling your paper in the drive way but ask you for your preference. Would you like your paper between the storm door and the main door or shall I bring it in the kitchen and set in on the table by your coffee? This kind of thing really happened. (Ask my dad he will tell you) Of course this also was before doors were locked and remotely monitored with a smart phone. Alas, technology giveth and taketh away. How far do you go to make the customer happy? Can you tailor your customer experience to fit each customer’s wishes? Amazon does this and they are a huge company yet they maintain a unique customer experience that does not feel impersonal despite dealing with you through the internet.
Face to face interaction and good service leads to lower dead beat customers. The paperboy interacts with his customer almost daily or at least monthly when he collects his money. What we can learn from this is to become like a friend to your customer. Some good advice I got from my boss at the CPA firm where I worked was to do your best at becoming a friend of the customer. He said it is easy to fire a service provider but hard to fire a friend. We can also learn to stay on top of our receivables by monitoring them regularly. The best way to stop bad debts is not allowing the receivables to become past due in the first place.
My 400 words have been used; I hope I have reminded you that we all can learn a little from the paperboy. Have a great week.
On April 10, 2013 I took a big step towards sticking it to the man, or so I thought. That day I bought the following items for my garden:
As I drove out of the parking lot of the store I was fiendishly laughing at how I was about to embark on an adventure which would stick it to the man. The big, publicly traded grocery store chain would have slumping sales this summer in my corner of Georgia. A down grade of their stock was surely imminent I thought. Perhaps I should take a large short position in their stock and cash in later this summer as revenues miss analysts’ estimates?
That was on April 10th. As I write this on May 6th, my plans are going awry. Since I planted my garden 3 weeks ago on April 15th, we have had 4 sunny days, 7 inches of rain and it has been almost 2 degrees below the average temperature. One head of romaine has fizzled leaving me with 8 plants to fulfill my dreams of slashing my grocery bill. As I re-assess my plan let’s look at the numbers. Those 9 heads of romaine cost me $3.77 with sales tax. Incidentally, why on earth is there sales tax on plants? Isn’t there are prohibition on taxing food? If so, then wouldn’t it make sense that the purchase of the raw materials for food – vegetable plants and seeds be non-taxable? I looked at a recent bill and an organic head or heart of romaine lettuce costs about $1.15 so if those remaining 8 heads make it to the dinner table in a salad I will have saved a whopping $5.43 for the effort. At 57 cents a pound at retail, my $19.02 investment in tomatoes better yield 33.37 pounds of vine ripened beauties. I think that is possible since the big boy tomato is about a pound on average. If I can manage 11 tomatoes per plant I will have recouped my investment.
I guess my plans of saving big bucks on my grocery bill are not looking too good right now. I will keep you posted on my progress throughout the growing season. Have a great week, reaping what you sow…
I was recently investigating a change to the 3 essential services needed for any home – Internet, Phone and TV. Concurrent to this quest, I received a series of unsolicited offers in the mail from a nationally known provider of said services. I had some free time between appointments one day so I decided I would take my multitude of offers and nail down that great price for the telecommunication trio.
I walked in the store and was quickly waited on by a representative. I explained that I had these offers, every one of which was better than the one before. He didn’t seem interested in my offers and proceeded to tell me what they had on sale. The last bundled 3 pack offer I got had the ultra low price of $79 for the holy trinity. He printed off his sheets for 100 channels 200 channels and 300 channels and the prices were curiously all about the same between $115 and $125 per month. This is still a better deal than I have with my current set up but what happened to my $79 dollar deal?
He tried to explain to me the differences in the plans but I only had about 30 minutes before my next appointment so I had to leave and study the information back at HQ. This should not be so complicated. What happened to the deal that got me in the store? There were so many variables and things going on “behind the curtain” that I was very distrustful of the entire process. They did a bait and switch teaser rate and muddied the waters so I could not make an informed decision. Is this the ideal way to treat a customer? I think not.
I suspect that they realize they are providing a service that is essentially the same as the competition. What they aren’t telling us is that their 300 crappy channels are just like Brand X’s 300 crappy channels. The way they differentiate themselves from the competition is with their commercials. They want us to choose them because their cute puppy is better than the competition’s talking unicorn or some such nonsense.
I think what they should do is give their customers a reason to stay with them and potential customers to do business with them. How about touting good service when a problem arises? What about consistent delivery of the product with minimal amount of down time? That might also be a good thing. Perhaps they should take a cue from Delta Airlines who says the real difference between them and the competition is that the people at Delta are better.
I am still looking for an answer to my telecommunications decision but I am getting closer and closer to going retro and buying an antenna for my roof and using Hulu Plus and/or Netflix as my content provider. Of course I will buy a subscription to MLB.tv for about $10/month for my baseball needs. Doing this I will save about $60 per month and I will program my own network of stuff I like to watch.
Have a great week being authentic with your customers. They will thank you with their loyalty.
I enjoy watching football but my enjoyment has been diminishing as the lack of defense has become ridiculous. Much of this has been a result of rules by the league in an attempt to increase scoring and popularity of the game. This may be working but I am losing interest and someday soon may not bother to tune in on Sunday afternoons. The college game is also trending in the same direct as the pros. I can’t tell you how many games there were that were higher scoring than most college basketball games.
Football has a better grasp on the business side of the game than baseball without a doubt. As bad as the product is on the field in football, baseball is equally bad at handling the off field part of the game. The economics of baseball threatens the continued existence of baseball as we now know it. Now that the steroid era has hopefully come and gone we can begin to enjoy the game without the video game home run numbers.
I created a short list of reasons why I like baseball more than football and have them presented below for your review:
Football decided it had a need for a taunting penalty. Think about that for a minute. Millionaires who play a kids game need to have a deterrent so they will not taunt one another.
There is also an unsportsmanlike conduct penalty for excessive celebration. Baseball has a tradition that if you have an excessive celebration after a home run the next batter will get a fastball in his ribs. There are not too many excessive celebrations after home runs and I like it that way.
Note: I have a very hard time forgiving baseball for having the Designated Hitter rule. They compounded the problem by not having it in both leagues.
The best summary of the differences between baseball and football and highlighting why baseball is a more likeable game can be found in a classic stand-up comedy routine by George Carlin. (It is also G-rated.) Read the text here.
Have a great week, baseball season is off and running!
The original Wizard of Oz is one of my favorite movies and I am surprised that it took me this long to blog about the business lessons to be learned from the movie. I have not seen the recently released Oz The Great And Powerful but plan on renting it someday. From a quick scan of critic ratings it seems as though it has more disappointing ratings than positive ratings but making a prequel to a classic will add an extra level to expectations. I will judge once I have seen it. Enough about movies, let’s get to business.
The three main characters besides Dorothy each believe that they have a flaw and are trying to remedy it by visiting the wizard. One lacks courage, one lacks intellect and one lacks a heart. In the movie, it is clear that the characters possess these qualities and just need encouragement to use what they already have. As a small business owner you may also have flaws and unfortunately there is no wizard available.
If you have not read the book The E-Myth I suggest you do so to understand what you have gotten yourself into. There are three key skills needed to operate a business and if you do not have all three you will struggle. You must have technical skills, managerial skills and must have entrepreneurial skills. Most people who start a business do so because they are a good technician. They can provide “the deliverable” but that is only a small part of running a successful business, especially if you want to grow it beyond a single-person shop. Having only two out of the three skills is as good as having a stool with 2 legs or having intellect and courage but no heart.
What do you do if you recognize you are lacking in one of the skills? Depending on the situation, you can try to learn the skill but running a business and devoting time to learning a vital skill is not the best idea. You may not have time learn the skill because you may be out of business before you are adept at it. My advice is to do what you are best at and hire good employees or outsource your weak spots. After a while you may develop your missing skill(s) but hopefully by then you will be best at entrepreneurship and will have an empire to manage while you create the vision for your company.
It may be easy for me to say (and self-serving) that you should hire or outsource areas that you cannot do well but I do have a good basis for my reasoning. That basis is Economist David Ricardo’s Law of Comparative Advantage from his book published in 1817; On the Principles of Political Economy and Taxation. This law can be explained by using a simple example we can all understand. For our example let’s say you are a maker of highly fashionable and sought after widgets. These awesome, industry-leading widgets sell for $100 and you can make your widgets in one hour and cannot keep up with the demand. If all of this is true, why would you waste time cutting your grass when you can pay the polite neighbor boy $20 to do that task which also takes an hour to do? By cutting your own grass you are losing $80! This might seem like a no-brainer to you but that is what you doing by handling all of your administrative tasks, social media marketing/website maintenance, Human Resources and, dare I say, your own accounting with QuickBooks? In a small business it does make sense to wear several hats but choose those hats wisely. For example, I enjoy writing and I believe and have been told that I have a skill for it so that is why I write my own blog. If I was terrible at writing and hated doing it, it would make no sense for me to write my own blog.
Have a great week travelling wisely down the Yellow Brick Road to success.
You may find it interesting to note that the average tax refund from the IRS is about $3,000. The total amount of individual income tax refunds over the past several years has averaged around $300 billion. That is a lot of money flooding the market and most of it is returned in February since the electronic filing rate has gone over 80% of all returns filed. This year due to the fiscal cliff drama at the end of last year, tax filing has been running behind since returns were not even accepted until January 30th.
I thought that since today’s blog is released on April 15th I would make a list of things I could do with the average $3,000 refund:
- On Amazon.com I could buy 216 copies of the Compact Disc, Revolver by The Beatles and still have$1.92 leftover for the Taxman which is the title of the first track.
- I could buy 600, Five dollar foot long subs at Subway provided I was in Oregon since they do not have a sales tax.
- I could go to a pizza shop and order a large Pizza since it is much more economical than a medium and then leave a really nice tip.
- Take my wife on a well deserved all-inclusive vacation to a Caribbean island.
- Buy 1.88 ounces of gold at $1,600 per ounce. The all-inclusive Caribbean vacation sounds like a lot more fun.
- Pay the toll on the Golden Gate Bridge into San Francisco for me and the next 499 commuters with 2 axles. That is a $6 toll and adds up to about $1,500 if you do not get the easy pass and use it every day except vacations and holidays. Tolls are paid electronically so there is no need to stop.
- Assuming I cut the grass weekly for 8 months out of the year I could give the neighbor kid $20 per cut and take almost four and a half years off. Now that sounds like a good use of 3 grand!
- Get Lasik eye surgery and save on eyeglasses and still have lots of money left over for buying gum and candy cigarettes.
- Drop It all on lottery tickets – you know make a GOOD investment.
- Use it to make a time machine and go back to January 11th 1969 and bet big on the Jets to win the Super bowl against the Colts.
Have a great week and I hope you are able to spend a little of your refund money in your own special way.
I am listening to Harvey Mackay’s book; The Mackay MBA of Selling in the Real World on my iPad and one thing that has stuck with me so far is the sentence he uses to describe selling. He says; “Selling is helping someone get what they want.” That really stood out to me. I never thought about selling in that way. I suppose that is why he is so successful. In case you do not know; Harvey Mackay wrote the blockbuster book from the late 1980’s; Swim with the Sharks without Being Eaten Alive.
If you are in the business of selling solutions like I am this means you have to develop some skills in determining what your potential customers wants before you can help them get it. To add to the difficulty sometimes the customer doesn’t even know what they want! This is where your skill has to kick in and peel away at the layers of the onion and get to the root of the problem. Hopefully you are the solution to the problem.
I might not be a highly skilled sales person but I thought I would share this nugget of wisdom in the hope that it will target your approach to selling towards finding what the customer needs and trying your level best to get it for him. By taking this approach, I believe it will alleviate the adversarial role you will have in your customer’s eyes. From my struggles with “selling” I would ask you to keep these 3 suggestions in mind when in front of a potential customer:
1) Avoid the urge to recite an advertisement about your goods or services in hopes that they will be unable to resist your great commercial. Remember to determine the need first. If you are selling what he doesn’t want to buy you are wasting your time and his time. He may know, trust and like you but if he’s buying shoes and your selling socks you are missing an opportunity.
2) To determine the need you have to ask the right questions. How do you know he is buying shoes? The best way is to ask questions that will get the person to talk – the more the better. Rather than ask him if he would you like to buy some of your nice socks. (This is an especially bad question because it results in a yes or no answer and if no you really didn’t learn much.) You might want to ask the person; a general question about clothing and see if mentions and need that you are able to fulfill. Remember, if you can’t help but you have determined a need for shoes; if possible offer a suggestion to put him touch with someone who has great shoes. It will certainly help you with them and the shoe salesman will certainly appreciate the referral and will reciprocate when he can.
3) Another thing to keep in mind is to keep an open mind. Don’t think you know what they need before you begin your conversation. If you do have your mind-set on what they need, you will probably not ask the right questions and you will lead them down your preconceived path. Even if you see they have holes in their socks they still might want shoes who are you to judge? It is not what you think they need is what they think they need.
To summarize, the next time you are meeting with a potential customer remember to determine the need by asking the right questions without assuming you know what they need. Have a great week selling socks to people who want to buy socks.