Marketing

Measure what matters – business metrics

December 20, 2017

A while back, we explored the business metrics that every business owner and leader should be monitoring to keep their finger on the health of their organization. We dug into the purely financial metrics like lifetime value of a customer and profitability.

Today, I’d like to explore the marketing/sales and employee metrics that we help clients define and grow as we work with them. Just as a reminder, those metrics are:

Marketing/Sales

1. Retention percentage (How many customers did we keep from last year)
2. New business win rate (How many prospects did we convert to becoming customers)
3. New business traffic patterns (How are our new customers finding us)

Employees

1. Employee satisfaction/retention (Average tenure of your team and the health of your team)
2. Employee value (How much value does each employee contribute to your company and are they continuing to grow/add more value)

Now let’s look at each of these and why they matter.

Retention percentage: One of the truths that many business owners forget is that the largest source of new revenue should be your existing customers. It makes perfect sense. They know and trust you. If you deliver consistently, they should need and want to spend more with you, year after year. Well, to make that work – you have to keep them as customers. When you combine this with customer ratings (how good of a customer are they for your business) you really have valuable insights.

New business win rate: When you get a chance to win a new customer, how often are you successful? If the number is too high, your pricing strategy might need some work. If the number is too low, you might be talking to the wrong people or there’s something else that’s not working. This data will also help you decide if you’re wasting a lot of time chasing after business you have no chance of getting or you’re setting your sites too low.

New business traffic patterns: One of the ways to assess your marketing spend is to understand how prospects find you. When you understand what brings your best prospects to your door – you know where to spend your time and money. Even if your best avenue for new opportunities is through referrals, there are tactics you can strategically employ to enhance the quality and quantity of referrals you get.

Employee satisfaction/retention: The team that serves your customers is a make or break element of your business. Keeping your best performers and knowing that your crew feels appreciated and well prepared to do their jobs is a vital metric for every business. As we enter into an era of scarcity when it comes to skilled and talented employees, this will become increasingly important to your business. Don’t scrimp on this – figure out a way to benchmark and then routinely measure this key metric for your business.

Employee value: Every employer knows that not all team members are created equal and that each of them contributes at a different level. You want to have a very clear understanding of the value they deliver to your customers and to your bottom line as you are determining career paths, salary increases, and bonus amounts. This will also help you decide where to invest for your long-term growth.

Once you decide how to get the data you need to track these metrics, the mechanics are pretty easy. For most organizations, quarterly monitoring will give you a good handle on the trends that have a huge impact on your company’s profitability and viability. This information will also help you determine new opportunities to explore and where you need to keep a watchful eye.

 

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Mini Marketing

October 25, 2017

The list of marketing tactics that you can use to reach an audience is staggering. The different ways you can slice and dice humankind into different audience segments is never-ending. The stories you can tell and the messages you can deliver are countless.

And that’s exactly what is ruining your marketing.

The truth is there is not a business on the planet that needs to be on everyone’s radar screen. Whether you are a global business or a Mom and Pop local shop – you have a very finite number of people who actually can benefit from what you do. One of the biggest mistakes marketing people make is inflating their number. They fish with a very wide net when a spear gun is a much better choice.

Stay with me on this analogy. When you cast out a wide net, it gets filled up with a wide variety of fish, debris, and seaweed. You spend a lot of time sorting out the good from the bad. You often will talk yourself into trying some odd fish that looks good but turns out to be hideous. And by the time you dig down to the ones you actually wanted – they’re a little worse for wear. If there’s even one in the net at all.

That’s how most businesses approach their marketing. They cast a wide net, trying to have a presence everywhere because they don’t want to risk missing someone. I’m here to tell you, you can miss most of the someones as long as you connect with a relatively small number of the right someones.

Kevin Kelly, the founding editor of Wired magazine, has been talking about this idea since 2008. You’ve probably heard of the 1,000 fans theory. His hypothesis is that an artist (performer, author, artist, etc.) can survive on 1,000 true fans. The number 1,000 is not a precise number but more of a ballpark. But the concept holds either way.

The idea is basically that as your fan base gets larger and larger, the ROI per fan gets less and less because you can’t possibly cater to them all. The long tail is past the sweet point of the effort to engage. According to Kelly, if you want to make money, you will make much more from the first 1,000 fans that are diehard because they’ll buy whatever you produce and engage no matter what. They will also tell the world about you and how much they love you. Back in 2008, the world looked very different, but changes in our connectedness and online behavior only make this base idea more relevant.

Odds are your business is a little bigger than a single artist, so recognize that the number 1,000 is symbolic. But the message is dead on. You need to figure out who your fans are and talk to them on a regular basis about the things they care about. That will attract more of them.

Here’s the danger zone in this effort. Once they have their attention, many marketers just check the box and consider it done. And they’re off to chase the next audience.

That’s where you can do it better by being smarter about keeping the target small and focused. The minute you broaden your message or your channel, you make your fans feel like customers. That shift – from being someone you care about to someone you want to convince to buy something, changes everything. They don’t feel special. They don’t feel catered to and they sure don’t feel like telling the world about you.

Marketing shouldn’t be wide. It should be deep. That’s where people evolve from prospects to customers and if you stay focused – become your raving fans.

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You are what you measure

October 18, 2017

Back in the good old days, measuring your business outcomes and the impact of marketing on those outcomes was a challenge and at best, imprecise. Today, we have the opposite problem. Thanks to the web, Google Analytics, cookies, and other tools – we can measure everything. Unique visits, time on site, clicks, and so much more. But are those the things we should be measuring?

In marketing, there’s an important axiom – just because you can doesn’t mean you should. I think that definitely applies to how we define and measure success. I think that the web has made counting things so easy that we’ve forgotten what actually matters. It doesn’t serve anyone to measure just for measurement’s sake.

There are a ton of tactical things we can measure that correspond to a campaign or a specific marketing tactic. Naturally, we need to watch those too but they’re not going to tell us if a business is healthy or not. They’re only insightful to a point.

At MMG, we’ve always subscribed to the philosophy that you should have a few vital metrics (KPIs, goals – call them what you will) that are at the core of your business’ success and you need to monitor them faithfully – watching for trends, good or bad and reacting accordingly.

Every business may have one or two unique metrics but there are some that are pretty universal. This week, we’re going to look at the financial metrics that every organization should measure. We’ll dig into the marketing/sales and employee metrics next week.

Financial Metrics

1. Lifetime value of a customer (How much does a customer spend over the entire span of working with them)
2. Annual value of a customer (How much did the average customer spend this year)
3. Profitability of a customer (For every customer you have, how much money did you make)
4. Revenue mix (Amount of money from existing customers versus new customers)

Now let’s look at each of these and why they matter.

Lifetime value of a customer: This is a vital metric that tells you how much you can afford to spend to chase after new customers. It also tells you if your pricing strategies are properly aligned and what the loss of a customer is actually going to cost you.

Annual value of a customer: Ideally, this number would increase every year. You want to keep delivering more value so that each customer wants and needs to spend more with you. It should also increase year over year as your retention improves. For most businesses, the customer is much more profitable in years 2+ than they are when you’re onboarding them in year one. The exception to that rule is if you’re a high ticket, considered purchase like a house.

Profitability of a customer: This is one of the most insightful metrics possible. You will quickly identify what size and type of customers are where you make your money. You will also be surprised at the customers who don’t yield a profit or worse – you are paying for the privilege of working for them. It may also suggest that certain products or services that you sell yield better profits.

Revenue mix: New dollars are harder to earn than recurring dollars. But you also need an influx of new dollars to offset the natural attrition that every business experiences. This metric and the retention percentage that we’ll cover next week work hand in hand.

For most organizations, it’s enough to monitor these quarterly because more often than that doesn’t really show much movement. It’s like a built-in early warning system for trouble that will give you time to course correct before the damage is too deep or too expensive to fix.

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One thing

October 11, 2017

In the wake of what we’ve been talking about over the last couple weeks, I’ve received a lot of emails asking about this idea of how to define who your organization is, who you best serve and what you do for them. Ironically, this all boils down to doing less, to focusing on just one thing. It’s so counter-intuitive that most business owners and leaders reject the idea. I get it – you want to offer as much as possible to your potential customers and surely more potential customers means more revenue, right?

Actually, no. Our world today is about specialization. In most cases, people have a specific need. I need someone to tune up my BMW not just I want an auto mechanic. I need someone to come to the house to tune my piano not just I need a piano store. I need long-term disability insurance for my company of 43 employees not I need someone who sells every kind of insurance under the sun.

We get it when we are the consumer. We want someone who has a depth of knowledge so we can be confident that they will not only understand my need but they’ve met my specific need many times for customers who have gone before me. But when it comes to the selling side of our world, we somehow forget the value of this distinction and want to sell a little something to everyone.

Here’s why that’s a flawed premise:

Your most profitable sale is the repeat sale: You know the least profitable of all sales is the first one. The sales cycle is longer. The concessions are often greater and the risk of a client mismatch or dissatisfaction is greater. But when you delight someone and meet their need to such a degree that they buy again – there’s hardly any sales cycle, they are happy to pay your price because they’ve already seen the value and they know they’re going to be happy.

You don’t need that many: I think one of the reasons businesses take the generalist route is because they haven’t done the math. If you could secure new customers that were going to be repeat buyers and great referral sources – how many do you really need? The truth is, you can only handle so many new clients. So why not narrow your focus so you only secure the best possible new clients?  Why not focus on the one thing?

Generalists are commodities: If you sell everything to everyone, you become the dollar store of your industry. You have to be less expensive because you are a generalist and generalists have to compete with everyone out there. So it becomes a price issue. Is that really where you want to be?

It diminishes the experience for your team: Being pretty good at a lot of things does not feel the same as being incredible at a few things. Everyone wants to take pride in their work. Everyone wants to be perceived as being best in class. Everyone wants to be appreciated for adding incredible value. With today’s shrinking workforce – you want to offer your team the luxury of being a rock star, not a garage band so that you can attract and retain the best talent out there.

Part of your work in defining your company’s values, mission and vision should be focused on the question “where can we truly over deliver that will add tremendous value to our clients?” Odds are the answer will not be everywhere. What is our one thing? Define the playing field where you have the shot at winning almost every game and refuse to play anywhere else. That sort of discipline is difficult but the short and long-term rewards are worth the effort.

Don’t try to be everything to everyone. Be indispensable to a few who will help you attract more just like them.

 

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What’s your mission?

October 4, 2017

Last week we explored how critical it is for a business to have a clear idea of who they are and what they’re all about –  mission, vision and values. My worry is that few owners have ever taken the time to actually articulate what their business is all about or made the effort to weave it into the fabric of the company.

Hopefully you invested some time last week to really define your core values and are ready to dig into the mission and vision portion of defining your organization’s core.

Many people confuse mission and vision. Here’s how we define them.

Mission — what you do best every day

Vision – what the future is like because you do what you do best every day

No matter what you sell, from legal services to multi-million dollar medical devices – someone else sells what you sell. Yours might be a little better, a little faster or it might last a little longer but it’s got lots of decent competition. Our best clients don’t love us for what we sell but how or why we do it. That’s where our mission and vision come in.

Why would you invest the energy? First, we have to acknowledge that there are no bad customers. But there are definitely bad customers for us. Every dollar is not earned equally. We’ve all suffered from a wrong fit client. Because we’re not in alignment with them – it’s harder to make them happy. We end up investing a ton of time and energy trying to fit a square peg in a round hole. That hardly ever works. We expend an incredible amount of time, money and energy trying to meet their needs when the truth is – we weren’t the best fit for them.

That’s the beautiful thing about really understanding why your business exists and what matters most to you. That clarity will attract right fit customers to you and it will also repel the wrong ones.

Another big benefit of that clarity is that when you define your why, as Simon Sinek encouraged us to do in his book, Start With Why, it also helps you find employees who share those beliefs and will stand along side you as you delight your right fit customers.

So how do you figure out what your mission and vision are? The key to doing this well is not settling for a superficial answer. Remember that your mission statement is what you do best every day. This statement should be from your customer’s point of view.

Why do you work so hard? How are you changing your sliver of the world?

If you’re having trouble articulating what you do best, try this. You know that feeling you get every once in awhile when everything falls into place and deep in your soul you think — THIS is why I do what I do? Figure out what triggers that feeling and odds are it’s a pretty good clue to your organization’s mission.

Unlike the mission, the vision is from your company’s point of view. Why are you putting in the effort? What are you trying to accomplish? What will be true for your organization if you deliver on your mission every day?

The trick to doing this well is pushing past the expected. If most of your competitors could claim your mission or vision – you haven’t dug deep enough. It needs to be uniquely yours, so keep pushing until you get to that level.

When you do this well, it’s evergreen. Just like our personal values and purpose rarely change – the same should be true of your company’s mission, vision and values.

Invest the time to do this well and then reap the benefits of knowing exactly who you are and who you are not.

 

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Should we kill marketing?

October 1, 2017

“What if everything we know to be true about marketing is actually what’s holding back our business?”

And in fact – “what if we realize we’ve invested the shipwreck of marketing?”

An interesting way to start a marketing book, eh?

I just finished a fascinating new book, Killing Marketing: How Innovative Businesses are Turning Marketing Cost into Profit, by Joe Pulizzi and Robert Rose. Joe and Robert are the creators of the mega-conference Content Marketing World, and Joe has written other books like Content Inc, Epic Content Marketing, and Managing Content Marketing.

Catching a theme?

The core message of their new book is acknowledging that the marketing world, as we have known it since the dawn of the big three (print, radio, and TV), is our past and that marketing doesn’t have to be just a cost center anymore. When done well – brands can actually create a profit center from their marketing efforts. Instead of your marketing requiring additional financial resources – what if it generated new dollars? We’ve all heard the idea that about brands should become media companies. You may not want to take your company quite that far. But wouldn’t you like to make money with your marketing efforts?

Traditional marketing has been primarily advertising – the renting of space on someone else’s channel to earn attention, brand awareness and alter the consumer’s behavior. Even PR falls under that description. Instead of buying an ad, the brand or their agency would pitch their story to the editorial side of the advertising channels. Their goal was to have a story written about them or their offerings that would create the same results as paid advertising would have generated.

Along came the Internet and suddenly consumers found their voice. Until that shift, they’d been our silent audience. But as it became easier to share opinions on message boards, forums, social media channels, websites and review outlets, they got louder and louder.

Initially as a defensive mechanism, brands because using the Internet too – creating content to fight for search engine position and to balance the consumers’ voice. But the brands discovered what probably seems to you as a very simple marketing truth. That when the brands provided valuable content and helpful information, the consumers would create a connection and magnify the brand’s reach by sharing the content and inviting others in.

On a mega-level, this is what Johnson & Johnson has done with BabyCenter.com. What started as a simple extension of their core website, it now reaches more than 45 million parents a month across the globe and offers their content in nine different languages. Eight of every ten U.S. mothers use BabyCenter.com.

Odds are your goals aren’t quite so lofty. Which is awesome because that means you can replicate your version of the results faster and with a smaller level of investment. The Internet and digital content have leveled the playing field. It’s why small brands like BigPoppaSmokers.com have crushed their competition, stolen the market share of much bigger companies and have created a brand that garners incredible amplification of their value from the consumers who love them.

The book isn’t suggesting that you abandon your core business model and become an organization that generates revenue the way a traditional media company does. Nor is it suggesting that you should abandon your paid and earned media efforts. For most organizations, there will always be a benefit to those channels.

But what the authors are suggesting is that businesses today also need a profit-generating owned media strategy that will give you an unfair competitive advantage.

Many people may quickly get to the idea that because it gets easier and cheaper to publish content and we have more and more places to put it – that the value of content will be diminished as the volume increases. If we’re talking about generic content that any business in your industry could produce as easily as you could – that’s probably true.

No one needs one more article of benign content that doesn’t take a position, challenge a stall belief or actually go out of its way to be helpful to the audience. It’s why Google changed their algorithm to reward “quality content” and the channels (like Facebook) changed their game so that brands had to buy eyeballs, even if they were sharing something of value.

So now the outlets that we were counting on to leverage our content began to behave like a traditional media channel. Which is why so many companies have decided that the only way to control the delivery was to control the channel.

And voila…they decided to stop competing on a playing field they didn’t control and instead, they became the channel.

Now, instead of relying on paid and earned media to drive people to make a purchase, the goal is to use those channels to drive the audience to your own content where you can add value immediately so that on the day they actually need to buy the thing you sell – you’re the obvious choice.

The book goes on to outline how a traditional company, who has been marketing in more traditional ways, can turn their marketing focus/efforts on its side and come out with a model of generating revenue from their marketing efforts.

I can remember being in an advertising class (so you know how long ago that was) and the professor was talking about the value of brand equity. He explained that Coca Cola was a publicly traded company and so they had to publish their financials. He put up a slide that showed that the company determined the value of their brand was in excess of a few billion dollars. With a B. In 2013 – the value was $79.2 billion dollars.

What happens when you go beyond the brand and create something like BabyCenter.com? Now you have a tangible asset that subsidizes the growth of your company and audience.

Interesting stuff, eh? And I am just scratching the surface of the book. It goes on to walk you through how to think differently about your marketing and begin to re-tool your efforts to this new model.

As with anything Joe and Robert do – I’m a fan. I think they’re insightful thinkers who have walked out what they teach (check out the Content Marketing Institute site) and continue to refine their viewpoint as things evolve.

Check out the book. Re-think your plan for 2018. Begin to build your channel and the equity it can bring your organization.

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Mission, vision and values

September 27, 2017

It’s vital to every business that they have a clear idea of who they are and what they’re all about. Few owners have taken the time to distill it down or made the effort to weave it into the fabric of the company. What do the mission, vision and values for your business look like?

Many people confuse mission and vision. Here’s how we define them.

Mission — what you do best every day

Vision – what the future is like because you do what you do best every day

And the values that your company are built on is what influences your mission and vision. Each of these is critical. If you believe you’ve already sorted these out for your organization– revisit them to make sure they’re still on target and meet the following criteria:

• Are your mission and vision statements a single sentence?
• Are your values short enough that everyone on your team could memorize and recite them?
• Are all three components written in common, easy to understand language?
• Are they unique to you? Could any other business claim the exact same set?
• Are they all from the client’s/an outside perspective? Remember this is how you want others to see you.

This kind of work looks simple enough, but the truth is, it’s incredibly difficult to dig deep enough to get to answers that fit all of the criteria.

If you’ve never developed a mission, vision or defined your company’s values, it’s long overdue. Let’s start with your values.

Go someplace that inspires you to clear your head and really do some deeper thinking. For some, this will be a quiet place like sitting by a lake or in an art gallery. For others, it will be putting on some headphones in a coffee shop and immersing yourself in the energy. Hopefully you know what kind of an environment triggers your best thinking.

Most people find it’s easiest to tackle the values first. Make a list of all of the values that you want your company to have. At this stage, don’t edit or censor. Just brainstorm the list and capture every thought.

Now, pick the 5-6 that are most important to you. These are the values you are not willing to compromise on, for love or money. These should not be aspirational. These need to be foundational to your business – you should already be using them as a guide, whether you’ve articulated them before or not.

The finalists should get a yes answer to the following questions (borrowed from Jim Collins in Good to Great):

• If you were to start a new business, would you build it around this core value regardless of the industry?
• Would you want your company to continue to stand for this core value 100 years into the future?
• Would you want your business to hold this core value, even if at some point in time it became a competitive disadvantage?
• Do you believe that those who do not share this core value—those who breach it consistently – do not belong in your organization?
• Would you change jobs before giving up this core value?
• If you awoke tomorrow with more than enough money to retire comfortably for the rest of your life, would you continue to apply this core value to your productive activities?

Rank them in terms of importance. Why does this matter? Because sometimes values are in conflict with one another and you need to know which ones trump the others.

Now, that you have the values defined, are you happy with the words you’ve chosen to communicate each one? This is your opportunity to wordsmith them. After you’ve done that – you’re done with step one. Next week we’ll dig into your mission.

 

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Every dollar is not a good dollar

September 13, 2017

If every dollar looks the same, how do you know which dollars are “good” dollars for your business? The reality is – every dollar is not created equal and doesn’t serve your business in the same way. In fact, some dollars actually cost you money.

Let’s say prospect #1 wants to buy something you don’t do very often and so you’re not as efficient at it as you are in other areas. On top of that, they’re in an industry that you don’t know very well. Earning that dollar is going to be slow and painful with a longer, larger ramp up time.

Even if you see that they have a big pile of dollars waiting to be spent – you might very well never get a chance to earn those extra dollars because you’re probably not going to delight them right out of the gate.

On the flip side, prospect #2 is in an industry that you know like the back of your hand. You know their jargon and quirks. On top of that, they want to buy the product or service that you sell day in and day out. You know exactly how to deliver on their need and you know they’re going to be elated at the results.

Each prospect has the same dollar. But the path you’re going to take to earn each dollar is very different, in terms of your enjoyment, their satisfaction and your potential profitability.

Logic tells us that we should:

• Specialize in terms of whom we serve and what we offer, based on what we’re best at. We can’t know whom to serve until we know who we are.
• We should have a clear picture of who our sweet spot clients are, based on who we are and only go after those prospects
• We should discriminate – rewarding our sweet spot prospects for coming a little closer and making if more difficult for the not so right fit prospects to find/hire us
• We should identify what we do best and not try to be everything to everybody. Saying no is a good thing. Having strategic partners is even better.

Logic may tell us all of that and yet – for many business leaders, sales team leaders and business owners – we can’t get past the fact that there’s a dollar on the table. We want the dollar.

Here’s the truth of the matter. I’m betting that right now you have a customer or two that you are literally paying for the privilege of doing work for them. That’s right — they are so unprofitable, because they’re the wrong fit, that you are losing money every day that you keep them as a client.

Their fees or purchases help with cash flow. It’s money in the door every month. That reality can often mask the truth underneath. You are losing money on that work. Many business owners are surprised when they crunch the numbers and realize one of their largest clients is actually one of their most unprofitable clients.

Before you go out and start pursuing new clients – I want you to evaluate the ones you already have. Crunch the numbers to see if you’re actually making money and rank your clients in terms of profitability. I bet there’s a surprise or two waiting for you.

Once you know which dollars are good dollars for your organization, it will help you target who your next customers should and should not be. Then pursue the right ones with a vengeance, knowing that each one you catch will make your business stronger and in a better position to say no to the bad dollars.

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Gratitude magnified

September 6, 2017

Last week we explored the idea of how smart businesses recognize that gratitude isn’t just a worthy emotion – it’s smart marketing. Everyone wants to be appreciated and today, when businesses must compete for both customers and employees, it’s an important retention tool. We covered how to create a spirit of gratitude inside your organization last week. But how do you expand that out to your vendors and customers as well? Gratitude magnified.

The sad fact is this. You don’t have to do much to get noticed. Your vendors and customers are so used to not being appreciated, you’ll completely catch them off guard by showing a little appreciation. Much like with your internal team, this isn’t about how expensive it is, it’s about how genuine it is.

Let’s start with your vendors. Here are a few ways to let them know how much you appreciate their efforts.

Put the spotlight on them. All too often, our vendors remain in the shadows – quietly helping us serve our clients. But a memorable way to say thank you is to shine the spotlight on them. Of course, they should be asking you for a written testimonial but like most businesses, they’re too busy and it never rises to the top of the To-Do list. Proactively write a letter that specifically states why you value working with them and how they help you and your business.

Put it on letterhead and send them a hard copy for their own use. But don’t stop there. Take snippets of your glowing praise and post it on their Facebook page or tweet about their efforts.

Another way to get them some well-deserved attention is to actively connect them to other potential customers or referral sources. No doubt you know and work with other people they should meet. You can introduce them informally, make LinkedIn connections or better yet – why not throw a referral party and invite all of your vendors to come and meet each other. Odds are – they’re going to make some great connections and remember just who made it happen. That’s gratitude magnified.

For your customers, a more personal touch might be in order. Sure – you can do the holiday card or gift or even hold a client appreciation event. But I believe the more personal you make it, the more meaningful it is.

I’ve written about it before, but there’s something magical about a handwritten note. Think of it as your love letter to your customer. Let them know why you value their loyalty and trust. Share with them how they make your job easier, more fun or more exciting. Don’t type it – no matter how awful your handwriting is. It doesn’t have to be super long but it should be very specific. A generic thank you feels like you sent everyone the same note.

A variation on this would be to help your client experience something important to them at a whole new level. Maybe they’ve always wanted to learn how to bake or they love live theatre or professional hockey. Use your connections to get them behind the scenes at a local bakery for a one-on-one lesson or see if you can score them backstage access after a play or game. The key to this strategy is to go beyond just buying them something. It’s the extra effort that really says thank you. That’s gratitude magnified.

Just a final warning – all of your efforts get drastically watered down if you attach any sort of ask or payback to your act of gratitude. This isn’t the time to ask for more business or a referral. Just be grateful and then be quiet.

I think you’ll be surprised at what you hear in return.

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Show a little gratitude

August 30, 2017

I believe that gratitude is a brilliant marketing strategy. I’m astonished at how many businesses give their customers the distinct impression that they’re a little put out by having to sell them something.

You’ve felt it – the grocery clerk who is too busy chatting to actually make eye contact. The phone rep that can’t wait to get off the phone. The sales pro that doesn’t return your calls, even though you’ve told him you’re ready to buy.

It’s annoying and hardly breeds customer loyalty. But gratitude isn’t just for customers. I believe the smart business owner creates a continuous chain of gratitude and not only is it genuine, but it yields incredible benefits.

Here’s how the chain gets constructed. First – you demonstrate your gratitude to your employees. You then give them the tools to extend that same gratitude to your vendors and clients. Then, you invite your vendors and clients to recognize your employees for serving them well.

See how it goes full circle? When you cultivate and encourage the cycle, it just picks up steam and gets stronger and stronger. It’s like a snowball that keeps growing and accelerating as it speeds down the hill. Pretty soon, it’s been woven into your culture and becomes part of your reputation. That’s a pretty powerful brand attribute.

So how do you make it happen? You develop tools for each group of people in the cycle. Let’s start with the employees.

The good news is that this isn’t about more money. It’s about recognition and appreciation. Everyone wants to be noticed for doing a good job. You start by defining what “a good job” looks like. Be very clear in your own mind what character traits you want on your team. Interview for those soft skills and attitudes.

After you hire the right kind of people – train them well. Don’t just train them to be good at their job, train them to be grateful for the clients who bring the opportunities to your company. Help them understand how each client contributes to the bottom line.

Now – start catching them doing things right. This cannot be left to chance or it won’t get done. Create a peer recognition program, where employees can thank each other for going above and beyond. Read the nominations at an all staff meeting or share them on your intranet. Find a way to publicize the kudos they received. Personally stop by their office (or call them if they’re not local) and thank them for making a difference.

What’s the business rationale for this effort? A study of over 1,700 employees conducted by the American Psychological Association (APA) indicated that more than half of all employees intended to search for new jobs because they felt underappreciated and undervalued. Further research on gratitude and appreciation documents that when employees feel valued, they have high job satisfaction, will work longer hours, build supportive relationships with co-workers and supervisors, and are happy to help the company achieve its goals.

On top of all that – they aren’t looking for other jobs. I don’t know about your industry but in my world it’s getting tougher and tougher to find qualified employees. So we want to keep the good ones that we have.

Beyond the employee peer recognition, there are other things you can do. On your employees’ anniversary with your company, why not acknowledge their contributions and how it’s impacted the company? Or send a note home, telling his/her family how they contribute to your organization.

Celebrate your employees and their wins. Be thoughtful, be personal and be sincere. But most of all – be genuinely grateful.

Next week, we’ll wrap up the cycle of gratitude by talking about how you can cultivate that among your vendors and customers.

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