Identity

I often hear phrases like the following attributed to success in business.

” She was in the right place at the right time.”

” It’s all timing.”

” He was fortunate enough to have BLANK.”

” She is lucky to have great people working for her.”

I don’t want to dwell on the motivations of the observers for ascribing “luck” or “chance” to the entrepreneur’s success.  Nor do I want to delve into the psyche of the entrepreneurs that allow themselves false modesty when they claim the same phenomena.  I simply want to share some examples from my past and others who have had some success.  In all of these cases, luck had very little, if anything to do with it.  If this sounds like bravado to some, fine.  That is not my intention.  My purpose is to move as many of us as possible into action. To get us on the road of “creating our own luck” if you will.

In all of the following examples, there is a recurring theme.  Watch for it.

* Inspired by his boss, my roommate from college went on to found and operate the largest privately held payroll services firm in the U.S.

* My best friend growing up, took over and successfully grew a high-end home remodeling business that was previously owned by a friend of his father’s.

* After attending a software developer’s user group meeting, I have some great prospects to hire for my new business.

* A good friend joined the most powerful entrepreneur network in the world and tripled his business in three years.

* I had a successful exit with my software business, do in large part, by the negotiation efforts of a local CPA referred to me, by my long standing business mentor.

The common theme in these successes is people.  The people you surround yourself with.  Your Network of Help.  In every case, there is a human relationship involved.  Someone that has committed themselves to helping another be successful.  Look for and cultivate these relationships.  Success rarely comes from how smart we are or how hard we work.  If we think we were “just in the right place at the right time”, look closer.  A far more likely possibility is that you or someone else put you there.

Luck has little to do with it.

To your success!

Scott

I recently came across what I consider to be a bad use of technology for the B2B service provider.  It is a case of using technology to conduct a “conversation” that needs to happen verbally, not electronically.  Here’s the case.

A SaaS provider of billing software for B2B service providers has a feature in their software that allows the service provider’s clients to login and view activity. Fine. I suppose that some clients would see this as added benefit.  However,  the software service also allows the client to log into the system and mark an invoice as “disputed”.  This is a bad business practice for the B2B professional on a number of levels.

First off, this practice leads the client to believe that by physically marking the invoice disputed, there is some chance that they will not need to pay the invoice.  The shear physical act contributes to a future expectation that will need to be managed soon.

Most tragically, though, the act of allowing a client to mark an invoice “disputed”,  does not address the fundamental problem.  The problem being a breakdown in care for the client or a breakdown in understanding of the Conditions of Satisfaction .   This is a conversation that should never be had via electronic means.  Email exchanges are bad enough.  The marking of an invoice as disputed, takes this practice to a very bad place.

This practice is no different than your customer taking a printing invoice, stamping “Disputed” on it, and mailing it back to you.  Imagine how you would feel if that happened.  Can you feel the animosity building?

As professionals, it is our job to set the proper expectations with clients.  One of those expectations should be the method the client will use for communicating any dissatisfaction with our services.  Until phones cease to exist, phone calls or in person conversations must be the method.  The client / consultant relationship is too important to trust to electronic means.  Voice to voice, interactive communication is key to understanding the depth of the problem and devising the solution.  Voice inflection, tone, degree, and give and take cannot be deduced by a carte blanche marking of the invoice by the client.

Your thoughts?

To your success!

Scott 

It’s Friday, 5:00 pm.  Your deadline for delivering the project to your customer.  You didn’t make it.  You broke your promise.  You broke trust with your client.  What happened?  Why was the deadline missed?  Did you simply forget?  No.  Did you not work hard enough? No.

The most common explanation for not meeting deadlines for the B2B service provider is that someone else you teamed with on the project did not deliver. Surely, your client will accept this.  Not a chance.  They don’t care.

We call the cause of this event a breakdown of a “downstream promise”.  In many of our projects we are individually insufficient to provide all of the services our client requires.  The graphics designer who makes the offer to create a website often needs help from technical folks  (CSS, HTML, PHP, etc.).  The architect, in putting together an estimate for a new project must rely on promises made by the sub-trades.  The consultant that leads a seminar at a hotel must rely on the promises of the hotel’s event manager.  All of these professionals are relying on downstream promises to reach the conditions of satisfaction agreed upon with the client.

The skill of your downstream “promisors” greatly impacts your identity in the marketplace.  If they can’t keep their promises to YOU, you can’t keep your promises to your clients.  Broken downstream promises result in missed deadlines, broken trust, lost clients, and most importantly damaged identity.  Your ability to attract new clients will be impaired. 

To insulate ourselves from broken downstream promises, we must devote time and effort developing relationships with those that can help us and can be trusted.  Trusted to make good promises and keep those promises.  How do we act upon this?  Identify the skills that the marketplace is asking for that you cannot provide.  Identify providers of these services and vet THEIR identity by:

* talking to other service providers and clients

* do they keep their promises

* how long have they been making and keeping promises, i.e. how long have they been in business

Our client relationships are too valuable to risk based upon the unknown.

Action:  review your roster of downstream promisors.  Assess them based upon how well they have delivered on their promises.

Do you need new resources to depend on?

To your success!

Scott

In the game of business, our personal identity is our most valuable asset.  More valuable than our computers, our car. Even more valuable than the cash in our bank account.  As a micro business owner, your business’s identity and your personal identity is one in the same.

Like other productive assets, our identity allows us to generate revenue.  It does so by providing the much needed differentiation in our services versus our competitors.  Sure, flashy brochures and websites help to establish our brand and what we stand for.  But the way the world, our customers, and our prospects assess our competence is largely determined by our personal identity.

So how do we define personal identity for the B2B service provider?  Your personal identity is NOT what you want it to be.  It is NOT how you perceive yourself.  It is NOT what you claim and display on your website. Your personal identity in the marketplace is the sum of what people “say” about you.  These people are customers, vendors, colleagues, and competitors.  Your identity is a mathematical equation.  People speaking well of you in the marketplace adds to your positive identity.  People trashing you, subtracts.  

Back to differentiation.  Reflect upon the last three or four new clients you landed.  Why did they decide to do business with you?  Was it price?  Probably not.  Was it your flashy brochure and website?  Doubt it.  Most likely it was your personal identity.  Your reputation in the marketplace.  Somebody they trust recommended you.  Somebody was “speaking well” of you in the marketplace.  Perhaps they learned about you from the web.  From a blog, from Twitter, from LinkedIn.  All of these sources can be the start of the formation of your identity in your customer’s mind.  Your identity then becomes solidified by how you perform….your actions.

What are some common components of personal identity that all B2B service providers should seek to create?

* Trustworthiness

* Keeping promises

* Listening skills

* Genuine interest in a client’s business

* Expert in your specific domain  (ex. graphic design, social media, B2B marketing)

What is your identity?  What do you want it to be?

Action:  write a short narrative on what you want your professional to be.

To your success!

Scott

A couple of years ago I was fortunate enough to meet  Julian VanWinkle, fourth generation owner of the Old Rip VanWinkle distillery located in Frankfort, KY.  For bourbon connoisseurs,  the VanWinkle brand means the tip of the top shelf.  The flagship brand, Pappy VanWinkle is the #1 rated bourbon in the world as noted by the Wall Street Journal and others.  The 20 year, lovingly aged “Pappy”, is a beautiful caramel color with a pleasant nose.  But what is more interesting to me, is the VanWinkle business model.

Pappy is produced in SMALL batches, with annual production of a vintage reaching around 5000 bottles per year.  Compare this with say, Maker’s Mark which produces over four million bottles annually.  It is the small batch production, better ingredients and better aging that makes Pappy a star.  

As a result, Pappy sells its top of the line 20 and 23 year vintages for over $200 per bottle, if you can find it.  A combination of superior quality and scarcity allows Julian to command a super premium price in the marketplace.  All production sells out long before demand diminishes.  This leaves pent up demand for the next batch, further driving up the selling price and profits.

So, what the heck does making high end bourbon have to do with the business of service?  Using the VanWinkle model helps us understand where we eventually want to be with OUR service business.  As a small, B2B service provider, we must differentiate ourselves from our competitors.  To live a good life, we must have highly profitable customer engagements.  To be highly profitable, we must realize a “gross service margin”  (GSM) that beats industry norms.  Your GSM is simple the price you sell your services for minus your cost to deliver the services.

How do we realize a high GSM?  Back to Pappy!  We declare that we are the “small batch” service provider.  We must deliver a unique service that customers cannot find elsewhere.  We must work to build our identity of high quality and scarcity.  Once we have this identity, customers will be willing to do two things:

1. pay a premium for our service

2. wait in line to receive our services

What are some of the steps to building this identity?

Stay, tuned.  More coming soon.

Your thoughts?

Happy New Year!

Scott