Author: Dan Blank

Copying All the Wrong Things

Many businesses are established because they find an idea that has taken hold in our culture, and want a piece of that pie. So if Starbucks can earn billions each quarter, what you often find is smaller upstarts vying to capture 1% of that market.

You saw this when Google became a juggernaut, with new search engines launching with the idea that if they could generate even 3% of Google’s traffic, then they would all be rich.

A few weeks back I wrote about what made one Starbucks shop exceptional, how it adapted to a situation to better serve customers.

This left me considering how many people look to emulate Starbucks, and whether or not they are finding value in doing so.

I frequent quite a few coffee shops, and by and large, I see many of them copying all the wrong things from Starbucks.

I am thinking of two easy examples, which I won’t name, but one is near where I live in New Jersey and the other is in Manhattan. Generally, this is my experience with these stores:

  • They look just like Starbucks. The layout of the stores, the items they sell along the wall, the lighting, the decorating and the overall ‘look and feel.’
  • The products strive to be familiar copies of what Starbucks sells. The goal seems to be to ride the coattails of Starbucks, to leverage Starbucks’ huge ad budgets. So the beverage selection is a near direct copy of what Starbucks offers. Nothing unique, unless they tweak their version of a Vivanno to include guava instead of strawberry.
  • The processes are exactly the same: from ordering to the beverage delivery process. Again – this is likely to leverage the money Starbucks spent on research & development, and to provide customers with a familiar experience. The issue here is that there are some things that work about this process, and others that don’t, from a customer perspective. From a process perspective, you will notice that Starbucks has a system of how their employees communicate to work quickly and efficiently, with a goal of reducing mistakes by repeating drink orders twice. I rarely see this process emulated at other coffee shops, even if the setup looks similar to Starbucks.
  • Employee training seems to be a top priority at Starbucks, and minimal at other coffee shops.  I have sat next to people being interviewed for a job at Starbucks, and its a very detailed interview – it is clear that the manager is looking for someone who has the right attitude and whose life is setup to commit themselves to making Starbucks a core part of their world.Employees are always friendly, and do their best to create a pleasant coffee shop experience – it is clear that they are trained to give you the feel of being a friendly local coffee shop.Many of the other coffee shops I go to have adequately trained their employees on the cash register and on making drinks, but beyond that, each employee brings his or her own work ethic and personality. And while I like to think this would be a positive thing, it often isn’t. Perhaps they great you with a huge hello as they were told to, but beyond that they barely look at you, are more engaged in conversation with co-workers, or spend more effort restocking cups than serving the customer right in front of them. When you couple this with the amount of time I get the wrong order at some of these places, it makes for a mediocre experience at best. Kind of like getting gas or checking out at the foodstore. It gets the job done, and that is all.

And this is where it all falls apart: I am left with an experience that looks and feels like Starbucks, but minus the soul – minus the little things that their employees and overall brand delivers that creates unique value and a pleasant experience.

The funny thing is, I am not really a huge fan of Starbucks.  But I do appreciate their employee’s attitudes and I do appreciate the free wi-fi and their support of the concept of ‘the third place,’ a place that you can relax at that is between work and home.

In your business, be it online or in person, when you look to a successful company as your model for growth, consider if you are copying the right elements. Are you wrapping a lump of coal to make it look like a successful product, or are you delivering core value: something unique, something valuable and something that will stand out to your customers, leaving them with smiles on their faces.

Learning By Listening: The Lessons of Mixergy.com

I have recently become obsessed with the website Mixergy.com. Day after day, the site’s creator Andrew Warner interviews people who are working to build online businesses. Some are fully in startup mode, moving from struggle to failure to struggle to failure – and others have had a great deal of success. Each shares their story.

What Andrew has created is compelling for a number of reasons:

  • His interviews are long and detailed, and he commonly slows people down to ask questions about every aspect of how a business evolved. When someone says, “I partnered with my friend Bob,” Andrew will ask a series of questions about that decision, about trust, about how it worked, and how it didn’t. These are the nitty gritty things that fill the lives of those in business, the anguished decisions of who to work with and the day to day challenges and opportunities of doing so.
  • Andrew finds lessons where others don’t. I will read a story about a business, and it will gloss over the details and create a simple story around why they are great or horrible. But Andrew paints a much better picture – one that is nuanced and full of lessons. While many of us would read a story in BusinessWeek about why MySpace is a flop or Facebook a success, Andrew creates a more realistic picture through his interview style, sharing the evolution, phases, successes and failures within every company.
  • The interviews are inherently positive, with the goal of teaching and mentoring. Even when discussing scandals, Andrew has zero interest in the sound bite or striking anything but a tone of “what really happened, what can we learn from this.”
  • There is something to learn nearly every day. His schedule of interviews is packed, and I see he is ALWAYS looking for someone new to interview. He uses Twitter to get in touch specific people he wants to speak with, and will even put out an open call for folks to come on his show. During the interviews, you see he constantly creates a list of new people to speak with.
  • He involves his audience. This really does seem to be a community he is creating, and Andrew is open about sharing what he is learning as it happens. If he wants to try out a new webcasting tool, he brings us along for the ride and asks us what we think.
  • Andrew has strong beliefs about the many ways a startup can operate, but he doesn’t preach, he simply finds example of example via the real-world experiences of those he speaks with. For instance, the value of partnering in order to realize your dream. This seems to be very important to Andrew, and you see how he asks people about how and why they chose to partner and the effect it had on their business. In general, he focuses on things that empower people to achieve large dreams, avoiding cliche’s that you need venture capital or a trendy idea. He seems to relish speaking with people who build strong but unsexy businesses that are somehow off the radar screens of other writers covering startups and the online space.

To be honest, I feel as though I am just getting into Mixergy, I still have a lot of his videos to watch, and am now planning out my month based on his interview schedule. If you are looking to grow your business online, Mixergy is an uncommon and incredible place to help you achieve your goals.

The Secret to Growing Your Business Online: Customer Service

David Taub
David Taub successfully transitioned his guitar instruction business to the online world, and now earns his living via the web. Today, I want to share the reasons that online made sense for him, and his tips to building a successful online business.

David’s brand is Next Level Guitar, which I profiled a few weeks back. He and his business partner Tim Gilberg create guitar lessons on video, promote them via YouTube and sell them via subscription & DVD on their own website.

Why online?

  • Scale
    David had a successful in-person guitar instruction business where he lived, but couldn’t expand further. He had about 30 students a week, which was his max. Likewise, there is only so much you can raise prices before he is priced out of the market. He hit the wall in terms of trading time for money.
  • Expand his Reach & Influence
    David has been playing guitar since the 6th grade and has been teaching others for years. As he honed his skills more and more, the brick & mortar nature of his business limited his influence. He may be the best guitar instructor in his area, but people in other states and other countries would never benefit from his teachings.
  • Differentiate His Product Offering
    People learn in different ways, and for his in-person lessons that meant constantly creating custom lessons for each individual student. With virtual instruction, David could productize these lessons to fit a wide variety of teaching styles and musical styles. Today David sells a variety of DVD packages in addition to his online courses and has several other instructors teaching for him, each with their own flavor and teaching style.
  • Build a Stable Business
    Before the web, 100% of David’s income came from him showing up to teach someone. Today, is clearly the linchpin of his business, but he has come a long way. He has a business partner who runs part of the operation, he has brought other instructors into the fold, and while he still works long days, it is certainly possible for him to hire others to help run the show if he needed time off or focus his efforts elsewhere. All along, he has been honing his skills as a businessman, understanding how to build a stable foundation and plan for growth.

I had a chance to speak with David recently, and these are the tips he shared for building a succcessful online business:

  • Focus on Things that Deliver Long Term Value
    Don’t wait to go ‘viral’ – that’s akin winning the lottery. Give your online business a solid backbone, focusing on core customer needs and building great products. It can be tempting for some to do a hard sell, trying to scale revenue quickly. This may work for some people in the short term, but it is difficult to build long term value this way.
  • Customer Service is Critical
    David feels that most companies miss the boat because their lack of focus on customer service. David works long days, and his top priority is ensuring that all emails are answered quickly, all products sent out immediately and that daily operations are running smoothly. There are always hiccups in business systems, and David focuses his energies to ensure these don’t affect customers.
  • Have a Plan
    I’ve seen many brands approach their online business by allowing their most junior employee to sketch it out and launch. Senior managers wait for it to pan out before they give it their attention. This only hurts your business, and makes it harder to re-align once you do approach it properly.David and Tim spent months prepping for the launch of their business, spending long days recording videos and setting up their online operations and marketing efforts. To this day, they still work long hours creating new material and taking measured steps forward.  They are conservative about spending money, and are risk averse.
  • Build on Your Strengths
    Don’t focus on some wild new idea that is outside of your core competencies. David spent decades honing his guitar playing and teaching style and Tim has a strong background in the web and marketing. They each stuck to their strengths and partnered to create more value together than either could by themselves. Find out what your existing customers value most, what you do best, and focus on bringing that experience online.
  • Keep Overhead Low
    David and Tim each work from home, research all expenses before making a decision and keep their operating expenses as light as possible. For their camera equipment, they buy budget cameras and lighting, ensuring they balance quality with price. Don’t assume that ‘the big boys’ are buying expensive systems, so you need to as well.

Every step of the way, David mentioned his focus on serving customers, and each of the tips above reflect that. So many companies worry too much about finding office space or complicated promotions instead of just creating a great product and ensuring their customers are happy.  Thanks to David for sharing his story!

The Best Aren’t 10% Better, They Are 300% Better. Find Out Why.

Our last post talked about how you can spend 15 minutes per day to listen to your customers online, and how that can benefit your business. Today, I want to talk about using that same 15 minutes to learn what how savvy business people and companies are using the web to get closer to their customers and extend engagement with their brand. I’ll share two examples:
  • How Twitter Can Bring Value to Your Business
    Perhaps your company became active on Twitter 4 months ago, and you have a junior-level person maintaining the brand account, and one of your manager also Tweets on their own. Where can you go from here?

    Why not simply watch how Zappos uses Twitter for 15 minutes a day? Take a peak at the Tweets in their Customer Service account, directly connecting with their customers. See how the Zappos CEO uses Twitter in an entirely different way on his account.  Or maybe you want to follow a few of the dozens of Zappos employees who Tweet. To make it easier, the CEO actually selected the best Zappos employees to check out.

    What are you hoping to learn by doing this? That there is no single best way to use Twitter, just a way that stands out with your customers and serves their needs; That an entire organization can embrace the service in different ways; That it can serve core business needs, and yet also deliver personal and random connections as well.

  • How LinkedIn Can Bring Value to Your Business
    What is interesting about LinkedIn is that it doesn’t just give you a vague sense of sentiment, but you can see the complete details of those who you are connecting with. So, if you go to their amazing Answers service, click on a category on the right (I’ll pick Finance & Accounting) and then pick a subcategory (I’ll pick Risk Management), you are now shown two things: open questions and experts.

    Open questions gives you a sense of what people want to know and how people answer those questions. Many of the discussions are fascinating, sharing a variety of viewpoints on an issue.  Use the search box up top to find specific questions/answers for your business. See which discussions have a lot of commentary.

    Now, going back to Experts section – take a gander at who is answering a lot of questions, their background and what their answers consist of.

At the very least, you are seeing how an online business community can operate, and how individuals can deliver value. Use this to shape your efforts online.

I think you’ll find that the best users aren’t doing things 10% better than the average user, but doing things 100 or 300 times better. They seem more engaged, more authentic, more passionate, more helpful. This is not to say that you need to be doing things 300 times better than you are. But don’t be satisfied with doing things 3% better, especially when talking about anything that connects directly with customers.

Find ways to enable customers, to amaze them. Use tactics that make you stand out from the competition in ways that make your employees proud. Find a new way to matter to your customers.

Listening to Your Customers: 15 Minutes a Day

Yesterday I wrote about “having a customer strategy, not a social media strategy.” Today I want to address how to do that in practical terms.

Whenever I speak with people about leveraging social media, the primary challenge for them is not understanding that there is value, and not even a huge barrier in skillset. The problem is often time – feeling that they have any time to either shift their brain into the social media world each day, or physically find a half hour to operate within it.

For those folks (which is most folks), I suggest this:

  • Don’t think of social media as something new, think of it as a way to do what you already do: focus on learning about and serving your customers.
  • Set aside 15 minutes a day to find and listen to your customers on social media.

So off the bat, we are trying to accomplish two main things here:

  1. Take the pressure off creating content, which takes more than 15 minutes for most people. While engaging with customers is the ultimate goal, we’ll just take that off the table for the time being.
  2. Create a simple process to find those who you feel are your existing or potential customers. This is not simple for many brands. Likely, it may take a few weeks of ’15 minutes per day’ to find an intriguing example of your core audience and their activities within social media.

How can you begin listening to your customers? Here is one way to consider:

  • Go to Twitter.com, and search on a few keywords. Ideally, you could search on a phrase, because just like searching in Google, you will get more specific results. So if I were a plumber, I could search on the term “sink leaking” and would find these results: days worth of people in their worst plumbing moments. What can a plumber learn from this? Right here is the basis of their future marketing materials and advertisements. You are seeing exactly how people around the world react to a plumbing issue. If you can use their words, their sentiments to find an engaging message – you have the basis for a successful marketing campaign. What’s more, you can interact with these people. Through @replies, you can follow up and find out how they went about finding a plumber or addressing the issue, and how satisfied they were with the process and solution.

This is just one example – but the start of an overall process of integrating your customer’s attitudes and needs into your daily workflow. For those who spend your entire day dealing with customers, it reshifts you to considering the needs of those who are not yet your customers.

After a month’s time, you will have spent 5 hours leveraging social media to better understand your customers and how you can serve them in new ways. That small commitment can have a profound effect on your business.