It's All About Productivity

Over the weekend I was continuing my thoughts about how companies are going to face the "interesting" economic times ahead. For sure they're going to reduce expenses and try to maintain or even boost sales - that much is obvious.

The other part of the equation, of course, is keeping on keeping on doing what they do. That takes an orchestrated effort of getting the most out of their people and processes. In order to do that - it will require that folks take a look at what they're doing - and being able to do it better and with more efficiency.

If you sum it all up into a single term - that means that everyone will want/need to be more productive. More productive, and therefore more efficient, in all aspects of their business. This means that the salespeople need to do better - but it also means that product development, customer service, support, marketing and all the other moving parts be enabled to do what they do - better, smarter and faster.

Then I came across an article in CIO Insight that talked about Business Process Improvement (BPI) - and it just confirmed my thoughts and gut instincts:

The top drivers for improving processes were quite similar during good times and bad, but IT executives signaled more urgency during more trying climates. For example, during good times, respondents cited productivity boosts as a top overall goal for business process improvement: 34 percent for companies with less than $500 million in annual revenue; 24 percent for companies making $500 million or more.

During a downturn, however, that number skyrocketed to 73 percent across all companies. Similar spikes were seen in other drivers, such as reducing costs, increasing revenue and keeping up with competitors.

So - that's all good and everything - but what the heck are you supposed to do about it? The answer is: technology.

When you're forced to more with less the only way to do it - is with smarter, better, more flexible technology - because at the end of the day - there's still only 40 hours in a work week.

That means that NOW is the time to "fix" those processes that are "broken." If you have internal or customer-facing systems that aren't up to snuff - it's time to take a look at where you can get the most "bang for the buck" - and change/enhance those systems.

Those changes can be small, or be large, depending on where you want to go with your business. It might mean additional reports to give managers more real time information into how the business is functioning - or it might mean adding a SaaS (Software as a Service) offering to your customers who want to "rent" rather than "buy" your application.

Either way - you need software tools that are flexible, fast, scalable and allow you to take advantage of multiple delivery methods (native client, browser, mobile) - with as little re-coding as possible. The last thing in the world you want - especially now - are tools that are complex, hard to debug and slow to roll out.

The key is to get these improvements in place quickly. It's not going to do you any good to start building stuff that can't be in the field within 2-6 weeks. Granted, if you're re-writing your core application to add SaaS capabilities - it's not going to get done in that time frame, but for other, internal applications those are the time targets you need to strive for.

If you are going to add a SaaS offering - try to offer a "lite" version of your current main application. This will allow you to potentially add to the top line growth by getting new customers into your ecospace. It will also allow your smaller customers the ability to stay with your software rather than jumping ship to a competitor who offers a more slimmed-down version of the same basic functionality and meets 80% of their needs at a much lower cost.

It's time to have a sit-down with your folks and discuss where things are "broken" - and to come up with ways to maximize their productivity (and hopefully make their jobs easier). The last thing you need in a down economy is unhappy, overworked, frustrated people on your team. Now and for the foreseeable future - it's all about productivity.

Recession Pricing

Let's face it - times are getting tougher. If we're not in a full-blown recession now - we're on the brink of another nuclear winter - much like the dot com meltdown of 2000.

With credit being tight - and billions in market cap being wiped out by the minute - everyone immediately turns to the place where they perceive they can make the "easiest" cut - their prices. But this is a lazy, knee-jerk reaction at best - and at worst it could kill your business.

A couple of weeks ago Brenda Duncan wrote an interesting article about Pricing In A Recession. She makes my point exactly:

Pricing theory (and in real life!) states that the price of a good or service sends a message to the consumer - about the quality or value or a product. Think about it - do you want to be a “cheap date” or a good date?

Personally, I'd rather be a good date, than a cheap one - and I think my customers would, too (ok, so SOME of them may prefer a cheap date - but that's a subject for another posting). The key to pricing in a recession (or depression - depending on your bullsh*t meter) is the same as it is in good times - those that provide VALUE to the customer will get their business and their dollars. Those that don't, won't.

It's really not rocket science - but it IS a critical issue to every business owner (and consumer) out there. How you handle your pricing and the demonstration of the value that you provide are critical in times like these.

Now is not the time to be shy. If you have success stories (and you should), articles in the press (and you should), customer quotes (and you should) - now is the time to put them front and center in your marketing materials, email signatures and website.

You want to remind people of the value that you're providing - and the fact that your pricing justifies the value you provide. Then you have people who are also verifying that - and you have a much better case when it comes to the "...I love your product (or service) now if we could only do something about the price..." portion of the sales process.

Do yourself and your business a favor - and take a look at your pricing model(s) - and just verify that you're offering the best possible value for the money. If you are - you have a much better chance of survival. If you just keep going on a "business as usual" track - you may not be around to make adjustments later.

Value For Money

Given the... ehem... "interesting developments" in the stock market yesterday - I was thinking about one of my favorite movies "Trading Places" starring Eddie Murphy, Dan Aykroyd and (a very young) Jamie Lee Curtis. If you've never seen this 1983 classic - it's well worth the rental.

I'm not going to totally bore you with the details - but the basic plot is that Dan Aykroyd (a successful commodities broker) is set up by the two elderly owners of the brokerage house to see what happens if he loses all his money. At the same time - they take "common scum" (Eddie Murphy) and teach him to become a successful broker - all for a $1 bet.

At the end - Dan Aykroyd and Eddie Murphy meet each other and figure out that their lives were turned upside down for a bet and they set out a plan for revenge (full plot details here).

When they're trying to figure out how to best "solve" the situation they come upon a universal truth:

Murphy: [watches Louis clean his shotgun] You know, you can't just go around and shoot people in the kneecaps with a double-barreled shotgun 'cause you pissed at 'em.

Aykroyd: Why not?

Murphy: 'Cause it's called assault with a deadly weapon, you get 20 years for that sh*t.

Aykroyd: Listen, do you have any better ideas?

Murphy: Yeah. You know, it occurs to me that the best way you hurt rich people is by turning them into poor people.

So they decide that the best way to get back at them is to wipe them out... by means of insider trading. Oops. Well, the whole insider trading scandals of the late 80's hadn't become public knowledge yet - so it was actually before it's time.

They basically "went short" on FOCJ (Frozen Concentrated Orange Juice) contracts. They started selling future contracts at market opening price ($40) and that lead to a frantic "buy" reaction by the other traders - which drove the price up to $145.

Then the commissioner came on TV to announce that the orange crop estimates would not be affected by the recent storms.

That lead to panic selling. So, the guys started buying shares (to cover the shares they had already sold) as people were unloading them and ever lower ad lower prices - eventually winding up at $26. So, they basically made the spread between what they sold it at ($40-145) and what they paid for it ($130-$26). And, they got rich.

The thing that struck me - was that the markets behave in a "herd" mentality. They just follow the next guy who follows the next guy, and so on. Consumers do the same thing - they hear "doom and gloom" and they respond. And then it just spirals from there.

It can really affect your business ("Gee - really, Bob - thanks for THAT great insight!"). What I mean is that when times are perceived as "tough" - business people start to panic as well. They start cutting prices and giving away services that they never would in a frenzied race to "get the sale" - no matter what.

This just leads them to be more overworked, and now UNDER PAID as well. This benefits no one. Pricing is another thing that goes to hell in a recession. Everyone has a "sale" or "special" or "one-time-only deals."

Instead, business folks should try harder than ever to reach out to both existing customers and new customers and make sure that their product or service is really filling the needs of their customers. I mean, who does that?

No one has called me up and said - "Hey, I know you may be feeling the pinch - how about if we re-structure your payments into a monthly rather than a quarterly basis to help you plan your cash flow better." OR "Are you guys doing OK now that credit is tighter? Is there any way we can help?"

Think about pricing your products and services like a restaurant. Bundle services and software into a "pick 2" menu of stuff they can buy - and then customize to what they want - much like a before dinner drink and a "complimentary" dessert.

It's easy to make sales in an 'up' economy, and if your organization is one that can reach out to customers when times are hard - and keep up and even enhance your value proposition to them (save them time, save them money, help them to get tangible results) - you'll have a customer for life.

The Joy of Auto

My wife's minivan had 110,000 miles on it - and it was "making noises." I knew that most of the noise came from an exhaust leak that made the van sound somewhat like a Harley (not a bad thing to a guy - but causes concern in the mommy-cool club). So we took it to the dealer (we've had some bad experiences using non-factory mechanics) - and they proceeded to keep the car for 6 (six!) days.

There was no callback, no update, no nothing. Every time we tried to get in touch with our "customer care representative" - all we got was voicemail - and no call back. Same when we tried to call the Service Manager directly.

So last Thursday we drew a line in the sand. We called the Service Manager and left a message saying - we're coming at 1:00pm to pick up our car - period. And we showed up, and of course our "customer care representative" was no where to be found.

In fact, no one could actually FIND our car in the first place. It was "in the system" (a HORRIBLE green screen thing from the 1950's) somewhere begging to get out.

After escalating into DefCon 4 - I was finally able to get the Garage Manager to get his ass out to the garage, get the car. So, he comes in and says - yeah, you have an exhaust leak, but the real problem is "rod rattle."

Yeah, I won't go there - but the recommended action was basically rebuild the engine for $8,000. Oh, and that'll be $75 for diagnosis, please. Yeah, right!

Anyway, we got the car back in all of it's Harley glory - and then our other car (a "hot" Chevy Impala) - started to make power steering noises. Of course! When it rains it pours.

Since we've basically owned Japanese cars - our expectation of when a car goes to "auto heaven" isn't until around 180,000+ miles. But this was an American car - which, apparently, is a whole different story. When my wife pulled into the Dodge service bay and they saw that it had 110,000 miles on it - the first thing they asked was "You want me to get a salesperson for you?"

Yeah, nice.

Needless to say we started to do some research on minivans on the web. I was able to find magazine reviews, price comparisons, crash test ratings, customer reviews, JD Power & Associate quality ratings, NTSB Safety ratings, side-by-side listing grids, get an appraisal of how much our HarleyVan was worth (NOT MUCH!), etc. all in about 2 hours.

On Saturday evening, my I had my wife go to a Toyota dealer on her way out to her scrapbook party - just to have a look at the Sienna and see what she thought (since she was the one that would be driving it the most). Well, when she got there - they REALLY wanted to sell her a big, V8 Sequoia for a "good price."

They kept pressuring her into the Sequoia until she just left them in the dust. She was able to find out that they had a 0% interest promotion going (only until Monday, of course!). So, that meant that we either had to go to another dealer and try to get an '08 (for 0%) or just wait until the car totally exploded and do it then.

So, I set off on Sunday after church with my daughter (my son and wife were off peddling Boy Scout popcorn) and before her softball game - on a search to see what we could see.

It was a "tent sale" (gawd - that is the MOST hideous thing ever invented!) at the other Toyota dealer. I was met by Hamid and we took a look at what they had in stock. After my heart restarted from the sticker shock - we were able to pick out a vehicle and come to terms (so I thought).

After getting the keys to our HarleyVan and some other information - they came back about 25 minutes later and Hamid was replaced by "Lou" (from Florida - but I SWEAR this guy was born in New Jersey) - Hamid's boss. This was the "closer."

Nice. I had all the print outs that showed the SRP (Suggested Retail Price), the Dealer Invoice (what they actually paid Toyota for the car) and what the average price people in that zip code had paid for the car. THAT was the price I was going to pay (plus a little more for a couple of upgrades).

I told him my payment, that I wanted the 0% and how much the trade appraised for online. So "Lou" came back with a payment that was 75% higher than I said I wanted and his math was totally off. I stood up to walk out and "magically" he realized "his error." The final deal we negotiated was about 10% more than I had told him I wanted to spend (but that was really 20% LESS that I could afford) - so we had a deal.

SUCCESS! I had to pick up my wife and son - and did so in the "new car." Then I dropped everyone off at home and went back to "finish the paperwork." Riiiiiiiiiight.

I got back and was handed over to "Maxwell" (the Finance Manager). He's the one that did all the paperwork, etc. Oh, and then in the sales cycle he's the "upseller."

Sure enough - we just sat down and he started into gap insurance, extended warranties, premium package this, and protectant that, and optional pre-paid maintenance, etc. etc. etc. I politely declined most of the stuff, and made it through most of the paperwork without too much other hassles.

Once I was done being upsold, spindled and mutilated - Hamid was back with the keys to my newly washed and prepped car.

It's sort of like going to the dentist for a root canal. You need to do it. You research the procedure. You intellectually know it's going to suck. Then you go through it - and it does basically suck. Then you are done with it - they hit you with a bill that makes you feel bad. Then it takes a few days for the pain to go away.

That's basically where we are now. We took the van back to the dealer today so they could add the couple of things we were promised, and they got us a rental car (for the next "3-5 days"). The folks over at Enterprise took 1/2 hour to come pick us up (about 1 mile from the Toyota dealer) - and then took another 1/2 hour to process us (you'd think we were the first people to ever rent a car!).

Then all they had was a bunch of... wait for it... DODGE MINIVANS and crappy, stripped down ones at that. My wife wanted to just drive something other than a van. There were no convertibles (what she really wants), the PT cruiser but that was going into the shop. She was going to go for a Toyota Carolla (AH!) but I put the kibosh on that.

There was one other car they had... a BMW 325i. I hope she'll be willing to drive her van once we get it back from the dealer...