New Home

While I've been quiet over here, it's only because I've been busy over here. Go to the beta site at the bottom of the page.

I am planning on moving this blog over there once I work out all the kinks, which seems to involve pressing every button in Joomla at least twelve times and sleeping on the keyboard.

But when I'm done, I will have the satisfaction of having my own web page--again. (I coded my own page back in 1996 with all kinds of ISP specific scripting, long before there was PHP. That page broke sometime in 2000. So now I endeavor to bring back the past.)

Two Kinds of People = Two Kinds of Sales

Item number 6 in my top ten list is "two kinds of people." However, I've already blogged about what I mean by that here.

So today I'm going to add on a "if this is true, then what else is true?" If you accept my two kinds of people: those trying to get promoted and those trying to keep their jobs, then how about the idea that there are only two kinds of sales.

1. the hope-based sale
2. the fear-based sale

The hope-based sales is one where the buyer expects that purchasing will somehow help get them promoted (or, outside of the business world, achieve some other goal, such as impressing that girl in their one-person-show acting class who only seems to make it to every other session).

Hope-based sales tend to be for things that will increase the company's revenue--for example a directory of potential customers for the buyer's company.

Fear-based sales would be the exact opposite. The idea is that if you don't buy the product you will lose your job (or disappoint that girl when she finally makes it to class and you are the one dude without velvety smooth Puma sneakers).

Luxury good are often perfect examples of fear-based selling because, since they are "nice to have" and not "must have to survive the cold winter" the force to purchase said Puma sneakers (or, to go back to the business world, an example might be a fancy gold pen or expensive computer screen) can only come from implying that they are, in fact, necessities because without them you will be alone, cold, and perhaps unable to weather the cold stares of your co-workers.

Do the two kinds of people exactly equal the two kinds of sales? Absolutely, yes. And absolutely no.

If your company is to succeed, you have to figure out what kind of person your potential buyer is, and then how your product relates to their personal goals. Because sometimes you will sell fear to a person trying to get ahead and sometimes you will sell hope to someone trying to keep their job.

And you need to do this before you launch into your pitch. Otherwise they will either think you are a fool for making them fear the Puma, cause they are this season's must have to get ahead at work, or are alternately a fool insisting on Pumas, when everyone knows they are so last year that if I wear them, I will be fired on the spot.

A couple more points:

1. The fear-based sale is much more prevalent, because there are more people worried about keeping their jobs than trying to get ahead (witness the episode of Star Trek with the evil Spock who comes from an evil universe where the norm is to scheme to get ahead rather than do as your captain orders), and because even evil Spock worried about losing his position if he failed to advance.

2. The hope-based sale is, however, more fun, and it also somehow feels more "righteous," and therefore many companies (and especially the engineers at said companies) make the mistake of trying to do a hope-based sale. Sure, their competitors can get along by selling the customer using worry and fear, but our product is so wonderful that it makes the customer happy by just being in their desks. Don't bet on it.

Top Ten

Today I am going to be enigmatic. Here are the top ten things I learned running (and losing) my own business.

1. Alignment.
2. Clarity.
3. Money.
4. Unique advantage.
5. Competition is good.
6. Two kinds of people.
7. Culture of change.
8. Respect.
9. Bad customers.
10. Emotion.

A couple of them I've already explained a bit on this blog. The rest will remain, until further posting, the kind of mystery that is to be enjoyed by the excitement that is the slow peeling back of the curtain.

Sinking Ships

The restaurant looked nice. Most of the tables filled. Smiling staff. A sign indicated a free drink was on offer and the menu had an Italian flair. A popular brunch place by all accounts. But it was not to be.

"I ordered a bloody Mary, not an orange juice."
"We ordered thirty minutes ago, can you see what the hold up is?"
"No, no one asked for the pancakes. Where is the vegetarian omelet?"

The confused waitress got more and more so and eventually just started sending over the busboy with pickles instead of pepper and napkins when we had asked for mustard.

"Looks like we're that table," my friend Carson said.

I agreed and remarked that I was surprised the manager didn't try to at least send us some free wine to try and cover up for all the problems.

"No," said Carson. "You don't understand. I worked in a restaurant. When one table starts going bad you don't try to save it. You're not getting a tip from them." He searched for his fork which the busboy had thoughtfully removed. "So you just let them sink."

I'd never thought about it that way, but of course, Carson was right. Let the bad customer get all the way bad and concentrate on the customers you can save. I noted that the tables around us seemed to be filled with happy patrons and replete with full compliments of condiments and silverware.

Because it is a fact that there are bad customers who, ultimately, you cannot satisfy. So why bother trying?

The Internet is why.

How many times has someone told you they had a problem with United, SouthWest, American or another airline and never to fly them? I used to counter by saying that I had had a bad experienced with every airline in my travels. It was beyond the control of the airlines to get every passenger a great flight every time.

But now I too am a sucker for the Internet's ability to turn one bad apple into an entire rotten orchard.

For example, I have been looking at taking a vacation in Santa Fe. I found a nice looking hotel called, appropriately enough, Hotel Santa Fe. The website is great. The haciendas look amazing. Expedia gives good reviews. But some travelers on tripadvisor.com say it isn't worth the money and the hacienda is a rip off that sometimes has no view and leaky showers. I note that many of those who complain site the earlier complaints of others--the literal bad apple syndrome.

So I don't go there. I book somewhere else. The one sinking ship customer has soured me. Why risk having the same experience when I can click and see the hotels that have not yet been sullied?

The same is true of eBay, Amazon, menupages (a restaurant menu site for New York City). Also note the many websites devoted to customer's individual complaints. One bad review is death for everyone from a baseball card dealer to a bookseller to a hot dog stand. Take careful note, Mr. Business, how much effort eBay sellers put into commenting on bad reviews, trying hopelessly to put the blame back on the bad customer.

In the past, even Mary Lou Retton could automatically ignore the Russian judge because the Olympic scoring system through out the low and the high score. But that is no more. Now companies must bail out every one of those sinking vessels lest one hit the bottom and its wreckage haunt them for ever more.

Ow, That Hurts

Last night I went to another networking meeting for entrepreneurs. The door price of $5 filtered out the most frayed edges of "I've got an idea for a jet powered poodle" type people. Sure, there was one guy in jeans, white sneakers, a bright red t-shirt reading a Superman comic who kept saying stuff like, "I don't understand. What's your target market? There's a lot of target markets, film, tv, people with hair, (and on from there)..."

But in general, the meeting was, actually, excellent. The best way to perfect what you want to say is to practice saying it, and this kind of slightly awkward, low risk, high school prom like arrangement of walking up to strangers and saying, "I do X" forces you to hone your pitch and be confident, otherwise your new acquaintance quickly moves along to the next fellow.

My favorite was a young man who told the assembled group, "I'm terrible at sales."

"Nonsense," came the response. "Tell us what you do and we will help you figure out how to sell it."

Masterful.

An old boss of mine used to call it the "broken wing duck" sales approach." Or, for those of you who watch the Simpsons, the "Poor Old Gill" sales approach.

Here's another sales closing technique I found on the web. It reads like Bugs and Daffy doing a "You don't have to shoot me now" routine. Funny.

Alignment

My word for the day is alignment. If your goals match those of your boss, customer, spouse, whoever, then there is success.

If not, not.

Achieving alignment = happiness.

And it is up to each party in the relationship to find the alignment.

What else is there to say?

The Best Business Book Ever

The best business book of all time is...drum roll puh-lease...Kitchen Confidential.

Kitchen Confidential? Not How to Win Friends and Influence People? Not Hammer's Reengineering book? Not Iacocca? Not even The Fountainhead?

No, no, no, and not even close.

Buried in Anthony Bourdain's story of learning to work in kitchens from the New England clam house of his youth to the four-star establishments of his colleagues that are "mysteriously empty of four-letter words" and the salacious facts that bread baskets are recycled ("it's a fact, get over it") is the information you need to run any business.

That's because a restaurant is the archetypical business. The ur-enterprise. The commodities commodity. What really is the difference between a Big Mac and a DB burger that costs literally ten times as much?

Why its the foie gras and the truffles and the better cut of meat and the...whatever. Just like any foodie, I would be happy to eat a burger that costs $100 before tax and tip. I would be glad to convince myself that the foie gras is superior to Deviled Ham and that the truffle is more wonderful than the most golden urinal in the most palacial estate described in the most british accent by Robin Leach.

Sure.

But if the roles were reversed, and the secret sauce contained flecks of platinum and cost as much as a Gucci handkerchief, then the world (with the help of the PR folks) might be convinced. It's not so crazy. Lobster used to be the food so cheap it was given to slaves and chicken more desirable than steak (hence Mr. Hoover's promise to put one in your pot when you've been eating nothing but sorry-ass steak).

So a restaurant has to create a unique competitive advantage out of almost thin air. Celery florets (the stuff you've always thrown away from the end of the stalk) are turned into a culinary delight.

Fair enough, I say. Good for the restaurant to create value. And all the more lesson to any business that thinks it cannot beat its competition for any reason whatsoever. It isn't about the product, it's about the perception of the product. And that truth is repeated over and over: Betamax was "better" than VHS, Oracle didn't have the best database, Microsoft didn't have the best operating system, even Google doesn't have the best search engine. But all these companies made the most out of what they did have, which was an understanding of the market and the customer.

I like to ask my clients if they want to have the best product in the market. If they say yes, I worry that they have a goal which will ruin their business and put their employees out of work.

Which is the real reason Kitchen Confidential is so good. It's all about management. How does a restaurant turn out consistent food? It isn't the chef making all the dishes. It's a bunch of South Americans and the dregs of society (as Bourdain calls them)--people one step away from prison or the mental hospital, or just back from there.

How do you make food that makes the NY Times critic swoon with these societal rejects? Especially when your competitive advantage is what might be considered literally trash? This is the toughest management problem in the world.

Bourdain gives us his first lesson in the book. He drops a hot pan because, well, it's hot. The cook next to him, a mountainous man with an evil eye, says something to the effect of "Little Sissy can't take the heat?" by not saying anything as he picks up another fiery pan literally from inside the pizza oven, drops it in front of Bourdain and makes him feel the reality of his role in the restaurant. "Grow up" is the message and it is something most every manager would like to be able to say to an employee finding problems with getting the job done.

And Bourdain, and every chef, doesn't resent the boss for yelling at him. He does the same now. He tells new hires that they can work for him, but it will be a year or more before they're allowed to talk.

Now that certainly doesn't translate one-to-one in the corporate world. Yelling is out of place. So is insisting that new employees with years of education and MBAs are idiots. After all, unlike an illiterate cook, it is only fair to give an MBA at least one chance to see if they have a good idea, or should be handed a hot pan and told to shut up and cook.

(Another great book is Heat by Bill Buford. It too explains how restaurants work, and should be informative to anyone in businesses from car sales to social networking sites. And, I am also very appreciative to Mr. Buford for his revival of the parenthesis. [I feel a new man. Thank you, Bill.])