Mike Michalowicz's Blog, page 93

Episode 25: Profitable Neuromarketing with Roger Dooley

Show Summary

Author and Entrepreneur, Roger Dooley,  joins Episode 25 of the Profit First Podcast. Roger shares a few tips on how to use neuromarketing to increase profitability in your business.

 

Our Guest

Roger Dooley is the author of Brainfluence: 100 Ways to Persuade and Convince Consumers with Neuromarketing, and writes the popular blog Neuromarketing as well as Brainy Marketing at Forbes.com.  He is the founder of Dooley Direct, a marketing consultancy, and co-founded College Confidential, the leading college-bound website.  That business was acquired by Hobsons, a unit of UK-based DMGT, where Dooley served as VP Digital Marketing and continues in a consulting role.

Dooley is focused on spreading his ideas through writing and speaking, with limited engagements for training, coaching, and facilitation.

Dooley spent years in direct marketing as the co-founder of a successful catalog firm and also was director of corporate planning for a Fortune 1000 company.  He has an engineering degree from Carnegie Mellon University and an MBA from the University of Tennessee.

 

Show Quotes 

95% of human behavior is non conscious, and only 5% is conscious.

You can reduce price sensitivity by re positioning your product as more of a luxury item.

Sometimes you’re just in a commodity market, therefore if you raise your price 1 cent over your competitors you will lose all of your business. However, make yourself the more attractive alternative – for example: Amazon.com.

First impressions make a big difference. People will form a first impression of you, your product, your website, etc. in just a fraction of a second. Then as you have their attention, even if you present information that contradicts their first impression, a portion of their first thought will remain in tact.

Use sensory metaphors/descriptive words to help people be more in tune with what your saying, and feel what you’re feeling.

You can use psychology to persuade yourself to do certain things. Increase the friction of performing a habit you don’t want to have; if you make it more difficult to do something you are less likely to actually do it.

Profit – it’s all in your customer’s head.

 

Show Links

Roger’s Website: http://rogerdooley.com

Neuromarketing: http://www.neurosciencemarketing.com/blog/

Forbes blog: http://www.forbes.com/sites/rogerdooley/

Roger Dooley on Twitter: @rogerdooley

LinkedIn: https://www.linkedin.com/in/dooley

Brainfluence: 100 Ways to Persuade and Convince Consumers with Neuromarketing:  http://www.amazon.com/Brainfluence-Persuade-Convince-Consumers-Neuromarketing/dp/1118113365/

 

Corporate Partners

Nextiva – VOIP phone providers for small businesses.

Fundera – Single source online funding for entrepreneurs. Also offers an adviser program for CPAs, bookkeepers and business coaches.

TSheets – The #1 customer rated time tracking solution!

How To Raise Prices When You Are Afraid Of Losing Clients

Inevitably the biggest challenge you will ever get for raising your prices will not be from your clients, but will come from you.  You will fear losing your clients, even if the price increase you are considering brings you up to prices that are comparable to your competitors.

That fear is normal.  But the reality is you will rarely lose clients when you increase your prices.  After all if you lose a client over prices, they are price shoppers… and is that really they client that you want.

Sometimes that fear is insurmountable without some strategy, keeping entrepreneurs stuck in a bad pricing model. If that is your situation, use the “More For Me” pricing increase strategy:

1. Tell your best client that you company is growing and bringing on new people (contractors, employees, part time, full time, it really doesn’t matter… you just need to explain that you are growing).

2. Tell them that you and/or your key employees will be continuing to do really the high end stuff, and that you need to charge a premium for that  time.

3. Tell them that some clients like working with you (and/or your best employees) so much that they have requested to continue working with you exclusively and understand that as a result can’t do other high-end stuff for clients.

4. Then say to make it fair for you (and all your clients), that you are charging your premium rate for all work.

5. Tell the prospect that your other clients have no problem with this and you wanted to make it available to them if they are interested.

Don’t say another word and see what they say.

If they won’t proceed with the higher price and will seek the services of another firm, you can explain that is exactly what you are making available through your new people. Conversely if they say they are ok with the higher price to continue working with you and/or your best employees you have achieved what you want.

Either way you keep the client and aren’t at much risk of losing them during your price increase.

The Biggest Determinant Of Success

The biggest determinant of success is the level of commitment you have to being successful.

5 Ways To Help Manage Someone You Hate

Hate your co-worker or employee? Congratulations!  You have completed the first step in making things work.  Acknowledging you have a problem, after all, is the first step.

Ironically, teams where everyone likes each other are typically weak teams.   People (that includes you) have a tendency to like people who are like them.  We revel in similarities.  Grew up in the same town as me?  You’re awesome!  Went to the same college? Hot diggity dog!  Enjoy the same TV show as me?  You’re practically my twin – gosh you are amazing!  With all those similarities, a team of copy-cats will have tunnel vision and won’t have complementary skills.  Great teams don’t like each other nearly as much as they respect each other.  There is greatness in differences.

Abraham Lincoln was famous for building a political cabinet of personal enemies.  In a country that was polarized by a horrific civil war, Lincoln’s genius was to assemble a cabinet of people who were his sworn enemies.  Members of his cabinet may not have liked him (or vice versa) but it served what the country (client) needed.  He built a government where every American, regardless if they were from the Union or the Confederacy,had at least one person in the government who they liked (or at least felt represented their best interests).

Your company has a mix of clients with different needs and demands of their own.  Your company has a mix of things to do, which requires special talents.  Your company needs diversity, but along with that may come personal conflict (just ask Abe).  Here is how you manage the people you hate:

 1. Stop Trying To Like Them - A big fallacy of managers is to believe they need to like the person they are managing.  That is not the case at all.  The manager just needs to respect what the employee does.  And when I say “respect,” I mean to see genuine value in a talent or ability of that employee.  Stop trying to find things to like about the employee that you hate, find something to respect.

2. Find The Bigger Enemy - My consulting group was engaged to help grow a business run by two sisters. The problem was finger pointing. Each sister blamed their struggles on the other, and they hated each other.  That was until they found out their father was diagnosed with cancer.  Immediately they had any enemy (the cancer) much greater than their hatred for each other.  Instantly they start to work together amazingly well.  Seek to find a common enemy (perhaps a competitor) that you and the employee you hate can target together.  A common enemy makes the best of friends.

3. Distance Makes The Heart Grow Fonder -  Short, temporary bursts of disgust trumps a continual stream.  If you just can’t get over the fact that you can’t stand the employee you manage, put distance between you.  Put them in a different part of the office, or a different office altogether.  Of course, you can fire them too… but we are working under the understanding that you have an employee that is great at their work, you just can’t stand them.

4. Hate Your Hate, Because It Hates You - The greater the hate you have for your colleague the greater the burden is for you to carry the weight.  Hating them doesn’t hurt them, it hurts you in the form of stress.  The fix?  Forgiveness.  Forgiving your sworn enemy does not make what they did alright, but it does release the stress for you.  How do you forgive?  Recognize that they are a result of everything they have experienced in their life, just like you and me.  If you experienced every single thing they did, in the exact same way and at the exact same time they did, you would be the same as them.  They are just human after all (like you and me).  Then simply say the words out loud, ideally to them.  And if you can’t forgive them face to face, go look at a mirror and say out loud that you forgive them.  Repeat it over and over until you feel you forgive them.  When you feel forgiveness, the burden you carry will evaporate and you will be able to manage them again.

5. What’s Your Problem? - The problem with disliking or hating others always boils down to your thoughts. Challenge yourself to explore what you don’t like about yourself that needs to be fixed.   When you seek out to understand what you don’t like about the person you hate, you in fact discover more about yourself.  Often, when we dislike someone, it is because we see a behavior in them that also exists in us.  Conversely, if that nasty, “hate worthy” behavior exists in them, and not in you, you will feel sorry for them but not hate them.  Hate is an indicator that something in you needs to be fix.  Appreciate the hate as an indicator of an opportunity to fix something in you.  And when you do fix you, you will be able to manage them better.

If Abraham Lincoln was able to manage a cabinet full of enemies and put a struggling country back onto the track to greatness, I think you just might be able to manage those employees you don’t like (but respect) and put your company back onto the path to success.

Growth Happens When You Say Ouch

I meet with my mastermind once a month.  We sit down together for five hours to discuss our business (and personal) challenges.

This past week, I was the first to present. My challenge? My brand. I think it is time to grow (after all if you aren’t growing you’re dying). I think it is time to mature it. But how?

I presented my thoughts to my peers and they gave their feedback. RJ looked at me, and said “No offence, but your stuff is kinda goofy.” Ouch. That hurt.

My goal is not to be goofy, it is to be approachable.

That “ouch” moment is a gift. That is when a sore spot is exposed. That is the spot where growth needs to happen.

My job is to grow out of the goofy, yet be true to ensure I am approachable.  Pedestals are definitely not for me, nor is trying to lead people off an island dressed like Gilligan.

What makes you go ouch?  Grow there.

Episode 24: Profit First In Germany With Benita Königbauer

Show Summary

Benita Königbauer, Tax Advisor and certified Profit First Professional, joins Episode 24 of the Profit First Podcast. Benita shares her story of implementing Profit First in Germany.

 

Our Guest

Benita Königbauer started her career in banking, but soon realized that the new world of banking and sales was not at all what she expected. She decided to become a tax advisor and soon after a business mediator; Benita was happy to provide advice and support to her service professional clients, however, she still felt something was missing – something that would really change her clients lives for the better… until she found Profit First. Now she has the perfect blend of skills to work with her ideal clients and really make a difference. Benita has spent her whole life striving to break through obstacles and continues to support others in doing the same.

 

Show Quotes 

There are 1.8 Million small businesses in Germany; 1.1 Million business owners make less than minimum wage.

It’s important discuss the problems in a clients business upfront before the business owner makes decisions on their profitability.

There is so much positive feedback about Profit First from small business owners and service professionals. When they start to see things going in the right direction there is so much relief for them, creating hope and a plan to fix their struggles.

If you are trying to implement Profit First in your business and your accountant or Bookkeeper is giving you push back, just say “trust me, just try it.” Until they have experience with it, they will resist it because we default to what we are familiar with.

It’s important to explain to clients that  not only should they make money for the work that they do, but they should get money for the entrepreneurial risks that they take. If there is no profit in your business then your essentially just another employee of your company.

 

Show Links

Benita’s Website: www.profit-first.de

Benita on Facebook: www.facebook.com/ProfitFirstDeutschland

Benita on LinkedIn: https://de.linkedin.com/in/benitakoenigbauer

Benita on Xing: https://www.xing.com/profile/Benita_Koenigbauer

 

Corporate Partners

Nextiva – VOIP phone providers for small businesses.

Fundera – Single source online funding for entrepreneurs. Also offers an adviser program for CPAs, bookkeepers and business coaches.

TSheets – The #1 customer rated time tracking solution!

The Element of Job Ads That Is Most Important (And Often Forgotten)

We’ve all seen (and maybe even written) those job ads that make it sound as though the staff is a sunny, smiling crew and the environment is full of high-fives and atta-boys. You know – those job descriptions that make it sound as though you’d practically pay for the privilege of walking through the door and being part of the team? Staff discounts, tuition assistance, team building….all can be yours if you’re the candidate lucky enough to be selected for the job.

In a way, it makes sense. You believe in your business. You’ve built it, and you know that it’s work worth doing. The trouble, though, is that employee retention is important, and if you’ve painted an unrealistic picture of what it’s like to work for you, then you run the risk of higher staff turnover. If you’ve mistakenly attracted candidates who aren’t even remotely qualified, then your ad hasn’t really yielded the desired results. It’s expensive to hire and train staff, and you want to work hard to find, hire, and retain good employees. Believe it or not, what you write in an ad can make a big difference in your retention rate. Here’s the secret…..

Use the vaccination technique. Rather than filling your ad with all of the wonderful things about the position you’re filling, do just the opposite. List all of the difficult and challenging aspects of the job. Think it sounds crazy? Here’s how it works: Let’s say that you need to fill a manufacturing position. You look at the troubles that previous employees have had and you list the obstacles that might prevent the wrong applicant from successfully completing the work. You’re up front and clear about what you’re looking for: a candidate who can stand for a twelve-hour shift and complete repetitive tasks. You clearly convey that you want someone tough enough to do the job properly.

You may be thinking that you’ll get far fewer applicants for your position, and you’re absolutely right. But here’s the key: The applicants you get will be the right ones. They’ll be informed. They’ll be qualified. They’ll be more likely to be competent for this specific position, and they’ll be much more likely to stick around longer. Think of it this way – you don’t need a hundred applicants for a position; what you need is the right applicants. The vaccination technique lets you sift out the candidates who wouldn’t be the right fit anyway. You don’t have to interview them, train them, or replace them when they don’t work out.

Let’s look at another example. You’re hiring for a weekend bartender for your restaurant. Now everyone thinks that being a bartender is the most fun job in the world, right? What’s not to love? Booze, food, people having fun…that’s what novices think the job’s all about. But you’ve seen those folks come and go over the years, and you know what you want in your new bartender. You want a professional, experienced, creative, serious bartender who knows the ropes. How do you find that person? You run an ad that clearly spells out that there will be: late nights, heavy lifting (a half keg weighs about 160 lbs, for those of you who didn’t know,) meticulous cleaning, difficult customers with pain-in-the-ass requests, and really busy holidays that will have to be worked. You’ve just weeded out all of the dilettantes who can’t make anything other than a rum and coke, and your frank ad will appeal to the professionals who’ll look at your ad and know that they’re the person for the job.

You vaccinate your applicants, knowing that the ones who make it through to the interview stage are far more likely to work out in the long run. Now I can’t claim all the credit for this technique; Dan and Chip Heath’s book, Decisive, had a real impact on me. Their overall point is not that we can ever become the perfect decision maker, but that we can become better, more deliberate decision makers. Taking steps to ensure that the folks you interview for a position are the most likely to be qualified gives you better options. Better options nearly always yield better results. If finding and retaining good staff is a challenge, then increase your odds of success by giving yourself a pool of candidates who understand the challenges of your business and are willing to help you succeed.

How To Cut Costs in Business Without Any Downside

You don’t have to go into debt, compromise quality or performance to cut business costs. There are significant ways to save money without compromise. How? Most of the techniques revolve around “productivity transfer,” where you get the same results by using alternative resources at a lower cost point. Here’s how:

1. The Power Of Pooling

Pooling takes some effort, but the savings can be huge. Contact other providers in your industry that buy from the same suppliers you do. Agree to work exclusively with one supplier for a period of time (I suggest minimally 3 years). Pool your combined purchasing power (and determine the savings you want – for example a 25% cut). Then go to the suppliers and tell them that you are all going to buy from the one vendor who offers the best price and the best deal. You and each of your providers will still buy with your money, but you’ll commit that money to that one vendor. The big numbers are very attractive to buyers and they may offer you a bargain.

2. Contractors 

Full time employees don’t necessarily work full time. If you don’t have work for employees, you’re paying them to be idle. Consider hiring contractors, and only pay for the hours worked. It is a win-win in many circumstances. Your contractor makes more per hour (and can serve multiple clients), while you pay for only what you use. Contractors are often extremely talented at what they do – so you get high quality services. I think it is still crucial to have a core talent – one derived from full timers. But, not everyone on your team should be full time.

3. Free Advertising

Unused advertising is one of my favorite methods of all time. Billboards, signs or websites where a business has gone out of business often have a number that’s still displayed, but disconnected. Call your local phone company and have that number redirected to you (if its been disconnected). Instant prospects! When customers call, let them know the business they were calling is out of business, but that you are there to service them. And yes, you can save tons of money by dropping the advertising you were paying for.

4. Telephone Costs

Telephone systems are expensive. Really expensive. But by combining a few free, and near free, services you can save tons of money, and the quality and flexibility of your system may increase. Try using Free Conferencing for free conference call services; Skype’s premium business phone (which is less than $3 a month) is great; and Grasshopper has a virtual phone system that can cover as many employees as you want.

5. The Office Space

The recurring cost of renting office space is usually the largest SG&A costs on an income statement. Good times or bad, every month you’ve gotta pay that rent. You have three options that can save you big money. First, convert your business to a virtual presence. You can have your employees work from home and get rid of the office in its entirety. Second, approach other spaces that already have tenants committed to long leases. More and more tenants have extra space, and you may be able to pick it up on the cheap (or in my personal case, I got the space for free). Third, renegotiate with your landlord. With a soft demand for office space, landlords are becoming more and more flexible on the rent, to keep you in.

6. Interns & Differently Abled Organizations

There’s a whole workforce of talent that most companies overlook—interns and people with disabilities. They have the talent and intelligence, but not much experience. Reach out to the local colleges for interns, and in exchange for pay, work with the college to give the student much need college credits. Contact organizations that can staff you with people with disabilities. Both represent talented, hardworking people, and often at a cost that is much lower than what you are paying now, simply because they don’t have the experience. We all started there!

7. Bottom Line Responsibility

One of the most overlooked methods of radically cutting costs, without compromising the business in any way, is to seek guidance from your team. Have a company wide meeting and educate your employees on the P&L and the need to cut costs. Empower them to bring suggestions to the table and to act on them directly. One company, for instance, had an employee who suggested everyone bring in a coffee mug from home instead of using disposable cups. It saves the company $100 a month. Similar ideas were implemented throughout the company, and the company turned profitable as a result.

How Noble Are Your Goals?

Jim Collins famously has taught us to set BHAGs (Big Hairy Audacious Goals) in his book Built To Last.  Together these goals define the big vision you have for your business’s future.  While I understand that the “Hairy” part is meant to be cheeky, it can take many an entrepreneur off course.

I suggest setting a new type of BHAG. I call it the Big BANG.  It stands for your Big Bold Audacious Noble Goals.  The keyword here being “Noble.”  How is your goal serving others and yourself? How well is your goal aligned with your life’s purpose?

Once you introduce nobility to your business’s objectives, it is unlikely ever to get hairy.  You are doing what you are meant to do, afterall.

Do It Now!

Great ideas are useless, unless they are executed upon.

Great initiatives are a waste if the initiative is not taken.

So whatever it is. No matter how hard (or easy) it is. It will only ever work if you do it.

Go. Do it. Do it now!