Your Client's Marketing Plan Stinks (Part 1 of 3)

There is a perception that CPA's are the last people in the world that business owners should ask for help when it comes to their marketing plan. Maybe that reputation is well earned, maybe it's not. One thing is for sure though, if you want to help your clients grow their businesses you are going to have to deal with marketing. It comes up in 100% of my client relationships. And it is often one of the biggest value adds you can deliver for your customer.

Marketing is simply the process of conveying your message to the customer in such a way that they buy what you are selling. I'm sure there are more lofty text book definitions, but this is the crux of it. You must have a message. It must be relevant to your customer. To be effective it must drive sales. Over this blog post and the next two I'm going to share the practical side of marketing in small business and the role you should be playing for your clients. The first question I want you to ask is this:

Does your client have a "build it and they will come" mentality?

Years ago my boys decided open up a donut stand on the Saturday of our neighborhood-wide garage sale. I fronted the inventory: about six dozen Crispy Creme donuts. They picked out the location: the baseball field parking lot along the main boulevard through the neighborhood. We set up shop on the tailgate of my truck.

One car showed up, and bought two donuts. Nothing else happened. Finally I said, "Boys, you can wait for the customer to come to you or you can go to the customer."

Now, imagine it's a Saturday morning. You've downed your first cup of coffee and you're contemplating breakfast but everything seems like too much work. The doorbell rings and there stands an eight year-old boy with an expectant look on his face and a dozen donuts in his outstretched hands, silhouetted in a shaft of light coming down from the heavens framed perfectly in your doorway. Would you buy the donuts?

I could not convince my two would-be entrepreneurs to continue pounding the pavement even after our first successful door-to-door sale. I think that had a lot to do with the fact that they were looking forward to buying the remaining inventory from me with their allowance. It's a silly story, but it illustrates the mentality a lot of your clients have toward marketing their product.

It might be a great new product offering. It might be glossy new marketing materials. It might be a remodeled store front. It might be a brand new high traffic location. Whatever it is there is a misconception that just because it's the biggest and best thing happening in the business owner's life it will be similarly huge for the customer. It won't. The customer has other important stuff they're excited about. What is important to you isn't necessarily important to them.

Are they wearing sneakers or loafers

There's a great story about a company called Staff Leasing that started here in Bradenton, FL. It was one of the first big PEO companies. The four owners each put up $5,000 for startup capital and literally set up shop in one of their garages. Every weekday for six months they would pick a busy commercial street and they would go door-to-door all morning. They would all gather for lunch, put on a fresh shirt, and spend the afternoon going door-to-door on the other side of the street.

I often tell my clients they need to go buy a new pair of shoes when they tell me about their latest product offering that is going to be wildly successful. For some businesses the suggestion is literal, for others it is just figurative. But the push back is real. If your plans don't include taking the message and the pitch to the customer I'm not interested in spending a lot of time executing. One of my most successful clients has a social media, adwords and website promotions budget that rivals the payroll of some of his competitors. He has learned the product is nothing if it turns out to be the proverbial tree falling in the forest.

Your role with your clients

It is not your job to construct the marketing plan. It is your job to make sure there is one. It is your job to ask the questions that get your client to consider their ignorance in this area and the need for a better plan of attack. Here are some questions you can ask:

1. How are current customers going to hear about this?
2. How many times are they going to hear about it in the next 30, 60, 90 days?
3. How are new prospects going to hear about it?
4. How are these people going to be pitched?
5. How do we know this is what customers and prospects want?
6. How has everyone (sales, service, support, admin and executives) been trained to deliver the same message?
7. How is everyone incented to deliver that message?
8. Why do we think this campaign will be successful?
9. What are the measures for success?
10. When will we gather to look at the results and decide what to do next?

Your clients may get too emotionally wrapped up in their latest project to see the rough edges and barriers that you anticipate. By asking simple, but very provocative questions you can help them take a critical look that makes success much more likely.

Photo credit https://www.flickr.com/photos/toddandd/

Don't Price Like Mickey Mouse

Here in central Florida the Mouse isn't just a theme park mascot. He's big business. And Mickey made some bone headed business calls this year, as recounted in this Motley Fool article, 5 Reasons Disney World Lost This Summer. Chief among these was raising prices for no good reason. And that's what I want to talk about.

Disney raised the price of single day tickets almost 20% during peak summer season. And they did it at a time when their four Orlando theme parks opened no new attractions. There was speculation that the move was meant to reduce last summer's rampant over crowding. And if that's what they were looking for, IT WORKED.

Things got so bad that Disney lifted all of the blackout days for their cheapest summer pass holders in the hopes that some of that overcrowding would return. It didn't happen and this year Comcast owned competitor Universal Orlando Resort is eating the Mouse’s lunch.

What does this have to do with your consulting practice? There's a tendency to raise prices on one-off tax returns and accounting work to free up capacity for more consulting. And that can have unintended consequences.

More demanding than ever

If you just raise prices a lot of clients you might want to leave will stay, pay the higher price, and become your worst nightmare. Everybody I know that DID buy summer passes to Disney gripes and complains at every opportunity about how they got screwed. They are still going to Disney, but they aren't doing much to encourage their friends and neighbors to go with them.

If you have a client that is an enormous time suck raising the price has the potential to make them an even larger thorn in your side. My experience is that your problem clients usually know they are a pain in the butt, and they secretly appreciate the fact that you put up with them. When you raise their price they will begrudgingly pay it, and they will feel more justified in demanding more of your time and attention.

I think it's better to tell these kinds of clients that you don't have the capacity or desire to keep doing their work. Arrange a soft landing at another firm and preserve the relationship. Your transparency here is important on two fronts. It keeps a poorly executed pricing strategy from back firing. And it bolsters your confidence and resolve to do the work you really want to do.

How deep is too deep

One of the problems with creating capacity through price increases is the inexact science of selling those increases to the customers. Disney clearly raised prices too high. But they didn't know that when they came up with their fancy tiered pricing model. I'm sure the spreadsheet looked great. In the real world it's hard to predict how your pricing increases are going to go over.

And once the new prices are out there you can't backtrack without losing loads of credibility with your customers. This is happening with Disney. When Disney lifted the blackout dates for all those cheap annual pass holders they simultaneously devalued the premier annual pass holders who paid through the nose to go to the parks whenever they wanted.

If you raise prices too high and a few too many clients walk, you will probably freak out. Then you will spend the next two or three years rolling over every time someone pushes back on your price. Your confidence and pricing fortitude will be gone. This is another reason I’m such a big advocate of transparency. As a small business owner you need confidence in yourself to be successful. Having one-on-one conversations with clients where you decide exactly who you will and who you won’t work with is a much healthier way to create capacity and build your self confidence at the same time.

Have something to show for it

I think this is the biggest lesson to learn from Disney. Had one or more of their parks featured a major new attracting they could have (and would have) used the grand opening to justify higher one day and season pass prices. It's likely a lot of people would have still opted out, but probably not as many. And Disney would have enjoyed a whole new tier of customers who weren't considering the parks until those new attractions compelled them to get in on the action.

In your consulting practice you can sell steep price increases if they entail higher value for your customers. Those who opt out are not left out. You didn’t give them a take or leave it price decision. Instead you let them weigh their options and decide whether they want the increased value enough to pay for it. If they don't want it, it is their decision that causes them to move on, not your blanket policy forcing them out the door.

You can increase the price of a tax return 50% if it includes planning throughout the year. You can increase payroll prep by 25% if it includes help with onboarding new employees and not just delivering their first paycheck. We doubled and tripled prices one year and told clients they would now be getting a custom suite of services designed specifically around their goals for the year. When you do these things not everyone will sign on, and that's good because it creates the capacity you are looking for. More important, you will find some clients that open up and take advantage of your expanded services, in spite of everything you ever thought about what they wanted or what they might be willing to spend.

Price increases aren’t bad, but as a strategy in and of themselves they can do more harm than good.

*Photo credit: https://www.flickr.com/photos/amassard/

Strengths are all that matter

Developing Employees’ Strengths Boosts Sales, Profit, and Engagement by Brandon Rigoni, Ph.D. and Jim Asplund in the Harvard Business Review is worth your time and attention as a consultant. Many times clients will want you to work on making people better. But you are working to take them from just being mediocre to being borderline proficient. This is what happens when you focus on coaching someone through their weaknesses. They may improve, but only marginally. And their improvement rarely means much for the company. The worst part is that you have done nothing for the individual. Who goes home with a sense of fulfillment after a day of being borderline proficient? Nobody! 

Here are some key take aways from the article and how I try to apply them in my work with clients. 

Focusing on strengths builds culture

Gallup found that those who use their strengths every day are more likely "to report having ample energy, feeling well-rested, being happy, smiling or laughing a lot, learning something interesting, and being treated with respect." Rigoni and Asplund mention this as an aside before they get into the sales and profit numbers, but I think it should be the central focus of the article. 

My most successful clients are the ones who have the most fun. Their employees smile a lot at customers, laugh a lot with their managers and generally enjoy going to work every day. And the reason is simple. Doing what you're good at produces a very deep current of well being that is easy to share with others. 

It doesn't matter how many foosball tables your client puts in the break room or how many miniature boxed cereals they stock in the kitchen. If their employees aren't going home every day feeling like they were  born to do this or gifted to do that or just really damn good at their job, they aren't going to drive the culture that makes your client standout from all other other companies that do what they do. 

Developing strengths is key to employee fulfillment, which drives culture, which drives everything important in your client's business. 

If you don't use their strengths someone else will

The authors found a 26-72 percentage point decrease in turnover when companies with high turnover implemented a program to focus on developing employee's strengths. Let that sink in for a second. Companies with high turnover were able to drastically reduce it, not by increasing wages, not with performance compensation, not with increased benefits, not with perks, not with free sushi bars and unlimited supplies of Red Bull. They reduced turnover by changing things up so people were spending more of their time in their sweet spot. 

That begs the question. Why were people leaving in the first place? Go talk to them. They'll tell you. I've sat in on lots of exit interviews and I'm sure you have too. Less than 1% say "I'm leaving, but I don't know where I'm going." They have the next spot picked out. They've accepted someone's offer and money isn't the reason they give for leaving. It's always the opportunity: the opportunity to do more, the opportunity to spend more time on their first love, the opportunity to do what they know they were made to do. 

If your client won't put in the time and effort to find a spot where their people will shine the employees will do it themselves, and often that means they will be lost to a competitor. 

What's good for the goose...

Rigoni and Asplund suggest that step one is to start with leadership. In most small businesses the leader is not spending the majority of the time in their sweet spot. If you are trying to help your client improve sales, profit and engagement starting with the person whose time is most valuable is a pretty good idea.  How you do this could fill a book, but here are a few things that have worked with my clients. 

1. Come up with a "will not do" list. This will include a lot of stuff that still has to get done. If you work with your client on building a culture of focusing on developing strengths you get to ask them completely different question than most business. Most CEO's look across their group of direct reports and try to decide which silo this soon to be delegated responsibility should land in. That's the wrong approach. Get them to think about the whole organization and ask "who's really good at this already?" It might be a manager, but it also might be an intern. Rather than just trying to get it off the owner's plate, think about who will develop the most if it lands on their plate. 
2. Limit everything else to 20%. We would all like to spend 100% of our time in our sweet spot, and their are people who do, but getting there is a journey. Start by limiting non sweet spot activities to 20% of the owner's time and budget them as such. Make a list of all of these non-sweet spot responsibilities and shoe horn them into the week. You can squeeze them into a 2 hour block every day or carve out an entire day of the week just for them. This is a very effective tactic. At first your client may not think they can squeeze it all in, but if you force them to they will find out the things that aren't absolutely necessary just go away without much pomp or consequence.
3. Be transparent. Use Strengths Finder, the same tool used by the authors, to identify your client's strengths and then get the owner to open up with their team. Get the to ask the team what things the owner is doing that don't fit into his or her top 5 strengths. Ask who would be better at these things or how the owner can play a smaller role in getting them done. Most business owners won't do this because it sets them up for accountability from their team. But those who do will find an easy out for things they didn't think they could stop doing. 

I read once that in his prime Tiger Woods rarely worked on his driving accuracy, one of his few weaknesses. He preferred to focus on improving his short game, a noted strength, and his extraordinary conditioning. Before Tiger very few PGA players hit the weight room as part of their regular training regimen. When asked about those choices and whether his lack of driving accuracy was holding him back he said that he usually hit the ball so far off the tee that he was well beyond most of the hazards golf course architects put in place to penalize less accurate players. And with his short game he was able to get back in a position to post birdies with less than stellar driving. As in golf, so it is in business.  If you develop your strengths most of your weaknesses become irrelevant.