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How to Get Better Results When You Train Your Employees

loveFor anyone starting a business, we highly recommend reading Michael Gerber’s The E-Myth. In the book, he tells a story that goes something like this …

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The Master Baker

There’s a young woman who loves to bake cakes. Her friends raved about her cakes; they told her that she should go into business. So she opens a little shop. She mixes each cake with tender, loving care. She is meticulous about her craft. And her customers love it!

So they tell their friends who tell their friends. Before she knows it, she has more orders than she can handle! So she hires her first employee. She shows her employee how to make the cakes. Then she turns her new employee loose.

Freedom! Now she has time to work on more important things. But it doesn’t last. Before long, she’s getting complaints from her customers about the quality of her cakes. That never happened before. She’s hearing from her customers that they’re not getting the same kind of service she gave them.

So she steps in and starts closely supervising her employee. But she still has her own work to do. Now she’s busier than she was when she didn’t have an employee. This just isn’t working out like she planned.

Show and tell doesn’t work

So it goes with many of us when we hire someone for the first time. We hire them because we’re so busy. We often find that we spend more time once we have them.

We’re all familiar with on-the-job training. The new employee watches as someone else performs a task. We expect that they’ll just pick it up, almost by osmosis.

There’s a Chinese proverb that says:

“Show me and I’ll forget; tell me and I may remember; involve me and I’ll understand.”

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Use this 5-step process

Step 1 – Tell them what they need to do. Explain to them how to do the task, step-by-step.

Step 2 – Show them how to do it. You perform the task step-by-step, talking about it as you progress.

Step 3 – Review and repeat as needed. Keep repeating Steps 1 and 2 until your trainee says he or she completely understands it.

Step 4 – Involve them. This is the part we often forget or pass over. We assume Steps 1 and 2 are sufficient. But they’re not. You want your trainee to actively participate.

So have them tell you how to do it, step-by-step. Then have them do actually do it, step-by-step, explaining the process as they go through it.

Step 5 – Review and repeat as needed. Discuss what went well and what didn’t. Then repeat Step 4 until you’re satisfied that your trainee knows how to do it.

But there’s something you should do before you do any of these steps. We’ll discuss that next Thursday! Come back and see us again!

 

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Increase Your Sales without Spending a Dime on Advertising

hilton We were at the Hilton in Las Vegas recently for the New Media Expo. When we checked in, they offered us an upgrade for $25. We thought that an “upgrade” just meant a better room. But we knew we weren’t going to be in the room much. We’d be at the conference all day and meeting up with people in the evening. So why upgrade?

 

One evening, we were at dinner with some friends. One of them had upgraded. She got access to the spa and fitness center, a private breakfast, and more! As our friend described it all, we wished we would have gone for it!

However, the employee didn’t talk about the benefits (or even the features) when he offered us the upgrade. He didn’t give us a single reason to do it.

But at least he offered it; some employees don’t even do that. Or there’s the other extreme – selling so aggressively that you begin to wonder if what you were thinking about buying is any good at all. You start to question the company and its products or services.

We don’t know if Hilton…

  • has an incentive to reward employees who are successful at selling upgrades.
  • explains why upgrades are good for customers, employees, and the company.
  • Thoroughly trains their employees to present the benefits of upgrades.


We do know that …

  • We would have bought if the upgrade was presented how our friend presented it.
  • “What’s in it for me” applies to employees too!
  • We still love Hilton!

The power of offering more

Every sale presents opportunities for more sales. One of those opportunities is upselling – selling more of the same thing. According to the great book Yes! 50 Scientifically Proven Ways to Be Persuasive, customers like choices “that fall between what they need at a minimum and what they could possibly spend at a maximum.”

The authors say that if you give your customers two choices, they will likely choose the least expensive one. However, you’ll make more sales than if you don’t offer a second choice at all.

The magic of 3

When you add a third product or service to the process, magic begins to happen. When that third product costs more than the other two choices, customers tend to go for the moderately priced product instead of the least expensive.

georgeOne of my businesses was a heating and air conditioning business. We had always offered our customers service agreements – we would schedule preventive maintenance of their furnace and air conditioner. We expanded that offer to include predictive maintenance (we automatically replaced inexpensive items that regularly broke down) and an all-inclusive program (our customers didn’t pay for anything else). We found that we sold more agreements than we did before. About 8% of our customers bought the high-end service, around 12% bought the low end package, and the rest bought the middle one!

marylynn So it pays to present your customers with a good – better – best offering. Your sales will skyrocket … as long as you can get your employees to tell your customers about it! Do you have any examples to share of good or bad upselling? How about some suggestions on how your business upsells to customers? Share your stories with us by leaving a comment.

 

 

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You Can Avoid the Mistakes that Brought this Business Down

quote There’s a great post by Roger Ehrenberg on his Information Arbitrage site. Roger was an investor, board member and leader in Monitor110, a company that planned to become the internet version of Bloomberg. The team had impressive credentials, but ultimately the business didn’t make it.

Roger spells out the reasons why. We admire him for sharing these lessons because most of us don’t like to talk about our failures. These are mistakes that any of us could make, so he provides a great opportunity to learn from others. But even more than that, it’s the way he wrote about it that impressed us – he doesn’t cast blame; he just discusses the lessons he learned in the hopes that we may benefit. And we did!

That’s why we highly recommend that you read the whole post. We’ll hit his highlights here.
 

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7 mistakes that led to the demise of this business

#1 – No single leader
Monitor110 had two leaders – a technology person who was one of the founders and Roger, who was a business person. Roger said this structure just didn’t work.

This reminded us of the number of times we’ve seen two people start a business. It’s pretty common to split everything 50/50. But it’s a recipe for disaster. In almost all cases, there has to be someone who has the final say for a business to succeed.

#2 – The technology-side drove the business
This made us think of the number of entrepreneurs who start a business in their craft. They’re technically oriented. They love their product or service, but they ignore what the customer wants and needs.

#3 – Too much PR too early
Roger’s company was featured on the cover of the Financial Times. You wouldn’t think that would be a problem, would you? But Roger says this raised the bar with everyone – customers, themselves, and financiers … which led to the next problem.

#4 – Too much money
Too much PR. Which led to too much money. Sounds like a company that’s been blessed. But Roger says the blessing turned into a curse.

  • Because of the great PR, expectations went up significantly.
  • Within the financial community, so money flowed in
  • With their customers
  • And most importantly – with the people of Monitor110.

With all these high expectations, they didn’t push a product to market because it needed to be just right. And that didn’t matter because they had a cushion of cash.

#5 – Not enough customer feedback

By now, you see how all of these mistakes were interrelated. Because of the great publicity, they were afraid to show the customers what they had. They didn’t want to disappoint them and be disappointed. But it wasn’t a problem at the time because they had plenty of money. One mistake was feeding another which was feeding yet another.

#6 – Slow to adapt to the market
On a post not long ago, we talked about a military concept called OODA loops. OODA is an acronym for Observe, Orient, Decide, Act. The idea behind the concept is that by getting into the loop, you gain information. Then, by adapting to what you’ve learned, you gain a competitive advantage.

#7 – Disagreements about strategy
This stemmed from the technology side and the business side not being able to come to terms. It’s also an outflow of Mistake #1 – without a single leader, it’s hard to have a clear vision.

Just get started!

All of this made us think of the saying, “You don’t have to get it perfect; you just have to get it going. That’s one of the things that we did with Bigg Success. We talked to a lot of people who had all kinds of great ideas. Some diametrically opposed to each other! We could have easily just got caught in the quagmire.

Ultimately, we just launched. It wasn’t perfect – we knew that. We’ve learned a lot. There are things we would do differently if we had it all to do over again. But by launching, we were able to learn from the most important people of all – our community. We learned from you.

We’re happy to let you know that you’ll be seeing some bigg additions in the near future. So keep checking in and let us know what you think! We’re listening!

 

 

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Is Your Schedule Overloaded Like A Dishwasher?

dishwasherSome couples argue about whether the toilet paper should roll over or under. Others squabble about whether toothpaste should be squeezed from the bottom or the middle. We might be unique, but we have a running disagreement about how full the dishwasher should be.

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marylynn If you’re keeping an eye on the news, you see that a lot of large companies are cutting marketing and even customer service. They’re cutting jobs and even entire departments. They’re streamlining.

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georgeAnd Mary-Lynn doesn’t fill it up enough … we spend money we don’t need to because we waste water and electricity.

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marylynn Well, we spend money when we have to wash the dishes again because some of them didn’t get washed in the overload.

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So now you see where we reach an impasse!

More importantly, this whole dishwasher discussion made us think about our schedules.

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marylynn My theory is that if you put too much into your schedule, just like the dishwasher, you can’t get it all done.

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georgeI don’t disagree that you have to be careful about overloading your schedule. I may be guilty at times of doing that, just like I overload the dishwasher according to Mary-Lynn. But you know the old saying – if you want something done, give it to a busy person.

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marylynn It’s the old 80/20 rule – 80 percent of the work gets done in 20 percent of the time. It is true that when you’re super busy, it seems like you are more productive. However, when you get too overloaded, you may not achieve what you set out to do. The result – you get frustrated and discouraged. It can even paralyze you at times.

4 ways to keep from being overloaded

#1 – Plan for reaction time

georgeWhen I first started managing people, I often overbooked myself because I didn’t allow for time to respond to my employees. I’ve seen a lot of first-time managers make this same mistake. The closer you are to the front line, the more important this is. Allow time to react to customers and employees or you’ll find yourself with too much to do in too little time.

#2 – Understand your patterns 

marylynn George is more of a morning person … I’m more of an afternoon person. So we just don’t work together at all! Seriously, plan your schedule so you’re working on your most important activities when you’re at your best.

#3 – Work at human capacity

georgeThis is a tough one. My dad, who’s one of my heroes, always thought he could get done more in a day than he actually could. He taught me well! Make sure you’re not planning ten hours of work if you only have eight hours to do it. Realize that you’re human, too. There will be times when you need to slow down or take a break.

#4 – Sometimes it pays to procrastinate

marylynn A prime example is the post you’re reading. Yesterday, we were trying to get this show done and I just wasn’t feeling well. We felt like if we pressed on, our end product wouldn’t have been as good as what you’re reading now.

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georgeSo we decided to put it off for a day. There was no reason not to … and hopefully, you’ll agree that we did alright!

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marylynn Now if I can just get George to stop loading the dishwasher so full!

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Customer Disservice: Policies That Repel Customers

We've been thinking about customer service lately, inspired by a trip and a book.

 

I was in Chicago recently and I had to use the restroom. I saw this little hot dog place. I thought that I could grab a dog for lunch and use their bathroom. As I approached the door, I saw a sign. The sign said, “No Public Restrooms.” So I stopped, looked around, and noticed a McDonald’s down the street. So I went to McDonald’s.

 

I could see a business limiting the use of their facilities to patrons, because some people will just use the bathroom and leave. But to not even let your customers use it … that seems a little extreme to me.

 

I learned this lesson the hard way. One of my earliest businesses was a Ben Franklin store – the old “five and dime.” We didn’t let the public use our bathrooms. There was one particular day every year when the town held a huge community sale. We got tons of traffic on that day, many needing to use the bathroom. People would come in and walk out because we said, “No”. Why wouldn’t they? We hadn’t served their immediate need. So we changed our policy – and most people who used the restroom did buy something.

 

This makes me think of the book, Our Toilets are Not for Customers by Floyd Coates. He tells the story about shopping for light fixtures. His house had been severely damaged by a tornado. He had to buy lights for his new house, so he went to a lighting store. He was about half done with his list – having already selected about $2,000 worth of merchandise – when he got the call of nature. He asked a clerk where their bathroom was. She said, “Our toilets are not for customers.” She went on, “There’s a place a couple of blocks down the street.” So he left … and he didn’t return – they didn’t get a dime out of him.

 

One of my professors, who became one of my mentors, said that most policies are created for 3% of the people – the exceptions – rather than the 97% who are responsible for the success of the business.

 

The #1 … and #2 … ways businesses flush money down the toilet

#1 – Create policies for 3% of their customers
The hot dog place in Chicago is the perfect example of this. Would more than 3% of the people who walk through the restaurant’s doors do their business without doing business with the restaurant? Yet all of their customers are affected by this policy.

#2 – Create policies for 3% of their employees
The renegades, you might call this 3% of employees. But the other 97% suffer for it. This results in lower morale among all the employees – especially the ones who did nothing wrong. Lower morale leads to lower productivity.

What’s that sound? Oh, that’s the sound of money getting flushed down the toilet!

This 3% rule is a good thing to think about before making any policy decision that affects customers or employees.

We’ve given one example, but there are so many more. What have you seen – as a customer or an employee? How do businesses flush money down the toilet?

 

 

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