Andrew Birol

Monday, 22 July 2002 09:40

Making the tough decisions

It happens too often. You launch a new product, service, sales initiative or marketing program with fanfare and the best of intentions.

But as soon as the kickoff is over, your eyes turn to results. At first, sales trickle in. Then, the trickle becomes drizzle. But that’s where it stops. The downpour never comes. The program is neither a success nor a failure.

Once again, the market response to a new initiative does not meet expectations and these questions remain unanswered:

  • Do we have the right product or service?

  • Have we positioned it correctly?

  • Are we packaging, promoting and pricing it correctly?

  • Do we have the right market?

  • Are we selling it the right way?

While your staff will answer these questions with the best of intentions, you, the owner or profit center manager, are left with the same dilemma: “Do I fish or cut bait? Should I reinvest to find out if the initiative can be successful? Or should I just cut my losses now?”

Financial analysis can only help so much. Sure, break-even analysis and return on investment are important tools, but their assumptions will kill you because there is no historical data. So it comes down to your judgment: “Do I kill the effort, or do I let it ride?”

Here are five steps to evaluate any new product, service or program initiative:

Reconfirm the objectives and sales or marketing process of the initiative. Are they realistic? Many initiatives in business fail because expectations weren’t set, agreed on and met.

Sales and marketing efforts often fail due to forecasts based on market ignorance or underfunding based on the need to limit risk.

If the goal is finding, keeping or growing customers, clarify this. If the tactic is creating more leads, reorders or referrals, make it clear. Otherwise, results are hard to predict or see.

Require the champions and the implementers of the initiative to demonstrate a model. Too often, the visionary on your staff who developed the idea is not as experienced in implementing it. Or vice versa.

In fact, it may not even be the same person. Demand a clear model for success.

Establish probabilities of success to ensure the initiative can be successful. This is where judgment, intuition and previous experience converge. Bring your team together and agree on the probability of expected results.

Set up a field “test kitchen” to demonstrate the required success. Stack the deck in one of the following ways: Pick a great sales territory, simple product version or traditional sales tactic. Then test your initiative.

If it is not successful, let it go. Be ruthless in preventing “scope creep” of the test and stay committed to seeing it through.

Pick a drop-dead date or event for your decision. At a certain point, you will know when you need to make a decision. It may be a moment in time or a reaction by the marketplace.

Tests like this always force a decision. They should not take longer than two or three months, and in Internet time, can occur much more quickly.

The burden of the questionable initiative is that it saps the financial and human resources of an organization. It creates dissension and finger pointing within a company. Sometimes it may even be preferable to cancel a promising initiative than to let it linger.

Too often, the idea is not the problem. It’s just not right for a given organization at a given time.

Andy Birol (abirol@pacerassociates.com) is president of PACER Associates Inc., a Solon-based consulting firm that works with companies who need to focus on their best ways to find, keep and grow more customers. He can be reached at (440) 349-1970 or www.pacerassociates.com.

Monday, 22 July 2002 09:37

Look before you leap

In the classic musical "Fiddler on the Roof," a frazzled father, Tevya, turns to his wife and asks her, "Do you love me?"

She replies, "What do you mean? I have fed you, darned your socks and borne your children." "I know, but do you love me?" he persists.

These days -- in business as in marriage -- it is often not enough that a relationship is productive. We all seem to want quality of life in addition to a living.

The client-supplier relationship is a good example. These relationships often involve the sharing of personal, confidential information and feelings, and may, in fact, last longer than the average marriage. So maybe it is worth another look before you leap.

It is standard practice to qualify a prospect on the basis of time, need, authority and money, but why not by corporate culture as well? We all find it easier to work with some companies over others, just as we prefer working with some employees instead of others.

In fact, as a result of outsourcing, the supplier-customer relationship should -- and will -- start to mimic the employee-employer relationship.

Building relationships

Suppliers should assess their prospects' corporate culture in much the same way individuals do when deciding to accept a company's job offer. I'm not recommending pre-relationship psychological testing; however, you may need to run a relationship check similar to a credit check.

People still buy from people (as opposed to companies), so some level of compatibility is essential. Customer-supplier relationships fail most often because expectations were not set, agreed upon and met.

Take a few moments to decide whether you are picking good long-term partners or "one-time sales stands."

  • Does the decision-maker communicate like you do?

  • Does he or she share some basic values with you?

  • Does his or her company make decisions like yours does?

  • How are disputes resolved, if they are resolved?

  • Is it a conservative or progressive environment in terms of risk-taking, communications, problem solving, partnering?

While sales goals have to be hit, they are rarely accomplished through the first order. Developing an ideal customer profile before closing that first deal will help ensure that more will follow. Take a few minutes when moving qualified prospects through the developed or proposal funnel stage before closing them. It will enhance the chances of successful long-term partnerships.

This profile can easily be added as part of your qualifying customer or pre-proposal questionnaire.

Maintaining relationships

In Japan, when they are preparing an executive to work in the United States, he is told, "In America, everyone always asks, 'How are you?' But no one really cares to know the answer."

A little harsh, but too often true.

Once a business relationship is established, do you work on keeping it healthy? Again, the marriage analogy holds true. The leading cause of break-ups, both marriage and customer, is lack of communication. In marriage, this leads to irreconcilable differences. In business, a customer's (or a supplier's) expectations cease to be met.

To keep a good business relationship healthy and on track:

  • Call for no particular reason and say hello.

  • Ask for advice on an unrelated issue.

  • Get together for a cup of coffee, a beer or with your kids if they are close in age. (In these harried days, everyone is trying to find ways to maximize their time).
Andy Birol is president of PACER Associates, which provides expert advice to owners who need to grow their businesses offline and online. He can be reached at (440) 349-1970 or online at www.pacerassociates.com.

Wednesday, 28 November 2001 11:35

A new focus

Which is better?

Eight years of sloppy success, six months of a pretend recession and the myth of dot-coms providing value, or real people with real money selling real things to real customers with real problems really soon.

Which is better?

If you're in business, of course your goal is to sell real products or services for real money to real clients.

I have been saying for years that business owners must understand and exploit the best and highest use of themselves and their employees. However, it appears that over the past few years, many business owners and managers have avoided focusing on that within their own businesses.

Instead, they have focused on delivering whatever their target markets have demanded. Now, as demand for almost everything has shrunk, providers are scrambling to deliver only on what they do best.

Sept. 11 has turned out to be a wake-up call to focus businesses. Many of us are recognizing that 9-11 was not the only day we were blinded by technology and missed obvious signals that something was dreadfully wrong.

So what is happening in business right now?

The turnaround business is doing poorly because banks are telling companies to solve their own problems and not letting them off the hook by allowing them to file bankruptcy.

Cleveland is suffering because it is lacking a clear focus. Industry in Cleveland, and most service providers that support industry, are not focused on what they do.

There is good news. There is a groundswell around the idea of refocusing, bubbling up. Although the ostriches are still burying their heads, many are focusing now on what they do well and like doing.

In addition,there is a focus on what is real and fundamental. People are going back to the basics. Here's what that means for your business.

Make sure you understand your customers and your competition.

The economic downturn? Ninety percent of those in business today were not yet 21 years old when the last real downturn hit between 1981 and 1985. That means a majority of those in business have no experience in taking market share and growing it at the expense of competition.

The can be done two ways:

* Externally. This is a high-risk option. In this case, a business will rely on outsiders such as venture capitalists and roll-ups to do the work. Unfortunately, this rarely creates any real value.

* Internally. This approach is less risky and oftentimes better. And, when you focus to grow internally, only two things matter when dealing with customers -- trust and relationships.

Trust and relationships are key, and after Sept. 11, most people have a new appreciation for both.

Andy Birol (abirol@pacerassociates.com) is president of PACER Associates, Inc., a Solon-based firm that helps grow businesses by growing their best and highest uses. He can be reached at (440) 349-1970 or at www.pacerassociates.com.

Monday, 29 October 2001 09:31

Developing a win-win situation

Good advertising agency relationships are hard to forge. But if you put your mind to it, you'll find that if you commit yourself to the process, you'll get better results.


Here are five steps to help you build a friendly and productive relationship with your ad agency.

Define your agency needs

Determine what kind of advertising you're buying and pick an agency that does that kind best. It is usually one of the following:

* Institutional (promotes the company)

* Product or service (sells what you make)

* Market or segment (addresses narrow customer needs)

As you learn what methods and tools are best suited for your company, pick or change your agency to one that fits your needs. Those may include direct mail, broadcast, sales support or Internet marketing and advertising.

Link goals to your agency's objectives

Agreement is imperative to success. Any agency effort should be tied to quantifiable goals in terms of finding, keeping and winning back customers or growing your customer base.

Understand your reasons for hiring an agency

Agencies can do all of the following, but often at a high cost. However, there are some things that are so routine and/or costly they should be done in-house.

* Creative development. The development of concepts, copy and design is best purchased from the experts, the advertising agency.

* Execution. When ideas are turned into production-ready storyboards and schedules, proofs and mailings are needed, an in-house person can share the burden and reduce the cost.

* Production of advertising campaigns. If you foresee a recurring need to place ads, print materials and develop Web sites, bringing this function in-house will save you time and money. Good project and outside vendor management is a commodity and you should require that this be performed in-house.

Choose your agency after defining your needs

Too often, owners choose agencies with their hearts instead of their heads. To make a good decision, ask to evaluate the agency instead of having it pitch you. It should get paid to pitch after you've chosen the firm that best meets your business objectives.

Then, ask the agency's other clients how well it defined their advertising objectives and how these objectives were met in terms of price quality and timeliness.

Manage your agency, projects and objectives

Understand the old adage that in advertising you can only get two of these three: low price, high quality, fast turnaround. Decide what you need and make sure the agency knows it. Be a good client and respond immediately to the agency's need for input, feedback and approvals. It is only trying to help you. Demand regular meetings where your objectives are tied to actual results.

If you don't manage your agency, it will manage you. It has too much at risk to let critical business decisions impacting advertising go unmade. So manage your agency's objectives and performance just as you would any in-house function.

And if advertising is a key success factor to your business, then manage it in-house and only go outside for the creative ideas.

Regardless of how you split the work, if you stay on top of your job, you just might end up raving about your agency. Andy Birol (abirol@pacerassociates.com) is president of PACER Associates Inc., a Solon-based firm that provides expert advice to owners and leaders who need to grow their businesses. He can be reached at (440) 349-1970 or at http://www.pacerassociates.com

Thursday, 13 September 2001 08:18

Bad marketing, good company

The signs are clear: Your sales force is confused, your CFO is anxious, customer service problems are mounting and manufacturing is angry.

All fingers point blame at the members of your marketing department. But is it their fault? After all, the department whose job is to make sense out of confusion and spend money makes a great company piata. Yet, when you start asking questions about how the marketing department is doing, their answers wear on your nerves.

If you are like most business owners, you're tired of complaints about budgets too small, expectations too high, an economy too slow, competitors too aggressive and the high cost of products. All companies face similar challenges and use marketing departments to overcome them. So why, then, is it that your company seems to have so many marketing issues?

Unless you're a marketing expert, it's hard to tell the difference between good and bad marketing. Most likely, your problem has one of two causes: a poor plan or a poor leader. Either is deadly. Here's how to tell which is the culprit and what the solution is.

Lay out expectations

A marketing plan has three basic goals:

  • To clarify and convey your company's best qualities so they meet the needs of a specific target market.

  • To become your organization's blueprint for pricing, product development, promotion, packaging, distribution and targeting decisions and activities.

  • To give your executive committee (including the marketing executive) a framework for making decisions and allocating resources.
  • The role and responsibility of your marketing executive is to execute the plan. That job is also three-pronged. He or she should:

  • Interpret the needs of the marketplace, create a practical marketing plan and sell it to your company.

  • Implement approved programs and tactics through inside and outside resources.

  • Resolve threats to completing the marketing plan.
  • How and why efforts break down

    No plan is foolproof, but you know you have the wrong plan when your organization isn't focused on leveraging its value and the company cannot profitably find, keep and grow customers.

    You know you have the wrong executive when, after two years, he or she still doesn't understand your business or implement your vision, cannot adapt skills and experience to meet the challenges of the business and has not efficiently used staff, budgets and time to generate reasonable results.

    Fix the problem

    Once you determine where the problem is, act. If it is the marketing plan, then with your executive committee and other experts, audit and refocus. Retool the marketing strategy so your company is better able to find, keep and grow customers. And take a close look at how your company is organized and resourced so profitable products and services are sold.

    If the problem is your marketing executive, replace him or her with someone who has executed a marketing plan like the one you have or need. Consider someone who understands the marketplace, distribution, products and technology and can better fit into the existing organization.

    Keep marketing fixed

    Good marketing programs and executives are like a fine Chardonnay. Both seem pretty good at the start but are best after two to four years. After that, they don't improve further and usually grow stale. Even if your marketing executive and plan seem on the ball, your firm's changing capabilities, customers and competition call for new approaches to pricing, promotion, packaging, distribution and targeting.

    If you sense your marketing is out of touch, ask your employees and your customers. If the answers are not comforting, decide if it is the plan or the executive. And fix the right problem.

    Andy Birol (abirol@pacerassociates.com) is president of PACER Associates Inc., a Solon-based firm that provides expert advice to owners and leaders who need to grow their businesses. He can be reached at (440) 349-1970.

    Pacer Associates website

    Thursday, 11 March 2004 11:53

    The great buy-in

    If you are a business owner, your company is your baby. And, like any parent, you feel frustrated when people don't treat your beloved with the same care you do.

    Whether you run a service, manufacturing or retailing business, the way you address problems and opportunities is never how your employees do. Their commitment, urgency and results fall short of yours, and this can frustrate you.

    So, how can you get your employees to act like the owners they will never be? Here are five ways to foster an entrepreneurial spirit throughout your organization.

    * Correct errors of commission; punish errors of omission. As much as it hurts to watch your employees screw up, at least they did something. Nothing is worse than hearing an employee say, "Well, you didn't tell me I should do that."

    If owners have a problem educating personnel, they have a bigger one instilling common sense and responsibility. Don't punish someone who reacted and tried. Punish the one who stood by and did nothing.

    * Don't be a control freak with ADD. If entrepreneurs had to take psychological tests, odds are more than a few would learn they are control freaks with ADD. If your people are giving up rather than following up, ask yourself, "Am I the problem?"

    If the old expression, "Let God; let go," resonates for you, practice what you preach. If you always step in and nothing still happens, then step out and see if it helps.

    * Reward actions and efforts beyond results. Many employees start off the job caring but give up when their actions don't produce company results or personal rewards. If one of your employees feels passionately about taking an action that failed, take a hard look at why. Perhaps he feels he has lost the battle in a war you know is winnable.

    * Support champions, long shots and rebels. One of my favorite expressions is, "If you want something done right, do it yourself." If your company has succeeded enough to require change from within, recognize and reward those who can drive it.

    * Identify and reward those doing right. Too often, the people most able to stop loss, prevent waste and report theft don't because they don't think you care if they care. Walk your own talk and recognize those who did right without being told.

    Nothing serves as a good example more effectively than a good example next door. Andrew Birol is President of Birol Growth Consulting, a Solon-based firm that helps grow businesses by growing their best and highest uses. Reach him at (440) 349-1970 or at www.andybirol.com.

    Thursday, 20 November 2003 11:14

    Family affair

    I've worked with more than 50 client businesses led by parent/children owners and regularly assist leadership in changing hands.

    Coaching family succession and transition is as thrilling as watching an Olympic relay race. When one generation successfully hands off to the next, it's wonderful to see the business gain momentum.

    But just as horrifying as watching a member of a relay team drop the baton and fall half a lap behind is seeing a great business blow a leadership handoff. Here are the three major phases of the relay race every successful business must run.

    Approaching the handoff

    The incumbent leader must finish strong. The baton should stay firmly in his grasp until he finds his true successor, not just a look-a-like in an adjacent lane. The upcoming leader bides his time until the right moment, then steps into his father's lane and prepares to start running the company.

    The hand-off

    The handoff in any relay race is the culmination of months of practice, requiring complete trust and total coordination. Taking over the leadership of a business is no different.

    In each case, the baton must change hands flawlessly and at full speed in the midst of multiple distractions, including the clamor of spectators. When perfectly performed, the outgoing runner sprints to full power and only then outstretches his hand, blindly expecting the baton.

    Leaving the fly zone

    Upon grasping the baton, the lead runner forges ahead to set his own pace toward a new record. The trail runner quietly and unobtrusively steps off the track after turning control over to new hands with fresher legs.

    For the business leader successfully passing the baton, his role going forward is one of cheerleader and spectator but no longer as an active runner.

    It's imperative to treat each phase as equally important. As with any long-term project, it is easy to begin the transition strong, then lose steam, especially as you realize your role within the company is going to change significantly.

    Done correctly, however, you will leave your company in good hands for many years to come. Andrew Birol (abirol@andybirol.com) is president of Birol Growth Consulting, a Solon-based firm that helps grow businesses by growing their best and highest uses. Reach him at (440) 349-1970 or at www.andybirol.com.

    Thursday, 23 October 2003 11:02

    Managing customers from hell

    Ask anyone who sells or serves customers about the buyer from hell and you'll get a great example. Here are a few of my favorites.

    * The client who asked me to submit a fake -- and higher -- bid so that his would win.

    * The owner who asked to buy 20 minutes of my time at his place at 5:30 a.m.

    * The entrepreneur who reneged on a commitment, then asked me to serve as a reference.

    Clients from hell are not born, they are made -- too often by those who serve them. Every customer deserves full service and occasional schmoozing, but there is a point of diminishing returns when more is not better, even for the customer.

    Unfortunately, too many sales and service people feel secure by meeting their customers' every want and need. Left unmanaged, customers stop asking for inches and demand miles. Instead, proactively manage your clients. Delight them within boundaries that are appropriate, constructive and mutually profitable.

    Head off unreasonable requests

    Know what your limits are and say no to customers whose demands are more than you agreed to. If you say no, mean no; often your clients will respect you more for doing so. If you overdeliver, make it clear that you are doing so and explain why. Customers cannot value what they don't understand, and usually don't value what they get for free.

    Stay away from requests that will jeopardize your business or reputation. No customer is worth more than who you are and what you stand for.

    Handle unreasonable requests with tact

    Reread your agreement and decide, from your client's perspective, whether you should comply. The benefit of the doubt goes to the client. If the demand is unacceptable, ask your client to explain the reason for the request, then propose a reasonable solution that includes a balanced commitment by both parties. Finally, agree on the solution or refuse the request.

    Partnership status with customers or clients is earned through trust, empathy and consistency. If you build this together, only miscommunication or a lack of communication will put you at odds.

    To ensure you never create a customer from hell, ask your suppliers what kind of a client you are. If they imply you are their client from hell, either you have nothing to complain about or you have got your own work cut out for you. Regardless, walk away. Life is too short to stay in bad relationships, particularly if you have helped create them. Andrew Birol (abirol@andybirol.com) is president of Birol Growth Consulting, a Solon-based firm that helps grow businesses by growing their best and highest uses. Reach him at (440) 349-1970 or at www.birolgrowthconsulting.com.

    Monday, 30 June 2003 05:34

    Classic questions

    "Now that's a great question."

    Every time I hear this, I smile. Why? Because a good question proves good listening, demonstrates critical thinking and uses humor to soften a pointed probe.

    The best questions force your respondents to better understand their condition, reply with honesty and discover a truth they did not otherwise accept. While the best questions are specific to a discussion with a prospect, client, employee or vendor, some are applicable in any situation. Here are a few of my favorites.

    "Tell me about a situation where you failed and what it taught you." If they say they have never failed, ask why they have set their goals so low.

    "If you know it isn't working, why do you keep doing it?" The key is to break through resistance or conventional thinking and start changing the perception of reality.

    "What is the one question you hope I don't ask?" Asked at the end of a discussion, this often reveals hidden agendas or information you may have missed.

    "You are telling me this for a reason?" When confronted with highly emotional individuals, this coaxes from them the reasons they feel as they do.

    "If you were going to tell me this, what would you say?" As ridiculous as this sounds, an uncooperative person may divulge confidential information if you let him or her speak after delivering this question with a straight face.

    "What's your best and highest use?" While this is my trademarked, signature question, your version will provoke people to ask what you mean. Develop your own icebreaker to engage anyone in a more personal and revealing discussion.

    Starting with Socrates and Plato, the art of questioning to gain knowledge, develop agreement and communicate expectations is critical to any of the leadership roles you play.

    Good questioning comes with practice, maturity and business experience, but most of all through your growing confidence. As a business owner, learn to ask good questions.

    As your questions become better, work on your timing, your ability to pause for an answer, and finally, on ways to control your environment in doing so. Andrew J. Birol is president of Birol Growth Consulting and co-founder of Independent Entrepreneur. He helps owners grow their businesses by understanding and targeting their best and highest use. Reach him at (440) 349-1970, by email at abirol@andybirol.com.

    Friday, 31 January 2003 10:39

    Assessment time

    Your business has survived many years, and now you have a chance to grow it to the next level.

    You have a great business plan, strong people and enough financing. But results are not forthcoming. How could such a great combination of resources and talent not create a winning formula?

    As you question key players and staff, it becomes clear they don't have the conviction to succeed. Whether your idea centers on entering a new market, developing a new service or squeezing costs without cutting heads, there is an opportunity for everyone to win, yet no one believes in your idea. Perhaps your plan is dead on arrival.

    This is true if you or other owners are motivated as much by protecting your wealth as by creating new value; salaried workers don't feel empowered to make changes; hourly workers don't connect the quality or quantity of their work to the company's success or pay increases; no one has had to sell an idea, product or service to make a mortgage payment; or you have insiders who see success in maintaining their positions, as opposed to outsiders trying to get customers, partners and vendors heard and served by insiders.

    This happens to several types of businesses and in various environments including:

    * Individuals who say they want to be entrepreneurs but don't take the risk.

    * Departments which are unable to achieve results regardless of resources, people or time.

    * Companies that lose touch with their markets by losing touch with their best and highest use.

    Consider the following solutions.

    * Pick and reward passionate, busy people over loyal, subservient workers.

    * Recognize that people cannot control their circumstances but can control their reactions. Reward those who react positively to change.

    * Cut out dispassionate people and championless activities before they infect the growth plan.

    * Differentiate good people and ideas from bad timing and underresourced efforts.

    * Wherever you see yourself or your organization going along to get along, stop and ask why.

    In spite good efforts at accomplishing great results, it comes down to moving mindsets from ambivalence to conviction. People are usually more competent than they are confident.

    Before your embark on that new plan to seize the day, take a hard look at those who must carry it with you and ensure it is within their grasp as well as yours.

    Andrew J. Birol is president of Birol Growth Consulting. He helps owners grow their businesses by growing their best and highest use. He can be reached at (440) 349-1970, by e-mail at birol@andybirol.com, or on the Web at www.andybirol.com.