Thank you!

How much does it cost to acquire a new customer? How much does it cost to retain an existing customer? We ran the numbers and Holy *%$#, new customers are expensive!

From a marketing perspective, in our case, the cost to acquire a new customer was ten times that of retaining an existing customer.

Marketing costs only tell part of the story. New customers are labor intensive. They require more utilities from the sales, operations and administrative departments. And, more often than not, new customers are won over by price. Yikes! Add it all up and you are probably not making much margin from your new customers

But you can’t have repeat clients without new. So you do what it takes.

Knowing the numbers is helpful because it crystallizes the value of repeat clients. Nothing is more important in your business than customer retention and nothing is more costly than loosing a previous customer.

Maximum efforts must be taken to keep your existing clients happy and feeling great about the services your offer. This means specific marketing campaigns, special events, extra patience and extra care.

Most of all it means saying thank you. To all our customers, thank you very much for your business. We greatly appreciate you, we value you and we look forward to serving you in the future.

What Did You Expect?

More often than not, service companies fail to meet their customer’s expectations. Who is to blame? Almost always, it is the service company! Unrealistic expectations start with over promising and end with unsatisfied customers.

Perhaps the super friendly receptionist states “John, will call you back immediately” or the smooth as silk Sales Rep states “ We’ve done this a million times, no problem” or the owner says “Our team is the best in the industry” or a previous customers states “ They were awesome! Nothing to do better” Either way during the sales process, the customer and the operations team can be set up for a fall.

When lofty expectations are not met the customer is inevitably dissatisfied. In other words, your operations team can deliver above average service, better than the competitions and the customer can still be unhappy.

How do you avoid this problem? Set realistic expectations from the first point of contact to final inspections. Here are some examples of realistic expectations:

• I am sending a message to Jack as we speak. I know that he is very busy today but he will return your call.
• John, the building is going to look worse before it looks better.
• It may not look brand new, but the building will look great when is complete.
• We work 7:00 – 3:30. But, Mary, sometimes our guys show up late. On Fridays they will probably leave a little early.
• Your landscaping may get damaged. If we break a plant, we will replace it.
• Problems will occur. We will correct the problems quickly.
• Surprises will pop up. We will inform you of the surprises as soon as we can.
• Weather dependent, the job should take two - three weeks.

Good service companies don’t over promise on purpose. It is human nature to pound ones chest but is not helpful. When your organization uses the appropriate language with customers it is easier to meet expectations. In fact, if you are good at managing expectations, you can exceed.

Under promise over deliver and your customers are satisfied.

Innovate, Innovate, Innovate

No doubt, innovation is key to success in business. The most innovative and different companies lead the pack.

A local “hero” of innovation is Silver Wheaton, a metal streaming company and an offshoot Goldcorp. Wheaton makes an upfront payment to “non-silver” mines in exchange for the rights of the silver production. The mines use the upfront payment to fund current operations, expand or explore and Wheaton gets the silver at fixed price. Wow, a win-win.

With this model, Wheaton has locked in its largest expenditure. In business, when you “fix” your most volatile expense, you are winning. Wheaton has overcome the biggest hurdle of their industry. Brilliant and Innovative!

Beware the Slippery Slope

Your competitor has talent on his roster. Talent, which you think would look good on your side. So, you decide to make a pitch. You invite the coveted “talent” for coffee and suggest that the grass is greener.

Surprise, the “talent” says he is very satisfied with his current position and that he has no intention of leaving.

Now what?

Guaranteed that the “talent “ is going to report the recruitment and any proprietary information that you divulged back to his Boss. By attempting to lure the “talent” you are suggesting to the market that you current roster needs improvements (not good for staff morale) Moreover, the door is now wide open for the competitor to come after your staff.

Whoops, you’ve just clamored up a very slippery slope!

If you are thinking about stealing “talent” you had better be sure your target is unhappy with his current lot. Underestimating your competitors corporate culture and staff loyalty, can lead to trouble.

If “talent” approaches you by all means recruit and improve your team. Attracting talent is paramount for any entrepreneurs’ success. But don’t get obsessed with the players on the other team. In the end you are probably best served to support and nurture you own talent and avoid the slippery slope.

Collusion is Great?

I often hear business people gushing about their competition; “Frank is a great guy. I stay away from his clients and he stands clear of mine.” Or, “John won’t undercut our pricing, he doesn’t want to drive the market down. What a great guy. We are on the same page”. Even more perplexing, often at job walks I will overhear competitors comparing pricing; “What was yourprice at East 4^th? We went in at 35 points”.

Funny that the guys doing all the talking or colluding are usually the guys on the loosing end.

The goal of business is simple: deliver a superior product or service at a better price than your competition. That’s right: if you want market share, you need to beat your competitors.

I fail to see how sharing intelligence gives you the upper hand. It takes years to build a brand and establish a true competitive advantage. In realty, the only advantage most entrepreneurs have over the next guy is the grey matter between their ears.

If you can deliver at a better price than the next guy, congratulations, you have won. Keep your secrets to yourself!

Business is a game of “high stakes” poker. In poker and business you need to out-smart and out-work the other guy in order to win. Discussing strategy with other players or competitors is loose and risky. You may be thinking that you can lead you competitors astray with a bluff; Sorry, eventually your bluff will be called.

When you sit down to the table keep you mouth shut and hold your cards high, or you will be knocked out of the game.

True Patriot Love

It started off with an ambitious relay across our great country and ended with a gold medal that will be cherished for generations.

Along the way we witnessed unspeakable tragedy on the Luge track and eloquent humanity during the opening ceremonies. Collectively, we held our breath when Joannie Rochette skated and triumphed under the most adverse conditions.

We watched, with jaws dropped, as Shaun White took our breath away on the half pipe and cheered wildly when Petra Majdic tenaciously skied to a bronze medal in Whistler. Canada’s athletes struck gold on home soil for the first time and then punctuated Bilodeau’s achievement with a record breaking thirteen additionally gold medals.

What a performance!

We high fived strangers on the street, hugged, hooted and hollered. “Oh Canada” poured out on every street corner like beer at Canada Hockey House. Yes, there were some glitches but, who cares! VANOC, its Volunteers and the city of Vancouver laid down a golden performance. The legacies are many: Canada Line, highways, stadiums, word class sporting facilities and Own the Podium.

But, more lasting than any is the feeling that Canada can “clutch up” on the world’s stage. I believe our country and our people have changed. Canadians are more united, more determined and more proud than before these games. This was a seminal moment for Canada.

I am so proud to be a Canadian. Go Canada Go!

Live and Learn

It seems that the recession is ending. Let’s hope? Consumer and business confidence is up, retail sales are solid, houses are selling and stimulus programs are in full flight. I question how the economy has turned around so quickly but, there is some light at the end of the tunnel.

The 1st quarter of 2009 was a dark time at Wolfgang HQ. Very bleak! But, as the year unfolded and we executed our recession strategy our prospects brightened. In fact, by year end, we had completed our best revenue and earnings year to date. So, what did we do right?

· We made the tough and painful decisions quickly
· We set clear expectations with our key staff to expect a bumpy road ahead
· We changed our business model from employee based to contract based
· We managed overhead tightly
· We increased our marketing effort four fold
· We watched cash flow like hawks
· We took great care to provide excellent service to our clients
· We lowered our prices
· Our staff came through big time with loyalty and performance

All the above were great “recessionary” moves that buoyed Wolfgang in 2009. Can’t help but think “Should have made those moves when the economy was booming!” Live and Learn.