Million Dollar Habits
By Brian Tracy
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TABLE OF CONTENTS
_________________________________________________
Introduction
You Are What You Do
Chapter-7
The Habits of Top Businesspeople
Chapter-8
Habits for Marketing and Sales Success
DEDICATION
This book is dedicated to my three fine brothers- Robin, Dalmar and Paul –
each of them remarkable in his own way, each of them possessed of fine qualities,
buttressed by great habits, and destined for wonderful things.
INTRODUCTION
You Are What You Do
“Habit my friend, is practice long pursued, that at last becomes the man himself.” (Evenus)
Thank you for reading this book. In the pages ahead, you are going to learn a proven and practical series of strategies and techniques that you can use to achieve greater success and happiness in every area of your life. I am going to share with you the so-called “Secrets of Success” practiced by every person who ever achieves anything worthwhile in life. When you learn and practice them yourself, you will never be the same again.
The Great Question
Many years ago, I began asking the question, “Why are some people more successful than others?” This question became the focal point of a lifelong search, taking me to more than 80 countries and through many thousands of books and articles on the subjects of philosophy, psychology, religion, metaphysics, history, economics, and business. Over time, the answers came to me, one by one, and gradually crystallized into a clear picture and a simple explanation.
It is this: “You are where you are and what you are because of yourself. Everything you are today, or ever will be in the future, is up to you. Your life today is the sum total result of your choices, decisions and actions up to this point. You can create your own future by changing your behaviors. You can make new choices and decisions that are more consistent with the person you want to be and the things you want to accomplish with your life.”
Just think! Everything that you are or ever will be is up to you. And the only real limit on what you can be, do and have is the limit you place on your own imagination. You can take complete control of your destiny by taking complete control of your thoughts, words and actions from this day forward.
The Power of Habit
Perhaps the most important discovery in the fields of psychology and success is that fully 95% of everything that you think, feel, do and achieve is the result of habit. Beginning in childhood, you have developed a series of conditioned responses that lead you to react automatically and unthinkingly in almost every situation.
To put it simply, successful people have “success habits” and unsuccessful people do not. Successful, happy, healthy, prosperous men and women easily, automatically and consistently do and say the right things in the right way at the right time. As a result, they accomplish ten and twenty times as much as average people who have not yet learned these habits and practiced these behaviors.
The Definition of Success
Often people ask me to define the word “success.” My favorite definition is this: “Success is the ability to live your life the way you want to live it, doing what you most enjoy, surrounded by people who you admire and respect.”
In a larger sense, success is the ability to achieve your dreams, desires, hopes, wishes and goals in each of the important areas of your life.
Although each of us is unique and different from all other human beings who have ever lived, we all have four goals or desires in common. On a scale of one to ten, with one being the lowest and ten being the highest, you can conduct a quick evaluation of your life by giving yourself a grade in each of these four areas.
Healthy and Fit
The first goal common to all of us is health and energy. We all want to be healthy and fit, to have high levels of energy and to live free of pain and illness. Today, with the incredible advances in medical science, the quality of our health and fitness, and our lifespan, is largely determined by design, not by chance. People with excellent health habits are far healthier, have more energy, and live longer and better than people who have poor health habits. We will look at these habits, and how we can develop them, later in this book.
Excellent Relationships
The second goal that we all have in common is to enjoy excellent relationships, intimate, personal or social, with the people we like and respect, and who like, love and respect us in turn. Fully 85% of your happiness will be determined by the quality of your relationships at each stage, and in each area, of your life. How well you get along with people, and how much they like, love and respect you, has more of an impact on the quality of your life than perhaps any other factor. Throughout this book, you will learn the key habits of communication and behavior that build and maintain great relationships with other people.
Do What You Love
The third goal that we all have in common is to do work that we enjoy, to do it well, and to be well paid for it. You want to be able to get and keep the job you want, to get paid more and promoted faster. You want to earn the very most that is possible for you at each stage of your career, whatever you do. In this book, you will learn how to develop the habits of the most successful and highest paid people in every field.
Achieve Financial Independence
The fourth goal we all have in common is to achieve financial independence. You want to reach the point in life where you have enough money so that you never have to worry about money again. You want to be completely free of financial worries. You want to be able to order dinner in a restaurant without looking at the right hand column to decide how hungry you are.
Developing “Million Dollar Habits”
In the pages ahead, you will learn how to develop the “Million Dollar Habits” of men and women who go from rags to riches in one generation. You will learn how to think more effectively, make better decisions, and take more effective actions than other people. You will learn how to organize your financial life in such a way that you achieve all your financial goals far faster than you can imagine today.
One of the most important goals you must achieve to be happy and successful in life is the development of your own character. You want to become an excellent person in every respect. You want to become the kind of person that others look up to and admire. You want to become a leader in your community, and a role model for personal excellence to all the people around you.
In each case, the decisive factors in the achievement of each of these goals that we all hold in common is the development of the specific habits that lead automatically and inevitably to the results that you want to achieve.
All Habits Are Learned
The good news about habits is that all habits are learned, as the result of practice and repetition. You can learn any habit that you consider either necessary or desirable. By using your willpower and discipline, you can shape your personality and character in almost any way you desire. You can write the script of your own life, and if you are not happy with the current script, you can rip it up and write it again.
Just as your good habits are responsible for most of your success and happiness today, your bad habits are responsible for most of your problems and frustrations. But since bad habits are learned as well, they can be unlearned and replaced with good habits by the same process of practice and repetition.
George Washington, the first President of the United States and the General in command of the Revolutionary Army, is rightly called “The Father of His Country.” He was admired, if not worshiped, for the quality of his character, his graciousness of manner, and his correctness of behavior.
But that is not the way George Washington started off in life. He came from a middle class family, with few advantages. One day, as a young man aspiring to succeed and prosper, he came across a little book entitled “The Rules of Civility and Decent Behavior in Company and Conversation.” As a teenage boy, he copied these 110 rules into a personal notebook. He carried it with him and reviewed them constantly throughout his life.
By practicing the “Rules of Civility,” he developed the habits of behavior and manners that led to him being considered “First in the hearts of his countrymen.” By deliberately practicing and repeating the habits that he most desired to make a part of his character, George Washington became in every respect a “self-made man.” He learned the habits he needed to learn to become the kind of man he wanted to become.
The First Millionaire
During the same period, Benjamin Franklin, who began as a printer’s apprentice and went on to become the first self-made millionaire in the American colonies, adapted a similar process of personal development.
As a young man, Benjamin Franklin felt that he was a little rough, ill mannered and argumentative. He recognized that his attitudes and behaviors were creating animosity toward him from his associates and coworkers. He resolved to change by rewriting the script of his own personality.
He began by making up a list of 12 virtues that he felt the ideal person would possess. He then concentrated on the development of one virtue each week. All week long, as he went about his daily affairs, he would remind himself to practice that virtue, whether it was temperance, tolerance or tranquility, on every occasion that it was called for. Over time, as he developed these virtues and made these habits a part of his character, he would practice one virtue for a period of two weeks, then three weeks, then one virtue per month.
Over time, he became one of the most popular personalities and statesmen of the age. He became enormously influential, both in Paris as an Ambassador from the United States during the Revolutionary War, and during the Constitutional Convention, when the Constitution and the Bill of Rights for the United States was debated, negotiated and agreed upon. By working on himself to develop the habits of an excellent person, he made himself into a person capable of shaping the course of history.
You Are in Complete Control
The fact is that good habits are hard to form, but easy to live with. Bad habits, on the other hand, are easy to form, but hard to live with. In either case, you develop either good or bad habits as the result of your choices, decisions and behaviors.
Horace Mann said, “Habits are like a cable. We weave a strand of it every day and soon it cannot be broken.”
One of your great goals in life should be to develop the habits that lead to health, happiness and true prosperity. Your aim should be to develop the habits of character that enable you to be the very best person that you can imagine yourself becoming. The high purpose of your life should be to ingrain within yourself the habits that enable you to fulfill your full potential.
In the pages ahead, you will learn how your habit patterns are developed, and how you can transform them in a positive way. You will learn how to become the kind of person who inevitably and relentlessly, like the waves of the ocean, moves onward and upward toward the accomplishment of every goal that you can set for yourself.
“We first make out habits, and then our habits make us.” (John Dryden)
CHAPTER 7
The Habits of Top Businesspeople
“Continuous, unflagging effort, persistence and determination will win. Let not the man be discouraged who has these.” (James Whitcomb Riley)
Everything that happens in life is a matter of probabilities. There is a probability that virtually anything will happen. There is a probability that you will live a long, happy, healthy and prosperous life. There is a probability that you will drive safely to and from work tomorrow. Actuaries and statisticians can determine these probabilities with considerable accuracy. The entire world of insurance is based on these numbers, as well as much of the world of finance and investments.
Most self-made millionaires in America are entrepreneurs, business executives or self-employed professionals. By becoming knowledgeable, proficient and skilled in the operations of successful business, you dramatically increase the probability that you will earn a lot of money, achieve financial independence and become a millionaire yourself in the years ahead. As it happens, all business skills and behaviors are learnable through study and practice. In this chapter, you will learn the most important habits practiced by the most successful businesspeople in every area. Your job is to adopt these habits and then to apply them in all your business activities.
The Purpose Of A Business
What is the purpose of a business? Some people say that it is to “make a profit.” However, Peter Drucker says that, “The purpose of a business is to create and keep a customer.” All profits are a result of creating and keeping a sufficient number of customers and serving them in a profitable manner.
The most important habit you can develop for business success is the habit of thinking about your customers all the time. Develop an intense customer focus. Put yourself inside their hearts and minds, and see everything you do from the customer’s point of view. Morning, noon and night, you must develop the habit of placing your customers in the center of your thinking in all of your business activities.
The aim of all business activities is customer satisfaction. Businesses succeed and grow because they satisfy their customers better than their competitors. Businesses shrink and decline because they fail to satisfy their customers with the products and services they want, at prices they are willing to pay. To be sure that you are doing the right things, one of the most important questions you ever ask is, “What does my customer consider value?”
The Power of Clarity
Perhaps the most important word in business and personal success is the word “clarity.” You must be absolutely clear about who you are as a person, and what you are trying to do or accomplish in your business or work. You must develop the habit of thinking carefully about every detail of your business life, and then take the time to achieve absolute clarity in several different areas.
Begin with your vision. What is your vision for your ideal business future? If you could wave a magic wand and make your business perfect in every way, what would it look like?
In the Bible, it says, “Where there is no vision, the people perish.” In business terms, this means that where there is no clear, positive, uplifting vision for the business, people eventually lose their enthusiasm and commitment and simply go through the motions of operating the business day by day.
Just as you need an uplifting and inspiring vision for yourself and your life, you need a vision for your business. Make it a habit to continually define and clarity this picture. Practice “idealization” in the creation of this vision. Imagine that you have no limitations and that you can create your business any way you want.
Think About the Words
Think about the words that you would use to describe your business if it was perfect in every respect. What would they be? What words would you want your customers to use in describing your business to other potential customers? If you could select the ideal words and put them into the mouths of your customers, what words would you choose? What words do you want the people inside and outside of your business to use to describe you and your business activities?
For example, if everyone around you described your business with the words “excellence, quality, wonderful customer service, high integrity, great people, best products, speedy follow-up, etc.,” would this be helpful to you? If so, how could you organize your business activities to assure that these are the words that people use when they think and talk about you sometime in the future. The greater clarity you have with regard to this ideal description, the easier it is for you to do the things that are necessary to make these words a reality.
A Mission and a Measure
What is your mission for your business? A mission is always defined in terms of what you want to accomplish with your business for your customers. A mission always contains a measure of some kind, that you can use to determine whether or not your mission has been completed.
For example, for many years, the mission of AT&T was to “bring telephone service within the reach of every American.” It took almost one hundred years for AT&T to complete this mission, but the mission never changed until it was achieved.
A company might say: “Our mission is to supply our customers with the best products, backed by the best customer service in our market, and as a result, achieve sales and profit growth of 15% per year.”
With a mission like this, strategic planning, marketing and sales, policies and procedures, all have a central focus that make it much more likely that this mission will be accomplished. What is your mission for your business and your customers?
Why You Do What You Do
What is your purpose for your business? The definition of purpose answers the question of “why” you are in business in the first place. What is it that you passionately want to achieve for your customers? What results do you want to get? In what ways is your business organized to improve the life of your customers in some way? Why are you doing what you are doing in the first place? The greater clarity you have with regard to your purpose, the better organized and the more efficient will be your entire business.
Set Clear Goals and Objectives
Once you are clear about your vision, mission and purpose, you define them in terms of specific, measurable, time bounded business goals. Your goals are the short-term, medium-term and long-term objectives that you need to reach for your business to be successful.
You need goals for how much you intend to sell and for how much you intend to earn on those sales. You need goals for the development and introduction of new products and services, and the improvement of existing ones. You need goals for the types of people that you want to attract and hire. You need goals for the markets you intend to enter, and the amounts you intend to sell in those markets. Developing the habit of clarity about your goals gives each person in your business, and yourself, specific targets to aim at every single day.
Fortunately, in business, all goals and objectives can be expressed in financial terms. Whatever you do in your business, you can create or determine a specific financial number to aim at that will tell you whether or not you are successful. Develop the habit of thinking in financial terms, and thinking in terms of net profits, at every stage of your business. This is the way the most successful businesspeople think most of the time.
Focus on Marketing and Sales
Every business is essentially a marketing organization. Drucker says that the role of the manager is to innovate and market, because these are the only two activities that create and keep customers, and ultimately generate financial results. Surprisingly enough, most managers spend much of their time on activities that do not involve innovation and marketing.
In one study, they asked business managers, “How important is the marketing function to your company?” Most executives replied, “very important.” They then analyzed the time usage of these managers and found that only 11% of the working week was actually devoted to marketing. Everything else was taken up in paperwork, meetings, administration and non-marketing activities.
It is important for you to develop the habit of thinking about marketing and sales results most of the time. Think about your customers most of the time. Think about the things that you could do, every single day, to make your products and services more attractive to more customers.
When I consult with companies on their marketing, I encourage them to establish a basic mission for their sales activities. One of the best overall missions is this: “Our mission is to get our customers to buy from us rather than from our competitors, to buy again because they are highly satisfied with their initial purchase, and then to tell and bring their friends to buy from us as well.”
The Customer Is King
Today in our society, the customer is king, or queen. The customer decides our success or failure. The customer determines our level of growth or decline. Satisfying our customer must be the central focus and habitual way of thinking of every person in the organization. Sam Walton, founder of Walmart, once said, “We all have one boss, the customer. And she can fire us any time she wants by simply deciding to shop somewhere else.”
Customers buy just one thing: improvement. The reason that a customer buys from you is to improve his or her life or work in some way. Your job as a business person is to convince your prospect that he or she will be better off by buying your product or service from you, than he or she would from buying it from anyone else. Marketing, sales and business strategy is as simple and as straightforward as that.
The customer is always right. If the customer does not buy from you, or even worse, buys from your competitor, it is because in the customer’s perception, your offerings are not attractive enough to induce the buying decision. For this reason, you must develop the “outside in” habit of dealing with your customers. You must continually look at your products and services, and what you offer, from the outside. You must see yourself through the eyes of your customers, so that you can make whatever changes are necessary to cause your customer to prefer buying from you rather than from someone else.
What Customers Want
Customers are incredibly selfish. They want the very most for the very least. They want the highest possible quality at the lowest possible price. They want everything to be better, faster, cheaper and easier to purchase and use. And whatever satisfied them yesterday is not enough to satisfy them today.
To please the demanding customer of today and tomorrow, you must develop the habit of continually improving what you sell. You must be continually raising the bar on yourself. You must continually be seeking ways to provide your products better, faster and cheaper if you want to stay ahead of your competition.
The most successful entrepreneurs develop the habit of intense market and customer orientation. They focus single-mindedly on their customers and think continually, day and night, about the different ways that they can please and satisfy them even more than before. Whether you start your own business, or work for another business, your intense focus on your customers will do more to assure your success than any other habit you can develop in business.
Think Like An Entrepreneur
Develop the habit of thinking like an entrepreneur. An entrepreneur is like a guerilla fighter in the world of capitalism. The entrepreneur has several qualities that enable him or her to start and grow a successful business against entrenched competition. Perhaps the two most important habits you can develop in entrepreneurial thinking are those of speed and flexibility.
Develop the habit of moving quickly on opportunities or problems, and of doing things quickly that satisfy your customers. Large companies tend to move slowly, but entrepreneurs have the advantage of speed. Today in our society, time is a critical element of decision making in buying any product or service. The faster you can serve your customers, the more valuable and attractive they will consider you to be. Develop the habit of moving fast in selling and serving customers and you will gain an edge in any market.
In addition, entrepreneurial thinking requires the habit of flexibility. Try. Try again. Then be willing to try something else. Remember that most things that you try in business will not succeed the first time, or even the second or third time. But the Law of Probabilities reigns supreme. The more different things you try, and the faster you try them, the more likely it is that you will discover the right method or process to make the sales and achieve the goals that you set for yourself. Keep asking, “If I was not doing this in this way, knowing what I now know, would I start it up again?” If the answer is “no,” be prepared to change quickly and try something else.
Most entrepreneurial businesses eventually succeed by doing something different from what they first started. They succeed by offering different products and services to different customers than they initially planned when the business began. One of the marks of successful businesspeople is that they remain open to new ideas. They accept feedback and make quick course corrections when they find that something is not working as they expected.
Seven Habits For Business Success
There are seven key habits that you must develop for business success. The absence of any one of these habits can be costly, if not fatal to your business. When you become competent and capable in each of these areas, you will be able to accomplish extraordinary results, far faster and easier than your competitors.
The first requirement for business success is the habit of planning. The better, more thoroughly and more detailed that you plan your activities in advance, the faster and easier it will be for you to carry out your plans and get the results you desire once you start to work.
There is a “Six P” acronym that says, “Proper Prior Planning Prevents Poor Performance.” Very often, the first 20% of the time that you spend developing complete plans will save you 80% of the time later in achieving the business goals that you have set.
To plan better, develop the habit of asking and answering the following questions:
What exactly is my product or service? Who exactly is my customer?
Why does my customer buy? What does my customer consider value? What is it that makes my product or service superior to that of any of my competitors? Why is it that my prospective customer does not buy? Why does my prospective customer buy from my competitor? What value does he/she perceive in buying from my competitor? How can I offset that perception and get my competitor’s customers to buy from me? What one thing must my customer be convinced of to buy from me, rather than from someone else?
Once you have asked and answered these questions, the next stage of planning is for you to set specific targets for sales and profitability. You must determine the exact people, money, advertising, marketing, distribution, administration and service people and facilities you will require in order to achieve your goals. The more thoroughly you plan out each stage of your business activities, before you begin, the greater will be the probability that you will succeed once you commence operations.
Get Organized Before You Get Started
Once you have developed a complete plan for your business, you must then develop the habit of organizing the people and resources you need before you begin. In organizing, you bring together all the resources that you have determined that you will require in the planning process. In the military, there is a saying, “amateurs talk strategy, but professionals talk logistics.” It is absolutely essential that you determine every ingredient that you will need before you begin business operations, and bring them together so that they are ready to go when you open your doors, or begin your project. The failure to provide even one important ingredient in advance can lead to the failure of the entire enterprise.
Find The Right People
The third habit you must develop is the habit of hiring the right people to help you to achieve your goals. Fully 95% of your success as an entrepreneur or executive will be determined by the quality of the people that you recruit to work with you, or to work on your team. The fact is that the best companies have the best people. The second best companies have the second best people. The third best companies have the average or mediocre people, and they are on their way out of business.
The Habit of Delegation
The fourth habit you need to develop for business success is the habit of proper delegation. You must develop the ability to delegate the right task, to the right person, in the right way. The inability to delegate effectively can be the cause of failure or underperformance of the individual, and even bring about failure of the business.
When people start in business, they usually do everything themselves. As they grow and expand, the job becomes too large for one person, so they hire someone to do a part of it. However, if they are not careful, they try to retain control of the task, and never fully hand over both authority and responsibility to the other person.
In our Advanced Coaching and Mentoring Programs, we teach executives and entrepreneurs to identify the two or three things that they do that contribute the most value to their companies, and then delegate the rest. You must do the same thing. You must learn to think in terms of “getting things done through others” rather than trying to do them yourself. It is the only way you can leverage and multiply your special skills and abilities.
Inspect What You Expect
The fifth requirement for business success is for you to develop the habit of proper supervision. You must set up a system to monitor the task and make sure that it is being done as agreed upon. The rule is, “inspect what you expect.” Once you have delegated a task to the right person in the right way, it is essential that you monitor the performance of the task, and make sure that it is done on schedule, and to the required level of quality. Remember, delegation is not abdication. You are still responsible for the ultimate results of the delegated tasks. You must stay on top of it.
When you have delegated a task, set up a system of reporting so that you are always informed as to the status of the work. Be sure that the other person knows what is to be done, and when, and to what standard. Your job is then to make sure that he or she has the time and resources necessary to get the job done satisfactorily. The more important the job, the more often you should check on progress.
What Gets Measured Gets Done
The sixth practice of successful entrepreneurs and executives is the habit of measuring performance. You must set specific, measurable standards and score cards for the results that you require. You have to set specific time lines and deadlines to make sure that you “make your numbers” on schedule. Everyone who is expected to carry out a task must know with complete clarity the targets that he or she is aiming at, how successful performance will be measured, and when the expected results are due.
In our Focal Point process, we teach the importance of your selecting and defining specific goals, measures and activities that are then used as benchmarks for performance. Jim Collins, in his book, From Good To Great, refers to the importance of selecting the “economic denominator” for a company, and for individual goals and objectives within that company. Whichever number you choose, it must be clear to everyone, and it must be monitored continually to make sure that everyone is on track.
Keep People Informed
The seventh habit for businesspeople is the habit of reporting results regularly and accurately. People around you need to know what is going on. Your bankers need to know your financial results. Your staff needs to know the status and the situation of your company. Your key people, at all levels, need to know what results are being achieved.
In a study on workplace motivation, several thousand employees said that the most important factor leading to job satisfaction was, “being in the know.” People in an organization have a deep need to know and understand what is going on around them in relation to their work. The more thoroughly and accurately you report to people the details and situation of your business, the happier they will be, and the better results they will get.
The Habits of Winners In Business
To succeed greatly in business, and to become a self-made millionaire, there are additional habits that you need to develop, as well. One of these habits is the determination to win, to succeed, to outperform your competition and to ultimately be successful. This competitive instinct and determination to win in the face of any obstacle or difficulty is a chief motivating power that drives entrepreneurs and eventually assures successful careers.
The determination to succeed is an absolutely essential habit for you to develop, through practice, by never considering the possibility of failure. Instead, you use speed and flexibility to find solutions to problems, to overcome obstacles and to achieve business goals, no matter what is happening around you. This decision, or attitude toward winning, motivates and enthuses other people and enables ordinary people to achieve extraordinary results.
Be Open To New Information
Develop the habit of questioning your assumptions on a regular basis, especially when you experience resistance or temporary failure. Many people leap to conclusions and assume things about their customers, their competitors and their markets that have no basis in fact at all. Always be prepared to ask yourself, “What do I base this assumption on?” What are my facts? What evidence do I have? What is my proof?” And most important, be prepared to ask, “What if my assumptions about this customer, product, service, market or competitor were not true at all? What changes would I have to make?”
The most dangerous assumption that an entrepreneur or businessperson can make is that there exists a large enough and profitable enough market for a particular product or service. Very often this is not the case at all. The primary reason for the dotcom implosion was because there was no real market for the products and services that the dotcom companies were offering. They fell into a false form of thinking called “argument by assertion.” People often get caught up in an argument because it is asserted loudly and vigorously, even though it may have no substance at all. Assertion is not proof.
Abraham Lincoln was once trying to make a point to the members of his cabinet. He asked this question, “If you took a dog, and called the dog’s tail a leg, how many legs would the dog now have?”
Several of his cabinet ministers suggested the answer, “Five.”
At this, Lincoln pointed out that, “No, the dog still has only four legs. Calling a tail a leg does not make it a leg.”
The moral of this story is that asserting, wishing, or hoping that a fact is true does not have any bearing on the ultimate truth of the statement. Only facts are facts. It is essential that you develop the habit of sorting out facts from fantasy, and making your decisions based on demonstrable, provable truths with regard to customers, markets, products and services.
Think Before Acting
In a fast changing business world, an important habit that you can develop is the habit of thinking before acting. Often, when we are pressured from all sides with decisions that have to be made, we leap to conclusions and make decisions without carefully considering all the possible ramifications of those decisions. Instead, develop the habit of buying time between the pressure to make a decision, and the actual decision itself. There is a rule that says, “If the decision does not have to be made now, it has to not be made now.”
Your mind is incredibly powerful, and never more so than when you give it time to reflect upon a decision before you make the decision in the first place. Make it a habit of asking for a day, or a weekend, or even a week or a month, before you make a final decision. Put it off as long as possible. The very act of allowing the various pieces of information to settle in your brain will enable you to make a much better decision later on than you might have made if you decided too quickly.
It is amazing how many people say, “If I had just thought about that for a little while, I would have made a completely different decision.” This is almost always the case. Make it a habit to delay and defer decisions as long as you possibly can. They will invariably be better decisions when you finally come around to making them.
Your Mastermind Network
Another habit for business success is the habit of masterminding with other people, both inside your company and outside. In our Advanced Coaching and Mentoring Program in San Diego, we work with successful entrepreneurs to create masterminding groups with other entrepreneurs to develop business ideas and make better business decisions. The result is absolutely astonishing! Very often, entrepreneurs who have been struggling with business questions and problems for many months get solutions from the members of their mastermind group in a matter of minutes.
A mastermind group can be either structured or unstructured. Either one will be effective. In a structured mastermind group, a particular question such as, “How can we increase sales in this market?” is thrown out and everyone brainstorms different ideas that they have found or are trying in their own businesses. Very often, an idea that has proven successful in one type of business is exactly the idea that works successfully for a completely different business.
In an unstructured brainstorming session, people get together and “free-flow.” They talk in general terms about business, the economy, sales, customers, competitors, and so on. Out of this ferment often come great ideas that members of the mastermind group can use in their own activities.
If you own your own business, you should sit down with your key people and mastermind a couple of times each week. Talk about how the business is going and some of the problems that you are facing. Ask if anyone has any suggestions or ideas. Listen attentively without interrupting when people make suggestions. Go around the table and invite input from everyone. You will be absolutely amazed at the quality of ideas that seem to emerge when you practice masterminding and brainstorming on a regular basis.
The Foundations of Business Success
There are seven key result areas in management. All business success is a result of working regularly in these seven areas to achieve better results. These are all habitual ways of thinking for business success and profitability.
The first key result area, or habit that you need to develop is the habit of thinking continually in terms of increasing productivity. The goal of strategic planning is to “increase return on equity.” It is to increase the financial results and outputs relative to the costs and inputs involved. It is to get more sales, revenues and profits out of the business than are currently being achieved.
All successful businesspeople think continually in terms of increasing productivity. They look for ways to do more with less, to get more out, at a lower cost. Even in times of economic growth and prosperity, they are continually looking for ways to increase results at lower costs.
Look at what you are doing today. How could you increase the productivity, performance and output of yourself, and your business by changing the things you do? What could you do more of, or less of? What could you start doing that you are not doing today? What could you stop doing altogether? What is it that you are doing today that, knowing what you now know, you wouldn’t start up again today? The answers to these questions can lead you to productivity breakthroughs that will dramatically improve your financial results.
Satisfy Your Customers
The second key result area, or habit that you can develop, which we have already discussed, is the habit of thinking in terms of customer satisfaction all the time. The starting point of developing this habit is for you to be absolutely clear about how your customers define satisfaction. What has to happen for your customers to be so happy with you that they buy again and tell their friends?
Domino’s Pizza is famous for having defined customer satisfaction as “speed.” Thomas Monahan, the founder of Domino’s Pizza, found that when people ordered a pizza, they were already hungry. For them, the speed at which the pizza was delivered was more important than the relative quality of the food. With this single insight, Thomas Monahan built a 7,000 unit pizza empire that extends around the world, and retired with a personal fortune of $1.8 billion dollars. Not a bad return on a single insight into what customers really wanted! How do your customers define satisfaction?
Profits Are The True Measure
The third habit you need to develop is the habit of thinking in terms of profitability all the time. Many businesses focus too much on the top line, on gross sales, rather than on the bottom line, on net profits. As Baron de Rothschild, in his Maxims For Success said, “Always concentrate on net profits.”
You should analyze each of your products, services, customers and markets to determine exactly how profitable they are. Many companies today are finding that their largest customers, because of high servicing costs and discounts, are not particularly profitable at all. Many companies are finding that certain products and services that they sell in large volume, because of many hidden costs involved, are not profitable. They are actually breaking even, or even losing money, on their best selling products or services.
What are your most profitable products? What are your most profitable services? Who are your most profitable customers? What are your most profitable markets? What products, services, customers or markets should you emphasize or deemphasize? Always think in terms of the bottom-line, of the dollar for dollar profitability of each one of your business activities.
Excellence Is The Answer
The fourth key result area is the habit of thinking in terms of quality all the time. Customers only buy a product or service because they feel that it is of higher quality in some way than that of competitive offerings. How do your customers define quality? What qualities or attributes of what you sell cause them to buy from you in the first place? What quality elements do they see in your competitors? How could you offset these elements to get them to buy from you?
One of your most important activities should be regular customer interaction, where you ask your customers why it is they buy from you, and how you could improve your quality and service to them. Practice the CANEI method. These letters stand for, “Continuous And Never Ending Improvement.” Remember, whatever got you to where you are today is not enough to keep you there. Whatever you are doing today, and however well you are doing it, you will have to be doing it considerably better a year from now if you still want to be in business.
The most important goal you can set for yourself and your business is to “be the best” in some area that is important to your customers. This is not only the key to increased sales and profitability, but it is also the key to motivation and commitment among the people who work for the company. Everyone likes to be part of an organization that is committed to winning, to excellence, to serving customers better than anyone else.
Your Most Valuable Assets
The fifth key result area in business is the habit of thinking in terms of people building. In business today, your primary asserts walk out the door at 5:00 pm. Of all assets, only people can be made to appreciate in value by investing time and training in them. Your people are everything. All productivity comes from them; there is no other source. All profitability comes from your people. All sales and fulfillment comes from your people. Your ability to select them and then to motivate and inspire them is essential for your success.
Develop the habit of spending time with the most important people in your business. Ask them for their opinions. Compliment on them on their accomplishments. Take them for coffee or lunch. Make them feel important and valuable. Remember, the very best companies have the very best people. And these people are invariably the ones who are the happiest because of the way they are treated by others, especially by their bosses.
Reorganize Your Business Continually
The sixth habit you can develop to build your business is the habit of organizational development. This habit requires that you continually look for ways to organize and reorganize your business so that it functions more efficiently and effectively in getting the results you desire. You continually move people around to assure that the job gets done better, faster and with less friction or interruption.
Some years ago, if a company announced that it was going through a “major reorganization,” it would be a sign that there were serious problems in that company. Today however, with the rate of rapid change in the business world around you, you and your company should be in a state of continuous reorganization. Every day, week and month, you should be thinking about how you can deploy and redeploy people and resources to assure the highest level of productivity, performance and output.
Within the context of organizational development, you should develop the habit of not only learning and growing continuously yourself, but also thinking in terms of training and learning experiences for the key members of your staff. Sometimes, one additional skill is all that a person needs to dramatically improve his or her productivity and contribution to the organization.
You should not only offer learning opportunities to your staff, but you should offer to pay for any courses or seminars that they take to improve their business ability. Encourage them to be self-directed learners. Encourage them to attend courses and seminars that are offered in your community that will help them to improve their performance and get better results. This is one of the most powerful motivational techniques of all.
Never Be Satisfied
The seventh habit you can develop is the habit of continuous innovation. As we discussed earlier in this chapter, you should encourage everyone to be thinking creatively all the time.
One way to encourage creativity is to ask each person to bring an idea to each weekly staff meeting. Start off the meeting by going around the table and having everyone contribute their ideas. Lead the general discussion about these ideas. When someone comes up with a great idea, lead the group in applause for the idea. Thank and congratulate the person. Encourage them to keep thinking in this way throughout the week.
You should have a company suggestion box. Offer a financial prize each week for the best idea to increase sales or cut costs. It doesn’t have to be very large, $5 or $10, to motivate people to think creatively all the time.
Announce the award for the best idea at the weekly staff meeting. Hand it out and congratulate the person. Shake his or her hand. Lead a hand of applause. You will be absolutely amazed at how many good ideas your people will come up with when they are encouraged and rewarded for thinking creatively.
The most important area for you to apply the habit of continuous innovation is to your products and services. Remember, fully 80% of products and services being sold today will be obsolete within five years. You must be developing and producing product and service innovations as a regular part of your business activities. If you don’t, your competitors will. One major innovation by a determined competitor can put you out of business. Be a leader, not a follower.
Think ahead and look at different ways that you can organize and reorganize your business to do things better, faster and cheaper for your competitors. Think of new products and services that you can offer. Think of new markets that you can enter. Think of different ways that you can offset advantages enjoyed by your competitors. Think of different ways that you could dominate your markets. The more you dedicate yourself to generating ideas, the more and better ideas you will come up with.
Brainpower Is the Most Important Competitive Advantage
As you read through the suggestions for the development of business habits in this chapter, you will probably notice that none of them cost any money. Every single one of these habits of thinking is learnable, via practice and repetition. You can develop them by simply reflecting upon the idea or habit on a regular basis.
The more you think about the importance of planning, the more habitual it will be for you to plan thoroughly in advance. The more you think about the importance of hiring and staffing, the more habitual it will be for you to think through the decision carefully before you hire a new person.
The more you think about customer satisfaction, the more it will become a habit for you to think in terms of different ways that you can satisfy your customers better than anyone else. The Law of Concentration says, “Whatever you dwell upon grows and expands in your life.” The more you think about any one of these habits or behaviors, the more you incorporate that habit or behavior into your personality. Eventually, it becomes a permanent part of the way you think, walk, talk act and get results.
No One Better or Smarter
Remember, no one is smarter than you, and no one is better than you. If someone is doing better than you are today, it is because they have developed a particular habit of thinking and acting before you have. And whatever other people have learned, you can learn as well.
The very fact that there are many hundreds of thousands of men and women who have started from nothing and become millionaires in business and entrepreneurship means that you can achieve these goals for yourself, if you just learn how. The only limits on your results are the limits that you place on yourself with your own thinking. By developing the thinking habits of successful entrepreneurs and businesspeople, you will eventually overcome all of your obstacles and difficulties, achieve all your financial goals, and become financially independent. Nothing can stop you.
Action Exercises:
Determine the most important thing you could do immediately to increase the probabilities that you successfully achieve your most important business goal, and then take action on it immediately.
Create an ideal future vision for your business and your career; if your situation were perfect 3-5 years from now, what would it look like?
What is the most important difference or improvement you make in the life and work of your customers, and how could you do this in an excellent fashion?
What is your greatest personal strength in your business, and how could you organize your time so that you are doing more of it?
Million Dollar Habits – Page 168
What is your biggest weakness in your business, and how could you develop yourself in this area, or compensate for it?
What innovations could you make in your products or services that would make them more attractive to your customers of today and tomorrow?
What are your most profitable products, services, markets, customers and activities, and what steps could you take immediately to focus more of your resources in those areas?
“Nothing contributes so much to the happiness and prosperity of a country as high profits.” (David Ricardo)
CHAPTER 8
Habits for Marketing and Sales Success
“All business success rests on something labeled a sale, which at least momentarily weds company and customer.” (Thomas J. Peters & Robert H. Waterman, Jr)
Calvin Coolidge once said, “The business of America is business.” He also said, “No enterprise can exist for itself alone. It ministers to some great need, it performs some great service, not for itself, but for others; or failing therein, it ceases to be profitable and ceases to exist.”
America is the greatest commercial society in history. Virtually all wealth is based on somebody producing a product or service and selling it to someone else at a profit. America is considered the most entrepreneurial country in the world according to the OECD (2003) because it is more open to more people who want to create and sell products and services to others, and the market is larger, than any other country or geographical entity.
It is the revenues and profits from sales that pay all wages, all taxes, all education, all medical expenses, and for all hospitals, schools, roads, airports, office buildings, defense, welfare, unemployment insurance, and everything else of a material nature in America. Where there are high sales, there is high prosperity. Where there are low sales, there is low prosperity, lack of economic opportunity, decline and ultimately failure.
The Reason for Success or Failure
Dunn and Bradstreet offers a credit rating service that includes most of the businesses in the U.S. Every year, active businesses are invited to contribute their financial information to this database, which is then made available for credit purposes to prospective suppliers and vendors.
Over the years, many thousands of companies close down, merge, or go bankrupt. Each year, Dunn and Bradstreet conducts a study to determine the major factors leading to business failure in that particular 12-month period. Over the years, the reasons for business failure have been high interest costs, changes in technology, poor management or under-capitalization. Often it is high inventory relative to sales, or over-indebtedness.
Not long ago, Dunn and Bradstreet took all the statistics that they had generated on failing companies over the years and ran them through a supercomputer. This program sorted out all the variables and distilled business success and failure into a simple conclusion: Businesses succeed because of high sales; businesses fail because of low sales. All else is commentary.
The rule is that, “Nothing happens until a sale takes place, until someone sells something to someone.” Businesses succeed because they make sufficient sales and generate sufficient profitability to survive and grow in the current marketplace. Businesses fail because of declining sales and revenues, which ultimately leads to the collapse of the enterprise.
The Most Important Number
The most important single number in the operation of any business is “cash flow.” In the wake of the accounting scandals amongst major companies on Wall Street, the accounting profession has reverted to focusing on what they consider to be the most important single economic denominator of business success, “free cash flow.”
Free cash flow is the amount of money that is left over or generated by the activities of the business, after all expenses have been subtracted. It is measurable, quantifiable and definite. It exists. It is there in the bank account to be accounted for and spent by the business. It cannot be faked. It is a real number. It is the critical indicator of business success or failure.
Where does free cash flow come from? It comes from marketing and sales, less all the costs of generating those sales and fulfilling those orders. There is no other source. All mortgages, loans, advances and lines of credit must ultimately be justified and repaid out of marketing and sales revenues.
Your Critical Determinant of Contribution
The greater influence that you have on the cash flow of your enterprise, the more valuable and important you are to that business. The more you can contribute toward increasing cash flow, the higher you will be paid and the faster you will be promoted. Sales are everything.
One of the most important habits that you develop on your way to becoming a selfmade millionaire is the habit of sales-orientation. All successful entrepreneurs and business people are intensely customer and sales focused. They think about their customers and how to serve them all the time. They have what Tom Peters calls, “an obsession with customer service.”
They think continually about how to make more sales to more and better customers. They are fixated on getting and keeping customers, on making more and better sales, and on developing larger and more profitable markets. They think about customers and sales night and day. This is the critical habit that you must develop to become a self-made millionaire as an entrepreneur or as a key person in any business.
The Four Habits of Marketing Success
There are several strategies, or habits of thinking and acting, that you can learn through practice that will make you a much more efficient and effective businessperson, especially in the area of generating sales, revenues and cash flow for your business. These are specialization, differentiation, segmentation and concentration. Let me describe each of them in turn.
To develop the habit of specialization requires that you decide clearly the area in which you are going to specialize to compete and win in the current market. Individuals and organizations that specialize are far more effective in creating and keeping customers than companies that generalize or try to offer too many products and services to too many customers and markets, in too many ways, at too many price points.
You can specialize in one of three main areas: products or services, customers, or markets. You specialize in a particular product or service when you decide that you are going to focus all of your energies on producing and selling a specific product or service that achieves a specific goal for your customers. For example, if you specialize in fast food, you only produce foods that can be picked up and consumed on the remises or immediately thereafter. You do not offer any product or service that don’t fall into the category of “fast food.”
If you specialize in automotive transportation, you do not manufacture tractors, photocopiers or refrigerators, even though your plants or factories could be adapted to produce these products over time. You specialize in automobiles.
Just as the pellets of a shotgun shell will spread soon after emerging from the barrel, there is a natural tendency in personal and business life toward diffusion of effort. There are so many opportunities and possibilities that the temptation to generalize, and to offer a wide range of products and services serving a wide range of customers and markets is very tempting. But successful individuals and organizations resist the temptation to spread their efforts and instead, dedicate themselves to specializing in a particular area where they have the ability to achieve market dominance. You must do the same.
Be Different From All The Rest
The second habit for marketing success, and perhaps the most important, is the habit of differentiating your product or service from that of all other competitors for the same customer. Customers only buy what they consider to be “the best” as it relates to their specific need at the moment. Sometimes “the best” is speedy delivery. Sometimes it is long-term durability of a product. Sometimes it is convenience or low price. But in every case, you must decide where and how you are going to differentiate yourself from your competitors.
This is called your area of competitive advantage, or your area of excellence. Your area of differentiation describes what it is that you offer to your customers that make your product or service superior to anything else available. How clear you are with regard to your competitive advantage largely determines the effectiveness of all your sales and marketing efforts.
Without a clear competitive advantage, an area of excellence or superiority, it is impossible for you to survive and thrive in a tough market. As Jack Welch once said, “If you don’t have competitive advantage, don’t compete.”
Ask yourself, “What is my competitive advantage today?” What makes your product or service superior to that of any of your competitors? It may be something as simple as the location of your business. It may be something less tangible, such as the personalities of the key people who sell and deliver your product or service. Many entrepreneurial businesses are started and become successful because of the personality and character of a single individual who customers prefer to deal with rather than with anyone else in that same field.
Determine Your Competitive Advantage
You should be able to write down your area of competitive advantage on the back of a business card. Once defined, it becomes the core message that you convey in all of your advertising and sales. Everyone in your company must know with absolute clarity why and how it is that what you offer is better in a particular way. Everyone must know why it is that customers should buy your product or service rather than any similar product or service available. The determination of this area of excellence, the development of this competitive advantage, is the fundamental key to business success.
What is your competitive advantage today? What will your competitive advantage be 3-5 years from now? What should it be? What could it be? What are the trends in your business, and what will you have to be doing in an excellent fashion 3-5 years from now in order to survive and thrive in the marketplace of the future?
Your ability to think ahead and answer these questions, and then to take whatever steps are necessary today to be sure that you have the competitive advantage you need sometime in the future, is essential to your long-term success.
What do you need to be absolutely excellent at doing for your customer? Looking around you at your marketplace today, and at the reasons why people do not buy from you, or even worse, buy from your competitors, what competitive advantage do you need to develop if you want to lead your field?
What could your competitive advantage be? If you were to reorganize your business, change your product or service offerings, change your market or methods of sales, marketing, manufacturing or distribution, what could your competitive advantage be sometime in the future? What steps could you or should you take today in order to assure that your products and services are clearly superior to that of your competitors sometime in the future?
The habit of asking and answering these questions for yourself is the core responsibility of the entrepreneur or executive. Developing your competitive advantage the key to success in any business. It is the primary reason for high sales and high profitability in any business large or small.
Determine Your Best Potential Customers
The third habit of marketing is the habit of segmentation. There are many people who might be able to buy what you sell, but they are not all prospective customers for you and your business. Your ability to analyze your market, and to create a profile of the exact type of customer who can most benefit from the product or service that you specialize in, who appreciates what your product or service does better than your competitors, is the key to marketing success.
In any market, there is a profile of potential buyers who are “high probability customers.” These are people who very much value what it is you do in an excellent fashion. These prospects are more willing than most prospects to buy from you. They are willing to pay you more money for your particular product or service because they value your offering more than those of your competitors.
They will pay faster and more dependably than other prospects. Your ability to identify this ideal customer for what you sell is the key to focusing your marketing and sales efforts and activities.
Focus and Concentrate Your Sales Efforts
The fourth habit for marketing success is the habit of concentration. Your ability to concentrate in general is essential for achieving success in any activity. The ability to concentrate in particular, and to focus all of your marketing and sales efforts and energies on those specific customers that you have identified who can most benefit from what you sell, is the key to maximizing your sales, revenue and profits.
Develop the habit of thinking like a marketing genius. Develop the habit of asking yourself questions like, “In what areas do we specialize? In what areas are we superior to our competitors in our area of specialization? Who are the most desirable and attractive market segments for what it is that we do better than anyone else? How can we organize ourselves to concentrate all of our resources on selling more to those customers who most appreciate what we can do for them better than our competitors?” Your ability to ask and answer these questions accurately can transform your business results.
Once you have developed your marketing strategy, there is a “Seven P Formula” that you should use to continually evaluate and reevaluate your business activities. As products, markets, customers and needs change rapidly, you must continually revisit these seven P’s to make sure that you are on track and achieving the maximum results that are possible for you in today’s marketplace.
Look From the Outside
To begin, develop the habit of looking at your product as though you were an outside marketing consultant having been brought in to help your company decide whether or not it is in the right business at this time. Ask critical questions such as, “Is your current product or service, or mix of products or services appropriate and suitable for the market and the customers of today?”
Whenever you are having difficulty selling as much of your products or services as you want, you need to develop the habit of assessing your business honestly and asking, “Are these the right products or services for our customers today?”
Is there any product or service that you are offering today that, knowing what you now know, you would not bring out again today? Compared to your competitors, is your product or service superior in some significant way to anything else that is available? If so, what is it? If not, could you develop an area of superiority? Should you be offering this product or service at all in the current marketplace?
Take the Bundle of Resources Viewpoint
Develop the habit of looking upon your business as a “bundle of resources.” At one time, your business did not exist. When it began, you brought together a variety of resources, in the form of people, money, facilities and so on, to produce a product or service to sell into the market that existed at that time.
This bundle of resources that makes up your company is very much like pistol. It can be aimed and fired in different directions. This bundle of resources can be combined and recombined to produce new products or services as the market changes.
Resist the temptation to become rigid in your ideas about the products or services you sell. Be flexible and open to the possibility or necessity of offering something completely new or different. See your business as a bundle of resources that has the ability to offer a wide range of products or services if the market demands it.
Consider Your Prices Carefully
The second habit you need to develop has to do with price. Develop the habit of continually examining and reexamining the prices of the products and services that you sell, to make sure that they are still appropriate to the realities of the current market. Sometimes you need to lower your prices. At other times, it may be appropriate to raise your prices. Many companies have found that the profitability of certain products or services does not justify the amount of effort and resources that go into producing them. By raising their prices, they may lose a percentage of their customers, but the remaining percentage generates a profit on every sale. Could this be appropriate for you?
Sometimes you need to change your terms and conditions of sale. Sometimes, by spreading your price over a series of months or years, you can sell far more than you are today, and the interest that you can charge on the amount that you carry will more than make up for the delay in cash receipts. Sometimes you can combine products and services together, with special offers and special promotions. Sometimes you can include free additional items that cost you very little to produce but which make your prices appear far more attractive to your customers than they were before.
In business, as in nature, whenever you experience resistance or frustration in any part of your sales or marketing activities, be open to revisiting that area. Be open to the possibility that your current pricing structure is not ideal for the current market. Be open to the need to revise your prices if necessary to remain competitive, to survive and thrive in a fast changing marketplace.
Proper Promotion Is the Key to High Sales
The third habit in marketing and sales is for you to develop the habit of thinking in terms of promotion all the time. “Promotion” includes all the ways that you tell your customers about your products or services, and how you then market and sell to them.
Small changes in the way you promote and sell your products can lead to dramatic changes in your results. Even small changes in your advertising can lead immediately to higher sales. Experienced copyrighters can often increase the response rate from advertising by 500% by simply changing the headline on an advertisement.
Large and small companies, in every industry, continually experiment with different ways of advertising, promoting and selling their products and services.
And here is the rule: whatever method of marketing and sales you are using today will, sooner or later, stop working. Sometimes it will stop working for reasons you know, and sometimes it will be for reasons that you don’t know. In either case, your methods of marketing and sales will eventually stop working, and you will have to develop new sales, marketing and advertising approaches, offerings and strategies.
Sales Training Can Double Your Sales
One of the most important parts of promoting your product or service has to do with the exact way that the product is sold when your customers are face to face with your salespeople. What are the exact words that are used? What is the exact offer that is made? What is the exact process that is used to identify the customer’s needs, make presentations and close the sale?
Fully 70% of salespeople in America have never been given this type of sales training. Instead, all they have received from their companies is “product training.” This is usually because many companies are operated by people who have not been in the sales field themselves. As a result, they are blind to the fact that fully 80% of sales success, if not more, is determined by the quality of the salespeople when they are face-to-face with the customer. Small improvements in the quality of this interface can lead to dramatic improvements in the level of sales, no matter what the product and service, and no matter what the state of the current market.
In my personal work with more than 500 companies, and more than 500,000 salespeople, I have found that small changes in sales proficiency often lead to rapid increases in sales results. I have worked with literally thousands of individuals, and hundreds of companies, who have been able to increase their sales five and ten times by learning and practicing better sales methodologies.
Where Your Product Is Sold Or Bought
The fourth “P” in the marketing mix is the “place” where your product or service is actually sold. Develop the habit of reviewing and reflecting upon the exact location where the customer meets the salesperson. Sometimes a change in place can lead to a rapid increase in sales.
There are many different places where you can sell your product. Some companies use direct selling, sending their sales people out to personally meet and talk with the prospect. Some sell by telemarketing. Some sell through catalogs or mail order. Some sell at tradeshows, or in retail establishments. Some sell in joint ventures with other similar products or services. Some companies use manufacturers representatives or distributors. Many companies use a combination of one or more of these methods.
In each case, the entrepreneur must make the right choice about the very best location or place for the customer to receive essential buying information on the product or service that he needs to make a buying decision. What is yours? In what way should you change it? Where else could you offer your products or services?
How Good Does It Look?
The fifth element in the marketing mix is the “packaging.” Develop the habit of standing back and looking at every visual element in the packaging of your product or service through the eyes of a critical prospect. Remember, people form their first impression about you within the first 30 seconds of seeing you or some element of your company. Small improvements in the packaging or external appearance of your product or service can often lead to completely different reactions from your customers.
With regard to the packaging of your company, and your product or service, you should think in terms of everything that the customer sees with his or her eyes from the first moment of contact with your company, and all the way through the purchasing process.
The element of packaging refers to the way your product or service appears from the outside. Packaging also refers to your people, and how they dress and groom. It refers to your offices, your waiting rooms, your brochures, your correspondence and every single visual element about your company. Everything counts. Everything helps or hurts. Everything increases the confidence of your customer in dealing with you, or lowers his or her confidence in dealing with you.
When IBM started, under the guidance of Thomas J. Watson, Sr., he very early concluded that fully 99% of the visual contact that a customer would have with his company, at least initially, would be represented by the salespeople for IBM. Because IBM was selling relatively sophisticated high-tech equipment, Watson knew that customers would have to have a high level of confidence in the credibility of the salesperson who was encouraging them to buy. He therefore instituted a dress and grooming code that became an inflexible set of rules and regulations within IBM.
As a result, every salesperson was required to look like a professional in every respect. Every element of their clothing, including dark suits, dark ties, white shirts, conservative hairstyles, shined shoes, clean fingernails, and every other feature gave off the message of professionalism and competence. One of the highest compliments a person could receive was “You look like someone from IBM.”
Revamp Your Personal Image
Many companies change their results by establishing a dress code for the people in their company who deal with their customers. They know the importance of appearance. During the dotcom boom of the late 90s, when business was exploding, many young dotcom executives would come to work in shorts, sandals and undershirts. But they would keep a business suit nearby to change into if a customer or venture capitalist came to visit. They recognized that people make lasting and important decisions based on how they look on the outside.
Many of my entrepreneurial clients return home from our Coaching and Mentoring sessions and completely revamp their images, changing their ways of dressing and grooming so they look better and more credible to their customers.
They often renovate their offices, especially their waiting rooms, so that when their customers visit, the first thing they see are beautiful, professionally appointed premises. In every case, my clients report to me that their customers are more open and receptive to buying, and easier to deal with, when their surroundings are attractive and professional.
Ask yourself some questions. Do you dress and look like a first class professional, in every respect, when you go to work, and when you meet with your customers or suppliers? Are you proud of the appearance of your staff? Do you feel happy to introduce your staff, with the way they currently dress and look on the outside, to your customers and supplies? Are your offices neat, clean, organized and attractive? Are you proud to have critical customers visit you and walk around your facilities?
Especially, do your products look absolutely excellent on the outside? Are your brochures beautifully designed and printed? Is your packaging attractive? Are you proud of every visual element that strikes the eyes of your customers in their dealings with you? Is there anything that you could or should change or improve to create a better visual image for your customers? If your answer is “yes” for any reason, you should act immediately to change what needs to be changed.
Position Yourself Properly
The next part of the marketing mix is called “positioning.” You should develop the habit of thinking continually about how you are positioned in the hearts and minds of your customers. How do people think about you and talk about you when you are not present? How do people think and talk about your company? What positioning do you have in your market, in terms of the specific words that people use when they describe you and your offerings to others?
In the famous book by Reis and Trout, Positioning, they point out that how you are seen and thought about by your customers is the critical determinant of your success in a competitive marketplace. Attribution Theory says that most customers think of you in terms of a single attribute, either positive or negative. Sometimes it is “service.” Sometimes it is “excellence.” Sometimes it is “quality engineering,” as it is with Mercedes Benz. Sometimes it is “the ultimate driving machine,” as it is with BMW. In every case, how deeply entrenched that attribute is in the minds of your customers and prospective customers, determines how readily they will buy your product or service, and how much they will pay.
Develop the habit of thinking about how you could improve your positioning. Begin by determining the position that you would like to have. If you could create an ideal impression in the hearts and minds of your customers, what would it be? What would you have to do in every customer interaction to get your customers to think and talk about you in that specific way? What changes do you need to make in the way you interact with customers today in order to be seen as the very best choice for your customers of tomorrow?
People Are Everything
The final part of the marketing mix is the “people.” Develop the habit of thinking in terms of the people inside and outside of your business who are responsible for every element of your sales and marketing strategy and activities.
It is amazing how many entrepreneurs and businesspeople will work extremely hard to think through every element of the marketing strategy and the marketing mix, and then pay little attention to the fact that every single decision and policy has to be carried out by a specific person, in a specific way. Your ability to select, recruit, hire and retain the proper people, with the skills and abilities to do the job that you need to have done, is more important than everything else put together.
In his best selling book, Good To Great, by Jim Collins, he discovered that the most important factor applied by the best companies was that they first of all, “got the right people on the bus, and the wrong people off the bus.” Once these companies had hired the right people, the second step was to “get the right people in the right seats on the bus.”
To be successful in business, you must develop the habit of thinking in terms of exactly who is going to carry out each task and responsibility. In many cases, it is not possible to move forward until you can attract and put the right person into the right position. Many of the best business plans ever developed sit on shelves today because they could not find the key people who could execute those plans.
Putting It All Together
You have now developed the habit of marketing orientation, continually thinking in terms of marketing strategy and the seven “P” marketing mix.
You have developed the habit of customer orientation, continually thinking about your customers and how your activities, at every level, affect them and influence their buying decisions.
In your development of the habit of sales orientation, there several smaller but equally important habits you must develop to maximize your business potential. Sales orientation requires that you think continually about how to make more sales, better, faster and easier, and more profitably than ever before. In reality, the sales effort is where the rubber meets the road in every competitive business.
An average product that is aggressively sold by first class professionals will dramatically outsell a superior product that is sold in a mediocre way by untrained salespeople. There are seven key habits that you must develop as a sales expert. Habitually thinking about each of these seven elements of the sales process, and how each of them could be improved, is the key to increasing your sales, your revenues and your profitability.
Finding Ideal Customers
The first habit of top salespeople is that they think about prospecting most of the time. To succeed greatly in sales, you must develop the habit of “spending more time with better prospects.” You must develop the habit of prospecting and looking for new business 80% of the time. You must be prospecting morning, noon and night. You must never relax in your prospecting efforts until you have so many customers that you do not have enough time left in the day to sell and satisfy all the people who want to buy from you.
If you have analyzed your business in terms of specialization, differentiation, segmentation and concentration, you will already have a good idea of the customers and prospects that you should focus on. If you have analyzed your business in terms of the seven P’s: Product, Price, Promotion, Place, Packaging, Positioning and People, you will be able to zero in more accurately on exactly those prospects who can most benefit the most rapidly from the product or service that you offer. But you must develop the habit of thinking about prospecting all the time, whether you are a salesperson, or whether you own the entire company.
Relationships Are Everything
The second habit for sales success is the habit of focusing on the relationship before anything else. You should focus on establishing rapport, trust and credibility with each prospect from the first contact. The most successful salespeople, once they have identified a key prospect, take as much time as is necessary to establish trust with that client. They ask good questions and listen closely to the answers. They lean forward and take careful notes. They seek to understand the customer’s situation and needs before they make any attempt to talk about their product or service.
The rule is this. “If the customer likes you and trusts you, the details will not get in the way of the sale. If the prospect however, is neutral toward you, or even worse, negative, the details will trip you up every step of the way.”
Identify Needs Clearly
The third habit of top salespeople is that they make a habit of asking questions and identifying the real needs of the prospect relative to what they are selling. Most prospects are not aware that they can improve their life or work situation when they first meet you. This is the reason that prospects often say things like, “I’m not interested,” or “I can’t afford it,” or “We’re quite happy with our existing situation or supplier.”
This is normal and natural. Most products and services that you sell are new, different and offer advantages and benefits that the customer is not yet aware of. The more you ask questions about the customer’s situation, and suggest that he or she could be much better off with what you sell, the more open the customer becomes to learning about your product or service, and eventually buying it.
The Presentation Is Where the Sale Is Made
The fourth habit developed by all sales professionals is the habit of making excellent, logical, well thought out presentations of the features and benefits of their product. Once they have clearly identified the customer’s wants and needs, they show the customer that his or her needs can be ideally satisfied by their product or service, and in a cost effective way.
In reality, the sale is actually made in the presentation. If you have identified a prospect who can benefit from what you sell, established a comfortable level of trust and rapport, and identified his or needs clearly, the presentation is where you show the customer why it makes excellent sense for him or her to take action on your recommendations.
Friend, Advisor, Teacher
In effective selling, you position yourself as a friend, an advisor, and a teacher. As a friend, you make it clear that you are more concerned with helping the customer to solve a problem or satisfy a need than you are about simply making a sale. Once the customer realizes that he or she can trust you and what you say, the customer will relax and open up. He or she will then tell you everything you need to know to help him or her to make a buying decision, or to determine that your product or service is probably not appropriate for this customer at this time.
In positioning yourself as an advisor in the sales presentation, instead of trying to overwhelm resistance, you instead present what you are selling as a solution to a problem, or as the satisfaction of a need. You present your product or service by giving advice that helps the customer to understand why what you sell will improve his or her life or work situation. You invite comments and you make recommendations rather than attempting to induce the customer to buy.
Finally, you position yourself as a teacher by educating your customer in how he or she can most benefit from what you are selling. The more that you focus on learning about the customer’s situation, and then teaching the customer how much better off he or she can be with your product or service, the more the customer will relax and trust you, and accept your recommendations.
Answering Objections Effectively
The fifth stage of excellent selling is the habit of answering objections and resolving concerns in a confident, competent manner. You do this by thinking through all the objections that a qualified prospect might give you, as reasons for not proceeding with your offer. You then develop logical and complete answers to each of these objections so that you are prepared if and when they come up.
The very best sales professionals have thought through every possible objection they could receive, and developed completely clear “bullet proof answers” to them, so that once they arise and are answered, they never arise again.
Asking For the Decision
The sixth part of selling is developing the habit of asking the customer to make a buying decision. No matter how good your presentation, or how high the level of trust and credibility that exists between you, there is always a moment of stress or tension at the making of a buying decision. Your job is to move quickly and professionally through that stressful moment by asking for the order in a confident, professional manner, and then wrapping up the sale.
The very best sales professionals plan their closes in advance. They watch for buying signals from the customer. They ask questions to make sure that there are no lingering objections. They then ask clearly and straightforwardly for a buying decision, and for the customer to take action now.
Here’s an interesting point: the more competent and confident you are in asking for the order at the end of the sales presentation, the more motivated and positive you are about prospecting at the beginning of the sales process. The better you get at closing the sale, the better you become at every other stage of the sales process, because you develop the habit or the “conditioned response” of anticipating sales success as the result of your efforts. You become self-motivated.
Ask For Resales and Referrals
Finally, top sales professionals develop the habit of asking for resales and referrals from each customer. They know that every person they talk to knows at least 300 other people by their first name. They therefore give good service to their customers and ask for referrals to similar prospects to the one to the person who has just bought from them.
The habit of thinking in terms of resales and referrals is the key to high income and high profitability. The most successful salespeople and companies have high levels of repeat business, and a continuous stream of new customers that come from referrals from their satisfied customers.
Here is an exercise for you. Imagine that three months from today, a law was going to go into effect that made it illegal for you to prospect for new customers. The only selling that you could do would be to referrals that you received from your existing customer base. You would have to organize your time, your work and your activities in such a way that your existing customers were so happy with you that they would give you a steady stream of referrals.
What could you do, starting today, to work “by referral only?” What steps could you take immediately to assure that your existing customers supply you with an endless stream of referrals in the future? What should you do right now to begin this process?
The key to success in business is repeat customers. These are customers that buy from you, buy again and bring their friends. These are people who become “customer advocates.” They tell everybody they know about how good your products and services are, and urge them to buy from you.
The Keys to Profitability
In the PIMS Studies at Harvard, examining the sales and profitability of 620 companies over a multi-year period, they found that “perceived product quality” was the critical determinant of the sales, growth and profitability of almost every company.
In addition, they discovered that product quality was only 20% determined by the actual product or service itself, and fully 80% determined by the way that the customer was treated during the sales and ownership process. The nicer, more responsive and more efficient the people in the company were toward the customer, the higher level of customer loyalty and the greater perceived quality of the product or service sold.
Superb Customer Service
There are four habits that you need to develop to achieve a reputation for superb customer service. The habit of service orientation toward your customers is the key to repeat sales, lower marketing and sales costs, and higher profitability. There are four levels of customer service that determine your ranking in your industry.
The first level of service is for you to develop the habit of consistently meeting the expectations of your customers. To achieve this, it is absolutely essential that you find out what customers expect of you. And whatever it is, it is vital to your survival and success that you meet those expectations every single time.
A primary source of anger, frustration and negative emotions, both personally and commercially, is “frustrated expectations.” This is when we expect something to happen and it does not happen the way that we wanted it to. Whenever you experience negative emotions of any kind, it can almost always be traced to having been frustrated or disappointed in a particular expectation. This is doubly true with regard to customers, and their dealings with different companies.
The most successful and profitable companies are those that made a habit of clearly identifying what customers expect, and then organizing the entire business to be sure that those expectations are delivered upon 100% of the time.
Do More Than Is Expected
However, meeting customer expectations is just enough to keep you in business. It is not enough for you to grow and succeed in a competitive marketplace. To do that, you must develop the habit of exceeding customer expectations. You must do more than customers expect. You must do things that are outside of the range of expectations. It is these extra things that you do that cause customers to be happy in dealing with you, and cause them to want to buy from you again
What are the little things that you can do better, faster, cheaper and easier that will make your customers happy that they dealt with you. Could you offer something extra to your customers that they did not expect? Could you do something extra for your customers that they had not thought of? How can you exceed your customer’s expectations, every day?
As it happens, as soon as a company finds a way to exceed customer expectations, and it becomes known in the marketplace, your competitors will copy you and duplicate your efforts in an attempt to stay even with you, if not get ahead. Therefore, every time a way of exceeding customer expectations becomes common knowledge in the workplace, it becomes a normal expectation of customers. From then on, customers expect to get what was at one time something extra in the normal course of doing business with you.
Delight Your Customers
The third level of customer satisfaction is when you develop the habit of delighting your customers. You delight your customers when you do something that is so unusual that it makes your customers especially happy. It can be something as little as a follow-up call from a senior executive to a new customer. It can be a call thanking them for the business and asking them for any ideas on how you might improve your services to them in the future. It can be something larger, like a gift of flowers or fruit to a customer who just placed a large order. It can be a thank you card signed by several people in the company. It can be a personal visit by a key executive to a new customer. In every case, these little gestures, which are not particularly expensive, leave a wonderful impression in the customer’s mind and dramatically increase the probability that he or she will buy from you again.
Amaze Your Customers
The highest level of customer service is when you develop the habit of amazing your customers. This is when you do something for them that is so extraordinary that they want to run around and tell everybody they know. Develop the habit of continually thinking of things you could do that would amaze your customers. This could change the whole nature of your business.
Some years ago, in the midst of the Federal Express advertising campaign, “When it absolutely, positively has to be there overnight,” there was a major blizzard in Colorado that closed down the mountain passes between Denver and the ski resorts to the west. Without reference to his superiors, a Federal Express deliveryman, who was blocked from fulfilling the promise of Federal Express, charted a helicopter to fly over the mountains and deliver Federal Express packages to his key customers.
To get maximum benefit, he telephoned ahead to find out where he could land a helicopter to deliver the packages. The story was picked up by the newspapers and eventually broadcast worldwide. It cost Federal Express several thousand dollars for the helicopter, but it earned them millions of dollars in good publicity by their effort to amaze their customers with service beyond anything they could ever expect.
Love Your Customers
Perhaps the most important habit that you can develop for business success is to think in terms of “loving your customers.” Stand back and look at your customers, your products, your services, your marketing and sales efforts and your business activities. If you genuinely loved your customers, the way you love the most important people in your life, what would you do differently from the way that you deal with them today? What changes would you make in your product or service quality standards? What changes would you make in your customer service policies? If you genuinely loved your customers, and wanted to please and satisfy them more and better than anyone else, what would be the first thing you could do to demonstrate this?
Nothing happens until a sale takes place. Your ability to put yourself in the shoes of your customers, to treat each customer the way that you would like to be treated if the situation was reversed, is the most important habit that you can develop for business and financial success. By developing the habit of thinking in terms of marketing, sales and customer service all the time, you will become better and better in every area. You will achieve all your business, personal and financial goals and lead the field in your business. You will earn the esteem, loyalty and respect of everyone inside and outside of your business, and become one of the most successful businesspeople of your generation.
Action Exercises:
Determine your area of specialization, in customers, products or markets, and make a plan to become the best in that area.
Decide upon your area of excellence, your “unique selling proposition,” and organize all your marketing and sales efforts around it.
Segment your market and determine those prospects who can most benefit from what you do well, and who can buy and pay the most readily.
Focus and concentrate all your marketing and sales efforts on your very best prospective customers.
Position yourself in everything you say and do as the most credible and believable supplier of your product or service to your ideal customer.
Treat your customers as if they were the most important people in your business life, because they are.
Decide upon the improvements you are going to make immediately to sell and service your customers better than anyone else in your market.
“The Golden Rule for every businessman is this: ‘Put yourself in your customer’s place.’” (Orison Swett Marden)
