Boy, could that stand repeating every now and then! I’m happy to welcome back guest contributor, Rachel Parker, who brings us more realness direct from the trenches. In this post, she shares an entertaining and educational story. It’s the case of a talented musician who might have gained more traction were it not for his sorely out-of-tune (business) instruments.
Know Thy Customer
This week, I did something I almost never—and this is an understatement—do.
I turned down work.
I’ve been working as a freelancer (with more steady gigs than not) since 2005. I love working. I am from the Midwest. You may know it as the flyover, but I know it as the place where there is weather and people define themselves by their work ethic. My father has always said in reference to me, with pride: “She’s a good worker.” I’ve learned, over the years (both as an employee at start ups as well as a consultant) that the most successful businesses are run by leaders who immerse themselves in every nuance of the sales process. They KNOW their customer. They KNOW how their customer finds them. This is their religion as much as their actual product or service is. A real product cannot disenfranchise itself from its sales and marketing process. A good leader knows this.
I am, at present, consulting for a tech company in Europe from my home in L.A on a part-time basis. It’s steady, but I need some more hours. I responded to a post I found on Craigslist, someone looking for a part time “marketing ninja” (which I think I’m going to start calling myself) to help out with a music promoter.
I send an appropriately aggressive but funny email in response. (Who asks for a part time ninja that doesn’t want some tongue in his cheek, right?) The guy got back to me right away after seeing my resume.
“You’re absurdly overqualified for this,” he said. (The pay wasn’t great.)
I agreed with him, but I told him that what I needed was a few hours a week to fill out some other work that I already had, and he got it right away.
“Let’s meet at my office tomorrow at noon,” he said.
His office in Santa Monica was tidy and small. He’s an L.A. musician, who found a niche for himself, playing weddings and big corporate events. He told me where he’d played (fancy Hollywood award ceremonies, fancy hotels, fancy weddings, good corporate events). This is a business that had been making him a good living, and business had been slow.
“The problem, Rachel,” he said to me, “is that no one here knows shit about how to do marketing.”
We talked for a while about all the, well, shit I do know about marketing, that I was sure I could help do some basic business development and marketing work to help him build his business back up; that even though the pay was low (less than 1/3 of my normal book rate), it sounded fun, at least it was creative, and that we’d talk the following week about setting up another meeting.
Delegate, Not Abdicate
When we talked the next time—on Tuesday—I started asking questions. When I start working with a new client or at a new gig, I ask a lot of questions. He’d already told me that this was his worst year, and I wanted to know why. What changed? He made it through the worst years of the recession doing well, what happened in 2014?
Me: Do you have a database of past customers?
Him: I think so.
Me: How is it stored?
Him: I don’t know. You’ll have to ask the girls [referring to his assistants who did all the booking and client contact for him].
Me: What kind of response have you gotten when you’ve farmed those contacts in the past?
Him: I have no idea. I’m telling you, I’m just not into that kind of stuff.
Me: Who refers most of your business to you?
Him: I don’t know.
Me: Event planners, wedding planners, your website, referrals from previous clients?
Him: I said, I don’t know and I don’t want to know.
Me: You have no idea where the bulk of your referrals come from?
Him: I have enough on my mind just trying to play music. I don’t want to be bothered with any of that.
Me: You realize that it’s crucial that you always digest what percentage of your business comes from what source, right?
Him: Listen, I already have to practice my instrument, and rehearse my bands. I don’t have time for that.
He then explained that the reason his business had fallen off is that he would occasionally have people work for him for a short term period (someone like me), business would do well, that person would leave, then business would fall off.
“Then it’s even more important then that you, yourself, know intimately how you get new and repeat business,” I said.
“That’s exactly what I want to outsource,” he said.
I took me about 10 minutes to wrap up the call and assure him that I wasn’t the right fit for him and that he should pick up one of the other hundreds of resumes he got emailed and take it from there.
Where Does Your Money Come From?
In the spirit of transparency, had the gig paid a lot, I would have done it. The time frame was short term, and, frankly, I could use the cash. I love music and I love supporting live music of any kind and, to be absolutely fair, this guy did have a good head on his shoulders and seemed to have a decent business that has done well in the past in terms of cash flow.
However, this is my gospel: I will never, ever again work for a business owner who thinks that it’s someone else’s job to understand how their own business cycle works. I’ve had to make this solemn vow to myself because the gigs I’ve held that ended badly have always been at companies helmed by people who didn’t focus enough on how their customers found them. It sounds so basic, doesn’t it?
Here’s an example: I’m sure if you walked into Tim Cook’s (current CEO of Apple) office and said “Tim, I want you to break down the major revenue sources for your company and tell me in simple terms the most impactful and effective tools that you use to earn that income,” he would, off the top of his head, spout those numbers. I’m not saying it’s his job to execute it. Of course, executing those tactics should be left to a team, but it’s his JOB as the company’s leader to know what’s the most effective way to make money.
I briefly worked with an electrician. This was such a blue-collar guy I don’t think he owned a white shirt. I asked him where he got most of his business and he went down the line like he was reciting it from memory (he was): Angie’s List gave him about 30% of his new business every year, another, say 30% was from direct referrals and the rest was repeat business from old customers. I’ve oversimplified all of that but the point is, the electrician knew where the hell his income came from.
Why is this important if you’re an entrepreneur? Everyone understands that business owners have to spend most of their time doing the thing they do, be it practicing the law, medicine, selling tires, etc. And, yes, those people need to hire marketing people—-people like me-—to ensure that all of their advertising and business development efforts stay on track. The trick is that the owner has to ASK the marketing person on a regular basis what’s working. What spends are the most effective? WHO and WHAT are the best marketing investments with the best ROI?
My point is also this: I also am empathetic if you’re an artist, or a creative professional, and you’ve found a niche that allows you to do what you love and make money. Our passions take time. We all have to rehearse, practice, rewrite drafts, go to voice lessons, etc. You, as a creative professional, however, are no less responsible for knowing your sales process than any other business owner. The guy I interviewed with was 1,000% right about outsourcing marketing. No one can do everything and they shouldn’t. But a small business owner has to take responsibility for knowing where that business is coming from so when that marketing person moves on, he can share that knowledge with the next one.
The thing you can’t outsource is your knowledge base. I tried to evangelize this to the musician. I assured him that if this isn’t what he “wanted to be bothered with” we shouldn’t work together. I explained that I would always push him to know that, say, X% of his highest paying gigs came from event planners or that X% of his clients referred him at least one booking. THIS IS THE MOST IMPORTANT INFORMATION THAT A MARKETING PROFESSIONAL CAN SHARE WITH A BUSINESS OWNER. He assured me that, if and when I tried to share this with him, he would rebuff my efforts to educate him. He basically said he wouldn’t listen.
And so, I said no thank you. I said it really nicely. I told him that I would be happy to answer questions for him, and I assured him it wasn’t a financial issue. I’ve learned the hard way that no matter someone’s profession, successful business owners and business leaders learn to embrace every aspect of their business, not just the parts of the business that interest them.
The Top 9 Tips For You to Consider
To both budding and seasoned entrepreneurs, below is a checklist. Some of it may be painfully obvious. Hopefully, most of it is helpful.
- Invest in a CRM tool. What is a CRM tool? It is essentially a computerized database that allows you to keep your client records current. You can typically also link it up with your accounting and invoicing software so you can even have, at your fingertips, records of who has spent what with you. Most of them can be customized so that you can create fields in the records that are important to you.
If you don’t have a CRM, any marketing consultant worth his or her salt can recommend one and hold your hand as you set it up or set it up for you. If this isn’t something that you have, I want you to drop everything that you’re doing and don’t stop until this is done. It’s 2014. We all have iPhones. Seriously, just get this done.
- If your sales are dwindling, invest in a marketing consultant who isn’t afraid of business development. Small businesses need consultants who can wear multiple hats. There are all kinds of marketing generalists out there. Find one, like me, who enjoys doing a little networking on your behalf. Make sure that person shares her networking secrets and methods with you so that you know what’s working. You shouldn’t expect any consultant to be your sales person, but you CAN hire someone to build up your database of contacts. Make sure that you get introductions to new contacts as quickly as possible because, ultimately, your business lives or dies with you. Consultants are the means to the end, not the end in and of themselves.
- If your marketing consultant needs some cash to market the business, please find it. Another reason I didn’t work for the aforementioned client is that he openly admitted that he didn’t have much of a marketing budget. Even if it’s $500, put something aside to help your consultant do something creative. We can all do a lot even with a little if you let us.
- Learn how to speak the language of sales. Your consultant should be able to help you do this. The SECOND that you decided to go into business for yourself, you became a sales person. When your marketing consultant gives you sales advice, write it down, stick it under your pillow and sleep with it until it becomes gospel.
- Have weekly meetings with your marketing pro. The topic of the meeting should always be, in a nutshell, “here are the things that are working and here are the things that didn’t.” Cover the bases in an hour. Write it all down. Understand it. Ingest it and learn from it. Accept that this is how you will stay in business forever.
- Train your entire staff to ask this question when a new customer contacts you: “How did you hear about us?” Your best knowledge is being left on the table if you don’t collect this simple answer. Make sure the answer is recorded in the, you guessed it, customer record in your CRM. This is the best, and cheapest, form of market research that you can ever do.
- Write thank you notes to everyone for everything. If you have an informational meeting, send a thank you note. A handwritten one, signed by you. Is it old fashioned? Yes, yes it is. Is it effective? Anyone can send an email. But if you’ve met with a contact who can potentially refer you business and he or she gets a card from you a day or two in the mail later, I promise you, you will stand out.
- Always send your clients thank you gifts. It doesn’t have to be anything expensive. It should really be in direct proportion to the amount of income they represent to you. So, a Starbucks gift card may be perfect for a one time small client, but a client or a referral partner that represents lots of revenue should get something generous from you. Don’t send anyone corporate swag with your logo on it. I will haunt your dreams if you don’t stop sending those t-shirts and mouse pads. Send something that feels personal. Send something that looks like you care and like you want them to know that you appreciate their business.
- While we always have to try new things in marketing, systematize your process as soon as you can. When you discover a certain method works, document it. All of these tactics should be added to a list called “This is what we need a marketing/sales consultant to do” and add to it or adjust as necessary. It’s a given that the marketplace changes and the things that worked today may not work tomorrow. But, you won’t have any idea about what works until you have a system.
Entrepreneurs have it tough. They are experts in a field that most likely doesn’t have anything to do with running a business. Successful entrepreneurs learn as much about their customers as they can. You don’t need business school for this. You need patience, organization, and a passion for the sales process. You probably also need some advice. There are experts out there that can help you. Those experts know what they’re talking about when it comes to sales. If you’re not ready to listen, however, we will eventually move on and you will be left with the same mess that we walked into.
Her list of consulting credits is a bit more robust. She helped bring MarketWire (now Market Wired) from a boot-strap start up into a profitable company. She’s worked for about a half dozen tech start ups since then and is now proud to be supporting the launch of a new gaming site (she’d tell you the name but she’s sworn to secrecy until the thing is live). Her professional experience has given her expertise into everything from why Best Effort Internet delivery isn’t going to support global video traffic to why people who think that the U.S. should revert to the gold standard may not be completely insane.
She studied playwrighting and acting at the University of Southern California.
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