Every year I make predictions. I predict who will win the Super Bowl. I predict who will win this election or that. And so on. Like most people, sometimes I’m right. And often I’m wrong.
However, I rarely if ever make predictions publicly. Unless, that is, I am extremely confident my prediction will come true. Maybe this is a psychological flaw; that I don’t want to feel publicly humiliated by making a wrong prediction. If it is, so be it; the fact is that I only make public predictions when I’m close to certain they’re right.
In fact, my last public predictions came nearly 4 years ago today. On that day, in an email to over 80,000 entrepreneurs, I predicted that Crowdfunding (which had just begun) was going to be huge. It turns out, I was right.
1) The Growth of Crowdfunding
When I predicted the success of Crowdfunding in 2010, it wasn’t even an industry yet, so there are no formal statistics on it. But as you can see in the chart above, $1.5 Billion was raised with Crowdfunding in 2011. This amount increased by 80% in 2012 to $2.7 billion. And then from 2012 to 2013, Crowdfunding increased by 89% to $5.1 billion.
2) Why Crowdfunding Has Taken Off
There are several reasons why Crowdfunding has succeeded.
One reason might be that we are becoming more and more of a consumer society; which is defined as a society in which the buying and selling of goods and services is the most important social and economic activity. People simply like to buy things, and investing in a company is a type of buying.
Another reason is probably that people want to belong and be part of something. By investing in a nascent company, you essentially become part of it. If it succeeds, you were there from the beginning. That’s exciting!
Another reason is that we more and more live in an entrepreneurial culture. Entrepreneur success stories, like Mark Zuckerberg and Facebook, are now mainstream media. Top entrepreneurs have gained the public status formerly only occupied by actors, musicians and athletes. Likewise, television shows like Shark Tank have positively shined light on entrepreneurship.
3. Will the Growth of Crowdfunding Continue?
Yes, I am 100% confident that Crowdfunding will continue to rapidly grow. Here’s why. While the JOBS was signed in April 2012, it did not allow for equity-based Crowdfunding until the SEC approved certain regulations. Some of those regulations have since been approved. For example, "accredited investors" can now make equity-based Crowdfunding investments. But non-accredited investors still cannot. When this changes (which is expected later this year), and the general public can invest, the Crowdfunding market should grow like wildfire.
4) How Can You Take Advantage of the Rapid Rise of Crowdfunding?
To raise Crowdfunding, do the following:
1. Follow the 14 Step Formula
Below are the 14 steps I teach in my Crowdfunding Formula course that are critical to successfully raising donation or rewards-based Crowdfunding.
1. Choose your Crowdfunding platform
2. Create an account
3. Create your funding project
4. Categorize your project
5. Create your project tagline
6. Create your project teaser text
7. Create your full text project summary
8. Determine the right fundraising amount
9. Determine the right donation time
10. Develop your list of rewards
11. Create your project visuals
12. Create your project video
13. Promote your project to your network
14. Maintain and update your project
2) Become a Great Marketer
No matter how good your idea is, you will need to market it to others to get them to invest in it. A good analogy is this: every day thousands of people release videos hoping and thinking they will go viral, but they don’t. Even if their video is great, they need to get it in front of a bunch of people who watch it, like it, then spread the word.
In 2010 I called Crowdfunding the most exciting thing that’s happened in the entrepreneurial space since the first venture capital investment was made in the 1950s. Crowdfunding is helping entrepreneurs raise money and gain customers, and more and more Crowdfunding success stories will be featured in the media in the coming days. Hopefully it’s you they’ll feature!
If you want to generate new leads and sales, consider public speaking. Assuming you’re not deathly afraid of speaking in public, below are answers to the five most common questions about using public speaking to grow your business.
1. Where should I speak?
In determining where to speak, the goal is to speak in whatever venues will get you in front of the most target customers.
This could range from local organizations such as your local Chamber of Commerce to national trade associations. Simply brainstorm events in which your target customers attend.
Then, contact the event organizers and ask them to consider you as a speaker. For annual events, there is often a place on their website where you can apply to speak.
2. What should I talk about?
Figuring out what to talk about is fairly easy. Figure out the questions and problems your customers are having, and speak directly to that.
For example, let's assume your company provides outsourced customer service. To begin, you'd want an audience primarily comprised of business owners. Since you know they probably have questions about how to provide better customer service, a great topic would be “5 tips to improve customer service.” For each tip, you would include good and bad examples.
Importantly, in giving such a presentation, you will naturally promote your company's service (as the "good" examples will be ones that your organization has done) without directly pitching the audience.
As you can imagine, such a presentation would generate new leads and sales without you having to be "salesy."
3. Where do I get material for my presentation?
This part is easier than you think. Once you determine your topic, brainstorm everything you can think of that it entails. With the customer service example, you can discuss costs, delivery & fulfillment, billing, refunds, returns & exchanges, technical support, customer phone support, etc.
Since you are already an expert in your business, the information is probably already in your head.
4. How do I overcome my fears of public speaking?
Don’t create your presentation all at once. Rather, keep a journal for a couple of weeks in which you collect ideas and tips you’ll want to share. Then, assemble this information into an outline for your presentation. You don't have to write it out word for word. Rather, develop a slide presentation that guides you through your talk.
Of critical importance is to never add more than 30 or so words per slide. You want attendees focusing on you, not reading your text.
Practice giving your presentation by yourself so you can pause and think about how it sounded along the way. Then have someone else listen to you in order to give feedback.
When the day comes, relax and remember to talk as if you're on the phone with a friend. You don't have to hold eye contact with anyone in the audience, and they'll forgive you for any blunders as long as you're sincere and interesting. Remember that your audience is there to learn from you, not to critique you as a public speaker.
5. How do I get the most value from public speaking?
To get the most value from public speaking, do the following:
a) Get contact information from your prospects. The easiest way to do this is to tell the audience to email you if they want a copy of your slide presentation. This will result in a large email list of qualified prospects.
b) Invite prospective customers to hear you speak. Having them attend will give you great credibility (you actually gain great credibility even if they don’t attend) which will help close more sales.
c) Have someone record a video of you speaking at the event. As appropriate post all or part of the video on your website and/or on social media sites. The video will give you more credibility and position you as an industry expert.
d) Make sure you bring lots of business cards to hand out and budget time after your presentation to speak with attendees. Typically, after you present, several attendees will come up to you with questions and you want to be prepared.
Public speaking is an excellent way to find and secure new customers, employees, partners, investors and so on. Follow the advice in the five answers above so you can reap these key benefits for your business.
Suggested Resource: Public speaking is a great way to increase your company's credibility and get new clients. For even more "publicity" methods to grow your business, check out Growthink's Publicity Playbook.
Publicity is an extremely powerful form of marketing. If customers say positive things about you, particularly online, many new customers will learn about you and possibly buy your product or service.
Likewise, if the media covers your company, not only will more customers hear about you and possibly purchase your offerings, but it gives your company an implied endorsement and additional credibility.
However, the opposite can be true. That is, having customers and/or the media say negative things about you and your company could lead to its downfall. Below are 3 strategies to protect yourself from such negative publicity.
1. Take care of your customers
This first strategy is pretty obvious, but often overlooked. The challenge is that sometimes entrepreneurs get too focused on maximizing profits that they forget about the needs of their customers.
Customers are the lifeblood of any business, so take care of them. The more satisfied your customers are, the more likely they will be to spread positive messages about your company.
2. Respond to customer complaints
No matter how customer-centric you are and no matter how great your product or service, some customers won’t love it. Sometimes these customers are negative by nature or maybe they simply had a bad experience. For example, I’ve often looked at reviews for restaurants I love and have seen at least some negative reviews.
As an entrepreneur or business owner, you need to respond to customer complaints wherever they appear, from in your inbox to social media sites, etc. Doing so allows you to solve the issue and satisfy the customer, and/or at least let other customers know that you stand by your offering and support your customers.
In many cases, for example, I’ve seen customers complain online with regards to products they wrongfully bought (they purchased the wrong item to suit their needs). By posting that information, in a nice way of course, online, your company explains the negative remark and gains credibility with prospective customers.
3. Create your own media
A final way to protect yourself from bad press, and in fact ensure positive press, is to write articles yourself.
Clearly, if you are the author of articles appearing in the media, they’re not going to say negative things about you. On the contrary, any articles you write give you and your company great credibility.
I’ve been using this strategy for years. Many years ago I started publishing articles on article submission sites like Ezine Articles. As I gained more expertise and a track record, I started contacting editors at bigger news sources requesting they publish my articles. Today, I regularly contribute to Forbes, Entrepreneur and AllBusiness. I also frequently contribute articles to smaller magazines and blogs.
Don’t like to write? Well, these days, that’s not really important. You can simply come up with a topic that customers want to know about, and dictate your expertise on the topic into a microphone or your mobile phone. You can then email your recording to a dictating service or to a freelancer who will transcribe and edit it into a great article.
Once you have the article (and/or beforehand), contact websites, blogs, newspapers, magazines, trade journals, etc. who might be interested in your article to convince them to publish it.
You might have heard the expression that there’s no such thing as bad press. This is true to the extent that it’s always great to have media spread the word about your company so new potential customers hear about you. But clearly, positive press is far superior to negative press, so start using these 3 strategies today to get positive press that yields new customers, more sales and improved profits. For further strategies and step-by-step guidance to getting tons of great publicity for your business, check out my Publicity Playbook course.
This weekend, I read The 80% Solution – a great e-book by famed business coach Dan Sullivan in which he makes the case that “perfectionism” is a misunderstood and under-reported “enemy” of successful entrepreneurship.
Per the title of his book, Sullivan's suggestion to combat this is simple yet profound - just work to get a task / a project / an idea to “80% done and out” and far more often than not that will be more than good enough.
Now, of course, the author makes the necessary disclaimers.
Like an “80% done right” heart surgery or an “80% safe” airplane, or products with 20% defect rates are obviously recipes for disaster.
But for the vast majority of us, cultivating this 80% mindset will do us a world of entrepreneurial good.
1. Most Stuff Doesn't Work. The sad reality is that most business initiatives - no matter how good our intentions or how brilliant we might think they are, and whether they be new products, new marketing strategies, new hires, process improvements - don't work.
The market greets new products with apathy (big yawns).
Process improvements don’t move the bottom line. The most likely return on a new hire…is exactly what you pay him or her.
For sure, some ideas are revolutionary and transformative, but everyone has to cycle through a lot of duds.
So the more we are able to increase our throughput - to throw spaghetti against the wall as fast and furiously as possible - far more often than not, we are the better for it.
2. Energy. Modern knowledge work, with its infinite distractions and always-on nature, is exhausting.
Maybe not so obviously as exhausting as hard physical labor, but exhausting nonetheless.
And, given that so much of it involves a series of virtual interactions with other knowledge workers facing similarly exhausting electronic loads, accelerating our “personal supply chain” via an “80% and out” mindset reduces insidious energy drains like long e-mail back-and-forths, projects extending beyond timelines and conference calls that just drone on and on.
Taking the “80% is Enough” mindset to all of it can free our energy and re-create a lightness and fluidity to our work like when it was fresh and new.
3. 80% is Fun. A great read in this same vein is Happy Brain Chemicals by Lorreta Breuning. Among its eye-opening findings as to the nature of our “mammalian brains,” Breuning talks about the power of the neurochemical dopamine and its influence on our wants and decision-making.
Dopamine can best be described as the neurochemical of anticipation and excitement.
It is that feeling one has right before one takes a bite of a chocolate cake, or the moment right before the kickoff of the Super Bowl (or for those Patriots fans of ours, the moment right when Malcolm Butler makes that interception!).
We all crave dopamine, and as such, we all crave excitement.
And excitement, because of dopamine, is dependent on “new stuff” - new projects, tasks, relationships, and the like.
“80% is Good Enough” frees up bandwidth for more new stuff to be anticipated and experienced.
And thus more fun.
So think “80% is Good Enough” and be more productive, and have more energy and more fun each and every day.
What beats that?
This week, Axial came out with a great report on the challenges and opportunities facing small and middle market businesses in 2015.
Compiled from interviews with over 100 CEOs, it is chalk full of great nuggets like:
The #1 Thing keeping CEOs up at night is "finding capital to grow their businesses." This challenge has many dimensions - from receivables and cash flow, to commercial banks (in spite of the strong economy) still mostly on the sidelines, to the availability of private equity and other forms of risk capital to fund growth initiatives.
Also ranked high on the list was properly "training, educating, and rewarding" employees.
A great white paper by AGC Partners sheds modern light on this challenge, specifically how technology innovations are “incentivizing and enabling individuals to monetize their skills, time, and possessions like never before.”
Companies like Odesk, 99Designs, and Guru are empowering skilled designers, coders, consultants, and marketers to offer their services to buyers directly, on an as needed, per project basis.
How does this relate to the talent challenges of small businesses?
First, by the simple fact that a lot of talented people - who 10 to 15 years ago would have been available for / interested in traditional W-2 employment - are now effectively out of the traditional work force.
Second, the ease with which buyers (business & consumer) can contract for services with providers and cut out “middlemen” companies that "hire and mark up" creates a whole other level of pricing and other competitive pressures.
Luckily, far outweighing these two challenges is the massive opportunity created by this “collaborative economy” for smaller businesses to access types and qualities of talent like never before.
As I have talked about previously, entrepreneurs and executives that master the art of finding and utilizing outsourced, "shared talent" from around the world - and that let go of fixed ideas of what a company is / should be - will have business model and market opportunities open to them like never before.
Finally, the Axial report shares the startling fact, even though the overall economic prognosis for 2015 is about as good as it can get, that 66% of the CEO’s surveyed rank "market forces” and the overall buoyancies of the US and abroad economies as a top worry.
To this, I would suggest a reading of Nobel Laureate psychologist Daniel Kahneman’s seminal work on negativity bias, where he found “that people regret mistakes twice as keenly as they relish successes.”
When it comes to growth planning, Phil Libin, CEO of Evernote, summed it up best when he noted that "When you point out what can go wrong, you sound smart and sophisticated, and when you emphasize what might go right, you sound naive."
It all kind of fits together: exude and embody optimism (and fight the natural propensity we all have to the opposite), conceptualize and take chances on new business models, and the money will follow.
And this is what CEOs really want, isn't it?
The technology age has brought with it a long list of business related success stories. There are plenty of cases where a small startup has managed to grow into a billion-dollar company.
While most people will think of companies such as Facebook and Amazon, GoDaddy.com is actually one of the greatest successes in recent history. What started as a small company has since grown into an easily recognizable brand which owns a significant portion of its own market.
GoDaddy was created in 1997 as Jomax Technologies by Bob Parsons who had recently sold his other company, Parsons Technology Inc., to Intuit.
At the time, a company called Network Solutions was essentially the only place from which people could register domain names. That changed in 2001, however, and GoDaddy.com quickly grew.
In 2005, GoDaddy.com became the world’s largest ICANN-accredited registrar on the internet. In addition to being one of the most popular domain registrars in the world, it also offers website hosting and a whole range of business related technology solutions.
In 2011, 65% of the company was sold to a group of private equity firms for approximately $2.25 billion. GoDaddy’s rapid rise to prominence and continued success are due to a few key factors. Studying what they did right can help business owners of any type discover new ways to grow their own companies.
Lesson #1: User Friendly Innovation
Innovation has been at the heart of everything GoDaddy has done since its creation. What it has managed to do is take something which is ordinarily very technical, in this case domain registrations, and make it appeal to a wide range of customers.
It was not very long ago that most people were unfamiliar with the Internet. The idea of marketing domain registration and web hosting to everyday people was unheard of at the time. This is part of what has made them so successful. Their effort to bring these services to the average person effectively opened up a vast new market.
Lesson #2: Cutting Edge Branding
Part of what has made GoDaddy so successful is its ability to create a readily identifiable brand. Nearly every person on the Internet has heard of GoDaddy and a majority of sites are registered with the company.
The power of this brand has come from its extensive advertising. Buying up expensive advertising space during events like The Super Bowl, GoDaddy made a name for itself with racy and often controversial marketing efforts. Its commercials, utilizing seductive women and star athletes, brought a sexy and exciting feeling to what could otherwise be a dry and technical company.
Lesson #3: Soups-to-Nuts Offering
GoDaddy is far from just a domain registrar. It offers a number of services including website hosting and ecommerce solutions. This has helped make it successful because it essentially offers everything someone might need when starting a website.
The domain can be registered, the site hosted, the platform installed, and upgrades can be added as needed. When a customer comes to GoDaddy for domain registration they immediately have access to everything else. This allows the company to offer upsells and products with recurring payment options that are relevant to what customers have already purchased.
Lesson #4: Customer Service in Layman’s Terms
GoDaddy’s customers may not always be experts at information technology. There are a number of different problems that a customer might run into. GoDaddy has made a point of offering outstanding customer service that explains complex technology solutions in layman’s terms.
Due to its high level of customer service, in a way customers understand, GoDaddy.com has become one of the most trusted hosts and registrars around.
Lesson #5: Upfront, Competitive Pricing
Unlike make technology service providers who bury prices in obscure parts of their website or require a call for a quote, GoDaddy publishes its prices very visibly.
Furthermore, its pricing is competitive, and it has prepared numerous product bundles to make it easy for customers to find what they need.
Rather than demanding money for a number of different services, almost everything is optional and customers can spend as little or as much as they want. This competitive pricing, coupled with constant discounts and coupons, has made it difficult for other companies to compete.
What to Take from This
Owners of businesses of any type can learn a lot from the GoDaddy. Its rapid rise to the top is something which is enviable in any industry and implementing a few of its key strategies can help any business. While not every company will have a budget as large as GoDaddy, there are still several concepts, discussed below, which can be useful.
A. Challenge Accepted Notions
At a time when many people were still unfamiliar with the Internet, GoDaddy targeted their advertising towards regular, every day people. This was a risky move, at the time, but actually showed incredible foresight.
Look at your business model – where have you been playing safe? Are there bolder strategies you can test?
B. Invest in Marketing
Many of GoDaddy’s biggest critics claim they bought their market dominance through expensive advertising. While this is not entirely true, marketing has been a major source of success for it. GoDaddy advertised mainly through inexpensive online banners for years before it was big enough to implement sexy and eye-catching ads during The Super Bowl.
Dust off your branding and marketing plan and review it. Is it relevant in today’s market? Are you getting the results you want? If not, it may time to go back to the drawing board and perhaps invest in expert guidance.
C. Offer Everything You Can Do Well
Specialization can often be a good thing in business, but the possibility of branching out into related products and services should never be ignored. GoDaddy started as a domain registrar but soon included a variety of other services as well.
Offering related services can boost profits and avoid losing customers to competitors with a full-service solution. For example, a car repair shop that doesn’t replace tires can lose their regular oil change customers when those customers need new tires and find a full-service provider.
The caution is to only branch out if you can provide excellent service in all categories. Adding more services, but doing it poorly, will hurt rather than help you grow.
Father Knows Best
GoDaddy is a familiar name on the Internet and with good reason. Growing from a small start up to a multi-billion dollar company, it has proven it is expert at predicting future trends, understanding its intended audience, and delivering on what it promises.
Your job is to learn from GoDaddy. Take the time to review your business model using the concepts in this article. Outline steps you can take to promote your own growth, then take actions. Carefully track your results to learn what works best in your market.
Over time, you will have a proven recipe for strategies that generate growth for your business. How long before I write an article about you and your stellar success?
“Social proof” is a critical psychological principle that savvy business owners can use to dramatically increase sales and grow their businesses. The principle simply states that people are more likely to do something when they see others doing it. For example, after entering a new restaurant, customers are more prone to sit down and eat if they see others in the restaurant versus if it was completely empty.
Interestingly, there’s one famous example when the power of social proof caused unintended and negative results. The example was Nancy Reagan’s ‘Say No to Drugs’ campaign in the 1980s. While the campaign hoped to decrease drug use, the opposite actually happened. Yes, teen drug use actually increased in the 1980s as the campaign implied that many teens were using drugs. This social proof made other teens think it was ok if they tried drugs too.
On the other hand, there are countless examples of using social proof for benefit, such as the following:
1. Social Proof from Other Users/Customers
Showing other users and customers is the most common form of social proof. Here are some examples:
Even more powerful is when you get your customers to invite their friends to become customers. Hotmail did this extremely effectively by putting “join Hotmail” advertisements in the footer of all email messages. This prompted Hotmail to grow from 500,000 users at the start of 2007 to over 12 million users by year’s end. Likewise, allowing friends to invite friends to play through Facebook helped Zynga grow over 10 times, from 3 million to 41 million average daily users, in just one year.
2. Social Proof from Experts
This form of social proof is when you show approval of your product or service from credible experts.
I used this form of social proof when marketing my book, Start at the End. Specifically, I received, and subsequently promoted, reviews from several experts such as: Marshall Goldsmith, Kevin Harrington, John Jantsch and Brad Feld among others.
A similar example is Sensodyne toothpaste promoting that “9 out of 10 Dentists Recommend Sensodyne” for sensitive teeth.
3. Social Proof from Celebrities
An estimated 25% of television commercials in the US now use celebrities. For example, you’ve probably seen Catherine Zeta-Jones promote T-Mobile over the years. You may have also seen Beyonce promoting milk and William Shatner promoting PriceLine.com.
Even if you don’t have the funds to afford to big celebrity, you can use this form of social proof to your advantage. For example, when luxury pillow manufacturer Pillo1 received positive publicity from Oprah on Oprah.com, Pillo1 effectively showed this on their website.
4. Social Proof from Research and Past Results
Showing research and past results gives positive social proof to spur new customers to buy your offerings. Here are some examples:
5. Social Proof from “Borrowed Trust”
A final form of social proof is when you “borrow” trust from other brands. Examples of this include:
As you can see, there are numerous ways to use social proof to influence others to take the actions you want. Use these examples as a starting point in brainstorming ideas to leverage social proof in your business. And then use the other proven marketing tactics to take your business to the next level.
With a little luck, 2015 could go down as one of the best years ever for American business.
Here are seven reasons why:
7. Low Oil Prices. For both businesses and consumers, $50 per barrel oil and $3 per gallon gas have both strong real and psychological benefits.
Real, as in lower input costs for businesses and more disposable income for consumers, and psychological in removing that sense of scarcity and dread that high prices at the pump bring.
6. And It’s U.S. Oil. And, oh yes, as opposed to that oil coming mostly from a collection of unsavory, overseas actors (see Putin, Vladimir), now for the first time in decades the U.S. is poised to be a net oil exporter. These dollars staying home naturally multiply themselves - perking up manufacturing, construction, real estate, travel, tourism, etc.
5. Low Interest Rates. Predicting the direction of interest rates is one of the great fool’s errands, but it does certainly feel like we have made a long-term transition to permanently low rates.
A key factor driving this is Federal Reserve's Chair Janet Yellen’s political philosophy - well-documented over decades - that employment is the most important matter of monetary policy and any “tightening” that might lead to rising unemployment is to be avoided at all costs.
And then there is simple supply and demand -- all the “safe” world currencies (Euro, Yen, Pound) sport extraordinarily low rates too so there is no “currency flight” pressure to drive tightening.
4. U.S. Technology Leads the World. In so many of the growth industries of the 21st century - Mobile, BioTech, HealthcareIT, Robotics, Social Media, Internet of Things - U.S. companies continue to lead the way.
In addition to the massive flows of capital and wealth created and distributed by the top tech. companies (to employees, vendors, shareholders et al.), this leadership also attracts the best and the brightest scientists, engineers, and developers from around to the world to our shores.
And from this human capital new technologies and new companies are born. And new wealth created.
3. Record Exports. U.S. Exports reached $2.3 trillion in 2013, both a new record and up more than $700 billion since 2009. And the soon to be in 2014 numbers will show another record year.
Why? Well for one, U.S. companies, aided greatly by an English language and America-dominated Internet, every year become more and more effective in marketing and selling to global customers (while global customers in turn become far more comfortable in purchasing across the wires).
This powerful trend will only continue to accelerate in the years to come – opening new markets and profit opportunities for U.S companies big and small.
2. Cash Piles on Sidelines. With $1 trillion in cash sitting in the coffers of U.S. private equity firms and $515 billion on the balance sheets of leading tech. companies (try Microsoft with $88 billion, Google with $60 billion, and Cisco with $52 billion), and with this cash in our low interest rate environment earning only fractions of pennies of return, there is a high probability we will see a lot of it pour into growth opportunities this year.
And there are no better growth investments than U.S. entrepreneurial companies, especially the smaller, private ones, that over decades have consistently yielded double digit returns for those brave and foresighted enough to invest in them.
1. Momentum. Good times beget more good times. The solid, economic, political, and social news and results we have had for a few years running now are building themselves into a powerful crescendo for the new year.
Yes, more than a little luck is always needed - mostly in the form of no large, negative political or environmental shocks.
Barring that, on balance for entrepreneurs and executives out there seeking to make their mark, 2015 is looking nice and juicy.
Here's hoping we all make the most of it!
It was not very long ago that the United States Postal Service was the only means by which to ship physical packages in the US. While this service had been invaluable, its quality had progressively declined over the years. Letters were lost, packages were damaged and customer service was nearly non-existent. This opened the door for private corporations to pick up the slack.
FedEx was hardly the first private parcel delivery service but it quickly became the market leader. With regional, national and international services, FedEx has been filling the need for a reliable way to send packages. Over the years it has expanded its reach through acquisition of similar companies as well as adding retail locations.
FedEx’s success has been due to the satisfaction of both its customers and employees. When a customer hires FedEx, they know their package will be delivered on time. And the company’s competitive employee benefits and professional work environment have created an army of loyal employees that are fully dedicated to the company’s mission.
Combined with an intense focus on the quality of their work and a close relationship with customers, FedEx has become synonymous with quality and dependability.
The Big Screen
FedEx’s commitment to quality and excellence is typified by the movie Cast Away, starring Tom Hanks. This movie, released in 2000, tells the story of Chuck Nolan, a systems analyst for FedEx. His job of resolving problems and improving service sends him on a trip to Malaysia. During the flight, a storm hits and the plane goes down. Chuck finds himself washed up on the shore of a deserted island with nothing but a few damaged packages.
After four years on the island, Chuck resolves to make an escape. Building a raft from material he scavenged from the area, he is rescued by a passing cargo vessel. The only possession he manages to save is an unopened and, as yet, undelivered FedEx package. The final scene of the movie shows Chuck delivering that package, late but still intact.
The most surprising aspect of this movie is that FedEx paid absolutely nothing for the product placement. In fact, upon hearing of the plot of the movie, FedEx was reluctant to give its approval. After reading the script, however, the company realized what a great marketing opportunity this movie really was. FedEx had become so well known for its dedication to service and reliability that an entire movie was built around it.
Lesson #1: A Culture of Excellence
FedEx gained its reputation through a culture of excellence, from top to bottom. While there are multiple aspects to this company, they are all overseen by a main office that focuses on keeping the machine running smoothly.
Even the character portrayed by Tom Hanks had the responsibility of analyzing the entire system and improving its functionality. This dedication to excellence is part of why FedEx is as powerful as it is today.
FedEx strives to offer the best possible experience to all its constituents. From corporate employees to delivery personnel and even retail location customers, FedEx has become known as a corporation which never settles for mediocrity. This commitment to quality is so pervasive that it has become a part of the entire brand itself.
When a customer sees the FedEx logo, they know they are dealing with a company that will do what it promises, no matter what challenges it faces.
Lesson #2: Driven to Improvement
Here is another little known fact about FedEx: when the fax machine became a standard, FedEx’s business declined by 50%. FedEx had a choice: fold or evolve. It studied the market and made a simple realization – not everything can be faxed.
FedEx redesigned its model to focus on documents that required a live signature and packages. Then it catapulted itself to the top of the food chain by making deliveries fast and reliable.
FedEx has never stopped trying to improve what it does. Every step of the process is constantly analyzed and there are employees who exist only to refine and improve the way in which people send and receive packages.
One reason why FedEx has been so effective in accomplishing this is because it really listens to it customers. The company understands how important customer satisfaction is and strives to give customers exactly what they want. From its inception, FedEx saw a need and filled it, and then it kept working hard to fill that need in a better way.
Lesson 3: Checks and Balances
All of FedEx’s improvements, however, would do little good if they were not constantly monitored. Before it was rebranded as FedEx, the logistics of the company was overseen by FDX. Over time, it acquired a few more logistics companies and formed FedEx Global Logistics.
This portion of the company was created to oversee the vast operations of all the subsidiary organizations. Creating this allowed the company to consolidate the entire command infrastructure to better ensure that constant improvements were implemented correctly.
There are redundant processes in place to track even the smallest package. If a package is at risk of being misdirected, alarms go off. Think of your own business. If you were about to miss an appointment, what systems are in place to let you know and allow you to correct the problem?
The FedEx Test
Every business can learn a lot from FedEx. Nearly every business can be improved in many ways and there are a few simple questions that can help get a smart business owner on the path to FedEx’s level of success.
1. Is work delivered on time? Delivering packages on time is one of the most important elements in the success FedEx has enjoyed. When work is promised on a given deadline, customers and clients are relying on that promise.
No matter what it may be, all deadlines need to be followed as strictly as possible. This will help build a reputation for dependability and will create a group of loyal customers.
2. Is the quality consistent? Customers need to know that a company will always produce the same quality of work. It is imperative that quality be a main focus of any business.
Fluctuations in quality are the surest way to lose any loyal customers. If clients and customers cannot rely on consistent quality they will turn to a competitor who is more reliable.
3. Is improvement ongoing? Every business can be improved. Redundancies can be consolidated, procedures can be simplified and processes can be refined.
Constantly improving a business is an important aspect of long-term success. Markets will always change and customers will always want more. Improvement is something that should be a part of your daily operations and every employee needs to be engaged.
4. What do the customers think? The best barometer of success and satisfaction is your customers. If a business is not listening to its customers then all improvements are simply theoretical.
Offering incentives to encourage customers and clients to fill out surveys and questionnaires is one of the easiest ways to find out how they feel about your business and what they would like to see in the future.
Not up to writing a survey? Then pick up the phone and call your last 5 customers. Be friendly and ask them what they thought of your service. Avoid interrupting them. Listen, take notes, and do not argue. If you get a poor review, apologize and make it right.
Putting your business to the FedEx test is a great way to find out how to turn a good business into a great one. These simple questions will often reveal weaknesses in your company while offering suggestions for improvement.
By following the lessons of FedEx, smart business owners can set themselves up for long-term success based on a reputation for excellence and a solid base of loyal customers.
The ending of one year and the beginning of another is a natural time to take stock of all that was accomplished in the past 12 months, and more excitedly, to dream and plan on the great promise of the New Year.
In this spirit, below are a few of my favorite quotes regarding dreaming, planning, goal-setting, and "Going for It!”
"You see things; and you say, 'Why?' But I dream things that never were; and I say, 'Why not?'"
- George Bernard Shaw
(My comment: reflects the essence of the entrepreneurial spirit)
"What is not started today is never finished tomorrow."
- Johann Wolfgang von Goethe
(My comment: the "fierce urgency of now" must always inform and drive us. We live in too fast-moving a world, too merciless a marketplace, to in any way dawdle or delay.)
"Success is not final, failure is not fatal: it is the courage to continue that counts."
- Winston Churchill
(My comment: The most accomplished executives and entrepreneurs that I have worked with have impressed me as much with their fortitude and resiliency as they have with their “glamorous” attributes - brilliance, connections, salesmanship, etc.
"Really great people make you feel that you, too, can become great."
- Mark Twain
(My comment: This is the essence of leadership in modern, collaboration-driven organizations. The best managers build alignment and focused energy around shared goals and objectives.
"Goals are dreams with deadlines."
- Diana Scharf Hunt
(Our comment: The great ones dream it and do it NOW!)
Happy New Year, and may 2015 be the best year of all of our lives!