Edison DID NOT Invent the Light Bulb


 

Did you know that Thomas Edison DID NOT invent the light bulb.

Why do I tell you this?

Because every single day at least one entrepreneur contacts me with some fear about someone stealing their idea.

And their fear is unjustified.

Successful entrepreneurs don't focus on the fear of someone stealing their idea. Rather, they focus on executing on the opportunity by bringing their idea to market.

Which is what the 22 inventors of the incandescent light bulb before Thomas Edison FAILED TO DO.

That's right. Twenty-two inventors had the idea before Edison (not only did they have the idea, but 22 people actually invented incandescent electric lamps before Edison did).

And Edison didn't steal their idea. Rather, Edison improved on their idea by first understanding the market. He realized that a more commercially viable and longer lasting light bulb was needed if light bulbs were to go mainstream.

So, he and his team created this product and the rest is history.

The moral is that he who has the idea first generally doesn't win. In fact, if your idea is so good, usually others have thought of it before you or at the same time. The winner is the one who takes is to market first, tweaks it based on customer feedback, and scales the business.

Most people don't have what it takes to go from an idea to a commercially viable product to taking it to market. That's why spending tons of time and energy protecting your idea is often a waste of time. Since the people you're protecting your idea from can't execute anyway. And those that can (i.e., successful entrepreneurs) generally have a ton of their own ideas to focus on. So you should be spending your time on execution.

(Likewise most ideas change dramatically once you start getting customer feedback; and you NEVER get that feedback if you keep your ideas to yourself!)

Importantly, the world is littered with quality ideas which never materialize. From motivational speaker Les Brown:

The wealthiest place in the world is a cemetery. Now one would ask, "For what justifiable reason is the wealthiest place in the world a cemetery?"

Simply put, in a cemetery, you will find that there are books that were never written. There are songs that were never sung. There are ideas that were never acted upon-dreams that were long forgotten. If one were to die today, then what ideas and what aspirations would die with him or her?


So, please stop focusing so much on protecting your ideas, and start acting on them!

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Customer Segmentation Marketing: Are You Doing It?


 

Customer-Segmentation-Marketing

Would you like a tool to attract more leads, convert more leads into paying customers, and better satisfy your customers?

Well, there's a market research tool that accomplishes just that and it's called Customer Segmentation.

Customer Segmentation is the process of separating your customers into sub-groups based upon similarities. As a simple example, a clothing store might segment its customers into two groups: men and women.

There are two core benefits to customer segmentation. The first is that it allows you to better service customer needs. Clearly, when you know that precise make-up and needs of your customer segments, you can better satisfy them. For example, a gym might offer exercise classes specifically for women and others specifically for men, each of which target and solve that gender's core workout needs.

The second benefit of customer segmentation is that it allows you to better communicate the benefits and of your offerings and thus increase conversion rates. For example, a car cleaner that offers special detailing services to sports car owners would better attract those customers than competitors offering generic car detailing services.

So how do you go about segmenting your customer base? The key is to collect data from your customers in order to better define them. One type of data is customer purchase data. Specifically, you should create lists of customers who have purchased certain products or services from you.

The second data you should collect, particularly if you are a startup or are launching a new product or service, is survey data. Using a tool like SurveyMonkey, you can survey your current and prospective customers to identify their wants, needs and current purchasing habits.

Importantly, in both your surveys and customer data, you want to collect and analyze both demographic and psychographic information. Demographic information includes variables such as the age, gender, zip code, and income levels of your customers.

On the other hand, psychographic information defines the wants and needs of your customers. It includes variables such as opinions, beliefs, values and interests. For example, while two customers might share similar demographics (maybe they live on the same street, are the same age and gender, and have approximately the same income, etc.), they may vary wildly from a psychographic standpoint (e.g., maybe one is extremely health conscious, the other extremely environmentally conscious, etc.)

Once you collect all the data, you are ready for the most important part of the customer segmentation process, analyzing the information. The official term for this analysis is "cluster analysis."

The result of your cluster analysis will be several clusters or groups of customers that share distinct demographic and/or psychographic characteristics. And then once you identify these groups, you can better market to and them.

For example, at Growthink, we use a basic segmentation model with two segments: startups (pre-revenue) and established (post-revenue) entrepreneurs. This simple segmentation helps us better understand and serve the needs of these two distinct groups.

For our clients, we've identified all types of unique customer segments. For example, one client had a customer group that was willing to pay more for their service as long as they were not bothered with details (we called them the "Don't Touch Me's"). Conversely, as is the case with many businesses, we found a segment that is completely price conscious and will always shop for the lowest price (you generally don't want to serve these customers).

One final benefit of segmentation analysis is in identifying unique partnerships and advertising venues. For example, if you identified that a large segment of your customer base was very health conscious, you could partner with local gyms and health food stores and/or advertising in health related journals. Most likely, your competition would not be doing this, and would miss out on this opportunity.

In summary, customer segmentation analysis will give you a competitive advantage by allowing you to attract more leads, convert more leads into paying customers, and better satisfy your customers.

Start by assessing any customer data you have, and supplementing that with surveys including product/service usage and needs data along with demographic and psychographic questions.

Next, conduct a cluster analysis on the data (I found cluster analysis software online, but you're probably better off finding a freelance market research professional who can conduct the analysis for you).

Finally, after identifying your segments, cater to them. Cater your marketing messages and offerings to them. And you'll start seeing your revenues and profits soar.

------------------------------------------------------------

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For a limited time, you can get ALL of our BEST marketing secrets for an incredible 80%-OFF discount.

On this page, you'll see everything that's included.

Right now is a GREAT time to kick your marketing into high gear, so you hit your goals for the rest of the year.

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The First Thing I Learned In My Marketing Class


 

Marketing-Class

I took my first marketing course 20 years ago. And I absolutely loved it. I was in my third year at the University of Virginia, and my professor, Sandra Schmidt, was simply awesome.

She was one of those professors who loved what she did. She was always smiling, spoke with great emotion, and truly loved marketing and teaching. And on the very first day of class, I still remember to this day, she asked us two questions to test our knowledge.

The first question was whether the following statements represented good news or bad news to the companies associated with them. She then read off a few lines. The one statement that I remember was someone famous (maybe a President) asking someone else to Xerox something for them.

I immediately thought that this would have been good news for Xerox Corporation. Free PR...what could be better. But, buzzzzz...I got this one WRONG. She explained that brand names lose their registered trademark protection if they became so successful that they become commonly used.

She told us that names such as the following were all originally trademarked brand names that lost their protection: trampoline, nylon, escalator, thermos, kerosene, laser, linoleum and Frisbee (interestingly other brands such as Band-Aid and Kleenex have been able to fight this off).

The second question she asked was what business discipline most CEOs started in. This one was easy. Marketing, of course, was the answer (she had to be promoting her own course I thought). Buzzzz...wrong again. Sales was the answer.

So, I got both questions wrong. But they stayed with me. For a long time. And this second question has really helped me. It has taught me that to be an entrepreneur or CEO (which an entrepreneur is), you must be well versed in sales.

You are always selling. Selling to employees, to customers, to investors, to partner, etc.  And if you're great at it, you have a major competitive advantage.

To ensure that you are as effective as possible in your sales efforts, I want to convey to you two key points that I took away from my recent interview of Adam Shaivitz, co-author of the best-selling book called "Selling is Everyone's Business: What it Takes to Create a Great Salesperson."

1. Make sure that you are properly motivating and solving the problems of your buyers.

The best salespeople are problem solvers who are able to sell the benefits of their offerings tailored to one or more of the six basic fundamentals that all of us as humans want:

1. Desire for gain
2. Fear of loss
3. Security and protection
4. Comfort and convenience
5. Pride of ownership
6. Satisfaction of some emotion like love or hate or ego

Great sales people understand which of these six motivators are most important to their prospects, and sell into them.

2. Spend time with your best sales performers. Adam told us that too many business owners neglect their top sales performers. Rather, they tend to focus on improving their lowest performers.

There are two problems with this approach. First, working with and improving the performance of your best sales performers by only 10% may be easier and more beneficial than improving the performance of your lower sales performers by 25%. Secondly, your top sales performers are the ones that will be targeted by headhunters and other firms, and you can't afford to lose them.

------------------------------------------------------------

Get Growthink's Ultimate Marketing Bundle
for 80%-OFF

For a limited time, you can get ALL of our BEST marketing secrets for an incredible 80%-OFF discount.

On this page, you'll see everything that's included.

Right now is a GREAT time to kick your marketing into high gear, so you hit your goals for the rest of the year.

But hurry, this sale ends soon.

------------------------------------------------------------


 

5 Benefits and 5 Keys to Raising Crowdfunding


 


Crowdfunding is getting a group of regular individuals to collectively fund your venture. And when I say "regular individuals" I am contrasting them to professional investors and lenders like banks, venture capitalists and angel investors.

Clearly, Crowdfunding gives the key benefit of providing funding to your business. But, I have found other key benefits. Below I list those benefits as well as 5 keys to successfully raising Crowdfunding.

5 Benefits of Crowdfunding

1. Market Research

Pre-selling your product is incredible market research. If people buy it, then your marketing message is on target and there is a real need for your product or service.

If people don't buy it, then maybe a market doesn't exist, or you need to adjust your marketing message or target market.

In either case, getting this market research BEFORE raising or trying to raise a ton of money is invaluable. It allows you to test whether you have a winner before going through this process.

2. Built-in Customer Base

When you get others to fund you via Crowdfunding, you build a customer base. If you provide a good product or service, these customers will be prone to buy more products and services from you (the same products, upgrades and/or new products you develop) in the future.

3. Case Studies/Testimonials

Showing case studies and testimonials from customers is a great way to convince new customers to buy from you. And you can get these case studies and testimonials from those customers you gain from Crowdfunding (assuming you delivered them the product/service and they liked it).

4. Word of Mouth Marketing

People who fund your company will tell their friends about it. Particularly if you make them feel like founders/initial investors (which you can easily do via email and on your website).

Done correctly, Crowdfunding can result in thousands of customers, most of whom can tell numerous friends and colleagues about your products and services. This word of mouth marketing can be worth millions of dollars.

5. PR

Local media sources are enamored with Crowdfunding as it's new and unique. As a result, countless entrepreneurs who have raised Crowdfunding have been profiled in local newspapers, radio shows and TV broadcasts.

So, with some legwork, raising Crowdfunding can get you lots of PR.

So, now that you understand the benefits of Crowdfunding, how do you raise it?

Below are five keys.

5 Keys to Raising Crowdfunding


1. Inspire People

When you tell your "story" to potential crowdfunders, inspire them. Yes, they are investing in your product or service, but they are also investing in you. Give them an inspiring story about yourself and why you are building your company. Inspire them to want to help you.

2. Provide Value

When people crowdfund you, they need to get something in return, such as equity in your business or your promise to give them a certain quantity of the product or service you create. Make sure potential crowdfunders feel they are getting value for their investment. If not, they won't fund you.

3. Create Social Proof

Social proof is the psychological concept that if someone sees someone else doing something, they are more prone to do, or want to do, that same thing. For example, a line outside a bar shows social proof that the bar is hip/cool/the place to be, and inspires others to want to go inside.

Social proof can be created in Crowdfunding. Here's how. As soon as you launch your Crowdfunding project, get as many of your friends and family as possible to fund it. Then, when others that don't know you go to your Crowdfunding page, they will see that lots of other people have already funded you. This will make them much more likely to fund you too.

4. Market and Build Buzz

Even if you have the coolest company, product or service in the world, chances are that crowdfunders won't automatically beat a path to your door. Rather, you need to market your Crowdfunding raise. Email all your friends about it and tell them to do the same. Tell everyone on Facebook and Twitter about it. And so on. Even if your company is buzzworthy, you need to first create the critical mass of people who know about it and can spread the word. So make sure you do just that.

5. Don't Slow Down


Once you start getting more and more backers to your Crowdfunding campaign, don't just sit back and let the money roll in. Crowdfunding is a fixed-term capital raise. For example, on Kickstarter, your Crowdfunding campaign can only last 90 days. So, once those 90 days is up, you can't raise more money (you'd have to start and market a separate campaign later). So, during the campaign, try to raise as much money as possible. Communicate with those who have backed you. Thank them and tell them to tell their friends to back you too. And make sure they don't have "buyer's remorse" - assure them that you remain steadfast in achieving the vision you laid out when you convinced them to back you.

Crowdfunding is an exciting new source of funding with many benefits. To get it, prepare yourself and follow these steps.

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How to Get Funded in 90 Days or Less

If you need funding fast, you have to use Crowdfunding.

Here’s how to do it right

1. It's fast. You’ll get the money in just 90 days or less.

2. It's easy. You don’t even need a business plan - you can get started right away.

3. You keep ALL the money. It’s not debt, and you don’t you don’t give up any ownership in your company either...

Click here to watch the video and learn more now

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Venture Funding Advisors: How to Find, Secure & Leverage Them


 

If you're looking for funding and/or to successfully grow your business, a little known secret is to find and leverage Advisors.    

So, who or what are Advisors? Advisors are successful people that you respect and that agree to help your company. Advisors are generally successful and/or retired executives, business owners, service providers, professors, or others that could help your business.    

Advisors generally will not cost you any money (you don't pay them), although I do recommend giving them stock options to incentivize them to contribute as much as possible.   

Getting Advisors is not a requirement for raising money, but they have multiple benefits as follows:

1. Practice: if you can't successfully pitch an advisor to invest time in your business, then you're not going to successfully pitch anyone to invest money in your business. So, practice your pitch on prospective advisors first, and use that practice to perfect it.

2. Connections to capital: as successful individuals, advisors often have the ability to invest directly in your company; and/or they tend to have large, high quality networks of individuals they can introduce you to.

3. Credibility: having quality advisors gives your company instant credibility in the eyes of lenders and investors.  For example, if you started a new hockey stick company, having Wayne Gretzky as an advisor would certainly give you great credibility (and connections). But even having much smaller names than Wayne Gretzky as advisors can build enormous credibility.

4. Operational success: In an interview I did with Dr. Basil Peters (a wonderfully successful entrepreneur, angel investor and VC), Dr. Peters said that mentors and advisors are an entrepreneur's "single most controllable success factor."  Having Advisors with whom you can discuss key business matters as you grow your venture will help ensure you make the right decisions, particularly if they have encountered and dealt with the same challenges already in their careers.

I have seen these four benefits first-hand for my own companies and for companies that we've helped build their own boards. Click here if you'd like to see the list and bios of Growthink's Board of Advisors.

So, how do you build your Board of Advisors?

The steps are fairly simple:

1. Create a list of people you would like to be on your Board
2. Contact and meet with them
3. Secure the best Advisors you meet with

The final step is to hold formal and informal meetings with your Board members to leverage them -- to get them to fund your company or introduce you to other funding sources; to answer key challenges that you are facing, etc.

I must admit that years ago I wasn't thrilled about investing the time to go through the steps of creating a Board of Advisors. But I can assure you; those hours spent have yielded an enormous return on investment. In fact, I should have developed my Board much sooner than I did.

So, go out there and start building your Board of Advisors today. And start reaping the enormous benefits.
   
Suggested Resource: Want advisors? Want funding for your business? Then check out our Truth About Funding program to learn how you can gain advisors and access the 41 sources of funding available to entrepreneurs like you. Click here to learn more.

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Raise Funding Quickly & Easily

If you’re struggling to raise money, it’s probably because your funding strategy is broken.

Here’s how to do it right

As I explain in this video, the key is to start at the bottom and work your way up the Funding Pyramid.

Click here to watch the video now

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How to Unlevel the Playing Field


 

You've probably heard the term "a level playing field" which refers to a scenario where everyone has an equal chance of winning.

For example, the desktop computer leveled the playing field by giving individual entrepreneurs virtually the same computing power as individuals working at multi-billion dollar companies.

When starting a business, you should choose a space where the field is level; meaning going into a market where you have a fair chance of winning.

But after you start your business, and/or if you have a more mature business, I encourage you to unlevel the playing field.

What I mean by unleveling the playing field is to make it so that nobody wants to compete against you. I want you to have an unfair advantage (using ethical tactics of course) so that you win the game.

So how can you unlevel the playing field? One of the best ways is to create organizational assets that your competitors don't have.

Here are five examples of organizational assets you can build:

1. Customers: Most mobile phone companies offer 2 year service contracts that all new customers must sign (and face penalties if they leave before the two years are up). This essentially "locks up" customers making it harder for new entrants (or existing entrants) to come in the market and take their customers from them. Customer agreements and contracts are one of the most powerful organizational assets you can build.

2. Systems: Most franchise organizations (e.g., Dunkin Donuts, McDonalds) have made significant investments in systems such as systems to serve customers, produce products, handle customer complaints, etc. These systems make it easier and less expensive to hire and train employees and better service customers, making it harder for others to compete against them. Likewise, I know many companies who have built customized software systems that allow them to perform faster, cheaper, and more consistently than their competitors.

3. PPE (Plant, Property and Equipment): When I was a teenager, I made a lot of money shoveling snow. I used that money to buy a snow blowing machine. Equipped with the snow blowing machine, I was able to remove snow ten times faster than my competitors. This allowed me to dominate the market.

4. Product or Service Variations: A local pizza shop promotes itself as having 36 varieties of pizza. Offering this large variety makes it harder for new pizza companies to enter the market. Because a new company would have a very hard time creating 36 varieties from the start, it would be harder for them to satisfy customers.

5. Partnerships: I've created several partnerships with major websites and organization to be the only business plan provider they promote. This excludes my competitors from working with those organizations and serving their customers.

What I want you to consider now is how you can build organizational assets that unlevel the playing field. How can you make it so that nobody wants to compete against you?

  • Can you lock-up customers with agreements and contracts?

  • Can you build new systems to make your company more effective and efficient?

  • Can you make investments in plant, property and equipment that allow you to cut costs or increase output?

  • Can you develop new product and/or service options that better serve customer needs?

  • Can you form exclusive partnerships to help you gain new customers that your competitors can't?

Importantly, whatever answers you come up with, realize that building these organizational assets will take time. Often times they may take as much as a year (or even longer). So make sure to properly plan their development. Set a long-term goal for when you want the asset built. And make sure that you build time into your daily, weekly and monthly schedules to move the development forward.

------------------------------------------------------------

The Secret Formula to
Building a $10 Million Company

If you want to build a $10 million+ company, you must focus on building Value. And to build Value, you need to follow a specific formula.

In this video, I layout the precise formula for you.

As you watch the video, you’ll see the important schematic below:

Don’t be overwhelmed by its complexity, by the time you see it, it’ll make perfect sense. And you’ll be able to follow it to dramatically grow your business.

Click here to watch the video now

------------------------------------------------------------


 

7 Interesting Marketing Lessons from My Broken Dishwasher


 

Interesting-Marketing-Lessons

Not too long ago, I was unloading the dishwasher.

I'm about half-way through and came to a dish that just wasn't very clean. Then another one. And so on.

Not good.

Since then, my wife and I have taken a bunch of steps to fix the problem (I'll tell you about those in a moment).

Then, this morning, I started thinking about all these steps, and noticed some interesting marketing lessons.  I figured you'd find them valuable, so I wanted to share them with you.

Step 1: The first thing I did was go to the Internet to try to solve the problem myself. I Googled "dishwasher top rack not cleaning" since the dishes on the bottom seemed fine.

I read a couple forum posts on this, and realized I didn't have the technical skills to solve this on my own.

Lesson:
Expect your customers to have some knowledge about your products or services. Note that this knowledge may not be accurate based on where they learned it (e.g., from a web forum post from Joey in Idaho).

Step 2: So, my wife called an appliance repair guy who she found by doing some local searches online.

Lesson: Make sure you (and not your competitors) are easily found online.

Step 3: The repair guy came, gave us a bill for $95.07 for showing up and diagnosing the problem. He said that it would cost about $300 to fix it, but that the dishwasher was installed in 1994 (16 year ago; well before we bought the house) and that it was probably a better bet to just buy a new one.

Lesson: The repair guy gave us advice that was good for us (don't do the repair, buy a new dishwasher) and bad for him (him losing out on the $300 charge). We decided to buy a new dishwasher. But, since he was honest and gave us good advice, we will use this repair guy again and definitely recommend him to others if ever asked. So, do the right thing now, even if you have to forego short-term profits, and you will get rewards later.

Step 4: I looked online for dishwashers. What I cared about in the purchase were the following: price, cleans well, time savings (i.e., don't need to rinse dishes before loading), looks nice (we wanted a stainless steel front), and is relatively quiet.

Lesson: not every customer cares about every feature. Many of the dishwashers promoted 9 different programs and cycles (like special cycles for glassware). My wife nor I have ever used these, so we didn't care too much about them.

Another lesson: I looked at customer reviews online to see what others said about the different dishwasher models. If you sell someone a product or service, you should follow-up with them to make sure they are satisfied (or to satisfy them if they are not satisfied). Because your customers may post their comments online (or offline) which will influence your future sales.

Step 5: I bought the dishwasher. I paid extra for installation and haul-away of my old dishwasher and bought a 3-year warranty.

Lesson: These add-on sales increased the total sales price by 24% and must have increased their profits by a lot too. And these upsells were things that I wanted. The lesson is that you must upsell your customers by offering them items that will better satisfy them.

Final lesson: My wife and I don't represent every shopper. Not every shopper goes online to try to solve a problem themselves or to compare products. Not every shopper doesn't care about certain product features. And not ever shopper is going to take your upsells.

But, make sure you figure out your main customer segments, think about how they will buy and make decisions, and create sales and marketing strategies that are in line with this.

------------------------------------------------------------

Get Growthink's Ultimate Marketing Bundle
for 80%-OFF

For a limited time, you can get ALL of our BEST marketing secrets for an incredible 80%-OFF discount.

On this page, you'll see everything that's included.

Right now is a GREAT time to kick your marketing into high gear, so you hit your goals for the rest of the year.

But hurry, this sale ends soon.

------------------------------------------------------------


 

The Widow Who Doubled Profits


 


A couple of years ago, a colleague of mine told me the following story. Is it true? Maybe. But even it it's not, it illustrates a critical point, and one that will significantly boost your success.

Here it is:

There was once a young man who had just graduated from college with an engineering degree. He did what most of his classmates did and got a job as an engineer. Within the next few years he got married and had his first child. And then another child.

But after working "for the man" for twenty years, he decided to start his own firm; an engineering consulting firm. While at first business was slow, over the years he built up his firm. In fact, 30 years after founding his company, he was generating millions of dollars in annual revenues.

But then, at the age of 72, he died.

And he left the business to his 71 year old wife.

Now his wife had never run a business in her life. In fact, lately, most of her days were spent at the country club golfing and dining with her friends.

But within a year, she doubled the firm's profits.

How did she do it?

Simple. She visited the company a week after her husband passed and sat down with the management team.

And then she told them to do two things:

   1.  Make me a list of the 5 things that worked the best in the last 12 months
   2.  Make me a list of the 5 things that worked the least in the last 12 months

The list of things that worked included items like upselling current clients, getting new clients from partnerships they formed, and their program that hired and trained new sales reps.

The list of things that didn't work included radio advertising, sponsoring trade shows, and a new service offering that just didn't catch on.

So the widow made one demand. She said, "Do more of the 5 things that worked, and stop doing the 5 things that didn't work."

The management team listened. And within a year, the company's revenues and profits both doubled.

Yes, it's that simple.

But most of us don't do this. Here's why. Throughout our lives, we've been told to improve our weaknesses and never quit. So, in business, when something doesn't work, our first impression is typically to fix it.

However, that's generally not the best solution. Rather, the best solution is typically to do more of what is already working. Those are the things that are proven to work. So why try to fix an unproven concept, when you already have figured out a winner?

Now, when it comes to marketing, I DO suggest to always tweak and test new ideas. Since creating new promotional vehicles which are profitable can give you competitive advantage. But in most other areas, you should focus more on your winners.

So, take out a pen and paper and:

   1.  Make a list of the 5 things that worked the best for you in the last 12 months
   2.  Make a list of the 5 things that worked the least for you in the last 12 months

And then make sure to focus the vast majority of your efforts on doing more of what's worked.

------------------------------------------------------------

The Secret Formula to
Building a $10 Million Company

If you want to build a $10 million+ company, you must focus on building Value. And to build Value, you need to follow a specific formula.

In this video, I layout the precise formula for you.

As you watch the video, you’ll see the important schematic below:

Don’t be overwhelmed by its complexity, by the time you see it, it’ll make perfect sense. And you’ll be able to follow it to dramatically grow your business.

Click here to watch the video now

------------------------------------------------------------


 

Improve Your Business with The Improvement Matrix


 

The Improvement Matrix

I hate to admit it, but I'm a bit of a dork.

You see, I did really well in school, so I guess I could have been considered a dork back then. But I was also a really good athlete, so that made me "cooler" and so I never got a dork label.

But I did something many years ago that clearly classifies me as a dork. What did I do? I had one of my articles published in Quirk's Market Research Review. Quirk's is a trade journal for market research professionals that mostly talks about new market research techniques and ways to tabulate data. Pretty exciting stuff, I know :-)

I think many of the other authors at Quirk's are like the guys from Revenge of the Nerds, complete with pocket protectors. But, when I submitted my article, I didn't care, because I had something important to share.

What I shared with Quirk's readers (this was way back in 1994 so they don't even have an archive of the article on their website), was what I call "The Improvement Matrix." I originally created these matrices for bigger businesses who paid big bucks for them.

But over the years, I realized they could be created much less expensively, and have HUGE value to entrepreneurs like you.

So what is the "The Improvement Matrix?"

It's simply a way of looking at your products and services and figuring out what you should improve and in what order.

Let me walk you through it. As an example, let's assume that I'm Sal. Sal's my landscaper. He frustrates me to no end since he's such a bad marketer [in fact he makes me think about getting into the landscaping business since I know I'd clean up....but I'll stop digressing].

OK. The first step is to identify what it is that your customers find most important.

So, as a landscaping customer, Sal should survey me and his other customers on the 8-12 attributes of his business that I find most important.

Maybe Sal would have chosen these attributes to survey:

1. Quality of lawn mowing
2. Quality of plant trimming
3. Offers to do additional work (e.g., clean leaves from gutters)
4. Price
5. Value (fairness of price based on quality of service)
6. Ease of billing
7. Ease of communications with company
8. Professionalism of workers

For each attribute, he should ask customers, "How important are these attributes to you in your landscaping company?"

He could have used a 4 point scale as follows:

1 - Not important
2 - Somewhat Important
3 - Very Important
4 - Extremely important

The results may have looked as follows:





As you can see, Sal's customers considered "quality of lawn mowing" and "ease of billing" to be the most important attributes. Conversely, the least important attributes were "professionalism of workers" and "offers to do additional work."

The next question on Sal's survey should have been: "How do you rate my performance on these attributes?"

He could have used a 4 point scale again as follows:

1 - Poor
2 - Fair
3 - Very Good
4 - Excellent

Importantly, Sal should judge responses to this performance question against how important the attributes are. The results may have looked as follows:




As you can see from the chart, on attributes like "value," Sal's performance is in line with importance. But, on the key attribute of "ease of billing," Sal is vastly underperforming. And, on the non- or less-important attribute of "professionalism of workers" (maybe Sal has his workers dress in formal uniforms), he is over-performing.

So, what should Sal do? Well he should clearly focus on improving his "ease of billing" since this will improve customer satisfaction. Also, if he is investing too much money and time in "professionalism of workers," he should consider re-allocating those resources to improving "ease of billing."

As you can see, the beauty of the chart, based on simply 2 sets of questions asked to customers, is that it identifies the most important areas of your product or service to fix to better satisfy customers and gain competitive advantage.

Now, a final way to look at the performance chart is as a matrix, which I call the "Improvement Matrix."  You can see the matrix below.




The Improvement Matrix is simply a different way of looking at importance vs. performance data. It plots the data and classifies each attribute into 4 quadrants:

1. Underperforming (but OK): you are underperforming in this area, but customers don't care much about it, so that's ok.

2. Overperforming: you are doing well in this area; but customers don't value it. Keep doing what you're doing, or consider allocating resources away from this area into a more important area.

3. Keep it up: these are areas that your customers care about and that you are doing well in. Keep it up.

4. Improvement Quadrant: this quadrant is the key. It shows those areas that customers find important, but for which your performance is not up to speed. You MUST get better in these areas ASAP.

As you can see, the Improvement Matrix will alert you to the key areas of your product and service that you must improve. All it requires is a simple customer survey and plotting of the data. And the results can revolutionize your business. So do it!

Suggested Resource: Would you like to know more ways to improve your business; and turn it into one worth $10 million or more? Then check out Growthink's 8 Figure Formula below.

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The Secret Formula to
Building a $10 Million Company

If you want to build a $10 million+ company, you must focus on building Value. And to build Value, you need to follow a specific formula.

In this video, I layout the precise formula for you.

As you watch the video, you’ll see the important schematic below:

Don’t be overwhelmed by its complexity, by the time you see it, it’ll make perfect sense. And you’ll be able to follow it to dramatically grow your business.

Click here to watch the video now

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How to Add Value to Your Business


 

Add Value to your Business

If you're like me and passionately roll up your sleeves and get to work on something great for several years or more (your business), you owe it to yourself to have a final result for your efforts that is truly a masterpiece.

I'm talking about your business, once it's complete...Done...Ready to sell for as much as you can reasonably expect, often for several times its yearly earnings.

If and when it does come time to sell, you want to be selling from a position of strength-to sell it when it is at its most valuable point and not when you're burned out, in ill health, or in some other situation where you are rushed or won't make nearly as much from the sale.

Like any great work, you have to start with the end in mind, and to that end I'll be writing this to clarify just what a "sellable" business looks like.  This will give you an ideal to work towards and guide your plans and work.

Below are several things to be aware of in increasing the value of your business to yourself and potential acquirers.

Positioned in its clearly-defined niche

Your business must be the best it can be at what it does, without trying to be everything to everyone. A business that knows its customer segments, their needs and language, and how to solicit a response from them is a lot more valuable than one that is a mixture of everything, or an unknown in its market.

Coach your team to run the business without you

Could other people ever run your business without you? They'll have to, if you're selling! So why not make this your goal from Day One?

Make an organizational chart of how your business will look when it's time to sell it. List all the various workers in marketing, operations, and those they report to.  It's okay if it's just you or a handful of people currently filling all those roles. Doing this will help you organize who is going to do what in your business before you hire a new person.

Then, over time, you can find other people to fill those positions one by one until you're out of the picture.

Build relationships with customers

Goodwill, such as your reputation and brand in the minds of your current and prospective customers, is considered an asset on your company's balance sheet. You build this over time by treating people right and maintaining good relationships.

If you intend to sell your business someday, or if you just want to have the option, this is something you have to make a priority throughout the business's life. You can't just start doing it well suddenly in the final year. Relationships and recognition take time.

Make sure you're stable

Make sure you're not overly dependent on any one customer, vendor, employee, or anything else. Diversify your strengths. If you have any "whale" customers that make up a large portion of your business, try to get at least 80% of your business from other people.

The new owner does not want to take the reins and have revenues drop in half in the event your biggest customer leaves.

Maximize your revenues

This one's self-evident, but deserves to be repeated. In my last essay, I shared 4 proven ways to increase your revenues-getting more customers, increasing your average order size, get customers to buy more frequently, and finding new ways to monetize your customers and visitors.

A company with higher revenues and which shows growing revenues will be more valuable and attractive to buyers.

Hold expenses accountable

You boost your net profit (and therefore the value) by reducing your expenses. However, no one ever shrank themselves into wealth. You're not going to grow your business by keeping expenses lower-but the numbers will increase as it grows.

Your goal is to keep the percentages the same, such as keeping advertising at 20% of your revenues whether earnings are $100,000 or $1,000,000 per year. 

Basically, you'll want to make sure that budgets are made and followed, to keep spending within projected limits and to avoid costs creeping up that don't generate more revenue in return.

Keep great records for the next owner

Keep excellent records of everything for the new owner-your files, databases, customer communications, marketing materials, financial records, employee agreements-everything.

Committing to do this now will make your life so much easier between now and the time you sell. Keep good records for your own efficiency, protection, and to make your business look a lot more attractive to buyers than one where all the records are filed away in the old owner's head.

Develop a plan for when it's "done" and ready to sell

I don't want you to have plans on top of plans, but each of these will take certain actions to make them happen.  So here's what to do:  Add these end results into your existing business plan, and use your best judgment when choosing how to make each of them happen in your company.

When it's all said and done, the next few years are going to go by whether you maximize your business's value or not. At the end of, say, 5 years, would you rather have a stable, attractive, polished business ready to sell for top dollar, or be left taking what you can get for what you have?

If it seems like a lot, remember you have until the time you sell to take care of these things. You don't have to do it all now! Just add these elements I described to your vision of what you want your company to be, and keep your eye on it until the big day finally comes.

------------------------------------------------------------

The Secret Formula to
Building a $10 Million Company

If you want to build a $10 million+ company, you must focus on building Value. And to build Value, you need to follow a specific formula.

In this video, I layout the precise formula for you.

As you watch the video, you’ll see the important schematic below:

Don’t be overwhelmed by its complexity, by the time you see it, it’ll make perfect sense. And you’ll be able to follow it to dramatically grow your business.

Click here to watch the video now

------------------------------------------------------------


 
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