Archive for the ‘Cash flow culture’ Category

4 Unusual Economic Indicators For The Small Business Owner

July 27, 2010

by Doug Smith, President, The Woodhaven Group

Oh, if we could only predict the future!

Every business owner or CEO has certain indicators they use to get a “read” on how their company is performing.  Based upon what those indicators tell the owner, he will adjust strategy going forward.  Business cash flow, profit and net worth depend on the owner making the correct decisions.  I have found most owners do a good job of reacting and making the necessary adjustments.

Unfortunately, all businesses are impacted by changes in the economy over which there is no control.

Should an owner invest in a new product line, open a new branch or cut back overhead in anticipation of rocky economic headwinds?  Those are tough decisions to make.

There are plenty of economic indicators released by the government such as housing starts, consumer price index, unemployment rates, consumer confidence index, and on and on.

They are all important to consider but, sometimes, there is information overload.  Compounding the confusion is when the government “restates” an economic indicator after it is released.

I have tended to include a few indicators of my own that I layer into my decision-making.  I will be the first to say they are not perfect and I do not look at them only in making a final decision, but these indicators do represent dollars spent that are impacting the economy one way or the other.

Here they are:

  1. Freight volumes for truckload carriers.  About 2/3 of the freight in the US economy moves by trucks.  This can be an indicator of inventory levels, consumer spending, manufacturing activity, and overall condition of the economy.  Lots of trucks on the highways is a good thing!
  2. UPS and FedEx shipments.  If the economy is tanking then  overnight shipments of almost anything will drop.  A month to month upward trend from these 2 companies is an indicator things are improving.
  3. Airline travel.  If overall airline travel is increasing that means business people are travelling to sell and close deals.  Even in the era of video conferencing, there is still no substitute for face to face meetings.
  4. Hotel vacancies.  Similar to air travel, hotels operating near capacity can be an indicator of more business occurring, more families vacationing and a bump up in conventions and conferences being attended. 

In my opinion, these 4 indicators are a reflection of how the economy is doing.  A downward trend for a number of months in each would probably cause me to think twice before charging ahead with expansion plans.

I would be interested to hear if you have your own unusual economic indicators that you follow.

13 Foolproof Steps To Delivering Superior Customer Service

June 25, 2010

by Doug Smith, President, The Woodhaven Group

If a goal of your company is to increase the sales, business cash flow and net worth for shareholders, then superior customer service has to be at the center of everything you do.

Your business can have cutting edge technology at the best price.  The structure and funding of your company can allow you to scale the enterprise quickly.  Your business plan can be the envy of venture capitalists and angel investors.  Your start-up may have been listed last year on the Inc. Magazine’s Top 500 fastest growing companies. 

In spite of that, if your customer service is not the best it can be then nothing else matters.  Your company will lose marketshare.

In speaking with companies of all sizes from many various industry groups, I find most saying that the difference in their own company from the competition is their customer service.  Really?  I find myself wondering if these companies really know what superior customer means.

From the corner office to the front lines it is time for all companies to step back from the day-to-day operations and ask themselves what superior customer service means, what does it look like, and how do they deliver that unique trait to their customers.

Here are 13 foolproof steps to delivering superior customer service.  Ask yourself if your company is doing the following:

  1. Listening To Your Customer:  It all begins here.  You may think that you have the world’s best value proposition, product, service,and employees.  But does your customer or prospect agree?  Ongoing feedback on how your company is doing is critical and the only opinion that counts belongs to your customer. Feedback may be from a customer forum on your website, a live person taking calls or some other method .  Review the information discovered at a meeting of top management.  A characteristic I have noticed of successful companies is that the customer is discussed frequently at management meetings.  Unfortunately that does not happen enough in most companies.  The simplest and most effective feedback process I have ever seen belongs to Nordstrom department stores.  They have a half page with horizontal lines.  Across the top it says “I would like to hear from you”.  Thats it.  As a result, Nordstrom gets their customer’s top of mind opinion without being distracted by a series of survey questions.  The comments may be positive or negative but I am sure management reads every one of them.
  2. Timeliness Of Replies:  None of us has enough time in our day to get done what needs to get accomplished.  Your customer is the same way.  When they ask a question, request a quote or have a problem you must respond as quickly as possible even if you do not have the answer.  Anything less screams to your customer that they are not a priority to you.  With email and voice mail available, there is no excuse for not getting back as soon as possible.  Have a process in place to measure the timeliness of replies.
  3. Maintain A Good Reputation:  Is your business the first one the consumer thinks of when they need a solution to a problem or need a desire fulfilled?  If you are a restaurant, are you the first choice where to dine for the weekend?  Are you the plumber at the top of everyone’s list when a leak occurs?  A good reputation is not just a result of superior customer service.  Your mother was right about reputation.  Make sure you maintain a good reputation whether it is on consumer forums, with the Better Business Bureau, or at the corner coffee shop in the morning.
  4. Always Be Professional:  No one has to do business with your company.  Show respect in everything you do.  Make sure all employees act and look like they want to earn your customer’s business.  The business environment is no place  for bad language, off-color jokes or an arrogant attitude.  It is  not a secret that people want to do business with other people they like and respect.  The most expensive advertising campaign can be off set by one  employee needlessly making a prospect feel uncomfortable.
  5. Stay  In Touch:  Don’t be like the insurance agent I once had.  The only time I saw him was when it was time for the renewal.  Especially in business to business relationship,  an occasional phone call asking how sales are going is appreciated.  Even better is if you can refer a prospect to your client that might turn into a sale.  Nurture the relationship.  It will pay big dividends.
  6. Show You Are A Team:  Have you had an experience with a company where you wondered if one department within  a company even knew that another department existed?  Or, someone could not help because “that is not my job.”  A reflection of a well run company that delivers superior customer is a consistency throughout the organization in meeting the needs and wishes of every customer.  Make sure your line of communication and processes are in place and there is a synergistic approach to serving the customer.
  7. Don’t Rationalize:  No one is perfect, especially businesses.  Mistakes happen.  When they do occur, admit it and put in place a solution that will make the customer satisfied.  Most customers are understanding.  They just do not want to battle for a solution when the fault is not theres.
  8. Don’t Prejudge:  Every customer, every client, every prospect should be treated as if it’s the only one the company will ever have.  Some of the finest restaurants in America do a great job of making sure each visitor has an unforgettable experience.  That is why some of these establishments have been around for 50 years or more.  Too often, in some businesses, the way a prospect dresses or the size of the company dictates the quality of service given.  Don’t ever let the culture of your company go in this direction.
  9. Does The Business Give Back To The Community:  Superior service does not stop at the doorstep of the customer.  Contributing to the improvement in the daily life of a customer and its employees is indirectly an example of superior service.  Donating services or dollars to worthy causes that helps the community will be recognized and appreciated by both customers and prospects alike.  Many a business has lost out on a sale because a prospect remembered that a competitor contributed to a local worthy cause.  Think of this as customer service and not a line item called “donation expense” on a financial statement.
  10. Are You There For Your Customer In Tough Times:  As individuals and businesses, we all go through tough periods in our lives.  Only then do we really know who our friends are.  You may have a client who unexpectedly loses their largest customer, has a catastrophic fire or suffers the untimely loss of a key executive.  Helping out may be nothing more than extending payment terms for a period of time to help your customer’s cash flow.  I have even seen a company loan an executive to help the client transition through a loss of management.  Gestures like this are never forgotten.
  11. Is Your Product Or Service Easy To Use:  Was the solution to your customer’s problem created by engineers with no thought given to the end-user?  The problem gets solved but a PhD is required to get through the instruction manual.  Superior customer service dictates that usage of the product should be effortless.  I recently reviewed a new CRM system that was promoted as being the latest and best way to manage the interactions with customers and prospects.  It worked.  I could not understand how to use it, so I passed on buying it.  Keep it simple and your customer will be asking how they can buy more of what you are offering.
  12. Do Something Unexpected:  Sometimes superior customer service happens when someone goes out of their way to satisfy the customer by doing something totally unexpected.  This one event may solidify the customer relationship for life.  I know.  It happened to me.  I took my Lexus into the dealership for a routine service and told them I needed it back that night since we were driving to visit my son at college 700 miles away.  That evening they apologized and said the car was not ready since a part had to be ordered.  All of their loaner cars were being used.  I expressed my concern that I needed my car since we were going to be gone 5 days.  The service manager said, “No problem,” handed the keys to a new Lexus setting in the showroom and said “See you in a week..”  That was superior customer service and totally unexpected.  I don’t know how many cars I have indirectly sold by repeatedly telling that story.  Does your company have similar experiences?  If not, why not?
  13. Take Time To Educate Your Customer:  Your customer is incredibly busy and yet needs to keep up to speed with the changes in their industry.  Your company can perform a valuable service by having an ongoing education program directed to your customer.  It can be in the form of webinars, podcasts or e-newsletters featuring key topics of interest with experts in your specialty.  This is added value to the customer relationship that will be appreciated.       

When your business offers superior customer service you are really telling the customer that you genuinely care about their company and them personally.  It allows your business to better understand your customer and deepen the relationship.  You will find price becomes secondary.  The satisfied customer will become the best marketing tool you have.

Make sure “superior customer service” is more than just words.

Will Telecommuting Increase Business Cash Flow ?

June 24, 2010

by Doug Smith, President, The Woodhaven Group

It seems like business owners and CEOs wake up everyday trying to find a new way to increase business cash flow, productivity and sales.

A tool being used more frequently these days to achieve those goals is telecommuting. 

Telecommuting is the process of an employee working somewhere other than at the office.  Usually this means the employee is working from home.  The increased utilization of the Internet has allowed this alternative workplace to become much more popular.  For many businesses it has turned out to be a win-win situation for both the employer and employee.  The telecommuting employee is typically referred to as a teleworker.

Is it something your company should be doing?

Most researchers and business consultants will advise you that it is the right thing for your company to do.

My answer to that question is that yes, teleworkers are going to become a larger percent of the workforce in the future and your company needs to include them as a part of your employee mix.  However, for the program to be successful, your management team must do their homework first or the concept could fail.  There are benefits and concerns that must be addressed.  Here are just a few of them:

Benefits:

  1. Improved Productivity:  There are university, corporate and government studies that show the teleworker operating out of their home is a more productive employee than the employee in the office.  Reasons often given are fewer interruptions, less stress, and a fresher employee ready to work due to not needing to deal with the issues of commuting  to the office. This may be true but, frankly, I am not sure how much more productive the employee working from home really is. There are distractions at home also.  Laureen Miles Brunelli had interesting comments on this subject in a 2009 blog post on About.com  You can read Laureen’s blog post here.
  2. Less Office  Space Needed:  This can be a real cash flow savings for the company.  Less space needs to be leased, no utility or phone cost, and office and workstations can be eliminated.  Those are all real measurable savings.
  3. Flex Time For the Employee:  A real benefit for the teleworker is the opportunity to utilize flextime in their day.  The day can be broken up allowing the teleworker to take time to address home and family issues and still get the job done.
  4. Can Reach High Quality Candidates:  I have seen individuals with advanced degrees who, due to family commitments, have to stay at home.  Yet they still want to realize their professional ambitions.  If they were required to come to an office this high quality candidate would be lost to the company.
  5. Can Utilize More Part Time Employees:  Depending upon the scope of work, the teleworker may not need to be a full-time employee.  For instance, two 20 hour part-time data entry workers might be the best solution for both the company and the stay at home employee.
  6. Opportunity To Employ Handicapped and Retired Workers:  There are some excellent handicapped workers and retirees who choose not to work in an office environment.  They become a real asset to the company working out of their home office.
  7. Improved Morale:  Studies have shown that teleworkers have  higher morale  than those in the office environment resulting in less turnover.  Not having to commute to and from work would be a morale booster by itself to many workers.
  8. Bad Weather Is a Nonissue:  No problem with snowstorms.  While the regular office may be closed for the day, the telecommuting employee carries on as if nothing happened.
  9. Geographic Location Is Not a Problem:  Working remotely allows the company to hire the best candidate regardless of where they reside.  I once hired a telecommuting employee from 600 miles away because she was the best candidate available.  Also, if the spouse is relocated to another city, your company’s teleworker can follow the spouse and continue on as if no move occurred.  

Concerns:

  1. Lack of Social Interaction:  This might be the biggest concern.  The teleworker operating from home does not participate in the “water cooler” conversations or have the opportunity to have a lively discussion at break time with others about the ball game on TV last night.  There must be a process in place to engage the work at home employee if they are the type that requires a lot of social interaction.  A behavioral analyses of the telecommuting candidate might be a good idea to use during the hiring process.
  2. Can the Worker Stay Focused:  Is the  teleworker self disciplined, organized and have the ability to manage their day?  If not, the productivity issue becomes a concern not a benefit.
  3. Is There Buyin From the Manager:  A work at home employee has to be managed differently than the one down the hall from the manager.  Goal setting with specific measurable results and deadlines is critical.  Managing to results is the way to make the teleworker accountable.
  4. Could There Be a Culture Problem:  Not all jobs are a good fit for the telecommuting program.  If there are employees in the office that perceive the teleworker as a slacker that does not pull their weight, then the productivity concern might shift to those employed in the office.
  5. Promotion May Not Be An Option:  If the employee wants to move quickly up in the organization, then working from home may not give them the opportunity to develop and show off their people management skills.  A manager career path training program might necessitate the employee only being in an office environment.
  6. Security Can Be a Problem:  If the teleworker has access to the company database and confidential documents, it is imperative that steps are in place to protect these valuable assets of the company.  A disgruntled employee working remotely can do serious damage.
  7. Are There Savings In Office Equipment:  If the company reimburses the teleworker for a computer, fax, printer and other office needs then how much savings were actually realized?  In some companies the teleworker uses their own home computer with no reimbursement.
  8. Overtime Can Be An Issue:  A happy productive at home employee can easily surpass 40 hours per week.  While managing to results is good, the company still must be in compliance with all labor laws.  This includes not only overtime but also making sure workmens compensation is paid. 

Incorporating telecommuting into your employee strategy can be a real source of additional business cash flow.

It is just important to do your due diligence to assure yourself that the program will be the success that you expect it to be.

Halt Next Day Delivery And Increase Your Business Cash Flow

June 18, 2010

by Doug Smith, President, The Woodhaven Group

It’s the little things that can blow a hole in your business cash flow.

Take for instance next day delivery.  As much as I like and am impressed by the efficiency of FedEx and UPS to deliver a letter or package overnight, I see too many businesses that still spend extra cash overnighting documents that can be sent using less expensive options. You should take time to identify how much this expense is costing your company annually.  You will be surprised how high it is.  

My suggestion is to establish a written policy of what documents must be overnighted such as a proposal that must meet a deadline in order to get an important sale.  Instead of overnighting a check for the payment of an invoice, use an ACH payment process if it absolutely has to arrive by the next day. 

Other correspondence can be sent by regular mail and should arrive in 3-5 days which, I have found, is sufficient for most business transactions that has to arrive as a hard copy.  In most cases business correspondence can be sent by fax or email attachment.

Don’t underestimate the potential cash savings by doing this.  If your employees still overnight documents instead of the less expensive options available, then you may find there are thousands of dollars that can be put to better use growing your market share.

Top 10 Tips To A Better Business Meeting

June 11, 2010

by Doug Smith, President, The Woodhaven Group 

One of the best ways to increase business cash flow is to improve productivity in the day-to-day operations of your company.

Unfortunately, for most businesses one of the least productive events is the meeting.  We all attend meetings.  Some of us have multiple meetings every day.  I believe it is safe to say that most of us would agree that a lot of our meetings are unproductive.  An unproductive disorganized meeting is a waste of time.  And time is money.

Here are 10 ways to improve the meetings in your company:

  1. Hold fewer meetings.  Can a weekly meeting be held every other week instead?  Can 2 meetings be consolidated into one?  If 2 meetings per week could be eliminated that were attended by 5 individuals, that would free up over 500 man hours per year.  Could those hours be put to better use?  Don’t get in the habit of holding a meeting for the sake of holding a meeting.
  2. Distribute an agenda prior to each meeting.  The agenda needs to clearly identify each topic to be discussed.  List the time allocated to the topic and who is responsible for leading the discussion on the topic.  This assigns accountability for a portion of the meeting to different participants.  It also allows others to prepare questions or comments on the topics to be discussed. 
  3. Have a set starting time and a set ending time.  This is mandatory and allows everyone to organize their day around the meeting.  Nothing kills morale quicker than drawn out meetings.  The overriding message that comes out of long meetings is that the company is disorganized.  A characteristic of legendary UCLA basketball coach John Wooden that all his players and coaches appreciated was that practices would start and end on time.  If he could do it so can you.  If you only take away one suggestion on improving your meetings let it be this one.
  4. Identify who needs to be at the meeting and eliminate everyone else.  Do you really need assistants or multiple managers from the same department in attendance?  I have found one positive result of smaller meetings is more active participation by those in attendance.
  5. The chair of the meeting  should spend the last few minutes summarizing the takeaways from the meeting.  This communicates that there really was a purpose to the meeting and allows those in attendance to deliver a consistent message back to those in their departments.  Without an organized summary the chair runs the risk of each participant communicating their own interpretations of what transpired.  To reinforce the importance of the conclusions coming out of the meeting, a follow-up email summarizing the key points should be distributed to all participants within 24 hours of the conclusion of the meeting.
  6. As part of the summary,  assign responsibility for specific actions at the end of the meeting.  This designates accountability to certain individuals and reinforces that the purpose of the meeting is to achieve results.  It also creates an expectation that the person assigned the action is to report their steps taken at the next meeting.  Future meeting agendas are also created by doing this.
  7. Everyone should review notes and summaries from prior meetings and come prepared to contribute.  An effective meeting should be a two-way street.  If a participant is not prepared and silently sits there then why do they need to be at the meeting?
  8. All electronic devices need to be turned off or eliminated.  The priority must be on the agenda and presenter.  There should be no texting to the person across the table editorializing about the comments just made.  The chair of the meeting must enforce what should be a hard and fast rule.
  9. The chair needs to make sure all attendees participate in the meeting.  First of all, everyone’s contribution is needed for the agenda to be successful.  Secondly, if participants know they will be called upon to contribute it will maintain everyone’s focus and assure the energy level is high.
  10. A completely different type of meeting may be held that is different from those discussed above.  If there is a small group that needs to meet daily at the beginning of a shift, consider holding a stand up meeting.  This type is literally held standing up (no chairs allowed).  It is informal but still needs structure.  Generally, a quick snapshot of 3 topics are covered: 1) a quick review of yesterday’s results, 2) any goals set for today, and 3) any pressing issues.  If a major issue comes up then finish addressing it after this meeting is finished.  The length should be 5-10 minutes and always finish on a high energy note.  I used this approach with a small group in a manufacturing plant and it was extremely successful in increasing output.  At once we saw hourly factory workers taking ownership of the results of their shift.   

If you need to increase the business  cash flow of your company start by holding more productive meetings.

The result will be a more energized, focused, and appreciative employee group.

The Best Employee Reward?

May 8, 2010

by Doug Smith, President, The Woodhaven Group

Have you noticed how often the same individuals get all of the awards, bonuses and free trips in a company for a job well done.  I certainly do not fault them their recognition and rewards.  As a CEO I structured many of those incentives in order to get results I wanted to see.  It usually worked.  We got more profit, marketshare, and cash flow.  It was nice.

But over the years I also noticed and appreciated the efforts and indirect results that others in the company working behind the scenes accomplished.  It was hard to directly measure their individual contribution but I knew they were critical to our success.

We would recognize these individuals at some year-end dinner or event but it never seemed to be enough.

So I started doing this.

From time to time and totally unannounced I would bring a behind the scenes contributor into my office and say something like this, “I just wanted to personally thank you and tell you how much I appreciate what you do everyday.”  I would give an example of something they recently did and why it was important to the success of the company.  Then I would tell them as an added thank you the company would like them to take a day off with pay.  Sometimes I made it 2 days off with pay.  Often the day off (their choice) was taken on a Friday or Monday so the employee got a long weekend.

I found this accomplished a few important goals.  First, it recognized a key loyal employee and showed them they were appreciated.  Second, it showed that as a business we recognized there is a life outside of work.  Finally, I found that this key contributor came back even more energized and committed than before.

Does this contribute to increasing cash flow?  You bet it does!

Will you find this spelled out in some MBA course on employee development?  Probably not.

Oh, and one other thing.  I gave the employee a $100 to spend anyway they wanted on that day off.

Pay For Performance Can Increase Productivity And Business Cash Flow

April 27, 2010

by Doug Smith, President, The Woodhaven Group

When a company improves productivity a positive result should be an increase in business cash flow to invest to grow the business.  Pay for performance compensation structured properly can be a driver of productivity.

There has been a trend for some time to reward those individuals who deliver the best results by shifting from straight salary to a lower base pay with some kind of incentive attached.

The intent is to not over pay nonperformers and give the top performers an opportunity to earn more than they were making before.

Many sales forces are used to being paid 100% commission.  That means no sales, no pay.  That also means reduced overhead for the company when sales are slow.  But what about other areas of the company that traditionally are not on pay for performance?  My experience has shown that you can often direct the outcome you desire by compensating an employee on results they can impact.

While 100% pay for performance will not work with all positions, a portion of some of the compensation for certain key people can be based on incentives.  

A few examples:

  • Make 10% of a retail store managers pay tied to reducing shrinkage.  They cannot stop all theft but they can reduce paperwork errors, a contributor to shrinkage.
  • Tie 20% of an accounts receivable manager’s pay to a positive change in days outstanding of accounts receivable.
  • Make a portion of a marketing manager’s pay tied to a reduction in marketing  % against net sales.
  • If customer service has been a problem tie 15% of a fulfillment manager’s pay to a reduction in customer complaints or an increase in repeat purchases.       

You get the idea.  Once you start doing this a next step can be compensating a team of individuals sharing a common goal.

Certain key points need to be kept in mind:

  1. Clearly define measurable goals when using any pay for performance.  Do not make it subjective.  Make sure the employee agrees the goal is attainable.  If the goal is too far out of reach the employee will give up and morale will go down.
  2. Make it clear you are rewarding measurable results and not effort only.  While everyone’s extra effort is expected and appreciated,  it’s the cash flow from increased results that pays the bills.
  3. Show the employee how much he or she can make if the goal is attained.  Then work with them to identify tactics and action steps to be taken to hit the goal and earn the extra income.
  4. Have  meaningful inital and ongoing  coaching sessions  to help the employee hit their goals.  In the beginning some employees may think the company is using this type of compensation to just reduce pay.  Actually, a well put together  incentive compensation program is a win-win.  The company does better and the employee earns more.
  5. Attempt to pay the incentive compensation each pay period.  If that is not practical then pay at least once per month.  The faster you can pay for the results achieved the more motivated your employee will be. 
  6. If the employee challenges the accuracy of the incentive calculation stop everything and verify that it is correct.  If it is not, then cut a new check immediately.

Well structured pay for performance can drive productivity, increase cash flow and retain top performers.

Employees in successful pay for performance programs never want to go back to only a salary or hourly pay.

Give it a try to see if it works for your company.

Increase Cash Flow With A Unique Value Proposition Strategy

April 27, 2010

by Doug Smith, President, The Woodhaven Group

What makes your company unique from the competition?

Can you ask a higher price and get it?

What is your competitive advantage?  Can you say it in about 10 words?

A unique value proposition is what your company is promising to deliver to a prospect that is better than anyone else can deliver.  A well executed value proposition delivers benefits that will address your customer’s wants or needs in ways that competitors wish they could duplicate but cannot.

If you have no value proposition or have an unclear value proposition then you will not be different from the hundreds or thousands of companies competing in your category.  You will get lost in the crowd.  

Your business will find itself competing on price as the differentiator and we all know there is always someone who is willing to keep dropping the price to get the deal.  This will kill marketshare, gross margin, profit, cash flow, and eventually your company.  Don’t let the competition dictate your pricing, profit strategy, and your future.

Here are a few thoughts to guide you when considering your value proposition:

  1. You must first know who your prospective customer is and what they want.  What is their pain?  What is their want or desire?  Do they think of your company first as a source to address that desire or pain?  Once you have identified your prospective customer, take a sample group and ask them what their biggest need is.  You will soon see a pattern that will give you direction.
  2. Be specific about the benefits you deliver, how they address your prospect’s wants and needs,  and how they differ from the competition.  Also, keep in mind that benefits differ from features.
  3. Show that your company has experience delivering this value proposition to others.  Third party testimonials often close a sale.
  4. Is your company capable of consistently delivering your value proposition at the quality level that you promise and your customer expects.  In otherwards, don’t over promise and under deliver in an attempt to be different.
  5. Can your value proposition be easily duplicated by others?  If  it can then do you really have a unique value proposition?  A $1.00 menu item or free delivery are examples that have quickly become the norm in some industries.  Make it hard for others to copy what you do.
  6. A well thought out value proposition becomes an effective guide for strategic and tactical decisions involving product development, customer communication, marketing, recruitment of talent and overall financial planning.
  7. Can the value proposition evolve over time as your customer’s wants and needs change?  If so, it will allow your business to think strategically and lead your customer forward with game changing innovations.

A unique value proposition gives your company a road map to growth and increased cash flow. It will make you different and allow your business to ask and get a higher price for what you offer.

Don’t try to be all things to all people. 

You just waste cash doing it.

Put Your Employees On The Cash Flow Team

April 26, 2010

by Doug Smith, President, The Woodhaven Group

Employees look to management for guidance or direction on what to focus on, what is important, what direction the company is going…… simply, what is your priority.

If the employee sees that the owner passionately believes in the concept of generating more cash flow then do not be surprised if you start seeing good results throughout the organization.  Employees will find ways to internally generate cash that you have not even thought of.

There are many ways to reinforce this mindset.  Here are just two:

  • As CEO or owner personally have a column in the company newsletter dedicated only to cash flow successes.  Show examples in the last month of additional money freed up as a result of actions by employees or new systems implemented.
  • Post in the employee break room or lounge a certain metric or dashboard related to cash flow that shows positive progress such as reduction in days outstanding of accounts receivable, increase in sales, or an uptick in inventory turnover.  Any of these metrics can have a column of their own in the newsletter.

The employee will take great personal pride in being knowledgeable about what is important to the success of the company.

Make sure the employees are the MVP of your cash flow team!  Do it by making sure you as management have open ongoing communication on this most important part of your business success.

Have You Listened to Your Customer Today?

April 14, 2010

by Doug Smith, President, The Woodhaven Group

We live in a day and age where we can instant message  what just happened in our life, twitter about the last play in a ball game, and let our facebook friends know who our new friends are.

I feel like we are spending a lot of time talking at people and we call it communication.  I call a lot of it noise.

I truly believe social media can be a game changer in the future, but when it comes to business, listening to your customer is critical to making sure your company is delivering the kind  of value you hope your customer wants.  Tracking comments about your company on twitter can be revealing but not always accurate.

As an owner, CEO or senior manager I am going to suggest including something radical into your communication strategy.  Pick up the phone and call random customers 1 or 2 times per week.  Do you want to differentiate?  That will do it.  Have marketing give you a list of customers and call one on the way home.  Make it a random list.  If you call 2 per week that is 100 unfiltered personal conversations you will have in a year.

I guarantee you there will be patterns in the feedback you receive that will surprise you.  Your company may be stronger in some areas than you think, weaker in areas you thought was a core strength.

Listen to what the customer says, how they say it and the inflection in their voice.  Google analytics can’t give this to you.

What are you going to say?  How about this…..

Hi, I’m Bob Jones, CEO of Acme Products and I personally wanted to call to thank you for being a customer of our company.  Do you have a moment I could get some feedback.

Great!  I just want to get a little information to help us improve:

  • In your opinion, how are we doing?
  • What is the one thing you have liked most about your experience with us?
  • What is the one area you feel we could improve upon?
  • If we were to add one product or service that would help you, what would that be?
  • If the opportunity arose, would you feel comfortable referring us to someone else?
  • Have you referred us already?
  • Are we easy to communicate with?
  • How could we improve in that area?

The key to all these questions is to:

  1. Listen to what they are saying
  2. Ask relevant follow up questions
  3. Don’t make it an interrogation
  4. And, you want top of mind answers which will most express their true feelings

At the end, thank them, give them your cell phone number and tell them again on behalf of all the employees how much you appreciate them as a customer.

Talk about something going viral. The word will spread about the CEO who personally calls his customers.

The statisticians will complain that the sample is not large enough to do a linear regression. That’s OK.

You will have just gotten much closer to your customer base and learned what’s working and not working in your company.  I have found customers to be brutally honest.

Listening can be a beautiful thing.  Done effectively,  listening will increase sales and cash flow in your company.

If  I can help in this area feel free to contact me.