Norman Davies' Blog

Innovation

Innovation  

 

When I think of innovation I think of leaders who have changed the business landscape forever.
 
Henry Ford envisioned and created the modern assembly line, which drove the cost of an automobile down to the point where almost every family in America could afford one.  
 
Actually, he invented the assembly line because he concluded that he could sell a lot of cars at a price point of $500. Mass production was the result,
not the cause, of his low prices.
 
Ford emphasized this point repeatedly, but a nation of product-oriented business managers refuses to hear the great lesson he taught.
 
Ford said, "Our policy is to reduce the price, extend the operations, and improve the article. You will notice that the reduction of price comes first. We have never considered any costs as fixed. Therefore we first reduce the price to the point where we believe more sales will result.  Then we go ahead and try to make the prices. We do not bother about the costs. The new price forces the costs down.  The more usual way is to take the costs and then determine the price; and although that method may be scientific in the narrow sense, it is not scientific in the broad sense, because what earthly use is it to know the cost if it tells you that you cannot manufacture at a price at which the article can be sold? But more to the point is the fact, that although one may calculate what a cost is, and of course all of our costs are carefully calculated, no one knows what a cost ought to be.  One of the ways of discovering...is to name a price so low as to force everybody in the place to the highest point of efficiency. The low price makes everybody dig for profits.  We make more discoveries concerning manufacturing and selling under this forced method than by any other method of leisurely investigation."
 
As Ford stated sometimes we don't know what we are capable of until we force ourselves to try.
 
For you and your business, it may not necessarily be about price.  Perhaps it is about service. Decide to stretch your business goals and make a commitment to get there.
 
Be better at something than anyone else. Deliver faster! Make it cheaper!  Improve quality! Devise new features!
 
Force your business to be better!

How to sell when nobody is buying?

How to sell when nobody is buying?

 

 

The fact is that sometimes sales are just very slow. 

 

My experience is that this is often the case when change happens.  Elections, bad economic news, natural or man-made disasters, large sporting events or anything that generally distracts people.
 
Eventually everything returns to normal but in the meanwhile selling can be tough.
 
So what to do?
 
Work harder!
 
Pull out all of the stops and put as much energy as possible into your sales effort.
 
Think differently!
 
Think outside of the box and look at every aspect of what you offer. Can you offer free delivery? More frequent delivery? Longer hours? Faster turn-around times? Better payment terms? Do you accept every possible credit card?  On-line sales? Warehouse sales? Drop your minimum order? Host a BBQ? Open House? Paint the front of your building
bright red?
 
There are probably one hundred things you can do quickly.  Do every single one
of them!
 
Think creatively and you will shake people loose from where their minds are at and back to the normal business of living!

What business are you really in?

What business

are you really in?

 

 

Chances are you are wrong! 

 

I recently needed to get my windshield replaced on my vehicle. While I was driving, I noticed a large chip and crack and thought I should get it checked out. I saw a sign for Anvil Glass and noticed that they were an ICBC Express shop and thought they could probably do a good job.  Dave the manager seemed pleasant enough.  He took my information and I booked an appointment. When I brought my car in on the appointed day Dave was not there.  Dave was on holidays and one of the installers was there in his place. I was not impressed with this person but left my car anyway.  

 

When I picked up my car later in the day I was not pleased.  The new windshield had been installed but the installers had damaged the trim around the window, the window did not sit flush and the window had a strange haze all over the glass. In addition, the car was dirty - they had not felt the need to clean up the mess they had made.

 

When I complained the installer denied causing the damage and told me that their job was only to install the glass, which they had done. They were extremely rude and when I further complained they told me to leave.

 

Of course I spoke to management who said they would correct the problem.  They also suggested that they had never received a complaint before and so they did not feel they had a problem with service. Ha!

 

The problem with Anvil Glass is that they believe that they are in the glass replacement business.  They are not!  They are in the customer service business.  I did not go to Anvil Glass to get my glass replaced.  I went to Anvil glass to feel better about my car. Unfortunately, Anvil's approach to business did not make me feel better about my car - their approach made me feel significantly worse!

 

Many companies miss this important point and it can hold them back or even put them out of business over time.  

 

Does it matter to Anvil's business whether I am happy or not?  It depends on whether I represent its core target market.  If its core market is fleet managers then how they deal with the occasional retail customer may not matter too much.  If, however, Anvil depends on keeping the retail customer happy then they are in serious trouble.

 

The problem with many businesses is that they focus on the function not on the result.  The classic joke about the doctor who said, "The operation was a great success, but unfortunately the patient died" illustrates this point perfectly.  

 

Let's imagine we are printers.  If we print something perfectly but there is a BIG spelling mistake in the middle (that was not our responsibility) is that our fault?  Well, technically, no but I can guarantee the customer will not be happy if they are forced to pay the full cost.  We might get paid for that job but not focusing on what is important to the customer (a perfectly printed job) will hurt our business.  

 

Starbuck's understood this concept. People didn't want better coffee; they wanted a better coffee experience.  Starbuck's sells coffee but they are in the experience business.   

 

A wholesale distribution business inventories and ships product.  What people buy is convenience, service, and often, most importantly, credit. Retailers will often deal with unreliable distributors because of generous credit terms. The average retail shop may have $100,000 or more of inventory, at cost, which suppliers have given them thirty to ninety days in which to pay. Many distributors are really providing a banking service by financing clients’ inventories.

 
What business are you in?

 

You are in the business of providing your customers with the feelings they are seeking from their purchase decision. When I purchased a new windshield for my car I was not buying a new windshield. I was buying a continued and renewed good feeling about my car - I was buying pride. Anvil Glass doesn't understand this important difference.  Why would someone spend more on a vehicle than is required for basic transportation? Pride of ownership!

What are your customers looking for?  Identify that and you will understand how to sell and more importantly how to please your customers.
 
Back to the example of running a successful print shop, perhaps you could employ the services of a professional proofreader to check all of your clients' jobs - at your expense?

 

Don't supply a product or service - answer
the real need and you will thrive!
 
Understanding your own business will also allow you to grow through any change because you will not be focused on producing a specific product or service but on keeping a group of customers satisfied. 
 
Wrigley's started offering chewing gum as a free incentive to entice customers to purchase their brand of soap. The gum provided was more popular than the soap and so they decided to move into the chewing gum business!  Wrigley's focused on satisfying customers and, as a result, built a dynasty!

Think about it!