A Startup Guy

I know it seems like common sense, but don’t make it hard for your customers to give you money. There are few things more frustrating than wanting to give your cash to a business and they put up roadblocks. The other day, I was trying to pay a utility bill over the phone. I usually pay online, but wasn’t near a computer. I waited nearly 10 minutes on the phone to pay. I guess they figured I had to pay them so I wouldn’t have up, though I was sorely tempted.

But paying utilities aren’t the only place I’ve had this happen. I’m sure we’ve all had to stand in the store waiting to give them our hard-earned money while employees stood around talking to each other, talking to outside friends or talking on the phone. Most of us have tried to buy products online and had trouble simply completing the process. Too many unnecessary fields to complete or you simply can’t find the button to buy.

As a business owner, you’ve worked so hard to get customers in the door, build their interest in your product and finally gotten them to pull out their cash to hand to you. Don’t turn your back on them. Don’t make them reconsider while they’re sitting on hold. No matter how many times you’re recording tells them that their call is important to you, actions speak louder than words. Make them wait and they don’t feel important.

Take a look at your business from the customer’s point of view. Look at your sales process. If you’re removed from the sales process, be a customer. Make a purchase on your website as if you had never seen it before. Do you have roadblocks? If so, knock ‘em down and pave a smooth road for those valuable people trying to give your their money.

Image by stephee via Flickr

I love when businesses get it right. They just supercharge me as a customer. There are a few stores in my town that do this and one I really love is Publix. I’ve heard bad things about this chain grocery store in other areas. I don’t know if it’s regional leadership or what, but the stores in my region are fantastic. Not just one store in my home town, but I’ve had the same excellent experience in at least 5 stores throughout Middle Tennessee.

I used to shop other chains, such as Kroger, but was frustrated with substandard fresh veggies and meats (at least at the one near my house). Not to mention just mediocre service. One thing I’ve noticed at Publix is that there are a few teenagers working there, but they are high quality workers. Kroger has LOTS of teens working there and it’s obvious that this is just a paycheck to them. And it’s obvious that kroger hires them because they’re cheap.

Here are a couple of recent examples:

One day I stopped in Kroger to pick up a few items. When leaving, I had my hands full with bags of groceries and trying to corral my 3-year-old son. I went out a door that wasn’t automated (you have to actually push it open, remember those?). Going out the same door, just a couple of steps in front, was a Kroger employee who looked back, saw I was struggling, and let the door shut in my face.

Contrast that to my experience at Publix one day recently. I ordered some sliced meats from the deli. The lady was finishing up with another customer and my order would be a few minutes. I asked her if it would be OK if I shopped a bit and came back to pick up my order and she said that was fine. A few minutes later, halfway across the store, she brought my deli order to me!

When I go into a local Kroger or Walmart, I generally don’t get much attention from the employees there. Frequently, I don’t get more than a “Will this be all?” from the cashier when checking out. On the other hand, when shopping Publix, nearly everyone I pass who works there greets me and asks if they can help me find anything. Their cashiers are always friendly.

Publix really has their act together and I love shopping there. Kroger or Walmart may be a bit cheaper on a few things, but Publix is chaper on some others. Quality products, fresh food, great service and good pricing keep me coming back. I’m happy they “get it.”

Image via Wikipedia

In light of my recent post “What If You Threw A Party & No One Came“, this one from Seth Godin titled “Failure As An Event” seems fitting. Give it a read.

As an entrepreneur, as a startup guy, you cannot fear failure. It’s how we learn. Babies crawl clumsily until they get it right. Then they fall many times while learning to walk. It’s how they master balance and coordination.

Entrepreneurs fail. It’s a part of the growth process. So don’t fear failure.

One of the concerns that stops many people from starting up their own company is this very thought. What happens if I start my business and no one buys? The truth is, that’s a risk for all of us. And most entrepreneurs will experience it at some time or another. However, if you let that stop you from achieving your goals, that’s the biggest shame of all.

Ouch
It’s a big ol’ wedgie to the ego if you put your heart & soul into a product and no one seems to want it. I know. I’ve been there… recently. For years I dreamed of having a service that would allow people to find historic sites that interested them and pull down data that helped them understand and appreciate the place more. Originally, I couldn’t act on it because I “knew” the costs would be too high and the technology just wasn’t quite there. A few years later, I realized no one was going to do this for me. I set out to build what I could. I designed a system that would allow people to collect their favorite sites online into customized travel guides. They could add site listings as wellas rate and review existing listings. Travelers could start their own blog through the site to talk about the sites they wanted to see and what they’d already seen.

Sounds great doesn’t it? About halfway through building it, I found out that Yahoo Travel had a general travel site that did just this. Then I discovered other sites I hadn’t found before doing similar stuff. (I still had a niche product – history, theirs were general travel sites.) To make matters worse, I had to scale back some of the features due to my limited coding skills and funds. (This project is where I learned to build PHP sites and work with mySQL.) Now, I had a non-unique, scaled back site. But I launched. And I was proud. And no one came. I invited everyone I knew: family, friends, friends of friends, friends of family. People came once and didn’t come back. I was crushed. I tried for a year and half to get regular users. But it didn’t happen. I took it personally.

Finally, I stepped back and looked closely at what I had built. It was fun to use (for me), but it wasn’t remarkable. It was a niche version of what others were doing. Why use my niche site when you can use Yahoo’s ultra-integrated, hooked-into-Flickr-and-Yahoo-Travel site? Why go to my site with no users when you could go through TripAdvisor with millions of active users? Finally, I quit feeling sorry for myself and realized that this wasn’t a referendum on me. The site wasn’t remarkable, but it didn’t mean people didn’t like me. In fact, many actually like the site. I get more than 1,000 unique visitors every month. People looking for information on historic sites. They just aren’t regular users.

Lessons Learned
The lesson is that if you throw your own party and no one comes, don’t take it personally. It hurts your feelings, but feel bad for a few days and then move on. You’ve got lots of potential. This isn’t your only idea. If you move on and work at your next project with the same gusto you gave this one, and apply the new lessons you’ve learned, you will eventually succeed.

Image via Wikipedia

Last week, Matt wrote a good post at SmallBizBee titled “7 Steps to Writing a Killer Mission Statement.” We struck up a conversation via Twitter about how many companies misunderstand the purpose of a mission statement. Matt was kind enough to offer me space on his site to write an article about it. I took him up on it.

Rather than repost here, I refer you over to SmallBizBee to read it. While you’re there, check out some of the other great content and resources he offers.

Setting a price for your products or services can be a real challenge for entrepreneurs. What’s a good price that will attract customers, but still deliver an attractive profit for the business?

In past decades it wasn’t quite as much of a struggle. Businesses would frequently just use simple formulas. Cost plus x% for profit margin gives you a price. Want to be the cheapest? Just price your product x% lower than your competitors (without taking a loss). Formulas can still be extremely helpful, but we have a myriad of additional options, features, prices, sizes, colors, flavors and even peer pressures to consider that weren’t as much of a factor in the past.

This is the challenge I’m facing right now. I’ve got a product I designed a year ago and put on the shelf, ironically enough, because of pricing issues. My profit margins appeared to be just pennies if I was going to price my product competitively. However, it’s such a fun product that I’m revisitng the business model again. Has anything changed? Yes, me! I’ve come to realize that I’m offering something different, so I don’t necessarily have to reflect the pricing structure of the big, established brands. In fact, not doing so will help to differentiate my product even further.

Another option would be to find a way to bundle my new product with some other product(s) that are inexpensive for me to buy, but carry a higher perceived value. We used to do this all the time at another company I worked for. We could package our products with cassettes or CDs that we bought for less than $1, but carried a list price of $9.99 & $14.99. Suddenly, our $20 product was worth $40 or $50 as a package, but our cost was only a couple dollars more than the single product alone.

So, with a couple more hurdles to leap, it looks like I may be able to finally roll out this fun product. So, what’s my pricing strategy going to be? I’ll be using both of the above strategies – x% markup initially and find items to bundle to improve value and profitability. Wish me luck!

One more thought, I’d rather price a bit to high initially than too low. Why? It’s harder to increase your pricing without a good reason for your customers – especially if your product is fairly new (see iPhone). Permanent price reductions (not temporary discounts) are always welcome by customers.

Do you have a set pricing strategy? Feel free to add a comment and share it with us.