Design the product around the customer

“Build it and they’ll come.” Well, they might…or they might not. It depends whether “they” want to.

The days of creating a mediocre product or service then throwing some money at an advertising campaign are long gone. The customers of today are far better informed as to their wants and preferences. They can tell the difference between a product that’s created to make money (i.e. supplier centric) and a product that’s created to satisfy a need (customer centric).

Any new product or service idea should emanate from a particular customer insight and ideally designed using customer input.

A nice way to check your focus is to see how well you can answer the following questions:

  1. What problem(s) is the product/service solving?
  2. What are the frustrations that customers typically experience when buying and using these sort of products?
  3. How does your product address those frustrations?
  4. What feedback did you get when you launched the first iteration of the product (MVP or minimum viable product) with a select group of customers?
  5. What aspects of that feedback have been built into the next version?

It is often a surprise to a supplier when a beautifully designed product receives a luke warm response from the target market. The trick is to engage the target market early in the design, or even before the design starts and build the product around the needs of the potential customer.

Good luck.

http://www.paulhopwoodconsulting.co.uk

 

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What ROI do you get from your management team?

If the employees of most organisations were lined up against the wall with the very best at one end and the least performing at the other (I’m not suggesting you do this by the way), the top third would be a group that you are privileged to have, the middle would be average and the bottom third, if you were honest, you’re probably better off without.

I’ve recently heard it said that the return from a talented, engaged and motivated employee can be up to 10 times than of a disengaged one. When I suggest this to my clients, I rarely get any push back, which tells me that it must be a fair, albeit staggering, possibility.

It’s also not unreasonable to apply the same sort of statistics to your management team.

If these ideas are any where near true for your organisation, then there’s a massive amount of potential that you’re not tapping. You invest huge sums of money in the directors and other managers, but are you getting the best bang for your buck?

Example:

Let’s play with some numbers here. Say you have 8 people in your management team. You pay them an average of £60k per annum, so nearer £75k when you include NIC, pension and other associated costs. Lets also assume you were tapping say 50% of their potential (probably the average I hear when I ask business owners).

If you were to uplift the all-round performance from that team from 50% to just 75%, the effect on the business, just at a cost level, let alone the opportunity cost level, would be a massive £150,000 (8 x £75k x 25%). That’s a direct hit in the bottom line with no more customers and no more effort. It is also a gain in each and every year, so over say 10 years it’s £1.5m. What’s more, I think these figures are probably conservative for most businesses.

I wonder what the average CEO, managing director or training manager is doing to tackle this issue? Like the most forward-thinking companies, I wouldn’t hesitate in setting up a Leadership Academy. A customised blend of training and coaching, both F2F and online to support, inspire and train the most expensive resource in the business. The cost is a fraction of the benefit and perhaps the most leveraged use of an investment budget.

What’s your approach?

http://www.paulhopwoodconsulting.co.uk/blended-learning.php

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Pricing strategy

As we know – if the price is set too high, we lose the sale. Set it too low and we leave money on the table. In other words, the customer will quickly provide us with feedback on whether we’ve chosen the right price for our product or service. So, what factors should we consider?

The following tips are meant to be practical and useful, based upon what I have seen work spectacularly well and what I have seen cause truly disastrous consequences. “Will I know which is which?” I hear you ask. I’m sure that you shall. Now, I only have room for 10 so I’ve had to choose my personal favourites. These are:

  1. No surprises. Always agree the price in advance – that prevents relationship breakdowns caused by misunderstandings. Remember vehicle service businesses getting this wrong in the past? The bill was always a shock when you picked up your car. Instant dissatisfaction and any compromise results in both parties losing out. I always agree my prices – if the prospect doesn’t want to pay, I don’t do the work. Test the temperature nice and early!
  2. Use price as a tool to vary demand for your product and thus choose customers you want to win, retain and lose. Probably obvious and rather a general rule, but increasing price will tend to lower demand and reducing price should increase it. Most businesses don’t want to attract everyone, so I usually recommend increasing the price just enough to attract ‘B’ grade customers, but deter ‘C’s. ‘C’s typically create too much effort compared to the reward, causing cross-subsidy of profit and focus away from the valuable ‘A’s and ‘B’s. Remember the Pareto (80:20 rule):
    1. 20% of your customers generate 80% of your sales
    2. 20% of your products generate 80% of your sales
    3. 20% of your customers generate 80% of your profit
    4. 20% of your customers generate 80% of your hassle!
  3. Never agree a discount without reducing something in the value proposition, unless you have a planned promotion. Controversial? Well, consider this: people subconsciously align the perceived value of goods and services with their cost.
  4. Arrive at your price from two angles:
    1. Traditional “cost plus” (materials, labour and possibly overhead + a little profit for you of course) and
    2. What is the market likely to pay for your product, based upon competitor products and prices? Research the market, so you have some certainty on how to position your product. So many businesses simply don’t bother to do this.
  5. Once you have done the research and carefully selected your price – you can have the courage to believe in it. Don’t be embarrassed by it. For example, I gained a different perspective on my day rate when I found out that the garage where I had my car serviced were charging £125 per hour for the mechanic. Remember the perception issue in tip 3.
  6. Allocate a percentage of sales to give away to a good cause – after all, you get your income from the community, so why not give something back? Be very selective and make sure you are benefiting the intended target. You win too of course, because you feed your self-worth.
  7. Check where your product/service is on its life-cycle – if it’s in the growth phase, it should be easy to grab sales as there’s plenty to go around and the price is less important to the buyer. If the product is in decline, or has commoditised, then demand may be shrinking. Awareness and knowledge will make the right pricing decisions obvious.
  8. Don’t copy everyone else – look at innovative ways to differentiate your offering through pricing policy. I don’t just mean being the cheapest. Explore other ideas. Can you fix, be transparent, guarantee in some way, link price to value or even let the customer decide?
  9. Be reluctant to promote price your key differentiator, unless you believe the customer prioritises price ahead of quality or service. Even if you believe they do:
    1. Check that your perception is the reality, not just an assumption. My experience is that pricing issues only tend to score about 7 out of 10 in importance. A focus group or survey should deliver the feedback you need.
    2. Remember that “cheapest price” isn’t the only option – you might get some traction from “fixed price”, “transparent”, “flexible”, “value-based” or even “most expensive”?
  10. Avoid common errors:
    1. Many businesses choose to be “bottom feeders”. They select a poor target market that delivers rather predictable outcomes – lack of money, low margins, bad debts, disproportionate time spent on servicing customer demands and even broken promises.
    2. “Mates rates”. If you offer discounts, your customers will recommend hoards of additional customers wanting the same deal. This can lead to you being a “busy fool” – working flat out or piling up stock, but not making any money.
    3. “Scope creep” – very common when selling services. Giving extras without agreeing an additional price at the time.
    4. Simply being too cheap, often caused by a lack of research or a lack of confidence in the product. There’s nothing wrong in being “Expensive, but really good value for money”. It’s so much better than “Good, but really expensive”. The “but” eliminates everything that precedes it!

Pricing policy is a critical success factor for any business. I have found that adopting a more strategic approach to pricing can have a major impact on the trajectory of the whole business.

http://www.paulhopwoodconsulting.co.uk

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10 hurdles to overcome when learning new skills

So, you have no time but urgently need new skills to stay relevant in a rapidly changing business environment. Regardless of your role in a business if you are not continuously growing and evolving, you will very quickly go backwards.

So what is stopping you from learning the new skills required for success? What are your options? What should you do first?

Globally we are seeing new skills being required to turn:
– sales people from order takers to business people who sell
– leaders from the star player to the head coach
– accountants from compliance focused to advisory focused
– advisors from consultants to facilitators

The 10 key issues we see that need to be addressed when learning new skills are:

1. Too much theory, not enough practice: Whilst it is important to understand the theory/background to a new model or approach you are learning, it is more important to apply it to a real life situation so you can quickly learn what works and what doesn’t in the field. Don’t spend too much time on the theory as learning through rapid trial and error can often be much more beneficial.

2. Get the context right: Yearly reviewing 100’s of marketing flyers for training courses quickly show that most are too focused on the topics being covered and less on ‘why’ a business person should invest the time in doing it. Spending the time before starting any sort of training experience outlining ‘why’ it is required in the context of your personal or business vision (and strategies) will assist greatly in ensuring its completed properly and applied quickly in the business.

3. Fear of failure: This is very often one of the biggest hurdles to adopting new skills. What if I’m exposed as not being as strong in a skill as I’m perceived to be? What will people think of me? The saying often comes to mind that fear stands for “False Evidence Appearing Real” as very often all these thoughts are just irrational beliefs raising their head.

4. Fear of success: It sounds strange but very often business leaders/owners hold themselves back due to the extra pressures and lifestyle changes that may come with increased success. Will I have to travel more for work that affects my life balance? Will I have more responsibility?

5. Just-in-time learning: You have an issue in improving the profitability in your business. You search the internet for a face-to-face course that suits your needs. The next one however is running in 3 months’ time but you need it right now, so what should you do? Many business owners/leaders find themselves in this situation and the only alternative is an online or ‘e-learning’ solution. This involves taking a course of your choice at anytime from anywhere in the world. Often these courses will feature videos from leading experts from around the world to help you get up to speed and apply instantly to your learning need. A great, just-in-time solution.

6. Ensure the learning is customised to your needs: Most courses in the market are very prescriptive by nature. For instance, to learn how to be a great leader, you go through 10 set modules and that will be all you need. However, the experience of the person or their desired objectives are rarely taken on board to build a learning experience tailored to the specific needs of the individual.

7. Before and after the learning: Before you learn a new skill ensure you define at the start a clear definition on ‘why’ you are going through the training and upon completion, allocate time to de-brief what you are going to do to start applying the new skills. ‘Doing’ the actual course is only a small part of the learning journey.

8. Retaining your new skills: Those that attend a face-to-face course forget 90% of what they have learned 24hrs after the event, which is a lot of wasted time and energy to only retain 10% of what you learned. So what are your options? E-learning provides the opportunity to continuously go back via an online platform and review the content you have learned, the videos you have watched to ensure that you continuously re-learn the skills over a period of weeks and months. Retention of learning is dramatically increased.

9. Leadership support: In a business context ensuring you have the support of your manager or the leadership team is critical to the application of the new skills you have learnt. Good leadership support will ensure the new skills can be applied quickly, hurdles overcome and time allocated for the development process.

10. No Time: We all have only 168hrs a week, no more, no less. How a person leverages themselves to make the best use of that time is often the difference between success and failure. In a learning context, it’s becoming more difficult to take two days away from the office to attend training as the distraction of returning to a heavy workload can negatively impact the learning experience. Looking for ways to break the training up into smaller, bite-sized chunks allows new skills to be learnt and implemented quickly. So experiment with more a blended learning approach (balance between face-to-face learning and e-learning) and different time-frames (potentially 3-4 hour blocks once a week) to overcome time hurdles and fit into the busy, business environment.

So if you have blockages to learning new skills for yourself or your team think through the issues above and determine those most applicable. Quickly you can develop 3-4 strategies to overcome each and dramatically improve your ability to change and adapt.

Our blended approach tackles most of these barriers – that was the subject of the last blog post.

http://www.paulhopwoodconsulting.co.uk

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Blended leadership and management development program

We have now run two 6-month blended learning programs for directors and senior managers. The mix of modular face-to-face training with the ability to customise topics via access to our online learning platform maximises the embedding of new skills and behaviours and the leverage makes it very cost effective.

Each delegate pays £1,500 plus VAT, which includes:

  • An initial interview to assess development needs and set measurable goals for the program.
  • 1 full day and 2 half-days training
  • 5 months access to the online learning platform
  • Unlimited access to support throughout
  • A final half-day group debrief to assess progress against goals and set the direction of the future development path

The program will also qualify for grant funding under the Growth Accelerator Leadership and Management training scheme.

Topics covered in F2F training include:

  • Leadership styles
  • Managing performance
  • Emotional intelligence
  • Managing risk
  • Coaching and mentoring
  • Goal-setting and visioning
  • Listening skills
  • Motivating yourself and the team
  • Time, stress and self management
  • Delegation and prioritisation
  • Recruitment, engagement and retention of ‘A’ players
  • Self-awareness and creating useful habits
  • Decision making
  • Problem solving skills
  • Understanding different personality types and how to manage them
  • Building high performing teams
  • Resolving conflicts
  • Presentation skills
  • Influencing skills
  • Negotiation
  • Managing and championing change
  • Using your intuitive faculty
  • Preparing and monitoring your own personal development plan

Obviously, the coverage of each area during the F2F training is deliberately light, so that delegates can delve deeper into the subject areas that interest them in between the F2F sessions.

Additional optional topic areas available during 5-month period online:

  • Sales skills
  • Strategic marketing and CRM
  • Business strategy
  • Understanding the basics of finance
  • Self-confidence
  • Lean thinking tools
  • Leadership development
  • Team development
  • Growth and product strategy
  • Project management

The online platform has 8-9 full training programs as well as a toolbox with over 150 business tools, each with short HD videos and step-by-step guidance. Part of my role is to act as guide to the delegates to help them access the most appropriate resources to meet their individual needs. I am accessable 24/7 (within reason).

Typical timetable:

  • Week 1 – interview with each delegate
  • Week 2 – first full day training. Start of online access
  • Week 9 – second half day training.
  • Week 16 – third half day training
  • Week 22 – Group debrief. Check progress against goals and set direction for future development path. Online access ceases.

Some of the key features and benefits are shown below:

Feature Benefit to delegate Benefit to sponsor
Broad range of leadership and management skills covered Ability to focus on those areas of most interest Delegates will become more rounded individuals with better self-awareness and knowledge of best practice.
Measurable goals for each individual are set at the outset Focus on relevant personal and career outcomes Assurance that there is a clear focus on outcomes to maximise the return on investment.
Blended learning using F2F and online Suits different learning styles.

Face-to-face sessions allow peer networking and bonding with fellow delegates.

24/7 access, allowing you to work at a time that suits you.

Minimise time away from the workplace.

Encourages the embedding of material in work, thus developing better working habits.

Leverage of the online platform makes the program much more affordable.

24/7 Access to learning materials and trainer You will always get supported throughout your learning and will never be stuck.

Bespoke your focus to fill personal knowledge gaps.

No need for intervention from line manager
Responsibility for progress passed to delegates Learn to take control of your own development. Delegates become more independent and comfortable to take responsibility.

They self-assess progress and performance.

Five month timeframe for program Allows time to really learn the material and practice new techniques in the workplace. Maximises the percentage of material that gets traction.
One-to-one interviews at the start to assess training needs. Customise the learning to your own needs, whilst learning/refreshing a broad range of topics. Balance of addressing individual training needs with broad coverage of leadership and management skills.
Debrief at the end of the program Progress transparency.

Chance to reset development path after the program.

Assessment of performance against measurable objectives set at start to focus on outcomes and ROI.
Only senior management will attend. Keeps the content and discussions relevant.

Good chance to bond with and learn from peers.

Ensures the learning is at the right level for the delegate.

If you would like to join our next program, please email me at: paul@mindshop.co.uk

http://www.paulhopwoodconsulting.co.uk

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Leverage is the key

I found that it was OK to earn £8 per hour when you are 16, but the economics don’t work at my age. It’s OK to put one unit of effort in and get one unit out if you’re a worker, but it has to be much better if you have a team.

Understanding leverage is, in my view, one of the key drivers to business success.

When I was an accountant, one of my clients said to me: “Paul, being an accountant is a passport to mediocrity.”

I thought to myself: “What do you know?”

Then, he sold his business for £7.2 million. Aha, the penny dropped for me. It’s almost impossible to leverage yourself when you sell time. There must be a better way.

Many of my clients are leaders of growing businesses. I encourage them to consider this idea, because they can fall into the trap of being a worker for large periods of their day, which means they aren’t doing the things they should be. The trick is to focus on effectiveness, not efficiency. Most time management courses make people very efficient at being ineffective. Doing what’s in front of you as fast as possible, rather than considering whether it should be in front of you at all.

I don’t have employees or associates, so realise it’s harder to get leverage in my business. That doesn’t mean I can’t of course. Some options I have would include:

  • Careful pricing linked to client selection
  • Creating a product that I can sell many times (E.g. a book or an app.)
  • Using our online platform to supplement face-to-face time
  • Offering blended learning

Of course, if you are building a team of employees or associates then it’s much easier, but you may have to change some of your daily habits. Getting 10, 100 or even 1,000 units of output from one unit of input is the challenge. How are you leveraging yourself?

http://www.paulhopwoodconsulting.co.uk

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Real-time online coaching support

Many of you will know about my long-term partnership with Mindshop. We have been working together for the last 18 years. As a global organisation, they had to be early adopters of online collaboration, so we’ve been training and coaching clients online for years.

So what’s new? Mindshop have just released their new online platform which I am now using every day with my clients to help them track all their strategies, actions and personal development in one place, with auto-email reminders for overdue actions and the ability for me to share and customise the whole Mindshop toolbox and all their training modules with clients in seconds.

It really is a game-changer for Mindshop facilitators and their clients. Here’s a short video showing some of the features and benefits of the new platform.

Guide to Mindshop Online

The key benefits are:

  • Just-in-time learning
  • Bite-sized implementation
  • Accountability
  • Customised learning paths for all users and
  • Cost-effective coaching support

Please ask me to show you how it could work for supporting you and/or your senior team members.

http://www.paulhopwoodconsulting.co.uk

07803 185000

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