Archive for category driving business

The biggest challenges Businesses face today

What are the biggest challenges businesses face today, was the question posed to members of the Business Exposure Group at a recent meeting, and below are the 10 most pressing concerns.

According to the CBI change is the new normal.

Growing revenue is the top challenge for businesses employing 5-30 employees.  Hiring employees is the biggest challenge for businesses with 30-50 employees and government regulations becomes the biggest issue for business with 50 or more employees.

What are the 10 big challenges for SME’s.

  • Uncertainty about customer trends – does this lead to short term focus, and does it make you feel vulnerable?
  • Financial Management – cash flow. Larger customers are imposing long payment terms, so how are you addressing this?
  • Monitoring performance – are KPI’s as good as they sound even though they compare historical information or are there better ways.
  • Recruiting the right talent – employee working flexibility is important to retain good staff, but increasingly stress in the workplace is a real challenge in small businesses when staff have to be able to multi-task.
  • Technology – it should be outsourced to reduce demand on administrators, but is investment in technology an asset or a handicap. Distinguishing which technology will attain the highest return in terms of time and investment is a problem.  The big issue is, is the IT fit for purpose.
  • Information overload. There are now big digital challenges for meeting the expectations of customers, together with finding and keeping people who can digitally transform a company that delivers a bespoke customer experience.
  • Customer Service – what is the right level, are customers’ expectations too high? Managing the relationship is key
  • Maintaining reputation – there is genuine concern about reputation management with easy access to social media and particular concern about cyber security disrupting the day to day functionality of the business.
  • Knowing when to embrace change is a worry and knowing how to balance quality with growth. Businesses are stocking less and relying on a lean supply chains, but is this clever or does it open up crippling disruptions.
  • Regulations and compliance are becoming more and more demanding of staff time

Everyone was in agreement that running a business is getting harder and is forever challenging, but all were motivated about the challenges and were ready to face them head on.

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To what extent do you review your business?

Strategic business reviews are useful if you are

  • uncertain about how well your business is performing
  • if you want to know how to get the most out of your business or marketing opportunities
  • if your business is moving in a different direction to the one you planned
  • if the business is becoming difficult or unresponsive to market demands

But what are the questions we should be asking ourselves?

Members of the Business Exposure Group discussed these questions and came up with the following.

  1. If things are running well should you let it run or is it actually time now to plan again? Most thought that it should be a constant agenda item.
  2. A simple planning cycle can greatly enhance your ability to make changes in your business routine.
  3. It is vital to review the progress of your business, but how are you measuring success and is your annual business strategy fit for purpose? Most thought that a review should take place every time a game changing event happens.
  4. What are your markets now and in the future and how do you gain market advantage? There is no point in going head to head with the competition, try to find a niche.
  5. Which of your products/services are succeeding and which are not performing as planned? Spend more time on the latter.
  6. How effectively are you marketing your goods/services to your customer’s needs? Have you reduced the risk of them placing an order with you?
  7. Conduct competitor analysis. Find out what they offer.  How they price their products/services.  What is their competitive advantage.  What was their reaction to your entry into the market.  Who are their biggest customers.  With this information your business can be more robust and targeted.
  8. How often do you review your financial position? Have your requirements changed recently?  How frequently do you review costs and new ways of doing things?  These questions are crucial.
  9. How often do you review and update your website? Don’t let it sit there reflecting the old times.

There is a benefit to have an outsider question your thought processes periodically.  They will ask questions that you never even thought of.  There will be many external factors which may affect your business’s ability to compete and it was generally felt amongst our members that is was vital to review your business periodically, especially if legislation changes, new technology is introduced, a significant customer is lost or a new competitor enters the market.  It has to be a disciplined ongoing process.

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Delivering Innovative Customer Experiences

To create distinctive customer experiences, businesses need to push the boundaries and adopt next-generation thinking in six key areas.

Some companies are moving fast to adapt, applying a range of approaches to improve customer experiences.  A great experience that delights customers and earns their loyalty is needed. Improving a customer experience from merely average to something that wows the customer can lead to a 30/50% increase in measures such as likelihood to renew or to buy another product.

Here are six areas discussed at a recent Business Exposure Group meeting.

  1. Measure customer behaviour and spend time with customers to understand them 

Companies need to empathize with customers when they experience difficulties and obstacles.

This means embracing new techniques for understanding customer journeys.  Such approaches allow companies to uncover new insights that allow them to design and deliver truly great customer experiences.

One of our Business Exposure Group members is an insurance broker specialising in the farming community. He was developing a new product and took time out to observe the daily activities of farmers.

He learnt that farmers are pressed for time but also very tech savvy, relying heavily on PCs and mobile devices in their daily activities. He had originally planned to market his new product through traditional channels, but lessons learned from an observation trip led him to create a digital solution, which allowed farmers to gather information and buy policies online at night and at weekends.

  1. Designing the complete customer experience

Design is not about making devices and screens look pretty. True customer-experience design involves each interaction customers have with your company. Design is not just what it looks like and feels like. Design is how it works.

To design a customer journey, companies must enlist everyone who has an impact on any part of a customer’s journey, not just people with the word “design” in their title—in particular operations and IT. 

A Business Exposure Group member has a marketing agency whose client specialises in visitor attractions. After a 12 month effort to root out pain points in the experience of visitors to theme parks, their clients introduced wrist bands. These brightly coloured wristbands allow visitors to board rides, pay for meals and gifts. More important, the bands and the technology behind them—which is in every part of the attraction—allow visitors to select exactly what they want to see and do in advance. That has helped turn a day out from a series of highlight attractions interrupted by waiting in line to a smooth end-to-end experience.

  1. Completely rethink the customer experience

The focus is addressing customer needs, not improving a process. Many of our members bring in people who are not normally involved in the business to encourage fresh thinking.  Looking at the best experiences employed in other industries can  be extremely enlightening.

  1. Become an agile organisation

Managers responsible for developing new offerings need the authority to make decisions quickly and to hold staff accountable. 

One of the Business Exposure Group members who has an IT software company shifted entirely to cloud technologies, which allowed new software developed by their team to go live on the clients websites in a matter of seconds.  By making the whole organisation agile, the IT company dramatically reduced time to market for their clients products and services. 

  1. From delivering a product to constant tweaking

Many businesses figure out what new product or service offering they want to create for customers and then launch pilots.

It’s impossible to know in advance how an experience will be embraced by customers. It’s better to launch sooner with fewer features and a simpler interface and learn what works, based on real customer input. 

Using this approach, one of the Business Exposure Group members was able to build a new tablet-based app in just 6 weeks.  It then tweaked new versions based on user feedback, improving the process.  After these tweaks, the app was scaled across new markets and more products within the company’s range.

  1. Working together spontaneously 

Companies need to push their people to move beyond traditional roles and work together to reinvent customer journeys.  Improvements  come from having motivated, empowered frontline employees driven by clear purpose.

Many of our members are working hard to reinvent their customers’ journeys. The ones that win will be those that push the boundaries and adopt new practices.

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How to Build Value into your Business

Other than financial . . . . . value creation is the essence of business.  Value is what attracts and keeps customers, attracts and maintains relationships with investors and suppliers who are critical to the businesses long term success.

It is a mistake to look at your business from within – better to look at your value propositions through your customers’ eyes, because the biggest differentiator on valuations of a business is the intangible value placed on business reputation.  So, therefore

  1.  Make and keep realistic promises on service, quality and delivery
  2.  Use IT to improve transaction speed and information sharing
  3.  Develop staff decision making practices
  4.  Spend more time and money on the important areas
  5.  Build capability within your business
  6.  Build enthusiasm with your staff

Value is all about creating a ‘serving mission’ for your customers.

There are 9 things that will make your business worth more than your competitors in the same industry.

1)         Recurring income

2)         Provide something different

3)         Show growth at a pace

4)         Be seen as a ‘trendy’ innovative company

5)         Ensure no customer is responsible for more than 10% of your revenue

6)         Be able to predict business conversion rates

7)         Have a second in command

8)         Be able to demonstrate happy customers

9)         Remove complexity and duplication in your business processes

If you can tick a number of theses 9 facts you are well on your way to creating and building an enhanced value for the future.

And looking to the future.  Stop thinking about ‘making products’ and start thinking about experiments.  Because it is one of the experiments which will be the one opportunity that will make your business fly!

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Is growth about adapting at speed?

Companies are being challenged as never before to adapt at speed in the face of relentless innovation.

So how do SME’s stay ahead when the competition is accelerating?  Not merely by adapting to changing conditions, but doing so quickly and decisively.

One of our Leeds members stated, at a recent Business Exposure Group meeting, that he is fine with his products and services for the next 2 years, but is fearful for the future as he has no idea which of his products and services will be relevant in 5 years’ time and this is a worry when he runs a £2m turnover business with 19 employees.  It’s quite a responsibility!

The discussion at the group meeting centred around five key questions:-

  1. How much growth do we need and how fast?
  2. How much growth is left in our core markets?
  3. How secure are we in our core market?
  4. What opportunities do we have to grow existing business?
  5. What new market opportunities do we have?

Some of the points raised were as follows:-

  • It is fundamental to understand your competitor environment
  • We must use customer insight to drive growth
  • The trick is to be agile and persistent, but with a realisation to exit flat business ideas, rather than holding on and hoping they will turn good
  • If you can’t comfortably hit your 5 year business plan with your core business, then you need a second act, one which operates beyond the core business
  • Embrace the non-conformist in your business, because although they are difficult to manage, they often show the most promise and can help the business adapt at speed

Although fast, innovative business seems to be flavour of the month, it was commented that innovation often has a short shelf life and goes sour like milk.  With that as a backdrop many of our members felt that a more ‘controlled expansion’ was appropriate to their businesses, so that cash flow was not put under pressure, staff remained happy and not overburdened, systems were able to cope, quality was maintained and complaints were kept to a minimum.  The reality is that core values diminish as a business grows, and if it happens too fast then cracks start to appear.  But, whatever your stance, it’s important for your business to be agile, with a rapid cycle between strategies and feedback.  Between an idea and having it in the market, in order to work out what works and what doesn’t.

The Monday morning sales meeting historically talked about how the business did last week.  Now, we need to discuss how we did by customer segment and by product segment so that we can push our limited resources in the direction where we will get the quickest wins allowing growth at a speed we are comfortable with.

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Do we need a formal business education to be on top of our business in 2015?

The current business environment is characterised by increasing competition, global trading, technology and the need for enhanced operational efficiency.  Yet we are faced with fewer staff undertaking a diverse range of complex activities.

Small business failures can often be attributed to poor management competences – So why do we have varying degrees of resistance to training?

The following comments were made at a recent Business Exposure Group meeting:

  1. Do staff take training seriously, or is it a day out of the office. Most thought that training only works well if you have a willing participant and that when they return to the office they are able to use their new skills and communicate the benefits to their colleagues.
  1. SME staff are often forced to be a jack of all trades in order to plug the skills group, which in the medium term is not sustainable.
  1. There can be fall out from training because the recipient my wish to move on to better opportunities which the SME cannot accommodate.
  1. Training at the lower level is fundamental because a business is only as good as its weakest member of staff.
  1. Many small businesses are between the rock and the head place. On the one hand desirous of a training benefit but on the other hand finding the absence of a colleague from the ‘day job’ as detrimental to the ongoing daily requirements of the business.
  1. Business education for the owner is less a job of sitting in a classroom, but rather by learning on the job with the aid of an expert coach, which will assist the owner in breaking through the glass ceiling created by their limited experience of how to move their business to the next level. A well experienced industry relevant ‘Non Exec’ is the answer for many of our members who have ambitions to significantly grow their business.

Training budgets throughout a business must be proportionate, so that both staff and the owner take equal priority to train and therefore build a strong, resilient business.

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Why should SME’s be using Customer Relationship Management

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During a recent Business Exposure Group meeting we collected the following comments.

It’s a way of managing your business interaction with current and future customers.  But most companies fail to use it on the premise that too much time is spent entering the information so that it is comprehensive, at the expense of engaging with customers.

However, any CRM system only needs 1) the prospect information 2) when and what was talked about 3) the follow up date 4) who is assigned to it 5) the value of the opportunity.

With this information you can establish whether your existing client relationships have the potential to grow.  Because retained customers are more profitable.  Firstly, customer acquisition costs are high, so they do not become profitable unless they are retained.  Secondly, customers buy more over time, thirdly, satisfied customers make referrals and fourthly, retained customers tend to be less price sensitive.  So just on the current client relationships an engaging touch point campaign which is hands on will increase sales by up to 30%.

CRM is a combination of people, process and technology which seeks to understand your company’s customers.  Because the more you know your customers and build a strong relationship, the greater your odds of winning the minds and wallets of your customers in this competitive market.

Some of our members were content to use Outlook and Excel to record their contacts and activities.  But it is not very efficient and cannot be seen by everyone at a glance.  More worrying it can be downloaded and pinched by a member of staff moving on, leaving your business vulnerable.

Using an integrated CRM system will have one database with all customers in a single place.  Which, if used properly will be the perfect vehicle for identifying groups of like-minded customers to target, allowing you to sell more to existing customers and prospects, creating the process to manage leads from receipt to getting an order, arranging numerous touch points with potential customers and monitoring that your staff are on top of the job.

The majority of the group confirmed that their sales people spent too much time on admin and not enough time selling.  With CRM, the sales team can easily see the relationship history.  So they are well armed to overcome objections and have no excuse to not following up sales opportunities which are tracked and reminders raised via the CRM system.

So, it all seems straight forward, however, because we have amassed so much data over recent years we don’t know how to effectively manage information.  Don’t try and back date, first start from now and implement a simple robust system, otherwise CRM will have lost its focus and worth and will become taken over by the IT function within your business.  The customer experience is core to client relationship management.  It is now becoming mainstream and I suggest that in a couple of years’ time we won’t even be having this conversation.

A contemporary well run business must have a CRM system to be able to sort out opportunities and be competitive.  Consider the following when deciding on the type of system.  It could be a cheap off the shelf cloud based system or a bespoke built arrangement, nevertheless it does need to address. 1) Are we B2B or B2C 2) How do we access, from home, on the road or in the office? 3) What are the main objectives eg is it for sales lead management, or marketing campaigns? 4) Which teams need to use the system – sales, marketing, customer service, operations? 5) Does it need to link to other systems? 6) How will emails link? 7)  Do you need the phones to link and do you need to record telephone calls straight to your CRM system?

All are well worth considering to get it right, but we all agreed around the table that no amount of technology can help manage your customers if you don’t have it in you in the first place to implement and record the information.

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