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Management Newsletter ~ Issue 8, Volume 2 ~ Feb 2008

NOTE: For a printable PDF version of this Newsletter click-here.

Donald's "Quote of the Month"

"When determining how best to compete in your chosen markets, it isn't all about price...unless you say it is."

Greetings and welcome. This month's Management Newsletter delivers several important business insights, all of which will take about ten minutes to read. I'm off to London, Singapore and Hong Kong this week, so I'll probably have lots more interesting "stuff" to report in next month's Newsletter.

1. It's not all about price...unless you say it is. How to change the game and grow your bottom line:

(time to read this article is about 3 minutes)

Printable version of this article.

NOTE: At 3 minutes, this article is a bit longer than usual, but if price pressures are hurting your sales or bottom line, this is an article you should read. However, if price pressures are not a challenge for you, skip this one and move on to Article #3 below.

Last week I had dinner with a friend who complained that in his business, the wholesale distribution of safety supplies, it's all about price and they struggle to make a decent profit. He was looking for sympathy...and he didn't get any from me. What he got was a different way of looking at his business that may also be helpful to you if you're being pressured on price.

I told my friend that it's never all about price...unless you say it is. I asked him what he'd have to do in his business to make it not all about price. What additional value would he have to create and consistently deliver? What unique products, services or information would it take to set his business apart? How might he change his entire business model to raise the bar and dominate his industry?

Or, conversely, what he would have to do to proactively make it all about price...and then to win that battle, profitably. Those are the two choices that businesses have...

a)	To add some compelling functional, emotional or financial value that makes it not all about price...or,
b)	To intentionally make it all about price and then become so efficient and so aggressive, that you win that war, profitably.

But most businesses would rather just carry on being be mediocre, being marginally profitable...and then whine about it.

So, here's what I told my friend, that may also be helpful to you...

1. First of all, I told him that maybe it isn't all about price...maybe he has just convinced himself that it is.

2. Next, I reminded him that most business make the mistake of defining themselves by what they sell and by how they've always done business. What they need to do is to redefine themselves, not by what they sell, but by how they HELP their target customers. It's simple and transformational. In my friend's case, they would stop defining themselves as "being distributors of workplace safety supplies" (who are constantly being beaten up on price), and redefine themselves as being in the business of helping companies keep their employees safe, healthy, alive and on-the-job.

Then, they will ask and answer two simple but powerful questions...

a)	"What kind of help do our target customers need in any way related to keeping their employees safe, healthy, alive and on-the-job? What products, services, information, education, increased awareness, training, coaching, reminders or encouragement do they need?"
b)	"How can we actually deliver some of that help in a way that 'grabs' our target customers, clearly differentiates us from our competitors, makes us 'famous' in our industry...and grows our bottom line?"

3. Workplace safety is a very big deal. Between 800 and 1000 Canadian workers die each year in work-related incidents. Over a million workplace injuries occur in Canada each year. The cost to families, to our economy and to individual businesses is staggering. To address this tragedy we don't just need safety equipment. We need awareness and action.

So, to take the lead, we can hire one of North America's leading employee safety experts, on retainer, to do the following...

a)	Write a free, monthly E-newsletter to educate our customers about safety issues and solutions, while positioning us as the knowledgeable and caring 'coach' in the field of industrial safety.
b)	Write articles on workplace safety, in the name of our business for industry magazines in the sectors we serve.
c)	Help design our 'best of class' website to deliver on-line safety info and solutions.
d)	Speak on our behalf at industry conferences about the tragedy of workplace illness and death...and the solutions.
e)	Help us design our own Branded product line to give us superior, differentiated, higher margin products. Have those products produced for us overseas with our own Brand so that we are competitively priced on unique and superior products, while making a much bigger margin. Depending on our current sales volume, we may have to buy up a competitor or two to get to the critical mass required for overseas production. Of course, once we have created superior products and created our own Brand, we can then enter the USA or European markets.
f)	Help train our sales staff to sell safety solutions more effectively.
g)	Call on key accounts with our management and sales team to help them with major safety challenges. For a fee, our 'expert' can perform Safety Audits for customers.
h)	Offer 'best in class' courses (for a fee) to train "Safety Officers" for businesses. These courses can be customized to suit specific industries. As demand for these courses expand, our 'expert' will train additional instructors to meet the demand. This can become a significant profit center.

4. To promote 'workplace safety', and our own Brand, we will run small awareness ads in business and industry magazines each month showing how many people have been injured and have died on the job, in Canada, so far that year. These 'shock ads' will raise awareness of workplace safety at the senior management level while reinforcing the need for our products, services and courses. They will also get us talked about and interviewed in the media, thus positioning us as the concerned professionals.

As part of our commitment to safety, we can create an annual 'National Workplace Safety Awards' event at which companies are honoured for their success in creating safer workplaces. This, of course, attracts more national and local media exposure for our business, raising us from 'expert' to 'celebrity' status.

Because we also sell safety vests for school crossing guards, we will run an annual Award for Canada's Best Crossing Guard. Schools will support the program because it helps them get kids to respect and heed their crossing guards. School children will write in to tell why their own favorite crossing guard should receive the honour.

Once again, the media publicity for this event at the national and local level will be incredible with the winning crossing guard, the student who nominated him or her and an executive from our company being interviewed on national and local TV and in print media.

Through these kinds of activities, we elevate ourselves to being a respected national (or international) workplace safety Brand. Is this a lot more work than running a mediocre safety supply distributorship that constantly complains about price competition and low profitability? Absolutely...but creating something extraordinary is always more work than whining.

5. Going the other way. Making it all about price...and winning that battle. Perhaps it really is all about price and creating an extraordinary national or international workplace safety 'Brand' is not the most profitable way to go.

If it really is all about price, we must become the most cost-efficient, aggressive player in the industry so that we can sell competitively and profitably. Or, we actually undercut our competitors, driving their profits down to the point that they go out of business...or we buy them for cheap.

This is a very different business model that requires world-class purchasing, cost and inventory control, warehousing, order processing, picking and shipping. The business will have a transactional focus rather than a value-added relationship focus.

6. Making a clear choice...or just doing nothing. I've challenged my friend to ponder the alternatives and come up with a clear direction for his business. At the same time, I challenge you to choose a clear direction for yours. Will you choose to make it all about price and then compete efficiently and aggressively to win that battle profitably?

Or, will you redefine and differentiate your business to be truly extraordinary by delivering more help, more information, more expert advice, more value, more uplifting experiences, faster response time, higher performance, more unique products or services? And then, will you find innovative ways to communicate that value, attract media attention and achieve celebrity status in your markets?

Specifically, what will you do to move from commodity, to expert and then on to celebrity?

Whichever way you go, what expert help will you need to become remarkable...and will you commit to searching out that help and getting them on board? Or, will you just be medicore, get beaten up on price and whine?

But remember, in this highly competitive world, mediocrity is no longer an option.

2. Is excesive price competition hurting your bottom line?...Announcing my new breakthrough presentation on battling endless price competition:

(time to read this section is about 30 seconds)

I've been asked by many clients to come up with a Keynote presentation or Workshop on how to battle endless price competition. This topic seems to be on everyone's mind these days. So, I've created some breakthrough thinking and a number of real-life case studies to bring clarity and solutions to this pressing problem. My new program is called...

It isn't all about price...unless you say it is
...how to change the game and grow your bottom line

If your business, or entire industry, is struggling with this price problem and you'd like to book or recommend me to deliver a dose of reality and and some real solutions, just contact Sharen Skene, our wonderful Director of Marketing at sharen@donaldcooper.com ...or by phone in Toronto, Canada at 1-416-252-3704.

3. Be careful what you believe...check it out before you act:

(time to read this article is about 40 seconds)

Printable version of this article.

In a recent conversation about customer loyalty and retention, a Travel Agency owner told me that, according to one Cruise Line executive, 80% of their repeat customers book their second or third cruise through a different Travel Agency than they used to book their previous cruise. Loyalty, he declared, is dead.

My Travel Agency friend was clearly depressed by this "statistic" and, based on it, was prepared to drop a number of innovative programs designed to encourage repeat business. "What's the point", he said, "if 80% of them are going to book with someone else next time anyway?"

"But is the 80% number really true?", I asked. "Contact the executive and get the source. Check it out." In fact, nobody knew where the number came from, nor was there any proof that it was true.

Here's another example of industry "truths" that turn out to be industry "lies". It has been said for years in the restaurant and hospitality industry that 90% of new restaurants fail or change hands in the first year. It has been said so often that it's now a generally accepted "truth". There's only one problem...it isn't the truth. The truth is that 25% of restaurants close or change owners in the first year...and 60% fail or change owners within 3 years.

So, be careful what you believe. Don't act on false information. Check it out. It would be a shame to make an important business decision based on some incorrect information passed on by your 2nd cousin, who overheard it at an industry cocktail party.

4. If you have children, or grandchildren...here's a very neat parenting tip:

(time to read this piece is about 20 seconds)

There's no limit to the value that this Newsletter brings you. Sometimes it's great soup or cookie recipes...today it's a brilliant parenting tip.

I met an extraordinary young father at a Conference in Indianapolis last week. Chris Wolley has two sons, age 6 and 9. On their dressers each son has three small boxes labeled "Gift", "Save" and "Spend".

When the boys earn money for doing chores, or receive money for a birthday, etc., 10% of that money always goes into the "Gift" box to be given to a charity or cause of their choice. 20% goes into the "Save" box, to be invested for their future...and 70% goes into the "Spend" box, to spend as they wish.

This is brilliant parenting Use it yourself, or pass it on...or both.

5. Another great example of the power of a customer database plus proactive marketing:

(time to read this piece is about 40 seconds)

Last month, I wrote an article titled, "Are you building a million dollar customer database?" Here's another example of how important this is.

On February 14th, my wife and I drove 120 miles and paid a lot of money to have Valentine's dinner at the beautiful "Inn on the 20" in Niagara wine country, southwest of Toronto. Why did we do that? Because they asked us to. Why did we drive past 100s of very good restaurants that were closer to home and probably less expensive? Because "Inn on the 20" served us wonderfully the last time we were there and then asked if we'd like to know about special gourmet dinners and culinary events that they offer from time to time.

We cheerfully gave them our email address and, magically, two weeks before Valentine's Day a beautifully designed email arrived on my laptop describing their special Valentine's dinner...just as I was starting to worry about how I was going to make this a special day.

I called their 1-800 number immediately, booked the dinner and was asked if we'd like accommodation in the Inn that evening and, perhaps, a couple's massage the next day.

Now, here's the bottom line on all of this. When we arrived at the Inn at 6:30, the dinning room was packed with happy couples. This Inn is in the middle of nowhere, especially in the winter, and they filled the place because they built a customer database, created an extraordinary event and then they asked for the order over the internet. They were proactive...and they were making money.

So, what will you commit to do in your business to be more extraordinary, more proactive...and more profitable?

6. Bits and Pieces:

(time to read this section is about 60 seconds)

Item #1: Economic update:

a)	Of the world's top 10 largest corporations, measured by "Market Cap" (the total value of their publicly traded shares), 4 are based in China and only 3 in the USA. Five of the 10 biggest companies in the world are in the oil and gas business. For a quick peek at the Top 10 list of the world's largest companies, by Market Capitalization, just click-here.
b)	Three of the world's 5 largest banks are in China.
c)	In just the first 9 months of 2007, over $250 billion of US corporate assets were purchased by overseas companies.

Item #2: That's a big pile of coal. To power just one regular 100 watt light bulb, 24 hours a day for a year, consumes 714 pounds of coal at a coal-fired electrical generating station. In the process, the following pollutants will be emitted into the atmosphere...

a)	5 pounds of sulfur dioxide, the main cause of acid rain.
b)	5 pounds of nitrogen oxide, causing smog and more acid rain ...and,
c)	1852 pounds of carbon dioxide, suspected of causing global warming.

This information was found on a great website at howstuffworks.com.

Item #3: That's a lot of marzipan. Almonds are the 9th biggest crop in the USA, by dollar value.

Item #4: How could you find innovative new ways to deliver your product or service to new markets? The Metropolitan Opera in New York City now simulcasts live performances to movie theaters around the world, increasing their revenue by about $6 million.

Tickets at the legendary Met are $220 to $320 each...but only $18.00 in the theatre. And, just like watching a hockey or football game on TV, the theater audiences get close-ups and views of the action from various angles that the big spenders don't. Sadly, however, there are no opera "instant replays". The fat lady sings only once.

So, how could you use current technology to reach more customers, deliver more value, or grow your bottom line?

7. Is everyone in your business growing? If not, your business probably isn't growing either.

(time to read this article is about 90 seconds)

Printable version of this article.

Here are three valuable insights about business and personal growth...

a) You can't grow your business without growing your people.

b)
If you grow your people, but don't grow your business, good people will get bored and leave.

c)
Employees who don't want to grow themselves will not help you grow your business. They're just not into growth of any kind. They're either "comfortably numb" or completely disengaged ...and they're holding you back.

During a 1-on-1 coaching session at a Landscape industry event in Ottawa last week, these very points came up. Fred, the landscape contractor that I was coaching, told me that he has two outstanding foremen and two equally great leadhands, who are now ready to take on more responsibility.

Fred is afraid that he'll lose the two leadhands if he doesn't promote them, but his foremen are so good that he wouldn't want to lose them either. Simply put, the problem here is that Fred has grown his people...but he hasn't grown the business to keep them challenged and to keep them from leaving.

I asked Fred 4 simple questions...

1.	"Is there more business out there that you could get, profitably, if you had one more crew in the field?"
2.	"Are you currently making all the money you need or want to have the quality of life that you want for you and your family now...and the retirement that you want for later?"
3.	"Are you spending as much time as you should, proactively marketing and managing the business...and do you have a list of things that you'd like to do, alone or with your family, that you just never seem to have time for?"
4.	"Would, by any chance, one of your existing foremen have potential as a day-to-day manager and project organizer, while the other one is happiest out in the field supervising his crew?"

Fred's answers were, "Yes, there's more business out there...yes, I would like to make more money...yes, I would like to have more time to market and manage the business and to be with my family...and yes, you have described my two foremen perfectly."

When we ask the right questions, the solution becomes clear. Here's what I recommended to Fred...

1.	Create a third crew and promote one of the leadhands to be the foreman in charge of it.
2.	Promote the other leadhand to be the foreman in charge of one of the other crews. Both of these positions get the new title of Crew Chief. The term "foreman" is old fashioned.
3.	One of the two existing foremen becomes the overall Project Coordinator ensuring that all 3 teams are staffed and scheduled effectively, have the equipment and materials that they need and that they finish projects on time and on budget. This is work previously done by Fred himself.
4.	The other foreman, who prefers to be in the field, is given the biggest, most challenging and most profitable installations to supervise and is given the title of Senior Crew Chief. Both former foremen are given equal pay increases along with their promotions and then subsequent pay increases will depend on their contribution to the company's profitability.
5.	This now leaves more time for Fred to... - Go out and sell and design the 50% more business that his company now needs to keep all three teams busy. - Have more time for marketing, managing and family.

Now, what does all of this mean to you and your business?
First off, are you growing both your people and your business? You can't grow one without the other. If you grow your business but not your people, I guarantee you, it will end badly. If you grow your people and don't grow your business, the best ones will become frustrated and leave.

So, who in your business or department is ready for more responsibility? Who's ready to help you grow the business and the bottom line? Who can do some of what you're doing so that you can do more of what you should be doing? And, who will go and do that for your competitors, if you don't give them the chance? Something to think about.

8. One more global crisis to add to your list...water.

(time to read this piece is about 60 seconds)

The developed, industrial world is running out of clean, fresh water...and the developing counties never had enough of it in the first place. The UN estimates that as many as 6000 people around the world die every day from a lack of clean water and up to 50% of the water produced by large cities is lost underground through leaks in old and broken water mains. We don't have enough water to go around...and we're squandering what we have.

Two years ago I predicted that, in the future, more wars would be fought over access to fresh water than over oil. Civil unrest over water availability and water prices is now a daily reality around the world. Wars will be next.

In the USA, Georgia State legislators want to redraw the border with Tennessee to gain control over a large water reservoir that sits one mile inside Tennessee. They claim that the state borders were erroneously surveyed back in 1818...and they want the reservoir back.

Lake Mead, just outside of Las Vegas, is the largest man-made lake in America, formed by the Hoover Dam holding back the Colorado River as it flows south west from the snowcapped Rocky Mountains, through the Grand Canyon, to the Sea of Cortez. Every city, town, farm and state along the way wants their share of that water and the level of Lake Mead is down 70 feet from where it is supposed to be. It's predicted that the lake, the primary source of water for Las Vegas, will run completely dry in 6 to 13 years...depending on how much snow falls in the mountains.

So, where's the "silver lining" in all of this? It's in investing in water and water related companies. According to the Zurich-based Sustainable Asset Management Group, the key investment opportunities will be in the areas of...

a)	Water treatment. The converting of unclean or non-consumable water into clean, fresh water.
b)	Water distribution and management. Building and managing the infrastructure to deliver the water to homes and businesses...and,
c)	Demand-side efficiency. Products and appliances that conserve water.

If you're an investor, it appears that some of your portfolio should be in this global water market.

9. Our quiz of the month:

(time to read this section is about 25 seconds)

"Thanks" to all of you who answered our January Quiz Question, which was, "In what extraordinary location did veteran fashion designer, Karl Lagerfeld hold his Fall 2007 fashion show?"

The answer is "The Great Wall of China".

Congratulations to Don Conaby of Conpute in Ontario. He takes home one of our DVD Seminars as his prize.

This month's Quiz Question:
The world's largest business, measured by stock market capitalization, is an oil company. Name that company.

Send your guess to Sharen Skene, our wonderful Director of Marketing, at sharen@donaldcooper.com. Each correct answer received within 10 days will go into the 'pot' and one winner will be randomly selected. The winner will receive his or her choice of any of our excellent DVD Seminars.

10. That's all for this month:
(time to read this section is about 15 seconds)

Thanks for all of your great feedback and suggestions. We especially love to hear of your successes using our insights.

Don't forget to visit our Free Articles section on our website for lots more valuable info on how to sell more, manage smarter and make more money in your business.

Also, let us know what you'd like to hear more about...or less about. And, do send us your stories and examples of great, horrible or just plain bizarre business practices that you find in your travels.

Finally, if you were sent this Newsletter by someone else and would like to subscribe yourself simply click this subscribe link.

Kindest regards,

Donald Cooper, MBA

Certified Speaking Professional

Member of the Canadian Speaking Hall of Fame

For information about booking Donald for your company or Association, contact Sharen Skene our wonderful Director of Marketing at Sharen@donaldcooper.com.

Back Issues of our Newsletters are available on our website (along with lots of other valuable articles and implementation tools).

Website: www.donaldcooper.com Email: sharen@donaldcooper.com
Tel: 1+ (416) 252-3704 Fax: 1+ (416) 252-3705

Management Newsletter ~ Issue 8, Volume 2 ~ Feb 2008

Donald's "Quote of the Month"

"When determining how best to compete in your chosen markets, it isn't all about price...unless you say it is."

1. It's not all about price...unless you say it is. How to change the game and grow your bottom line:

(time to read this article is about 3 minutes)

2. Is excesive price competition hurting your bottom line?...Announcing my new breakthrough presentation on battling endless price competition:

(time to read this section is about 30 seconds)

3. Be careful what you believe...check it out before you act:

4. If you have children, or grandchildren...here's a very neat parenting tip:

(time to read this piece is about 20 seconds)

5. Another great example of the power of a customer database plus proactive marketing:

(time to read this piece is about 40 seconds)

6. Bits and Pieces:

(time to read this section is about 60 seconds)

7. Is everyone in your business growing? If not, your business probably isn't growing either.

(time to read this article is about 90 seconds)

Printable version of this article.

8. One more global crisis to add to your list...water.

(time to read this piece is about 60 seconds)

9. Our quiz of the month:

(time to read this section is about 25 seconds)

10. That's all for this month: (time to read this section is about 15 seconds)

Kindest regards, Donald Cooper, MBA Certified Speaking Professional Member of the Canadian Speaking Hall of Fame

For information about booking Donald for your company or Association, contact Sharen Skene our wonderful Director of Marketing at Sharen@donaldcooper.com.

Back Issues of our Newsletters are available on our website (along with lots of other valuable articles and implementation tools).

10. That's all for this month:
(time to read this section is about 15 seconds)

Kindest regards,

Donald Cooper, MBA

Certified Speaking Professional

Member of the Canadian Speaking Hall of Fame