Do you treat your clients like Tiffany customers?

No matter how good your company is, sooner or later you’re going to mess something up. You won’t mean to, but you’ll do something that upsets a client. Maybe you’ll miss a deadline, maybe costs will come in higher than you estimated, maybe one of your employees will unintentionally offend a client with a stupid joke. The question is not whether or not something will go wrong in a client relationship. Something always goes wrong.

The real question is: what do you DO when something goes wrong? A trusted business advisor once told me that it’s always a good strategy to overreact to a mistake. Don’t assume that just because the client says it’s no big deal that it’s no big deal.

Here’s a great example of the right sort of overreaction from the little blue box of high-end retail: Tiffany. A friend’s husband ordered her a necklace from the Tiffany website as a Christmas present. He selected a shipping method that would get it there by Christmas Eve. For reasons that may or may not have been Tiffany’s fault, the necklace didn’t arrive on time. They assured him it would arrive the following week.

But in the meantime, they overnighted — for Saturday delivery, no less — a complimentary gift card for $100. I don’t care who you are, a hundred dollars for free makes an impact. It’s a heck of an apology. My friend says she’d never really been a big fan of Tiffany before, but now she’s a true believer. Her husband, who had planned to have another jeweler knock off a celebration ring Tiffany makes to save a little money, now feels it’s imperative that he buy that ring from Tiffany, regardless of cost. His takeaway: “I know Tiffany will do it right.”

Of course, the reverse happens often enough. There’s a dime store in Atlanta that has been here for about three generations. It’s a well-loved institution. They’ve built their reputation one happy customer at a time, year after year after year. It’s the kind of place where parents take their kids for a ride on the same mechanical horse they rode as children. A ride on the horse still costs a dime.

One day I watched a cashier eradicate all those decades of goodwill, at least for the one customer she was serving. This guy handed her a clapping monkey he wanted to buy. You know the one, with the striped trousers and the brass cymbals. The price tag on the monkey said one price. The register rang it up at a higher price. The customer said he wanted to pay the price on the price tag. The cashier said, well, I can’t sell it to you for that, because the register says it’s supposed to cost such and such. They went around and around and around until finally the customer said, you know, I’ve been shopping here for years, but now I’m not coming back again. What’s more, he promised to tell all his friends what happened with the clapping monkey. And he walked out — monkeyless and not happy about it.

Wouldn’t it have been worth the few bucks difference in price to keep a long-time customer happy? I like to think that if the owner had been there, he would have apologized profusely to the customer. And then given him the clapping monkey for free.

Ride the wave of love for startups — and existing small companies

If you’re an entrepreneur — or are thinking about becoming one — take advantage of the prevailing national pride in small business. America has always had a love affair with the Mom and Pop Main Street shop, but now, more than ever, the country is depending on entrepreneurs of every ilk to play a large role in our economic growth.

During the dark days of this recession, small business owners everywhere watched the big banks and car companies in the news and joked, “Where’s my bailout?” If it’s lonely at the top, it’s especially desolate at the top of a small business, where entrepreneurs have struggled alone with all kinds of tough decisions, from whether to lay off valued employees to if it might be time to file for bankruptcy. Plenty of small companies have folded, but many more are still standing.

These business owners, and the new entrepreneurs joining their ranks, are poised to become the national heroes of the American economy. For one thing, they provide half the jobs in the country and create up to 80% of all new jobs. Lawmakers and business reporters are now pulling out all the classic metaphors, like small business being “the backbone of the economy” and “the engine driving our economic recovery.”

If you own a small business and survived 2009, or if you started a business last year, you deserve some high praise. No doubt it required sharp business acumen, not to mention bravery, to pull that off. The people around you, in your company, your community and even your country, appreciate what you’ve done to help keep your employees working and your vendors in business. People with income can spend, which creates more income, and more spending, and eventually, the economy will be thriving again.

This is what I’d like to see. I’d like to be sitting on a plane sometime soon and have the airline attendant stand up and grab her microphone to say, “Ladies and gentleman, we have some small business owners on board with us today. Let’s give them all a round of applause to thank them for their part in stimulating the American economy.”

How a tough year for your business in 2009 might mean a fantastic 2010

I can’t believe I’m saying this, but 2009 was actually a great year at Tribe. And I’m thinking it might have been at your company too.

Of course, we did lose our largest client, due to the slump in the housing market. We had to lay off a few talented, hardworking people that we’d hire again in a heartbeat. We cut back on some perks, like having a fresh flower in everyone’s office each Monday and providing free takeout for lunch five days a week. We froze salaries for most of the year. We gave a somewhat smaller holiday bonus than usual.

On the other hand, we’ll enter 2010 ready to compete on a much higher level than ever before. We’ve used this slow year to reinvent, and to move into some new territory. We’ve expanded our internal communications practice area to incorporate social media and engagement tools. We’ve created some interesting initiatives in new media, for both consumer audiences and employee ones. We’ve developed expertise in some key research areas, like the widely varying perspectives of Gen Y, Gen X and Boomer employees in the workplace, and recession spending by affluent couples. We’ve dabbled in creating our own content and products, like our “Start Your Own Company” card deck and iPhone application.

Other small business owners I’ve talked with seem to have done their own share of reinventing. This year has been about accepting that the recession is real, having time to reflect on what works and what doesn’t about our companies, and exploring some new areas we might not have had time to spend time on before.

Everyone’s talking about how companies are stronger for trimming expenses and figuring out bow to do more with less. Thinking small is a good exercise.

But an even better way to think is how we could get bigger. Ways we could expand to serve other types of clients than we have in the past. How we could fill some new need that’s not being met. What we could do next that would make us wake up excited about getting in to the office.

Nature moves in cycles, and business does too. New moon to full moon. High tide to low. Winter to spring. 2009 has been a good year for sending our roots deeper and in new directions. Soon, hopefully beginning in 2010, certainly in the next few years, our economic downturn will swing back in the other direction. The economy will grow, our clients will grow, our companies will grow. The quiet reinvention so many small businesses have done in 2009 will position us well to reap all the benefits of the next boom time.

Can you cut your payroll and still keep employees happy?

Most small businesses have already done some belt tightening this year. We’ve trimmed dead wood, become a more lean machine, and every other metaphor you can apply to spending less money. Still, when we see our final projections of where our year-end financials will end up, we might  wonder if we should cut a little more.

Sylvia Ann Hewlett, founder of the Center for Work-Life Policy, wrote in the New York Times this weekend about a creative approach to cutting costs by trading employees money for time. She cites the example of KMPG, the giant accounting firm, and their solution to cutting payroll costs without losing star talent. They presented 11,000 employees with a Chinese menu of choices: work a four-day week and take a 20% pay reduction; take a short sabbatical while earning 30 percent of their base salary; both of those options; or neither of those options, retaining their regular salary for their standard work week. Over 80% of them chose one of the flex options.

Hewlett points out that because KPMG positioned these options as “a strategic response to the downturn, rather than a ‘benefit’ for working mothers, it has gone some distance to legitimizing flex time. Taking this option has become an honored choice — a way to save jobs. As a result, overloaded men as well as overloaded women have felt free to vary their schedules.”

I’ve seen one small company try a flawed version of this plan with disastrous results. Faced with the need to reduce payroll and loathe to eliminate jobs, the business owner asked everyone in the company to take a 15 percent pay cut, assuring them that she was taking the same reduction in salary. She hoped they would see this as a good way to help all their coworkers keep their jobs.

It didn’t work that way. Morale plummeted and some of her best talent jumped ship. Months later, when she was able to reinstate full salaries, she didn’t score any points with her staff because the damage was already done.

The crucial elements of cutting payroll while retaining employees are 1) giving them something back, i.e. time, in exchange for giving up some of their salary, and 2) giving them the choice of making that trade or not. Asking employees to help suck up your losses by getting paid less for the same work week is only going to hurt the company in the long run.

The thing about being an entrepreneur is that you have the potential to make a lot of money in good years. You also have the potential to lose money in the bad ones. We all willingly take that risk, but it’s not fair to expect our employees to share in the down side. On the other hand, in 2010 or 2011, when we see year-end projections that show us closing the year with gobs of money, we’ll benefit nicely from the upside of that risk-reward ratio.

Online or in person: Don’t make it all about you.

When we talk about social media at Tribe, one of our strongest recommendations is to make sure you don’t talk about yourself too much. We encourage people to make comments on other people’s updates and blogs, to retweet or post about others’ work, to spend some time promoting others. If it’s all about you all the time, you’ll wear people out. Even more importantly, you’ll be missing an opportunity to create a connection and build a relationship.

Same thing applies to actual face-to-face networking. I had lunch today with someone referred to me by an old neighbor. He recently moved from San Francisco to Atlanta and his work has some overlap with ours, so she thought I might be able to connect him with some people in town he’d like to know. (I’m not naming any names, but Michael, you know who you are.)

This guy is filled with energy and ideas and plans. Over our Flip burgers and Cokes, he talked about innovation and change and shaking things up. He talked about a major conference he’s planning. He talked about his speaking career. He talked and talked and talked.

At the end of our lunch, I told him I was going to give him some unsolicited advice. (My business partner said, fairly loudly, she claims, “Don’t do it.” I didn’t hear her, but I’m not sure that would have stopped me anyway.)

I will introduce you to a few people I think you’d enjoy knowing, I told him, but you have to promise to let them talk about themselves a little. I pointed out that we’d been at lunch for over an hour and he had not asked either of us one question. Not about our company, not about either of us personally, not even about where we managed to find a parking place.

Easy mistake. One I’m sure I’ve made myself. But driving back to the office, it struck me once again. Courtesy is courtesy, whether you’re online or sitting across the table from someone. You have to flip the focus back to the other person once in awhile. Like your mother always told you, it’s important to be a good listener.

Small Business Wisdom: How To Ruin Years Of Effort With One Dumb Mistake

This is how you can make years of progress toward a goal and then ruin your chances with one stupid mistake. We completely blew a meeting yesterday with a prospective client. The client’s assistant had sent us typed directions for several possible routes to their office, but no one at Tribe had stopped to read them very carefully. An hour or so before the meeting, we briefly discussed as a group which set of directions we should take and decided on one. Then my business partner and I set out for the meeting, an ample 45 minutes ahead of time.

The route we chose was the wrong one. Instead of the 20 or 3o minutes the trip should have taken, we drove around our elbow and through four counties (I’m serious), all the while following our typed directions. At five minutes before our meeting was scheduled, we were still whipping along some distant suburban highway and trying to come to terms with the fact that we were going to be late. We had GPS, we had our iPhone Map application and we had the office on the phone. All three assured us we were heading in the right direction, but we had a long way to go.

We apologized profusely and the prospective client was very gracious about it. But it’s a tough first impression to overcome. We were also rattled in the meeting and I’m sure we were not anywhere near the top of our game. The client turned out to be someone we enjoyed immensely. She was smart and energetic and funny and we would probably love working with her, but I’d be very surprised if we ever landed any of her business. And that’s completely our fault.

Our dumb mistake has much larger repercussions than one meeting. The drive back to our office (taking another of the listed routes on the assistant’s sheet) took less than 20 minutes. The crew back at Tribe understood that we’d shot ourselves in the foot with that meeting, but I don’t think they truly realized that we’d blown much more than one hour of a prospect’s time.

The effort it took to land that meeting began years ago. That prospective client works for a large Atlanta company which has been on our hit list since 2004 . For five years, my business partner has been reaching out to them with mailings and promotional pieces and emails and phone calls.

Over a year ago, in August of 2008, I finally connected on LinkedIn with Jo Ann, the then-marketing director of the company. Six months ago, Jo Ann left the company to start her own business and emailed to see if I’d like to get together for lunch or a glass of wine. Three weeks later, we finally met for lunch. She asked some advice on running her own company; In return, she kindly offered to set up an introduction with Leigh, the marketing director who took her place at her old company. Several weeks later, the introduction was made. It took my business partner a month after that to get Leigh to agree to a meeting. The meeting we had with her yesterday.

So there was a long road to that meeting yesterday, and I don’t mean the one we were following through four different counties. What we blew wasn’t one meeting. It was the years of effort to create a long series of very tiny movements toward that meeting.

Moral of the story: There’s so much a small business can’t control about whether a client hires us or not. Let’s control the ones we can. For instance, check out your directions ahead of time.

 

Friday Afternoon Feng Shui Ritual

How do you like to end the work week? I have this thing about clearing everything off my desk and either filing or tossing all the stuff stacked on my credenza. Then I wipe it all down to remove the week’s accumulated coffee circles and other debris.

Our Feng Shui consultant got me started on this, years ago. She said it was important to clear out all the old energy of the week, to make things ready for a fresh week to come. She advocated the use of Clorox Wipes, and suggested leaving a blank pad of paper square in the center of your work space to signal to the universe that you’re open to receive more business.

I swear, I think this weekly ritual helps. I love coming back to my office Monday morning and seeing that wide-open expanse of uncluttered desk space. And somehow, it lets me leave Friday afternoon feeling like I’ve got everything squared away, with no loose ends hanging.

Lately though, I’ve started to notice  how action-packed that 4:00 to 5:00 PM hour is in the social media world. Tweets are flying back and forth, Follow Friday is in full force, people are posting on Facebook, checking their LinkedIn account. Twitter, particularly, is like a weekly 60-minute cocktail party you don’t want to miss. Maybe it’s people killing that last hour of the week when they feel like they should be at their desk, even though they’re not about to start something new that close to the weekend bell.

So either I’ve got to start my little OCD clutter-clearing ritual a little earlier, or I’ll miss some of the fun online. What do you guys do to close out the work week? And what’s your must-click time of the day or week on social media?

Home office: Open in case of medical emergency

Even if you have fabulous office space and enjoy going in every morning to be surrounded by your crackerjack staff, it’s not a bad idea to maintain a functional home office as well. I worked from a home office for the first several years after starting Tribe, and learned this week how lucky I was that I kept it largely intact after we leased real office space.

I’ve spent this week in that home office, thanks to the swine flu. I came down with it Monday night, my fever broke Tuesday night, and I thought staying out of the office for 24 hours after my temperature returned to normal would be a gracious plenty of time to stay away.

However, my entire staff voted to keep me home for the rest of the week, and then assigned my business partner the task of talking me into that. Nobody wants to catch H1N1. We also have two pregnant employees. One of them went in for her weekly check up and when she mentioned that her boss had the swine flu, the doctor went ape. Apparently, pregnant women are at elevated risk for complications with this virus.

So I set up shop in my old home office, where the wireless still works, the printer still works, my cell phone gets a good signal and the coffee machine is just a few steps away. I opened up all the windows, let the dog settle in at my feet and then I got down to business. I’ve kept up with the constant flurry of email. I’ve worked undisturbed for long stretches. And when I needed to touch base on projects with people in the office, we did it by phone or iChat.

Yesterday was such a gorgeous sunny fall day that I spent the afternoon on the deck with my laptop. I could hear the birds singing, feel the breeze in the trees, enjoy the rich colors of the potted mums waiting to be planted. Midway through, I took a break to walk up to the school to collect our fourth grader. Sam started in on homework and I got back to my work. Later, I could see him out of the corner of my eye on his homemade bag swing, figuring out ways to use a ladder to make the swing go higher and further. Once in awhile, I’d respond to a “Mama, watch this” request.

It’s a nice way to work. I might miss my home office on Monday.

When can entrepreneurs stop worrying about winning more business?

“My business seems to be successful,” said the new entrepreneur, “but when do I get to quit worrying about enough work coming in?” Jo Ann is an accomplished marketer, with 20 years of experience under her belt and an MBA, not to mention gorgeous and personable. She left her post as VP/CMO at a venerable brand to start her own marketing consultancy.

“Never,” was all I could tell her. In my years of running my own companies, I’ve been able to come to a strange peace with that fact, but some days it requires a certain amount of zen not to completely freak out.

I gave her my rock climbing metaphor. When I was just starting my first ad agency, I  asked that same question of my friend Bill, a wildly successful illustrator who has run his own business for decades. Bill’s personality is about as low stress as mine is high, and I would never peg him for a worrier. (One night at some industry event, I remarked to Bill that it had been a gorgeous afternoon. He agreed, and revealed that he’d turned down a job to do a Newsweek cover that afternoon so he could go hiking instead. I was impressed, but he laughed and said, “I’m thinking I made the wrong decision.”) Bill told me the same thing I told Jo Ann: never.

Bill said he still worries all the time, but he doesn’t view worry as a negative. He suggested I try to enjoy the fear, the same way I enjoy the fear inherent to rock climbing. “Think of it as exciting,” he said. “It’s scary, but it’s kind of fun.”

Here are my four best tips for maintaining perspective:

1. Redefine worry. Worry can be useful, if it wakes you up in the middle of the night with the realization that you won’t be able to make payroll unless you collect that big receivable that’s running late. Worry can make you get up the next morning and get your client on the phone to help push that invoice through their accounting department and get you a check. Instead of telling yourself that you’re worried, maybe you’re actually just “aware.”

2. Remember how much is in your control. Although you can’t control the economy or a potential client’s budget cuts, you can control your efforts. During slow times, ramp up your networking, your outreach, your marketing. In your own business, you truly have more control over your success than you would working for a large company.

3. Give seeds time to grow. For the sort of professional services many small businesses are selling, the sales process can stretch out for years. If you don’t get a piece of business you pitch today, that doesn’t mean you won’t win some work from that client somewhere down the road. At Tribe, we got our first project from UPS a full two years after I’d sent an introductory letter to a heavyweight there. He’d kept that letter in his files until he had a need for us. Similar story with our Chick-fil-A clients. Life is long.

4. Don’t slack off in good times. When a small business is busy, it’s usually all hands on deck to get the work done. It’s very difficult to come up for air long enough to formulate any sort of marketing efforts. Just don’t let your business development machine grind to a complete halt. Keep pitching. Stay visible. Be in touch.

I’m sure some of you out there have tips to add to that list. How do you deal with the relentless need to keep drumming up business?

5 tips: What do you do when one client represents most of your business?

This is the curse and the blessing for an entrepreneur lucky enough to land a big client. That one large client can take your company to a whole new level, increasing your billings dramatically. You’re able to hire more people, upgrade a few things, maybe even expand.

It’s fantastic. And also terrifying. What if you should lose that client? Entrepreneurs with a disproportionate share of their income stream coming from one source often lose sleep at night worrying about what would happen to the company if something happened to that client. 

If one client represents the largest slice of your business, here are five tips that might help you worry less:

1. Market yourself to other large clients. This one is the first and most obvious. The best way to even out the business would be to add at least one other large client, which could be easier now that you can brag about that first big client.  The ideal scenario is that your largest client become a smaller percentage of your overall billings, while increasing the total of those billings. First though, make sure your company has handled any growing pains of taking on that first large client.

2. Create other revenue streams. Can you add another service line or product so you have something else to sell?  If your core business is accounting services for professional companies, like law firms or architects, you might develop some seminars on AR collections, or managing banking relationships. Or maybe you could offer training in Quickbooks or some other accounting software to help companies too small to afford your services handle their own accounting needs in-house.

3. Ramp up just enough. Yes, a large client may require you to add to your staff, company fleet, office space or IT capabilities. But don’t get carried away. Clients come and clients go. Explore ways to stretch the capacity you already have, before you significantly increase your operating budget. 

4. Have a plan for scaling down quickly. This is like having a fire evacuation plan for your family. You hope you never have to use it, but it’s a good idea to have it in place. Outline a plan for how you would reduce expenses quickly if your largest client were to walk. You might think through who you would have to lay off, whether you could handle a salary decrease yourself, if you could sublet some of your space. If you were to lose your biggest client, you’d want to minimize the impact by streamlining your spending quickly.

5. Trust that you could survive the blow. This is the most important one of all. Although you can nurture that client relationship and do the best job you can for them, there all kinds of reasons beyond your control that could  result in the loss of that account. Don’t worry too much about it. If it happened, you’d deal with it. Some entrepreneurs even report that losing their largest client was actually a blessing in disguise.