Business Quests in the Information Age

The power of enthusiasm

Seth Godin has a post about the impact of enthusiasm. He claims that enthusiasm makes a great impact and improves an experience in business. While I agree with him that it is far more pleasant to be dealing with people who are passionate about what they do, I believe it is fundamental to choose the context and the audience in which it is OK to be enthusiastic.

Who has not seen an enthusiastic business person becoming a nuisance simply because the audience is not ready to follow or the context is not appropriate? In fact, more than a choice of context, enthusiasm is something you share with your business partners, so if you want to play by this tune the key is to be able to adjust yourself to the mood and style of your counterpart(s) and to help them make the transition from the state in which they are to a state in which they can actually take your enthusiasm...

Of course, a prerequisite for being credible as an enthusiastic business person is to actually be passionate about what you do, to be committed to your projects... Which brings us to the importance of actually doing something one likes rather than something that has the only virtue of being acceptable to a social group (especially if the social group is overly conservative - if Picasso had listened to conservative types quite a few works of art would not be around for us to enjoy them).

Doing something with passion in business is another way of saying that you are actually pursuing a business quest.

Cirque du Soleil: what a business!

Yesterday evening I went to the Alegria show of Cirque du Soleil. Impressive as a show and perhaps even more as a business. Cirque du Soleil is one of the most effective marketing machines I have ever seen.

First of all I must say the people who run Cirque du Soleil know something about customer experience: from the second I drove into the parking lot to the moment I went out of the place (Tour & Taxis, Brussels), everything went smoothly. They got me a parking space very quickly, checked us in the tent extra fast, delivered a fantastic show (here's my impression of the show in French), always had smiling and helpful people to serve me as a customer and to help me get what I needed and very efficiently got me out of the parking lot with only minimal hassle (I have been to events where it takes you an hour just to get out of the parking area).

Secondly, merchandising seems to have no secrets for them. The first thing the customer sees upon getting inside the tent is the incredible and very beautiful collection of hats, T-shirts, shirts, DVDs, mugs and books of Cirque du Soleil. I bought a book and the DVD of Alegria at a cost of 52€ and I would bet Cirque du Soleil makes at least 30€ per person on top of the revenue from tickets (just a wild guess).

Thirdly, there is clearly comething about operational excellence in every single area of the business. I watched people work on lights, on sound, on wlecoming guests in the main tent and of course I was delighted with the performance of the artists (which is clearly a central part of the operation). Precision, speed, efficiency and they made it all look so simple! During the break I was thinking that every single nut and bold of this huge machinery had travelled thousands of kilometers without a glitch to be assembled in Brussels for a little over a month, pondering at the degree of organization this performance demands... Huge!

And of course all this translates in financial terms. Don't get me wrong: financial performance is the by-product of all the hard work done to create, produce, organize and deliver the experience to each one of the 2600 spectators in the main tent. So I am not saying it's a money machine that runs on its own, but it's probably the closest thing I have ever seen to a money machine. So I did some research: Cirque du Soleil has a yearly turnover of more than 500 m€ (yes that's five hundred million Euros!). Here's an interesting article from Business Week on this amazing business:

Download 20041213_BusinessWeek_CirqueDuSoleil.pdf

I also quickly tried to assess how much money is made when there are actually 2600 people attending the show. Assuming the average price of a ticket is 35€ and that on average people spend around 25€ per person on food drinks and merchandising, the revenue of one show is over 150 k€ (yes, one hundred fifty thousand Euros). That's if the sow is sold-out. Assuming a 66% occupancy rate (which is low considering the availability of seats as published on their site today), each event yields 100 k€ in turnover (minimum)... In Brussels the show is scheduled to be performed around 50 times, which means that their turnover must be in the region of 5 million €. In fact that's not huge considering the infrastructure required and the level of investment that the creation of the show represents. Not bad, but not a game won before it begins...

I really find this company stunning and a great model for anyone interested in excellence.

The value of customer experience

Sometimes it is interesting to watch small things happening at a very local scale because they can be food for thought for larger operations. How about a business loosing about 30% of its potential revenue simply because it fails to create the right customer experience?

Right across the street from where I live there is a small shop selling fruits and vegetables. The people who run that shop do not seem very capable of welcoming their customers and serving them optimally. For example, these guys don't really like being paid with lunch vouchers (in Belgium we can pay for food and drinks with lunch vouchers called "tickets repas") for some reason I cannot fathom since a few meters up the street there is a butcher who gladly accepts this form of payment. On top of that they seem to have some form of paralysis of zygomatics and to suffer from Alzheimer in the brain centers that manage good manners. Anyway, when the people running the fruits & vegetables shop serve me as a customer I don't feel welcome. When I pay them with lunch vouchers, they don't like my payment... So I don't really enjoy going there.

Today, due to time constraints there was no other choice, and I actually forgot a couple of things but since they are not essential I will just wait until I can visit go to another shop. Now, I paid something like 11 € and if I felt motivated enough to go back to that shop I would pay another 5€ or 6€...  Wrong customer experience means a loss of 31% of revenue in this case. It seems like a pricey negligence, don't you think? Especially since I know that when my experience is good in a shop I always have a preference for spending my money there and for spending a bit more than strictly necessary there... So in fact the loss of potential revenue (including implusive buys) is actually higher and may even exceed 40%.

Of course I know that one instance is not statistically significant blah blah blah... still in this case knowing that it is a fairly permanent situation it simply occurred to me to try to quantify the loss for that business. I thought that this might actually be happening in a number of other businesses which do not care for customer experience. And that might actually be good food for thought, at least for today...

How to set sales objectives properly?

Usually sales objectives are set in terms of volume of business to be signed by a certain date or in terms of growth of turnover over a period or as improvement to the gross margin of a line of products... I wonder whether all of these objectives are properly formulated. I mean to examine how adequate it is to be setting objectives that are not strictly dependent on the mobilisation of the people who will eventually be assessed for their ability to reach the said objectives. This is actually something I learned in the NLP class I attended: "proper" / adequate formulation of objectives. I found it to be extremely powerful, so I thought I would use the tool to think a bit about the ways in which sales objectives could be set.

Let me use an analogy for a minute before proceeding further. Let us assume I am an actor and decide that my objective is to make the public applaud my performance without interruption for at least 15 minutes, because that is for me a good indication that my performance was good. Is it "fair" to be setting that objective given that it is not solely dependent on me and on my will? Indeed:
- the public may love the performance and still not applaud for 15 minutes for whatever reason
- the public may not like the performance even though it was excellent
- ...

So is it "harmonious" (I told you Harmony is important to me and I will write something about its role in business sometime) for me to define a criterion, which is not solely dependent on my acting, to measure my success as an actor?

In a way, something similar happens with sales. When I set for myself the objective of signing at least 15 new customers this year, is it a gracious way of doing things? Should I consider it a failure if I sign only two who will generate twice as much turnover as my forecasts with 15 new customers? Should I consider it a success if I get 15 new customers to sign for something they don't need or I don't feel like delivering to them? What if despite my doing my job in the best possible way there are not 15 new customers by 31 Dec 2005 and? What if...

How would it help harmony (and therefore my business since a sustainably profitable business is also a manifestation of Harmony for me) to formulate objectives that are solely dependent on me? If I do so, can I afford to attach "rewards" and bonuses to those objectives given that their occurrence will not necessarily mean "turnover now", much less "immediate return"? How can I formulate objectives that are solely dependent on myself (which is "fair" and harmonious in my view) and still have the drive it takes to make my business fly?

I believe that incentives are not always productive methods for building sustainably profitable and recurring business. Incentives are not necessarily to way to achieve quality of sales, assuming they are a proper way to achieve quantity of business. Yet, focusing solely on quality of sales is a conspicuous lack of Harmony for me, because both quality and quantity TOGETHER are important.

So I guess that "dry" targets of quantities are not enough to drive sales activities that can help build a sustainably profitable business. It is also necessary to set goals that are solely dependent on the actions of each and every person participating to the sales operations. That second part of the equation is more often than not forgotten in targetting and setting of objectives. It is also absent from approaches like the balanced scorecard. And it is definitely absent in consulting activities that are solely interested in improving performance indicators or indeed in governments that are exclusively focusing on reducing a rate or unemployment (sometimes by "creatively adapting" the definiton of "unemployed")...

Thoughts in progress...

"Progress lies not in enhancing what is, but in advancing toward what will be" - Khalil Gibran

Factors affecting a customer's buy decision

I recently made the decision to lease a new car. So, I wrote down a list of essential requirements: (1) to be able to safely travel from point A to point B, (2) to do so with a good deal of comfort - most usual distance 250 km - most usual duration duration of trips: 2.5 h, (3) good sound system, (4) decent gas consumption, (5) decent envrionmental performance.

All this sounded pretty simple until I started visiting car dealers:

• the first one looked at me head to toe and I suspect did not feel inspired by my casual attire on a weekday. So he dealt with me in a slightly demeaning fashion. Did not like it. Would not buy from him if I decided to go for that car manufacturer.
  
  And I know it is utterly subjective, but that's what sales is all about: a subjective relationship between two persons that will or will not transact. And yeah, there are "objective" ways of deciding, with scorecards and the whole lot, but ultimately... it's all about people.

• the second one knew what model of car I should get before even hearing my above requirements, but proceeded to listening to what I had to say with a distracted expression on his face. When he failed to find the car in his catalogue he called a colleague to get some help. That's when he discovered that the model he had in mind was no longer manufactured and started ranting about it with his colleague on the phone... in front of his would-be customer.
  
  Sad, but that's not where it ends. I asked him to tell me why he "immediately" thought of model X for me and he said: "well, because it has that great looking dashboard with chromed rims around the rev counter and  speedometer... and of course it also has the  cruise control that you wanted". Did I have reason to feel my requirements were understood?
  
  
• the third never managed to follow-up on our initial appointment until I sent a fax complaining for not getting his leasing proposal and for his failure to organize a simple test drive. He immediately sent me a leasing offer. Would I make such an important decision (for me it is important) without trying the product first?
  
  
• a fourth one just took the configuration I had made on the car maker's site on the web looked at it and gave me the keys to try a similar model. To him selling a car was tantamount to processing a file in a bureaucratic fashion and he would not bother listen to requirements or accompany me to tell me about the greatness of the car he was about to lease to me. Dan Sullivan, an executive coach, says that "a bureaucrat is an expensive microchip"

I was not impressed. But I kept looking.

And finallly, I was blown away by a young sales person who took the time to listen to my needs, asked good questions, offered proper advice in a language I can understand (I am not a car specialist / fan)... Then he entered the paramters for the car configuration we had agreed upon and issued a formal leasing offer on the spot for me to take away and reflect upon. After that he came with me for the test drive, probed how I felt, showed me functions I would not have tried otherwise... The next day I gave him feedback asking for a different engine and he faxed me two leasing offers, one that was exactly what I had requested for and the second that was slightly amended in a way he thought was better for me. And he was right: it was a better deal for me.

Initiative, common sense, listening, undertsanding, empathy, enthusiasm, confidence, determination to make a damn difference for the customer...

That's a G-R-E-A-T sales person.