I was recently speaking to a class of entrepreneurs who were preparing to start their first business.  It was an open discussion about customer service and I was the guest speaker.  We were brainstorming about ways to build customer loyalty.  The idea was put forward that they should seek to surprise the customer “in a good way”.  This thinking is common among new business owners.  It is a dangerous strategy and all too often has the opposite effect.  Here is why it is hard to surprise a customer “in a good way”.

• Trust. Your customers come to you because they trust you.  The fundamental basis for that trust is that you and your product are reliable.  Or to put it another way they trust you because you are predictable.  Nobody wants a $20 steak at McDonalds.  It doesn’t matter which McDonalds you go to, the food always tastes exactly the same.  As soon as you try to surprise your customer you are eroding their trust in you and your product.  Instead, build trust by increasing anticipation.  Send your customer a note that a gift is coming.  Not only is this one more promise delivered, most times the pleasure of anticipation will be what your customer really remembers.
• We could do better, if we wanted to. Think about it.  Your loyal customer has been a regular purchaser of your product.  Then one day you decide to reward them for all their loyalty.  You deliver a product that is twice as good as what they have been getting for the same price.  And then you tell them that next month you will go back to delivering the same old product.  What does that really tell the customer about how you value them?  It may come across to them that you could do a better job every month if you really wanted to.  Rather show your appreciation with something unrelated to your product.
• Unearned Praise. Have you ever had the experience of being publically applauded for something you did not do?  If you have not you can imagine how embarrassing and disconcerting such an experience would be.  When you surprise your customer, especially in front of their piers or employees, you may be recreating that experience.  I know someone who walked away from a slot machine payout because the flashing lights and alarm brought too much attention.  Most people do not like attention they do not think they have earned.  Instead make sure your customer knows why they are being appreciated.
• Diminishing Returns and Cost. If you really want to surprise your clients, it makes sense to make it big.  I am not talking about a new car big, I am talking about a gift basket big.  But what about next time you want to surprise them?  You end up going bigger.  After the while your customers begin to see the surprise as a perk.  Something they expect.  Congratulations you have just created a very expensive rewards program.  A rewards program should be logical, documented and most importantly budgeted.

Your customers deserve appreciation and a properly designed appreciation program can build a loyal customer base.  Make sure that your appreciation has the desired effect.  There are great ways to keep the WOW factor.  Even an annual drawing for a cruise can excite your customers as long as it does not surprise or embarrass them.  Take a minute to share in the comments how your vendors have successfully or not so successfully showed you their appreciation for your business.

It is an interesting observation that that there are people in the world who we do not like, yet we are surprised and offended to find out there are people in this world who do not like us.  My five year old twin daughters just finished up their year in 4K.  Other than Sunday school at church it is there first time they have had regular interaction with a large group of children their own age.  It has been an interesting learning experience for the whole family.  As twins, they have some built-in social skills and have always made friend rather easily.  However, before going to school they never had anyone say “You are/aren’t my friend”.  It has created an interesting dynamic.  They were understandably crushed the first time someone told them “You are not my friend”, and it was a hard story to listen to as a parent. They made it their quest to make that child “their friend”.  This quest has come at a cost, both in giving up turns on the playground swings and on five year old emotions.  We have struggled, as parents, over the last month as we try to instill in them the true meaning of friendship. 

To us as adults, we see this as a normal part of growing up.  We all have gone through the same experience of learning what true friendship is.  Most of us have only a few true close friends and many acquaintances.  This is the normal, healthy way that social relationships work… at least until you start your own business.  We invest our time, money, and dreams into your new business.  We work so hard and are so excited about our new product.  And somehow, we all return to K4.  We get off the school bus with almost no concept of what friends, (or more specifically customers) really are.  We expect everyone to embrace us with open arms.  We are surprised and offended to find out that there are people who do not want our product.  Even worse we find out there are people who prefer our competitors products over our own.  We make it our quest to convince make them our customers.  This quest too comes at a cost. 

It is a valid marketing tactic to offer potential customers discounts.  It is necessary at times to reduce a quote to capture a high potential customer.  But too often we spend time and money trying to hook a potential customer that we just want to be our “friend”.  We spend money and more importantly time trying to wine and dine potential contacts who are not potential customers.  We adopt high pressure selling techniques that never accept no for an answer.  We think that we are being persistent, but from the other side of the table it comes across as desperate, naive, and even annoying.  We take every no too personally.  It wears on our own confidence and adds stress to the business.

I often ask new business owners who their ideal customer is.  Too many times I hear the response “everybody”.  They haven’t taken the time or disciplined themselves to seriously consider who is a high value customer and what is the customers true potential value.  I am not saying that we should have a users mentality or only consider what is in it for us, but it is an important piece of the equation that new business owners rarely consider.  You will have customers who you will regret working with.  It has been my observation that most of these troublesome customers are ones that we have tried too hard to get and we have been too proud not to get.

As you move forward building a successful business, count the cost of each potential customer.  Don’t take it personally if some just don’t want to buy from you.  Remember there are great products being sold by great people who you did not buy from either.  Add a comment about the last product you did not buy and why.  We could all learn from ourselves what it is like to be a customer again.

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“…we can say that Muad’Dib learned rapidly because his first training was in how to learn. And the first lesson of all was the basic trust that he could learn. It is shocking to find how many people do not believe they can learn, and how many more believe learning to be difficult.  Muad’Dib knew that every experience carries its lesson.” -Dune, by Frank Herbert

The human mind has a voracious appetite for information.  Yet, it has always amazed me how many people assume that they they cannot learn new skills.  Contrary to popular myth, recent studies show that the human brain maintains the ability to learn and grow new neurons throughout our entire lives, not just childhood.  The brain, like any other muscle, requires continuous exercise to prevent atrophy and permanent decay.

I have 5 year old twin daughters.  I find it revealing how few things we actually taught them.  Every day they use new words, perform new physical feats, and make previously unimaginable connections.  It is rare that any of these things were taught to them.  Their brains are devoted to the task of learning and it is not difficult.  We all began our lives the same way.  Somewhere between Calculus and English Literature we were taught the learning should be hard.

Secrets to continuous learning:

• Decide that it is easy to learn.  It may sound silly, but the biggest reason why people stop learning is that they believe they cannot learn.  The mind craves new things, but we often limit ourselves by deciding what our limitations are.  We rob ourselves of the opportunity and joy of learning.
• Have Confidence.  Once you have decided it is easy to learn, start to act like it.  Put yourself into situations where you have to learn or fail.  It is amazing how a little bit of adrenaline can aid in your ability to learn.
• Concentrate on patterns not details.  Our brains are powerful pattern matching machines.  In school we were taught to memorize facts, but which is more important, the date of the Normandy invasion or the ramifications of the Normandy invasion.
• Something you Enjoy.  It should go without mention, but I have seen so many people decide to learn something impressive that they don’t really enjoy.  Learning is about you and your enjoyment.
• Make it Fun.  Lets face it, “All work and no play makes Jack a dull boy.”  Learning like any other skill only sets in if you really enjoy it.

Make a commitment today to learn one new thing and enjoy the process.  Share in the comments what you are choosing to learn.

Most people spend all their time trying to make themselves needed.  This trend seems to increase every time there is a downturn in the economy.  It is a quest for security and safety that drives employees to try and carve out niche tasks and programs in their corporation.  Small Business Owners attempt to lock their clients into needed tasks.  Rather than spending their time enhancing their clients businesses, they hamper their clients business in an attempt to secure a permanent customer.

As a business owner, practice not being needed for a change.  Support your clients on a path of enabling them to go beyond needing you.  People who are needed are too easily replaced.  It may seem counter-intuitive to help your client outgrow your services, but in helping them grow, you will grow.  Your best clients, those who you enjoy working with the most, are outgrowing you already.  If you want more of the best clients you need to create them by helping them outgrow you.  It is only then that you can transform your business from one that is needed to one that is indispensable.

What can you do today to not be needed?

I recently had the chance to take a week off and go on a cruise.  I was ready to escape the January temperatures and enjoy some Caribbean sun.  Little did I realize that we were about to experience record cold in the Bahamas and Key West.   You probably saw the news reports about sea life in jeopardy and the impact to regions of the country not accustom to near freezing.   On our return trip we actually heard a national newscaster say “I feel bad for anyone who decided to go to Key West this week for vacation.”  Don’t get me wrong, it was a phenomenal trip.  I enjoyed every minute of it and hope to be able to go again sometime.

What I found interesting was watching the two distinct reactions to the weather.  One reaction was to get angry, while the other reaction was to resolve to enjoy what we had.  While the weather was understandably disappointing, and high winds forced us to forgo one of the island stops we had planned.  I was amazed to see people walking around the ship pouting about how bad we had it.  Here we were on a floating paradise, surrounded by people whose entire job was to wait on us and rather than enjoying what we had, some spent the day in their room watching TV.  Rather than enjoy the enviable pleasures they had, they spent their time focused on those they had missed.

It made me think about being a business owner.  How easy it is to look back at 2009 and give into the media hype seeing only the bad.  I’ll admit, I would have liked 2009 to have brought more growth, but the economy is only a small part of the story.  I am a business owner.  That alone is a privilege that many will never experience.  I get to work with other business owners.  Every day, every meeting, I get a chance to share in the eternal optimism that is behind every startup.  I am surrounded by giants.  At no other time in history have the truly great individuals literally been accessible to each and every one of us.  I have a wonderful wife and family.  On those days in every business owners life, when you wonder why we chose the road less traveled by, that is when my family reminds me that they believe in me, that they see my vision, that they understand.

As we look forward to 2010, let us remember that it is up to us to choose our own outlook on every day.

One of my favorite Abbott and Costello routines is from an episode of their TV show called The Army Story.  In it, Bud Abbot is trying to cheat the perpetually juvenile Lou Costello in a game of craps.  Lou admits to never having played the game before and Bud explains the game as they go along.  As Lou keeps winning, Bud begins changing the rules.  By the end, Bud falls afoul of his own modified rules and Lou ends up winning all the money.

As a business owner, this skit sounds all too familiar.  We have all been in this situation before, especially in the early years of business.  Either we get lured in with false flattery and kindness or we are forced to deal with an established competitor or business bureaucracy.  Soon we find out that they are changing the rules to protect their position.  As discouraging as this can be, how you react will determine whether you come out on top.

Here are a few things to remember next time you find yourself in a game where the rules keep changing:

1. If you know that someone is trying to cheat you, one thing is certain, they have already underestimated you. Nobody cheats unless they are sure that they will get away with it.  They never expected you would figure it out, but you have.  This provides you with a unique advantage.  Take a step back and consider how you can use this advantage to win.  Most people who change the rules do so because they feel threatened.  They are cheating because they do not want you to realize that you already have the upper hand.
2. The Law of Unintended Consequences. People who are desperate enough to change the rules rarely take the time to consider the full consequences of those changes.  Take notes, get the new rules in writing, pay attention.  Before long they will get caught by their own rules.  It is inevitable.
3. Karma. My friend Daniel Waldschmidt, author of The DEW View, often talks about investing in Karma.  What goes around truly does come back around.  Take some extra time to invest in your good Karma.  Your opponent will reap their bad Karma and there is nothing you have to do to make it happen.  The true irony of Karma is that the consequences of our bad Karma are usually received from our own hand.
4. “A Sad Little King of a Sad Little Hill” – River (Firefly).  Your opponent is trying to stay in the lead by blocking you rather than outrunning you.  In nearly every situation where I have found myself the supposed victim of changing rules, I end up feeling sorry for my opponent.  As an entrepreneur I cannot imagine anything more painful than realizing that you are at the pinnacle of your career, that you are as far as you will ever get.  It is the curse of bureaucrats and middle managers.  Trying to defend what little illusion of power they have.  Trying to justify their own existence.  Trying to impress people of power who will never see them as significant.  Truly, they are “a sad little king of a sad little hill.”
5. My Grandfather, who stormed the beaches of Normandy, once told me that no one who cheated at cards survived D-Day. You are not the only person that your opponent is trying to cheat.  Rest assured, there are plenty of other people out there just waiting for the perfect opportunity for revenge.  Make sure you are not one of them; revenge often destroys both parties involved.

Next time you find yourself in a game with changing rules, decide that you will come out the winner.  It will take a little discipline not to react out of anger or desperation, but it will be worth it.  There is nothing more satisfying than taking the high road and winning because you have the moral character to succeed.

I have always believed the best path to understanding is not the quest to know the right answers, but rather the quest to know the right questions.

Even a schoolchild knows that the Earth rotates on its axis every twenty-four hours, but few adults have ever watched the cycle of the rising and setting sun and asked themselves “How?”.  Throughout the ages we can see examples of men whose profound understanding of their questions about their universe have taken them farther than we can hope to go.  Paradoxically, this is holds true  even though we now know that their understanding of the answers about their universe were dead wrong.

I have often thought about what questions truly define the entrepreneurial spirit.  Since I have four-year-old twins, the simple question that stands out in my mind is “Why?”.  I hear the question every day more times than I can count.  It almost becomes the white noise of my relationship with my children.  And yet, it is one of the greatest questions that we, as entrepreneurs must have a profound understanding of if we are to succeed.  Why did we break free from the norm to start and run our own enterprise?  Why did we trade the apparent safety of a paycheck and trade it in for the apparent risk of entrepreneurship?

I enjoy the responses of those who have never taken the time to attain an intimate connection with the question.  The most common response they offer is “To be my own boss”.  That makes as much sense as a teenager joining the marines because he is tired of his parents telling him what to do.  How about we do it “for the money”.  You could paper the world with the get rich quick promises that are full of answers, yet can be identified by their unnatural lack of real questions.  “To have more time.”  Goodbye 9 to 5, hello 7:00 AM until whenever the work is done (usually about 4 hours after you thought it would be done).  “To spend more time with my family.”  You will understand that this one does not hold water when your toddler starts pretending to go to “meetings”.

Don’t get me wrong, each of these answers holds some truth.  But each is also a cop-out.  When is the last time you really forced yourself to answer that question.  Why do we do this?  To echo the famous words of George Mallory, when asked why he wanted to climb Mt. Everest.  “Because it’s there.”