Revenue Journal®

The economic news is in full tailspin mode. Cash is tight. It’s harder to find a job than it was, although employers are still hiring. Retirement savings are shrinking, spoiling the plans many had for their use. The pundits are even starting to utter the “D” word. Politicians and the media are telling us it's terrible, and it's going to get worse.

What now?

Now it gets really, really fascinating.

For obvious reasons, I was thinking about "thanks" this week. And, because I never stop thinking about revenue, the two subjects came together. There's a saying, "To him who has, more will be given." I think that saying is often misinterpreted, because of the unstated truth underlying the statement.

The only way you can truly "have" something is to be satisfied with it and appreciative of it. If you are thankful for what you have, you will take good care of it. You will cherish it. You will look for ways to add other similar things to your life. This is how that "to him who has, more will be given" promise comes true.

How does this apply to revenue? In just about every way.

She runs a hot dog shack on the waterfront of a major harbor. She's a tough old bird. Her name is Abbey. She serves hot dogs, burgers and coffee to the industrial workers from around the harbor.

I was standing there along with the workers, last in line, waiting to order. It was obvious that Abbey was always in a permanent bad mood, and always saying "Nope, can't do that." I had already heard from others that "No" was her favorite word. Someone went to her for a cup of coffee at one point in the day, and she said "I'm not serving coffee now." He smiled and pleaded, to no avail. She only served coffee when she wanted to serve coffee, in spite of the sign saying "coffee" to the side of the window.

Finally my turn came, and there was no one else around. We struck up a conversation, and I could see that Abbey had a good heart. She asked me what I do for a living, and I told her that I teach people how to make money. "Oh," she said, enthusiastically. "I need to talk to you! So, how do you make money?"

I've always been more comfortable working with "bootstrappers" than the highly leveraged, venture-capital-funded companies. There always seemed to be a distinct lack of realistic thinking in the venture-backed companies.

I've always attributed the unrealistic approach of venture-funded businesses to several factors, including:

• Multiple layers of "playing with other people's money" – in the sense that the CEO of the financed company is spending money obtained from VCs, and the VCs obtained that money from investors
  
• No connection between "money the company has available to spend" and actually meeting customer needs
  
• Having to answer to VCs, rather than to the actual customer

  Lately it occurred to me that the last item was the most damaging, and not just because the VC is often out of touch with customers, may be clueless about the business and/or industry he is investing in, or is just on a power trip.

Someone who is frustrated - and whose frustration could be eliminated by an appropriate product or service - represents a revenue opportunity. That kind of frustration is a positive thing. The bigger the frustration, the bigger the opportunity.

However, on the other hand, if you're running a business, you can't afford to have any frustration inside your company walls. Companies with a lot of internal frustration do not do as well as the companies with little or none. That's just a fact.

If a company's frustration factor is low, everyone is happy - including customers, partners, employees, and managers. Customers return to the business again and again to make purchases. Partners make a point of signing up. Employees work harder and are more loyal. And everyone gets more done - including managers.

In my first book, Rivers of Revenue, I talk about the fact that money is always flowing somewhere. Where do these "rivers of revenue" come from? Needs and desires. People, everywhere, have needs and desires, and they're looking for solutions. If lots of people have the same need or desire, you have a BIG river. Going after opportunities is a matter of identifying the needs and desires you can satisfy, and figuring out how you can satisfy them.

All of this sounds pretty straightforward and logical when you're enjoying a steady flow of revenue. But, if your river starts to dry up, life changes - fast.

Careers and businesses used to last a lifetime. Not anymore. You'll be lucky if what you are doing lasts for five to ten years.

When your river dries up, everything that you did, everything that made sense, everything that "worked" for years suddenly just doesn't work any more. You are stumped. You will have no idea what to do next.

By now you've seen the ridiculous Seinfeld ads (shoe ad and family ad) that Microsoft is running. And, additionally, there's this ridiculous article in the NY Times about how Microsoft is tired of being kicked around and isn't going to take it anymore.

The article includes these quotes:

Apple executives have been "using a lot of their money to de-position our brand and tell people what we stand for," said David Webster, general manager for brand marketing at Microsoft in Redmond, Wash.

"They've made a caricature out of the PC," he added, which was unacceptable because "you always want to own your own story."
The campaign illustrates "a strong desire" among Microsoft managers "to take back that narrative," Mr. Webster said, and "have a conversation about the real PC."

You can almost hear Mr. Webster sniffling as he makes these remarks.

Labor Day weekend. A great time to ponder the bigger picture, to think about what really matters. All of this came home to me in a new way, watching a video. It's twenty minutes long, so you'll probably want to watch it at home.

The part we're going to focus on comes fifteen minutes into the video. But, if you fast forward, you will miss seeing an example of a great teacher. Since a big part of successful management is teaching, the 15 minutes are well-spent. But enough about the video...take a look.

In all my years of musical education, from the time I was 8 through college, no one even came close to communicating the essence of music in the way that Zander manages to do in this one video. Even better, what he says about shining eyes captures so much of what I try to communicate in this blog every week. It is the essence, the capstone, the critical element that is exceedingly rare in all business articles.

No matter what you're selling, but especially if you're selling something technical or complex you can't assume that "the way we've always done it" will work for you now. "The way we've always done it" usually means that the salespeople have minimal training, and are set loose on customers.

Big Mistake. It was a smaller mistake back when salespeople could be "order takers," (I think that phrase was last heard sometime last year), but it's a catastrophic mistake now. Why? Because buyers have changed their behavior. Companies that adapted to those changes are doing OK. Those who haven't are slipping, fast.

The most significant change I see in buyer behavior is an increase in impatience. They have no patience for websites and salespeople that don't answer their most pressing questions. That's the first big hurdle you must overcome. Then, if you manage to answer their important questions, and meet their "Critical Criteria," they are impatient to make the purchase. They want your product or service NOW.

Let's look at these two dynamics separately. We'll do it using a fairly simple real-life example, but one that can be applied to even the most complex type of sale.

Last week, over a 5-day period starting on Thursday, I flew to from Providence to San Jose to meet with a new client, then to San Diego and Tucson to visit family, then back to Providence. I flew Southwest all the way. It was pleasant, as it always is. Whenever I fly domestically, Southwest is my first choice.

Southwest is famous for its "love" theme, tenuously connected to Love Field in Dallas, where they started. It's such a departure from the other airlines, whose snarly bureaucratic behavior I've covered here before. What I want to focus on this time is how that "love" manifests itself in the customer's interaction with the airline.

Of course, it starts at the top.

It's hard enough to get customers. In tight times, the last thing you want to do, after you've gotten a customer, is to lose them. Not a good idea. But, it happens all the time to lots of companies. Why?

One reason. Yes, that's what I said: ONE reason. In every situation, for every type of product or service, in all the thousands of customer interviews I've conducted, it's obvious that there is really only one reason why customers leave. The reason:

"You stopped caring about me."

You want to grow your revenue - you need to grow your revenue - but the big question is: How?

Do you take what you've already done and try to do the same thing in another location? Do you partner with others who are doing something related to what you're doing? Do you offer more products and services - to current customers, or new customers? Do you continue doing what you do now, but expand your distribution channel - selling through more portals, distributors, resellers? Do you make it easier for people to buy from you, on your current website? Do you increase your marketing spend? Do you hire more salespeople?

The real answer is not what to do, but how you go about figuring out what you should do.