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Why Pricing is the Biggest Lever You’re Not Pulling

Posted on January 25, 2017 | No Comments
Categories: Business Toolkit, Entrepreneur, Sales, Strategy

Price TagPricing is a powerful lever but we don’t pull it often enough. Thinking through your price point as well as your pricing model can dramatically improve profitability.

Pricing is one of the most critical decisions an organization makes. A 1% difference on top-line price is worth a 10% profit increase on a business with a 10% gross margin. That’s huge! All too often we don’t think of pulling the pricing lever because it seems small. “Heck, it’s only 1% or 0.5%. Why bother?”

Why bother? I’ll tell you why to bother!

Pricing and Profits

By way of example, if you’re selling your product for $100, and you make $10 per unit, that’s a 10% margin. If you raise your price by 1%, and go from $100 to $101. That incremental dollar drops straight to the bottom line! Now you go from making $10 to $11. That’s a 10% improvement on the bottom for a 1% improvement on the top! Even with a 0.5% price increase you’re still increasing your profitability by 5%. Better yet – if you’re a publicly traded company, your stock price is based on a multiple of your earnings so that 5-10% profit improvement gets multiplied by your P/E ratio which boosts your stock price. Pricing just got compelling, didn’t it?

Pricing has a huge impact on your overall profitability. You need to understand how your product or service is priced. Is it a one-time fee? Is it a subscription model? Do you have a razor and blade model where you sell something really cheap, but the replacement parts are an ongoing stream of revenue? Do you sell accessories or extras with your core product? Do you offer additional services or warranties? Different prices for different customers and different markets and features are typical for most businesses. The better you understand your pricing model, the easier it is for you to increase prices without undercutting the volume of product you sell.

Cost-Plus versus Value-Based Pricing

Two common pricing approaches are cost-plus or value-based pricing. Depending on your industry, your product/service, and customer behavior, one of these models may be more appropriate than another. That said, just because you currently have one pricing model, that doesn’t mean you can’t change to another.

Let me explain the difference between a cost-plus pricing model and a value-based pricing model. Read More…

3 Things You Must Get Right if You Want Happier Customers

Posted on January 23, 2017 | No Comments
Categories: Books, Business Toolkit, Customer Service, Entrepreneur, Guest Blogger, Sales

Finger Pressing Customer Loyalty ButtonCustomer loyalty takes just as much energy to build as new customer growth. Unfortunately companies spend too much time focusing on new customers and not taking care of the ones they already have.

Today’s post is by Noah Fleming, author of The Customer Loyalty Loop (CLICK HERE to get your copy).

Most executives I talk to feel like they’re drowning in data and yet anyone and everyone within the organization is telling them they need more and more data! Do you ever feel overwhelmed with all the things you need to worry about, let alone the collection of “big data” with the belief that data might help you generate better customer relations, or a more loyal customer?

I’m going to let you in on a big secret. The companies and clients that I work with who are at the top of their games, or continuously increasing revenue are only really placing a concerted effort on three key areas. I’m going to warn you, there’s nothing ground-breaking here that you don’t already know, but how these companies are focusing on these areas might surprise you.

I’ll tell you until the cows come home that most organizations are too focused on the new customer at the expense of their existing customers, but I’m also a realist. The current customer is the beating heart of any great business, but you need new customers to grow. Anybody who tells you otherwise should be thrown from your office. Today we’re going to about new and existing customers.

The first area that these companies excel in is their uncanny ability to sell to their existing customers more often. I said sell, not just “market to,” and not just putting offers in front of them, but selling. You need the same level of gravitas and effort that is put towards new customer acquisition, applied to selling more to your existing customer base. That requires a customer retention process. Most businesses have a sales process but not a retention process. The best companies do.

I once heard an author and marketer say that all great sales and marketing is just about sharing your message over and over again. He might have been half right, once. A decade ago, maybe a quarter right. Now, it’s more like a tenth.

If you want to sell to your prospects and existing customers either the first time or the sixth time, then you need to get three things right. But you need to get them right, all the time and every time.

Awareness

Read More…

How knowledgeable are you about global megatrends?

Posted on January 19, 2017 | No Comments
Categories: Leadership, Poll, Strategy

EKG Pulse Graph with Glowing Blue LineOur reader poll today asks: How knowledgeable are you about global megatrends?

– Very — We monitor the pace of change, long-term, across all megatrends: 10%
– Somewhat — We stay informed only about megatrends we think directly affect our business: 40%
– Not very — Industry trends are our main focus: 29%
– Not at all — Too busy fighting fires to look beyond our business and the present: 10%
– What’s a megatrend?: 10%

The broader the better. While a slim majority of you are focused on trends beyond your own industry—such as global demographic, economic, political, environmental, societal, and technological trends—there is the possibility of missing out on key insights by being too selective. As this blog post points out, environmental disasters such as the recent earthquake in Japan can affect a wide range of U.S. companies and sectors. Engaging in broader scenario planning could make all the difference in securing a sustainable future for your company.

Do you agree with these poll results? Let us know in the comments below!

Mike Figliuolo at thoughtLEADERS, LLC

Did you enjoy this post?  If so, I highly encourage you to take about 30 seconds to become a regular subscriber to this blog.  It’s free, fun, practical, and only a few emails a week (I promise!).  SIGN UP HERE to get the thoughtLEADERS blog conveniently delivered right to your inbox!

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Guidance for New Leaders Who Want to Lead the Thinking

Posted on January 18, 2017 | No Comments
Categories: Books, Career, Entrepreneur, Leadership

Young Woman Sitting and ThinkingNew leaders must step into the space of leading the thinking for their organization. Leave the day to day work to your team and look over the horizon to what’s coming at you next.

I recently had the pleasure of being interviewed by Vera Ng’oma of ExcellicaGroup. Here’s the second part of our conversation on the power of personal leadership (you can read part 1 of our interview here). The conversation was based upon the methods I write about in One Piece of Paper: The Simple Approach to Powerful, Personal Leadership (CLICK HERE to get your copy).

Vera Ng’oma: What’s your assessment of the quality of leadership today and what advice would you give someone going into leadership for the first time?

Mike Figliuolo: I know the biggest challenge leaders face is the sheer velocity and volume of issues they’re dealing with at any given time. Resources are tight and they’re being asked to handle more responsibilities and make changes more quickly than ever before. The differentiator in terms of performance is the leader’s ability to see issues coming before they become big issues and their ability to delegate and develop their teams so they can handle the volume of work on their shoulders.

For new leaders, I encourage them to shut up and listen for a few months. Don’t change anything. Learn your business. Learn your people. Understand where you fit in that dynamic. It’s arrogant to think you can walk into a new team and start changing things on Day 1 because you know better than they do as far as what needs doing. Start out trusting their competence until proven otherwise. If you come in and start changing things without a full understanding of why things are the way they are, you’re going to cause unnecessary resistance and resentment. Invest some time in learning before acting.

VN: Are there some key characteristics that you believe every leader should have and what would be your top three?

Read More…

Face-to-Face With the Beast: Confronting Failure

Posted on January 16, 2017 | No Comments
Categories: Career, Entrepreneur, Guest Blogger, Leadership

Napoleon StatueAll of us face the ‘beast’ of personal failure at some point in our careers. While failure hurts, there are lessons we can learn from our own mistakes.

Today’s post is by Susanna Quirke of Inspiring Interns.

It’s a common business cliché: every failure is another route to success. But how to confront that fiasco in the moment?

According to the Statistic Brain Research Institute, 71% of businesses don’t survive their first ten years. For every start-up that folds, another entrepreneur is left fingering the dying ashes of their dreams. Furthermore, what about the everyman? When you’ve just missed your targets, or forfeited that promotion, it can be hard to look on the bright side. The demon of workplace failure is a ruthless one. For many people, it can be the end – of self-respect, if not their actual career.

Here are three reasons why you should look failure in the face and laugh.

Failure is Inevitable

“He that makes war without many mistakes has not made war very long.”

So, supposedly, said Napoleon Bonaparte. This great leader understood that the key to victory was not in a lack of defeat, but an ability to move past those suffered. And, at one point, he had the whole of Europe to show for it.

Failure in life is inevitable, as is loss in war. And, just as in war, a lost battle need not spell the end. To be a success in life, you must understand that failure is unavoidable – and, thus, something you must learn to accept.

Shalini Vadhera, a wildly successful American beauty entrepreneur, who got booted out of her own $21 million beauty brand, warns against associating oneself too closely with one’s career. That way, if things go south, you can have the presence of mind to keep things in perspective. This is not an end. In fact, if you play things right, it could represent a beginning – of a new chapter, a new direction. If you discovered a tree lying across your path, you wouldn’t give up on your journey, would you? You’d find a way around.

So don’t give up at the first sign of disaster. Often, it’s just your first test.

Failure Teaches You Things

Read More…

How often does your organization take big risks?

Posted on January 12, 2017 | 1 Comment
Categories: Communications, Leadership, Poll

EKG Pulse Graph with Glowing Blue LineOur reader poll today asks: How often does your organization take big risks?

– All the time — We make a lot of big bets: 10%
– Occasionally — We’ll take a big risk from time to times: 39%
– Rarely — We’re generally risk-averse: 40%
– Never — We’re extremely conservative: 11%

Even Odds. 50% are risk takers and 50% aren’t. If you’re making a lot of big bets, look back at your track record and see if they’ve paid off over the years. If you’re not making any bets at all, ask what’s holding your organization back from doing so. Conservatism can kill your business just as easily as excessive risk can. If you’re averse to risk, think about how to break big decisions down into smaller ones and make a higher number of less risky decisions. It’s an easy approach to overcoming your decision making fears. It’s a balance but taking no risk at all is perhaps the largest risk you can assume.

Do you agree with these poll results? Let us know in the comments below!

Mike Figliuolo at thoughtLEADERS, LLC

Did you enjoy this post?  If so, I highly encourage you to take about 30 seconds to become a regular subscriber to this blog.  It’s free, fun, practical, and only a few emails a week (I promise!).  SIGN UP HERE to get the thoughtLEADERS blog conveniently delivered right to your inbox!

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The Power of a Personal Approach to Leadership

Posted on January 11, 2017 | No Comments
Categories: Books, Career, Entrepreneur, Leadership

Personal Development Written on Metal GearsPersonal leadership is about being authentic. It’s about stepping outside uniform expectations of behavior and leading based on your personal values and beliefs. It’s that personal touch that unlocks the true power of your leadership.

I recently had the pleasure of being interviewed by Vera Ng’oma of ExcellicaGroup. Here’s the first part of our conversation on the power of personal leadership. The conversation was based upon the methods I write about in One Piece of Paper: The Simple Approach to Powerful, Personal Leadership (CLICK HERE to get your copy).

Vera Ng’oma: A lot is written on leadership but not much on personal leadership. How do you define personal leadership and why did you go with this focus in your book “One Piece of Paper”?

Mike Figliuolo: Personal leadership is about being an authentic individual. It’s about being yourself. Too many leadership models and approaches out there tell people “Look, we want you to be authentic but here’s exactly how we want you to behave.” That doesn’t make any sense. That advice is contradictory. It’s telling people that who they are is okay only as long as it fits a model for behavior. I prefer flipping that model around and saying “You’re okay how you are. Your beliefs and perspectives matter. Here are the job outcomes we want from you. Use your leadership approach how you think you’ll be most effective to achieve those goals.” That approach enables people to be truly authentic.

VN: Leadership is complicated but you’ve distilled it down to a core – the leadership maxims approach which evidently works. How did you assess that such a basic framework would be enough and effective as a tool?

MF: Simplicity is more challenging than people think. The more complicated a leadership model is, the less likely it is to be put into daily practice. It’s that daily practice that builds effectiveness. What I’ve learned with this very simple framework is that people actually use it. When you can write your entire leadership philosophy on your coffee mug like a CFO I’ve worked with has done, the odds of applying that philosophy all day every day go up dramatically. He’s distilled his approach to something simple and he carries it with him everywhere he goes. That constant reminder of who he is and what he stands for is more likely to guide his actions than some big, convoluted model written in a giant binder that sits on his book shelf gathering dust.

VN: Some of the feedback on your book is on how this approach to leadership is helping people learn about themselves. What’s been some of the feedback you’ve received that has pleasantly surprised you?

Read More…

Is Humble Leadership about How You Act or Who You Are?

Posted on January 9, 2017 | 2 Comments
Categories: Books, Guest Blogger, Leadership

Condoleezza RiceLeaders can be taught to act humbly. But humility is far more powerful when it’s connected to character.

Today’s post is by Bernie Swain, author of What Made Me Who I Am (CLICK HERE to get your copy).

Since the financial crisis and great recession deflated a lot of big egos, humility has come to the fore as an essential trait of successful leaders. The arrogant, my-way-or-the-highway swaggerer has given way to the empathetic, humble servant. A number of academic studies confirm that it’s a good thing. Researchers at the University of Washington Foster School of Business, for example, found that the most effective leaders tend to be humble people.

That’s certainly been my experience over more than 25 years at the Washington Speakers Bureau. We represented some of the most well-known leaders in the world—among them, three of the past four presidents of the United States, four prime ministers of Great Britain, five U.S. secretaries of state, and countless government and military leaders, journalists, authors, and sports legends. With few exceptions, I’ve found that the common thread in their character is humility.

That isn’t idle flattery. For the past ten years, I’ve interviewed more than 100 of those clients about what made them who they are. In case after case, the stories they told me about what shaped them involved humble circumstances and a deep sense of gratitude to the people who made a difference in their lives.

Take James Carville, whose fierce intelligence and relentless drive helped put an obscure Arkansas governor in the White House. James grew up in a small Louisiana town that was home to the world’s largest research and treatment facility devoted to leprosy. The decisive influences in his life: a mother who sold encyclopedias, a father whose dedication to serving his neighbors led him to keep his country store in business long after the big grocery chains made it unprofitable, and a large community of African-Americans subject to injustice that was obvious to the teenage James.

Read More…

How well did your end-of-year review process go last year?

Posted on January 5, 2017 | No Comments
Categories: Leadership, Poll

EKG Pulse Graph with Glowing Blue LineOur reader poll today asks: How well did your end-of-year review process go last year?

– Very well — We did a great job of reviewing performance: 12%
– Well — We did OK, but it could have been better: 31%
– Not well — It was somewhat ineffective: 11%
– Poorly — It was a frustrating waste of time: 18%
– What end-of-year review? 28%

Are reviews dead? Only 43% of you had a positive experience with end of year reviews. Hopefully that means people are set up to succeed this year and they received actionable feedback. For the other 57%, ask yourselves why the process is broken. It is fixable if you focus on key changes you can make. Is it the process itself or the quality of reviews being written. If the former, remember you own the process and have a responsibility to fix it. If the latter, you get out of the process what you put into it. Invest the time. For the 28% without an end of year review, as long as feedback is given on a regular basis and people are continuing to grow, that’s fine. If there’s no feedback, you have an impending crisis you need to get in front of.

Do you agree with these poll results? Let us know in the comments below!

Mike Figliuolo at thoughtLEADERS, LLC

Did you enjoy this post?  If so, I highly encourage you to take about 30 seconds to become a regular subscriber to this blog.  It’s free, fun, practical, and only a few emails a week (I promise!).  SIGN UP HERE to get the thoughtLEADERS blog conveniently delivered right to your inbox!

Read More…

6 Leadership Resolutions for a New Year

Posted on January 4, 2017 | 1 Comment
Categories: Entrepreneur, Leadership

Happy New Year on a Glass of ChampagneA new year provides a fresh start. Leaders would do well to assess how they can be more effective in the coming year before getting overwhelmed by the day to day.

Happy New Year everyone! I hope you had a restful, safe, and enjoyable holiday season. Now get back to work!

Not so fast. There’s still time to pause, catch your breath, and be thoughtful about how you want to tackle the year ahead. I enjoy the holidays because they offer time to reflect. The work world slows down for a few weeks and you can think about what went well that year, what didn’t go well, how you want to grow, and what you can do to improve yourself for the year ahead.

In the spirit of saving you some time in case you haven’t yet used the holiday period to be reflective, I’d like to offer a list of resolutions for the new year to get you started.

1. Take better care of yourself.

I’m eminently qualified to opine on this topic after having two heart attacks in the last few years. Changing lifestyle can be a struggle. You have to overcome excuses, give up things you enjoy (sweets, naps, sitting on the couch), and put in some effort. Trust me on this though – you’ll feel better and be more effective if you invest time and effort in taking care of yourself. Go get a physical. Know your numbers. Change your diet. Drop a few pounds (this one takes time and is a constant battle to eat right). Exercise – even if it’s only a 20 minute walk a few times a week. I’m a convert. I won’t say this is easy. It requires dedication. That said, it’s the sum total of small acts that will make a tremendous difference over time.

2. Stop blaming.

Read More…

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