The £60 Pizza Meal

One of my friends recently told me that he and his wife had been out to a local Pizza restaurant which was not one of the well-known restaurant chains.  He ended up paying over £60 for a simple pizza meal for two and a bottle of wine.  This was significantly more than he was expecting.  He felt that the quality and ambiance was no better than the equivalent meal at a chain Pizza restaurant where (with the readily available discount vouchers) he would have only paid around two thirds of the price.  He remarked that, because the quality didn’t justify the price, he would not be visiting this particular restaurant again!

This is a great example illustrating that customers often have a sense of ‘fair value’ – something which is determined by a combination of price and perceived quality as illustrated below.

The concept of fair value means that businesses need to pick their strategy and marketing positioning very carefully.  For example, Poundland and Louis Vuitton are retailers at different ends of the price spectrum.  Poundland’s market positioning is ‘economy’ whereas Louis Vuitton’s is unashamedly ‘premium’ – but in the minds of their target customers they both offer ‘fair value’.

The pizza restaurant which my friend visited does not seem to understand this price-quality relationship.  The dining experience suggests it lies above the ‘fair value’ line in the above chart, in the area of inferior customer value.  I shall be watching with interest whether this particular restaurant can survive with it’s current market positioning or whether it will need to change something.

As a result of this example, my questions to your business are:

• What is your market positioning?
• How are you placed relative to the ‘fair value’ line for your market sector?
• What can you do beat the competition by providing superior customer value?

As a Vistage Chair in the South East UK, Alex Kent works with Managing Directors and Chief Executives who are committed to becoming better leaders, making better decisions and achieving better results. Click here for further details

What’s Your Story?

A few weeks ago I participated in the South East and London Vistage Open Day.  This was a very popular workshop attended by over two hundred Vistage members, their key staff and guests.

On this occasion the Open Day included a session from the ever popular Vistage speaker Marcus Child.  I have now heard Marcus on  four separate occasions and each time it was a fresh and highly motivating experience.

One of the themes discussed by Marcus, and which particularly struck a chord with me at the time, was that of employee engagement.  Apparently you are lucky if in your business more than one third of your employees are on average actively engaged in their jobs.  It is also likely that there are people in your business who are actively disengaged (sometimes called internal terrorists!).

Based on my experience of working with and mentoring successful business leaders it appears that there is one consistent factor which helps to engage staff in the business.  Now, I’m not saying that this is the only factor but it does seem to be an important one.

The factor that I have identified is that the leader is able to tell the ‘story’ of the business purpose and objectives – sometimes called the business vision.  Often people launch into jargon when describing their ‘story’ and/or have a ‘story’ which is not clear or engaging.  Without the right ‘story’ I think it is very difficult to create a business in which staff are actively engaged in their jobs.

So some questions for you to consider:

• If you run a business, what’s your business story?  How engaging is it? (You will need to ask your staff to understand the latter).
• If you work in a business, do you know and understand your business story? How engaging is it? If it’s not engaging you what would need to change? How could you raise this issue?

£400,000 Savings In 3 Months!

As a Vistage Chair, I facilitate regular monthly meetings of an invitation-only group of successful business which draws its members from the Sussex and Kent area.  In a number of the meetings we bring in expert speakers who can provide the latest business knowledge and thinking, to help members stay ahead of the competition.

In September 2011 Vistage speaker Malcolm Smith held a negotiation workshop  with the group.  He made a bold opening statement.  By applying his negotiation tools and techniques the group would – in a short space of time – be able to save £250,000.  Needless to say the members took this with a pinch of salt!

In December 2011, when we reviewed what had been achieved, it became clear that the members had not only reached this target in the space of three months, they had in fact achieved savings of around £400,000.

What was particularly interesting is that the members managed to achieve this by seeking ‘win-win’ negotiation outcomes.  Malcolm’s phrase “this has got to work for us” has quickly become a mantra for some of the businesses, and everyone is now aware of the importance of having a list of negotiation tradeables.  One of the group members also said: “We’re having so much fun negotiating now!”

Dr Alex Kent is a Vistage Chair in the South East UK who runs an invitation-only group for senior business leaders. In this role Alex works with Managing Directors and Chief Executives who are committed to becoming better leaders, making better decisions and achieving better results. Click here for further details

Do you go with your ‘gut feeling’?

No, this is not another suggestion for a New Year’s weight loss resolution! It’s about ignoring your ‘gut feeling’.

Many of the successful business leaders that I have worked with have a great gut feeling for their businesses. In other words, they have a good instinct for what will or will not work for their business.

I’m not saying that a ‘gut feeling’ is going to be 100% reliable. However, problems can occur when you start to ignore your instincts. I come across examples quite regularly when business leaders have felt something was not quite right but didn’t do anything about it early enough. Reasons for this might include lack of time; or they couldn’t put their finger on what was wrong; or they simply didn’t trust their instincts.

Therefore, my suggestion is that you regularly take time to identify and think about what your gut feelings are telling you. What is causing you unease about a particular situation? What additional time might you have to invest later if your gut feel proves right but you took no action? Don’t ignore your instincts; if they have helped you in the past your gut feeling could be a very valuable and perhaps under-rated asset.

Dr Alex Kent is a Vistage Chair in the South East UK who runs an invitation-only group for senior business leaders. In this role Alex works with Managing Directors and Chief Executives who are committed to becoming better leaders, making better decisions and achieving better results. Click here for further details

Be Careful When Reaching Conclusions!

It can be all too easy reach a conclusion, but in many situations the underlying assumptions can cloud the facts, or indeed simply be wrong.  Unfortunately it’s a common trap in which to fall, and something most if not all of us will have experienced from time to time.

What I have found most helpful is to try and separate a conclusion into a fact and an interpretation.  Consider this in terms of the following mathematical equation:

 Conclusion = Fact + Interpretation

Let me give an example.  I have waited in all day for an important delivery but it did not arrive.  I jump to the conclusion (and perhaps get angry) that the sender did not do what they had promised.  The fact is that the delivery did not arrive.  However, without any other facts, everything else is simply my interpretation. There could be any number of reasons which have caused the missed delivery.

Why might this fact/interpretation analysis be an issue you should consider?  One reason is that our attitudes are often strongly influenced by the conclusions we reach.  If we have reached a conclusion on a poor interpretation of the facts then it’s likely to be a poor, even potentially damaging conclusion.

So next time you reach a significant conclusion, I would suggest that you try and understand your conclusion in the context of the facts and the interpretation you have placed on them.  Does this tell you anything about the validity of the conclusion you have reached?

Dr Alex Kent is a Vistage Chair in the South East UK who runs an invitation-only advisory group for senior business leaders. In this role Alex works with Managing Directors and Chief Executives who are committed to becoming better leaders, making better decisions and achieving better results. Click here for further details

The Time Thieves

Business leaders sometimes complain to me that they don’t have enough time.  For example, they arrive at work with a list of things they want to achieve during the day.  When they look back at the end of the day, they are frustrated that they only achieved a fraction of what they intended.  Does this sound familiar?

Beware there are always ‘time thieves’ about.  People and events will – even with the best intentions – steal your valuable time.  These ‘time thieves’ can take many forms, for example:

• A number of competing priorities (so you jump from task to task)
• New opportunities (you need to strike while the iron is hot!)
• Unplanned events (dealing with emergencies; staff problems; customer and supplier issues; internal and external events etc.)
• Others don’t do their job (lack of clarity; or commitment; or motivation; poor delegation)

But remember that individuals can also waste their own time.  In this context, a couple of the  biggest time wasters are:

• Over promising.  Often we know at the outset that we can’t get something done in time – but we don’t admit it.  In these cases it’s essential to work out a realistic goal; otherwise you are wasting other people’s time, not just your own.
• Unfinished business.  This can have a hold on you, and take up more energy than you realise.  It is also typically something which can wake you up in the middle of the night because you are continually thinking about it.  However, if you have identified a clear next step then you won’t waste time going over and over the issue in your mind.

So the questions for you to consider as a result of this blog:

• Who or what is stealing your time?
• What time are you wasting? and
• What are you going to do about it?

Dr Alex Kent is a Vistage Chair in the South East UK who runs an invitation-only group for senior business leaders. In this role Alex works with Managing Directors and Chief Executives who are committed to becoming better leaders, making better decisions and achieving better results. Click here for further details

Cross-Selling Makes Me Cross!!!

Increasingly businesses – particularly retailers – are attempting to ‘cross-sell’ to their existing customers.  By cross-selling I mean offering customers other products and services in which they might be interested.  Often they are trying to offer products or services which provide higher margins for the business.

I don’t know where and how this trend has arisen.  Possibly it has come through advice from management consultants or sales and marketing experts.  Possibly businesses have realised that it’s easier to sell to existing customers than to find new customers.

Based on my observations, I think that there is a distinct danger that businesses are taking this strategy too far.  Let me give you a couple of High Street examples.

- The Post Office.  Nowadays, PO counter staff seem very intent on selling additional services such as  insurance, travel money and financial products.  The result is they don’t focus on what the customer came in for and every transaction takes longer.  The customer experience is worse and counter queues lengthen!

- WH Smith.  My wife tells me that if she had 10p for every time she shopped in WH Smith and was asked at the cash till “Do you want to buy some half price chocolates with that?” she would be really quite well-off now.  The effect of this store’s drive to sell more at the point of sale is that my wife will now avoid going in to the shop.

So I have a couple of questions for your business:

1) Are you ‘cross-selling’ and (if yes)

2) Is cross-selling actually reducing rather than increasing your business?

If you don’t understand your customers’ needs you may be surprised with the answer to the second question!

Dr Alex Kent is a Vistage Chair in the South East UK who runs an invitation-only group for senior business leaders. In this role Alex works with Managing Directors and Chief Executives who are committed to becoming better leaders, making better decisions and achieving better results. Click here for further details