Your Customers and Business Crave Simple — Stop Complicating Everything
Riddle me this, Batman, how did Chipotle* get where it is today? How did Apple* create its commanding fan base? How did CrossFit(TM) quickly capture the attention of millions of people around the world?
Companies who create BIG products and BIG services all do something in common. They give their customer something REMARKABLE & SIMPLE.
In the case of Chipotle, you don’t have to think about what you’re getting. It’s a base (tortilla or bowl), meat or tofu, veggies (including salsas), dairy, and fat (guac). The ingredients are sourced from quality farms, the restaurants are clean, the staff is typically kind and helpful. You can understand the entire business model just by looking behind the counter. According to Chipotle’s founder, Steve Ellis, the company has essentially kept the same menu items since it began in 1993. They do not complicate the customer experience just to put an average food item into the market as a short term ploy. They keep a simple idea at their forefront; “Serve quality food from well sourced suppliers to your customers in a friendly, fast, and simple way.” It is this approach that has changed the fate of Chipotle. Ellis originally opened Chipotle as a way to make money to fund a high end restaurant. Chipotle quickly went from a “back up plan” for Ellis into his main business and evolved into what it is today. (check out this history lesson in Chipotle here: https://www.youtube.com/watch?v=wmH73Diqf5Q)
I get it, you are trying to make a name for yourself and you’re trying to set your business apart from the vast sea of other businesses. You feel like you need to put complex ideas into place. The goal is noble but results don’t usually follow suit because you’re forgetting a major tenet of business…
Your customers buy for THEM. They do NOT buy for you, your products, or your business. They don’t care if you like what you’re selling. They only like it if it makes their lives better, easier or more complete.
And, in a world where your customers have fewer free hours during the day and more options slapping them in the face, you had better be able to show them QUICKLY why your product or service makes their lives better.
Let’s get to the brass tacks…how can you setup your business in a way that allows you to be remarkable while not overly confusing your employees or your target market? While keeping the bottom line in mind, let’s take a look at the major parts of your business and how you can set them up for success:
- Products and Services — Like Chipotle, have you set your products in a way that your customers do not have to wonder what you are offering? Many service companies are very poor at creating and messaging their services to the market. It isn’t enough to say that you are a lawyer or a personal trainer. You need to make sure that you’re defining your product so simply that your target market can use their minds to think about why it’s helpful to them instead of wasting time wondering what the product actually is. In the personal trainer example, it isn’t a matter of how much schooling you have. It isn’t a matter of how fancy your equipment is. It isn’t even a matter of how “good” you are. It is a matter of WHY your service enhances the lives of your target audience. If you have too many service offerings at too many price points, you will lose your audience before they understand what you are selling. This is a huge reason why CrossFit(TM) found so much success. You walk into a gym and you know that you are going to workout hard with a group of people. Certainly there are a lot of people who don’t like that model but, for the people who like that sort of training, they knew instantly that this service was something that they wanted to try. Don’t complicate your products and services to sound smart or seem dominant in the market. Create your products and services so that they are very definable, very simple, very exciting, and very helpful to your audience.
- Marketing — If you aren’t tracking it, why are you doing it? Don’t waste your time doing things that aren’t moving your business forward. You can buy all of the Facebook ads that you want, are they working? Are they converting to sales? Do you know what your clients are doing from the time they see your ad to when they click the offer or to your website (click through rate). Do you know if those prospects are buying over time (conversion rate)? Now, take Facebook and couple it with Digital Marketing (email), radio ads, event sponsorship speaking engagements, etc and you have your entire marketing platform. I am not naive, there will always be art in marketing. You have to connect with people, you have to lay a base of your brand so that perhaps on the 4th, 5th , or 6th contact your customers have built a level of trust in you where they are ready to buy. But, you can setup tracking in two categories, brand recognition and conversion to sales. They work together, you know how effective each is, and you have a system setup to say “if I can’t track this, why am I doing it?”
- Human Resources (HR) — In small business, there is always a difficult give and take between having enough employee help and paying too much money for too little productivity. If you cannot point (track) to why an employee is working for your company then why are they there? On the flip side, if you have projects that you believe will be successful (AND you actually want to be more successful) but you don’t have the man power to fulfill those projects then you need to put more people into your business. The action is simple, take stock of how your people are helping or hurting your company, TANGIBLY, and make the decision to get people into more beneficial roles or get them out of your company. Of course not all employees lead directly to revenue like your sales people do, but you need to look at success rates in and around your projects and business lines to understand if your employees are helping your company succeed. For the people who are not tangibly correlated to profit you can look at components such as timeliness of phone support in the case of a support employee. You could look at timeliness of order fulfillment and inventory management for those directly involved with processing and shipping your products. If you do not know how somebody is helping, or will help, your company and you aren’t already extremely successful, meaning you don’t mind burning cash on unneeded expenses, you are merely putting your other employees in a negative position which hurts your company. Once your employees are in their respective seats, you need to make sure that they have a simple and positive process and outlook for their long term growth. We will explore this topic another time.
- Financials — Shocker again. What are you tracking? There is quite a large number of companies who are in one of two places. 1) They track nothing which actually complicates their operation because they don’t know where their money is or what they are doing with it. 2) They are spending way too much time looking at 30 different metrics but they don’t know what they are looking at nor do they know how these metrics can/will change their businesses. To simplify this process you need to get very very clear on a few things: 1) Revenue, 2) Cost of Goods Sold (COGS), 3) Gross Margin which is the Gross Profit (revenue minus COGS) divided by the Revenue, 4) Total Expenses, and Company Margin which is net profit (revenue minus expenses) divided by revenue. As a small business, if you know these number very clearly and you can see what is moving these numbers up and down (meaning what revenues and expenses are moving up and down) then you can understand where your business used to be, where it is at this moment, what is helping/hurting your business, and what you need to improve over time.
- User Experience — While user experience is a part of all of the above topics, what I want to define here is that you always have to think about how people are looking at what you do. Let’s look at Apple for a moment. Steve Jobs fought for decades telling his employees, investors, and board members that people wanted a simpler user experience with computers. If you remember, 15–20 years ago computers were defined by how many things you could upgrade with. You could add hard drive space, extra speakers, a CD Rom drive. The computer makers believed that by adding choices to the machines they were selling that they would have long term success. And, you know what, it worked…for awhile. It worked until there was a much more simple, yet remarkable product. The reason that the simple version didn’t catch steam right away is because the computer didn’t have enough “umph” initially. It wasn’t until Apple built a machine that thought about the end user’s ENTIRE experience that this worked. That user experience began upon unsealing the box and setting up the computer, which was easier. Then, it came with the user interface, which was easier. Then it went to using CD’s and speakers, which were easier. But, it didn’t stop there, the marketing was about the beauty and simplicity of the machine. You didn’t have to be a computer expert to run the computer. You could be an artist or a teacher. That feeling has run through the veins of Apple for about well over a decade and look at the company’s results since then. The moral of this story is that if you don’t think about how your users think about your products/services and your brand, you won’t be able to keep their attention or show them how great your business really is. Keep their experience simple and crisp and you are in a great place
In business, you either have to take market share from existing companies or you need to create your own market. For those of you who haven’t YET created the market changing idea, you need take market share from companies who ALREADY OWN IT. That means that you need to capture the hearts and minds of your audience. A great example of this phenomenon is Nest*. They have a product that can probably run all of the electronic systems in your house. How did they decide to come to market? With a thermometer system that is “smart.” The public sees a product that is simple enough to just pick the temperature that they want in their home. It’s no more complicated than that. Does that mean that the technology is simple? No, it doesn’t. But, it isn’t successful because of the coding, it is successful because the market knows what it is, why it helps them, and how to use it EASILY. In today’s day in age, when you only have a few seconds to capture an audience, you have to create a product that they understand AND you have to maintain that simple and unique user experience from the first contact point (advertising) through their jounrey with product/service (fulfillment), and then through the continued engagement of that same audience for years and decades to come (retention).
The business who implements simple strategy brilliantly well will find earlier and longer lasting success for all of their business lines.