Entrepreneur Best Practices: #6 Learn To Cut Bait …early
Not all customers are good customers, and not all new business is good new business. Entrepreneurs are often faced with a dilemma; do I compromise my price, and or my service to make the cash register sing?…in these economic times I probably should right?
The answer is a definitive: NO.
Market leaders provide value and realize a fair value exchange from their customers.
Market losers chase every sale, and often learn to regret those they should have passed by.
When you land an account, a customer you should have “thrown back” they often bring a new set of problems;
They are often “time vampires”…sucking the life out of you
They do not value your work and will always be working you to discount what your do
They become service nightmares
They often short pay you
They often become a collections problem
Sometimes you do the work and they never pay you (I particularly hate this one)
…that is why we must learn how to “cut bait” and get back to fishing.
I enjoy fishing. I can spend hours out fishing enjoying nature and the quiet. It’s one of the few things I do that helps quiet my busy mind like church. Often times when I fish in a new fishing hole I am not familiar with… I get snags. You know …you have your bait in the water, and something takes the bait. It could be a fish, (and you hope based on how your fishing rod is bending a BIG fish) but more often than not you have a snag.
On rare occasions it actually is a large fish. One time I was convinced I must have snagged my bait on an underwater log and much to my surprise found a large cat fish on the other end of my line.
More often than not though whatever has my bait is a distraction, a snag and it is something that is taking me away from doing what I love to do…fishing and catching fish.
What we must build as entrepreneurs is the discipline to “cut bait” early and get back to fishing.
We often waste too much time “hoping” we have a large fish on the other end of the line when there is a high probability you have a YAFO snag.
For example, ever since my eBook about the 50 ugly truths of being an entrepreneur came out and the pod cast with the struggling entrepreneur, I have been receiving email and phone calls.
I received a call from a local financial planner whose business revenue from fees has dropped over 40% in the last year and wanted to know if my 10 step process would work for a financial planner. The answer was quickly yes as I used this process in the financial industry serving a 401k third party administrator and we quickly grew his business. Keeping with my fishing analogy, I had a nibble.
After answering his questions he asked if he could take me to lunch to learn more…I have one on the line…(I think) As we enjoyed some great Chinese food, he wanted to know my 10 steps and how it works. I explained that that is what people pay me for, however I will be happy to share some success stories I have had using this process. As we closed lunch he asked I send him a proposal and he said …”but remember I am a financial advisor and not one of those big companies you help.”
To a fault I love helping people, so I wrestled with a price model that would drive the growth he needed and compensate me fairly for the time I would be giving his project. I developed a program that had a modest upfront cost, a monthly retainer and an aggressive compensation for me on every new account my work landed for him.
I compromised my standard price model to help him. We went back and forth for days with emails and eventually he asked for only the small upfront fee and no compensation on the business my work would bring him or monthly retainer….and I almost took it, bur instead…
I quickly cut bait.
I should have cut bait even sooner as in the flurry of emails I quickly learned he was more attached to the “cost” and not the “outcome “of my work. He has been paying a coach a modest amount per month for years and thought I should match or beat this price. I asked him to read all the nice comments people I have helped in the past put on my web site, linked in, and so on. I even gave him some past customers to call….but his attachment was on cost not benefits, and he definitely did not have a strong enough desire (yet) to have his problem ( pain) solved.
Where I blew it was not cutting bait sooner. As I have shared, I just love helping people, particularly leaders with an “entrepreneurial spirit”. However after I shared my compensation model and I modified it to meet his needs that we discussed, and he “snagged” I should have cut bait earlier.
While you wrestle with snags other fish are swimming by…often big hungry ones.
Market leaders know the value of cutting bait early and getting back to fishing.
Market losers chase every deal and compromise their business models, products and or services and are always disappointed in the end.
Having reeled in my share of tree limbs in my days on the lake, you spend time that could be out casting into better waters only to reel in something that at the end of the day does not put food on your table.
The opportunity cost of chasing bad business is too great.
How about your company….
Do you chase every deal …compromise your model to accommodate every snag?
How’s that working for you?
Have you trained your salespeople in the value of qualifying new business early, and the power in cutting bait?
Are you currently struggling with what you hope is a big fish….but you know has a probability of not putting food on your table?
