Michael Loban is an Entrepreneurs' Organization (EO) member in Cincinnati and cofounder of InfoTrust, a digital analytics consulting and technology company helping marketers use data to make smarter decisions. He recently attended a CEO workshop with EO founder Verne Harnish and shared his top takeaways:
What better way to acknowledge the day than by sharing tips from Verne Harnish? Verne has made a significant impact on the entrepreneurial landscape by founding EO, establishing Gazelles Growth Institute, coaching thousands of leaders and authoring several bestselling business books.
I met Verne in 2015 at a Scaling Up workshop. We kept in touch, and though Verne doesn't offer one-on-one coaching anymore, he invited me to a recent CEO workshop.
There were 10 of us in Verne's class. Spending quality time with high-caliber industry leaders running businesses of different sizes spotlights the fact that at the end of the day, we all face the same issues.
I believe these tips resonate whether you're running a $100,000 or $100 million business:
1. Own your niche: The art of hyper-specialization.
Far too many companies make the mistake of marketing and selling their services to everyone. Verne's take: Find your niche--usually about 7 percent of the market--and then own 70 percent of that niche.
For example, don't be a marketing agency servicing everyone. Be a marketing agency that specializes in supporting restaurants or drill down even further by providing regional pay-per-click services for independent restaurants.
This strategy serves a dual purpose: You can become the best in your niche, and it will be easier to market yourself to similar customers. Find your niche and own it. Hyper-specialization and global sales are what produce big results.
2. Look within to maximize returns.
Entrepreneurs tend to think that sales, innovation or R&D produce the most significant return on investment. In reality, the highest ROI comes from leadership development. This means having the right people in the right roles and continuously helping them grow.
One enlightening exercise is to document who leads each business function in your organization. Without a designated leader, there's no accountability for meeting goals. If you find a function without an identifiable leader, it's time to assign one.
3. Make things easy for customers.
We live in a culture of convenience--everyone wants everything to be easy and convenient. Use this to your advantage: Ask yourself which aspects of your business are not easy for your customers, then transform those areas.
Consider various companies and services that you rely on. The reason they are so successful is that customers will often pay extra for conveniences that simplify their lives-- including grocery delivery, veterinary house calls, TaskRabbit and Amazon Prime.
4. Generate demand.
Today's unicorns have mastered the art of demand generation--think of Uber, Airbnb and Dollar Shave Club. Now analyze your situation: Are customers flowing in? This is the area to target for exponential growth.
Look around. Supply exceeds demand in almost every category. As entrepreneurs it's our job to understand demand, then make it work to our advantage.
5. Identify your chokehold.
Every business has at least one constraint that could limit growth. What is one challenge that, if solved, would be the key to your unlimited success?
Consider the history of Softsoap. The Minnetonka Corporation of Minnesota was the first to introduce mass-market liquid soap in 1979. However, Proctor & Gamble and Colgate were both positioning to enter the market, putting tremendous pressure on Minnetonka.
The key to the product's success was the dispenser. Without a spring pump--an item manufactured by only one factory at that time--any liquid soap product would fail. So what was Minnetonka's strategy? They asked the manufacturer how many spring pump dispensers they could produce in a year, and then bought every single one of them. Every single one.
It worked. Minnetonka enjoyed a virtual monopoly on liquid soap until Colgate-Palmolive acquired them in 1987.
6. Judge your sales manager using the No. 1 priority.
Verne asked our group, "What is the No. 1 priority for your sales manager?" As we kept throwing out answers, we kept hearing "maybe" from Verne--or in other words, "No, try again."
The answer is coaching. A good sales manager should spend at least 75 percent of their time coaching salespeople. If they are closing sales or doing anything but observing and instructing, then your process needs more work.
7. Make customers want to pay for sales calls.
This idea is simple, yet profound. So many entrepreneurs fail when going from founder-based sales to professional sales because salespeople never know the market as well as the founder.
Verne isn't saying that you should actually make customers pay for a sales call, but if your marketing and sales team provide enough added value that customers would be willing to pay for the knowledge and expertise about your product category--you're definitely onto something!