Take a systematic approach to small business public relations.
PR is a powerful small business marketing tool. By PR, we mean getting positive press mentions about your firm in local, trade and national publications.
These mentions are so powerful because they are seen to come from unbiased 3rd parties. So, they are more believable. People may think ad messages are just sales hype, but when they read about how great you are in the local business journal…well, it must be true.
A lot of people think that gaining positive PR is luck. No! It’s the result of a systematic commitment to generating media coverage.
The hardest part is getting the PR machine rolling. Once you get coverage, it just keeps on coming. The more coverage you get, the more the press will keep coming back to you.
Here’s our step by step system for generating positive press coverage.
Step 1 – Build relationships before you ask for the order! Target your media sources, including a growing list of Internet based media and news resources. Start networking with these media targets today by requesting editorial calendars, sending industry information, commenting on stories they write, passing on surveys and data, inviting them to workshops.
Tip: Network with the advertising sales folks at the publications too, they will give you lots of good information about who does what and where in the course of trying to sell you an ad.
Step 2 – Create three or four central media themes for the year that support your core marketing message.
Step 3 – Create a list of ten to twelve minor, but interesting, marketing related themes for ongoing PR. You need to fill in with volume while you are working on the front page feature.
Step 4 – Create a PR calendar and assign a PR theme and goal for each month. Focus on one publication or one writer and you will be amazed at how much you can accomplish. Remember to target editorial calendars (Publications will often assign themes to a month. Match your pitch to their theme.)
Step 5 – Write a fully developed pitch (start with our sample Media Pitch Letter below) for each of your major themes – A pitch is a story idea that you can “pitch” to a member of the media. This is not a press release, but more of a sales job. Wrap your story idea around a news angle or trend and package the pitch to interest the readers of a specific publication you are pitching. You can change and repackage your pitches as needed. These are reserved for your central media themes.
Step 6 – Formulate one page press releases (Send for the free Press Release Creator we talk about at the end of the article) with catchy headlines for each of your minor themes.
Step 7 – Once a month, target your core media list and distribute a press release or pitch for a major theme. Post all press releases on a national wire service such as PRWeb and send copies of your press releases to clients and prospects. Don’t forget op-eds and letters to the editor.
Step 8 – Follow-up with your core media list by telephone and offer some new piece of news or trend angle that you did not include in your pitch or press release.
Step 9 – Track media coverage in local and trade press, set-up Google Alerts for a number of key related terms and reprint for marketing purposes any media coverage received.
Step 10 – Send handwritten thank you notes (or t-shirts) to members of the media to thank them for an interview or mention.
Are you starting to get a glimpse of how combining advertising, PR and referrals can build momentum and create marketing energy? Try it and see the results.
Sample Media Pitch Letter
(Insert Date)
Dear (Insert Name of Media Representative/ Reporter):
(Intro – state the problem) Heart disease is the #1 killer of Canadian women. Unfortunately, only 57 percent of women know that heart disease is their leading cause of death and most fail to make the connection between its risk factors and their personal risk of developing heart disease.
(The “ask” – what you want them to do )In conjunction with The Heart Truth, a nationwide campaign raising awareness about women and heart disease, (insert Organization name) is asking you to consider producing a three-part series on women’s heart health. Your broadcast will send a clear message and go a long way in raising awareness and prompting action among your viewers.
(Summary – details about the story content) The requested series could explore the following themes:
Part I: The Problem—An overview of the impact of heart disease on women
Part II: The Risk Factors—A look at heart disease risk factors and how they affect women
Part III: The Solution—A practical action plan women can follow to find out their heart disease risk and steps to lower it
(More detail) The Heart Truth features a Red Dress as the national symbol for women and heart disease awareness. What’s a Red Dress got to do with it? A simple Red Dress works as a visual red alert to get the message heard loud and clear: “Heart Disease Doesn’t Care What You Wear—It’s the #1 Killer of Women.” To help enhance this message, broadcasters could wear red or wear the Red Dress Pin to complement the series. We can also help coordinate interviews with local female heart attack survivors and local experts on women and heart disease.
(Conclusion) We urge you to embrace this issue and help us alert women to The Heart Truth. Media coverage has proven to help raise awareness among its audiences and motivate change. Please consider including a series on women’s heart health to your news programming to raise awareness about this critical issue.
(Contact information) For more information on The Heart Truth campaign and to view the Red Dress Pin, visit http://www.thehearttruth.ca/the_campaign/
Please contact (insert contact name and information) to discuss the proposed series. Thank you in advance for your consideration.
Sincerely,
Free Online Press Release Creator Allows You To Instantly Create Powerful, Attention Grabbing, Perfectly Formatted Press Releases in an instant
Now even people who have never written a press release before can crank out professional looking press releases in a matter of minutes. Instant Press Release is the creation of a 20-year small business marketing pro and is absolutely free to use.
Instant Press Release is online software created to benefit a good cause or what we call “CareWare” In other words, you are free to use this powerful press release writing program at no charge, use it and tell your clients, friends, subscribers or anyone you like…if, at some point you decide you have gotten some benefit from it, please take the opportunity to donate a small amount to help the Ronald McDonald Children’s Charities.
Click here to use Instant Press Release.
Revolutionizing the way small businesses grow.
Tuesday, June 30, 2009
Wednesday, June 24, 2009
What's Your "Active Ingredient '90' "?
When I was growing up in the 1950's, Shell, the gasoline company, was advertising that their fuel contained "TCP" an additive that increased horsepower and made your engine run better. There was no reference to fuel economy that I can recall—who cared? ...gas was about 20 cents a gallon!
Anyways, Shell sold a helluva lot of gas with this tactic.
Thing was, all gas contained TCP, but Shell was the only one pounding that drum.
Back then, there was a lot more gas station brands to choose from so competition was fierce. And at 25 cents per gallon, there wasn't a lot of room for price cutting. Gas company credit cards were in their infancy so there wasn't any brand loyalty coming from card usage either.
Shell needed to create a perceived difference and they nailed it with TCP. Didn't matter that no one really new what TCP stood for, if it was in the product and made it better, customers were in the market for it …in droves.
Since then there have been zillions of product claims of "active ingredients" that make the product "new and improved" or in other words, "better than the stuff you've been wasting your money buying from us for years."
Advertisers are continually at war with one another to prove their product is better that the competitors'. In the ad industry this is known as the "unique selling proposition" and it is still one of the mainstays of advertising today. How is the product or service different, and therefore better, than the competition?
Take a look at what you're selling and ask yourself, "What do we provide or do that makes us stand out? What could we do or add to our product that would make more people want to do business with us?"
One way is to ask your customers why they do business with you. Tabulate the answers and see if anything stands out and if so perhaps the answer to what makes your business stand out.
Another way to do the same thing is to find out the problems or "pain" that those who could be potential customers are experiencing and that your services might solve. This is a bit more difficult but say you were a lawyer and you found out that a great many people could not get to a legal office due to infirmity or daytime commitments—you could advertise that your firm has flexible hours or makes house calls.
If you find a niche that needs filling, why not fill that niche with your unique product or service and stand out from the rest? It's like having "active ingredient 90" only this one makes your business run better and be more profitable.
Anyways, Shell sold a helluva lot of gas with this tactic.
Thing was, all gas contained TCP, but Shell was the only one pounding that drum.
Back then, there was a lot more gas station brands to choose from so competition was fierce. And at 25 cents per gallon, there wasn't a lot of room for price cutting. Gas company credit cards were in their infancy so there wasn't any brand loyalty coming from card usage either.
Shell needed to create a perceived difference and they nailed it with TCP. Didn't matter that no one really new what TCP stood for, if it was in the product and made it better, customers were in the market for it …in droves.
Since then there have been zillions of product claims of "active ingredients" that make the product "new and improved" or in other words, "better than the stuff you've been wasting your money buying from us for years."
Advertisers are continually at war with one another to prove their product is better that the competitors'. In the ad industry this is known as the "unique selling proposition" and it is still one of the mainstays of advertising today. How is the product or service different, and therefore better, than the competition?
Take a look at what you're selling and ask yourself, "What do we provide or do that makes us stand out? What could we do or add to our product that would make more people want to do business with us?"
One way is to ask your customers why they do business with you. Tabulate the answers and see if anything stands out and if so perhaps the answer to what makes your business stand out.
Another way to do the same thing is to find out the problems or "pain" that those who could be potential customers are experiencing and that your services might solve. This is a bit more difficult but say you were a lawyer and you found out that a great many people could not get to a legal office due to infirmity or daytime commitments—you could advertise that your firm has flexible hours or makes house calls.
If you find a niche that needs filling, why not fill that niche with your unique product or service and stand out from the rest? It's like having "active ingredient 90" only this one makes your business run better and be more profitable.
Friday, June 19, 2009
Why do we ignore each other so often??
We are spending a lot of time, and some money too, working on ways to stay in touch with people who have said what we are doing is interesting.
These aren't prospects, and frankly they may never be. They are just folks who for one reason or another have read something we've posted, or met Ken at a party and are intrigued by how we can make a loving doing what we do.
Now normally, we would say "Hi!", the way you do, you know...the way you run across someone and then never think about them again.
How come?? Well, mostly it's because we are busy. We have work, family, volunteering, old friends. And frankly, most of us aren't interested in have more of any of that.
But we are also interested in making a good living, so we are paying a little more attention to keeping in touch. What if that person spread the word to her cousin, the highly-qualified prospect? What if he found himself in need of services like ours 18 months from now?
We need a cheap, cheerful and incredibly easy to operate system so we don't lose these possibilities.
Did you know that about 99 percent of small businesses could literally double their sales in a year by doing this?
Here's the program we are creating.
* Revamp the website to make it crystal clear to visitors what we do
* Revamp our educational offerings - make them useful, practical guides people will want to acquire, and will let us know they want to keep in touch
* Reach out to the hundreds of people on our contact list and let them know these new materials are available
* Create high-value outbound messages using email, regular mail, phone, events...and find out what people like to find in their mail box. Continue to provide real value they can use every day
* Create an easy way for people to get back to us. Kudos, complaints, ideas, tips or just saying hi; these conversations are the lifeblood of our business
* Automate the process so we have the time to get out from behind the computer and meet real people
These aren't prospects, and frankly they may never be. They are just folks who for one reason or another have read something we've posted, or met Ken at a party and are intrigued by how we can make a loving doing what we do.
Now normally, we would say "Hi!", the way you do, you know...the way you run across someone and then never think about them again.
How come?? Well, mostly it's because we are busy. We have work, family, volunteering, old friends. And frankly, most of us aren't interested in have more of any of that.
But we are also interested in making a good living, so we are paying a little more attention to keeping in touch. What if that person spread the word to her cousin, the highly-qualified prospect? What if he found himself in need of services like ours 18 months from now?
We need a cheap, cheerful and incredibly easy to operate system so we don't lose these possibilities.
Did you know that about 99 percent of small businesses could literally double their sales in a year by doing this?
Here's the program we are creating.
* Revamp the website to make it crystal clear to visitors what we do
* Revamp our educational offerings - make them useful, practical guides people will want to acquire, and will let us know they want to keep in touch
* Reach out to the hundreds of people on our contact list and let them know these new materials are available
* Create high-value outbound messages using email, regular mail, phone, events...and find out what people like to find in their mail box. Continue to provide real value they can use every day
* Create an easy way for people to get back to us. Kudos, complaints, ideas, tips or just saying hi; these conversations are the lifeblood of our business
* Automate the process so we have the time to get out from behind the computer and meet real people
Monday, June 15, 2009
We've been invited to become a Infusionsoft Certified Marketing Automation Coach
We are delighted that Infusionsoft has asked us to become a Certified Marketing Automation Coach (CMAC).
Infusionsoft makes a pretty simple promise to small business users: you can double your sales. Guaranteed.
It's a web-powered software program that helps you "Fix Your Follow-up Failure" and:
* Convert more leads
* Get repeat sales from customers
* Grow your business without growing your staff
You have to be a marketing or small business guru to be invited to be a coach - so we are really pleased to have been asked.
Stay tuned for a powerful series of educational events to show entrepreneurs and small business owners about best practices and trends.
Infusionsoft makes a pretty simple promise to small business users: you can double your sales. Guaranteed.
It's a web-powered software program that helps you "Fix Your Follow-up Failure" and:
* Convert more leads
* Get repeat sales from customers
* Grow your business without growing your staff
You have to be a marketing or small business guru to be invited to be a coach - so we are really pleased to have been asked.
Stay tuned for a powerful series of educational events to show entrepreneurs and small business owners about best practices and trends.
Friday, June 12, 2009
Read this! Alan Weiss on why you never, ever reduce your fees.
You Can't Back Down When Your Back Is Against the Wall
Off the Wall: A Column by Alan Weiss, Contributing Editor
One of the most consistent questions I'm asked even when coaching successful entrepreneurs is, "What do I say when they want a reduction in fee?"
What you say is complex and arcane, so you may want to stop here to get a pen and paper, or open your laptop. Ready?
You say, "No."
Our tendency to be vulnerable when a buyer (or much worse, a non-buyer) unabashedly asks for a fee reduction is based on a poverty mentality. We remember when we didn't have much business and still feel that we need to take any business we can get, on any terms.
Let me tell you something: abandoning poor business and lousy terms is a win, not a loss.
Who in Their Right Mind Does This?
When a prospect has said to me, "How about reducing your fee for us?" I respond with, "Do you do that for your customers, simply take less profit because a customer asks?" If the response is "No," then I ask, "Then why should I do it for you?"
If the response is "Yes," then I explain, "Well, if you do that, then you really need me more than ever, because you need to stop doing that."
Can you vaguely imagine, without the aid of controlled substances, asking your attorney to simply charge less than his or her normal fees? Or your physician to operate for less? Or the courts to accept less for your speeding ticket? Or a restaurant to accept less for an entrée?
I know there is an entire cadre of connivers out there always trying to get something for nothing or sneak into the better seats, but those aren't the people I expect to be doing business with.
The reasons, in addition to a poverty mentality, that we even entertain a request for a lower fee, include:
* Poor self-esteem: who am I to ask for this much?
* No clear sense of value.
* Allowing a third party to intervene (e.g., a speaker's bureau).
* The mistaken belief that something is better than nothing.
* The promise of fantasies, such as "exposure," and "business down the road."
Believe me, that's not the Yellow Brick Road.
Hey, Whose Side Are You On?
Recently, a woman asked for my reaction to a speaker's bureau that wanted to book her at a client she had spoken for two years ago. Not only did they not want to apply her contemporary, higher fees, but they wanted the same fee as two years ago, that travel be included, and that the bureau's commission would remain the same.
Whose side is the bureau on? Aren't they supposed to be marketing the speaker and trying to get higher fees in return for the commission the speaker has to pay? This applies to any third party with a financial interest, including the "brokers" and "agents" in the consulting business. But many of them just cave in to low level client people who are concerned about protecting their budgets and wouldn't understand value if it bit them on the nose. The third parties just want their placement fees, and have their own poverty mentality (since most of them are order takers, and not very good marketers).
Here's what determines a high fee and justifiable resistance to lower it:
1. A great relationship with a true economic buyer who can find the money to pay for value and appreciate ROI. This is virtually never a human resources or training person.
2. Providing options, so that the buyer can choose the appropriate investment and return for him or her. ("I really love option 3, but might not have the budget." "That's okay, that's why we have option 2!")
3. A strong brand and reputation. There just aren't many people with your talent and track record.
4. A strong pipeline, so that you don't have to accept just any piece of business.
5. Refusal to work with intermediaries who are parasitic and just want a piece of your action without actively promoting you.
6. The pride and willingness to walk away from an unfair deal.
Hard to Believe…
I've actually heard people say, "My prospects are having hard times, so I don't feel comfortable charging more than I absolutely have to." Well, why not just go into charity work? Those prospects are paying for their mortgage, payrolls, heating, insurance, and so on.
Money is never a resource issue, it's a priority issue. You have to demonstrate enough value to a real buyer so that you become the priority. Put your back against the wall on these values. You can't back down from there.
Alan Weiss, Ph.D., is a contributing editor to RainToday.com and has been cited by the New York Post as "one of the most highly respected independent consultants in the country." His clients have included The Federal Reserve Bank, Hewlett-Packard, Mercedes, JP Morgan Chase and over 200 similar world-class organizations. He has written 25 books which appear in 7 languages. He conducts a global mentoring program. You can reach him via his web site: www.summitconsulting.com or his blog: www.contrarianconsulting.com. All Rights Reserved. Copyright 2009 Summit Consulting Group. Used with permission.
Off the Wall: A Column by Alan Weiss, Contributing Editor
One of the most consistent questions I'm asked even when coaching successful entrepreneurs is, "What do I say when they want a reduction in fee?"
What you say is complex and arcane, so you may want to stop here to get a pen and paper, or open your laptop. Ready?
You say, "No."
Our tendency to be vulnerable when a buyer (or much worse, a non-buyer) unabashedly asks for a fee reduction is based on a poverty mentality. We remember when we didn't have much business and still feel that we need to take any business we can get, on any terms.
Let me tell you something: abandoning poor business and lousy terms is a win, not a loss.
Who in Their Right Mind Does This?
When a prospect has said to me, "How about reducing your fee for us?" I respond with, "Do you do that for your customers, simply take less profit because a customer asks?" If the response is "No," then I ask, "Then why should I do it for you?"
If the response is "Yes," then I explain, "Well, if you do that, then you really need me more than ever, because you need to stop doing that."
Can you vaguely imagine, without the aid of controlled substances, asking your attorney to simply charge less than his or her normal fees? Or your physician to operate for less? Or the courts to accept less for your speeding ticket? Or a restaurant to accept less for an entrée?
I know there is an entire cadre of connivers out there always trying to get something for nothing or sneak into the better seats, but those aren't the people I expect to be doing business with.
The reasons, in addition to a poverty mentality, that we even entertain a request for a lower fee, include:
* Poor self-esteem: who am I to ask for this much?
* No clear sense of value.
* Allowing a third party to intervene (e.g., a speaker's bureau).
* The mistaken belief that something is better than nothing.
* The promise of fantasies, such as "exposure," and "business down the road."
Believe me, that's not the Yellow Brick Road.
Hey, Whose Side Are You On?
Recently, a woman asked for my reaction to a speaker's bureau that wanted to book her at a client she had spoken for two years ago. Not only did they not want to apply her contemporary, higher fees, but they wanted the same fee as two years ago, that travel be included, and that the bureau's commission would remain the same.
Whose side is the bureau on? Aren't they supposed to be marketing the speaker and trying to get higher fees in return for the commission the speaker has to pay? This applies to any third party with a financial interest, including the "brokers" and "agents" in the consulting business. But many of them just cave in to low level client people who are concerned about protecting their budgets and wouldn't understand value if it bit them on the nose. The third parties just want their placement fees, and have their own poverty mentality (since most of them are order takers, and not very good marketers).
Here's what determines a high fee and justifiable resistance to lower it:
1. A great relationship with a true economic buyer who can find the money to pay for value and appreciate ROI. This is virtually never a human resources or training person.
2. Providing options, so that the buyer can choose the appropriate investment and return for him or her. ("I really love option 3, but might not have the budget." "That's okay, that's why we have option 2!")
3. A strong brand and reputation. There just aren't many people with your talent and track record.
4. A strong pipeline, so that you don't have to accept just any piece of business.
5. Refusal to work with intermediaries who are parasitic and just want a piece of your action without actively promoting you.
6. The pride and willingness to walk away from an unfair deal.
Hard to Believe…
I've actually heard people say, "My prospects are having hard times, so I don't feel comfortable charging more than I absolutely have to." Well, why not just go into charity work? Those prospects are paying for their mortgage, payrolls, heating, insurance, and so on.
Money is never a resource issue, it's a priority issue. You have to demonstrate enough value to a real buyer so that you become the priority. Put your back against the wall on these values. You can't back down from there.
Alan Weiss, Ph.D., is a contributing editor to RainToday.com and has been cited by the New York Post as "one of the most highly respected independent consultants in the country." His clients have included The Federal Reserve Bank, Hewlett-Packard, Mercedes, JP Morgan Chase and over 200 similar world-class organizations. He has written 25 books which appear in 7 languages. He conducts a global mentoring program. You can reach him via his web site: www.summitconsulting.com or his blog: www.contrarianconsulting.com. All Rights Reserved. Copyright 2009 Summit Consulting Group. Used with permission.
Thursday, June 11, 2009
How to get the most from your subject line
We subscribe to Marketing Experiments for its marketing research results. We get to see data we can trust on issues of real importance to our clients - like this investigation into how to make the subject line of an email work best.
It's common sense to say that emails reaching out to clients and prospects won't work if they don't get opened, but this experiment demonstrates that there are other things you can and should be measuring if you don't want to leave money on the table.
Let's look at the experiment, and what you should learn from it.
In this case, a florist wanted to increase the effectiveness of a "Thank you" email campaign to previous customers, and entice more of them to increase their purchases.
They sent out two emails, with exactly the same content but different subject lines. Any differences in results could only come from the difference in the subject line.
They used an email service that allowed them to measure who opened the email and who didn't "open rate", and who clicked through to a web site and who didn't "clickthrough rate". Customers could also order on line, so they could also measure the sales resulting from the program.
Both emails offered a 15% Off special offer.
Subject Line #1 was "Thank You For Making Us Your Florist Of Choice". Subject Line #2 was "15% Off - Our Way Of Saying Thank You!"
Here are the open rate results: 20% of recipients of version #1 opened the email, but only 15% opened versions #2, the one with the specific 15% Off offer. That's a 26% difference.
Does that mean putting a specific offer in the subject line is a bad idea? Many people would think so. It looks at first glance that being too aggressive will put people off.
But look what we see when we dig a little deeper. 60% more people who received version #2 with the 15% offer clicked through to the website. And version #2 ended up earning 56% more dollar sales.
Sure fewer of them opened the email, but they spent a lot more money.
What can you learn from this?
First, what you measure is important. In this case, if the florist only looked at who opened the email, she would have been badly misled. She might have planned future campaigns that practically guaranteed she would reduce sales by 56%!
Second, testing is important. This advertiser had at least a 50-50 chance of guessing wrong with "gut feel" - and potential huge business loss.
Third, if you use email, you need a batch or broadcast email solution that allows you to do this kind of testing and measurement. Don't just send out to a huge "to" list - you will never be able to get the measurement and practical, business-building knowledge you need. (Check out Constant Contact, SwiftPage and Infusionsoft)
It's common sense to say that emails reaching out to clients and prospects won't work if they don't get opened, but this experiment demonstrates that there are other things you can and should be measuring if you don't want to leave money on the table.
Let's look at the experiment, and what you should learn from it.
In this case, a florist wanted to increase the effectiveness of a "Thank you" email campaign to previous customers, and entice more of them to increase their purchases.
They sent out two emails, with exactly the same content but different subject lines. Any differences in results could only come from the difference in the subject line.
They used an email service that allowed them to measure who opened the email and who didn't "open rate", and who clicked through to a web site and who didn't "clickthrough rate". Customers could also order on line, so they could also measure the sales resulting from the program.
Both emails offered a 15% Off special offer.
Subject Line #1 was "Thank You For Making Us Your Florist Of Choice". Subject Line #2 was "15% Off - Our Way Of Saying Thank You!"
Here are the open rate results: 20% of recipients of version #1 opened the email, but only 15% opened versions #2, the one with the specific 15% Off offer. That's a 26% difference.
Does that mean putting a specific offer in the subject line is a bad idea? Many people would think so. It looks at first glance that being too aggressive will put people off.
But look what we see when we dig a little deeper. 60% more people who received version #2 with the 15% offer clicked through to the website. And version #2 ended up earning 56% more dollar sales.
Sure fewer of them opened the email, but they spent a lot more money.
What can you learn from this?
First, what you measure is important. In this case, if the florist only looked at who opened the email, she would have been badly misled. She might have planned future campaigns that practically guaranteed she would reduce sales by 56%!
Second, testing is important. This advertiser had at least a 50-50 chance of guessing wrong with "gut feel" - and potential huge business loss.
Third, if you use email, you need a batch or broadcast email solution that allows you to do this kind of testing and measurement. Don't just send out to a huge "to" list - you will never be able to get the measurement and practical, business-building knowledge you need. (Check out Constant Contact, SwiftPage and Infusionsoft)
Monday, June 8, 2009
"Oops! 13 Management Practices That Waste Time and Money (And What to Do Instead)"
We ran across this terrific book by Aubrey Daniels in a Wallace Immen article in Friday's Globe and Mail. We hope you all run out and buy the book. We sure did!
From Friday's Globe and Mail, Saturday, Jun. 06, 2009 04:10AM EDT
When times are tough, managers are expected to reach into their bag of tricks and pull out the ones that will motivate employees.
Unfortunately, the ones that managers resort to all too often turn out to be illusions that backfire, inadvertently rewarding bad behaviour and punishing good.
Knowing more about human behaviour can help managers avoid such blunders, the Atlanta-based president of Aubrey Daniels International told Wallace Immen. Here are excerpts of their conversation:
These behaviours you call mistakes are things that most managers believe in. Why have the failings been so difficult to see?
People who develop management theories understand money, but they really don't understand people. For instance, most managers think of raises as positive reinforcement, but the problem is that money doesn't automatically inspire people to work harder. A manager who understands positive reinforcement will do things that make people feel more enthusiastic about what they are doing and make them want to do more. Just saying, "Wow, you did a great job" or giving a high five when someone has a good performance could motivate them more than a raise at the end of the year.
What do managers need to understand better?
It's up to managers to get to know the underlying motivating factor of every single one of their employees. But tell that to the average manager and they will say, "I can't do that. I don't have the time. I have too many people and I have too much on my plate." Managers who don't take the time to observe and ask their employees what would motivate them to put in their best effort are going to be wasting a lot of time dealing with unenthusiastic workers. The easy way to find out what employees want is to ask them. As a manager, you should make the point that your success depends on how successful they are. And you can make that point by asking something like: "How can I help you be successful?"
Bonuses have gotten a bad reputation lately. Is there a way to use them effectively?
There is a place for bonuses, but only if the contribution the employee makes to the organization is in excess of the money you pay them. However, when they are an expected part of compensation, and executives at a company like Merrill Lynch demand them in spite of the fact that the organization lost billions, they are just a waste of money. Another total mistake is retention bonuses. For instance, AIG was giving hundreds of employees big bonuses for staying with the company in spite of the fact it is losing money and getting millions in government bailout funds. If you have to pay someone to stay loyal to the company, then you have issues so serious that the employees are going to leave as soon as there is no more bonus money. The main job for managers is to inspire people to want to be there, to feel good about the future of the organization and the way they are treated.
How can you build enthusiasm if the outlook remains grim?
To make employees motivated to do better, you've got to increase positive reinforcement. Get everyone together and be open about the problems the company is facing and ask for their help in coming up with solutions. People will pitch in if they think their efforts could save their jobs. But, all too often, managers don't want to hear what they have to say. Someone comes up with an idea that could save a few dollars and they say, "No, that's not going to help us. That's silly when we need to save big money." But thinking about something that will save a dime is the same behaviour that can find ways to save a million dollars. If you don't encourage one, you are not going to get the other. Just say: "Every day, spend some time thinking about how can you do your job better tomorrow."
A lot of companies are downsizing but you say it should only be used as a last-ditch effort. Why?
I don't argue with the need to downsize because of the rapidity of changes in the economy and technologies that can make your work force too large. But the issue is how you do it. Too many companies use downsizing as the first thing they do when they get into trouble, but it should be the last thing. The biggest blunder Circuit City did was look for the immediate financial saving [it] could get in 2007 by firing all of its sales employees who were making more than the median pay rate. But that meant they fired their best sales people. That short-term decision obviously was wrong in the longer term. This year, the whole company went bust because of falling sales. Companies eliminate jobs and outside vendors and then obsess about how to make the limited resources they have more productive when they are being stretched to the limit. That's negative reinforcement. If you scare people into doing things - because if they don't, they'll be fired - at some point, they'll stop trying to do anything more than they have to, figuring they'll probably lose their job anyway.
Aren't some of these changes going to be harder to implement in this challenging economy?
Just the opposite. The chaos that companies find themselves facing is a good time to change management policies to make them more effective. If, for instance, you are going to be freezing salaries, use this as a time to rethink annual raises and bonuses. Any future rewards of money should be on the basis of pay for actual, immediate performance. Not only will you get more for your money, but you'll find employees will find it more motivating.
What are the best insights you've gained about motivating in a tough time?
At the moment, it is not so easy to see accomplishments. The future is looking unsure, clients may be holding back, sales are harder to come by, it can be harder to make things happen with smaller budgets. This is a time to celebrate even small successes. Any sale is a big deal. Any victory is a big victory. We should be congratulating not only those who achieve success but the people who helped others accomplish successes, and find ways to make accomplishments as visible as possible. Motivation should not be some management secret. Ideally, you will get every employee involved with you in finding ways to help themselves and others find ways to do better each day. There are millions of ideas that people have. If they feel valued and appreciated for their contributions, they are going to want to tell you about them. And they will give you full effort, no matter what the economy.
***
Getting it right
Aubrey Daniels identifies 13 management practices that waste time and money, and prescriptions for how to change them:
Employee of the month
What's wrong with it: It acknowledges just one employee and leaves out the rest.
How to right it: Acknowledge achievement when and where it happens.
Stretch goals
What's wrong with it: Employees end up exhausted and frustrated if they fail to reach lofty targets.
How to right it: Set achievable short-term goals; chart employee progress month by month.
Annual reviews
What's wrong with it: Universally despised by managers and employees; ignored the rest of the year.
How to right it: Give immediate management feedback whenever employee excels or falls short.
Ranking employees
What's wrong with it: Even if there is little difference between employees, some end up at the top of the list and others at the bottom start to think of themselves as also-rans.
How to right it: Set performance benchmarks all employees are expected to reach.
Rewarding negatives
What's wrong with it: Awards for having zero defects or no accidents actually encourage people to do as little as possible to avoid potential incidents.
How to right it: Recognize actual accomplishments and contributions.
Merit raises,automatic bonuses
What's wrong with it: Once given, a raise is permanent, but it is unlikely to motivate continued future improvement. Bonuses are seen as entitlements even when performance is poor.
How to right it: Pay for performance or revenue sharing that must be earned each year.
Good news, bad news
What's wrong with it: In a mixed message, people forget the praise and obsess over the negative instead.
How to right it:: Praise and criticism should come in separate discussions.
Sandwiching good and bad
What's wrong with it: Wrapping criticism between layers of praise means two positive messages are lost as employee focuses on the negative.
How to right it: If there is an issue, be straightforward with it.
Overvaluing smart people
What's wrong with it: Treating smart, talented employees as privileged undervalues the potential of others.
How to right it: Encourage training and provide promotion opportunities for all employees.
The budget game
What's wrong with it: Tedious, time-consuming divvying of resources makes everyone ask for more than they expect.
How to right it: Budget according to what departments can prove they need to get results. Reward those who do more with less.
Promoting unlikable people
What's wrong with it: Managers may have to deliver tough messages in grim times, but distrusted and threatening managers will have employees performing out of fear rather than enthusiasm.
How to right it: Promote people who are well liked and can get results through co-operation.
Downsizing
What's wrong with it: Staff cuts mean people get stretched and organizational performance may decline to the point that you have to rehire staff.
How to right it: Layoffs should be the last thing done after exploring employee suggestions for cost savings to spare their jobs.
Mergers
What's wrong with it: Most often decisions are made based on economics rather than looking at the potential clashes of corporate culture.
How to right it: Get affected employees working together to develop a common mission and procedures everyone can support.
From Friday's Globe and Mail, Saturday, Jun. 06, 2009 04:10AM EDT
When times are tough, managers are expected to reach into their bag of tricks and pull out the ones that will motivate employees.
Unfortunately, the ones that managers resort to all too often turn out to be illusions that backfire, inadvertently rewarding bad behaviour and punishing good.
Knowing more about human behaviour can help managers avoid such blunders, the Atlanta-based president of Aubrey Daniels International told Wallace Immen. Here are excerpts of their conversation:
These behaviours you call mistakes are things that most managers believe in. Why have the failings been so difficult to see?
People who develop management theories understand money, but they really don't understand people. For instance, most managers think of raises as positive reinforcement, but the problem is that money doesn't automatically inspire people to work harder. A manager who understands positive reinforcement will do things that make people feel more enthusiastic about what they are doing and make them want to do more. Just saying, "Wow, you did a great job" or giving a high five when someone has a good performance could motivate them more than a raise at the end of the year.
What do managers need to understand better?
It's up to managers to get to know the underlying motivating factor of every single one of their employees. But tell that to the average manager and they will say, "I can't do that. I don't have the time. I have too many people and I have too much on my plate." Managers who don't take the time to observe and ask their employees what would motivate them to put in their best effort are going to be wasting a lot of time dealing with unenthusiastic workers. The easy way to find out what employees want is to ask them. As a manager, you should make the point that your success depends on how successful they are. And you can make that point by asking something like: "How can I help you be successful?"
Bonuses have gotten a bad reputation lately. Is there a way to use them effectively?
There is a place for bonuses, but only if the contribution the employee makes to the organization is in excess of the money you pay them. However, when they are an expected part of compensation, and executives at a company like Merrill Lynch demand them in spite of the fact that the organization lost billions, they are just a waste of money. Another total mistake is retention bonuses. For instance, AIG was giving hundreds of employees big bonuses for staying with the company in spite of the fact it is losing money and getting millions in government bailout funds. If you have to pay someone to stay loyal to the company, then you have issues so serious that the employees are going to leave as soon as there is no more bonus money. The main job for managers is to inspire people to want to be there, to feel good about the future of the organization and the way they are treated.
How can you build enthusiasm if the outlook remains grim?
To make employees motivated to do better, you've got to increase positive reinforcement. Get everyone together and be open about the problems the company is facing and ask for their help in coming up with solutions. People will pitch in if they think their efforts could save their jobs. But, all too often, managers don't want to hear what they have to say. Someone comes up with an idea that could save a few dollars and they say, "No, that's not going to help us. That's silly when we need to save big money." But thinking about something that will save a dime is the same behaviour that can find ways to save a million dollars. If you don't encourage one, you are not going to get the other. Just say: "Every day, spend some time thinking about how can you do your job better tomorrow."
A lot of companies are downsizing but you say it should only be used as a last-ditch effort. Why?
I don't argue with the need to downsize because of the rapidity of changes in the economy and technologies that can make your work force too large. But the issue is how you do it. Too many companies use downsizing as the first thing they do when they get into trouble, but it should be the last thing. The biggest blunder Circuit City did was look for the immediate financial saving [it] could get in 2007 by firing all of its sales employees who were making more than the median pay rate. But that meant they fired their best sales people. That short-term decision obviously was wrong in the longer term. This year, the whole company went bust because of falling sales. Companies eliminate jobs and outside vendors and then obsess about how to make the limited resources they have more productive when they are being stretched to the limit. That's negative reinforcement. If you scare people into doing things - because if they don't, they'll be fired - at some point, they'll stop trying to do anything more than they have to, figuring they'll probably lose their job anyway.
Aren't some of these changes going to be harder to implement in this challenging economy?
Just the opposite. The chaos that companies find themselves facing is a good time to change management policies to make them more effective. If, for instance, you are going to be freezing salaries, use this as a time to rethink annual raises and bonuses. Any future rewards of money should be on the basis of pay for actual, immediate performance. Not only will you get more for your money, but you'll find employees will find it more motivating.
What are the best insights you've gained about motivating in a tough time?
At the moment, it is not so easy to see accomplishments. The future is looking unsure, clients may be holding back, sales are harder to come by, it can be harder to make things happen with smaller budgets. This is a time to celebrate even small successes. Any sale is a big deal. Any victory is a big victory. We should be congratulating not only those who achieve success but the people who helped others accomplish successes, and find ways to make accomplishments as visible as possible. Motivation should not be some management secret. Ideally, you will get every employee involved with you in finding ways to help themselves and others find ways to do better each day. There are millions of ideas that people have. If they feel valued and appreciated for their contributions, they are going to want to tell you about them. And they will give you full effort, no matter what the economy.
***
Getting it right
Aubrey Daniels identifies 13 management practices that waste time and money, and prescriptions for how to change them:
Employee of the month
What's wrong with it: It acknowledges just one employee and leaves out the rest.
How to right it: Acknowledge achievement when and where it happens.
Stretch goals
What's wrong with it: Employees end up exhausted and frustrated if they fail to reach lofty targets.
How to right it: Set achievable short-term goals; chart employee progress month by month.
Annual reviews
What's wrong with it: Universally despised by managers and employees; ignored the rest of the year.
How to right it: Give immediate management feedback whenever employee excels or falls short.
Ranking employees
What's wrong with it: Even if there is little difference between employees, some end up at the top of the list and others at the bottom start to think of themselves as also-rans.
How to right it: Set performance benchmarks all employees are expected to reach.
Rewarding negatives
What's wrong with it: Awards for having zero defects or no accidents actually encourage people to do as little as possible to avoid potential incidents.
How to right it: Recognize actual accomplishments and contributions.
Merit raises,automatic bonuses
What's wrong with it: Once given, a raise is permanent, but it is unlikely to motivate continued future improvement. Bonuses are seen as entitlements even when performance is poor.
How to right it: Pay for performance or revenue sharing that must be earned each year.
Good news, bad news
What's wrong with it: In a mixed message, people forget the praise and obsess over the negative instead.
How to right it:: Praise and criticism should come in separate discussions.
Sandwiching good and bad
What's wrong with it: Wrapping criticism between layers of praise means two positive messages are lost as employee focuses on the negative.
How to right it: If there is an issue, be straightforward with it.
Overvaluing smart people
What's wrong with it: Treating smart, talented employees as privileged undervalues the potential of others.
How to right it: Encourage training and provide promotion opportunities for all employees.
The budget game
What's wrong with it: Tedious, time-consuming divvying of resources makes everyone ask for more than they expect.
How to right it: Budget according to what departments can prove they need to get results. Reward those who do more with less.
Promoting unlikable people
What's wrong with it: Managers may have to deliver tough messages in grim times, but distrusted and threatening managers will have employees performing out of fear rather than enthusiasm.
How to right it: Promote people who are well liked and can get results through co-operation.
Downsizing
What's wrong with it: Staff cuts mean people get stretched and organizational performance may decline to the point that you have to rehire staff.
How to right it: Layoffs should be the last thing done after exploring employee suggestions for cost savings to spare their jobs.
Mergers
What's wrong with it: Most often decisions are made based on economics rather than looking at the potential clashes of corporate culture.
How to right it: Get affected employees working together to develop a common mission and procedures everyone can support.
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