There is a lot of confusion especially in small and medium size businesses about how to share profits, how to motivate employees as well as customers via incentives, return on investment, salaries, who decides and about what, how to decide, who are the share holders, board members etc…
The ones that think that they solved the above puzzle aren’t necessarily right (they just think they are and continue to live in this personal illusion/reality)
On the other hand, many repeat the relatively NEW mantra “the business belongs to the customers”…But, in reality, they don’t behave in the fashion of what they say “the business belongs to the customers…” In reality, they behave as if the business belongs to them and only to them….No wonder then that employees that do not feel “belonging” drag their feet and do not cooperate as expected as “they do not feel/live” as if the business also belongs to them…The same as said about the employees goes for motivated and or unmotivated customers.
So, what is the solution to all of this mess?
I am currently working on t the financial model that will try to solve the above issues.
There are 4 issues that are pretty clear:
- The investors who invested in their business should receive up to 25% as a annual return on their investment. By doing so, you satisfy the investors side and make sure that your business is an attractive option for investors (on condition that it has a medium/long term profitable business plan)
- The staff/employees should get a decent salary compared to the standard that is offered in our/your industry.
- There should be incentives (based on profits) that should be shared with the employees. By doing so, you can offer employees both a better income as well as a sense of belonging as they can earn more by achieving/contributing more.
- If you are not just the investor but you also have an active position in your business, you should earn the same as you would agree to pay to someone else to do your job.
After all of the above is cleared and on condition that your business shows profitable results, what is left is to solve the issue of how to share profits among employees/staff and rewarding the customers that you claim are the real owners of the business.
It isn’t an easy issue to figure it all out and to satisfy everyone who is involved, however, the ultimate success only appears once this formula is finally figured out.
Point Of Skin will take all the above into consideration and come up with a win win win business model that will satisfy investors, staff and customers at the same time!!!
Published by: Ron on July 28th, 2010 | Filed under Uncategorized
Comment now »
People still read this post untill today as it appears on google search…under Air Baltic customer complaints!
On June 22, 2010 5:23:30 PM GMT+02:00 Air Baltic contacted me and asked me to send them the details of my flight “so that they can fix the damage…”
On July the 15th, Air Baltic twitted me with this NEW MESSAGE (see bellow…)
It is now over one month after the case and there is NO SOLUTION and the way it looks, there isn’t also going to be any solution EVER. The taste that AIR BALTIC left me with is – unhappiness!!!
Zappos on the other hand made “delivering happiness” (to customers, suppliers and employees) it’s main strategy and company’s culture!!!
Making people happy as the Zappos’s business strategy made Zappos become one of the best places to work for and this simple yet most powerful strategy made Amazon acquire Zappos for over 1.2 Billon Dollars (after just 10 years in business).
The taste that Zappos customers are left with is – happiness!!!
As Tony Hsieh (pronounced Shay) Zappos CEO says “Customer service is a Zappos’s business strategy and not a business department…”
Happy customers love/are happy to share their happy experiences with friends and colleges whereas UNHAPPY customers remember/are happy to warn everyone from becoming unhappy…In both cases- happiness and “being happy about” is what motivates people to talk about you. You can decide and take action to make customers happy ( as Zappos does)…otherwise, you take the responsibility of people sharing their unhappiness about you…(as Air baltic does).
I just finishes reading “Delivering Happiness”, I love it and recommend it to everyone who wants to succeed while building a business that delivers true happiness.
Customer service and customers happiness should be your business culture!!!
Published by: Ron on July 26th, 2010 | Filed under Uncategorized
Comment now »
Point of Skin Munich completed it’s staff recruitment and is now starting it’s staff training and preparations for the next steps.
The money that was received for renting one of the corners to a nail designer (Manuela-on the right hand-side) was enough to pay Alice the cosmetic practitioner (on the left hand-side)…
Now Point Of Skin Munich that started as a one person operation grew by 300% to a team of 3 professionals.
From offering just consultation about what skincare you should use and selling mainly retail items (just 10% treatments), Point Of Skin munich will start offering:
- Nail design - all sorts and all kinds
- Make Up
- Bridal packages: including hairstyles for brides, make up for brides and all the bridal beauty services.
- Full beauty treatments
- Full body treatments
- Skin analysis – retail consultation.
So, from having one main service and one main solution, Point of Skin Munich is now offering 10 different services/solutions without increasing it’s budget.
- The simple rule is that when you have more to offer more potential customers will have the reason to visit your business. this means more customer traffic.
- The next simple rule is – when you have more customer traffic you retail more!!!
Every small beauty salon/Day Spa can do the same as Mary from Point of skin Munich did and increase the customer traffic by increasing the amount of services that one offers within your geographic area.
Offering more treatments and more services ends with having more customers and more sales.
Published by: Ron on July 25th, 2010 | Filed under Uncategorized
Comment now »
So, when I first met Dr.Tufan I was extremely impressed from his warm welcome and hospitality.
Dr.Tufan runs his business from a home clinic and before you start the treatment you spend some time with him in his personal living room (see the video below).
The place “doesn’t feel” like a classical sterile clinic, the opposite, you feel at home. Located in one of the most beautiful parts of Istanbul, his living rooms looks more as a music recording studio than a classical dental clinic.
Several guitars, a piano and huge sound boxes reveal his second or maybe his main passion (Song writing competitions).
The dental treatment rooms are connected to his main sound system, so, during the treatment you can listen to beautiful music that takes away some of the pain that is normally involved…
Between one injection to another, I could go back to the living room and relax. During those short breaks, Dr.Tufan demonstrated his passion for music and played some beautiful songs…You feel at home among friends.
Seeing that I stayed for several hours (and during lunch time) Dr.Tufan even cooked us a soup…You feel at home among friends.
I completed in one week (all together 3 appointments) a treatment that otherwise could take a year and the price was about a third compared to Germany.
Dr.Tufan is a top professional with tons of years in practice. The materials he uses as well as the techniques and technology are up-to-date as in the west of Europe!!!
The results were outstanding!!!
So, wherever you go and whatever you experience there is always a main impression that you take away with you. This main impression/experience is filed in your brain and this particular main impression/experience dictates your decision to come back again for your next treatment/experience.
Referring – This main impression/experience that you take with you is what stands behind your motivation to refer a business that you have visited to your colleges/friends (that is what I do just now).
It is unusual to meet a Dentist that is also an entertainer, a musician, a cook and that makes you absolutely feel at home.
Those unusual issues are the ones that build the experience and the ones that leave the kind of impression that you want to refer to others.
Core benefits- naturally the core benefits that you expect from a Dentist is perfection in his job as a Dentist. This is what Dr.Tufan also delivered.
The off-core benefits such as feeling at home and among friends completes the picture, determines and summarizes the entire experience before filing it in your brain as positive or as negative.
We people look for both the core as well as the off-core benefits. This is how we are.
The honest question that you should ask yourself is: what kind of experience do people take away from visiting your business? Do they feel at home? are they entertained? and how will they remember you?
Answering those questions will also answer the next question - is your business easy to refer?
Dr.Tufan is easy to refer and I am sure that by now you also understand why…
When you consider a serious and expensive dental care, check Dr.Tufan as an alternative, you will visit one of the most beautiful parts of Istanbul, you will hear him singing and you will enjoy his food additional to having your dental care done by a MEDICAL artist! http://www.tufantezcan.com/
Published by: Ron on July 23rd, 2010 | Filed under Uncategorized
Comment now »
Just returned from Turkey. Dr,Baumann Turkey also owns two cosmetic schools.
The standard course to become a cosmetician was until now 256 hours and costs about 1750euro.
Question 1- I have asked: what kind of a certificate does a person need in order to start working as a cosmetician.
The answer was: there is no need to have an “official certificate” to become a cosmetician. In other words, when you have a certificate from a cosmetic school confirming that you have studied anatomy and face massage techniques, you can start working as a cosmetician.
Next question- 2: ow long does it take to learn/teach anatomy and face massage techniques? The answer was 45 hours.
As a result- we designed a NEW COURSE FOR NEW COSMETICIANS – this course is just 45 hours and costs 375 EURO. This means that after one month a NEW cosmetician can start working and earn about 400 EURO (monthly). In other words, the return on the investment is just one month.
What program will get more people joining? the one that costs 1750 euro and takes 256hours or the one that takes 45 hours and costs 750 euro?
I guess that the answer is clear.
Look at your products and treatments and ask the question- what motivates customers to buy such a product / treatment? what is the benefit that they expect? Find out if you can make this treatment shorter, faster and more cost effective. By doing so, you make this service/treatment more available for more potential customers who are looking for the same benefits but want to have it faster and cheaper.
The people that joined the cosmetic school in Turkey did it because they wanted to work as employed cosmeticians and do face treatments. Now they can do it in less than 20% OF THE TIME AND FOR A QUARTER OF THE PRICE.
PS – the 256 hours of the classical cosmetician course was about make up, body treatment, epilation etc…YET, the main reason that NEW cosmeticians have is in face treatments. NOW THEY CAN DO IT much faster and much cheaper.
Published by: Ron on July 22nd, 2010 | Filed under Uncategorized
Comment now »
If you are a student and you BUY a macbook you pay $999 and you get a FREE 8GB Ipod touch valued at $199. This means a 19.92% DISCOUNT (Depends on how you calculate it).
So, why doesn’t Apple just give a straight 19.92% discounts and sells it’s macbook for $999-$199 (for the Ipod)=$800? If they do so (sell the macbook for $800) they might sell much more Macs…So, why don’t they?
There are many answers to Apple’s strategy (here are some…):
- A straight discount of $199 means that they will loose $199 whereas if they give away an Ipod that may cost them just $50 or less makes them loose just $50, means that their promotion budget for selling a macbook is about 5% ($50) which is in the reasonable promotion budget.
- When a student uses his/her Ipod, it means that other students see it and are encouraged to buy one too.
- Once that a student got the Ipod, the next step is to download and buy some apps as well as music, films etc… from Apple’s Itunes store.
- If a student was about to buy another MP3 (not the Apple one), now, after receiving the free Ipod, buying an MP3 from Apple’s competition isn’t relevant.
- A student that was a PC user will now turn to be a Mac user. This means that this student will most probably buy some suitable software such as Iwork as well as some Mac accessories (A mouse etc…)
- The change from a PC to a Mac gives Apple the opportunity to keep this student as a future customer that will later buy an Imac (bigger Mac) and so on…
There are many additional rationals that explain Apple’s gift wit purchase strategy (Buy a macbook and get a FREE Ipod), but, let’s stop here.
However, at least one point must be clear- The main reason behind this strategy is the opportunity to introduce Apple’s products to a future customer. A future customer means a customers that will continue to purchase Apple products in the future. The earnings from those future purchases should be bigger than the “today $50 cost” of giving away a FREE Ipod.
I believe that you can see that Apple is making here a good investment and that the chances of getting back this investment PLUS a nice profit from the future purchases is pretty reasonable.
THE SAME PROMOTION PRINCIPLES are relevant when you think about increasing your sales as a beauty salon/SPA.
Offering customers a FREE product on a purchase of another product (for a full price) can have the same “future effect” as offering a FREE Ipod to a student who buys a macbook.
Customers that will be introduces to this FREE products may like the product and buy it for a full price (once they finished using the FREE product), if they liked the products they might tell their friends about it, they might give the FREE products as a present to their friends and this FREE products will now be known to other potential users etc…
3 years ago, I received an Apple Ipod as a present. I liked it. Since than, I bought an Iphone, a new Ipod touch, a macbook as well as an Imac. I have introduced Apple to my colleges who bought a macbook and an Iphone…
This was a bit…about the power of FREE gifts as a powerful sales generator and the potential of future purchases as a result!
Published by: Ron on July 21st, 2010 | Filed under Uncategorized
Comment now »
When you buy commodities such as:milk, sugar, salt or rice, a tomato or a potato you pay the full price and you don’t get any special offers or anything else for FREE (i.e. gift with purchase, purchase with purchase etc…). You don’t expect to receive any FREE gift because you buy commodities.
But when you buy a camera you may get a FREE bag (limited edition…) or a FREE 4GB memory card etc… Customers expect to receive something for FREE because buying a camera is not considered (by customers) as a commodity See here…
The same principles are relevant when customers consider buying skincare, they expect to receive something for FREE.
Ignoring customers expectations may be taken by customers as “you don’t care” about them”, and going out from your beauty salon/SPA without anything FREE feels like they didn’t do a “good deal”.
On the other hand “offering good deals” will not only leave the customers with a good feeling but may cause the customer to spend more of it’s skincare budget in your beauty salon/SPA instead of buying similar products at your competition (the parfumeries, pharmacies and other chains…).
So, if you believe that offering special offers and “good deals” can increase your sales by 15%, you can expect to increase your profits (before tax) by at least 42% or even more (see the tabulator bellow).
The budget for special offers and FREE stuff that you should calculate is about 5% of your sales. This means that if you give away products for free and you calculate those products at your cost prices, you actually give away a value of 10% (but it costs you just a half).
Here is the point – not all your customers will agree to buy more and receive a present. Those customers will prefer to buy less and pay the full price. This means that you can offer more (more than 10% that costs you just a half) to the customers that do agree to buy more and receive more!!!
*This tabulator represents the av. sales and the av. expenses of a mid size beauty salon/day SPA.
Column B represents 15% more sales supported with a budget of 5% for promotions. Bottom line – 42% increase in profits.
|special offers||special offers|
|Cost of sales||€5,500.00||€6,325.00|
|Profit before tax||€450.00||€642.50|
Offering promotions, specials offers and FREE gifts on purchase will not only leave your customers with a goof feeling, but will mainly leave your bank account with an even better feeling!!!
Published by: Ron on July 19th, 2010 | Filed under Uncategorized
Comment now »
Just finished a two day Branding seminar with the staff of Dr.Baumann Turkey.
It was a Saturday-Sunday seminar.
Normally, some of the staff will find some excuses to why they can not be present on SUNDAY (this is normal as they want to spend their weekend with their family/friends). This was also the case with some of the Dr.Baumann Turkey staff.
However, after the Saturday seminar, everyone decided to appear to the Sunday seminar.
I guess that two things happened:
- The Saturday seminar was interesting and they understood that by not attending the Sunday seminar they will loose some important information.
- The Branding culture in Dr.Baumann Turkey started to play an important role and the staff feels/understands that each of them depends on the others. hence, if some do not appear they won’t be able to cooperate (with the team) an contribute as expected!!!
This seminar included all the business departments, from accounting to internet programming to designers, customers service and sales.
During the process of building a BRAND education your entire system/staff before starting to educate your customers is the highest priority.
This is ultimately true as your staff are the ones that come in contact with your customers. You can not expect your staff to educate your customers about your BRAND without being educated themselves…
Many businesses don’r put enough value on their staff’s education and suffer from the obvious consequences. Other businesses do educate their staff but just concentrate on sales etc…
In Dr.Baumann Turkey, sales is a result of an educated team that learns Branding seriously!!!
Learning branding is as starting from Ground Zero and going each time one level higher. It is a slower process but it guarantees faster result!
It is amazing to see the reactions of the participants once that they really understand what we do and why it is important. They feel involved, committed and proud. Only then, they are really ready to build a long lasting and profitable BRAND.
Published by: Ron on July 19th, 2010 | Filed under Uncategorized
Comment now »
People and consumers talk about your business (mostly) when you do things (products and services) that are really outstanding or when your products/services are really bad! They never talk about you when you are in the middle, not good but not bad, not expensive but also not cheap…in other words, they don’t talk about you when you are boring!!!
So, if you want people to talk about you and refer you to their friends > colleges > family etc…you have to be outstanding, anything else won’t work!!!
The same goes when you are extremely committed to deliver the highest quality and or extremely authentic by keeping to your business principles.
They will talk about you even more once that you combine the highest product/service quality together with the most authentic business strategy mixed with a total commitment…to lead your industry quality standards.
Now, all of the above is not NEW, yet, I find it strange that so few businesses stick to those well known principles and prefer to stay in the boring centre!
BUT- here is an additional point to remember. New innovations that you present are NEW TODAY and will be forgotten in a short while…Those NEW INNOVATIONS of yours will be soon taken as the NEW standard and people will stop talking about it…remember? people don’t talk about standard stuff!
So, the formula that you should keep in mind must also include the word NEW!!!
Dr.Baumann Cosmetics is a living example of implementing all the (above) mentioned principles.
Committed (with no limit) to innovating the highest quality DR BAUMANN COSMETICS introduced today 14 NEW SKINIDENT PRODUCTS. Expanding the existing SKINIDENT product range to hair products, leg and foot products, sun and solarium products as well as NEW SKINIDENT face skincare.
SKINIDENT - The only skincare line world wide that is made with 100% of the ingredients that are 100% identical to the human body. NO ingredients that aren’t present in your body are included!!! Nothing like it world wide. Now available in a NEW and ELEGANT DESIGN!!!
Therefore, people will talk about it!!!
Published by: Ron on July 16th, 2010 | Filed under Uncategorized
Comment now »
I am back to Turkey for five days intensive work, focusing on time management and branding.
This week is an “internal system” education that is designed for the staff of Dr.Baumann Turkey (not for beauty salons).
Day 1 – we will meet each of the staff members individually and go through their annual plans, half year plans and down to monthly, weekly and daily plans. we will do some adjustments (if necessary) and give the team members a feedback and “homework” that will be presented on day 4 and day 5.
Day 2 and 3 – we will repeat the millionaire seminar II focusing on branding. Yes, repeating the same seminar awakes new understandings!!! It happens again and again that people who visit the same seminar come out with new understandings ( as it is a total new seminar). The truth is that this seminar will include some additional and new issues that will have a synergy and empowerment effect to the previous branding seminar.
Day 4-5 – back to the individual time management meetings with each of the staff members to see the implementations of the time management meetings that we did on day one plus the new tasks that each of the team members decided to implement as a result of the two day branding seminar.
The purpose of those 5 days are as follows:
- Reviving the branding principles. This will be done through the two day branding seminar.
- Turning the branding seminar principles into a working plan, action plan and a measurable progress process that can be evaluated in every time point and adjusted if necessary.
- Making sure that the team plans “time for growth” where each of them will come up with new ideas about improvements, innovations and setting up newer and higher quality goal..rising the bar!
The truth is that there are relatively little “so called secrets” in regard to how to grow ones business and wealth.
The main problem is the daily disciplines that involve carrying out what is already known and is unfortunately forgotten in the daily noise and during the daily rush.
Hence, the need to take those “time out” sessions and refocus on the game is what makes the winners win the game.
It is a hard work of writing and accumulating TO DO lists and turning those TO DO lists into action that brings you eventually to your wished goals. (No short cuts).
Dr.Baumann Turkey is doing this kind of work for a while. The results (so far) are an increase of about 300% in the purchases from Dr.Baumann Germany during the first half of 2010 compared to the same period in 2009.
Global financial ups and downs have a minimal effect if at all once that you are totally focused on branding and allocate the time (time management) and follow the plans of turning branding into a daily controlled practice.
Published by: Ron on July 14th, 2010 | Filed under Uncategorized
Comment now »