A 1st Grader’s Guide to Growing Sales

My oldest daughter is suddenly curious about money. She has figured out that things cost money and that this money thing is kinda important to how the world works.

As in, why can’t I just take that cute doll out of the toy store… because it’s not yours and you didn’t pay for it.

Darn there’s that money thing again.

So the other day she says, “Daddy I want some money… can you just give me some?”

Of course my answer was “Umm… no. If you want money you gotta earn it.”

“How do I do that?”

“Remember how I tell you and your sister to not be problem “talkers” (aka whiners), and instead be problem solvers?” (I’ve been telling her this since she was 2 years old)

“Well to make money, all you have to do is solve someone else’s problem and have them pay you for doing it.”

“Oh okay… I want to open an ice cream store. Do you think I could make money that way?”

“I don’t see why not… do your friends have a problem getting more ice cream?”


So now she and her little sister are busy planning which flavors of ice cream to carry in their story.  Mint chocolate chip seems to be the leading contender.

Now of course there are lots of practical things wrong with this situation, but I’m glad she has the general right idea and want to encourage it as much as possible.

And sadly, I find many business owners in this economy are completely forgetting the basics.  Businesses exist to solve the problems of others.

Note the 3 of the last few words…. SOLVE… PROBLEM… OTHERS.

Lets tackle that in reverse order.

OTHERS – if there are no customers, there is no business. If the “others” (your former customers) have disappeared in mass from a particular market or geography, the simple (but admittedly painful) solution is to find a different group of “others”

PROBLEM – do your customers have a big headache?  If not, there is no business. If they have a little headache, that’s great for business — 3 years from now. If you want revenue NOW, you need a customer with a problem that must be solved NOW. Pure and simple.

SOLVE – does your product, service, or an invented “bundle” (one of my favorite and easiest ways to innovate) actually make the customer’s problem go away?  This seems like a very simple question, but it is actually quite profound.

Most CEO’s think in terms of selling a product or service. I encourage you to think in terms of Problem vs. Solution.  What is the problem you are solving for customers? And more importantly what problem does the customer want solved?

Apple Case Study

Before Apple came along, all the MP3 players thought (incorrectly I might add) that the problem they were solving for customers is “I want a better, cooler, larger capacity, small MP3 player.”

The initial genius in Apple’s creation of the iPod was not just the product innovation, but their definition of the problem they solve for customers. The competitors focused on solving the “I want a better mp3 player” problem, Apple decide to focus on the problem of “I want THAT song right now.”

They focused on cutting the lag time between deciding you want  a song on your mp3 player and actually getting it there and listening to it.

Before the days of itunes, people would listen to a song on the radio, really like it, decide they want to buy it… and then they would…

1) write on their to do list a trip to the music store

2) drive to the music store at the mall

3) find the album by that particular artist

4) pay for the whole album (even though they only wanted 1 song)

5) drive home battling traffic

6) insert CD into computer

7) “burn” the disc and convert the songs to mp3

8) load the mp3 song onto the mp3 player

9) play the song on your cooler, fast, higher capacity mp3 player

I guarantee you that every mp3 manufacturer in the world was focused on #9 above. Manufacturers culturally think about products. Steve Jobs at Apples thinks about problems.  Apple focused on Steps 1 – 9 of the WHOLE problem, while competitors only focused on #9.

The genius of the ipod/itunes combo wasn’t the cool design (though it definitely was/continues to be cool). The genius was they figured out a way to eliminate the drive to and from the music store.

Clients often ask me to lead and facilitate their annual strategic planning process. They know they need to think differently, but everyone in the company is so deeply experienced in their industry that they find it hard to think “outside the box.”–so they ask me to participate and challenge their thinking.

One of the things I will ask an executive team is to have them explain to me what does your customer do BEFORE they use your product/service, what do they do AFTER. This simple question often flushes out the entirety of the customer’s problem (from their point of view) and not just the very narrow definition most companies have.

If all the mp3 competitors had asked that question, it’s pretty obvious that before you use an mp3 player you gotta drive to the darn mall to get the cd.  This is hardly rocket science. It is so obvious to anyone who listens to music in the pre-ipod days… so like most brilliant insights, it’s hiding in plain site (which is VERY common I might add).

In my next few articles, I will highlight several companies big and small that are solving customer problems in an interesting way — innovation at its core — and all are rocking in this economy.

In fact, I’m swimming in examples this week as I am noticing so many of these success stories this week (when it rains, it pours) that I can’t keep up writing about them. I’ve actually started a file folder to keep track of all of them.

One thing is absolutely certain. Many companies are not just muddling through or surviving in the current economy. They are absolutely crushing it and blowing away their sales and profit numbers.  These are big companies and small. Low tech and high tech.

The magic is NOT their industry (most companies are in industries where everyone else is struggling)… it is HOW they run their business in a way that is STRATEGICALLY brilliant and different from competitors.

Two final thoughts for today:

1) In a shrinking market, the only way to grow is to take business away from a competitors (when the size of the pie shrinks, you must grab a bigger slice of it)

2) It’s unrealistic to expect to take business away from competitors by doing the same things they do.  You have to be noticeably different to pull it off.

On a personal note, I have recently located to Bainbridge Island, WA – a small island in the Puget Sound, 30 minute ferry ride from Seattle.  After a combined 12 years in Silicon Valley, 7 years in Manhattan, and 2 in Boston, my wife and I decided to opt for the road a little less traveled.

As the kids are entering school age, we wanted a place with a slower pace of life. So for the first time in my life, I live in a place where the trees outnumber the people and cars — which I find very unusual as do the girls.

On a practical matter, my business continues to be nationwide and global – with clients in the US, Canada, Argentina, and the United Kingdom. I have several clients in Silicon Valley and am in the San Francisco Bay Area just about every month.

I also continue long term relationships with clients across the entire East Coast – New York, Washington DC, Florida. So on a practical matter, clients and prospective clients will not notice the slightest change in how, where, and when I do business other than a change in the phone number.

On that note, I will wrap up for today and encourage you to look forward to several case studies to be posted in the days to come.

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