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Why small businesses may be the key to big sales - from Entrepreneur Magazine

Grow Big by Selling Small

Go where the money is by catering to like-minded entrepreneurs.

By Emma Johnson   |   November 10, 2009

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It's an easy fantasy to nurture; you land The Big One. That one giant, fat account that will launch your business into the big leagues, put the kids through college and secure an early retirement on that Hans Christian 48-foot sailboat.

Give it up. Instead, build your dreams around a wide and varied customer base of other small businesses, experts urge. Success with this model is more likely, less risky and a smarter way to grow a solid enterprise. Plus, in most cases small businesses simply aren't equipped to respond to a whopper of a sale.

"Smaller companies often pursue the big guys and leave low-hanging fruit, which is other small companies," says Don Mazzella, a small-business consultant and co-author of The Janus Principle: Focusing Your Company on Selling to Small Business. "However, it's easier and more effective to sell to your counterparts than to larger clients."

Why Sell to Small Businesses?
If a single sale to, say, FedEx or Wal-Mart would exceed all revenue expectations, why spend your limited energy on lots of small accounts?

First, as a small business you talk the talk of other small businesses, and the learning curve for dealing with a small firm is much easier than breaking through the cinderblock walls of a global corporation, Mazzella says. "Small-business owners are often surprised to learn that other small businesses make decisions the same way they do."

Further, selling to other entrepreneurs is actually where the money is. The U.S. Small Business Administration reports that this country is home to 27.2 million small enterprises that represent a market of $7 trillion--a sum equal to more than half the U.S. domestic national product and greater than the GNP of all but eight countries.

Finally, it's simply safer for your business to have many small customers rather than a few behemoth ones. The Janus Principle authors underscore the maxim that no one client should constitute more than 40 percent of your revenue.

Evolve IP, a Wayne, Pa., based tech-management services provider, strategically targets small-business customers. "By having 10,000 customers each spending $500 per month, we have the ability to build a stable revenue foundation that will sustain over a long period time," says Tim Allen, chief sales officer. The loss of one of those thousands of clients barely dents the bottom line, while losing one of a precious few could force a firm to scale back, or even go under.

How to Find Them
Quaint as it may sound, experts say you should network locally to reach potential small-business customers. "Small-business owners often [maintain close ties to] their community," Allen says.

Indeed, a survey conducted by the authors of The Janus Principle found that 73 percent of all business is conducted within a 50-mile radius of the firm. This figure is down from 84 percent five years ago, but still remarkably high considering the perceived effects of the internet on commerce. One key reason small businesses like to partner with local vendors: They know where to find them should things get ugly, Mazzella says.

Allen looks to local business associations for networking as well as for forging formal partnerships to offer services and products to members--usually at a discount. Membership in civic organizations such as Rotary and Kiwanis clubs can be especially effective when combined with media coverage to maximize your visibility. Use article mentions and advertisements in local newspapers and on radio and TV to target a local customer base.

Likewise, trade publications are an invaluable resource for businesses whose customer base is national or global. The key is to find familiar connections between your and the other businesses' target customers. Referrals from peers are one of strongest ways to secure a first meeting.

"Getting Donald Trump to endorse your product is not as good as another small-business owner promoting your product," Mazzella says, because small-business owners trust their peers above national spokespeople. Again, entrepreneurs understand other entrepreneurs.

Cold calls are far from out of date, experts say--especially when it comes to approaching entrepreneurs. The Janus Principle notes one New York City salesman who claims a 25 percent success rate landing meetings with small-business owners by cold-calling them and offering to bring a corned beef sandwich from the city's famed Katz's Deli. "For 15 bucks I am in the door," he says. Do you think any variety of salted meat could get you a meeting with, say, Oracle's Larry Ellison?

The Meeting
So once that meeting is secured, what happens?

The first step is to find out what the customer's needs are. Then find a way to prove your product or service fits that need. Finally, establish your reliability.

Keep it real. Don't be shy about mentioning a mutual friend or colleague, and spend time getting to know that decision-maker as a person. Everyone likes to do business with people they like and trust. This may be especially true for small businesses, as it's usually just one individual who makes all the company's buying decisions, unlike large corporations that run purchasing through layers of cumbersome processes, says Edward Dolan, principal of EPIC Results, a business consultancy for entrepreneurs.

"They have to have a sense of connection and trust, which comes from a rapport or shared value," he explains. "People buy from people they know and like."

It's this combination of listening, then filling a need and being accountable that secures a sale to a small business, Dolan says. "It's that old saying my mother used to tell me: Nobody cares how much you know until they know how much you care."

Evolve IP's Allen says that producing copies of stories in national media outlets that have mentioned your company can help you sell yourself to another small business; it underscores your company's credibility to a customer who may not fully understand your product, he says. This probably isn't necessary with large businesses; the big guys will often be staffed by a team of research experts armed with detailed questions about your product.

Sales for Now and the Future
The first sale is often the easiest one. It's building a long-lasting, mutually beneficial relationship that often proves tricky for small-business owners.

The key is to identify customers' challenges and remain nimble enough to accommodate them. Perhaps you provide creative financing options or, like Evolve IP, offer a purchasing credit in exchange for replacing your product with that of a competitor to whom the customer has already committed – thus removing the financial hurdle to the sale.

Dolan notes a distribution company that, unlike its competitors, refused to administer a fuel surcharge during the gasoline crisis a few years ago. Instead, the company asked its clients to consolidate orders when possible--proving a win-win situation for both parties.

"If you always have your poker face on and are always negotiating, that's the kind of [adversarial] relationship you'll have," Dolan says. "But if you look at [selling to small businesses] as [building] partners, the relationship can be mutually supportive."

Some great advice and insights from those powerful minds at McKinsey

The use and abuse of scenarios

Although it is surprisingly hard to create good ones, they help you ask the right questions and prepare for the unexpected. That is hugely valuable.

NOVEMBER 2009 • Charles Roxburgh

Source: Strategy Practice

In This Article

• About the author
• Comments

Scenarios are a powerful tool in the strategist’s armory. They are particularly useful in developing strategies to navigate the kinds of extreme events we have recently seen in the world economy. Scenarios enable the strategist to steer a course between the false certainty of a single forecast and the confused paralysis that often strike in troubled times. When well executed, scenarios boast a range of advantages—but they can also set traps for the unwary.

There is a significant amount of literature on scenarios: their origins in war games, their pioneering use by Shell, how to construct them, how to move from scenarios to decisions, and so on. Rather than attempt anything encyclopedic, which would require a book rather than a short article, I have put forward my personal convictions, based on experience in building scenarios over the past 25 years, about both the power and the dangers of scenarios, and how to sidestep those dangers. I close with some rules of thumb that help me—and will, I hope, help you—get the best out of scenarios.

The power of scenarios

Scenarios have three features that make them a particularly powerful tool for understanding uncertainty and developing strategy accordingly.

Scenarios expand your thinking

You will think more broadly if you develop a range of possible outcomes, each backed by the sequence of events that would lead to them. The exercise is particularly valuable because of a human quirk that leads us to expect that the future will resemble the past and that change will occur only gradually. By demonstrating how—and why—things could quite quickly become much better or worse, we increase our readiness for the range of possibilities the future may hold. You are obliged to ask yourself why the past might not be a helpful guide, and you may find some surprisingly compelling answers.

This quirk, along with other factors, was most powerfully illustrated in the recent meltdown. Many financial modelers had used data going back only a few years and were therefore entirely unprepared for what we have since seen. If they had asked themselves why the recent past might not serve as a good guide to the future, they would have remembered the Asian collapse of the late 1990s, the real-estate slump of the early 1990s, the crash of October 1987, and so on. The very process of developing scenarios generates deeper insight into the underlying drivers of change. Scenarios force companies to ask, “What would have to be true for the following outcome to emerge?” As a result, they find themselves testing a wide range of hypotheses involving changes in all sorts of underlying drivers. They learn which drivers matter and which do not—and what will actually affect those that matter enough to change the scenario.

Scenarios uncover inevitable or near-inevitable futures

A sufficiently broad scenario-building effort yields another valuable result. As the analysis underlying each scenario proceeds, you often identify some particularly powerful drivers of change. These drivers result in outcomes that are the inevitable consequence of events that have already happened, or of trends that are already well developed. Shell, the pioneer in scenario planning, described these as “predetermined outcomes” and captured the essence of this idea with the saying, “It has rained in the mountains, so it will flood in the plains.” In developing scenarios, companies should search for predetermined outcomes—particularly unexpected ones, which are often the most powerful source of new insight uncovered in the scenario-development process.

Broadly speaking, there are four kinds of predetermined outcomes: demographic trends, economic action and reaction, the reversal of unsustainable trends, and scheduled events (which may be beyond the typical planning horizon).

• Demography is destiny. Changes in population size and structure are among the few highly predictable aspects of the future. Some uncertainties exist (potential increases in longevity, for example), but only at the margin. Sometimes, the effects of these trends are far off—as with Social Security in the United States today—so they are generally ignored. When these trends grow near, however, their effects can be powerful indeed, as when the baby boom generation is on the brink of leaving the workforce.
• “You canna change the laws of economics!” Just as Scotty the engineer could not change the laws of physics when Captain Kirk¹ demanded more warp speed, so business leaders cannot assume away the laws of economics. If demand shoots up, prices will too—which will limit demand and drive increasing supply—with the result that demand, prices, or both will drop. Nothing increases in price forever, in real terms. We recently saw oil prices more than double and then sink back again by an equal amount. Price changes of this scale inevitably drive supply and demand reactions in every relevant value chain. As in physics, every economic action has a predetermined reaction. These reactions are often ignored in business strategy. If uncovered through scenario planning, however, they can generate powerful insights.
• “Trees don’t grow to the sky.” Business plans often extrapolate into the future trends that are clearly unsustainable. Economies are fundamentally cyclical, so beware of politicians bearing tales about the end of boom and bust. Equally, do not build a strategy based on the claim that the business cycle has been tamed. Often, optimistic projections are accompanied by bold claims of a new paradigm. Strategists need to be very cautious about alleged new paradigms. The appearance of even a genuine new paradigm almost always results in a speculative bubble. The “new economy” was a good example. More recently, securitization proved to be another sound idea that resulted in a speculative bubble. And in the past, many new, innovative technologies—railroads and radio, for example—were hailed as “new paradigms” and then promptly led to investment bubbles. A useful test is to project a trend at least 25 years out. Then ask how long can this trend really be sustained. Challenge yourself to try and prove why the shape of the future should be so fundamentally different from the more cyclical past. Chances are you won’t be able to, and this will open your eyes to the possibility of a break in the trend.
• Scheduled events may fall beyond typical planning horizons. There is also a simpler kind of predetermined outcome that does not involve any unalterable laws: scenarios must take into account scheduled events just beyond corporate planning horizons. A recent example, the results of which we have already seen, is reset dates on adjustable-rate mortgages. Well before the event, one could have predicted a spike in resets as mortgages sold in 2005 and 2006—the peak years—completed their low, three-year introductory rates. Something bad was going to happen to the economy in 2008. Right now, there is another important “timetable” to watch: the wave of large bond issues that has resulted from banks having to refinance hundreds of billions of dollars of maturing debt. Although these types of scheduled events ought to be common knowledge, they tend to be overlooked in planning exercises because they fall beyond the next 12 to 18 months. Scenarios should account for scheduled events that could have a big impact in the 24–60 month time frame.

While some errors can be avoided by recalling certain fundamental economic and demographic facts or scheduled events, problems of timing will continue to exist. Your company’s strategic planners may know that a massive dollar value of mortgages is about to reset. But when will the market actually wake up to this reality? Financial services cannot grow as a percentage of GDP forever. But at what percentage will this stop? We didn’t know before, and we still don’t know today. Still, the realization that something must happen, even if it is not clear when, leads to the inclusion of at least one scenario in which, say, financial services stop growing sooner rather than later.

Scenarios protect against ‘groupthink’

Often, the power structure within companies inhibits the free flow of debate. People in meetings typically agree with whatever the most senior person in the room says. In particularly hierarchical companies, employees will wait for the most senior executive to state an opinion before venturing their own—which then magically mirrors that of the senior person. Scenarios allow companies to break out of this trap by providing a political “safe haven” for contrarian thinking.

Scenarios allow people to challenge conventional wisdom

In large corporations, there is typically a very strong status quo bias. After all, large sums of money, and many senior executives’ careers, have been invested in the core assumptions underpinning the current strategy—which means that challenging these assumptions can be difficult. Scenarios provide a less threatening way to lay out alternative futures in which the these assumptions underpinning today’s strategy may no longer be true.

Avoiding the common traps in using scenarios

For all these benefits, there is a downside to scenarios. Inexperienced people and companies are prone to fall into a number of traps.

Don’t become paralyzed

Creating a range of scenarios that is appropriately broad, especially in today’s uncertain climate, can paralyze a company’s leadership. The tendency to think we know what is going to happen is in some ways a survival strategy: at least it makes us confident in our choices (however misplaced that confidence may be). In the face of a wide range of possible outcomes, there is a risk of acting like the proverbial deer in the headlights: the organization becomes confused and lacking in direction, and it changes nothing in its behavior as an uncertain future bears down upon it.

The answer is to pick the scenario whose outcome seems most likely and to base a plan upon that scenario. It should be buttressed with clear contingencies if another scenario—or one that hasn’t been imagined—begins to emerge instead. Ascertain the “no regrets” moves that are sound under all scenarios or as many as possible. Ultimately, the existence of multiple possibilities should not distract a company from having a clear plan.

Don’t let scenarios muddy communications

The former CEO of a global industrial company once suggested that scenarios are an abdication of leadership. His point was that a leader has to set a vision for the future and persuade people to follow it. Great leaders do not paint four alternative views of the future and then say, “Follow me, although I admit I’m not sure where we are going.”

Leaders can use scenarios without abdicating their leadership responsibilities but should not communicate with the organization via scenarios. You cannot stand up in front of an organization and say, “Things will be good, bad, or terrible, but I am not sure which.” Winston Churchill’s remarks about British aims in World War II—“Victory at all costs, victory in spite of all terror, victory however long and hard the road may be”—are instructive. By insisting on only one final outcome, Churchill was not refusing to acknowledge that a wide range of conditions might exist. What he did was to set forth a goal that he regarded as what we would call “robust under different scenarios.” He was acknowledging the range of uncertainties (“however long and hard the road may be”), and he resisted overoptimism (which affected many bank CEOs early in the recent crisis).

A chief executive, a prime minister, or a president must provide clear and inspiring leadership. That doesn’t mean these leaders should not study and prepare for a number of possibilities. Understanding the range of likely events will embolden corporate leaders to feel prepared against most eventualities and allow those leaders to communicate a single, bold goal convincingly.

One additional point about communication and scenarios is worth noting. Scenarios can help leaders avoid looking stupid. A wide range of scenarios—even if not publicly discussed—can help prevent leaders from making statements that can be proven wrong if one of the more extreme scenarios unfolds. For instance, one financial regulator boldly announced, early in the financial crisis, that its banking system was, at the time, capitalized to a level that made it bulletproof under all reasonable scenarios—only to announce, a few months later, that a further recapitalization was required. Similarly, the head of a large bank confidently suggested that the downturn was in its final phases shortly before the major indexes plummeted by 25 percent and we entered a new and even more dangerous phase of the crisis. Many CEOs have given hostages to fortune; scenarios would have helped them avoid doing so.

Don’t rely on an excessively narrow set of outcomes

The astute reader will have noticed that the above-mentioned financial regulator managed to embarrass itself even though it was using scenarios. One of the more dangerous traps of using them is that they can induce a sense of complacency, of having all your bets covered. In this regard at least, they are not so different from the value-at-risk models that left bankers feeling that all was well with their businesses—and for the same reason. Those models typically gave bankers probabilistic projections of what would happen 99 percent of the time. This induced a false sense of security about the potentially catastrophic effects of an event with a 1 percent probability. Creating scenarios that do not cover the full range of possibilities can leave you exposed exactly when scenarios provide most comfort.

One investment bank in 2001, for instance, modeled a 5 percent revenue decline as its worst case, which proved far too optimistic given the downturn that followed. Even when constructing scenarios, it is easy to be trapped by the past. We are typically too optimistic going into a downturn and too pessimistic on the way out. No one is immune to this trap, including professional builders of scenarios and the companies that use them. When the economy is heading into a downturn, pessimistic scenarios should always be pushed beyond what feels comfortable. When the economy has entered the downturn, there is a need for scenarios that may seem unreasonably optimistic.

The breadth of a scenario set can be tested by identifying extreme events—low-probability, high-impact outcomes—from the past 30 or 40 years and seeing whether the scenario set contains anything comparable. Obviously, such an event would never be a core scenario. But businesses ought to know what they would do, say, if some more virulent strain of avian flu were to emerge or if an unexpected geopolitical conflict exploded. Remember too that it would not take a pandemic or a terrorist attack to threaten the survival of many businesses. Sudden spikes in raw-material costs, unexpected price drops, major technological breakthroughs—any of these might take down many large businesses. Companies can’t build all possible events into their scenarios and should not spend too much time on the low-probability ones. But they must be sure of surviving high-severity outcomes, so such possibilities must be identified and kept on a watch list.

Don’t chop the tails off the distribution

In our experience, when people who are running businesses are presented with a range of scenarios, they tend to choose one or two immediately to the right and left of reality as they experience it at the time. They regard the extreme scenarios as a waste because “they won’t happen” or, if they do happen, “all bets are off.” By ignoring the outer scenarios and spending their energy on moderate improvements or deteriorations from the present, leaders leave themselves exposed to dramatic changes—particularly on the downside.

So strategists must include “stretch” scenarios while acknowledging their low probability. Remember, risk and probability are not the same thing. Because the risk of an event is equal to its probability times its magnitude, a low-probability event can still be disastrous if its effects are large enough.

Don’t discard scenarios too quickly

Sometimes the most interesting and insightful scenarios are the ones that initially seem the most unlikely. This raises the question of how long companies should hold on to a scenario. Scenarios ought to be treated dynamically. Depending on the level of detail they aspire to, some might have a shelf life numbered only in months. Others may be kept and reused over a period of years. To retain some relevance, a scenario must be a living thing. Companies don’t get a scenario “right”—they keep it useful. Scenarios get better if revised over time. It is useful to add one scenario for each that is discarded; a suite of roughly the same number of scenarios should be maintained at all times.

Remember when to avoid scenarios altogether

Finally, bear in mind the one instance in which strategists will not want to use scenarios: when uncertainty is so great that they cannot be built reliably at any level of detail.² Just as scenarios help to avoid groupthink, they can also generate a groupthink of their own. If everyone in an organization thinks the world can be categorized into four boxes on a quadrant, it may convince itself that only four outcomes or kinds of outcomes can happen. That’s very dangerous. Strategists should not think that they have all reasonable scenarios when there are quite different possibilities out there.

Don’t use a single variable

The future is multivariate, and there are elements strategists will miss. They should therefore avoid scenarios that fall on a single spectrum (“very good,” “good,” “not so good,” “very bad”). At least two variables should be used to construct scenarios—and the variables must not be dependent, or in reality there will be just one spectrum.

Some rules of thumb

Obviously, some general principles can be assembled from the points above: look for events that are certain or nearly certain to happen; make sure scenarios cover a broad range of outcomes; don’t ignore extremes; don’t discard scenarios too quickly just because short-term reality appears to refute them and never be embarrassed by a seemingly too pessimistic or optimistic scenario; understand when not enough is known to sketch out a scenario; and so on. But there are some additional rules of thumb that I have found particularly useful.

Always develop at least four scenarios

A scenario set should always contain at least four alternatives. Show three and people always pick the middle one. Four forces them to discover which way they truly lean—an important input into the discussion. Two is always too few unless there is only one big swing factor affecting the situation.

Technically, of course, many scenarios can be sketched out in almost any situation. All possible combinations of just three uncertainties will create 27 scenarios. But many of them will be impossible because the variables are rarely completely independent. Usually, the possibilities can be boiled down to four or five major possible futures.

“Crunch” the quadrants

Often people use a two-by-two matrix when presenting scenarios. But it is not routinely the case that there are just two major variables. In developing scenarios, it would be typical to identify three to five critical uncertainties. How to resolve this tension? One approach is to create multiple two-by-twos using all possible combinations of the four or five critical uncertainties. It will quickly become clear that some uncertainties are highly correlated and so can be combined—and that others are not principal drivers of the various scenarios. At minimum, this will allow for simplification. Sometimes, however, it is possible to uncover a real insight when trying to describe a quadrant created by an unusual combination of uncertainties.³

There should always be a base or central case

This point goes back to the chief executive, mentioned above, who claimed that scenarios were an abdication of responsibility. It is fine to put forward scenarios—it is, in fact, the responsible thing to do. But those who must weigh scenarios and reach decisions based on them expect and deserve to get a specific point of view about the future. The scenario that is highest in probability should always be identified, and that ought to become the base case. If that proves impossible, it should at least be feasible to fashion a “central” case—but there must be crystal clarity about the degree of certainty attached to it, the alternatives, and the resilience of any strategy to those alternatives.

Scenarios must have catchy names

The notion of attaching clever names to scenarios may well sound trivial. It is not. Unless scenarios become a living part of an organization, they are useless. And if they do not have snappy, memorable names, they will not enter the organization’s lexicon. Use two to four words—no more. Plays on film titles and historical events are recommended. Some names that I have used, and that appear to have stuck, are “Groundhog Day,” “the long chill,” “perfect summer,” “end of an era,” “silver age,” and “Mexican spring.”

Avoid long, descriptive titles. No one will remember “Restrengthening world economy at a lower level of overall growth.” And avoid boring “bull, bear, and base” scenarios, even though these are used by many stock analysts. If no snappy title seems to present itself (assuming that someone creative is available), the scenario is probably too diffuse and may contain elements of two different scenarios jammed together.

Learn from being totally wrong

Developing scenarios is an art rather than a science. People learn by experience. It is useful to look back at old scenarios and ask what, in retrospect, they missed. What could have been known at the time that would have made for better scenarios? Events will prove that some scenarios were too narrow or that one was thrown out too soon. The more comfortable an organization and its people are with mistakes and learning from them, the less likely it is to be mistaken again.

Listen to contrary voices

This is a good corrective to groupthink. We tend to dismiss the mavericks. Scenarios are there to make room for them. Maverick scenarios have the virtue of being surprising, which makes people think. If a company’s scenarios are all completely predictable (conventionally good, conventionally bad, and somewhere in the middle), they are not going to be valuable. The best scenarios are built on a new insight—either something predetermined that others have missed or an unobvious but critical uncertainty.

On one occasion, when oil was at $120 a barrel, we presented a scenario with oil at $70. Someone asked what would happen if oil dropped to $10 a barrel. We said that was unnecessarily radical. But we probably should not have been so dismissive, as oil promptly fell below $50 a barrel. We should have been more open to the possibility of this radical price swing—after all, oil has been at $10 a barrel well within living memory. Scenarios should not assume a short-term time series; they should go back as far as possible. If a data series going back 300 years is available, you should consider using it (they do exist for UK interest rates and UK government debt as a percentage of GDP and these long-term data series have certainly informed current debates about the possible interest rates and sustainable debt to GDP ratios). Most variables can only be supported by data going back tens of years—but even this is much more instructive than the meager data often used and helps broaden the range of possible outcomes.

Even modest environmental changes can have enormous impact

The best example of this principle is that specialist business models fail when the business environment changes. I call this the “saber-toothed tiger” problem. The saber-toothed tiger was a specialist killing machine, its big teeth perfectly evolved to capture large mammals. When the environment changed and the large mammals became extinct, saber-toothed tigers became extinct too—those lage teeth were not as good for catching small, furry mammals. By contrast, the shark is a generalist killing machine—and so has remained highly successful for hundreds of millions of years.

A specialist business model can suffer the fate of the saber-toothed tiger if the environment changes. Many winning business models are highly specialized and precisely adapted to the current business environment. Therefore no one should ever assume that today’s winners will be in an advantaged position in all possible futures (or even most of them). Therefore, scenarios should be based on creative thinking about how predicted changes in the business environment will alter the competitive landscape. If the environment changes in a scenario but the competitors remain the same, that scenario may not be imaginative enough.

None of the above is rocket science. Why, then, don’t people routinely create robust sets of scenarios, create contingency plans for each of them, watch to see which scenario is emerging, and live by it? Scenarios are in fact harder than they look—harder to conceptualize, harder to build, and uncomfortably rich in shortcomings. A good one takes time to build, and so a whole set takes a correspondingly larger investment of time and energy.

Scenarios will not provide all of the answers, but they help executives ask better questions and prepare for the unexpected. And that makes them a very valuable tool indeed.

About the Author

Charles Roxburgh is a director in McKinsey’s London office.

Some great tips for service staff from the New York Times...

October 29, 2009, 12:39 pm

100 Things Restaurant Staffers Should Never Do (Part 1)

By Bruce Buschel

Herewith is a modest list of dos and don’ts for servers at the seafood restaurant I am building. Veteran waiters, moonlighting actresses, libertarians and baristas will no doubt protest some or most of what follows. They will claim it homogenizes them or stifles their true nature. And yet, if 100 different actors play Hamlet, hitting all the same marks, reciting all the same lines, cannot each one bring something unique to that role?

1. Do not let anyone enter the restaurant without a warm greeting.

2. Do not make a singleton feel bad. Do not say, “Are you waiting for someone?” Ask for a reservation. Ask if he or she would like to sit at the bar.

3. Never refuse to seat three guests because a fourth has not yet arrived.

4. If a table is not ready within a reasonable length of time, offer a free drink and/or amuse-bouche. The guests may be tired and hungry and thirsty, and they did everything right.

5. Tables should be level without anyone asking. Fix it before guests are seated.

6. Do not lead the witness with, “Bottled water or just tap?” Both are fine. Remain neutral.

7. Do not announce your name. No jokes, no flirting, no cuteness.

8. Do not interrupt a conversation. For any reason. Especially not to recite specials. Wait for the right moment.

9. Do not recite the specials too fast or robotically or dramatically. It is not a soliloquy. This is not an audition.

10. Do not inject your personal favorites when explaining the specials.

11. Do not hustle the lobsters. That is, do not say, “We only have two lobsters left.” Even if there are only two lobsters left.

12. Do not touch the rim of a water glass. Or any other glass.

13. Handle wine glasses by their stems and silverware by the handles.

14. When you ask, “How’s everything?” or “How was the meal?” listen to the answer and fix whatever is not right.

15. Never say “I don’t know” to any question without following with, “I’ll find out.”

16. If someone requests more sauce or gravy or cheese, bring a side dish of same. No pouring. Let them help themselves.

17. Do not take an empty plate from one guest while others are still eating the same course. Wait, wait, wait.

18. Know before approaching a table who has ordered what. Do not ask, “Who’s having the shrimp?”

19. Offer guests butter and/or olive oil with their bread.

20. Never refuse to substitute one vegetable for another.

21. Never serve anything that looks creepy or runny or wrong.

22. If someone is unsure about a wine choice, help him. That might mean sending someone else to the table or offering a taste or two.

23. If someone likes a wine, steam the label off the bottle and give it to the guest with the bill. It has the year, the vintner, the importer, etc.

24. Never use the same glass for a second drink.

25. Make sure the glasses are clean. Inspect them before placing them on the table.

26. Never assume people want their white wine in an ice bucket. Inquire.

27. For red wine, ask if the guests want to pour their own or prefer the waiter to pour.

28. Do not put your hands all over the spout of a wine bottle while removing the cork.

29. Do not pop a champagne cork. Remove it quietly, gracefully. The less noise the better.

30. Never let the wine bottle touch the glass into which you are pouring. No one wants to drink the dust or dirt from the bottle.

31. Never remove a plate full of food without asking what went wrong. Obviously, something went wrong.

32. Never touch a customer. No excuses. Do not do it. Do not brush them, move them, wipe them or dust them.

33. Do not bang into chairs or tables when passing by.

34. Do not have a personal conversation with another server within earshot of customers.

35. Do not eat or drink in plain view of guests.

36. Never reek from perfume or cigarettes. People want to smell the food and beverage.

37. Do not drink alcohol on the job, even if invited by the guests. “Not when I’m on duty” will suffice.

38.Do not call a guy a “dude.”

39. Do not call a woman “lady.”

40. Never say, “Good choice,” implying that other choices are bad.

41. Saying, “No problem” is a problem. It has a tone of insincerity or sarcasm. “My pleasure” or “You’re welcome” will do.     

42. Do not compliment a guest’s attire or hairdo or makeup. You are insulting someone else.

43. Never mention what your favorite dessert is. It’s irrelevant.

44. Do not discuss your own eating habits, be you vegan or lactose intolerant or diabetic.

45. Do not curse, no matter how young or hip the guests.

46. Never acknowledge any one guest over and above any other. All guests are equal.

47. Do not gossip about co-workers or guests within earshot of guests.

48. Do not ask what someone is eating or drinking when they ask for more; remember or consult the order.

49. Never mention the tip, unless asked.

50. Do not turn on the charm when it’s tip time. Be consistent throughout.

November 5, 2009, 9:00 am

100 Things Restaurant Staffers Should Never Do (Part 2)

By Bruce Buschel

This is the second half of the 100 do’s and don’ts from last week’s post. Again, this list is for one particular restaurant, mine, which is under construction in Bridgehampton, N.Y., and will, with any luck, open this spring. I realize that every deli needs a wisecracking waiter, most pizza joints can handle heavy metal, and burgers always taste better when delivered by a server with tattoos and tongue piercing(s).

Not even a hundred suggestions can cover all the bases, so one is grateful for the many comments following the 50, including striking “you guys” from the restaurant lexicon and making sure the alcohol order is taken lickety-split. Thanks for all of the help.

51. If there is a service charge, alert your guests when you present the bill. It’s not a secret or a trick.

52. Know your menu inside and out. If you serve Balsam Farm candy-striped beets, know something about Balsam Farm and candy-striped beets.

53. Do not let guests double-order unintentionally; remind the guest who orders ratatouille that zucchini comes with the entree.

54. If there is a prix fixe, let guests know about it. Do not force anyone to ask for the “special” menu.

55. Do not serve an amuse-bouche without detailing the ingredients. Allergies are a serious matter; peanut oil can kill. (This would also be a good time to ask if anyone has any allergies.)

56. Do not ignore a table because it is not your table. Stop, look, listen, lend a hand. (Whether tips are pooled or not.)

57. Bring the pepper mill with the appetizer. Do not make people wait or beg for a condiment.

58. Do not bring judgment with the ketchup. Or mustard. Or hot sauce. Or whatever condiment is requested.

59. Do not leave place settings that are not being used.

60. Bring all the appetizers at the same time, or do not bring the appetizers. Same with entrees and desserts.

61. Do not stand behind someone who is ordering. Make eye contact. Thank him or her.

62. Do not fill the water glass every two minutes, or after each sip. You’ll make people nervous.

62(a). Do not let a glass sit empty for too long.

63. Never blame the chef or the busboy or the hostess or the weather for anything that goes wrong. Just make it right.

64. Specials, spoken and printed, should always have prices.

65. Always remove used silverware and replace it with new.

66. Do not return to the guest anything that falls on the floor — be it napkin, spoon, menu or soy sauce.

67. Never stack the plates on the table. They make a racket. Shhhhhh.

68. Do not reach across one guest to serve another.

69. If a guest is having trouble making a decision, help out. If someone wants to know your life story, keep it short. If someone wants to meet the chef, make an effort.

70. Never deliver a hot plate without warning the guest. And never ask a guest to pass along that hot plate.

71. Do not race around the dining room as if there is a fire in the kitchen or a medical emergency. (Unless there is a fire in the kitchen or a medical emergency.)

72. Do not serve salad on a freezing cold plate; it usually advertises the fact that it has not been freshly prepared.

73. Do not bring soup without a spoon. Few things are more frustrating than a bowl of hot soup with no spoon.

74. Let the guests know the restaurant is out of something before the guests read the menu and order the missing dish.

75. Do not ask if someone is finished when others are still eating that course.

76. Do not ask if a guest is finished the very second the guest is finished. Let guests digest, savor, reflect.

77. Do not disappear.

78. Do not ask, “Are you still working on that?” Dining is not work — until questions like this are asked.

79. When someone orders a drink “straight up,” determine if he wants it “neat” — right out of the bottle — or chilled. Up is up, but “straight up” is debatable.

80. Never insist that a guest settle up at the bar before sitting down; transfer the tab.

81. Know what the bar has in stock before each meal.

82. If you drip or spill something, clean it up, replace it, offer to pay for whatever damage you may have caused. Refrain from touching the wet spots on the guest.

83. Ask if your guest wants his coffee with dessert or after. Same with an after-dinner drink.

84. Do not refill a coffee cup compulsively. Ask if the guest desires a refill.

84(a). Do not let an empty coffee cup sit too long before asking if a refill is desired.

85. Never bring a check until someone asks for it. Then give it to the person who asked for it.

86. If a few people signal for the check, find a neutral place on the table to leave it.

87. Do not stop your excellent service after the check is presented or paid.

88. Do not ask if a guest needs change. Just bring the change.

89. Never patronize a guest who has a complaint or suggestion; listen, take it seriously, address it.

90. If someone is getting agitated or effusive on a cellphone, politely suggest he keep it down or move away from other guests.

91. If someone complains about the music, do something about it, without upsetting the ambiance. (The music is not for the staff — it’s for the customers.)

92. Never play a radio station with commercials or news or talking of any kind.

93. Do not play brass — no brassy Broadway songs, brass bands, marching bands, or big bands that feature brass, except a muted flugelhorn.

94. Do not play an entire CD of any artist. If someone doesn’t like Frightened Rabbit or Michael Bublé, you have just ruined a meal.

95. Never hover long enough to make people feel they are being watched or hurried, especially when they are figuring out the tip or signing for the check.

96. Do not say anything after a tip — be it good, bad, indifferent — except, “Thank you very much.”

97. If a guest goes gaga over a particular dish, get the recipe for him or her.

98. Do not wear too much makeup or jewelry. You know you have too much jewelry when it jingles and/or draws comments.

99. Do not show frustration. Your only mission is to serve. Be patient. It is not easy.

100. Guests, like servers, come in all packages. Show a “good table” your appreciation with a free glass of port, a plate of biscotti or something else management approves.

Bonus Track: As Bill Gates has said, “Your most unhappy customers are your greatest source of learning.” (Of course, Microsoft is one of the most litigious companies in history, so one can take Mr. Gates’s counsel with a grain of salt. Gray sea salt is a nice addition to any table.)

5 marketing megatrends you can't ignore- from our friends at iMedia Connection

media planning & buying: IN FOCUS

5 marketing megatrends you can't ignore

By Adam Kleinberg

November 02, 2009

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Article Highlights:

• Savvy marketers are recognizing the impact of mass collaboration and constant connectivity
• The broader trends of globalization and corporate distrust are reshaping how consumers interact with brands
• The global sense of urgency to fix the world's problems goes well beyond the green movement

Next In Focus

Finding the elephants in the room

What's a megatrend, you ask? It's something big. I'm talking really big.

Think of a giant unstoppable tsunami of change transforming society as we know it. Think global warming scale -- then apply it to mass human behavior. Think glaciers carving the grand canyon of consumer sentiment.

Stay informed! For more insight into the fundamental shifts taking place in today's fragmented media landscape, attend the iMedia Agency Summit, Dec. 6-9. Learn more about the iMedia Agency Summit.

Compare and contrast. Here are some regular trends:

"Everyone is on Twitter these days."
"Boomers are investing more in home renovations as they approach retirement."
"Green is 'in' this season."

All of these are important. None are mega.

Here's a megatrend:

"Social media has permanently transformed the way people connect and share information."

See? Big.

Much of the planning that goes into positioning a brand takes into account product attributes, competitive differentiation, and target insights. These are all critically important considerations. But they're not what I'm talking about here.

I'm talking about what is so often left on the table -- the elephant in the room. Megatrends. Latching onto these tectonic shifts can surge an entire brand strategy forward way ahead of the curve. Google caught on to an access-to-information megatrend. Facebook caught on to people connecting. Yet, these megatrends are rarely leveraged by brands. (This was confirmed for me by the sheer difficulty I had coming up with campaigns for this article).

Most companies wait until a megatrend is so pervasive and obvious that it becomes a minimum standard, a non-differentiating proposition -- so that leveraging them does nothing to differentiate their brand. Case in point: Who doesn't have a "green" message these days?

So what are the new megatrends that I believe will transform society in the coming years? What brands are taking advantage of them? And what can you learn from them?

Read on.

Next page »

Three Best Ways to Win Community Support - From Wall Street Journal Small Biz Network

Three Best Ways to Win Community Support - Wall Street Journal

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Three Best Ways to Win Community Support

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• Comments (2)

By MAUREEN SCARPELLI

The recession has taken a beating on local businesses, but many consumers still want to support and patronize their neighborhood shops. If you're a small retailer or service provider, highlighting your local roots can keep the regulars coming in – and even attract new customers seeking to improve their hometowns' economic health by buying from local merchants.

Here are three best ways to showcase your origins – and win community support.

Nathan's hosts the International Hot Dog Eating Contest each July.

1. Hold contests or events that capture local flair. Take a hint from Nathan's, which holds one of the nation's most famous annual events every summer at its original location on Coney Island's Surf Avenue: the International Hot Dog Eating Contest. Thousands have packed the beach every Fourth of July since 1916 (with the exception of two years) to see dog-snarfing competitors eat as many as they can in 12 minutes.

Although Nathan's sells their dogs around the world, the company wouldn't think of holding the event anywhere but Coney Island. "I'll be traveling around the world and no matter where I go, someone will always come up to me and tell me how their grandparents kissed for the first time at Coney Island," Nathan's CEO Eric Gatoff says. "The centerpiece of our brand is that store."

On a smaller level, businesses can hosts events that show off their own signature styles and welcome members of the community to participate. Hideaway Pizza, which was founded in Stillwell, Okla., built its reputation by delivering pizzas in painted Volkswagen Beetles. Now, several of the company's stores host "Big Stuff" fundraisers, inviting local groups such as high school teams or church groups to fit as many people as possible into VW bugs. The events raise money or awareness for local charities and causes.

2. Team up with other local businesses, especially those with complementary products or services. Galaxy Cookies of Westport, Conn., has had its labels on the pizza boxes of its next-door neighbor, Four Brother's Pizza, since starting up in 2004. Galaxy owner Connie Grant encourages pizza eaters to sit in her store, since the Four Brothers location is small. Four Brothers also lists Galaxy Cookies on its catering menu, giving Galaxy an extra 5% in business it normally wouldn't have since the cookie company doesn't cater. The pairing up has made Galaxy Cookies an office favorite, says Ms. Grant, now that businesses can easily tack on a dozen or so with their pizza order.

ESSpa Kozmetika, a day spa in Pittsburgh, decided to pair with a women's retail company, Carabella, hoping to break into an older demographic. The two shops, located a 15-minute drive from one another, struck a deal: Carabella gives a spa gift certificate to anyone that buys a Cinzia Rocca coat worth 25% of the purchase price (with a cap at $150). The campaign has brought new customers to ESSpa, which co-owner Scott Kerschbaumer credits to the neighborly collaboration.

Hideaway Pizza hosts "Bug Stuff" events.

"The desire for local, it's always subconsciously been there," says Mr. Kerschbaumer. "But recent economic turbulence has pushed it to the forefront." ESSpa also orders lunches for customers using the services of Luma, a high-end restaurant across the street.

3. Join or start a grassroots business alliance. At least 30,000 small businesses belong to local alliances, which generally provide information, support and advocacy for independent businesses, says Stacy Mitchell, researcher and writer for the nonprofit Institute of Local Self Reliance based in Washington, D.C.

Areas without alliances could be ripe for a start-up, as Lisa Boet, who owns a French bistro in Naples, Fla., discovered. She wrote a letter to the Naples Daily News called "Small Businesses are the Soul of Naples" two years ago – and when more than 25 restaurants contacted her, she decided to form the restaurant coalition Naples Originals.

"The reality is that most of us are… mom and pop establishments – we can't afford the big marketing," says Ms. Boet. "This sort of thing has really helped our businesses."

Throughout the year, Naples Originals members contribute $50 gift certificates, which are then sold quarterly for 30% of the price on the group's website. The group typically sells out of gift certificates within an hour of posting them and self-publishes a regional dining guide with a circulation of 50,000. Ms. Boat is hoping other industries start their own similar coalitions.

"The whole idea is to strengthen in numbers," Ms. Boat says. By "marketing ourselves as small-business owners, we've actually created a brand. We've become the voice for our business."

Marketing Tip - KnowEm Helps Small Business Owners Claim and Protect Their Brands

From our friends at SmallBizTrends.com:

KnowEm Helps SMB Owners Claim & Protect Their Brand

Small Business Trends

October 22, 2009

By Lisa Barone

Back in August I highlighted Knowem.com, a cool new startup that I thought small business owners needed to be aware of. Well, earlier this week partners in crime Michael Streko and Barry Wise unleashed a new version of the brand-claiming service which has made it an absolute MUST for small businesses. This is one that simply needs to be on your radar.

KnowEm 2.0 launched on Tuesday with a brand new Web site and a host of new features that make it even more powerful than it was before (and it was pretty impressive the first time around). The KnowEm Enterprise Dashboard has been helping Fortune 500s secure their brands in social media since May of this year through private profile set ups (complete with links and pictures). According to KnowEm Co-Founder Barry Wise, “since the launch of the private invite beta of the enterprise dashboard, [KnowEm] has secured over 100,000 profiles”. Now, with the relaunch, they’re not only extending that service for major brands, but giving small business owners a way to get in on the action.

With the free, basic version of KnowEm, small business owners can instantly check brand name availability on 330 social media sites to see where their name is or is not registered. You can also register your personal name or brand for free on the site. If you haven’t yet launched that site or product, a quick KnowEm search is a great way to get some insight on names you’ll want to avoid or gravitate toward based on what’s already been registered.

Once you’ve identified where your brand is available, you can then choose have KnowEm secure it across any of the networks. There’s also a personal dashboard that SMB owners can take advantage of to access all of their social accounts from one centralized location. If you’ve ever had to manage multiple accounts, you know what a time saver this is.

To help businesses further control their brand, KnowEm offers three fee-based services:

• The Individual Edition: KnowEm will start the signup process for you at 150 different social media sites. They won’t create profiles, though, so you’ll have to do that manually. Cost: $99
• The Corporate Edition: KnowEm will personally register your username across 150 of the top social media Web sites, setting up a basic profile that includes photos, bio, URL and a description. These profiles are not automated and are set up by a living, breathing person from New
  Jersey (insert your own joke ). Cost: $350
• Subscription Plan: A monthly services that will sign up your username as new sites emerge (up to 30 new sites a month) to help ensure you get your brand on the next hot social site before it’s too late. Cost: $49/month

When we talk to clients about creating social media plans, our first step is to advise them to grab their brand everywhere. And we actually recommend KnowEm when we do it. It’s very important that you have control of your identify all over the Web and KnowEm is a great way to do that. If you’re looking to fill out your Google 10, now that KnowEm offers company and personal profiles, it’s also another site you can use to help you get this done.

From a security and branding perspective, KnowEm packs a powerful punch that you simply can’t get anywhere else. Most SMB owners don’t realize the importance of creating a consistent brand. You don’t want someone else to register your brand name and then misrepresent or malign you across the social media channels. The consistency also helps people who know you in one community to trust that you’re the same person in another. It’s about all about building authority and credibility through a trackable history.

I don’t think SMB owners really need to go the route of the Subscription Plan (unless social media is the core of what you do), but both the Individual and Corporate Editions are definitely worth the investment. Even if you simply opt for KnowEm to create and fill out basic accounts for you and you personalize the ones you’ll be using the most. It’s really important that you take the time to build a presence in social media.   As a result, KnowEm really is worth its weight in gold.

A CEO’s guide to reenergizing the senior team from the McKinsey Quarterly

In today’s tough and fast-changing environment, CEOs must help their top leaders to work through fear and denial and to learn new rules.

SEPTEMBER 2009 • Derek Dean

In This Article

• Sidebar: CEOs, tough times, and emotions

• About the author
• Comments (5)

When business conditions change as dramatically as they have in the past year, CEOs need to be able to rely on their best leaders to adapt quickly. But what should they do when their strongest executives seem unable to play a new game? The costs—organizational drift, missed opportunities, unaddressed threats—are so big that it’s tempting to replace leaders who are suffering from paralysis. But this is a mistake when, as is often the case, these executives possess valuable assets, such as superior market knowledge, relationships, and organizational savvy, that are difficult to replace.

Before sending promising executives off the field, CEOs should try to help them learn to play by new rules. While part of the task—making a compelling case for change, helping him or her meet new job demands—involves appealing to an executive’s rational side, there’s also frequently an emotional element that is at least as important. Empathizing with the complex emotions executives may be feeling as the assumptions underlying their business approach unravel can be a critical part of overcoming the fear, denial, and learning blocks keeping them stuck (see sidebar, “CEOs, tough times, and emotions”).

Read more:

Energizing the Senior Team, from McKinsey

Useful team building tools

• To innovate, make your goals your team's goals
  The trouble with most corporate innovation efforts isn't that employees aren't sufficiently innovative, argues Dr. Win Wenger -- it's that their individual goals aren't well aligned with those of the company as a whole. Companies need to find ways to convince employees that corporate interests and their own concerns are not separate matters, but aspects of a co-dependent effort, he says. InnovationTools (9/28)

Message to all operators on marketing and promotion: DIFFERENTIATE

Legal Sea Foods Stirs The Pot (Again)

by Karlene Lukovitz, Friday, September 25, 2009, 12:33 PM via MARKETING DAILY

When it comes to advertising, seafood restaurants are generally heavy on the overflowing platter images and light on the message.

Boston-headquartered Legal Sea Foods continues to defy that expectation. Take last year's campaign. To drive home just how "fresh" its fish are, the restaurant chain and its agency, DeVito/ Verdi, plastered the tops of Boston cabs with ads featuring a cartoon fish declaring: "This driver has a face like a halibut." Then they used the same concept on the sides of the city's Green Line trolleys, also expanding the fish's repertoire with other ads that included observations such as: "This line gets around more than your sister."

As intended, the ads got plenty of attention, eliciting both laughs and irritation among the public. The "halibut" version also generated so many angry complaints from trolley drivers -- members of the Boston Carmen's Union, who actually threatened to strike -- that the Massachusetts Bay Transportation Authority had that ad removed.

Legal Sea Foods also uses radio and TV quite frequently. One TV spot showed another cartoon fish swimming up to the camera to announce: "Bite me."

o Legal Sea Foods. One retired to a houseboat, only to drown when he "went to get the paper, and forgot his house was a boat." Another marked his achievement by getting a tattoo of an anchor -- and while at it, also got a tattoo of two women riding a dinghy, to commemorate "a different occasion."

Black-and-white newspaper ads that look, at first glance, like news coverage, play out the theme. One shows a fisherman holding up a huge fish, with a "caption" noting that he has finally sold a fish to Legal Sea Foods and the quote: "This is my proudest accomplishment, completely outweighing the birth of my two children."

The campaign aims to convey that Legal "is in the fish business -- we control our sourcing, so we know exactly when and how each fish was caught, and we select and test [for mercury levels] ourselves for total quality assurance," President and CEO Roger Berkowitz tells Marketing Daily. (Legal, founded by the Berkowitz family as a Cambridge-based fish business in 1950, opened its first restaurant in 1968, but remains "primarily a fish company," according to its official history.)

"Some have expressed disappointment with our humor -- some have even said that we have a warped sense of humor," adds Berkowitz. "We could just show great pictures of fish on plates like other seafood restaurants, and those might be attractive. But we use the tongue-in-cheek ads to underscore our serious message about being in the fish business. This is our point of differentiation."

Legal Sea Foods currently has more than 30 restaurants spanning the length of the East Coast. The "Legal" part of the name came from a family-owned market that dispensed "Legal Stamps" (forerunners of S&H Green Stamps) to customers in the early years.