Thursday, February 22, 2018
Tuesday, February 20, 2018
Sometimes You Have to Change the Rules. You Always Have to Be Careful About It.
L.L. Bean got undeserved grief for adjusting its famous lifetime guarantee. But the company needed to deter the "customers" who were gaming the system. Startups, too, face the issue of seeing good intentions veer off course. Learn how to reduce that risk.
There's an old expression that "no good deed goes unpunished," which I sometimes think has become a clichéAnd then when I watch the trials and tribulations of a business like , whose good-faith commitment and lifetime guarantees to customers have been shamelessly abused for years by flea market phonies, eBay a-holes and other crafty resale store shoppers, I remember that things become clichés, not because they're pithy phrases, but because they're sadly too true. It's unfortunate when a few bad apples (cliché alert!) can spoil things for the rest of us, but it's the nature of our world today.
When a first-class firm like Bean tries to respond-- in a reasonable and long overdue way-- to creeps and cheats gaming its return policies by implementing common-sense adjustments, the company is summarily subjected to cheap shots, bad press, a bunch of SM trolls and strike suits/baseless litigation by the omnipresent class action lawyers. I just hope Bean has the guts to stick to its gum-soled hunting boots. Honestly, knowing that merchants stand behind their products for the long haul is more a source of comfort and reassurance than some kind of dollar and cents consideration.
At the same time and in the interest of full disclosure: I'm a million years old and yet I'll readily admit that, when I bought my latest pair of Doc Martens, I went with the For Life 1460's because I liked the idea that I might actually be around long enough to take advantage of the guarantee. Was the lifetime guarantee really a deciding factor in my purchase or any realistic component of the "consideration" for the commerce? Did I detrimentally rely on the guarantee, as the lawyers say? I don't think so. It was maybe a "nice to have" add-on or a "feel-good" feature, but it certainly didn't drive the deal. I just love the boots.
And more likely, what's really at work here is another version of the classic psychological observation that many of us who are still buying books (now neatly stacked on our nightstands or in our bookcases) actually do it in part because we think that buying the books will create the time we need to read them. (Concerned digital readers should rest assured that I also have a stack of Kindles sitting right next to the pile of books.)
Of course, in our "right now" world, maybe offers of lifetime guarantees have effectively outlived their viability and even their marketing value in an age where the demand for instant gratification is intense and overnight product obsolescence is virtually assured. On the other hand, if we're lucky, the ideas and values they stand for-- excellent execution, commitment and pride, and true craftsmanship-- will never go out of style, regardless of how many cute little gizmos we can 3D print in our garages. We may not always want to pay for it, but we know great quality when we see or feel it.
This whole "good deed" thing got me thinking about how in the startup world there are also a multitude of ways in which the best of intentions can easily lead to bad decisions and lousy results. This is something for every smart entrepreneur to keep in mind. We see a problem and we want to be super responsive; we jump to a conclusion, we impose a quick solution (a new rule, a different process, more required approvals, etc.), and then we move on to the next fire.
But, in our desire to hurry up and do something--pretty much anything, if the truth be told-- it's too easy to overdo it. When your hair's on fire, you really want to avoid putting it out with a hammer. Sound familiar? We've all been to this movie but, as often as not, it doesn't have a happy ending, for a few important reasons.
First, effective and consistent communication is harder than you think. You know what your new change is intended to accomplish and how you expect to see it implemented but, in the heat of the moment, not everyone gets the right message. And then things start to quickly go south. Some folks take the news too literally and they end up slowing down every transaction in order to get things exactly right instead of only dealing with the exceptions and the outliers. People aren't good listeners and it pays to repeat yourself a lot. And also, it's very smart to keep an eye on the store so that, if and when things get off the track, you can intervene before it's too late. As they will tell you at Cape Canaveral, a millimeter's deviation at launch and you miss the moon by miles. Head the problems off at the pass and save a lot of grief in the future.
Second, even startups can be surprisingly bureaucratic. You don't want to answer the same questions over and over again and, for sure, you don't want to waste time addressing the same problem repeatedly, so you make a new policy or rule in order to put things behind you and to bed. And sometimes that happens. But policies don't put themselves into effect; people need to be part of the program and, here again, it quickly becomes clear that one size (or one solution) never fits every situation. You've got to make room for some flexibility and exceptions to even the best rules. Rote rules make for robots, not great results. Overkill is a real issue and customers are very sensitive to changes in the ways you've always done things. This is especially true if you haven't done a good job of explaining the "why" for the change as well as the "what" that has changed for both your team members and your clients and customers as well.
And finally, take your time and try to overcome your best/worst instincts to fix something fast. Not everything is a fire drill or a complete crisis and going off half-cocked is the worst thing you can do in sensitive situations -- especially when it later becomes clear that you charged off in the wrong direction. In the short term, people want answers, but in the long run, people don't remember how quickly you fixed something; they remember how well the solution worked out for them.
How can advisors adapt their businesses to compete in an age where many clients rely on smart phone apps and technology to manage their investments?
We spoke with Howard Tullman, CEO of the Chicago-based technology incubator 1871.com, to get his insights. Here are his edited comments.
Technology has changed the landscape within the retail sector and is also impacting the way many people manage their investments. How should advisors approach the rapid advancements in technology?
Howard Tullman: One of the things I often say is that retail isn’t dead but lousy retail is dead. And in the same way, advisors can use technology as a shield to protect themselves, or they can use it as a weapon to help them do a better job. How do they make their connection to their customers more personal? How do they make it more about real results? And then how do they add back the human element? Treating technology not as the enemy, but as your friend, is the best approach, in my opinion.
How can advisors go about this? How do they embrace technology and use it to improve results?
Tullman: Well, I think the first thing advisors need to understand is that algorithms and machines can help them do their job better. Because it can free up time that they previously spent on analytics and on reviewing things. And they can convert that time into improving their connection to the customer. Ultimately, I think the best defense against automation, algorithms, and price competition is connection. Connection is about demonstrating that you are actually paying attention to your clients. That means demonstrating on a regular basis that you are actively looking out for your clients’ best interests.
Many of today’s younger investors have never known a world without the Internet or smart phones. They are comfortable transacting online. How can advisors reach out to these investors and establish personal relationships?
Tullman: Fidelity’s own research indicates that a large percentage of advisors would say that they have no connection with the adult children of their clients. That’s something advisors have to work on. They have to figure out how to create an environment where they can have a family meeting or invite their clients’ adult children to a luncheon or some other meeting. Or perhaps, with the permission of the advisor’s client, advisors can create a portfolio document of some kind that shows them where things stand and what they might inherit from their parents in the future. Or even solicit the names of stocks which the children are interested in as a potential part of their portfolio.
In today’s hyper-connected world, it can be hard for advisors to stand out from the crowd and gain attention. Do you have any suggestions for how advisors can execute an effective content marketing strategy?
Tullman: A lot of advisors start out with the best of intentions, but they quickly get overwhelmed. In some cases, they have not looked at their website or updated it in years. They end up with a “ghost site,” and that’s a horrible message to put out to clients and prospects. Even a simple active blog is better than a stale website. But if advisors scale back their plans a bit, keep their content personal, and post on regular basis, they may not find the process to be too onerous. Sharing one or two thoughts a week will help keep their firm top of mind for their clients and prospects. Relating these comments to current events is a good way to make things more relevant. The truth is very few people have enough time to create significant amounts of original content on their own. But if you can be perceived as somebody who’s in the know, who’s keeping clients current, and who’s saving them time, that’s a significant way to reinforce the value of what you’re doing for them.
With the pace of technological change seemingly moving faster every day, what can advisors do to adapt and keep up?
Tullman: The most important thing to remember is that the world won’t wait for you and that you need to start changing now. Or else you’ll be left behind. It’s okay to feel uncomfortable or uneasy about these things. Nobody is going to be a master of it on Day One. But if you don’t put your toe in the water, then for sure, you’re not going to be able to keep up. I think it’s also important for advisors to understand that in many cases, they have acted as a “Lone Ranger” in many respects. That’s how they grew up and it’s how they built their practice. Today, that’s just not a good strategy for success. Nobody is going to be able to do this stuff on their own. You need to have partners and people who can help you do a better job. Collaborating with your broker dealer can help you serve your clients and the next generation of investors even better.
Monday, February 19, 2018
Sunday, February 18, 2018
Friday, February 16, 2018
Thursday, February 15, 2018
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LINKS TO RELATED BUSINESSES
- 1871 - Where Digital Startups Get Their Start
- BCV Evolve
- HighTower Advisors
- Options Away
- Packback Books
- Philo Broadcasting
- Popular Pays
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