Email Communication Really Sucks in The West

by MHolland | Jan 17, 2024 | Business Tips

A few years ago, I wrote a well received blog on email etiquette. This was pre-Covid. I think the time near the end of Covid restrictions and especially now, post-Covid, the tone of emails has sharply declined.

To be serious about awesome service, it starts with the intricate details. The following is my original blog post, with some edits…

If People in Business Spoke Like They Write Emails

I am a huge advocate for transforming how people write emails in the West.

There seems to be a school of thought that writing nice emails filled with softeners (see further below) are either, (1) an unnecessary, inefficient waste of time, (2) not professional, and (3) only for underlings, not important people.

I do not buy it. Emails are still used more than texts or phone these days, and if people spoke on the phone the way they write emails, it would be rude.

It certainly would not create an aura of awesome service in your company. You have all heard it said, “how you do one thing, is how you do everything.” And we have come to tolerate abrupt emails as if that is acceptable.

Here is an example of a pared-down efficient email I could send to a client:

Attached fs for Dec 23.

~M

Here is it gussied up a wee bit:

John,

Attached fs for Dec 23.

Regards,

Mark

Now, this is the “awesome service” version:

Good morning, John,

I hope you are having a great start to the week…

Please find attached your Financial Statements for December 2023.

Kindly let me know if you have any questions at all.

Thank you John and I am looking forward to talking soon,

Warm regards,

Mark Holland

Its true that it takes a few seconds longer to type the third email. However, how it is received by your customer/client is night and day. And how does it make you feel writing it? For me, it feels uplifting to add softeners.

Kenya versus Canada

My wife and I have spent a lot of time in Kenya, Africa and I have noticed how polite and gracious all the emails are written there in business. They are a bit more formal than what we write in the West yet filled with kind softeners.

Here is an example (real email redacted) from a businessperson in Nairobi:

Dear Mark:

I am grateful for your swift response, and I hope that you have had a good start to the day.

I wish to confirm that I am a full CPA, MBA (finance), and BComm (accounting) with 21 years experience in both the private and non-profit sector…

[the email goes on from there and ends with….]

Looking forward to hearing from you…

[signature]

The reason Kenyan emails are much softer and more gracious has to do with cultural differences. In Africa, relationships are more important than tasks. In the West, we are much more task-focussed and less relationship-centric. However, what about awesome service?

Softeners are Crucial in Email

Softeners are words that add “tone” to emails that are toneless. They are words and phrases like:

• Good morning/afternoon/evening
• Hello (versus “hi”)
• Please
• Thank you
• Kindly
• Warmly
• I was wondering if…
• Would you mind if…
• I hope you had a great weekend/day/holiday
• Welcome back (from your holiday, time off etc.)
• I hope you are feeling better (if they were sick)

Use their name once in while.

Do not use too many emojis (one happy face or two maximum per email).

All the above inject a soft, friendly tone into your emails.

A Way to Create Awesome Service

A lot of businesses talk the talk about awesome service and claim to provide it. Remember this though, awesome service is in the details. It is in the littlest of things.

And how you email, text, and answer the phone in business will be the greatest indicator of how your culture operates.

In fact, in the spirit of “how you do one thing is how you do everything” consider that this will be even more indicative of how your culture is if you email/message/talk on the phone in the same way you would to your external customers to ALL internal Team members, including suppliers.

To train yourself for awesome internal communications, just imagine your clients are listening in on ALL those internal communications.

It Will Transform Your Own Mindset

There is a great side benefit to writing with softeners – you will feel great! It is always what we generate in life that creates how we feel, not how others treat us.

What Not to Do

Regarding awesome email communications there are a few never-do’s:

• Process your emotions in an email or text (especially when upset)
• Say anything that you could regret later
• Use it for negotiations

If upset, get on the phone, or meet in person. My personal rule is – Never email/text when upset. It will not go well! It will go back-and-forth until either the communication is broken or one of you picks up the phone.

How We Got Here

If you look at how people post on Facebook (with exceptions of course), they use a lot of softeners and emotional words. They would never post on Facebook the way they may write curt, unemotional, tone-dead emails.

In my research what I discovered are two schools of thought – (1) my school of thought, where softeners are liberally used to create a message of caring, awesome service, and, (2) the Fortune 100 Executive school of thought, where softeners are seen as weak, and a waste of time.

The rationale for the Fortune 100 School of Email Writing is this – “I am important, and I do not have time to waste with sprinkling softeners throughout my emails. And, frankly, I really could care less what you think of me, or what I am saying” because I am an Executive.

Here is my final bit of advice – be yourself, and if too many softeners seem like a waste of time and inauthentic for you, then try just adding 2-4 words that lift the dry tone of an email.

Start with “please” and “thank you,” and “hello, instead of “hi”” …and see how it goes!

Thank you for reading…

The Balanced Scorecard **

by MHolland | Jan 11, 2024 | Business Tips

To fly a large jetliner a pilot needs more than 3-4 indicators to get you safely to your destination…

You are about to board a flight. It is a large Boeing 747. You glance inside the cockpit. (Okay, okay, imagine it is pre-9/11).

You see the pilot has taped over all the dozens and dozens of gauges, lights, and dials. There are only three he is focused on.

What do you do?

You turn on your heels and rapidly exit the aircraft.

Running a Business is Like Flying a Plane

A business is much like flying an airliner. A businessperson needs more than a few financial indicators.

The challenge with financial indicators (and they are, of course, critically vital) is that they are the measurement of a result. And you cannot change the result; it is too late.

Activities that we measure that have an impact on the result you desire are called Leading Indicators. They are like advance warning signals of things to come. You can take corrective actions to change them, and the results – hopefully – will change.

A Business Example

Now, let us look at a business example….

You have a goal for a certain sales target.

To keep it simple, we will look at four Key Performance Indicators that are Leading Indicators to reach your goal. We will choose one from each of four areas of your business – (1) Finance, (2) Operations, (3) Customers, and (4) Team.

Number One (Finance Area) is repeat business. How often, on average, do your customers come back each month.

Number Two (Operations area) is on-time delivery. This will be a powerful leading indicator of how well you are doing and may impact sales volume.

Number Three (Customer Area) is customer satisfaction as measured by customer surveys after each transaction. If the score is high this will have an impact on the number of referrals you will receive, as well as repeat business.

Number Four (Team Area) are employee satisfaction surveys measured weekly. An unhappy Team may lead to unhappy customers and thus lower sales.

Of course, one of your KPIs is sales, yet this is a Lagging, or results based, KPI. You can stare at your sales figures all day long and yet not know what to do to make them grow. To do that you need to track the key activities that are impacting sales.

How Many KPIs Should You Track?

A paper published in 1956 was called “The Magical Number Seven, Plus or Minus Two” talked about the limitations of the human brain to contain and process more than seven bits of data.

Well, since 1956 we have had Executive/Business Dashboards. We do not need to contain in our head all the business KPIs we may be measuring.

Okay, so what is the “right” number. Current thinking is somewhere between ten and twenty. This is more than the seven as written about in 1956, yet not so many that you cannot make informed decisions to attain your business goals.

Four Main Areas for Your Key Performance Indicators

As mentioned above your business KPIs should be grouped into four main categories – (1) Finance, (2) Customers, (3) Operations, and (4) Learning/Growth (or Team).

About 3-4 per grouping is enough, with a few more in the financial area. You will track both Leading and Lagging Indicators.

Here are some examples you can track:

1. Financial
   1. Sales and Gross Profit by Product Line (tells you what products/product lines are the most profitable)
   2. Break-Even Sales (total sales required to cover all your fixed costs plus a profit)
   3. Days to collect receivables on average (measures efficiency of converting sales on credit to cash)
   4. Cash-Flow (where did cash come from and what was it used for)
   5. Days in inventory on average (measures how quickly inventory is converted to cash)
2. Return on Equity
3. Current Ratio (measures liquidity)
4. Customers
   1. Conversion rate (percentage of leads converted to customers)
   2. Customer satisfaction score (how customers rate you will be a major leading indicator of future results)
   3. Referral rate (are new customers coming from referrals – the best source for new business)
   4. Average transactions per customer (repeat business is the lowest cost for new business, as it is existing customers who are coming back to buy more)
   5. Average sale per customer (the amount people pay on average per sales transaction)
5. Operations
   1. On-time deliveries (leading indicator of future results)
   2. Error rate for a manufacturer (will cause customer problems, or higher costs per transaction)
   3. Machine Output per machine (down time will result in lower sales)
   4. Productivity per Team Member (higher costs per transaction arise when productivity is low)
   5. Percentage of wages to sales (a leading indicator of possible lower productivity or sales volume issues)
6. Team
   1. Team satisfaction scores (as measured by check out forms done weekly)
   2. Team turnover
   3. Education/training costs invested per employee.
   4. Ranking of Team members by customers

You Get What You Measure

Remember, you get what you measure. If you choose the wrong things, you might get the wrong result.

Here is an example. Let us say you want higher sales. However, your mission statement is to fulfill on what your customers want and maintain them for life.

What you measure is the average sales value per salesperson. And you reward them for their results. Higher average sales mean higher commissions and bonuses.

Your salespeople may end up pushing sales on your customers that work in the short term, yet have the customer feeling used and unappreciated, and they might leave. This obviously works against your Mission Statement.

Attach a Key Performance to a Team Member

Each KPI must be owned by a Team Leader and each person on her/his Team. Holding people accountable for their numbers will make the KPI an active measure, not passively watched by the company with no actions taken.

Here is an example. In the trucking industry it is common to have greater than 100% turnover of truckers.

Wow! Imagine that? How do they cope?

Let us say you have a human resource manager responsible for the truckers in a company that has historically experienced 90% turnover.

You give her a Target KPI of 70% turnover. She will be evaluated and rewarded on her ability to attain this 70% KPI.

What is she now thinking about all the time?

How to motivate her truckers to keep them happy and employed with this company. This consumes her thinking all day. And her actions will line up with things that will make her truckers stay and not want to leave.

Of course, she will have a budget to work with as well. (This is how you manage conflicting motivations, or she could overspend to attain her goal of 70% or less turnover.)

Summary

Think about what your goals are for the next 1-3 years. Create KPIs that will help you define and act on problems before the problem becomes too big or chronic.

Delegate the ownership of those KPIs to individual managers in your company.

Track your results weekly in some cases and monthly for others.

Meet with your Team to discuss the numbers and take corrective action.

Make sure you have many Leading Indicators so that corrective action can be taken quickly.

Thanks for reading…

** This blog is based on the thinking of a book called The Balanced Scorecard by Robert Kaplan and David Norton

6 Ways to Survive Tough Times

by MHolland | Nov 25, 2021 | Business Tips

A man I trust (he has been right so often) predicts we may have about two more fat years. Followed by six lean years.

Fat years? Fat years? Yikes, imagine what the lean years will look like!

These past 19 months have been brutal on businesses. Restaurants. Pubs. Airlines. Travel agents. They have been pummeled.

What is the one thing that people do – most often – when things are going great?

They assume the sun will always shine, and they spend more.

This is the worst thing that any business owner can do when times are rockin’ is to add to their fixed costs.

There are six things you can do to thrive during tough times.

Keep Your Fixed Costs Tight

The first thing to do when times are good is keep fixed costs tight.

Go through all your operating expenses and ask which ones are discretionary versus fixed.

What is the difference between the two? Let me explain…

A discretionary cost is something like advertising. Unless you are locked into advertising contracts you can often turn advertising costs on or off.

Rent as part of a lease is often fixed and cannot be turned on or off.

Some wages may be fixed and some not. If you have long-term employees, it would be difficult to just shut them out without severance pay which could be high.

With all your discretionary costs separated from your fixed costs…

Work Out Your New Break-Even Sales

Take your total fixed costs from above and divide the number by your Gross Margin percentage.

Your Gross Margin percentage is calculated by first subtracting your total Cost of Goods Sold from your total Sales. That number is called your Gross Profit. Divide your Gross Profit by your total Sales to get your Gross Margin %.

Here is an example – your Cost of Goods Sold is $30,000. Your Sales are $50,000. Subtracting $30,000 from $50,000 you get $20,000. When you divide $20,000 by $50,000 you get 40%.

Based on your calculation above you determine your bare bones fixed costs are $60,000.

Taking $60,000 and dividing by 40% you get $150,000. That is what your break-even sales must be.

Next, ask yourself this…

Can I Raise my Prices?

In a tough market you will need to be careful raising prices. Is there something of value you can add? Can you add something that would cost less than the price increase people would be willing to pay?

A price increase – with no loss in sales volume – goes directly to the bottom line.

If price increases are not possible, look to….

Bundling

Can you bundle together other products or services to increase your average sales per customer?

Can you add services to a product that were never added before? An example here would be installation services for electrical products.

Restaurants during Covid use delivery services, like Skip the Dishes, to maintain sales.

Learn to Live on Less

My friend says we have two lean years left before 6 years of famine. These two fat years are anything but fat for most businesses.

Now is the time to eliminate debt, and save, save, save. Live on less.

Bring Supply Chains in Close if Possible

In the West we have become very depdendent on Asia (China, Korea, Viet Nam, India) for manufacturing.

With supply chains being broken in 2021, ask yourself if you can find a supplier within Canada or the USA. If you manufacture, can you start the process of bringing your manufacturing back to Canada/USA?

In Summary

Six things to do over the next 2 years:

1. Lower your fixed costs
2. Know your break-even sales. (This goes down as your fixed costs are lowered)
3. Raise prices by adding value
4. Bundle services and products to increase your average sale
5. Cut personal expenses. Live on less.
6. Bring manufacturing home

Thanks for reading…

How Do You Choose What to Measure?

by MHolland | Feb 3, 2021 | Business Tips

We have all heard the saying, “what you can measure, you can manage?”. It is over-used to the point of being cliché…

Yet, it is true. The challenge is – what to measure?

Start with this – focus on the activities that produce results.

There are two things we must measure – activities and results.

Activities are real-time, happening now, and controllable.

Results are after-the-fact, past based, and non-controllable.

Wayne Gretzky could not control how many goals he got per game. He could, for the most part, control how many shots he took on goal.

You get the difference.

What are Your Business Activities That Lead to Great Results?

What is your strategic purpose?

To grow?

To grow you need a pipeline.

Ok, here is a starting point. Measure your referral rate. Do you know what it is?

Here are some interesting facts –

70% of all new business for service-based businesses comes from referrals…

…and clients are responsible for 30-60% of those referrals.

The simple act of asking for referrals can result in a 9% increase in referrals. Wow!

But do you ask?

Who is Making the Referrals and Why?

Once you know this, you can put a system in place to increase it.

How Much do you Currently Spend on Advertising?

Before you spend another dollar on advertising, find out where your customers are coming from.

How much exactly do you spend?

What is your per client cost of acquisition?

A Few More Probing Questions

What do your clients think of you?

What is your attrition rate?

How frequently do your customers come back to do business with you?

How frequently do you write to your clients – particularly just to say thank you?

What is Your Turnaround Time on Sales Calls and Leads?

Here is an interesting study…

A while ago, a company called Performark mailed in thousands of responses to ads for goods and services costing at least $5,000.

You would think the price tag alone would be enough to trigger a quick response!

Hmmmm, well, not really. It took on average 58 days for a response. 25% of enquiries went unanswered.

Only 1 in 8 requests triggered a follow-up sales call. That call came 89 days – on average – after the initial enquiry.

Two More Activities to Measure

How are we creating new customers?

How do we ensure they keep coming back?

Keep this in mind – a 5% increase in customer retention can cause a 25-85% increase in profitability.

To Summarize

Know your acquisition costs per customer/client.

Know where you are getting quality leads from.

Focus and expand on what is working.

Follow up on enquiries fast.

The old adage “what you can measure you can manage” becomes, “measure the right things to get the results you are seeking”.

Lastly, remember this – you cannot control results, only activities…

What activities will you start tracking?

Thanks for reading…