By Bryan Orr
You know the guy – He walks into the coffee shop wearing a backpack loosely slung over one shoulder. He has a beard, or a moustache at least and his hair is tightly clipped on the sides but long and well styled on top. He’s wearing a flannel shirt and worn jeans with pegged bottoms and brown boots that a lumberjack might wear. Not a REAL lumberjack, but maybe one in a storybook or movie, or a made up fantasy in the head of someone like me.
This is hipster.
Certainly not a new breed but the latest brand of authentically fabricated styles that shouts to everyone who may notice “While I may have never split wood, I sure do appreciate the hypothetical concept of being outdoors and possibly touching some pre-fabricated faux lumber.”
Full disclosure: My wardrobe now contains ample flannel as well as a pair of Clarke’s “Chukka” boots. Don’t Judge me.
In business, we may look down on the manic fluctuations of style and think: “My khaki pants and ill fitting button down shirt will serve me just fine, thank you!” But wait, you have fallen victim to another and possibly more insidious trend. The BUSINESS BUZZWORD.
ROI (Return on Investment)
On the face of it ROI feels pretty solid; if you are going to make an investment, what is the measurable return. Fair enough. My issue comes in when folks start using the initials ROI in conversation.
The marketing salesman sits down with you and instead of showing you the price of the package he is pitching he starts right in talking ROI – “The ROI of this product is such that it will pay for itself in such and such a number of months and blah, blah, blah…”
First off, most small businesses measure almost nothing, so when the marketing salesperson comes in and starts talking ROI they are doing it to wow you and woo you into spending money. It does you no good unless you are tracking all of the leads as well as the net profitability of those leads AFTER factoring in the added cost.
Now when two business owners are at a chamber event and they BOTH start swapping ROI back and forth like a peace pipe at a powwow- It get’s especially humorous when ROI is used as a way to backup circumstantial evidence, “I ran an ad in the newspaper and two days later I got my biggest contract yet.”
ROI as a decision making tool is great when applied to large quantities of well organized and well maintained data, but not as a way to justify doing what you were going to do anyway before you learned that saying it makes you sound smart.
USP (Unique Selling Position)
Some people call it USP, others call it your “unfair advantage,” you may call it what you are good at. The positive thing about talking USP is that you are thinking about what sets you apart in the marketplace. If you own or manage a business you know that the things that set you apart are all about what you do and what you do is not actually unique.
More often than not what makes your successful business unique to your customers is that they know you, they like you, and they trust you in a market where they don’t have that relationship with anyone else who does what you do.
A real USP is not something that we come up with or rebrand. A USP is something you already are and your customers already know. The only challenge for you is to distill that truth into an idea that is easy for you to communicate in the marketplace.
You are a lumberjack because you actually cut down trees, not because you’ve positioned yourself as the guy who wears flannel in the woods.
Customer Lifetime Value
I was talking to one of my team leaders the other day in my office. He was wanting to run a particular ad set in a very large retirement community. I started asking him about the “lifetime value” of acquiring a customer in this particularly high value and high loyalty segment. As soon as the word lifetime escaped my lips we looked at one another and knew what the other was thinking, “How much longer will they live?”
This is an example of where customer lifetime value metrics can get a bit hazy, sure they are loyal customers and yes they are likely to make big ticket purchases but their odds of remaining a customer may not be much better than a 40 year old once you factor for the Grimm Reaper.
This doesn’t mean that customer lifetime value isn’t a good thing to consider, it just goes to show how there are so many variables that you may be better off analyzing short term, transaction profitability and focusing on strong customer service, and driven and reputational customer acquisition strategies and then let the chips fall where they may.
We aren’t in a corner office on the 40th floor in Manhattan; we are small business owners. So let’s leave the boots to the lumberjacks and the buzzwords to the corporate analysts. If you ever see me in flannel, go ahead and call me out, just be careful not to drop an ROI.