Have you ever received a cryptic letter from a credit
card company warning you about a potential security breach
of your account?
I recently did--and it really drove me crazy for
two reasons.
First, it contained no salutation--only
a fraction of our account number. What a great
way to emotionally bond with your customer.
In addition, the letter read:
"In our ongoing commitment to your security
and privacy, we are writing to inform you that we have
been advised of a potential compromise of your check
card. Heartland Payment Systems, Inc., a card
payment processor of over 100 million transactions
per month, informed us of a potential security issue
that may include your VISA check card number."
This worthless letter is akin to
the Department of Homeland Security leaving a voicemail
to inform me that "somewhere in the world, right
now, there may be a threat to our safety."
How does this type of communication
improve your client relationships? Does anyone
wonder why even the most established banks upset and
lose their customers?
This useless drivel which passes as a caring customer
letter explains why my bank has hit a plateau in their
growth, recently reported a $24M loss due to bad loans,
and may be headed for decline.
If you are a startup or a sole proprietor, you will
probably be too busy focusing on acquiring clients to
care about this article.
However, if you have safely passed the startup phase
of your growth, and may even be basking in the glow of
more rapid growth, it is imperative that you eliminate
these forms of customer communications. They will only
confuse them, and cause them to focus on things that
are outside of their control.
I spoke with Marc Johnstone, President
of Shirlaws Coaching in San Francisco, California. His firm describes
various company growth phases very effectively. Shirlaws
has created a Stages of Growth Chart that helps
people understand the emotions we experience at every phase
of growth. (contact
me if you want a copy of this chart) He also says that
if most companies can survive the startup and rapid growth
phase, they may eventually hit the "second brick wall."
Scaling the second brick wall takes
focus and patience. In
fact, Shirlaws finds that scaling that second wall can
take five to seven years. The founders must agree
to invest in five key areas to ensure business continuity:
1. Re-position the company. Positioning
relates to how a company differentiates itself in the
eyes of their customers, and provides focus for the business
model and all related activities. This is the core
of your communications strategy.
2. Develop solid distribution and referral systems. Distribution
is about creating and maintaining referral relationship
channels in the market so that the company frees itself
from the traditional direct sales approach. Consider
joining or launching an elite referral group that is
committed to serving its members.
3. Strengthen your company's functionality. This
looks at how your company allocates its resources across
the three key areas - strategy, operations and infrastructure
-- and then getting the right people doing the right
jobs. Operations relates to revenue generating activities
such as sales, product delivery, client service and marketing. Infrastructure
relates to overhead costs such as accounting, information
technology, facilities, human resources, legal, compliance,
and administration.
4. Expand your capabilities.
This refers to the quality and breadth of skills in your
firm. Possibly for the first time in the company's history,
you must focus on hiring people for their skills and
track record, not on personality, tenure, family affiliations,
or friendships.
5. Build a succession strategy that centers on
hiring top performers—not on the founders'
eventual exit. The focus is on building a strong “A
team” so that the founders' exit is successful. During
troubled times, accountability and hiring people smarter
than you are more important than ever.
This article gives you just a glimpse into the various
phases of growth. My upcoming book dedicates a chapter
to the topic because I think it's critical to understand
what stage you're facing. You can pre-order
your copy now.
Your awareness of these growth
stages—and
your ability to free your mind around each one—can
make a difference between growth and extinction. The
same holds true for our financial institutions.
P.S. You
just got a sneak preview of a chapter taken directly from
my upcoming book - click to learn more.
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