Reess Kennedy

Ideas, sharings, projections

Category: Sales and Marketing

7 Trader Joes-inspired business success strategies I use

People in NYC love Trader Joes.

I’ve found that TJs operates by some simple principles that can be applied to any business which I outline below.

1. Don’t try to do everything for everyone
Trader Joes stays nimble by only offering a few items but making sure people really like those items. They’re okay knowing that you’ll have to go elsewhere for some things because they know you’ll still buy from them the things they do better than others. Trying to create a store that would be a “one stop shop” would hurt their ability to do all the other things they do well. “Put more force behind one arrow” is a powerful mantra for any business and the way a David can take down a “Goliath” — the focused slingshot rock right at the blind spot inevitably created by the Goliath’s size.

2. Set reasonable prices, make money on volume
TJs keeps things simple and wants to offer value. People recognize this and customer loyalty is created. People also recognize that the lack of frills is a part TJ’s charm and what allows them to offer affordable quality.

3. Experiment and discard what doesn’t sell
TJs is constantly introducing new stuff and removing old stuff that isn’t selling. Inventory or product or feature pruning and focus is important with any business.

4. Invest your profits into your staff
Staff members at TJs are generally happy and friendly. Maybe this is because they make more money and are given better benefits than those working elsewhere. The customer experience is far more enjoyable as a result. It sounds corny but it does seem like somewhat of a family when you shop there. Consider how much more confident you’d be in retaining customers at your own business if they also felt like they were a part of a family as a customer of your business.

5. Give free samples
Free samples just make people happy and show you’re confident with your products. At TJs this means literally giving out food samples but in other service of product businesses it may sometimes mean providing your services or products at a discounted, below market price at the beginning to make it easy for new customers to see how good you are and win trust.

6. Offer sustainability
Having an advertised mission beyond profit shows customers you have a higher purpose and are working to also make a larger difference.

7. Keep location overhead low
People care about the value of the products and not the office space. Good employees will care more about whether they are making a good living working on something they care about than the grandeur of their office.

 

 

Nike’s 93 billion started with one waffle iron

When my mind becomes overwhelmed by new, creative ideas, I meditate on this simple truth about Nike: the entire company was started by one man, Bill Bowerman, a track coach, who just wanted to “scratch his own itch” and help his athletes by creating one thing that he thought was better than the other available things.

His beginnings were very humble, using a waffle iron to prototype his new shoes but my point is this: Most massive companies started as just an idea for one thing that would be better than other available things.

It’s a powerful formula for success. People like the first thing you make and you begin to profit from it. Then you start to reinvest that success into efforts to make additional superior products and because of the trust you’ve built up because of your first products the sale of new things becomes a lot easier and this virtuous, profit-making cycle ensues.

But it all starts from making that one thing that’s way better and creating some trust in your company. This is something like the zero to one moment Peter Thiel speaks of–creating something new and significantly better for people to gain and early and commanding lead before competition steps in to make the environment to win over brand loyalty more challenging.

Now Nike is massively diversified. An Amazon search for Nike yields over 500,000 product results. That’s five times as many products available on Amazon from Adidas.

But mastery of one thing is usually needed before moving on to diversification. Nike was founded in 1964. It’s had 50+ to diversify.

With technology, even when you become a multi-billion dollar company, focus and constraint in your offerings still seems to be the winning formula.

Google started like Nike, by just creating one superior product in search.

But now, unlike Nike’s thousands of products, Google is different: they really only have seven blockbuster products with over a billion users and the rest of their products are more speculative and they are discipline about killing their less popular innovations to only commit to big wins.

Apple is in the same boat. In an interview with Charlie Rose a few years ago Apple CEO Tim Cook said “Despite this table being so small that you and I are sitting at,” Cook told Rose, “you could put every Apple product on it, and yet this year our revenues will be approximately $180 billion.”

He goes on to say that it’s not about what we’re going to do next, it’s more about what we’re not going to do next. We have so many ideas but we have to just stay focused on doing a few things really, really well. We’re the most valuable company in the world and yet all our products could fit on this small table.”

That really gets me! Consider that: The most valuable company in the world and their entire current product line can fit one table.

A huge number of companies fail because they become unfocused and try to do too much, too quickly instead of just focusing on making one thing really, really great.

So I’m starting a new list in my to-dos today called, “Probably don’t do these ideas.”

And I know that’s the right strategy.

Book review and favorite quotes from Marc Cuban’s “How to Win at the Sport of Business”

I like Mark Cuban. I know he is brash and has an ego but he also isn’t afraid to say what he believes and he is humble when he talks about how fortunate he’s been and sincerely likes to help people — both on Shark Tank (a billionaire doesn’t have to make the, sometimes, small investments he makes on that show) and with the short book he wrote in 2011, “How to Win at the Sport of Business.” (Amazon link here.) I read it in two nights as my before-bed read.

Overall review: I’m not sure the book will go down as a classic business read but I like Cuban’s honesty. He was a very average dude who, after some failures, completely committed himself to winning at business. He emphases the importance of finding the right business partner who compliments you. In his case, it was someone who could handle the details of the business while he sold. He stresses the importance of an absolute focus on sales and to putting in the time when your potential clients are sleeping to learning the information your need to close more sales when your potential clients are awake. There are some other good nuggets too. True to form, there were times I wished Cuban had dug into something more or done more research but this just isn’t his style. He’s not bogged down by perfectionism. And that’s actually one of the secrets to his success.

Quick Cuban story: In 2011 I was at an event at the Wynn Las Vegas and went to grab a drink at a bar surrounded by slot machines in a quiet part of the casino and I look over and Mark is sitting two seats to my left on his Blackberry with a Michelob Ultra in front of him. Looking back, I should have said “What up Mark dawgg!” But I didn’t have anything to pitch him and didn’t want to bother him. About a minute later a group of people came over to ask for a picture and I left.

Anyway, below are some of my highlights from his book.

On finding a business partner who compliments your skills:
“We could drive each other crazy. He would give me incredible amounts of shit about how sloppy I was. I would give him the same amount back because he was so anal he was missing huge opportunities.”

On the power of a knowledge advantage:
“Most people won’t put in the time to get a knowledge advantage.” AND “Of course, my wife hates that I read more than three hours almost every day, but it gives me a level of comfort and confidence in my businesses.”

On Bill Gates stealing two women from him at a party when they were both much younger and unwed:
“As I would learn later in life, money makes you extremely handsome.”

On never turning off and always learning:
“Relaxing is for the other guy. I may be sitting in front of the TV, but I’m not watching it unless I think there is something I can learn from it.”

On the competitiveness of business:
“That’s what makes business such an amazing sport. Everyone plays it. Everyone talks about how good he or she is or wil be at it. Just a smal percentage are.”

On being an obsessively productive salesman:
“every hour of the day that I could contact a customer was selling time, and when customers were sleeping, I was doing things that prepared me.”

On how to properly measure the success of your investment of time:
It would have been easy to judge effort by how many hours a day passed while I was at work. That’s the worst way to measure effort. Effort is measured by setting goals and getting results.

On choosing something you can get lost in:
“Maybe I wasn’t the best programmer in the world, but in combination with business and sales skils, I found something that was a blast to me that I could and did do 24 hours at a time and not miss a beat.”

On the importance of learning how to learn:
“In my humble opinion, once you have learned how to learn, then you can try as many different things as you can, recognizing that you don’t have to find your destiny at any given age—you just have to be prepared to run with it when you do.”

On avoiding debt to allow you to take chances on your dreams:
“The greatest obstacle to destiny is debt, both personal and financial. The more people you are obligated to, the harder it is to focus on yourself and figure things out. Your first house, car, whatever you might want to buy, is going to be the primary reason you stop looking for what makes you the happiest.”

On the need to delegate so you can focus on your core strengths:
“pretty much every other strategic element of my businesses I have learned to delegate— that’s not easy for an entrepreneur to do. In the past, I would have taken on anything and everything that I thought I could add value to …. You may work 24 hours a day, but those 24 hours spent winning your core business will pay off far more. Bottom line is this: If you are adding new things when your core businesses are struggling rather than facing the challenge, you are either running away or giving up”

On the fallacy that more cash or investment is always needed to grow:
“So what’s wrong with that? Nothing! It’s okay to start slow. It’s okay to grow slow. As much as you want to think that al things would change if you only had more cash available, they probably won’t …
The reality is that for most businesses, they don’t need more cash, they need more brains.”

On never creating silos and wanting to make sure all customer emails get sent to him directly:
“I don’t know how they do it. I make my email available to everyone and anyone. Not only that (and more importantly), I make sure that al the customer service emails get forwarded to me.”

On the permanence of the sales profession:
“If you can sell, you can get a job—anywhere, anytime.”

Debunking myths about sales people and framing what the best really do:
“It’s not the hustler who is a smooth talker. The best salespeople are the ones who put themselves in their customer’s shoes and provide a solution that makes the customer happy … The best salesperson is the one the customer trusts and never has to question.”

On individuals being a poor judge of their own skills:
“The best salesperson is the one the customer trusts and never has to question.”

On starting the right business for you:
“Don’t start a company unless it’s an obsession and something you love.”

On creating deals that are win-win situations:
“Every good deal has a win-win solution. There is nothing I hate more than someone who tries to squeeze every last penny out of the deal. Who often raises the aggravation level to the point where it’s not worth doing the deal.”

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