Martinka Consulting

425-576-1814 john@johnmartinka.com

Leaving Cash on the Table

Posted on by JohnM

On our return trip from our Rotary project in Antigua I was the first one to check in and did so via a kiosk. As the machine crunched information it gave me a confirmation screen that asked if I wanted to upgrade on the first leg of the trip. I thought it was a reasonable price so I agreed.

My wife was next to me and about a minute or so behind me. She did not get an upgrade offer. The American Airlines representative said to ask at the counter when we checked our luggage. So, we did and were told that it wasn’t showing many seats and the price was so high he knew we wouldn’t pay it.

I get on the plane and I’m one of five people, out of 16 seats, in first class. I asked the flight attendant why my wife wasn’t offered an upgrade, she didn’t know but did go back and get her so she could sit with me.

American Airlines lost an opportunity to take in a couple thousand dollars that they can never again get. Not a lot to a multi-billion dollar company but one has to wonder how often this is happening.

Without getting into the discussion of “how to upsell everyone any and everything,” it should get all of us thinking about if we’re losing out on revenue, and our customers and clients losing out on our value, because we’re ignoring opportunity, have bad systems, poor follow-up or anything similar. For small businesses, a couple thousand dollars every-so-often can add up quickly.

We returned from Antigua to Seattle and guess what:

“Oh no, it’s raining again…It’s only time that heals the pain and makes the sun come out again.” Supertramp from It’s Raining Again

Everything is Relative

Posted on by JohnM

I’m writing this while in Antigua on our annual Rotary Club project and on Sunday we had an off day so a few of us went on a kayaking and snorkeling outing.

As we crossed the bay in a fast moving skiff there were waves of about two feet, with small whitecaps. I commented to my wife that at our lake two-foot waves are usually accompanied by dark skies and we stay off the lake. In Antigua it’s 80, sunny and a great boat ride.

Monday morning as we did an early morning walk on the beach we met a local Rotarian. He comes to the beach daily at sunrise to walk and swim. He told us his wife hasn’t been out yet this year as it’s still too cold. We’re from Seattle; 76 at 7:00 am is not cold. :-)

As the above life examples show, we all have different perspectives. It’s the same in business; what’s a roadblock to some is a minor speed bump to others. However, too often we let what others think influence us, even though they apply different filters.

It’s why I tell business buyers and sellers that most due diligence is relative. There are very few absolutes. We interpret the rest based on our experience and skills.

Don’t Salary Cap Your Business

Posted on by JohnM

Well, the Seahawks received their first Lombardi trophy after they crushed Denver and won the Super Bowl so it’s time for another (last for this season) football-business story.

At Rotary last Friday I mentioned to somebody that I really hope the Seahawks win because fame is fleeting in the NFL in an era where the salary cap is the most important thing to which a team has to pay attention. Don’t think it’s important? The Ravens won it last year and didn’t make the playoffs this year. The Giants won it two years ago and haven’t made the playoffs since. In fact, only two teams have made the playoffs each of the last five years.

The same can be true in business. If you have self-imposed salary caps on your people or equipment you’ll see short-term profits that may not be sustainable. If you overspend you’ll run into cash crunches and profit dips. Ever see a business that has too much space (more rent than necessary) or too much equipment (idle equipment costs money)? Even in my small business I make sure I have the best equipment and that I highly utilize my two assistants.

Take a hint from football. Spend wisely, don’t overspend and stay current. There’s a popular saying in football, “Next man up,” which means if someone is injured the next man needs to step in and make the plays. The Seahawks have a lot of depth and it helped when they had a few injuries this year. Create the same depth for your business.

“Individual commitment to a group effort – that is what makes a team work, a company work, a society work, a civilization work.” Vince Lombardi

* The two teams in the playoffs the last five years are the Packers and the Patriots.

 

Provide Value – Be Needed

Posted on by JohnM

I’m in Antigua on our annual Rotary service project. Last week I was talking with my friend Jeff Mason at Newport High School – his students do all the computer installations, upgrades and teaching of the teachers – and in lamenting some of the (lack of) cooperation we’ve received from the schools he referenced the two primary project leaders in Antigua when he said, “Why can’t they all be like Cordel and Ato?”

My answer was simple, “Because if they were it wouldn’t be Antigua and they wouldn’t need us.”

Think of my answer in terms of your business, your customers businesses, etc. If your customers could do what you do they wouldn’t need you. If your staff couldn’t do what they do you wouldn’t hire them.

It comes down to filling what is needed. Successful people and successful companies become that way by helping successful customers do even better, helping struggling customers achieve success and filling some of the gaps that we all have.

In a non-profit’s board meeting the other day I referenced the Pareto Principle aka the 80-20 rule when discussing the staff’s productivity. This organization gets 80% of their “production” from a small number of people.

The same as most companies, especially on the sales side and definitely here in Antigua where the Rotary Club (and similar) do so much more than most others, especially the government that doesn’t have the resources to do much at all.

The point is to recognize where productivity is and do what you can to maintain it, whether it’s top customers, key employees or the systems you have.

Some Things Never Change

Posted on by JohnM

Back in the 1990’s, in the days when you actually paid for long distance phone calls, I called my telephone company salesperson (when you also had a sales rep not a call-center person) about my rates. I had heard an ad for their company that featured a rate much lower than mine. He told me, “They don’t pay us to stay in touch with existing customers, they only pay us to generate new business.” He ended up dropping my rate in half and it took my initiative to do so.

Fast forward to 2014. I see TV ads for ATT that are offering a multi-phone plan that’s noticeably less expensive than what we pay. So, I call and within three minutes I’ve reduced my bill by 20%.

So why can’t ATT (or any of the others) treat their existing customers the same way they treat new customers, without the customer having to take action?

It would seem to me that you want to reward loyal customers to keep them from moving to the competition. Provide great service in order to keep your customers and generate referrals.

You Don’t Need to Badmouth the Competition

Posted on by JohnM

We recently had the “pleasure” of going mattress shopping. For the last few years we’ve said that when it became time to get a new bed our top choice would be the Westin Heavenly Bed because every time we stayed at a Westin we just loved the bed.

However, we felt we needed to do some comparison-shopping so we started by heading off to Sleep Country USA, the major mattress chain in Seattle. Bad mouthing the competition may work with some people but not us. We mentioned how much we like the Westin bed and got a diatribe about how it’s not that great a mattress and here’s a better one. We mentioned the Sleep Number bed and heard what’s wrong with it  and how the (similar) one they sell is so much better. And so it went. We walked out saying that we’ll get our bed somewhere else, no matter what model we finally choose.

Our next visit was to Macy’s where the approach the salesperson took was completely different. She explained different mattress features, pros and cons of different types, why their best selling model is their bestseller, etc. We finished at Nordstrom’s, as they’re the only store that carries the Westin bed. Again, the salesperson was informative and helpful.

A mattress is a big decision. Even though the financial outlay is much less than a car, it’s just as important as we spend a lot more time on a mattress than in our car.

Bottom line: we all have competition. If we didn’t we wouldn’t have a business. Want to be the only business selling floppy disks (soon to include CDs)? Good, healthy and honest competition keeps us productive. We get customers and clients by demonstrating the value we provide, which is more than just features of our product or service. We don’t get customers by telling them that the product they like, from personal experience, isn’t that good.

“Right now, the most avant-garde thing you can do is to be sincere.” (Actor) Steve Coogan

P.S. We ended up with the Westin bed based on experience, reinforcement of said experience at Nordstrom’s and the fact that it was on sale for about 30% off, making it half the price of our next favorite.

Are Your Employees Really Valuable Team Members?

Posted on by JohnM

In January 2014 Delta Airlines announced a new membership policy for their Sky Clubs. In simple terms, they doubled the annual fee and got rid of some perks like spouse memberships, free access for American Express Platinum cardholders and more.

Okay, it’s their business and if you’ve ever been in an airline club in a hub city at peak time (try Atlanta at 5 pm, especially on a Friday) you’ll understand why they want to weed out some of the people. There’s absolutely no exclusivity anymore.

What I found amazing was that they gave their employees, including those working in the Sky Clubs, absolutely no advance notice of this. They got the same email blast that members got, at the same time.

Now I’ll bet Delta has spent millions on consultants to help them build teams. I’ll bet they stress to the employees that they’re not just workers but part of “a team.” And then they keep those employees who will take the brunt of the questioning in the dark.

Seems to me there was a bit too much overthinking here. Some people in the executive ranks made a decision and didn’t realize the ramifications to what the employees would face. There is a better way. Get employee input and coach them on the changes and how to handle them.

“People are like bicycles. They can keep their balance only as long as they keep moving.” Albert Einstein