Why Should We Care About Customer Lifetime Value?

customer lifetime valueAn article in Forbes magazine caught my attention recently: What’s a Lifetime Customer Worth? You’d Better Know. One section, in particular, continues to resonate with me:

“Any business that isn’t thinking along these [customer lifetime value] lines is simply playing the wrong game. Granted, it’s not always easy to think this way; it’s only natural to push back from time to time when you feel a customer is asking for too much. For that reason, it’s critical to constantly remind yourself, and your team, that you are striving to capture the customer’s lifetime value. This helps put the little things into perspective.”

Isn’t it true that all the little things tend to pile up and, ultimately, become the thing that puts us over the edge? Suddenly, you find yourself in a defensive argument with a customer over a small issue that, in the grand scheme of things, makes little difference to the bottom line of your business.

Customer Lifetime Value puts the value of each of your customers into perspective, allowing you to put yourself in the mindset to start putting real customer service strategy in place. That perspective helps you and your team diffuse dissatisfied customers, rather than allow customer service situations to get out of hand.

Calculating Customer Lifetime Value is a simple equation, but it takes a bit of analysis work to get the right numbers for your business to plug in.

Average Value of Sale x Number of Repeat Transactions x Average Retention Time

What is the lifetime value of your customers? How will knowing this help improve your customer service strategy?

Emotional Intelligence In Modern Leadership

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EI_Tree_Emotions_FinalWe hear a lot about emotional intelligence in our professional lives these days. So much that it has almost become a buzzword in modern business jargon. When we first began talking about what the topic for our next new leadership development training session should be, there was a little bit of a debate around whether or not we should touch emotional intelligence. Is emotional intelligence a fad? Has its time come and gone? Is it relevant across all cultures, ages, and genders?

I firmly believe that emotional intelligence is among the top timeless leadership skills that produce better results from ourselves, our management teams, and our employees. Successful managers around the world leverage this skill to engage and motivate teams while building strong working relationships and partnerships. As a leader of your organization, you need to be self-aware and able to self-manage your own emotions in a variety of situations. You also need the skills to assess and manage the reactions of your team.

I am exceedingly proud of our newest Bullet Proof® Manager leadership development module – Leadership Influence Through Emotional Intelligence. Emotional intelligence is a timeless skill that is key to a leader’s success. As more organizations restructure to a team-based, matrixed organizational structure, leaders must have strong social awareness and relationship management skills to influence decisions.

Improve Performance with Mindset

What’s Your Mindset?

Your Mindset Affects Performance

My son came home from college this weekend and we were discussing his past semester at school. He said, “Mom, I am exhausted. I study hard, but I never feel like I am great at a subject. There’s always a group of students smarter than I am in the class. For once, I want to have the top grade in the class.” I asked him, “Do you think you are learning a lot?” He replied, “OMG, I am learning so much my head hurts!”

Carol Dweck, the author of Mindset, The New Psychology of Success, would have asked my son the following questions: When do you feel smart, when you’re flawless or when you’re learning? If you had to choose one which would it be, loads of success and validation or lots of challenge?

In her book, Mindset, The New Psychology of Success, Dweck defines two types of mindset personalities, a fixed mindset and a growth mindset:

“A ‘fixed mindset’ assumes that our character, intelligence, and creative ability are fixed and can’t be changed in any meaningful way, and success is the affirmation of that inherent intelligence, an assessment of how those givens measure up against an equally fixed standard; striving for success and avoiding failure at all costs become a way of maintaining the sense of being smart or skilled. A ‘growth mindset,’ on the other hand, thrives on challenge and sees failure not as evidence of unintelligence but as a heartening springboard for growth and for stretching our existing abilities.”

One of the ways in which Dweck tests this theory was to observe the different mindsets of children playing with jigsaw puzzles. The children were allowed to do an easy puzzle once and then gave them a choice. They could either do the same puzzle again, or they could try a more difficult one. After observing the choices the children made, she asked them why they made the choices they did. The children who elected to do the same puzzle again believed that by doing the same puzzle again they were less likely to make mistakes and were, therefore, smarter because smart kids don’t make mistakes. The children who chose to move on to the more difficult puzzle, on the other hand, could not understand why the other children would want to do the same puzzle over and over again. In their mindset, becoming smarter is more important than being seen as smart.

So What’s Your Mindset?

Do you strive for mastery and realize that mastery is a journey? Do you appreciate that your hard work will pay off and improve your skills? Do you anticipate and welcome objections and challenges as an opportunity for growth, or do you view them as failures to be avoided? When you don’t close the sale, do you feel depressed or do you take the time to debrief and use this experience to fuel your urgency to get the next one? Are you learning and growing or are you comfortable?

The mindset you adopt for yourself affects the way you lead your whole life.

People in a growth mindset don’t just seek challenge, they thrive on challenge. The growth mindset allows people to love what they are doing and to continue to love it and to grow in the face of difficulties. They do not fear failure—they fear complacency.  They are lifelong learners!

“To Do” vs. “To Be” in Leadership

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extraordinary leaders to be listI’m willing to bet that at least 90% of the people reading this use a “To Do” list regularly. Perhaps you have a daily list, or a weekly or monthly list. However long your list timeline, it’s something you use to make sure you stay on track with the tasks that you know you need to get done. You happily cross items off your list as you accomplish them. It’s a wonderful thing.

But I’ve found that extraordinary leaders don’t simply lead by managing task after task. They lead by example, by creating a vision of a better future and inspiring people to follow them to that vision. They have the leader’s mindset to lead based on their beliefs, their values, not just from accomplishing daily tasks.

Do you have a “To Be” list?

Most leaders will tell me that they use a “To Do” list, but almost none of them have a “To Be” list. Why is that?

What is a “To Be” list? Well, it’s exactly what it sounds like. You sit down and write down the kind of person that you choose to become. This takes some real thought and reflection on your part. To make this effective, you need to identify your values and then think about the person that you want to be in the context of your values.

The most important thing for us as leaders to acknowledge is that if we want our people to do well, then we must ensure that our people are well. In other words, if we want to make sure that someone’s behavior is good, then we have to ensure that they are the kind of person who could produce good behavior. I call that the difference between “to do,” the things I do, and “to be,” the person I am.

To have a good “To Be” list, you must also have a “Stop Doing” list. For example, I have stopped reading the newspaper in the morning. I‘ve discovered that – for me, personally – reading the newspaper every morning does not materially affect or influence my performance in business that day.

Instead, in the morning, I read something that nourishes my mind and nurtures my heart. I read something that gets me going in the right way with the right direction with the kind of attitudes that can achieve great results. And in the evening, I’ll catch up on my reading, including the newspaper.

So, my recommendation is to include writing a “To Be” list and a “Stop Doing” list on your “To Do” list. Start leading as the person that you are, and the person you want to be, rather than simply from the tasks you need to accomplish.

What will you put on your “To Be” list?

Tammy Berberick is the President and CEO of Crestcom International, a worldwide leadership, sales, and management training business in over 60 countries. You can read more of Tammy’s writings on leadership, purpose, and life on her blog, Tammy’s Corner: Everyday Wisdom for Business Leaders.

photo credit: :- To Do via photopin (license)

Doing Things “The Way We’ve Always Done It”

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Change is objectively uncomfortable for almost everyone.

Business person having bright ideaThere are those people who thrive on change for change’s sake. However, the majority of us find comfort in our routine, in sticking with what we know.

In many cases, we will stick with “what we know to be true” even long after “what we know” is no longer true or relevant. Simply because it is “the way we’ve always done it.” This mindset can be downright dangerous when applied to really any aspect of our lives, particularly in business.

In business, the inability to change is equivalent to living with a parasite. Sure, you’re still walking around, likely even feeling somewhat normal and healthy. But in reality you are dying a slow death without taking care to eradicate it. If you are operating a business using the same procedures and policies you did 10 or 15 – heck, even 5 – years ago, you are indeed dooming your business to obscurity.

Also consider your professional career. In my experience, no leader is in the position they are in today because they simply did exactly as they were told. You career can only truly develop through your ability to proactively solve business problems and innovate procedures and policies. Without a willingness or ability to innovate, you end up being stuck wherever your boss puts you, without influencing the outcome of your own growth.

Innovating and instigating change is not easy, nor is it for the faint of heart. My recent experiences in implementing organizational change has opened my eyes to the importance of creating an innovation culture. We already know that change and innovation is tough, but when an organization has been living in a “this is the way we’ve always done it” mindset for a long time, it becomes even more difficult to make necessary changes. In this case, it becomes very important to use great change management skills to achieve short-term goals in parallel with creating an innovation culture to achieve the long-term company strategy.

Executive Presence Is Key To Achieving Success

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“It is executive presence—and no man or woman attains a top job, lands an extraordinary deal, or develops a significant following without this heady combination of confidence, poise, and authenticity that convinces the rest of us we’re in the presence of someone who’s the real deal.”

Sylvia Ann Hewlett, Executive Presence: The Missing Link Between Merit and Success

Executive PresenceExecutive presence can be defined by the sum of three contributing attributes:

  1. Physical: This includes a polished, refined physical appearance, but also how you present yourself. How do you carry yourself when you walk into a room? People look for things like a straight posture and a smile on your face to signal that you are confident, in control and approachable.
  2. Functional: Your intelligence and expertise in the technical skills of your function contribute to your executive presence. The functional attribute of executive presence also includes your professionalism in your work, how you organize and hold yourself accountable. It’s taking pride in your work. At the highest level, your expertise is sought out as a trustworthy, unique source of advice and insight.
  3. Influential: Everyone agrees that the way you communicate with others contributes to your executive presence. The ability to speak up and communicate with confidence and clarity is just the beginning. Influence also includes the “wow factor” ability to engage and empower others to action with your love and passion for what you do. It includes empathy, authenticity, and the ability to actively listen to others.

An executive presence helps you reach your full leadership potential. Whether you are just beginning your career or you are at the senior level, you should be continually working toward developing and refining your presence. Not all advances are about skill. Not all sales are closed based on product stats. Your presence elicits far more response than technical attributes.

Note that not all leaders are strong in every area. Some are very refined in their presence, and highly intelligent, but are not influential in their communication. Those that are at the very highest levels of executive presence did not get there without putting significant thought and effort toward achieving it. People are not simply born with a natural executive presence – they have to achieve it.

There is a debate around this – the extent to which a person can develop an executive presence versus having a natural affinity to it. What do you think – can executive presence be learned?

photo credit: 1976 Volvo 264 TE via photopin (license)

Looking Forward on the Lunar New Year

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positive energy lunar new yearMonday marked the Lunar New Year, a time that symbolizes a fresh start, a “clean slate” to your life. It’s a time to look ahead to the good luck and new opportunities that are ahead of you in the new year. It’s also a time to put the bad luck and challenges of the previous year behind you. Remove any emotional and psychological baggage of the previous year and look to the future.

The Lunar New Year symbolizes a new start in life – refreshing hopes for prosperity, wealth, and happiness.

“We always want good things to happen to us,” says leadership training facilitator, Hoàng Ngọc Bích, in Vietnam. “But life is full of surprises. Good luck and good things come together with bad luck and bad things as well. At the end of the year, many people feel tired and unhappy of things that did not happen the way they wanted. The New Year is the time when people feel relieved because a year of bad lucks, bad things is behind us. And we always believe the New Year will be much better than the old year.”

This is a time of renewed energy.

Generate positive energy from the learnings and wisdom of the prior year and the momentum of new initiatives. Use that energy to visualize your future and your success in the coming year. Your positive energy attracts positive relationships, as people want to be around others who generate positive energy. Leverage these positive relationships to grow yourself personally, and also to grow your business.

Surround yourself with positivity.

The people you surround yourself with are a big influence on your life. Surround yourself with good people who are encouraging and supportive of you. Also, surround yourself with people who are motivated and conscientious to improving their own lives and doing positive things in the world. Their motivation and productivity will help keep you positive as well.

How will you keep your positive energy throughout the rest of the year?

photo credit: Happy New Year via photopin (license)

Clear Communication Saves Time & Gets Results

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How often do you think you’ve clearly communicated a request to your direct reports, only to find out that the results are not what you need?

Some people blame it on the “Curse of Knowledge” – it makes perfect sense to you because you know exactly what you’re looking for, but it doesn’t make sense to people who do not live in your head! But don’t discount the common issue that arises when you don’t know why you need the result and the expectation of what you will do with it.

In his book, The Jelly Effect: How to Make Your Communication Stick, author Andy Bounds describes this concept as “afters”. Afters defines what a person or audience’s future need from the result of a request is. For example, when I ask my CFO to give me a report on last year’s sales compared to the previous two years, I don’t need a report. I need to understand how my company has grown over the past three years, recognize seasonal sales trends, and be able to intelligently predict future sales growth projections. I say I want a report, but “afters” understands why I need that report and what I will do with the information provided in it.

“Curse of Knowledge” will tell you “Of course, my CFO understands this is what I need – why else would I ask for it?” In this simple example that may be true. But, what if my CFO put together a spreadsheet with some total numbers at the bottom and sent it over to me? What would I do with it? How would I use that information? I would probably send it back to her and ask for some data visualizations to help me better understand the data.

When you engage in this back and forth communication, not only are you wasting your own time, but you’re also expending the energy, time, and motivation of your team by making them re-do work needlessly. Before I make a request from my direct reports – particularly one that I know is going to take a bit of time to achieve – I find that it is worth a minute or two of my time to answer these questions:

  1. Why do I need the result of this request?
  2. How will the result of this request contribute to the success of the company?
  3. What will I (realistically) do with the result of this request?
  4. How is successful completion of this request defined?

When you’re responsible for getting the most out of your team, be very careful you don’t just delegate tasks, but talk about the afters of the task. Practicing this will eliminate the frustration and expense of needlessly doing the work twice.

But this process isn’t just for us as leaders. Coach your employees on how to ask future-based questions of you and their direct managers to better understand the afters of their tasks as well. With everyone working toward delivering on afters rather than on tasks, your team will be working at a much higher level of productivity and job satisfaction.

Big Rocks & Eating Frog at 4:30 a.m.

What’s the first thing you do in the morning?

-Procrastination is attitude's natural assassin--There is nothing more fatiguing than an uncompleted task- William James

Many of us are familiar with Stephen Covey’s “Big Rocks” illustration. When we spend our time on the easy and unimportant little things (the small rocks), we run out of time for our most important priorities (the big rocks). To accommodate this time misallocation, we make tradeoffs in our relationships and our health.

It used to be that, as soon as I awoke, I would immediately check my emails. One email led to another, and soon it was time to leave for work. I had not accomplished my key priority nor done any exercise that morning. I would get into my car, feeling unorganized and a little down.

Today, I don’t start my day with trivial things. Here’s my new approach to time management:

  • 4:30 a.m. Frog Eating: There is an old saying about eating frogs: If you have to eat 3 frogs, don’t spend a lot of time looking at them, and don’t start with the smallest one. Eat the biggest one first. When I wake up, I get dressed in my workout clothes first thing, and then I tackle my most important task from 4:30 a.m. – 6:30 a.m. Once accomplished, I reward myself with exercise and my healthy shake.

    eating frogs

    Teddy knows a thing or two about eating frogs.

  • Follow the Schedule: To make sure I’m focused on my big rocks, my goal is to accomplish everything on my schedule for that particular day. I know that if I do not accomplish what I have scheduled for that day, it will have to be moved to the next day. By following my schedule, I generate personal energy instead of exhaustion. I feel that I am in control of my schedule, rather than a schedule victim.
  • Evening Brain Release: Before I go to bed every night I review my schedule for the next day and ensure I have everything planned and noted—this is key and if I skip this step I cannot sleep well. My brain will worry that I may forget something and it processes all night. I need this brain release.
  • Weekend Review & Planning: I review my schedule for the upcoming week and I schedule everything on my calendar. Not just my meetings, but also exercise, reading, writing, preparation time, get-togethers with friends.
  • Document & Schedule the Tasks: I document all of my tasks on my Google tasks list and attach a due date to each. These all appear on my calendar so I can adequately schedule work time to complete them. Tasks are blue and my meetings are green on my schedule.

Focusing on my big rocks and eating frog at 4:30 in the morning has changed my productivity and my attitude. And that’s no bull!

Tammy Berberick is the President and CEO of Crestcom International, a worldwide leadership, sales, and management training business in over 60 countries. You can read more of Tammy’s writings on leadership, purpose, and life on her blog, Tammy’s Corner: Everyday Wisdom for Business Leaders.

Living up to the Big C—Are You Worth It?

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Are you someone who lives up to your commitments?

Consider your reaction to the following questions:

  • Being 45 minutes late to a family dinner is okay—they are just family.
  • I missed my deliverable date at work this week—it was really just a soft date, what’s one more day anyhow?
  • I called the day of the event to cancel for my volunteer timeslot—other people with more time can take my place.
  • I told my son I would attend his game on Friday, but I got stuck in traffic and missed it—he will understand, he always does.
  • I am supposed to make at least 15 sales calls per day, but I usually only have time to make 10—there is just too much to do in a day.

commitmentWhy are some people comfortable with allowing their commitments to slip while others will always meet them? Why is it that the busiest people are always the ones to take on more?

There are connections between personal and professional commitment

I once worked with a CEO who would go to the gym every day at 5:30 a.m. He never missed a day. He called his personal commitment to exercise a ‘non-negotiable’ in his life. He hired a trainer to help him with his daily routine and it soon became a habit, a positive ritual. This CEO is in control of his schedule and he sticks to it. By achieving his daily personal commitment to exercise, he feels energized and full. When he leaves the gym, he feels empowered because he just met one of his personal commitments. This feeling starts at the beginning and sets the tone for the rest of his day.

This feeling of abundance is his secret to having so much time to give to others.  He is every bit as busy in his daily commitments as you and me, but he still always has time to give to important community projects.

I am sure you know this type of person. The person who is always on their game, busy, organized, and yet they always seem to have time to take on more and to give to others. These are the people you can count on. They will always get it done, no matter what. They understand their worth, the value of their time, and the value of other’s time. These are the folks that radiate energy and abundance.

How will you commit to achieving your commitments?

Think about your schedule next week. What commitments have you made or are you making? Ensure you will meet your commitments and put one of the most important commitments first thing in the morning so when accomplished, it fuels the rest of your day.

With a demanding schedule, achieving your commitments can be difficult, and the changes that you may need to make to accomplish this will not happen overnight. Become a student to train yourself in maximizing your time and productivity, improving performance, and increasing accountability techniques.

Know your worth! When you understand what your time is worth and can respect the value of other’s time, you will nurture healthier relationships.

Being responsible makes you a better sibling, friend, spouse, community member, and colleague. Keep your commitments and make more time for those people who stand by their word. Reduce the time spent with those who continuously blow you off. You are worth it!

What personal commitment have you made (or will you commit to making) that empowers you to achieve other commitments that others are depending on you for?

Tammy Berberick is the President and CEO of Crestcom International, a worldwide leadership, sales, and management training business in over 60 countries. You can read more of Tammy’s writings on leadership, purpose and life on her blog, Tammy’s Corner: Everyday Wisdom for Business Leaders.