One of the not-so-secret secrets in business is that companies do not treat all customers the same. This should not be shocking: retailers have “preferred customer” programs; the TSA has a PreCheck program that allows some to skip the long lines; our local big box hardware stores have preferred parking for some customers. Our favorite Chinese restaurant always adds a sweet to our order, and our favorite Thai restaurant always comps us an appetizer. All customers never have been, nor never will be of equal value to businesses.
At Kona Impact, we are always busy and never start the day without at least a handful of days of work “in the queue”. We make decisions every day on what projects to do first, next and last. While we try to stick to a “first in, first out” process, at times we have projects that get to jump the queue and take priority over existing projects. We don’t like to do this a lot, but, truth be told, all of our clients are not equal.
Here’s are some things you can do to put yourself at the end of the line:
- Have a history of paying your invoices slowly. If I can do a project that has instant cash flow, all things being equal, I will do that one first. Think about it. Wouldn’t you?
- Give us only small, no-profit projects. We don’t mind doing your business cards or a few stickers, but these projects make us very little money and take a lot of our time. If you have us do bigger projects, we’re very happy to do these smaller projects.
- Be known for start-and-stop projects. We don’t get paid until the project is done, so if you start and then stop projects, we’re less likely to start new projects for you.
- Be known as someone who requires excessive revisions. If your sign has more than 3 revisions cycles, something is wrong. We once had a client go through 12 revisions on a business card; we have declined all work from her since. Be prepared. Be comprehensive in your feedback. Be respectful of our time.
- Be a grump. Leave your grumpy personality in your car. Don’t “stink talk” other providers. If you need to put down other people to make yourself feel better, you’ll do the same to us. Customers are not entitled to petulant behavior, just as you would not expect it from us. A “please” and “thank you” can go a long way.
How do you get to the front of the line?
First, expect preferential treatment for your project only on occasion, not every day. We’re happy to work late or work weekends to help you out if you’re in a pinch, but clients who are always in crisis mode for their projects are tedious and dispreferred. On occasion, yes. Every project, no!
- Pay invoices quickly
- Let us make money from you by having us do a variety of big and small projects
- Complete projects you start. Don’t go fishing for the lowest price by asking for excessive price quotes (that you seldom accept).
- Come to us with a clear idea what you’d like. Provide comprehensive feedback on the first revision. Making changes on changes shows a lack of respect for our time.
- We love what we do and try to keep a positive work environment. We want to hear if your project does not meet your expectations. We don’t want to hear about Trump, City Hall, your previous provider or anything else that you want to be grumpy about.
Some may say that it’s not right for businesses to give preferential treatment to some customers. Well, the truth is it happens every day at every business. A more reasonable way to look at it is to figure out what you are doing to move to the front of the line (on occasion) or the back of the line.
Marketing is the activity of promoting and, hopefully, selling products. It is rare that a business can become sustainable without significant marketing efforts. One website has identified 52 types of marketing, giving a great overview of the possibilities for businesses. In our experience, a small business might focus on a handful of these, and a large business probably does some variant of all 52.
The most important outcome of marketing is sales, either immediately or building a brand and awareness that might result in long-term sales. Every marketer faces these questions every day: am I spending too much, too little or just the right amount to drive profitable sales? That is, a am I making a good return on the investment in marketing? If I buy a Super Bowl commercial for $5 million–the cost of a 2018 Super Bowl ad–will I get my money’s worth? Will it drive huge sales? Will it introduce my new product to millions effectively? Does it position my brand as the go-to brand for that product?
In the ideal world, we all seek a causative effect between our marketing and our revenue. If I spend $1, will I make $10? Or, if I spend $1 will I make a $1, which for most businesses with overhead, staff costs, and product costs, this is a money-losing investment.
Key to determining the value of marketing is to look at activities which are causal–a direct and undeniable link between the activity–and correlational–a link that is anywhere from highly probable to assumed.
Here are some marketing activities that provide evidence of a direct causal link:
- Google Ads and Bing advertising, where the click is tracked to a sale
- Coupon codes for a website that are unique to a promotion
- Coupons used in a store or for a service provider
- Unique phone numbers used for a promotion
- A/B testing of for an email campaign with unique URLs
With these, there is certitude about the connection between the activity and the sale.
Here are some marketing activities which can only provide a correlational link to sales:
- Sponsoring a community event
- Most print (newspaper, magazine) advertising
- Most radio advertising
- Most television advertising
- Podcast advertising
With these, there may be strong evidence of a connection, but it cannot be certain. If your sales go up after an ad, and nothing else has changed, it’s a good bet the ad caused the sales. Likewise, if your sales go down after stopping a promotion, and nothing else has changed, it’s a reasonable assumption the ad was a good sales driver.
The correlational aspect of the above comes from the fact that you can’t prove someone bought booked a tour because of any one activity. They may have learned about you from word of mouth, finding you on a Google search, seeing your storefront signage, and many many more places. There is no certitude, no direct link between the activity and the sale.
I know some business owners who eschew any advertising which does not allow them to draw a causal link between sales and marketing efforts. They basically believe if you can’t measure it precisely, it is or may be a waste of money. This is an extreme view of marketing.
At the other extreme are what I call data-phobic business owners. These are business owners who distrust numbers–perhaps because they don’t understand how they are generated or how they can be interpreted–and focus their efforts mostly on things that can only offer a reasonable and logical (one would hope) connection between marketing efforts and rewards.
If you are exclusively at the extremes–only causal or only correlational–you are, without a doubt, missing many opportunities.
At Kona Impact, we strongly believe that businesses should have their feet in both camps: work on ways to grow your business that are causal, but also keep doing things that may have a less direct link to sales. We like to experiment by starting and stopping various marketing efforts to see what effect this has on our sales. We prefer certainty but are willing to accept a level of ambiguity along the way.
Kona Impact 808-329-6077
A cognitive bias is a deficiency, an error in the way we process information. We’re all guilty, at times, of letting our cognitive (thinking) biases cloud rational decision making. Good business decision making will sometimes come from “the gut” unexplained–at least to some–ways of reaching decisions. That said, rational decision making based on good data will, over the long run, result in better decisions and more business growth.
One of the most destructive cognitive biases I’ve seen in my experience in working with hundreds of business owners a year is called the confirmation bias. This is selectively filtering all information through our preconceived ideas and not accepting information or ideas that challenge our existing set of beliefs. For example, I’ve seen businesses continue to advertise in phone directories, because “we’ve always done that, and it’s the best way to reach people.” I also see this a lot with business owners who stick to online marketing ideas that are 5-10 years old and no longer effective.
Another one cognitive bias is the post-purchase rationalization. I see this a lot when a business owner spends a lot of money on some ineffective marketing (like newspaper ads or paying an online marketing company for something not understood very well) and then, after there are very few sales, rationalizing the spend by saying, “Well, it was brand building. Sales will come later.” They won’t.
A third cognitive bias that can be very detrimental for business decision making is the negativity effect, which is when people hear a negative story, often in the news or anecdotally from a friend, and then completely miss the good, the big picture. I see this a lot with social media marketing. It’s impossible to avoid stories of poor data protection and then avoid–just because of this–any social media marketing. Or, they see their children “wasting time” on social media and assume it’s all a waste of time.
How to Avoid Cognitive Biases in Business Decisions
- Learn what they are. At a very minimum, understand confirmation, post-purchase rationalization, negativity, gambler’s, projection, anchoring, and selective attention biases. I’d also look at descriptions of logical fallacies.
- Have a confidant. I know many business owners who have set themselves as the first, last and only source of the decision-making process. This is especially true for men. Everyone needs to have a confidant, a sounding board, someone who can speak honestly, and even let the boss know he wrong.
- Encourage creative decision-making. Define a problem or a goal and assign a small group of employees to brainstorm, research and present options.
- Start with questions when you talk with employees, customers and suppliers. We’re trying to do this. What your ideas? We have a problem with this. How can we resolve it?
- Keep an open door policy. Many business owners, even though they might not fully recognize it, create a workplace atmosphere that does not welcome or accept any back-and-forth on decision making. It’s all top-down. Employees, after they feel they have no voice, are bound to withhold valuable data or alternative perspectives, which, over time, can be very detrimental to the health of the organization.
- Have someone outside the organization that will provide truthful feedback and support. A good friend, drinking buddy, spouse or childhood friend will often give honest feedback.
- Seek data and information from a wide range of sources. If you want to get better at your online marketing read widely and include magazines, non-commercial websites, and vendor websites. Subscribe to some online marketing podcasts. Talk to people in your community that have done well. Talk to vendors, but be careful not to move into the position that makes you look like you’re looking for free consulting.
- Make a chart with your rationale for your decisions and keep a column for counter-points and reasons why your idea might not work.
- Be willing to question all your assumptions. “We’ve always done it this way.” “I heard a story about online crime on the news last night.” “My friend’s brother’s wife said…” If these are your reasons, dig deeper; look for firmer ground.
- Learn from past mistakes. Making a mistake once is, of course, something we all do every day. Making the same mistakes again and again shows a lack of learning and ability to look in the mirror and change and grow.
Kona Impact LLC 808-329-6077
We’ve heard it for years: retail is brutal. Competition with big box stores and online channels make it very hard for a locally-owned retail store to survive. This is certainly true to some extent; the traditional models of retails are quickly failing everywhere, but that’s the ‘glass is half empty” perspective. Some retail shops in Kona not only survive but thrive.
How can a retails store do well in Kailua-Kona, Hawaii?
Here are ten things a retail shop can do:
- Offer products and services. If you’re selling fabric, have classes and offer and an alterations service. If you sell bikes, have accessories, of course, but also offer bike repairs and rentals. Selling art supplies? Add classes and, perhaps, a small gallery where artists can sell their work. If you’re selling tourists goods, partner with a tourist activities business and offer a booking service (for a nice referral fee, of course).
- Create a punch card offering discounts for multiple purchases or, even better, just visits. Come into the store ten times and get $10 off.
- Sponsor or organize local events. Naturally, a paddling supply shop should be organizing and sponsoring regattas or weekend mini races. A pet supply business should be working with the Humane Society to offer onsite adoptions or discounts to new pet owners. Dog training classes should be offered, as well. Become part of the community.
- Focus on products that need to be fitted. Clothes come in basic sizes, but shoes almost always need to be tried on. An outdoor activities shop should have a good selection of shoes and boots. Tennis and golf clubs need to be held, swung.
- Carry products that pack easily. If you’re targeting tourists, have a bunch of products that take up very little suitcase space. You’re not going to sell pogo sticks, no matter how cool, to people who visit the island!
- Another important thing for tourists is small gifts they can bring home to friends or family. Asian tourists, in particular, have a strong gift-giving culture, so having small Hawaii-branded gifts – key chains, 2 oz coffee, snacks, etc — can add up to huge sales over time.
- Focus on convenience and service over price. You’ll be paddling up a creek if you try to always have lower prices than online retailers. Local and online shopping are apples and oranges; compete on having products here now and offering expert advice on fit, use and local use. Free delivery can be a big differentiator.
- Be sure to have a good web presence! Kona, Hawaii has a lot of people coming and going each year, so if you don’t have many ways for people to find you online, you’re missing huge opportunities.
- Have an awesome customer contact system. Do whatever you can to build a great email marketing program for your business. Send a newsletter at least once a month.
- Invest in good signage. Handmade signs might appear to save you some money in the beginning, but you’ll look like a temporary, low-level business. Think about doing your vehicles, shop windows and inside your store with consistent and high-quality signage.
Kona Impact 808-329-6077
The first day of the work year is a good time to think about some ways to make 2019 better than 2018. Not that last year was bad at all: it was quite good in all respects, but being an entrepreneur I have to believe that 2019 will be even better!
Here are five things I will focus on in 2019:
- Simplify. Simplify. Simplify. For the first two weeks, I will aggressively unsubscribe to all the email that clutter my inbox every day. If I don’t seem tremendous value in a company’s email, I will unsubscribe. Likewise, I will try to focus on reading only a few of the magazines (most are complimentary) we receive at the office each week. I’ll also set aside 15 minutes at the beginning of the day and 15 minutes at the end of my day for non-work related internet surfing.
- Be an expense hawk. When times are good–as they have been–we tend to become a bit loose with expenses, buying things for the office that are experimental or just cool. We have subscriptions to many online software services; all of these need to be reviewed and pruned from our monthly expenses. I don’t know what 2019 will bring in terms of the economy, but we’ll be able to survive bumps in the road better if we run a tight ship.
- Spend as much time focusing on current customers as finding new ones. After 12 years in business, we have hundreds of current and past customers. This year we will reach out to our these businesses with the same energy we spend on finding new customers.
- Spend more time new product and services development. I often tell people that when Kona Impact started we had five pillars to the business, but within 6 months, we had already given up on two of them. We now have five pillars and are looking to add a few more in 2019. These are extensions of things we have been doing for years; we just need to market them better to customers.
- Spend less time working. Every successful entrepreneur I know has a fair amount of paranoia, which often results in overwork. One of my favorite jokes is: What do you call someone who works 80 hours a week so they don’t have to work 40? An entrepreneur! My plan for 2019 is to continue to automate our processes, use our machines more and delegate more, when possible.
I’m not a huge believer in grand, lofty goals for business. I tend to follow the kaizen (gradual, iterative improvement) approach to business where I want to get a few percentage points better at everything we do. Decrease expenses 3% and increase revenue 3% and that’ll be a big impact on the bottom line. Increase our new customers 3% and re-engage 3% of our past customers, and we’ll see tens of new projects this year. Decrease my work hours 3% and I’ll have about 100 hours a year. Small changes, big results.
Kona Impact 808-329-6077
This year was like most others in Kona: we lost some businesses and we gained some new businesses. We typically see a churn of 10-15% of the businesses in our 2,000+ businesses database a year, and this year was no different.
Why are so many businesses lost each year? Well, we define a business as a legal entity registered with the State of Hawaii. This could be as simple a registering a name and not doing anything with it or, at the other extreme, registering a name, building out a work location, hiring employees and running the business.
Some of the businesses we lost this year were due to changes in the marketplace. Kona Coast Office Supply is basically gone (though it does have minimal operations in the furniture store next door). They just could not compete with online and big-box retailers. It’s a shame because this is a business that I relied on for expert knowledge and hard-to-find paper. I purchased most of my office supplies, equipment, and paper from them whenever possible, but, sadly, not enough people did.
Another business that we lost of Oshima’s Store in Kainaliu. I understand the Affordable Care Act impacted their prescription drug business, and, just like Kona Coast Office Supply, they were unable to survive in the land of big box stores. I have very fond memories of buying a drink or some candy there when I would go to the Aloha Theater.
One of my favorite businesses that closed was Chirashi Sushi by Jiro, a small kiosk sushi shop in the Lanihau Center. His product was excellent and he did a great business, but non-business issues forced the closure. On the bright side, we have a sushi bowl restaurant in the same location that is also excellent.
Another loss to Kona was the closure of Bubba Gumps. Their lease expired and they were unable to come to new terms on the location. I was not a huge fan of Bubba Gump’s, going there maybe once a year when we’d have guests visiting the island. I look forward to what will be taking its place, as the location is simply awesome.
The Pizza Hut on Palani also closed. It might have been good for delivery, but the inside of the restaurant was one of the most outdated and poorly maintained chain restaurants I have seen. Not surprised it closed.
There is a new excellent place to get NY style pizza: Kona Crust. I’ve been there several times and like the big, flavorful slices, served quickly.
Another business that lost its location is Fabric and Quilting Delights. No word, yet, if they will have a new storefront in town.
One new business in Kona is Planet Fitness, on the corner of Queen K and Henry Street–the old Borders location. There are now about 10 fitness centers in Kona. I suspect there will be some contraction of this number in the future.
Speaking of fitness, we now have a nice retail store for outdoor enthusiasts: Kona Sports Center, by the soon-to-open Starbucks across from Honokohau Harbor. They also offer bike rentals.
Another one of our favorite new businesses is Kona Kones. They have a beautifully designed trailer, from which they sell ice cream made with real fruit. Right now they are at the Sheraton’s farmers market on Wednesdays and Fridays.
I also have to give a shout out to a business that is directly across from Kona Impact, Ola Brew Company. They have been in business a year and amazed the community with their beers and ciders and their commitment to doing things right. They have been an awesome neighbor and a great addition to the Old Industrial neighborhood. We look forward to seeing them prosper!
Kona Impact 74-5599 Luhia St, E-7, Kailua-Kona, HI 96740
Few clients ever regret signage. It’s one of those no-brainer ways to draw attention to your business. Being visible is always a good thing for businesses.
The Kona Sports Center is a new business in Kona. It has bicycle rentals, camping and hiking gear, beach gear, running shoes and a bunch of other great things to enjoy the great outdoors. After Sports Authority closed, a lof outdoor enthusiasts were disappointed at the lack of retail for outdoor sports in Kona. Now, however, we have no excuses: the Kona Sports Center is here.
Kona Impact designed and installed the 10 white pieces of cut vinyl. This project is completely in alignment with our belief that you need to tell people what you do, more than you need to tell them who you are. A lot of businesses believe their logo is paramount and should be the most salient thing on their building. This is absolutely true if you are an established brand–McDonald’s, Subway, Lowe’s–but it is not true if your brand is basically unknown. In this case, let people know what you do, what problem you can solve for them.
We look forward to seeing the Kona Sports Center grow. We’ll be their customers, for sure, and we hope many others will shop there as well.
We’ve seen a huge increase in the number of customers that are doing their own graphic design work and then bringing it to Kona Impact for output. This can be a good win-win situation for the businesses and Kona Impact. It can also result in higher total costs for the client if it is not done properly.
I won’t discuss design quality, as that is often in the eye of the beholder. I will, however, show the things, at a minimum, that the designer must have a solid grasp of.
- Copyright. We absolutely cannot and will not reproduce graphics for which you or we do not have a license. No, we won’t print your Hello Kitty graphic that you “found online”. Every image online is owned by someone, unless it has a specific Creative Commons license attached to it. We do not willingly break copyright law.
- 72 dpi vs 300 dpi. Almost all web graphics and photos are at 72 dots per inch (dpi), and the requirement for good output is 300 dots per inch. Enlarge a 72 dpi graphic 100% and it becomes 36 dots per inch! If you download anything from the internet to use for output, it is more than likely too low of quality for enlarging, and likely to be very low quality at its original size.
- CMYK vs. RGB. CMYK is cyan, magenta, yellow and black/registration and RGB is red, green and blue. These are what we call color spaces: CMTK is for professionally printed output or what we call 4 color printing. RGB is a color space for monitors and displays; that is, web graphic. If a file is set up for RGB, it will not look as it should when printed on paper or a sign. It is very important that files that are going to be printed be set up and saved in CMYK.
- Bleed, cut lines and safety lines. The cut size a business card 3.5” x 2”, while the dimensions we need is 3.625 x 2.125. All essential text should be ⅛ inside of the cut size. Ask for a template and we’ll gladly provide you one. Give us a file that doesn’t have the correct settings for the bleed, cut and safety zones and you’ll see added costs for your project.
- PNG, JPEG or PDF? We never want png files for printing, but jpegs or pdf are fine—if the quality is high. Again, a jpeg you download from the internet is most likely 72 dpi, less than 25% the quality level you need for good output. A 300 dpi jpeg is fine. Ideally, we receive a pdf file that is created after the fonts are outlined and transparencies are flattened. Don’t have a clue what this means? Spend some time to figure it out, as it will greatly decrease problems with the output.
The above are just the basics and are necessary for any files set up for output. It’s all learnable.
At Kona Impact we are fond of saying: “Everything has a cost. Who is going to pay?” If we receive a file that needs to be re-done, the cost has to shift back to the client.
Kona Impact LLC – 808-329-6077
If you are like most small business owners in Hawaii, you follow what’s happening in Washington, D.C., but feel somewhat removed from it. It is, after all, “over there”, and we are as far away from over there as possible.
That said, the recent craziness in our nation’s capital does affect us. The ebb and flow of the global economy certainly can affect our investments and our local economy. A U.S. recession inevitably causes a global recession, which affects tourism and investment in Hawaii.
But, should we be overly concerned with what happens over there?
I argue for caution, but at the same time, I look at where my efforts can change the trajectory of my business. What can I do every day that will allow Kona Impact to zig when the economy is zagging? Or, how can I be less affected by the inevitable downturns in our economy?
I have more power over my business than any politician in Washington, D.C. I am the pilot of my business, and the local and national economy are just headwinds or tailwinds. I cannot change them, but I can certainly have a big impact on my business by changing some of my everyday habits.
Here are five things businesses can do to survive, if not thrive, during a chaotic economy:
- Focus on existing customers. Reach out to these through email, a phone call or a letter and make sure they know the full range of your services, and that you value them as a customer.
- Add to your products and services. If you haven’t traditionally done repairs or maintenance, consider adding repair services. Can you add some equipment that might allow you to offer something new, something that doesn’t exist in the market now? Can you become the distributor for a Mainland or international supplier? How about adding consulting services?
- Invest in marketing. There are always opportunities to find new customers. Get creative and find them!
- Look for any waste in your business. Are there any subscriptions for services or products you no longer need? Is your office lighting using low energy LEDs? (We saved about $600/year, by replacing our lighting.) Is there staff that needs to be re-tasked or re-trained? Look at every expense and get rid of the non-essential fluff.
- Grow your understanding. If you don’t really understand your company’s finances, get a few books on accounting and figure it out. If you’re not very good at providing feedback to your employees, seek out some knowledge and new approaches. Figure out how to do routine maintenance on your vehicles, and you might save thousands of dollars a year. Looking for ideas on online marketing? There are tons of books, audiobooks, and websites that can help you figure out new directions.
Like many, I find it hard to watch the news these days. There is a lot of things that distress me as a business owner: reckless spending at the national, state and county level, taxes, regulations, education, America’s role in the world, and much, much more. Because of this, I mostly avoid the news. Instead, I have worked hard to work within the area the I control.
Kona Impact LLC 75-5599 Luhia Street, E-7, Kailua-Kona, HI 96740 808-329-6077
Small business owners, like everyone else, often find themselves pondering what role they play in their community. They, after all, are tied to a physical location (unless they are e-commerce only business) and must rely on others for labor, supplies and a sense of community.
One of my favorite poems is by John Donne. In part, it reads,
“No man is an island entire of itself;
every man is a piece of the continent,
a part of the main;
There is not a lot of deep meaning to it. Its meaning is transparent: we’re all connected! Simple, but important.
Here is Kona Impact’s take on our role in our community:
- We need to maintain financial viability to exist. Making money is rule #1, as, without it, we’re, as they say, toast.
- Providing good, stable work conditions and pay for our employees is a very important part of our mission. Providing jobs, good jobs, is one way we serve our community.
- Avoiding evil. We recycle. We don’t dump toxic chemical on the street. We pay our fair share of taxes. We do things as safely as possible. In other words, we try to do no harm to our community as we run our business.
- We help other businesses achieve financial viability through our goods and services. We love to see an entrepreneur take an idea and eventually make a living from it. Even better is when we can make them successful enough to where they need to hire people and provide good jobs to our community.
- We buy locally whenever we can. Supporting our community is best done by helping the other businesses survive, and even thrive.
- We give a lot of our time to our community. This includes serving on Boards of Directors, volunteers on community projects and sharing what we know to help non-profits do things better, more efficiently.
- We give a lot of stuff at a greatly reduced cost to community groups that do good and have values aligned with ours. For example, we give big discounts on our services to some communities of faith (i.e., churches) that have active programs for taking care of our homeless population, people with disabilities, recovering addicts and other marginalized people that can use a hand up.
- We give away a lot of product to a select group of local non-profits that are near and dear to our hearts. This includes our local community theater, a group that works with teens, a non-profit that works with families with children in need.
What we don’t do:
- Support groups that aren’t based in our community. We might do this with our personal funds, but Kona Impact only supports local groups.
- Write a bunch of small checks every year to all the groups that request donations. We give several thousand dollars a year to a handful of groups, but long ago, decided that we wanted to avoid getting on the mailing and donation list of many groups. It’s highly inefficient to keep sending out solicitations and processing small donations, so we decided to focus on the most efficient ways we can help our community: going deep with a handful of causes close to our values and saying “no” to the rest.
So, to the question in the title, we at Kona Impact believe that we have a deep and important connection to our community. We live here. We raise our children here. We work here. We play here. We’re not always perfect, but we do try very hard to keep our community-centric values as we go out running our business.
Kona Impact LLC 74-5599 Luhia Street, E-7, Kailua-Kona, HI 96740 808-329-6077