Marketing Headhunter

Calculating Total Compensation

As an recruiter who often assists in complex salary negotiations, I'm encountering this issue in many of the searches I'm working on this quarter:  The candidate says "I need to make $85,000.  Period."  Conversely, the employer says "Our compensation for the position is capped at $75,000 + a 10% bonus, take it or leave it."

What each party hears is a seemingly insurmountable $10,000 gap, when the difference is actually much less after the bonus is paid out.  This problem is one of communication -- and is solved by teaching both parties a little math:

• For the employer to meet the candidate's expectations, the base salary must increase from $75,000 to $77,273 (... because $77,273 + 10% = $85,000).
• For the candidate to meet the employer's expectations, the total compensation must decrease from $85,000 to $82,500 (... because $75,000 + 10% = $82,500).

Once they know the math, both parties will usually split the difference, which makes sense if the candidate is an A-player.  To quote Warren Buffett, "Where hiring decisions are concerned, it's better to be vaguely right than precisely wrong."

Here's the formula for the above calculation:

((Total Comp - Base) / Base) = Bonus Percentage

Example:  ((82500 - 75000) / 75000) = 10%

You can build this formula in to an Excel spreadsheet and use the "Goal Seek" function in the Tools menu to solve for any of the above variables, or you can use the SOLVE function in any HP-17B or 19-B financial calculator.

In the above case, a good recruiter might convince the employer to pay a 13.33% bonus to an A-player, which would turn a $75K base salary into an $85K package.  This same recruiter would be well advised to remind his candidate that all job opportunities must satisfy the 3-F's:

1. FUN - Will the job be fun?  Are the people nice?  Would you have them as friends?  Are they funny?  Forgiving?  Will they tolerate Covey's "mistakes of the head" as you ramp up the learning curve?
2. FUTURE - Where will the industry be in five years?  Where will the company be?  What about your function and department within the company?  (Can your job be outsourced?)  Does the company have a sustainable competitive advantage in its current and future markets?
3. FINANCE - What's the pay?  Base?  Bonus?  Perks?  Benefits?  How consistently has the bonus paid out?  What are the metrics used to determine your share?  Are these metrics truly 1.) Measurable, 2.) Objective, 3.) Relevant to YOU, and 4.) Controllable by YOU?

Money is last.  (Re-read that.) Sure money matters, but taking a job purely for the pay is like getting married for money.  Life's too short.  Have fun in a future oriented field and the money will take care of itself -- even if it's because you're having too much fun to worry about the fact that you passed up a job you might have hated for a few dollars more somewhere else.

  ____________________________________________

Q:  Need the number of a recruiter who "gets it?"
A:  Download Harry's contact info for future reference.

How to Get Stinking Rich in Business

Psssst:  Wanna download the best PowerPoint presentation I've ever seen?  Ever?  It's about business, marketing, venture capital, management, and everything!  Click here.  The really good stuff starts on page 25 ("philosophy").  Enjoy the ride.
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Q:  Need the number of an executive recruiter who "gets it?"
A:  Download Harry's contact info for future reference.

Ten Ways to Improve Your Ad Copy

Alan Rosenspan is one of the world's greatest copywriters.  Recently Mr. Rosenspan was asked by a marketing newsletter to provide 10 rules for writing more effective copy.  Here's what he wrote:

1.)  Start with your most important benefit.  Many copywriters hem and haw, and metaphorically clear their throat before they tell you what's important.  Or worse, they save it for the end - like the punchline of a joke.  Would any newspaper survive doing that - or do they give you the most dramatic story right in the headline?

2.)  Write like you talk.  That's how people like to read.  Even if you are writing to the most educated target market - keep it simple.  The best test of writing is how it sounds when you read it out loud.  I came across an ad for a cologne that read, "The incarnation of the masculine duality interpreted with humor."  Try reading that out loud with a straight face.

3.)  Include ideas and information.  Some writing feels like biting into a marshmallow - there's nothing to grab hold of and chew.  Don't try to impress me with your writing, your knowledge or how clever you are.  Give me an idea, a fact, a nugget of information in each paragraph.  Otherwise, I won't continue reading.

4.)  Short words and sentences work.  Not sure why.  Makes it easy to read.  Worth testing.

5.)  Long letters work, too.  If you really want to know what works in direct marketing - study those who live and die by it.  If IBM's direct mail doesn't work - IBM will still grow and prosper.  But if Save the Children's direct mail doesn't work...  That's why so many non-profits and mail-order companies use 2, 4, 8 and even 24-page letters. They work.

6.)  Connect the dots.  When you use words like "And" or "But" to begin a sentence, you may be using poor grammar.  But you're also leading the reader from sentence to sentence ... connecting the ideas ... and coaxing them to read on.  And it works.

7.)  Ask provocative questions.  It's one of the best ways to get attention.  Our direct mail letter for Scott's LawnService started with "What's wrong with your lawn?"  It won a Gold Echo and created over $28 million worth of additional business.

8.)  Write something that's never been written before.  Travel writing is the worst example of this - every destination is invariably "a study in contrasts."  Every business has their share of jargon and specific terms.  Try to replace them with something new and refreshing.

9.)  Tell me a story.  Before there was copywriting, before there were hieroglyphics - people communicated by telling stories.  Children love them, and so do we.  We want to know what happened, then what happened next, and how did it end?  If you tell interesting stories in your copy, you will always be successful.  The famous package for the Wall Street Journal is a perfect example.  It's not about the newspaper - it's the story of two young men.

10.)  Rewrite for success.  The best writing looks almost effortless.  As if the phrases and sentences flew magically onto the page.  But aren't you a little too old to believe in magic?  Good writing is hard work.  It involves an enormous amount of preparation and research, so you know what you are writing about.  And then it involves getting it all down onto paper in a coherent and compelling manner.  There are no shortcuts.

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Q:  Need the number of a recruiter who "gets it?"
A:  Download Harry's contact info for future reference.

Sidewalk Guerrilla Marketing

These are all drawings done on sidewalks. Keep in mind the surfaces are FLAT!

A "Raid" Logo Would Work Here.
Check out the Coke bottle at Poolside (lower left).

This Sony Laptop is Cool.

Is the kneeling man real?

The guy on the right is the real one.

Treating Customers Like Family

Tomorrow is Father's Day, and my four kids are brimming with confidence that they have the perfect gift for me.  And why wouldn't they?  They know me better than anyone ...

Hold that thought.

ToddS at A Penny For has an interesting post on his blog called How Design Conference Disappoints.  Read his post and the links associated with it.  It's all about using product design to build a business.  Makes sense:  Remarkable products gets remarked about in the marketplace.  Or as Seth Godin says:  A company's products should be buzzworthy.  No argument here.

Now, go back to Father's Day.

The gift is a means to an end -- not an end unto itself.  My kids are trying to make me smile ... to give me a lift ... to show me how much they know about my secret desires (and love me just the way I am). They want to surprise and delight me.

This should be the goal of any product or service.

In his new book All Marketers Are Liars (a great book, by the way), Seth Godin points out that the real money is to be made satisfying WANTS -- not NEEDS.  Where you can satisfy wants, there's pricing power and economic goodwill.  Where you satisfy needs, the playing field is pricing and you will only be as smart as your dumbest competitor.

So here's my thought:

• If you were going to GIVE your Top Fifty customers a personal gift, what would it be?  Make a list right now.
• What are their secret desires?
• What are their top three daily frustrations?
• How can you make them smile ... give them a lift ... show them that you know all about them and love them just the way they are?
• How can you surprise and delight them?

Analyze your list.  What are the similarities between customers?  The differences?  What trends emerge?  Now for the (hypothetical) acid test ...

If you called each customer's spouse, would their answers be any different from the ones on your list?

Assuming the answers are not of a private nature, what if a reoccurring answer seems unrelated to your business?  Well, if you can't address it cost-effectively through your core product or service, then at least make it part of a special offer.

Example:  You own a GM dealership and you learn that your customers dread weekend yard work.  (Hey, it could happen.)  Here's the offer ...

Attention North-Atlanta Husbands:

Do you hate yard work -- busting your can in the blazing hot sun while you could be golfing, fishing, or just watching TV?  Us, too!  That's why now through July 1st -- when you test drive a 2006 Chevy Impala -- we'll give you a gift certificate good for $50 worth of yard work!

Wouldn't you rather spend 20 minutes behind the wheel of a brand-new six cylinder Impala than pushing a lawn mower all afternoon?  You can -- and we'll help!

Don't waste another beautiful day:  Call (404) 555-1122 to schedule your visit now.  Appointment times are filling up fast!

Don't laugh.  According to direct marketing legend Dan Kennedy, very often the customer will buy your product or service just to get the bonus.  Happens all the time in infomercials and home shopping, two of Kennedy's most profitable media.

My point is this:  To be successful, treat your customers like family.  Marshall Fields did it.  So did Cartier.  Love your customers for who they are -- not for who you want them to be.  Understand that truly selfless service requires humility -- what St. Augustine called "the gemcasket of all virtues."

Realize that "love" is an action verb:  You can't just have some bullshit tagline that says "We treat our customers like family" and leave it at that.  In business, talk is not only cheap, but if it's in-authentic, it will actually destroy value for your firm.  Your customers will see right through it.

Give the people what they want.

You have to develop your products, services, and offers with a gift-giving mentality; as if each were going to be a gift to the customer; as if money were not the primary issue (because it never is in gift-giving, which is why we take the price tags off the gift).  It's gotta be something that they want -- not need.

People buy feelings -- not features.

The fact is, your customers care less about what a product costs than how it makes them feel.  They have more money -- and insecurities -- than time.  If you can develop products and services that address this fact, then you'll have more ... loyal ... higher-margin ... and buzz-creating customers to show for it. Their lives will be better, and yours will too.

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Q:  Need the number of a recruiter who "gets it?"
A:  Download Harry's contact info for future reference.

17 Deadly Small Business Mistakes

Some of my readers know about my father.  He's a self-made entrepreneur who, along with his partner, founded and built AJC International -- now the 12th largest privately held company in Georgia.  In 2004, AJC exported more frozen poultry than any other American company -- except Tyson Foods.

Aside from an uncanny ability to smell a bad business deal from ten miles away, my dad is a Franklin planner junkie.  The back section of his cracked leather planner is crammed with checklists and reminders on how to run a small business.

Think about that:  Here's a guy with six foreign offices and 250 people on his payroll, whose risk-intensive business did $460 million in sales to 134 countries last year, and he's leafing through checklists like an airline pilot to make sure he doesn't overlook anything on AJC's flight to $1 billion.

Indeed, whenever I say "Dad, you've forgotten more about business than I'll ever know," he says "If I have forgotten it and my competitor hasn't -- who's better off?" Amen.

Okay, now the reason for this post:

One of the things that has remained in Dad's planner is an article by John Osher called 17 Mistakes Start-ups Make.  I just started a small business and Dad has asked me about this list at least ten times -- lest I take my eye off the ball.

Here are Osher's 17 mistakes for small business start-ups:

1. Failing to spend enough time researching the business idea to see if it's viable
2. Miscalculating market size, timing, ease of entry and potential market share
3. Underestimating financial requirements and timing
4. Over-projecting sales volume and timing
5. Making cost projections that are too low
6. Hiring too many people and spending too much on offices and facilities
7. Lacking a contingency plan for a shortfall in expectations
8. Bringing in unnecessary partners
9. Hiring for convenience rather than skill requirements
10. Neglecting to manage the entire company as a whole
11. Accepting that it's not possible too easily, rather than finding a way
12. Focusing too much on sales volume and company size rather than profit
13. Lacking simplicity in your vision
14. Lacking clarity of your long term aim and business purpose
15. Seeking confirmation of your actions rather than seeking the truth
16. Lacking focus and identity
17. Lacking an exit strategy

Here are 5 tips to get a small business on the right track:

1. Know and constanly review your goals for the venture
2. Recruit and hire the best people
3. Develop a forgiving strategy
4. Be honest with yourself (One of Jack Welch's mantras.)
5. Commit to the small business

The items in red (7, 13, 15) are the rules I have violated in past small business ventures of my own and paid the price with abject failure.  Money doesn't care who makes it.  It only cares which entrepreneurs play by these rules.  Also, as a recruiter I see companies make mistake # 9 all the time.  Penny-wise.  Pound foolish.  Surround yourself with great people.  There's really no way around it, especially in small business.

For you Franklin planner junkies, here's an Adobe link to the article in printer-friendly format.  John Osher's a genius.  And I guess my dad was smart enough to recognize that.  One of his many talents, I suppose.

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Q:  Need the number of a recruiter who "gets it?"
A:  Download Harry's contact info for future reference.

VP of Online Marketing ($160K)

Week 22 -- "A-Player of the Week"

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