StartupNation

---

• WJR Business Beat with Jeff Sloan: Put Your Brand First to Create Customer Loyalty (Episode 249)
• 3 Tips for Building a Successful Subscription-Based Business
• A Blockbuster Retail Franchisee Reveals Why The Chain Was Built to Fail
• WJR Business Beat with Jeff Sloan: Consider Purchase Order Financing for Your Business Needs (Episode 248)

WJR Business Beat with Jeff Sloan: Put Your Brand First to Create Customer Loyalty (Episode 249) Posted: 29 Jun 2021 05:00 AM PDT On today’s Business Beat, Jeff discusses strategies on how to create customer loyalty, which starts with putting your brand above everything else. Tune in to Business Beat, below, to learn more about how to make customer loyalty soar: “What you stand for and the quality of your personal relationship with your customers is your edge. Focus on those things, and put your brand first, and you’ll drive customer loyalty long into the future.” – Jeff Sloan Tune in to News/Talk 760 AM WJR weekday mornings at 7:11 a.m. for the WJR Business Beat. Listeners outside of the Detroit area can listen live HERE. Are you an entrepreneur with a great story to share? If so, contact us at editor@startupnation.com and we'll feature you on an upcoming segment of the WJR Business Beat! WJR Business Beat Transcript Good morning, Paul! On the Business Beat today, we’ve got a tip for any and every small business wanting to increase customer retention and drive more sales. Here it is: focus on continually enhancing your relationship with your customers. At the heart of achieving this? Your brand. Businesses who operate with a brand-first approach do so by establishing and operating by brand values and attributes that are indicative of your underlying mission. And at the heart of your mission is to serve your customers. You need to make what you stand for clear, and then you need to make it clear to your customers that you put them first. It’s no secret that brands matter more than ever in the post-pandemic era, but too many companies don’t focus enough on conveying their story, sharing their passion and expertise for whatever it is that they’re selling and continually operating in a way that makes it all clear to their consumers. Think about this. For big businesses, a consumer relationship is really based on the experience the merchant delivers to you: selection, convenience, price and efficiency. Think Amazon. Do you buy from Amazon because of what they stand for and because of your relationship with them? Of course you don’t. You buy it from Amazon because of things like efficiency, convenience, price and selection. But now, think of your relationship with local merchants in your community. Why do you buy from them? Well, a big part of why you buy from them is because of the relationship you have with them and the way you feel about them. What you stand for and the quality of your personal relationship with your customers is your edge. Focus on those things, and put your brand first, and you’ll drive customer loyalty long into the future. I’m Jeff Sloan, founder and CEO of StartupNation.com, and that’s today’s Business Beat on the Great Voice of the Great Lakes, WJR. The post WJR Business Beat with Jeff Sloan: Put Your Brand First to Create Customer Loyalty (Episode 249) appeared first on StartupNation.

3 Tips for Building a Successful Subscription-Based Business Posted: 29 Jun 2021 02:05 AM PDT The way consumers buy goods and services is changing. Have a look at your bank statement over the last several months, and I'll bet there are more than a few recurring charges for Netflix, Amazon Prime, Spotify or Zoom. Consumers used to buy one-off products or services but are now increasingly subscribing to receive them on a regular (often monthly) basis. Many consumers have realized they are tired of the high price that comes with outright ownership and prefer the flexibility and added value that a subscription-based service can offer. With this shift in consumer demand, a thriving "subscription economy" has emerged. StartupNation exclusive discounts and savings on Dell products and accessories: Learn more here Benefits of a subscription-based business model Subscription-based businesses can come in many forms, such as software-as-a-service (SaaS) companies like Salesforce, which offers software services through a recurring online subscription, subscription box companies, including the likes of Birchbox or Blue Apron, which physically ship you a product on a recurring basis, or streaming/access services, such as Netflix or Disney+. For small businesses, there are a number of upsides to operating a subscription-based model, the most prominent being the ability to generate predictable revenue. The ability to forecast future income ultimately enables your business to scale with confidence and can help you to raise further financing more quickly if needed. Another upside is that due to the long-term interaction with your customers, you are able to foster deeper relationships, which enables you to deliver more value to them and in turn inspires their loyalty. Related: Building a Successful Business Using the New Subscription Economy Tips for starting a successful subscription-based business So, while the benefits of starting a subscription-based business might be clear (who wouldn't want to be the next Netflix?), the secrets of success might be less so. We've worked with over 400 recurring revenue businesses and evaluated their success and future earning potential and, in short, there are a number of key themes and traits that crop up among the most successful. Keep it simple As the old adage states, "When it comes to pricing, keep it simple, stupid!" Simple pricing always wins. Offering complex pricing tiers simply adds complexity at the expense of velocity. Not only do various tiers add complexity at the front end of customer acquisition, but they are also complicated to manage — meaning you may be spinning your wheels as a business to manage your basic operations rather than investing that time in creating more value for your customer. Pricing in the subscription world truly is an art form. For example, when you present two options to someone, their preferences among those first two options can be drastically affected with the introduction of a third option — something called the decoy effect. Small changes like this increase the complexity of decision-making. But once done right, subscription models can lead to a very healthy and predictable revenue stream. The best subscription-based businesses create intrinsic value for their goods/services based on comparable companies existing in their market. They make assumptions on a reasonable price point that satisfies necessary margins without deterring potential future customers. Once that is in place, you test and define the ideal annual contract value (ACV) of a customer subscription, meaning roughly how much revenue you’ll generate per customer. Finally, tweak the ACV via different billing frequencies (i.e., annual, quarterly, monthly) and associated discounts. Uncover "flywheels" According to the dictionary, a flywheel is defined as "a heavy revolving wheel in a machine that is used to increase the machine’s momentum." In Jim Collins' respected business book, “Good to Great,” he defines what he calls as the "Flywheel Effect" by describing how great companies are not created by one singular defining moment or killer innovation, but rather by "relentlessly pushing a giant, heavy flywheel, turn upon turn, building momentum until a point of breakthrough and beyond." While it might not be that incredible of an origin story, most successful subscription-based business in my experience all adopt this philosophy. They work hard to uncover these "flywheels" across their organizations, thereby growing more efficiently and compounding on their investment of effort to get to "escape velocity" (the other quote from the flywheel book!) For instance, at Capchase, when great customers grow fast, this leads to more volume being deployed, which in turn leads to lower cost of capital in the form of lower rates for our customers. This then allows us to be able to work with more top customers. Sign Up: Receive the StartupNation newsletter! Experiment again and again Another key trait of the most successful subscription-based businesses is that they religiously experiment and test things out. Through this process, they gain valuable data and insights that help them to refine (or sometimes completely nix) ideas before fully committing. In the long run, this saves time and money and ensures you are only devoting resources to the most promising business opportunities. Key takeaways on building a subscription-based business There are many benefits to subscription-based businesses, the the most prominent being the ability to generate predictable and recurring revenue. Use the above tips to keep your subscription model simple, build up to your breakthrough moment and use your data to continually refine your idea. The post 3 Tips for Building a Successful Subscription-Based Business appeared first on StartupNation.

A Blockbuster Retail Franchisee Reveals Why The Chain Was Built to Fail Posted: 29 Jun 2021 02:00 AM PDT The following is adapted from the book “Built to Fail: The Inside Story of Blockbuster's Inevitable Bust.” Blockbuster was built by one of the most successful entrepreneurs in history, Wayne Huizenga. Before turning it into one of the most powerful brands in the entertainment world, he started Waste Management with a $5,000 loan and one truck. After Blockbuster, he founded AutoNation, the largest chain of auto dealerships in the country. Waste Management and AutoNation still dominate their respective industries, but Blockbuster, arguably the most iconic of the three, is gone. Under Huizenga's leadership, Blockbuster brought the new home entertainment industry mainstream and turned an $18.5 million investment into a retail behemoth that he sold to Viacom for $8.4 billion just eight years later. During those years, its stock grew faster than Microsoft's, which was founded about the same time. Blockbuster made thousands rich, but it was never worth more than when Huizenga sold it — in 1994. StartupNation exclusive discounts and savings on Dell products and accessories: Learn more here Instead of building on its early success, Blockbuster has become synonymous with failure. When business pundits ponder if a company will become the "next Blockbuster," everyone knows exactly what that means. The history of Blockbuster provides a classic example of a company that seized opportunity on a grand scale but never transitioned to operational excellence. Its impact on the entertainment business in the 1990s cannot be overstated. For years, it was Hollywood's largest customer. And with over 5,000 stores in the U.S. alone, there was a Blockbuster store within minutes of almost every American home. Its dominance of home entertainment dwarfed the streaming companies of today — even Netflix. Most believe Blockbuster was just another innocent victim of technological progress. But the truth is, Blockbuster was a shell of its original self and in deep financial difficulty more than a decade before Netflix or anyone else streamed a single movie. How did that happen? I was there for the entire ride: a Blockbuster franchisee for 25 years who profitably ran my stores for eight more years after the company filed bankruptcy in 2010. My stores were the last to close — except for the now legendary one in Bend, Oregon, which ironically, is the subject of one of the most popular films on Netflix called “The Last Blockbuster.” My new book, “Built to Fail: The Inside Story of Blockbuster's Inevitable Bust,” tells the rest of the story of a seemingly invincible company can fail — long before its time. Related: 6 Tips to Help Find Empowerment Through Embracing Failure The genesis of virtually all Blockbuster's problems came from its lack of intellectual curiosity, the ultimate example of which was the inept mismanagement of its massive movie viewing database. The company had almost as much information on its customers as bankers, with extensive demographic data to cross correlate with every movie they had ever rented. The result was the richest movie viewing database in history, more so than anything the Hollywood studios possessed at the time. But despite its dominance of home entertainment, Blockbuster's financial difficulties began as early as 1996, a year before Netflix began mailing DVDs to its subscribers, and more than a decade before its new streaming service would begin to impact the business. When Blockbuster returned to the public financial market in 1999, Wall Street greeted it with a valuation that was 65% less than when Huizenga sold the company just five years prior. The Blockbuster story is littered with examples of ignoring its competitors until it was too late. It famously passed on Netflix founder Reed Hastings' offer to sell the company for $50 million in 2000. But it also ignored opportunities to partner with the early pioneers of the DVD rental kiosk business, beginning with Greg Meyer, who installed the nation's first machines in 2001, and later Redbox, which would come to dominate the business with over 40,000 kiosks across the U.S. Instead of engaging the progressive thinkers of the day, Blockbuster continued to do the only thing at which it excelled — opening more stores than anyone else. Its relentless growth-at-all-cost strategy produced a bloated, high-cost company that had little chance of survival as the business transitioned from brick-and-mortar. John Antioco, Blockbuster's chairman and CEO from 1997 to 2007, led the company in its most transitional years. During his 10-year reign, DVD replaced the old VHS video cassette as the format of choice. Netflix began mailing them to its subscribers, and Redbox began dispensing them in vending machines. All the while, Blockbuster's standard response was to open more stores. When that did not work, it launched a series of failed strategies and promotions that were more intended to temporarily placate Wall Street than address the real issues of the day. The most notorious example of such strategies was Antioco's decision to eliminate late fees in 2005. Although the message played well to those who did not understand the business, it broke the company's supply chain and delivered a devastating blow from which it never recovered. Under pressure from disgruntled shareholders, Antioco left the company two years later but continues to blame Blockbuster's failure on his successors. Sign Up: Receive the StartupNation newsletter! Instead of relentlessly pursuing fact-based solutions, Blockbuster's history is dominated by complacency. The result was a wanton ignorance that left it defenseless against anyone who better understood why people watched movies. Reed Hastings could not have known at the time, but when he offered to sell Netflix to Blockbuster, his company already had a doctorate degree in movie knowledge as compared to Blockbuster — which never got past the first grade. The financially challenged Netflix of the day could not beat Blockbuster with money, but it easily did it with a deeper understanding of consumer behavior. Redbox did the same. Business psychologists have various terms for the behavior Blockbuster demonstrated throughout its brief 25-year history. But perhaps Bill Gates' simple observation best describes it: "Success is a lousy teacher. It seduces smart people into thinking they can't lose." Blockbuster was the embodiment of this characterization. Overwhelming success in its early years created unwarranted contentment that became permanently embedded in its culture. This led to repeated attempts to solve complicated problems with superficial solutions. Now, more than a decade after Blockbuster filed bankruptcy, the story still resonates. It was the ultimate example of a brilliant entrepreneur seizing an opportunity that was misjudged by everyone else. But Blockbuster never made the leap from an ultra-successful startup to a company that could build on its early success. Today, all that remains is the ultimate example of a company that was built to fail. “Built to Fail” is available now and can be purchased via StartupNation.com. The post A Blockbuster Retail Franchisee Reveals Why The Chain Was Built to Fail appeared first on StartupNation.

WJR Business Beat with Jeff Sloan: Consider Purchase Order Financing for Your Business Needs (Episode 248) Posted: 28 Jun 2021 05:00 AM PDT On today’s Business Beat, Jeff discusses purchase order financing, which helps companies fill orders they couldn’t otherwise without having the funding to pay for production costs. Tune in to the Business Beat, below, to learn more about purchase order financing and how it could benefit your company immensely: “Here’s the bottom line: It’s good to know of all of the various types of funding options available to you in your business when you need funding. Purchase order financing is a lesser known but important additional source that you need to be aware of.” – Jeff Sloan Tune in to News/Talk 760 AM WJR weekday mornings at 7:11 a.m. for the WJR Business Beat. Listeners outside of the Detroit area can listen live HERE. Are you an entrepreneur with a great story to share? If so, contact us at editor@startupnation.com and we'll feature you on an upcoming segment of the WJR Business Beat! WJR Business Beat Transcript Good morning, Paul! We’ve featured from time to time on the Beat how critical funding is to the startup community, ranging from angel funding to bank loans to venture capital funding. Simply put, you can’t have a vibrant startup community unless you have sources of capital to fuel them. And we’ve got another one for you to consider today here on the Beat. That source of funding? Purchase order financing. This type of financing is specifically used to fill orders that the company would be otherwise incapable of filling without having the necessary funding to pay for the cost of production. Managing cashflow is always a balancing act for small companies, particularly those, for example, that are in manufacturing, where large cash outflows are required to support the initiatives followed by large cash inflows once the customer pays. Now, it’s the period in between those two major events that becomes very challenging, specifically for small businesses, and purchase order financing is intended to address that very specific cash challenge. You source this type of financing typically from purchase order finance companies. The key to obtaining it? You need a purchase order from a customer, which has really good credit worthiness and demonstrated track record of making payments on their purchase orders. If approved, you receive the funding against the purchase order, and you use those funds to do the manufacturing of the goods that the customers bought from you. And you win because you have the capital in order to make the sale, produce the goods and receive the payment in association with a purchase order. Here’s the bottom line: It’s good to know of all of the various types of funding options available to you in your business when you need funding. Purchase order financing is a lesser known but important additional source that you need to be aware of. More than that, though, you really need to match the right type of financing to your business' needs. Check out purchase order financing if it sounds like this could be the right type of funding to solve your business' cash needs. I’m Jeff Sloan, founder and CEO of StartupNation.com, and that’s today’s Business Beat on the Great Voice of the Great Lakes, WJR. The post WJR Business Beat with Jeff Sloan: Consider Purchase Order Financing for Your Business Needs (Episode 248) appeared first on StartupNation.

You are subscribed to email updates from StartupNation. To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google, 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States