5 ways to avoid craptastic business writing

May 11, 2010

At business school, we played a silly game called buzzword bingo. Before a professor arrived, students chipped in a buck in exchange for a bingo card with words like “value-added”, “synergy”, “seemless” and “share of mind”. When a student mentioned your word in class discussions, you circled it on your card. If you got enough words for bingo, you raised your hand, and made a comment incorporating an embarrassing phrase that pays, like “I read this (homework) on the toilet…”. Back then, it was just a juvenile way to amuse ourselves and bug the professors. But the undertone was on-target: Showing people how silly they sound when they use buzzwords.

Overuse of buzzwords are just one example of ways people muck up their business writing. Here are a few tips:

1) Stop following the herd. In “Why Is Business Writing So Awful?” Jason Fried argues that phrases like “full-service solutions provider” and “value-added services” are overused to the point of being generic. “A quick search on Google finds at least 47,000 companies describing themselves as full-service solutions providers…,” explains Fried. “When you write like everyone else and sound like everyone else and act like everyone else, you’re saying, ‘Our products are like everyone else’s, too.’ ”

2) Write for your target readers. Fried cites an example of a company that does this well. Woot.com sells cool stuff cheap. Here’s an excerpt from their FAQ page….. Question: “Will I receive customer support like I’m used to?” Answer: “No… If you buy something you don’t end up liking…. sell it on eBay. It’s likely you’ll make money doing this and save everyone a hassle.” Woot isn’t trying to be all things to all people. They’d rather come off as honest and direct, which their core customers appreciate, at the risk of alienating others.

3) Avoid useless modifiers. Frances Cole Jones, an author and media coach, explains this well. Words like “amazing” and “great” are too vague to be helpful. Others, like “we’re the leader in the market” must be backed up with facts, or they can backfire.

4) Word to your mother. Imagine that your mom will read what you are writing. Would she understand what you mean? If not, simplify and clarify.

5) Size matters. Don’t use ten words if you can use five. Write in short sentences. They are easier to read. Get it?


Size matters: How to estimate your total addressable market.

May 5, 2010

Market size is important, because it provides a general idea of just how big an opportunity you’ve got. If you are going after a market where customers currently spend $10 million per year, it’s probably unrealistic to think that you’ll generate $5 million in revenue anytime soon – that would require a 50% market share, which is more than Coca-Cola has, and they’ve dominated their market for more than 50 years.

Still, sit through enough pitches, and you are bound to hear something like the following:  “This is a $1.5 billion market. It’s huge! If we capture just one percent, we’ll have a $15 million business!!!” Trouble is, the $1.5 billion market size is pretty much irrelevant because it includes lots of segments that have nothing to do with their business. Also, one percent is arbitrary—that could be a little or a lot, depending on the competitive dynamics.

When sizing up a market, focus on the part you can sell to—the total addressable market. That’s the amount of revenue your company could generate if you got 100 percent of your potential customers.

For example, let’s say you are starting a cosmetics business, selling high end products (“prestige” in industry parlance) through U.S. specialty stores like Saks, Sephora and Neiman Marcus. Total annual sales of cosmetics may be more than $40 billion on a global basis, but that’s not your opportunity. You won’t be selling lipsticks at Wal Mart, for example. Instead, you’ll compete in the U.S. market for “prestige” cosmetics, which is closer to $3 billion in revenue.

It may seem like bigger is better, but overstating the market opportunity is bad for everyone. It can mislead founders and shareholders, who will be disappointed when sales are lower than expected. It can also reflect poorly on founders, especially when pitching to investors who know better.


Lifetime value of a customer

November 19, 2009

If you’ve got any interest in marketing, you should be reading Seth Godin’s blog. Today, he talks about the lifetime value of customers.

When planning a new business, it’s easy to get mired in the weeds of complex financial projections – that are nearly almost wrong. But very often, so-called back of the envelop numbers are more useful and accurate. For example, unit contribution, and break-even volume. Understanding the costs of acquiring an average customer and the lifetime value of that customer are also at the top of the list, especially for companies with large numbers of customers. Here’s an excerpt from Seth’s take:

If you walk into a company-owned cell phone store to sign up for a contract, what are you worth? Given the huge gross margins at AT&T and Verizon and the standard two-year contract, I think it’s easy to figure on more than $2000 in lifetime value…

Few businesses understand (really understand) just how much a customer is worth. Add to this the additional profit you get from a delighted customer spreading the word–it can easily double or triple the lifetime value.

So, a chiropractor might see a new patient being worth $2,500, easily. And yet… how much is she spending on courting, catering to and seducing that new customer? My guess is that $50 feels like a lot to the doc. Instead of comparing what you invest to the benefit you receive from the first bill, the first visit, the first transaction, it’s important to not only recognize but embrace the true lifetime value of one more customer.

Write it down. Post it on the wall. What would happen if you spent 100% of that amount on each of your next ten new customers? That’s more money than you have to spend right now, I know that, but what would happen? Imagine how fast you would grow, how quickly the word would spread.

Here’s how you’ll know when you’ve really embraced this–a good customer at your podiatry practice (or supermarket or tax firm) walks out the door in a huff and you turn to your partner and say, “There goes $74,000.”


Pricing pixie dust

November 10, 2009

Just re-read a chapter of Predictably Irrational.  Fascinating thoughts on pricing. Consider this… Let’s say you’ve got a restaurant, and the most expensive entree is a $20 strip steak. If you add a $24 soft shell crab entree, you’ll increase revenue. But you won’t sell much if any of the $24 crab.

Huh? Pricing is all about context. Adding the $24 crab makes the $20 steak seem inexpensive on a relative basis, and you’ll sell more of it – trading customers up from the $17 entrees.

If you are thinking about pricing strategy, give this book a look.


The case for product evolution

October 12, 2009

One of my clients is looking into launching a specialized job site, in a space that seems to have been overlooked. One thing he’s wrestling with is whether to A) Start small, dominate one niche, and expand, or to B) Go after something a bit bigger right from the start.

I see a lot of entrepreneurs flame out with option B. They spend months raising capital, building fancy tech, and launching major marketing campaigns, only to find out that the dogs don’t want to eat the dog food they’re serving.

Instead, I usually vote for option A. Seth Godin does a great job of explaining why here:

“Envision the events that might happen to a brand (shelf space at Walmart, an appearance on Oprah, a bestseller, worldwide recognition, a new edition, worldwide rights, chosen by the Queen, whatever) as a series of dominos.

It turns out that if you start with all of them at once, you’ll fail. And if you start with the big one, you’ll fail.

But if you line up all the dominos one by one, in the right order, you may just have enough energy to push over the first one. That one, of course, adds momentum so that when you crash into the second one, that one goes too. All the way to the Queen.

Wait! Isn’t this obvious? Sure it is. So why is it so often ignored?

Brands get stuck constantly. And they always get stuck circling the big domino. They try to launch worldwide and beat Google. They try to get an endorsement from the Prince of Denmark. They try to break out with a feature on a major blog. They try to act like Coca Cola from the first day. And they try and they try and they try until they get so frustrated, they quit.

A few brands pick out tiny dominos instead. And topple them. And they do it again. They do it so often they create noise, momentum and most important, a sense of inevitability. That’s how you win.”