Go Big or Go Home.  In entrepreneurial circles you hear that statement a lot.  It means that in order to get noticed you need to be extravagant.  Don’t lie, cheat or steal, but find a way to make the most of your assets.  It may mean that you have to increase your assets in order to be able to sell them in a big way.

Recently, I have had the opportunity to see this in action in a couple of venues.  I wrote last week about the DePaul e-Motion event.  One of the new ideas that the Coleman Center staff cooked up this year was an opportunity for some of the fledgling companies that they mentor to have a table to showcase their company to the guests.  These guests, presumably had an interest in supporting entrepreneurial ventures and had an opportunity to vote using play money on the best presentations.  There were about 15 companies in the exhibition area.  Each had an earnest young pitch person behind the table ready to talk about their venture.

It was obvious which teams came prepared to Go Big.  One had her entire table covered with pictures of the events that she produced, in full color.  She was dressed in business attire and handled questions from the audience like a pro.  Another had various samples of her products on the tables for people to touch and examine.  She was able to easily describe her company and the benefits she was able to bring to both her customers as well as her vendors.  A third had a sample of his product on his table and could clearly talk about his customer, their drivers and how his service differed from the competition.  These folks came prepared to do business and make a splash to an audience that was already predisposed to hear the message. The best presenters received significantly more play “venture capital” than the less prepared companies.

Others looked like they had not planned for this event or worse, had spent the previous night pulling an all-nighter to get the minimum amount done.  Most did not have materials to hand out or samples or even table decorations. This is basic blocking and tackling. Entrepreneurs need to be able to understand how to display impressively at these types of events in order to be successful.

It is not only the entrepreneurs who need this lesson.  This week I was able to go to the National Restaurant Association Show.  I like going to this show.  It is not just the samples (although there sure were a lot of them). It is an opportunity to see what is important to companies in the restaurant industry —  both to the companies who display at these types of trade shows and the restaurant owners who attend.

A couple of lessons from this show.

There were several times that we took samples from food vendors and the food was awful.  Not just ok, but truly awful, face crunching awful.  It might have been due to sitting out for a while or lack of proper attention from cooking in a non-traditional setting.  It actually doesn’t matter.  OK food at this show was table stakes — the price of being at the show.  You at least had to have ok food.  The best purveyors had taken the time to show off their best and they were able to get customers to pay attention.  They went big.  The others just showed up and spent a ton of money just to say that they were there.  The result was marketing dollars poorly spent.

The big guys are not immune, either. You can’t get bigger than Coke and Pepsi.  It was amazing to see the difference in their booths. Coke’s booth was huge, colorful, full of product and showing off new dispensing systems and flavors.  People were carrying around large shopping bags with Coke on them. Pepsi’s booth was about the same size. There were few people around.  They had a small dispenser station for the carbonated beverages.  Their iced tea was on a small uncovered table in two stainless steel dispensers. A very different vision for the visitor.

Pepsi probably spent 80% of what Coke spent.  They both had to have staff there, both had to have product shipped in, both had to deal with the unions in Chicago, both had to rent space.  The difference in the spending of the additional 20% was huge. Given the sizes of Coke and Pepsi, the 20% is a rounding error, even in these difficult financial times.

Moral: If you are not going to go in with your A game, it probably is better not even to show up.  There are 3 potential outcomes.  First, you don’t show up.  Nobody knows about you, but then nobody has made a value judgment about you.  Second, you go all out and bring your best.  Everybody knows about you and hopefully talks about you.  Third, you limp in.  People know about you and don’t like what they know.  You spend the money and people come away not liking what they now know.  There is even a good case to be made that if you aren’t going to Go Big, then don’t go at all.  At least people don’t know anything about you and may be willing to take a chance on you and your product or service.

I have previously written about my reading  The Knack: How Street-Smart Entrepreneurs Learn to Handle Whatever Comes Up by Norm Brodsky. I keep going back to it to find different takes on small business. Here is another lesson by Norm and some ways that current companies just don’t get it.

Norm’s Lesson

The name of the game is customer retention.  Growing a business is much harder if you are constantly having to replace customers you’ve lost. Which would you prefer, after all — making fifty sales in a year and having a 100 percent customer retention rate, or making 100 sales a year and having a 50 percent retention rate?  I’ll take the former any day of the week.  Yes, you’ll have more sales during the year and you’ll wind up with the same number of customers at the end, but, if you lose one account for every two you land, you’ll spend twice as much time, energy and money to get them as you would if you made half as many sales but were able to hold on to all the customers you signed up.

Real Life Example

It is always amazing to me that companies will offer huge discounts to people to get them to change to their service.  I’m talking to you, cell phone companies and cable companies.  In most cases, they are just cannibalizing their base by offering these discounts.  Why?  Most of the consumers who change, do so from a competing product.  They are not just new to the marketplace.  By offering these discounts to new users only, they encourage the churn in customer base.  I know that when my introductory rate with Company X expires, I will look to change my service, since my rates will go up and Competitor Y will offer me a better deal.  It is a short term fix that does nothing to encourage customer loyalty.  Shouldn’t Company X look for ways to keep me on their books, since they “spent” a significant amount of money to acquire me as a customer?  Yes, but since I joined up on the basis of a deal, others will too.  Over the long haul, you will certainly not engender the type of customer relationship that you really want because your customers do not view you as a trusted partner.  And in our connected world, being able to be trusted is one thing that will take your company to the next level.

I am a big fan of entrepreneurs.  You all know that already.  I love the energy, the risk taking and the determination to make the vision into a viable moneymaking enterprise. As an entrepreneur, you always have to be ready for the bumps in the road.  Sometimes the bumps are internal.  Sometimes external.  But they all hurt as you try to navigate around them.  The best of us find the ways to get to the end, wherever the end is, by working our determination.

For some reason, today found me awash in examples…

A friend owns a restaurant.  He has the opportunity to expand the restaurant.  Can you believe it?  In this economy, he is seriously looking at expanding a restaurant. Oh, but expansion will cause the size of his restaurant to move to the next class under the city’s ordinance.  No problem, what could that mean?  2 new bathrooms.  He got the estimate this week and the cost to develop 2 new bathrooms is $50,000! $50K seriously?  You could buy a 3 bedroom house in parts of this country for $50K.  How many meals does he have to serve to recoup $50K?  Is this an incentive to being an entrepreneur? No, but it is a part of the journey down the road with many bumps.

Another friend sold his company years ago.  He decided to start a Montessori preschool in his town as a non-profit venture.  Over the years the school has grown due to the progressive and excellent education provided.  He now serves 70 kids in his suburb and is outgrowing the rented space he has had for 7 years.  Great job in building a company that the community has found helpful, right? He found a former church building, bought it and made plans to refurbish and move in last year. Only one thing.  There were 17 families who lived near the church, who were worried about noise and traffic.  They went to the city and zoning board and protested.  They planted signs in their yards.  They waged a negative PR campaign. My friend spent a year and significant dollars in legal and planning fees, developed a remediation plan and went through the process with City Hall.  Finally, after a year and significant scrutiny, City Hall ruled that the school would get the necessary permits.  Now the neighbors have sued the city and my friend because they felt they didn’t have enough time to prepare their defense.  When these folk’s taxes increase because businesses are scared of the hassles of locating in their suburb, they would do well to remember this.  However, for my friend, he is continuing on the path that was allowed by the City Hall approval.  And I give him a lot of credit to continue the dream after being beat up by the bumps in his particular road.

As an entrepreneur, it is critical for us to remember that in order to survive, we need the determination to see things through, even if we haven’t planned for the side trips.  It is all part of the journey and the journey really is the reward.