Risk Management and Business Growth

I recently came across this blurb by one of the executives who was involved in the release of New Coke on April 23, 1985. Sergio Zyman says that “he knew New Coke was going to be a disaster almost from the day of its launch”. In a summary of the fiasco at snopes.com the thinking seems to be that this was a genuine mistake on the part of Coca-Cola executives. There are no analyses that I could find where the risky decision to implement New Coke was put under a microscope from a business perspective, but Coca-Cola’s own description of the event shows that they were surprised by consumer reaction. Perhaps with the benefit of hindsight, my marketing mind says the whole thing was brilliant. They couldn’t lose! And in fact, they didn’t. Classic Coke was reintroduced and came back stronger than ever, subsequently leading to immense growth in the Coca-Cola company.

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Key Customer Metrics for Growth

When I ask small business owners about their customers, I often get long pauses and even blank stares. Many business owners are so focused on their products or services that they forget to pay attention to their customer numbers. One of my first tasks is to shift that focus onto the customer. Without customers, there IS no business. Therefore, it is critical to every business to know precisely how they get and keep customers. There are three key metrics every business owner needs to know about those customers: Customer acquisition cost Conversion rate of prospects to customers Lifetime value of the customer

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Choose Customer Service

In today’s news, Metrolinx, the provincial agency that oversees transit planning in the Greater Toronto Area, stated that it was considering charging for parking at the GO Transit parking lots.  Publishing this possible action is a clever move — it allows them to gauge customer reaction and get feedback before taking any action. If you’re planning a major change to how you to do business, finding out what customers think about it ahead of time is a sound idea. As the comments to the news story show, customers are overwhelmingly against paying for parking at GO Transit lots. They feel they are already paying for parking in the price of the fare. Some have noted that ridership will go down as people seek to car pool instead of pay an additional $100 to $200 a month. Alternatively, some people will abandon public transit and drive their cars into the city, an activity GO Transit was designed to reduce. While the 65,000 parking spaces at GO Transit lots can rightly be seen as an untapped business asset, instituting a parking fee for those spaces will hurt business growth. Customers see it as “double-dipping” into their pockets, and have clearly expressed that…

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