Free Advice

Originally published in and reprinted with permission from The Eastside Journal, April 21, 2001.

Businesses can learn from Microsoft

The headline read, “Microsoft unveils operating system.” This wasn’t 20-25 years ago, it was in this paper on February 14, 2001.

No matter what your opinion of them, Microsoft is a success. The above headline got me thinking about the lessons every business can learn from their strategies. Here’s five you can implement.

Work your customers

Microsoft is a master at churning. There’s always a newer, better version emerging. We had Windows 95, 98, 2000, ME and now XP. There have been numerous versions of Office.

Ask yourself how your company can sell more to existing customers. What’s on the market now that you could easily adapt and offer your customers (or use to generate new ones). Microsoft didn’t have the first spread sheet or word processor, but they now dominate the market. Their new X box may have been the event that forced Sega to announce they’re not going to produce hardware anymore.              

Bundle your products and up sell. They give away Outlook Express, but there are some things it doesn’t do, hence the need for Outlook, which is part of the Office package.

 Provide excellent service by doing the little things. Go out of your way to make your customers ecstatic. I once had a problem downloading a workable version of a free program they offer. The day after calling, I received a CD via overnight delivery.

Hire the best

 Microsoft hires quality people. They compensate them well and they expect results. Too often business owners tell me how they want to get a good employee but don’t want to pay the market salary. That’s as ridiculous as companies who limit what their salespeople can make, forcing them to seek other opportunities.

Your employees and management team are the reason you have profit. Profit is the top influence on your firm’s value. You shortchange yourself when you don’t hire the best. Even amidst all the recent high-tech job-hopping, most people like stability. They look for opportunities to demonstrate their abilities.

Provide value

Want long-term customers? Want customers demanding to be your best reference? Provide them with value far beyond the price they pay. In the mid-1980’s I paid more for a dBase program that was impossible to use than I pay now for Office that includes nine programs and many other tools.

Do you provide that kind of value for your customers? Service companies can guarantee the quality of their work. Manufacturing companies have the ISO programs. Delivery companies’ guarantee when they’ll deliver your letter or package. Think about what you can offer your customers that will set you apart from your competitors – and allow you to charge more for your product or service.

Pay attention to marketing

Immediately, Apple fans cried that Windows XP is imitating the new Apple system. Nothing new here. For years, they’ve complained that Apple was better. More versatile, better graphics, easier to use and just as powerful. So what? You don’t have to be the first or the best if you know how to get what you have to your customers.

What kind of research do you do? What trends are in your industry? Microsoft changed their Internet strategy “on a dime” a few years ago when their research told them they were heading in the wrong direction.

Sometimes it’s as simple as telling people you’re the best (especially if you can back it up). Often it’s letting one department refer you to another department in the same firm. For Ken, a distributor of industrial products, it was reminding customers of all the lines he carries. In 2000, his sales per employee grew by 50%.

Grow by acquisition

Consolidations, mergers and roll-ups are buzzwords. What about just buying the competition? Or buying a product line you don’t currently have (but which your customers would love to buy from you)? At a recent meeting of the Northwest Venture Group (a non-profit business organization that helps entrepreneurs succeed), I sat next to a former owner who sold his company to Microsoft and now works there. He developed a technology, they bought it and are able to take it to the next level.

No matter what your industry, if you’re successful now there’s a good chance you can be even more successful with additional customers, added products to sell your customers or with fewer competitors. You can get all these benefits, plus one more, by buying your competition. That extra benefit is employees. Most small businesses purchased by larger, yet not huge companies, are purchased to get the customer base (growth potential) and the management team (key employees whether they be management, sales or production).

Learn from a leader. Take care of your customers, excel at marketing, provide value, hire the best and acquire your way to increased market share.

© Copyright John Martinka 2000-2001. All rights reserved.