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Marketing has evolved from one-size fits all mass marketing to your entire target list, to laser-focused personalized messaging customized to that exact individual.  Personalized digital marketing is now the rule rather than the exception. From email campaigns to pay-per-click, personalized targeting is the accepted standard across most of the digital marketing world.  And, it’s not just ubiquitous—it’s increasingly close to the strategic core of how good marketers do business. To help me dig deeper on this topic, I solicited the wisdom of my colleague, Ronald Dod, the CMO and Co-Founder at Visiture, a leading ecommerce marketing agency with expertise on this topic.


Here are the top five reasons why increasing the level of personalization in your digital marketing is one of the most impactful marketing investments you can make. 

1.  Improved Knowledge of Customer Base

One key aspect of marketing personalization is gathering the data you need to effectively segment and target your customers. In an omnichannel world, you need omnichannel data collection. A savvy 21st century marketing team will always be on the lookout for opportunities to get more customer data, whether it’s through opt-ins like surveys or tracking and analytics tools. Thus, as your marketing personalization works toward its other goals, it can simultaneously work to provide you with better information on your customers and what they respond to.

A customer data platform, or CDP, is one of the most popular ways to collect and organize customer data into an easily usable format. These software packages integrate all of the customer data you collect through email, sites or apps and create customer profiles. You can then examine these profiles, find insights, create segments and create data sets for other tools like email marketing and PPC platforms.

A side benefit is that these customer profiles are useful for much more than just marketing. Examining your customers, their demographics and their interests will yield insights that you can use to drive decisions in distribution, product development and other areas. It’s a perfect example of how taking the plunge into personalization can have positive ripple effects across your business. 

2.  More Sales and Conversions

The numbers are clear: when it comes to driving sales and conversions, personalization works, and it works well. In one study, 88% of businesses said that personalized marketing gave them a measurable sales lift, and 53% reported the boost as 10% or more. Another study found that businesses using various personalized marketing techniques reported revenue gains between 8% and 21%. 

Personalized ads can even serve as a second line of defense to catch conversions that might slip away, thanks to the practice of retargeting. Retargeting, which involves serving targeted ads to people who have already visited a company's website, has been associated with a 70% higher conversion rate in visitors who see a retargeted ad. With figures like that, it’s not hard to see why personalization has planted itself firmly in the marketing mainstream, and why marketers are scrambling to realign their sales strategies with these new realities.

3.  Better Customer Engagement

Loyal customers who engage with a brand through multiple channels are incredibly valuable to the brand’s health and longevity. But with more choices and competition than ever—and brand loyalty possibly on the wane among millennials—it’s become critically important to foster that engagement through personalized service and content.

Loyalty programs, to name one example, have always been a popular way to increase customer engagement, but they’re undergoing a strategic shift. Now, it’s more common to find businesses concentrating on personalization and relationships in their loyalty programs. It’s a re-imagining from the somewhat impersonal traditional loyalty program, where a customer spends money and receives points, to one in which the retailer acts more like a trusted guide and partner. 

This is a good time to make another point: there’s definitely such a thing as going too far with personalized marketing. Although many customers enjoy being courted by businesses, it can be deceptively easy to cross the line into a situation in which a customer feels uncomfortable or creeped-out, so businesses need to tread carefully. Be especially wary of pushing into a customer’s family life or personal relationships and, of course, take steps to ensure that customers’ data is safeguarded. 

4.  More Efficient Marketing Spending

When applied correctly, personalization makes your marketing dollars go farther and do more. By creating the perfect match of content and customer, personalized marketing can materially improve ROI by making it possible to precisely target and fine-tune messaging. 

This is an especially important part of PPC advertising, where segmentation and personalization are both easy and necessary. Most PPC platforms include robust audience targeting tools, allowing you to serve ads to people whose data indicates they’re interested in your product using keyword bids and audience customization. If you’re thoughtful about your bid strategies and put in the work to learn the tools, the ROI can be impressive (as much as 5-8x greater than without personalization).

Email marketing is another channel where personalization can drive great ROI. The personal nature of the email inbox makes it the perfect place to deliver targeted pitches and personalized copy. Marketers in one study found an eye-popping 760 percent increase in email-based revenue after introducing segmented campaigns. 

5.  Shorter Sales Cycles

Personalized marketing can be helpful for shortening the time it takes a customer to move down the sales funnel. Using smart segmentation and audience metrics, marketers can identify and target customers who are further along their path to purchase, helping to create conversions more quickly and prioritize the most promising leads. 

This can be especially important for B2B companies and other businesses that struggle with their longer sales cycles. A long sales cycle usually indicates that a customer has numerous decisions to make that may have to go through multiple levels, so it’s critically important that a business establish itself as a helpful and interested partner who’s invested in creating a relationship. Personal attention to the customer’s needs is key to moving a customer confidently through the path to purchase—and that’s something that personalized digital marketing excels at providing. 

Concluding Thoughts

Personalized digital marketing may have once been a leg-up strategy to break out of the pack, but it’s now integral to the whole playbook. If your business has yet to fully dive into this field, now is the time. It has mature and well-developed tools, in addition to an exciting cutting-edge frontier. By learning about and speaking directly to your customers, you’ll set your business up for continued success. 

Thanks again to Ronald and Visiture for helping me write this post.  Your insights on this topic will be of terrific benefit to the Red Rocket blog readers.

For future posts, please follow me on Twitter at: @georgedeeb.  And, you can also follow Ronald Dod at @Visiture_Search and Visiture at @Visiture.


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I recently met a business where the owner made 100% of her decisions based on how it impacts the immediate cash flow of the business.  And I mean every decision!  Whether it was hiring business professionals like accountants or lawyers that were advising the business.  Or, making marketing decisions based on what drove revenues this minute.  All the way down to minute things like figuring out which credit card to use, to drive immediate cash back rewards on expenses.  Some of this is admirable.  But, most of this was completely short-sighted and hurting the business long term. 

I get it.  Most entrepreneurs are cash starved and looking to save every penny they can.  But, in this case study post, you are going to learn that cutting pennies today, could be costing you millions of dollars tomorrow.  Allow me to explain.

DON’T MAKE SHORT TERM DECISIONS THAT HURT LONG TERM GROWTH

One of the actions this entrepreneur made was only investing in marketing tactics that would drive an immediate sale and immediate return on marketing investment.  The problem with that focus was that she was running a B2B business, where the highest ROI spend this minute, may not be the best tactic for maximizing long term sales, given the long sales cycle lead time of B2B.  For example, if you focus on driving sales, profits and returns today, you would most likely select Google as your primary marketing channel.  And that will most likely result in lower ticket transactions, where the client budget is already in place and can be spent today.  If she was focused on the long term, perhaps she should have invested in big trade shows in her industry, where very large ticket orders could be secured, albeit on a slower and more patient timeline.  So, yes, trying to drive an immediate return is nice.  But, not if you are sacrificing 10x that amount of sales and profits down the road.  It would be more ideal, to better capitalize the business to better focus on the biggest long term ROI opportunities, even if it requires needing some short term working capital to bridge the gap.

DON’T BE CHEAP ON STRATEGIC ISSUES, YOU GET WHAT YOU PAY FOR

When I presented this client with around 10 accountants and 10 lawyers to consider to help her business, I gave her a complete picture of the strengths and weaknesses of each of these professionals, and gave recommendations on which ones I thought were the best to help her business and her specific needs.  For example, I knew she was going to need advisors with a lot of M&A experience to help her accomplish her desired roll up strategy.  But, the only metric she focused on was price.  She ended up picking the cheapest lawyer and the cheapest accountant on this list, neither of which had the required M&A experience she was going to need, which came at a slightly higher hourly rate.  That is like cutting off your nose to spite your face!  You need advisors that know your business needs or industry.  Engaging human talent should not be the same mindset as buying a commodity, like loaf of bread.  With human talent, you really do get what you pay for, based on their expertise.

DON’T PICK THE CHEAPEST SOLUTION, PICK THE BEST SOLUTION

Then I was helping this client with setting up various off-the-shelf technologies, service providers or other point solutions for her business.  This included things like her advertising agency, her CRM software, her SEO firm, etc.  And, again, like with the lawyers and the accountants, it was more of the same.  She would see five options for every need, would ignore the strengths or weaknesses of those solutions, and focus only on price.  She didn’t care that there may be better options out there, to help propel her business to new heights.  All she cared about was how the investment would impact today’s cash flow.  Stop the madness!  Price should be one of the major considerations when picking solutions, but not the only driver.  It is much more important you find solutions that present the best value—offering the most advantages and least disadvantages at the most acceptable price (which is not necessarily the cheapest price).

DON’T LET SHORT TERM DECISIONS, HURT YOUR CUSTOMER EXPERIENCE

One of the short term decisions she made was in picking her shipping provider, moving goods from her warehouse to her customers.  She considered around five solutions, and again picked the cheapest, trying to maximize gross margin.  The problem was, she didn’t investigate other important data points, like the percentage of successful online deliveries of each vendor.  It turned out, that the cheapest shipping vendor, was also the one with the highest instances of late deliveries to customers.  And, guess what happened next; customers started complaining about missing shipments, which put the company in a negative light, and they started to lose repeat sales.  Again, vendor decisions should be much more than simply a price-based decision, to avoid customer facing situations like the above.

DON’T BE SO FOCUSED ON THE WEEDS, THAT YOU LOSE FOCUS ON THE GOAL

This entrepreneur was so focused on short term cash flow, that is was like an obsession.  It just entirely consumed her and drove all of her attention.  She would pull out her monthly income statement, run through every expense item, line by line, and figure out how to drive down the cost of each item.  She put hours and hours of work into that sole goal.  Congrats, you saved a few bucks.  But, shame on you for not putting those same hours into figuring out how to propel your revenues to newer heights, which to me, should have been an even more important area of the business that required her attention.  You may have saved $10K in monthly expenses, but you probably hurt your revenues by $100K per month had you focused your energies there.  The point here: you need to prioritize your time and invest it in the best ways possible.

CONCLUDING THOUGHTS

So, the moral of this story here:  don’t be a cheap ass!!  Yes, you want to keep your expenses as low as possible.  But, you don’t want to make cash flow driven decisions that end up slicing your own throat.  Each business decision needs to do what is right for the business, overall for the long term.  Not, simply what is best for the bottom line in the immediate term, for the reasons summarized above.  Instead, make sure your business is properly capitalized to allow it to afford the “right” solution for the business, that will help give the business the highest odds of long term success.  And, remember, it is impossible to maximize long term growth and short term profitability at the same time, you have to pick one or the other.

For future posts, please follow me on Twitter at: @georgedeeb.


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Over the years, I have become a “data hound” looking for every morsel of wisdom I can ge to help me make smarter decisions. The good news here: accurate data is king. You can’t effectively manage your business without accurate data. Getting it is not always easy but without it you risk making the wrong business decisions -- hurting your business when you thought you were helping it. Allow me to explain.

Read the rest of this post in Entrepreneur, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.
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I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about business coaches and mentors, and how they can help your business.  I thought this video turned out great, and I wanted to share it all with you, to help you with your market research and business planning needs.  I hope you like!!


The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above, or feel free to watch it on the ASBN website.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.


For future posts, please follow me on Twitter at: @georgedeeb.

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Back in 2018, we acquired Restaurant Furniture Plus, a B2B ecommerce business that sells food service furniture to restaurants and other hospitality companies.  We recently received a request for proposal from one of the most recognized restaurant brands in the world. If secured, the project would have doubled our sales overnight. We walked away from the opportunity, which may sound silly to you. But, here’s why.

Read the rest of this post in Entrepreneur, which I guest authored this week.

For future posts, please follow me on Twitter: @georgedeeb.
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I have long thought movie stars and sports heroes were drastically overpaid in comparison to their contributions to society.  For example, teachers are teaching future generations of kids, and get paid pennies in comparison.  And, even well paid doctors saving lives, are paid a small fraction of what a basketball star gets paid to simply play the game of basketball.  In the last decade, these inequalities are starting to be seen in corporate workplace, as well, with rising CEO pay and a mid-level jobs under siege due to outsourcing and technology automation.  I think we need to rethink the traditional pyramid shaped organizational structure to “right size” the work completed vs. compensation paid equations.  Allow me to explain further.

WHAT IS A PYRAMID SHAPED ORGANIZATION?

In most hierarchical organizations, it could look something like the following.  One CEO manages five EVPs who collectively manage 25 SVPs, who collectively manage 125 VPs, who collectively manage 625 directors, who collectively manage 3,125 managers.  As you can see, a very wide base and a very narrow top results in a pyramid design as you move up the organization.



And, as you move up the organization, the compensation dramatically grows with each level, where a manager can make $37.5K, a director can make $75K, a VP can make $150K, an SVP can make $300K, an EVP can make $600K and a CEO can make $1.2MM+.  And, depending on the size of the company, the Fortune 500 CEOs can make $25MM a year, which have dramatically increased to that level in the last decade or two.

PROBLEMS WITH THE PYRAMID DESIGN

The first problem with the pyramid design is compensation disparity from the top of the organization to the bottom of the organization.  In the example above, do we really think the CEO is worth 32x the managers at the bottom layer of the organization?  Or, in the case of a Fortune 500 company, what could be 1,000x the entry level workers?  Probably not, as often times the people in the trenches are doing the hardest work.

The second problem is the caps it creates in upward mobility.  At every level of the organization, there are 5x as many candidates that can be promoted into the tier above them, as illustrated in our example.  Presumably, the 125 VPs are all roughly equal in terms of doing a good job, but only 25 of them will have a chance to get promoted to the next level.  That is like a 20% chance of winning the lottery from one level to the next.  Or, if you go from the bottom level to the top, you have a 32 in 100,000 chance to go from entry level to CEO.  Sorry to the 99,968, you are just out of luck—no lottery ticket for you.

The third problem is the impact that has on the U.S. economy.  The wealth gets concentrated in the top 1% of people and the 99% in the middle class are getting squeezed right out of existence, as inflation-based raises are not keeping up with the rapidly growing cost of living and rising consumer debt levels.  This country was built by the middle class, and with growing levels of outsourcing and disintermediation by technology, the American dream is really becoming a real potential for a very few people that are able to make it all the way to the top.  The old adage is, you need to have money to make money; and right now, there are very few that have it, to give them a realistic chance of making it.

HOW TO FIX THE PYRAMID—BUILD A CYLINDER

Firstly, in my example above, there were six levels of workers, from managers all the way up to CEO.  But, instead of having 80% of workers in the bottom tier, what if each tier was evenly distributed with 16.7% of the workers in each tier, closer in shape to to a cylinder than a pyramid.  But, that creates some interesting management hurdles, along the way.  As an example, you can’t have 651 people acting as CEO or managing the company by committee.  But, you could empower more people to make more strategic senior decisions, with fewer levels of bureaucracy.  Maybe break the business into pieces, in terms of how it is managed by department, by region, by customer, by channel or whatever.  This would require a lot more thought on how best to divide up key decision making roles, to empower more people to take leadership positions.  But, if we can elect our Presidents by democratic vote, maybe there is a way to run our businesses the same way?

Secondly, in my example above, there was a total payroll of around $194,512,500.  If all 3,906 employees we treated the same, the average would be around $50,000 a person, which would be like a 33% raise to the 80% of employees in the bottom tier, and would materially improve their lifestyles.  Now, I am not saying there shouldn’t be a step up on compensation with each tier.  But, maybe it is a 25% bump instead of a 100% bump in my example, to help make more room for the folks in the lower tiers.  And, don’t forget, in the cylinder model, we moved 80% of workers up into higher tiers within the cylinder, so the raises will end up being much higher when combining the salary per tier with the more people in higher tier advantages.  For example, taking a quarter of the bottom tier up to $62,500 (up 67%), another quarter to $78,000 (up 108%), and a third quarter up to $94K (up 151%), as examples, as they were reshuffled upward within the organization.

The natural pushback here will be there are not enough quality candidates for each tier.  To that point I would say: (i) we simply need to make education or training of those people more affordable and more accessible; and (ii) we have a ton of “underemployed” people on the sidelines waiting to get back into the game in a much more material way.  Of course, the current people at the top, won’t like this model, as it means materially scaling back on their compensation, but that is the price of helping to rebuild our middle class.  Instead of having one billionaire Jeff Bezos at the top, I sure he will live just fine on multi-millions of dollars a year, as an example.

CONCLUDING THOUGHTS

So, the points here are: (i) why should the vast majority of the corporate compensation spoils go to elite few, when a business is built on the shoulders of many; (ii) how do we get skyrocketing executive salaries in check; and (iii) how do we save our middle class which is under siege.  I am just trying to think out of the box on how best to reinvent organizational design for a modern 21st century business.  If you have any ideas here, please add them to the comments box on this page.  Together, we may just figure out a way for the anonymous John Doe to get paid the same as Tim Cook, Lebron James or Tom Cruise.

For future posts, please follow me on Twitter at: @georgedeeb.
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Building successful startups is not easy.  That is why only one in ten startups actually succeed.  But, if you are going to have any chance of success, you need to K.I.S.S.—Keep It Simple Stupid.  You have to boil your idea down to one specific thing, and stay religiously focused on that end goal.  Which means not getting distracted by the various “flavors of the month” that can lead you down rabbit holes and stress out your organization in the process.  Allow me to explain.

A Case Study of What Not to Do

The other day, Red Rocket had a call from a startup seeking to raise capital.  When I asked him to explain his business model, it went something like this.  We are a human services company, and an artificial intelligence company, and an ad sales network, and a consumer marketing brand, and an ecommerce business (in one of the hardest industries to break into).  I kid you not, that was the pitch, trying to be all things to all people in their industry.  And, the problem was: the entrepreneur had no clue there was anything wrong with that strategy.

First, from a business model perspective: the tactics required for successfully running a B2B business is completely different from the tactics required for successfully running a B2C business.  The former is more sales driven and the latter is more marketing driven, as an example.  So, strike one.  Then, drilling down even further, running a B2B services business is completely different from running a B2B technology company.  The former is human driven and the latter is software coding driven, as an example.  So, strike two.  And, drilling down even further, running an artificial intelligence company is materially more complex than building a simple piece of B2B software, with hardcore data science and machine learning required.  Strike three, you’re out!  And, I didn’t even get to drill down on the various B2C complexities here.

When I told the entrepreneur, of the FIVE different business strategies discussed, they needed to pick only ONE, whichever one would be the easiest, most-lucrative one to pursue, I was met with a blank stare on his face, with him not exactly knowing which one was the best, or why he couldn’t reasonably be doing all five strategies at the same time.  I told him, Keep It Simple Stupid; pick one which will be your core competency that you will do better than everyone else, and outsource and partner for the other pieces of the puzzle if you feel they are important.

A Case Study of What to Do

As you may know, we recently acquired Restaurant Furniture Plus.  When the entrepreneur was pitching their business to us, their communicated mission was very clear:  we are the leading ecommerce seller of furniture to restaurants.  And, they differentiated themselves with a “free furniture sourcing service”, to take work off the plate of busy restaurant owners that didn’t have the time to research furniture themselves.

Why did that pitch resonate?  First, the restaurant industry was large, at approximately $800BN a year, so a big business could be built.  Second, all the competitors lead with products and prices, and this company lead with service, as a clear differentiator.  Third, given the heavy B2B services nature to the business, it would be more defensible versus the big ecommerce-only players in the industry, like Amazon, that are not deep in services.  And, the company’s clear focus showed in their financial metrics.  The business was growing very quickly, with a very high conversion rate and many happy repeat customers, both data points which spoke to the high quality of the service and its appeal to customers.  All in all, it was very simple in its design and execution.  And, guess what?  We bought the company!

K.I.S.S. Applies to All Areas of the Business

The above case studies were speaking to high level business strategies.  But, simplicity applies in all other areas of the business.  Is your product offering streamlined?  Are your operational processes simple?  Are your sales and marketing efforts laser-focused on the most profitable tactics?  Is your company culture clearly communicated for all others to follow?  Are your monthly financial statements reporting the most important key performance indicators, so you can best manage them?  Etc. Etc.  So, critically look at all areas of your business to streamline and better focus the business.

Concluding Thoughts

So, my pitch to all of you entrepreneurs out there: stop what you are doing, take a breath and re-assess everything you are doing today.  Is everything as simple and laser-focused as it can be?  If not, you have some fixing to do.  And, oftentimes, entrepreneurs are simply too close to their own business to clearly focus.  So, maybe you need a non-biased outsider to come in with a fresh set of eyes, to help you “navigate the forest through the trees”.  If you K.I.S.S. your business, good things will surely follow.


For future posts, please follow me on Twitter at: @georgedeeb.
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The old adage, a “bird in hand is worth two in the bush” may work in some instances in business, but slotting people into employee roles is definitely not one of them.  I can’t tell you how many times I see early stage entrepreneurs slot a person into a role, simply because it is convenient, with them already known and on the team operating in an entirely different role.  Stop this madness!!  Do you want the quickest solution to your hiring needs, or the best solution?  Allow me to further explain.

Read the rest of this post in Forbes, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.
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I have been a long-time fan of the ecommerce industry. As offline retailers were struggling to compete with online retailers, many large chains went out of business, and an increasing amount of consumer buying moved online. For a long time, ecommerce startups were printing money in what felt like a “can’t lose” industry. But, like with any gold rush, empowered by ecommerce platforms like Shopify -- that made it quick and inexpensive to get your online store up and running -- ecommerce attracted a bunch of competitors trying to get their products discovered.

But, what happens when millions of ecommerce stores are fighting to get discovered on only three primary websites -- Google, Facebook and Amazon -- where consumers are looking for potential shopping solutions? All hell breaks loose, wreaking havoc on your cost of customer acquisition and your bottom line profits. This means the only long term winners in ecommerce are, you guessed it, Google, Facebook and Amazon. These three keep raking in all the highly-profitable advertising dollars while the ecommerce businesses themselves are starting to struggle to make a profit. Allow me to explain.

Read the rest of this post in Entrepreneur, which I guest authored this week.

For future posts, please follow me on Twitter at @georgedeeb.
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Our brains have been wired to think about our careers going up the corporate ladder over time.  A manager, becomes a director, becomes a vice president, becomes a president, etc.  But, if you think about that structure, there are a lot fewer job positions the further you go up the ladder.  An example typical company may have 125 managers, 25 directors, 5 vice presidents and 1 president.  So, the odds of moving up the ladder aren’t really in your favor, with 80% fewer positions at each next level.  But, people need to make a living.  What happens when an employee needs to go back down the ladder, to find more open positions?  Is that a good idea for you to consider that candidate as a hiring manager?  Let’s find out.

DOES THE CANDIDATE HAVE THE RIGHT SKILLS?

In this post, let’s talk about the sales department as an example.  Most “upper ladder” sales managers have been “lower ladder” salespeople at some point in their past careers.  So, it is highly likely and logical that a sales manager most likely has the knowledge and skillsets required to succeed as a salesperson again.  But, to be clear, the job of a sales manager is completely different from a salesperson.  The salesperson maintains client relationships and closes sales all day, and a sales manager manages and mentors the salespersons all day, to make sure they are hitting their agreed upon targets.  So, making that shift back down the ladder, really means taking on a completely different job again.  You just have to be sure that candidate truly has the appetite for that change.

DOES THE CANDIDATE HAVE THE WILLINGNESS TO DO THE JOB REQUIRED?

Continuing this example, once a sales manager gets used to the tasks of being a sales manager (more in the office, less travel, less repetitive tasks, the prestige that comes with the role), for many, it is really hard to get back into a quota hitting sales producer role.  But, that is a more of a general guidance.  There are exceptions to that rule.  Maybe a sales manager got promoted, and realized they don’t like managing people, and actually prefer the “thrill of the hunt” of being a salesperson.  So, it is really important you ask the right questions during the interview process to ensure that candidate will actually be happy doing the work required in that “lower ladder” position.  Understanding that many will say whatever is required to get the job, so buyer beware.

DOES THE CANDIDATE HAVE THE RIGHT COMPENSATION EXPECTATIONS?

In addition to the role changing at lower lowers, the compensation is typically lower at lower levels.  So, let’s say that Vice President was making $150,000 and now they are looking at a Director level job that makes $80,000.  Once a worker gets used to living off a higher salary, it is really hard for them to make ends meet on a much smaller compensation.  The only times that works out is if the role is combined with material other incentives (like an aggressive commission plan or equity upside to make up the difference), or if they are older in their career (having built up a big savings account to live off of, and perhaps are self-aware of their need to reset their target role and compensation expectation to have a better chance of getting employed at their age).

SHOULD I BE WORRIED IF SOMEONE IS WILLING TO TAKE A PAY CUT?

My off the cuff answer is yes, someone willing to take a pay cut could certainly trigger a concern.  But, it doesn’t necessarily mean it is a deal breaker.  As discussed above, if other incentives are in place, or there is a logical “story” with this candidate, you may be perfectly fine.  Remember, what you gain with an “upper ladder” candidate, is all that extra years of experience that comes with that.  So, if you can get comfortable with the situation, it is like getting a Porsche for the price of a Toyota.  But, buyer beware.

DOES THE CANDIDATE PRESENT A FLIGHT RISK, AWAITING A BETTER POSITION?

Based on my experience of hiring people over the years, once somebody gets used to getting paid at a certain level, they are going to try to maintain or exceed those levels in future jobs.  So, if they are taking a job with you at half the compensation, without a matching good “story” or incentives, that opens the door to those candidates continuing to look for new jobs, even after they have accepted yours.  But, again, that is a general rule of thumb.  That may not be the case in all scenarios, so do your due diligence and make a judgement call.  For example, someone approaching retirement looking for their last job before they retire, could be perfectly fine and worth the risk.

WILL THEY HAVE THE RIGHT ENERGY FOR THE JOB?

Generally, a person’s energy declines with their age.  But, that is not always the case.  I have worked with many people in their 60’s whose energy levels exceed that of people in their 20’s.  Another way to think about this:  older “upper ladder” employees are typically more efficient in how they work, so whatever you think they may lack with energy, they should more than offset that risk with efficiencies they have honed with their prior years of experience. 

IS IT POSSIBLE FOR CANDIDATES GOING DOWN THE LADDER TO RESULT IN A GOOD OUTCOME?

As you have read above, a lot of things have to go right for someone going back down the ladder to result in a good outcome for your business.  But, that does not mean you should close the door on that scenario in all cases.  You need to assess each candidate on their own merits.  What is their “story”?  How do they answer your questions on the above topics?  Do you believe they can live on a smaller compensation and have the energy and appetite to be successful in that “lower ladder” job?  This situation is laden with potential pitfalls, but it most certainly can work out for the best.  Do your homework!


For future posts, please follow me on Twitter at: @georgedeeb.
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