October 14, 2020 7 min read
Opinions expressed by Entrepreneur contributors are their own.
We have all had to re-invent our approach to business in the wake of the crisis created by the Covid-19 pandemic. But we have learned during the pandemic that crisis is not all-together bad. Crisis helps us think deeper, stretch our imagination, restructure our organizations, and discern the real needs of our business.
But how do we, as business owners, crisis-proof our business? We may not be able to stop the crisis from coming, but our business can cope with it better when that crisis does arrive.
Avoid false advertising
Many small businesses constantly grapple with the crisis of customer defection or a consistent inability to attract and keep new customers. The problem is often with their marketing strategy.
A leisurely scroll through your timeline on social media will expose you to a myriad of ads from small and medium-sized businesses all vying for your attention. In many of these ads, you will find one nasty feature; false advertising. While these ads promise astonishing freebies or cut-price deals, the reality behind often reveals something totally different.
I once received mail from an advertising business I had almost patronized. It read, “I noticed you stopped short of making the purchase. Hey, I know the ad was a bit deceptive but…” Needless to say, that put me off from the business.
One key feature of Forex trading is the risk factor. It is one of the most glaring features of the market, so glaring that Donald Trump’s Covid-19 diagnosis caused quite a stir. Every serious-minded Forex trader, trainer, or broker reveals the nature of risk involved in trading while advertising their services or teaching their courses.
My early foray into Forex trading brought me in contact with FxBro, a sibling run Forex trading community where they were so vocal about the risks of trading Forex that it almost seemed like it was their marketing strategy.
However, I noticed I was drawn to Maksim and Nina Konstantinov’s strategy (Fx Bro Co-founders), because their clear warnings made me appreciate even further their offer of guidance.
While taking advantage of PPC campaigns and ad marketing that social media provides, you must realize that building a loyal following does not involve sacrificing the truth on the altar of appeal.
It is pertinent that you market nothing beyond what you can offer, and though you must engage your creativity in marketing, you must also draw the line just before creativity begins to drift into dishonesty.
In co-founder of Fxbro Maksim Konstantinov’s words, “When we fall downstream, we always say it loud and explain to our customers that even after the 15 years experience I have garnered trading Forex, we can still make losses and so would they”. Konstantinov finds that having begun from scratch himself and experiencing all the downturns, it is great to always be clear about the risks while advertising.
This is the attitude that marketers should have across the board and is one of the most powerful ways to avert the crisis of customer defection.
Spin the wheel, don’t reinvent it
Two years ago, I served on the panel for a grant-issuing body for upcoming African entrepreneurs. As I sat on that panel, I discovered that almost 90% of those who were unsuccessful were failing because they were trying hard to reinvent the wheel. They were trying to run a business that was novel in every single aspect. Their crisis was a “lack-of capital,” and it was self-engineered.
Granted, innovation and invention are generally good for business, but they are not always necessary, especially when there already exists verified working systems that are yielding massive results in your industry.
Forex trading platforms realize that many people are not going to sit down to study the technicalities of the market, so to enable the largest number of people to invest, they have to integrate a “Mirror Trading System.”
Alex Campbell, Chief Executive Officer of Vast Triumph, in explaining their “mirror trading” and AI strategies that have been used to great effect, explained it as “a system that minimizes the need for vast knowledge and experience of the market. Mirror trading pairs investors and new traders with our top-earning traders, yielding results for investors without the exertion of personal trading.”
No system guarantees success, but if you can find working, proven systems for your business to adopt, I often advocate the “Ctrl C, Ctrl V” approach. There is no shame in copying working systems. Given the same circumstances, there is no reason they won’t work for you.
Upcoming entrepreneurs can stand out with their company culture, values, and mission, but when it comes to business strategy, learn what works and spin the wheel. When you insist on constantly treading uncharted waters you are easily prone to unforeseen errors.
Protect today with yesterday
My first attempt at trading the Forex market saw me obliterate a $300 account in one day. It hurt, and I learned. Crises are unavoidable in business, but if you are keen on documenting your experiences and adjusting your business to become resistant to that same crisis, you’ll win in the long term.
The human body becomes more and more immune to the diseases it has survived before, Hurricane-prone areas of the state begin to re-imagine its infrastructure to withstand such a harsh climate.
Likewise, in Forex, every successful firm or trader has a “trading journal,” where they document all their moves in the market to further understand how it moves and reacts.
For small business owners, it is necessary to know that to become crisis-proof, you may have to cherish and document all wrong business steps as well as the right ones. Not moaning over losses and failures is the best way to understand business and, more specifically, your industry.
Nothing you read in books will prepare you for the business experience you gain firsthand, so write your own books by keeping records, and make sure your business evolves with this knowledge.
Balanced risk-reward ratio
The question I get asked often from young entrepreneurs is “How do I maximize profit?” This question is vital, but becomes a bit worrying when I see these businesses trying a little too hard to make money from every margin in their business.
Often, profit maximization can become the direct opposite of customer satisfaction. Small businesses must be satisfied with bearing a lot of risks. To do this, you would have to find a balance between profit and risk.
This place of balance is a place where you do not overextend yourself as a business, yet offer the customers enough satisfaction to warrant their continued investment.
In currency trading, a trade is considered bad when the risk far outweighs the profit potential, and a trade is safe to engage in when the risk-reward ratio is at least balanced. This is an invaluable tool for all successful currency traders and firms: risk management.
To prevent a crisis, you need to become analytical, patient, alert, balanced, truthful, and customer-centered. This makes it far easier to evolve positively as a business and grow a thicker skin in the wake of a crisis.
Learn These 5 Personality Strategies to Supercharge Sales
October 22, 2020 6 min read
Opinions expressed by Entrepreneur contributors are their own.
Have you ever tried to pitch someone your idea and for some reason they just didn’t seem to engage? Walt Disney tried to encourage his best friend, Art Linkletter to buy the surrounding property around Disneyland. Linkletter did not see the opportunity and passed. Ironically, the Fujishige family saw the potential and bought fifty-six acres for $2500. Decades later they sold the land back to the Disney Corporation for just under $100 million. How can one person see an opportunity when another one passes on it?
This is what author Woody Woodward calls the 20/80 Rule. His newest book “D.R.I.V.E. Sales” focuses on the five distinct “buying personalities” he’s identified. Each of us inherently speaks one language (20 percent), and in doing so, accidentally alienate the other 4 buying personalities (80 percent). The process of recognizing the distinct motivations of the customer you’re pitching makes a dramatic (or even exponential) difference to your selling success. When Walt was pitching, he was not connecting with Art’s buying personality.
I spoke to Woodward this week about his findings. In short form, the five buying personalities depend on what makes you feel most important. They are as follows:
- Director. You like experiencing life and life’s purpose. You thrive on freedom, creativity, performing, overcoming, and appearance.
- Relator. You thrive on relationships, influence, service, family, friends, parents, and spirituality.
- Intellectual. Your priorities are knowledge, learning, health, nature, moment, standards, and organization.
- Validator. Your hot buttons are recognition, acceptance, praise, trust, respect, validation, and being needed.
- Executive. Your tickets are winning, control, work, goals, security, providing, and problem-solving.
Here’s an easy exercise you can do right now. Simply rate the five personalities in the order of what makes you feel important. The result is your buying personality profile. I had no idea what to expect for my own – but when I walked through the exercise the result was distinct.
While in actual life I’d be a Relator or an Intellectual, when it comes to making a sizeable purchase or investment, I behave like an Executive: I’d look first and hardest at the proof of return and the ways the decision would make my life better, which would mean I’d respond most strongly to reviews and third party testimonials (this is true). I’d focus on the big picture more than the details of how to achieve it. Others who fall in this model include Phil Knight, Steve Wynn, Ruth Bader Ginsberg (I’m honored), Serena Williams, and John D. Rockefeller.
In all, my profile came out as E.D.R.I.V. This is important in that every customer you present to will have both Primary and Secondary motivations for buying. To the extent you are able, it is important to understand those nuances, too.
There are myriad examples of large-ticket purchases that would have had an astonishing impact for both buyer and seller but never happened. Why? In large part because the proposition being presented didn’t meet the right buying criteria that would have resonated for them.
Steve Jobs offered his first boss, Nolan Bushnell, the founder of Atari, one-third of Apple for $50,000. Bushnell passed. Myspace CEO Chris DeWolfe was offered Facebook for $75 million by Mark Zuckerberg, but he too passed. This problem of pitching to the wrong D.R.I.V.E. (buying personalities) goes back for centuries, Woodward notes in the book. Western Union was offered the telephone from inventor Alexander Graham Bell for $100,000. The offer was disdainfully rejected with the pronouncement, “What use could this company make of an electrical toy.”
The first step to making your pitch more attractive to your customer base is to identify how the benefits of your product or service meet the five buying personalities. Cell phones are probably one of the most widely saturated products. However, each D.R.I.V.E. buys for a different reason. A Director benefits because they can be free and independent doing business anywhere. A Relator wants to connect to family and friends anytime. An Intellectual is buying it to be more efficient and organized. A Validator benefits from social media apps and how they encourage their relationships, while an Executive wants to be able to win and excel at their goals.
So once you’ve identified the benefits of your product and the buying personalities for your prospective customer or customers, the way to accelerate your sales is to show, don’t tell the way your product answers their needs.
For example, Woodward recalls in the book the challenge the Center for Science in the Public Interest (CSPI) faced in alerting the public to the relative safety (or danger) of movie theater popcorn, with 30 grams of saturated fat for a medium-sized serving, as illustrated in the book “Made to Stick.”
With an eye toward the buying personality of movie customers (“It’s a treat, it’s a part of my lifestyle and it’s how I relate with my family”) the CSPI stepped away from the scientific explanation of the danger. Instead, they created a visual that showed the average medium serving of popcorn contained more artery-clogging fat than a bacon-and-eggs breakfast, Big Mac and fries for lunch, and a steak dinner with trimmings, combined. The story was an instant sensation and not only had buyers’ attention, resulted in nearly all of the nation’s biggest theater chains announcing they would move to a healthier oil.
Additionally, if the selling process leaves you stuck, you move to the strategy of P.I.C.K.S., an acronym that stands for Parables (stories around the proposition), Identify Needs (specific to the recipient), Calls to Action (limited time opportunities to act), Keep in Touch (persistence counts) and Surprise Them (follow up with a delightful offer they would have never anticipated).
In all, whether you’re an experienced seller or a novice, these ideas could boost your outcomes substantially. I will definitely give them heed and I suggest every current business owner consider them strongly as well.
How Income Inequality Has Erased Your Chance to Drink the Great Wines
Among the many ways the rich are different from you and me: Only they can afford grand cru Burgundy.
That wasn’t always the case. In the 1990s, middle-class wine lovers could still afford to experience that rite of passage — drinking a truly great wine, not simply to enjoy it, but to understand what qualities made it exceptional in the eyes of history.
It might have been a splurge, perhaps requiring a few sacrifices. But it was feasible, just as it was possible to buy first-growth Bordeaux, or the top wines of Barolo, Brunello di Montalcino or Napa Valley cabernet sauvignon, to name a few other standard-bearers.
For example, back in 1994, a bottle of Comte Georges de Vogüé Musigny 1991, a grand cru, retailed for $80 (the equivalent of $141 in 2020, accounting for inflation). Today, that bottle costs about $800.
In a more extreme case, Domaine de la Romanée-Conti La Tâche 1990, another grand cru and one of the world’s great wines, cost $285 in 1993 ($513 in 2020, accounting for inflation). That’s no small sum then or now, but profoundly curious people might have found a way.
Today, a bottle of the 2017 La Tâche goes for about $5,000, well out of reach for dedicated students of wine, except for the most wealthy.
Plenty of other options exist: Village Burgundy rather than grand cru, or any of the many other great wines now being produced around the world. But these bottles, as good as they may be, have not been part of a conversation that has endured for centuries.
For wine lovers, drinking such renowned bottles would be the equivalent of a college course in Shakespeare, Beethoven or Charlie Parker. In any field, it’s necessary to comprehend the reference points, the benchmarks that connote greatness, to join that conversation even if ultimately you choose to argue the point.
These days, it is impossible for most people to pay for these wines.
You could argue that prices have risen on all sorts of consumer goods since then. Why should wine be different? You would not be wrong.
But the issue is not simply that prices in general have gone up. The prices of top wines have risen at a far steeper rate than the prices of many other luxury goods. La Tâche 2017 is almost 18 times as expensive as the 1990, while a basic Hermès Birkin 30 bag, the grand cru of handbags, has gone from about $3,000 in 1990 to $11,000 in 2020, not quite four times as much.
Bordeaux operates on a slightly different scale than Burgundy. Far more wine is produced. But it, too, has its benchmark wines, and like Burgundy, their prices have skyrocketed.
Orley Ashenfelter, an economics professor at Princeton University, has closely tracked the Bordeaux market for years. In 1980, the price of a first-growth Bordeaux was roughly four times the price of a fifth-growth Bordeaux, he said in a phone interview, referring to an 1855 classification that ranked top Médoc producers in five tiers, or growths. Nowadays, he said, as prices have risen for all these top wines, the ratio between first- and fifth-growth price is more like 10 to 1.
What accounts for these disparities?
Partly it’s the good old law of supply and demand. Great wine is tied to finite pieces of land and to the rhythms of agriculture. With a limited quantity of grapes and only one opportunity to make wine each year, production cannot be increased to meet rising demand.
With the exception of certain top Champagnes like Dom Pérignon, which are not linked to particular vineyards, the best wines are not luxury goods like watches or handbags in which production can grow to meet demand. Nor can production be kept artificially low, for that matter, to create demand.
Yet even for a trophy wine like Dom Pérignon, the relative price has gone up. A study published in 2017 in The Journal of Wine Economics analyzed Champagne prices in New York City from 1948 to 2013 by determining how many hours people in various income groups would have to work to pay for an entry-level Champagne, a midrange bottle and a flagship or luxury cuvée like Dom Pérignon.
The study found that the entry-level bottles across income groups required fewer work hours in 2013 than in 1948, but the hours necessary to buy luxury bottles had increased. What’s more, the study found that the work hours required for a top Champagne increased at a much higher rate for the lower income groups relative to the highest, meaning that their access had diminished.
Thirst for top wines continues to increase exponentially. The audience for these wines was once restricted largely to connoisseurs in Europe, North America and a few other scattered places. It expanded gradually after World War II, encompassing countries like Japan and Australia, and really took off with the fall of the Iron Curtain and the economic opening of China, spurred on by the globalizing effects of the internet.
Today, wine lovers from around the world clamor for roughly the same pool of great Burgundies that was available in 1990.
In another example from Bordeaux, Professor Ashenfelter, along with two researchers from the University of Bordeaux, presented a paper in 2018 showing that as income inequality has increased since 1980, the price of first-growth Bordeaux has paralleled the rise in top incomes.
Though the problem matters to wine lovers, the rising inaccessibility of fancy wines is just a microscopic example of how income inequality and the concentration of wealth in fewer hands have affected daily life.
I live in Manhattan, where, until the pandemic at least, the price of Manhattan real estate has soared for decades as more people and companies competed for a fixed amount of space. Predictably, Manhattan became harder to afford for small businesses, struggling artists and writers, not to mention civil servants, police officers or firefighters.
Yet billionaires continue to vie for space. A hedge fund billionaire paid $238 million for a new apartment in 2019, in a building constructed only after dozens of middle-class tenants were evicted from their apartments. When billionaires decide that they want something, whether an apartment or a bottle of wine, it drives up prices for everybody else.
I am admittedly simplifying a complex issue. But thriving mixed neighborhoods have been transformed into luxury ghost towns, as the lifeblood of many communities gave way to grandiose condominiums with absentee owners and chain businesses.
“In order for income differentials to drive price increases, supply can’t increase,” Professor Ashenfelter said. “That’s the secret of real estate and wine.”
I don’t want to paint too dire a picture for wine lovers, though. Just as artists and musicians left Manhattan for other parts of New York City, so have many wine lovers had to turn elsewhere for formative experiences.
Fortunately, great wines are being produced all over the world nowadays. Those who are fascinated by how wine can express in intricate detail the characteristics of a place and culture can turn to German rieslings, the chenin blancs of Savennières, Chianti Classicos and Priorats.
They also have many other less-expensive options, in places like Burgundy and Bordeaux, wines that are highly pleasurable and offer a taste of what the fuss is about, even if they don’t tell the full story.
The wine areas themselves, or the culture that made the wines what they are, are also vulnerable. Bordeaux is already dominated by corporate ownership, but Burgundy has until recently largely been a region of small farmers. Only in the second half of the 20th century, when more grape-growers began to bottle their own wines instead of selling to large merchants, did some measure of prosperity begin to flow toward the farmers.
Today, the price of Burgundy has sent land values soaring, threatening the continuity of many small family estates as succession of ownership is confronted with steep inheritance taxes and the natural inclination of some in the next generation to cash in rather than grow grapes.
This has not occurred on a wide scale yet, but in 2017, in one recent example, Bonneau du Martray, which makes exquisite Corton-Charlemagne, a grand cru white Burgundy, was sold to Stan Kroenke, an American billionaire, after 200 years of ownership by one family. Mr. Kroenke may turn out to be a fine steward of the property, but the community and culture lose out.
I’ve spoken to Burgundy producers who grumble about their wines’ going solely into the hands of wealthy collectors, or of investors who will never open them but seek to profit from them as their value rises. These bottles are made to be opened and shared, they will say.
The producers have little recourse. If they were to sell their wines at lower prices, investors would leap in to buy them and then resell the wines at the market price. The investors, rather than the producers, would pocket the profits, without having to wait years for the bottles to appreciate.
Diminishing access to great wines is certainly not a catastrophe, or much of a problem for anybody not enamored of wine. But it is a shame.
Psycke secures Seed funding to match consumer personalities to fashion products
In an overcrowded market of online fashion brands, consumers are spoilt for choice on what site to visit. They are generally forced to visit each brand one by one, manually filtering down to what they like. Most of the experience is not that great, and past purchase history and cookies aren’t much to go on to tailor user experience. If someone has bought an army-green military jacket, the e-commerce site is on a hiding to nothing if all it suggests is more army-green military jackets…
Instead, Psycke ( it’s brand name is ‘PSYKHE’) is an e-commerce startup that uses AI and psychology to make product recommendations based both on the user’s personality profile and the ‘personality’ of the products. Admittedly, a number of startups have come and gone claiming this, but it claims to have taken a unique approach to make the process of buying fashion easier by acting as an aggregator that pulls products from all leading fashion retailers. Each user sees a different storefront that, says the company, becomes increasingly personalized.
It has now raised $1.7 million in seed funding from a range of investors and is announcing new plans to scale its technology to other consumer verticals in the future in the B2B space.
The investors are Carmen Busquets – the largest founding investor in Net-a-Porter; SLS Journey – the new investment arm of the MadaLuxe Group, the North American distributor of luxury fashion; John Skipper – DAZN Chairman and former Co-chairman of Disney Media Networks and President of ESPN; and Lara Vanjak – Chief Operating Officer at Aser Ventures, formerly at MP & Silva and FC Inter-Milan.
So what does it do? As a B2C aggregator, it pools inventory from leading retailers. The platform then applies machine learning and personality-trait science, and tailors product recommendations to users based on a personality test taken on sign-up. The company says it has international patents pending and has secured affiliate partnerships with leading retailers that include Moda Operandi, MyTheresa, LVMH’s platform 24S, and 11 Honoré.
The business model is based around an affiliate partnership model, where it makes between 5-25% of each sale. It also plans to expand into B2B for other consumer verticals in the future, providing a plug-in product that allows users to sort items by their personality.
How does this personality test help? Well, Psycke has assigned an overall psychological profile to the actual products themselves: over 1 million products from commerce partners, using machine learning (based on training data).
So for example, if a leather boot had metal studs on it (thus looking more ‘rebellious’), it would get a moderate-low rating on the trait of ‘Agreeableness’. A pink floral dress would get a higher score on that trait. A conservative tweed blazer would get a lower score tag on the trait of ‘Openness’, as tweed blazers tend to indicate a more conservative style and thus nature.
It’s competitors include The Yes and Lyst. However, Psycke’s main point of differentiation is this personality scoring. Furthermore, The Yes is app-only, US-only, and only partners with monobrands, while Lyst is an aggregator with 1,000s of brands, but used as more of a search platform.
Psycke is in a good position to take advantage of the ongoing effects of COVID-19, which continue to give a major boost to global ecommerce as people flood online amid lockdowns.
The startup is the brainchild of Anabel Maldonado, CEO & founder, (along with founding team CTO Will Palmer and Lead Data Scientist, Rene-Jean Corneille, pictured above), who studied psychology in her hometown of Toronto, but ended up working at in the UK’s NHS in a specialist team that made developmental diagnoses for children under 5.
She made a pivot into fashion after winning a competition for an editorial mentorship at British Marie Claire. She later went to the press department of Christian Louboutin, followed by internships at the Mail on Sunday and Marie Claire, then spending several years in magazine publishing before moving into e-commerce at CoutureLab. Going freelance, she worked with a number of luxury brands and platforms as an editorial consultant. As a fashion journalist, she’s contributed industry op-eds to publications such as The Business of Fashion, T The New York Times Style, and Marie Claire.
As part of the fashion industry for 10 years, she says she became frustrated with the narratives which “made fashion seem more frivolous than it really is. I thought, this is a trillion-dollar industry, we all have such emotional, visceral reactions to an aesthetic based on who we are, but all we keep talking about is the ‘hot new color for fall and so-called blanket “must-haves’.”
But, she says, “there was no inquiry into individual differences. This world was really missing the level of depth it deserved, and I sought to demonstrate that we’re all sensitive to aesthetic in one way or another and that our clothing choices have a great psychological pay-off effect on us, based on our unique internal needs.” So she set about creating a startup to address this ‘fashion psychology’ – or, as she says “why we wear what we wear”.
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