There's Money in Mistakes

How many times has someone come to you with a problem that has cost them money, time and aggravation — a problem that you could have spared them if only they had come to you sooner? They’ve made a mistake you’ve seen clients and prospective clients make before. In fact, you see this same mistake being made all the time.

What might not have occurred to you is that those mistakes can be valuable. Pointing out the mistakes in your area of expertise that people or businesses frequently make can help you differentiate yourself quickly from your competitors and market yourself in a unique way.

Mining for Mistakes

In order for them to capitalize on the value mistakes can bring to their businesses, I typically advise my clients to make a Top 10 list of mistakes that companies or clients often make, following the format that David Letterman has made so familiar. There’s no reason the list can’t be longer or shorter, but the Letterman format is so well known that most people feel comfortable with it. These could involve misconceptions that people have about your business or what you do, or blunders that uninformed owners frequently make in your area of expertise.

For example, Dani Kaplan, president of SMC Data Systems, a New York–based supply chain management company, says that a key issue for many companies is having outdated supply chain software. This can lead to mistakes that range from mere nuisances to threats to the business’s survival. All of them are likely to cost the business money and customer loyalty. On accounts receivable issues, Kaplan notes that outdated supply chain management software can allow a large account to go unpaid and escape notice until it creates a cash flow issue. This can then result in the receivable being factored (receivables sold at a discount), directly — and negatively — impacting the bottom line. Kaplan goes on to note that outdated software can turn your website into a double-edged sword. Have you ever ordered something from a website only to be told that the item was not available? If so, you’ll probably think twice before you go back to that online supplier. All of the inconvenience, delay and ill feeling could have been prevented if only the supply chain software had been updated and the item hadn’t been out of stock. By drawing up a list of 10 common mistakes and distributing it to would-be clients, Kaplan can built credibility for his business, which specializes in customizing this type of software.

John Hill of John A. Hill & Associates of East Northport, N.Y., is a consultant who helps companies use trade shows to build business. He notes that most companies that exhibit at trade shows spend a great deal of money on them — usually $35,000 to $75,000 for a major trade show — but have a very fuzzy sense of how to get a decent return on their investment. One of the mistakes that John sees being made repeatedly involves qualifying prospects at shows. He points out that the face-to-face contact afforded by trade shows creates a great environment for qualifying prospects, but many companies have no system for doing this. Many just collect business cards in a goldfish bowl or use a pre-printed contact form that is often provided by the promoter, but neither approach will give you the specific information your company needs. Instead, exhibitors should have an established process for qualifying prospects.

John also points out that companies needlessly spend money at trade shows, from missing discounts for early setup to using expensive literature (69% of literature given out at trade shows is thrown away before the person gets home) to offering giveaways without asking for information in return. Again, John, like all business owners, has a toolbox of solutions he can offer clients. Pointing out what needs fixing is a good way to get would-be customers to realize that they need those tools.

Sometimes mistakes can be almost painfully obvious. Bob Bonagura, a wealth manager at UBS on Long Island, likes to tell people about the “Uncle Jack” syndrome, in which people take financial advice from everyone (including their Uncle Jack) but the financial professionals. Both Hedda Nadler of Mount & Nadler, a public relations firm working with financial services, and Steven Skyles-Mulligan of Evoke Strategies, a full-service marketing firm for small businesses, note that one of the key mistakes their clients make is thinking it is easy to write clearly and concisely and that it can be done in-house. Clients waste time and effort and develop poor marketing materials that don’t deliver. Pointing that mistake out to potential clients and getting them to consider the cost or lost opportunity involved, and then convincing them that you can take away that problem or cost, is the key to developing a loyal customer.

This sampling should give you ideas on what you need to make your own “Top 10 mistakes your client makes” list. Nothing is too obvious to be included. Remember, nobody knows your business the same way you do, and what seems very obvious to you is likely to be very profound to someone who is not in your line of work.

What to Do With Your Mistakes List

Once you have this list, what do you do with it? A list like this can actually help you build business. All of the people above and many others use the “mistakes method” to perform better, bring more value to their clients and develop more business.