More Henry. Henry, Henry, Henry. Your autobiography is a page turner.

I've previously squee'd all over how awesome Henry Ford’s autobiography is, including a hugely powerful excerpt which sadly describes the “startup economy” to a T.

This week we’ll focus on two critical functions of any bootstrapped business:

  • Deciding who to sell to – and how to pitch them
  • Deciding when to listen to customers (and when not to), and how

Do these wrong, and… well… I was going to write a graphic description here of the way your business will die (hint: it involves long, ropy intestines), but let’s just say it’ll be bad.

Without further ado, the man himself, on how Ford (under his hand) sold cars:

Who to Sell to – and How to Pitch

We did not make the pleasure appeal. We never have. In its first advertising we showed that a motor car was a utility. We said: We often hear quoted the old proverb, “Time is money”—and yet how few business and professional men act as if they really believed its truth. Men who are constantly complaining of shortage of time and lamenting the fewness of days in the week—men to whom every five minutes wasted means a dollar thrown away—men to whom five minutes’ delay sometimes means the loss of many dollars—will yet depend on the haphazard, uncomfortable, and limited means of transportation afforded by street cars, etc., when the investment of an exceedingly moderate sum in the purchase of a perfected, efficient, high-grade automobile would cut out anxiety and unpunctuality and provide a luxurious means of travel ever at your beck and call. Always ready, always sure. Built to save you time and consequent money. Built to take you anywhere you want to go and bring you back again on time. Built to add to your reputation for punctuality; to keep your customers good-humoured and in a buying mood. Built for business or pleasure—just as you say. Built also for the good of your health—to carry you “jarlessly” over any kind of half decent roads, to refresh your brain with the luxury of much “out-doorness” and your lungs with the “tonic of tonics”—the right kind of atmosphere. It is your say, too, when it comes to speed. You can—if you choose—loiter lingeringly through shady avenues or you can press down on the foot-lever until all the scenery looks alike to you and you have to keep your eyes skinned to count the milestones as they pass.

(and later in the book, but to my mind, the same topic!)

If a device would save in time just 10 percent or increase results 10 percent, then its absence is always a 10 percent tax. If the time of a person is worth fifty cents an hour, a 10 percent saving is worth five cents an hour. If the owner of a skyscraper could increase his income 10 percent, he would willingly pay half the increase just to know how. The reason why he owns a skyscraper is that science has proved that certain materials, used in a given way, can save space and increase rental incomes. A building thirty stories high needs no more ground space than one five stories high. Getting along with the old-style architecture costs the five-story man the income of twenty-five floors. Save ten steps a day for each of twelve thousand employees and you will have saved fifty miles of wasted motion and misspent energy. Those are the principles on which the production of my plant was built up.

This is something I pound into my 30x500 students, over and over: Sell to people you can sell on value. It’s the only sane way for a small company.

And don’t focus on loss aversion. People don’t open their own businesses because they’re afraid of loss. Focus on gains. A gain, in negative form, is a loss (5 stories vs 25)… and it’s a lot easier to sell.

The number of ways & dollars you can save your customer? Finite and very constrained. The amount you could help them grow? Much less finite. Hence the 5 vs 25 floors – a gain, which can be portrayed as a loss but which isn’t, really – compared to “Save 10% on your server bills.”

(Oh, you’d rather sell to consumers? Well, you might as well quit today. It’ll be more expedient.)

When to Listen to Your Customers… and When Not To

As you might have noticed, this is a topic near and dear to my heart.

The salesmen were insistent on increasing the line. They listened to the 5 percent, the special customers who could say what they wanted, and forgot all about the 95 percent who just bought without making any fuss. No business can improve unless it pays the closest possible attention to complaints and suggestions. If there is any defect in service then that must be instantly and rigorously investigated, but when the suggestion is only as to style, one has to make sure whether it is not merely a personal whim that is being voiced. Salesmen always want to cater to whims instead of acquiring sufficient knowledge of their product to be able to explain to the customer with the whim that what they have will satisfy his every requirement—that is, of course, provided what they have does satisfy these requirements.

Replace “salesmen” with “us” and you have a stunningly accurate description of how most of us instinctually run our own businesses: listening to the 5% who articulate, ignoring the rest. And putting far too much weight on whims.

There’s only one way to practice “listening to customers” and stay sane: learn to separate the wheat from the chaff.

To do that, you have to disengage from natural conversation and look at it from an analytical standpoint. Take the 5,000 ft view.

You need to figure out what’s really important:

  • You need to be able to tell when a person is just talking at you to “express themselves.” There’s a certain kind of person whose complaints are like a spit valve on a clarinet: just a gross side effect of totally normal functioning, signifying nothing.
  • You need to understand that when a person raises a point, they are often covering up their true feelings with it. They bitch about price? That’s not a sign your prices are too high – it’s a sign they are feeling unsure of your value.

But you can’t just “listen,” even in this advanced way.

If you react only to the squeaky 5% — and ignore the majority of fairly happy, quiet customers – you’ll end up with a product that only the 5% want and it won’t be easy to charge 20x more to make up for it!

You also have to get out there, take charge, and learn from people who aren’t talking to you.

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