SharpInsights: Get to Know Your Customer – Again, by Seena Sharp

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January is over. How are you doing on your business resolutions? If this is your year to reconsider, retool, and reinvent, take a look at your customers or clients with fresh eyes. Do you really know who they are and what they want?

Consider this:

  • More than half of American men identify themselves as their household’s primary grocery shopper. Even if the figure is lower, it’s still higher than most stores assume.
  • A Pew Forum study showed that atheists and agnostics are more informed about religion than most believers. Holy cow!
  • Consumers who are 50+ make up a third of the most frequent customers at fast food restaurants, buy half the new cars sold and spend 75% more on vacations. Yet, most advertising is geared to 18 to 34 year olds.
  • Teens would rather text than tweet. We recently advised a client not to spend money promoting their new offering via Twitter because their target audience is simply not there.
  • New immigrants to the US are far more likely to settle in a small town or a suburb. In decades past, immigrants generally formed enclaves in big cities.

How current is your knowledge about the people who buy your goods and services? Are you missing opportunities? Competitive intelligence reveals today’s reality to grow your business. Prepare to be surprised and seize competitive advantage.

 

Seena Sharp of Sharp Market Intelligence is my long-time colleague who identifies your competitive edge by uncovering opportunities, threats and growth segments. Visit Seena at www.sharpmarket.com, and Download the free chapter in Seena Sharp’s new book, Competitive Intelligence Advantage: How to Minimize Risk, Avoid Surprises, and Grow Your Business in a Changing World (Wiley)http://bit.ly/8XLKmj. And read the great Amazon reviews.

 

Pitching & selling: don’t rush your prospects to close

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Whether you are leading a product business or expanding your consulting practice, you cannot rush your prospects to close the deal.  You must be persistent but not annoying.   You must be available but not “chasing.”

Defining your strategies to respect this invisible line, and to judge when to take an action, is critically important and often learned through experience.  And the more personal your contact with the prospect, the more loaded your expectations for a response.

So, here are some approaches that have worked over time:

Make certain you are speaking with the person who can sign the check (the decision-maker).  This is done during the first meeting, often by simply asking what decision-making structure exists (is there a management committee, boss, or Board that needs to approve the deal?).  If you are not speaking with the decision-maker, move quickly to determine how much work you must do to reach that decision-maker (a simple introduction to him or her, or a series of proposals or bids that move up the chain of command?) and then determine if that work and the margin involved is worth the effort of the close.

Be gracious.  Be available to help, offer some top line expertise or sample products, and move to negotiation after there is an initial relationship created.  The initial relationship is that the prospect feels supported by you and encouraged by the value of your offering, and that you feel as if you can close and support this prospect and still maintain appropriate margins.

Don’t panic.  Often prospects take much longer to close than you would expect.  They have some other agenda or hidden issues they may not be sharing with you, other than the decision-making issues.

Don’t believe everything you hear.  Sometimes prospects lie. Sorry, sometimes their egos drive them and they mislead you in some way as to their importance or power, or sometimes they are trying to get your strategy in a proposal with no intention of hiring you to execute.  Be especially aware of this in international work, where cultural norms and expectations may be different during negotiation.  But it can happen often in the U.S. as well.

Don’t take offense.  If the close is delayed, do not take it personally.  You don’t know what is involved in the decision on the other side.  No one is “conning” you (except if they are lying, see above).  Stay supportive and persistent without chasing.

Don’t show you need the deal.  This “negative-selling” approach is most effective.  While you are being supportive of and patient with your prospect, be (or seem to be) easy in your approach to the timing of the close.  Imply that all is well, and you are ready when they are ready.  Don’t show tension for the new revenue, or in meeting some monthly or quarterly goal.  None of this will help.

The customer or client will not sign until they are ready.  There may be many reasons for the delay that you will never know.  This softer side of selling tends to create longer-term relationships, based on your availability and support, and on your not embarrassing your prospect.

Remember that this prospect is likely to become a client or customer, and this closing phase is the beginning of the lifelong relationship and value you want to create.

 

 

Best Practices to Optimize Your Brand, Manage Your Web Reputation by Terry Corbell

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tc2 Best Practices to Optimize Your Brand, Manage Your Web Reputation by Terry Corbell
By Terry Corbell, The Biz Coach

As you no doubt know, the digital age has brought new challenges and opportunities. Best practices are critical in order to maximize your Web presence and to manage your online reputation.

The Key to Internet Dominance Is to Think Integration – naturally, the first steps include a quality Web site and synching it with your social media, business listings, inbound links and other elements.

Despite warnings here and other places, many small businesses have made a tactical error in thinking Facebook is the crème de la crème in marketing. A Facebook page can be helpful as part of your marketing mix, and a large volume of fans might enhance a site’s ranking on the search engines.

However, Aside from Privacy, Security Issues, Facebook is a Threat 2 Ways. It’s also worth noting that the majority of business Facebook fans aren’t local. Plus, fans usually change their minds. Within a month or so, they decide a business’ Facebook page offerings are boring.

As for advertising, it rarely helps small businesses to insert their ads on the social medium. It’s better to save the money or budget it for prospects to offer loss-leader discounts to try your products or services.

By virtue of its 800 million global members, Facebook is highly ranked. Despite the Facebook buzz, it’s losing members in North America and Europe. Facebook’s growth is in emerging Third World countries.

Moreover, if not managed well, a Facebook page can and will dilute or cannibalize your Web site’s presence. You never want to let any social medium presence outclass your Web site ranking. You want to use a social medium to enhance your site’s presence and drive traffic, not have it stop there.

How to maximize your search-engine listings

In U.S. market share, according to the various ranking services, Google consistently has about a 65 percent share, and Bing and Yahoo each have about 15 percent. Of course, there are others but most use Google for search. Worldwide, Google has a 90 percent share.

So develop a quality Web site. If budget is a concern, it’s possible to use free online tools for an adequate site. Insert your Facebook, Google+ and Twitter widgets. If you cater to a professional clientele, include LinkedIn.

Otherwise, the big Kahuna to generate local customers is Google Places. If a consumer searches for a local product, Google weaves the top seven results at the top. Normally, the top three business listings attract the most customers.

So it’s imperative to maximize your Google Places’ presence:

  1. Complete all the information – physical address, telephone number and your relevant categories.
  2. Insert professional pictures and a video.
  3. Synergize your listing on CitySearch, Local.com, Manta, Merchant Yelp, YP.com and mobile sites such as Foursquare and Facebook Places. Produce an informative video for YouTube.
  4. Entice your best customers to insert reviews. If feasible, encourage them to take a moment to write a review before they leave your business.

Reinforce your Web presence

Even though you’ve done all the footwork to create a Google Places presence, you’re not done. Next, protect your turf. Yes, many businesspeople have been stunned to learn their local listings were closed on Google Places.

Here are the necessary preventative measures:

  1. Regularly update your Web site. On your home page, every week make a change, even its small such as a loss leader or testimonial.  Again, include your social media widgets if you have a blog, insert the latest headline. Customers and prospective customers will notice. Just as importantly, so will the search engines.
  2. Strategize with media centers of influence. Write search engine press releases and submit them to local media outlets if you have a newsworthy item. If you Need PR, But Don’t Have a Budget? Here’s How to Leverage News Media. In addition, insert a press page on your site and include your releases. The news media will be a big source of credibility.
  3. With blogging success, others will want to re-publish your work it or otherwise link to you. Don’t allow them to do so, if they have an inferior Web presence. The first step is to check their site’s Google page rank.
  4. Regularly monitor your Web presence with search-engine news alerts, especially with Google Alerts and Tweetdeck. Daily search for what’s being written about your business, and evaluate any changes to your search rankings and customer reviews. Respond quickly. So develop a prototypical emergency response strategy including templates. Why? Some competitors of businesses are gaming the system with false reviews for their gain or to badmouth others to enhance their online presence. They furtively do this and can quickly dominate the Internet by downgrading your presence. So keep a careful record of your business listings, and have template responses ready to insert in advertising along with key words ready to implement on the search engines and other sites. This includes responding to journalists, social media and other online forums.

Every business is different. These are merely the basics to cover most situations. But if you implement these steps, you’ll be well on your way for strong results.

Terry Corbell, my close colleague and friend, is Seattle’s “Biz Coach.” He is a business-performance consultant and profit professional.   I wanted to share his article with you, and refer you to his site, where you will find hundreds of interviews and articles (http://www.bizcoachinfo.com), and where you can contact him for a complimentary chat about your business.

Is Ageism Real? by Amy Hirsh Robinson

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The recession swept through America, leaving scores of unemployed Baby Boomers in its wake. Millions have been unable to find work since. It’s now gotten so bad for the unemployed over 50, that President Obama is proposing legislation to make discrimination against the unemployed illegal.

So is ageism in the workplace real? You bet it is. But the situation is complicated by these competing truths:

Many older workers do not have the skills and competencies that employers need to compete in the new economy.

  • Some younger managers are afraid to hire older workers because they don’t know how to manage them.
  • Sometimes older workers cost more to employ. Sometimes they cost less.
  • Productivity can decline with age, but younger workers are not always more productive, nor more reliable.

To be over 50 and unemployed carries a terrible status in our country, and we are ALL complicit. My challenge to hiring managers is to check your assumptions when screening candidates and look for the competencies most critical for the role. My challenge to Baby Boomers is to prove your relevancy to the new economy, adapting your skills and offerings to meet these changes in the market.

It is in everyone’s best interest for organizations to attract and retain top talent. What are you doing, as a hiring manager or potential employee, to help or hinder that goal?

My colleague, Amy Hirsh Robinson, MBA, is a leading expert on the impact of generational differences in the for-profit and not-for-profit workplace. She consults to C-level leaders on strategies to reduce attrition costs, increase profitability and create agile workforces able to adapt to ongoing change. See www.interchange-group.com.

Words to live by from the dawn of technology

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I’ve been thinking of all those pithy sayings about living our lives, like the Chinese “May you live in interesting times” and “Be careful what you wish for…”

And I have found my new message.

So, I am only about 50 pages into the nearly 600 pages of Isaacson’s biography of Steve Jobs, and I have already found my favorite part – that new message.

Mind, I have been in the technology business nearly as long as Steve Jobs, although not as long as Atari-founder Nolan Bushnell, with whom I worked some many years later, after Atari.

But there were Nolan’s words for me to live by, on page 44 of the book, revealing the simplicity of his approach to technology and design: the instructions for Atari’s Star Trek game:

1.  Insert quarter.    2. Avoid Klingons.

 

Marketing Checklist to Measure Your Brand’s Personality by Terry Corbell

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  Marketing Checklist to Measure Your Brand’s Personality by Terry Corbell

Here are two key questions about your marketing: 1. How much have you invested in your brand and personality? 2. How’s it working?

These are important questions. However, many companies – large, medium and small – can’t accurately answer the questions. That’s especially true regarding their return on investment. Yet, ROI is critical to measure.

New research shows how to gauge your brand’s personality appeal – if it’s suitable to yield sales.

“We developed this means of measuring brand personality appeal (BPA) so companies can figure out how favorably their brand personality is viewed by consumers – and what they can do to enhance that personality’s appeal to their market,” says Dr. David Henard, an associate professor of business management at North Carolina State, in a press release.

The paper, “Brand personality appeal: conceptualization and empirical validation,” was co-authored by Henard; Dr. Traci Freling, of the University of Texas-Arlington; and Dr. Jody Crosno, of West Virginia University. The paper was published in the Journal of the Academy of Marketing Science.  (For purchase:  http://www.springerlink.com/content/mm753j27h285511v/ )

“Until now, researchers have only been able to determine whether a company has a brand personality,” Henard says. “The only existing scale was Aaker’s Brand Personality Scale, which could determine whether a brand personality is rugged, sophisticated, competent, exciting or sincere.

“What we’ve done here is develop a system that digs deeper to help companies link brand personality to concrete outcomes. For example, does the brand personality actually make people want to buy their product?”

The study lists 16 questions to ask about your brand in three variables: Favorability, originality and clarity.

The press release explains: “Favorability is how positively a brand personality is viewed by consumers. Originality is how distinct the brand personality is from other brands. Clarity is how clearly the brand personality is perceived by consumers.”

The press release offers more explanation about the three variables.

“For example, a company may find that its brand personality has a moderate rating on favorability, but is viewed as highly original and clearly defined. High marks for originality and clarity make the brand personality more appealing than the moderate favorability rating might indicate. It also tells a company that it needs to focus its efforts on improving its favorability rating, rather than distinguishing itself from competitors, in order to boost the brand personality’s overall appeal.”

The 16 questions:

  1. This brand’s personality is unapparent…apparent
  2. This brand’s personality is distinct…indistinct
  3. This brand’s personality is satisfactory…unsatisfactory
  4. This brand’s personality is obvious…not obvious
  5. This brand’s personality is unpleasant…pleasant
  6. This brand’s personality is common…distinctive
  7. This brand’s personality is attractive…unattractive
  8. This brand’s personality is ordinary…novel
  9. This brand’s personality is positive…negative
  10. This brand’s personality is bad…good
  11. This brand’s personality is vague…well-defined
  12. This brand’s personality is poor…excellent
  13. This brand’s personality is undesirable…desirable
  14. This brand’s personality is predictable…surprising
  15. This brand’s personality is routine…fresh
  16. This brand’s personality is unclear…clear

The study provides interesting food for thought, right? Munch away.

“What”s a brand? A singular idea or concept that you own inside the mind of the prospect.”  - Al Ries

 

Terry Corbell, my close colleague and friend, is Seattle’s “Biz Coach.” He is a business-performance consultant and profit professional.   I wanted to share his article with you, and refer you to his site, where you will find hundreds of interviews and articles (http://www.bizcoachinfo.com), and where you can contact him for a complimentary chat about your business.

Offshoring, the new economics and the American middle class – a detailed look at Apple & Asia in the New York Times

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Earlier this week, on Monday, I was out to dinner with friends at one of our local Santa Monica hang-outs, a rather funky neighborhood place with good food and lots of room, and quiet.

At 7:30, in an orderly assembly, 45 Asian teenagers arrived and filled the big booths with 6 kids each, both boys and girls.  Half the large restaurant was filled with these charming kids, about 14 years old.  Their leader was a dapper Asian gentleman around 50, who quietly (nearly silently) directed them to arrange themselves in their booths, and then left them to join 3 other adults at a separate table.  The kids ordered, ate, talked among themselves.  The adults had their dinner and did not interfere with them even once.

And the restaurant was as quiet as if they were not there.  The kids had a good time and enjoyed their food.  This was clearly a celebratory outing for them all.  I realized it was the Chinese New Year (Monday, January 23rd, 2012), the first evening of the year of the dragon, and that was the celebration.

And they in no way disturbed any of the other folks in the restaurant.  No acting out, no food fights, no discipline of any kind was required.  Upon our finishing our meal and leaving, my husband approached the leader, bowed slightly and complimented him on the exemplary behavior of his young charges.  The man was delighted, came over to the other 3 of us, bowed and shook our hands, beaming and saying thank you.

Now, I tell you this story because that morning I had read, online at the New York Times, about the economics of off-shoring manufacturing and logistics in Asia, by Apple and most other consumer electronics companies.  This article seems, at first, to be an indictment against Apple and others, but in fact quite clearly explains the cost/benefit realities of the Asian vs. the American workforce — the flexibility, the speed, the low cost, and the results achieved by off-shoring, when it is well-managed by Apple or others… and the lack of appropriate skilled workers at the required levels and the lack of training for such jobs within the U.S. workforce.

I have built a company in China, so I have some experience about both its changing economy and the working life of the Chinese, as well as the challenges its government faces in feeding 1.3 billion citizens.  I have been an entrepreneur in the U.S. for 25 years, so I know something about building businesses here too.

This article filled me with both excitement about the global marketplace, and with some dread for the U.S. workforce (at least in the short term).  My optimism about our resilience and flexibility, and the opportunities seen at other end of this period of major change, remains undaunted.

It is a long article, and worth reading every word.  The world has indeed flattened, and the realities of that change begin with this information.

 

Strategies for winning funding in 2012 from the venture capital panel at the Consumer Electronics Show

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Recently I chaired the Venture Capital panel at the Consumer Electronics Show (CES), hosting a stellar cast of investors, who offered savvy advice on winning investment capital in the current funding environment.

They offered key strategies and tactics for rising above the noise of so many early stage companies competing for the few positions available in each Fund.

Number of new deals planned for 2012: 4-5 per early stage investment firm

Consistent with last year’s panel (2011), each early stage Fund planned to invest in a Series A for four or five new early stage companies during this year.  No more than that.  In the case of Jerusalem Venture Partners, Yoav Tzruya reported that this number represents no more than 1% of the 600 companies JVP reviews each year for its early stage fund.  Kevin Spain of Emergence Capital which has a focus on B2B applications, and Chris Petrovic of GameStop Digital which is a strategic investor/acquirer of game companies, as well as Habib Kairouz of Rho Capital agreed with the plan for 4-5 new deals this year.

Current market competition is significantly increased

We are in a boom period again, this time for the number of early stage companies in play in the market.  The continuing trend that allows for new technologies and applications to be built with many off-the-shelf tools, using world-wide technical expertise, for much less capital, has created many new companies competing for the funding resources available.  The new trend of incubating companies in accelerators has added some seed capital to these concept-companies to get them through their initial product development.  But then these companies need to get some traction in the market, hopefully to significant revenue, before they can hope to move from seed capital to Series A.

Alternative strategies if you cannot get from Seed to Series A, or from Series A to Series B funding: ways to create a stronger offering

Looking at these market conditions, some on the panel offered an interesting perspective for rising above the noise: consider early stage strategic alliances/mergers to strengthen your position to attract funding.

Early stage companies not attracting that critical Series A or Series B funding should consider connecting strategically or through acquisition or merger with other similar-stage companies to create a stronger offering for funding.  Aligning with other early companies that would enhance your market position or extend your product offerings or brand, you might attract that essential next stage of funding.

I found this “investment banking” approach fascinating for early stage companies, but of course in the hour we had, we didn’t delve into and examples or the terms of such deals.

Kevin Spain added a new point, that he sees a strong emerging trend in B2B and enterprise applications using the new technologies that are mostly focused on the consumer market now.  He advised companies to look for those B2B market opportunities for their current B2C products and applications.  A doubling of your target markets, which rise and fall under different economic conditions, may present a strong offering to investors.

Strategic approaches to sourcing capital

We did move on to speak about strategic corporate capital, as both Scott English from Hearst and Chris Petrovic of GameStop approach their investments as strategic additions to their portfolios, rather than as pure venture investments –even though each has a different priority for these investments.

The first point made was to conduct your due diligence about how strategic investors value their target companies.  Hearst, for example, is a later stage investor focused on financial ROI to Hearst first, and strategic value to the portfolio second.  GameStop, focused on early stage game companies, values its acquisition targets first as an operational addition to its portfolio plan (does the company add to GameStop’s infrastructure, product mix, learning about new markets, or strategy) before financial and ROI considerations.

The lesson here, as offered often in these pages, is to ~

  1. do your homework about your company’s “fit” with what an investment group might be seeking,
  2. talk with other companies in the investor’s portfolio, and
  3. narrow down your list and your efforts to those investors that prefer your company’s stage, market sector, and your possible enhancement of their portfolio’s current companies.
  4. Some strategic and corporate investors function very much like venture capitalists, and others have different priorities.  So, after your due diligence, and as you enter discussions, read the deal’s restrictions and the detailed legal conditions before negotiating or accepting any investment.

Critical factors for winning investment above the competition

The panel was particularly savvy about the profile of companies who would receive their funding:

Norm Fogelsong of Institutional Venture Partners, a later-stage venture fund, insisted that your company’s vision must be big, very big, to attract the rounds of capital needed to become a major player.

The panelists agreed that they are very focused on execution, in particular execution on market penetration.   After you have been funded on your product’s unique value, it is time to turn your attention to your market, especially your customer acquisition and retention strategies, tactics and results.

Yoav related that he looked for CEOs with deep market savvy, a founder who knows his or her product and its market realities, and has a strong go-to-market strategy.

Sharon Wienbar of Scale Venture Partners, a later stage investor, said that she looks for the CEO to “de-risk” Scale’s investment with the following factors:

  • Proof of market responsiveness:  does your customer commit to your vision of your product’s value, price and use?
  • A business model that prioritizes customer acquisition and retention:  do you have a plan that acquires each new customer quickly and for less and less cost of acquisition?
  • Compelling metrics:  are your projections for market penetration, growth and profitability backed up by proven metrics?

So, amid the growing competition for capital we are seeing this year, particularly in the consumer market, investors’ focus seems to move quickly from unique technologies and applications to strong execution.  Early stage companies need strategies to present compelling offerings to investors, and an increasing focus on market execution that leads to growing a big company and taking significant market share.

 

Punk Rock Circa 2012 by Megan Lisa Jones

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Or, why iterative changes matter more than disruptive ones.

maine 224x300 Punk Rock Circa 2012 by Megan Lisa Jones

Punk rock erupted in 1974 as a response to the excesses of the mainstream 1970s rock world (big bands, big shows and big hair; more focused on business than music/audience; arrogance; bad music). Punk music was hard, fast paced and raw, with shorter songs and less instrumentation. Oftentimes a political or anti-establishment message was worked in. Audiences loved the authenticy and accessibility. And what is rock music if not rebellious (corporate wasn’t cutting it)? These artists struggled in the real world like we did. A subculture developed. The movement spread.

Remind you of YouTube and the Arab Spring?

The online content world (today) is exciting, original and creative. It’s raw and funny, inappropriate and not subject to committee. It’s fun and not (as) interrupted by commerciasl. And it’s engaging, at a personal level. My son’s YouTube favorite, Nice Peter (and his partner Epic Lloyd) comment on the related YouTube videos made by their fans, even those with little traffic. How cool is that!

Online content can be produced at such inexpensive levels (my own Captive related videos were shot on a Flip and edited with iMovie). It’s also audience focused with a lot of online content driven in response to viewer feedback and suggestions. My son discusses the viewer suggestions for future Epic Rap Battles of History with great excitement. Best of all, the cost structure allows it to avoid a generic “mass” audience appeal; creators can afford to make mistakes and take related risks. Spared star salaries and expensive marketing, content can be posted quickly and doesn’t have to look perfect to justify a $15 movie ticket or $1.29 download.

Those new rules hold true for video, music and books (education, too, btw).

Watching my children I see how they personalize and customize their content. They don’t watch anything on a pre-set schedule. They multi-media. And my kids prefer YouTube to television or movies (they like television and movies too; but as I’ve already commented here, my daughter at nine had already stated that movie sequels were made to trick children). They read both paper books and Kindle books, choosing based on convenience and availability (those instant downloads are a huge selling point).

Taking over from my (fired) publisher, I’ve learned how easy book distribution can be (marketing is very, very hard). Online, it’s also inexpensive and price points can change at will. I’m pondering all sorts of possibilities in the book world and find the options more empowering than limiting. I’m not alone as online content continues to explode. My costs to play around with business models are nominal to the extent that I’m even pondering starting an online publishing house (interested writers?).

Media is tough because the market is so cluttered that building a loyal audience can be a challenge. But people succeed; in all industries. For a writer, the large publishers offering digital books at $16 plus dollars is insanity. Is that book sixteen times better than one at $.99? What about the free one? Do you want people to test the alternative waters to make that decision?

I grew up in and out of Silicon Valley and love to watch an evolving industry. My one conclusion to this post is to point out that iterative destruction is more potentially damaging that is creative destruction. People can figure out how to watch a video online (an iteration combining the internet and television). They may not embrace bigger and more disruptive changes so readily. The creation of the Internet didn’t damage the traditional media business; people incorporating it into their lives over time did. No laws can limit digital content consumption.

My close colleague Megan Lisa Jones is an investment banker who works primarily with companies in the digital media, technology, gaming and other emerging industries (formerly with Lazard Freres, Needham & Company and Merrill Lynch). Her investment banking blog is at www.ibla.us and check out her first novel, Captive, at www.meganlisajones.com.

Unlimited paid vacation days — a new concept in managing grownups

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One of my Millennial clients, happy about her recent promotion, reported back to me last week that her new compensation plan included unlimited vacation days, along with the other usual benefits (health & dental coverage, etc.). “Paid vacation?” I texted. “Yes,” she responded, “as long as we get our work done and arrange coverage while we are away, we get unlimited days off.”

Then I saw this article on Inc.com, posted by Joe Reynolds, and wanted to share it with you. It’s a fine explanation of a great new trend that treats employees like grownups. Reprinted here, or online.

Give Your Employees Unlimited Vacation Days

Will it improve company culture? Sure. But can giving workers all the time off they want also increase their productivity?
By Joe Reynolds | @RedFrogEvents | Jan 5, 2012

Unlimited paid vacation days a new concept in managing grownups

The 9 a.m.-to-5 p.m. workplace is almost dead. Throw your preconceived notions about vacation out the window and give your employees the no-strings-attached, unlimited vacation days they deserve or you’ll soon be a dinosaur.

With an unparalleled culture in which our people actually enjoy coming to work (see Your Employees Need a Treehouse and Let Your Employees Choose Their Titles) as the foundation, every last Red Frog employee is unflinchingly focused and devoted to our mission. Producing vast amounts of quality work is the norm, so we reward them with unlimited vacation and they, in return, reward Red Frog with outstanding work that blows me away every single day.

Taking vacation at Red Frog is encouraged (and even celebrated). And it’s not abused. Ever. By anyone. Simply make sure your work is getting done and make sure you’re covered while you’re away and that’s it—no questions asked.

The pessimists and naysayers have said this policy would either be abused or that it’s not entirely real—that our employees feel pressured to never take off. I assure you they’re underestimating a positive work culture and are simply wrong. Also, I feel sorry for their workplace.

Through building a company on accountability, mutual respect, and teamwork, we’ve seen our unlimited vacation day policy have tremendous results for our employees’ personal development and for productivity. There. I said it. I think Red Frog is more productive by giving unlimited vacation days. Here’s why:

  1. It treats employees like the adults they are. If they’re incapable of handling the responsibility that comes along with having unlimited vacation days, they’re probably incapable of handling other responsibilities too, so don’t hire them.
  2. It reduces costs by not having to track vacation time. Tracking and accounting for vacation days can be cumbersome work. This policy eliminates those headaches.
  3. It shows appreciation. Your employees will need unexpected time off and some need more vacation than others. By giving them what they need when they need it, you show your employees how much you appreciate them and they reciprocate by producing more great work.
  4. It’s a great recruitment tool. We hire a mere one out of every 750 applicants at Red Frog. When you combine fantastic benefits with a positive culture, it’s noticed.

I lead by example. I worked more 100 hours last week, but this week, as I write this column, I’m watching surfers and sipping a delicious Hawaiian brew.

Joe Reynolds is an entrepreneur at heart who decided to pursue his passion by turning a $5,000 investment in an event production business called Red Frog into a thriving $45 million company in just four years. Red Frog Events was named the 2011 U.S. Chamber of Commerce Small Business of the Year and recently won the Chicago Innovation Award as well as the Chicago Tribune Best Workplace.