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Daniel Morris, Founder VeraSage Institute

Twitter @morriscpa

Success Leaves Clues

Genuine People. Creative Ideas. Valuable Results.

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Beliefs Behavior Results

“Creating Significantly Better Results that are Sustainable ALWAYS Requires a

change in Beliefs”

Anchors and Drag are Below the Surface

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Changing beliefs requires a different vocabulary

Words Matter

Better Words = Better World

1 Theme and 4 Voices with an Optimistic Future •  Dan Ariely: We really don’t know what we want

•  Simon Sinek: Understanding why we do what we do

•  Joseph Pine: The Experience Economy

•  Rory Sutherland: All Value is Subjective

Success Leaves Clues: You Are What You Charge For

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Some Fundamentals:

•  The Value Curve

•  4 Ways to Spend Money

•  Top versus Bottom Lines

•  Innovation

Success Leaves Clues: You Are What You Charge For

The Value Curve

High

Low

Relative Value Added

Unique Services

Experiential Services

Brand Name Services

Commodity Services

Price- Insensitive

Price- Sensitive

Volume of Work Available © William C. Cobb SOURCE: Adapted from William C. Cobb, "The Value Curve and the Folly of the Billing-Rate Pricing," in Beyond the Billable Hour: An Anthology of Alternative Billing Methods Richard C. Reed, ed. Chicago: American Bar Association, 1989, p 18.

4 Ways to Spend Money

Yours

Someone else’s

You Someone else

Family car

Gift

Expense account

Government

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Confusing Revenue with Profits

Gross Revenues Per Team Member KPMG: $23.42B $155k EY: $25.83B $148k PWC: $32.09B $174k Deloitte: $32.40B $160k McKinsey: $ 8.00B $417k Apple: $170B $1,840 with profits of $584k/team member

Would You Have Invested?

Microsoft 1978

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Opera Grows while Symphonies Suffer

Even as movie going stagnates and symphony attendance declines, opera in America keeps growing. Over a 20-year period, the number of people at live opera performances grew 46 percent

Success Leaves Clues: Lessons from Amazon, Netflix & Google

Karl Albrecht

“The loss of focus on the customer as a human being is probably the single most important fact about the state of service and service

management in the Western world today.”

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Not jet engines.

Flying time.

BUT

Not cement. BUT On-time delivery.

“Worth noticing or commenting on.”

Remarkable:

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If I had a son or daughter, would I be willing to have him or her work for this company? If yes, why? If

no, why?

Peter Drucker

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Dan Ariely, Duke University

All Prices are Contextual

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Relative vs. Absolute Price

Couple w/o children

Couple w/children

Expensive Date

Cheap Date

Dinner + Concert = $150

Dinner + Movie =

$75

$150 + $50 Babysitter

$75 + $50 Babysitter

2:1

1.6:1

Framing

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Simon Sinek, Start with Why www.ted.com

1.  It’s inspiring. 2.  It’s about meaning, not money. 3.  It comes from the inside; what you really believe,

not what others think you should believe. 4.  In some small way, it contributes to something

greater than earning a living. 5.  It’s difficult – maybe impossible – to fully achieve.

How do you know you’ve reached deep enough to find your purpose?

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The Five Most Important Questions

1. What is our purpose (“Why”)? 2. Who is our customer? 3. What does the customer value?

(Most important and least asked) 4. What are our results? 5. What is our plan?

Chinn and Associates

“I believe in handling divorce so there is

a family left standing, even if

there is no marriage.”

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“The customer never buys a product. By definition the

customer buys the satisfaction of a want. He

buys value.”

Peter Drucker

Are You a Commodity?

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You are what you charge for.

¢ If you charge for stuff, you are in the commodity business (fungible)

¢ If you charge for tangible things, you are in the goods business (tangible)

¢ If you charge for the activities you execute, you are in the service business (intangible)

¢ If you charge for the time customers spend with you, you are in the experience business (memorable)

¢ If you charge for outcomes the customer achieves, then you are in the transformation business (effectual)

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4 Bucks

The Customer Experience

The sum total of all interactions a person has with a company (Moments

of Truth = MOTs).

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Who Is Our Competition?

We compete against any organization that has the

capability of increasing our customer’s expectations

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American Girl

American Girl Birthday Party

“Selling is persuading someone to buy something that you had and wanted to sell while marketing

is having something that a prospect already wanted to buy. In a perfect world, the aim of

marketing is to make selling superfluous.”

Peter Drucker

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“Advertising is a tax for having an unremarkable product.”

Robert Stephens Founder, Geek Squad

Mini Cooper Ship Tracker

“Harley-Davidson offers the ability for a 43-year-old accountant to dress in black leather, ride through small towns and have people be afraid of him.”

––Harley-Davidson Executive, explaining what

customers really buy

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Results from a Excellent Customer Experience

1.  Willingness to buy more 2.  Reluctance to switch

suppliers 3.  Likelihood to recommend 4.  Willingness to pay a price

premium

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“The business enterprise has two -- and only two -- basic functions: marketing and innovation.

Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business."

Peter Drucker

“If you don’t like change, you are going to like irrelevance

even less.”

General Eric Shinseki

“There is NEVER a good sale for Neiman Marcus unless it’s a good

buy for the customer.” ––Herbert Marcus, advice to his son, Stanley

Marcus, upon his arrival to work at Neiman Marcus, 1926

Stanley Marcus 1905 – 2002

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NAGBA is Part of the Problem: A

Better Evaluation Form

1.  What did you hope to gain from your participation in this learning experience? What did you contribute to the dialogue?

2.  When were you the most anxious or fearful?

3.  When were you the most inspired or ecstatic?

4.  What did you learn about yourself?

Discussion Questions

¢ What makes your CPE special? What’s our “Why”?

¢ Who is our competition?

¢ How can we exceed our customers’ expectations?

¢ What “plussing” opportunities could we add?

¢ What “Moments of Magic” could we offer our customers?

¢ What is the (your) core offering?

What if Disney entered your industry?

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“Tell me ten things you never hear said about this industry?”

––Branson’s challenge before entering a new industry

Richard Branson, Founder, Virgin

All Value is Subjective

“When it leaves the factory, it’s lipstick. But when it crosses the counter in the department store, it’s hope.”

Charles Revson, Founder, Revlon

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$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

Cost

Price

Value

Rory Sutherland, Vice-Chairman, Ogilvy Group,

UK

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Why?

The Problem with Efficiency

The Antithesis of Efficiency

• Continuing education • Knowledge management/CKO • Total Quality Service (Ritz-

Carlton) • Mentoring and coaching • Social media • Pricing on Purpose

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Competing with Zero Pricing

High

Low

Defection Rate

Immediate

Threat

Business Model Threat

Minor Threat Delayed Threat

Low High

Growth Rate

A Gedanken

A Gedanken

Air Canada’s KPIs: v On Time

Performance v  Lost Luggage v Customer

Complaints

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“When we’re looking for goals for an entire company, we make sure our employees know what we’re going for: to get the planes on time, not to aim for a certain return on investment. Goals such as certain equity or debt ratios…work fine for accountants…But when it concerns the whole company, we need a companywide goal–something that employees can immediately identify.”

–Gordon Bethune, CEO, Continental Airlines, From Worst to First: Behind the Scenes of Continental’s Remarkable Comeback

“This is one of the most common problems in businesses. Businesses fail because they want the right things but measure the wrong things–or they measure the right things in the wrong way, so they get the wrong results. Remember? Define success the way your customers define it.”

–Gordon Bethune, CEO, Continental Airlines, From Worst to First: Behind the Scenes of Continental’s Remarkable Comeback

“The only way to look into the future is use theories since conclusive data is only available about the

past.”

–-Clayton Christensen, et. al. Seeing What’s Next

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Thank You!

dan@verasage.com

Twitter @morriscpa

VeraSage website/blog www.verasage.com (408) 292-2892