Yesterday I was relaxing by the pool at my sister in law’s place. And as I was flicking through the newspaper I read an interesting article which mentioned something called the Hawthorne Effect.
Anyway, I was curious, so I jumped onto my iphone last night while I was flicking between the tennis and the cricket (both disappointing games) to discover how it came about.
Anyway, as it turns out – and I quote Wikipedia…
The term was coined in 1950 by Henry A. Landsberger when analysing older experiments from 1924-1932 at the Hawthorne Works (a Western Electric factory outside Chicago). Hawthorne Works had commissioned a study to see if its workers would become more productive in higher or lower levels of light. The workers’ productivity seemed to improve when changes were made and slumped when the study was concluded. It was suggested that the productivity gain was due to the motivational effect of the interest being shown in them.
Now here’s my take on “The Hawthorne Effect”…
I believe that when anything is measured and observed, it will improve for the simple fact that when we start seeing the numbers it forces us to start to think about them and hence improve them.
So let’s bring this down to the practical level.
How many leads did you generate last week… how many of those leads did you convert into sales… how many existing customers have returned to purchase off you in the past 12 months?
Knowing numbers like these is especially powerful. And I believe one of the single biggest keys to success in business is…
KNOWING YOUR NUMBERS
And being to break them up in a number of different ways.
For instance, if you know what the lifetime value of your customer is – you can then identify how much you can afford to invest to get that new customer.
And if you are making more than it is costing you to get that customer from a lead generation campaign, guess what?
You can continue to market extremely hard because you know you are profitable.
And that is the key to building a successful business.
Advertise conservatively… get a profitable model running… and then step the foot on the accelerator.
But you’ve got to know your numbers.
And that’s where the Hawthorne Effect kicks in.
By creating your own experiment, you start observing everything your business is doing. And as a result, you notice you are being observed and start seeing the results…
And you naturally think of how to improve them.
Want to know how to identify the average lifetime value of a customer… and how to analyse the true profitability of any advertisement you run? You’ll find everything you need in chapter 3 and pages 70-71 of my advertising manual.
Elite athletes observe themselves and their results all of the time. But amateur athletes don’t. I am guessing it’s the same in business – if you want to be the top of your field start measuring all your numbers today.
There’s an interesting quote I read the other day by John Wayne, and it read: “Life is tough. But it’s tougher when you are stupid.”
And I really liked it – because it rang a bell for me because whenever I have done stupid things in my life… or things without knowledge… life was tougher.
For instance, when I first started in business I was stupid.
I didn’t think I was of course. I thought I knew everything.
But the reality is I soon found out I was stupid in a few areas…
I didn’t understand how to hire, train and manage staff.
I didn’t understand how to ensure all the hard earned funds weren’t being stolen out of the till.
I didn’t understand how to manage cash-flow.
And I didn’t understand just how much time and effort was required to get this business up and running.
As a result, despite my best efforts my first business fell flat on its face.
I guess “stupid” is a harsh word. After all, we are all “stupid” in some areas, particularly the ones we are new too. And I could personally apply this to many areas in my life…
I was “stupid” socially when I was in my teens. And moving around a lot I got a bit of a hard time in my teenage years.
I was (and still am) “stupid” with handyman “hammer and nail” stuff – and that is tough for me to get my head around.
I was “stupid” with sales when I first started out and struggled like nothing else in my first door-to-door sales job at the age of 17.
Truth is, there’s no shame in being stupid. We all are when we first start out on any task – because we don’t know anything.
But there’s this electric insulation called Myelin which wraps around our nerves every time we try and improve in a particular area – whether it be business, a sport, gardening, fixing a car or whatever.
For instance, Roger Federer and Rafael Nadal would have a heck of a lot of myelin wrapped around their nerves when it comes to playing tennis.
And if you read the “Talent Code” by Daniel Coyle you’ll discover that you too can go from stupid to genius if you have the determination to do so.
Knowledge – such as what you’ll learn at http://www.morecustomersmadeeasy.com
But that’s useless without implementation, follow through, resolve and continually watching your feedback and focusing on making your results better.
I was in town the other weekend with my son when I saw a busker and I thought, may as well go and check this guy out and see what he has to share.
Anyway, he had an ok show. Nothing I hadn’t seen before, but I had to admire the guy for giving it a shot and putting himself out there…
Until the guilt trip started at the end of the show.
It’s not the first time I have seen these buskers do it, and here’s how it goes…
You’ve all chosen to stop and watch me. Now don’t be a cheapskate. When I finish, dig into your pocket, fold up a note and drop it into my hat.
And if anyone leaves before I finish, I’ll point you out to the crowd and name and shame you.
It put a really bad taste in my mouth. And trying to “guilt trip” people into giving you money, in my view is just bad karma.
Needless to say, he didn’t get a dime from me. (yes, I know we use “cents” in Australia, but I thought dime sounded a whole lot better 😉
But here’s the thing – I think the busker did this because he gets annoyed that he has to put in all of this energy into his show and then people don’t pay him for it.
But the thing is – he didn’t set things up right.
You can’t go cold door-knocking people and then try and guilt trip them into buying.
That’s a fast way to frustration. Trying to sell to people who have only a vague interest in what you have to share.
But that’s what I used to do when I started.
At the age of 17, I was doing the cold-selling and getting frustrated with those who wouldn’t give me the time of day and didn’t appreciate the gold I had for them.
Just like the busker – I would have been better off running lead generation ads and getting interested prospects to call me.
Then pre-qualified them… then charged them for an appointment…and then I would have increased by closing rate by several hundred percentage points.
The busker certainly p***ed me off. But in reality he was a guy who didn’t understand how to make marketing work magnetically.
And when you don’t understand this process, it can become a real tussle between you and your buyers.
But believe me, when you understand the marketing secrets I reveal in http://www.morecustomersmadeeasy.com it makes sales, marketing and business so much more enjoyable – and profitable.
So don’t be like the busker. Learn how to develop mutual respect and appreciation from your customers (without having to resort to guilt trips and sneaky sales tactics) by mastering the art of attracting and pre-qualifying customers.