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Lessons from Warren Buffett, the Second-Richest Entrepreneur in the World


 

Bill Gates is a household name. To no one’s surprise, he holds the title of the richest person in the world for the fourth year in a row. Yet, a slightly lesser known name has moved into the spotlight this year – Warren Buffett. Buffett jumped into the number two position on Forbes’ 2017 Billionaires List with a gain of $14.8 billion in the last 12 months, the largest gain of any billionaire on the list. Find out what you can learn from this business tycoon in this week’s entrepreneur spotlight.

 Lessons from Warren Buffett, the Second-Richest Person in the World

Born with a Brain for Business

Buffett, the “Oracle of Omaha,” is the founder of Berkshire Hathaway, Inc., a multinational holding company. But long before he became the business mogul we know today, he was a young boy with a passion for entrepreneurship. Buffett was born in Omaha, Nebraska in 1930 to a four-term U.S. congressman and stockbroker. At just 10 years old, Buffett accompanied his father on a trip to New York City. They joined At Mol, a member of the New York Stock Exchange, for lunch. Mol hand rolled a custom cigar after lunch, and it was then that young Buffett had an epiphany.

While the country was still going through the Great Depression, Mol was enjoying custom cigars. This planted the seed in Buffett’s brain that money was something he wanted to base his career around, with help from the Stock Exchange. By the age of 13, Buffett made a profit as a neighborhood paperboy and salesman of his own creation, a horseracing tip sheet. Business savvy by nature, Buffett claimed his bicycle as a $35 tax deduction that same year.

In high school in Washington, D.C., Buffett went into a joint business venture with one of his friends, purchasing a pinball machine for $25. They installed the machine in a local barbershop and turned a fast profit. They used this money to buy more machines, installing them in three different locations. Buffett later sold the business for $1,200. On top of this business, Buffett sold golf balls, cleaned cars, and sold stamps to accumulate a small fortune equivalent to $53,000 by the time he was 16.

Buffett’s Education and Early Career

There’s no arguing that Buffett was born to be an entrepreneur, with the personality of a salesperson and the drive to become his own boss. He even argued with his father about attending college, because he didn’t see the point. However, his father won and Buffett graduated from the University of Nebraska (after he spent his first two years at the Wharton School of Business at the University of Pennsylvania). Buffett then moved to New York to pursue his graduate degree at the School of Business at Columbia.

Buffett made the decision to attend Columbia after learning that Benjamin Graham, author of The Intelligent Investor, worked there. Buffett had learned the philosophy of “value investing” from this book, which he said changed his life. Graham, however, refused to offer Buffett a job, despite being the only student to earn an A+ in his class. Buffett earned his master’s degree in 1951 and moved back to Omaha, where he sold securities for his father’s brokerage firm for three years. Graham reconsidered and eventually offered Buffett a job as an analyst at Graham-Newman Corp.

Buffett earned the modern-day equivalent of a six-figure income at this position, before starting his own company in Omaha after Graham closed his partnership in 1956. He started Buffett Partnership Ltd., which soon blossomed into seven partnerships. By age 32, Buffett was a millionaire. In 1962, Buffett merged all his partnerships and invested in Berkshire Hathaway, then a textile-manufacturing firm. He eventually took control of the firm and shifted its purpose from textiles to insurance.

Buffett’s Rise to Billionaire Status

In 1986, at age 56, Buffett finally earned the title of billionaire. His fortune did not come solely from Berkshire Hathaway, which in fact only earned him around a $50,000 salary. Instead, his big money came from his investments. For example, Buffett owned seven percent of Coca-Cola Co. by 1988 – a billion-dollar investment that grew almost 16 times. Buffett’s ingenious investment strategy has been his financial mainstay for decades.

When considering an investment, Buffett asks a few critical questions. He looks at the company’s performance, debt history, profit margins, and whether the company’s products rely on a commodity. Buffett requires a company to have a competitive advantage, or something that sets it apart from others in its industry. For example, he would not invest in an oil and gas company simply because it sells a commodity. It would need something else that makes it unique.

Using the theory of value investing, Buffett then analyzes whether the stock is undervalued, or selling at 25 percent below its true value. He determines the company’s intrinsic value and its liquidation value and then compares it to the current total worth of the company. If the intrinsic value is at least 25 percent higher, it is a company that has value to Buffett. In many ways, value investing has been the key to Buffett’s entrepreneurial success. Yet, Buffett’s road to riches hasn’t always been easy.

A Bumpy Road to Success

There have been numerous occasions when Buffett has come under fire for fraud charges and controversies. In 1975, Buffett and his then business partner, Charlie Munger, faced investigation by the Securities and Exchange Commission (SEC) for a fraud charge. Buffett and Munger bought stock from Wesco at an inflated price after causing a merger to fail. In 1991, Buffett’s large investment in Salomon Inc. raised red flags and almost led to a ban on buying Treasury notes – an action that would have bankrupted his firm.

Most recently, Buffett has been involved in the Wells Fargo fraud scandal. Wells Fargo is one of Buffett’s four main investments (along with Coca-Cola, IBM, and American Express). After Wells Fargo had to pay $185 million for illegal banking practices, which included opening thousands of credit cards and more than one million bank accounts in customers’ names without permission, Buffett lost millions.

The Wells Fargo scandal was enough to drop Buffett from third-richest to fourth-richest person in 2016. This was a significant fall from his 2008 peak fortune of $62 billion, which earned him the title of richest person in the world (beating Bill Gates, who had been number one on the list for 13 consecutive years). Since then, however, Buffett has rebuilt his fortune and now holds the number two spot for 2017.

Not Your Average Billionaire

Today, Buffett continues to turn a profit through his many business ventures. In 2013, he purchased H.J. Heinz, which he later merged with Duracell and Kraft Food Groups, all holdings under Berkshire Hathaway. Heinz is now the third-largest food and beverage company in North America. In 2016, he launched Drive2Vote.org, a site with the goal of encouraging people in the Nebraska community to get out and vote. This showcases Buffett’s passion for life outside of the business sphere.

Buffett has made headlines for more than just his impressive fortune – he’s also one of the world’s most modest-living billionaires. At age 86, Buffett still lives in the Omaha home he bought in 1957 for $31,000. He uses public transportation instead of flying around in private jets, and donates billions to charity. In 2010, he (along with Bill and Melinda Gates) launched the Giving Pledge, which encourages billionaires to give away the majority of their money to worthy causes over their lifetimes. His generous donations mark him as one of the world’s most liked billionaires.

The Takeaway

What’s the takeaway when looking at Buffett’s exhilarating career history? There are many points you can grasp from his story – don’t put all your eggs in one basket, trust your gut, invest wisely – take a page out of any book of Warren Buffett’s life and you’re sure to learn something. You decide which lesson applies most to your business. Above all, prioritize your company’s reputation. Buffett has told his executives in the past that they can afford to lose money, but not the company’s reputation. This is what protects your brand and keeps it in business for the long haul. 

Are You Ignoring Your Omnichannel Efforts?


 

“Omnichannel” is a prominent buzzword in B2B Marketing 2017. It is concept that’s become necessary in a business sphere that runs on multiple devices. As businesses branch out to implement desktops, smartphones, tablets, smart watches, and other devices into their business strategies, B2B marketers do themselves a disservice by only focusing on mass marketing. Instead, marketers need to join the shift toward omnichannel marketing – a shift consumers made long since. Here’s how to master your omnichannel before it’s too late.

Are You Ignoring Your Omnichannel Efforts

What Is Omnichannel Marketing?

To capitalize on omnichannel marketing, you must first understand what it is – and what it is not. It is not multichannel marketing. Multichannel marketing publishes content on more than one channel simultaneously. Omnichannel marketing prepares your content for each and every channel. Instead of posting the same block of content on Facebook and Twitter, omnichannel marketing optimizes the post for each separate platform. The Facebook post may have a paragraph of text, while the Twitter post provides readers with a hook and a bitly link.

As the consumer journey continues to evolve, it is of the utmost importance to optimize your omnichannel marketing. There is no telling what devices or screens consumers will access websites of the future from. Consumers are already gravitating toward virtual and augmented realities for online shopping and access sites from multiple devices in a matter of minutes. Just as brick-and-mortar stores had to adapt to sell online, so must today’s B2Bs adapt to embrace changing forms of media. The solution lies in omnichannel marketing.

Marketing for the omnichannel means marketing for all channels in one. Instead of spending time optimizing your marketing for each individual device and platform, omnichannel marketing lets you accomplish the same goal with much less labor. Today’s consumers expect websites to function seamlessly across all devices. For example, a customer should be able to place an item in an online shopping cart via mobile, then go home and finish the purchase from a laptop. Your B2B must tap into the convenience of several perfectly synchronized channels to win the hearts (and business) of modern buyers.

Create a Seamless Omnichannel Experience

Now that you understand omnichannel marketing, the question of how remains. Despite the widely recognized importance of omnichannel marketing, many B2Bs are at a loss as to how to create an omnichannel. Start by transforming your marketing approach. One-on-one customer experiences lie at the heart of omnichannel marketing. Your customers thirst for personalized engagement, and omnichannel marketing can achieve exactly this – when done correctly. Let your buyer control the omnichannel process, accessing your content from whichever device desired. It is your job to make sure the experience remains seamless no matter what.

Drop the traditional sales funnel, and its boxed-in notions of the buyer process. The process is no longer as simple or streamlined as “awareness, interaction, interest, and action.” Today, a consumer may jump around the funnel or skip steps altogether. Stop thinking of customers as leads down your sales funnel. Instead, think of them as people who require a personalized experience with your company. Embrace a marketing technique such as Forrester’s customer life cycle model, which places the customer at the center. This strategy bases marketing on the customer’s view of the brand, not the brand’s view of the customer. Putting the buyer first reshapes all aspects of marketing.

You must engage with your customers on all channels equally. On the customers’ nonlinear paths to purchase, your brand must be ready to connect with them at all angles. This involves personalized offers, targeted promotions, and customer recognition. Boost engagement with an interaction history. Acknowledge users when they access your site, and tailor each customer’s interaction based on recent actions across channels. Drive these actions with data-driven insights into your customers’ behaviors, wants, and needs. Leverage your data to create micro-focused marketing campaigns that work on all devices.

Measure Your ROI to Maintain Your Omnichannel

Marketers are increasingly turning to omnichannel efforts for B2Bs, but a survey by B2B Marketing and Sitecore surprisingly revealed that only 49 percent prioritize measuring returns in investment. In addition, just 21 percent of marketers surveyed thought their omnichannel efforts would produce value. This shows a marked lack in confidence in omnichannel marketing – one not grounded in fact, but in the low priority of measuring ROI from omnichannel marketing. Marketers blame data problems and lack of resources as top barriers preventing ROI tracking.

If you’re serious about omnichannel marketing, you must make it a priority and measure your performance. Otherwise, you will be in the dark about how your efforts are coming to fruition. Measure omnichannel marketing as you would with any other campaign – see what works, what doesn’t, and make continuous improvements. Pay attention to key performance indicators, not vanity metrics such as how many likes your last Facebook post received. Look at how your omnichannel marketing efforts are paying off in terms of lead generations and conversions.

Data is everywhere. It’s up to you to leverage it to your advantage. Focus on individual efforts on multiple channels, then look at your overall success on the omnichannel. Both need to work together to optimize the customer experience. Tailor your messages to be appropriate according to what channel your customers are accessing. Analyze the relevancy of your content, and use consumer data and insights to continue improving. Measuring your ROI is the only way to make sure your B2B benefits from omnichannel marketing.

Leverage Omnichannel Marketing to Increase Conversions

In the end, omnichannel marketing is about sealing conversions. When savvy consumers find that your company understands their browsing and buying habits, they will reward your efforts with their business. If, on the other hand, your application does not work on certain devices, or fails to keep up with consumer behavior, they will bypass you in lieu of a B2B that prioritizes these needs. Consumers don’t just expect the omnichannel – they demand it. Failure to meet their needs marks you as insensitive, outdated, and behind the times.

Stay ahead of the competition by mastering your omnichannel. You cannot ignore this marketing tactic in 2017. There is too much at stake in the competitive business place to delay taking the first step. Consumers are already ahead of marketers when it comes to the omnichannel – don’t be the last brand to join the conversation. Be the marketer who delivers on the promise of a highly personalized, flawlessly integrated omnichannel before others in your field. This is the only way to optimize your brand in the coming years of multichannel browsing.

If you need help tackling the omnichannel, consider hiring a professional. A professional marketer will understand the omnichannel and help your small business take advantage of its full potential. While so many marketers are still in the dark about what omnichannel marketing is and how to use it, you can be the brand that offers this sought-after service to your customers. Working with a professional can make the process simpler, and place you in a better position to see your ROI. When it comes to something as complex and important as omnichannel marketing, don’t be afraid to ask for help. Sometimes, hiring a pro is the best thing you can do for your B2B.

The Takeaway

The omnichannel isn’t going anywhere. In fact, it is swiftly becoming the preferred way to market for all B2Bs and B2Cs. To optimize your omnichannel efforts, keep three things in mind: customers want personal interactions, the traditional sales funnel doesn’t apply, and data is your friend. These three mainstays will serve you well during your efforts toward the omnichannel. They are the only way to begin and maintain a successful omnichannel approach in the B2B market.

Your brand must meet customers on their chosen channels – be it social media, text messaging, websites, email, or voice calls. Across every channel, at all times, you need to answer their needs with relevant content. This is possible with advanced data analytics, automation, and an occasional helping hand from marketing professionals. The omnichannel is the wave of the future. Leverage it to boost conversions and stay ahead of the competition sooner rather than later.