Predictable Prospecting
Marketing and Sales for Small Businesses
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Episode Highlights:
- The top challenges that Melinda solves for her clients
- 3 reasons why small businesses fail
- “Servicing the market” : Customer service for big corporations and small businesses
- Melinda’s strategies for improving retention
- How big corporations can best connect with small business owners
- Marketing and Sales for small businesses
More From Melinda:
- Follow her on Twitter @SmallBizLady
- Read her book, Become Your Own Boss in 12 Months
- Visit her on the web for consulting and speaking bookings, blog posts, and her store
- Connect with Melinda on Linkedin
- Want to speak with Melinda direct? Email her at melinda@melindaemerson.com
Favorite Quotes: “Anyone will buy something once, but the goal is to get them to buy over and over again” “The best way to build a trusting relationship is through communication, especially online” “There’s 23 million small businesses. There’s only 1800 large ones” “I believe your business should be working for you”
Episode Transcript
Marylou: Hi everybody, it’s Marylou Tyler. This week, I have a very special guest, Melinda Emerson. She’s know as the “small biz lady.” “SmallBizLady” is her claim to fame. She’s the number one (is it?) small business professional, consultant, keynote speaker, author, strategist in the world.Melinda: I don’t know if I’m the number one in all of those things, Marylou. They do call me America’s number one small business expert often. Forbes named me the “No. 1 woman for entrepreneurs to follow on Twitter,” but I don’t know if I’m number one in all of those occupations. Marylou: She is number one, people. She’s very modest. Don’t let her fool you. Melinda, it’s so great to have you on this show today. It’s funny because a lot of the work that I do is in upmarket enterprise. When it comes down to it, especially top-of-funnel, most of the sales executives, business developers, and prospectors are sort of like small businesses running their own corporation and trying to get people to engage, so your experiences in working with small businesses is really impactful I think for my guys because they’re really looking at trying to start conversations with people they don’t know, trying to get them emotionally involved and engaged, and also be able to serve up an opportunity, in this case, for the next person in the chain, which is gonna take that opportunity down to close. In your world though, you’re working with people – or are you working with people (and there are people on this podcast who listen) who do all sales roles? Is that more of a common occurrence in your world – that you have one person doing all roles? Melinda: A lot of times, as small business owners, you are the chief sales officer. Nobody should be able to sell better than you, even if you do eventually get to a point when you can hire sales reps. But I actually have a dual role in that my company Quintessence group, we actually work with Fortune 500 companies that target small business owners. Like you, I work with a lot of enterprise level customers who are trying to figure out: who small business customers are, what is their pain, how do they buy, when do they buy, what are the real kinds of trigger events that would get them to switch vendors? We work with those groups of folks – a lot of sales and marketing organizations, but then I also do a lot of work directly with small business owners. I have my book Become Your Own Boss in 12 Months, which is an international bestseller in its 2nd edition, but I also have a huge blog succeedasyourownboss.com. I do a live weekly tweetchat on Twitter, where I answer small business owners’ questions live every week on the internet, so I have the unique perspective of straddling both worlds, helping large corporations have authentic relationships with small business customers and also helping small business owners start and grow successful small businesses. It’s an interesting walk. Marylou: I was gonna say – it’s amazing! In your world, where do you find the most challenges and problems that you solve lie? Is it enterprises selling to small business or is it small businesses trying to generate more predictable revenue? Melinda: You know what? It is 50-50. I think that there are three top reasons why small businesses fail, and the number one reason is because the person wasn’t realistic about starting their business in the first place. They thought some magic fairy was gonna come and lock and unlock the door everyday at their business. The second reason why small businesses fail is because small business owners spend so much time chasing new customers as opposed to nurturing existing customers. Interestingly enough, I think large corporations have the exact same problem. It is amazing to me how enterprise customers have a really big problem with churn. They’ll get a small business customer, and they lose as many as they get because their customer service arm is not there. Because they don’t spend $40,000 a month, nobody’s servicing them. If you are going to service that small customer, that 25-employee-and-under customer – I consider anybody in small business, under $20 million, but 95% of all small business owners in the world will never gross over $1 million in revenue. These guys are really small businesses. But if you’re gonna service that market, you gotta service that market. You can’t give lip service to it. Marylou: What does that mean to you when you say you gotta service that market? I just got off the phone with another colleague of mine. We were talking about – mostly what I’m familiar with, which is net new business, and he brought up the whole customer service side of things. I really hadn’t thought about that a lot because I’m so focused on net new. Help us understand. Where are we falling down – especially since there’s a lot of SAAS companies probably listening to this, who are dealing with renewals, which is a customer service issue, I think? Melinda: Sure. I think at the end of the day, anybody will buy something once, but the goal is to get them to buy over and over again. But the only way to get somebody to buy it over and over again is to continue to appreciate their business, thank them. They should hear from you. Nobody owes you business, and that’s a large corporation or a small corporation. You need to be having surveys. You need to be doing recency strategy. Customers should hear from you within some 10 days after they buy from you, no matter who they are. They can hear from you all kinds of ways. They can hear from you in email – obviously phone is best. You may not have the resources to deploy people to make phone calls every single customer, but every single customer over the lifespan of a customer, should get a phone call from somebody in your business. I don’t care how big your business is. I think that if you show people you care, if you show people you’re interested in helping them with their pain, their problem, growing their business, they’ll be loyal to you forever. But if you treat them like it’s a volume game, it’s about the numbers – if you treat people like numbers, as opposed to customers, and if you don’t have a customer-centric approach, you will be out of business because somebody will come along and put you out of business. Ask all the taxi cab drivers in the US about Uber, “Why is Uber booming?” because taxi experiences in a lot of major cities were horrible. If you wanna invite smaller upstart companies to come eat your lunch, keep mistreating your customers. Marylou: What are some of the levers that you pull in helping your customers and clients really implement a good strategy for retention? Melinda: One of the things that I help my customers do is really build a communication channel with small business owners. If your corporation is always sold to enterprise level customers, and now all of a sudden, somebody’s done some research and you now have decided that the small business market is worth pursuing, you can’t pursue it for a year and think it’s gonna turn around because it’s about like, know, and trust. People do business with people they like, know, and trust – brands they like, know, and trust. That’s big and small brands they like, know, and trust. But you have to spend time to build that trust relationship. Nowadays the best way to build a trust relationship is through communication online, whether it’s content, videos, highlighting happy customers. You really have to spend the time to build a legitimate, and authentic social media loop with small business customers. You can’t do it for a year and think it’s start gonna raining more money in your business. You’ve gotta do it and understand that you’ve gotta give it at least a three-year commitment, particularly because now, so many people are developing content. Every corporation has a corporate blog and da-da-da. You gotta make sure that you look legitimate, authentic. You gotta look like you care and that it’s not just about the money. Marylou: Right. Melinda: Cause small business owners naturally distrust large corporations – naturally. Marylou: Yes, naturally. Yeah, definitely. You mentioned that having a blog is one of the ways that communication can be established, but that’s on the client to actually read the blog. What other ways do you recommend that we entice engagement, after we’ve already signed up – cause one of my biggest pet peeves – let me just share with. The audience already knows this. When I buy an app – you pay a year at a time – I don’t hear from the company until it’s time to renew, and then all of a sudden – some companies renew without telling me cause they got my credit card… Melinda: Absolutely. What they do is they set you up for auto-renewal, so they really don’t have to talk to you. Marylou: I will tell you, Melinda. Over the last year, I’ve probably stopped six of the apps that I had because they auto-renewed without telling me. I just saw the charge on my card, and these are not small numbers. These are large payouts for enterprise-level apps, that I hadn’t heard from them for the entire year, and I may not have used the software in this case for the entire year. Then and only then, when you asked them to cancel, do they communicate with you via email. It’s a very sad state. Melinda: And the price keeps going down, when you tell them, “I’m leaving! I’m out of here. I’m leaving.” It’s a game. It’s really, really sad. And with a lot of the SAAS guys, it’s impossible to reach a human on the phone, if you’re really having a problem or you really have a question. Getting a human to answer your question is just really ridiculous. I mean, they may offer you a live chat option, but really, it’s like – you have my money, and I have a question. I should be able to reach a human. Marylou: Yeah. What are some of the best practices that you instill in your clients, that, “Look, at a minimum, you gotta have that, these and those.” What are the top two or three things that you say, “Look, you can’t do this properly unless you have these two or three things.” What are they? Melinda: Number one – don’t assume you know what small business owners need. That’s the true kiss of death. Secondly, make sure that you are working with firms that know something about small business customers. It is amazing to me how many enterprise-level companies are using enterprise-level agencies to develop their strategy to target small business owners. What would they know about it? Those are people with paychecks, too! It’s the blind leading the clueless. Make sure that the people you are hiring to do strategy for you actually know your target customer and aren’t doing a cookie-cutter campaign like they did for the other five corporations they’re working with. Then consider using content leveraging influencers to build your brand and to get out there. Be in it to win it. I realize that at the end of the day, social media for a lot of corporations is coming down to ROI, numbers, sales, “we gotta show what we’re getting for all these money we’re spending,” but social media doesn’t work like that. It’s more esoteric. You’ve got to build your brand. You’ve gotta have people out there understanding who you are, what you’re about, your values, and then you can push products on people. But if you think you’re gonna use social media to just push out to landing pages on your website, don’t even bother. It’s not gonna work. Marylou: There’s an old saying that “It takes just as much time to service the little guys as it does the bigger whales.” What do you say to that? Melinda: Absolutely. That’s completely true, but I think whales and little guys have different problems. Certainly, would you like to have just three customers – three zillion-dollar customers? Sure. But the little guys – if you get in the right niche, right vertical for small business, if you are able to provide value for them in a way that you can still make money – there’s 28 million small businesses. There’s only 1800 large ones. Marylou: That is a big number difference. Melinda: Yeah, it is. Ain’t it? Marylou: Yes. Melinda: Yeah, do small businesses churn? Yes. It’s not one-out-of-two going out of business in their second year. It’s more like two-out-of-three going out of business. Things are getting better, but I think that the small business market – there’s great opportunity in the small business market for a company that’s willing to hang in there and really learn and really listen to your customer and get the right experts that know your customers. I’m very fortunate in that I have been in business for 17 years, so I have had every kind of iteration of a business. I remember when I was a sole entrepreneur working out of my house. I remember when I was working in downtown Philadelphia and had offices and all bunch of employees, a payroll, unemployed, . And then now, we’re a little bit more of a virtual model. We have international customers. I fortunately have run any kind of small business. Only thing I haven’t done is take in venture capital money, which I probably never will, but my point is, I understand how to serve your customers because I am one of your customers. Marylou: You’re walking the walk. For sure. Melinda: Yeah, I can tell you intimately what is not gonna work. Marylou: Yes, I hear you. Let’s talk on the other 50% now, since you’re a sales and marketing – are you marketing and sales strategist, or do you specialize primarily…? Melinda: Definitely. Cause they go hand in hand. Marylou: They do – hand in hand. Melinda: If the sales department’s shooting us in the foot, it doesn’t matter what the marketing strategy is. It doesn’t matter what the marketing message is, if we can’t get the sales organization to implement the strategy, too. It doesn’t work. Marylou: Right. Let’s talk about that side of the business now, because I think some of the listeners here consider themselves solo practitioners, entrepreneurs. They wear multiple hats. Is that the profile that you’re seeing in the small business today, that you work with in trying to help them? Melinda: Absolutely. Marylou: Okay. Tell us a day in the life of conversations that you have with the guy or the gal or is it a department of marketing and sales. When you walk into a small business, typically, what do the personas look like? What do the buyers look like and the people who are actually generating revenue? Melinda: For one, it’s not usually this big team of people. It’s usually – the CEO is the founder, is usually the main sales person, and then they might have one to four or maybe five tops salespeople working for them. These aren’t big sales organizations. These are small guys, who eventually get a Director of Marketing, then they get a sales rep or two, and that’s how they do it. Marylou: Where is the first “aha!” moment? When does that come in? What do you see? Okay, now I’ve got a CEO. I may have been selling. I’ve been pretty successful at it, but obviously my bandwidth is not there so I need to delegate that role. I get my first sales guy, and then what happens? Melinda: Once you have your first sales guy, then you have to make a decision about how you’re gonna divide and conquer. Are they gonna bring in all the business, and you nurture all the existing business? You’ve gotta make a decision about who’s gonna do what, knowing that you’re still gonna have to help that new sales rep get up to speed and learn how to sell what you sell. The second thing is you’ve gotta figure out – this is top of the year, so now should be the time when you have this prospect list of who you’re gonna go after for 2017. Really, I’m referring to more professional service and consulting businesses, but you’ve got to have that target list. Then you’ve gotta start figuring out how you’re gonna meet these people. Are you gonna go to conferences? Are you banging on LinkedIn? Are you just picking up the phone, cold-calling people? What are you gonna do? One of the key decisions you have to make is: are you building a lifestyle business or are you building a business that one day you want to sell? Because that is gonna determine how you sell, what you sell, and how you package your solutions. Let’s say you’re making a decision that you eventually wanna create a business – cause what happens to a lot of small businesses is that they are cults of their founders’ personality. Really the business can’t run without that founder, and that’s a very, very dangerous way to have a business owner burnout. So you want to get to the point, where, frankly, your brand can be in the room without you being there, and you can have project managers and people servicing the customers without you having to be there. You have to have a mind-shift to recognize that this [is a] prison you built for yourself if you don’t do that. Then as you’re looking at your customers, you have to make the decision – are we gonna chase more customers or are we gonna look at our customers like a market, and try to see how we can get bigger, better relationships across the whole organization? Cause a lot of organizations now, they keep buying and keep buying companies, so now most companies are multinational. Most companies are international. They have offices all over the world. How can you stop from just doing business with the St. Louis office to doing business with all of their offices in the country? Marylou: Yeah. What I’m hearing is you have to figure out your exit strategy. As you said, where do I wanna take this thing? Then how do I wanna structure the actual company internally? We have the same problems, same issues in that we’re trying to figure out the separation of sales roles. Typically I’m working with companies that have multiple divisions of labor, if you will. There’s a marketing director. There’s a sales operations director. There’s a sales director. Very seldom do I deal directly with the CEO because it’s all delegated by these division heads. But the issues are the same. We have to figure out what we wanna sell, who we wanna sell it to, where we should position ourselves in the market based on our SWOT (our strengths, weaknesses, opportunities, threats), and also who are the people within the companies that we want to sell to. Then that question you just said is, “What kind of companies are these? Do we have targeted accounts? Or are we just the spray-and-pray variety of trying to get as many clients in as possible because we’re going to put ourselves on the shopping block later on?” So that’s interesting that you cover all of that with the small business owner because that’s a lot of stuff to cover. Melinda: Well, it is! A lot of people come to me. They come to me because they have created a nightmare, and they need to reinvent. Or they come to me, when they’re ready to take their business to the next level. Marylou: Where do you like to work most? Are you a – you love to get the problem solvers folks, the challenges, or are you hoping that you groomed your clients enough so that they hit the ground running and then they come back to you and say, “Okay, now we’re ready to take it to the next level?” Where do you see yourself…? Melinda: I love the variety, to be honest with you. I’m not gonna say, “I just love being a fixer or I love it when somebody brings me a train wreck. I’m good at being a fixer.” But everybody has something in their business that’s a train wreck, even if the whole business isn’t a train wreck. Because we all tend to do the things we do well. What’s a train wreck in my business? HR. I’m not even gonna lie to you. My COO is like, “Keep Melinda away from the people.” And I always joke with him that he’s like the union shop steward, like, “What are you coming to me about now? Get them to work! Get them to do their work!” That’s my Achilles’ heel. I’m horrible at hiring and firing people. We now pay people to do that cause I’m horrible. But can I come into your business and tell you how to hire people? Yes. Marylou: Right, of course. Melinda: It’s like the shoe makers can’t go without shoes. I can tell you what layers you need, what levels you need. What I find a lot of times is, particularly if I’m dealing with a business that’s like at $2-3 million in revenue, and they wanna go to $10 million in revenue, the first thing we look at is how much they’re outsourcing and how they need to bring those roles in-house to reduce costs and just get better control over their processes and systems in their business. It’s very common for us to reach out and be like, “Okay. Let’s look at all these people you’re paying and how much you’re paying them, and what if you had one person in-house that does these three things that you just pay this amount to versus all this money over here?” So we start helping people organize their teams and really getting an organizational structure that will help them grow because a lot of times, what happens to business owners – and actually my new book that I’m working on for 2017 is about this. When a small business starts hiring people, typically they hire doers. “Can you do this for me? Can you do that for me? Can you do this?” but they don’t prioritize hiring thinkers. They don’t do that because they think they can’t afford it. They aren’t thinking that, “Oh wow, I need somebody else in this business thinking about how this business makes money other than me.” Then when finally the lightbulb comes on, “Oh wow! I’ve got all these people in here. And the people that I have can’t take me to the next level” – that’s when you have to get a lot more strategic about your hires, who you hire, what you hire them for, and how you pay them. It starts with making the decision about what you wanna be when your business grows up. Marylou: Yes. Let’s get back to the sales side of what you said about – are they outsourcing sales as well, like prospecting and things, when you come into small businesses? Are they typically outsourcing? Melinda: Some people are. Some people are using firms that are making appointments for them. I think when you say outsource, do you mean entirely outsourcing your sales operations? Marylou: Or like you said, taking some of the pipeline, the active sales pipeline, and outsourcing pieces of it or do they outsource the whole thing? Or is there a hybrid? I’m just curious what you see mostly. Melinda: Small business owners tend to be kind of scared to outsource the whole thing because that’s a great way to let somebody steal your customers, but even when you hire people, depending on how you hire them – if they’re a contractor or consultant or something – you’ve gotta make sure you got pretty ironclad non-disclosure, non-compete stuff because I’ve seen it many times. People hire somebody to be their Director of Marketing or Director of Sales, and then the next you know, that person leaves them and takes their biggest client with them. I’ve seen that quite a bit. So people have to be very careful about how they sell, how they teach people about how they sell. I’m a firm believer in commission-only sales people. I believe you should kill what you eat because that will always keep you more motivated. I’d rather bonus you out than give you a base salary then plus bonus. I give higher commission because of that, but after 17 years of business, I have hired every variety of salesperson to work for me. What I have found – what works best for me right now is commission-only. Marylou: Yeah, in enterprise, there’s a definite move to go to more of a higher base with a bonus structure than commission based. So that’s interesting to hear you say that, that it’s working for you there because a lot – especially at the enterprise level. I can’t speak for the small business cause that is not my area of expertise, but the enterprise level for prospecting especially, since the job is so tedious and it’s a lot of habitual day-in-day-out same thing, making a lot of calls, doing a lot of conversations, working with a large number of records. Melinda: I think it depends on what the sales cycle is of the business and what the business sells, whether or not that can work. I mean, I have a business – fortunately, most of our customers call us. My sales reps are not prospecting for me. They’re closing the stuff that’s called in. Fortunately, I’ve build my brand and my business in such a way they will call us, so we have a great list of people that we’ve done business with over the last 9-10 years since I really moved into consulting. These guys are closing, so it’s a very different thing. Marylou: Plus, I’m sure you have an extremely active referral network, as the other channel. A lot of the listeners on this podcast are business developers, so they’re developing business. They’re taking cold lists, dormant lists, inactive lists, and they’re trying to go after accounts that meet a certain profile. But in addition to doing that, they wanna build the referral business so that it actually impacts their inbound work, like what you have, and also their referral. It works in concert, but the focus is to get out there from a list, from a targeted environment, and create opportunities pretty much out of thin air because it’s not like the chill was warmed up by anyone, although marketing does play a role in some of that. It’s really up to the business developer to generate the opportunities consistently so that they can scale. It’s usually when this type of sales function comes into play. Also, there’s a dollar amount tied to it that it just doesn’t work. It’s too expensive if your products and services are less than a certain dollar amount. Melinda: Oh, I’m sure. But again, we’re talking about people under $5 million in business and revenue, when I’m talking about these guys. But it is interesting – the folks that are taking a cold list or inventing opportunity for a business, that’s a different matter. Marylou: Yes. Melinda: But a lot of times, small businesses aren’t set up like that because most of the time, what happens is the owner or founder has been the one that has built the business, and they finally hire somebody when they just can’t handle it anymore. So it’s rare for a small business to be like, “Alright. Great! Here’s the vertical we sell to. Go dig into my LinkedIn. Good luck!” That’s not what’s happening. Marylou: Usually, it starts off with – even in start-ups – it starts off with your own personal rolodex, your own personal network you reach out to and you’re building your referral network. And you may then tackle inbound and get some people to engage, but if you want predictability and if you wanna scale and if you want to grow the business exponentially and your price point allows it (your average deal size allows it), then you’re gonna look at typically an outreach program of some sort, that you’re going to use as another channel of lead generation. But this particular channel is accountable down to the penny because you’re the one who is in control of it, as opposed to – you probably couldn’t wave a magic wand around your client base and say, “I want 10 inbound calls today, and 3 of them are gonna result in sales.” It may end up being that way, but it’s not as predictable as you reaching out to people, knowing the conversion rates and actually generating revenue off of that. It’s not for all businesses for sure, but I was curious and I’m happy to hear that even in your work, you’re still struggling with that separation of roles. I mean, who does what? Who’s better at doing at what? You may not have as many bodies, so you’re probably multi-tasking people here and there, but the issues are the same. Melinda: Definitely. What is interesting is when we transitioned folks into our organization that come from enterprise, it’s always really interesting for them, particularly if – the COO of my company is a former Senior Vice President of Sales at Comcast. It was a little bit of culture shock for him. What’s interesting is I teach him, and he teaches me. I’m like, “Let me teach you something.” He’s always like, “Mm-hmm. Mm-hmm.” And then of course whenever he teaches me something, he laughs, “Old dog still knows a trick or two.” Marylou: You mentioned that you’re in the second edition of your book Become Your Own Boss in 12 Months, and you mentioned a new book on the horizon. Tell us about that. Melinda: Yeah, I’m working on a new book for 2017. It’s called Fix Your Business. Marylou: Okay. Fix Your Business. Melinda: Fix Your Business. After years of being branded as the lady that knows how to help you quit your job, I am finally putting a stake in the ground and developing a book for existing small business owners that are ready to take their business to the next level, but they have one or two areas that are a train wreck. So I am focusing on building, helping people build a business that can last. I am really, really excited about helping people get back their time, freedom – helping them really be able to build a business that can run without them and successfully hire people and document processes and systems and onboard people, building successful hiring practices – all the stuff you do when you become a big-boy or big-girl business. Marylou: Right. Like you said, life-work balance is really important. We’ve all been there. We’ve all tried to really figure out a way to do that so that we’re not working those 80-hour weeks and that we lead a life. Melinda: There’s a lot of small businesses out here that are still killing themselves working for 14-,16-hour days, seven days a week. I believe your business should be working for you. I don’t believe you should be forever – the first two years of your business, your business does own you, but I do believe that there’s a certain point, it should flip the other way, financially and workload level. That’s what I’m about helping people create in my book Fix Your Business, and I’m really excited about. Marylou: When are we going to see that hitting the shelves, so to speak? Melinda: Oh gosh, it won’t be out till towards the end of the year, next year. Marylou: Alright, but in the meantime, we could buy Become Your Own Boss in 12 Months. Melinda: You sure can, because it’s still very valuable and relevant. If you wanna know how to build a very powerful content strategy and social media brand and build a really good website, how to crowdfund (if that’s something you wanna do) – I have got all of that stuff in the updated version of Become Your Own Boss in 12 Months, which I’m very proud of. It’s been out for seven years. Marylou: New business developers listening out there. The whole content piece, the social media – that all applies to us because we are the brand, when we’re going out there and reaching out to people we don’t know to start conversation. We may be the brand for our company, but we are on the signature on those emails going out and the phone calls that we’re leaving. We’re stating our name, our company, so we are the brand of our company. I think what Melinda says and writes about in this book is gonna be relevant – maybe not all of it, but there’s definitely some pieces of it that you’ll notice if you apply to your prospecting efforts are gonna help you generate more predictable outcomes, which is what we’re trying to do with these podcasts and introducing you to these folks, who have lived and walked and been in your shoes and have taken it to a whole new level. Melinda, how do people get a hold of you? Melinda: Well, if you can all remember my name Melinda Emerson, you can always Google SmallBizLady, and you’ll find everything you want about me. I am SmallBizLady on Twitter and Facebook. I’m Melinda Emerson on LinkedIn, but if you’re just interested in talking to me about how to work with your organization to target small business owners better, shoot us an email. I’m really easy to find at melinda@melindaemerson.com. There you go. Marylou: Okay, very good. SmallBizLady. Biz is B-I-Z for those of you who are wondering. Melinda: That’s me. Marylou: Thank you so much for your time, Melinda. It was really great speaking with you. Melinda: Marylou, thank you so much. It’s been great.