What’s The Pumpkin Plan by Mike Michalowicz about? Are you a struggling entrepreneur who’s exhausted and overwhelmed?
In The Pumpkin Plan, Mike Michalowicz says that the key to being a good entrepreneur is to change your mindset from quantity to quality. He further discusses the components of the quality mindset and how you can implement them.
Read below for a brief overview of The Pumpkin Plan.
Overview of The Pumpkin Plan
In The Pumpkin Plan, Mike Michalowicz says that if you’re a struggling entrepreneur, the problem is that you’re trying to be everything to everyone—you’re chasing every potential customer and offering every service those customers may want. This wastes resources, drains your energy and time, and forces you to spend your days catering to annoying people.
To escape this overextended, miserable state, Michalowicz suggests changing your mindset from quantity to quality: Instead of trying to cater to everyone, focus on providing a unique product or service to the people who will most appreciate it—and doing so better than any of your competitors. This quality mindset can dramatically increase your business’s success because you’re devoting all of your resources to excelling in a single area, instead of splitting them among many areas and making little progress in any of them. Michalowicz derived this method from prize-winning pumpkin farmers, who kill most of their pumpkins so they can focus all their resources on growing a single enormous one—hence the title of the book.
A quality mindset has three components: differentiating from your competitors, focusing on your most valuable customers, and creating operational frameworks. Differentiating from competitors lets you identify your unique product or service, prioritizing the most valuable customers ensures you provide it to the right people, and creating frameworks helps you provide it in a consistently high-quality way. These components aren’t strictly divided into separate stages—you aren’t done differentiating when you start creating frameworks. Instead, you must continually evaluate your company, identifying when you need to differentiate further, whether your focus is drifting from your most valuable customers, and how you can improve your operational frameworks.
Michalowicz wrote The Pumpkin Plan to improve entrepreneurs’ happiness and quality of life. Having been a struggling entrepreneur himself, he understands how miserable it is to constantly race to keep your company afloat while never seeming to make progress. As someone who went on to found four multimillion-dollar companies and become a popular keynote speaker, he also knows it’s possible to break the cycle. He brings these experiences to bear in his other business books, too, including Fix This Next (how to prioritize impactful solutions to your company’s problems), Clockwork (how a hands-off approach can reduce burnout), and Profit First (how intuitive accounting methods can help your business succeed).
Component #1: Differentiating From Your Competitors
The first component of the quality mindset is differentiating your company from your competitors. People are attracted to the unique and extreme, so to attract customers, Michalowicz says you need a product or service that stands out and is unique to you. Otherwise, customers won’t notice you amongst your competitors and you’ll struggle to succeed.
We’ve organized Michalowicz’s advice for differentiating from your competitors into two main strategies:
Strategy #1: Develop a Completely Unique Product or Service
One way to differentiate your company is by developing a unique product or service. This method eliminates all your competitors by redirecting customer demand in a new direction that no other companies are pursuing. And since you’re the only one operating in this new niche—an extremely unique position—you’ll attract customer interest and your company will grow more successful.
To do this, identify your industry’s standard operating procedures—the unspoken rules that everyone follows and expects from a company in that industry—and then do the opposite. Specifically, Michalowicz recommends identifying which common strategies and policies irritate people. If your opposite approach resolves those issues, you’ll attract customers both by being extremely unique and by improving their experience. (We’ll discuss how you can identify these irritations in more detail later in the guide.)
Strategy #2: Develop a Unique Approach to Delivering Products or Services
Another way to differentiate your company is by developing a unique approach to delivering your products or services. Even if you don’t have a unique product or service, the way you deliver them can make your company stand out and grow more successful.
Michalowicz says there are three elements to consider when developing your approach:
1. The aspect of business you prioritize. Michalowicz says you can choose to prioritize either quality, price, or convenience when delivering your products or services. Instead of being mediocre in all three areas, focus your energy on becoming the best in one of them. This leverages people’s interest in the extreme that we discussed above. For instance, if you choose quality, you’d focus on providing extremely high-quality products. People will be attracted to the idea of receiving the best products, so they’re more likely to buy from you, even if your company is more expensive or less convenient than your competitors.
2. The type of task you’re most skilled at and most enjoy. Michalowicz says to focus on completing these tasks and leveraging your strengths as much as possible. Doing tasks you hate and lack the skill to properly complete wastes time and energy, so outsource those. For instance, if you hate bookkeeping and lack the skills to complete it quickly and accurately, you’ll spend a lot of time struggling with it. In contrast, if you hire a bookkeeper, you can spend your time and energy on leveraging your strengths, such as landing new customers.
3. Your experience and personality. Your past experiences and personality inform how you operate your company. Since these elements of your life are unique to you, they make your company more unique, too. For example, a reserved individual may gravitate toward digital marketing and interacting with customers online, while an outgoing person may market through in-person events and personal relationships with customers.
Component #2: Catering to Your Most Valuable Customers
Michalowicz writes that the second component of the quality mindset is focusing your time, energy, and resources on your most valuable customers. As mentioned previously, many entrepreneurs mistakenly believe that any customer is a good customer. Thus, they overextend themselves and force themselves to constantly deal with frustrating people.
In contrast, identifying what a good customer is and then focusing on making those people happy has three main benefits:
1. Your customers will grow increasingly valuable. As you adapt your processes to better serve them, your customers will appreciate your company more, increasing the odds they’ll use your services more often in the future.
2. You’ll attract more high-value customers. Since you know exactly who your desired demographic is, you can market to them more effectively. For instance, instead of putting cheap, generic ads for your business in as many places as possible, you can put more pricey, customized ads in places you know your most valuable demographic will see them.
3. You’ll be happier. You’ll spend your time focusing on customers who are more enjoyable and less frustrating to serve, improving your overall work experience.
These benefits so influence your business’s success that Michalowicz says this component is the most important of the three. Thus, catering to your most valuable customers should be your first priority. In this section, we’ll explore Michalowicz’s three-step process for doing so.
Step #1: Rank Your Customers by Value
Michalowicz says it’s important to rank your customers because their rank will determine how you should treat them to ensure your company’s success: The more valuable the customer, the more you’ll prioritize their needs and desires.
Step #2: Fire Bad Customers
Once you’ve ranked your customers, Michalowicz says you need to fire the bad ones—the ones who don’t share your values, aren’t financially trustworthy, and aren’t cooperative. As mentioned before, many entrepreneurs struggle with this step because they don’t want to lose any customers. However, the customers in this category actually damage your business: They drain resources, leaving you less time, energy, and funding to devote to your valuable customers who’ll actually help you succeed. By firing these customers—and eliminating the expenses associated with them—you give yourself room to better serve your remaining ones. As discussed, this better service will then attract more valuable customers, helping your company grow.
Michalowicz recommends re-ranking your customers every quarter. This ensures you catch any new bad customers before they can cause much damage. It could also help you decide which mediocre customers to fire when making room for more valuable ones.
Step #3: Continually Improve Your Most Valuable Customers’ Experiences
Once you’ve fired your bad customers, the next step is to improve your most valuable customers’ experiences. As discussed previously, this will further increase their value and help your company succeed. We’ll focus on the method Michalowicz spends the most time discussing: turning customers’ dissatisfaction into delight.
Component #3: Creating Operational Frameworks
The final component of the quality mindset is creating operational frameworks for your company. An operational framework explains one of your company’s processes in a clear and detailed way that your employees can easily follow to give every customer the same, high-quality experience that you would’ve personally provided.
For example, part of an operational framework for addressing complaints might look like this: “Listen to the customer’s complaint without interrupting. Write down any details they mention so you can resolve the issue quickly. Once they’ve explained, say something like, ‘I understand why you’re upset. I would be too.’ This validates their feelings and shows them that you’re on the same side, so they’re more likely to work with you instead of blaming you.”
In this section, we’ll first cover the benefits of creating frameworks, then discuss how you can create them.
The Benefits of Creating Operational Frameworks
One benefit of creating operational frameworks is that they keep the company running smoothly as it grows. When your business was small, you likely kept everything running and did most of the work yourself. As the business grows, this becomes unsustainable: You won’t have time to ensure each customer is satisfied and receiving high-quality service, so you must ensure your employees can provide that service without direct supervision. Otherwise, you risk your quality of service declining, which can drive customers away.
Creating frameworks also grants you greater freedom. Instead of working long hours trying to manage a large number of customers because you’re the only one who can do so, your employees can manage the customers themselves by following the established process. This means you can work less even as your company grows—the company can continue operating normally without you, so you can take time off, whether for leisure or in case of an emergency.
Finally, creating frameworks for your company will save you time and effort in the long term. Once you establish the framework, your employees can complete the task whenever necessary, giving you more time to complete more important tasks. Many entrepreneurs avoid doing so, however, because creating a framework is time-consuming and effort-intensive in the short term. They’d rather spend an hour completing a task than spend 10 hours creating the framework. Michalowicz suggests overcoming this mindset by remembering that the time you spend on the task is cumulative: If you have to complete the task every month for the next 10 years, you’ll spend 120 hours on it. Compared to that, 10 hours to create a framework is reasonable.
How to Create a Framework
To create a framework, Michalowicz says to first identify the task you perform most often for your customers. Then, explain exactly how you do that task. The goal is for someone with no training to be able to read the explanation and then complete the task exactly as you would have, so be detailed and include all of your tips, tricks, and advice. Once you’ve completed the initial draft, walk back through the process and add any information you missed on the first pass. Keep doing this until you’re certain you’ve recorded all the information necessary to execute the task.
Once you’ve recorded all the necessary information, simplify your explanation of the process—Michalowicz says it should fit on a single page. Anything longer will be overly complicated and difficult to follow. He uses airline safety cards as an example of a properly created framework: They clearly and simply explain the process for surviving a plane crash on a single page, in such a clear way that anyone can understand it.
