Profits: How to Save on Sales Opportunity Costs
If your sales efforts aren’t leading to your desired results, here are a couple of questions: How many times have you been burdened by so-called prospective customers who waste your time without buying? How many times has a business or government agency asked for information on projects but used your ideas without paying you?
Ouch. That’s a waste of time and other resources.
Candidly, there are four plausible reasons why people don’t buy from you:
- You haven’t done a good enough job selling your company.
- You’re dealing with habitual tire-kickers.
- You’re trying to sell to customers who are too price-conscious and are not value-minded.
- Not to be gauche, but you’re dealing with parasites or thieves who will try to replicate your ideas without paying you.
Regarding the latter, remember these two adages: 1. “What goes around comes around.” 2. Sooner or later, they’ll get theirs.”
Don’t get mad. Get even. Getting angry only hurts you. It’s usually a waste of time and energy, and often creates negative PR images.
When you point your finger at someone, there are usually reasons why you have three fingers pointed back at yourself. So before you start pointing fingers, remember to assess your role and processes, and make the necessary improvements.
There are five basic dos and don’ts for productive selling:
- Review your branding and marketing. A strong marketing program will prevent such problems by pre-selling your products and services, and will minimize the footwork required to close sales.
- Distribute informative sales collateral and upgrade your Web site – without divulging too much information.
- Improve your customer service and sales processes. Make sure that you and members of your team are using the techniques. Basically, this means remembering when and how to use the Golden Rule – empathy; incisively qualifying and researching your prospects; asking the right questions; listening; providing strong value propositions; showing an attitude of enthusiasm coupled with gratitude; preventing buyers’ remorse; and providing added value whenever possible.
- Become a better student of human nature. Remember the basic law in economics 101 – know when to cut your losses. On the other hand, understand when it’s important to persevere and not give up prematurely.
- Maintain your mental acuity and balance when dealing with prospects. Don’t be desperate to make a sale to a prestigious-looking customer or company. Don’t allow them to use you or your intellectual property. As a prospect deliberates, keep moving and prospecting. Don’t spend your profits before the customer buys, and remember the adage: “A sale ain’t a sale until the money is in the cash register.”
- Be loyal to customers who are good to you. This will make you feel better and you’ll enhance your odds for repeat business, which will also cut your sales opportunity costs.
Remember the essence of productive selling and you’ll save on sales opportunity costs. It’s all about wisdom in creating a happy buying environment and developing relationships.
From the Coach’s Corner, for more on profitable sales techniques, see: The Seven Steps to Higher Sales.
Invigorate Sales with Customer Retention, Referral Strategies
April 15, 2010
Avon, the No.1 direct seller of cosmetics is ostensibly implementing new strategies to accelerate sales, including a new product mix. A Reuters report also indicates another goal is to retain customers despite losing sales representatives.
Basically, for higher profits, Avon will cut back on its non-beauty products, such as jewelry and kitchen products while focusing on sales of hair and skin care items, including children’s.
This is in response to marketplace challenges. Avon’s North American revenue dropped 9 percent in 2009 after a 5 percent decrease the year before.
Avon’s dilemma serves as a reminder to review customer-retention strategies. It takes more than new products to invigorate sales.
First and foremost, if customer loyalty is not paramount at your company it should be. Businesses lose business 70 percent of the time it’s because customers feel taken for granted.
In this digital age with a heavy reliance on social media, the Internet is indeed important. But the No. 1 reason – 52 percent of the decision-making process – why people buy a product or service is what customers think of a company’s spokesperson and sales reps.
Yes, the quality of the product is important, but for customers to really feel like they’re making a smart buying decision, they want a good rapport and want to feel appreciated. That’s the best way to turn them into brand evangelists.
Here are more pointers:
- Like a marriage to enhance any business relationship, it helps to listen during 80-90 percent of conversations.
- Create an interactive dialogue and invite feedback.
- Don’t get defensive in the face of criticism even when the customer is wrong – simply take notes and use basic assertive techniques.
- Upon receiving a compliment from a customer, ask for two referrals – the names and contact information of “two people just like you who this need great product, too.”
- Provide added value without hurting the bottom-line.
- Prevent buyer’s remorse by reminding the customer of the value of the purchase.
- Say and write the magic words, thank you, at every opportunity.
- Depending on the level of purchases, make personal contact a priority.
Finally, remember women make 80 percent of all household-buying decisions. So adapt your strategies accordingly.
Elsewhere in this Marketing/Sales category are numerous related columns with proven solutions for maximum profits, including my “60 Ground Rules for Effective Client Service.”
So if you’re losing customers, improve your odds in heavy double-digits with excellent customer-retention and referral strategies.
From the Coach’s Corner, a new study reveals 73 percent of all women Internet users are heavy into social media. There are a lot of enlightening details in Website Magazine.
NFL Heroics: Great Metaphors for Business Success
Past Super Bowl feats serve as terrific examples to inspire equally superb business performances to achieve profits.
Indeed, enthusiasm and hard work deliver results. Joe Theismann always seemed to be on target as quarterback for the Washington Redskins, but he isn’t always right in predicting the National Football League’s most valuable player.
He didn’t criticize Shaun Alexander’s ability, but Theismann said the Seahawk couldn’t win the award because Seattle is a smaller media market than others, such as New York City. Of course, Alexander was an enthusiastic hard worker and was voted MVP after his record-setting performance in 2005.
The moral? Anything is possible if you dream big, stay positive and work hard.
Good Marketing Captures Emotions. In a nationwide TNS Express Online Survey sponsored by Coors, a poll asked fans to pick their favorite Super Bowl moments. Nearly half of the males said at least one of their early top Super Bowl memories was included in the current Coors TV campaign, “Coors Light Super Train.”
Three of the most-mentioned favorites:
- Joe Namath’s 1969 prediction that his New York Jets would beat the then-Baltimore Colts, which was a lesson in marketing puffery. You might recall he went on to sell tons of products, especially hosiery.
- Hank Stram’s colorful quote the following year, “Pump it in there, baby,” was a lesson in perseverance.
- The invincible “Steel Curtain” of the Pittsburg Steelers, which taught us lessons for protecting brand equity.
Even non-Steeler fans enjoyed watching the team’s cast of defensive stars, including “Mean” Joe Greene, L.C. Greenwood, and Jack Ham, including Greene’s poignant commercial when he gave his jersey to an adoring nine-year-old boy who gave Mean Joe a Coke.
His memorable commercial also sold a lot of Cokes; unlike many commercials that are clever and cute but fail to generate a good ROI.
Lessons in Execution and Courage. The aerial artistry of Terry Bradshaw’s pass completions to Lynn Swann and John Stallworth were awe-inspiring. The receivers were like graceful ballet dancers as they leaped to catch the ball. They were also tough and never fumbled; examples of mental strength and focus. With his enthusiastic, likable personality, Bradshaw remains popular as an NFL commentator.
But my all-time favorite Super Bowl was in 1980 when the Steelers defeated the Los Angeles Rams in a highly entertaining game, 30-19. My most inspiring player in that game was All-Pro Ram defensive end Jack Youngblood who played every down of the NFC Title Game and Super Bowl on a broken leg.
So act with courage and execute well. Both are needed for success in business.
Lessons in Marketing Strategy. Reprise Media’s “Super Bowl Search Marketing ScoreCard,” measures how well advertisers capitalize on their Super Bowl advertising investments. The technology firm, www.reprisemedia.com, helps companies increase their brand equity in online marketing.
The company contends that national advertisers fail to capitalize on their Super Bowl commercials by not taking enough precautionary steps in online marketing. That means focus on ad text, keyword selection, and landing page content.
Not to oversimplify, the company offers four basic reminders:
- Make sure to include your Web site address in your advertising.
- On search engines, bid on your company’s name, products, services, and your spokespersons.
- Ensure a common thread in all your advertising and repeat your key phrases.
- Prevent buyers’ remorse by making visitors feel rewarded. Offer to let them register to win a product and promote interaction with you.
Smaller advertisers, too, can benefit from Super Bowl-like performances by learning from successful national advertisers. You’ll reach the best prospective customers with good credit or high net worth by advertising on local news outlets.
Cost-effective keys to online success include media outlets with strong journalistic standards. You’ll also be amazed how economical their Web sites are, too, if you insert banner and rich media ads. Don’t forget to generate opportunities by submitting quality press releases to their news departments.
From the Coach’s Corner, branding remains an important factor in fast food sales, which has suffered as a result of the economic downturn. It has forced fast food companies to discount prices and focus on value meals. However, as consumers now count their eating out at fast food restaurants as a dining-out treat, the companies with the strongest branding and customer service will win.
Here’s a case-in-point: Wendy’s/Arby’s earned $14.7 million in Q3 2009 a year after their merger. But Arby’s appears to be the weaker of the two and some analysts predict they can only succeed with value meals.
Value meals are a drag on earnings if customer service is not perceived as good. Obviously, that’s a concern in the fast food business, especially when a company does not have a visionary salesperson. (Beloved Wendy’s founder Dave Thomas knew about quality, customer service and what his customers wanted.)
Whether the economy is strong or weak – 18 percent of customers will only buy the cheapest product or service – they’re not likely to return unless you have the cheapest prices. So, you want your stores to succeed on repeat business by targeting the 82 percent who are concerned about price but are influenced by other factors.
My cursory sampling of fast food restaurants shows a connection between a successful fast food stores and the perceived level of good food and customer service. A key ingredient is respect for the customer and showing an attitude of gratitude. The stores that have employees who excel in customer service and say thank you to customers are a catalyst for customer loyalty.
For value-conscious customers, price is important but their purchases are decided on emotion.
In order of importance, their five buying perceptions are:
- What they think about your spokesperson and employees
- Your company image
- Product or service utility (is this good food?)
- Convenience
- Price
For more related reading, see: Case Study: Mistakes Companies Make When Losing Profits, The Seven Steps to Higher Sales, and Sports Offers Lessons on Strategic Management and Planning.
Meantime, emulate Terry Bradshaw’s enthusiasm and you’ll get repeat business.
How to Profit: Word-of-Mouth Advertising, Customer Service
When was the last time you explored options for improving your word-of-mouth opportunities? Customer service is the No. 1 key to good word-of-mouth advertising and repeat business.
My firm’s research shows that consumers usually respond favorably to marketing after receiving five positive messages. Conversely, they will divorce your company if they have five or fewer unfavorable experiences.
So we’re talking about performance and delivery. If your company fails to meet a customer’s expectations, it’s important to respond instantly with empathy and problem-solving skills.
If customer-retention is an issue, it’s worth noting why: Customers start patronizing your competitors 70 percent of the time because they feel taken for granted. Most won’t warn you. And if customers feel your service is horrible, they’ll vehemently complain and tell acquaintances about their unhappiness for years.
In the eyes of many consumers, customer service has developed a split personality. A boss is usually adamant about customer service being paramount. But the employees don’t seem to get the message. It appears companies place too much importance on sales as a profit center while treating customer service as a cost center.
Naturally, it’s important to look at business processes and understand the emerging dynamic in consumerism. Thanks to the Internet, consumers are in charge. They can easily obtain competing information about products and services, and they blog about their experiences. Your employees need to realize that consumers are serious about demanding service. Only then, will you be ready to develop and implement customer-service strategies for higher profits.
For your business to stand out to earn more word-of-mouth opportunies, here are ten reminders:
First impressions. Value perceptions about your customer service start within seconds of the first contact. In order of priority: Consumers psychologically evaluate your company by the quality of your people, your company image, product or service utility, convenience factors and price.
Last impressions count, too.
Dialogue techniques. Develop unique, value-selling propositions. You’ll want to establish a dialogue, but never start by asking a closed-ended question, such as: “Can I help you?” Great salespeople know an 80 /20 ratio of listening vs. speaking yields the best results. Use an open-ended question to entice the customer into talking.
When the customer leaves – whether making a purchase or not – it’s vital to thank the customer and close with a statement to prevent buyer’s remorse. But never close with this trite, over-used phrase: “Have a nice day.” Upon hearing that phrase 15 times a day, I’m tempted to respond: “Thanks, but I’ve made other plans.”
My questions are:
- How boring do you want your company to be in the eyes of your customers?
- Why would you want diminish your chances by 50 percent to make a sale?
Attitude gratitude and service. Look for opportunities to show a positive attitude. Never end meetings with customers or employees until you consider saying the magic words, “thank you.” In 98 percent of conversations, if you think about it, these events translate into golden opportunities to bond with others. That goes for emails, letters and faxes, too.
Centers of Influence. Some customers are Centers of Influence – their emphatic word-of-mouth advertising provides the prospect for a competitive edge. It’s then possible to kick sales to the next level with new cross-sell and up-sell opportunities.
Event factor. In the mind of a consumers, even the smallest of purchases represent an event their lives – sometimes a celebration. That means the bigger the purchase a customer makes, the bigger the event. So be attentive before, during and after the sale.
Surprises. Consumers don’t appreciate negative surprises. They expect seamless service. When several steps are needed in the sale process, proactively keep the customer apprised with status reports with e-mails or telephone calls.
Commitments. Keep all promises. And you’ve heard the adage: “Under promise and over deliver.”
Common courtesies. Never miss an opportunity to say please, thank you, and the person’s name. If you’re talking to someone older than you, use the person’s last name, preceded by Mr., Ms. or Mrs. And in your e-mails and notes, use a 19th century salutation, “Dear…”
Candidly, I make it a practice to use formal greetings the first five times I meet a prospect or customer. I have two clients I’ve known since 1993 and I still greet them or refer to them in front of their employees as “Mr.” 50 percent of the time. And guess what, they still appreciate it. It also reminds them how I value them and it is an for me when I interact with them.
Referrals. The most-opportune time to ask for referrals is when a customer compliments you or your business.
Never ask: “Can you refer me to anyone?”
Instead, ask an open-ended question, such as: “What are the names of people just like you…?”
Remember good salespersons never let a customer do what the salespersons should be doing – by themselves.
Complaints. True, customers are not always right. But when they are, many companies forget it costs more to attract new business than it does to keep customers happy. If you get a complaint, the first response should be empathy.
The second should be appreciation. Encourage your employees to be resourceful in solving the problem. Give them adequate authority to act. Some calls from unhappy customers shouldn’t end with this annoying question: “If there anything else I can help you with?” Besides it’s poor grammar.
From the Coach’s Corner: An on-demand customer service software company, Parature, has a series of white papers for being successful in customer service. Here’s the link: www.parature.com.
You might want to check out this: “60 Ground Rules for Effective Client Service.”
21 Tips on How to Start a Business in a Recession
Conventional wisdom probably indicates a recession is not the best time to start a business. But if you have ever dreamed about it, there might be good reasons why the seed to start a business in a recession was planted in your mind.
Good ideas are worth a lot of money, especially in a recession. Many successful companies were launched in economic downturns. They range from General Electric to Hewlett-Packard.
A recession can be a good time if you have a great idea and have entrepreneurial instincts. Entrepreneurial personalities do not let fear run their lives.
Think of fear as an acronym: Frantic effort to avoid responsibility. Entrepreneur-types see a good idea as a responsibility to act. Plus, a recession motivates them to work harder and smarter on developing and executing their ideas.
True, consumer confidence is down, home foreclosures are increasing and the business climate is tepid.
As many companies cut back, new business opportunities appear. But you’ll have to hustle. Successful entrepreneurs do their homework and work as hard as dedicated athletes who train for high performance. Yes, there are numerous pitfalls for startups, and it will probably be the most difficult undertaking of your life.
Here are the 21 tips on how to start a business in a recession:
1. Pick the right niche. You’ll need to enjoy your work and be passionate about it in order to succeed.
2. Take baby steps. Strategize now while working at your present job. Don’t quit or wait for a layoff. If you’re out-of-work, money is problematic but you might not have a choice. Consider all your options.
3. Develop your vision. Write a one-page vision, which explains where you will want to be. Then, consider a business plan for a roadmap. Do your research and become an expert in your industry. Know your competition.
To determine where you are business-wise, conduct a SWOT analysis to assess your strengths, weaknesses, opportunities and threats. Some firms then develop and implement a strategic plan. A business plan is a management tool vis-a-vis a strategic plan, which is a leadership tool.
This also means learning accounting techniques, forecasting your cash flow, and considering buying good bookkeeping software.
4. Seek expertise. Read about successful entrepreneurs. Look for a mentor and a qualified sounding board.
Also, contact a Small Business Development Center. The organization has countless offices throughout the country.
Here’s the link: http://www.sba.gov/aboutsba/sbaprograms/sbdc/index.html
5. Get a head start on marketing and selling. Line up customers before you launch. Always remember: Cash flow is paramount.
You might want to read my column, “The Seven Steps to Higher Sales,” http://www.bizcoachinfo.com/archives/27
6. Market and sell every day. Establish a marketing budget and stay with it. Many companies lose market share by cutting advertising and promotion. Implement strong public relations.
Make yourself known to your local public officials and news media. Suggest to reporters that they consider interviewing you when they want an authority in your niche. Look for ways to multiple sales with your customers.
Consider networking with larger companies – many outsource to micro-businesses.
7. Make customer service a priority. When customers take their businesses elsewhere, my research shows 7o percent of the time it is because they feel taken for granted.
Practice great customer service for referrals and repeat business. Survey your customers. When a customer pays you a compliment, ask a question such as this: “What are the names of two people just like you who might appreciate my company’s services.” Be sure to follow-up with the referrals.
If you plan to free-lance or become a consultant, consider my “60 Ground Rules for Effective Client Service,” http://www.bizcoachinfo.com/archives/106
8. Harness the power of the Internet. Learn blogging and search engine optimization techniques, and how to develop online press releases. A strong Web presence is paramount.
9. Line up your resources. Seek references from trusted associates for a good accountant and lawyer. Plan your policies and procedures. Learn to manage your books.
10. Arrange your financing. You’re unlikely to get a bank loan without a track record. Besides, it’s more economical to use your own resources and start from scratch. Avoid reliance on credit cards and home equity.
If you are seeking investors, consider another column I wrote: “What No One Tells You about Raising Investment Capital” in an interview with leading consultant Joey Tamer: http://www.bizcoachinfo.com/archives/1177
11. Appearances matter. Look professional – pick a good business name, logo, memorable tagline, and a branding-benefit statement that adequately tell your story. That also means quality business cards and stationery, a Web site, and email address using your domain name.
12. Understand legal requirements. That includes business license and taxes at the local, state and IRS. If you’re planning to hire employees, check with your appropriate state agency.
13. Consider buying a micro business. Avoid buying a company that’s losing money unless you’re certain you’ll succeed. Consider proposing owner-financing in a leveraged buyout. But do your due diligence. Walk away from a prospective seller who shows even a hint of bad practices.
14. Develop backup plans for equipment and operations. You’ll never know when bad weather or misfortune will strike. Fortune favors a prepared mind and business.
15. If you plan to hire employees, learn best practices in human resources. Hire the best workers, who demonstrate the 3 A’s – attitude, appearance and ability. (Note a good attitude is most important.)
Motivate them to be productive and to make your business look good in the marketplace.
16. Location. Just as in buying a home, there are key points to remember about where to locate (scroll down to the last paragraph for a link).
17. Keep sources of inspiration handy. Bone up on slogans and quotations to keep you motivated.
18. Community service. In addition to your regular routine of hard work, recreation and exercise, you’ll find it gratifying to devote time, talent and/or money to a worthy cause to lessen the misery in your community.
19. Network and join your local chamber and industry associations. Develop relationships and become a spokesperson for your industry. Become known as the “go-to” person.
And get involved in public policy when events adversely affect your industry. Government agencies are not known for enhancing or even protecting entrepreneurs’ economic and political liberties.
20. Budget time for continuous improvement. It’s vital to regularly reflect on your business and how to evolve in the marketplace. Review your SWOT analysis annually, and fine-tune your planning.
21. Remember to play and rejuvenate your mind. That means you should exercise, engage in your hobbies and do whatever works for you to stay mentally healthy.
Again, if you start a business, it will be the hardest thing you will ever do.
Yes, it’s a lot of footwork. But if you start with these rules, you’ll enjoy a competitive edge.
From the Coach’s Corner, to help you determine your entrepreneurial capabilities, here’s a link to a Small Business Administration site:
http://www.sba.gov/assessmenttool/index.html
For more insights on starting a business, I was honored when New York Times columnist Brent Bowers featured me.
Here are links to the columns:
- ”Been There… Done That… Here’s How” http://www.nytimes.com/2008/02/26/business/smallbusiness/26hunt.html? _r=1
- “Advice on Taking an Entrepreneurial Leap” (including tips on where to locate a business) http://www.nytimes.com/2008/03/26/business/smallbusiness/26hunt.html