How (not) to sell in hard times

Do we all love to play the ‘discount game’ in hard times?

When I sell services or consulting I’ll consider offering a complimentary ‘project’ discount or offer some auxiliary free services – but the price never normally goes down from that point unless its a much bigger deal with an end of contract bonus. I would walk away otherwise.

So my approach is to add some perceived value when I present a price discount.

What about other companies?

I’ve had a few companies over and asked for some quotes on improvement work to our hall and landing at home.

One quote is nearly 50% lower than the other for an circa 80% identical product.

The representative who gave the lower price passed it across with no nervousness and just left it with us decide in our time over a week or so, including the current standard discount.

The representative who presented the much higher deal was a bit nervous and agitated (and took a few minutes to present his price on a typed letter head) when it came to presenting the price. I immediately baulked at the price and said it was over my perceived budget.

What’s happened since……

The higher deal was subsequently lowered in writing within a few days after I said it wasn’t within our budget.

I then shared my maximum budget nos with them explaining the 2nd quote was still too high and I asked for options on specification or price.

So today the representative presented a further discount and said the Directors will only give us to the end of the day to agree and pay a 35% deposit. This was still quite a lot over our budget.

So I ‘passed the porcupine’ back across by email and said my wife and I would need to consider in our own time and I asked if the Directors would keep the last price offer open (as who would ever revert to paying a higher price?!).

I find this a fascinating story in sales approach and techniques in austere times when nearly everyone expects a discount to be presented.

Comments welcome!!

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Growing a business

I attended a local and exclusive networking event last week for SME Business Owners, Advisors and Entreprenuers called the K-club (http://www.k-club.co.uk)

There was an excellent talk by Sarah Goulbourne from Gunnercook LLP who spoke passionately about the ‘Sea Change in Law’.

With regard to my own work as a business consultant helping SME business owners in pretty much any sector to plan and grow for the future, Sarah’s talk about how to grow a modern law firm was real music to my ears.

Sarah’s business Gunnercook is trying to demystify the client legal experience and I suspect the way law firms grow and market. Sarah simply believes that a modern law firm needs to put in place marketing and sales systems like most entrepreneurial businesses. I believe Law firms in America are even starting to offer basic services over the internet (see LawPivot!).

nuOrder believe that any businesses can put in place a tested sales and marketing system and get fantastic scalable results that can be measured for success.

I you need help doing such as thing drop us a line at nuOrder and we can help you today.

Go On; Spoil Your Customers

We are often asked by clients “How can I improve my marketing?” – Often this means – “How can I get new customers?” Indeed, most businesses put most of their marketing effort – and budget – into new lead generation.

However, it’s amazing how few businesses are effectively marketing to their existing customers. Most business owners are sitting on massive untapped potential in terms of their existing client relationships.How do you unleash that potential? Try answering these questions:

  • What cross-sales, up-sales, new products/services could you offer your existing customers?
  • And when did you last let them know? In fact, when was the last time you wrote to your customers or emailed them or phoned them. And what kind of response rate did you get?

If you doubled the number of times you contacted them what would happen? One retail client used a brochure to market to his client base and generated hundreds of thousands of pounds in turnover each year from this method. The brochure was sent out once a year, in springtime. We asked him to try sending it again in autumn. Guess what happened!Play the easy game. Make sure you have a database with all your existing clients listed. And then……speak to them……pamper them……offer them special previews and promotions……ask them to tell their friends.

Remember It costs six times more to get new customers than it does to increase sales to existing customers and 64% of customers don’t purchase from your business a second time because of the perceived indifference with which they are treated.

If you want to reduce your marketing spend, or the cost of customer acquisition, reinvest your pounds into strategies that will retain your customers, so they keep buying from you. Investing in customer relationship strategies – the payback is stunning.

Get in touch and ask us to conduct a business evaluation and find out about our unique way of designing and implementing strategies to generate sustainable business improvement.

How to Grow and Managing a Business for Profits: Seminar

Growing and Managing a Business for Profits – What business owners need to do to boost income and manage a business through tough times

http://nuorderbusinessgrowth.eventbrite.co.uk/

Event Details:

Duration: Tuesday 13th June, 9am to 12.30pm.
Location: Mere Court Hotel Conference Centre, Mere, Knutsford, Cheshire.

Full Fee: £35 including booking fees and VAT
Early Bird Fee: £25 including booking fees and VAT (Sold Out)
Finders Fee: Receive £5 for every person you recommend who then attends the seminar.

Normally £50 + VAT, this personal invite entitles you to attend this joint seminar at a discounted rate.

Seminar Details:

Do you want to recapture your enthusiasm for your business or for the business you work for?  Are you looking for ways to grow your business and instill a sense of pride in your workforce that will result in increased profitability?

Then this is a seminar not to be missed.  Delivered by two experts in their field, Roger Brown and Lisa Gibson, the 3 ½ hour seminar programme will provide you with simple yet highly effective techniques to achieve your business aspirations.

You will come away with top tips on Social Business and the use of CRM and well as understanding the power of having the right person in the right job within any organization.

This seminar programme will benefit anyone who:

  • owns a business and wants help to grow or manage the business more effectively
  • wants tips and advice on managing and inspiring a team
  • want to increase leads and grow a client base

How do I book a place?

  1. Purchase your tickets. http://nuorderbusinessgrowth.eventbrite.co.uk/
  2. Once your booking has been received and assessed, you will be sent a booking confirmation, which will include the location, directions, and the terms and conditions.

About your speakers:

For information on Roger Brown and his testimonials visit http://www.linkedin.com/in/rogerbrownnuorder

For information on Lisa Gibson and her testimonuals visit http://www.linkedin.com/in/lisagibsontriple3

Are You Ready To Sell More?

Often at our seminars and events we survey business owners to discover the challenges they face within their own businesses and one topic often comes through loud and clear; ‘I need to sell more’. But whilst I agree that growing sales is an essential component of business growth it is often not the real solution to their problems.

Before you embark on a sales campaign first examine the following questions:

  • How do you intend to cope with increase in demand?
  • What will be the impact of a successful campaign on cash flow?
  • Can the business sustain any growth long term?
  • How does this campaign fit with the long terms goals of the business owner?
  • Are the sales processes effective?
  • Are the staff sufficiently trained?
  • Is the marketing plan robust and will it generate the levels of inquiries necessary?
  • What are your motivations for growth?

Let’s start with the last point first; why do you want to sell more? Far too often the motivation in the first place is wrong, and many owners see selling more as the solution to long hours, poor cash flow and low staff morale and productivity, often with disastrous results.

Recently I worked with a business owner who had spent the last 4 years chasing bigger sales with good success. Sadly as the business grew so did his headaches; cash flow just got tighter, already creaking systems began to implode, the demands on his time became greater whilst profits remained static. The harder he seemed to work, the harder it all seemed to get; worse, his home life was rapidly heading for trouble, his relationships with loved ones being eroded by his long hours and short temper. His dream of owning a £1,000,000 + business was rapidly becoming a nightmare.

I can’t begin to imagine how he felt, he was successful! He had set a goal for growth, gathered his team around him and cajoled, motivated and trained them to the best of his ability and it had worked! He had hit every sales target he had set and yet somehow his only reward was a bigger overdraft (and pressure from the bank) and a larger mountain of work, hassle and issues to deal with. It must have been a devastating moment when he realised he was the author of his own undoing. Sadly this is an all too common tale.

So where did he go wrong? The truth is that it costs money to grow and businesses are limited by the rate at which they can grow safely and securely. Furthermore if the motivation for selling more is to relieve a cash flow problem or to create enough space to employ more staff to reduce hours (meaning you are already over capacity) then more than likely you are setting yourself, and your business up for a very bad fall. Our poor business owner had simply magnified the problem by not dealing with the core issues which created the lack of cash and profit (not to mention time) In the first place.

When we work with business owners we check a number of key factors within the business before we will allow them to go out selling and I suggest you do the same.

  • Firstly and most importantly, look at the end game; where do you want to be in 2, 3 and five years time? Selling more just to solve a problem is not healthy as we have already discussed.
  • Secondly check and get control of the finances of the business; how much stock do you hold, how long do clients take to pay, how quickly do suppliers expect payment, are you pricing correctly and can overheads be reduced? These parts are crucial as they have a major impact on profitability and cash flow and EVERY business owner should know these metrics for their business off by heart.
  • Next take a look at the people who will help you achieve your goals, these can be split into three major groups:
  1. Customers: Do you truly understand your target market, do they want what you have to sell and why do they buy from you?
  2. Staff: Do they work late without asking for extra pay? Are they part of the team and working with you to achieve the businesses goals or are they leaving you alone at the end of the day to finish off? If the team is not motivated and behind you, growth will be a very rocky journey!
  3. Suppliers: As you grow so will the amount of trade you do with suppliers. Are they willing to give you the credit you need and can they meet the increase in demand? What impact will this have on their selling price to you?
  • Now take a look at your systems and processes. Do you have a manpower plan for when the business grows, and how will staff be recruited and integrated quickly into the team. How will you cope with expected demand?
  • Lastly Conduct a SWOT of your business (Strengths, Weaknesses, Opportunities and Threats) to determine if you have covered everything and put a plan in place to address these issues before you go on a selling spree.

Now I know this seems a lot to do and it is and maybe this is the reason so many businesses don’t do it. Indeed I have heard all sorts of excuses in my time from “it is unnecessary“(a foolish notion) to “I’ll do it after this next big sale which is going to make everything all right” (It won’t).The truth is often they don’t know how to do it or they are trying to take a short cut, sadly you can’t, and in general those businesses that try, fail.

It’s an old and tried mantra but businesses that fail to plan are planning to fail, and it’s truth is something that irks us business advisers no end! We watch time and time again as people struggle without asking for help. I have never tried to build my own house, make my own car or grow my own food; I am simply not qualified. Yet the average business owner tries to grow his or her own business on the same basis, and wonders why he/she fails losing their dreams, homes, self respect and relationships along the way.

So go on, get your business ready to sell more; give us a call and ask for a health check and I promise to leave the tools in the garage……

Get in touch and ask us to conduct a business evaluation and find out about our unique way of designing and implementing strategies to generate sustainable business improvement.

6 ways to grow your business

1. Get an edge
Find an underlying advantage of 10 to 30 times over the competition to dominate your industry. How to figure this out? Look at your industry’s biggest cost and time constraints and challenge the conventional thinking in those areas of the business.

2. Own a phrase
Brand is about owning a word or two in the minds of your market. And how do you know if you own the phrase? Google it and see if your company shows up.

3. Hyperfocus
Align the entire company around a single measurable priority each quarter. Not 75, not five, but one overarching focus for the next 90 days that removes a significant bottleneck in the business. What about yours?

4. Control your cash
Growth eats cash, so construct a business model that fuels your growth without the need of outside capital. Gift cards, advanced payments, tighter billing practices, and shorter sales and delivery cycles are a few of many strategies. And to stay focused, look at your cash position daily. You’ll sleep better knowing the business can fund its own growth.

5. Write!
Flood the digital market space with blogs, white papers, YouTube videos, and Twitter messages that align with the phrase you own. Then enhance your authority.

6. Pulse faster
If you want to move faster, pulse faster. The executive teams of the fastest-moving companies huddle daily, as if in constant crisis mode — driving on priorities, metrics, and data gathered from the market.

And successful executive teams gather once a week vs. annually to get some talk time around the six strategies I’ve outlined for growing the business. It’s about having a bias for action.

Find Your Highest Potential Customers

The 80/20 rule – that 80 percent of your sales come from the top 20 percent of your customers – applies to most businesses. Nurturing that precious 20 percent means focusing your marketing programs on the customers who drive your company’s profitability. A laser-like focus on these high-profit buyers also prevents you from expending too much effort on lower profit customers.

Remember that profitability does not necessarily correlate with the amount of money a customer gives to your business. In many businesses, smaller sales can be highly profitable, while larger sales can cost the company a lot to administer or deliver, and therefore have a smaller profit margin.

Use the tips here to unearth your most profitable customers.

Calculate acquisition costs

To assess customer profitability, you need to determine how much it costs your business to attract each customer. Many SMEs will be able to get away with a cost of sales analysis that is much simpler than what larger companies use. Keep in mind that the cost of sales numbers produced through these calculations are averages, to be used for rough evaluations of your customer base.

To conduct a simple analysis, first review the effort involved in closing a typical sale. Be sure to include expenses like a salesperson, direct mail, Web site development or other advertising costs. Estimate the total cost of your outreach and divide it by the number of sales you close annually to do a quick analysis.

Calculate cost of customer service

It is important to track your customer service expenses to measure how profitable your current customers are. The equation is similar to the cost of sales analysis. Apply costs for service-related items such as order taking personnel, project manager salaries and delivery of your product or service to each customer. Estimate the average cost of servicing each customer by dividing by the number of customers you serviced during the year. If you need help determining key service expenses in your industry, ask your accountant for industry standards. Keep in mind that the cost of service numbers produced through these calculations are averages, to be used for very rough evaluations of your customer base.

Create a high-potential profile

With the two figures above and the revenue that each of your customer provides, you can determine a rough sense of individual customer profitability. You can use this information to develop a profile of your high-potential customer. Look for common characteristics and behaviors. Do they fit into specific demographic or geographic categories? Do they have certain shared attitudes or values? Do they make their buying decisions in a similar way? This profile will help you develop the most effective marketing programs to reach these targets, extend their value to your company, and attract more high-profit customers.

Some businesses might want to go a step further and develop a customer potential pyramid – a three-segment hierarchy that breaks out the company’s high-potential, medium-potential, and low-potential customers. The purpose of this profile is to look for marketing tactics to migrate customers into the high-profit categories.

Reallocate efforts around least profitable customers

In support of your focus on the top 20 percent of your customer pool, you should make an effort to not attract unprofitable customers. Review your records for those customers who cost you valuable time and money and create a profile of them in the same way you built a high potential profile. To the degree that you can, be sure that your marketing programs exclude these customers, to keep you efficient and profitable.

Since every relationship is an important link to other customers, try to avoid alienating anyone by telling them you don’t want their business. Instead, just avoid focusing resources on reaching them.

Get in touch and ask us to conduct a business evaluation and find out about our unique way of designing and implementing strategies to generate sustainable business improvement.