Jul 27, 2020 | Customers, Sales
Every business needs a flow of leads that can be turned into a transaction, and better still, a relationship that includes numerous transactions.
You have current customers, who are, hopefully, very happy with your service and products. What better source of more business could you ask for?
In his seminal book ‘Influence’ published 30 years ago, and updated several times since, Dr. Robert Cialdini noted one of the 6 principals of persuasion is ‘Reciprocity’. The sense of obligation created when you do something, even a really small thing, for someone else out of pure generosity.
You do something generous for them, and they will feel obligated to, at some time, do something in return.
When that something happens to be a referral to someone they know, who could use your services, and with whom they have a relationship with mutual trust as a foundation, and they refer you to them, it is like money in the bank.
I have a client who has made successful referrals a central KPI of his workforce. His service requires that his employees are in peoples homes, and so trust is a fundamental part of a successful project completion. When those happy customers refer him to someone else, the conversion rate dwarfs anything coming from other sources. It is not always immediate, people are not always ready to buy when you are ready to sell, but when that time comes around, he is always at the front of the line.
Ask yourself a very simple question, and implement the answer to double your sales at very low cost.
‘How can I engage a customer in a way that they offer to refer me to their networks’?
You will probably find there are some simple answers to the question, including doing a great job for your current clients. However, the most effective way is to do something nice for them, with no (obvious) agenda.
My client has a modest bunch of flowers delivered to the lady of the house with a personalised thank you note attached. The note includes the suggestion that they might know somebody who would benefit from his services, and he would appreciate a referral.
A simple gesture, with a profound impact.
Leads are great, genuine referrals emerging from trusting relationships are money.
Jul 13, 2020 | Communication, Customers, Strategy
Writing an email sequence is not as easy, or effective, as the videoed on-line courses (special deal $695, ends at midnight) would have you believe.
The templates and advice is all pretty vanilla although useful, but does not get to the heart of why people buy from you, and how, amidst the tsunami of stuff coming at them, they pick out yours.
Many seem to think digital is different from the old fashioned advertising I grew up with, and it is, tactically, but strategically, it is the same.
A potential customer goes through some sort of journey that differs in every case, but generally follows a process:
- recognition that there is something of interest out there for them
- Awareness that the stuff out there has relevance to them as a solution to some sort of a problem they have, or have recognised as a result of the discovery process.
- The problem now seen becomes something that has a value in its solution
- There is activity seeking that solution
- Choosing a supplier, and installation of the solution
- The after sales process, where they can be persuaded, assuming you did a good job, to be an advocate for the problem you solved for them, and more specifically for you as the solution provider.
The process by which this all happens is not a nice logical ‘Sales funnel’ where progress is made in an orderly manner. In reality is looks more like a huge ball of tangled fishing line, a real mess. Seeking to put order to the mess makes sense so long as you do not lose sight of the simple fact that the whole thing will resist the orderly, sequential nature of software, and revert to the mess at any and every opportunity.
The targets of your ‘content’ at each stage also has wrinkles.
You have current customers, the easiest to reach, potential customers, those you really want to reach who may have the problem unrecognised, some who may have recognised their problem, and you have advocates, those who might amplify your content.
The further audience is the wider community, out of whom all the other three groups emerge in one way or another.
Therefore, you need to mix and match between the mediums and the message to maximise the outcomes of the investment in content. You do this by the combination of focus on specific market personas. This includes personalised messaging of current and past customers, as well as more general communication of the problem/value proposition equation to gain reach into the varying audiences, to generate marketing leverage.
How deeply have your considered your mix of content and medium to reach your preferred audience?
Header credit: Maksym Kopylov via Flikr
Jun 25, 2020 | Branding, Communication, Customers
Kids understand stories, it is the way they learn, the way they absorb the lessons of the past for later use.
Why don’t we use this instinctive capability more often in our marketing?
Take your kids to the pantomime, they love it.
They get excited every time the villain comes on stage. They boo, yell warnings to the hero, and hop up and down in frustration when the hero looks around as the villain hides.
Why does this matter?
When building a brand, you have to make choices. Who is your brand for, and just as importantly, who is it not for?
If you can explicitly state who your brand is not for, then those for whom it is for, will rally around and support it against the villain.
Simple stuff, hidden in the instinctive responses in our brains.
Watch your kids at the panto, and learn how to build a brand.
Define the villain, and the kids will cheer for you.
Jun 22, 2020 | Analytics, Customers, Marketing
One of the questions occupying my newly monastic mind over the past few weeks has been: ‘what changes can we expect in the revenue generation processes as a result of the ‘Bug?’.
In the lead up to this crisis, I have been considering how automated everything was becoming, at the expense of humanity.
There is an inherent conflict between the centralising force that is the ‘Martech’ (marketing technology) automated decision making processes, and the front line sales function. Martech investment requires that a range of decisions to buy and install various combinations of software be made that automates a selling relationship. The decentralised nature of the sales front line does not benefit from such automation, as people still prefer to buy from people, particularly in cases where the investment is large, or there is an emotional element to the purchase.
To my mind, it has become too clinical and automated in most large businesses. This creates opportunities for smaller businesses whose niche is perhaps more clearly defined, and who lack the resources and capability to leverage an integrated ‘Martech stack’.
The Bug has brought the question to the fore.
On one hand, we are now compelled by circumstances to interact using the digital tools, but there is a steep learning curve for many, and SME’s are rapidly discovering their capability shortcomings. On the other, human contact will become more valuable than ever, and those same SME’s may be in a better position than most large companies to be ‘Human’.
Where on the scale does your business fit?
May 25, 2020 | Customers, Marketing
Settling on a pricing mechanism for your products and services is a profoundly important element in a successful enterprise, but is often the last thing done.
Ask a few people internally, go and see what others are doing, or just add a margin to your costs and out you go, all of which will result in a less than optimal revenue/margin mix.
Settling on a strategically driven price is really fundamental to financial success.
When should I tell them the price?
My general advice is an old saying mumbled to me by my key mentor as a young bloke: ‘He who mentions price first, loses‘. ‘Anchoring‘ is a key concept in a sales conversation, reflected in this adage. In consumer products, this is cannot always be the case, walk into any supermarket, and the price is there for all to see, so our options are limited, as we have lost control of the conversation. That conversation happens in the buyers office, where there is usually an imbalance of power in any event. However, in B2B, we generally have control over price, so we can manage the conversation, in which case, the old saying holds. Psychologically, it feeds into another old, and often repeated saying, this time from Warren Buffett: ‘Price is what they pay, Value is what they remember’. Therefore, it makes sense that you allow the buyer to reflect on the value they will get by a purchase, and then price accordingly. On line, this is now being controlled by algorithms that look at your history, the history of those like you, product availability, and a host of other individually tiny, but cumulatively significant factors, and set the price quoted accordingly.
Should I have standard prices?
Are all your customers prepared to pay the same price? No, so consideration of differential price packaging should be a core part of your strategy. The challenge is how to apply differential pricing while retaining control of your price list. The most common categories of differences are demographics, geography and volume. Your local wine shop has trouble competing with the big chains, because they buy a few cases, delivered into their back dock, while the chains buy a few truckloads delivered into a central location for redistribution on retail demand. This increases their stock turn, by minimising pockets of slow moving stock, reducing average cost.
How many price options should I have?
Do not give each customer any more than three price options. Our minds tend to get overwhelmed by too many choices, three is the optimum. Those three options should be clearly articulated with the differences in value that is delivered by each. This strategy is almost universally used for on line sales of software services. They all use the three columns, with varying added services for an increased price.
In which order should I show price options?
Show the highest price first. Often this is counter intuitive, as the instinct of many sellers is to go low in order to ensure they secure the sale, which almost always leaves money on the table. It is way easier to go high, as you then have room to come down while perhaps removing pieces of the value offering that do not add value to the buyer, or that cost you nothing to remove, but seems to be a concession. By contrast, by going in low, you have nowhere left to go if the buyer is looking for ‘more’.
Should I show shipping costs?
No. Instead, shout ‘Free shipping’ which is a powerful motivator. ‘Free’ is one of the most psychologically strong motivating words, so use it by including shipping costs in your price. Amazon has used this strategy to devastating effectiveness by offering an annual subscription that enables free shipping via Amazon Prime, now in over 50% of US households. It also adds a distribution channel for other services, such as video streaming
How can I manage competitor pricing?
You cannot, you do not live in a vacuum, competition is a reality of commercial life. However, concentrating on the value of your offer rather than just the price will deliver the best results. Every purchase decision made has a context, winning just because you are the cheapest is a good way to go broke.
How do I manage price increases?
Carefully, but offering notice of a price increase is both proactive as a means of simply being courteous to your customers, and as a deadline by which they must purchase in order to get the current price. This can act as a powerful call to action.
Another of Warren Buffett’s quips is: If you have to have a prayer meeting before you put your prices up 10%, you have a lousy business’
The final word is that not every deal, not even those that seem to be ‘in the bag’, will come to fruition. The reason stated will often be ‘price,’ but that is rarely the whole story. Politely probing for the real reasons and learning from them for the next time, is a core part of the task of a quality sales process.
Apr 28, 2020 | Change, Customers, Strategy
What you may ask, is a ‘Rundle’?
A new word, made up to represent a ‘Recurring Revenue Bundle‘, an idea whose infancy was spent in software, but that is now reaching puberty in other markets.
The result of this pubescence is that business models are in the midst of radical change from ‘Ownership’ to ‘Usership’. The revenue and marketing models of software have moved from purchase to subscription, and following will be, almost everything that can be bundled as a service.
This is not a new idea, it is the foundation of the success of Xerox, charging by the copy, rather than selling copying machines, and Gillette in its early days, giving away the razors in order to sell the blades.
Given the boldness of that forecast, there is another thing that will emerge: Control of distribution will be essential. If you have a recurring revenue model, and no control of your distribution, you will be screwed.
Let’s consider cars, personal transport. Are we beginning to see the trend now, as differing companies place cars for ‘digi-rent’ in heavily populated neighbourhoods around the inner city. If you are going to digi-rent a car, it will not usually matter what the car is, beyond a functional definition: takes four kids, has a bike rack, and so on. So, the power of the brand of car will move towards the platforms that rent them out. If you are running Ford, or Mercedes, you need control of the platform from which the cars will be Digi-rented, in order to keep being able to move cars off the end of the production line.
What then will differentiate the Ford platform from the Mercedes platform?
Distribution.
You can see the beginnings of the battle to come in the subscription entertainment services. Netflix Vs HBO Vs Stan, and all the rest, now including the newly launched Apple TV and Disney. There is not room for them all, so there will be billions thrown at content, and most will end up in the hands of the few who control the distribution, building arithmetically on the recurring revenue.
My prediction is that Disney will be one of the last standing. They have a great brand, huge back catalogue, the cash reserves to churn out more great stuff, but their most important asset is the extension of the subscription services into other revenue sources. Licencing, Disney world, holidays, games, and all the other areas where the Disney brand has an existing or expandable position. The other winner will be Amazon, who have a platform, including Prime, that is in 55% of US homes, and rapidly taking over in other geographies. Distribution is automatic and bundled. The current leader, Netflix, is out on its own, great first mover advantage, but lacking the broad competitive base of Disney and Amazon.
The rest, beyond the very specific, super focussed services that will inevitably emerge, are toast.
Instead of products, you will be seeking to create ‘Rundles’ or Bundles of a value proposition to keep people coming back for more, rather than marketing to convince people to buy again.
The strategic task: Build barriers to churn.
