Jun 19, 2023 | Customers, Sales
Optimising a sales process is not just about the conversion rate, as that is an outcome, a function of many things that come before and contribute to that outcome. The challenge is more about optimising each stage in the process that leads to a maximised conversion rate.
Over the years there have been many tools that assist the process, BANT being one of the best known. All of them in one way or another recognise a progression through a process that should be simple, but which consultants and others have overcomplicated.
The following 3 part qualification process should play a role.
Basic criteria for qualification.
Does the prospect fit the picture of your ideal customer?
Basic criteria + Fit.
Does the prospect have a need for what you have, do they have a problem you can solve better than anyone else? How compelling to them is your value proposition?
Basic criteria + Fit + Intent.
Is the prospect aware of the problem, are they searching for a solution, have they engaged with you in some way? Are they willing and able to pay for your solution? What elements will drive the timing of their decision to buy now, delay, or decide not to buy?
While this may seem too simple, often the best is also the simplest.
Feb 22, 2023 | Customers, Marketing
Few would disagree that the very best way to find a new customer, to build a business, is to have existing happy customers refer you to their networks.
Even anonymous referrals are better than nothing. How often have you looked up a service provider on social media, and looked at the ratings? Recognising they may be from friends, fools, and their mother, they are still a guide.
Happy customers will refer automatically.
Sadly this is not the case in a proactive sense. Happy customers may give you a wrap when they happen to be talking about whatever problem you solved for them with their friends and colleagues. That is not the same as proactively being an advocate for your product. You have to ask them to refer you, and the manner of asking is crucial.
Customers do not like referring.
In my experience, happy customers do like referring you, but as noted, they have to be asked. The psychological drive of reciprocity comes in here. When you have met and hopefully exceeded the expectations of a customer, they will feel obliged to at least be nice to you. Asking for a referral is a very easy way for them to be nice.
It is OK to pay for a referral.
No, it is not. Paying for a referral is almost an insult. Most people do not like to benefit personally from a referral where there is a friend or acquaintance involved, as it is their credibility at stake.
Potential customers do not believe in referred products.
Yes, they do. When someone who is trusted delivers a referral, that referral takes on an element of the trust that is in the relationship. Both parties know that trust will be damaged if a referral does not ‘pan out’ as promised, so they are careful. This is entirely different to the so called ‘influencer marketing’ that infests digital platforms. These influencers are no different to the talking heads we used to see all the time in ads in earlier times.
Assuming a referral will lead to a sale.
Many things must be aligned for a sale to eventuate, all a referral does is give you a credible foot in the door, the right to have that first conversation in the sales process. You still need to do the hard yards. You still need the sales process.
In a world where the first and must win commercial battle is for the attention of your potential customer, the presence of a credible referral is like getting a 20 metre start in a 100metre race.
Jan 5, 2023 | Customers, Management, Sales
In almost every situation I have ever seen, ‘Sales’ includes all sales, and salespeople are often rewarded via commissions on the total of all those sales.
In many categories of B2B sales, the only time a person does a ‘Sales’ job is to gain that first transaction, after which it is all about retention, a different set of skills.
Assuming the first transaction goes well, the product was delivered on time, in specification, and did the job promised, the chances of a repeat at the appropriate interval is higher, and may not require the ‘sales’ skills of the original salesperson. Rather, it requires the interaction of operational and logistics personnel to manage the relationship, and the transactions that occur within that relationship.
If that is the case, why do we habitually reward salespeople on the total of all sales?
Salespeople are as different as any other group of people. The archetypal ‘Always be Closing’ salesman of the past has now almost disappeared, replaced by a range of people covering differing tasks. This reflects the changed role of sales with the move of information from the hands of the seller to those of the buyer.
Almost every salesperson also sees customers as ‘their’ customers.
Again, if the hypothesis is that they are only necessary for the first transaction holds, this is a mistake.
The logistics and operations people should hold the relationship, assisted by an internal ‘customer service’ person, while the salesperson goes off ‘hunting’ for the next new customer, or indeed, sales in an adjacent product or market area of a current customer not currently serviced. This would be a far better use of the time available to a salesperson than running around at the factory trying to wrangle a preferred spot in the production schedule.
A business I ran as a contractor some years ago had a specialist sales force made up of highly trained technologists. When tracking their activity, it became obvious that most of their time was consumed by tasks other than ‘sales’. These involved interaction with the customers technologists, their operational, marketing and planning personnel. Significant time was also spent at their desks dealing with the complexity of our planning and operational processes in order to meet sometimes impossible delivery promises made under pressure from customers.
This blurred the line between the tasks best undertaken by a specialist technical salesperson, dealing directly with generating more sales, and the tasks that were better done by internal customer service people. The ambiguity of responsibility for specific tasks, and our very malleable processes was hamstringing the productivity of the investment in sales.
The communication tools we have today really mean that we are now able to direct the activities of sales personnel towards where their value lies, identifying and solving customer problems. They do not have to be in the office apart from training and progress sessions. The logistics of providing the products are best managed by those who are hands on in the factory, warehouse and admin functions.
After some changes, sales went up significantly, as did the margins, as the salespeople had more time to spend identifying and solving difficult challenges that naturally brought higher margins.
As you consider the structures necessary for success as the new year opens, you might give some thought to the priorities set for the salespeople, and their support functions in your business.
Header credit: Scott Adams via Dilbert
Nov 14, 2022 | Customers, Marketing
Last week I published a post that outlined the four essential questions for successful marketing. A number of people contacted me and said, ‘more detail please’.
So, here goes:
What problem can I solve?
Unless you can solve a problem for someone, why would they buy from you?
Albert Einstein, my senior marketing guru, said, amongst other things, “If I had an hour to solve a life defining problem, I would spend the first 50 minutes defining the problem, the rest is just maths’
So, do your research before you jump in.
The definition of how you solve the problem becomes your value proposition. In other words, how does what you do add value to the lives of those ideal customers?
If you cannot articulate that, you have nothing except price, and nobody wins a price war.
The solutions to problems come from being able to ask the right questions.
Seeing things others do not see, solving problems better than others, and sometimes seeing a potential problem before it is an acknowledged problem, highlighting it, and then solving it.
The classic case is the iPod. It was not the first MP3 player, and arguably it was not the best technically, but it did something no other mP3 player did. It put ‘1000 songs in your pocket’. It articulated the problem that the product solved.
While others all talked about their technical superiority, the stuff the geeks thought was important, Apple just told us what consumer problem they solved.
Who is my ideal customer?
Who is your ideal customer, the one who will not haggle the price, who loves the product you sell, and proselytises for you? Knowing that person in detail would be marketing and commercial gold.
Like all gold, it is hard to find, subject to all sorts of distractions and false starts, but immensely valuable when discovered, and discovery is usually incremental, rather than a ‘eureka’ moment. This means it is also a demanding challenge.
What is often also forgotten in the effort to define that ideal customer, is that every customer also has an ideal supplier, one who meets all their needs, delivering value in excess of the cost to them. It is a two-way street, and a relationship only prospers where there is value being delivered to both parties.
Defining your ideal customer is an iterative process, deceptively demanding, as it requires choices about who is not an ideal customer, and therefore excluded from primary consideration. Choices like this are challenging, but necessary, particularly for small and medium businesses which do not have the luxury of a big pot of marketing money. You must get it right or risk wasting limited resources.
Following is a list of 6 parameters you can use. Not all will be equally applicable in every situation, but it will pay to give each deep consideration.
Who: Is the demographics they may exhibit. Where they live, age, gender, education, job, and all the other quantitative characteristics that are available. These parameters are pretty much all that was easily available in any detail until digital tools came along.
What: are their behaviours. Do they go to the opera or rock concerts, perhaps both, do they travel overseas for holidays, what sort of causes, if any, do they support, are they likely to demonstrate their beliefs publicly, or are they just internal. All the sorts of things that offer a picture of how they think, feel, and behave in all sorts of situations.
Where: will you find them digitally, as well as in the analogue (perhaps real) world, and what means can you use to make a connection. Are they likely to be avid users of Facebook, LinkedIn, or other social platforms, are they comfortable buying online, do they ‘showroom’ digitally then visit the physical retailer, do they get their news from Facebook and Reddit, or more focused news sites, or even, surprise, surprise, newspapers, radio and magazines.
When: will they be ready to buy? Customers are rarely ready to buy when you are ready to sell. Understanding the customer buying cycles, particularly in B2B and a larger consumer purchase is critical.
Why: should they respond to your entreaties, to do whatever it is you are asking of them. What is your value proposition to them? What promise of a new and better tomorrow can you deliver? What can you deliver that is different and more valuable to them than any alternative? If you cannot answer these questions, it will come down to price, and winning a price war is a great way to go broke.
How: will you service the transaction, and the subsequent relationship that may emerge? This is usually down to questions about your business model and the ‘fit’ that has with the customer.
How and where do I apply Maximum Marketing Leverage?
Identifying the point at which you can apply Maximum Marketing Leverage (MML), or in other words, get the most productivity from your marketing investment is the point at which the previous three questions intersect.
Answering these three questions leads to conclusions on the fourth; how do I make a profit? Answering that requires a combination of introspection on your business, in combination with ‘exospection’, the examination of your business from an external perspective. The point where these two perspectives intersect is the best spot to apply marketing leverage.
Most will be familiar with the SWOT model of business analysis; this is one of many, and simplest of the many ‘Mental Models’ you can use to do the examination. Porters 5 forces, Balanced Scorecard, BC matrix, Business Model Canvas, and many others are alternatives. All have their pros and cons, but the key point is that you give due consideration to them, as they will identify and clarify your point of MML.
How do I make a profit?
Just as a successful young single male professional might opt for a red sports car, when 10 years later, with a family, kids, soccer practise, he might opt for a brick on wheels, you can have different business models to suit different circumstances and conditions.
Most small and medium businesses with which I have been associated give little if any thought to the business model, but it is of critical importance.
Are you retail, wholesale, franchised, subscription, digital, or some combination? All are different, working in differing ways, to allocate and absorb the costs and benefits that accrue. Being very clear about your business model and being able to anticipate if a potential customer will fit is in some circumstances, a vital component of making a profit.
The ‘maths’ leading to profit
All that has gone before, in Albert’s language, is the definition of the problem. Now we get to the maths, the way in which you apply the leverage.
Most small businesses rush straight to the tools of leverage without due consideration of the nature of the problem they want the tools to solve. However, once defined, pick a tool, or most often a combination of tools that best fits your point of leverage and apply them, recognising that there is no formula to give you the exact right answer. Therefore you need to be prepared to experiment to find the best outcomes. The process of experimenting will also give greater clarity to the 4 questions, which will in turn clarify the point of MML.
The choices you face are multitudinous. Digital, analogue, which social platform, how much should be spent on AdWords, does Facebook work, how to use the automation tools available, what about email, letterbox drops, and so on, and on, and on. 20 years ago, life was much simpler, there were few choices, but there was also very few of the tools available that enabled the identification of the point of MML, so experimenting was far more costly and risky than it is now, to the point where small businesses had very few options. Now you have plenty, the challenge is to use them in the best possible manner.
Good luck, and when you need to draw on deep experience, give me a call.
Header credit: The header cartoon is a repeat of the Tom Gauld cartoon used on the original post
Nov 6, 2022 | Change, Customers
Who will miss you when you are gone?
That is a question I often ask clients as they contemplate challenges such as the profile of their ideal customer.
Last week I was gone. Laid low by flu such that for the first time in the almost 15 years of writing and posting on StrategyAudit, averaging 2.5 posts a week, there was nothing.
Nada.
Part of the logic of regular posting is that those who follow you get used to a regular communication, it becomes part of their day to absorb the messages sent. Break the pattern, and you risk losing their almost automatic attention, and once lost, it is a hard pattern to re-establish.
Fair time to ask the question of myself, I thought.
Should not have done that, the answer is a touch depressing.
While StrategyAudit is little more than a pimple on the arse of the blogosphere, I did think there would be a few who missed the experience on strategy, marketing, and business improvement built up over a long commercial career that I put out there.
One person emailed me to let me know a link in a recent post was broken, and one other who I know quite well, rang to accuse me of ‘retiring’ without telling him.
There was the usual level of traffic to those existing posts that typically attract readers, mostly via Dr. Google, but often via referrals, which you can easily pick by the sudden peak of readership.
‘Who will miss you when you are gone’ remains a great question as you contemplate the investment made in marketing. It does pay however to have a thick skin as the answer may not be what you had hoped.
Oct 28, 2022 | Customers, Marketing
The J. Walter Thompson advertising agency is one of the prototypes for the ‘Madmen’ of advertising, the architype of the explosion of consumer advertising that occurred in the sixties.
The agency was started by James Walter Thompson in 1896, when the ‘advertising’ function was nothing more than a brokerage service for selling space in newspapers.
Advertising in those days, well before even radio and consumer magazines, had only newspapers as their communication medium. It slowly expanded into creating the ‘advertising product’ to make selling the space easier into the expanding range of communication options, all on commission.
Simple days.
Most success relies on simple things, breaking down the complex so they are easily understood. So it was with advertising in those early days, before we were blasted by ever increasingly complex offers and intrusive psychological hooks to sell us more stuff.
It is often useful to go back to these roots, to see what made for success early, what were the simple things that worked.
The ‘Thompson T-Square’ is one such tool in copywriting.
Every successful copywriter used it, a few simple questions to focus the mind on what was really important as they wrote the copy. At J. Walter Thompson, it was pinned to the wall of every copywriters office.
What are we selling?
To whom are we selling it?
Where are we selling it?
When are we selling it?
How are we selling it?
Simplistic yes, but also effective, and leading to the ‘four P’s’ of marketing, articulated by E. Jerome McCarthy in 1960.
Those simple questions lead to the consideration of the most effective articulation of value to the ideal customer, who would be receiving the messages in a manner that made them comfortable, and receptive to the idea of a purchase.
So, the simple answer to the question in the header is ‘Yes, every day”, it still works!
The header is an 1868 portrait of James Walter Thompson, courtesy of Wikipedia.
