Oct 19, 2015 | Customers, Marketing, Sales, Small business
Strategic Key Account Planning
Almost every organisation I have dealt with uses some variation of the accepted sales funnel model.
Start by gathering as many leads as possible, then progressively whittle them down through the funnel until you have a customer. The practice is always way more chaotic than the nicely drawn funnel, as leads enter and exit the funnel at various times for various reasons. Chaotic is usually an appropriate expression.
When you think about it, there is a huge amount of waste in the process.
You start with many, and expend considerable resources to turn leads, of which a large majority are unlikely ever to be customers, into prospects, into hot prospects, (or whatever creative name you call them) then create a transaction, then hopefully to build a relationship.
In most B2B situations, this simply does not make sense.
Would it not be far better to spend a fraction of the resources identifying your ideal customer based on your value proposition, then identifying the decision makers and their procurement processes in those ideal customers, then setting out to engage them with personalised marketing?
This is in effect turning the funnel upside down, but recognising that prospect behaviour is unpredictable if not chaotic, it may be that the pyramid, in what ever orientation is the wrong metaphor.
Why not use a cycle of some sort, with the central objective of creating a relationship with the key customers and prospects in your industry.
Digital technology is making this easier by the day to execute, but the foundations of good marketing have not changed. Digital technology cannot change those foundations, the things you simply have to get right to earn the confidence of a prospect to give you their money.
Oct 13, 2015 | Customers, Marketing, retail, Sales, Small business
Innovation in supermarkets
Small business suppliers to supermarket chains are substantially compromised by the lack of resources to innovate.
Peter Drucker stated 50 years ago that innovation is the only really sustainable competitive advantage, and the passage of events have proved him correct.
Commercial survival requires that you are able to continually innovate, or you rapidly find yourself left behind, simply because everybody else is.
Knowing this does not however, make the challenge any less daunting, especially in an environment like FMCG where the retail gorillas stamp on variation as a source of transaction costs, and are actively seeking to reduce SKU numbers by pushing housebrands.
Lets define what we mean by innovation for the purposes of this post.
It does not include business model and process innovation. Both are terrific ways towards commercial sustainability, are paths every business must follow, but have little to do with innovation from the customer perspective, at least in the short to medium term.
By contrast, product innovation is concerned with new stuff that adds value to consumers.
Pretty simple definition, that precludes line extensions, which are just a fact of life, and product changes, which are again a fact of life. We are seeking to talk about the things that really make a difference, and how and why that happens.
Following are some thoughts on the nature of the strategic environment we find ourselves competing.
Innovation Paradox. Big businesses get big by being able to reproduce things without variation, their processes ensure consistency, and reject the outliers. This goes as much for people as it does products, so generally large businesses have more difficulty seeing and acting on something new than small ones. There are obvious exceptions, and large businesses everywhere are seeking ways to overcome the innovative inconvenience of their scale, with greatly differing levels of success. Nevertheless, the generality holds, but the small business end of the FMCG supply chain has been decimated, perhaps almost eradicated by the scale of the supermarkets and the power of their business model. Where is the innovation going to come from I wonder.
Risk. The risk profile of every business is different, but as a generality small businesses have a greater capacity to take risky decisions, but a less capacity to absorb them when they go pear-shaped. Large businesses survive on consistency as noted, and success for individuals in a large business is usually counted by their successes, failures are frowned upon, so the tendency to take risks is reduced, hence, their inability to innovate. Again there are notable exceptions, but they always occur when there is a leader who mandates and lives risk tolerance.
Wide view. Any organisation, no matter how big, only has a small proportion of the people thinking about the categories they compete in, so why do you think you will come up with the great ideas? Those using what I have always called “Environmental Research” always do better. This has nothing to do with hugging trees, and everything to do with understanding the context in which the behaviour of your consumers happens. When you understand the context, and see shifts, the opportunities suddenly become more easily identified.
Habit. Consumers are driven by their own habits, and once formed, it takes a lot of effort to break them. Habits work because they make our lives easier, and we are loathe to risk what we know works, for that for which there may be a question.
Boundaries. Innovation efforts need boundaries, or they tend to wander off into irrelevancy. I have found it far better to provide those boundaries in the pre-workshop, if that is what you are doing, material. It is necessary to encourage people to as the cliché goes, “think outside the box” but it is counter productive to have people thinking outside the municipality. Far better to ground the process in a context that is familiar, where there is market and customer knowledge available to feed the process. Without such grounding you tend to get uncertainty and irrelevancy, and ideas and conversation that skates across the surface rather than digging deep to where the problems and opportunities that provide the fodder of successful innovation are buried. I love the metaphor of Classical music and Jazz in the context of innovation, the score provides the boundaries. To be a good classical music player, you need to be a master of your instrument, and be able to reproduce note perfectly what the composer has written, the allowable variation is very small, the emphasis is on technique. Jazz by contrast requires that you are a master of the instrument, as well as the music to the extent that you can take what a composer has written and innovate around the base rhythm and melody, so you need to be not just a master technician, but a master of the music. Great innovation in a commercial environment has exactly the same characteristics.
Think different. The great 1997 Apple advertisement said it all, but how many corporate entities will tolerate the crazy ones? Very few. If you are to truly be an innovator, somehow you have to accommodate some crazy ones. Generally they are tough going, irreverent, unconcerned with status and the status quo, constantly irritating the nice smooth flow of processes that deliver the consistency that corporates thrive on.
Problem definition. Innovation occurs when a problem is solved. Often it is an old problem solved in a new way, sometimes it is a problem unrecognised until the solution comes along, the classic example being the post-it-note. A huge part of the challenge of innovation is the identification of the problem. Rarely does a problem emerge with a fully-fledged solution, but as Einstein, in my view one of the greatest marketing thinkers who never receives any credit at all once said, “if I had an hour to solve a live changing problem, I would spend the first 55 minutes defining the problem, the rest is just maths.”
Margin maintenance. This is tangled up with risk profile, but is separate. Over the years I have done many proposals for new products killed at the gate by the margin problem. “If we launch this, it will erode our margins” often true, but the standard response I give is “better us than someone else”, but it is often a futile response when the ultimate decision maker is compensated by short term considerations. After all, Kodak managed to survive for 40 years after they invented the digital camera in1975, several generations of CEO had passed through in that time, all taking their packet, it was just the last in the line who had a problem.
Value not just price. Consumers look for “value”, but way too often that is translated by suppliers and the retailer into “price”. Price is just one way of reflecting value, but it is the most obvious, and easiest to articulate.
Barriers. Every industry has its own set of barriers to innovation in addition to the more general ones above. In the case of the Australian packaged goods industry, they are several, all associated with the concentration of power in the retail trade.
Margin squeeze
Speed of house brand copying the successful products
Timing of distribution and advertising
On shelf management of facings, cut in, position, promotional programs and stock weight
13 week “live or die” time
On shelf upfront costs
Category management if you are not the category captain, and few small businesses are, you are at a significant disadvantage
Risk averse retailers
Habit. Everyone is used to doing business in a certain way, so that is the way it is done.
Opportunities for suppliers.
Similarly to barriers, every industry has its own unique set of opportunities that when seen are open for businesses to chase.
Social media. FMCG suppliers have not yet solved the problems of how to best use social media to market their process in supermarkets.
Mobility. Engagement with the web and its tools is now mobile, a majority of net interactions are mobile, and most people have their smart phones with them all the time. Using this capability and the geo-location capability to foster a direct relationship between the brand owner and the consumer with the supermarket playing the distributor role is a real opportunity currently under-recognised and utilised.
Food service and ingredient. These are fragmented markets, where innovation, service and brand can still play a real role, and getting a return on your investment is still up to the quality of your business, not the whim of a buyer in a gorilla suit. Depending on whose numbers you use, sales outside the major chains of ingredient and to food service outlets from fine dining to fast food, is north of 60 $billion.
Digital coupons. Retailers in Australia have ensured that the redeemable coupon, so prevalent in the US does not get a start here, too much transaction cost, but a digital coupon? Why not? There have been several tries of various types, Groupon being the most obvious, but smartphones make it so much easier to collect coupons and redeem them in some way, not necessarily even associated with the retailer.
Range optimisation. Category management as it has evolved has always been data intensive, and from a retailers perspective, the objective has been margin optimisation. The next step I suspect will be range optimisation which is really just margin optimisation with a far greater understanding of consumer behaviour thrown into the mix. We have all operated with the view that our various research tools and their data gave us enough to work with, and they did, but suddenly there is the “big data” behaviour mining opportunity offered by social media and geo location, in addition to the fragmentation of times we shop, and how we place and receive orders. Range optimisation to accommodate all these changes just became in my humble view, the FMCG marketing challenge of the decade.
Innovation from the waste. Until very recently, produce that was outside the specs for appearance was consigned to the waste bin, juicing, and other marginal uses, it was not deemed good enough by retailers to sell, not because it was nutritionally or organolepticly deficient, but because it looked crook. Along came the idea of highlighting the products visual imperfections, “Imperfect pick” is the term Harris Farm have used, Canadian chain Loblaws has successfully rolled out “ugly fruit” in Canada, and both Woolies and Coles appear to be tinkering with the idea currently. There are a myriad of opportunities to utilise undervalued product to build a category, for example, shin bones are the foundation of Osso Bucco, many of us will sample great Osso Bucco at an Italian restaurant, but never cook it at home, when it is an easy, tasty meal with a very low meat cost. Pretty simple marketing I would have thought.
Innovation is tough, but it is also fun and makes the future. Those who just wait for the future to happen will be overwhelmed by it, those who take a role in shaping it will at least have the chance to do well.
This post is the 8th in the series examining the means by which small businesses can deal with the retail gorillas.
The one that started it, back in October 2014, is a summary of the 10 ways to beat the gorillas at their own game, a summary post that generated a lot of interest, so I expanded the individual points in subsequent posts.
The first expanded post was the 3 essential pieces of the business model
The second, 5 ways to compete with data
Third, 6 category management ideas for small business at Christmas
Fourth, 9 imperatives for small businesses to build a brand
Fifth deals with the reality for all supermarket suppliers, that they have two customer types, requiring different approaches.
Sixth, deals with the least understood large cost impact on small businesses: Transaction costs.
Seventh suggested ways for small businesses to collaborate for scale,
Aug 10, 2015 | Customers, Marketing, Sales, Small business
cold calling
Almost everybody I know hates cold phone calling, there is something in the psychology that prevents us putting ourselves in a position where absolute strangers can reject us 99% of the time.
“Cold email calling” is the less confronting and can be a hugely effective option, but unless you follow some simple rules, will still be 99% ineffective. It is just that the email will go to the trash, and you will not have to put up with someone rejecting you verbally.
If you follow these rules, and optimise your emails, their effectiveness will explode.
1. Research the prospect list.
It is easier today than ever before to create and segment your prospect list into finely drawn groups, each having a persona that is likely to respond to specific messaging. Sending an email to a professional chef outlining your Aunt Mabel’s favourite cup cake recipe is unlikely to be read.
Ensure you have a strong value proposition for each persona that you draw, one that feeds into their motivations, problems and fears.
2. Have a compelling subject line.
Your subject line is like a headline in a newspaper, or the cover of a magazine in the newsagent. In a very few words it needs to capture attention and lead you to the next action.
Ask yourself, “would I open this email”
Have a compelling “sub head”
Your first sentence is like the sub headline on that same magazine cover. If you watch what works in your local newsagent, it is often piquing curiosity that works best. Writers of these covers are the cream of direct response writers, so model your emails on the pattern that works for them.
3. It is not about you.
If your email opens with “my name is Fred Nurk from ABC Corp, and we provide the worlds best Blah Blah product” you have probably already lost them. Instead, you need to spell out exactly how you can help them do their job better.
Be conversational. Write like a peer, someone who understand the challenges and opportunities of your target, and who relates to them. Being “needy” is the best way to lose a reader, even if you think your cause is the best in the world. Avoid weak terms like “I hope..” and “I just ….”
4. Establish credibility.
Without credibility, you chances of converting are minimal. Providing social proof, data, of some sort is essential. A testimonial from an existing customer can be very effective, but these days, they have to be video, and the individual has to be clearly identified, and identifiable, otherwise you will be suspected of writing it yourself or getting one of your mates to do a video.
5. Create a process.
A cold email rarely creates a sale, at best it can create a warm reception to the follow up. This is the entry to your sales funnel.
There are three parts to a successful email process that recognise the “moments of truth” that occur. First you need the finely drawn persona noted above, second, you need to map the buying journey to be able to identify the points at which you can create interest, and third, you should have a schedule. It is easier to map out a series of posts around a topic, then write them, than it is to sit facing a blank screen trying to think of something to write today. Believe me, I have tried both.
None of this is easy, and it takes time and expertise, but does work. There is never any substitute for experienced, professional writing. It is not the case that everyone who can write a letter and ensure the spelling and grammar is OK can write a good sales letter, it is an art, so you are probably better off getting an artist.
Jul 29, 2015 | Customers, Marketing, Sales, Small business
Small businesses selling B2B always struggle to generate sales leads. Survey after survey confirms it as one of the biggest challenges they have.
There are plenty of tools out there that supposedly make it easy, and certainly they do make it easier than it has been in the past to generate many contacts, but it is still hard to generate a warm lead, and then to convert to a sale.
None of the tools are any good unless you have a crystal clear picture in your minds of the value you can deliver, being “wishy washy” and peppering the conversations with adjectives (particularly “awesome” my latest hate word) no longer works.
Following is a list of options that have worked over the years for my clients. Most are pretty obvious, when they are pointed out.
1. Referrals. Being referred is the best sales lead you could ever have. Someone who is familiar with your work saying “Bill is great at …. you should talk to him” to a colleague would be wonderful. Yet, so few of us explicitly ask for referrals. When you have done good work, ask who else your client knows who could benefit from your expertise, not expecting to be referred to their competitors.
2. Testimonials. Perhaps second to referrals are testimonials, people with whom you have worked who are prepared to say in the record how great you are. Video is the only way to go with testimonials. Nobody believes any more that the written ones on your website from “Monica X from Parramatta” are real, they believe you have written them. It takes Monica to front a camera, identify herself and say how great you are for it to be effective, then is very effective.
3. Personal networking. A lot of small business people join network groups, in the expectation that this will lead to referrals and work. It can, but almost always takes time and effort. Others in the group need to understand what you do, and how that is relevant to their problems, then they have to be convinced that you offer the best value solution to them. Being in such a group can be rewarding for small businesses in more ways that just generating leads, as it get them out of the office, and forces them to speak publicly about the value they can deliver, which almost always acts to sharpen the elevator pitch. These skills come in very useful when actually in elevators.
4. Digital networking. LinkedIn is the obvious tool here, too often misused by those who just see you there and immediately start selling. LinkedIn like any social platform requires that you demonstrate your bona fides first, and the best way to do that is to identify the groups, preferably closed ones, where your prospect hang out, and start to engage in the debates and conversations that occur. You can then follow up privately with some, and have a more focussed conversation about their needs and after a rapport is established, your solutions.
5. Seminars, webinars & e-books. In most cases, our clients buy from us because we have something, or know something that they cannot get elsewhere. Demonstrating your mastery of a topic by running seminars on them, producing webinars, and writing e-books demonstrates your mastery. The secondary benefit of this type of content is that it can be used, reused, repurposed, and reused again, and again.
6. Platform cross-posting. Many people blog on their own site, hoping people will stumble over the posts, but there are many other platforms now that can provide a shopfront for your products and services. LinkedIn recently introduced a blogging platform which works very well, you can open up a YouTube channel and post instructive videos, or put great information up on slideshare. Then there is guest blogging, a great way to leverage the lists of others, by adding value to their audience, a win win both ways.
7. Lead magnets. These are things that visitors can gain access to by exchanging their email address. It is a great way to reuse the content you produced in a webinar or e-book. Here the challenge is that you need to attract the eyeballs to the lead magnet before it has a chance of being magnetic.
8. Direct mail. Yes, snail mail does work in this day of digital everything. Now we get so few things in the mail that is not either bills or junk, that a handwritten envelope with a stamp, will always get opened and read. This requires that a modicum of research into your prospects is done, as a wrong spelling or title means immediate filing in the round-file. Best done in small batches, that way you can also test the response to the sales letter you send.
9. Warm cold calling. Bit of an oxymoron there, but a deliberate one. If you do not know the name and position of the person you are preparing to call, do to waste your time. However, if you do know their name, there is a reason they might be interested in hearing from you, and you can articulate that reason in 20 seconds or less, then that implies you have done sufficient research to make a cold call a warm one.
10. Advertising. The last and perhaps most obvious tactic to generate leads. All social platforms survive by taking advertising, they are the newspapers of the 21st century in that regard. You give them your profile and preferences, inadvertently or otherwise, and they sell that to advertisers to whom your profile fits their target. Having said that, the tools available on the platforms are terrific. Both Facebook and Google in particular set about making it increasingly easy to spend ad money with them with features like Facebooks lookalike audiences explained here by Jon Loomer, easy and AdWords strategies outlined by Wordstream.
Most businesses use a mixture of the above, too often randomly rather than as a deliberate strategy. The old marketing communication “rule of 3” still applies: Know what you want to say, know and articulate why it is relevant to the receiver, listen to the response.
Jul 8, 2015 | Branding, Customers, Marketing, Sales, Small business
Free works
It happened again last week.
A client asked why I advocated giving away a lot of information on their products and supporting technology, seemingly for free off their website. For them it is a challenging idea, one that runs against everything they have ever thought or done.
Their products are challenging, technical products, heavy in intellectual capital, so why give it away?.
To answer, I created the following list, and it is all about creating value before asking for the purchase order. Do it well, and customers do not have to be sold, they become buyers.
Provide assistance. Information assists potential customers to recognise that they have a problem, an opportunity, or that there may be a better way of approaching a situation.
Demonstrate. By demonstrating how their problems will be solved, enabling comparisons, and offering technical and financial case studies, the cost/benefits of a purchase can be more easily calculated. This makes the internal purchase approval processes easier for those charged with their carriage in a customers business.
Risk identification. Risks of adoption, and non-adoption can be articulated, demonstrated, and often costed and compared.
Learn. Information offers a prospect the opportunity to learn without the costs usually associated with learning, and they will not forget the opportunity.
Decision necessary information. Availability of strategically significant information from a supplier can accelerate the adoption and implementation of new products and processes, delivering a market benefit.
For my client, the list of benefits is as significant, and in this information driven modern commercial world virtually a competitive necessity.
Be expert. We will be seen as the experts in the market, and who would want to buy from an also ran?
Cycle time. It has the potential to shorten the sales cycle by removing some of the steps normally associated with such B2B sales of significant size
Conversion cost reduction. As a result of both of the previous items together, our cost of conversion from random and often unknown prospect to a transaction is likely to be reduced, and the numbers increased leveraging the costs of our sales effort.
Short listed. Information availability increases the chances that at least we get onto the short list of those who are considering making a purchase, but who may not be in our immediate sales radar.
Sales funnel information. Downloading of various material by prospects gives us not only information on who is in the market, but what they are looking for, and leads on their specific interests and concerns.
Build a brand. The biggest benefit of all is that of the building of the brand, the position of expertise in the market. In this day of ubiquitous information, being seen as the expert in any domain is a hugely valuable asset.
Being secretive, and believing that information held closely is power is now a failed strategy. It worked in the past, but no longer. Information is still power, but the way you leverage it has changed radically.
Jun 29, 2015 | Marketing, Sales, Small business
13 routes to success
Small businesses have few resources, so they need to get a lot of mileage out of what they do have.
How do they generate successful marketing campaigns that generate revenue and a long term position in a market without breaking the bank?.
Following are 13 ways that I have found to be successful in 20 years of advising small businesses. It is also fair to acknowledge that 20 years ago, the astonishing range of tools now available were barely in the minds of science fiction writers. There has been a revolution, and small businesses suddenly have the opportunity to look like and act like large ones, while retaining the advantages of being small.
1. Hone your elevator pitch.
You need to be able to engage a prospect in a very short time, sounds easy, but is very hard. The pitch is rarely about the product or service you have, although this is the subject of 9/10 pitches, the successful ones are about the outcomes your product can deliver to the prospect.
2. Collaborate.
Small businesses have great opportunities to collaborate with others with complementary products and services. The shoe shop with the dress shop, the florist with the liquor shop, the chiropractor with the gym, and so on.
3. Leverage social media.
I am often asked about the value of Social media, and can only respond by observing “that is where your customers are, so why would you not be there?”. However, managing social media can however become a burden if you try and do it all yourself. Listen to and believe many of the pundits with a silver bullet to sell, and you risk finding yourself lighter in the wallet, but no further forward, but trying to do it all yourself consumes considerable resources. The advent of digital marketing tools has not changed the basic foundations of marketing at all, just made them more accessible, and so outsourcing the bits you do not know how to do offers great opportunities for leverage.
4. Have a digital presence beyond a Facebook page.
If your marketing effort is all about Facebook, you have missed the boat. Facebook is a fantastic way of connecting, but it is only one, and it is not the best place o transact business, or cover the final step prior to a transaction, that is best done on a website. Social media delivers a set of great tools to drive people to a website, and start the process of engagement, moving them through a “funnel” towards a transaction, but it is only one of the tools needed. Refer above.
5. Foster creativity
The management structures of large businesses are designed to ensure the repeatability of process, so that they are not dependent on the knowledge and commitment of individuals. Therein lies their weakness, as another way of looking at a process is that it delivers multiple opportunities to say “no”. Find ways to foster the creativity of those in your networks, or out of them currently who have expertise and knowledge that can be applied to your sphere of operations.
Network relentlessly. Get out of the building, create networks and friendships that know about your businesses, what it does, its “Why” and it will enable over time organic growth.
6. Open envelopes.
A colleague of mine once said disparagingly about a mutual acquaintance that he would “go to the opening of an envelope”. On talking to this bloke on another occasion, he laughed and indicated that it was right, so long as he could wield the letter opener, meaning, he had an opportunity to put a point of view, and be the focus of some attention, even if only for a moment. I always thought it a good idea to take every opportunity to speak, as it builds credibility, and as a result, builds a business organically. It follows that you also need to be a competent public speaker, so if you are not, get some training, or opening envelopes at the local “toastmasters” group would be a good idea.
7. Seek referrals.
The most powerful marketing is word of mouth. When someone we trust tells us that a particular product or service is good, we tend to believe it, and will try it out when the need arises. Referrals are now hackneyed, as many web sites have them from people we have never heard of, and often we think the site owner probably wrote his own, but that does not diminish the power of the personal referral. Seek the personal referrals out, ask for them, post them, and build “social proof” in other ways.
8. Be the expert.
Whatever is your niche, make sure that you present yourself, and indeed are, an expert. The world is full of experts, but for a small business, if you are the expert in your local area, and those around who may need you understand you are the expert, who will get the business as it evolves?
9. Build relationships.
People buy from people, not businesses. I know that sounds odd with all the stuff being sold on line, but look at the sites that are successful, beyond the mega sites like Amazon and Alibaba, they all have a human face, and a personality. You might be sending your money via a credit card to a business you are not familiar with, but 9 times in 10, you would have looked at the profile of the “face” of the business, looked at the products they sell and endorse, sought some sort of social proof. You get to feel that in some way you know them, then you might buy. An old mentor of mine used to say, “Success comes to those who build many bridges, and never burn one”
10. Localise.
Most small businesses are local by their nature, be sure that your customers know where you are, that they can get their hands around your throat if necessary, but more importantly have a cup of coffee with you wen all is going well. Local, and the human touch that brings is enormously valuable. Even large businesses are localising. I rang the customer service lines of one of the banks recently, with a complaint, something they had done which had (presumably) unintended consequences on me, and I was nit happy. The first call was answered by a call centre, clearly not in Australia, the first hand-off was to the supervisor, again clearly nowhere near Australia, by which time I was getting really annoyed, but the third was to someone in a local call centre, who handled the problem quickly, easily, and in a language we both had as our first.
11. Offer incentives.
Most times these words are uttered, the first thing that springs to mind are discounts. These may play a role, but are far from the only ones. Time limits, quantity limits, guarantees, freemium, there are all sorts of incentives that do not require you to make a sale at a discount, many of them when used creatively will actually increase your conversion rates by adding some urgency to the selling process.
12. Everyone is in sales.
In every business, particularly small businesses, everyone in the business needs to recognise that they are in sales, that their job relies on selling, irrespective of the title they may have on their business card. This particularly applies to some of the marketing people out there who seem to think their job ends before accountability begins.
13. Promise the world, then deliver + Mars.
Under promising then over delivering used to be an effective strategy, but it has lost its gloss. Promising the world is easier than ever, and there are more people than ever making those promises in your space. Today you need to be known as the one who promises the world, like all the others, but then delivers with more than was promised. In effect it is an over delivery on the expected over delivery.
If you can do all of these, even a majority, the world is your oyster.
