Nov 20, 2014 | Communication, Customers, Marketing, Sales, Small business
Success these days is hard won, how do you go about winning your share?
Most progress of a sales prospect through the sales funnel happens with some sort of design in mind, rather than accident, even though the actual process is usually chaotic. As the one setting out to engage, there are things that need to be done to maximise the leverage that can be applied without exerting any “hard sell” pressure on a prospective customer, poison in this day of sales mobility.
There are three headline of questions that you can ask yourself, and then reflect the answers in the manner in which you communicate, in every way from the published ads, to the website, location signage, the words your staff use, and the way you follow up any contact.
What is your Share of Attention?
- The world we now live in is one where everyone is bombarded with messages almost every moment, from every imaginable device and location from the sophisticated and targeted offer on your own mobile phone to the ad on the back of the dunney door in the shopping centre. Those marketing their goods and services are in life and death competition just to get noticed, and extract the few seconds it takes for someone to skim a headline, and hopefully be sufficiently intrigued to take some action. Usually that action at the first point is just to read or listen to the rest of the message.
- Who is it for? Nothing can be for everyone, and but too often this simple and basic fact of marketing life is ignored. The targeted ad to a mobile phone number is way more challenging to assemble than the general ad in the dunney door which can only discriminate by gender. Gaining a share of attention of someone in the market for a new car has to involve recognising the personal circumstances of that person. Setting out to sell a two seater sports car to a lady with one child and another on the way is usually a waste of effort, better to focus on delivering a car that will meet her particular needs, more likely a 4 door sedan that fits her budget and preferences. The process of answering the question “who is it for” will always throw up uncomfortable choices. In days past, as someone who spent millions in advertising on the 80’s and 90’s, the typical target audience was something like ‘women 25-40, with children” It was about as good as we could do in those days, with a bit of U&A added. Nowadays, that broad description is so inadequate as to be laughable.
- How are you going to reach them, to create an awareness that you are in a position to meet their need or solve their problem, when and f it occurs. The tools of the web have been absolute game-changers here.
What is your Share or engagement?
- Why should a prospect be giving you some of their most valuable resource, their time? To be worthy of peoples time, you need to add value in some way to build a share of their brain, to get them to think about what it is you have to offer and how that offer can be of value to them.
- Why should they buy from you? In almost all cases, a buyer has options when it comes to buying something. Being clear about why the chosen vendor should be you is fundamental to getting the sale. To continue the analogy above, a car dealership that has some female sales personnel, and who have as a part of their marketing efforts a pick-up and delivery service from the local day-care centres is more likely to make the sale to our pregnant Mum than a dealership full of men emerging from the workshop with grease to the elbows, calling prospective female customers “Luv”.
- In sales with long lead time, there is a process that most prospects will go through, from initial awareness of a need through often several stages of engagement, before a sale can be made. Tactics vary through this sales funnel, but one thing remains consistent, the sale goes to those who are constantly working all points in the funnel, being available to the prospects, and . Perhaps the best salesman ever, Joe Girard who sold 13,001 new cars over a 12 year career in one dealership, a feat that sees him in the Guinness book of records. Joe not only never missed an opportunity to engage, and develop a relationship, and once you were on his radar, he created opportunities to speak to you, all in the days before the internet. Once you had bought a car from Joe, you got a post card about monthly from him, always thanking you for your business, congratulating you on a birthday or promotion at work, and offering help in some way. When it came time to buy Another car, Joe was the only salesman most people spoke to, as they knew him, trusted him, and understood he would be there for them.
What is your Share of Wallet?
- Share of wallet is an absolutely vital and often overlooked measure. When you have created a customer, ask yourself how much that customer buys over a period that you could supply. If they spend $1,000 dollars a year on products similar to yours, but you sell them only $200, your share of wallet is 20%. To continue the story of Joe Girard, he knew that the average time between new car purchases was about 3 years, so sales cycle his typical customers “wallet” was about $20,000 every three years, and he stayed in regular contact, so that when the purchase time came around, his share was high, I have been told as high as 60%. Given some people moved away, some died, and some just changed car brands for any number of reasons, that is an astonishing figure.
- Defining the wallet is usually a challenging exercise, what to include, what to exclude, and over what time frame. My advise is always to calculate the wallet over the average purchase cycle time, for cars, 3 years ago it was about 3 years, for refrigerators it may be 10 years, for womens fashion it may be a couple of months. A friend of mine, a professional woman shops almost exclusively at a particular retailer. They know her sizes and preferences, offer her an exclusive first look at anything new that comes in that they think she might like, deliver on a few minutes notice, collaborate with the shoe shop, and accessories retailers in the vicinity to ensure everything is matched, and do a number of other small things that ensure she simply has no reason to go anywhere else. I suspect their share of my friends considerable wallet is very high indeed, and they have defined it to include the things that go with their products, on which they make no money, but it adds to he service they provide.
None of this is easy, there are no formulas that work for every case, but there are general rules that can be applied. In addition, today, everything is measurable, every time you reach out to a customer or prospective customer you can measure the effectiveness of that action. Joe Girard would have been in hog heaven.
Nov 17, 2014 | Management, Small business
About the most common management advice I have both had, and been given over 40 years goes something like:
“Have a To Do list, update daily, and stick to it”
Many variations, but basically make a list, ensure the list is up to date, relevant, and helps manage your most valuable resource, Time.
I have always struggled with the “list idea” despite knowing the value, trying hard, and advocating it to others. Problem seems to be threefold:
- Short attention span,
- Curiosity,
- Connecting dots.
My more picky friends and colleagues have always accused me of having the attention span of a mozzie on speed, and being overly curious about all sorts of things, often unconnected directly with the task at hand. However, having been picky in those two areas, they also concede that the best stuff I come up with is usually when I connect otherwise unconnected ideas, things, or people in some unpredictable way.
Somebody I know vaguely, and ran into in a cafe last week has always had a similar problem, which he has solved, he tells me with a very simple strategy, that also relies on a list.
A “Don’t you bloody dare” list.
A list of things stuck on the wall of his home-office that commonly distract him, from looking at emails immediately the inbox “pings” to having an “excuse” not to make that difficult phone call, not completing a task he has set out to do just because the result is not due for another few days, to just staring out the window.
It is a simple hand written list, using his own brand of the vernacular, and he swears by it, reckons it has increased his productivity by 25%.
Sounds like a great idea to me.
Nov 5, 2014 | Marketing, Small business, Social Media
Courtesy http://tomfishburne.com/ Thanks Tom, love your work!
For many small business people, Social media is a mix of mystery, distraction, and something that at some level they feel they should know about. However, they have seen too many stupid cat videos, observed the stream of consciousness that can be twitter, seen their children leave an indelible image on facebook they would rather not have seen, lack any native sense of what it is about, and lack the time to find out, so they avoid it.
It is pretty common, but misses the essential point. Social media is where your customers are, where they gather their product and supplier intelligence, and pass on their experiences. Choosing to exclude your business from these experiences is akin to going to play golf, but believing you can still be competitive if you leave your clubs at home.
There are a number of pretty simple ways to start. Social media is by its nature both incremental when you choose it to be, whilst at the same time if you allow it, overwhelming. There are just a few simple things to remember:
- Nobody can know it all, even the experts. Anybody who tells you different is either a liar, delusional, or just after your money. In the end, like all business decisions, there is risk and reward, your job in business is to be on the positive side of the ledger, and to do that you must make decisions and take action.
- Anybody can become engaged, in a small way, become comfortable, gain some understanding, and take another step, or indeed, backtrack and take another route.
- Social Media is a combination of two words, “Social” and “Media”. Individually they mean different things, together they take on another persona. If you remember the “social” part, and behave on SM as you would face to face, there is very little that can go wrong, unless, just like it is in person, you act stupidly, without regard to consequences.
- You need a “map”. Navigating Social Media is no different to finding your way through any unfamiliar territory. You need to know where you are, where you want to end up, and then if you have a map, you can make choices along the way depending on the circumstances in which you find yourself.
- Know who you want to talk to, and find the e-places they congregate. The better you can define your target “receiver” the better you can focus your communication on their needs and wishes. Demographics are just a start, on top you need behavioural and contextual information, how they react in different circumstances. If you can describe your intended audience as a person walking through the door, you will have done well, as to get to that point, you will have to have made choices about who is in, and who is out.
- Social Media platforms are not alike, almost not at all. Whilst there are similarities, and overlap, it is both relatively simple and sensible to choose 2 or at most three platforms on which to engage, depending on who you want to talk to, what you want to talks about, what you want to say, and importantly, what you want them to do with the information you give.
- Leveraging social media commercially rather than using it as a simple place to “e-meet” requires that you assemble and find ways to leverage the “list” those who by signing up in some way give their permission for you to market to them. This is a concept first articulated by Seth Godin 20 years ago, and is probably more relevant now than it was then.
- Develop curiosity. The best way to get to get to understand and feel comfortable with social media is to play around with it, make a few mistakes, gain some confidence, and most importantly, be curious, and experimental. After a while, it becomes easier, and the easier it becomes, the more you will use it and in turn get better at using it.
To get started, shop around until you find someone in whom you have confidence, can demonstrate they know what they are talking about, and read widely to inform yourself, then just get on with it.
Nov 4, 2014 | Change, Marketing, Small business
In the 35 years I have been practising marketing, absolutely everything has changed.
Well, almost everything.
What has not changed are the foundations.
The recognition that delivering value to a customer is the “raison d’être” of marketing, and that seeing everything you do from the customers perspective is absolutely essential if you are to understand what “Value” really means in any given context.
It is a fact of life now that marketing is controlled by software.
Marketing was pretty late to the software game, but in the last 5 or 6 years, it has exploded. Now we can not only automate a whole lot of tasks previously taking up valuable time, and gain vast leverage from the automation, but we can measure the performance of activities, bringing a whole new world of accountability and reach to the practice of marketing.
What we cannot automate, and really only measure after the fact is the influence of creativity on the process, the ability to see what others cannot, to interpret a given set of numbers and circumstances through new eyes, to connect the unconnected dots.
This explosion of automation and tools has created a new “middleman” in marketing, he/she is called “Software”.
Like all middlemen, “Software” needs to be proactively managed. There are many choices of middleman that can be made, often more than one may be appropriate, but those chosen need to be managed, and these tasks require a whole new set of capabilities many businesses do not have, and smaller ones often think they cannot afford.
They also need a new way of working, a collaborative, and cross functional culture that encourages hypothesis generation and experimentation. It must be “failure tolerant”, simply because failure is not really failure, it is an opportunity to learn about your market, competitors and customers.
Nov 3, 2014 | Change, Small business, Social Media
Believe it or not, Social media is a mystery to many, particularly those of us of a “certain age”, many of whom are running their own small businesses.
They know it is important to their businesses, know that their competitors are probably using it too beat them over the head, but how to proceed and find a way to understand and leverage the power, and importantly, where to find the time is still a mystery. Often managing and engaging on Social media is a task left to their kids, the summer intern, or the bloke next door who dabbles a bit, which almost inevitably ends in tears.
Couple of weeks ago over the course of a morning, I collaborated with a colleague, Nelson Luc of Asprout to deliver an information session to a group of small business people and their friends and colleagues from Inner West Referrals in Sydney.
I did the “strategic” stuff, what it was, how it worked, when to use it, and a bit about the evolution that is going on at the speed of a rampaging bull, while Nelson gave a session on the specifics of Google adwords and Facebook ads. These were things they had specifically asked about in a pre-session survey, and a couple of days later, I gave a couple of them a session over a coffee on the basics of Linkedin, and some of the simple tools available in the free version.
The intention was to remove a bit of the mystery, to create a sense that curiosity and experimentation , to offer a few simple tools to start with, and to leave them with the understanding so long as you applied a bit of common sense, and an open mind, Social Media is not so scary. It is just a tool, one that when well used is a wonderful tool for small businesses to get their message out in a way impossible for them just a few years ago.
It all went well, the scores given in the session feedback form were the sorts of scores I usually just dream about, and I see several have dipped their toes into the water, that now seems a little less murky.
Oct 29, 2014 | Marketing, Small business, Strategy
Any business that has done business with the supermarkets knows that they are not there to do you any favours. They have shareholders to keep happy, customers to sell to at the lowest prices possible consistent with their margin objectives , competitors to beat, and shelf space for sale to their suppliers.
In order to survive and prosper selling via supermarket distribution takes a business model that is tailored to the demands that the retailers make.
Following are 10 strategies that have worked in the past, the more of them you cover off the better, and the first few are mandatory.
- Understand the supermarket business model. The supermarket business model is based on three factors: high volumes, lowest possible supply chain and transaction costs, and low prices. With some minor category exceptions for some retailers, they do not vary from this model, in Australia or overseas. Given the scale of their operations, they get to set the rules, and there is little room for negotiation, even for major suppliers.
- Be savvy with data. Mass market retailing is a data intensive game. The retailers have mountains of data at their disposal, and plenty of suppliers willing and able to interpret it for them, with the obvious disadvantage to those who do not interpret. Scan data, combined with the loyalty card data increasingly being used is a goldmine of demographic, behavioural, and promotional information. Being in a position to present data with your interpretation, and having the credibility to interpret the retailers and your competitors data is a price of success.
- Aggressively execute on Category Management. Category management disciplines are the foundation of the retailers ranging, promotional and in store product placement strategies. It is data intensive, and an integral part of he business model, and as such sufficiently important to be treated as a separate “to do” for those to whom success with supermarkets is essential. Allowing your products to be “category managed” by your competitors is simply not sufficiently competitive , or aggressive. You need to execute on category management in partnership with the retailers, even if you are not in the “category captain” role.
- Build a brand that has relevance and connection to consumers. The alternative to having a brand that has at least a small but demonstrable group of consumers your brand has no effective substitute, and who will perhaps change their choice of retailer for, is essential. To be a price taker with no leverage at all, is to be an irrelevant supplier who is absolutely dispensable.
- Recognise you have two customers. The supermarkets may be your direct customers, but the consumer is also your customer, indirectly. As a part of brand building, you need to open communication channels with consumers, so that they are predisposed to buy your products. This may seem like brand building, and it is, but it is more short term direct, and actionable than building a brand which is a long term investment. Direct promotional and communication activity can now be a part of your tactical marketing plans in a far more directed manner than has ever been possible before.
- Remove transaction costs. Transaction costs have two basic causes, the first is not getting “it right first time” requiring rework to correct, and the second is the penalty of small scale. It costs the same to raise and process an invoice of $1,000 as it does for an invoice of $100,000. To the extent that technology can be applied to process the invoices, the costs will not be material, but if people are involved, the costs of the $1,000 invoice is 100 times as much as the $100,000 invoice. This relationship is reflected throughout the supply and distribution chain, and even minor improvements can deliver substantial savings. The source of Woolworths superior performance over the last decade compared to Coles has been the impact of their reductions in transaction costs that have dropped straight to the profit line. Wal-Mart became the biggest retailer in the world by focussing on the reduction of transaction costs of all types, and passing the savings on to consumers as lower prices.
- Collaborate for scale. Small suppliers to supermarkets have to find ways to apply leverage to their opportunities. Collaborating to reduce various forms of transaction and supply chain costs , as well as pooling data and data capabilities are logical if challenging tasks. Many produce suppliers have found ways to collaborate, but their produce is unbranded, and commoditised by retailers, so it is harder for branded FMCG but nevertheless possible.
- Constantly innovate. It is almost a cliché, but nevertheless true, that to stay still is to be left behind. Innovation is a part of the necessary armoury of success. Not just innovation in the product supplied by the means of its production and supply require constant innovation.
- Build agile value chains. Commercial agility is the ability to alter processes in the face of changed circumstances without resorting to non value adding discussion and debate, and without losing sight of the objective. Agility is not flexibility, which implies that things “bend” then go back to normal. By contrast, agile value chains have the characteristic of being able to evolve rapidly, and improve in the process.
- Do not play. The last and most obvious strategy is to ignore the supermarkets, and play in channels they do not control where the value in the product is able to be recognised in some way that is impossible in the high volume low margin supermarket game. Depending on how you measure, and what category we are talking about, supermarkets control between 50 and 80% of FMCG sales, which leaves some 30 billion of Australian FMCG sales left over, not an insignificant sum.
That is an awful lot to do, and the best time to start was a while ago. However, the second best time is now, so go to it. If you need a bit of assistance, just get in touch, and I will bring along my 35 years of experience with this stuff and put it at your disposal.
