Welcome to Super Debut!
You’re probably wondering why the strange number? It’s because the three marketing strategies below aren’t just based on targets we’ve set for them – you know, expressed as always in round numbers such as 20%. These are strategies which have really worked, produced demonstrable increases in revenue for us or our clients of between 28% and 367% as you’ll see from the success stories.
Tactic 1: Find out who your best customers are
If you only have a few customers, you probably already know who the best ones are. But we’re constantly shocked at the number of clients who have no real idea who their best customers are, or know who their best customers are but do nothing to build a relationship with them, or suffer under the delusion that their best customers are only those who generate the greatest sales, rather than the greatest margins. There’s a simple formula for working out who your best customers are:
Profitability x Sales x Loyalty
(length of time they have dealt with you, amount of repeat business over that time, how easy they are to do business with, and where they rank you amongst their other suppliers or service providers)
x Potential Business
(are they growing and will they help you to grow?)
On one of our Franchising Best Practice Study Tours to the United States we came across an award-winning home builder who made the decision to turn away any of the lower-margin projects that had traditionally made up around 50% of the company’s sales. It was a gutsy move, but one that paid off. In the first year, the focus on higher-value clients slashed theirrevenue by half, but it also enabled them to work harder to improve their operating processes, cost structure and marketing, with the result that their profit was the same as the previous year. They were then able to build on their improved systems and structure to grow their sales without compromising their margins. The result: Average annual sales growth of 27% and profit growth of 43% over the next three years.
Tactic 2: Make friends with your existing customers, or especially your best ones
We all know – or should know – that it is ten times less expensive to retain an existing customer than to bring in a new one. But how many businesses actually go to the trouble of building an ongoing relationship with their existing customers that actually means something to the customers? We’re not talking about sending them the odd newsletter or Christmas card. We’re talking about a real relationship, one with some personality and real value for them, giving them a reason to keep buying from you and even – shock! horror! – to recommend you and refer their friends to you.
1. We set up one of New Zealand’s first banking call centres back in the 1990s. The purpose of the centre was to take the load off the local branches and provide responsive personal service to customers who called the bank. But another purpose was to make outbound calls to customers, not to hard-sell them but again to provide helpful service. For example, we phoned customers to remind them that their term investments were coming up for expiry, giving them the latest interest rates and special offers and the convenience of renewing or transferring their investments over the phone, without any paperwork or the need to go into their branch. The call centre quickly grew to more than 120 staff, taking an enormous amount of cost out of operating the branch network and increasing the bank’s revenue by 28% over two years.
2. We used to work for a direct marketing agency which specialised in charity organisations such as the Red Cross, Cancer Society and CCS. We changed the way we communicated with these organisations’ donor bases by writing letters with the personal touch, from people affected by diseases or disabilities, not in a pleading or needy way, but taking a positive approach – demonstrating the difference the recipient’s donation would make in their lives. The approach worked, typically increasing donations by more than 30% on earlier, less personal communications. Then we did something else we had never done before. We wrote to personally thank everyone who donated more than $20. To our complete surprise, some 20 – 30% of these donors were so blown away that they had been thanked that they actually DONATED AGAIN!
Tactic 3: Become a sales driven organisation
You may already think your business is sales driven. You may be selecting your people by their sales ability, supporting them with all the tools, systems and ongoing training they need to succeed, and integrating your sales and marketing efforts. But you may still be missing the X Factor. Here are two examples of businesses with the X Factor.
1. We did everything right with one of our clients, a leading home building franchise. We upgraded the recruitment processes for both franchisees and sales consultants. We provided them with the sales tools, systems and training. We supported them with advertising and online campaigns to generate more leads for them. And although the results were impressive – a 36% increase in sales in the first twelve months – we still felt there was something missing, something more we could do. But what? Then it hit us – despite the fact that sales and marketing ability was an important criteria in our client’s franchisee recruitment process, the franchisees’s main strength was project managing the building of homes, not managing their teams of sales consultants. How could we provide better sales management across the franchise network? The answer was for the franchisor, not the franchisees, to employ a National Sales Manager whose job it was to work with the franchisees and their sales teams to get the best out of the franchise’s sales resources. The result: 367% sales growth across the network over the next three years.
2. This is a kind of reverse success story, but it illustrates our point. When we were managing a number of shopping centres across the country, it became abundantly clear to us that there was one critical factor in the success of retail chain stores: The quality of the regional sales manager. Success to us as the landlord was measured by sales per square foot. This was because most shopping centres not only charge a standard rental rate per square foot, but also additional rent based on any excess turnover generated above a set rate per square foot. In this case, a well-known women’s fashion chain store was achieving sales per square foot 42% greater than the next best performing women’s fashion store. We couldn’t put our finger on why – until one thing changed. The chain’s regional sales manager left to have a baby. The store still had the same manager, the same staff, and the same range of stock, but went from No. 1 to No. 3 in its category within six months.
OK we’re not in the US but the term they use over there for a concise, carefully planned, and well-practiced description about your business that a 12 year old (I have one which is useful!) should be able to understand delivered in the time it would take to ride up or down a lift is a good one.
An elevator pitch is something all of us in business should use and memorise so that’s it easy to trot out. It’s halfway between your opening selling one-liner e.g. a good opening question that can’t cause offence such as “do you have a good accountant?” and your sales script where you go into detail about your products and services.
It should cover:
- Who you are
- A very brief description of what you do
- Who your market is
- What your USP (Unique Selling Point) or competitive advantage is
- How you do what you do to provide credibility
- A counter to the biggest objection prospects come up with e.g. cost
Whew, I can hear you saying, all that in a few short words – that sounds tough? Well yes but as they say, if you’re going to do something you may as well do it properly so here are some pointers:
- Keep it as short as possible. Ever been to a business speed dating event? Enough said?
- Practice until you’re word perfect, timing yourself
- Don’t use jargon or technical terms
- Have a hook or a call to action
- Keep this updated frequently
- Spend more time listening than talking as the person you’re talking to will be feel a lot better about you if they’ve told you all about them!
Once upon a time…
Sam was worried about his electrical supply business, and rightly so.
The initial burst of growth over the first three years of the business had halted in the fourth year and in the fifth his sales and profitability were now going backwards.
Sam urgently needed more bank funding to keep the business afloat until he could drum up some more sales.
So he first met with Pam, his CPA, to complete a loan application, and that started by reviewing the business’s financials.
“Not pretty” she observed.
“Agreed” said Sam. “But I can’t figure out why we’re in free fall. Sure the GFC had an impact but we actually grew in the early stages of that and now we’re going backwards. And I really need this loan so the business can survive the drought we’re going through at the moment.”
An uneasy pause filled the room.
“Do you have a business plan Sam?” Pam asked, even though she knew the answer.
“Er … not as such” replied Sam.
“Well that may explain why your business is in decline. The importance of a good business plan is one of the fundamentals taught at every MBA college and if you hire any business consultant worth their salt it’s one of the first things they’ll want to put in place. Besides” she continued, “the bank’s going to want to see a business plan including your financial projections before they’ll even think about giving you a loan”.
Sam could see the logic of Pam’s argument but protested: “Okay but I’ve got no idea how to do a business plan, let alone financial forecasts. Frankly, that sort of stuff gives me a headache.”
“Well naturally I can help you with the numbers side of the plan. And as for the rest of it that’s no problem either” said Pam as she reached for the stack of business cards in her top drawer and handed one to Sam. “This guy’s a friend of mine but that’s not the reason I’m referring you to him. He’s not only got an MBA he’s also a qualified business coach and he knows how to put together a plan that’ll impress the socks off the loans officer at your bank.”
And they all lived happily ever after…
Quite the opposite in fact.
Sam met with Rudy, the business coach, who explained that yes, he could help but that he’d need $2,500 up front each month.
Sam didn’t have that sort of cash to spare so he paid with one of his credit cards and made a mental note to apply for another credit card, just in case he needed it to fund Rudy’s fee in the upcoming months.
After all, according to Pam and Rudy, getting that business plan sorted was not only the key to better business performance, it was also critical to getting the business growing again.
After a stressful couple of months, the business plan was completed, the loan applied for and thanks to the impressive chart in the plan which showed an upward trend in sales and profitability, the loan was granted, albeit with onerous monthly repayment conditions.
On the one hand the loan brought Sam some breathing space but on the other hand he was more stressed than ever. Sure, he’d paid off most of his outstanding creditors but how the heck was he going to service the loan repayments?
“Not a problem” said Rudy. “All we need to do is implement the plan. We’ve done the hard yards. You’ve now got a mission statement so you know what your purpose is. And your vision statement gives you a clear sense of long term direction. Also, you’ve now got that really nice wall plaque that tells your team what your business values are.”
“Well yes” said Sam, shifting a little uneasily in his seat “but how is that going to get me the new clients and new sales I need?”
“Whoa, steady on Sam” said Rudy. “Sure we need to get some marketing happening but first we need to make sure your staff Position Descriptions and your supplier agreement are updated. After all, there’s no point in getting new clients in if you’re not well organized in the back room”.
Sam thought for a moment. “Well okay. You’re the expert Rudy and you come highly recommended from Pam so I guess we better get started with the paperwork huh?”
Rudy and Sam worked together for another four months putting Human Resources and supplier systems into place, holding team meetings, recording agreed actions, reviewing the financials which continued to deteriorate and creating quality control checklists and documenting other systems.
But after six months of headaches and extra hours, Sam finally snapped.
And at their next meeting he let Rudy have it.
“Rudy I’ve now spent fifteen grand with you and after six months of blood, sweat and the occasional tear, I still don’t have any more clients and not even one additional sale to show for it. It’s like my ship’s still sinking and all we’re doing is straightening the proverbial bloody deck chairs!” he protested.
Rudy was ready for this. Sam wasn’t the first client to express such a concern.
“Hey Sam, relax. You’ve come a long way and now we’re ready to start the marketing. Don’t give up yet, we’re just about there. We’re going to redesign your Yellow Pages advertisement, get you onto Facebook and start your Blog. After all, most marketing is going on-line now and so of course we need to get your website made over as well. Also we need to do a review of your product range, complete a customer satisfaction survey and we should probably hire a research firm to find out what the market place really wants. All that’ll give us a whole lot of valuable information that we can use in our marketing.”
At that point Sam exploded. “Are you freakin’ crazy Rudy? That’s going to cost me a small fortune. I’m struggling as it is and if I don’t get new clients in soon I’m going to have to shed some staff or shut the doors. Rudy, it’s time you left. We’re through.”
Rudy didn’t mind too much. He’d seen this before. And after all, he’d still banked fifteen grand. Sure, it was a shame that Sam didn’t ‘get it’.
“I mean, what does he know?” Rudy thought. “I’m the one with the MBA and I’m the one who earned my business coaching diploma with first class distinctions.”
Unfortunately this sorry story, or variations on its basic theme of wasting money on BS theories that don’t put money into the business account, has been repeated hundreds of thousands of times the world over.
The moral of Sam’s story is this: it’s effective marketing that makes the difference, not a business plan and not any fluffy stuff such as Visions, Missions or Values statements.
And no matter how exciting they may look, no amount of upwardly trending growth charts of row upon row of increasing dollar amounts will make one fig of difference in your business.
And even if your product or service is terrific and your clients love you, that’s also not the thing that will make or break your business.
The history of business is littered with a million or more businesses that had a product or service that was good enough or even great.
To paraphrase the pragmatic and ever-inspirational Ed Johnson:
“They say that if you build a better mousetrap then the world will beat a path to your door. The hell they will. It’s the marketing that makes the freakin’ difference.”
Summary: once you’ve got a product or service that people like, stop messing with it and make the time to continually grow your “Marketing Muscle” and then flex it every day of the week.
Once you know how to get people buying your stuff, then, and only then, should you start messing with the management side of your business.
How can you build your marketing muscle? Simple…
If you want to grow a physical muscle you need to do two things: feed the muscle the right diet and then exercise it.
And it’s the same with growing your Marketing Muscle: feed your mind the right diet of proven marketing ideas and then exercise the muscle by implementing those ideas.
Then, and only then, you may live happily ever after…
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