Categories
Direct Marketing Marketing Media

Working the stage

People at Red, Canon and Nikon are fanatical about the photography and video equipment they build. People at Adobe and Apple are fanatical about the video software they build.

This amazing video is an example of their “why”. Imagine the feeling this emotional piece would give you if it was made with your tools.

Would you take Denali home? Do you have any doubt about the strength of Ben and Denali’s relationship? Do you feel like you know them?

Would you want Ben to make a video about your business?

The next time you step off the stage (or the page) after sharing something important to you, what will leave your audience feeling as strongly as you felt as you watched this film?

Are you working the stage?

 

Categories
customer retention Lead generation Marketing Recurring Revenue Sales Small Business

18 questions to increase sales

This week, I’ve been working on metrics because I can’t have my fingers in every pie at once – at least not once the number of pies grows beyond my ability to manage them all in my head at the same time. Even if you can do that, it’s very difficult to sense where changes are happening much less where trend directions are changing.

Some of this can be done by gut feel because you’re right in the middle of it, but sometimes gut feel will burn you because you filter what you’re experiencing through existing expectations. Thus the need for metrics – so that you don’t have to spin too many plates at once, assume too many things or make decisions based on too much gut feel.

Metrics are questions, too

Metrics are a form of question.

For example, a common metric for businesses with a web site is “page views”. A page view metric asks the question “How many people saw a specific page this month?”. When all of those page view metrics are combined, it becomes the question “How many people saw our website?”

Website metrics are pretty common and easier to collect than metrics from other media – which are often on you and your team to collect. The work to do that might seem painful, but you can learn a lot from it.

How many people called about the radio special you advertised on KXXX? How many people visited the store and mentioned the radio special you ran on KXXX?

These things are important so that you know whether to invest in marketing that item on KXXX vs. marketing something else on KXXX, vs. marketing anything at all on KXXX.

You would do the same for anything else marketing on any media, otherwise you’ll have nothing other than gut feel to help you make these decisions. Traditional media doesn’t often provide these metrics, because they can’t. Radio, TV and print newspapers can’t do that because they usually aren’t contacted by prospects seeking whatever you advertised. It’s tough to know if you aren’t part of the transaction process.

That doesn’t mean you shouldn’t track them.

The right questions help increase sales

Coming up with the right question can be a lot harder than not having the answers.  You have to be careful to ask open-ended questions designed to tell you what you don’t know, rather than asking questions designed to confirm your assumptions.

Where is the profit in your business that you haven’t yet found?

For most people, the answer probably lies in your existing customer base. The next question I’d ask you is how many of your customers are buying 100% of what they should be/can be buying from you?

How can your current customers help you find that profit?

The natural follow to the previous question.

To rephrase it, what percent of your customers are giving you all the business they could? Who are those customers? What actions will be necessary to either sell to the ones who aren’t buying everything you make, or determine the ones who won’t buy?

Once you’ve identified the ones who won’t buy, it’d be good to identify why they won’t and correlate that (if possible) with where they came from as a lead. Are the leads who buy some buy not all (or who buy once but not ongoing) leads who came from a certain type of media or a certain type of marketing campaign?

Are the ones whose initial purchase is different than the ones who do keep buying – and buy it all? Can that be solved by pursuing slightly different leads, or by changing marketing or the product / service?

Finally, can / should that gap be fixed? Does it matter if this group of clients aren’t recurring buyers, or that they don’t buy everything you offer?

Are you communicating with customers optimally at all touch points?

Are there touch points you aren’t thinking of?

I was chatting on Facebook with a reader earlier this week who owns a locksmith business. After our conversation, I wondered if there was an opportunity to get involved in home and/or commercial property sales – ie: lock / key / lockset changes that might be warranted when a property changes hands.  It’s an opportunity to get a new client if there are enough buyers who want locks changed at purchase time.

Does your business have secondary transaction opportunities like that?

Categories
customer retention Direct Marketing Lead generation Marketing Small Business Trade Shows

Planning for a strategic trade show

Last week, we discussed why you shouldn’t skip a trade show. During that conversation, I mentioned that you need to work trade shows strategically and with a plan.

This week, I’d like to elaborate on what that means. In order to do that, let’s break down what happens at a trade show.

Who attends a trade show?

First, let’s consider who goes to a trade show, as that’s a critical piece in planning what you do.

Attendees break down into two or three groups. You’ll have up and comers and newbies to the business of all ages. You’ll also have industry veterans – people “everyone” knows. They may have worked for several vendors and/or market leaders in the industry.

The industry veterans may have created groundbreaking new products, processes or services in your industry. Some of them will be so knowledgeable and so well-networked that they are not only the go to person for anyone who needs an answer, but they’re also right person to offer the backstory on that answer and can give you a list of the subject matter experts who know even more about that particular topic than they do.

These attendees will work at your clients, competitors, partners and prospects. Your trade show strategy needs to consider how your pre-show and post-show marketing communicates with each of these attendee subgroups. Your products and services are often targeted at different expertise levels, sophistication levels, experience and/or business sizes. Your booth’s message and the overall presence you have at the show needs to be crystal clear about communicating in a way that provokes attendees to think to themselves, “Those are exactly the people I need to work with.

Smart attendees come to the show with a plan. They want to meet certain vendors, find certain products, investigate certain services and renew their relationships with existing vendors. Think about how you can help an attendee get the most out of the show. How you do that may differ for clients vs. prospects.

Partners and competitors

Shows give you a unique opportunity to meet partners, improve your network, discuss plans and check up on competitors. Don’t be shy about introducing yourself to the people in your competition’s booth and be pleasant about it. You never know what a conversation will lead to. Even the largest industries boil down to a network of influencers who set the tone and make things happen. You want to know who those people are and you want them to know of you, particularly if you intend to be one of them.

Their booth and overall presence at the show will say a lot of how they’re doing, what they intend to get out of the show and how important the show’s audience is to their business. Study what they’re doing – and what they’re not doing. You might get ideas (or not), but knowing what they’re doing will help you understand what this show means to them.

Email and the phone are great when you have no choice, but face to face discussions with potential and existing partners can be far more productive means of communicating, while building and strengthening the relationships that great partnerships require. Take advantage of the brief face time you have with them.

Run up and follow up

One of the biggest differences between companies that leverage their appearance at a trade show and those who don’t is what they do before and after the show.

Today’s shows either seem to be growing or shrinking. How will they find you? How will they recognize your booth from the other end of the aisle? Why should they make the effort to attend a shrinking, but still-important show? What important client-only events should they attend?

Your communications prior to the show should help them not only be a better attendee, but also help them learn and plan how to make the most of the resources your business will be offering at the show.

Will your experts be there? Trying to get some private time in a busy booth to discuss a client’s not-so-public projects doesn’t work too well. Give them time to set appointments in advance in non show floor time where possible.

We’ve only scraped the surface of what you need to think about when planning a strategic trade show appearance, but this is where you start.

Categories
Customer relationships Direct Marketing Lead generation Marketing Small Business

The shortcut to easier sales

One of the more common questions I get is “How do we find a shortcut to easier sales?” The shortcut starts with a few questions…

Who is the ideal person for your product/service and what is the specific situation your products and services solve for them? You’ll know it’s them if they would look at your “menu” of available products and services and say “That’s exactly what Ive been looking for.

If you are thinking things like “I’ve been a little frustrated with sales lately.” or “I’m frustrated with my website. I’ve been having trouble figuring out what the site should look like, how the sales process should look, etc.” then this is quite likely the source of the problem.

The reason this is a problem is that the conversation your sales process and / or your website engage in isn’t the conversation going on in the minds of your potential customers. It’s not what keeps them up at night. It’s not what’s on their mind when trying to make payroll, much less when trying to figure out how to pay themselves AND the bills.

To have that conversation, you have to have a much narrower focus on each type of person that you’re selling to.

Who is your target market?

Is the answer a single word or phrase? Is it a paragraph describing what you sell? Or is it a description of the people and/or business AND the situations those people are trying to address by using your products and services?

Is the answer “I don’t really know?” or “I thought I knew but now I’m not so sure.

Imagine that you are taking one of these people under your wing. Who would be the perfect person for you to do that for? Can you describe them and their situation in detail?

Example: They’re a couple in their early ’60s. The husband is about 10 years older than his wife. He’s retired. They’re both from Brazil but are naturalized U.S. citizens. The wife’s employer is closing down, so she’s looking for a way to supplement her income. Try to describe people in their situation.

The accurate but not useful answer is: “People who need an income“. A better start is “retired people who need an income” and “retired expats who need an income“. These are two different groups. For someone who is looking to serve people with these kinds of problems, there are probably dozens of similar groups with important, yet subtle differences.

If you tell me your clients are “lawyers”, I would suggest that is an incomplete answer. What kind of lawyer are they? Personal injury? Family law? Transactional? Estate? Tax? Each of them have different conversations, potentially different clients and they’ll each have different conversations with their clients.

The most expensive marketing mistake

The most expensive marketing mistake you can make is trying to have the same conversation with each of these groups. The “…with important, yet subtle differences” part is what changes the conversation with each group.

You need to narrow things down so you can have a conversation with one person (even if there are 100,000 of them) rather than 100 different people who have a related issue that this product will solve for each of them.

Pick one, do that one. Pick the next one. Do that one. You can only grab one person’s attention at a time and encourage them to solve this situation. Who will it be? Be specific.

Introduce me to your market

There are two pretty common ways to get to the bottom of this.

One is to role play introducing this person to someone who knows nothing about them, but will be immediately expected to be effective selling product or service that the salesperson is familiar with to the expat couple once your introduction is complete. I think you can imagine that to go from knowing nothing to being effective selling to them is going to require more than insight than “This is Joe and Mary and they need an income“.

What would you say?

The second method is to identify a familiar / famous person who fits the mold, if one exists. Introducing them might be a bit easier since you likely know something about this person and will be able to dig into quickly.

The shortcut to easier sales starts with knowing your audience better than anyone.

Categories
Blogging Customer relationships customer retention Direct Marketing Marketing Small Business

Has your client list heard from you lately?

As we head into retail’s peak shopping season, the big question is “Will my clientele buy…again?”

Have you had any contact with them since last November or December? The people spending money are in your client list, right?

Client list?

If they aren’t on your client list (or you don’t have one), how would you tell them important news when they aren’t on your site or in your store?

Without an accurate list, the only way to attempt to reach them is by spending a ton of money on advertising that isn’t guaranteed to reach your existing clients.

While you may want to advertise anyway, the message you craft (note the use of the word “craft”) for your clientele about this news should be different than the message received by the general public (or your market, if you’re  business-to-business)

Think about it. How would you tell them these things?

  • We’re moving.
  • We moved.
  • We expanded our facilities.
  • We added a new location.
  • We closed an old location.
  • We’ve expanded into these great product lines that are perfect for you.
  • We got rid of a product line that wasn’t up to our standards.
  • We’ve hired someone who is an amazing subject matter expert on (whatever is important to your clientele).
  • We bought a competitor, now we have even more great locations and consistent product and services. For those who are clients of the competitor, here’s how we’re different, better, etc.

Your client list is an asset as much as a building or your checking account. If you aren’t building it, it’s difficult to keep a connection with your clientele. What will keep them from randomly going to someone else?

The medium you use to reach them doesn’t matter. Reaching them is what matters.

What do I say to them?

What’s changed at your store in the last year? What’s new in the last year?

If “Not much” is your first instinct in response, consider these questions:

  • What service, product, customer care, processes, payment methods, shipping, return (or other) policies have changed?
  • What are people buying this year that they weren’t buying last year? Why? Is the reason important to your clientele?
  • What isn’t selling this year that was last year? Why? Is the reason important to your clientele?
  • What have you learned in the last year that can benefit them?
  • Do you have new staff members that can help them?
  • What new equipment do you have that allows you to serve them faster or better?

Would those changes be jarring to someone who hasn’t been in your store in 10-12 months? Warn them in advance than surprise them when they walk in the door or move to your checkout page.

But Mark, I don’t have a store

That’s OK. The question is at least as important for you if all of your sales are done by phone, online or in a mobile storefront (think “food cart”).

If you sell on Etsy, on your own site, via Shopify or Facebook or at local events like the farmer’s market and ballgames – how will they remember you when it’s time to buy if they haven’t heard from you in months (or longer)?

What do I say?

I covered that above, but it’s important enough to discuss in general terms because you will eventually feel like you’ve run out of things to say.

At that point, the temptation will be to do one of these things:

  • Send something, any old thing, just to stay in touch.
  • Send ads when you can’t thing of anything else to say.
  • Send nothing.

All three are a bad idea, but the first two are the worst.

The first one often results in a shrinking client list because they aren’t receiving anything meaningful from you.

The second one requires care. If you are sending useful, actionable information often enough, then an occasional ad email or footer on your regular emails is OK. What you don’t want to do is forget why you built the list in the first place and start advertising 100% of the time.

The third one is not ideal, but it beats the other two.

The key is to communicate with meaningful, useful info. You may think you have nothing left to say, but the reality is that you’ve forgotten more about your business than they’ll ever know.

Given that… Be helpful when you contact them. It’ll pay off.

Categories
Business model Competition Customer relationships Marketing Positioning Small Business

What are your compelling reasons?

This past week, I’ve had several conversations revolving around why people don’t buy, why people stop buying, how we can get them to use what they bought and how we can get them to switch to our product instead of a competitor’s.

These conversations all have the same foundation: Giving people a compelling reason to change.

Whether we’re talking about buying, changing what they use, or using what they’ve bought, people need compelling reasons to change what they’re doing – even if they’re not doing anything.

Without compelling reasons – buying and implementing is much harder

It seems obvious that making it easier to buy is important, yet some businesses do their best to make it hard to give them your money.

However, buying isn’t the only obstacle to overcome. That’s why I’ve told the software setup story as many times as anyone would listen.

Selling them is one thing, getting them to use, adopt, implement it is quite another – and in fact, it’s more important than the sale over the long term.

If you don’t care what they do after they buy your stuff, it’s an indication that your business model is broken, even if you’re selling that stuff like crazy right now. Someday, that will change. When it does, how will your current business model work?

If you aren’t focusing on making sure they implement what they buy, your business model might not be broken, but your management of it is. You wouldn’t plant a crop and never watering or weed it, so why would you make a sale and then make no effort to cultivate the use of what you sold them?

That’s what the software setup story addresses and as you can read, I’ve been there.

What’s their point of view?

One of the things that fails business owners most often is assuming that their clientele is just like them. To be sure, there some cases where that’s true, but in others – it’s simply wrong.

The danger in this is that people buy, implement and change things for reasons who may not have considered, or for reasons that are meaningless to you. If that reason is the primary driver in decision making for your market and you miss it because their reason means nothing to you, closing a sale could be quite an uphill climb.

Even if you’re shy, you have to ask questions.

What are the obstacles to change? In many cases, they might want to change but think they don’t have the time to retrain their people, adjust their internal business processes and deal with yet another change. Solving that requires your value proposition to be clear, compelling and long-lasting.

What are the real reasons they might change? What truly causes the pain they feel? What keeps them up at night? What makes them worry about their future? Why is changing worth it at all if the outcome is the same? Same reports, same Excel spreadsheets, same profit?

If you don’t know the answers to these questions, you’re going to struggle to sell to them even if you have exactly what they need and want to take away their pain.

I don’t sell things that make the pain go away

If you aren’t making someone’s business pain go away, your clients are probably some portion of the general public. You might want someone to buy your cosmetics, or perhaps you’d like them to give your dry cleaners a chance vs. them continuing to use the one they use now.

Think about the risk people take when they change from Maybelline to Bare Minerals or from One-Hour-Martinizing to Joe’s Hometown Cleaners.

How do you currently communicate that trying your stuff is so easy and so risk free that if it doesn’t work out, they lose nothing?

Once you’ve done a great job of taking risk off their plate, you still have the task of proving the value of switching.  How are you doing that these days? Put yourself in their place.

Imagine a bank asks you to switch to their bank from the one you currently use – the one where your direct deposit goes and where your bill pay stuff is all setup and working smoothly.

Or consider switching from Windows to Mac or iPhone to Android.

Now you understand how they feel when you ask them to switch.

 

 

Categories
Direct Marketing Email marketing Marketing Press releases Public Relations Small Business

Effective press releases for small business

Days after a EF4 tornado tore up Central Arkansas and killed 15 people, this press release arrived in the local TV weather team’s inbox:

Saying “enough with the tornado clean-up” to a media person in the area of a killer tornado in question is at best, someone being an inattentive and/or insensitive jerk. The media person who receives it is likely to not only delete your message, but put you on their email block list.

That isn’t why you send press releases.

Why press releases?

If you haven’t written for a newspaper or magazine, or worked for a media agency, you may not realize that many of the stories you see start with ideas seeded with press releases.

Sending press releases to your local media, and selected national media (such as the editor of a nationally-read newspaper, blog, magazine, podcast, etc) can make sense to draw attention to your business and what it’s up to, but only if you don’t make a few key mistakes.

What qualities do effective press releases for small business have, and what should you watch out for? As with any other marketing piece – what matters is your understanding of and ability to reach the audience.

That doesn’t mean your PR should grind to a halt every time there’s a disaster of some kind, but you should make these efforts with care.

What media people need from your press release

Media people need story ideas, but not just any old story idea.

They need story ideas of interest to their readers, which means you need to consider their audience and what’s on their mind.

This isn’t about how many people you can get to see your press release. It’s about how many of the RIGHT people see it.

Doesn’t that sound exactly like the kind of content that you’d create when direct marketing? Of course.

Media people don’t need spam. Like you, they get plenty.

Getting stuff you don’t want to read and aren’t interested in (ie: spam, junk mail) is an annoying waste of time. Why would you expect the reader of your press release to feel differently?

What media people don’t need from your press release

They don’t need you to waste their time

When you send a press release about your new sailboat trailer product line to a writer for a national magazine for electricians, the message they get is something like this:  “My story is more important than anything you’re doing, so I think it’s OK to waste your time by telling you about something that has nothing to do with your readers’ interest, much less your publication’s chosen subject matter.

Media people don’t need story ideas that have nothing to do with what they write about / what their publication covers.

If there’s a tangent that does apply for a seemingly off-topic press release, you’d better make your point quickly. Let’s use the sailboat press release as an example.

If your sailboat product line press release reads like something sailboat owners want to read – DON’T send it to the electrician publication.

On the other hand, if there is a unique technique or technology that you used during your manufacturing process handled grounding, wire protection, or wiring that spends time underwater, then write a press release specific to those topics. That’s something the electricians who don’t sail are more likely to care about.

Media people don’t want to see press releases about stuff their readers don’t care about.

I get press release emails quite often because of the weekly newspaper column I write. I can think of one in the last seven years that had anything to do with what I write about. That one press release was not about an author’s just released romance novel – and yes, I do get those releases.

Think twice before you send

If you look over the press release image, you’ll see that the PR agent’s client is an author and that author appears to have some sort of relationship with Wyndham resorts.

If you’re the author or an employee, manager or stockholder of Wyndham, would you want that PR email blast associated with you?

I sure wouldn’t.

You do PR so people will discuss and hopefully promote the subject matter in your press release. Take care what you send and send it to someone whose audience genuinely cares about the topic.

Simple, right?

Categories
Advertising Business culture Customer relationships customer retention Direct Marketing Getting new customers Internet marketing Lead generation Small Business Software Software business The Slight Edge

Customer relationships – Do yours mature and adapt?

One of the things that separates people from most machines and systems is their ability to adapt their interactions as the relationship matures.

A tough-as-nails 61 year old grandfather who supervises workers on an oil rig in North Dakota’s Bakken adapts his communication to the recipient when training a new guy to stay alive on the rig, and does so again when chatting with his three year old granddaughter about her Hello Kitty outfit via a Skype video call.

He doesn’t coo at a young buck and he doesn’t growl at his granddaughter. He adapts. It’s common sense.

Our systems, processes and communications don’t do enough of this.

Adapt to the relationship state

Why do our companies, software, processes, communications and systems so infrequently adapt to the state of our customer relationships?

An example I’ve used a number of times: You get mail from a company offering you a great deal “for new subscribers only” – despite being a subscriber for decades. It’s annoying, not so much because someone else gets a better price for a short time, but (to me at least) because they don’t appear to care enough about their existing customers to remove them from a lead generation mailing.

It’s a trivial exercise to check a list of recipients for a new marketing piece against a current subscriber / client list. Why don’t “we” do it?

For mailed items, it would reduce postage and printing costs. It would cut down on the annoyance factor in clients who inappropriately get special lead generation offers – regardless of the media used.

Adapting your marketing (for example) to the state of the relationship you have with the recipient is marketing 101. It’s a no-lose investment.

Adapt to the maturity state

Like the grandfather, most of us alter our face-to-face speaking to the state of the relationship and maturity of the other person.

Sometimes we don’t, but that’s usually because we haven’t had the opportunity to determine the maturity of the other person in the conversation.

I’m speaking of the maturity of the customer relationship as well as where the client is with your products and services. There’s far more to this than simply adapting to a client’s intellectual and age-related maturity.

Remember that “tip of the day” feature that was popular in software not so many years ago? The half life of that feature was incredibly small and the value it delivered was tiny when compared to its potential.

Why? Because few software development companies took the feature seriously once it had been coded and tested.

How can I say that? Easy. Did you turn that feature off once you realize the tips were of little value after an hour’s use of that software? Did you turn it off earlier than that because the tips were of no use at all?

My guess is that one or both of those are true. The tips weren’t there for users throughout their lifetime of use with the software. In fact, most of them weren’t very useful beyond the first hour of use. Every time we move the software to a new machine, it’s likely we have to turn it off again. ROI for that feature? Not so high.

The content of these tips was everything (in fact, the only thing) to the user of that software, yet the content in most tip-of-the-day systems appeared to be rushed out as an afterthought.

What does a software’s tip of the day feature have to do with your business? Everything.

Take your time, implement well.

That the tips rarely were of use to new users beyond the first hour or so of use shows a lack of investment in their content.

Imagine if these tips were sensitive to the maturity of the user’s knowledge and use of the software.

Some cars do this. They automatically adjust the seat and mirror locations when Jerome unlocks the car and use different seat/mirror positions when Carmen unlocks it. Adaptation.

What if your systems, products, services, marketing, processes and other client interactions recognized and adapted like this?

Adaptive interaction isn’t an all-or-nothing thing. It can mature over time, as other things do. Take your time, do it right. You tend to get only one chance to break a relationship with a client, but you can strengthen it with every interaction.

Adaptive behavior is all about making your business personal.

Categories
Automation Business model Customer relationships Direct Marketing Getting new customers Lead generation Management Productivity Sales Small Business tracking

Where does new business hide?

In every town, there’s a place where new business hides.

If you can’t find its hiding place, your business is likely to struggle.

Most of the time, that struggle is rooted in the inability to dependably produce predictable, month to month revenue.

Without predictable month to month revenue, businesses close, scale down or at the least, fail to reach their potential to support their owner, their family, their employees’ families and their community.

Revenue consistency problems influence a business owner’s decision making because their decisions end up being driven by cash flow. Decisions based on sales you made last week (much less yesterday) rarely fit into a long-term strategic plan.

Predicting revenue isn’t all that difficult. You simply have to check the Sales Thermometer.

What’s a Sales Thermometer?

Imagine that there’s a thermometer on the front door of businesses and homes that told you to pull in and sell something to someone because they had developed a need or a want that *had* to be fulfilled.

Armed with a town full of sales thermometers, you’d have all the new business you’ve ever wanted and wouldn’t waste a bit of time chasing around town after people who didn’t want or need what you sell.

Instead, you’d simply drive through town, check the thermometer and stop at the places where the temperature was the highest.

On days when you need a little extra revenue, you might get up a little earlier and drive around a little later so you could check more thermometers. 

Once you took care of the places with the hottest temperatures, you could retrace your steps, scan for the next highest set of temperatures and take care of those sales.

As the sales thermometer readings change on other homes and businesses, you’d see them during your travels so you could pick up on the newest opportunities for new business – simply by being observant.

Scaling

There is a downside to this sales thermometer thing. It has some scalability issues.

For example, you can only drive so far in a day and every customer who takes an hour of your time consumes an hour that you can’t use to check other thermometers. That will eventually force you (subconsciously at least) to stop and work with only the hottest thermometers.

If only there was a way to automatically check the hottest thermometers without spending all that time driving around.

Fortunately, there is.

Getting new business isn’t a joke

While talk of a sales thermometer seems like a bit of a fantasy or even a joke, your business’ inability to consistently produce new business from existing and new clients is no joke at all.

If your business struggles with that, the problem isn’t the lack of a thermometer. The problem is that you aren’t reading it. 

The sales thermometer in the information you should already have about your clients and prospects.  The thermometer’s temperature is driven by behavior and interaction, both yours and that of your prospects and clients.

Those behaviors are like a patient’s symptoms. Monitoring  and acting on them in a predictable, repeatable, systematic way is what gets your business to the point where you *can* produce consistent, predictable month to month revenue.

Random revenue from new business is an indication that you’re not watching and acting on these symptoms on a consistent basis. We all know we need to do these things, but sometimes we get sidetracked by the crisis-of-the-day.

While they should be acted on individually for each prospect or client, these symptoms should also be grouped together (aggregated) to help you monitor the health of your business and your market.

Things that drive up temperatures

What causes rising temperatures?

  • Interaction behavior changes.  You should know when someone is paying more attention than a typical prospect. Do you have a way to detect this?
  • Sales cycle behavior changes. You know how long it takes to close a sale. Is that timeline changing? Are certain prospects skipping steps in the process? Is their path-to-purchase pace is faster than normal? If so, does your internal behavior toward those prospects change to suit their timeline?
  • Purchasing behavior changes. For example, customers who are buying more (or less) often than they normally do. Even if you’re tracking sales on paper, you can monitor this .

Are you monitoring the sales thermometer?

Categories
Advertising Business model Competition Lead generation Marketing Small Business Strategy

Win on low price, lose on low price

Do you depend on having the best price to win business? If so, are you sure that’s really how you want people to choose your company?

I ask that because if you cut your price 10%, that 10% comes out of your profit margin. Perhaps obvious, but not always something folks pay attention to – particularly when price is used as an end-all, be-all to close a sale.

You can tell that’s going on when you intentionally keep silent when someone names the price of a product or service. Stay silent long enough after they react to your “What’s the price?” question and the “we’ll win on price at all costs” salesperson (particularly the novice) will often get nervous and say something like “Of course, we can go lower…”

Use low price as a component

As Amazon Web Services SVP Andy Jassy is fond of saying, “I’ve never met a customer who asked if they could pay more.”

So how do you balance between being too expensive and being the one with the paper-thin margins?

Don’t get me wrong. Using price as a component of the things you use attract customers is fine. Where you run into trouble is when it’s used as the primary decision point. In those cases, you’re more than likely going to get burned and less likely to attract long-term customers.

One common example is using products and services as loss leaders. It’s OK to leverage price in this way as long as you know your numbers very, very well *and* you know that once you get that customer, there are plenty of opportunities to provide more value to them – value that they’ll be happy to pay for.

Fail to do this and you’re headed for trouble. This isn’t just about milk at the back of the store. You see it frequently with internet-based services. How do they offer “free” to so many people, yet still make a profit?

They know how much it costs to offer that free service.

They know how many of those freebie users will convert to paying customers because they want services, features and benefits not offered to freebie clients.

They know their margin on the paying customers is enough to fund the freebies, plus profit margin, so that more paying customers raise their hand and say “Yes, I need that.”

Bottom line, they know their numbers and they never stop recalculating them, just in case something changes.

Low price isn’t owned by the internet crowd

You can use free or cheap as a lead generation carrot as long as you too know your numbers, and make sure that you’re using that offer with the right prospect.

That’s where most businesses get started down the wrong road – they make the offer to the wrong group of people, ie: people who would never have been their customer in the first place.

If you make your offer to the right people, that’s a different story altogether – and that’s the magic formula no matter what your pricing is like.

The timeshare business has done this for years by giving away a free night or two, dinner, etc – all in order to get you to see and enjoy what their facility offers. They know historically what percentage of people will buy if they take the time and make the effort to attract the right prospects to their offers.

Using low price requires well-crafted offers

Timeshares don’t make their numbers by giving away all those free nights, golf rounds, lift tickets and meals to anyone and everyone. They’re careful to pre-qualify prospects using financial, behavioral, demographic and psychographic measures to make sure they closely match historical buyers.

When you attract people with a low price offer, the goal isn’t simply to make it free or available for a low price, but to provide enough of a taste with as little risk as possible to the prospect so that the right person can make a decision to become your newest client.

If you can do this without killing your margins during the period between the time they taste and the time they get serious about buying the real value you can deliver, then low price can work.

Do you know your numbers that well?