Business Advisor Network Blog

Welcome to part 2 of our marketing mini-series.

If you missed out first installment you can check it out here – Market Research.

The most fundamental principle in marketing is knowing who your customers are and what they need.  Yet many small business operators do not understand this.  They decide on what they are going to offer, start the business and wait for the customers to come rolling in.  They see their customers as a crowd of people, out there somewhere, just waiting for this product or service.  They have not segmented their market.

For most products and services there is not just ‘one’ market but groups of sub-markets.  These sub-markets are groups of people who have some common characteristics or needs, but who differ in characteristics and needs from other groups.  These sub-groups are called market segments.

Many small businesses take a non-segmented approach and try to reach the whole market. These are often the businesses that find themselves in difficulty and without a suitable marketing strategy.  A weak appeal to the whole market is not as effective as a strong appeal to a specific segment.  In other words, you are better off saying something to someone than nothing to everyone.

The better you can segment your market, the more clearly you are able to identify what motivates those customers and the more accurately you can tailor your marketing mix to meet their needs.  This leads to a much more effective use of your marketing dollar.

The table below lists the factors that identify specific groups of customers.  When you analyse the customers within your industry, you will notice that they fall into groups with one or more of these factors in common.

Ways of Segmenting Your Market

Identifying Factors

GEOGRAPHICAL

• Location – urban, inner city, suburban, distance from your business

DEMOGRAPHIC

• Disposable Income – high, middle, low
• Age – child, teenager, adult, retired
• Sex – male, female
• Occupation – professional, clerical, white collar, blue collar, trade
• Education – secondary, tertiary, trade qualifications
• Special Characteristics – nationality, religion, race, cultural background

PSYCHOLOGICAL

• Lifestyle – image, preference, usage patterns
• Personal Preferences – hobbies, interests

WHAT IS PURCHASED

• Volume of purchases
• Type of purchase – wholesale, trade, retail

TYPE OF ORGANISATION

• Residential – flat, house, townhouse
• Business – partnerships, companies, sole traders, franchise, agents,
• Industry

For example, the market for dog food might be segmented and ‘labelled’ as follows:

‘Baby Substitute’ (10% of market)

• Demography – one small dog, no children, higher income, urban
• Psychological – dogs fragile indoor animals, owners very attached to dogs, dogs are finicky eaters, great desire to give what the dog wants

‘Nutritionist’ (15% of market)

• Demography – multiple dog owners, unlikely to have children, Australian urban, high/middle income
• Psychological – very personally attached to do, dog belongs to woman, interested in nutrition, food is varied, least interested in cost

‘Functionalists’ (40% of market)

• Demography – multiple dog ownership, usually children, lower income
• Psychological – dogs outdoor, hearty, eat anything, no bother, little attachment to dog, woman not involved in dog

I’m sure you can think of brands of dog food which target these different market segments.  Some brands appeal to ‘finicky eaters’, others promote their ‘nutritional content’ and other represent ‘value for money’.

Having segmented the market, you can better identify those segments that you can or should concentrate on, that is, which group to target.

Segmenting the market is a powerful tool.  Consider the case of two small manufacturers of paper plates.  If one manufacturer was market oriented, they may segment the market and find that there is a higher income group who would make more use of paper plates if they were more substantial, a more appealing range of colours and prints and a better finish.  The manufacturer can then create a marketing strategy to target this group and gain a competitive advantage over the other manufacturer.

Next issue we will look at the Product Life Cycle and this can dramatically impact your business.

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Many small business owners are frightened by the term market research.  Market research is seen as something that a large company does, not a small business.  yet nothing is further from the truth. 

Successful small business operators are constantly analysing the market, the competition and the needs of their customers.  They probably don’t call it market research though.  They call it “sharp business practice” or “being one step ahead”.  The effect is the same; they understand the market they operate in.

Market research is also seen as being too expensive.  But you should view it as an investment not as a cost.  It is possible for you to do your own research.

Whether you wish to research the market to start a new business or develop a strategy for your existing business, you do not need a marketing degree to gather the basic information.  What you do need is time, energy and a determination to develop a winning marketing strategy from the information you collect.

What then is market research?  Put simply, market research is the means by which you find out about the size, characteristics and nature of a market.  A market is any identified group of people who could use your product or service.  Valid market research may be as simple as talking to potential customers and finding out what they want.

There are many things that market research can tell you.  For example, you can:

• see if a market exists for your product or service
• define the size of that market
• determine customer profiles and target markets
• analyse market trends
• keep up with changes in the competition
• investigate customer needs
• ensure your price and product/service mix is realistic
• make sure your promotion is appropriate
• evaluate new product opportunities
• determine better ways of getting your product to the customer.

Market research helps you avoid one of the most common mistakes made in small business – producing a product or service and then trying to find customers for it.  By using market research, you can be sure you will be selling what customers want rather than just what you want to product/sell.

Be careful.  It is a trap to make assumptions about consumer needs based on your own values and behaviour, or those of your family and friends.  Your market research should extend further than family and friends which will soon verify or discount such assumptions.

Market research will give you the information necessary to create effective marketing strategies.  However, it is frequently difficult to sift through all the information you collect to come out with a clear picture of where you are now and where you want to be.  There are a number of techniques to help you interpret your research, the three most helpful to small business being:

• segmenting the market
• analysing the product life cycle
• conducting a SWOT analysis.

In the coming weeks we will look deeper into these techniques and examine in details the best approach for small business.  In the meantime, have a think about your own business “intelligence gathering” practices: are you listening to your customers regularly, are you surveying your customers, do you keep a look out for emerging trends and are you aware of changes in industry and governance issues that will effect your business.

Until next time.

Virtual Business Advisor

This week we look at Part 2 of 7 Strategies to Generate More Business.

Today we are going to examine 4 strategies that are simple to implement that will generate new business, increase business from your existing client base and build repeat business.  Let us remind you that you may not be able to use all of them in your business but you can certainly use some of them.

Packaging Different Products or Services Together

This is a marketing strategy usually used to increase the average purchase size in a business.  I recently saw an example of bundling in a book store.   The book was called “How to Buy Property – Cheaply” and sold for $32:95.  They store was also selling an audio CD called “Property and the Law – How to Save on Legals” and it sold for $29:95.  Packaged together they were selling for $49:95 – quite a saving.  I ask the store manager about the sales of the products and she indicated that they sold roughly a third each.

Prepay Agreements

You’ve probably seen this strategy used in the Health and Fitness markets.  You pay say $300 for a membership that entitles you to use the Gyms facilities for X amount of times over X period rather than paying for each individual visit.

This same idea can apply to many different businesses and it even presents an interesting opportunity for the small business owner to raise operating capital.  with this strategy, capital can actually be raised from customers by collecting in advance for future purchases.

Let’s use a restaurant as an example.  The restaurant owner could sell membership cards good for 10 meals anytime from a selected menu for $249.  If purchased one at a time the total cost may be $300.  So by purchasing the card in advance the customer saves about $50.   You may also want to tie in preferential reservations on short notice or offer some other bonus such as free parking or discount vouchers to your partner businesses.  If the restaurant sells 50 of these memberships, that’s over $12,000 up front to put back into the business as you see fit.

The Acceptance of Major Credit Cards

Every business should consider accepting Mastercard, VISA, American Express and Diners Club.  Of course retail stores, online marketers and restaurants almost HAVE to honour  these cards, but just about any business should.

Businesses including Doctors, Lawyers, tradesmen and professionals of all shapes and sizes should use credit cards as a way to increase their business, implement price increases with less client resistance and reduce collection problems.  The concept is quite simple – the easier you make it for your customers to buy and the more payment options you offer the customer the better.

Other extended credit options via finance facilities are growing in popularity outside of the traditional car, furniture, health equipment, computer and white goods suppliers.  It may be worth considering offering this facility in your market.

Regular Contact with Past & Present Customers

One of the most effective marketing strategies that any business can use to build customer loyalty, retain customers and to stimulate more frequent purchasing is the publication and distribution of direct mail.  A monthly newsletter is an extremely powerful, cost effective marketing method.  When you keep in touch with your clientele via your newsletter you do all of these valuable things.

1.  You create a habit on the part of your customers.  They expect to receive your newsletter and they get in the habit of reading it.

2.  You remain top mind for your category.

3.  You can pass along useful information and ideas that you customer appreciate.

4.  You can continue to demonstrate your expertise in your field.

5.  You can stimulate word-of-mouth advertising

6. You can advertise sales, special offers, new products, new services, new locations and anything you feel is relevant, adds value to your customer and increases the experience of doing business with you.

Now that you have these 7 strategies that can help you stimulate new business, increase business from existing customers and build repeat business, you need to give some thought into how to use them effectively.  We will look closer at implementing these strategies in later editions so stay tuned.  So you don’t miss any of this series or any of the blog posts, make sure you subscribe to updates via the RSS link at the bottom of the page.

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Now before we start, a word of warning…. Not all of these strategies are going to be suitable for every business.  Consider your product or service offering carefully and make a judgement call.  However don’t be afraid to give something a go.  Just because it hasn’t worked for someone else or hasn’t been used in your industry before, doesn’t mean it won’t work for you.  Dare to be different and stand out from the crowd.

Today we are going to examine 3 strategies that are simple to implement that will generate new business, increase business from your existing client base and build repeat business.

Frequent Buyers Program

We’ve all seen the major airlines introduce these types of programs over the years and now it has become an expectation of their overall service offering.  Hotel chains have also jumped on board in an attempt to encourage repeat business.  For the coffee drinkers amongst us the local coffee shop has even adapted this strategy.  It need not be anything fancy.  A simple business card or conveniently shaped card that fits neatly into the wallet will do just fine; it need not be anything complicated.

The idea is too not dazzle your customers with brilliant designs but encourage them to return to your place of business rather than spreading their patronage around town.  To make the incentive even more effective, you should tie it to an expiration date so that the stamps, punched holes, points or credits on the card have to be accumulated and redeemed within a certain time period.

You can make this type of program even more effective by ensuring you capture the details of the customer you are issuing the rewards card too.  The most effective way to do this is to capture the details of the customer before you issue the card, or at least when they redeem their reward when the card has been filled or the promotional period has ended.  This then enables you to communicate with them on an ongoing basis and add more value and enhance their experience with your business.

Discounting

Discounting is probably one of the most commonly used marketing strategies.  At some point in time I would guess every business in Australia has had at least one discount promotion… however, if overused it can quickly lose its effectiveness.

There are many examples of markets where the discount promo has been done to death and is now having adverse effects.  The jewellery business is one that comes to mind.  The public has been trained to expect huge discounts on retail jewellery and as a result, is reluctant to pay full retail price.  Rugs are another example – who has ever bought a rug at full price?

This customer mindset has also been created by artificial discounting.  This is the practice of quoting high retail prices only to discount the product to seal the deal.  Be very careful when using this tactic.  It can come around and bite you, as customers realise your sticker price is meaningless and everything becomes negotiable.

One company that has effectively managed the discounting in a very competitive market is David Jones.  DJs is not renowned for its discounting.  However, when they run their “Once Yearly Sale”, the discounts are genuine, it generate attention and gets results.

If you are going to use discounting as a strategy, it is important to have a logical reason tied to the promotion.  Otherwise you run the risk of essentially admitting that your regular prices are excessive and you diminish your value statement.  Inventory overstock, bulk purchase, an anniversary, introductory offer or, new release are examples of acceptable reasons for discounts.  I’m sure you could come up with many more.

Premiums

A premium offer is essentially, “Buy this, get this free”, or variations thereof.   This strategy can work well both on the B2C level and the B2B level.

An example of premiums in the B2C markets would include retail offers of free gifts with purchase.  The smarter marketers don’t give away the same product as the gift, they introduce new products as a way to encourage uptake of new inventory items.  For example, a free lipstick (new range) with every foundation purchased.  All parties win.  You’ve maintained the value and the integrity of your pricing and have planted a new product in the hands of the customers which can encourage repeat purchase; you’ve also built a relationship with your customer.  The customer also wins as they have benefited from an increase in perceived value and get to experience a new product.

Another example of premiums is discounted products for additional purchases.  E.g. Second item half price.  The concept is simple, the client was likely to be purchasing only one unit anyway and the second sale would’ve been missed.  The idea is to protect the full retail value of the initial product and discount or giveaway the margin on the second.  Once again a win win result.

An example of a B2B premium strategy would be the targeting of individuals responsible for the purchase of business products and services.  A free gift of a colour TV, DVD or holiday voucher are becoming popular with the purchase of office supplies, consumables and business related products.  In effect this type of offer let’s the business customer spend tax deductible business dollars for supplies and receive free and tax-free a gift they will use personally.

Have a close look at your market, is it dominated by one type of promotion, is there a lot of discounting or premiums offered?   Perhaps it’s time to have a look at breaking the mould and trying something different.

More next week.

Virtual Business Advisor

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Find out about Government Grants for Queensland business?
Would you like to become an Accredited Advisor?
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At some point during the life of your business you will have to write an advertisement or a promotional piece for your business.  Be it editorial content, advertising or website copy, this can often be a challenging task.

Here are 10 sure fire tips that will improve your copywriting skills instantly.

1.  Translate product or service features into benefits. Don’t present information and assume that your reader will be able to interpret it.  For example, one of the most common instances of customer information assumption is in the Flat Screen TV market.  Telling a customer that the model they are looking at has a 10,000ms refresh rate means nothing.  It would be a huge mistake to assume that your customer knows why a high refresh rate is a desirable feature.  Telling them that a refresh rate of this speed eliminates blurring when viewing fast action sequences such as car racing or it produces sharper screen image for playing computer games makes far more sense.

2.  Don’t talk about “I” or “We” ,  Talk “You” or “Your”. When writing your copy, write from the your clients perspective not your own.  For example, replace “We build long lasting equipment” to “You will experience extended pleasure from the extraordinary durability” – see the difference?

3.  Credibility Counts. When demonstrating credibility the tendency is to pile all your proof into one or two sentences.  This can more often than not come across as the business trying too hard.  Sprinkle proof of credibility throughout your copy.   You can discuss, the length of time you have been in business, the size of your business, the number of customers you have served, include testimonials and memberships in associations and talk about guarantees and warranties.  Just don’t over do it.

4.  Use a little dramatic license. Now don’t take this the wrong way, we are not encouraging anyone to deceive or misrepresent anything.  The best way to explain this is to use an example.  We’ve all seen the Remington advertisements where the company President says, “I like this Remington shaver so much that I bought the company”.  Well that is just down right ridiculous… but a simple part of the truth none the less.  Other factors would’ve gone into the acquisition of this company, not least of which would’ve been the quality of the product.  Do you think he would’ve bought the company if it was a financial disaster waiting to happen?  Most likely not.

5.  Stories sell – facts tell. Use first person and third person stories about customers and their experiences with your company where-ever possible when highlighting key selling points.  Facts are often boring; when mixed into a relevant story they take on a life of their own.

6.  Don’t be afraid of long copy. Advertising copy should be as long as it needs to be.  It should be long enough to tell your story effectively and persuasively.  One of the most successful sales letters of all time is 42 pages long.  Whether your copy is short or long or in-between, just make it quality.

7.  Keep your sentences and paragraphs short. Don’t make the common mistake of overestimating the comprehension skills of your audience.  To be quickly and easily understood it should be structured for the reading ability equivalent to a year 8 student.  Complex sentence structure or long paragraphs can be intimidating and confusing to many people.  Remember to create your copy with your target market in mind.

8.  Create a sense of urgency. This can be done with discounts or bonus offers that expire within a certain time period or with extra incentives for fast response.  You’ve all seen it…. “Available to the first 50 callers only”, or “Ring now and we will also include…..”.

9.  Internal Repetition. Internal repetition is a critical technique to learn.  Try to make your main selling points in several different ways.  Using this technique allows you to remain focused on the message and drive home your key benefits.  Remember, when trying to explain something to different people quite often they will comprehend your message differently and the first penny will drop at various points and at different times during the conversation.

10.  Pimp your headline. If your prospects aren’t captured by your headline, then the rest doesn’t matter.  There are many techniques for writing headlines; here are a few examples.

1. Include a benefit statement in your headline: “Lose Weight Fast and Feel Great”.
2. Give specifics – “Lose Weight Fast - Drop 10  Kilos in 3 Weeks and Feel Great”.
3. Create a timeline.  “Lose Weight Fast! – Drop 10 Kilos in 3 Weeks in Time for Summer and Feel Great”.
4. Introduce intrigue.  “New Research Reveals:  How To Lose Weight Fast! – Drop 10 Kilos in 3 weeks in Time for Summer and Feel Great”.
5. Add a guarantee. “New Weight Loss Secrets Revealed: Discover How To Lose Weight Fast! – Drop 10 Kilos in 3 weeks. Feel Great this Summer, Guaranteed or Your Money Back.

And finally, become a student of copywriting.  Collect as many different examples of promotional pieces and direct mail as you can.  Over a period of time you will have a valuable “swipe file” that you can delve into when it comes time to create your own masterpieces.

Virtual Business Advisor

Somewhere in your office either resting on a shelf, on your desk or mounted to the wall is the most underutilised yet most powerful and effective marketing tool going around.  And guess what?…. you’re already paying for it but probably using it less and less effectively as time passes on.  We are talking about the telephone.

As the cost of other traditional methods of prospecting, qualifying customers, maintaining contact with existing customers and general marketing activities continue to increase almost daily, the art of telemarketing is seeing a resurgence and a return to favour.

Telemarketing has become an area of tremendous interest especially to the small to medium sized business… and it has many advantages.

With direct mail, to obtain economy of scale you may have to print several thousand or more flyers or brochures all at the one time.  Telemarketing enables you to pay as you go.

When it comes to most media advertising you have to pay for circulation; usually calculated by the thousand.  Depending on the medium you may be forced to reach out to tens or even hundreds of thousands of people all at the one time.  The good ole telephone allows you to reach out and contact as many or as few prospects as you wish.

Let’s look at a practical application.  If you run a local business like a real estate agent, hairdresser, gym, printing shop, clothing store or any form of retail outlet and you are disciplined enough to call just 3-5 prospects per day, you would’ve promoted your business to at least a thousand potential new customers a year in less than half an hour a day with virtually no extra costs.  Now any business can afford to do this type of marketing.

Telephone prospecting can be used effectively when qualifying or inviting new customers to a special event or sales presentation or seeking approval to email or mail further information on your offer.

This method of marketing does require the selection or compilation of a prospect list.  However, you don’t have to purchase large  lists from brokers, you can simply use your smarts.  If you are a B2B business you can target businesses in your local area and obtain their details from local business listings or online directories.  If you are more B2C then you can target a local area with a special promotion aimed at a particular suburb.  Some of the best promotions we have seen work have been directed at very small and targeted markets such as gated living communities and assisted living facilities.  Obviously your product or service will determine if this type of activity is suited to you.

Another application of telemarketing for most businesses is as a way of communicating with past and existing customers.  A personal phone call to an existing client is usually well received when it contains a special offer.  In store sales events, limited time discounts, close out offers, new products, sample ranges etc are all good excuses to phone existing clients and give them the jump on the general public when it comes to attending one of your events.  I  purchased a new car last year and the dealer phones me with invites to test drive all the latest vehicles in the range in additional to deals on after market accessories and extended warranties etc.   It works a treat….

Yet another application is the up sell.  This method is used most often when customers call into the business to place an order.   An example of this well executed is my local printer, after the order has been processed I receive a COLUMBO…. what is a COLUMBO?  It’s a marketing technique named after the famous TV character played by Peter Falk.

Columbo would always stop at the last minute and ask one more thing.  The printer simply asks.  “Just one more thing before you go.  We have a limited offer this week for our telephone customers of 25% off business cards and letter head printing, do you want to check, is it time for a top up of these items?  Simple huh?…  This can be used in just about any business.

Now I can hear what you are thinking…. and yes overseas telemarketing centres have recently tarnished the fine art of telemarketing.  However, used in the right manner with a genuine and caring approach, this marketing method can work a treat for your business.  Give it a try for just 2 weeks and see the results - it will cost you next to nothing but your time.  Make just 3-5 calls a day and see what happens – It think you will be surprised.

Virtual Business Advisor

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If you’re anything like most people that I meet you’ll have some idea, but would probably be horrified to learn exactly how the conversations go between your sales team and individual customers day to day.

Its hard enough if you’re managing internal salespeople, where at least you can overhear some of their telephone conversation but, if you’re managing a field-based team the problems become far worse.

Whether it’s just carelessness or a lack of focus, salespeople say the strangest things to customers without any thought of where it might lead them. Below are some actual examples of phrases I’ve heard salespeople say to clients or prospects either over the phone when I’ve been listening to calls directly in front of them or when I’ve been doing field visits with the salesperson.

SALES MISTAKE #1 – Telling the customer that they are wrong.

Customer: “I’m not convinced about the reliability of the machine. I’ve heard you can get problems when it’s been running for a certain period of time”.

Salesperson: “Well I don’t know who you’ve heard that from but that’s just plain wrong! This machine is the best of the market and never breaks down!”

Customer: “Oh really? That’s not what Jim said over at XYZ Machinery where you installed one last week and have been back to it twice already”.

Salesperson: “Oh… so you know Jim at XYZ Machinery? Erm…..”.

This type of response happens so often it’s frightening! The salesperson hears an objection, can’t deal with it, panics and makes something up on the spot in a desperate attempt to sound convincing!

The result? The salesperson loses all credibility in front of the prospect or client and is so embarrassed that, not only do they not get their outcome from this call, but they rarely feel like they can call this person back ever again.

SALES MISTAKE #2 – Not listening to the Customer.

Customer: “I’m sure that it’s a great system but I don’t think we need anything that complicated here”.

Salesperson: “It really is good. It’s the best system on the market and you can even program it remotely and configure it in real-time from an external location”.

Customer: “I don’t think we’d use that feature, it’s too complicated for us and we don’t have the budget for such an extravagance”.

Salesperson: “Oh so budget’s a problem for you is it? When will you get your new budget?

Customer: “Not until next March”.

Salesperson: “Oh, so we’d probably be better waiting until then, wouldn’t we? Shall I call you back towards the end of February?”

Customer: “Great, speak to you then”.

No, No and No! How on earth did the sales person mishear what the customer was saying to him? The problem is, most salespeople don’t listen to what the customer is saying to them, they’re too busy thinking of what they’re going to say next.

You wouldn’t believe how many conversations I listen to where buying signals are missed and critical information is ignored because people just aren’t listening. Even worse, the salesperson then left the call and wasn’t going to call back for a few months’ time. What do you think would happen in that time?

That’s right – a competitor would call the customer and actually listen to them, propose a solution more to their needs and close the business, leaving our salesperson to call back in February already having lost the business.

SALES MISTAKE #3 – Making the customer feel worthless.

Customer: “What’s the extra charge for?”

Salesperson: “That’s the small order charge. All order under $50 are subject to it”.

Customer: “But I don’t need any more than what I’ve ordered. I don’t see why I should have to pay a penalty for placing an order with you. I’m sure that some of your customers don’t pay that charge; is that right?”

Salesperson: “Well, our gold level customers don’t pay it, but that’s because they spend a lot of money with us”.

Customer: “So are you saying that you charge it to some customers and not others? Why is my business worth less to you than theirs?”

Salesperson: “Errrrrmmmmm……”.

Blabbermouth strikes again! Instead of explaining what the small order charge was for and suggesting ways around it, our salesperson has now created an irate customer who feels that their business isn’t important to the company!

Anyone suggest a better way to get a customer to seek out another supplier?

SALES MISTAKE #4 – Making a complaint worse.

Customer: “Martin, we’ve been having a few problems with our xyz system, can you do anything to solve it? We’re getting sick of it going wrong”.

Salesperson: “We’ll I’d like to do something to help, but you’re outside of your warranty period, you see”.

Customer: “And?”

Salesperson: “Well, we’d have done something for you if it was still in the warranty period, but it’s not”.

Customer: “So are you saying you’re not willing to help me?”

Salesperson: “Well, as I already said, it’s outside the warranty period, but we do have a great range of new machines you could buy…”.

How helpful was our salesperson in this scenario? Not very. Not only, by stubbornly sticking to “policy” did he annoy an existing customer and virtually drive them to his competition, but he also put in a very badly-timed sales pitch as well.

I’m always astounded how much effort salespeople will put into winning new business and then as soon as the customer is “on-board” they treat them like second-class citizens and virtually drive them elsewhere.

Not very helpful if you’re tyring to build long-term relationships and business with your customer is it?

How many opportunities do you think the average salesperson blows? How much money do they leave on the table every month? How many deals do they lose that they could (and should) have won.

From a management standpoint it is worth your while to find out. You don’t need to act like big brother and tap phones or ride gunshot on sales calls – instead take a proactive role in regularly undertaking refresher courses and small workshops to ensure your sales staff are on, and then stay on the right track. Your business and customers will love you for it.

By Andy Preston

Accredited Associate of the Institute for Independent Business

How to book a meeting with a business advisor, mentor or coach?
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You will never meet a salesperson who failed because they had too many prospects to talk to.

For the majority of salespeople, finding new customers is without a doubt the most difficult and stressful aspect of the profession.

Prospecting should be viewed more as a mindset rather than merely as an activity. It is something you need to be constantly aware of because you never know where your next prospect will be coming from.

It really doesn’t matter how competent you are or how well you know your product line; if you don’t have a qualified prospect in front of you, you don’t have a sale.

1. Prospecting for new business is similar to working out. You know it is good for you and it will produce positive results if you do it routinely.

Professional salespeople prospect daily. It is important to block-off specific time on your calendar for prospecting activities such as phone-calling and emailing.

2. Be prepared, get organised and take good notes.

It is critical to have a computerised contact system to record remarks and future contacts or appointments.

3. Use a script – don’t shoot from the hip.

There is only one thing worse than listening to a salesperson read a script over the phone and that is to listen to a salesperson without a script.

Obviously it is important to not only have a script but to practice it until it sounds smooth and natural. Set aside time to role-play with an associate over the phone. By taking turns presenting and critiquing, you will gain confidence, polish your script and be more effective. When prospecting, avoid the temptation to sell over the phone. Your objective is to gather information and make the appointment.

4. Strike while the iron is hot!

When working with a new prospect, it is important to make contact quickly. Prospects are perishable. No matter how interested a prospect may appear, don’t wait for them to call you. You are only one of many competing interests for your prospect’s time and money.

5. Keep the high ground and avoid the temptation to badmouth your competition.

While it is fair to make head-to-head comparisons, you should avoid personal attacks. Attacking your competition makes you look unprofessional and petty. Emphasize the benefits of your product or service by guiding your prospect through a comparison of quality and price. Play to your strengths and not the weakness of your competition.

6. Rejections are a natural aspect of the sales process, so don’t take it personally.

Learn from rejection, use it as a feedback mechanism and look for ways to improve your presentation. Salespeople who take rejection personally lack perseverance and seldom make the sale.

Virtual Business Advisor

His name is Joe Girard. That name may not ring any bells – but dig out a copy of The Guinness Book of Records, and you’ll find he gets a mention.

According to “the Book”, he is the best salesman in the world. And, if what they say is true, it’s a label he well deserves. The statistics tell the story:

In the cut throat world of retail sales of new automobiles, he averaged 6 sales per day! On his best day he sold 18 cars.

In his best month, he sold 174 vehicles. In his best year, he sold a staggering 1,425 vehicles. All at retail. All to “non fleet” buyers.

His secret?  It’s almost laughable. His success was based solely on the fact that he “stayed in touch”.

Instead of dealing with a prospect or customer then leaving them to go their own way, Joe would send them a follow up “thankyou” letter.

Then a birthday card. Then a Christmas card. Then a St Patrick’s day card (or any other card he could think of). Plus a variety of other letters and notes to ensure that his name was always at the top of the prospect’s mind.

You see, Joe recognised that people prefer to deal with people they know, rather than total strangers. And they like to feel appreciated.

So he implemented a simple strategy. He made sure all his prospects and clients felt completely familiar and comfortable with him. He made it clear he appreciated them.

And he made a fortune in the process.

We all know we’d respond positively if we were followed up after a sale. Yet most sales people … and most businesses … fail to do ANY follow up to their clients or prospects.

Instead of staying “close”, they send the client off, then complain about the lack of customer loyalty when that person buys from a competitor the next time they purchase.

Fact is, if your customers aren’t loyal to you it’s because you haven’t done enough to deserve their loyalty!

Ask yourself, honestly, whether you’re really building a close relationship with your clients. Are you really making them feel appreciated? Chances are you’ll find that there’s plenty of room for improvement.

If YOU don’t harvest the lifetime value of your customer, your competitors will.

One of Joe’s “success secrets” was to actively look for information about his customers. As well as basic information like their full name and their family’s names, he’d also take note of the cigarettes they smoked, the football team they barracked for, the school their kids went to, the ‘tipple’ they preferred … and much more.

Most of this information could be collected during the course of a friendly conversation, then noted on the client’s file or card after they’d gone.

Just the process of noting the information would help you remember it – and if your memory failed, a quick check of the client’s card would bring you back up to speed.

As you can imagine, that information made it much easier for Joe to talk with his customers about issues they found fascinating – and the gifts he occasionally gave them were always things they’d appreciate.

He also went to great lengths to demonstrate his commitment to his customers … and their commitment to him. One simple technique he employed was to take a photo of each customer standing proudly beside their new vehicle. These photos were displayed on the wall of his office.

If you paid enough attention you’d see that the photos were displayed in sequence. At the left of each row of photos, you’d find the customer with the first car they purchased from Joe. The next photo in the row would show the same customer standing next to the second car they’d bought from him. The third photo in the row was even more recent … and so forth.

In some cases the rows of photos held as many as a dozen snap shots, covering the growth of the customer from flower-powered hippy through to high-powered business executive.

But he didn’t stop there. Under each row of photos were other smaller rows. If you looked closely, you’d find that the people in these snaps often had an uncanny resemblance to the people in the top row.

They were the original customer’s children!

The point is that Joe actively set out to earn his customer’s lifetime value. Instead of focussing on making ‘this’ sale, he was focused on making the next sale … and the one after that.

It makes sense. Your customer will almost certainly need your sort of goods and services again in future – so why wouldn’t you try to establish yourself in their minds as the person to come to the next time they’re ready to buy.

After all, if you lose a customer you’ve actually done yourself a double disservice. First, you’ve missed out on the profit which was there to be earned. And secondly, you’ve helped a competitor grow stronger.

Let’s learn a lesson from Joe. Next time you acquire or greet a client, focus on doing whatever it takes to earn the next sale from them.

Just that little shift in thinking can be enough to transform the way you think and act … and the way your clients feel about you.

Virtual Businss Advisor

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Looking for an excellent sales role-model? Then look no further than your Doctor.

In the medical profession they have an adage that says ‘prescription without diagnosis is malpractice’. In simple terms, it means that if a doctor prescribes a treatment without first taking the time to find out what you need, then they’re potentially guilty of malpractice.

The same applies in selling. If we’re going to be professional, WE should not prescribe or recommend a solution either …until we’ve diagnosed or found out what the customer really needs.

Seems fairly obvious, but how often have you seen a sales person launch straight into a presentation as soon as you paused in front of a product? Apart from anything else, apart from the fact that this approach is unprofessional and possibly even malpractice, it’s also the hardest possible way to sell.

For instance, imagine you visit the doctor and the moment you walk into their office they say ‘Here, take these drugs’. You’d probably feel a little uneasy about taking those drugs.

But if the doctor began by asking questions about how you felt; if they took your blood pressure; listened to your heart, had you stick your tongue out and so forth … and then they prescribed some drugs, you’d probably feel a whole lot more comfortable with their recommendation.

The same applies in selling. By asking questions – by diagnosing the customer’s requirements before we make a recommendation – we achieve two important results.

First, we build trust and rapport. And secondly, our questions will help us to unearth the customers concerns, requirements, budget, expectations, time frames … and so forth. That in turn will let us make the best recommendation to them.

And when THAT happens, we’ll make more sales, more profitably, to happier customers … who’ll refer us to their friends.

Virtual Business Advisor

How to book a meeting with a business advisor, mentor or coach?
Find out about Government Grants for Queensland business?
Would you like to become an Accredited Advisor?
Need information on how to prepare a business plan?
Do you want a step by step guide to growing your business?
Become a sponsor or partner of BAN and connect with small business decision makers?
I wish to make a donation to help small business.