Filed under: Business Growth, Profitable Growth, Uncategorized
It is standard practice to qualify a prospect on the basis of time, need, authority and money, but why not by corporate culture as well? We all find it easier to work with some companies just as we prefer working with some employees more than others. In fact, as a result of outsourcing, with more and more work going to suppliers instead of employees, perhaps the supplier-customer relationship should (and will) start to mimic the employee-employer relationship.
If this is so, then as suppliers, we should start to assess our prospect’s corporate culture just as we did when deciding to accept a company’s job offer. While I’m not recommending pre-relationship psychological testing, we may need to run a relationship check just as we would a credit check. Since people still buy from people (as opposed to companies) some level of compatibility is essential. After all, customer-supplier relationships fail most often because expectations were not set, agreed upon and then met. Some relationships may be already doomed from the start!
So let’s take a few moments and decide whether we are picking good long-term partners or “one-time sales stands.”
- Does the decision-maker communicate like you do?
- Does he/she share some basic values with you?
- Does his/her company make decisions like yours does?
- How are disputes resolved, if they are resolved?
- Is it a conservative or progressive environment in terms of risk-taking, communications, problem solving, partnering?
While sales goals have to be hit, they are rarely accomplished through the first order. Therefore, developing an ideal customer profile before closing that first deal will help ensure that more will follow. Taking a few minutes when moving qualified prospects through the developed or proposal funnel stage before closing them will only enhance the chances of successful long-term partnerships. This profile can easily be added as part of your qualifying customer or pre-proposal questionnaire. Feel free to contact me if you would like some further thoughts on how to do this.
If The Economy Is Slowing, Is Your Business Growing? 12 Tactics To Ensure Your Business Does Well During A Slow Economy
Filed under: Business Growth, Profitable Growth, Top Line Growth, Uncategorized
By now, there’s no question the U.S. economy is mired in an economic slowdown. While your specific industry may actually be strong, slowdowns are epidemic in nature and have a way of leaking into otherwise solid sectors.
All of this has put business owners in a precarious situation that they haven’t witnessed during the roaring ’90s. But that doesn’t mean your business has to stop growing just because the masses are taking a wait-and-see attitude.
Here are 12 tactics to help ensure your business doesn’t follow the downward trends.
Warranty and maintenance contracts that extend the useful life of the status quo.
Programs/products and services that promise reduced costs and greater efficiency will be more attractive than those promising increased sales.
Channel power will go to those with paying customers or the ability to retain their margins.
Loyalties and relationships of convenience/laziness will be broken. In times of stress, relationships either deepen or disappear. Pick and choose your partners on both the supplier and the customer side. You can’t be all things to all people.
The transition from having not enough people to having too many people may be sudden. “Bargain-price” human resources can help increase customer service or search for new customers.
The challenge of focusing on your best and highest use, your target market and your customer pain becomes all the more imperative. As demand slows down, every purchasing decision will be questioned. The practice of finding the best suppliers may be replaced by finding the one lowest cost supplier.
As people become more risk-averse to selling on the basis of fear, uncertainty and doubt will be effective.
Capital goods will be harder to get approved by customer finance departments. If so, they will be prioritized in the following order:
- Those that improve profits
- Those that increase sales
- Those that decrease production costs
- Those that decrease administrative costs
Technology factors. When tech capability greater than the market’s capability to absorb it, then price falls when everyone beyond the early adopters stop buying it. The minute the technology isn’t used, the value drops. Technology starts being given away and revenue streams devalued. Inevitably, the technology is adopted and price goes up, or more likely the next great thing replaces it as the cycle repeats itself.
Outsourcing may or may not decrease but the need doesn’t.
Leverage goodwill if you already created it with your customers.
Rethink the time versus money tradeoff. People may have more time to spend on tasks they formerly might have paid others to perform.
While there is no surefire way to avoid a slowdown, if you’re proactive in your approach odds are you’ll be better off then your not-so-prepared competitors.
Filed under: Business Growth, Pittsburgh, Profitable Growth, Uncategorized
Remember the movie City Slickers where Jack Palance tells the boys to find “The One Thing!”
Whatever you make and sell, if you practice abundance while offering scarcity, your profitable growth will follow. Why?
First, let’s define abundance and scarcity.
- Abundance is your confidence that there are always more customers with new wants and needs. Your and their glass is always half full.
- Scarcity happens every time you convince buyers that your business is different, better and unlike every other business. Scarce means you are in demand.
Here are five ways to practice abundance and scarcity and create profitable growth.
Five ways to practice abundance
- Move beyond your industry’s certifications and best practices and create your own. Find and follow your own best and highest use. Here’s my YouTube video to show you how.
- Invest in your own business. You will always have too little money or too little time. Your confidence and conviction will have much more to do with your success.
- Donate your time and your money where you believe it will have impact not visibility.
- Give more referrals than you get. Paying it forward works!
- Write, speak, present and react to issues where you are an expert. Social media makes it easy.
Hines Ward, of the Pittsburgh Steelers is a great example of living an abundant life. At this writing, he’s a finalist on Dancing with the Stars. What is next for Hines?
Our two-party system, which boils most issues down to destructive platforms and sound bites, is the opposite of abundance.
Five ways to practice scarcity
- Be truly independent and unbiased in your advice and build all the trust you can with your clients.
- Find the extraordinary in the ordinary and give your customers unique ways to accomplish what they want to.
- Discover, propose and sell third and fourth alternatives to problems when everyone else sees only one or two.
- Say no to cutting your price, accepting bad business and indulging bullying or non-paying clients.
- Be fun and still get the job done. Work hard, play hard! Make people need you.
Barbara Streisand, Cher and Madonna rarely tour but always sell out when they do. They are great examples of scarcity.
Creative advertisements for GEICO, Progressive, State Farm and Allstate Insurance come so fast and often we forget who made which ad and sells what brand. Not scarce at all!
Combine Your Scarcity and Abundance and They Will Create Profitable Growth.
Being scarce with an abundance mentality comes down to having the unconscious and innate confidence that you can make life better for your customers and clients than any of your competitors or they themselves can. Practice practicing scarcity and abundance. When you do so, profitable growth will follow because your customers will connect you with their successes and will not be able to duplicate this with your competitors. And they will be willing to buy more from you and pay you more for it. And that is profitable growth!
Filed under: Business Growth, Profitable Growth, Uncategorized
Like Captain “Sully” Sullenberger, does your sales team humbly acknowledge the whole company did the right things and luck had something to do with it.
Or, are they more like Libyan rebels victoriously firing their guns skyward celebrating their victory over Gadhafi regardless of NATO’s “shock and awe”?
What is your sales force’s self awareness, and more importantly what is the truth?
Despite your sales group’s humility or hubris, no one can control changes in your buyer’s behavior or marketplace forces.
Here are the three ways to gain insight:
1. How did your customers learn about your firm? Call the decision-making buyers and ask them why they decided to buy now. What did the customer initially want and what did your rep say that finally made them buy? If the buyer refers you to other influencers or don’t mention your sales rep, then their buying process has changed and you need to understand why and how.
2. How did your firm learn about these new customers? It takes 12 “contacts” or “touches” to close a new client including your advertising, traditional and electronic mail, referrals, reference checks and internet research. How did your company connect to the decision maker?
3. What did your sales rep do to prospect, qualify, develop and close his or her new customer? Was he or she a former, dormant customer or a brand new one? Was the decision made by the same buyer, department, and using the same criteria as before? Did it change during the selling cycle?
As Bob Dylan once sang, the times they are a changing, it’s highly likely that understanding and reconfirming changes in the customer’s buying process is critical. Here are four questions to answer.
- Has the buyer, reasons or criteria changed?
- Has the distribution changed?
- Does the product need to be repriced, turned into a service or unbundled?
- Has the target market changed, moved or disappeared?
There may never be a substitute for personal face-to-face selling in your business. Or is there a major change in how important and when it is the right thing? In the era of young people texting, internet and voice mail, you don’t want to be the last to know that you have a Willy Loman-style, “Death of a Sales Force”, holding your company back.
Today I met an old friend for lunch at Chili’s.
We had years of catching up to do.
But not before our caffeinated waitress hawked every feature, pushed every special and described each of her favorites on the menu! First, we ignored. Then we resisted. Ultimately, we succumbed and ordered “her” mushroom steak fajita special. At last, we could share our business/family trials and traumas.
But no! Our waitress burst in to tell us that for a dollar more we could each get a second fajita order, packaged to go no less.
Fine, we shrugged and she left.
But yet again, she returned, crestfallen with news that her manager would not let her offer the mushroom steak fajitas for a dollar more, so out came the menus to pick different fajitas.
I think you get the picture, but Chili’s doesn’t. For me, lunch is about connecting not cuisine.
Why would any business cut its returns by 50%? Devalue its product line? And harass its customers in the process? Of course, your business wouldn’t do any of this. Right?
But are you sure? Have you thought about sending secret shoppers into your business? They might just help you discover how to save money, upscale your products and delight your customers.
Back to my Chili’s experience.
Continuing through lunch our waitress brought out three rounds of soft drinks. Lining them up she said, “In case we ran out.” Then she gave us two checks so that we wouldn’t fight over them.
This reminds me of some business owners and entrepreneurs.
What assumptions are we making about our businesses? What assumptions are we making about what our customers really want and expect from us?
What silly story can you add to mine? Come on, I know you have a one dollar fajita story crying to be told!
As Paul Simon sings, “One man’s ceiling is another man’s floor.”
One casualty of all the corporate downsizings, bankruptcies and restructurings are customers. Many are now being neglected by their vendors. Suppliers have cut staff, dropped service levels and assigned junior people to key accounts.
With so many companies focusing on fewer products, services and customers, why not make a home for another company’s cast-offs? What a great source of profitable growth for your company!
Here are five such ways to profitably grow your business.
1. Ask your customers which products and services their suppliers are ignoring.
2. Notice which competitors are increasing their outsourcing, online service or prices and offer their customers traditional services they prefer.
3. Sell your competitors on selling you their unprofitable customers.
4. Partner with your customers to meet their customers’ needs.
5. Work with your suppliers to service their other customers’ customers that they see being neglected.
Whenever companies are being bought, sold and closed, their customers are often innocent bystanders or unintended casualties. Swoop in with your great service and support and save them. They will never forget you for helping them in their time of need.
And you could have a brand new source of profitable growth!
As we climb out of this great recession, we have all learned to run lean and mean.
We spend less and consume resources ever more efficiently.
But have we any better idea of our costs of doing business? And how have they really changed through the recession? Knowing our costs allows us take better risks and make ever better pricing decisions. And now more than ever, when we decide what to sell, who to sell it and what to charge we must be right.
As business owners do we get an A, B or C when it comes to knowing how much our product or service costs?
Take this test to see how well you do. On a scale of 1-10, with 10 being the highest, circle your answers to the following questions.
I know my:
1. Total direct labor and material costs. 1 2 3 4 5 6 7 8 9 10
2. Average or standard direct labor and materials by market segment; product family or major services. 1 2 3 4 5 6 7 8 9 10
3. Actual direct labor and material costs by individual customers, orders, services or items. 1 2 3 4 5 6 7 8 9 10
4. Monthly fixed costs and break even production level of goods or services.
1 2 3 4 5 6 7 8 9 10
5. Overhead expenses are fairly allocated to every sales order and proposal to maximize profitable sales. 1 2 3 4 5 6 7 8 9 10
6. Costs of finding, keeping and growing a customer. 1 2 3 4 5 6 7 8 9 10
7. Pricing, purchasing, staffing, and servicing decisions are based on real facts and current information instead of emotion and old data. 1 2 3 4 5 6 7 8 9 10
Add up your answer to the seven questions and grade yourself.
If you scored 60-70, give yourself an A!
Congratulations, you have true costs, know how to apply them on an individual customer basis and do so in growing your business.
Now you can go on and really exploit your knowledge by:
- Reducing or increasing prices to increase your margins with individual customers.
- Determining the product lines or services that have to be profitable on their own and the ones that can be loss leaders or impulse items.
- Focusing your staffing, materials, inventory, and purchasing departments on saving and making you more money where it matters most.
If you scored 50-60, give yourself a B.
Yes, you have a costing system and while it may not be correct on an individual basis, you do have some structure and discipline in your pricing and investment decisions. Now it is time to bring on a financial/marketing analyst to dig into the average numbers and start rooting out hidden opportunities in your business like:
- Creating a structure of product parents, grandparents and children to bring order to what you make and sell.
- Assuring your breakeven numbers are being used in establishing your monthly pricing.
- Driving your financial, materials, purchasing and staffing functions to manage their costs for profits.
If you scored below 50, you get a C and need a wake up call.
Your costs and your subsequent decision-making is flawed. Where you think you are making money you may not and vice versa.
Get started by:
- Making your business run by the numbers. Hire a plant accountant or business manager as soon as possible and uncover your direct materials and labor costs to forecast your overhead.
- Developing a manual costing system before you invest in a CRM or ERP system. What doesn’t work manually will not work when it is automated!
- Changing your peoples’ thinking on this, or change your people. Regardless of whether your margins and prices are high or low, you cannot manage your business if your people are not managing its costs.
Knowing what your products and services cost is imperative to your profitable growth. You will succeed only when you are sure you know… How Much!