The great marketing opportunity delivered by tough times.

The great marketing opportunity delivered by tough times.

 

A hundred years of practical experience and academic research proves that cutting marketing budgets during tough times is the worst thing you can do. Most do it, simply because it is easy, seems sensible to the uninitiated, and often prevents yelling from the corner office.

This provides great opportunity for those who hold their nerve.

Brands are built by having a ‘share of voice‘ greater than their market share over time. Brand building is a long-term exercise, which becomes cheaper in a recession, as others cut their expenditure, demand for advertising space drops, so does the price as a result, and your customer is more likely to see your ads in a less cluttered environment.

This is a strategic investment.

You should reduce the existing tactical, promotional deals if you can, as they are costs to the bottom line, not investments in your brand. You might get a short-term volume bump, but the added volume rarely replaces the margin lost from the discount.

Do the maths before you agree to the discount.

How much extra volume do you need from the promotion to recover the margin surrendered? Consider also the customers perception of the ‘right price’ for your product. Have you just lowered it?

You can cut yourself to oblivion, easily, while being clapped from the sidelines. Usually those clapping control access to consumers, as do supermarkets, or are those customers who would have been happy to pay more.

Do not miss the opportunity to build your brand while your competitors are hunkered down giving discounts in an effort to maintain volume, while destroying long term commercial sustainability.

 

Header credit Tom Fishburne at marketoonist, who very effectively pokes fun at marketing hubris.

 

 

 

 

 

 

The simple 3 step lead qualification tool

The simple 3 step lead qualification tool

 

Optimising a sales process is not just about the conversion rate, as that is an outcome, a function of many things that come before and contribute to that outcome. The challenge is more about optimising each stage in the process that leads to a maximised conversion rate.

Over the years there have been many tools that assist the process, BANT being one of the best known. All of them in one way or another recognise a progression through a process that should be simple, but which consultants and others have overcomplicated.

The following 3 part qualification process should play a role.

Basic criteria for qualification.

Does the prospect fit the picture of your ideal customer?

Basic criteria + Fit.

Does the prospect have a need for what you have, do they have a problem you can solve better than anyone else? How compelling to them is your value proposition?

Basic criteria + Fit + Intent.

Is the prospect aware of the problem, are they searching for a solution, have they engaged with you in some way? Are they willing and able to pay for your solution? What elements will drive the timing of their decision to buy now, delay, or decide not to buy?

While this may seem too simple, often the best is also the simplest.

 

 

Why does Goliath never beat David?

Why does Goliath never beat David?

 

Goliath, contrary to the stories, usually does win, it is just that we simply never hear about it. There is no drama, no unexpected outcome, no backstory of how little, under resourced David beat the giant who had all the advantages, and got away with the prize.

We use these stories in marketing all the time, because they work, and we know they work,  because they have been told to us as stories when we were kids, and we remember them.

They have meaning.

Go to a live event, with someone selling something from the stage, and you will always hear pretty much the same sequence: hardship, battling against the odds, a personalised stage of despair then  some insight that shows them the path, which made them hugely successful.

Now they want to help you walk the same path, they offer a picture of what it will be like at the end of the path, you just must be brave enough to take those steps, to grasp the opportunity they are offering, which they know works, because they are the living proof.

Trouble is, just buying the books and courses of someone who has been successful does not make you successful.

In fact, the reality is usually that the only success that someone flogging a book or course has had, is in selling you a book or a course.

How to maximise the return from your investment in sales personnel

How to maximise the return from your investment in sales personnel

 

 

In almost every situation I have ever seen, ‘Sales’ includes all sales, and salespeople are often rewarded via commissions on the total of all those sales.

In many categories of B2B sales, the only time a person does a ‘Sales’ job is to gain that first transaction, after which it is all about retention, a different set of skills.

Assuming the first transaction goes well, the product was delivered on time, in specification, and did the job promised, the chances of a repeat at the appropriate interval is higher, and may not require the ‘sales’ skills of the original salesperson. Rather, it requires the interaction of operational and logistics personnel to manage the relationship, and the transactions that occur within that relationship.

If that is the case, why do we habitually reward salespeople on the total of all sales?

Salespeople are as different as any other group of people. The archetypal ‘Always be Closing’ salesman of the past has now almost disappeared, replaced by a range of people covering differing tasks. This reflects the changed role of sales with the move of information from the hands of the seller to those of the buyer.

Almost every salesperson also sees customers as ‘their’ customers.

Again, if the hypothesis is that they are only necessary for the first transaction holds, this is a mistake.

The logistics and operations people should hold the relationship, assisted by an internal ‘customer service’ person, while the salesperson goes off ‘hunting’ for the next new customer, or indeed, sales in an adjacent product or market area of a current customer not currently serviced. This would be a far better use of the time available to a salesperson than running around at the factory trying to wrangle a preferred spot in the production schedule.

A business I ran as a contractor some years ago had a specialist sales force made up of highly trained technologists. When tracking their activity, it became obvious that most of their time was consumed by tasks other than ‘sales’. These involved interaction with the customers technologists, their operational, marketing and planning personnel. Significant time was also spent at their desks dealing with the complexity of our planning and operational processes in order to meet sometimes impossible delivery promises made under pressure from customers.

This blurred the line between the tasks best undertaken by a specialist technical salesperson, dealing directly with generating more sales, and the tasks that were better done by internal customer service people. The ambiguity of responsibility for specific tasks, and our very malleable processes was hamstringing the productivity of the investment in sales.

The communication tools we have today really mean that we are now able to direct the activities of sales personnel towards where their value lies, identifying and solving customer problems. They do not have to be in the office apart from training and progress sessions. The logistics of providing the products are best managed by those who are hands on in the factory, warehouse and admin functions.

After some changes, sales went up significantly, as did the margins, as the salespeople had more time to spend identifying and solving difficult challenges that naturally brought higher margins.

As you consider the structures necessary for success as the new year opens, you might give some thought to the priorities set for the salespeople, and their support functions in your business.

Header credit: Scott Adams via Dilbert

 

 

 

The single ‘Must-have’ to start a successful business.

The single ‘Must-have’ to start a successful business.

 

There are many things needed to start and scale a business, the ones I bang on about all the time are cash and commitment.

There is however another.

Trial.

Without trial, there is no business.

Whether you are starting a business in a well understood and competitively supplied market, or a completely new product in a new field, the challenge is the same.

You must generate trial.

The strategies necessary are entirely different for every business, as the challenges are entirely different. However, the common feature is that you must make the value proposition attractive enough to bust the power of the status quo, and often the barriers to exit for the current customers of incumbent competitors, before you will generate trial.

Then, and only then, if the product performs, and the barriers to adoption post trial are breached in sufficient numbers, you have a chance at survival.

It seems pretty obvious, but we do not usually think about trial as the single and first essential barrier to success. Rather, we tend to think about it as just the first step in a process, not giving trial the weight it deserves.

 

 

 

Rethinking sales commissions

Rethinking sales commissions

We understand that the behaviour we reward is the one we get. It is the way we train our pets.

Many also tend to overweight commissions when we pay salespeople, rewarding a set of behaviours, some of which may not be what we want.

Years ago, we learnt that paying piece rates in a factory resulted in quality problems, and myriad ways of ‘gaming’ the system to the detriment of the overall numbers.

Why have we not applied the same lessons to sales commissions?

I will not argue that the best salespeople do not deserve to earn more than the average. The question is how much more, and how do we increase the overall productivity of the investment in sales so that there is more to share?

The answer lies in the results of the enterprise, and the way the enterprise then shares those outcomes across all stakeholders.

Collaborative teams work in factories, we have used them successfully to improve productivity and quality while reducing costs for 40 years. It makes sense to deploy similar tactics in your sales force.

Sharing customer, competitor and market information, and the best practice sales techniques amongst all salespeople, learning from each other, will lift the average without compromising the best.

Not all salespeople need to be on the same salary, but they should all have a common interest in making the enterprise successful by maximising the impact of the investment made in generating revenue.

Bonuses paid to salespeople tend to be tied to volumes, and/or profitability of the sales they make. However, all sales are not equal.

Let’s assume the strategy calls for expansion into an adjacent market. There is marketing expenditure directed towards generating awareness of the enterprise, and the value it delivers in that adjacent market, but there are established competitors whose best interest is to see you fail. In that case, you need your best salespeople on the case, but they may be reluctant if most of their income is tied to commissions on the same calculation base as the easier sales. In that case, there needs to be recognition of the greater difficulty, as well as the strategic imperative.

There is no one size fits all template that will be useful to you.

However, starting by tying remuneration of the individual to the outcomes of related work groups, strategic priorities, and enterprise outcomes is a start.

Header cartoon courtesy of Scott Adams and Dilbert.