Why do customers buy from you?

Why do customers buy from you?

Sep 9, 2016 | Sales

Last week I found myself in another conversation trying to make the case to the owner of a medium sized manufacturer that his best shot at survival was to focus obsessively on a niche where he could add value in some way to customers that his competitors could not match, where he had a competitive advantage.

As often happens, the need to deliberately choose to ignore a possible ‘walk in’ was winning the day, the  desire to be all things to all people ‘just in case’.

It is a common challenge for all businesses, not just small ones.

In the course of the conversation, I recalled a sense of confusion that occurred last Christmas.

My wife bought me a couple of shirts. I needed them, but hardly inspiring.

As ‘Santa’ handed the wrapped pack to me, she said “I did not know what to buy you”.

In that moment, I realised that while the woman I had been married to for 35 years did not know what to buy me, I got emails every day from Amazon offering me stuff that I would really like!

A bloody algorithm knows me better than my wife!

Go figure that one out if you can.

Jeff Besoz has made a huge dent in the world, and one of the quotes attributed to him is: ‘Amazon  does not sell to customers, we help them to buy”

Pretty good advice, and to do that, you must know them intimately, at least as intimately as possible.

Bezos insists that there is an empty chair in every meeting at Amazon representing the customer, to continually remind all and sundry of why they are there.

Simple really. Customers will buy from those who know  them well enough to anticipate and deliver on their needs.  Customers are not interested in us, they are interested in them. The extent to which we can help them, they will be prepared to buy from us rather than someone else who exhibits less interest in them.

Rethinking the 6 challenges of local advertising.

Rethinking the 6 challenges of local advertising.

Sep 5, 2016 | Marketing, Small business

Local businesses only need local advertising.

Right?

Usually.

So the choice is then between local analogue adverting and digital or a mix. How do you make the choices when you are a small local business with a small marketing budget. (The reality is that every business no matter what their size faces the same choices, it is only the scale that differs.)

Local analogue advertising includes everything off line, billboards, local sponsorships, letterbox drops,  and many others. In most cases, digital becomes  a choice between Facebook and Google AdWords . Often I see business owners make a series of compromises that dilute the effectiveness of their efforts by spreading it too far, and further they do not adequately consider the varying strengths and weaknesses of  the platform choices they are making.

Creating a simple framework against which to ‘score’ the alternatives against your   objectives is useful, but there are two critical questions to be answered first:

  • What is  the objective of the marketing spend. Without a clear objective, the rest becomes a potentially costly academic exercise, so lets assume you have that one nailed.
  • Who is my ideal customer. Being able to refine your communication in whatever form it is to attract the people you want to attract is key. No point wasting communication money reaching those who do not want, or cannot afford whatever it is you are selling. In addition  understanding the behaviour so you can refine the channels you use to communicate is a benefit that   is delivered by digital tools, but that knowledge is transferrable to analogue. Recently I saw an ad in a bus on a route in the north shore of Sydney for a specialist self managed superannuation provider. Firstly adverting such a service on a bus is perhaps not the best channel, and secondly the advertiser was located in Stanmore, so any ‘local’ advantage was lost.

Following are 6 simple things to consider that may assist the choices:

Longevity.

The sponsorship of a local sporting team lasts the period of the sponsorship, perhaps longer as the kids wear the jerseys running around the park. A Facebook ad that attracts page likes can be used and reused to the same presumably interested audience,  a Google ad is gone once the budget is spent on clicks, which may be from a potential customer, a competitor consuming your budget, or a bot in the Philippines.

Remarketing.

This has become flavour of the month as digital has made it seemingly easier, by providing tools that do it on autopilot. Google offers remarketing tools that can be remarkably effective, but they can also be remarkably annoying when you are chased around the web after a casual look at a website for any one of a number of reasons not necessarily associated with a purchase. However, it is an old idea, one that effective analogue advertising has been using for  ever, often called ‘leverage’. When you spend some money sponsoring the local kids soccer team, putting your businesses on the back of their jerseys, there is nothing stopping you giving out a voucher to visit your restaurant, shop, or for a discount on your services at the games where the kids are playing, displaying your sponsorship. This is simply leveraging the investment made in the sponsorship, ‘remarketing’ to the digital mavens.

Data.

On line you  can track everything, and generate an explicit ROI on your marketing expenditure, using the numbers to refine and focus the investment. This is way harder to do using analogue media, but there is no reason you would  not be able to track the redemption of the vouchers given out at the match noted above, and steadily refining the offers you made. It is just a bit more work, and nobody ever thinks of doing it. However, the value of  the data generated by digital media is huge, so long as you make the further investment in collecting, analysing, generating the insights, then actually using the insights to direct your efforts. Most local businesses in my experience fall down in this cause and effect chain.

Collaboration.

Local businesses have a significant opportunity to collaborate way more than they do. The dress shop with the shoe shop, real estate agent with the interior decorator, restaurant with local grog shop, the list goes on. Digital media makes this a bit easier, but only a bit, you still have to agree the terms, timing and nature of the offer, and how the costs and benefits are to be shared irrespective of the media.

Generating and using lists.

Analogue channels are not good at inexpensive list building, but it can be done, and has been done forever. However, the building and leveraging of lists, either by email, targeted digital adverting, or indeed  the combination of a list with old fashioned snail mail is a channel  where digital has the goods on analogue. However, many local businesses fail to build lists and the technology to leverage them although now well known and pretty simple eludes many, leaving money on the table.

Attention & impact.

Finally, perhaps the most important parameter  for which it is hard to have some tick on a list, is the impact of your communication. Paying for an ad or offer that is not sufficiently memorable or impactful to generate an action of some sort as a result of the ad is a total waste of money irrespective of the medium. Small businesses do not spend anywhere near enough time, effort or expertise considering this vital element.

When you need a bit of assistance with all this stuff, call someone you trust, and who has the experience, as  the cost will be greatly outweighed by the benefits

 

This post was inspired by another of Hugh McLeod’s insightful cartoons that popped into my inbox, and I used it in the header for this post as well. Thanks Hugh.

8 rules for successful networking

8 rules for successful networking

Sep 2, 2016 | Small business

Networking has become a ‘must-do’ for those in small business. As a group we have bought into the value of networking, being able to meet those with whom you may have something in common on neutral round, have a conversation, build a rapport, and perhaps do some business.

I go to a few groups, and see some consistent mistakes being made.

Never ask for something until you have given first.

To successfully use personal networking as a marketing tool requires that you are prepared to put yourself out for others, to share what you know freely, and be seen to be doing so, otherwise, why should any others do anything for you. You need to put stuff into the bucket before you take anything out. Be generous with your knowledge and time.

It takes time.

Networking is a human activity, being impatient never works, unless you get lucky, and run  into some one who has a problem for which you have a specific solution.

Take the initiative.

Leaving a meeting hoping that your ideal customer that you have just met will call you as you suggested should they ever need you is silly, pick up the phone, connect on LinkedIn, send an email, send them an article, whatever you do, take the initiative somehow.

Do not be a ‘card-ninja’.

As a kid there was a Japanese Samurai show on TV,  (I even remember his name, Shintaro) badly dubbed into English. The playground game of the day was mimicking the throwing of  the star knives the Samurai in the show used to deadly effect. I am often reminded of this when someone I have never met before approaches at a network event, says hi, forces a business card into my hand, and moves of to the next victim. Needless to say, they all get the round file treatment.

Do not ask for referrals too soon.

When I give a referral, implicit in that referral is the assurance that I would do business with the person I am referring should the appropriate circumstances arise. Therefore my credibility is at stake, and so I will be very careful about who I refer, and to whom I refer them. I certainly will not refer someone I do not know well, and in whom I do not have absolute confidence.

Do  not ‘landscape”.

How did you feel when talking to someone who does not look you in the eye, and does not give you their attention? rather they look over your shoulder seeking someone more interesting, obviously seeking to move on? You do  not like it, and you will avoid them in the future, so why do you allow yourself to do it to them?

Be yourself.

Trying to be someone you are not will get you found out very quickly indeed,  and forever labelled as  a fake. Not a useful outcome. Not everybody will like you, relate to you, or even be vaguely interested in what you have too say, so there is no point in wasting time trying to be someone you are not. Humans have a very well developed social instinct, work with it, not against it.

Apply common courtesy .

This is almost a catch-all of the above, but the little things count, such as being punctual, remembering names, welcoming new members, and just simply offering a smile. A member of one group I am in is consistently late. While it is a little thing, him almost always coming in late is disruptive to the meeting flow, and is a poor recommendation of his personal habits, and I would never refer him as a result.

Networking is a powerful and pleasant way for small business owners to not just build revenue, but find others with whom they share common challenges, and learn. However, like any commercial activity, it should be undertaken with due regard to the objectives you have, and the costs involved. perhaps most importantly, the owners of small businesses are usually pretty time poor, so reflecting on the productivity of the time you spend networking will pay off.

The most important question to ask yourself

The most important question to ask yourself

Aug 31, 2016 | Management, Small business

Working with clients to develop a sustainable, robust and commercially viable strategy is usually not just a walk in the park that leverages my 40 years of doing this stuff.

The technique I usually employ in conversation is what I call hindsight planning, a process that develops a picture of what success looks like, then works backwards to examine and understand the drivers of that ‘success’. A common affliction of those in business for themselves is that they have too much to do, and too little time. Finding a way to easily enable them to leverage their time to get the best return possible is a core part of the business improvement process.

During the prioritisation and optimisation process I find myself consistently asking the same question;

‘Why does that matter’

Asking this simple question often serves to stop the flow of words, and brings the conversation back to the things that will really add value, and lead to business success while giving back the owner some of their life.

As a result, it can also be very confronting.

Some time ago I worked with a book-keeper on his sales pitch. He is a bloke who is very good at keeping the books of his range of SME clients, but struggled to get new ones in a pretty competitive market.

The conversation when I asked him how he added value to his clients went something like this;

Him. ‘I make sure all the entries are made, and bank recs are done’

Me. ‘Why does that matter?

Him. ‘So they always have a clear view of their financial position’

Me. ‘Why does that matter?

Him. It removes a source of great worry, and frees up a lot of time

Me. Why does that matter?

Him. It means that my clients have  more time to do things that are important to them

Me. Why does that matter

Him. My clients all want to work to live, to enjoy their lives, but keeping the books is a huge barrier to that outcome.

I ran into him recently, and he has refined his elevator pitch. Even further to: ‘Would more sex be a nice idea…… get your book-keeping  done to free up the time to enjoy your life.

He told me the uptake was ‘enthusiastic’

 

 

Environmental research: A commercial necessity.

Environmental research: A commercial necessity.

Aug 29, 2016 | Change, Leadership, Strategy

Last week I was fortunate enough to be invited to a session that outlined the latest Roy Morgan research focussing on Mortgage stress and superannuation.

The data presented by Morgans CEO Michele Levine  was both informative and disturbing in a number of ways. I recommend you have a look at  the slides, and the report, and give some thought to the problems that will evolve over the next few  years that this country will have to address, somehow.

As I considered the data and the implications, it got me thinking more broadly  about one of my long term hobby horses.

Environmental research.

Not the tree hugging type, although there are significant commercial questions and opportunities there, but the sort of research that informs thinking about the long term trends and behavioural changes that will impact the competitive environment in which we all have to live.  Understanding the direction of change has proved time and again to be more important in successful commercial development than the more common stuff that just tests the reactions to a specific proposition. It provides the context for  the varying value propositions reflected in commercial and social offerings, and creates the framework from which you can learn.

environmental research 1

 

A sensible framework includes an ongoing process to scan the trends, focus on those that will have a long term impact on the community, generate alternative responses, execute responses in a trial format, test , measure and iterate.

 

In the fortunate circumstances that we had a political climate that encouraged and enabled the sort of decision making that a society needs if it is to optimise the mix of economic and social policy outcomes over the long term, this sort of ‘environmental research’ would act as a valuable input to the debate.

Pity we do not have that sort of political environment, our children will pay a high price for our failure in that regard.  The best I think that we can hope for is to rely on the collective common sense of the electorate, but I sense that cynicism and the resulting self interest are dominating.

Not much of long term community value seems to be coming from the current politics, although the participants all claim to represent the mood and values of the community. They should be publicly considering the implications of research such as that done by Morgan, and we would all be better off in the long run for the informed debate founded on facts rather than supposition, suspicion and hyperbole.

There is however considerable meat in the data useful for the development and informing of commercial strategies and priorities. This ‘meat’ should assist you to optimise your returns while our so-called leaders fiddle.