Selling is still social

Selling is still social

Well may you ask, has it not always been so?

Sales has always been at least somewhat social, the old ‘not what you know but who you know ‘ sort of process. However, the last decade or so things have become so competitive that the numbers have taken over, and we often seem to put the social dimensions back into second place.

The numbers however, have hidden the essential truth that people buy from people  not from organisations. The social selling tools that have evolved have put another  layer onto the selling process that enables scaling of effort, but at the end, people still buy from people.

Most of my clients these days are B2B marketers, some have embraced the social platforms around, but most see them as a place to stay in touch with family and friends, and have a point of common dislike of all the cat photos infesting social media.

However, leveraging the social platforms as selling tools that span the numbers and the people aspects of selling can make sales efforts highly effective. The platforms provide leverage to your efforts and when used well can deliver significant results.

Following are a few  commonly asked questions, and my usual response:

Which of the social platforms are best to use?

LinkedIn and Twitter are the most common for B2B, but B2C is a different matter, where Facebook and Pinterest dominate, but the needs change. What is clear is that you  cannot be all things to all people  so it is more about figuring out where your major prospective customers may hang out when in a professional mode rather than a social one, and going there. No different to the old sales techniques where you joined the golf club inhabited by your target prospects.

How to I spend my time productively?

Social sites can be prodigious consumers of that most rare of resources, our time. In my experience if you join platforms based on where your prospects are, you will maximise your time by limiting it to a combination of  two networks. This implies that you have a clear view of the interests, habits and digital behaviour of your primary potential and current customers, which is a whole new topic.

How do I connect?

Connection is a two way process, you need to reach out to them, but they need to be able to see that you might be worthwhile them investing some time, no matter how little in ‘being reached. ‘ Even if you are just asking someone to accept a connection invitation, most people will make the conscious decision, Yes or No, and there are things you need to do swing the numbers to’ yes’.

  • First you need to make the choices well. If you appear to be somebody who just seeks connections at random, and it is apparent that numbers are your objective, the rejection rate will be high. Think of your own behaviour, you are more likely to reject a connection request if it is just a generic request from someone you do not know. If you appear to be discriminating in your connections, that the circles you have a may be of value to the person on the receiving end, and the request is personalised, you will significantly improve your acceptance rate. It also takes more time.
  • Second, your profile needs to be one that is attractive to a potential connection. There is lots of advice on the net about ‘personal branding’ and while much if it is just common sense and tosh, the foundation is right. Imagine you are at a social gathering, you are more likely to be drawn into conversation with someone who appears to share your values and interests than someone who is way outside your normal fields. This is human, so consider it as you fill in your profile.  Ask yourself what it is about you that might interest those with whom you wish to connect, and highlight those characteristics and experiences.
  • Third, answer the question of yourself  “what is the value I can bring to this connection?. If you have nothing, why bother, and why should they bother.
  • Finally, send them a personalised message, something that offers evidence that you have done a bit of homework, and have something of value to offer them. Better still if you have a mutual acquaintance to who might be prepared to offer you the courtesy of using their name as a referrer. Importantly do not try and sell a new connection anything.  Again, think of the social setting. When you are introduced to someone who just talks about themselves, or immediately goes into a sales pitch, most of us just want to get away as fast as possible, and it is no different on social platforms.

Having done all that, the work of sales starts.

The 3 dimensions of Lead generation

The 3 dimensions of Lead generation

Virtually any B2B business owner I talk to, one of their key challenges is lead generation.

When you dig a bit, often it is the case that lead generation  becomes a problem where there is a shortage of sales, then they react in a short term manner.

Lead generation is a long term proposition, B2B and B2C, the techniques may differ a bit,  but when working day to day the only effective tool to get another sale is price, so you lose.

So it seems to me there are three dimensions to effective lead generation:

  1. The means by which you generate the lead
  2. The conversation rates at various points  through the sales process
  3. The time taken in the sales process

Lets look at them in a little detail.

Means. This is the essence of marketing, the game is to identify who might be a buyer, why, when, and the means by which you can facilitate and support the transaction then build on it for a longer term. Digital has exploded the techniques available to us but the rules have not changed: Understand how you add value to who, and walk them through the relationship building and sales processes to a transaction. Brand building by another name.

Conversion rates.  How do you calculate your sales conversation rates? Digital is now awash with numbers, marketing has changed from the fluffy to the numerical and we are belted over the ears to get with the program.

Marketing Experiments is a shop flogging the notion that marketing experience, creativity and intuition can be turned into a mathematical formulas, and in doing so they have done a fair job of nailing the variables in a digital sale to the extent that they can be nailed:

Probability of conversion = Clarity of Value proposition + (incentive to action – friction associated with the action) – Anxiety.

Whilst a bit convoluted, it does make some sense, and you  can weight the factors according to your market, but the essential message is that marketing can be measured. To an extent  it can be, but losing sight of the emotion involved would be a mistake, and emotion will always be virtually impossible to measure with any certainty. As Gary Vaynerchuk asked, “what is the ROI of your mother?”

Time.  Every business and market is different, as is every potential customer situation so there are no rules in this except one: Only a small number of your prospects will be ready to buy right now.

However, if you extend the time frame to a month, or a year, and there will be many more ready. The challenge therefore is to be talking to them in terms that they are comfortable with at that particular point in their  journey to a transaction.  Given the reality of this journey, the worst thing to do is make the effort ‘stop-start’. It has to be a continuous marketing effort to ensure that there is a flow of leads into and through the sales process. Take the foot off the pedal and you will have a hole in the sales. Keep talking, build a relationship, guide them through the process. Demonstrate credibility and expertise, so that when they re in the buying mode, you get the call.

Too often we concentrate on finding the few who are ready to buy now, rather than playing the long game. Patience rewards the skilled fisherman, same with sales.

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The 6 ways to benefit from losing a tender

The 6 ways to benefit from losing a tender

Most of the businesses I work with are medium sized, at best. Most have a significant functional capability that can deliver great value, but they often do not have the ‘grunt’ in other areas to get over the line with large customers.

Many of them are in businesses where competitive tenders are a fact of life, it is a characteristic of many B2B markets, and whilst it is breaking down, the bias towards ‘The big guy’ remains. As they say in corporations,  ‘You do not  get fired for buying from IBM’ which is just a way of expressing the risk aversion of those in many large businesses where making a mistake is career-toxic.

So, why celebrate when you lose?

Here are 6 reasons:

  1. You did well to get on the radar. A key component of B2B marketing is getting on the radar of those in your ideal customers who have some influence, if not always decision making power. Being included in a tender list is evidence that you have succeeded crossing that first hurdle.
  2. Customer intelligence. The information in a tender necessary for tenderers to adequately meet the specifications can tell you a lot about the business. What are its priorities, their capabilities in your areas of competence, their budgeting and  buying rhythm,  and how the buying process works. All great information. It is also extremely useful to assess weather or not they are someone you want to do business with. Selling is a transaction, a 2 way process, as the seller, it is your choice to work with a potential customer or not, so do not be afraid to work only with those who will not only pay you, but value what you bring to the table.
  3. Know the personnel & process. People buy from people, not corporations, the better they know, like and trust you, the greater the chance you have. Getting to know like and trust is a human process, it happens over time, face to face. Preparing and submitting a tender while painful when you lose, is a great way to create other opportunities during the process. Even after you have lost, don’t waste the opportunity to reinforce the relationships that will serve you the next time.
  4. Follow up intelligence. Keeping in touch with a project you have missed out on can tell you a lot about the client, and also a lot about the winning tenderer.  Knowing your competitor better than they know you is always an advantage.
  5. Other opportunities. If the tender you lost was the first tender you did for the customer, you should not be surprised that you lost. Change is hard, and risky, those managing tenders like a simple easy life, so they tend to stay with what they know. However, it is also in their interests to have options, so being around and interested, making yourself an option, might open up  other small opportunities that would just normally get missed. Getting a foot in the door with a small job and doing it really well is the best way I know of to get on the next big tender list.
  6. You get to know where you are not wanted. Sometimes there are opaque barriers to success. Try as you might, make the tenders truly great, and you still do not win, or even get any useful feedback, get the message. Our time combined with our expertise is the most valuable resource we have, don’t waste it where it is not valued, or where there is some invisible barrier to success. Move on.

Remember as well that those awarding tenders are just people, they like to he liked and valued. They like to think that they are awarding business to those who really want it, and are determined to do a great job. So, be persistent and committed, although never ‘needy’, seek to assist them in ways not necessarily associated with a tender, it will help keep you on the radar, and build a relationship.

What is the difference between Mark-up and Margin?

What is the difference between Mark-up and Margin?

Words are wonderful things, they allow us to communicate meaning.

However, some words are easily interpreted in differing ways, making the shared  understanding challenging, and sometimes the differences are exploited in a selling situation.

One of the common “pea & thimbles” I see when small FMCG (CPG to my American friends) businesses are negotiating with chain retailers is the variable use of mark-up  and margin, particularly by retail buyers in a high pressure sales situation where the supplier is being put through the wringer.

Following is a quick explanation of the generally accepted meaning of the two terms.

Mark-up reflects the number, absolute or more generally percentage that an item sells above its cost.

If an item costs you $1.00, and you sell if for $1.50, the mark-up is 50%

Mark-up = profit/Cost

Margin is the profit made as a proportion of the sale price. Using the simple example above, profit is .50 cents, the selling price is 1.50, so the margin is 33%.

Margin = gross profit/revenue.

Imagine you are negotiating a promotional deal with a buyer, a discount for a period of time against an agreed  purchase  volume by the retailer.  The buyer uses the terms interchangeably, referring to his margin as only 33%, when his minimum allowable is 45%, conveniently forgetting that one is margin, the other mark-up. He uses that as a means to persuade you to dip deeper into your pocket to fund the promotion based on the significant orders you will be receiving, and might even do a ‘once-only, just between us’, deal where he accepts 40%.

markup Vs margin tableHe has not done you a favour, but he has enhanced his margins, which is generally the retails KPI, considerably.

 

 

7 steps to a certain sale

7 steps to a certain sale

Forests have been denuded as ‘experts’ publish their complicated sales processes.

Most have value coated in all sorts of hyperbole, jargon, psychological puffery, and sometimes just plain old mysticism.

However, when you add a bit of plain common sense, the sales process while not easy, and usually somewhat complicated by circumstances and personalities, is simple to articulate.

  1. Find a potential customer who has a problem to which you have a solution
  2. Find a potential customer to whom your solution delivers value that can be quantified
  3. Find a potential customer to whom your quantified value is superior to alternatives
  4. Communicate the value you can deliver to that potential customer
  5. Tailor as appropriate your solution and payment options to their specific circumstances
  6. Make the case
  7. Take the order.

Now, to stop the killing of trees, even digital ones, and save yourself some time, figure out how to apply this simple framework to your products.

Need some help, call me, and have a great 2016.

The lesson from Nurofen’s leadership folly

The lesson from Nurofen’s leadership folly

Reckitt Benckiser did everything right, and they did everything wrong with their Nurofen brand.

How can that be?

The ACCC has now successfully prosecuted Reckitt Benckiser in the federal court for misleading consumers with their Nurofen brand of painkillers, requiring them to pull product off the market within three months.

There will also be a fine, potentially a significant one to drive home the message.

In the process, years of investment in the brand will be trashed.

Who will ever trust Nurofen again?

On one hand, I have absolutely no sympathy for a corporation of any type that knowingly and deliberately perpetrated this sort of misleading communication. The writing has been on the wall some time after Nurofen won Choice magazine’s coveted “Shonky Award”  which garnered a fair bit of publicity at the time, including a star appearance on the ABC’s ‘Checkout” program. That Reckitts chose to ignore the ‘social warnings’  and voluntarily adjust their communication is a huge failure in leadership.

The marketing however has been very good over a long time.

Having run large corporate marketing departments, I can understand exactly how it all evolved.

An experiment with a brand extension generated added market share, consumer preference and retail shelf space at premium prices and margins. The marketing people responsible were recognised and rewarded by their employer and peers. Who would not take the next step, and seek new segments?

Back pain, period pain, migraine relief, et al, commercially seductive stuff.

Nobody would tinker with that sort of success. Anyone who dared to suggest that it was wrong, and they should walk away from the measurable short term success in favour of being a brand worthy of long term trust, a truly difficult notion to measure, would find themselves seeking other opportunities very quickly.

The failure is in the leadership of Reckitt Benckiser.

Reckitt Benckiser management simply  failed to reconcile the short term financial benefits of successful brand marketing with the long term benefits of having a brand and business that demonstrated leadership by building trust. They failed the basic test of personal leadership which is to do what is right, even when it is  not necessarily expedient.

Clearly the ‘leaders’ of Reckitt’s were there not as leaders, but as managers. They are undoubtedly good at managing the numbers, negotiating the deal, maneuvering amongst the corporate politics, but would you want them beside you when the going got really tough? Instinctively you know it would be all about them, they would  not ‘ have your back’

It is easy to forget that business is about people, not corporations.

People buy products from people, not businesses.

While we all talk about ‘relationships’ endlessly, particularly in the digital and social spheres that now so dominate our lives,  we tend to forget just how hard it is to maintain a real relationship.

One night stands are pretty easy, there is  no real personal investment, marriage is hard just because there is that investment required.

We should never forget the difference.