Apr 14, 2014 | Branding, Customers, Marketing, retail, Sales
Walking into chain retailers these days you are inevitably confronted by displays of product, usually at a discount.
Most people seem to think that it is the retailer doing the promotion as a means to attract added sales, which is true, but the reality is that the promotion is funded by the suppliers, and it is a competition for the retail space that is generally won by those suppliers with the deepest pockets, and best information.
Retailers are in two businesses, selling stuff to consumers, and renting retail space to suppliers. Chain retailers business model relies on a formula that accommodates volume, revenue, and total margin over the space allocated. This can get very complicated, as the number of variables is enormous.
For a supplier to a chain retailer, the challenge is to balance the complex and competing demands of enterprise profitability and investment in the future against the need to meet retailer margin demands necessary to retain access to the consumer via the distribution controlled by the retailer.
Of real significance is the difference between sales that would have been made irrespective of promotional activity the “base sales rate” and sales made in a period as a result of promotional activity, “incremental sales”.
The need to fund retailer margin via promotional allowances is universal, but the sales that occur as a result of the activity may not be there when there is no activity, and are therefore” rented” sales. The effectiveness of the activity has many measures, but to the supplier two measures only are of any real use.
- The real cost of the promotional activity including all discounts on deal volumes and associated co-operative advertising.
- The number of consumers who convert over time from being a rented consumer to one who becomes a part of the base sales volume.
If you are not making these calculations, and adjusting the mix of your expenditure programs accordingly, and are prepared to make some very tough choices on the basis of the information gathered, chances are you are going broke being successful, a very common complaint in the Australian FMCG market.
Mar 25, 2014 | Customers, Leadership, Sales, Small business
Many years ago, pre-digital, I gave time to a sales rep who rang up and promised to bring in some samples of brand new products from Europe that had changed the dynamics of the market segments they were in. I presumed that all contained the stuff he sold, but the pitch was persuasive.
The upshot was that he brought in some examples that were at best mundane, that I had seen before, were not innovative in any way, and that I was not interested in hearing about. Then I had to be rude to get rid of him and his lying pitch, but was further subjected to a stream calls, letters, offers, and promises from him and his superiors that “spoke ” to me as if I was a red hot prospect, desperate to throw myself at their shitty product.
He wasted my time, misled me, and then continued to irritate by trying to waste more of my time and presumed a relationship that did not exist, and that I would not have, and I have never forgotten the lesson.
Don’t waste peoples time!
The older I get, the more intolerant I seem to get when someone consumes that most valuable of all our resources, time, and I was pretty “bolshie” 25 years ago when this happened.
Whilst today everything moves so much faster than before, our time is if anything more valuable, but the presumption of those who want our attention seems to be that we all have plenty to share and usually waste.
One of the most effective sales people I have ever seen made appointments for 10 minutes each. He promised not to take more than the 10, and to deliver something of value while he was there, and he always did. No coffee, no chat about last nights football, straight to the point in 10 minutes or less, and any more time spent was entirely at the discretion of the appointee, he was always ready to leave, having delivered his pitch.
He valued peoples time and attention, so he got more of it.
Are you asking your people to waste not just their time, but that of those with whom they are paid to interact?
Feb 18, 2014 | Branding, Communication, Customers, Marketing, Sales
Jan Carlzons great 1987 book Moments of Truth reflected on the point at which a “front line” employee interacted with a customer, and how important that interaction was. The digitisation of our lives has profoundly changed the context in which interactions occur, the moment is no longer the point at which some personal interaction occurs, it is now far more likely that it will be a digital one, and in addition, “front line” now includes everybody.
The idea of Moments of truth needs to be expanded, and categorised so they can be managed independently if it is to be of much more than a cliche.
- Opening moments of truth. That may occur anywhere!! Anyhow on a range of platforms.
- Referral moment of truth, When someone refers someone else to a web site, blog post, social media platform etc.
- Conversion moments of truth. When a “lead” evolves into a “prospect”. Then there are more as the prospect moves through the system to the transaction
- Depart moments of truth. The point at which prospects drop out of the funnel, what do you do with them then? Do not lose them!!!! Figure out how to re-engage.
- Recidivism moments of truth. The point at which a departed prospect returns to the funnel. Sales funnels as a metaphor work, but the neat, orderly and logical progression seen on all the whiteboards and consultant presentations are far from the truth. The process of moving a contact through a set of steps towards a transaction, then hopefully, many subsequent transactions is messy, random, often illogical and emotional. Therefore, a key marketing task is to raise your recidivism rate
- Apostle moments of truth. When a user becomes an advocate, an apostle, for you.
- Complaint moments of truth. When customers complain, that is potentially full of information, and opportunity to serve them better, discover where and how you can improve, and convert them to advocates. Alternatively, give them to your competition to harass, as the customer is not always right, but the right customer is always right.
- Loyalist moments of truth. When loyal customers return, they do so because they have been satisfied in the past, convenience, the offer is compelling, and sometimes just because it is easy. A returning customer costs way less than it costs to find a new one, the loyalists are the financial backbone of every enterprise, thank them, and treat them like you are grateful for their custom, and pleased to see them again.
I tried some word games to make the list more memorable, hopefully you can do better than me, I’m just happy that the idea that the context of MOT’s reflects the way you should treat it.
Jan 17, 2014 | Communication, Customers, Marketing, Sales, Small business
Every day I get stuff by email that purports to make me some sort of compelling offer, something that some dill out there kids himself (herself?) that I need.
It often starts:
Dear Alan (wrong spelling)
I am the CEO of Buttstuffers & Co, we are experts at something that we know will add 50% to your bottom line. Hopefully you are the right person for us to talk to. (I do not care who is the CEO of Buttstuffers, I do not know who they are, what they do, all I care about is how in hell they got my name, and yes, I am the right person, because I can ignore you, or more satisfyingly, tell you to piss off)
I would like to offer you a free ???????????, guaranteed to work for you, just to demonstrate our goodwill. (too late, my quotient of goodwill disappeared when you misspelt my name, and since then you have just managed to annoy me)
Download our free whitepaper now for more information. (Why would I do that, all it does is confirm an email address, and give you more information to throw more crap at me that demonstrates you are simply full of it)
We are experts at:
Marketing automation
Marketing ROI
SEO
Creating client relationships
Etc,etc.etc.
(If you were expert in any of this, which I seriously doubt, you would not have sent me this. In former times, you would be selling snake oil)
It gets really tiresome, marketing flatulence like this just gives those of us who genuinely care about what you think, and how your business can improve, and how our expertise and experience may assist, a bad name.
I tell my clients it is part of the price we pay for the tools that the web delivers, but nevertheless, flatulence smells bad irrespective of the cause.
Jan 14, 2014 | Branding, Marketing, Sales
Perhaps following on from the success of McDonalds “Angus” strategy, Domino’s has launched a “Wagyu Pizza” for our indulgence.
I like a pizza as much as the next bloke, but it is not one of the major food groups, just an occasional easy cholesterol hit. Being asked to pay 3 times the going rate is asking a bit, even if a bit of a Wagyu does inhabit the topping somewhere, and the packaging is a bit fancy.
Wagyu is a term used to describe a small number of Japanese cattle breeds that deliver a high level of fat marbling, creating a soft, juicy and flavoursome steak. In addition there is the banding mystique that comes from the stories of individual animals being looked after like kings, massaged, fed specific diets including beer, and generally leading an exercise free and indulged life, until the chop.
In Australia, Wagyu cattle are usually grass fed and just finished on grain, but are increasingly just grass fed, keeping costs down, but compromising the marbling, and I presume the tenderness and flavour.
But the “Wagyu” brand remains strong, and combined with the scarcity, attracts a premium in fine dining locations.
However, I wonder what a pizza does to the Wagyu brand story? Not much I suspect.
Is anyone getting a Royalty? Is this the beginning of the end for exclusive Wagyu?
Dec 19, 2013 | Change, Customers, Sales
Had an interesting debate at a conference a short time ago, something that I think makes a big difference, but is not usually considered, at least in my experience. The debate was the merits of pitching Vs what I call “long form selling”
Selling is a process, it takes time, effort, and involves multiple touch-points as a relationship evolves that can lead to a sale. Obviously the process varies depending on many factors, you would not expect to spend much time considering the competing merits of different paper-clips, but power stations are a bit different.
By contrast, a pitch is a yes/no equation. You get one shot, a short time, little opportunity to build rapport and points of empathy with your audience. Make or break.
In some industries pitches are the norm, nobody thinks much beyond the immediacy, they are the all there is. In others, long form selling is the norm.
Often the forms are mixed up.
Being an account executive selling to an Australian supermarket retailer is usually called “selling” but the reality is that it is just a series of pitches, with little opportunity to build a relationship much beyond knowing the other parties name and a few commercial characteristics.
Clearly, the greater the imbalance of power in the conversation, the more likely each interaction will look like a pitch. The task of the seller in that case is to take control of the conversation, and ensure it is a process, with opportunities to revisit and review, not just a once off opportunity to sell.
I know which I prefer, but I also know which focuses the mind.
Walking into chain retailers these days you are inevitably confronted by displays of product, usually at a discount.
