Jul 13, 2009 | Sales, Strategy
The sales job has changed substantially with the emergence of the web.
In the past, many sales people were mobile, human brochures, the keepers of the information. No longer.
Most of the mundane information on specifications, performance, competitive advantages, and so on is freely available on the web, often out of your control, in customer and consumer forums for important products or large purchases.
Sales professionals now have to assist the customer to a solution to their problems and competitive challenges, which is much, much harder than being a human brochure.
Are your sales people up to the task?
Are you giving them the appropriate support and information
Are they spending their time in a manner that will give you a return on your considerable investment in their time and training?
Jul 12, 2009 | Marketing, Sales, Strategy
A short time ago I purchased a new pair of black “Julius Marlow” shoes from a major retailer. Within a month, the body of the right shoe had separated from the sole, hardly a reasonable result from a purchase worn around the benign environment of a carpeted office.
I contacted JM, owned by Pacific Dunlop as I discovered, via the web site, after some searching, but OK so far.
Eventually, I got an automated response to my note of complaint, which required me to engage in more automated “discussion” with the web site, by which time I was pretty annoyed.
After several more automated responses with me becoming more specific about where I would like to stick the machines micro-processors, a very pleasant young lady rang me. Potentially a step forward, but a bit late, and to get anywhere I had to invest the time to take the shoes back to the store I got them from (I’m sure the staff will be pleased to see me) along with the proof of purchase. Not an option, so as an alternative I could bundle them up and send them, at my cost, to Melbourne, where they would “look at them” .
So, JM failed to deliver what I had paid for, and reasonably expected, having worn many of their shoes over my life. After they failed, they expected me to spend more of my time, and money, to further satisfy them of their failure, with no notion of any outcome to me. The final indignity, after the final email from me, was an automated response that quoted the “incident” number, followed by the words “Incident resolved”
Through this saga, I was reminded of the work by economist Ernst Fehr, and an experiment well known as the “trust game” which seemingly identifies a biological link between peoples behavior in getting revenge against those who have dudded them, even when the revenge behavior appears on the surface to be well over the top.
The point to all this is if you set out to communicate with customers when they are a bit off put, and fail to meet their expectations in that communication, and the ensuing resolution, a bit off-put can turn into behavior that seeks to extract revenge for the dudding, and in the world of the web, that revenge has the potential to stuff your brand very quickly indeed. Imagine, I made short video of obviously brand new JM shoes with the sole half off and putting it on you tube with some creative fun being had, sending it to a few friends, and having it go viral. How much damage could that do to the brand (but probably unfortunatley not to the dills responsible) who stuffed up a simple communication with a long term and relatively loyal customer?
Jul 9, 2009 | Management, Operations, Sales, Strategy
Selling is a tough job, and getting tougher, as the number of ways a potential customer can purchase expand with the web, and consumer confidence is fragile, despite the stunning Australian figures a couple of days ago.
No longer can sales people fulfill their budgets by being accurate and sympathetic purveyors of information, and doing a lot of calls, they now need to be able to add value in ways that competitors and no other channels can duplicate at the price.
How do you do this?
- Have only skilled sales people, ones who without thinking, empathize with customers and their problems. Make sure they know your products intimately, and the business of the customers as intimately so they can identify unique ways your products can add value to the customer.
- Have in place the sales support mechanisms so that every opportunity identified is optimized. Sales people make sales talking to customers, not chasing late orders through your systems.
- Have a “sales culture” where the whole organisation recognises that customers are the reason they are in business, and it is everyone’s job to sell, not just those with a bag.
The bad news for sales professionals is that there will be less of you as time goes on, the good news for those left is that they will be paid a lot more than they are now as their value is recognized.
Jul 5, 2009 | Marketing, Sales, Strategy
It used to be word of mouth, it still is in its essence, but the need for face to face contact has been removed by the emergence of the web tools now in front of everyone.
Ideas spread on the web like a virus, even quicker than “pig-flu,” a good idea spreads logarithmically, gathering momentum as it goes, or conversely, just disappearing without trace if it does not attract an audience prepared to be an advocate by passing it on.
This simple notion of brand advocates, rather than simply demographic and psychographic profiles of people to whom, your advertising is directed radically changes the dynamics of brand building, from a mass advertising effort, to an effort turned 180 degrees towards engaging customers in the value the brand delivers to them on a very personal level.
Jul 1, 2009 | Management, Sales, Strategy
A vexed question, and managing customer profitability is as fundamental as managing the P&L, but possibly more complicated.
It is usually unrealistic to measure the profitability of all customers, but most businesses live by the 80/20 rule, so concentrate on the 20, and apply the knowledge gained to the remaining 80, with appropriate caution. Several parameters should be measured, the more the better, in order of importance:
- The basic measure is gross Margin. You know (or should know) the marginal cost of production and delivery of the products they buy , this is the basic measure, and should be done religiously.
- Costs to service the customer need to be considered. Some customers are easy, undemanding, and cause little disruption. Others you may wish to pass to your competitors. This ends up being a combination of data, such as product returns, debtors days, inventory you need to hold, and perhaps others, as well as the harder to measure things like how much time and trouble the sales force, technical support, and other functions need to spend to service the customers needs. Cost to serve is usually obscured from view, and hard to measure, but it is a huge factor in most businesses.
- Customer life time value, measures the value of the customer to you over a period of time. This analysis can be done in conjunction with a discounted cash flow analysis, as a means to better understand the returns that may come from investments in managing the customer.
Measuring customer profitability is a key part of a program of pro-actively managing the investment most businesses make in servicing their customers, but is too often allowed to drift.
A complication is that customers that have the potential to be amongst your top customers have to start somewhere, so the manner in which you measure profitability must be sufficiently flexible and responsive to recognise those that are currently not amongst your top customers, but are nevertheless “key” customers in your planning processes, and for your future.
Jun 11, 2009 | Demand chains, Management, Sales, Strategy
Most supply chains are driven by orders, someone reacts when an order is received.
The niggling question is always about demand, as most recognise it drives orders, inventories, innovation, competitive pressure, and so on, but is rarely measured.
Orders are at the end of the process, they arrive after making allowances for out of stocks, poor display, customers memory, competitive activity, the skill and interest of the sales person, and many other factors.
Demand is created by understanding the customer, and positioning your good or services in their minds as the best value solution available to address their need. This is longer term stuff, harder to measure, easy to ignore, but it is the foundation of commercial sustainability.
How much better would it be to have in place signals that reflect demand, they might give us an opportunity to reduce the incidence of lost opportunities, whilst better managing our investment in inventories, brands, customers, and the short term sales tactics used to stimulate an order.
