Archive for the 'How to Increase Sales' Category
Getting From No To Yes
Over the years we have used this first newsletter of the year to reflect on subjects that have been on the top of our client’s list of things they want to solve.
Regardless of why and where we are engaged, it is clear that clients are looking to invest in projects that accomplish one thing – generate more revenue and gain market share. Everything else is just details that support those goals.
How Much Is Enough?
“How much should we budget for marketing and sales?” is a question we are often asked. The answer is, well…it depends.
Marketing Budget
First of all, it is important to establish a preliminary marketing budget based on the type and maturity of your business. If you’re a high-margin business, you can make a case that you want to continue to spend until you begin to see diminishing returns on your investment. Along that line, another important point to consider is the lifetime value of a customer. Establishing appropriate metrics is the first step in knowing when enough is enough.
As a rule of thumb, a new business trying to establish itself, needs to think 5 to 10% of projected gross sales (remember – gross sales will most likely not be that high a number compared to where you would like it to be in 3-5 years). Because of this, we recommend spending at the level of your projected sales – not last year’s actual.
On average, if you’ve been around awhile, we’d recommend lowering this figure to 3 to 5%. If you are an established business, operating for some time now without much marketing, count your blessings…and set aside perhaps 2 to 3% of projected gross sales. While it’s nearly impossible to give you a rule of thumb for marketing due to so many variables, allow me to make a few comments about what is ultimately needed.
Does “Loyal” Mean The Same Thing As “Profitable”?
When a C-level manager talks to us about “loyalty marketing,” most often he or she is actually talking about how to gain and retain more of the most “valuable” customers in terms of profits. But is the most loyal customer always the same as the most profitable customer? And how do customers define loyalty?
Not surprisingly, the way a customer defines loyalty is often completely different from the company’s point of view. Customers define their own loyalty based on how long they have been buying a particular brand, or their preferences for one particular brand over another. In short, customers see loyalty as being any factor that makes them stick to a brand despite all the temptations to switch. This causes marketers a problem in that even low profit customers can consider themselves to be among a brand’s most loyal patrons, and they expect the brand to recognize them for having stayed faithful for so long.
So, unless marketers can recognize those customers who not only have been faithful to the brand for a long time, but are also actually profitable, the company may well be incenting the reduction of margins – or even losing money. They may be even more surprised by the sheer impact that these customers can have, given the age of instant communication. It takes only the click of a mouse to spread the word, and refermore marginal business your way.
There’s No Substitute For Good Service
“Comcast and all other enslavement brands like them had better take note. Your days are numbered. We are fed up with the lies, the betrayal and the avoidance.”
WOW!
That’s one of many comments on Ad Age’s website in response to the perception of Comcast’s “abysmal service and callous treatment of its customers.” “I will not be satisfied until Comcast is on its knees, weeping,” wrote Bob Garfield. “In fact, I won’t be satisfied until it is heaving with sobs, squealing and hyperventilating with snot dripping from its nose.”
Want To Light A Fire Under Your Sales Team?
We recently wrote in Minnesota Business about how to increase sales without increasing your sales staff. We mentioned that, when it comes to selling, many of us have operated under the old rule of thumb that it takes three contacts to get on our prospect’s radar screen, and at least seven before he or she is ready to consider us as an option. We have all heard stories that up to 90 percent of leads are never even followed up on and that most sales people, under the pressure of delivering results NOW, don’t ever reach the third contact let alone the seventh where all the action is supposed to happen.
Today, in a world of challenging economic conditions and complex sales cycles, the new rule of thumb is more like 10-12 contacts to be recognized, and 16-18 to be invited to the party. At the same time the pressure for immediate results has not gone away. In many cases, the direction from sales managers is simply to work harder and make more calls, which is not a long-term solution to the challenge facing us.
Clearly we cannot continue to operate the way we have in the past and expect, or hope, for better results. And the answer is not in adding staff to recognize the additional number of contacts required to make a sale – - let alone continue to support and expand the relationship with a new customer so they won’t bolt at the first hint of a better deal. So what is the answer?
Once Upon A Time…
These four simple words conjure up the anticipation of a tale of wonder and fascination. One might think this is something for a campfire, classroom or bedside. But that would be very wrong.
The definition of story in this case is an account of incidents or events, a statement regarding the facts pertinent to a situation in question – - not a work of fiction.
All of us have been in a business management or sales meeting where the speaker clicks through a PowerPoint presentation showing charts and numbers. Few people, if any, take anything away from those meetings. But put the same information in the context of a story and the point is made. When you tell a story, people understand what the mission is and they understand how they can make it happen. If you just talk at a high level of mission and vision the reaction is, “What am I supposed to do with that!?”
On Becoming A Top Performer
We were asked to contribute to an article that appeared in the Minneapolis StarTribune on ‘Tips For Becoming A Top Performer.’ I thought you might find the information we provided — gained from working with our clients – interesting:
The difference between top producers and average performers is often less than what most people think
I am sure that you have you heard this many times as it relates to professional athletes and others. But the truth is, the ability to perform daily at a consistently high level is what separates the high achievers from the “ordinary” category. And the key to that is having the personal commitment and discipline backed by process and tools that allow you to do a number of little things just a little better than your competition each and every day.
Thoughts For A Successful Year!
One recurring theme we hear when interviewing decision makers on behalf of our clients is their desire for trusted resources – partners – who can help them be better than they could be alone. Challenging times offer unique opportunities to step up to the plate and cement a bond by coming through for them in a time of need. It presents an opportunity to get back in touch with key customers, and prospects on your target list that just didn’t get called as you had hoped.
This is also a great time to revisit whether or not you still feel that your value proposition is current and meaningful. Does it clearly state the tangible results a customer gets from doing business with you? Or said another, less tactful, way – does it answer the question of why they should do business with you? What you wrote one, two or more years ago may not resonate today. If not, it may just be because you have grown. In that case, congratulations and now get out a pen and paper and start jotting ideas. Short, clear, and crisp. Something that could fit on a t-shirt. Something you can embrace and have fun with. Something that inspires and gives purpose and direction.
Read the rest of this entry »
Does Your Marketing Sizzle?
Author Thomas Sant wrote a recent article in which he quoted Elmer Wheeler’s famous line, “Don’t sell the steak – sell the sizzle.” Wheeler went on to say, “The sizzle has sold more steaks than the cow ever has, although the cow is, of course, mighty important.”
What Wheeler meant by “sizzle” is the compelling benefit that has primary appeal to the customer. In other words, that aspect of your product or service that grabs your prospects’ imagination and gets them excited about what will happen if they buy from you. It represents the one clear benefit that is most closely linked to the customer’s interests or motivations. Or better said – their emotions.
Read the rest of this entry »