Archive for category driving business
With every passing month it becomes increasingly important to separate your business from the competition. Gone are the days of copying and undercutting. You have to get out of the commodity business and shout about what differentiates you from the rest.
So, how do you do this or has your mind gone blank with all the Covid uncertainty. This was the subject for discussion by members of the Business Exposure Group at our recent meeting.
One of the big differentiators at the moment are those businesses which pursue the face to face meeting in a Covid safe way. Many larger businesses are following business rules which prohibit meetings and demonstrations etc, but many SME’s are able to take advantage of those businesses on hold, and provide what the customer wants. It’s a great time to steal a march on competitors.
Equally take a look at your current customers, is there a common element among your best customers. Interview them and ask why they choose to work with you, why they stay and why they refer others. Study your competitors to establish what you could do better and what don’t they offer.
Focus less on traditional marketing and more on customer experience. Get personal with your customers, get to know their life story and find out the real reasons why they buy your products. Build a relationship with them so they move from being account number 2367 in your ledger to customers with whom you have a real relationship.
7 months into this Covid pandemic. It is now time to act not react!
Part of any business owners dream is to have rapid growth and an influx of business. But increased demand puts pressure on your systems, people and cashflow.
So, how do you handle an influx of business? Have you been able to maintain the same level of customer experience? Have you made any changes in how you service your customers? Do you have a strategy for growth?
This was the topic discussed by members of the Business Exposure Group at our recent meeting.
Some of the barriers to growth are – lack of business plans / muddled marketing / running the business in the same old way / meddling and misspent time / wrong objectives based on just sales / no financial strategy and poor controls.
Check your systems, processes and procedures are up to date and adopt a proactive management approach with a quality control system where everyone uses the ‘same scripts’. The ability to grow must be influenced by your willingness to devolve certain decisions to staff. You must have a strategic plan for the short, medium and long term growth of the business.
To achieve growth – invest in ‘safe bets’ / identify strategies with a good probability of success / start with core business and eliminate secondary products on a regular basis.
Good information equals good decisions. Can you deal with a sudden influx of orders with no way to fulfil them?
First of all spend time finding out what is causing growth and understand why your company is suddenly getting more business, as this is could be important to many of your future decisions. It is also important to understand the reasons why business is slowing down.
One way to overcome barriers to growth is to invest in staff development. Try to plug the skills gap in your business to move your business up a level. Identify staff responsibilities and make sure you employ and retain the right people.
Be careful not to expand too quickly, look at whether you are growing to be more profitable or is it growth for growths sake.
Many fast growing companies change their goals too often; they never quite complete a plan before starting the next one, and because of this will get into all sorts of difficulties when business growth stalls. It’s important to retain the culture of your business when taking on new staff. Be careful not to let them dilute the personality of your business.
Ask yourself when looking at growth:
- Do I have the qualities and diversity of people
- Do I have systems in place
- Do I have the ability to delegate
- Do I have enough cash
And finally, ensure that it is not your mind set that is holding your business back.
Strengthening your business doesn’t just involve financial management, it includes strategies to maintain and broaden your customer base, keep morale high amongst staff and improve business practices. Chamber of Commerce figures show that three quarters of SME’s are concerned about the economy but few have plans in place to protect their business, if business takes a downturn for the worse.
Have a plan which outlines a comprehensive menu of cost savings which could be implemented in a downturn. Adapt products to be more suited to customer’s current needs, diversify to protect from the loss of a significant customer. These points were posed to members of the Business Exposure Group at their recent meeting.
Cash equals survival, does this need to take precedence over profit if business goes awry. Having a contingency plan to produce short term profit, despite a drop in revenue, can make all the difference. A decline of 10% in revenue could wipe out the entire bottom line and most companies have a relatively narrow margin for error.
So it is important to develop your forecast on optimistic, realistic and worst case scenario basis. But, who does? Businesses generally fail because problems are noticed too late, so thinking about vulnerabilities and opportunities early on can be a big advantage.
Identify and maintain your strengths and your best customers. Identify your highest-margin customers and understand what you are doing right for them. Instead of cutting costs, be ready to shift resources to retain high margin customers and continue to be creative in how you can add value for your customers without increasing costs. Look through your costs and identify what’s inefficient, what’s nice to have, what’s there historically, and what isn’t creating value like it used to.
Be ready to take a knife to anything that isn’t adding value.
So, how recession proof is your product or service – is it a necessity or a luxury?
Quite often banks have a level of credit granted but some levels may no longer be required, which may mean you should move them to other areas. If business is good consider increasing your line of credit and establishing new credit facilities, even if you don’t need them at present. Perhaps look into unconventional sources of finance as a fall-back.
Look at speeding up working capital to release cash. If sales fall can you respond so as to avoid excess stock? Review your sales forecasts, keep an eye on your stock inventory and reduce the number of slow moving products. Look at other sources of income such as sub- letting part of your premises.
Review and delay your expansion plans and the purchase of high ticket items. Categorise your company’s assets into, underperforming v high performing, and strategic v non-strategic. Try to lock prices with your suppliers to stabilise margins.
Look at buying optimistically or defensively a competitor to stop them falling into the hands of another competitor. Monitor advertising by competitors, if they are cutting down now is your chance to do more. It’s equally important for your business to find new markets.
In conclusion, the best time to prepare for a downturn is when the company is operating well. Plan ahead so that if needs be you can react in a controlled fashion.
Above is a snap shot of the comments made during the discussion at the Business Exposure Group meeting.
Many businesses have a sales machine, designed to replicate the star performer. But recently sales have been caught off-guard by a dramatic shift in customers buying behaviour; longer sales cycle time, lower conversion rates, less reliable forecasts, reduced margins. Has selling become harder and why?
This question was posed to the members of the Business Exposure Group at their recent meeting and the following points were discussed.
Process driven sales fall short because it gives the sales rep no room to exercise judgement and creativity when dealing with highly knowledgeable customers. Sales team should not just compete on price. It is not a good idea to have a price driven quick sale as opposed to a longer sale that offers a better solution and best value. Support your sales team rather than direct them; give them greater latitude. ‘It’s not the journey but the destination we have to focus on’. Reward the sales team for long term focus rather than short term deal volume. Do not let sales reps simply sell products rather than solutions, purely to boost their figures.
There is now a new world of sales
|Customer has a definite need||Customer is uncertain|
|Find someone with authority to spend||Find someone open to change|
|Demonstrate value in your solutions||Disrupt the customers thinking and assumptions|
Perhaps the answer is to have adaptive sellers who challenge customers with disruptive ideas and offer unexpected solutions-‘Insight selling’. Demand should be created early in the sales funnel rather than responding to it later on. Instead of making the sales rep work through a checklist of sales activities focus instead on the customer’s behaviour, and let the customer acknowledge that the status quo is not working. Verifying whether a customer is open to change is a prerequisite to pursuing a sale. It’s not enough to do a demonstration; you need to first establish with the customer that the existing approach is underperforming and that a new solution is necessary.
Large sales driven organisations monitor sales reps by KPI’s, especially cycle times and closure rates, smaller businesses can and should be more agile and flexible. We can track and report on a customer’s actions rather than on the sales reps activities, which would encourage the reps to focus on achieving outcomes with the best possible solutions.
Originally sales was about scheduling times with the decision maker; determining if they have a budget for the purchase and sending a proposal in writing. Now, find out if the customer has agreed that status quo is unsustainable; does the current approach expose them to risk; how much is in their budget; can we help the customer think creatively about funding if money is not available in this year’s budget.
The Institute of Directors state that only 17% of existing sales people score high on the competencies required for ‘Insight Selling’. ‘Hire people not in sales, but hire people who have good critical thinking and are willing to sell’.
If you used to recruit as follows –
‘Wanted experienced professional looking to maximise earning potential in a fast paced competitive sales organisation’.
Change this advert to
‘Wanted critical thinkers looking for an opportunity to exercise their judgement and assume significant responsibility for business growth’.
Businesses that continue to embrace the sales machine process are watching their margins fall. Our Business Exposure Group members agreed that it’s better to hire good people, create an empowering environment and then get out of the way.
Companies typically run their sales operations on either model. Inside sales have sales people report daily to their office and make sales via phone or web. Outside sales includes reps that travel for more personal face to face meetings.
Which one do you use and why? – This was the question posed to members of the Business Exposure Group at their last meeting.
There are pros and cons for both inside and outside sales. Should you choose one model or have teams doing both.
A sales rep can only do so many appointments in a day. Is it about quantity v quality and the size of the sale.
Inside sales teams are centered around low cost products, lower complexity, small scale orders. An inside sales rep makes 7+ more pitches but an outside sales rep converts 40% of prospects. Inside sales reps close new business 18% of the time and for every one field rep hired, 10 inside reps are hired.
Small business customers can react badly to having to take time out of their day for face to face meetings. 75% of buyers would prefer not to spend time in meetings. Therefore do inside sales better cater for today’s customers?
Customer acquisition costs money, inside sales teams can bring in new customers for 40%-70% less than a field rep. If you spend more time in the office you can deal with all the admin of the sales process quickly so you are more efficient, but is it different if you are going for major accounts as the core of your sales commitment.
Is the field rep an outdated sales approach? Outside sales require far more business intelligence, situational awareness and planning. Inside sales, whilst equally demanding, requires persistence, research and back end work.
Many of our members thought that their inside sales may be underutilised as traditionally the field rep drove strategy and execution of the account and inside sales reps provided the support function. But recently has the emphasis of sales changed, particularly with the impact of PPC technology on the buying process.
The sales model that a business adopts is often influenced by the business owners’ perception of which sales model would be the most effective. Is inside sales telemarketing or something more? Nowadays inside sales people are highly skilled and knowledgeable. Yet they get paid a fraction of their higher paid, harder to manage colleagues in outside sales. The average B2B deal takes an average of 5 decision makers – so inside sales allows the business to touch base more times with email, etc and keep the prospect warm. No longer is the quarterly call by the sales rep fit for purpose.
In our meeting 80% of business owners said it is easier to take on board new sales people and share best practice with an inside sales team.
But one of the biggest challenges is how do you get the two different sales teams to work together? The answers from the Group were as follows –
Define the differences / support each other on different size of deals / reward fairly / have a common sales manager / have all-inclusive sales meetings with both teams so that they are not in conflict competing for the same customers.
This discussion left the members of the Business Exposure Group with food for thought as to the future role of their sales operations.
How do you provide your buyers with a complete understanding of what you do, what you sell and why your products or services are better than the competition?
Too many businesses are already generating all the leads and prospects they need but are unwittingly losing up to 90% of opportunities to convert them into sales.
As an aide memoire it is important to consider the following:-
- The buyer is more intererested in themselves than you.
- Map your sales process. A step by step process to convert enquiries and leads into sales. Build trust/understand the buyers goals/create certainty that your product meets their needs/ overcome fear of making the wrong decision/officially confirm the sale.
- There is value in trying to convert old and cold prospects. It may be time to approach another prospect in the target company.
- Qualify leads so you don’t waste time. If a prospect isn’t ready to buy don’t give them to the sales team. Provide useful mailshots and wait your time.
- Spend enough time researching the buyer’s needs, then offer the solution to win the sale. It is important to listen and find the solution for the prospect.
- Offer content and information that educates, regular newsletters are the beginning of the process.
- Fish where the big fish are, don’t waste time trying to convince people to buy when they are clearly not interested or ready to commit.
- Establish a no communication deadline to remove redundant prospects from your pipeline.
- Follow up your initial call a few days later asking questions, eg, have you had a chance to go over the information and make a decision? 80% of all significant sales occur only after a minimum of 5 follow ups. Following up will apply pressure and open up dialogue to discover questions and concerns that the prospect may have.
- Have a list of scripted answers readily available for every possible objection/query.
- Remind them that you have a solution that is going to make them more money.
- Don’t adopt a one size fits all approach, target and segment, focus on the best prospects first.
It’s all very obvious but there is tremendous value in reflecting on the above and evaluating your conversion process.
Strategic business reviews are useful if you are
- uncertain about how well your business is performing
- if you want to know how to get the most out of your business or marketing opportunities
- if your business is moving in a different direction to the one you planned
- if the business is becoming difficult or unresponsive to market demands
But what are the questions we should be asking ourselves?
Members of the Business Exposure Group discussed these questions and came up with the following.
- If things are running well should you let it run or is it actually time now to plan again? Most thought that it should be a constant agenda item.
- A simple planning cycle can greatly enhance your ability to make changes in your business routine.
- It is vital to review the progress of your business, but how are you measuring success and is your annual business strategy fit for purpose? Most thought that a review should take place every time a game changing event happens.
- What are your markets now and in the future and how do you gain market advantage? There is no point in going head to head with the competition, try to find a niche.
- Which of your products/services are succeeding and which are not performing as planned? Spend more time on the latter.
- How effectively are you marketing your goods/services to your customer’s needs? Have you reduced the risk of them placing an order with you?
- Conduct competitor analysis. Find out what they offer. How they price their products/services. What is their competitive advantage. What was their reaction to your entry into the market. Who are their biggest customers. With this information your business can be more robust and targeted.
- How often do you review your financial position? Have your requirements changed recently? How frequently do you review costs and new ways of doing things? These questions are crucial.
- How often do you review and update your website? Don’t let it sit there reflecting the old times.
There is a benefit to have an outsider question your thought processes periodically. They will ask questions that you never even thought of. There will be many external factors which may affect your business’s ability to compete and it was generally felt amongst our members that is was vital to review your business periodically, especially if legislation changes, new technology is introduced, a significant customer is lost or a new competitor enters the market. It has to be a disciplined ongoing process.
To create distinctive customer experiences, businesses need to push the boundaries and adopt next-generation thinking in six key areas.
Some companies are moving fast to adapt, applying a range of approaches to improve customer experiences. A great experience that delights customers and earns their loyalty is needed. Improving a customer experience from merely average to something that wows the customer can lead to a 30/50% increase in measures such as likelihood to renew or to buy another product.
Here are six areas discussed at a recent Business Exposure Group meeting.
- Measure customer behaviour and spend time with customers to understand them
Companies need to empathize with customers when they experience difficulties and obstacles.
This means embracing new techniques for understanding customer journeys. Such approaches allow companies to uncover new insights that allow them to design and deliver truly great customer experiences.
One of our Business Exposure Group members is an insurance broker specialising in the farming community. He was developing a new product and took time out to observe the daily activities of farmers.
He learnt that farmers are pressed for time but also very tech savvy, relying heavily on PCs and mobile devices in their daily activities. He had originally planned to market his new product through traditional channels, but lessons learned from an observation trip led him to create a digital solution, which allowed farmers to gather information and buy policies online at night and at weekends.
- Designing the complete customer experience
Design is not about making devices and screens look pretty. True customer-experience design involves each interaction customers have with your company. Design is not just what it looks like and feels like. Design is how it works.
To design a customer journey, companies must enlist everyone who has an impact on any part of a customer’s journey, not just people with the word “design” in their title—in particular operations and IT.
A Business Exposure Group member has a marketing agency whose client specialises in visitor attractions. After a 12 month effort to root out pain points in the experience of visitors to theme parks, their clients introduced wrist bands. These brightly coloured wristbands allow visitors to board rides, pay for meals and gifts. More important, the bands and the technology behind them—which is in every part of the attraction—allow visitors to select exactly what they want to see and do in advance. That has helped turn a day out from a series of highlight attractions interrupted by waiting in line to a smooth end-to-end experience.
- Completely rethink the customer experience
The focus is addressing customer needs, not improving a process. Many of our members bring in people who are not normally involved in the business to encourage fresh thinking. Looking at the best experiences employed in other industries can be extremely enlightening.
- Become an agile organisation
Managers responsible for developing new offerings need the authority to make decisions quickly and to hold staff accountable.
One of the Business Exposure Group members who has an IT software company shifted entirely to cloud technologies, which allowed new software developed by their team to go live on the clients websites in a matter of seconds. By making the whole organisation agile, the IT company dramatically reduced time to market for their clients products and services.
- From delivering a product to constant tweaking
Many businesses figure out what new product or service offering they want to create for customers and then launch pilots.
It’s impossible to know in advance how an experience will be embraced by customers. It’s better to launch sooner with fewer features and a simpler interface and learn what works, based on real customer input.
Using this approach, one of the Business Exposure Group members was able to build a new tablet-based app in just 6 weeks. It then tweaked new versions based on user feedback, improving the process. After these tweaks, the app was scaled across new markets and more products within the company’s range.
- Working together spontaneously
Companies need to push their people to move beyond traditional roles and work together to reinvent customer journeys. Improvements come from having motivated, empowered frontline employees driven by clear purpose.
Many of our members are working hard to reinvent their customers’ journeys. The ones that win will be those that push the boundaries and adopt new practices.
Other than financial . . . . . value creation is the essence of business. Value is what attracts and keeps customers, attracts and maintains relationships with investors and suppliers who are critical to the businesses long term success.
It is a mistake to look at your business from within – better to look at your value propositions through your customers’ eyes, because the biggest differentiator on valuations of a business is the intangible value placed on business reputation. So, therefore
- Make and keep realistic promises on service, quality and delivery
- Use IT to improve transaction speed and information sharing
- Develop staff decision making practices
- Spend more time and money on the important areas
- Build capability within your business
- Build enthusiasm with your staff
Value is all about creating a ‘serving mission’ for your customers.
There are 9 things that will make your business worth more than your competitors in the same industry.
1) Recurring income
2) Provide something different
3) Show growth at a pace
4) Be seen as a ‘trendy’ innovative company
5) Ensure no customer is responsible for more than 10% of your revenue
6) Be able to predict business conversion rates
7) Have a second in command
8) Be able to demonstrate happy customers
9) Remove complexity and duplication in your business processes
If you can tick a number of theses 9 facts you are well on your way to creating and building an enhanced value for the future.
And looking to the future. Stop thinking about ‘making products’ and start thinking about experiments. Because it is one of the experiments which will be the one opportunity that will make your business fly!