You only need one lead to make a sale, says common wisdom. However, your chances of selling increase with more leads.
So, how do you generate more leads?
1. Offer compelling products and services for your customers.
2. Be compelling. Approach prospects with a view to helping, rather than making a sale. Show your enthusiasm, smarts and ingenuity.
3. Be in the information your prospects review before buying. Know how your customer buys through market research.
4. Spend time building relationships with your target market. Understand where your target market is, gathers information – and be there to help them out. Speaking, writing, helping with associations are some ideas.
5. Market on the internet. Have a website. Get on Facebook, Twitter — if your customers will be there.
6. Give customers a chance to try out the product or service. A free trial. View it on video. Whatever works for the product or service.
7. Monitor where your leads come from, and keep doing what works!
The jungle gym is a great blend of structure and chaos. Perfect for kids.
In an organization, we need that same perfect blend — the one appropriate to the company’s size. After all, we are kids at heart, right?
A start up has few systems. Expenses need to be tracked. A business plan is needed for financing. The organizational structure can flow – we are getting things going. Once the revenue stream is there, we need to know who’s on first – to ensure commitments are met.
As the organization grows, it is practical to add structure. However, keeping the chaos, the motivation, the energy and purpose is key. Adding structure while maintaining energy is a challenge. It takes adding the structure with finesse only as needed.
When the organization is choking on its own bureaucracy it’s one sign there is too much structure. Have the systems of a $300B organization been added to a much small company? If so, it will only slow the company down.
Yes, ensure employees are treated fairly across the organization, ensure laws are met, the work is safe and so on — but maintain the employee ingenuity, the ideas that serve customers and open new products and market. Keep the ability to move fast!
So your company is working hard, doing everything right, and it just isn’t growing fast enough.
Well, there is the economy. The recession has slowed customer demand in most segments a lot. Still, excel in a recession and life should be even better when the economy picks up.
So, the company has a competitive advantage and it is one that matters to your customers. You have solid, objective evidence that this is true, right?
If so, the issues lie in implementation. Have you investigated buying behavior to ensure your promotional plan will meet prospects when and where they are looking for you? If not, know where to find your prospects and what they are looking for. Your promotional plan needs to take this into account.
With all the footwork done and the strategies and plans set, the key becomes implementation. How to get the message out effectively. How to brand consistently, and build value through the brand. That in itself can be a competitive advantage – with strong equity. Think of Coca Cola.
All prospect and customer touch points become critical. From the first contact as a new lead through to shipping and invoicing. What is your prospect’s or customer’s experience? Try to live it yourself, to understand how the experience REALLY is. Don’t base your decisions on internal company myths. These often hold the company in higher regard than customers do.
Quick surveys can help here. To understand what customers appreciate, would like more of, and how the company stacks up against the competition. Then solve the key issues effectively – turn them into company advantages.
It takes work, dedication, and a solid understanding of your market – prospects and customers alike. Feel free to write, tell me how it’s going, and where you are seeing the challenges and wins.
Your top sales manager has been pursuing the largest sale in history of your company. Do you want it?
The company needs the sales. Of course, you will take the business. What a crazy question, you say.
But do you know you have the capacity to make the order? There is nothing more damaging than to leave a customer without product. There will be no sales from them for a very long time, if at all. And think of the word-of-mouth-express.
Do you know your capacity? Do you know what you can make? It’s easy to figure out. Just multiply the production per hour by the number of hours of prodution for any given time period, a week, a month, etc.
It’s best to monitor the daily productivity in operations by product, machine, operator, shift, and other relevant factors. Then the scheduler has good numbers to use for production planning.
Don’t forget to factor in the time for preventive maintenance, as well as a realistic amount of time for breakdowns, interruptions, breaks, etc.
Being realistic is a watchword for production planning.
Of course, once the capacity of the business is clear, then it is possible to determine whether the firm can deliver on the order.
So, if the firm cannot take the order, do you turn it down?
Not yet. There is another consideration. Customers usually do not need all the product right away. It takes them some time to sell it. So, perhaps some product can be delivered by the initial date, with additional shipments at later specified dates. If the company takes this approach, don’t forget to factor in addition set up costs, if any, when trying to understand the profitability of the order.
There are other options, too, such as subcontracting some of the work to other suppliers, usually competitors, which can raise some complications. Or, the customer can split the job between a number of suppliers, though you may not want to let a competitor in.
If your firm has a competitive amount of capacity and is pursuing target business, it rarely comes down to turning an order down due to capacity. However, it is definitely a critical consideration for a large order as it moves through the selling cycle to a sale. Train the sales force on capacity issues, so they know about potential issues so they can ensure it is handled appropriately upfront. A well organized large order leads to much happier customers and repeat sales.
Even the best laid plans can go awry, and we all have tough times in business. It can be challenging to close major sales, get the growth we want, and our competitors tend to throw up obstacles.
Through all this, how do you stay motivated? What works for you may not work for someone else. This is a personal question.
For the goal-oriented among us, it can help to have some objectives with timeframes. Of course, part of the goal will be an outcome based on your actions. However, you can only control your actions. What you do and how you do it. Many hone these to obtain the desired results throughout their career.
It is important to understand where you are now, and to set realistic goals. Stretch goals can push you further. However, impossible goals are demotivating.
Another source of motivation is the satisfaction in the work, the process. The results may not be what you want right now. The growth you had expected by now may be disappointing. However, the joy of doing the work and doing what will bring growth can buoy spirits until the next spurt of growth occurs. When it does, don’t forget to celebrate.
Following the greats or your mentors can provide new ideas and inspiration. Focusing on the potential of your business creates energy and excitement in your work. Keeping some quote handy or learning more about your idol’s accomplishments, ideas. Brainstorming ideas with peers can create that energy too.
Noting your progress is key. It is always so easy to look at what we haven’t done, at what is left to do. However, looking back at what you have accomplished so far helps your perspective. You are equal to the task at hand.
Checking in with your team on a weekly basis can demonstrate progress and focus the team on the key activities at hand. It can provide an excellent forum for discussing the vision, brainstorming and generating excitement.
Finally, if you are just having a bad day, it might be time to take a break, go for a walk, smell the roses, or say hello to your family. This can give you a fresh look at the problem, with new solutions.
One of the main reasons companies go out of business is for lack of cash. These companies may even be growing, successful in the market — but they run out of cash.
Don’t let this happen to you.
Make sure you prepare cash flow projections on a regular basis. One time of great risk is expansion. There will be investment in buildings, equipment and/or inventory. It is critical to be sure the business has the cash to finance this.
Think about the cash-to-cash gap. That is the gap between spending money on raw materials and then getting cash from the customer. Just think, you will need to make the product from the raw materials, ship it to the customer, and then be paid before the company gets that cash. Without a projection of cash flow, you won’t know if there is going to be trouble.
If you realise that the 30 days it takes to make the product and the 45 days it takes customers to pay will strap the company for cash, it can be possible to set up different payment terms. Perhaps a prepay will be needed, and will be acceptable to the customer. Or perhaps on the basis of the cash flow projections, the bank will loan you extra until the cash flow gets healthier.
It’s really important to look at the best case, worst case and most likely case for these cah flow projections – and don’t forget to include ALL the expenses. This is always a good reason for an accountant to prepare these projections – they generally think of all the expenses. Check it over to be sure.
So expansion can be an exciting and risky time for the business. Keeping track of the cash flow will assist in the preparation for and during the expansion.
Monitor the accounts payables and the accounts receivables. The sooner receivables are collected, the shorter is the cash-to-cash gap. It can help to provide a discount to customers to pay sooner, especially if the business is or is expected to be in a cash crunch.
While cash is a problem, a cheap source of financing is ‘stretching’ the accounts payables, that is, paying them later. However, if you can see there will be problems with paying particularly key suppliers, then it is a very good idea to take your courage in hand and call them to set up a payment plan. It will be key to make payments on time, according to the plan, in order to retain credibility with your suppliers. If this occurs, they will look favorably on your phone call. Otherwise, the supplier sees the later and later payments and has no idea what is going on. Not the way to build a partnership.
So, congratulations on your business success, and ability to expand. Just be careful the business has enough cash during this time.
The bank wants a business plan. You have collected all the information on the external environment, company strengths and weaknesses. You thoroughly understand the market and financial rationale for starting or expanding your business.
Maybe that wasn’t wasted time…
Now it’s time to put the plan together. Typically the business plan will start with a one page executive summary. It will include the compelling reasons for the expansion, including the customers you have in place. For a start up, the executive summary will highlight the advantage of your business over the existing competitors out there.
Then you move into the details. A business plan typically starts with the marketing plan, the reason for the business’s existence. It will include your target market and how attractive it is to be in that market. Include market growth, trends, size, etc. Demonstrate a clear understanding of market needs, backed by objective data where possible.
Detailing your competitive advantage is key. Here it is critical to provide information on your competitors in order for readers to objectively evaluate the power of your business’s advantage.
Translate the competitive advantage into a value proposition. How valuable is your advantage to your customers? This information will feed into your business model ie, how you plan to make money.
Wind this all up with your promotional plan: how you plan to position your product or service in the market; product features; the pricing level, especially versus the competition; the promotional plan for getting your message to the market, including direct sales; and how you plan to deliver your product to the market.
Operations is the next key piece of the business plan. This is the opportunity to explain in detail how the product will be manufactured or the service delivered. It is important to outline the rationale for the key expenses and investments needed, as this will provide the information to support the numbers in the upcoming financial plan.
Ensure the competitive advantage is delivered by the operations, if that is your source of advantage. The more proof there is to demonstrate the advantage will be delivered to the market, the more credible the plan is to the bank — and verfied for your own peace of mind.
The next sections of the business plan will include the other key functions of your business. This will vary according to the business. Possibilities include Regulatory, Research and Development, and Information Technology. Again, explain the expenses, investments and how these departments deliver on your competitive advantage.
Finally, crucial to your business plan are the financials. These will include your pro forma (projected) income statements with your revenues and expenses. It will also include your pro forma balance sheet, with the impact of the profit or loss on your assets, debt and equity. The assumptions need to be clear. It is a good idea to have an accountant review these numbers, if not help you put them together.
For the variables that present the most risk, it is a good idea to include a best case, worst case and most likely case. This will show the impact of shifts on the financials, which clarifies the variables to most closely monitor. An accountant can also assist with the sensitivities.
Following the above steps will yield a solid business plan for the bank, and for your own management of the company. Here’s wishing you the best of luck with your new business, or expansion.
I just spoke with a bank manager yesterday about how his clients do not have well thought out plans for starting a business or expanding a business. So, I thought I’d help you out here.
There are some standard questions the bank will ask:
– Do you have experience in the industry?
– Does your plan make sense?
– Is there a market need?
– Can you make money?
– Does your pricing make sense?
– What are the risks?
You need to have your bases covered on these questions before talking with the bank.
Then, the bank will ask for a business plan. The plan covers a lot of the work I have described in previous blogs on Building a Business.
For a new business, the bar is high. You are trying to prove a need without the sales to show you have a salable product or service.
For an expansion, you must have already demonstrated the value of your product. However, the bank will still require a well thought out plan that it believes you can and will implement.
Prepare for the Business Plan with Research To prepare for the business plan research the government requirements, effect of the economic cyle (especially being in a downturn now), social and technological trends. Understand these issues thoroughly and how they will affect your business.
Then look at your possible competitors. This includes substitutes for your product, the ease of entering the market, the bargaining power of suppliers and of buyers. Take a look on the web and talk to industry participants.
Summarize your research with a list of opportunities and threats for your business.
Spend some time understanding your market needs and buying behavior (Refer to What DOES Your Target Market Want? below). The results will provide you with the information you need to determine your competitive advantage and/or the reason your expansion will be successful.
Follow the research up by understanding the value of your product or service to your customers in dollars and cents, particularly versus your competition. Ensure you have your product or service, pricing, promotion and delivery of your service figured out.
Then thoroughly consider your company’s strengths and weaknesses. Try to get an outside view from customers. A simple but carefully considered survey can help here. The wording will be crucial to obtaining useful information. Take a look at the Net Promoter(R) Score literature to see if this is the approach you want to use (netpromoter.com).
Armed with this information, you will be ready to prepare your business plan. I will cover this in the next blog. Feel free to let me know any specific issues you have so I can be sure to address them.
Effectively implementing an excellent marketing strategy is the best bet for profitable growth. Such a strategy will be founded on market needs and internal capabilities. It will have at its core, a valuable advantage over your competitors.
The whole company needs to understand what this advantage is. Each person needs to know how they contribute to this advantage.
Bear in mind that the marketing strategy is best if at least each function contributes to developing the plan. Then each department can provide input based on their market contact, as well as the practicalities and impact of the strategy on their department.
That being said, the marketing plan drives the strategy of each functional department.
The marketing strategy drives sales. It determines the customers to focus on – and the prospects to leave alone. It delineates the strengths to sell on, including the overarching advantage of buying from the company. Of course, sales will in turn provide essential feedback on how the plan is working in the field. So, this interaction is critical.
The marketing strategy drives operations. If the strategy is low cost, then ops needs to drive costs out of the product. If it is offering a continuous stream of new products, then ops needs to have the flexibility and expertise to do this cost-effectively.
The marketing strategy drives research and development. It determines whether new products need to be developed much, and the parameters of these products. It also determines the required timing of the product launches.
The marketing strategy also drives finance. It dictates the parameters that need to be monitored and measured. Again, if cost is king, finance needs to ensure the right metrics are being tracked, and to provide the analysis on the success of the strategy.
So, marketing strategy will drive the strategy in the other departments in a company that is geared to grow profitably. Promotional strategy is a piece of the marketing strategy, owned by the marketing department. But marketing strategy is much bigger than that, holding the keys to competitive advantage and therefore profitable growth.
The basis of marketing is understanding what your target market wants or needs. So, how do you do this? How do you go about understanding your target market?
Understanding your market is really a blend of science and art. The key is to collect the data. I believe it is important to do this through market research techniques, and through customer visits. Ensure you maintain personal contact with your market. To me, there is so much more power from what a customer says directly to me, than through sales or even market research. The personal contact gives me a feel for the market.
However, my personal contact with the market needs to be balanced with data from market research. This information provides more scope of information, and more details than it possible in customer visits. Market research has the leeway to ask more questions, while sales calls exist to build the relationship with the customer. In addition, there is some bias when customer talks directly to people at a company. When talking to a third part, it is easier for the customer to be honest – there is less pressure to sugarcoat the message.
So, it is key to join and be active in the key associations in your industry. Get to know the industry players, your customers, your prospects. Understand what is important to them, how they view your competition, how they view your company. This is all critical context.
However, market research, if done properly will give you a less biased view of the world. It will help replace the company’s view of itself with the market view of the company. Include both customers and non-customers in your research. This will provide a truer picture.
Screen your research participants to ensure they either make the buying decision or are part of making the decision. Key questions to ask the decision-makers in the market research are:
– whose opinion do you pay attention to when buying product A
– where do you look or who do you talk to, to find companies to buy product A (on the web, magazines, people)
– what do you wish suppliers of product A would provide
– who makes the buying decision
– what criteria is your buying decision based on (you may want to have them force rank the criteria)
– where do the decision-makers hang out (associations, websites, magazines, etc.)
Generally, when performing market research, you will start with qualitative market research. This is a few, indepth interviews. The qualitative research sometimes leads to a need for more qualitative market research, or provides the basis for doing the quantitative research.
Quantitative research consists of polling a lot of participants in your target market in order to have statistically significant data. Through this, you can understand which percent want x and which percent want y. Of course, there is always a margin of error, dictated largely by the sample size and number of segments within the sample.
Combining the information from your interaction in the industry, research on the web, reading, and market research is the art. Your conclusions will drive your marketing strategy. As always, it is critical to keep a finger on the pulse of the market as change is the constant in this world.
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You only need one lead to make a sale, says common wisdom. However, your chances of selling increase with more leads.
