Marketing

Article: No Better Time For Market Research (October 2009)

The economic downturn is no time to guess what your clients are thinking. Before investing in gut feelings or past remedies, find out what your customers - and ex-customers - want. Just ask. It's existing clients who offer the most potential for growth, and at the lowest cost. Talking to them is a good way to further develop or to start a customer relationship management program.

Market research will enhance the informal feedback you gather every day and could prevent you from making costly planning mistakes. No longer just for the big corporations, small and medium businesses usually know their customers well enough to do their own primary research - information direct from the source - on a scale that can still reap effective results.

Here are some tips on structuring do-it-yourself market research:

  1. Many ways to get in touch

    A direct mail campaign is the ideal method to survey customers, if your budget permits. Or, email or internet surveys are good options. If you have time, but no budget, consider including questionnaires with invoices or statements, or with direct mail campaigns already budgeted in the marketing pipeline. For the personal touch, sales consultants could distribute printed surveys on client visits or do them by phone.

    Prune any questions that don't directly contribute to collecting and analysing information for making business decisions. If possible, design questionnaires with a single purpose, such as feedback on customer satisfaction or to test interest in a proposed new service. If seeking opinions on a few different topics, divide the survey into clear sections.

  2. Plan for easy analysis

    A plan for measuring results with uniformity is the first priority. Multiple-choice is popular because it's easy to both answer and analyse, but you must accommodate all responses, including "don't know" or "other". A ranked answer system should include no more than five items for assessment because it becomes difficult to order preferences the more items are listed, making the answers less reliable.

  3. Style for accuracy

    Questions should follow each other with smooth transition. Watch the tone doesn't pre-suppose a position or assume the respondent has particular information at hand, such as budget percentages, financial details or past purchasing statistics. Avoid vague terms like "most" and "least", as everyone's perspective is different.

  4. Ask single focused questions

    Each reply should be about one topic. Seeking a "yes" or "no" to "do you like our colour and size range?" won't work if you need to know whether your size range in particular is on target with buyers. Short questions save people's reading time and also prevent you inadvertently biasing answers or creating confusion through over-explanation.

  5. Seek truthful answers

    Anonymous versus identified participation will affect the honesty of replies. Some loyal clients might simply not want to hurt your feelings by expressing their legitimate complaints; others may hesitate to answer about spending intentions and prefer to under-estimate in fear of sales pressure. In general, make sure your questions are non-threatening and make privacy policies clear if seeking special details.

  6. Keep it brief

    One page is the best length for a written questionnaire, and a 10 minute commitment is ideal. Any longer and respondents might set the task aside or give less thought to their answers.

  7. Consider incentives

    Even token rewards are welcomed by survey respondents. Corporate gear featuring your logo is likely to be as effective as items with a high monetary value. For even better response rates, promise the gift on completion. Tailor your ‘gift' to the respondent. An MD might require more than a free pen or movie tickets to be tempted to complete your questionnaire.

  8. Cover letter essentials

    Your personal introductory letter should be friendly, brief and persuasive. If there's no tangible incentive to participate, appeal to their business integrity with your willingness to listen, particularly if you are looking for suggestions on how to keep your business growing in slow times. Include how long the questionnaire will take to complete to increase response rates, particularly if it's genuinely in the five- to 10-minute range.

  9. Edit for variety

    Change the question style throughout the survey to keep it lively. If 20 questions start with "do you think ..." the respondent might develop a rut of responses to match. Be creative in the writing style to keep the reader's attention.

  10. Ask why

    It's the most powerful question of all. Many respondents will be keen to elaborate on their opinions and their qualitative responses could prove to be highly valuable. Even complaints are important opportunities for business improvement, so make it clear that further comments are welcome. Provide a place to include it on the survey or an email address for sending additional feedback.
Get in touch and ask us to conduct a FREE Business Evaluation Meeting and find out about our unique way of designing and implementing strategies to generate sustainable business improvement.

Article: Making Your Business Different - MARKET! (June 2008)

Repeatedly we are advised that most small to medium sized businesses don’t understand marketing and what it can do for them. You are in the position to set your business up differently and really reap the rewards of this simple function.

Remember, marketing is a function of your business and you need to take full advantage of that function.

15% of your clients will purchase your product and/or service based on price alone. 68% will purchase, or more importantly will stop or not purchase based on a perception of indifference.

Do you want your business to focus on the 15% or the 68% of purchasers in the marketplace? The 15% will drive you broke and the 68% will make you rich if you treat them well.

Get in touch and ask us to conduct a FREE Business Evaluation Meeting and find out about our unique way of designing and implementing strategies to generate sustainable business improvement.

Article: Customer Focus (May 2008)

In rough trading conditions maximising customer profitabiliy is vital. We discuss how to do it.

Given activity-based costing is at the heart of measuring profitability, are most companies already monitoring it? 

The pioneering companies who did this and adopted activity-based costing to identify individual customer profitability and customer segment profitability certainly got themselves some useful information.

What continues to amaze us is how many medium and large enterprises don't really have a rigorous approach - businesses need to make better informed decisions.

  • How do you price things?

  • How do you manage discount strategy?

  • How do you manager channel strategy?

  • How do you guide marketers in terms of customer acquisition, if you don't know which ones are profitable and which ones are not?

The evidence is there is a huge gap to be filled. 

Do companies that measure, do so reliably?

A number of people think they have customer profitability information, but companies don't necessarily get to the right answer. When you actually work with them and try to understand the detail, however, you find that their data isn't that good. You need to know how much it costs to service a customer aquisition.

Any activity based costing implmentation needs to be treated as a business wide implementation.

What should you do with the information once you have it?

At the strategic level, businesses need to understand, by segment at least, who your profitable customers are. You may be making 120% of your profitability out of the top 20% of customers. One idea is to have a balanced scorecard which looks at customer satisfaction.

We all see the McDonalds upsale "will it be large fries". They have a fundamental understanding that once the customer is there, you're incurring the cost to serve. That is the key understanding of where we can make extra sales.

Recent Statistics

  • 33% don't know who their most profitable customers are.

  • 86% beleive they would run a more profitable business if they had the information.

  • 25% lack the tools they need to measure customer profitability.

Article adapted from Accountancy Age (May 2008).  

Get in touch and ask us to conduct a FREE Business Evaluation Meeting and find out about our unique way of designing and implementing strategies to generate sustainable business improvement.

Article: How can I make Cold Calling easier? (April 2008)

Lately we have been working with a number of sales teams to help them increase the success of their cold calling and I thought I would share with you some of my tips for success:

  • Don’t try and sell on the phone; you can’t. You can, however, get a meeting or permission to send information
  • Talk about how you can help that business or how you have helped other business. Don’t try and sell to them
  • Name other clients that you are working with who are in a similar industry or who are a similar size to the company you are calling
  • Set a goal for each phone call. Would you like contact information, a meeting or permission to send information
  • Write down all the possible objections that you are likely to encounter and have an answer ready for them
  • Target a particular Industry at a time so the script can be adapted and modified to their current situation, challenges or problems they may be experiencing
  • Always treat Assistants, Personal Assistants and Executive Assistants with respect; they have the power to get you in or keep you out
  • If you get through to the right contact and they sound busy or harassed ask them “is now a good time to talk?” should I call you at a later time?
  • Make your calls from 9.30am to about 11.30am and then start again around 2pm and go through till 4pm
  • Set yourself a call target rather than a time target, it makes it easier to achieve
  • Don’t leave messages; it is rare that anyone would call you back
  • Ask or appeal for help rather than just going straight into a spiel
  • Don’t be fooled into thinking that a person asking you to send information means they are interested….. they are simply trying to get you off the phone!
  • If you send information by email make sure you follow it up the next day to confirm the person received it. This gives you the chance to ask them if they have any questions and gauge their interest in meeting
  • Try and do your calls in a block of time, one after the other, after the other. After you have finished 10 calls, for example, then send out information or do follow up. This saves you reliving the ‘fear’ or the ‘pain’ of picking up the phone. After about 3 or 4 calls you will have established a habit and you will be much more confident.
Get in touch and ask us to conduct a FREE Business Evaluation Meeting and find out about our unique way of designing and implementing strategies to generate sustainable business improvement.

Article: Your Checklist and Analysis to Quality Service (March 2008)

Without quality service you could be turning potential customers away and loosing your existing ones. Here is a basic checklist you can implement into your business to analyse your customer service quality.

The Customer Service Analysis Checklist

  • Are your staff adequately reaching objectives, carrying out necessary functions and working toward your mission when communicating and assisting a customer?
  • Do your staff identify both internal and external customers?
  • Are your customers expectations appropriately recognized by your staff to ensure customer satisfaction and quality?
  • Is market research carried out on your customers to ensure you are providing them with what they want and need?
  • Do your staff accurately recognize/document your customer needs and wants?
  • Do you know what is that your customers are actually wanting to buy?
  • Is there a customer complaint log?
  • Do you and your staff understand what your customer complaints suggest and use methods to improve the level of customer satisfaction?
  • Have you identified weak or failed points in the customer service cycle?
  • Has your total service strategy been defined?
  • Do all of your staff adequately understand the service strategy?
  • Is your customer service system easy to use by your customers?
  • Is your customer service easy to use by your frontline staff?
  • Is there a strong commitment to customer service by all staff?
  • Is there a commitment to providing the highest quality of customer service in the business?
  • Is there adequate delivery of commitment to customer service to your customers at the time of sale and after sales service?
  • Have your staff been adequately trained in providing the highest level of customer service?
  • Do you regularly monitor and assess customer service levels provided by staff.
  • Are there rewards and recognitions that embrace the quality of customer service provided by your staff?
  • Are there systems in place to regularly monitor and improve the level of quality customer service in your business?
  • Are there monitoring and review systems to improve efficiency, effectiveness and productivity associated with the delivery of your customer service?

This checklist should help you to analyse your current customer service abilities and focus on those areas that need improvement or implementation. You can edit this checklist to better suit your business or include other areas required for assessment.

Once you have completed this you will better understand how to retain your customers and hence increase your ability to successfully market to them. 

Article: How to market your business (February 2008)

John Wannamaker, founder of Wannamaker departments stores in the USA and considered the father of modern advertising is credited with saying "Half the money I spend on advertising is wasted; the trouble is I don't know which half".

This is the dilemma for many business owners how do I promote my business and get the biggest "bang" for my marketing spend? Most business owners use a couple of trusted methods to promote their business: the Yellow Pages, advertising in the local paper or through business front signage for example.

How you market your business to set yourself apart from your competitors is the topic of this article…

If you do a Google search for a definition of marketing you will get approximately 32 million hits trying to explain this concept. Some definitions talk about products, others about supply and demand, advertising and even needs, but one thing is obvious, not even the experts can agree on a single definition.

Marketing to us is simple - it is about raising awareness of how your business can satisfy potential clients' needs, so when they are ready to buy, they know who to see. There is nothing complex about that. It means two things:

  • Telling potential clients about how you can help them and
  • Tell potential clients about how to contact and do business with you when they are ready

What makes marketing your business complex is actually getting to these points! That requires planning and consideration of the following points:

  • Identifying what makes you different from competitors in your market
  • Identifying the characteristics of clients you want to attract
  • Determining how best to tell these potential clients about your business
  • Deciding on what specific service or group of services will attract them to your business
  • Agreeing on how you will manage and follow up your activities

In other words: Who do we want to attract to our business? What are their needs and issues? What services/products will satisfy these needs and issues? How do we tell them about us so that they understand how we can help them with these needs and issues?

The mistake that many businesses make is in telling potential clients about absolutely every service/product they offer. This can overwhelm a potential client and leave them wondering "How can this business help me with my needs?" Marketing your business is a great time to practice the K.I.S.S. principle - Keep It Simple Stupid! Obviously, the alternative is just as bad. Not telling anyone about your business is unlikely to see you flooded with a constant stream of new business.

One area of marketing that is surprisingly overlooked is identifying the competition. We are still amazed at the number of business owners who do not think they have any competitors. Competitors don't need to offer identical services/products to yours; they may offer a slightly different service/product. What makes these services/products your competitor is that they are competing for the same clients.

This is why it is so important to be able to differentiate your business from the business down the street. Go back to basics: rather than telling every potential client how many great services/products you offer, tell them how your business will help them with their needs and deliver value.

Once you address this, the medium you use to get your message out will become obvious - direct mail, word of mouth, telemarketing calls, advertising in the local paper etc. So if you go back to our definition you will see that you have begun the process of marketing your business.

By shifting the emphasis from marketing services to marketing value, you immediately set your business apart.

Article: 2008 Is the year to increase your response rates? (January 2008)

Marketing your business will require you to seriously think about all of the marketing campaigns and marketing funds that you have spent money on in the past year, only to improve the year ahead.

2008 should be a year where you set strict boundaries and only use those marketing activities that you know will guarantee you the response rate.

Unlike other areas of your business, marketing is the one which is seen as a money spender and not a money maker. 2008 is the year to change that and whilst you will still be spending money you will be spending it with the intention of making money.

Some marketing goals for you to think about in 2008 include:

  • Increase response rate by 5% from your webpage
  • Make a 20% return on all marketing investments
  • Always breakeven on marketing projects
  • Reduce marketing costs by 10%
  • Have 5 strong marketing campaigns that guarantee results
  • Increase the average £ sale per purchase
  • Stop discounting on sales
  • Develop a customer rewards program

Any of the above goals mentioned will work toward helping your business to grow and succeed. Ensure that any goals that you set follow the rules for goal setting. These include, always having it in writing. It carries the elements of Specific, Measurable, Achievable, Realistic, Timely (SMART) rule, where you break larger goals down into smaller ones and you are continuously optimistic about achieving your goal.

Before you set your goals for 2008 you should:

  • Review all of those marketing campaigns and activities that didn't work and design a strategy for each. Consider why they went wrong and accordingly list the pros and cons or negatives and positives. Determine why they went wrong, for example, were they lacking in something, did it fail in getting your message across, did you give enough detail, is it portraying the right image, etc.
  • Choose 5 top marketing campaigns that gave you a reasonable response and determine how these could be improved.
  • Set provisions for all marketing campaigns to be measured and reviewed by the end of each campaign or at the end of the year.
  • Have a budget for each campaign and track your expenditure.

Article: Find Your Highest Potential Customers (December 2008)

The 80/20 rule – that 80 percent of your sales come from the top 20 percent of your customers – applies to most small businesses. Nurturing that precious 20 percent means focusing your marketing programs on the customers who drive your company’s profitability. A laser-like focus on these high-profit buyers also prevents you from expending too much effort on lower profit customers.

Remember that profitability does not necessarily correlate with the amount of money a customer gives to your business. In many businesses, smaller sales can be highly profitable, while larger sales can cost the company a lot to administer or deliver, and therefore have a smaller profit margin.

Use the tips here to unearth your most profitable customers.

Calculate acquisition costs

To assess customer profitability, you need to determine how much it costs your business to attract each customer. Many small businesses will be able to get away with a cost of sales analysis that is much simpler than what larger companies use. Keep in mind that the cost of sales numbers produced through these calculations are averages, to be used for rough evaluations of your customer base.

To conduct a simple analysis, first review the effort involved in closing a typical sale. Be sure to include expenses like a salesperson, direct mail, Web site development or other advertising costs. Estimate the total cost of your outreach and divide it by the number of sales you close annually to do a “quick and dirty” analysis.

Calculate cost of customer service

It is important to track your customer service expenses to measure how profitable your current customers are. The equation is similar to the cost of sales analysis. Apply costs for service-related items such as order taking personnel, project manager salaries and delivery of your product or service to each customer. Estimate the average cost of servicing each customer by dividing by the number of customers you serviced during the year. If you need help determining key service expenses in your industry, ask your accountant for industry standards. Keep in mind that the cost of service numbers produced through these calculations are averages, to be used for very rough evaluations of your customer base.

Create a high-potential profile

With the two figures above and the revenue that each of your customer provides, you can determine a rough sense of individual customer profitability. You can use this information to develop a profile of your high-potential customer. Look for common characteristics and behaviors. Do they fit into specific demographic or geographic categories? Do they have certain shared attitudes or values? Do they make their buying decisions in a similar way? This profile will help you develop the most effective marketing programs to reach these targets, extend their value to your company, and attract more high-profit customers. For more on segmenting your customer base, click here.

Some businesses might want to go a step further and develop a customer potential pyramid – a three-segment hierarchy that breaks out the company’s high-potential, medium-potential, and low-potential customers. The purpose of this profile is to look for marketing tactics to migrate customers into the high-profit categories.

Reallocate efforts around least profitable customers

In support of your focus on the top 20 percent of your customer pool, you should make an effort to not attract unprofitable customers. Review your records for those customers who cost you valuable time and money and create a profile of them in the same way you built a high potential profile. To the degree that you can, be sure that your marketing programs exclude these customers, to keep you efficient and profitable.

Since every relationship is an important link to other customers, try to avoid alienating anyone by telling them you don’t want their business. Instead, just avoid focusing resources on reaching them.