Article: Go On; Spoil Your Customers (December 2012)

We are often asked by clients “How can I improve my marketing?” - Often this means - “How can I get new customers?” Indeed, most businesses put most of their marketing effort – and budget – into new lead generation.

However, it's amazing how few businesses are effectively marketing to their existing customers. Most business owners are sitting on massive untapped potential in terms of their existing client relationships. How do you unleash that potential? Try answering these questions:

Article: Find Your Highest Potential Customers (February 2012)

The 80/20 rule – that 80 percent of your sales come from the top 20 percent of your customers – applies to most 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 SMEs 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 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.

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.

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

Article: Marketing Magic Comes Before Sales (November 2011)

If you are like most business owners when it comes to marketing, you’ll be unsure of what works and what doesn’t or at worst, you’ll have a long list of things that don’t work because you’ve wasted thousands over the years. Well here are a couple of key facts to help us feel confident about our marketing:

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

Article: 6 Sales & Marketing Problems Solved (October 2011)

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

Article: The Economy Seems To Be Recovering .. How Do I Adjust My Sales Strategy (October 2009)

The short answer is - go back to basics. Treat your company like a start-up business by getting hungry and enthusiastic and don't think yesterday's successes always guarantee today's.

Over the past eighteen months, from what nuOrder have observed, the companies that resisted temptation to adjust their sales strategy drastically are the ones that remained most buoyant through these tough times. The business leaders who hit the panic button and shed resources (and valuable IP) during this time are now the companies needing to adjust yet again.

Reactive by nature, these companies are frantically rethinking their strategy - in doing so rehiring people for the same positions, in some instances at triple that of what it would have cost to have retained them in creative ways. Suffice to say, their recovery will take some time, but at least they're still trading right? Well, we guess that depends on your end game and at what cost.

Let's be honest, business is tough in any market. The companies nuOrder see succeed over the long-term invariably have a way of being that enables them to maintain their entrepreneurial spirit through thick and thin times. Not just hungry for new business, but an appetite for knowledge, learning and growing, always. In tough times you need to work smarter and harder, but you also have to do more of what works, not less of it.

The companies that look for easy, quick-wins with no risk are often left ‘reacting' and ‘reinventing the wheel' periodically based on market and external forces. There is a distinction between being adaptive and reactive we should note: To be reactive is to be guided by external forces, while being adaptive is using external forces as part of your strategy. In sales, you can never control the outcome - all you can effectively control is the process to help facilitate the outcome. Lose control of your process and you lose the ability to facilitate the outcome.

Your sales strategy should not need to change that much, particularly if it works. The strategy you develop should be adaptive and yet set on a foundation of planning for what is foreseen on the horizon. We could all see the GFC coming. The dark clouds were imminent for some time, and the media were not short of making sure we saw the potential for the storm, if not adding to its ferocity.

There will always be dark moments in business, particularly following overly optimistic sentiment and business decisions being made as such. History suggest every 10 years we see a correction take place in some way, so don't be too shocked when it happens next. Our advice is, as a sales leader, take responsibility and be proactive by constructing a more adaptive strategy that allows for peaks and troughs and plan for corrections rather than waiting until it's too late.

Having the ability to stay the course in tough times is a sure sign of confidence. It also sets a positive tone with team members and sends a message to customers that you believe in what you are selling and how you sell it. In turn this will make your customers more confident in choosing you. And guess what? With confident team members and customers you will ride the recovery much quicker by being able to maintain momentum rather than attempting to move the bolder (once again) from a standing start.

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

Article: How to deal with falling sales (March 2009)

If your latest sales forecast is dipping you need to understand how to reverse the trend before any serious issues arise. The other approach is cost cutting which offers different threats to the business.

Please find some simple tips on how to deal with falling sales:

• Be positive - get your head up and treat the recession as an opportunity.
  
• Do more tactical marketing - Firms that cut marketing in a downturn loose out when things to get better. You can divert spend to areas of marketing that actually do deliver results. The key is just to work out how.
• Effort should be targeted more than ever - Identify your best possible customers and focus on them rather than time-waster. 
• Shift old stock in a clearance sale - Create a breathtaking offer on 'clearance stock' that generates cashflow and new customers.
• Improve the sales team - The use of harsh but fair performance targets can be really useful to ensure all sales staff work to maximum effect. Take time to retrain people is they have spare time.
• Incentivise people - everyone in the organisation should be asked to sell and rewards should be given to motivate this.
  
• Be carefull who you sell too - Remember a sale is not sale until the cash in banked. Sales targets need to reflect money in the door not debtors.
  

Please ensure you remain positive - if you throw in the towel and say 'who will buy from us' that is the way things will go.

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

Article: The Customer is always right  (June 2008)

Sales is not just about finding new clients, it's also about making sure you don't loose existing clients. When you only have a few customers, it is pretty easy to keep track of who is getting what, when they are getting it, how they are getting it and maintaining the relationship. But, when you have several employees, an ever expanding customer base and no system, things can get out of hand.

To help, we are giving you several techniques which will get your customer service policy rolling and keep track of those customers who aren't happy.

Customer service policy

Put it in writing. This could be a statement or a detailed description which lays the basis for how your salespeople or employees are going to resolve the issue. For example, you may have a statement that advises employees they have the right to give unsatisfied customers a 20% discount on their purchased product/service.

Support systems

There should be established support systems that provide employees with clear instructions about the level of service required. This setup will allow your employees to acknowledge possible problems and initiate superior customer service at all times.

Measure customer service

Acknowledge and reward those employees who practice good customer service and maintain a high standard. Ensure you set a precedent for customer service and your employees will happily follow, as they will see the benefits financially and in the long term.

Be committed

Be committed to providing good customer service. Make this a reason why your customers would recommend you to others and return to purchase more. As a competitor to others in your industry, customer service is where you can beat them every time.

Happy phrases to make your customer smile...

These are simple and can be used to diffuse anger in a customer, resolve an issue or just be helpful and assertive.

"How can I help you?"

"I can solve that problem for you."

"It will be exactly what you ordered."

"I will take responsibility."

"I will keep you updated on that if you like."

"I appreciate your business."

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: In Sales The Relationship Is Everything (May 2008)

As a salesperson, your objective is to serve, not to sell.

Article: Design a commission plan that drives sales (April 2008)

If you establish and oversee the commission package for your company's sales force, you should consider numerous components to create a plan that both fairly compensates and adequately motivates the sales team. Ultimately, your plan should keep your salespeople happy while supporting and advancing company goals.

You will find that methods for creating a compensation plan vary widely and often reflect industry-specific standards. However, some ground rules cut across industries and they can provide a framework for establishing or reviewing your company's sales incentive package. Some of the more important rules include:

• Start with the outcomes and behaviours you want to foster
• Prioritize behaviours
• Keep the incentives flexible so that they can evolve along with your company's goals
• Make the compensation plan easy for everyone to understand
• Benchmark your competition to stay competitive
• Review regularly for relevance

Start with results

Of fundamental importance is to determine what results you want to encourage and to design your plan from there.

A sales team's goals should reflect the company's larger goals. Consider reprinting corporate goals in your sales agreements to underscore a unity of purpose. For additional clarity, you may want to include work objectives, even if they are not tied to commissions.

Some carrots are larger than others

Every incentive in a commission plan is a carrot, but some carrots can be larger than others depending on the behaviour they reward. Prioritize the behaviours you want from your sales force. You then can set up a system of rewards that encourages top-priority behaviour, as well as motivates salespeople for situations that are clearly distinguishable.

For example, you may want to commission third-party products at a different rate. You also might consider commissioning services differently than products.

You can implement an accelerator plan, which provides flexibility in the commission percentage earned and paid. In this case salespeople are paid at a lower rate until they meet their target.

After that, they are compensated at a more accelerated rate for every pound they generate in excess of the target.

Keep it simple

A commission plan needs to be easy for your sales team to understand. Not only do sales people need to see clearly what is motivating them, but you don't want to spend your time haggling over commission payments.

Clearly identify how commissions are earned and keep the calculation formulas straightforward.

You can check your plan's simplicity by creating a few sales scenarios and asking the sales team to derive the compensation. If the plan is easily understood, everyone should come up with the same numbers. If different figures are calculated, consider reworking the plan.

Know your competition

If you want to retain a top-level sales force, your plan needs to be competitive. Gather intelligence on how your competitors compensate their sales professionals. You can work out what commission levels are reasonable and competitive for your industry or profession through many methods e.g. internet search.

Human resource specialists in an industry often can help you locate surveys with compensation information; or sales professionals always know what their industry pays and can share documentation. You also can tap in to your industry's professional association or ask your peers how they structure their commission contracts.

Commission structures

At the core of any incentive plan is determining what role commissions play in the overall sales compensation package. Four of the most common commission structures are:

• Commission only
• Commission plus salary
• Commission plus bonus
• Commission plus salary, plus bonus

Although industry standards carry significant weight when creating a commission structure, ultimately your budget and priorities will determine how you pay sales professionals.

Again, when you hire sales professionals, they should immediately understand their earnings potential. For example, if you are paying commission only, you can specify that the commission will be X percent of the net sale, less any discounts. Or, you can define a base salary along with a target commission amount - the amount the salesperson would earn at 100 percent of quota. You might pay 50 percent base and 50 percent commission, or 80 percent salary and 20 percent commission.

If you pay bonuses, you'll need to determine not only the percentage, but if they are based on company-wide goals, individual goals or both.

Different pay for different people?

If multiple salespeople do the same job, their commission compensation should be equal. On the other hand, if job responsibilities really are different, these expectations should be spelled out and compensated for appropriately.

You might want to reward salespeople through higher base salaries for length of service, experience or stellar performance. Most importantly, be clear with your sales staff and apply any differences consistently.

First-time vs. recurring sales

You will need to address what commission is applicable to first-time sales as opposed to sales to repeat customers. By establishing higher commission percentages for new accounts, you encourage your sales team to bring in new customers.

But, you don't want to discourage sales to existing customers, as this is a strong sign of customer satisfaction with the product. It may be better to pay equally, but to award a bonus to each salesperson who brings in X new customers in a given period.

Timing of commission payment

Your plan will need to specify when commissions are earned. Some options include payment at the time of invoicing or product shipment, when the customer payment is received or a combination thereof.

Paying full commission when a sale is invoiced or when a product ships has the inherent risk of paying out the salesperson on what may be a slow or non-paying customer. To alleviate this risk, some companies pay commissions only after customer payment is received.

Conditions-based payment

Another strategy is to pay 50 percent of the commission at the time of invoicing as long as certain conditions are met, with the remainder payable at cash collection.

You can put in the plan that anything uncollected for more than X-number of days past due will be removed from commissions, motivating salespeople to assist with collection follow up.

The "certain conditions" part of the commission agreement are for behaviours you want to encourage. For example, you might specify 50 percent commission payment for sales containing net 30-day payment terms. For sales with net 45-day terms, commission might be paid only when the cash comes in.

Another condition might be pricing in accordance with the internal discount guidelines. If salespeople get any additional discount approved beyond the guidelines, then you pay a proportionately penalized commission percentage, or pay only when the cash is received, or both.

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: You Are In Sales (March 2008)

How many people will tell you that they are completely hopeless at selling anything and that they couldn’t sell lollies to kids? The answer is lots. We hear this sort of comment all the time and yet we are all in business to provide a service or product. The fact is if you are in business you are in sales.

Like many I don’t feel I am a good sales person but I do know a lot about what I do. I am good at talking with business owners, getting an understanding of their business and the issues that are holding them back. But I’m not good at sales. Or am I? Business owners come to me because they want some help but they don’t know exactly what services I can provide; whether I am the right person for them and what the service may cost. They need someone to understand their problems and provide a service that will help them. I spend a lot of time trying to establish a relationship, understanding their needs and helping them decide if I am the right person to help them. I don’t feel as though I am selling but on reflection I am using a pretty good sales process. The key is building a relationship and finding out what your customers needs are.

Imagine the situation where a prospective customer is looking at a food processor. A sales person comes up and starts “That is a great food processor. It will cut 40 kg of cabbage in 30 seconds flat. It has a 310 horsepower motor that operates at 2000 revs a second and never stops. It’s a great deal, give me your credit card and it can be yours.” Not much relationship here and certainly no understanding of the needs. Chances of a sale – zero.

Compare that with “If you are looking for a food processor perhaps I could outline some of the features of the various products we have?” “Could I just ask you what you are going to use the processor for?” “Well I have a young baby that is just starting on solids and I want something that will process cooked vegetables and stewed fruit.” “So you aren’t looking for something that is really heavy duty?” “No, although if it could dice vegetables for our own meals that would be good.” “Well from what you have said it sounds to me that Product A here would suit your needs. It is relatively light and compact so it is easy to handle; it would easily process cooked foods; it has an attachment which provides a basic dice operation; and it is a very affordable price. If you wanted something that could do a few more things such as……. Product B would do that for you. It is only little bit more expensive but it does that a bit extra and it is very quiet so you can still use it while your baby is sleeping.” Chances of a sale – excellent. You have established a relationship with the client. You have found out what her needs are, provided a couple of choices and outlined the features and benefits of each. Chances are that your customer will take the more expensive Product B, be happy with her purchase and will later return to purchase something else.

Being in business doesn’t mean you have to master the hard sell. In most cases a few relevant questions and your own understanding of your products will win the day.

Article: Eight Ways To Boost Sales Fast (February 2008)

With a wiff or recession in the air now's a good time to boost sales. We look at some tactics and strategies that could help you ride out any storm.

Chistmas is long since gone and wasn't a great time for many businesses with averge sales grow on 2006 of 0.3%. However, some firms outperformed the naysayers and doom merchants; Waitrose, for instance, posted a 4.1% jump, which shows that you can prosper in tougher conditions. Here are eight quickfire ways to give your sales figures a shot in the arm:

1. Make Special Offers

Make your customers offers they can't refuse every now and then. Everyone loved a BOGOF (buy one get one free). However, it is essential that you understand fully what you are trying to improve. If its profitaility then you might be onto a loser. But it its revenue or footfall then it might be a smart move.

Limited time offers are the key to success as it creates a sense of urgency and tailor you deal. 

2. Try Giveaways

What you should be looking for is an item that is both very cheap to source and which fits in with the lifestyle of the people that you are trying to attract. However, you need to be the one really gaining out of the deal, as you aren't doing this just to be nice.

3. Reward Loyalty

Loyalty schemes are a great way to boost profitability as long as you recognise what is of value to your customer bot not expensive for you. Such schemes tend to work well where there is a relatively predictable pattern of behaviour from youe consumer and especially if there is a high profit margin on the product that you sell.

4. Use Points Systems

Air Mile and Nectar are two of the most well-known players attracting many retailers to their schemes. The value of point systems is that they offer a tantaslising benefit at the end of the buying period. Often this is something that normally a customer might not buy, could not afford or would simply love to get for 'free'.

5. Offer Free Trails

You might have a great product but if people don't understand it or aren't sure of its value they won't buy it. For instance nuOrder have offered free 'clinic' sessions to firm to bring in new business - we sent out a mailshot to companies that we would really like to work with and offered and advice clinic for a day either for free or at a very discounted price. Such an offer could result in a very successful viral marketing campaign.

6. Tie In A Major Brand 

Tying up with a company that has more reach, marketing muscle and brand awareness than you is a smart way to piggyback your way to success. Also, niche operators are sometimes very valuable to larger brands as they bring a level of innovation and attention to detail that some of the big companies might lack.

However, you need to get your pitch right and be able to demonstrate that a deal would be in their best interests as well as yours. There needs to be a clear overlap between your customers and theirs. For instance, if you were an expensive watch manufacturer then you might look to tie-up with the likes of Mercedes as you are both premium brands. Or if you ran a business that provides childcare then you should look at children’s brands.

7. Sell Vouchers

Vouchers are now a staple part of most retail organisations and are understood by and popular with consumers. Essentially a gift item, they enable people to buy from you who normally wouldn't. Vouchers for DVDs or books are some of the most well known.

In order to get a voucher system up and running you should have them professionally designed and printed and watermarked to guard against fraud and train your staff in their use. It is essential that you keep track of the number of vouchers you issue and should treat each one as a sale. Vouchers are very effective but warns they aren’t things to be given away.