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20 sales and marketing problems solved
Thursday, 30 April 2009 00:00
Patrick Stafford & James Thomson
Page 1 of 3
More on ...
Marketing guru and SmartCompany blogger Colin Benjamin says there is a big problem with
discounting - once your drop your ...
He says a sales process really needs to have three phases - a sales process for creating an
opportunity; a sales process f...
Barrett says that companies cannot afford to be complacent in a downturn and must figure out a plan
to survive, and part o...
Structuring incentives for your sales people is not easy, particularly in difficult economic times when
the bonus pool is ...
Problem: How do I make sure my marketing gets people buying?
Solution: Call your customers to action.
Luke Bayliss from Su...
Researching your customers may seem boring, but Debra Templar says it is the only way you'll start
making progress in the ...
Adrian McFedries, managing director of franchise consultancy firm DC Strategy, says that too many
businesses spend too muc...
"Clearly at the moment the key topic for businesses is cashflow. Businesses in this environment
have a set cost base, so t...
"There's always going to be times to take risks, and we do, but we're focusing on the fundamentals
at the moment, and that...
Comments (2)
...
written by Quentin Brown, April 30, 2009
Great article however I would have to disagree with Trent Leysha...
Profitable growth
The point is not to grow a business, but rather to grow a profitable one, And to do that a business need...
which moved its billing day forward by two weeks. This meant that the firm's invoices got into their
clients' payables led...
line. But what of the longer impact of that cost saving? Okay, so it's taking slightly longer to respond
to customer queri...
How can we keep on top of reviewing our pricing?
Author: Julia Bickerstaff on 24 February 2010
Lasts 5 posts
 Our partner...
Best of all, you will outsmart your competitors and forever more be able to answer the question: "Do
you regularly review ...
shape of time - overworked employees - rather than money, the magnitude of the investment was
largely invisible. And becau...
These are the guys who want to know how your product can add value. They are very analytical and
when you meet them they c...
And my last piece of advice was to put their prices back up!+
+
I've done the budget for 2010, what else should we do in
p...
 I think a high level SWOT analysis is a useful tool next. Not only does it get everyone in the right
frame of mind for p...
via tax evasion and money laundering, however legally off-shore banking does not prevent
asset from being subject to perso...
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20 sales and marketing problems solved

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20 sales and marketing problems solved

  1. 1. 20 sales and marketing problems solved Thursday, 30 April 2009 00:00 Patrick Stafford & James Thomson Page 1 of 3 More on Advertising and Marketing  Can you handle your own PR campaign?  The power of mobile marketing  How to spread a viral marketing campaign  Are mailing lists worth the risk?  How I stopped a big project from killing my business Read more on:  sales  marketing  selling  tips  revenue The recession has thrown the sales and marketing strategies of entrepreneurs into disarray. Customers have become more hesitant to buy, sales teams are struggling to get deals over the line, and the marketing budget isn't looking as healthy as it used to. But don't despair - we have asked a range of sales and marketing experts and entrepreneurs to help solve 20 major problems that are confronting business owners. Most of the advice won't cost you a cent to implement, and you will also be able to create more robust sales systems and processes that will last you long into the recovery. Problem: Customers are crying out for discounts. Solution: Don't drop your prices - find another way to get them over the line.
  2. 2. Marketing guru and SmartCompany blogger Colin Benjamin says there is a big problem with discounting - once your drop your prices, it is nearly impossible to raise them again. Luke Bayliss, co-founder of Sumo Salad, agrees. "We are preferably not discounting because that has a negative impact on the business as a whole. Particularly during the global financial crisis, people may respond well to those in the short term, but they cause long-term damage." Benjamin says companies must find other ways to persuade customers to buy, mainly through offering improved service. Offer customers better terms of trade (by giving them longer to pay), offer priority delivery or think about giving them a little gift with every purchase. "The key is to try and get more revenue out of each customer," Benjamin says. Problem: Two our sales people are doing well, but the other eight are struggling. Solution: Get the stars to teach the laggards. Trent Leyshan, managing director of sales consultancy Boom Sales, admits the sales environment can be cut-throat and sales people can be very protective of their intellectual property - that is, their sales methods. But he says that good companies need to break down these barriers and forces top sales people to share ideas. "A lot of sales models can be very competitive, and sales people can operate in their own silos. To me that's counter-intuitive to a business that is genuine about doing the best by its customers." He suggests getting all sales people together for a brainstorming session to create a sales process that everyone can do. Naturally, this should be led by your sales stars, who will hopefully pass on tips and advice to help other members of their group start climbing towards their level. Problem: I don't know what my sales process should look like. Solution: Develop strategies to win, keep and grow accounts. Rob Hartnett, sales coach and founder of consultancy Selling Strategies, says that the sales cycle (from lead generation through to client management) generally stretches out when the economy slows as customers guard their cash, and it is during these times that a robust sales process becomes crucial.
  3. 3. He says a sales process really needs to have three phases - a sales process for creating an opportunity; a sales process for managing opportunities; and a sales process for retaining and growing accounts won. "A down economy is a good time to review your sales process to improve its effectiveness," Hartnett says. Problem. We haven't really had to sell for five years. Solution. Make every employee part of the selling process. Trent Leyshan was recently approached by an engineering firm that had a big problem - no-one in the organisation actually knew how to sell. They could work on tenders, they could manage projects, but the business just hadn't needed to be sales focused in the past. Now they needed help. Leyshan concentrated on getting the firm's top management to understand the importance of putting sales at the centre of the firm's strategy and to demonstrate that everyone in the firm had a role in selling, from the admin staff to the accountants to the project managers. "It's about getting everybody and the same page and getting everyone to understand how they engage customers." Problem: Customers don't seem to "get" what we do. Solution: Develop a clear sales message. Sue Barrett, head of sales consulting group Barrett, says that businesses must give a clear, concise message of what exactly their business does before they can even think of making a sale. "My basic solution is that you need to have a clear marketing message of intent. What do you do? How do people understand what you do? You need to sell the right way and to do that you need to ask what it is exactly that you do for people." "Being pro-active and talking to people is great, but if you're not clear about what you do then they're not going to understand." Problem: Where do I start with sales and marketing planning? Solution: Get your sales targets clear.
  4. 4. Barrett says that companies cannot afford to be complacent in a downturn and must figure out a plan to survive, and part of that strategy involves setting clear sales targets. "Look at the numbers to decide what you have to do. If you need X amount of revenue, then look at what your average sale is, and out of that ask how many sales you need to make each year, how many prospects do you need to talk to for sales and ask how many people you need to contact," she says. "A lot of people rely on websites and such, which is nice but they in themselves do not make you a sale. They keep your brand out there, but you have to pro-actively put yourself out in the market. "You need to look at details. Know what markets you need to be targeting. Who do you need to be in front of, and how often do you need to do that?" Problem: I need leads. Solution: Work your database. Debra Templar of retail services firm The Templar Group says the downturn is a good opportunity to work your database and contact those on your database who have served you well. "Remind them that you exist. Fill them in on any new products or services you're offering. I recently had a marriage celebrant decide she was going to re-contact her former customers... Not only on the off-chance they may need her services again but because they most likely could have friends and associates who might need her services." A bit of database pruning doesn't go astray, too. "Get rid of the dead wood and work hard on satisfying the needs of your top 20% of customers (most likely they're giving you 80% of your business)," Templar says. "Too many times we run around chasing new business and we forget about the 'gold' sitting in our databases. We assume our top customers will always be loyal and we forget to reward them for having got us where we are. They've brought us to the party; the least we can do is dance with them." Problem: I've got no money for sales staff incentives. Solution: Find other ways to reward your top performers.
  5. 5. Structuring incentives for your sales people is not easy, particularly in difficult economic times when the bonus pool is looking decidedly shallow. Colin Benjamin says that the obvious strategy is to move towards short-term sales commissions, but he says this can create a competitive and poisonous environment among your sales team and can lead businesses to focus too much on the short term. His solution is to use non-financial rewards in the short term, such as flexible working arrangements or time off for a special occasion. Then, depending on whether sales targets have been made, sales staff should get financial bonuses at the end of the year. Problem: My company can't afford to carry inventory. Solution: Use the 80/20 rule. Organisations that were selling out of inventory in the boom have found themselves with a problem - to free up working capital, there has been a need to run down inventory levels. Of course, this creates another problem - selling stuff that you don't have is a good way to annoy customers. Benjamin says it's time to employ what he calls the 80/20 rule. Concentrate on the 20% of your products that bring in 80% of your revenue and make sure that you always have these products in stock. You should be able to run down inventory levels across the rest of your range. Problem: Where should I aim my marketing campaign? Solution: Narrow your focus with micro marketing. Brian Walker, principal and founder of retail consultancy The Retail Doctor, says the days of the mass marketing campaign is fast diminishing. For example, sending a catalogue or flyer to every home in your area just won't work - instead, you need to target your marketing to the people who you know are actually interested in your product. He suggests any such campaign will need to be multi-disciplined; online, direct email marketing, and advertisements in appropriate media. A campaign based around a loyalty or rewards type program can be particularly effective, as you can be certain you are targeting those customers who want your goods. "It's about protecting the margin as best you can," Walker says. "Think of ways of giving them a reason to come to you."
  6. 6. Problem: How do I make sure my marketing gets people buying? Solution: Call your customers to action. Luke Bayliss from Sumo Salad says that companies need to focus on marketing that will deliver them a solid return on investment. "In these times you've got be careful where you spend your money. It's easy to not get a return on your investment and effectively waste your money, which is what you don't want to do right now when you're trying to stockpile cash," Bayliss says. "We're focused on return-on-investment type marketing, call-to-action type marketing messages that drive the revenue of the business. "Call-to-action is something that gives consumers a specific reason to buy. Not necessarily a discount, but points of differentiation like a special flavour for the month, or a new product. Simply from a marketing perspective, it's just about being pro-active and getting out there." Problem: It's expensive to buy media space for marketing. Solution: Negotiate with media buyers and grab a bargain. During a downturn, many businesses are making decisions based on fear that the economy will continue to deteriorate. But Chad Polley, marketing manager for video games retailer GameTraders, says that businesses should do all they can to communicate with ad agencies to pick up good deals while the time is right. "With the decrease in advertising spend across the country, media buying costs are coming down and there are some great deals to be had," Polley says. "During tough times consumers are more conscious of value and tend to spend more time at home, and TV spend can become increasingly effective. "Cement relationships with your media partners and advertising agencies, work with them for mutual benefit. If their business doesn't survive, you will be forced to find new partners, which could take significant time to get them up to speed." Problem: How will I know if my marketing campaign is getting a good result? Solution: Measure, measure, measure.
  7. 7. Researching your customers may seem boring, but Debra Templar says it is the only way you'll start making progress in the downturn. "You've just run an ad and an additional 100 people have come through the door on day 1 of the ad. Your marketing has worked - irrespective as to whether or not they have bought your product/service. You could easily have 100 people through the door and sell to one of them," she says. "You don't have a marketing problem, you have a selling problem. Before you run the ad again, you'd better get up to speed with sales techniques, otherwise you're going to get the same results again and again. The marketing worked, you and/or staff didn't. "The flip side of this is when you have 10 people come through the door and you sell to eight of them. There's nothing wrong with your sales and service skills - but the marketing wasn't the most successful. Measure, measure, measure - so you know where to put your future marketing spend. Problem: There are not enough customers for my store. Solution: Learn how sell to the ones you get. Retail expert Brian Walker hates it when downturn-hit clients tell him the reason they are struggling is a lack of customers. "There's no shortage of customers, you're just not selling to them." He says that on average just 20% to 25% of people who walk into a store actually buy anything, and 60% of transactions have no add- on component. Improve these ratios, he says, and you'll quickly solve the problem of falling sales. Walker says retailers should concentrate on pouring sales training into their staff to improve their product knowledge. Shop layout and ambience (music, lighting, décor) is important and stock management is crucial. "You can't sell what you don't have," Walker says. He also suggests emphasising those little extra things you do, such as a clothing shop that offers an alteration service. Problem: My sales pitch just isn't working. Solution: Understand the difference between a customer's need and their decision- making process.
  8. 8. Adrian McFedries, managing director of franchise consultancy firm DC Strategy, says that too many businesses spend too much trying to sell a product while ignoring how a customer thinks before they buy it. "Between 70% to 80% of businesses don't understand the difference between a customer's need and their decision-making process - that's the most important aspect of selling; full stop," he says. "How many times have you had a salesman ask you, ‘What's important to you when you buy?' They just crap on about functions and features and price, but don't really ask what is important." Taking the example of a mobile phone, McFedries says too many companies will try and sell a broad concept - the phone itself - without addressing the specific customer needs, such as USB connectivity, wireless functions, etc. "Remember that a customer doesn't always know what they want. More important is the process by which they make a decision. Your fundamental need may be a phone - that's not rocket science - but the process by which they decide which phone is the key to your sales strategy." Problem: I'm spending too long dealing with customers who never buy. Solution: Win fast and walk quickly. Rob Hartnett says timing everything right now. "The economy is very patchy at present. Not only are some industries affected by the economy more than others, there are many organisations that are being more affected than others." Sales people must work out who to stick with, and when to move on. "So you must work with active prospects who are buying and leave those prospects who are negative or shrinking to another time. That is not to say abandon them, just focus on the active accounts that are buying." Problem: We're only attracting rats and mice, not big customers. Solution: Identify your most profitable customers. During a downturn, business owners may become so desperate for sales that they throw themselves at anyone who comes along. But Adrian McFedries says this isn't the right approach.
  9. 9. "Clearly at the moment the key topic for businesses is cashflow. Businesses in this environment have a set cost base, so they have to do what they can with sales. What they need to do is look at their existing customer base. "So don't spend too much time on customers that aren't profitable," he says. "Identify the most profitable customers and remember that not all customers are created equal. A lot of customers are unprofitable, and others are a pain in the arse, but you need to spend time on the painful ones and not ignore them because they may the most profitable." Problem: My customers aren't coming back. Solution: Give them a reason. When customers are strapped for cash, it's no surprise they often won't return to favourite destinations, but Paul Greenberg, co-founder of online retail warehouse Deals Direct, says that you need to give them a reason. "The best aphrodisiac for a new sale is an existing sale. It sounds obvious, but we hadn't done it, so now we put an offer on the sale that provides an incentive or deal on the next order. "So in many ways I see a parcel going out as an opportunity to get another sale. The logic is simple - you've got a parcel in super quick time, and you think it's great, and then when you give them something extra it only helps your business." Problem: Should I start selling in a new area? Solution: No. This is not the time to experiment. Many businesses see expanding their product range as way to survive the downturn, but some experts are saying now isn't the right time to be experimenting with your core business. Chad Polley at GameTraders says that businesses should have a clear focus and shouldn't divert from a business plan. "It all comes down to strategy and what you achieve. We focus on the most profitable areas of our business. Continue working on areas of profitability, focus on your core business, and don't focus on anything new and experimental.
  10. 10. "There's always going to be times to take risks, and we do, but we're focusing on the fundamentals at the moment, and that's where we stand." Problem: I am worried about getting through this downturn. Solution: Remember - basic principles hold true, whatever the environment. Small businesses may be tempted to change their strategy in a downturn, feeling pressured by ominous economic forecasts and fewer people walking in the doors. But Richard Uechtritz, chief executive of JB Hi-Fi, says that businesses shouldn't be scared into changing their marketing plans if they are already experiencing success. "The basics of retailing, sales and marketing are the same in a downturn. People think you retail differently in many aspects. I see it all the time. People say "we're retailing for the downturn" - there's no such thing. Retail principles hold true whether it's in good times or bad times. "There is no difference whatsoever." Related Items :  Veteran ad man John Ford to resurrect the collapsed branding agency The One Centre  I want to stab my business partner to death with a pen. Help!  10 sales and marketing secrets of the Smart50  Coffee is for closers  Affiliate networks and advertisers caught up in collapse of marketing services company Companies : JB Hi-Fi, Deals Direct, Gametraders People : Luke Baylis, Paul Greenberg, Sue Barrett         
  11. 11. Comments (2) ... written by Quentin Brown, April 30, 2009 Great article however I would have to disagree with Trent Leyshan about getting your top sales people to help the ones not doing so well. Having tried this technique previously I found that my top sales people got tied up a lot with those that were not achieving. It sounds good but sales people are not trainers. You want to get your top sales people out there selling more and not bogging them down with underachievers. A better idea is to take those underachievers and get management or a trainer in to go over their presentations etc and improve their sales technique. I never take the ones that are generating the income for me anymore away from their job. Also never put them in management. They are sales people and thats what the do. Quentin ... written by BeDifferent BeDifferent, May 04, 2009 I really like the article. I think if your company is struggling in raising sales, you should develop great marketing plan to get ahead of your competition. Great marketing website I came across lately was http://www.waam.com.au/ , if your company is looking for a wide range of all kind of marketign solutions, I think WAAM would be more than helpful as they have very extensive services portfolio.
  12. 12. Profitable growth The point is not to grow a business, but rather to grow a profitable one, And to do that a business needs firm foundations, inspirational intentions, a strategy to stick to and execution, execution, execution. Julia Bickerstaff will look at some of the very real challenges to profitable growth and provide some practical advice. Author: Julia Bickerstaff on 28 July 2010 Lasts 5 posts  Our partner has just changed the rules. Help!  We outsource our marketing and CFO functions but my mentor thinks we are now too hands off. Help!  Why is our business only barely profitable?  How do we say no to work?  Should I turn a difficult client away? We are growing fast and need cash but are reluctant to saddle ourselves with big borrowings. What can we do to free up cash from within our business? A big topic of conversation at the moment is the availability, or lack thereof, of bank funding for small businesses. While the banks are saying that they are back in the lending game there are plenty of small businesses struggling to access funds. And it's a problem because growing a business requires a fair cash injection! Interestingly though many businesses could free up cash from within their business, if they only knew how. To help, I suggest that companies think about looking inside their businesses for cash under three headings: strategic, tactical and housekeeping. Strategic Dell famously transformed its business 20 years ago by custom building for consumers. The clever part was that by taking cash in advance and paying their suppliers in 60 days they were able to reduce their cash cycle from 63 days to negative 21 days, thus freeing up an enormous amount of working capital. Small businesses can change their business models to free up cash too. It's certainly not easy to and I acknowledge that it requires a lot of imagination and innovation but if you at least put it on the agenda you give yourself a fighting chance of finding a solution. Tactical This is about making a change to the way you do business but is not as radical as the business model overhaul above. A good example of tactically freeing up cash is the professional services firm
  13. 13. which moved its billing day forward by two weeks. This meant that the firm's invoices got into their clients' payables ledger before the month end EFT run and a good proportion thus got paid a whole month sooner. Tactical measures are not that hard to come up with but they are rarely given enough senior management thinking time. Again, get it on the agenda Housekeeping The third source of freeing up cash is basic housekeeping such as invoicing on time, chasing debtors, running credit checks, sticking to credit limits and negotiating supplier terms. A few weeks ago I wrote about discipline in business and Ireferred to the problem in US hospitals where the lack of hand washing is a major cause of death. The parallel with small businesses is that lack of basic debtor management is the death knell. Basic housekeeping (or hygiene if you will) is easy to implement, but let's face it, it's unexciting. So a good idea with housekeeping is to focus on it intensely for a quarter and raise its profile as a whole business priority. Freeing up a decent amount of cash from within a business to fund growth may be quite doable, but you need to harness the collective intelligence of your team. You can't just leave it to the finance team; it's a whole business issue.  home  search Should I cut some customer support costs? Author: Julia Bickerstaff on 16 June 2010 Lasts 5 posts  Our partner has just changed the rules. Help!  We outsource our marketing and CFO functions but my mentor thinks we are now too hands off. Help!  Why is our business only barely profitable?  How do we say no to work?  Should I turn a difficult client away? We are short of cash and my accountant is suggesting I cut some customer support costs. I'm not so sure. Help! Whatever size business you have there will always be pressure on resources and tricky decisions to be made. Should we spend this dollar here or there? Should I spend my hour doing this or that? Of course when a business is growing the pressure is even greater; growth sucks cash so a dollar saved in the back office is an extra dollar that can be spent on much needed inventory. Under pressure it is easiest and most satisfying to cut costs you can measure. One less person in customer support is an immediate saving and everyone can see the positive impact on the bottom
  14. 14. line. But what of the longer impact of that cost saving? Okay, so it's taking slightly longer to respond to customer queries, but do customers mind? Now that's a much tougher metric to measure. An online business - code name Ecru - was short of cash. Needing to make a bulk purchase of product and struggling to raise finance they decided to chop some internal costs. The number crunchers reviewed the p&l and saw that the customer support department was quite costly to run. Investigating further they noticed that because the company was small and conscientious when fulfilling customer orders, customers rarely had cause to contact them. Scrapping the customer support phone number and replacing it with email-only seemed logical. The new product was a great success but the increase in sales volume caused headaches behind the scenes. A few customer orders went awry and Ecru started receiving customer complaint emails. Overwhelmed with new orders to ship and old orders to sort out, the company fell behind answering emails. Rather than hire more customer service staff they decided to reframe the expectation of an immediate reply and posted a note on it's website stating: "The usual response time is 24 to 72 hours". But the problems kept on coming and it was now taking way longer than three days to reply to emails. Again they decided against hiring more staff and the lone customer service guy thought – erroneously - that they could placate customers with the following email auto-responder: "Due to substantial increase in the demand we are currently experiencing a very high volume of enquiries. As a result it might take longer than usual to reply to your email". Unsurprisingly customers weren't comforted by the suggestion that the company was too busy servicing new customers to look after the unfulfilled ones. For a time Ecru management just didn't realise how serious the customer questions and complaints were, rather they were simply delighted with the volume of business being done. But then the trickle of notifications from credit card companies - that customers were seeking to have their payments to Ecru reversed - turned into a flood. The finance department told the boss who enterprisingly Googled "Ecru complaints". He was stunned to find pages and pages of customers venting their frustrations on websites such as "complaints board" and "ripoffreport" each one saying "Don't buy from this site". On reflection the boss realised that not a single member of the Ecru management team had ever looked at a customer complaint email. And when he spoke to the solo customer service rep he confessed to having become immune to customers' tirades and simply replied with standard 'not-our- fault' emails. This was over a year ago and Ecru is still down the hole it dug itself. Plenty of things went wrong at Ecru and there are lots of places to point the finger. But it all started with a false economy. Keeping the behind-the-scenes costs low may seem like a good idea but a number cruncher's solution is not necessarily a good business one.  home  search
  15. 15. How can we keep on top of reviewing our pricing? Author: Julia Bickerstaff on 24 February 2010 Lasts 5 posts  Our partner has just changed the rules. Help!  We outsource our marketing and CFO functions but my mentor thinks we are now too hands off. Help!  Why is our business only barely profitable?  How do we say no to work?  Should I turn a difficult client away? We're not very good at regularly reviewing on our pricing, how can we keep on top of it? I have been doing a survey, it's a small sample and terribly unscientific but the results are unanimous so I feel confident about sharing them. My survey population was the 25 business owners I had most recently spoken to and the single survey question I asked was a simple one: "Do you regularly review your pricing?" I wasn't interested in wishy-washy answers so I gave my delightful respondents the choice of answering just 'yes' or 'no'. And guess what, 100% of my small population, when forced to give a one-word answer, said no. Of course, they were itching to say more than 'no' and most accompanied the word with an embarrassed giggle, an eye roll and a 'but...' But there we have it, enough evidence - for me at least - to conclude that small- and medium-sized businesses are woeful at keeping on top of their pricing. We all know how important pricing is, so no need to revisit that here, but why then are so many businesses letting it slip off the agenda? The answer I think lies in the fact that no single person is made accountable for it. Pricing is an issue that crosses finance, marketing and strategy. And because it's a complicated and challenging topic you rarely find an individual putting up their hand to lead it. By default it becomes a 'team issue' and there you have it - if everyone is accountable then no one is. So my tip this week is that you appoint someone to the prestigious post of "Chief of Pricing" (or COP for short). Of course, if you are the only person in the business this will naturally fall to you, and in many cases it does remain on the list of CEO roles, but not always. Importantly the role of Chief of Pricing doesn't mean that that person actually has to do the work around pricing but rather that they ensure that the business keeps pricing top of mind. All this essentially means is that the business regularly has access to, reviews and considers the mountain of data that contributes to pricing decisions. Regular readers of this column will know that I am an advocate of monthly and quarterly strategy meetings. Pricing should always be on the agenda. That way the Chief of Pricing will always be required to have something to report, thus rendering your business proactive on the pricing front.
  16. 16. Best of all, you will outsmart your competitors and forever more be able to answer the question: "Do you regularly review your pricing?" in the affirmative.  home  search We have opportunitiesbut are low on revenue. Help! Author: Julia Bickerstaff on 13 January 2010 Lasts 5 posts  Our partner has just changed the rules. Help!  We outsource our marketing and CFO functions but my mentor thinks we are now too hands off. Help!  Why is our business only barely profitable?  How do we say no to work?  Should I turn a difficult client away? We have a great business and many opportunities on the go but we don't seem to turn any of these into revenue. Help. A business I visited this week reminded me of an observation made by David Packard, the co- founder of HP. He said that a great company is more likely to die of indigestion from too much opportunity than starvation from too little. The CEO of the company I visited – let's call it Redco - was a little despairing. "How is it possible", she said, "to have so many opportunities and yet finish the year in the same place as we started it?" Redco had done so many things right. Over it's journey from start up to established business the company had matched quality work with clever marketing and as a result attracted many opportunities. Problems started to arise however when the sheer number of opportunities started to overwhelm the business. Redco literally pursued every opportunity that presented itself, and - as is not uncommon - the new opportunities felt a little more exciting than the existing ones and so attracted more time and energy from the employees. Consequently, at the end of 2009 the company was sitting on a mass of partially completed projects and not a single finished one. Looking ahead at 2010 the CEO could see a crisis looming. Unless a few of the projects were actually finished and started to generate income, cashflow was going to become an issue. The business needed to make a tough decision - which projects should they run with? And that is when the CEO realised that the business had never really adopted a process of evaluating opportunities. Because the investment required for the majority of projects was in the
  17. 17. shape of time - overworked employees - rather than money, the magnitude of the investment was largely invisible. And because the management team couldn't see what they were spending on the projects they didn't think to evaluate it. Right now Redco is madly analysing the time cost of its projects and doing return on investment calculations. So if you, like Redco, have a tendency towards a "never turn down an opportunity" mentality, then get smarter and start evaluating your opportunities. You want to say 'no' more than you say 'yes'. If your business is good enough to attract lots of opportunities then you won't starve by pursuing a few less.  home  search I’ve been reducing my prices in the hope of selling more of my services but it’s not working, whynot? Author: Julia Bickerstaff on 16 September 2009 Lasts 5 posts  Our partner has just changed the rules. Help!  We outsource our marketing and CFO functions but my mentor thinks we are now too hands off. Help!  Why is our business only barely profitable?  How do we say no to work?  Should I turn a difficult client away? The great temptation when your sales volumes are low is to lower your prices. Last week I was talking to a company, whose business could be loosely described as selling media services to other businesses. Sales volumes are low and the business owner had, like many business owners before him, lowered prices in the belief that sales would increase if he made the service more affordable. But will it work? Price has much in common with a misfit child. It is routinely blamed, rarely responsible and largely misunderstood. Whether or not a lower price will result in an increase in sales depends (among other things) on who your buyer is. There are four types of buyer and, as you will see, the price button doesn't need to be pushed with all of them. The value buyer
  18. 18. These are the guys who want to know how your product can add value. They are very analytical and when you meet them they can come across as cold. If you are selling something that will enhance the efficiency of their business they will want to know exactly how many dollars they will save if they use your product. And if you can't give them that detail then you are wasting your time. These guys don't care how cheap your product is, they just want to know what it is going to do for them The relationship buyer These customers want to be taken care of. They are looking for a supplier who they can trust to bring them the right products because they don't have the expertise to do the evaluation themselves. If you work with these guys they will want you to love their business just as much as they do. These guys are friendly but cautious and it takes a long time to earn their trust. The worst thing you can do to a relationship buyer is to give them the hard sell. Talk too much about price and they will flee. The price buyer These guys care only about price so you can forget tempting them with value-adds or trying to build a relationship. They are very aggressive and see everything as a commodity. The trouble with these guys is that they have no loyalty, when a lower cost provider comes along they will drop you instantly. The teaser These guys just love to play games. They will flirt with you to make you think they are a relationship buyer, then they will get all price conscious to make you think they are a price buyer. Just when you get close to agreement on price they will start asking you to add bells and whistles into your service because now they want value. For these guys purchasing is sport and one of their favorite games is pitching top quality businesses against lowest cost players just to see what happens! The media business I mentioned earlier slashed their prices before doing their homework. A business of their size simply doesn't have the right internal cost structure to make money out of selling to a price buyer, and, to be honest, the team is hopeless at playing games and so should avoid the teaser buyer. What the business is good at though is selling to relationship buyers and it can learn how to better sell to value buyers. My advice to the business was this, when targeting a:  value buyer invest more time working through the numbers to demonstrate the quantitative benefits of the service;  relationship buyer be gentle and earn their trust by doing a few small bits and pieces of work for them.
  19. 19. And my last piece of advice was to put their prices back up!+ + I've done the budget for 2010, what else should we do in preparation? Author: Julia Bickerstaff on 20 May 2009 Lasts 5 posts  Our partner has just changed the rules. Help!  We outsource our marketing and CFO functions but my mentor thinks we are now too hands off. Help!  Why is our business only barely profitable?  How do we say no to work?  Should I turn a difficult client away? The other day an enormous Excel spreadsheet arrived in my inbox. "Here's our annual plan," announced the email proudly "what do you think?" I looked at the mass of numbers; the only words I could find were the column titles. "I think this is the budget" I replied. "You're right, it is the budget. Our annual plan is to make the budget." "But what steps are you actually going to take to make the budget?" "Oh, not sure yet." It's May. CFOs are buried in 2010 budgets. CEOs are muttering about containing costs and steadying revenues. Plans are being born. Or are they? A budget isn't a plan; it's simply a financial interpretation of a plan. If you are serious about making 2010 a good year, you need to be serious about planning. It's not too late to get it right, but you do have to start now. Here's how:  Book an annual planning day in the diary of your whole management team. And don't let anybody wriggle out; despite what they may think, nobody is too important to the daily running of the business to attend this session.  Hold the annual planning day offsite. If you don't do this you will lose half the team to their computer. In my experience an offsite held in a little cottage half way up a mountain works very well - not least because the iPhone/BlackBerry doesn't. The best offsites start with dinner and a sleep over the night before, thereby getting all the social stuff done before the day itself.  Start the planning day with a recap of the business foundations (purpose, passion, profit driver, brand promise and core competencies) and strategic intent ("big hairy audacious goal", five year targets). If you are a bit rusty on these I suggest you hold a strategic planning day in advance of the annual planning day to work these up.
  20. 20.  I think a high level SWOT analysis is a useful tool next. Not only does it get everyone in the right frame of mind for planning the business, but it also gives people a chance to air their concerns.  A review of the year just gone is a useful next point on the agenda. But just cover off three highs and lows. If you want to do this in more detail than I suggest you do so over dinner the night before. Now we are into the planning bit. First up I would start with the question "what do we want to achieve by the year end?" While you want to end up with measurable goals out of this section, leave it quite open to begin with. You want to unearth goals such as "new product X on market" which you won't do if you head straight for goals around revenue, profit and ROI. Decide on, say, five measurable goals. Maybe three around the financial metrics (revenue, profit, working capital) and two around something that is important to the future of your business but will not drive profit this year (such as foot in the door with "A" list clients/new geography, newproduct). Once armed with the goals, spend some time nutting out the five strategies you will adopt to get there. Remembering that after the planning day there will be no action unless someone is held accountable, I would allocate an accountable person to each strategy right now. Next take the five core strategies and work them up into tactics for each quarter. You will probably want to focus your effort on tactics for quarter one, just noting for future quarters when you will start those things that will be kicked off later in the year. You can complete the tactics for the subsequent quarter at your next quarterly meeting. You do have one, don't you? At the end of the planning day you should have agreed on five annual goals, five core strategies for the year, and a handful of tactics for the first quarter. You can quickly document this in a one-page spreadsheet. You are probably now thinking that this is a lot to cover in one day, and I tend to agree. I regularly recommend that the "annual planning day" be a two-day event but I also realise how hard it is to get the management team away for one day, let alone two, so it's your call. What next? Well there is much to do to bring your annual plan to life in the business. But first you can give it to the CFO so that he can work on creating a budget that reflects the plan, rather than a plan that reflects the budget. A Off-Shore Bank is a bank located outside the country of residence of the depositor typically in a low tax jurisdiction that provides financial and legal advantages. These advantages typically included : 1. Greater Privacy 2. Low tax or no taxation 3.Easy access to deposits 4. Protection against local political or financial instability Off-Shore Banking has often been associated with underground economy and organised crime,
  21. 21. via tax evasion and money laundering, however legally off-shore banking does not prevent asset from being subject to personal income tax on interest.Except from certain persons who meet fairly complex requirement, the personal income tax of many countries make no distinction between interest earning in local bank and those earned abroad. Person subject to US income tax are required to declare on penalty of perjury, any off-shore bank account which may or may not be numbered bank accounts they may have. Although off-shore bank decide may not to report income to other tax authorities, and have no legal obligation to do so as they are protected by bank secrecy, this does not make the non declaration of the income by the tax payer or the evasion of the tax on that income legal. Following September21, 2001 there have been calls for more regulation on international finance, in particular concerning off shore banks, tax havens, and clearing houses such as clearstream based in Luxembourg being possible crossroads for major illegal moneyflow.

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