DriveYourSucce$$

Salespeople Who Can’t Say No and the Consequences that Follow

What are the consequences of a salesperson who just can’t say no? Surprised to hear that the best salespeople often have to say no in order to win business? Surprised to hear that simply saying “yes” isn’t the best course of action when closing orders? Don’t be. It’s easy to say “yes” when working with customers. Yes is the easiest of answers because it is the simplest way to please a customer. It’s less confrontational, easier to say and is often seen as the surest way to keep customers engaged. However, sales success has never and will never, just be about saying yes. Sometimes, salespeople must be able to say no. In fact, not saying “no” means the difference between business won and lost and ultimately means the difference between a happy or unhappy customer.

Unqualified Marketing Leads: The Consequences and Outcomes

What exactly does a qualified marketing lead look like to your enterprise? As an enterprise focusing on business to business sales, should that definition be based on your potential customer’s size? Should it be structured around the products they buy or their geographical location? Or, should you also consider their technical requirements and the amount of money they could spend? Properly answering these questions requires you first start by segmenting your customer base into their unique business models, strategies and approaches. Every customer falls under a different customer segment, and each customer segment fills a different role in a given industry or market. Understanding these unique customer segments allows your enterprise to immediately identify qualified and unqualified prospects. If not, then you’ve forever set the table for producing one unqualified marketing lead after another. So, what are the consequences and outcomes of not producing qualified leads because your marketing strategies lack focus and direction?

Redefine Sales Excellence in Today’s Constantly Changing Marketplace!

Sales key performance indicators (KPI) must now match the complexities of today’s global marketplace. Gone are the days when small businesses could measure their sales team’s performance solely by the amount of revenue or gross profit they generated. No longer are smaller enterprises able to rely upon these antiquated and outdated performance measurements, only to reconcile their true costs of sales at a later date. Granted, the value of a sale and its corresponding gross profit will always be important. However, equally important is the type of product the team sells, their sales forecast accuracy, their ability to liquidate slow moving inventory and ultimately, the team’s ability to help the company reduce its cost of capital. It's time your small business track these very same measurements!

Defining Customer Benefits in Supply Contracts: Essential Negotiation Strategies

As the vendor in a supply contract, how would you define the benefits of these contracts for your customer? Would you focus solely on the savings your customer enjoys by committing to a long-term contract, one where your enterprise is able to reduce your customer’s pricing through their economies of scale? Or, might you focus more on how these contracts help your customer reduce their turn times on finished goods? Most vendors assume these are their customer’s main benefits. However, other vendors understand that there are additional benefits, ones they can outline with their customers in order to strengthen their own negotiation position. They define these additional benefits in order to accentuate their company’s value proposition. So, what are these other benefits and how can your enterprise use them to strengthen your negotiating position?

Do Your Marketing Plans Stretch the Truth Just a Wee Bit?

There are reasons marketing and sales go together. Both are built around business development. Both aim to grow revenue and both are known for stretching the truth in order to pique customer interest. However, what happens when marketing goes too far? It’s not uncommon for marketing to over-promise, or to use one too many prompts to illicit a buying response. What might this involve? Well, it could include an email or direct mail campaign promising immediate availability of product. It might involve placing information on the company’s website about performance, or about inventory levels that may or may not be accurate. After all, what’s wrong with stretching the truth just a bit? Surprisingly, these situations have a way of building upon themselves until all that’s left is an alienated customer base.

Price Skimming Sales Strategies: Remove Middlemen in the Value Chain

When someone talks about price skimming, what exactly are they referring to? Are they referring to a pricing strategy, or about focusing on a particular type of customer, or both? In order to answer these questions, think of how some companies are able to get a higher price for their product by focusing in on a couple of unique customer segments. They have a product offering whose cost-per-use benefits are clearly ahead of their competition's offering. However, because they operate in a price sensitive market, they focus on a specific customer segment in order to get the highest possible return on sales. Therefore, it’s a pricing strategy that is predicated on appealing to the needs of specific customer segments. So, how does this work?

Today’s Sales KPI Must Measure Inventory & Receivable Financing Costs

It’s not uncommon for companies to go sales KPI crazy. After all, there are a number of ways a company could assess the value of a given sale. However, if there was ever one sales key performance indicator every company should use, it would most certainly have to be those benchmarks associated with reducing the company’s inventory and receivable financing costs. Why should companies use these two financing costs to measure the value of a given sale and the overall performance of their sales team? Simply put, these financing costs determine the gross profit on sales, and in today’s economy, these financing costs are substantial.

Lower Customer Acquisition Costs With Analytical Marketing Practices

Can marketing be used to lower a company’s costs of acquiring new customers? Can marketing justify the universal claim that it costs companies anywhere from three to four times more to find new customers, than to retain existing ones? Well, the simple answer to both of these questions is a resounding yes, it can. Most companies hear that it costs them more to find new customers, than to keep existing ones, and chalk up this statement as just another erroneous business cost that can’t easily be quantified, or one that is merely a soft cost not to be concerned about. Unfortunately, for them, and fortunately for you the reader, they’re dead wrong.

A TOWS Analysis Can Make Your First Quarter Your Best Quarter

Can the TOWS analysis help your company navigate the upcoming year so that it's well positioned to tackle whatever challenges await? No doubt you want to make your first quarter your best quarter, but how does the TOWS analysis go about laying the groundwork to start every year off on the right foot? More importantly, how does this planning tool help define last year in terms of what went well, what didn’t go well, what market changes occurred and what your enterprise must do to replicate success from your first quarter, and every quarter thereafter? We’ll answer each one of these questions in detail by providing insight into how your company can use the TOWS analysis to define action plans, set priorities and lay the foundation for a successful new year. So how can your company use this strategic planning tool?

Sample Kan Ban Contract: Finished Inventory, Semi-Finished Inventory & Raw Materials Inventory

Today I decided to include a sample Kan Ban contract that specifies the liabilities for both a buyer and supplier as they pertain to the finished inventory, semi-finished inventory and raw material inventory within the agreement. These contractual agreements work when both parties clearly define these aforementioned liabilities and are willing to negotiate in good faith. However, it’s essential that these agreements are signed by both parties, as the amount of inventory needed to make these contracts work is quite substantial. Use properly, the Kan Ban agreement can help reduce the buyer’s inventory holding costs, while providing the supplier with consistent manufacturing volumes.

Defining Strategic Partnerships Between VARS, Integrators & OEMs

Is your business that of a VAR (value-added reseller) whose strength lies in how it manages large amounts of inventory? As a supplier of time-critical parts, are you looking to enter into a strategic partnership with your market’s largest OEM (original equipment manufacturer)? Or, are you an integrator servicing the equipment manufacturer’s end-user customer base, a customer base that forces you to rely upon the VAR for spare parts, and the OEM for technical expertise? Regardless of whether you find yourself in the middle as the integrator, as the VAR servicing the OEM’s customers, or as the equipment manufacturer itself, there are opportunities for each party to enter into a strategic partnership. So, what would one of these partnerships entail? More importantly, what must you do to ensure your partnership addresses your company's specific needs?

Inbound Marketing VS Outbound Marketing for Small Businesses

As a small business owner, do you sometimes find marketing to be somewhat overwhelming? Do you often question the wisdom of investing capital in approaches that are hard to track and whose results are hard to nail down? More importantly, have you relegated your marketing strategies to coming up with a new brochure, catalog, attending a couple of tradeshows & conferences and hoping that a onetime revamping of your website and company blog will suffice? If you’ve answered yes to these aforementioned questions then perhaps it’s time to understand inbound marketing vs. outbound marketing and why one has taken over the other in terms of increasing marketing return on investment. So, which one is it and what should your small business concentrate on?

VOC Data and Simplified Kano Analysis Steps for Product Managers & Marketers

If you find the above title a little intimidating, don’t worry. We’ll simplify this entire process. Using voice of customer (VOC) data techniques and employing a Kano analysis can be daunting. However, while the tasks themselves are involved and the process of gathering data somewhat laborious, they are very straightforward methods of quantifying those product features and benefits that customers want, versus those they don’t need. Every company has its internal and external customers. Each push their own solutions and their own initiatives. As a product manager, your must isolate those VOC data points that dictate what your product must have for market entry.

Bad Credit Customers: The Cure for a Cash Strapped Business World

Conventional wisdom dictates that bad credit customers are just that, bad. After all, it’s nearly impossible to plan inventory purchases against customers who might be here today, gone tomorrow. Most companies shy away from customers who must prepay orders, or those customers with a less than stellar credit rating. However, there is another school of thought that espouses pursuing bad credit customers at all costs, especially in cases where cash flow is a going concern. 

This doctrine dictates that in a cash strapped business world, where credit is hard to come by and delayed customer payments are the norm, companies should refocus their efforts on customers who’ll reduce their receivables financing costs and improve their cash position. So, given the reality of today's economy, should your company pivot and start looking for customer who must prepay orders?

Benefits of Customer Consolidation Through Multiple Distribution Channels

Most businesses have heard of the benefits of vendor consolidation, but few have considered the benefits of customer consolidation. The approach is to reduce the customer base in order to reduce the company’s sales transaction costs. The mechanism that makes this possible is to use multiple distribution channels to market, or multiple sales agents. This is often a goal of companies whose costs on sales transactions are simply too high, whose manufacturing is fractured by infrequent customer orders and cyclical demand, or whose customer volumes are too small to service. Imagine the costs of selling 3 units to 100 different customers, as opposed to selling 300 units to a single customer. Obviously the second transaction has lower costs and is therefore easier to manage. So, how can companies benefit from customer consolidation through multiple distribution channels?

Sample Customer Scorecard Excel Sheet: Grading Your Customer’s Value

What factors do you consider when it comes to grading your customer’s value to your business? Like most enterprises, does yours simply base this value on the amount that customer spends? Or, do you base it on other criteria, in addition to how much they spend? To help you answer these questions, I’ve decided to include a sample customer scorecard excel sheet that not only accounts for how much your customers spend, but also takes into consideration their payment habits, their contribution to your inventory turnover rates and their impact on your inventory and receivables financing costs.

Sales Negotiation Training: Never Sell on Price, Sell Savings & Solutions

When discussing sales negotiation training with my customers, I always tell them to never sell on price, but to instead sell savings & solutions. Now, most business professionals are convinced that salespeople sell on price because they lack the ability to sell properly. However, in many instances it’s the company itself that forces the salesperson to sell on price. This often happens because the company views this approach as the only way to guarantee the order. Unfortunately, lowering the price does nothing more than lead to the dreaded price war, and nobody wins a price war! Declining prices do nothing more than reduce gross profit margins and force your company to pursue a portion of the market that nobody wants. So, what can your business do to correct this?

B2B Customer Management: Moving Customers up the Value Scale

In my recent post entitled B2B Customer Management: Determine a Customer’s True Value, I covered four criteria companies could use in order to determine the true value of a customer. These four criteria included, 1) how much the customer spends, 2) the products the customer purchases, 3) the customer’s payment habits and 4) whether the customer helps to increase the company’s inventory turnover rates. The company would apply a grade to each of these criteria and then use a weighted average score to determine the customer’s true value. The focus of this post is how a company can move customers up the value scale.

B2B Customer Management: Determine a Customer’s True Value

What are the steps needed to determine a customer’s true value? How does a company distinguish between valuable customers, opportunistic customers and ones that are too costly to service? Is this decision based on the amount the customer spends, the products they buy, how fast they pay their invoices, or how often they consume inventory? Well, when it comes to B2B customer management, each of these criteria plays a role in determining whether that customer is too costly to service, whether they should only be viewed as an opportunistic sale, or whether they are the kind of customer the company should build its business around. The idea is to grade each of these criteria in order to provide a weighted average score, a score that helps to distinguish the customer's true value.

Small Business Marketing: Simple Steps to Determine Current Market Share

Earlier this year I put a post on this blog about the importance of forecasting market share in a growing market. Today, I thought I would go back a step and expand on small business marketing by outlining some simple steps to determine current market share. It’s a fairly straightforward process and doesn’t involve any convoluted calculations. In fact, determining market share can be summarized in three simple steps. First, the company would need to determine its current market size. Second, it would have to account for the number of customers it is currently servicing and third, it would have to determine how many customers remain and what potential they represent to the small business. It really is that simple. So, how can determining market share be condensed into these three easy steps?

Commitment to Dell’s “Push-Pull” is Paramount to Success

If you’re going to run Dell’s “Push-Pull”, then you must commit your company's resources to making it a success. Dell’s strategy isn’t merely an inventory and supply chain approach, but also a doctrine that dictates how your company goes about manufacturing its products, and what your marketing & sales strategies must be focused on to secure consistent customer demand. While an argument can be made that the Push-Pull strategy bridges the gap between Min/Max and JIT, it would be wrong to assume that it’s only focused on how a company manages its inventory. To make this strategy truly successful requires you commit yourself to a multipronged approach and one that impacts your company's entire operations. So, what does it take to make Dell’s “Push-Pull” a success?

Manufacturing Essentials: Marketing to OEMs with Dell’s Push-Pull

What are the most proactive marketing strategies for manufacturers selling to OEMs using Dell’s Push-Pull? When answering this question, think of how manufacturers must meet the OEM’s unique requirements. Pass initial qualification trials, secure approved vendor status and then move forward with providing the original equipment manufacturer with consistent, on time delivery of components and finished goods. The conventional approach was always to build first and sell later. However, this simply isn’t conducive to meeting a customer's specific requirements, requirements that often change at a moments notice. So how does Push-Pull empower manufacturers to better handle the customized needs of OEMs and what role should the company’s marketing play?

Strategic Business Planning: Top 5 SWOT Analysis Applications

In my recent post entitled Strategic Business Planning: Use TOWS to Move SWOT to an Action Plan, I outlined how the TOWS analysis can turn the items under each SWOT heading into an actionable plan. The approach is to be succinct, to the point and not go overboard in assessing the four quadrants of the SWOT analysis; Strengths, Weaknesses, Opportunities & Threats. With this post I wanted to go over the top 5 applications for the SWOT analysis with respect to the content on this blog. Suffice it to say, this strategic business planning tool has multiple applications.

Sales Negotiation Training: Creating a Sense of Urgency With Customers

 
Can a salesperson create a sense of urgency with customers and use that urgency to incentivize them to place an order? In fact, they can. However, there are some conditions that must be adhered to. For instance, laying the groundwork for that “sense of urgency” must be subtle and not so direct or confrontational that it makes the customer feel uncomfortable. Otherwise, the salesperson risks overplaying their hand and if the customer balks, then the salesperson has few options to explain how that ‘urgent’ situation, wasn’t entirely urgent. Therefore, when it comes to sales negotiation training, what must salespeople do when trying to create that sense of urgency with customers?

Critical Steps to Determining Your Financing Cost on Sales

What exactly do companies mean when they refer to their high financing costs on sales? To answer this question, think of the company’s financing costs to support its inventory and its financing costs of supporting its receivables. The longer it takes to sell inventory, the higher the costs. The longer it takes a customer to pay their invoice, the higher the costs. These aren’t soft costs by any means, but real, identifiable and quantifiable costs that directly impact a product’s gross profit and the company’s bottom line. So what are the critical steps to determining your financing costs on sales?

Higher Commissions for Prepaid Orders & Faster Turnover Rate Products

Most companies ignore the benefit of paying a higher commission to salespeople for securing prepaid orders and focusing on faster turnover rate products. These companies simply ignore their daily cost of money and its impact on the product’s gross profit. They fail to account for the company’s financing costs of inventory and the company's costs to finance receivables. For instance, if the product is retained for months on end, the salesperson still gets the same commission. Consequently, if a customer takes 30, 60 or even 90 days to pay an invoice, again the salesperson still gets the same commission. However, doesn’t it just make sense that the company’s sales team should be compensated for ensuring that inventory moves quickly and that customers pay faster? It most certainly does!

B2B Sales Strategies: Using Reward Programs to Track Market Pricing

In one of my earlier posts entitled Sample Back-End Rebate Excel Sheet for Customer Retention , I showed how a back-end rebate and reward program could be used to improve customer retention in B2B sales. While most of us associate these reward programs with larger consumer focused companies, the right back-end reward program can improve customer retention and dramatically upgrade your B2B sales strategies. More importantly, using customer reward programs will help your business better track market pricing, thereby allowing it to remain one-step ahead of your competitors.

Sample Back-End Rebate Excel Sheet for Customer Retention

It simply doesn’t matter what type of market your business operates in, if you aren’t doing everything you can to retain customers, you’re dead in the water. It's just that simple. Customer retention is an essential part of business growth. It’s one thing to capture and close on new opportunities, but it’s something else entirely to retain business for the long-term. With this in mind, I thought I would provide a sample back-end rebate excel sheet for customer retention. The process is simple and straightforward and is ideally suited for B2B sales.

Use Stage-Gate Process to Determine Best Marketing Strategies

Can you use the Stage-Gate process to choose a marketing plan? Well, if you’re new to DriveYourSucce$$, then you may not have read the numerous posts where I’ve advocated matching a company’s inventory approach to its business model. Well, the same rule applies to deciding upon your company’s best marketing strategies. In this case, match your marketing strategies to your business model, your industry and your customers’ needs and requirements. This means using the Stage-Gate process to simplify how you decide upon a marketing strategy.

B2B Sales Negotiation: Defining Your Market’s Decision Makers

One of the more important aspects of success in B2B sales negotiation is the ability to identify an account’s main decision makers. Most sales professionals understand that a company’s decision makers are never the same from one customer to the next. However, within every market there are a set of norms or common practices with respect to who makes decisions. For instance, industries that are heavily reliant upon custom-made designs, typically depend upon engineering & product manager decision makers. This contrasts to industries where products are priced like commodities and have no differentiating indicators, thereby putting the decision in the hands of procurement managers. Defining your market’s unique decision makers is paramount to closing on opportunities.