Monday, 28 November 2011

Great Expectations

We are all consumers at one time or another whether it’s making large purchases such as a new car, holiday, or even a house or something smaller like a TV or washing machine. We understand the process and judge who we will buy from based on the information we receive from the various vendors.   It does however surprise me how we seem to forget this when selling something through our own business. What we expect when making a purchase doesn’t seem to correlate with what we think our customers expect when they are buying from us, so this begs the question….who sets their expectation?.

You may think it’s external market forces such as the economy, you may even believe to a certain extent it’s determined by your competition, but in reality the very simple answer is that you do…if you’re the seller that is. It starts with the first time you engage with the customer, this could be through your website, an advert, a mail campaign, or they just walked past your place of business, it could even be from seeing your company van. The point is it starts with one or other of your marketing efforts and from then on you will be gauged against each subsequent interaction be it a letter, email, telephone conversation or meeting.

It’s for this very reason that marketing people bang on about consistency of the message. What this means is if you sell a quality product then everything you put in front of a client must shout quality even down to how you present yourself. Your marketing material must be consistent in its look and feel and the message it delivers, this even includes your staff and company vehicles, you only have to look at recognised quality brands to see what I’m talking about. There is a popular misconception that this approach comes at a premium, but I’d argue that a good looking website costs no more than a bad one and the same goes for literature, signage letterheads etc. it’s purely a question of taking the time to get it right.

So is that all there is to it?....of course not. You need to personally engage with the customer; the old adage that people buy from people they like is most definitely true. You need to be open and honest about what you can and cannot provide and in what timeframe, most of all when you are in the position to set out what you can and can’t do you are also in that precious moment when you can set the clients expectation at a level that you know you can surpass…but to get there you’ll have to have done everything else right first…….no pressure then.

Thursday, 17 November 2011

Cultivated Growth!

In these demanding times we’re all looking to grow our businesses in the most cost effective way and that’s why a strategy for growth through existing clients should be a major part of a business plan. It makes complete sense, because with any current relationships a significant amount of information about their business and buying patterns, as well as a picture of their credit status and history is already available. To get the most out of this opportunity it may be necessary to re-evaluate your product offering or structure, but this could be an opportunity to diversify into other markets to sell complimentary added value products or services.

All too often the emphasis is on new business which risks losing valuable and loyal customers, as competitors will be targeting your clients with their new business teams. This is not to say that new business should not be part of the plan but its worth considering that the cost of acquiring new business is high, typically running out at many times what it costs to gain additional business from existing clients. If operating in a mature vertical market, then aggressively pursuing a new business strategy can result in a price war. With little or no start-ups entering the market then the only recourse is to take business away from the competition, and they’re not going to give them up without a fight.

A sensible solution is to have both as part of your plan and have them serviced by two different types of salesperson; these are commonly referred to as Hunters and Gatherers (or alternatively Hunters and Farmers).  They have very different types of personalities, the hunter chases every sale to closure then moves onto the next one and they prefer a short sales cycle. The gatherer however takes a longer-term view and nurtures sales through relationship building over a period of time.  Utilising both competencies to the full will bring great benefits, as new clients will be developed through delivery of added value products and services. If implemented correctly a reputation for excellent service will quickly follow and in turn will generate new business, which if continued will ensure loyalty. This strategy is very difficult to break down and although it can be costly to initially implement from an overhead perspective, customers will ultimately accept a higher price for service excellence and so in time it will pay for itself.

So to sum up, a careful approach to servicing and developing existing clients will help to grow your business, your reputation and ultimately your market share, conversely too much emphasis on new business can effect your reputation and market share in an altogether different direction.

Wednesday, 2 November 2011

Why you should have a Strategic Plan

Well there are good reasons for having a plan both internally within the organisation and externally as well but perhaps the most important reason is that it defines the growth aspirations for your company and your brand.
Internally, it gives your staff and colleagues a common goal and a sense of purpose, if everybody understands what it is the company is setting out to achieve then there’s every chance they’ll all pull in the same direction. In order to get everybody buying into the objectives it should be communicated clearly with visibility as to how each person and/or department fits into the plan. The most successfully businesses are those where all the employees pull in the same direction and project the brand values of the company.

Externally there are several reasons to communicate the plan. If you have distributors, resellers or agents then it is as important to communicate your plan with them as if they were your own staff. You need them on board to ensure its success unless of course you are completely restructuring your channels to market, in which case that part of the plan would obviously be considered confidential. All the people or organisations that have an interest in the strategy are commonly referred to as “stakeholders”.

Perhaps one of the most important external reasons for having a plan is if you are looking to gain additional finance for your business. Nowadays the banks are not as free with their lending as they once were, I would venture that in almost every case today when approaching a bank for additional funds, if you haven’t got a strategic business plan then the bank will tell you to come back when you’ve got one. If on the other hand you’re looking towards venture capital for your funding, then I can tell you from experience that without a plan you can forget it.

If an exit plan is your ultimate goal, then before you start dreaming about that beachfront apartment in some far off exotic location consider this, any organisation as part of the due diligence process that takes place when buying a business, looks to have sight of the strategic plan and expects to see growth defined clearly in it. It’s essentially the same as the infamous  “Home Information Pack” but for businesses. A well thought out and detailed plan can save a lot of time and awkward questions when it comes to moving on.

So some good reasons for having a plan, there are some others such as giving confidence to your suppliers and of course your customers which are equally as important, and some other less known ones such as helping in your recruitment process as it will in all likelihood help attract motivated and skilled individuals to your ranks.