Power Up - Marketing and Selling for Greater Success

Are you letting buts get in the way of your success?

While talking with a local CEO about his business challenges and how the firm needs to transition to a different business development system he agreed with the soundness of the reasoning, but interjected "However..." and "But..." and "We can't..."  As our meeting came to a conclusion I pointed out to him that his lack of support for the new approach, no matter how sound, was going to cause it to fail.  He was shocked and dismayed by my comment.  "I support it," he stated.  I replied that his words showed his true beliefs.  It is one thing to point out challenges which will need to be address to accomplish a goal, and another to only point out the challenges and obstacles. 

 

"If you believe in the new approach you need to think beyond the challenges to the solutions," I told him.  We need to move beyond the "buts" to the "we can," and "we will."

 

These are challenging times that call for new thinking to solve business problems.  If we confine our thinking to the past, we will never get to the future. 

 

Consider the opportunities for you and your business; are you thinking "can't" or "will"?

New pricing strategies to improve company viability

As the economy improves and companies look at their narrow profit margins, it is time to rethink their pricing strategies.  They cut prices to keep their doors open in the recession, and now that the economy will be recovering, albeit slowly, there is a clear signal that increases in materials, labor, and overhead will eat into any profit margin that currently exists. 

You need to put in place a solid new pricing strategy.

There are 3 main elements to consider in your new pricing strategy: anticipate higher costs, competitive issues, communications.

You need to make some estimate as to potential cost increases.  Maybe make several scenarios to be prepared for various eventualities. 

You cannot, should not, price yourself out of the market.  However, without a profit there is no long-term reason to be in business.  Determine what low profit, no-profit, customers you are willing to lose to your competition.  Determine what you are willing to do to retain long-term profitable customers.  Exceptional service, outstanding quality, and reliability does enable you to charge a premium price.  Are you worth a premium price?  What can you do now to ensure your product is perceived as meriting a premium price?  Can you bundle services to provide a package pricing strategy?

The biggest fault that most companies make in re-pricing is that they don't communicate it effectively to their customers.  There is a need to not just pass price increases through, but to let your customers know what you have done for them to validate the new price.  And if your story is not a solid one then rethink what you can do!  Good relationships are built on solid communications and understandings.  Passing price increases through without explanations, or with a simple letter, is not the way to maintain customer relationships and keep the competition away.

Here is a pricing situation to consider.  My wife brought home some salsa this weekend.  She paid $5 for one 16 oz. jar and $4.75 for another 16 oz. jar.  Salsa at the regular grocery store we visit costs about $2.50 a jar.  Why did my wife pay twice the price?  She is adamant that it was cost justified.  She pointed out the different flavors - although she did not sample the product before purchasing the more expensive salsas.  A tiny example of the emotional aspects of buyers and how, with a better understanding of customer desires, you can get a higher, maybe not double, price for your product as well.  There is no need to price your product as a commodity when it is not.

Be proactive and determine your strategy for your new pricing.

Bandages are the most expensive medicine

The past week has been an educational one for me in many ways.  I guess this means I am not getting old since I am still learning.  Or, is it that I have learned the lessons before and am just seeing them again? 

It matters not how the process works - it is just sad that the same issues continue to appear.  Corporate decision makers seem to think that band-aides can fix the aliment of soft sales and poor strategic marketing.

The conversation in point revolves around a company that has been having problems for several years in getting their sales to the next level.  They make a good product.  They have a solid reputation.  Their management is weak but they are trying to strengthen the team.  Their industry has seen a lot of pressure from overseas imports - low cost but with high quality.  What has been lacking is a consistent marketing effort.  Their sales person is not being given the support he needs, e.g. direct mail, advertising, trade show support, brochures, and basic guidance in terms of what management wants and does not want. 

This last point is very basic; what type of customers does management want and which type of prospect do they feel they can develop into long-term profitable accounts.  This is basic information but the call reports from the salesman shows that he has not been given the guidance he needs.  He is making lots of calls, but producing few new accounts.  The problem is lack of targeting, lack of follow-up support systems, and lack of reinforcement for the salesman.

The president is upset with the results and wants to cut the salesperson lose.  I advised that maybe it would be a good idea to talk with the salesman and find out what his perspective is on the industry, which has been soft the past 5 months, and what the salesperson needs.  I sense that the solution will be, by the president, to just cut the guy loose.  It is a fast way to lower cost, to show decisiveness, and is an inappropriate solution to a long-term issue.  The sales man has been in the industry for years but with this company for only one year. 

There is a need for a solid strategic marketing plan that supports the selling effort and generates awareness among prospects of the company's capabilities.  Without a salesman in the field the entire new business development effort will be waiting for the phone to ring in the hope that someone found the company's website and was impressed enough to make a call.  Not a positive strategy.

Bandages are great for small cuts but, when the company is hemorrhaging and needs sales, cutting the sales force is the last thing that is needed.  In fact, applying the bandage remedy will give a false sense of hope and distract from the real medicine that is needed.

I hope your business can be more objective on how to appropriately address business downturns and how to support the sales team.  I wish you the best.

Overlooking the obvious

The recent issue of BusinessWeek had a scathing feature article on Sprint Nextel and customer service.  As the new CEO, Dan Hesse, of the company recounted, when he attended his first operations meeting and looked at the agenda, there was no time for addressing customer service - which has been the main problem, and well known to management, for several years.  This was just one of many "aha moments" for Hesse.

How does this relate to our businesses?  It is a sad glimpse into human nature and management.  We tend to avoid addressing the elephant in the room.  We can justify avoidance as much as we postponed studying for exams in school.  Then we wonder why our sales and profit margins are so low.  The answer is obvious - we avoid the essential much too often.

As you review your operations, take a hard look and detail the key issues. Make them first on your weekly agenda.  Wishing you all the best.