The Never Ending Chase After New Revenue

Business ownership is a never ending chase after new revenue. If we don’t get new revenue we won’t get revenue growth. And if we don’t get revenue growth we will get revenue decline. And revenue decline is a nasty thing.

But where should we focus our marketing and sales strategies. All too often business owners are all over the map. Looking for new customers; trying to get existing customers to buy more; creating new products; rushing here and rushing there. With so many efforts going on at once the results are often diluted.

So we have created the Revenue Growth Quadrant (see below) to help our clients focus their strategies in the right place.

The term product is being used in its generic sense. It encompasses physical products and services.

Sell existing products to existing customers

This is without doubt the “safe zone”! Your existing customers love you and your products or services. They see the value and happily write cheques to your company. So why not just focus on existing customers and thrive with that? Because some of them will leave you! So there must be strategies dealing with customer service or customer education around products they may not have bought yet. A classic example is the retail industry placing point of sale products right by the cash register.

Sell new products to existing customers

One way to prevent customer leakage and have your existing customers buy more is to be constantly finding new products for them. BUT, and this is a big but, make sure the new products are consistent with your core business and make sure they reflect your company’s mission. If you buy your products for resale then there should be strategies to search out new suppliers; to attend trade conferences.  If you develop your own products then include new products in your plans. However new products are worthless if nobody knows about them. So they need to be supported by marketing strategies like launch campaigns, advertising, viral marketing etc.

Sell existing products to new customers

If your business is in its early years the chances are high that you don’t\’t have enough customers. However, if you do have enough customers the reality is you will lose some; some estimates are as high as 30% of your customers leave each year. So this option should be part of the mix. You must be executing strategies that bring in new customers; for example, networking, cold calling, referral programs etc.

Sell new products to new customers

Selling new products to new customers is often the way to bring in new customers. There are those out there who know about you but have no need for your existing products. The new product might be just the thing they want! But unless you tell them about it they won’t know they need it; so tell them! Strategy examples include Groupon or a Steve Jobs type fanfare launch. Or more modestly some advertising supported by email sequences.

So when you are creating your plans for revenue growth bring out the Revenue Growth Quadrant to make sure you have strategies for each quadrant. You need your existing customers to buy more and you need new customers to replace those that wander off.

You need to add new products and you need to constantly inform your customers about your products they haven’t yet bought. The other day I was working with a client who was extremely upset because one of her customers had gone to a competitor for a particular service. Why was she upset? Because her company offers the same service but her customer didn’t know about it!

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Marketing the 80/20 Way

There are numerous, no thousands, of tools, techniques and methods you can apply to your marketing and sales efforts. The bookstores have shelf after shelf of books sharing the secret ingredients to successful sales and marketing. So where do you start?

Start with a simple tool discovered by a guy called Pareto back in the 1890’s. The tool is called the 80/20 Rule and it states that there is an imbalance between effort and results. And this imbalance is very often close to the 80/20 ratio. In plain English this means:-

• 80% of your revenue comes from 20% of your customers
• 80% of customers’ complaints are caused by 20% of the problems
• 80% of your expenses are due to 20% of your expense items
• 80% of your new customers come from 20% of your marketing efforts
• and so on and so on……

 So how can you apply the 80/20 Rule to your marketing and sales plans?

• Identify the 20% of your marketing activities that bring in 80% of your new clients. For example, do free workshops bring in new clients? Does networking help fill the free workshops?
• Be brutally tough on yourself when it comes to booking lunch and/or coffees with prospective clients.
• Never never never forget your existing clients. Identify the 20% that are responsible for 80% of your revenue and nurture them. Bring them more value; help them in anyway you can.
• This rule also applies to costs. An example was a client of ours who was spending 80% of his marketing costs on networking but was getting no meaningful results. We diverted those expenses to other marketing activities that did result in new clients.
• Apply the rule to new initiatives. For example, a new web site. You can build a $5,000 web site or you can build a $50,000 web site. But at what point does the extra cost stop having any significant effect on your marketing results?
• It’s all in the numbers so do your Numbers Game. In order to get 1 new client how many prospects do you need? To get each new prospect how many new people do you need to meet? This helps you focus the 80/20 way.

A final thought. You can apply the 80/20 Rule to your personal life! Did you know that 80% of your pleasure comes from 20% of your activities?

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Procrastination – The Art of Avoidance

The blog theme for March is procrastination, which probably means it will never happen!

Procrastination is putting off doing something important to work on something trivial; or not work on anything at all. We are told this is a bad thing. But we are also told everyone procrastinates. So how can something that everyone does be bad? In fact procrastination could be good if it puts off doing something important for long enough that it ceases to be important anymore.

But procrastination does become bad when it hurts your business. Here are 7 such scenarios:

1. You avoid picking up the phone to call an upset client. You will do it later today. And then you realize that tomorrow becomes today. The result of your procrastination ~ you lose a client who tells 10 other people what an awful experience they had with your company.

2. You don’t deal with the employee whose performance is below standard. Time to procrastinate. You persuade yourself that as time passes his performance will improve. It doesn’t and things go from bad to worse. In frustration your star employee leaves.

3. You are having cash flow problems and are unable to make the HST payment this month. You know you should call HST and you will; tomorrow. But tomorrow never comes and the call is never made. The HST people get mad and start hounding you, which takes more of your time and energy than the telephone call would have done.

4. You meet an excellent prospect at a networking event. Her needs will be met perfectly by your product and the two of you get along like life long friends. You promise to call next day to set up a time to meet again. Back at the office life takes over and you put off making the call. A week goes by before the call is made only to discover she has gone with your competitor.

5. The company’s tax returns have come back from the accountant in plenty of time to meet the filing date. You could review them right now and if everything is in order mail them. But finishing the design of your new workshop is more important and much more fun. Procrastination kicks in and the tax returns are forgotten until well past the filing date. The result; a hefty and avoidable penalty from the tax department.

6. You are to be interviewed on a TV show that your ideal clients watch. This is a wonderful opportunity. To prepare for the interview you know you should read the articles you have written and familiarize yourself with past blog topics. But that takes time; lot’s of it. As the interview starts the questions are easy and you relax. Then the questions refer back to past articles. Articles you have long forgotten about. You start to stumble and the experience becomes horrible. An opportunity has been lost.

7. You know that processes should be documented to avoid errors. But documenting processes is boring and easily avoided. So you procrastinate and the inevitable happens. Your outsourced VA does your bank reconciliation and cash flow management.  The process is not documented and one month he makes a big mistake. A mistake that causes you to think there is more cash available than there actually is. Cheques start bouncing and irate people start calling.

Next week we will share 7 ways to overcome procrastination. In the meantime remember Robinson Crusoe always had everything done by Friday.

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Customers Leave Because They Think You Don’t Care

The statistics are startling. Of the customers who leave you:

• 3% do so because they move away
• 12% are lured away by the competition
• 15% just don’t like your products or services
• 70% leave because they think you don’t care

Yes that’s right … 7 out of every 10 customers who stop doing business with you do so because they think you don’t care about them.

This is huge but it is fixableJ Here are 10 things you can do to show your customers you truly care.

1. Stay in touch. Don’t just talk to them when they are buying from you. Stay in regular touch so they know you are thinking of them.

2. Ask their opinion. They know more about using your products and services than you do. So ask them what they think. What could be improved? What should be changed?

3. Respond to their complaints quickly and honestly. Don’t let the complaint fester. And don’t hide behind “it’s not my fault”. And thank them for bringing it to your attention. After all the alternative is a customer who silently leaves never to return, which unfortunately is the norm.

4. Remove multi-level voice mail menus. Nothing is more annoying and time consuming for your customers than having to navigate long telephone menus in order to speak to someone. If at all possible have a human being answer every call.

5. Recognize important dates. So some people don’t want reminding it is their birthday. But what about the anniversary of their business launch?

6. Say thank you. It’s a funny thing but we sometimes forget that these two little words are probably the most important words we can ever say. They bring so much joy and they impart so much caring.

7. Arrive on time. Arriving late for an appointment communicates a complete lack of respect. It shows that your time is more important than their time. Of course, situations will occur that make an on time arrival impossible. Subway breaks down; flights are delayed. But these are exceptions.

8. Keep your promises. Or as soon as you know you can’t keep the promise because of a situation completely out of your control let them know.

9. Return emails and phone calls promptly. Yes, we are all busy and time does pass in a flash. So set a realistic standard for replying to email and phone calls and communicate that standard to your customers.

10. Listen with intention. It’s tough to do but when talking with your customer listen closely to what they are saying. Force your mind on them, look into their eyes and truly listen. Nothing imparts care and interest more than good listening. To learn more go to www.listeningbetter.com

These are 10 easy things you can do to make your customers feel cared for. Then they will stay with you!

Do you have other simple ways you show your customers that you care? Please share by either leaving a comment or emailing me at nick@yourplanningpartners.com.

Build Your Business by Building Relationships

I was recently reading an article about the differences between Canadian and Indian business manners. Interesting topic but what really caught my attention was a quote from Srikantan Moorty, Vice President of Education and Research at Infosys (a huge Indian IT company). He said: “I actually lost a client because I barely talked during a presentation. The report was technically correct. But I was so shy that it was hard to seem persuasive.”

He was partially right but actually wrong! Yes, he was shy but his shyness didn’t prevent him from being persuasive, it prevented him from building a relationship with his prospect. It’s the relationship that matters; not the persuasiveness. People buy on trust and credibility. Positive relationships create trust and credibility. Even if they are buying online they buy because there is something in the website that causes them to trust you or they have been referred by someone or something that they trust.

Think about cold calling. It is the most unproductive way to build your customer base. Why? Because the first contact is a negative contact: “Why are you invading my space? Why should I trust you?” To then try to build a positive relationship is an uphill, virtually impossible challenge.

Think about the more nightmarish networking events. People rushing around thrusting business cards into your hand and asking you to buy.  You don’t know them from Adam. Why would you buy from them? You won’t!

Here are some tips on relationship building:

• Be interested; ask questions; research their industry/company
• Listen, listen and then listen some more
• Follow up when you say you will
• Ask yourself ~ how can I help them
• Turn up on time
• Help them

It doesn’t matter if you are Wal-Mart or a Solepreneur. To get and, more importantly, keep good customers you must have good relationships with them.

Remember; it is your responsibility to build and nurture the relationship … not theirs.  Who can you help today? How can you build the relationship?

There are Diamonds In Your Backyard

David was an ambitious and proud man who was desperate to be very rich. To this end he traveled the globe, spending years away from home searching for a diamond mine. He was sure that once he owned a diamond mine his dream of riches would come true.

Unfortunately David ended his days neither rich nor happy. After he died, the local condominium developer bought David’s property and started to dig the foundation. And what did she find? She found that for all these years David was sitting right on top of a very large, very rich diamond mine. The moral of the story … stop focusing your efforts searching for new clients and new marketing activities.  Look more closely at the opportunities that are sitting in your own backyard.  Who are the Diamonds In Your Backyard?

When you are developing strategies to increase sales don’t think first about new clients, or new markets, or new products. Think about the Diamonds In Your Backyard; for example, your current and past clients.  They are the ones, after all, who know and love you and buy your products. And, what’s more, it costs ten times more to land a new customer than it does to sell to an existing customer.  You have already invested your time and energy to build this relationship.

Here are some proven strategies to nurture the Diamonds In Your Backyard:

Keep in regular contact. It is an old adage but true, “out of sight, out of mind”.  One way to stay in front of past clients is through a regular communication.  Be it a newsletter, a Blog, an occasional article.  Fact is, however, face to face contact is still the most effective. Pick up the phone and have a conversation. Contact customers who haven’t bought for awhile and find out why. Meet for lunch, coffee or martini.  What ever you do … Stay in touch and nurture these valuable diamonds.

Provide free value to those who have already bought.  Recently, a major bank launched an incentive program to get new clients. They offered a really cool gift to every new customer who opened an account with them. No free value for existing clients; nothing for those loyal customers who had been with the bank for many years.  I’ve been a customer for over 20 years.  I was really ticked off.  Take a lesson from this. Provide free value for your customers on an ongoing basis. Hold free half day seminars. Thank them for there business and encourage them to buy again and more.

Educate.  Do not assume your customers know all about your products. They only know what they bought last. Educate them in all of your services and make sure they are brought up to date on all new products. They can only buy from you what they know you have. Look at what your top five customers are not buying and talk to them about these products. This will give you a valid reason to get in touch with them (regular contact!) and potentially increase sales. Remember, you are not doing your customers a favour by not telling them about products that could benefit them.

Here is a classic real life example of Diamonds In Your Backyard. The Four Seasons, the premier hotel chain in the world, decided it was time to diversify. They decided a complimentary market to their hotel business was Time Share properties. Their first venture was in California and as befitting a global organization noted for its top quality service and higher prices their Time Shares were top of the line and priced above the market norm.

Sales were slow to say the least. Then someone had a brainwave. Out in the world there were literally thousands of people who were clients of the Four Seasons hotels. People who loved the hotels and the personal service they always received. The Time Share marketing campaign shifted gears to target their own clients and sales boomed. They had recognized the power of focusing on their clients; their Diamonds in their Backyard.

Dig down deep.  Ask yourself who are the diamonds in my backyard?  I guarantee you will find lots of business opportunities right in your own back yard.

Remember, when you do find your diamonds, look after them really well.  You don’t want any one else coming along and taking them away from you.

 

 

Not Everyone Wants to Buy from You

Not everyone shops at Wal-Mart. Not everyone buys a Mini Cooper; despite the fact that I think it is the coolest car around. Not everybody dines at the Windsor Arms Hotel. Nor does everyone eat at MacDonald’s. And, believe it or not, not everybody wants to buy from you. Ouch, that hurts!

But wait! Read on …

There are still plenty of people who will buy from you. There are plenty of people who value what you do enough to pay for it. They want to buy from you; they love buying from you. These very smart people are called your Ideal Clients.  And, there are plenty more of them out there.

You simply need to get a clear and accurate picture of who your current Ideal Clients are so you can focus all your marketing and sales efforts on attracting more of those people.  Don’t waste your time and money trying to convert people who will never buy from you anyway.

The place to start is by taking a good hard look at “Who is currently writing you a cheque?  Or, do they pay buy credit card”? J  Get out your client list, identify your one or two Ideal Clients and start painting a detailed picture of them and their buying habits.  There are more people like them out there; you just need to know who you are looking for so you can get in front of them.

Make this your opportunity to look really closely at those who have bought from you; they are a good indicator of who will buy from you in the future. Past performance is a great indicator of future performance. This is not an easy exercise.  It will take a long time.  But, it will bring you a huge return on investment of your time and money.

To kick-start the exercise, here are some initial questions to ask about your Ideal Client.  They may seem irrelevant but they aren’t, trust me.

• Where do they live?
• Where do they work?
• How do they travel to work?
• What other outside services do they use?
• Are they male, female or neither?
• How old are they?
• What is their income?
• How did they come to be your clients?
• Are they married?  With children?
• Gay?  Straight?
• Professional?  Blue Collar?  Executive?
• What do they do in their spare time?
• What are they passionate about?
• What organizations do they belong to?
• How do they learn?   Where do they go to learn?
• What do they eat?  Where do they eat?
• Are they healthy?
• What do they read?  Where do they read?
• How do they buy?  Web?  Shop?
• How do they pay?
• What do they value?
• What are they buying from you?
• Why are they buying from you?
• Do they belong to industry associations?
• Do they use Face Book or LinkedIn?
• Etc. etc.

Keep asking questions. Bring your team together to brainstorm. Explain to them how important this exercise is to the future of the business.

With a really clear picture of your Ideal Client you can focus all your marketing attention on them; the people who truly want to buy from you. You set the right marketing strategy  to reach your Ideal Client. If they take the TTC you can advertise in the morning give away papers.  If they attend industry association meetings you can speak to their group. If they have Smart Phones you need to have a mobile friendly website.   And so on ….

Not everyone is your customer. In fact, not everyone SHOULD be your customer. So identify your Ideal Client to serve them better.

The best part is you’ll have way more fun working with people who really value the work you do, are happy to pay you for it and say thank you at the end.

 

Money Now Money Later

One of the biggest challenges faced by all business owners is balancing the Money Now with Money Later. Money Now is the revenue being earned right now; it is the money used to pay today’s expenses. Money Later is the revenue that will be earned in the future; as time passes it turns into Money Now. The challenge comes about because we are so busy delivering to our customers we have no time or resources left to work on Money Later. The result is obvious and painful; Money Now dries up.

How can we stop this rollercoaster ride of abundance followed by scarcity? By understanding the cause. Business development is made up of marketing and sales. Marketing is what you do to get in front to of your potential clients. Sales are what you do when you get there. Marketing is the Money Later. Sales is the Money Now. The scarcity is caused by inconsistent marketing. By fitting marketing into the small windows of time that occasionally surfaces. To get off the rollercoaster you must ensure that consistent marketing gets the priority to deserve. Here are some ideas.

Let’s first look at the most powerful marketing tool of all – follow ups. If you don’t follow up you will not get the business; guaranteed. Studies have shown that 80% of people buy on or after the 5th contact. However, these same studies have shown that very few companies (only 10%) continue to follow up 5 or more times.

Networking is still a popular and effective marketing initiative. But to be successful networking must follow 4 rules:
1. Network strategically. That is, network where your ideal clients and/or connectors hang out.
2. Network consistently. Don’t go to one event once and expect results. Networking is about building trust and credibility; that doesn’t happen in one meeting.
3. Don’t network to make sales; network to build relationships.
4. Follow up, follow up, follow up!

Stay in front of people. As Judi Hughes of Your Planning Partners keeps repeating: “They are just not ready to buy YET!” Write articles; give presentations; blog regularly; hold events; phone people; volunteer your time; have a newsletter.

Develop campaigns. For example, have a campaign to reconnect with past clients; remind them you are still here.

To make sure all your marketing initiatives happen create a Marketing Calendar for the whole year. Buy one of those large plastic Year At A Glance calendars and hang it on your office wall. You can write on it and erase from it. You can use different colours to represent different things. It should have everything on it; your networking events; schedules for newsletters; campaigns; events; blog schedule; the works!

And a final idea to help avoid the scarcity caused by inconsistent marketing; become a marketing oriented company. But now we are out of time so we will cover that topic in the next blog!

Diamonds In Your Backyard

David was a very ambitious and proud man and was desperate to be very rich. To this end he traveled the globe, spending years away from home searching for a diamond mine. He knew that once he owned a diamond mine his dream of riches would come true.

Unfortunately David ended his days neither rich nor happy. After he died the local condominium developer bought David’s property and started to dig the foundation. And what did she find? She found that for all these years David was sitting right on top of a very large, very rich diamond mine. This story illustrates a powerful marketing model; Diamonds In Your Backyard.

When you are developing strategies to increase sales to fuel business growth don’t think first about new clients, or new markets, or new products. Think about the diamonds in your backyard; namely your present and past clients. They are the ones, after all, who know you, love you and buy your products. After all it costs ten times more to land a new customer than it does to sell to an existing customer.

Here are some proven strategies to nurture the diamonds in your backyard:

Keep in regular contact. It is an old adage but true, “out of sight, out of mind”. One way to stay in front of past clients is through a regular newsletter. However, face to face contact is still the most effective. Pick up the phone and have a conversation. Contact customers who haven’t bought for awhile and find out why. Meet for lunch, coffee or martini for a more informal chat. Stay in touch and nurture these valuable diamonds.

Provide free value. Recently, a major bank launched an incentive program to get new clients. They offered a really cool gift to every new customer who opened an account with them. No free value for existing clients; nothing for those loyal customers who had been with the bank for many years. Take a lesson from this. Provide free value for your customers on an ongoing basis. Hold free half day seminars. Thank them!

Educate. Do not assume your customers know all about your products. Educate them in all of your products and make sure they are brought up to date on all new products. They can only buy from you what they know you have. Look at what your top five customers are not buying and talk to them about these products. This will give you a valid reason to get in touch with them (regular contact!) and potentially increase sales. Remember, you are not doing your customers a favour by not telling them about products that could benefit them.

Dig down deep and you will find lots of business opportunities right in your own back yard. When you find your diamonds look after them really well so that no one else comes along and steals them!

Build Your Business by Building Relationships

I read in a recent Washington Post article that India has a rapidly growing industry teaching their very smart business graduates and managers all about business manners. For example, asking someone what their salary is might be acceptable in India; it is definitely not acceptable in other parts of the world.

While the topic was interesting what really caught my attention was a quote from Srikantan Moorty, Vice President of Education and Research at Infosys (a huge Indian IT company). He said: “Before my training, I actually lost a client because I barely talked during a presentation. The report was technically correct. But I was so shy that it was hard to seem persuasive.”

He was partially right but actually wrong! Yes he was shy but his shyness prevented him from building a relationship with his prospect. It’s the relationship that matters; not the persuasiveness. People buy on trust and credibility. Positive relationships create trust and credibility. Even if they are buying online they buy because there is something in the website that causes them to trust you.

Think about cold calling. It is the most unproductive way to build your customer base. Why? Because the first contact is a negative contact: “Why are you invading my space?”  To then try to build a positive relationship is an uphill, virtually impossible challenge.

Think about the more nightmarish networking events. People rushing around thrusting business cards into your hand and asking for the order. You don’t know them from Adam. Why would you buy from them? You won’t!

Here are some tips on relationship building:

• Be interested; ask questions; research their industry/company
• Listen, listen and then listen some more
• Follow up when you say you will
• Ask yourself ~ how can I help them
• Turn up on time

It doesn’t matter of you are Wal-Mart or a soleprenuer. To get and keep good customers you must have good relationships with them. But don’t forget; it is your responsibility to build and nurture the relationship … not theirs.

To read the Washington Post article about business manners in India click here http://bit.ly/bIZLSv

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