Here are some tips that are relevant to the majority of small growth companies, regardless of sector and focus on the need to become more pro-active in the search for more profitable customers. If you have any comments or additions to the list, or find these tips interesting why not let me know?
1. Customer Loyalty is not a given:
With competition intensifying and customers becoming more and more sophisticated in their buying habits, the idea of keeping customers for life is becoming out of reach for many small businesses - why?
Did you know that 67% of business customers go elsewhere because no-one keeps in touch with them? Not because the product or service is poor, or the personnel incompetent, or price but simply because no-one cares enough to keep in regular contact with them. Do you as consumers feel the same?
The answer to retaining more quality customers is simple - do not give people a reason to shop around, keep in touch with them, be pro-active, call on a regular basis, take your best clients out for lunch every now and again. Do not assume just because they have not made contact with you there is no reason to call.
2. 80/20 Rule - Fish where the big fish are:
The 80/20 rule is a phenomenon of life. It shows that in all things the figures of 80% and 20% inter-relate. For instance, it is proven that 20% of motorists cause 80% of accidents (just ask your insurance company for confirmation), 20% of the carpet takes 80% of the wear, and 20% of our favourite clothes are worn 80% of the time.
This rule also applies in business in two important areas
• 20% of a company's products/services generate 80% of profit
• 20% of customers generate 80% of sales.
Think about the implications of that one for a moment - It is well worth focussing the company's finite resources on the 20% - go for the big fish. By analysing who your 20% are, we will help you find more of the same.
3. Rule of 7:
Picture the scene: you have been chasing a prospect for a few weeks - you were convinced he/she was in the market for your service, indeed, they approached you at a recent network but so far after 2/3 phone calls and a letter - nothing.
So what do you do? File in the dormant, and move on??
Research shows that six months after an initial enquiry 51% of enquirers for industrial products were still actively in the market and before you say 'ah well, it’s different for industrial products' similar issues exist in all markets. Two thirds of enquiries from a business to business exhibition were not realised until 11-24 months later.
The point I am making here is all business people are busy people, lead in times for all jobs in the main are getting longer, decisions are very rarely immediate. Research across all sectors indicates on average, it takes seven points of contact before a deal is struck.
This could be made up of phone calls, letters, Emails, etc. So do not give up after 2/3. If you do not believe this try keeping a record and see how many times you have to contact a hot lead or prospect before you get a result. Tenacity always pays off in business.
4. Referrals - When to ask?
Asking for referrals is still perceived as a difficult task by many business managers, especially in certain sectors where it is still positioned as 'not gentlemanly conduct'. As a marketer working in the SME sector I can tell you the most cost effective marketing tactic by far is word of mouth and referrals, I would say it is time to bite the bullet and ask.
Here are my suggestions for the best time to ask:
1. When you have come to the end of a review meeting with a client or customer and checked they are happy with your service/product offering.
2. When a customer asks for a discount - deal! 'OK I can offer you a 10% price reduction if you can give me 2/3 hot referrals'. When you have just lost the sale. This is a golden opportunity to capitalise on executive's stress and discomfort at not being able to give you the job. In many cases you may have lost the job in question for political reasons, and in certain circumstances throughout pitching for the work had the opportunity to build a good working relationship with the prospect, so use it.
5. Networking - You've Got to be in it, to win it:
Do not underestimate the power of business networking. Many owner/managers of smaller companies go along to a network once and come away thinking 'well that is not for me, I met no-one tonight who is in the market for my product so that was a waste of an evening'. This is a little short-sighted in my view for two reasons.
Firstly, most business networks do not attract every single member to every single event they host so you will only ever meet a portion of the total membership at any one event.
Secondly, and this is even more important, when you network with a group of business people you are not only raising your profile and that of your company's to them but to all of their contacts too.
Just think about this, on a typical evening, say you meet and chat to 20 individuals, how many business contacts have they got between them?
Finally, on this point networks are not simply about selling, they are also about buying and deals are done that result in efficiency savings and service enhancements all the time. Remember people do business with people they know and like.
6. The 10 word test:
How many times have you opened a conversation with a new business contact by asking them what they do only to be as baffled as you were when you asked five minutes earlier, despite lengthy and complicated explanations of their company's products and services.
This is a common phenomenon with business professionals. I challenge you to the 10 word test (sometimes called the lift test). Be specific, focused and simple. Tell me in 10 words what your company does?
My response may help you... 'We help businesses get and keep more customers via a targeted, marketing planning process.' (Ok, so this is 14, but you get the idea!)
7. Markets & Industries - Do not confuse the two:
This is a very common mistake many companies make when in marketing planning mode. Remember, industries are groups of firms with similar technologies and products. Markets are groups of customers with similar needs. Confusing the two creates a key strategic vulnerability and missed opportunities.
For an example of this look no further than retail banking sector. Banks have only ever identified their market as the traditional banking industry. Their failure to recognise the difference between the industry and the market has led to the fragmentation of retail banking.
8. Ask for Customer Complaints:
It is a well documented fact that if a customer has a positive experience with your firm they will maybe tell 5 people. However, if they have a negative experience with your firm they will tell on average 25 people.
You need to ensure the complaint does not get to this stage. Do not assume because you do not get any complaints at present all your customers are satisfied will all aspects of your service. In most cases, we Brits very rarely complain, we simply wait for the end of the contract, or end of the meal etc and simply do not return. We take our business elsewhere leaving the company wondering why.
Carrying out regular customer satisfaction surveys either by phone, post or face to face give you the opportunity to 'diffuse the niggles' before they become issues and cause your customers to move on. This also sends out positive messages that you care - back to that pro-activity we all crave.
9. Business Cards - Pick of the Pack:
I think it is worth saying a few words about business cards as I see more bad ones than good ones in my line of work.
A few basics - make sure your cards are always with you and they are standard size to fit people's wallets. filofaxes etc. Ensure they carry all your contact details including Email and web addresses and state your job title.
This is very important as it positions you later with the prospect when he/she refers back to the contact. Whatever you do keep your business cards up to date - phone number changes etc.
There is nothing worse than being handed a printed card with biro markings all over it - All that money you just spent on a corporate image and professional printing is lost immediately!
10. Passion Wins the day every time:
And finally, people are more likely to give you their business if you are confident and passionate about your product or service offering. If you appear to be bored or complacent about your business why should they get excited about it?