Chances are you may be making the following mistakes in your business …

Mistake #1

Many business owners believe that if they have a great product or service, business will automatically come to them. Well, you probably do offer the best product and great service. You’ve the best-trained employees, the longest warranties and the most awards. But that alone hasn’t brought you all the prospects you can handle…has it? No! If you don’t promote your business, it will eventually dry up and blow away-no matter how good your product or service is.

Mistake #2

You believe that your business is so different from all other industries. Yes you may be in the “XYZ” business. But essentially your business is no different from other businesses—be it manufacturing, service, wholesale, distribution or trading. The product or service you provide may be different. But like all other businesses, you’re essentially in the business of marketing your product or service. Hence, marketing should be the most important function in your business.

Mistake #3

You do not differentiate your business from your competitors. Listen…if you cannot say to your potential customer any thing other than “Our pricing is competitive”, “Our quality is good” & “Our services are reliable”, you’re in fact just another ‘me too’ business. Your competitor will be telling the market the same thing. Now more than ever you must differentiate your business today. There are simply far too many choices for consumers. To command a strong position, you don’t have to be the best; you just have to be unique to the market. Any business can do that, even if your product is a commodity.

Mistake #4

You believe that marketing is a costly expense. And that’s the first item that you cut when business is bad. Nothing could be further from the truth. Marketing is the engine that drives your business. You should instead invest more on marketing, even when your competitors are cutting back in bad times. Marketing doesn’t necessarily entail big money. There are many low cost or even no cost marketing strategies that your business can use.

Mistake #5

You neglect to market to your current customers. It costs a business at least six times more to get a new customer than to sell to their existing customers. And yet many businesses choose to ignore their current customers. You may have focused too much on the first sale when the real goldmine lies in the ‘backend’ sales. Try to think about what other things that are supplementary or complementary to the products your customer has bought, can you continue to sell to them.

Mistake #6

You fail to capture your customers’ details. You’ve spent so much money on acquiring your customers and yet you don’t know who they are, where they live and how to contact them. Since they’ve bought from you, there is a high probability that they’ll come back to you, if you communicate with them. However, you can’t do that unless you’ve their contact information.

Do any of these mistakes sound familiar?

Now, you can avoid making these costly mistakes in your business by changing your perspective on business. A business essentially consists of three vital components: Distribution, Marketing and Systems. If you continue to run your business purely from the distribution aspect of your business i.e. by having the best product or service, you’ll be in for a big disappointment. On the other hand, when you re-engineer your business towards marketing and systems-centred activities, you’ll begin to experience a sustainable long-term growth in your business.

So, start building a solid foundation on your marketing knowledge. Lay your hands on any good marketing resource, book, tape, report or manual. It will go a long way in helping you to run your business in a fun and profitable way.

Better still, if you want to cut short your learning curve and accelerate your personal and business growth, then get yourself a business coach. They are well equipped with tested and proven business systems that will help you make more money from your business and more importantly to have more personal time for yourself!

Step 1. Start your letter with a greeting…

How many of you greet your customers face to face with Dear Mr Jones?  Use a more conversational style of opening and it will build rapport right from the start.  Try openings like …

Hi, Gidday, Good Morning John.

Build a bit of rapport, tell the reader that you hope they’re having a great day. If you’re writing a follow up proposal, thank them for taking the time to talk with you the other day.

Step 2. Paraphrase …

If your developing a proposal or trying to sell your product or service, let them know you understand what they want by paraphrasing it back to them. This will refresh their dissatisfaction with their current situation and give them confidence that you understand their frustrations.

“From what we discussed, I understand that there are a few key areas that you needed to address. You mentioned that…”

Step 3.  Build dissatisfaction with their current circumstances …

Push their ‘hot buttons’. Don’t be tempted to tell them what ‘you’ think they should be worried about … work on what ‘they’ are concerned about.

Step 4.  Mention their investment up-front …

Cover their ‘investment’ for your services or solution early in the letter. Don’t underline, bold, italicise or highlight your price. That simply draws the reader’s eye straight to the price which is bigger than anything else including the benefits of your service! Cover their investment up front, then spend the rest of the proposal justifying it with benefits!
“Based on what we discussed, I believe that a quarterly consultation would best suit your individual circumstances. Your investment for our VIP GST compliance program would only be $1,000 per month and would include:…”

Step 5. Explain the benefits of buying from you …

Justify their investment with the benefits and build their vision. It’s important here to understand the difference between ‘features’ and ‘benefits’. Remember, our prospects buy benefits not features, so we need to turn all our product features into buyer-related benefits.

Step 6.  Tell them what to do …

Never, if at all possible, leave the ball in their court. Finish the letter! Tell your reader ‘exactly’ what they need to do now, or what to expect next. The best letters are often completely undermined by the traditional closing sentence, “If you have any queries, please don’t hesitate to call”. Try something like this:

I’ll give you a call within the next couple of days once you’ve had time to go over the information. If you can see the benefits of our service boosting productivity in your business, then I’d like to make a time to visit. This will allow me to work out with you the best way to work with you and your staff, and check a few other details that we’ll need to know so that we can work with you as ‘seamlessly’ as possible.”

Step 7.  Close the letter differently …

Close the letter a little differently. Just to stand out:

Until then, I hope you have a… …brilliantly profitable day.

When writing, remember to think outside the box.  You need to be able to define what makes you different from the others, handle the response & qualify who you want as clients.

In order to HAVE anything in life we all recognise that we have to DO something to achieve it. If you want wealth you must invest. If you want love you must give it first. If you want respect you must earn it. No matter what you want, you need to DO in order to HAVE.

But DOing is not the only thing you need to change in order to HAVE. You must BEcome the person who would have the things or the person that you desire. You must develop the identity, beliefs and values that the person who has those things has. We’ve all heard of the Lotto winner who, within 3 years, lost the several million he won. He didn’t become the “millionaire”.

Let’s talk a bit about BEcoming.

Everyone has an identity that they developed, usually at a very young age. That identity has values and beliefs that can limit you. Perhaps you believe that customers are always looking for a discount. You will attract that sort of customer to your business because of your belief. Maybe you believe that business owners are greedy. What do you suppose you will be when you own your own business?

In order to HAVE something like a million dollars, you have to develop the beliefs and values of a millionaire, and believe me they have an identity that needs to be copied. In fact it is said that you will earn + or – 10% of the earnings of the three people you associate with the most. Why? Because you develop the values and beliefs of these people.
Business is no different…

In order to HAVE amazing customers, and amazing businesses need amazing customers, you must develop your business into one that will attract amazing customers. What is an amazing customer? It is specific to your business. Only you can define for yourself the characteristics of your amazing customer. Perhaps it includes a customer who always pays cash. Maybe one who sends you lots of referrals. You must identify who your amazing customers are and what these customers want. You must know how these customers shop. You must BE the place where these customers want to shop.

And the same is true of an amazing business. It is one where your amazing customers shop. It consistently delivers more than your customer expects. The amazing business attracts these amazing customers.

Once you are the business, then you must DO the things that make these customers know what the perfect business will do for them. Imagine, if you will, an owner of a Jaguar leaving his automobile at the local garage that looks as though it has never seen anything better than a ’64 VW Microbus. Not likely. If you want the customer to come you must BE the business to which he will come.

If you are the person or business that attracts the people in your ideal target market then they will come. Just remember you must BE as well as DO in order to HAVE.

Many business owners believe that if they have a great product or service, business will automatically come to them. Even if you do offer the best product and great service, if you don’t deliver what the market wants it will eventually dry up and blow away.

Get to know your market and how it is changing. No longer is your biggest competition coming from down the road, it is coming from overseas or online. Know what changes are happening in your industry and prepare for them now. A great way to do this is to be in regular communication with your customers and listen to what they are saying.

2. How well do you know Your Numbers?

Business is all about turning assets into sales, sales into profit and profit into cash. If your business strategies aren’t putting more cash in you bank account, then don’t do it, or do it differently.

Take the time to review what happened last year, analyse the results you achieved, see what adjustments you need to make to obtain the results you require, plan next year and look at what assistance you need to obtain the desired result.

Every business has 2-3 critical drivers that are producing the bulk of its results. Learn what they are for your business and focus on these. You’ll get to your future destination much quicker.

3. Where are you going?

Setting and achieving goals is one of the best ways to measure your life’s progress and create clarity. Consider the alternative – just drifting along aimlessly hoping that one day good fortune will fall into your lap with little or no effort on your part. You’ve got more chance of finding a grain of sugar on a sandy beach.

It is a fact that successful people do the things that unsuccessful people will not do. Successful people write down their goals. Goal setting is a powerful process for making your vision and dreams a reality.

Get very clear on where you are going and stay connected to this daily. Back this with a clear step by step plan and you’ll be well on your way to achieving your future

4. What is your succession plan?

Every business owner must condition themselves that eventually, the baton must and will be passed, and he or she must be able to do so without hesitation. There are three important components of succession planning that must be kept in mind during the entire process:

1.   Attracting and retaining the best talent.

2.   Building leaders from within the business.

3.   Developing the careers of potential successors.

Create systems in your business so your business becomes ‘systems dependent’ rather than ‘people dependent’. This will mean when you come to exit your business you’ll have the fundamentals in place so you can hand over to a general manager or you’ll have a more marketable asset to sell.

Begin with the end in mind so you can maximise your return on effort.

5. Who are you listening to?

Too many business owners listen to ‘BBQ Bob’ – the guy at the BBQ who will give you all the ‘free advice’ about how to run a business… when he hasn’t even run one himself… Be careful about who you take advice from.

Surround yourself with the best advisors and become a generalist, rather than a specialist. In an information economy, there is a lot to keep on top of so surround yourself with the best experts who can keep you informed about the key changes that will impact you and your business. It will be a small investment compared with the acceleration they’ll give you.

Take time to find the right advisors who can fast track your journey.

6. Do you have cash for growth?

Profit and cash flow are not the same thing. A business can still go broke whilst making a healthy profit just by not having enough financial reserves to meet its commitments.

Cash flow management is the fundamental and essential responsibility of the Business Owner or General Manager. A good cash flow manager reviews cash flow needs for the next week, next month, next quarter…and plans for any large cash need before it becomes a crisis.

Remember that cash flow management is more than just what’s happening with accounts receivable and payable. It also includes sales, raising finance through loans/overdrafts or sale of assets, controlling stock…

7. What is your exit strategy?

For many business owners, their business is their superannuation – so get clear now on how you will exit your business and who would buy it.

Do you have employees with the management ability and the mindset of an owner and the ability to access capital to pay for the business? If these people aren’t working for you now, do you have time to recruit them and teach them the business with an understanding that they might take over? What about your suppliers, customers or competitors? They might be looking for an opportunity to enter your part of the industry.

So what’s the difference between a business coach and a business consultant?

Robert Townsend defined consultants as ‘the people who borrow your watch to tell you what time it is and then walk off with it’. Often things can be going well when a consultant is working with a business, but when they leave things slip back to where they started.

In contrast, the ‘business coach’s aim is to teach business owners by showing how, rather than just ‘doing it’ and leaving.  As the saying goes ‘Give a man a fish and he will eat for a day, teach a man to fish and he will eat forever’. Coaching is about permanent results.
The coach also helps business people understand that there’s more to success than just knowing what to do to reach a goal.  Coaches must be able to guide their clients in ‘who they need to be, to do what they need to do, to have what the want to have’.

Just like a sports coach, a business coach is there to focus you on results.  Essentially they are:

Someone to be accountable to. It is often too easy for business owners to neglect the management and marketing of their business through recurring postponement of tasks. Sharing of your goals with your coach means that if you don’t complete them and your business strategies lapse, your coach wants to know why.

Someone to help you refine your ideas into practice. You have great ideas… some you will be able to put into practice easily, but others will be new and need refinement to implement.  Your coach has a vast knowledge of almost every business strategy, what makes them work and what confounds their effectiveness.

Someone that has a wealth of ideas to grow your business. For when you’ve just ‘run out of ideas’ on how to sell your products and services. But at all times, your coach will endeavour to make your contact educational, so that you understand the principles and can apply them for the rest of your business life.

Someone that has the contacts you need. When you need contacts for your business, equipment, investment advice, or just growing your library, your coach has the contacts and knows where to find the information.

Someone outside, looking in. After a while, you find that you don’t see the business with the same clarity that you used to. Like living next to a busy road, after a while you don’t hear the traffic. Your coach is there to take a fresh look at you and your business.  They know what to look for and most importantly, see what your customers see. And they will always give you feedback.

Business today is a race for productivity and uniqueness.  It is a race that has few rules.  Yet so many business owners try forcing a path through the thick undergrowth of ‘trial and error’, ‘traditional’ thinking and ‘lack of information’.  They end up exhausted far short of the finish line.

The reality is that many business owners have run the race before you, creating an excellent freeway of knowledge and experience.  Experienced business coaches who have studied the race for business success can run you in an express limo service down the success freeway.

Dependent on the sort of business you’re in, going in with a larger ad can make a lot of difference.  Doubling the size of your ad will more than double your response.  In fact, it’s been proven that if you get 100 calls with a 1 unit display, you’ll get 400 using a 2 unit.  Going up to a 4 unit will boost response up to 1100 calls.

Despite that, you need to also keep in mind the cost vs the likely outcome.  For example, if your ad is $15,000 and your average profit on a sale is $10, you need to make 1500 sales, or approximately 30 a day from yellow pages…just to break even.

Add a headline …

Putting a headline on your ad can easily double your response.
To understand why, think about this situation. You’re shopping for air conditioning in the Yellow Pages.  The first ad you look at has ‘George’s Cool World’ in big letters up the top. The second says ‘ Air-conditioning City’.  The third has a headline that says ‘7 reasons to call Harry’s Air-Conditioning’.  Which one are you more likely to read?

Generally, adding a headline is like creating a breath of fresh air in your section.  Whilst everybody else is so intent on putting their business name in ultra-large type, you’ll actually be providing people with a reason to read your ad.

Use keywords …

One of the most important things to know about Yellow Pages is that people are looking for keywords.

Let’s say you’re after someone to re-tile your bathroom.  You’re looking for two words – “tiling” and “bathroom”.  If you see an ad with those two words somewhere in it, you’ll call the number.

On the other hand, if the ad simply says ‘all tiling jobs’, you may not call – people need to be completely sure they’re dialling someone who can provide what they want.  If the ad doesn’t specifically mention what you’re looking for, there’s a chance you’ll pass it by.

Use pictures …

Pictures are absolutely essential in every Yellow Pages ad.  People see pictures before words and tend to translate them into thoughts immediately.

Don’t try and be clever – just put a picture of whatever it is that you are selling.  If it’s dogs, include a big picture of a dog.  If it’s security doors, show the designs you have.
Another important point to remember is that people like to look at people.  If you’re including a picture of your product, make sure there’s a person in the ad.  The reasoning is simple – the first thing your eyes look for is other eyes.  The first thing you’ll see are the people.

Add a definite call to action …

Don’t be wishy-washy with your ad – TELL people what you want them to do.  Tell them precisely how to communicate with you – either ‘drop in’, ‘call’ or ‘fax’.  You also need to tell them what they are contacting you for – an appointment, a quote, more info, a free consultation or a tour of the showroom.

If they zig, you zag …

Whatever you do, ensure that you stand out from the crowd.  If all of the ads are full of text, adding a few pictures will work wonders.  If they’re all colour stick with plain black.  If no one is including any detail, add a little more text.

Learn how to deal with phone enquiries …

It doesn’t matter how many calls you get – if you’re blowing all the leads, you’ll get nowhere.  Make sure you have scripts in place so you can convert your leads.

But consider this – you’ve probably been testing and measuring all your business life. Remember the newspaper advertising you tried that ‘didn’t work’, and the radio spots that ‘did OK’.  That’s all testing is… Testing what works and what doesn’t…

The next step is to do it properly, here’s the five steps to successfully working out what ‘works’ and what doesn’t…

Start asking people where they heard about you.

Start right NOW, immediately. If there’s one thing we stress to business owners when coaching them, it’s this – if you don’t know what’s working and what’s not, you can’t possibly make informed decisions and you’ll never know which ads to run. You may keep running an ad that never brings a sale, and accidentally kill a good one.

Customers usually come from so many sources, it’s impossible to judge how an ad is working on sales alone. You need to find out for sure. Create a tally sheet, including the ways someone could hear about you – newspaper ads, direct mail, fliers, phone directory, referrals, walk-by traffic etc

Every time someone buys, ask them this question – “By the way, can I just ask where you heard about my business’.  Make a mark on your tally sheet in the relevant column. Keep track, and ensure every member of your team does the same. At the end of 14 or 28 days, tally up and get the figures.  Now you can start making decisions…

Prune, modify and increase.

The first thing to do is see what’s not working. If you ad is getting a very low response (which means the profit margin from the sales is not at least paying for the ad), kill it straight away.

Now you only have one option – improve your ad to ensure you get a great response.

There’s a couple of things you can do to make the task simpler.

First, go back over your past ads and think about how well each one worked. Pull out the best couple and see if you can pick what gave them their edge. Next, read a couple of books, or at least flick through them. Last, look at what your competitors are doing. Do they have an ad which they can run every week? What can you learn from it?

Go through this process with each marketing piece that you are currently using… Kill, examine, modify… Kill, examine, modify… Remember – the true test of a marketing strategy is whether it pays for itself. If you run an ad and it costs you $600 and makes you $1300 in profit, it’s a good ad.

Test and measure for another two weeks.

Measure the enquiries with the new revised strategies. Also compare this with how much you’re spending on marketing.  You’ll probably find you barely miss those dud strategies and the ‘larger scale’ working strategies are paying out nicely indeed.  If it’s not, return to the original size.

Check your conversion.

Conversion is the number of enquiries that become sales… So many times when analysing a business, I discover that poor marketing is not the problem – it’s inadequate sales techniques. There are stacks of businesses that have ample leads, but no skill to make them sales.

Be honest with yourself – how many leads do you convert into sales? Is it possible to increase this ratio, even just a little?… In almost every case, it is.

You just have to give the customer a reason to buy from your business. Price is not the only reason a customer spends with your business. What if the salesperson at the more expensive shop actually took an interest in your needs? And what if they were that little bit friendlier? And what if they were willing to back their product with a guarantee? And what if they offered free delivery? All of these ‘what ifs’ add up, and can tip the sale your way.

Consolidate.

Leave it for a month or so, just working on converting the supply of leads you have. A better conversion technique, plus more leads from bigger scale successful marketing strategies should give your business a boost.

Very soon, you’ll develop a collection of marketing strategies that work, and weed out all the costly ones. Now that’s a business success formula!

“But my customers will leave, I’ll go out of business”.

This response is their gut reaction, however their comments aren’t necessarily valid.

If the product or service you sell is priced at $1.00, how many do you have to sell to generate $1,000,000.00? The answer is obvious, one million.

If your product or service is $1,000.00 you’d need to sell 1000.

If $10,000.00 you’d need 100 sales.

You get the point!

So how about the poor bloke who sells a product priced at $1,000,000.00. He gets up at 10.30am, walks over to the phone, makes one sale and can now go back to bed for 365 days. He made one sale which generated $1,000,000.00, while there are so many business owners selling $1.00 items looking to make a million dollars.

If you sell higher priced products or services you can physically generate fewer sales and still get the same income.

If you present margin is 20% and you increase your price by 10% you can have a 33% decline in sales and still achieve the same gross profit.

If you present margin is 40% and you increase your prices by 10% you can have a 20% decline in sales and still achieve the same Gross Profit.

ARE YOU EXCITED YET ???

Less work to achieve the same dollars. If you are worried about clients leaving, I say “great”. If some clients leave you they will generally be your C & D grade customers. Those who cost you more than they are worth and took up your time and resources. You can now re-deploy your resources to generate sales with more profitable customers.

Most customers won’t notice a price increase or won’t be concerned. The extra dollars generated flow straight through to your bottom line and into your pocket.

Get excited !

Put your prices up today! I challenge You!!

Have you ever answered a question with a question? Would that be making a difference to your conversion rate? The answer to the latter is most definitely yes! Asking questions not only increases your conversion rate, but builds rapport with your customer and ensures that the sale becomes their idea and not yours.

Asking questions also means active listening. You can ask questions about your customers work, business, kids or hobbies but make sure that your are listening with sincere interest. It may even be helpful to note down some of the answers – such as the names of their kids, interests etc for future communication. By asking questions and listening, you are building rapport and attaching importance to their conversation.

Also, by asking questions you are remaining in control of the conversation. Once you find yourself doing all the talking you are no longer in control. Just remember that the person asking questions sets the direction for the conversation. If the customer is dominating the conversation by asking you questions make sure you answer the question with a question. However, try to vary the questions that you ask. You may remember from looking after your own children or babysitting that being asked “but why?” over and over again tends to get a little monotonous.

Questions can guide consumer interest, discover a need and give accurate information.  There are two commonly known types of questioning – open ended and closed questions.

Building Rapport and Qualifying

Open-ended questions are an excellent way to ensure customer involvement in the conversation and are key to identifying not only what they need but a lot about themselves.  You can use open-ended questions to build rapport, to find a need, to discover a customer problem and find the right solution. In journalism there are six key questions used in the interviewing process which is as equally useful in sales – who, what, where, when, why and how.

Here are a few example of open-ended questions which are very useful:

Who are you buying the product/service for?

What features were you looking for in this product/service?

This type of questioning yields a lot of great information from your customer and helps you determine which product/service is uniquely suited to them.

Closed questions tend to get one word answers “yes” or “no”. They can be used to gather information quickly – not unlike a check-list. Using closed questions can also confirm a buying detail and help confirm the sale.

By using questions you are encouraging the customer to communicate, building rapport, establishing their needs, directing the conversation, diffusing tension and inviting discussion.

Learning the art of questioning and listening is the key to increasing your conversion rate and well on the way to creating a continuing customer relationship.

Action International is a business coaching and training company that works with small to medium sized business educating the business owner about how to improve the sales and marketing in their business.

While a business requires a steady flow of leads to sustain growth and replace lost customers, lead generation strategies are typically the most costly methods to grow sales.

So what should you do in these changing times? Before you invest time and money generating new leads, know and understand the other factors that drive your sales: conversion rate, number of transactions and average dollar sale.

For many businesses, these are untapped profit opportunities – lots of room for improvement at substantially lower costs!

Sales conversion rate is simply how many leads you or your sales people convert to paying customers. Think of it as an efficiency measure for sales. What is your sales conversion rate? If you don’t know, track it. After all, leads that are not converted to sales are a waste of time and money!

Your conversion rate can often be changed quickly by streamlining your sales process and ensuring your team is trained and upskilled in sales.  In fact, there are there are many conversion strategies and techniques, that can be systemised so that once a new contact enters your database, they are automatically cultivated and nurtured to become a paying customer.

To see the impact of this, if your current conversion rate is 20 percent of every 100 contacts or leads, that translates into 20 new customers a month. Boost conversions to 30 percent and that represents a 50 percent increase. Convert 40 percent instead of 20 percent and your customer base has effectively doubled without doing any extra marketing or advertising.

The number of transactions relates to frequency – how many times your customers purchase from you over a specific time-period, typically one year.  The average dollar sale represents how much customers spend each time they purchase. What would your bottom line look like if your customers made one additional purchase each year or bought one more product or service when they purchased from you?

For most owners, the answer is ‘substantially better than it does right now’. The key – small improvements in these areas can increase sales without acquiring new customers.

There is nothing surer that it is harder to get new customers, than it is to sell to your existing customers.  In fact, it usually costs 6-7 times more to gain a sale from a new customer, than it does to get a sale from an existing customer so it makes sense to put a lot of attention on this area.  Focus on regular promotions to your current customers, add on selling, package deals and loyalty strategies such as VIP programs.

One final tip, once you’ve focused on these other areas and it is time to look at more leads, first work out your niche – what you are great at and can compete well in.  Look at what parts of your business and industry are going to do best in a recession.  For example, a plumber may have less work in new housing developments as building slows but there will always be a need for emergency plumbing.  Strategically, the plumber could position themselves in this market.

Businesses who have a keen understanding of the needs and desires of their market will be the ones who do well.  Those that can offer the products and services and clearly communicate benefits to the market, will be the ones who thrive on expanding market share in the current conditions.

5 Top Tips

1.    Run a promotion to your existing customers.  They have already bought from you so what would entice them to buy something else from you.

2.    Follow up all leads promptly and professionally.  Focus on you conversion rate so you win more of the business that is already coming your way.

3.    Stop running marketing that is not making your money.  Test and measure everything so you can make a logical choice and only run profitable campaigns.

4.    Create a referral program.  Design a referral program that rewards customers for bringing others to you. Referral rewards can be in the form of discounts, gifts, invitations to special events, or “closed door” sales events.

5.    Create Strategic Business Alliances.  Partner with other businesses who have a common customer demographic but no actual direct competition.  You’ll leverage off the trust they have created and so are more likely to follow their recommendation or endorsement to use your product or service.