Small Business Guru

Discounting vs Value

In the current economic climate a lot of business owners are discounting their prices in an attempt to get customers.  This strategy is fuelled by the notion that there is ‘no money’ being spent.  Actually, the money is still moving.... it’s just that consumers are being more conscious about how they spend it.

The problem with discounting is that you actually have to get even more work than you did before to make up for the discounted prices.  Further, your customers will likely resist your normal price in the future – so you are either stuck with the discounted price or you potentially lose the customer.

So instead of discounting, how can you increase the value in your service or product packages so that people are more likely to spend their dollar with you instead of your competitor?

A business coach I know is offering a 6-month Mentoring Program.  In essence it is 6 months of coaching, charged at his normal monthly coaching fees.  But he has packaged in a range of ‘additional’ benefits (such as unlimited email contact, discounts off his other programs and products, worksheets and other tools) that cost him very little to deliver, yet offer significant value to his clients. 
How could you use this approach?

• If you’re a plumber or electrician, with any call-out you could offer a ‘free’ check of your customer’s set-up to ensure maximum water/electicity efficiency and safety.
• If you’re in retail you could offer a gift voucher with any purchase over a certain dollar amount.  Not only does this increase the value of the original purchase but it gets the customer back in your shop.
• If you’re in hospitality, you could offer free coffees with a meal (or similar), or a free salad with the main meal.

All of these ‘inclusions’ cost you very little to deliver, yet add significant value to the customer. 
So don’t discount, increase your value to the customer.

(Not sure how to package up value for your business? Email me and I’ll give you some ideas.)

Why I Use Twitter

This is adapted from an email I wrote in response to the question, 'why do you Twitter?'

From a business perspective, Twitter enables you to:

1. Gain insights into people’s lives that you wouldn’t (e.g. I follow a number of ‘gurus’ in the states because I look to them as role models. I look at this group as roles models and news providers… I follow them because I get to see what they’re ‘following’ in terms of trends, information, people etc)

2. Direct traffic back to your site by posting links about your latest blog, offer, product, program, service etc.

3. Finally and yet I think most significantly…. To create a network and then maintain regular contact with them…. this builds familiarity, credibility and therefore trust.  The power in Twitter is you can literally maintain multiple conversations at once…. Similar to how you do at a networking event…. except you can do with far more people than you can do face-to-face.  The power comes in as you don’t actually have to leave your computer.

To effectively use Twitter you therefore need to:

1. Post a combination of ‘what I’m doing’ posts as well links to useful and interesting information – be an information provider, be ‘follower-worthy’

2. Engage in meaningful conversation with the people in your Twitter network – i.e. when you see someone’s post that resonates with you or you can help, reply…. Publicly most times (because it helps to build your follower list), but then by Direct Message (DM) as that is private – this is where I share email and phone details for example – for specific follow-up and more personal conversation.

My final tip for the newbies…. Don’t try to manipulate it… just voyeuristically participate for now and you’ll get the hang of how to make it work for you… that’s how I started only a few months ago…. Now I have over 120 followers and an very active 'response' network.

Be warned - it can be addictive - but it's a lot of fun and an extraordianarily powerful social media too.

If you want some more info on how to use Twitter, check out these sites...

http://prevential.com/twitter-tips/

http://www.fourhourworkweek.com/blog/2009/02/25/how-to-use-twitter-without-twitter-owning-you-5-tips/

http://www.briansolis.com/2009/02/finding-tweet-spot-top-tips-for.html

See you in 'Twitter-Land' :-)

Cat

(are you following me?  www.twitter.com/catmatson)

What's the Benefit?

I happened to be watching some daytime TV today, so saw some 'different' ads (you know, the ones targeting mums).  The one that got me thinking was the BrandPower infomercial style ad for Omo laundy powder.

First of all, the BrandPower (and similar) style ads are interesting in themselves - providing third party credibility to an otherwise bland product... providing key information rather than fluff and bubble.

What was of particular interest about the Omo ad was it promoted the new 'concentrate' version - use 1/2 as much to do just as good a job as previously.  Therefore the product is now available in a smaller box.

So the 'new' features are 'concentrated formula', 'use less', 'smaller box'.

So what's the benefit?  Is there a cost saving?  I don't know, it wasn't mentioned in the ad.  Is it important that it takes up less shelf space in the laundry?  Didn't look like it's footprint was any smaller, so that can't be it.  Do I feel better for only using 1 scoop per wash instead of 2?  Honestly, I don't care... and in fact I will generally put in the same amount of scoops regardless of the 'concentration' just out of mindless habit.

Don't leave your potential customers guessing about the benefits of the features of your product.  If I was writing that Omo ad, for every feature I want to mention I would also have at least one 'so that....' statement, often two, to demonstrate the benefit - e.g. it's concentrated so that you use less so (that) you save money.

Feature, function, benefit - if you're going to showcase the feature, showcase not only the function but the benefit.

What are the benefits of your services?

Cat

Brand consistency

I love the schweppes balloon burst TV ad - I love the creativity, the super-slow-mo bubbles... but most of all I love the emotion it evokes.

It has so etched what 'refreshing' is to me in my mind, that I actually described a refreshing customer service experience as schweppervencent... it was so refreshing.

Now, because I needed to check the spelling of schweppervencent I went to the schweppes website... and the brand message, the emotion, the 'refreshment' was all reinforced... the music was there, the bubbles were there, the smiling faces were there.

And then... when I got past the welcome screen, their core brand messages were consistent with the ad - none of this "who we are" and "what we do" - rather "discover", "enjoy", "experience".  Oohh... now I was not only tingling with the emotion of the brand but I was also excited at the execution of the campaign - so congruent!!

As small business owners we can still convey this congruency and consistency... sure, the big budget ad helps... but it isn't necessary if you're not trying to reach the mass market.  The keys are to evoke strong emotion and then consistenly remind people of that emotion everytime they interact with your brand.  To do this, you need to know what you stand for, what your business stands for and therefore what your brand stands for.  Then, when you 'speak', you speak from that stand.... the emotion will be evident.

(as an aside, as an avid fan of The Gruen Transfer, I saw the creator of the ad, Russell Howcroft, talk about this particular campaign.  He said it was one of those fortiuitous moments in advertising where the client was willing to go all the way with a really creative idea... and everything came together - the imagery, the music... what is really impressive to me is that Scweppes have taken it way beyond the campaign and incorporated it into their entire communications strategy)

Cat

Marketing - the foundation for your business

There are really only 4 things you need to 'handle' in business;

1. Marketing
2. Sales
3. Everything else (that is, the systems that support 1 & 2)
4. You

Why?  Because if you are not selling something, you are not making money.... and you can't sell anything until you have marketed it.  Therefore anything you do that does not support your marketing or sales efforts are a waste of time.... your administrative, financial and HR systems should all support your marketing and sales functions.

So, from that position.... I then read this blog post from one of my favourite bloggers - Seth Godin - Which Comes First, the product or the marketing?

Marketing really is the number 1 priority in your business - it's the platform on which everything else is based.

Cat

Strong Foundations

Tuesday 27th January this year signalls the start of the Chinese New Year.  2009 is the year of the Earth Ox and provides a focus on foundations, getting your house in order and themes of patience, relationships and systems.

In the current climate of panic, fear and resultant consumer caution, giving some attention to the foundations of your business is a sound idea.  When the economy bounces back (which it will do, it’s just a matter of when), the businesses that will best positioned to take advantage will be the ones who have rock-solid foundations.... not those built on sand. 

So what foundations do you need to look at?

From a marketing perspective, what is your core marketing message?  What does your brand stand for?  Is your marketing working for you or are you wasting time and money on random, hit-and-miss campaigns?

A solid marketing foundation – an integrated marketing plan based on a consistent message, strong relationships and networks.

In the sales area, do you have a consistent sales process with a high success rate?  Can you track your sales leads and follow-up on customers who are still in ‘decision-mode’?

A solid sales foundation – a strong sales process that works supported by a relationship management system.

From an operations perspective, do you regularly experience ‘drama-free’ days, or are you often “putting out fires”?

A solid operations foundation – systems and processes that support the marketing and sales functions while efficiently managing the administrative, financial and compliance requirements of the business (they don’t have to be documented, but they do need to work).

And lastly but most importantly, YOU (the driver of the business) – are you clear on your direction, your focus and targets for the year.... or are you scrambling to keep up?

A solid owner foundation – clear business and personal goals, how you’re going to achieve them, personal development opportunities and personal wellbeing.

Remember the whole year is about strengthening your foundations... it doesn’t all have to happen overnight.  Just schedule some time each month where you can ‘structurally’ review the business and strengthen as you go.

Tough times? Really?

I am so tired of hearing about how tough things are.  People are citing the current economic climate as the reason for not buying, the reason why business is struggling, the reason why they’re ‘cutting back’.

The fact is, for most people, things are no more ‘tough’ than they were two months ago (I know some people have unfortunately lost their jobs but that’s not the majority).  Sure, people’s asset-base has taken a hit (yes, your superannuation fund does not look as good as it did month ago), but your day-to-day discretionary income has not changed one iota.  Grocery prices having been going up for the last 18 months.... petrol prices have been going up for the last 12 months.... so we have already been dealing with those increased cash flow burdens. 

Since the supposed economic crisis hit, petrol prices have actually come down... and so have interest rates!!  So in reality, most people should have more free cash to spend... not less!!

The fact of the matter is mainstream media would have us believe that we are moments away from recession.  This does nothing other than fuel fear... which influences buyer behaviour... which then creates a self-fulfilling prophecy of slowed economic growth.  Readers older than 50 would recall similar ‘slow-downs’... and would recall coming out of them unharmed.  The problem is we’ve had such a long period of growth that most people in business haven’t seen ‘conditions’ like these before – it’s easy to make hay while the sun shines.....

So what does it mean for you, a small-medium business owner?

Normal operations!  Stop thinking ‘doom and gloom’ – be proactive amidst the negativity.

Get smart with your marketing and reconnect with your customers.... demonstrate you are as important (and valuable) to them now as you were last month.  Expand your communications, your programs, your products, your services – resist the temptation to shrink and ‘go small’.

Unless you are selling to retirees or people servicing that market, your customers have the same discretionary income (if not more) they did six months ago.  Don’t fall into the trap of thinking ‘times are tough’.  They’re not.  They’re just different. 

Bringing in the Catch

Last issue I discussed ‘throwing the net’ – the marketing activities we do to get our target market to ‘nibble’ on our bait.  Once they’re nibbling, what should you do with them to ensure you make the catch?

First of all, remember that selling your products or services to a prospective customer is more about helping them get a good solution to their problem than it is about you ‘making a sale’.  If come from this perspective making sales will come easier... and you’ll avoid any of the ‘stuff’ you have about being an ‘undesirable salesperson’ (and that’s another conversation for another time!).

Secondly, define your sales process.

The first step in the sales process is to Establish Rapport & Credibility – essentially, build a relationship with the prospect so they trust you.  Depending on your marketing and your product/service this step may already be largely covered, or you may need to spend quite a bit of time on this stage.  Examples of establishing rapport and credibility are conversation, testimonials, your website and other marketing collateral and references.

The second step is Discovery, that is discovering what the really customer needs.  In my line of work, this involves talking with the prospect and listening to the challenges they’re experiencing in their business.  For a tradesperson, it’s about asking enough questions to discover what the issue really is.

The third step is Presenting the Product/Service – showing the customer how you can solve the problem.  This includes price, time-frame and any other variables.... and should be a natural ‘fit’ for the problems the customer outlined during ‘discovery.

The final step is ‘Closing the Sale’ – which is essentially ‘completing’ the sale – making the appointment, selling the product, asking for the money.  It is different for each business and is the stage that most people have the most problems with.  But really, if you have followed all the previous steps, closing the sale should be a natural completion to the discussions you’ve had with the prospect.

Is having a sales process going to ensure you catch every fish that bites?  No.... but it will improve your odds and ensure that less ‘get away’.

Throwing the Net

Marketing and sales are often confused by business owners, thinking they are one and the same function.  However marketing is like throwing out a fishing line to see what nibbles... sales is reeling those that nibble into the boat.

Unlike a good fisherman however, most business people fail to ‘haul in’ a good percentage of those that nibble... so rather than just casting a line, most small business marketing really needs to be like throwing out a large fishing net... giving you more opportunities to make a catch.

The first component to a strong marketing net is a crystal clear marketing message.  This consists of:

1.       Who are you trying to catch (your ideal customers/clients)

2.       The problem they experience (problem, predicament, issue)

3.       The solution you provide (solution, benefit, result)

4.       Why you are the person to provide to solution over all others (credibility)

5.       A strong call-to-action (what should the buyer do next?)

The next step is using your marketing message to communicate with your target market.  It could be in local press ads, classified ads, direct mail or email, website, brochures, TV or radio advertising or a whole host of communication methods.  The key at this step is to communicate with your target marketing where they are likely to ‘listen’ to your message.  For example, accountants don’t respond well to direct mail, so that isn’t a good method for them.  However they do respond well to articles and presentations by experts and one-on-one conversations.  So if accountants are your target market, you need to be writing, speaking and networking.

Consider what methods work well for you... or for your competitors or similar businesses (e.g. if you’re a plumber, what’s working for the local electrician?).  Then consider how you can improve your message so it’s more effective and generating the nibbles you’re looking for.  It’s not about ‘clever’ or ‘creative’, it’s about ‘does it make the phone ring?’

Notice in none of the above steps did I talk about sales... that comes next... once you’ve got the right people nibbling on your line... and what I’ll address next time. 

 Until then... happy fishing!!

Netweaving... not networking

Well, it’s official!  With Melbourne Cup Day now behind us, it really is a downhill slide into the festive season of social engagements and parties – business related and otherwise.

Rather than decline these social invitations citing ‘busy-ness’ as your excuse, consider using these opportunities to expand, enrich and ‘weave’ your networks.

I don’t mean handing out as many business cards as you can, or trying to generate as many new customers or clients you can in the shortest space of time.  What I really mean is what I call ‘netweaving’ – truly connecting with people and connecting them with others.  Netweaving is more about helping others... whereas traditional networking has been about ‘what’s in it for me’ (WIIFM).... which, by the way, is why so many people don’t like traditional networking.

The festive season is a great time to reconnect with your networks (business and personal) and practice the art of netweaving.  Look for ways that you can put people in touch with others where they can create mutually beneficial relationships.  For example, if someone mentions they are experiencing a particular problem, or looking for a particular service provider – pass on those resources that you would personally use if you had the same need.  I recently was talking to a client who mentioned they were having challenges with their electrician.  I gave her the name of mine as someone she could call if hers couldn’t do the job.  I also often promote other peoples services or events out to members of my network purely because I think they would benefit... not because I get any benefit from doing so.

One of the side-effects of this style of netweaving is you will increase your visibility in your networks.  This means, when someone does need your product or service, you’re more likely to me remembered.  It’s not about netweaving to get this result.... but genuine netweaving produces this result.

So, party on.... and enjoy the social aspect of the next few weeks.