Posted: December 28, 2010
Last week following a rare (these days) squash triumph I was chatting to a couple of players behind the courts who pointed out that having looked like the Xmas turkey at one point, in their words, I’d refused to panic and managed to pull myself into the lead point-by-point and held on until the end.
I was reflecting on this conversation a while later and realised that the “not panicking” thing also has parallels in business. Most organisations go through rough patches at some point in their history, but what separates the men from the boys is the way they rise (or don’t) to the challenge.
Even rock bottom is no time for knee-jerk responses, unless your instincts are flawless (and if that were the case, you probably wouldn’t be having lean times in the first place). Failure is more often a case of the business not keeping to strategy than it is the strategy itself, so, first off, take an honest and close look at your business to be sure that you are staying true to your aims at every point in your delivery process.
Don’t make the mistake of switching all your resources to the front line either. You have to remember that sales have their own gestation period. If your sales ratio is one in twenty leads, doubling your sales resources will only give you the ability to follow up twice as many leads. You may get twice as many sales for a limited period this way, but you’ll very quickly realise you’ll need twice as many leads to keep going and that’s about the rest of your marketing machine. In fact, best practice is firstly to focus on activities earlier in your marketing process to increase the quality of the leads that you generate, improving your sales ratio and thereby increasing the efficiency with which you use your sales force.
Failure to maintain your strategic initiative will quickly find you on the kind of expensive and labour-intensive tactical mill-wheel that just about every business in the developed world is trying to stay away from. Not only are you unlikely to influence your sales ratio, your lead-generating initiatives will have stopped, so nobody will have set up future sales opportunities and you’ll be back to square-one, condemning yourself forever to door-knocking for sales, which, as we all know is very inefficient indeed.
There are a few other things that you can do too. Look at your sales process model and dinterrogate the links where the fall-out occurs. If people seem to be interested in your product, but don’t end up buying, work out why this is. Maybe its a pricing issue? It’s amazing how many businesses still try to sell parity products at premium prices, but, when times are hard, these are the businesses that suffer. Being more expensive than your competitors isn’t always the end of the road as long as you are offering at least equivalent value. If the price you are asking buys more features or benefits than your competitors’ emphasise your advantage at every point in the sales chain. However, you’d be wise to make sure first that the added features are ones that your market cares about. Don’t start by kidding yourself that just because your bundle is bigger it is worth any more to your customers – ask them.
When all else fails your only option is to reduce your price, which means taking a close look at your delivery system and cutting out inefficient practices. If you think you are running lean already, think again. A good marketer can usually find ways to improve the efficiency of even the most streamlined business.
Of course, it could just be that you need to be more creative in the way you stack the deal. For example, payment plans can be cut and diced many ways to suit specific customer needs. Consider what you and your customers need and tailor your offer accordingly. If you need cash-flow, structure your offer with an incentive for up-front payment or introduce a sliding scale payment plan that covers your liabilities, but makes your product more accessible. Conversely, if shifting dated inventory is your problem maybe you need to create a deferred payment scheme that will enable customers to get hold of your stuff whilst tying them in to you for longer. If you manage to resist the knee-jerk, you could even come out of your bad patch in better shape than before.
Posted: December 11, 2010
A friend of mine bought a pair of boots from a chain store, but when he arrived home with them he discovered that the box contained two right feet.
The next day he returned to the store and explained the error to the assistant. “I’ll just check the stockroom to see if we have another pair” she said.
She returned a few moments later. “I’m really very sorry sir. You won’t believe this, but the only other pair we have in your size had the same problem, except there are two left feet”!
Posted: December 7, 2010
In case you missed it, Britain is currently engaged in a debate over the merits or otherwise of legislation that will force cigarette manufacturers to package their products in plain brown boxes.
I heard the subject being aired last week on TV when a marketing “expert” was asked by a sceptical presenter whether the move is likely to have the intended effect. The expert replied that it might make a small difference, but it wasn’t going to convince people to give up. Now, pardon me, but I think either she or I missed the point here.
Firstly, there’s a limit to the influence anybody can have on existing smokers. Smoking isn’t a habit, but an addiction that education isn’t going to have much impact on and in this context packaging even less. However, I find it hard to belive that the folks responsible for the anti-smoking campaign haven’t worked out they’ll get a quicker return on their investment by focussing on preventing people from becoming smokers in the first place and in this respect, packaging is very influential.
This being so, the packaging idea makes a good starting point for anybody seeking to reduce the number of smokers. Smokers are largely brand loyal and once hooked they’ll buy their favorite whatever the packaging. Sure, nice packaging may help maintain the “Brandship”, but we’re not talking about brand-switching here and the box really comes into its own in attracting newcomers to the world of the weed.
For as long as I can remember, tobacco manufacturers have invested millions in package design – Why? Because it works! Generations of smokers have been lured by attractive packaging, but while the packaging that wins a smoker in the first place has done its job for the brand, it has, in the process, also added to the smoking community. The thought behind the idea of brown box packaging surely isn’t to persuade smokers to give up, but to reduce the appeal to, largely young, non-smokers who are more susceptible to the lure of packaging? On that basis the plan gets my vote.
I’m feeling guilty that I’ve been neglecting my blog for the last few months. Time flies when you are having fun and I’ve been engrossed in developing a new offer with Immedia Broadcast, who lead the UK in the design and delivery of bespoke live radio solutions for commercial enterprises.
Having set the bar for the last ten years in the high-ticket radio and TV solutions that have made them famous Immedia are keen to apply their skills and experience to the volume end of the market and I’ve been working with the amazing technical, radio production and music psychology experts in Newbury in the South of England, to create what we have called Dreamstream, an off-the-peg music solution that smaller businesses can access for a minimal monthly subscription. It’s still a work in progress, but take a look and let me know what you think of it so far. www.dreamstream.co.uk
The journey has been fascinating and among the interesting processes we have encountered along the way, we commissioned a significant research piece that involved talking to 800 small store proprietors. This as a bit of an eye-opener and maybe a pointer to why our small stores aren’t always realising their potential.
While I’m used to retailers in the US and elsewhere, who, regardless of their size, already recognise the business case behind in-store music, their UK counterparts definitely need help joining the dots. There’s research everywhere (and its a fundamental of my “Brandships” principle) to establish beyond doubt that music, that reinforces and reflects your brand will make customers feel at home. It also shows that as a result of this they stick around longer in the store and return more frequently and we all know that once you have achieved this you’ll see an increase in sales.
There’s another angle to the in-store music argument though and that’s the impact it has on employees. Those of us who have worked with this tool will know that store staff are responsible for a lot of the complaints about in-store music. It’s also often the employees who exacerbate the problem by messing around with the content and volume in the stores where they work. However, retailers that get their music right will find that their employees are energised and more enthusiastic about their work and this in turn increases productivity and sales. Its pretty conclusive – increased customer propensity and greater employee engagement and there are case studies on the Internet where retailers have shown increases of 20% in sales just from music, without any announcements or commercials.
Sadly, some UK independents remain sceptical. Our research even found a few who believed that in-store music actually had a detrimental effect on business. The reason for these opinions can only stem from their experience of some of the absolutely awful in-store music that we hear in the UK. I think there’s a major education challenge facing the sector and, with current challenges of the new economy, and the drift towards “clone towns” we need to get cracking on this quickly.
It beggars belief that a cash-strapped shopkeeper will pay more than £300 each year on PPL and PRS music licences, only to waste it by playing local radio or worse still the dregs of their own music collections. Music that works is the product of the marriage of science and art that you can only get from professionals. These small businesses need to understand that the DIY approach is a recipe for disaster and local radio is not going to do it for them either.
UK independent retailers have a long way to go to catch up with their counterparts in the US and until they understand how to make the most of the opportunities like in-store music that are definitely available to them, their self-pity and claims of a market biased toward multiples aren’t going to receive much sympathy.