Never Stop Selling

(How to avoid boom & bust)

One of the biggests risks for some businesses is having so much business that you stop selling. In some companies, when they are busy they are not selling and when they are selling, they are not earning. This is a particular risk for professional services businesses - even quite large ones - where the best sales resource is often the most valuable delivery resource. Many businesses fall into the same trap. They reduce their sales and marketing efforts when order-books are full. They lack the time to continue their relationship building when times are good. The bad news is that good times are often followed by bad times. A couple of cancellations can leave you starting from scratch to rebuild the relationships that you allowed to become fallow whilst you were busy. What to do?

1. Never stop selling - Even when you are really busy, keep all of your relationships alive. Many professionals sell the majority of their time to people they have kept in touch with over an extended period when they were not buying.
2. Manage your relationships - When order-books are full, keep a close eye on customer satisfaction. Make sure that you are easily dissatisfied. Treat long-standing clients as though they may defect at any moment. Take no-one for granted.

Review If you are at full capacity and growing the number of customers is not appropriate:

• Avoid turning potential business away (business that will most likely stay away from you if things change and you have more capacity);
• Think creatively about how you can satisfy those clients that are currently unsatisfied;

Things to consider

• Look for alliances and other mechanisms to satisfy these customers without adding to your cost base;
• Think about price as a tool to manage your customer base to become more profitable so that you can fully satisfy all the highest spending clients;
• Use Segmentation tools to better understand your customer base;
• Adding flexible capacity that has no fixed cost (outsourcing, sub-contract, …..)
• Additional products with lower costs or new processes;
• New, higher value, products / services may be appropriate for some.

Don't Buy Paperclips - Cost Control Lessons for Enterprises from SME's

One of the many quotes attributed to Duncan Bannatyne is that he forbade the purchase of paperclips in his businesses. This made me think. I never buy paper-clips. There is a jar in my office where incoming paper-clips are stored. I use a few every day, but the level remains constant. Large organisations focus on the major cost centres when they initiate cost saving programmes. This often results in head-count reductions - sometimes with unfortunate consequences for customer service. SME's rarely have significant numbers of staff and are forced to be a little more creative in their cost control programmes.

This attitude leads to a constant search for best value - something which is often overlooked in larger enterprises where:

• It is somebody else's money;
• Most cost saving initiatives involved a purchasing change or a policy change.

I am not knocking the top down approach to cost saving - I expect it has made a huge difference to most organisations over the last 24-36 months. I am advocating something extra.

If a large enterprise is to learn the lessons of an SME in cost control it will need to establish a culture change. This culture change has to start at the top. If you want everybody in the business to be careful with every penny, then you need to start leading by example.

Simple Steps/ Things to Think About

• Trains - split tickets - manage your arrival time in London (for example) carefully and a split ticket can save a significant proportion of the cost. My own (standard class) journey to London is at least £40 cheaper if I buy a Nottingham / Market Harborough return and a Market Harborough / London return at a discount rate for leaving Market Harborough after 09:00am. It may mean staying later in London to get everything done, but the saving is significant - especially if you have several people making the journey on a regular basis. I expect that most readers of this blog are well used to working in standard class rail carriages. The attitude of Sir Nicholas Winterton. is not exactly helpful!
• eBay/ Second Hand - whilst a large enterprise could be making a false economy by changing the IT procurement policy away from Dell or HP for PC's and servers, there are a number of expensive items that do not need to be brand new every time. Server racks for example - good condition is important, but is new essential? Most SME's locate their second hand office furniture store and buy good quality second hand desks and filing cabinets - and get something better than if they had bought new on their budget.
• Meetings Meetings Meetings - Internal meetings are one of the biggest cost wasters in large enterprises. Your most expensive resources locked in rooms, often making assumptions about the customers they no longer have time to go and see. If your organisation can only exist by keeping senior people in an incessant stream of internal meetings, you need to change. Start at the top. Think about the number of meetings and their duration. Think about making sure that you have the right people in each meeting. Halve the duration of your board meetings. Insist on information being circulated in advance - one page briefings preferably so that the meeting is used for clarification, review and decision making - not for interminable briefings.
• Internal Reporting - I once worked for an organisation which had so many matrices and internal communication routes that some senior managers spent 40% of their time compiling internal reports - usually repeating information already reported elsewhere in a different format.
• Car & Van Sharing - How often do your people turn up at a remote site, each in their own vehicle? Have you considered the cost of this? Senior people are usually the worst offenders. However, a small client of mine had 10 vans but usually paired fitters on site. By halving the number of vans and some creative thinking in the work scheduling their transport costs were reduced by a significant margin. Couple that with a good deal on weekly rental of un-liveried vans (some magnetic signs are inexpensive) and you have a flexible solution to a major cost issue. It could be that the biggest obstacle to savings like this is your "Fleet Manager" who exists to manage a fleet of vehicles.
• Bonus Schemes / Buy-In -In an SME, it is easy to make sure that people understand the cost management issues. In a larger enterprise, you might need to be more creative if your people are to be bought in to your cost management philosophy. Your main objective is to ensure that most of the initiatives are started by the people who are most affected. Nothing saps morale in a large organisation faster than a continual stream of penny pinching changes to expenses and car policies. If you have a large service organisation, get the ideas from the people who are most affected. They may surprise you. If you have a bonus scheme, you may already have the means to reward the right behaviours - you only need to facilitate the change projects.
  

The Message
Be creative and give your teams an incentive to participate in the cost saving programme - it will make a refreshing change from trying to impose yet another change to the expenses policy.

Related Articles
Seth Godin wrote a recent blog which offers a counter argument. John Crickett wrote a great article which is in broad agreement with my sentiments above. Your firm, your choices!

Lies Lose Sales

Sat at a desk in a client's office the other day, we were interrupted by the telephone. My client's sales manager took the call. The caller (having selected our sales line) asked for the Tech Support manager by name. The caller was, politely, advised that we needed to find the Tech Support Manager but could we know who was calling. Fred Smith from Blogs & Co. "Is he expecting your call?" "Oh ye" came the answer.

After a walk to the next room to find the Tech Support Manager engrossed in the weekly team meeting (the one where all unresolved trouble tickets are reviewed), our caller was advised "He is in a meeting. And he says he was not expecting your call."

The caller then said "no he wasn't, but you are a salesman, you know the game of saying anything to get past the gatekeeper."

So, we have an expensive resource ensuring that my client will never do business with his employer - because he lied. They may have a fabulous proposition which, at some more convenient time, the Tech Support Manager may have found compelling.

It was a stupid lie too - one that was easily found out.

The lesson: If your sales people are so weak that they resort to lies to try and con their way past gate-keepers you have a real problem. Gate-Keepers are good people doing a variety of jobs - always with the best interests of their employer at heart.

Make sure that your sales team have a short introduction which includes your compelling USP - that anybody can understand. Then you will often find that the internal meeting only lasts an hour every Tuesday and a call back later in the afternoon on another day will see your call put through. It will not always work, but it will give substantially better results than telling lies to gate-keepers.

Do your target clients know what you do?

In their eagerness to set out a comprehensive list of services some businesses fall into a common trap. They claim to be experts in too many things.

Many businesses, especially those in their early stages of development, offer too many things to too many people. They fail to specialise, with the result that their target customers become confused as to what they offer (and to whom).

Why is this important?
The human brain is a wonderful and complex filing system. Our brains work on a system of associations. We need to know how something compares with something we already know before we can index it. On-line and paper directories are organised around these things. Good old yellow pages are a classic example. Finding a business is much easier when you know which category it is in.

Most successful businesses have a real understanding of what is special about them – what their Niche is. Niche marketing is all about narrowing your focus... specialising... establishing yourself as the expert in a tightly focused range of products or services.

Your niche is the place in which you have a natural competitive advantage because you occupy the right place in the right business category.

Know what you do
You must be clear in your own mind about your lead offer - before your customers and prospects can easily work out what you do. This is easier for some than for others. It is always worth the effort.

Express what you do in one line
If you need to qualify and explain, then you may still leave your prospects in doubt as to where your real expertise lies.

The good news
You do not have to turn away work that is not totally within your declared specialism (as long as you stick to work for which you are qualified). If you are busy, there may be a justification for starting to be fussy – perhaps using price as the mechanism to discriminate.
The point is to refine your proposition to the market so that clients and potential clients can label you. When people can label your business, they are much more likely to enquire about your products and services. What really counts is your passion and consistency in promoting your core products and services to your chosen target customers.

Be brave
If business starts to fall off, it is easy to fall into the trap of becoming a generalist again. Your specialism may need to be refined, but having the courage to stay specialised will pay.