Not All Customers Are Alike

Author: Valerie Dennis

Not all customers are alike. And there may be some that you just don’t like. But for the purpose of today’s discussion, we’ll stick to the first statement. Given the fact that your customers are diverse, your sales structure and segmentation need to be anything but homogenous.

Customers can be profitable, unprofitable, growing, declining, high maintenance, low maintenance, strategic in value, high revenue, low revenue, etc. They can use up all your resources and give you very little to show for it. Your sales efforts will vary by customer type—with some being easy to sell, attain and retain. So why would you treat them all the same?

Sales structure is critical to sales success and it is often overlooked. Many companies don’t think twice about restructuring but don’t think about the new challenges it creates. For example, if you change a sales model from account management to a combination of business development and account management, you will not have a better performing model if you don’t evaluate the people and make the necessary changes.

Account managers don’t always make great business development reps and vice versa. Most account managers prefer to build long-term relationships, be the expert in the customer’s business and grow the business over time. Business development reps like the hunt, but not the long-term service and sales support of a customer. It is unlikely that you’ll be lucky enough to have each member of your sales team with those combined talents—although there are some who are great at both and like to do both.

Other misconceptions are that all selling is alike and the cost of the sale is the same. Customer segmentation is key here. The cost of the sale, the complexity of the sale and the customer value should be considered. Your A and B customers are your high revenue, high growth, strategic and/or high profit accounts. You will also have C and D customers—low revenue, profit and maintenance accounts—customers that might be better suited to inside sales support.  The key here is to match up the skills and cost of your sales force to the revenue and cost of the customer.

Restructure your customers first—A through D and align the sales force accordingly. In other words, put the right sales people with the right customer opportunities. Someone better suited for inside sales or small accounts will flounder in a national or key account. Sometimes, high growth customers are ignored, simply because they are growing on their own. I know, that’s counter intuitive but it happens. If the customer is selling themselves, so to speak, some reps will spend time where they can be more impactful. Not realizing that there is greater growth potential or that retention is also their responsibility.

Another thing to think about…“that one customer” who is HIGH maintenance. Uggh!! We’ve all had them–think about your high maintenance customer(s). With all due respect to the client, they are probably that way because the organization allowed it. As such, the cost to serve a customer is another consideration. Low revenue accounts (caveat: with no growth potential) should not get the same resources and support as your top accounts.

At the end of the day, when you look at your customer segmentation and sales structure, a compelling goal is to provide the right experience and value to your customers. These changes will help you optimize your selling, manage your sales costs and create the right customer experience.

 

Technorati Tags: customer segmentation,sales,sales structure,account management,business,selling

Social Media Madness

Author: DeVerges Jones

The emergence of social media networks has caused the world of marketing to shift much of its attention to these vehicles as keys to success in developing brands. I don’t necessarily agree and believe that we need to take step back. Good marketing is first and foremost developed by having well defined and specific objectives and a strategic platform that is well thought out. With the advent of the Internet many marketers said “We can change our strategy and or web site everyday if we choose.” This is a classic example of mis-guided thinking! This short-term nano reactionary thinking does not circumvent the need for a strategic and thoughtful approach to reaching consumers and customers.

Keep in mind that Twitter, Facebook, My Space are all tactical media vehicles that can be used to develop a program to communicate to consumers. They are not strategies – they are tactical programs just like the Internet, radio, print or network TV.

Many companies don’t have a strong and intimate understanding of their users but they will gravitate to the hype associated with digital media. Any advertising effort that is not well grounded in a fundamental understanding of consumer wants is not going to drive sales and profits over the long-term.

Social media will like other mediums evolve overtime and take its place as a formidable tool for marketers. It is not the end all – more over it is a part of a vast array of tools that marketers have at their disposal.

Let’s get back to doing more strategic thinking and stop employing knee jerk reactions to the next social media product that hits the market. Let’s evaluate the true role within the overall marketing mix that social media can play and how it can cohesively react with other forms of communication.

 

Technorati Tags: social media,twitter,facebook,myspace,marketing,marketing strategy,strategic marketing,business

Social Media to Integrate or Not?

Author:  Liz Rohleder

How do you integrate social media into your current business model?  Is it a part of the traditional marketing plan? Is it a channel?  Does it work for B-C and B-B customers?

 The answer is different for every business situation.  More and more companies are taking the plunge and no longer sitting in the fringe wondering if they should or should not enter the area of social media.  What will it take for your organization to engage in this new business opportunity?  How can you leverage your existing advocates of your products and services?  Why is it that so many organizations large and small are leveraging this emerging tool and why are executives engaging and utilizing?

 Your target base will determine the best strategy for you to approach your audience and drive your message out or engage feedback of your audience.

 Two of the more popular tools are Twitter and Facebook based on demographics and reach potential.  Professionals are also leveraging Linked-in to build their business connections.

 Good advice is to start slow with a personal page and follow others in the target audience or interest areas.  Then branch out to a company page and drive your strategy home.

1. Form your strategy for social media.
2. Determine what will reach target audience.
3. Get up to speed on how they work first.
4. Set-up your company page.
5. Allocate time commitment to make social media work for your business.
6. Have fun and create or engage existing fans of your company/product/service.
7. Keep learning – follow new trends!
8. Go to seminar on social media in your area.
9. Check out your local bookstore for reference books on the topic.

 For more information on marketing and sales strategy follow us at  http://peakvizn.wordpress.com/.

– Taking business to new heights!

To CRM or Not To CRM?

To CRM or Not To CRM?

 Author:  Alisa Walser

Is your business like most businesses struggling with making the decision to invest in a Customer Relationship Management System?  In difficult times, making the decision to invest in a CRM typically gets put on hold until the decision reaches a business critical situation.  Companies tend to endorse the “go with the flow” and “if it’s not broken, don’t fix it” mentality.  They feel that the pain of implementing a CRM is by far above something they can tolerate.  It doesn’t have to be.

The following questions may help you identify the reasons and justify the need for a CRM.  If you don’t have the answers, ask your executive staff to weigh in on the following questions:

• Are you investing in Trade Shows and leaving viable leads in a shoebox?
• Are you investing in lead generation but not contacting the responders?
• Do you invest in training your sales and customer service reps?
• Do you currently communicate frequently to your customers/clients?
• Do you currently communicate regularly to your vendors/suppliers?
• Do you have a way to capture all your current client information?
• Do you have all the client information available to up-sell or cross-sell for products that are currently in your pipeline?
• Is your organization prone to sales personnel turnover?

If any of the answers to these questions are yes, you have the basis for taking the step toward identifying and implementing a CRM.

Once you have identified that obtaining a CRM would be an option for you, make sure you ask for participation from all functional areas of your organization.  Many hands make light work and help to create a strong blueprint and foundation upon which to build your CRM. 

The foundation or blueprint is just like a house foundation, it is the most important part to critique when you are looking at the options to choose from for your CRM.  Make sure you consider a CRM provider that has the ability to easily expand your foundation.  The foundation should be able to be altered to fit your ever-changing business requirements, without loosing or jeopardizing information that you currently store.

Understand that support is a very important factor in the success of your CRM implementation.  Support from your IT/IS team is paramount to the success of the project.  In addition to the technical support, your organization should understand the merits of a good training program that includes a follow-up program a few months after implementation. 

For further information on the selection and implementation of a CRM, please continue to follow PeakVizn for future postings!

Seasonality of the Toy Industry

Author: Carrie Hood

The key selling periods for toy companies are: December, Easter then Back-To-School. One way to advertise the toy products is with “roto ads.” When you read the Sunday newspaper, such as the Los Angeles Times, you will find a plethora of ads from various retailers, such as Target, Kohl’s, Kmart and Macy’s. These ads are called “roto ads”.

During the holiday season, you will see more roto ads from Wal*Mart, Target, Toys-R-Us and Kohl’s featuring their toys on sales. The 4^th quarter (October, November and December) is a key selling period for toy companies because of the holidays in December (Christmas, Hanukkah, Kwanzaa, etc.). Toy companies are able to sell their higher-priced items during the holiday season because this is more of a gift-giving time of year.

Most of these retailers end their fiscal year in January. They sell-through their holiday inventory in December and January and start the new fiscal year in February. Retailers do not like to mark down their inventory because it lowers their gross margin and overall profit.

Another key selling period for toy companies is Easter. Easter usually occurs in March or April. Some of the toy companies run the same type of promotion during the same week as the previous year. This way, you are able to compare the sales from the previous year vs. current year. Easter is a good time to take advantage of the in-store foot traffic of people shopping for Easter baskets, Easter candy and outfits for Easter Sunday. Toys sold during the spring season (February, March, April) tend to be less expensive than toys sold during the fall season (holiday season) because people do not want to spend a lot of money on toys.

Back-To-School draws families and their children into the stores. Some people start shopping for school-related items in July and August. Toy companies will sometimes run a promotion during these months and call it a Back-To-School Special.

The next time you read the Sunday newspaper, take a look at the roto ads from the different retailers. Notice how the toy items that are advertised change in price and selection depending on the time of year.

Technorati Tags: Toy industry,marketing,retail

If You Could Do It Yourself – You Would Already Be Doing It! Today’s Changing Business Model

Author:  Denise Keddy

Years ago you went to college, graduated, found a job and pledged your loyalty to the company.  If you were lucky you could retire after 30 or so years with a nice gold watch.  Today’s business model is evolving- partly because of the economic turmoil, party because of the ability to work any where, anytime, and partly because the new model is moving toward more collaboration. Time Magazine has an interesting report on The Future Of Work .

 The following really struck a cord with me:

“Paying your dues, moving up slowly and getting the corner office — that’s going away. In 10 years, it will be gone,” says Bruce Tulgan, head of the consulting firm Rainmaker Thinking, based in New Haven, Conn., and author of a new book about managing Gen Y called Not Everyone Gets a Trophy. “Instead, success will be defined not by rank or seniority but by getting what matters to you personally,” whether that’s the chance to lead a new-product launch or being able to take winters off for snowboarding. Tulgan adds, “Companies already want more short-term independent contractors and consultants and fewer traditional employees because contractors are cheaper. And seniority matters less and less as time goes on, because it’s about the past, not the future.”

Smart companies are changing their business model to include contractors and consultants and why not?  If you have a project wouldn’t you rather hire someone who is flexible, has the experience to solve your problems and can help you attain your goals?  After all if you could do it yourself you would already be doing it! 

What makes a good consultant?  If you are hiring a web designer undoubtedly you will have a detailed list of requirements; understands SEO – check,  can develop a secure e- commerce site- check, has the ability to design the new site so that you can easily update it – check….and so on and so on.  The true beauty with the changing business models is that you can hire people that are passionate about what they do!  What a concept! 

Instead of fighting the changing business model companies need to embrace it!  After all how many companies are struggling with their marketing and sales initiatives since they downsized the marketing department and put finance in charge of marketing? (When is that ever a good idea?)   I am sure many of us have been in the position where we “inherited” responsibility for an area in the company that we have no interest or desire to manage.   So we silently march along doing what we were told because the company told us to (O.K. so some people are not so silent about it!).

Businesses need to open up to the idea of collaboration.  Why not bring in a team that has experience solving the problems your company is facing?   One thing that does seem to be missing from the detailed list of requirements in hiring a consultant is passion.    You can  go down your check list and hire a consultant that will bring value to your company, but you must ask yourself if this is someone you can establish a true partnership with?    Just going by the numbers may get you a better number to show to the finance group but hiring someone who is as passionate about your product or service as you are will give you the extra edge in the future because they WANT to be there working with you and helping you grow your business.  Wanting to work with your company is a whole lot different than getting the remnants of the marketing department shoved into the finance department

Business is changing and these are challenging times.  I had a boss who constantly reminded us in our weekly staff meetings  “When you’re through changing, you’re through” *   funny how this has more meaning today than ever before.

I believe businesses who are quick to adapt this business model with be successful because they are surrounding themselves with people who have a common interest  and goal and who have a passion to succeed!

–Originally quoted by Bruce Barton

Are Your Pricing Practices Hurting Your Profits?

Author: Valerie Dennis

On Friday, I was with two colleagues and our conversation turned to a small business that is developing their pricing methodology, after the fact. They think they are leaving money on the table. They probably are. This isn’t a blog on how to set your price; it’s about ancillary factors that affect profit. If you ignore things such as pricing analysis, pricing practices vs. policy and guidelines, you’re probably leaving money on the table. 

Surprisingly, the cost component is sometimes oversimplified, which negatively affects your profits. Pricing models are dynamic; they should be reviewed on a regular basis to make sure they represent the current cost of doing business. When was the last time your labor costs went up, the price of gas, rentals, leases, insurance, facility and equipment costs, fleet expenses, miscellaneous expenses, etc? And when was the last time you adjusted your pricing to reflect those changes?

Take a surgical look at your contracts; this is another area where profit escapes. It’s not unusual for grandfathered contracts to freeze pricing levels—for years. Same goes for evergreen contracts, they get lost in old files, along with outdated pricing terms. Customers generally accept pricing changes when they are justifiable and anticipated. If you have multi-year contracts, specify the frequency and amount of your price increases so your customer can budget and plan for it.

Charge customers for the services or products you provide. Pretty simple, huh? Well, think about the ancillary services that you provide—the ones you don’t charge for. You may find a viable income stream here—for now, it is an expense straight off your bottom line. There’s adding value and then there’s giving your services away for free—which are you doing?

Market equity should be considered. Not all customers are alike; they don’t spend alike and it is unlikely that they cost the same to serve. The challenge is that without guidelines and analysis, you can have two customers with the same spending levels who have markedly different discounts or pricing. You can have one customer with higher spending levels, only to find that the lower revenue customer has the better deal. Try explaining that to a strategic or high-revenue account.

A comprehensive pricing analysis will help you determine pricing guidelines, and anything that doesn’t fit into the guidelines will be the exception. Just make sure you have rules around the exceptions…I have seen some great sales people justify a better discount for a client that belongs on a standard program.

In some companies, practice overtakes policy or policy is non-existent. Your systems and processes may give unintended access. Pricing changes are made over the phone by calling Customer Service or through direct computer access. Every sales person wants to close the sale and they want to do what is best for their client. But not all of them understand the impact of pricing decisions to the bottom line—or they do, and they don’t care. Too much authority without the associated accountability and visibility will lead to pricing decisions that can make a profitable customer unprofitable. Create and communicate policy to all affected departments and employees.

Rest assured, if you lack the right policies, guidelines, analyses, and accountability to support pricing initiatives, you invite risk to your profits. The risk is you’re either overpriced for your market and don’t know it, or you’re enabling every sale to close on price alone—not your value.  Your customers will love you and so will your competitors (if you’re over priced)–your shareholders or partners, not so much…

 

Technorati Tags: Pricing,Profit,Business,Sales,Contracts