I am writing five blog posts on the 5-keys to Business Success. The first key was FINANCE which you can read about by clicking here. In this post, I will talk about the second two keys of MARKETING and SALES.
Marketing is the ability to differentiate your company and get the message out to your marketplace that you exist and you’re awesome.
Defining a niche for most small business owners is extremely difficult. A niche is a clear definition of your client in every possible way. Let’s say I’m an ice cream vendor and I say, “I want to serve ice cream to people.” What if I then say, “I want to serve ice cream to kids.”? Do you see what happens? Right away, I start to think about marketing my product differently. If I sell ice cream to everyone, I now need to think about what everyone likes. Where do I market to everyone? If I sell ice cream to kids, I can create images that attract kids. I can market to places that kids and families hang out. What if I say, “I want to sell ice cream to families who want nutrition with great taste.”? See, how I can create a much narrower niche?
Most small business owners are afraid that if they define their niche too narrowly, they may miss out on customers. Ironically, it is just the opposite. Once you decide on a niche, two things happen: 1) customers feel like you care about them… not a general caring about an entire population and they respond; and 2) the business owner only invests marketing funds in niche places that will pay off.
Marketing Tactics & Strategy
Let me quickly define the difference between a tactic and a strategy. A marketing tactic is an actual task that is designed to bring customers to the front door of a business. A marketing strategy is an all-encompassing brand which defines who a company is.
Strategy: You should define your marketing strategy before you start picking tactics. Let’s go back to the ice-cream company. Let’s say that you want to serve ice cream that has 25% less sugar that competing brands. You want to do this because you feel like kids are becoming obese from the excess sugar in traditional ice cream. You have also figured out a way to reduce sugar without an artificial sweetener and your ice cream tastes awesome. This one idea will establish your ice cream branding and the way you market your product. Your logo, tag-lines, value proposition and even your colors should reflect this branding idea.
Tactics: It may not surprise you to learn that there are over 100 tactics to market whatever you sell. Your trick is to pick no more than five tactics. Before you start stressing out about which tactics to pick, simply start somewhere and commit yourself. Understand what each tactic will cost and understand how many prospects it needs to attract in order to justify whatever it costs.
Clarify Your Identity
I have covered this a little bid in market strategy; however, this is where most small business owners fail. If you’re going to start a company, you have to be different and better. Otherwise, why would anyone want to be your customer? The reason that this is hard for small business owners is that they somehow fail to see their unique skills and abilities. If they happen to see them, they are terrible at articulating these advantages to prospective clients.
Another trap is that new business owners feel like they can succeed by being the same as every other company that does what they do. If you plan to offer a commodity service and simply hope to luck into a few clients in the general marketplace, you will fail. Everything a consumer buys is justified with a reason or emotion as to why they bought it from someone and did not buy it from someone else.
Here is how you establish your identity. Develop an elevator speech, a unique value proposition, and taglines that define how your business is different than the millions of businesses in your industry. Think about WHY you do what you do. Come up with a WHY, HOW, and WHAT statement for your company. Most people can quickly identify with the WHY of your company before they will understand the HOW and WHAT of your company… so start with the WHY.
If you are struggling with this item, ask a good friend or your clients to tell you who you are. Oddly, others can sometimes see us clearer than we see ourselves.
Track Marketing Success
Remember, how I told you to pick no more than five marketing tactics? You need to give these marketing tactics a chance to work. Six months is a good amount of time to see how any tactic is working. On the other hand, you should not spend valuable marketing dollars on tactics that are not working.
Make sure that you constantly ask your clients how they heard about you. Each company will have a different level of success with different tactics. If you track how well you are doing with each tactics, you’ll be able to increase investment in tactics that are working well and cut off investments in tactics that are not working at all.
When a tactic is not working, you can either try a different tactic altogether; or increase investment in a marketing tactic that is working well. You should never have fewer marketing tactics than three and should never have more marketing tactics than five. Especially, if you are a small business owner.
Most business owners combine marketing and sales into one category. Marketing gets your prospect to respond to your company in some way. Once a prospect is interested in your company, you need to convert that prospect into a customer. Sales is the ‘process’ of converting an interested prospect into a customer.
Happy day! A customer just ran across your website and thinks they may be interested in your product or service. They call you on the phone and ask you all kinds of questions about your product… what exactly is your product? how much does it cost? Why are you better than ACME? How many employees do you have? What’s your process for doing what you do? Do you have references? Why are you a better value than ACME?
You can just rattle off answers to these questions in hopes that you will win a new client; or you can gain control of the situation in the form of a ‘sales process’. The sales process will vary based on what you are selling. If you sell some widget on the internet and it’s identical to 1,000 other widgets, your sales process may be as simple as a widget description on a web shopping page. If you have a unique therapy service that helps people get over the loss of a pet, you may need to find out more about your prospective client and education them on how you do what you do. The more education and information gathering that is required, the more sophisticated your sales process ought to be.
The guts of a sophisticated sales process include: qualification, objection handling, and awesome questioning skills. Inexperienced sales people will start vomiting information about their product to clients which usually ends up with a hung up phone or a bored prospect in a sales presentation.
- The first step in the sales process is asking ‘open ended questions’. An open ended question allows the client to expose their actual problem before you start babbling about some solution that doesn’t suit their needs.
- The next step in the sales cycle is to acknowledge and validate the client’s concerns. This means that you repeat what they told you and express understanding about why they feel how they feel.
- The next step is to describe benefits of your product and why your product or service is uniquely qualified to solve their problem.
- The final step in the sales process is to ask for the order. Most prospective clients may never buy something from you unless you ask. Asking for the order is a ‘close ended question’. It can only be answered with a YES or NO.
The Buying Process
After understanding the sales process described above, you need to also understand the order of priority people place within their buying decision. Here’s the order: 1) People; 2) Company; 3) Product; 4) Price; and 5) Timing.
- Person: If the sales person is a dud, most prospects will not even pay attention to the rest of the sales pitch. This is especially true if the product being purchased is complicated in any way. Think about it this way, most prospective clients will never learn enough to make an informed buying decision. So, they need to believe that the person who is selling them the product is trustworthy and cares about them.
- Company: The next priority is the company. If the company is brand new, most prospective clients will feel like they are test subjects. However, if the company has a reputation for high quality service; stands behind their products; or whatever else is important to a prospective buyer, then the prospect is more likely to become a customer.
- Product: The features and functions of the product being sold certainly matters. However, this category is third on most buyer’s lists. Especially, if the product or service being sold is hard to understand. A sales professional needs to explain product features in language that lay-people understand… No jargon. The sales person needs to connect the benefits of the product or service to the needs actually expressed by the prospective client. That’s why questions are so important in the sales process. If you don’t ask questions, you don’t know what the prospective client needs.
- Price: Rookie sales people freak out about price. Price will establish value in the mind of the client. Up until the time you describe price, you have been able to describe the benefits that your client will get for the price they will pay. If you have failed in the previous categories of Person, Company and Product, you ought to be embarrassed to now have to explain why your price is too high. On the other hand, if you succeed in the first three categories, they will think they are getting a bargain for the price you expose. There are always situations where prospective clients will want to know price before you have a chance to describe value. Don’t hesitate to give a price. Hesitation on this question communicates fear… and thus a price that is too high.
- Timing: Last on the list is timing. If your prospective client is ready to buy your product today, and you then tell them they will have to wait a month to get the benefits you have convinced them they need, they may be a little upset. In most cases, timing is simply a formality. Hopefully, if your client has to wait a month, all clients in your industry have to wait a similar amount of time and so you may still close the deal.
Sales & Marketing
Most people who start a business are good at what ever they do; but are terrible at marketing and selling their own products and services. I’m not sure why this is, but often times business owners do not understand their niche; cannot attract prospective customers to their business; and cannot sell their products and services. If this is you, do not feel shy about hiring a consultant to help you out; or hiring great sales and marketing people to do the job for you.
One note of caution. If you are not great at sales and marketing, you may not be able to hire a great marketing and/or sales person… And there are a lot of fakers out there who cannot market or sell; but can convince you otherwise. Even if you go the hiring route, you may consider having an expert help you with the position description, and hiring process.