sales

How does your business shape your pricing?

November 15, 2017

As we head towards the end of the year, we’re going to kick off a series of conversations about money. One of the most overlooked aspects of marketing is your pricing strategy. Over the next couple weeks, we’re going to talk about how you price and sell your services and what that says to your audiences.

Let’s first think about how you determine your pricing and what that says about your value proposition. You have lots of options, and while we might assume it’s always smarter to be more expensive, that actually may not be the best decision for your business.

When thinking about your pricing strategy, you need to consider:

Positioning: How are you positioned in the marketplace, relative to your competitors? Does one of them own the discount or premium position so strongly that it would be difficult to unseat them?

Differentiation: This is related to positioning. The more you can demonstrate a unique value proposition to your potential customers, the more valuable you are and the more of a premium price you can charge.

Your costs: Obviously your prices have to take into account what it costs you to deliver what you sell. Depending on the work you do, the kinds of people you employ, and the materials you need – some pricing strategies may not be an option.

Demand: The more people need/want what you sell, the more they’re willing to pay for it. But demand is also finite. Is this something they will always need/want or is it fleeting like Cabbage Patch dolls or a particular style of clothes.

Time/effort to deliver: Some companies make a widget that they can mass produce and sell at a relatively low cost because there is no customization or manual labor involved. On the flip side, a guy who designs and builds custom furniture by hand has a huge time investment and the value is in the individuality of what he delivers. That’s a very different reality.

Harsh reality: Sometimes you have no choice. Economic conditions, market saturation, inventory issues or some other element of your business may force you to modify your prices, either temporarily or in rare cases, permanently. There is no such thing as forever when it comes to business strategy. We must all evolve or die, and pricing is certainly one aspect of your business that may change over time.

Revenue goals: We often assume that there’s only one reason to be in business, which is to make money. But there are many shades of grey within that. Are you trying to make the most money possible in the short term? Or would you rather make less money every day but have the sale live on for longer? Are you trying to maximize profits or are you reinvesting in something else – be it your company or your community or some population of people that you serve?

Static or elastic: For some organizations, it makes sense that once you set your pricing, it remains the same for an extended period, until inflation, demand or some other combination of influences triggers a one-time price shift. On the flip side, you may sell a product or service that has a lot of elasticity in its pricing. You might run sales or promotions on a regular basis to drive traffic to your location or site. You may have a seasonality factor. If you sell Christmas trees, they’re at a premium price the day after Thanksgiving and at a deep discount price on December 24th.

These elements are the business realities that have to be factored in as you think about your pricing model. Next week we’ll dig into how to think about pricing through your marketing lens.

 

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May I ask you a question?

July 5, 2017

One of the biggest issues marketing and sales folks face is just getting on the radar screen of their prospects. Even when you have something of incredible value and you genuinely know the prospect needs what you have to sell – it’s tough to get their attention long enough to ask a question or even be noticed.

That’s even more of a challenge for organizations that don’t have a six-figure marketing budget or exist in a crowded, competitive landscape.

That’s where some psychology can be incredibly helpful.

One thing that is almost universally true about us humans is that we are incredibly flattered when someone thinks we have something of value to offer in the way of experience, knowledge, expertise or hard-earned wisdom.

And that, I believe, is the door we need to open if we want a prospect’s time.  For this technique to work, I think the following needs to be true about your business:

• You/your organization have a niche/specialty in which you have a great depth of expertise
• You have some outlet (website, blog, podcast, newsletter) in which you share that expertise without a sales pitch or being self-serving
• You have a genuine interest in the people you serve and a passion for helping them in your unique way with whatever you do/sell
• You sell something that is more of a considered purchase and less of a commodity

If that’s you, read on.

Make a list of your ideal prospects and their influencers. Who would you most like to serve and are the people/companies that you know you could delight? Or, who has information/insights that could be incredibly valuable to your target audience?

Once you have compiled the list, call/email them and ask them if you can interview them for your blog, website, newsletter, podcast, etc.  I think you’ll be surprised at how many of them say yes and are flattered by the invitation.

Now the hard work begins.  Do your homework.  The prep for the interview is key to the success of this marketing tactic.  You want to ask questions that really get them to go deep and give you some insights into the way they think, work and what they believe about the work they do.

Be smart about the interview itself. I know I don’t have to tell you this but show up on time, look and act professionally, be gracious if things go awry, and don’t sell. If your interviewee asks about your business, give them a quick overview but do not go into selling mode. You’re there to learn and connect. Focus on that.

Send a handwritten thank-you note after the interview, sharing something valuable you learned during your time together. Not an email or a computer generated thank you.  Invest the time to actually write the note.

Next, create the content piece and reach back to your interviewee so they can review it.  Share with them your publication plans and tell them you’ll send them a link/copy once it’s out there so they can share it with their network as well.

When you hit publish (or print the newsletter if you’re old school), re-connect with your interviewee and invite (not demand, require or nag) them to share it.

Let’s recap your prospect touches.  Between the initial invitation and the publishing of the content, you’ve connected five times.  That difficult to reach prospect has probably welcomed your communications five times.  If you’ve been engaging and sincere, I believe they would be willing to at least learn a little more about the work you do.

Not only that but you are creating content that truly helps your entire customer and prospect base.

That’s marketing that will lead to sales time and time again.

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Become a partner, not a vendor

June 21, 2017

I know very few businesses that aren’t looking for additional sales. Ninety-nine percent of the time, those businesses identify potential customers and then woo them until they either buy something, tell them to go away or they get busy enough that they go back to ignoring the prospects. Without a doubt, we need to chase after new clients. But we often overlook the quickest, easiest sale –our existing customer base.  Businesses that grow year after year don’t do it by chasing new prospects.  They do it by delighting their customers in a way that they can’t get anywhere else – by becoming a partner, not a vendor.

Want to have that kind of permanent impact on your sales to existing customers? Partner them with smarter employees from within your organization. By smarter, I don’t mean someone who knows the most about your business, products or services.

I mean someone who knows the most about your customer’s business and business in general. The more your project managers, customer service team and salespeople understand how business works, the more they can serve their clients in ways beyond just selling them something.

Businesses that are thriving today aren’t selling their clients stuff. They are helping them solve problems.  We need to deeply and genuinely understand our client’s business or life (if we sell consumer goods) so that they can be helpful.  As we’ve talked about before, helpful is the new entry point of marketing and sales, whether that entry point begins online or in your brick and mortar location.

Your employees don’t magically become more knowledgeable and helpful. It requires a big investment (both time and money) on your part. But it’s an investment that keeps on paying dividends.

There are many reasons why your team needs to understand your clients’ core needs.

• It allows them to bring better, more complex solutions to their client’s real problems
• It allows them to be a valuable resource to their client, rather than just a vendor
• It differentiates them from other companies that are still just selling stuff
• It allows you to charge a premium price – because they can document the value they deliver
• It typically means they are better at retaining clients
• If you’re selling to a business, it gets them to the C-suite table, rather than having to deal with middle management

You have a choice to make – you can either be a trusted advisor or a vendor.  In both cases, you can earn referrals from your client. But customers treat partners and vendors very differently when it comes to price, repeat business and expectations.

So you have to decide – how do you want to be referred and what kinds of new client relationships are you trying to earn.

If you want to be your customer’s partner and want to be able to rely on repeat business from them, here’s how you can build a team who is prepared to deliver on that promise:

• Broaden their education by taking classes
• Join a club, networking group or professional association focused on best business practices in your customer’s field
• Ask clients if they can shadow them for a few days and ask a lot of questions
• Read leading books on the industry
• Visit trade shows and attend their educational workshops
• Start their own small business on the side to learn about business in general

For this strategy to work, it has to be a company-wide initiative. Everyone has to adopt the idea that it’s their job to understand and guide your client’s business or life to a very different depth than most organizations would be able to do.

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Are you a commodity or are you different?

April 5, 2017

One of the first questions we ask a new client is “how are you different?” We usually hear things like:

1. Our people are better

2. Our products/services are better

But rarely do we hear – we do what we do differently than others do it. The harsh truth is, your people probably aren’t better. They may be great but your competitor’s staff is probably also pretty great. Odds are, your products and services do have rivals that are equal to what you offer. I’m sure you also have competitors who have lousy people and mediocre products/services but they’re probably cheaper than you are and that’s how they compete.

Let’s assume that there are a handful of companies who sell a product/service that is comparable to you and who have well trained, eager to serve employees. Those are your real competitors – the ones who do it as well as you do.

The danger to your business is that it’s just as easy to choose the other guy in the blink of an eye. When there’s really nothing different between you and the other companies – you all become, over time, average.

And that’s a very scary place to be. The reality today is that average doesn’t cut it. There are so many places I can get a “decent” buying experience. If that’s all that is available to me – why wouldn’t I then decide who to do business with based on the resources I hold most dear in a buying transaction:

• My time
• My money

I put those in that order on purpose. Today’s most scarce resource for the vast majority of consumers and business buyers is time.

I love the Buy Local movement but there’s a problem with it. If Buy Local doesn’t offer me something special and unique – most people are not willing to spend additional resources (both time and money) to support the cause.

Without something special in how you deliver your goods or service – you become a commodity. I know that’s harsh and I know it hurts to hear it. But if you don’t offer your customers something beyond what your other worthy competitors do, it’s your reality.

So how do you avoid to commodity trap?

Be more helpful than everyone else: If you are a resource that your consumers turn to time and time again, long before they buy, then they’re going to form an attachment to you. That attachment is a combination of trust, appreciation and obligation. You’ve already been so helpful – of course they’re going to consider buying from you.

Be more memorable than everyone else: One of the biggest factors in today’s buying decisions is the experience. Make it cool. Make me feel important. Make it selfie worthy. Do something to create an experience I want to tell others about. Don’t poo poo this if you’re a B-to-B based business. Those purchasing agents, business owners and general managers will love it if you wow them.

Be easier than everyone else: Why is Amazon winning? It’s so dang easy. 24/7, free shipping (with a Prime membership) and voila, it’s at your doorstep in a day or two. Plus, they have everything from shoelaces to lawnmowers and thanks to the customer reviews – you can quickly get a sense of the product’s quality in relation to what you’re trying to buy. That’s tough to compete against.

We may not like it – but offering something of value at a reasonable price is no longer a game changer. It’s a commodity.

If you want to be a company that buyers seek out, recommend and remain loyal to – you’re going to have to do better than that. You’re going to have to change the way you deliver your product or service so that it’s downright remarkable.

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The question behind the question

February 8, 2017

If you were ever to become an employee at Walt Disney World, you’d go through a class called Traditions. You’d learn all about the vision and legacy of Walt Disney and all the ins and outs of working at your one specific location. If you were slated to work at the Magic Kingdom, one of the things you’d learn is that the most common question asked is “what time is the 3 o’clock parade?”

The trainers use this absurd question to teach their new cast members (what Disney calls employees) a very important lesson that is just as critical in marketing as it is in theme park management.

The lesson is this: look for the question behind the question. When people express a concern or raise a question, there’s often something underneath that initial inquiry. But to figure out what’s really at the core – you have to understand your audience and their heart a little.

The people that ask, “what time is the 3 o’clock parade?” have waited on a curb for one to two hours for the upcoming parade. They’ve probably saved for more than three years to afford the trip to Disney in the first place and they probably will not be back for a few years at least. Which means that they are very invested in this vacation and one of the highlights of their day is supposed to be the big parade. Their kids are (by mid afternoon) tired and a little whiney so this parade had better be awesome. What this harried Mom or Dad is actually asking is “what time does the 3 o’clock parade pass by this exact spot and are we in a good viewing location?”

If the cast member didn’t understand the stakes for the average Disney guest – they might offer a snide reply or give the guest a look that says… “Duh.” Hardly a stellar customer service moment. But imagine how a guest feels after asking that question and having a cast member say, “the parade is kicking off in Frontierland, so it should be here by about 3:20. And you’ve got a great spot for not only seeing the parade but interacting with some of the characters.”

That’s real communication. That’s anticipating what your customer really needs. And that’s the kind of customer care and understanding that earns repeat business. So how do you apply this idea of understanding the question behind the question to your organization?

Dissect your FAQs: Make a list of the questions your staff gets asked most often. And be sure not to exclude anyone – your accounting department, your shipping crew, and the people who handle returns. Ask anyone and everyone to help you put together a master list.

Bring together a diverse team from your organization and really look at what’s underneath those questions. Force yourselves to go beyond the expected assumptions. Ask “what if” questions to explore new possibilities.

Look for patterns: Patterns suggest that there’s a common thread or behavior worth investigating. Don’t dismiss them, especially if it’s around a product/service that isn’t selling as well as you expected. Odds are, there’s something underneath the lack of sales beyond what you’re assuming. Every objection hides an insight underneath.

Test your theories: We know assuming is dangerous so be sure to test your new insights. Whether you use customer surveys, access a client advisory board or do some A/B testing with ad messages – make sure you get validation. Once you do, you can start folding the new insights into your marketing messages and materials.

Everyone wants to do business with a company that truly gets them. Understand what they’re really asking so you can demonstrate that you’re the right choice.

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Will it work?

January 25, 2017

I was sitting with the leadership team of a new client during an onboarding meeting and we’d gotten to the “do you have any questions for me” stage of the meeting. One of the senior people looked at me and said, “Yeah, I have a question. Will it work?”

I’m a big fan of being straightforward, so I appreciated the opportunity to be equally frank with him. I said, “Well, that all depends on you and the rest of the team. I know our part of the equation will work.”

Marketing, no matter the product or service, is about connecting with the right audience in a way that they find interesting/helpful so that when they’re ready to buy what you sell – you’re in the consideration set.

Within that reality are several places that things can go awry and when something does get off track, the marketing results suffer or over time, the marketing might not work at all.

What are the must do elements to making your marketing work? Here’s what I shared with my new client that day to answer his question, “Will it work?”.

We have to be consistent: Marketing is like investing in the stock market. You never know exactly when the market is going to go up or down, so the wisest investment strategy is to invest consistently so you can be in a position to take advantage when it goes up. The same is true with marketing. You never know when a prospect might be ready to turn into a customer. So you have to be consistently in front of them with messages that are attention worthy so that when they are ready, you are top of mind.

Where companies mess this up: You start something but don’t really commit to it. The monthly newsletter goes out four times a year. The blog gets updated once in awhile. Your best customer calling program gets derailed every time you get busy.

We have to narrow our focus: The worst marketing is aimed at everyone. When you try to be relevant to everyone, you can’t help but be very general and broad. It turns out, that’s not particularly helpful or interesting to anyone. The best marketing is when you can get incredibly specific and most people are completely uninterested but the ones who are interested – are very, very interested.

Where companies mess this up: This is a tough one for organizations to wrap their head around. Every dollar is not a good dollar to chase. Knowing who your sweet spot customers are and only communicating to them requires incredible discipline and bravery.

We have to be customer-centric: If your marketing is all about you, you’ve lost the battle before you’ve even started.

Where companies mess this up: You blather on about you. You talk more than you listen. You push for the sale too soon rather understanding there are many tiny next steps that need to come before the ask.

We have to make the marketing to sales connection: The only way to be confident that your marketing is worth the investment is to track prospects through the sales funnel and identify what got them there in the first place.

Where companies mess this up: Most companies either can’t or don’t put the mechanics in place to accurately track and measure conversions.

It seems so simple and yet very few do it really well because it’s actually a very delicate dance and it’s so easy to get out of step.

Will it work?  It will if you: Know your audience and what they care about. Earn their trust by helping not selling and be absolutely consistent in your delivery. Track their progress through your sales funnel so you can quantify your results.

That’s it. Sounds simple enough, doesn’t it?

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Do you rush things?

January 18, 2017

There’s a ride at Walt Disney World called Rock n’ Roller Coaster. At the very beginning of the ride, the car you ride in goes from a dead stop to over 60 mph in less than three seconds. What a rush! While that’s enough to get anyone’s heart racing, the folks at Disney don’t leave anything to chance. The riders’ hearts are racing long before they hear the sound effect of tires screeching or the car starts moving.

Disney is a master at the art of building anticipation. You load into the car and they bring you right to the brink of the ride’s start. The music starts to get louder and louder. The signage is warning you to keep your head firmly against the headrest. Right about the time you begin to wonder what’s taking so long, the neon sign above you and the speakers in your headrest start the countdown. The car starts to vibrate as the engines rev and then, with a loud screech of the tires, you are accelerating to 60 mph and an upside down loop as the ride begins.

My point is – they could have just loaded their guests in the car and after a second or two started the ride. The roller coaster would still be pretty thrilling but it wouldn’t be the same experience.

Whether you’re a roller coaster junkie or you’re scared senseless and peer pressure got you on the ride – the build up is incredibly effective. By the time the ride begins, you’re about to crawl out of your skin you’re so ready to just get started.

It’s not just that ride either. Disney uses this technique over and over to create an increased hunger for their rides, movies, and special events. They use it because it works. It creates demand. It’s increases perceived value. And ultimately, it increases sales.

I think we can all learn a little from Disney’s example. Many businesses rush to the sale and in that effort; spook their potential buyer because they’re either not interested or just not ready to buy.

But make someone wait or tell them you have a limited number of whatever they want – and suddenly they’re the ones asking for the sale. So how can we slow down to help the sales heat up?

Create some buzz: One of the best ways to build anticipation is to get other people to start talking about you. A concerted PR effort is a great way to get some media coverage or viral attention. When you can trigger positive word of mouth, you can count on increased interest.

Give your best prospects a sneak peek: Everyone likes to feel like an insider that has access or information that everyone else doesn’t have. Creating an opportunity for a select few to do a test drive but not have full access to the offer will generate anticipation for the actual release. Apple employs this technique better than just about anyone.

Don’t blurt out everything all at once: This is a mistake most marketers make. They’re in such a rush to pack every possible bit of information into every communication that they not only kill any possibility of anticipation but they also bury the audience with too much too soon.

Keep it a secret: The world loves a good mystery. One great way to create a mystique around your product/service is to tease the market and hold some information back. The more mysterious you are, the hungrier they’ll be to know.

At the end of the day, you don’t sell anything until someone wants it. Companies like Disney and Apple are great examples of how well using anticipation to stimulate that want is a great marketing technique that drives sales. It might be worth a try!

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How is showcasing changing your business?

October 5, 2016

Showcasing is yet another new wrinkle that the internet and mobile technology has brought to our culture. If you’re not familiar with the term, it’s when someone goes to a brick and mortar store to look at an item but fully intends to make their purchase online. This isn’t a new behavior but it’s certainly been on the increase for the past decade.

Smartphones have really contributed to the increase of this practice. Now shoppers can compare prices on the go, right there in the store. In fact, “showroomers” as they’re called, use their phones in retail establishments 50-60% of the time.

They might be comparing prices, checking product reviews or even creating a shopping list for later.

Whether you own a retail establishment or not, you can see the rub. The retailer goes to the expense and time to stock the item, the person actually is in their store and yet – they still don’t buy it there. There’s no reward to the retailer at all for helping the shopper get exactly what they want.

When asked, the number one reason cited for showcasing is price. Almost 3/4ths of showroomers checked and discovered that they could get a better price online. Interestingly – very few of them had ever asked the retailer to match the lower price.

Almost 50% of the time, the shopper walked into the store fully intending to actually purchase it later but they wanted to see the item before they made the purchase or do a little legwork before they went home and made the buy.

One of the main reasons for not making the purchase? They did not want to carry the item home. Many showroomers have gotten very used to the convenience of home delivery and as we know – in most cases, they are not paying extra for that service.

Interestingly – these shoppers are different from the “I like to shop at 2 am shoppers” who rate the 24/7 access as the primary reason they shop online.

The retailers own some of this trend too. If 50% of the showroomers walked into the store intending to buy online, that means the other 50% intended to make their purchase right there in the store. So why didn’t they?

About half of them discovered that the store didn’t actually have the product they were interested in on their shelves. The store was out of stock or didn’t offer some of the conveniences (like free home delivery) that could swing the decision.

But this isn’t all gloomy news for retailers. There are also plenty of shoppers who are reverse showroomers. They do their research online but want to buy locally, for a variety of reasons.

So what should a retailer do, to encourage the showroomers to buy immediately rather than going online to shop and at the same time, to keep the reverse showroomers happy?

Increase the caliber of your sales staff: Make sure they know the merchandise and also have the tools in the store to get an answer if they don’t know. They also need more sales training so they can be genuinely helpful.

Over service to keep selling: Try a mix of price matching, free home delivery, extended warranties, tech support and checking in on customers after the sale. An online store can’t offer that level of service.

Leverage their phone time: Why not send time sensitive coupons and offers to their phone using geo-targeting to get them to buy right now? Invite them to use your in store wifi and help them comparison shop.

This connection between our mobile devices and shopping isn’t going away. This is the new normal and if anything – it’s going to get more pervasive. Retailers have to find a way to leverage showcasing to their advantage.

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Selling shouldn’t equal annoying

February 13, 2013

There’s a Walgreens a few blocks from my house. It’s a convenient place to get just about everything, so I’m there a few times a week.  It seems like every week they are collecting money for some charity.

They have the cause of the week prominently displayed.  I can buy a paper boot, heart, ribbon or balloon. And when I go to check out, there’s a jug there — inviting cash donations.  When I run my credit card through — as I approve the charge, I am given the opportunity to donate.

So — I have ample opportunity to give.  But then, if all those efforts have failed to get me to donate — the clerk asks me — do you want to make a donation to XYZ?

Now I’m feeling cornered.  The people in the line are listening. The clerk is looking at me like I’m a cheap jerk and while I should not care about what these strangers think — I sort of do.

That’s not a comfortable position and we shouldn’t be putting that sort of squeeze on our prospects or clients.

There’s a fine line in marketing and sales.  We’ve talked about it before.  You can lead a horse to water but you can’t make it drink. If someone is not ready to part with their money, you can’t force or humiliate them into doing so.  And if you keep pushing — all you do is alienate them.

Sometimes this over the line behavior is overt, like my Walgreens friends.  Other times, it’s more subtle – like the passive aggressive voice mail messages or constant up selling or incessant follow up even when you’ve been told no.

Subtle or not — it’s not effective. It makes us question your motives (I am pretty sure Walgreens has some sort of contest among their stores…to see who can raise the most money) and it feels a little desperate.

I know this flies into the face of the sales motto — always be closing.  But the hard sell doesn’t work anymore (Did it ever?).

Instead — you have to find a way to know who your real audience is, capture their attention, market consistently and have something of value to share/teach often enough that you stay on their radar screen until they’re ready to buy.

If it was easy — everyone could do it.  Do you have the stamina to sell?

 

Photo courtesy of www.BigStockPhotos.com

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