Tuesday, 24 August 2010

A big sales technique for small businesses

- Consultative selling, or solutions selling , is a technique used by big companies for complex sales. However, it can be used by SMEs for business-to-business (B2B) or even business-to-consumer (B2C) selling. The essence is to go beyond the stated requirement to understand your prospects’ needs and explain how your product or service meets those needs better than anyone else’s.


- Research on the customer (for B2B - turnover, growth, products, stated aims, stated strategies, culture and strengths. For B2C – the benefits your various customer types are looking for);

- Research on the market (emerging trends, main players, size, growing/shrinking, macro-economic factors eg is the market driven by the housing market or unemployment);

Set the scene:

- For planned meetings send an agenda/have a pre-meeting telephone call that sets the expectation that you are interested in how your product or service can help the prospect achieve their aims – you are not turning up to talk about features or technology

- For unplanned (eg in a shop) make sure you have a script that engages the prospect in a discussion about their needs

The discussion:

- For B2B, set out to understand the following things:

o What the company produces

o How many/how much they produce

o What is important to their customers

o What is their USP?

o How do they get the best from their staff?

o What are the top three challenges they are facing?

- For B2C, set out to understand the experience they are seeking

o In a shoe shop, don’t ask “Can I help you?” ask “Are you looking for shoes with a special event in mind?”

o If someone rings about a new carpet ask them “What does the room feel like?” or “What atmosphere are you trying to create?”

- Explore with open questions (that require a descriptive answer) and confirm your understanding with closed questions (that can be answered Yes or No)

- Listen, listen, listen

- Explain to them how your product or service helps them achieve this

o Point by point match benefit to need

o Use their own language

o Don’t assume they will recognise all the benefits you are offering without you telling them

More business advice for business owners.

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Monday, 16 August 2010

Why qualifying sales will help sales grow

Why do you need to qualify sales leads?

- The process which takes a lead through to a sale (the conversion process) can consume a lot of resources, particularly for complex sales

- This process is much more productive (that is, has a higher conversion rate and uses less resource) if those leads which are likely to be low value and/or unlikely to result in a sale are screened out earlier in the process

- If the conversion process has very low marginal costs (eg an online shop) then the need for qualification is correspondingly lower

What factors can be used to qualify sales leads?

- The factors can vary widely according to the industry you are in but could include:

o Are you talking to the decision-maker and budget-holder?

o Are they in your target market and the right type and size of customer?

o Do they have the funds or budget to buy your product?

o Do they have the compelling need, commitment and motivation to buy now?

o Can you provide what they need without stretching your product, credibility or resources?

o Do you have all the necessary pre-qualifications (policies, accreditations, size and stability)?

o Is there an incumbent or preferred supplier who is almost certain to win the business?

How are leads qualified?

- Qualification should be part of your sales process

o It should also be built into your marketing

- It could take place at a single point or you could have several stages of qualification

- The criteria for qualification (taken, for example, from the above list) should be recorded against each lead in your sales management system

- The conversion process results (wins and losses) should feed back into the qualification process

o A low conversion rate may well indicate poor qualification

More business advice for business owners.

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Tuesday, 10 August 2010

Why do so many small businesses fail?

Why do so many small businesses fail?

This topic generated over 50 comments on a LinkedIn forum recently.  This counts as a furore in the restrained atmosphere of LinkedIn Groups.

Comments came from a range of business owners, with perhaps a preponderance of those who advise other businesses. Whilst this skewed the comments made it also ensured that there was considerable experience of the reasons why UK SMEs survive or fail.

I counted up the reasons put forward – a completely unscientific analysis of a self-selecting group but interesting nevertheless. The reasons put forward were:

1. Owner's attitude/mental strength/direction/native ability/intelligence (8 mentions)
2. Business management knowledge and willingness to take advice (7 mentions)
3. Sales ability (6 mentions)
4. Financial understanding and control, particularly of cash flow (6 mentions)
5. USP/great idea or product, effective market research (5 mentions)
6. Business planning (3 mentions)

Also mentioned were: Customer understanding, luck, banks, pricing and contracts.

Not the ranking I would have come up with at the start I must confess. It prompts the question: If this ranking is reflective of anything like the actual reasons, what interventions are actually likely to be most effective?

Postscript:  Whilst preparing this blog I met the owner of a design and branding company who is in his tenth year of business and expecting to turnover £1.5m this year.  He and his partner have been using the latest of a series of advisors for the last 9 months - a series which started with a mentor when they set up the business.  We talked about their plans to take on a shared FD shortly - not to control the finances but to raise their strategic game.

Perhaps businesses that are smart enough to know when they need advice and are willing to invest in it stand a better chance of survival.

More business advice for business owners.

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