Securing customers is key to the success of a business, regardless of what stage it is at. For early stage businesses, “where is my next customer coming from?”, will resonate. For growing businesses, the owner’s concerns become, “I need to find customers who pay on time”, and “I need more clarity on my pipeline, if I’m to have the confidence to keep the current over-head or to invest”. Clearly, securing more customers is vital for a business to survive, grow and ultimately be saleable when the owner wants to exit. So how can business owners secure more of the right types of customers? There are essentially 5 Steps.
Step 1 – Know the purpose of your business
It sounds obvious, but what transformation will a customer get from buying from you? What need will you satisfy and is there a real need for what you provide? In the competitive world we live in, what you do, and how you do it, is not a sufficiently compelling reason for people to buy from you and not a competitor. You should be clear about what makes you stand out and what transformation you make for customers. If you are unsure about “why” people should buy from you ask yourself, “what do you do?”, and then in reply to the response, “and what is the benefit of that?” a minimum of seven times. By the end you will have clarity on the purpose of your business and what makes you different. From this you will be able to define your ideal customer and hence workout the best channels to market to them.
Step 2 – Make customers aware you exist
Given that services and products are ultimately purchased by people, it makes sense to design the promotion of the service or product to match the target market and communicate the proposition via a channel they will use. Traditionally, this has been carried out by segmenting the market by demographics e.g. age, gender, occupation, social class, marital status, family life stage, family size, income, education, home ownership, ethnicity and religion. In the case of business to business you should target a “job role for a type of business” regardless of the person’s personal characteristics.
With the advent of the internet the number of communication channels continues to increase. That said, the fundamentals have not changed. Choose your market, carefully segment to identify targets and then use the most appropriate communication channels to create awareness or start a relationship. The internet has simply added several hundred more channels, but your targets will only be using a small number, so identify them and don’t disregard the pre-internet channels, lots of people still use them e.g. networking, exhibitions, referrals, parish magazines etc. As targets use a limited range of channels it will make your marketing more productive when the best channels for your service or product has been identified.
Step 3 – Sale and closing the deal.
Getting customers to be aware that your product or service exists via the appropriate channel is just one part of the process. What follows is the sale. It can be a simple transaction, where the customer compares the price, availability or ease of purchase, and then purchases at the advertised price. Where a service is involved, or the product has a much higher value then the process can take time and will involve the steps of the parties, knowing, liking and trusting each other. The sales negotiation is more likely to succeed if the match of the service will achieve the customers aspirations or relieve a pain they are suffering. Sales techniques come in many forms, hard sell, wheeler dealer, through to those who have a genuine desire to provide the best match possible. Where there is a genuine desire to provide the optimum solution for a customer, the level of profit and the subsequent level of advocacy, for the business, by the customer will be better than where the customer feels cheated.
Step 4 – Increasing and expanding the sales
Once a business is established the original idea is tested in anger in the market place. The owner should be mindful of feedback and will refine the offer to optimise the number of sales. In 18 months to 2 years, if the business is going to succeed there will be confidence that traction has been achieved. Once there is enough data about profit levels to types of customers, a review should occur to identify the most valuable ones. Sales to these types of customer should be focused upon and any upsell to existing customers identified. It is worth carrying out an annual review of the market to spot changes which provide different risks and opportunities. Changes in technology and legislation are frequent, the impact upon the business in the future should be ascertained to avoid the business either being overtaken or missing out on being a first mover.
Step 5 – Getting the price right
Small and medium size businesses should be very focused upon their position in the market in terms of how they differentiate themselves. With differentiation comes the ability to charge more. In fact, if the customer is concerned about price then you probably offering your service to the wrong person, or they have misunderstood the method you have used to promote yourself.
Having a good handle on pricing and having the ability to gain feedback on both successful and unsuccessful sales is key to maximising your price and still securing a sale. Small percentage changes can make a difference to the success rate, so having a reliable pricing feedback loop will reduce the number of failed sales. Having no failed sales means you are pricing too low and will soon fail as you will be overwhelmed with work. Delivery quality, customer satisfaction and staff engagement will deteriorate in a ruinous cycle, damaging your brand. Decide what an acceptable success/failure rate and work towards it.
The whole process from identifying potential clients to recording the pricing information and ultimateley the customer satisfaction levels should be recorded in a CRM system. Having the complete story to hand, makes analysing your market a lot easier.
Whilst this blog was called “winning more work”, don’t be afraid of losing some work, if quality and profits are to be maintained.
If you need any more help with your marketing or sales, then please request a free health check to find out how Business Doctors may help you. http://ow.ly/SyPn30j0MUY