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Monday, March 03, 2008

Beyond the extremes

This posting is about marketing extremes -- but you can also look at business extremes geographically. Consider the situation in Dubai and the other Emirates, where everything is over the edge and beyond our regular comprehension, business-wise. And yes, many North American building supply manufacturers and some larger contractors have found good business opportunities in these booming areas.

In selling and marketing, you can find two extremes in perception. At one extreme is the "do nothing" but look for bids approach -- common in the construction industry, where contractors and sub trades descend like lemmings to a public tender posting, and fight to come in low, and "win" the job.

Somewhat related, but of course much better business wise, are the companies that stake their name on their reputation -- they deliver excellent (perhaps under priced!) service and value, and potential clients call them on referral, or repeat business. Sometimes the business relies on one or two steady excellent clients, which works well as long as the few select clients don't run into problems of their own.

At the other extreme, we find the pushy salespeople, using cold calls, canvassing, telemarketing, and other intrusive methodologies, maybe even spam emails. These businesses play the "numbers game" and train their sales reps in the ticks of the trade to manipulate and manage potential clients. Rarely do they rely on repeat business from satisfied clients (though they may say they do); rather, they are always out looking for more customers, one by one, through pure hard rock selling.

Somewhat related to this extreme, are businesses that fork over sizable amounts of money to lead services, advertising in the yellow pages, and the like. This at least generates the inbound calls -- then the selling machine is turned on.

Are these approaches and diverging perceptions on how to market and sell necessarily wrong? Not in my opinion. After all, if the business model works for you, it works. If you have a systematized approach to canvassing that generates enough business, good times or bad, am I right to tell you you are wrong? And if you have such good client loyalty that you really do not need to market your services, should I tell you to drop everything and start canvassing or cold calling? You'd rightfully consider me nuts to even consider the question.

However, I sense that most businesses will do best somewhere in in the middle, with the emphasis on one side or another of the spectrum determined perhaps by your product or service and the way most clients perceive it in the marketplace. Some basic guidelines or measures of success are:
  • How many people do you talk with, on initial inquiry, who ultimately purchase/use the your serve? If everyone is saying 'yes' without question, you have good grounds to raise your prices. If everyone says 'no' you won't be in business very long.

  • How many of your clients become repeat customers, or refer friends? This is a key indicator of success. You want to see virtually 100 per cent positive results here, and the closer you reach this score, the better off you are.

  • How many complaints do you hear; and do clients ever use the word "scam", "nuisance" or "annoying" relating to your business? If these things happen more than infrequently, something is wrong. You may be winning business, but you are probably costing yourself more in long-term relationships and your cost of selling will keep rising until your business is uneconomic (or, if you don't really care, until you can find another 'scamming' game to play.)

  • Does one client count for more than 50 per cent of your business? If it does, do you have a solid and easy-to-implement contingency plan if the client fails to pay a major invoice, or drops you like a lead balloon? It happens, all too often.
I am not going to tell you to do one thing or another; every business is different, but I prefer a balanced approach -- using effective marketing and promotion (including websites, email and advertising) and solid, competent (and carefully selected) sales reps to bring new business in the door, while retaining clients who are satisfied and ready to refer others because of your overall business practices, values and integrity.

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