Archive for the ‘Marketing’ Category

Increase Sales And Cash Flow By Marketing To The Echo Boomer Generation

May 13, 2010

by Doug Smith, President, The Woodhaven Group

The echo boomers are coming!  Some say they are already here.

For the last 40 years the baby boomer generation has driven marketing decisions in America.  Those businesses that were able to tap into the boomer’s wants and needs have been successful.

Now those boomers have kids and the total size of that market called echo boomers rivals the size of the baby boomer generation.

Ignore them at your own peril!

Every business should be asking two questions:

  • How will the echo boomer decide what they want to buy?
  • How can our company persuade them to buy our product or service? 

Here are a few observations and conclusions I have about this generation and how to market to them:

  1. They obviously are comfortable with technology and anything digital. We see it with their use of social media, text messaging, PDAs, and past times like online games. We need to keep this in mind when deciding how and where to spend our marketing budget. 
  2. They really do not want to be fooled or misled.  The negative reaction to a bad experience will be immediate in forums and social media sites.  The echo boomer has moved on from “the letter to the editor.”
  3. The echo boomer tends to be well-educated and, I believe, will want to continue to learn throughout their lifetime. Utilizing an education based marketing strategy as it relates to your product or service  will gain your company credibility and earn you the right to ask for the sale at a future time.  A call to action by itself will not be enough.
  4. Later marriages among this group means more independent shopping by both the male and female.  For instance, will there be more single female homeowners?  Absolutely!  And this female will not be going to Dad or a boyfriend for a final decision.  She will have the money and the authority to decide on her own.
  5. Traditional or “old media” such as newspapers, direct mail and TV is giving way to making buying decisions through the Internet.  A smart marketer will find a method to “get in the way” of an echo boomer searching online.  How?  By using relevant timely  information that can be accessed when the echo boomer chooses to access it.  In the years ahead, I believe, some evolving form of social media combined with mobile technology will be the method of choice when this group decides to buy.
  6. Echo boomers like to help other people.  We see it with their participation in organizations like TeachForAmerica, microlending, and various social entrepreneurship groups.  As businesses we need to find a way to tap into these opportunities alongside the echo boomer.  Its good for business and good for society.
  7. Traditional brands are not as important to this group.  The echo boomer wants to know what the brand has done for them recently.  Is it evolving to fit their wants and needs?   Does it have momentum?  Do not bore them with your brand.  Think of Apple as an example.  How does your business compare?
  8. You need echo boomers on your sales and marketing teams.  They understand this demographic better than anyone and how it is changing.  Just reading studies or listening to a seminar speaker is not enough.  You should even consider engaging an ad agency owned and dominated by echo boomers.  

More than ever the consumer is in charge.

The next wave of decision makers will be the echo boomers.  It is critical that your company learns their behavioral characteristics and how they differ from today’s customer.

Is your marketing strategy ready for them?

Your marketshare, profit, and cash flow will be dependent upon it.

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Is Your Core Product Still Generating Profit and Cash Flow?

May 10, 2010

by Doug Smith, President, The Woodhaven Group

Is your core product still a priority in your company?

Do your employees know what your core product is?

Is your core product profitable and creating cash to drive your business forward?

A core product of a specific business historically has solved a problem or fulfilled a unique need better than the competition.  Often it represents a product or service that is first to the market and is hard to displace.

As sales of a core product grows for a company a major benefit is a strong loyal customer base.  Examples of companies and their core products:

  • Starbucks:  a good cup of coffee
  • Google:  search and advertising
  • KFC:  chicken
  • Goodyear:  tires 

A few thoughts on core products:

  1. The core product of your business should be your company’s most profitable product line.  Calculate the direct profit of all of your products by taking the selling price less direct costs such as labor and materials.  You must know how profitable each product line is.  Based on profit, is your core product still #1.  If not, why not?
  2. Has your company become bored with your core product and branched into other product lines that are not as profitable but are using up cash and management time and talent?
  3. Does your customer know that you have been known for your core product and why?
  4. Have you evolved your core product to stay abreast of your customer’s needs or have you allowed competition to steal sales with a newer better version?

As a company grows sometimes it loses focus and direction.  Make sure your core product is the most profitable part of your business.

Never let a competitor take your core product and the loyal customers that go with it.

Pay For Performance Can Increase Productivity And Business Cash Flow

April 27, 2010

by Doug Smith, President, The Woodhaven Group

When a company improves productivity a positive result should be an increase in business cash flow to invest to grow the business.  Pay for performance compensation structured properly can be a driver of productivity.

There has been a trend for some time to reward those individuals who deliver the best results by shifting from straight salary to a lower base pay with some kind of incentive attached.

The intent is to not over pay nonperformers and give the top performers an opportunity to earn more than they were making before.

Many sales forces are used to being paid 100% commission.  That means no sales, no pay.  That also means reduced overhead for the company when sales are slow.  But what about other areas of the company that traditionally are not on pay for performance?  My experience has shown that you can often direct the outcome you desire by compensating an employee on results they can impact.

While 100% pay for performance will not work with all positions, a portion of some of the compensation for certain key people can be based on incentives.  

A few examples:

  • Make 10% of a retail store managers pay tied to reducing shrinkage.  They cannot stop all theft but they can reduce paperwork errors, a contributor to shrinkage.
  • Tie 20% of an accounts receivable manager’s pay to a positive change in days outstanding of accounts receivable.
  • Make a portion of a marketing manager’s pay tied to a reduction in marketing  % against net sales.
  • If customer service has been a problem tie 15% of a fulfillment manager’s pay to a reduction in customer complaints or an increase in repeat purchases.       

You get the idea.  Once you start doing this a next step can be compensating a team of individuals sharing a common goal.

Certain key points need to be kept in mind:

  1. Clearly define measurable goals when using any pay for performance.  Do not make it subjective.  Make sure the employee agrees the goal is attainable.  If the goal is too far out of reach the employee will give up and morale will go down.
  2. Make it clear you are rewarding measurable results and not effort only.  While everyone’s extra effort is expected and appreciated,  it’s the cash flow from increased results that pays the bills.
  3. Show the employee how much he or she can make if the goal is attained.  Then work with them to identify tactics and action steps to be taken to hit the goal and earn the extra income.
  4. Have  meaningful inital and ongoing  coaching sessions  to help the employee hit their goals.  In the beginning some employees may think the company is using this type of compensation to just reduce pay.  Actually, a well put together  incentive compensation program is a win-win.  The company does better and the employee earns more.
  5. Attempt to pay the incentive compensation each pay period.  If that is not practical then pay at least once per month.  The faster you can pay for the results achieved the more motivated your employee will be. 
  6. If the employee challenges the accuracy of the incentive calculation stop everything and verify that it is correct.  If it is not, then cut a new check immediately.

Well structured pay for performance can drive productivity, increase cash flow and retain top performers.

Employees in successful pay for performance programs never want to go back to only a salary or hourly pay.

Give it a try to see if it works for your company.

Increase Cash Flow With A Unique Value Proposition Strategy

April 27, 2010

by Doug Smith, President, The Woodhaven Group

What makes your company unique from the competition?

Can you ask a higher price and get it?

What is your competitive advantage?  Can you say it in about 10 words?

A unique value proposition is what your company is promising to deliver to a prospect that is better than anyone else can deliver.  A well executed value proposition delivers benefits that will address your customer’s wants or needs in ways that competitors wish they could duplicate but cannot.

If you have no value proposition or have an unclear value proposition then you will not be different from the hundreds or thousands of companies competing in your category.  You will get lost in the crowd.  

Your business will find itself competing on price as the differentiator and we all know there is always someone who is willing to keep dropping the price to get the deal.  This will kill marketshare, gross margin, profit, cash flow, and eventually your company.  Don’t let the competition dictate your pricing, profit strategy, and your future.

Here are a few thoughts to guide you when considering your value proposition:

  1. You must first know who your prospective customer is and what they want.  What is their pain?  What is their want or desire?  Do they think of your company first as a source to address that desire or pain?  Once you have identified your prospective customer, take a sample group and ask them what their biggest need is.  You will soon see a pattern that will give you direction.
  2. Be specific about the benefits you deliver, how they address your prospect’s wants and needs,  and how they differ from the competition.  Also, keep in mind that benefits differ from features.
  3. Show that your company has experience delivering this value proposition to others.  Third party testimonials often close a sale.
  4. Is your company capable of consistently delivering your value proposition at the quality level that you promise and your customer expects.  In otherwards, don’t over promise and under deliver in an attempt to be different.
  5. Can your value proposition be easily duplicated by others?  If  it can then do you really have a unique value proposition?  A $1.00 menu item or free delivery are examples that have quickly become the norm in some industries.  Make it hard for others to copy what you do.
  6. A well thought out value proposition becomes an effective guide for strategic and tactical decisions involving product development, customer communication, marketing, recruitment of talent and overall financial planning.
  7. Can the value proposition evolve over time as your customer’s wants and needs change?  If so, it will allow your business to think strategically and lead your customer forward with game changing innovations.

A unique value proposition gives your company a road map to growth and increased cash flow. It will make you different and allow your business to ask and get a higher price for what you offer.

Don’t try to be all things to all people. 

You just waste cash doing it.

Add-on Sales: An Easy Way To Increase Sales and Cash Flow

April 22, 2010

by Doug Smith, President, The Woodhaven Group

Would you like fries with that?  We have all been asked that at the drive up window.  If you said yes then you just participated in an add-on sale.

This is one of the easiest and best ways to increase sales and so many businesses do not have a strategy in place to capitalize on this  easy path to more cash flow.

Why isn’t it used more often?  Some sales people and sales managers believe that attempting to add-on may upset the prospect and kill the original sale.

My experience is that rarely occurs.  Why?  You have either just solved a real problem for your prospect or addressed a need, or fulfilled a desire.  Either way the prospect turned buyer now feels good about you, your company and your product or service.

You have persuaded them to cross an important psychological barrier and make a buying decision.  In the buyer’s mind the hard work is completed and the stress of decision-making is over.

Some tips to maximize the potential of add-on sales:

  1. Don’t attempt an add-on sale until you have a commitment on the core product or service the prospect was wanting or needing.
  2. Make sure the add-on directly relates to the product or service you sold them.  Example:  It makes sense to sell tennis balls with a new tennis racket.
  3. An add-on is still a sale so make sure you explain how the customer will benefit from this extra service.
  4. Track what the most successful conversions of add ons are when offered to a customer.  Don ‘t assume you know.  Test different add ons and let the consumer tell you which is most often preferred.
  5. Train the sales staff how and when to offer add ons.  This training should include scripting, role-playing, and recording on video.  When done correctly, an add-on is a natural extension of the existing sale.
  6. Often when executed well an add-on sale will be sold at full price resulting in increased margin.
  7. Add on sales do not always have to be sold at the point of sale.  They can be as a result of a follow-up contact when thanking the customer for making the purchase.  Internet marketers often do this on the thank you page. Some companies sell the add-on at the time of installation or delivery.  An example might be extended warranty or a maintenance contract.  You should be catching the customer at their highest point of satisfaction.   

A properly executed add-on sales strategy delivers added value for your customer.  For your company it can deliver increased sales, more cash flow, lower marketing costs and more profit.

As an owner or senior manager make sure you commit to this important business strategy.

Someone is going to make that add-on sale to your customer.  

Make sure it is your business and not your competitor.

Have You Listened to Your Customer Today?

April 14, 2010

by Doug Smith, President, The Woodhaven Group

We live in a day and age where we can instant message  what just happened in our life, twitter about the last play in a ball game, and let our facebook friends know who our new friends are.

I feel like we are spending a lot of time talking at people and we call it communication.  I call a lot of it noise.

I truly believe social media can be a game changer in the future, but when it comes to business, listening to your customer is critical to making sure your company is delivering the kind  of value you hope your customer wants.  Tracking comments about your company on twitter can be revealing but not always accurate.

As an owner, CEO or senior manager I am going to suggest including something radical into your communication strategy.  Pick up the phone and call random customers 1 or 2 times per week.  Do you want to differentiate?  That will do it.  Have marketing give you a list of customers and call one on the way home.  Make it a random list.  If you call 2 per week that is 100 unfiltered personal conversations you will have in a year.

I guarantee you there will be patterns in the feedback you receive that will surprise you.  Your company may be stronger in some areas than you think, weaker in areas you thought was a core strength.

Listen to what the customer says, how they say it and the inflection in their voice.  Google analytics can’t give this to you.

What are you going to say?  How about this…..

Hi, I’m Bob Jones, CEO of Acme Products and I personally wanted to call to thank you for being a customer of our company.  Do you have a moment I could get some feedback.

Great!  I just want to get a little information to help us improve:

  • In your opinion, how are we doing?
  • What is the one thing you have liked most about your experience with us?
  • What is the one area you feel we could improve upon?
  • If we were to add one product or service that would help you, what would that be?
  • If the opportunity arose, would you feel comfortable referring us to someone else?
  • Have you referred us already?
  • Are we easy to communicate with?
  • How could we improve in that area?

The key to all these questions is to:

  1. Listen to what they are saying
  2. Ask relevant follow up questions
  3. Don’t make it an interrogation
  4. And, you want top of mind answers which will most express their true feelings

At the end, thank them, give them your cell phone number and tell them again on behalf of all the employees how much you appreciate them as a customer.

Talk about something going viral. The word will spread about the CEO who personally calls his customers.

The statisticians will complain that the sample is not large enough to do a linear regression. That’s OK.

You will have just gotten much closer to your customer base and learned what’s working and not working in your company.  I have found customers to be brutally honest.

Listening can be a beautiful thing.  Done effectively,  listening will increase sales and cash flow in your company.

If  I can help in this area feel free to contact me.

Knowing Your Target Customer Will Save Cash

April 9, 2010

by Doug Smith, President, The Woodhaven Group

It drives me crazy the amount of cash that is wasted from poor marketing strategy or just dumb advertising.  John Wanamaker, the department store owner in Philadelphia, once said that “50% of my advertising is wasted. I just don’t know which 50%.”  I can help here.

Lets go back to marketing 101 to learn how to save cash.  It’s really very simple. Know who your customer is and know who is not your customer.

Once you have figured that out then determine what their urgent needs and wants are.  Then make sure your product or service delivers value at a reasonable price to fulfill that want or need.  Also, make sure that value delivered surpasses anything a competitor to that target group is offering.  After that,  stand behind the sale and develop your target customer into a raging advocate for your company.  How do you do that?  By showing you care about their opinion by listening to what they have to say and quickly solving any problems that may come up.  

Channel all of your marketing efforts into owning that target niche.  Focus your media advertising, public relations dollars, event advertising and Internet investment towards your target market.  Google can help you on that last part. You will see a higher return on  investment from your cash spent.

Put away your shotgun and get out the rifle. Or, another way of putting it…. don’t sell bikinis to Eskimos and don’t market down parkas at the equator.  Got it?  Good!!