Posts Tagged ‘strategy’

Use Google TV Ads To Build Brand And Increase Cash Flow

July 16, 2010

by Doug Smith, President, The Woodhaven Group

As a small business owner or CEO you do not have the luxury of wasting the cash flow of your business while trying to build your company’s brand and increase sales.

One of the quickest ways to blow cash and profit is to invest too many dollars in the wrong marketing channels.

Most business owners have been turned off by TV because of the big ongoing expense and long lead time to produce and schedule a spot.  However, the biggest complaint I have always heard is the inability to truly measure the results of a specific TV spot.

Most small businesses that have included the Internet as part of a well executed  integrated marketing strategy  know about Google’s successful AdWords program.  What you may not realize is that for about the last 2 years Google has been incorporating the mechanics of the AdWords program into purchasing TV spots.

As a small business owner you can find programs on Cable TV and bid on specific spots on those shows.  By using keywords similar to those used in AdWords Campaigns, your company can target programs and times that work best for your marketing strategy.  Best of all, you can measure the results afterwards.

To find out more go to Google TV Ads here.

Successful marketing is all about testing concepts, measuring results, making adjustments and testing again.

Whether you want to build brand or develop a top-notch direct response program, I suggest your company test Google TV ads.

Leverage your knowledge and experience with Google AdWords to become more productive with your TV budget.

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A Fool Proof Way To Generate Business Cash Flow Now!

July 11, 2010

by Doug Smith, President, The Woodhaven Group

Do you have customers who purchase from you daily, weekly or monthly?

Would you like to have those customers help you with your business cash flow?

No problem.

Here is what you can do.

Let’s say you are a chiropractor who charges $50 per visit and your average customer comes to you for 2 visits per month.  Offer your customer a discounted package of 12 visits, 30 visits or 52 visits if they pay upfront.

Impossible to do, you say.  It is happening everyday across America.  Currently, the average person earns maybe  1-3% at most on their cash if they invest in Treasurys or CDs.  The chiropractor might offer a discount of 10-15% for a package of visits.  It is a great deal for his customer (patient) and he gets use of the cash immediately.

Here is a sampling of businesses that could benefit from this pricing strategy:

  • Hair salons or barber shops
  • Massage therapists
  • Yard maintenance companies
  • Physical Therapists
  • Oil change companies
  • Car Washes
  • Commercial window washers
  • Residential cleaning services

An added advantage to using this approach is that it takes your customer out of the market.  If your customer has “prepurchased” from you, then chances are they will not be going to your competitor.  The only caveat to remember is that you have received your cash upfront.  It may be smart not to spend all this cash at once as this future cash flow will not be coming in as it has in the past.  A good cash flow forecast would be in order to assure there will be  no short falls.

Discounted packages are a core pricing and sales strategy for many small business owners.  You may want to test this program to see if it is right for your company.

Keep Overhead Expense As A Percent Of Total Sales Low To Save Business Cash Flow

June 21, 2010

by Doug Smith, President, The Woodhaven Group 

Some of the best well run companies in America keep their overhead expense very low.  It becomes a competitive advantage when competing against other businesses.  Your company needs to have the same strategy.

Any available cash from having overhead low can be channelled into marketing and sales to drive marketshare. You never know when the local television or radio station might come to you with a last-minute buy that you do not want to turn down.  If your cash is tied up in fixed overhead costs then that special offer becomes a lost opportunity.  For example, years ago due to a last-minute cancellation our company was offered a Super Bowl Ad by a local network affiliate. Due to having available cash on hand we were able to take advantage of this once in a lifetime opportunity.  Customers talked about seeing that television spot for years afterward. 

Regardless of your industry, one way to monitor growth of overhead is to watch the trend of your actual overhead dollars being spent over time.  You would like overhead dollars to stay the same or decline as sales go up.  Another way to measure the change in overhead is to look at the combined overhead expense as a percent of sales.  As sales increase the percent will decline.  That will  be a good thing. 

What is the takeaway here?  

As owner, when you are managing areas like operations, inventory, and customer service, do not let an increase in overhead prevent you from taking advantage of marketing opportunities that may come up.  In addition, if sales shows an unexpected decline you will already have the overhead expense under control.

Look closely each month at every line item of overhead and constantly challenge the amounts. Overhead expenses can be reduced.

Always have overhead dollars and percent to sales low and trending downward and you will like the strategic flexibility it will give you.

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.

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.

Video Training Is A Great Cash Flow Strategy

April 19, 2010

by Doug Smith, President, The Woodhaven Group

I was on the debate team at Purdue University and thought I was really good.  That is until they decided to videotape a practice debate prior to the National Championship.  It was ugly.  No one had to say anything to me.  My introduction was bad, my counter arguments were bad, my conclusion wasn’t much of a conclusion.  My debate partner was not much better.  To make a long story short, we immersed ourselves into  practicing and changing our approach.  More video taping followed.  In the end we finished as National runner-up.

What did I learn from that experience?  Two important things:  1.) training is critical to achieving your goals, and 2.) using video can be the difference between success and failure.

As CEOs, owners, and senior managers we must drive more productivity into the selling process.

With video training sales people can critique themselves in role-playing situations.  You can be there to coach them.  They can make mistakes in practice without losing a sale.  I have successfully used video to train sales associates selling furs in department stores as well as in home salesmen pitching replacement windows.  In every case the employee was their own worst critic.  In every case they appreciated the opportunity to use technology to improve their performance.

There are many benefits to effectively using video training.  Here are just a few:

  1. The sales person can make more money and become more self-confident.  Having seen what they look like in a presentation removes a great deal of doubt in their mind.
  2. If you have successful people then you have less turnover in your sales force.  That translates into less cash spent on recruiting replacements.  More time can be invested taking the sales staff to the next level instead of training new candidates.
  3. When you do hire new sales staff (as you grow) personalized video training can be an added value that differentiates your company from the competition.  Top performers are always wanting to improve.  Finding a company with the tools in place to do that for them gives you a hiring advantage.
  4. Consistency in the execution of a successful selling methodology is important to closing sales.  You can put your #1 sales person on video, the trainee can watch and then record themselves and compare.  It will be obvious to them where they need extra work.
  5. You can have a more motivated sales team as a group since more members will be successful, sales will be increasing, and they feel good that the company is committed to their success as a team.
  6. Video training can identify a potential underperformer early on.  You don’t have to waste valuable leads to find out that maybe you made a bad hire.
  7. When a top sales person goes into a slump, they can record their presentation and compare against an earlier video of themselves. It will be apparent to them what needs worked on.
  8. Video training can be used in customer service for those employees who come face to face with upset customers.  Different situations can be role played on video.
  9. Training and, in my opinion, video training separates top companies from those who can’t succeed.  You can end up taking their marketshare.
  10. This type of training is not only effective but also inexpensive.  No need to invest big dollars in elaborate systems. Take a video camera and just start recording.  Put the results on CD or a thumb drive and play it back.
  11. Finally,  properly executed video training can increase sales, decrease % marketing cost,  increase gross margin, and increase average sale. 

What does video training have to do with cash?

All of the above combined improves the cash flow of the business.

Cash is a competitive weapon!

When it is invested in video training it becomes a great business strategy.

Prioritize Accounts Receivable Collection As Interest Rates Rise

April 12, 2010

by Doug Smith, President, The Woodhaven Group 

A smart business person must have a successful cash flow strategy that is proactive and anticipates the impact on consumers and businesses from changes in the economy.

We are in the midst of rising interest rates taking place for homes, credit cards, and autos.  Combine these 3 critical areas with the fact that household debt continues to exceed household disposable income and that could be a formula for a potential decline in consumer spending.

If consumers have to pay off high existing debt with increasing interest rate levels it could slow up the purchases of consumer goods, both small and big ticket. The result would be a drop in revenue at businesses and a decline in their cash flow.  You could end up seeing your accounts receivable balances increase as your customers find it difficult to pay your invoices.

Don’t let this happen.  Have a strategy in place to collect your accounts receivable and keep the total balance outstanding  in line.  Do the following:

  1. Understand that as a company your employees and shareholders deserve to be paid on time for their efforts.  You put out a quality product and you stand behind it. 
  2. Assign a key manager to track accounts receivable balances and make that person accountable for making sure balances and aging do not get out of line.  Notice I said a manager and not a clerk.
  3. At a minimum you as owner or senior manager must see an accounts receivable aging report each week to see which customers are not paying on time.  Better yet, have a preset weekly meeting with the manager responsible for accounts receivable and come out of the meeting with action steps that need to be taken. Review the results at the next week’s meeting.
  4. Make it a practice to contact any key customer by phone immediately when an invoice is not paid on time. Follow up with a note.  This may sound drastic but if your customer knows to expect the call they will make sure you get paid on time. You may even have to make the call your self.
  5. Don’t let any one customer become too high a % of your overall revenue.  In my opinion, be careful if one client goes over 30% of your total revenue.  If they have financial trouble so could you.
  6. Have late payment fees and late interest charges and use them when you are not paid on time.
  7. Have a good collection agency or collection attorney in place to follow up on seriously delinquent clients.
  8. Whatever you do, get your invoices sent on time— best to have them arrive the same time as your shipment.

There are other suggestions for collecting accounts receivable that I will cover in future posts, but just make sure collecting accounts receivable is a major priority of your management team.  

Don’t be your customer’s bank!

It is your cash and you deserve to have it working for you—- not someone else. 

I would be interested in hearing what strategies you use to collect accounts receivable.

Price Bundling and Product Bundling Can Increase Sales and Cash Flow

April 8, 2010

by Doug Smith, President, The Woodhaven Group

Sales are down. Cash flow is tanking. It’s easy to blame the lousy economy. Your customer would buy more if they could. Or so they say.

Well here is one solution to consider. Adjust your pricing but not the way you may think. I’m not talking about cutting prices in the hopes that tired strategy will increase sales. Any fool can give it away and end up losing profit.  I am suggesting using a strategy that as a consumer you participate in everyday and like it. The result ends up increasing your average sale, always a good thing when overall sales also increase.

Its called bundling. Some call it price bundling, some call it product bundling. There have been study after study done on this type of pricing with a lot of names given to it.  All I know is if done properly many good things can happen for your business:  1.) overall sales may go up, 2.) average sale can go up, 3.) gross margin dollars should see an increase, 4.) and potentially your marketing cost could go down. All good things for your cash flow.

Bundling occurs when instead of a prospect buying one item for one price they buy a bundle of products or services for one price. An important element in this form of pricing strategy is the prospect must see added value in the combination of these products for the price being asked. It won’t do any good to bundle together products or services that the prospect doesn’t care about when sold separately. But watch what happens if you can bundle “hot ” items together.

The important take away here is for your company to test to see what combinations work for both the company and the customer. Measure the results on a small sampling. If it works then roll it out. If not then adjust until you find a win-win  for everyone.

Here are examples:

  • Happy Meals at MacDonald’s
  • New cars with “standard equipment included.”  I saw a car with 38 standard items included.
  • Buy two suits and get a free shirt and tie
  • “Gift with Purchase” cosmetics in a department store
  • Vacation packages that include hotel, airlines, and car
  • Car wash with clearcoat  wax, underbody, rust inhibitor, and wheel bright
  • Free xrays with a package of chiropractor appointments
  • Get a free cell phone with a 2 year contract
  • A dozen red roses.  You can also bundle one product into a larger commitment. Whats wrong with 1 rose?

You get the idea.  Find out what works for your company and integrate this powerful sales and pricing strategy into your  marketing mix. 

I would be interested to hear your thoughts on this. Has anyone had a bundling success story they can share with the rest of us?