Yesterday, I accompanied a sales consultant in a client meeting, a sales pitc. The customer asked for the price of a particular product. I was shocked how the sales consultant handled it. She answered, its AED 650 before discount. She offered discount without even client asking for it! Very unprofessional, I felt.
When I thought about it later, I was able to find the disadvantages of throwing discounts:
* The product doesn’t worth the price.
* We are keeping a high margin.
* Keep bargaining and you’ll get a better deal .
* Am I qualified to sell to you (instead of “are you qualified to buy from me”)?
* Our products are overpriced.
My message to sales people is” stop throwing discounts; At least wait for customer to ask for it. Better yet, don’t get into pricing at all”.
But what if your prospect is a bargain hunter?
In this case employ the strategies by Scottie Claiborne
1- Say “Sorry we don’t offer discounts “
Especially when you don’t like to deal with the customer or if you see customer has no other choice than doing business with you.
Explain to the customer that you simply don't offer discounts. You are selling your time more than anything else, and you have a limited supply. Many clients feel they ought to ask for a discount, just in case. When told no, most will still retain your services.
2- Say "I can't offer a discount but I can offer you something else"
Take a hint from the cosmetic companies -- they don't get into pricing battles amongst themselves. They fight it out with extravagant gifts with purchase. For a $20 purchase, you get a free gift worth $50! Who wouldn't buy?
So what can you offer? Well it really depends of your sort of business. In our case (office interiors and furniture):
- Free delivery
- installation
- an extended warrantee
- better service
3- "but you competitor (company ABC) is AED 300 less!”
First of all do not bad mouth your competition when answering this objection. Some ways to answer this comment is:
- Well, Company ABC will probably do a fine job for you, if your budget is limited.
- Our service has a proven record; feel free to contact our clients for a referral.
- We are confident our products or services are well worth the prices.
Well, if they really wanted to buy from company ABC, they would have already done it! They want to hire YOU, not them.
Sunday, June 17, 2007
Tuesday, May 22, 2007
The Visionary Networker
Business networking is one of the strongest yet the most inexpensive means of marketing.
How does a normal networker and a visionary networker differ.
Find it in the networking tips section of the Early Birds blog.
How does a normal networker and a visionary networker differ.
Find it in the networking tips section of the Early Birds blog.
Tuesday, May 08, 2007
Networking Tips on Dubai Early Birds
I have started the networking tips section on the Early Birds blog. This is the soft version of my weekly 3 minutes educational session.
The Green Cow
This one is Jamal's creation and this is how he describes it:
It is neither blue nor yellow; it is simply the multiplication of both colors. A Multipational color that suits a vegetarian passionate hardworking four legged creature"
Monday, April 30, 2007
Bob Urichuck on research
Client research is an absolute must. It’s a fair sentence according to many sales proffesionals and I too have written about it before.
I attended Bob Urichuck sales seminar in Dubai, and I learnt about the revolutionary ABC123 sales system. It is a fantastic system and it has already started to pay for me.
However in the seminar there was no mention of client research. So I asked Bob about research and the ABC123 system. Well, I was wrong; research is in the system. Here is what Bob said:
Bob: Research goes on without saying it.
What is most important though is not to share what you know but to get the prospect talking - the more they talk, the more you listen, the more you learn and the more they will like you - you are building trust.
Research is necessary to identify decision makers, competitors, market positioning, vision, mission, etc. but do not let it take you away from asking those questions of the prospect.
Hope this helps, and don't be shy to A.S.K.!
Wednesday, April 25, 2007
Change in direction
In the past I wrote about both sales and marketing. I was looking at the world from a marketer's point of view. I have just been promoted and I am now a sales and marketing manager, so sales is going to be the most important issue and all marketing efforts should result in sales (well here the real marketing starts).
I guess this will impact the nature of my posts as now I think differently.
Stay tuned.....
I guess this will impact the nature of my posts as now I think differently.
Stay tuned.....
Wednesday, April 18, 2007
Saturday, February 03, 2007
Strategies for finding cavaliers
There are customers which are price sensitive and there are some who will pay a bit more, just to do business with you!
So which group should you target?
In many cases it is possible to sell to both groups. Its just the matter of identifying which customer is willing to pay a bit more and who is more price sensitive. This way you can charge according to their willingness to pay.
There are 3 strategies for identify customers are cavalier about price: 1) Unique Target 2) Group Target 3) Self-Incrimination
1) The Unique Target Strategy:
Evaluate each customer as an individual and charge according to how much he or she is willing to pay.
This is the strategy of the used car salesman or the real estate agent. It usually takes skill and a lot of effort; hardly surprising, then, that it is most often seen for items that have a high value relative to the retailer’s time.
Examples:
- Supermarkets accumulate evidence of what you’re willing to pay by giving you “discount cards,” which are needed to take advantage of sale prices. In return for getting a lower price on certain items, you allow the stores to keep records of what
you buy, and then in turn offer you coupons for discounts on products.
- Internet retailers such as Amazon can identify each customer by putting a tracing device called a “cookie” on her computer. Amazon used to tailor their prices based on their records of individual customers.
Of course, the “unique target” approach is unpopular. In Amazon’s case, customers started to realize that if they deleted the cookies on their computers, they were offered different, often lower prices. And when they found out what the company was
doing, there was an outcry. Amazon has promised not to do it any more.
2) The Group Target Strategy:
Offer different prices to members of distinct groups.
Who could complain about reduced bus fares for children and the elderly? Surely it must be reasonable for coffee shops to offer a discount to
people who work nearby, and for tourist attractions to let locals in for a lower rate?
Examples:
- Disney World in Florida offers admission discounts of over 50 percent to locals, they’re not making a statement about the grinding poverty of the Sunshine tate. They simply know that for a reduced price, locals are more likely to come regularly. But tourists will probably come once, and once only, whether it is heap or expensive.
- The AMT coffee bar in Waterloo station in London will knock 10 percent off the cost of your coffee if you work locally. This isn’t because the local workers are poor; they include top government officials and the extravagantly remunerated employees of the gigantic oil company Shell. The discount reflects the fact that local workers are price-sensitive despite being rich. Commuters who pass through Waterloo in a hurry see only one or two coffee bars and are willing to pay high prices for convenience.
3) Self-Incrimination:
To get customers to give themselves away, sell products that are at least slightly different from each other. Offer products in different quantities or with different features or even in different locations.
Examples:
- Starbucks offers products in different quantities (a large cappuccino instead of a small one, or an offer of three for the price of two), or with different features (with whipped cream, or white chocolate), or even in different locations, because a cup of cappuchino in a station kiosk is not the same product as a physically identical coffee shop in an out-of-town superstore.
Source: The Undercover Economist
So which group should you target?
In many cases it is possible to sell to both groups. Its just the matter of identifying which customer is willing to pay a bit more and who is more price sensitive. This way you can charge according to their willingness to pay.
There are 3 strategies for identify customers are cavalier about price: 1) Unique Target 2) Group Target 3) Self-Incrimination
1) The Unique Target Strategy:
Evaluate each customer as an individual and charge according to how much he or she is willing to pay.
This is the strategy of the used car salesman or the real estate agent. It usually takes skill and a lot of effort; hardly surprising, then, that it is most often seen for items that have a high value relative to the retailer’s time.
Examples:
- Supermarkets accumulate evidence of what you’re willing to pay by giving you “discount cards,” which are needed to take advantage of sale prices. In return for getting a lower price on certain items, you allow the stores to keep records of what
you buy, and then in turn offer you coupons for discounts on products.
- Internet retailers such as Amazon can identify each customer by putting a tracing device called a “cookie” on her computer. Amazon used to tailor their prices based on their records of individual customers.
Of course, the “unique target” approach is unpopular. In Amazon’s case, customers started to realize that if they deleted the cookies on their computers, they were offered different, often lower prices. And when they found out what the company was
doing, there was an outcry. Amazon has promised not to do it any more.
2) The Group Target Strategy:
Offer different prices to members of distinct groups.
Who could complain about reduced bus fares for children and the elderly? Surely it must be reasonable for coffee shops to offer a discount to
people who work nearby, and for tourist attractions to let locals in for a lower rate?
Examples:
- Disney World in Florida offers admission discounts of over 50 percent to locals, they’re not making a statement about the grinding poverty of the Sunshine tate. They simply know that for a reduced price, locals are more likely to come regularly. But tourists will probably come once, and once only, whether it is heap or expensive.
- The AMT coffee bar in Waterloo station in London will knock 10 percent off the cost of your coffee if you work locally. This isn’t because the local workers are poor; they include top government officials and the extravagantly remunerated employees of the gigantic oil company Shell. The discount reflects the fact that local workers are price-sensitive despite being rich. Commuters who pass through Waterloo in a hurry see only one or two coffee bars and are willing to pay high prices for convenience.
3) Self-Incrimination:
To get customers to give themselves away, sell products that are at least slightly different from each other. Offer products in different quantities or with different features or even in different locations.
Examples:
- Starbucks offers products in different quantities (a large cappuccino instead of a small one, or an offer of three for the price of two), or with different features (with whipped cream, or white chocolate), or even in different locations, because a cup of cappuchino in a station kiosk is not the same product as a physically identical coffee shop in an out-of-town superstore.
Source: The Undercover Economist
Sunday, January 28, 2007
When you cannot fulfill a commitment
Bad news is bad news. But when there is some bad news, we'd better not sit back, and wait for the problem to be solved on its own. Specially in the business.
If you can’t deliver on time, don’t wait for the customer to call you angrily, and then you decide what you can do. This way, if the customer can afford, he will cancel the order or at least, he will not do business with you anymore, not to mention he will bad mouth you.
Take the initiative
Don’t sit on the problem. The problem is there and the customer will come to know about it. Don’t wait to exceed the deadline and to receive the call from the anxious customer. Pick up the phone and make the call and tell him that you hate giving good people bad news.
Be Honest
Ok, the worst thing has happened, but never lie to your customer. If the shipment has not arrived don’t say that all shipments from Europe have been delayed, because your customer will come to know you are lying and it will push him to the top.
Put the customer in control
People like to be in control of thing belong to them. When you ship a good to a customer, the good really belongs to him, and he has paid for it. So he is the best person to take corrective action. When in the day of trouble, pick up the phone, and immediately inform customer about the problem and work with him to find a solution.
Take responsibility
In every transaction there is one entity who pays money and another entity who gets money. As long as you or your company get the money you are responsible for any problems may arise. Next step is about you: are you a leader or a normal person? If you are a leader you don’t want to blame other departments. Your customer wouldn’t care if you have done something wrong, or your logistics department or your supplier. You need to take responsibility, fix the problem and not the blame.
Ask for repeat business
This one is a very important one yet often neglected. When based on the above steps, you have successfully solved the problem, and have proved to be a leader, ask your customer 2 simple questions: 1) Is there anything else I can do for you? and 2) Do you know anybody else, who might need my sort of products/services.
If you can’t deliver on time, don’t wait for the customer to call you angrily, and then you decide what you can do. This way, if the customer can afford, he will cancel the order or at least, he will not do business with you anymore, not to mention he will bad mouth you.
Take the initiative
Don’t sit on the problem. The problem is there and the customer will come to know about it. Don’t wait to exceed the deadline and to receive the call from the anxious customer. Pick up the phone and make the call and tell him that you hate giving good people bad news.
Be Honest
Ok, the worst thing has happened, but never lie to your customer. If the shipment has not arrived don’t say that all shipments from Europe have been delayed, because your customer will come to know you are lying and it will push him to the top.
Put the customer in control
People like to be in control of thing belong to them. When you ship a good to a customer, the good really belongs to him, and he has paid for it. So he is the best person to take corrective action. When in the day of trouble, pick up the phone, and immediately inform customer about the problem and work with him to find a solution.
Take responsibility
In every transaction there is one entity who pays money and another entity who gets money. As long as you or your company get the money you are responsible for any problems may arise. Next step is about you: are you a leader or a normal person? If you are a leader you don’t want to blame other departments. Your customer wouldn’t care if you have done something wrong, or your logistics department or your supplier. You need to take responsibility, fix the problem and not the blame.
Ask for repeat business
This one is a very important one yet often neglected. When based on the above steps, you have successfully solved the problem, and have proved to be a leader, ask your customer 2 simple questions: 1) Is there anything else I can do for you? and 2) Do you know anybody else, who might need my sort of products/services.
Saturday, January 06, 2007
"Achilles' Heel" and "King of the Hill” Advertising
This article is based on an interview with Allan Kay by Guy Kawazaki .
Allan Kay is the founder of Korey, Kay & Partners, a $75-million advertising
agency in New York City.
Kay believes that there are 2 kinds of advertising methods when you are going head-to-head with competitors: "Achilles' Heel" and "King of the Hill”.
Achilles’ Heel:
In Achilles’ Heel advertising, you find out the competitor's weakness, and you combat it with your strengths.
Kay gives example of Achilles’ Heel advertising method his agency has used to develop a campaign for Wise Potato Chips.
In 1970s, P&G had come out with a new product: Pringles. Allan Kay and his guys studied the packaging of the new P&G chips, and they got all they needed in order to compete with Pringles. The Package read like a chemistry set—with things like mono- and diglycerides and butylated hydroxyanisole—to preserve freshness of all things!
Kay then looked at Wise Potato Chips pack and their ingredients were potatoes, vegetable oil, and salt.
So they created a very simple commercial: two women sitting side by side. In front of one woman was a can of Pringles and in front of the other woman was a bag of Wise potato chips. The woman with the Pringles picks up the can and reads the long list of chemical ingredients. Then the other woman picks up the Wise package and reads, "Wise potato chips contains potatoes, vegetable oil, and salt." Then they cut to Pringles and the announcer says, "The newfangled potato chip." They cut to Wise and he says, "Or Wise, the oldfangled potato chip. You decide."
King of the Hill:
In King of the Hill advertising you find out the competitor's strength and present yourself as being stronger at it.
A sample campaign is the one Kay and his associates did for Virgin against British Airways.
British Airways was the gold standard in San Francisco. Kay's agency wanted to tell people as much as they could about Virgin Atlantic Airways in as short a period of time. Virgin was a relatively unknown quantity in San Francisco.
People knew British Airways had good-quality products; so did Virgin. They knew British Airways had regular flights and big airplanes; so did Virgin. Therefore, if they could quickly put themselves on the same pedestal as British Air, they would get considered.
So the advertising started with a teaser that appeared on billboards and on television with the phrase "Yoooooo-hoooooo, British Aiiiiirrrrwayyys," which signaled, Uh-oh, somebody's coming to compete with British Airways. It was the shortcut to the top of the mountain. The customer knew that there was going to be someone new in town. They had a frame of reference even before they knew the name of the product.
So how to develop strong campaigns?
Kay gives us great advice on developing campaigns against our competition. He says: "You have to know yourself and your competition equally well, and you have to know the customer—we always say start with the customer.
We have five basic guidelines for developing advertising: Start with the customer. Live with the client. Uncover the obvious. Keep it simple. And follow through.
If you do each of these five things, you're going to come pretty damn close to the target. I always believe the problem will dictate the solution if you really understand the problem and set your objective."
Allan Kay is the founder of Korey, Kay & Partners, a $75-million advertising
agency in New York City.
Kay believes that there are 2 kinds of advertising methods when you are going head-to-head with competitors: "Achilles' Heel" and "King of the Hill”.
Achilles’ Heel:
In Achilles’ Heel advertising, you find out the competitor's weakness, and you combat it with your strengths.
Kay gives example of Achilles’ Heel advertising method his agency has used to develop a campaign for Wise Potato Chips.
In 1970s, P&G had come out with a new product: Pringles. Allan Kay and his guys studied the packaging of the new P&G chips, and they got all they needed in order to compete with Pringles. The Package read like a chemistry set—with things like mono- and diglycerides and butylated hydroxyanisole—to preserve freshness of all things!
Kay then looked at Wise Potato Chips pack and their ingredients were potatoes, vegetable oil, and salt.
So they created a very simple commercial: two women sitting side by side. In front of one woman was a can of Pringles and in front of the other woman was a bag of Wise potato chips. The woman with the Pringles picks up the can and reads the long list of chemical ingredients. Then the other woman picks up the Wise package and reads, "Wise potato chips contains potatoes, vegetable oil, and salt." Then they cut to Pringles and the announcer says, "The newfangled potato chip." They cut to Wise and he says, "Or Wise, the oldfangled potato chip. You decide."
King of the Hill:
In King of the Hill advertising you find out the competitor's strength and present yourself as being stronger at it.
A sample campaign is the one Kay and his associates did for Virgin against British Airways.
British Airways was the gold standard in San Francisco. Kay's agency wanted to tell people as much as they could about Virgin Atlantic Airways in as short a period of time. Virgin was a relatively unknown quantity in San Francisco.
People knew British Airways had good-quality products; so did Virgin. They knew British Airways had regular flights and big airplanes; so did Virgin. Therefore, if they could quickly put themselves on the same pedestal as British Air, they would get considered.
So the advertising started with a teaser that appeared on billboards and on television with the phrase "Yoooooo-hoooooo, British Aiiiiirrrrwayyys," which signaled, Uh-oh, somebody's coming to compete with British Airways. It was the shortcut to the top of the mountain. The customer knew that there was going to be someone new in town. They had a frame of reference even before they knew the name of the product.
So how to develop strong campaigns?
Kay gives us great advice on developing campaigns against our competition. He says: "You have to know yourself and your competition equally well, and you have to know the customer—we always say start with the customer.
We have five basic guidelines for developing advertising: Start with the customer. Live with the client. Uncover the obvious. Keep it simple. And follow through.
If you do each of these five things, you're going to come pretty damn close to the target. I always believe the problem will dictate the solution if you really understand the problem and set your objective."
Monday, January 01, 2007
Defining your customers
"Consumption is the sole end and purpose of all production” said Adam Smith, Father of modern Economics.
Without customer there is no consumption and without consumption, there is no need for production. Without customer there is no business.
Customers are the most valuable assets of every organization and marketing is about customers. No wonder there is so much books and articles written about customer satisfaction and marketers are very interested in social sciences.
As we continue our study on “Marketing 4 Sales”; in this article we concentrate on customers.
The more we understand our customers the better we can feed the sales force with useful information on where customers are and how to deal with them (how to take care of them), and most importantly we can identify the qualified leads and sales ready customers.
Understanding customers is indeed a difficult task but in reality we need to answer 3 rather simple questions:
- Who is using and who is buying your product?
Who is using kids’ toys and who is buying them? Obviously kids use toys but in reality parents buy them. Therefore while packaging it, its important to use the word “educational”.
Think of your business. What products and services do you produce and why? Who buys them and who uses them: especially who buys them? For example if you offer companies with interior design services then your customer is the decision maker(s) and staff are the users. Now should you target staff or decision maker(s)? Obviously decision maker(s) and for that you need to get closer to your target market and learn more about them. What sort organizations are they? What industries? What size? Small, Medium or Large? If a small company then perhaps you have to target CEOs but in case of a large organization, the purchasing manager could be your customer. Why should they buy from you and not from your competition?
Buy understanding your customers and users, you will be more focused and will have better results in terms of ROI.
- How are products in your category used by your customer?
When we learn who our customers are, we then need to learn how they use our products/services. I think an interior design firm who sells to businesses is always a prime example, because 1) It’s a B2B environment which is much more complex than B2C and 2) it involves both products and services. So an interior design company might learn that the freestanding desks are often linked together to shape a meeting desk, due to space limitation (rent is increasing so space is at premium). By marketing multipurpose modular desksing solutions, the company can generate new enquiries.
- Are laws, regulations, or societal pressures changing your marketplace?
What if the interior design firm faces a new rule: demolishing existing walls and building new ones are prohibited. No tenant should change the floorplan of existing office? In this case the firm may use “mobile partitions: as a way to penetrate market and to generate new leads.
You need to answer the above 3 simple questions, if you want to successfully market your business. In most cases, thinking enough and using available sources of information, will give you essential data to answer the questions, But in some cases you’ll need to plan a research to answer the questions. In the next article we will quickly talk about market research.
Without customer there is no consumption and without consumption, there is no need for production. Without customer there is no business.
Customers are the most valuable assets of every organization and marketing is about customers. No wonder there is so much books and articles written about customer satisfaction and marketers are very interested in social sciences.
As we continue our study on “Marketing 4 Sales”; in this article we concentrate on customers.
The more we understand our customers the better we can feed the sales force with useful information on where customers are and how to deal with them (how to take care of them), and most importantly we can identify the qualified leads and sales ready customers.
Understanding customers is indeed a difficult task but in reality we need to answer 3 rather simple questions:
- Who is using and who is buying your product?
Who is using kids’ toys and who is buying them? Obviously kids use toys but in reality parents buy them. Therefore while packaging it, its important to use the word “educational”.
Think of your business. What products and services do you produce and why? Who buys them and who uses them: especially who buys them? For example if you offer companies with interior design services then your customer is the decision maker(s) and staff are the users. Now should you target staff or decision maker(s)? Obviously decision maker(s) and for that you need to get closer to your target market and learn more about them. What sort organizations are they? What industries? What size? Small, Medium or Large? If a small company then perhaps you have to target CEOs but in case of a large organization, the purchasing manager could be your customer. Why should they buy from you and not from your competition?
Buy understanding your customers and users, you will be more focused and will have better results in terms of ROI.
- How are products in your category used by your customer?
When we learn who our customers are, we then need to learn how they use our products/services. I think an interior design firm who sells to businesses is always a prime example, because 1) It’s a B2B environment which is much more complex than B2C and 2) it involves both products and services. So an interior design company might learn that the freestanding desks are often linked together to shape a meeting desk, due to space limitation (rent is increasing so space is at premium). By marketing multipurpose modular desksing solutions, the company can generate new enquiries.
- Are laws, regulations, or societal pressures changing your marketplace?
What if the interior design firm faces a new rule: demolishing existing walls and building new ones are prohibited. No tenant should change the floorplan of existing office? In this case the firm may use “mobile partitions: as a way to penetrate market and to generate new leads.
You need to answer the above 3 simple questions, if you want to successfully market your business. In most cases, thinking enough and using available sources of information, will give you essential data to answer the questions, But in some cases you’ll need to plan a research to answer the questions. In the next article we will quickly talk about market research.
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