Beating a Recession – 9 January 28, 2009Posted by David Dirks in business strategy, Increasing Your Profitability, Recession: How to Beat It!, Solving Business Problems.
Tags: chief revenue officer, creating new products, growing revenues, increasing profits, newspaper business model, raising revenues
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I think I’ve found my dream job. In the last several years, you might have heard this title being flaunted around and wondered what it meant. Chief Revenue Officer. When I first heard this title I’ll admit I thought it was a bit over the top. Over time, with a bit more insight and study, I see this relatively newcomer position in a different light. I think it actually makes sense!
Most organizations are run with functional silos like sales, marketing, customer service, product development, research & development, and on and on. In a smaller business you’ll surely have less silos like these (as you may be wearing all the hats!), but the ‘division of function’ is usually there in one form or another.
The issue can be summed up in one word: inefficiency. No matter how well your organization does, it suffers to one degree or another from the inefficiencies caused by functional roles. The sales people are responsible for driving sales. The marketing people are responsible for driving consumer interest in your products/services. The customer service people take care of things after the sale. Great people within great functions but the difference is that they generally see into the forest but not over the trees. Everyone is focused on making sure they do their part in the most optimized way but not necessarily able to see the big picture.
Even if all these functions run well, you can bet there are plenty of missed opportunities to drive revenues and profits higher. Enter the Chief Revenue Officer whose job it is to find opportunities for increasing revenues by leveraging existing resources that are underutilized today.
Let me give you a great example using the newspaper industry. Traditional newspapers are struggling mightily to figure out how to stay alive, let alone grow revenues. Everyone is trying to bridge the gap between the printed paper and the digital paper and figure out how to make money at it.
With all that focus on trying to figure out what the business model for traditional newsprint media should be, little has become of it. Instead, we see more newspapers and other publishers going out of business or into bankruptcy re-organization. It’s a dire state of affairs not made any bit easier by this current economic downturn.
The print media is exactly where I’d want to be the CRO. Journalists focus on the great work of producing excellent journalism, as they should. Hiring a CRO who is NOT married to the sterotypes of traditional publishing is who you want. Why? Simply because you need someone who can look over and into the entire organization and be able to QUESTION EVERYTHING.
Why? What? When? Where? How?
If I was a CRO of a newspaper publisher, my task would be to question everything. I would look deep for resources that were underutilized across the organization, not just in one department. I would look to connect the dots on processes that are unconnected and less effective at generating revenue.
As a publishing CRO, here are some places I’d start in an effort to improve and grow revenues for a traditional print media publisher:
Follow the People magazine and Harvard examples. People magazine popularized the concept of creating special ‘Year in Review’ issues are to this day one of their best selling issues even though it’s more of a soft cover book than magazine. Did I mention that it’s very profitable too? Their secret sauce? They take the best and most exciting content pieces written during the year and re-package them into a ‘new’ content piece.
Harvard University has a extremely talented group of professors who are required to publish as a part of their teaching role. Harvard Publishing takes those many content articles produced over the years and creates special edition books that focus one speciality area such as innovation or venture management. What did they do? They re-packaged content and distribute it on a wider and broader basis. Very profitable business for them.
What does a newspaper produce every day? Content. Tons of content primarily sold only in one way: through the daily or weekly paper. Then it’s offered for free on their website the same day (with few ads either). The content that most people like to see is local coverage of newsworthy events or top local issues of the day. What are the most read sections of the paper? Primarily the business section and the sports section.
Here’s the game: How about re-packaging local sports highlights during the year and make it available to readers? What parent wouldn’t want a copy of that to see a photo of their son or see their local team in print? What about a special community ‘Year in Review 200X’ that was composed of some of the best local stories of the year? Why not? If you publish 365 days a year, you’re bound to have excellent content that people will have long forgotten except for a nicely bound softcover magazine that capture those fascinating highlights forever? What about a series of business guides based on stories and columns written on a variety of business subjects during the year?
You get the picture.
I like the idea of hiring an unbiased, objective, question-everything Chief Revenue Officer. What an opportunity to really be held accountable for producing new sources of revenue and increasing the profits from revenue streams already in hand!
More on this in an upcoming post. Stay tuned.
Retailing Winners: Deep Discounters and Used Re-Sellers January 23, 2009Posted by David Dirks in Building Foot Traffic, business strategy, Increasing Your Profitability, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics, Sales Tactics.
Tags: beating a recession, business strategy, buzz marketing, differentiation, fighting a recession, increasing profits, increasing revenues, market differentiation, recession strategies, retail sales, revenues, sales, sales strategy, Sales Tactics, small business sales
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We should have seen this one coming. While most of retailing struggles, there are those who are doing just fine, thank you. I noted a recent cnbc.com report that told the story of Family Dollar Stores with quarterly profits jumping 14% in the 4th quarter of 2008. Deep discount stores have for a long time been the butt end of business jokes but no more. If every dog has its day, then this dog is having a good one. Mind you, stores like Family Dollar and 99cent Power have always done well and only just increase their sales and profit tempo by several fold in tough times like this.
Gamestop is another interesting retailing story. They sell both gaming hardware and software but with a twist: they also re-sell used gaming equipment and gaming software. Just think of it. When some people move up to the next system or change systems, they are often stuck with a substantial inventory of gaming hardware and game cartridges. However, they realized that there is a very vibrant and growing secondary market for this stuff. So they buy it outright and re-sell it at good profit. So far, the kids can’t get enough of this stuff and keep buying and selling. Gamestop also offers a discount off of new games if you bring one in for trade. Either way, they make a good profit.
You might be familiar with a franchise called “Play It Again Sports” that buys and then re-sells used sporting good equipment of all kinds. What an idea! Take the stuff that we who have kids seem to accumulate in droves, buy it on cheap (we just want to get rid of it not realize an ROI!), and re-sell it to folks who are smarter than we are (because they can buy sports equipment in excellent condition for a fraction of the cost we paid for it). It’s a great play but especially in times like these where every dollar spent is measured carefully.
What can we learn from these retailers? Here are a few questions I’d be asking myself:
- What part of my business could take advantage of this concept of offering deeply discounted or re-selling high quality, slightly used products? For example, if I owned a retail shop that sold hi-tech equipment (think like a Best Buy but on a smaller scale), I might seriously consider buying slightly used, ‘late-model’, high-quality equipment from folks who are looking to unload it for cash.
I’m not suggesting here that you sell junk. Leave that to the yard sales to move. Instead, you are creating another source of incremental sales revenue and profits by way of offering a less expensive alternative to ‘new’. Don’t worry about selling the new product as there will always be those who will only buy new…however, in these times there are a lot less of them.
- Don’t get hung up on the concept of selling slightly used products. Don’t let your pride get in the way of your ability to DRIVE TRAFFIC TO YOUR STORE. This is about creating another level of differentiation that customers will value.
- Set up a distinct area of your store or website that offers the re-sale product and promote the heck out of it. Nine times out of ten if it doesn’t work, it’s because it wasn’t promoted every way possible. You can build it but if they don’t know about it, they won’t come.
- You have to let folks know you are a buyer of product. You have to market to the people who own the product you want to resell. If you promote to sell product, you also have to do the same to buy it.
- Buy low, sell high. Establish an idea of what the used product goes for on the market given different levels or grades of quality. Ebay is a great place to start. Look there to see what used items in that category are going for.
- Set high quality standards for the used products you buy. The good news is that you don’t have to buy anything that you deem junk. Set standards for quality (and safety) that anyone could use to measure whether a used product is worthy of you buying.
This concept of re-selling slightly used product or deeply discounted new product doesn’t fit every business model. Remember, this is about giving customers and potential customers a reason to come to your store (or retail website).
Are you networking? January 20, 2009Posted by rickbron in Bronder On People, Changing behavior, Networking, Relationship, Self assessments.
Tags: network, network assessment, network techniques, Networking, networking actions, networking assessment, networking strategy, networking tips
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How networked are you? The Big Dogz know that before you can achieve a higher level of networking, you need to know how networked you are right now. Here is a self-assessment to evaluate just how networked you are.
How true is each statement for you? Rate your self on a scale of 1-10 where 1 is almost not true at all and 10 is almost completely true.
I understand specifically what I need to get from my network.
Having defined specific needs for your network will allow you to identify potential networking sources. It will help you decide where to spend your time and energy
I can articulate what value I bring to a networking relationship.
Knowing what you have to offer allows you to be more assertive in developing relations. You can start the exchange of support by offering something of value. Have a consistent “elevator speech” that you can deliver comfortably when you meet someone new.
I have an effective strategy for networking.
The basis of an effective strategy is the identification of your approach to networking. What do you want to achieve? How will you achieve it? Networking without an overall strategy is just not as effective.
I contact the people in my network frequently.
Networking is not just calling people when you need help. Cultivate key relationships using periodic contact such as face-to-face, telephone or even an email.
People in my network contact me frequently.
When people are contacting you, it is a clear indicator that people in your network value your opinion and the relationship they have with you. If you are not getting frequent calls from people in your network, start calling them!
I belong to professional and community organizations.
These types of organizations offer a target rich environment for networking. Usually members of these organizations are movers and shakers in their field or in the community.
I am active in volunteer task forces or committees at work, in professional organizations and in the community.
Volunteering to serve on these committees often allow you to meet other people who are in positions of power or may have something of value to you. It is always an effective action to give back to your profession or community.
I have at least three people in my network with whom I have constant interaction.
Pareto’s Law says that 20% of what we do has 80% of the value to us. The same principle is true of networking. Cultivate a small number of key relationships that are of mutual high value.
I use technology to leverage my network.
There are many websites set up for networking. Make sure you are using one of them. Make frequent updates to your entry. Try to select a networking site that aligns with your networking strategy. If one that supports your strategy does not exist, select the one with the broadest appeal.
I am confident in my ability to network.
Self-confidence is the key to building effective networks. It takes confidence to approach a senior person to create a connection. The most effective way to develop your confidence in networking is to practice your interpersonal skills.
There is no passing score for this assessment. Set your own targets for your scores based on what you believe to be effective. The assessment is a tool for you to determine the strengths and areas of improvement of your networking. Look at the statements you rated yourself low. More focus on these actions can help you build a stronger network. The Big Dogz know that having a strong network is a major contributor to success.
To make sure you get a valid self-assessment, please see my July 30, 2007 entry on calibrating your self-assessment skills.
Sales down? Invest in Your Sales Teams January 13, 2009Posted by David Dirks in Grow your skills, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics.
Tags: beating a recession, recession sales strategy, sales, sales development, sales training, training
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Another knee-jerk reaction to slower sales and revenues: cutting back on sales training. Cutting into the training investment you make to enhance skills and intellectual capital of your primary weapon for sales revenue is business suicide. When times are ‘good’ (yesterday), sales seem far easier to bring in than they are when times are ‘bad’ (today). When the money is flowing in and the business is riding along, investment in things like sales training doesn’t make anyone bat an eye. That all ends when things get tight. Then it’s cut, cut, cut.
I’m not advocating sales training for the sake of just training. You can spend a lot of money on sales training and get very little bang for your buck. The key to sales training effectiveness isn’t how much you spend. It’s more about what you focus your on and how consistently you do it. One-shot sales training is a losing proposition for you and your sales team.
When does your sales team need training the most? Two answers: 1) they need it on a consistent basis with enough frequency to help keep them focused on skill building and keep them learning. 2) THEY ESPECIALLY NEED IT NOW MORE THAN EVER. When the economy cycles down as dramatically as it has during the last few quarters, it can absolutely frustrate and drain the energy from the best of sales professionals. You cannot let that happen.
What do sales professionals need right now? They need an infusion of new ideas/tactics/strategies. They crave some fresh thinking. They desire sales leadership that will keep the ball moving and facilitate the kind of learning draws fresh life into the sales cycle. You don’t do that by cutting back on time and resources dedicated to sales development.
Remember, right now they are worried about the economy, their jobs, their houses, paying for kids college, and the fall their 401k just took. Do you think they just arrive at your business all fresh and ready to go? In times like these sales teams can wear down before they even get started. Then enter the crunch of falling behind on sales that used to come to fruition in a regular basis. Here are a few ways to insure you give your sales professionals the care they need to sustain themselves and win in the market place for your business.
- Make sure you have a good inventory of the skill levels of each person on your sales team. Match their skills against the sales cycle for your business and take measure of how well each person performs along each stage of the sales cycle. The idea is to create a list of sales skills that are matched to your sales cycle and can be the focus of a weekly, bi-weekly, monthly training plan.
- Focus your training efforts on sales strategies and tactics that solve current sales challenges. Ask your sales team(s) where they are experiencing the most problems along the sales cycle. Map the sales cycle out from raw lead to closed sale and make sure that time is spent on brainstorming ways to overcome any challenges in the sales cycle.
- Hold people accountable for learning. Some people are self-motivated and directed to learning. Some just need a little leading and prodding to move along. Others just sit there like a load of sand and contribute nothing to their own sales skills and intellectual capital. Those folks need to go. My bet is that those in that latter category are probably the bottom performers in your business. Get rid of them. Sales is a motivational business and you need people who are motivated to both sell and continually learn.
My definition of both sales and marketing success is when you can truly differentiate your business from your competition. This is in the context of being framed in the mind of your customer and potential customer as a business that provides more than just products and services. You can’t do that if you sales efforts are just as bad as the rest. Making a consistent investment in your sales development efforts will differentiate you from your competition. How do I know that? Trust me. I buy products and services all the time and it always amazes me at just how lousy most sales efforts are across the board in businesses both large and small.
And that my friend, is your opportunity.
Beating a Recession: Don’t Play on Price Alone! January 4, 2009Posted by David Dirks in A New Webinar!, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics, Small Business Advertising.
Tags: advertising, advertising strategy, beat a recession, beating a recession, bundling services, marketing strategy, retail sales, retail strategy, sales growth, sales strategy, Sales Tactics
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I recently saw an ad in my local paper from a tire dealer. It was a good sized ad and it had one focus: price. Price as in ‘here’s the old price (crossed-out) and now here’s the new low price’. No doubt, this is a retailer whose sales have gone down to some degree as this economy grinds to a near halt. Competing on price is a typical knee-jerk reaction to slowing sales. It’s also a good way to spend precious money on advertising that will NOT move the sales needle much at all, if any. Trust me, it won’t. Advertising is a good thing and should be done in the face of a recession, despite the urge to cut those costs. However, advertising spending that focuses only on price will only frustrate and cause a business owner to make the mistake of cutting out advertising at the point when they need it the most.
Competing on price, in any economy, is the kiss of death in my book. Here’s why. In a commodity business like the tire business, for example, you can get your tires from many places these days. Cut your prices and I’ll find someone else who either can match it or come pretty dang close. I firmly believe based on experience that the only way to win is to find ways to DIFFERENTIATE yourself from your competition. Is price all you’ve got? Is that it? Yikes. You’re in trouble because everybody can play that game.
Instead of competing on price alone, compete on services or create value added items that your competition doesn’t. For this tire dealer, I’d recommend figuring ways to bundle additional services along with pricing to show the customer the value-added services that come with that pricing. What kind of ‘additional’ services? How about:
- Free tire check ups and rotation
- Free car wash (make a deal with a local car wash and you’ll help both businesses)
- Take an extra X% off your next tire purchase on top of advertised sales prices for returning customers only
- Special customer discounts for automotive parts purchases at a local car part dealer (work a deal out with a local parts retailer and create special coupons just for your customers who purchase tires with you).
- Free gas card for $xx dollars for each purchase?
You get the idea. Bundle as many direct and indirect services as you possibly can and keep coming up with new ones and new combinations all the time (because some of your competitors will get the drift of this too and copy you). Bundle. Bundle. Bundle. Show them that they get more out of their purchase from you than just the idea of saving a couple of bucks. Anybody can cut their prices and most do. Do more. Think outside the knee-jerk reaction of depending on price cutting to solve your sales revenue problems.
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Beating the Recession Webinar Now Available! January 2, 2009Posted by David Dirks in A New Webinar!, business strategy, Buzz Marketing: Lowest Cost/Highest Payoff, Increasing Your Profitability, Innovation: Not Just for the Big Dogz, Public Relations Strategies, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics, Small Business Advertising.
Tags: business growth, business profitability, business stability, growth, marketing, marketing pr, marketing webinar, promoting your business, promotion, public relations, recession strategies, revenues, sales, sales webinar
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