On Building A Sales Organization – 1 July 20, 2013Posted by David Dirks in Building A Sales Organization, Sales Management, Sales Strategy/Tactics.
Tags: business strategy, increasing revenues, sales, sales growth, sales management, sales strategy
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Note: This is the first in an ongoing series on building an effective sales organization/team for a small business.
There comes a time that some successful small businesses find themselves in. It’s the time to consider the need to build more revenue by engineering a sales organization. What does a vibrant, dynamic and proactive sales force give you? How about the ability to scale your revenues by adding more boots on the ground? Now I’m NOT talking about going from 1 or 2 sales people to 20 overnight. The first step is recognizing that the only way you can scale revenues in a northerly direction is by building a sales organization starting from ground zero.
But let me save you the money, time and resources it takes to build a sales organization and culture in your small business. It’s simple from my experience. If you are willing to do ALL of the following, you have the right stuff to really create a viable and revenue contributing sales organization whether with 1 or 20 people:
- Willing to either hire experienced sales talent or willing to invest in the sales training required to help entry-level sales personnel become productive in a reasonably short time period. Doesn’t much matter how great your sales opportunity is if you aren’t willing to either hire successful, experienced talent or hire the best & brightest entry-level talent – and then be willing to support them with the best-in-class sales and product training you can afford.
- Willing to create a sales compensation plan that truly rewards people for their efforts but doesn’t leave them wondering how they are going to eat while they ramp up & beyond. Whether you hire experienced or entry-level sale people, be prepared to compensate them within the range of what is at least the standard for you industry. Going cheap on the compensation plan equals consistently high turnover. At best, you’ll be a good place for someone to get some training and experience before they go off and find a real sales organization to make a living off of.
- Willing to support your sales team with the resources they will need to get the job done. That includes providing them with professionally created sales collateral (brochures, catalogs, product info sheets, etc.) – and not material created by your niece or nephew who calls themselves a “graphic designer”. Sure, they’ll work on the cheap for you but more often than not, their work is substandard. Hire professionals with a bonafide track record.
So, if you’re truly committed to hiring quality, providing compensation that motivates and allows someone to earn a better than average living, and support them with the sales tools they’ll need to be successful – you can entertain building a real sales organization.
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).
Retailer Strategies: Beating the Big Boxes December 20, 2008Posted by David Dirks in Building Foot Traffic, business strategy, Buzz Marketing: Lowest Cost/Highest Payoff, Marketing Buzz, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics.
Tags: beating a recession, business strategy, increasing revenues, market differentiation, marketing, promotion, public relations, sales, sales strategy, Sales Tactics
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A regular reader of our blog, a marketing director of a two-store retail operation, recently sent me this note:
“I have stumbled across your site via Google, and have found many useful tips, and ideas to use in our day to day operations with my previous employer in the retail industry.
I am now in the retail world, and although similar in the “customer focused industry”. I am finding it harder to come up with ideas to draw in foot traffic for our unique, upscale home & garden boutique. We capture e-mails & information, send out mass e-mails with flyers, intimate wine & cheese events that have a store wide sale during that event. I’m in the process of creating a newsletter for launch Jan 1, and our owners are constantly running a sale of some sort (which I think devalues the product if there is a 15-25% off sale every day).
Do you think you can help? I need something that will create a buzz quickly, our owners want fast results…”
I called her and we had a nice chat. For the most part, she is doing many things already that will pay bigger dividends as time goes on. She’s new to the retailer she works for now and has some excellent marketing skills. After our conversation, I sent her an email recapping some of my thoughts.
I thought you might find them helpful, so I’ve added my summary to her below:
Thanks again for taking the time to chat with me today. We’re glad that you’ve found the “Running with the Big Dogz” blog helpful to you.
I thought it would be good just to quickly recap a few items we discussed:
- It seems that you are already creating additional customer value by developing your newsletter and adding other ‘event’s’ to your store schedule.
- Increasing the number customers that are added weekly to the customer database will become more critical as time goes on. I would recommend capturing all customers, even those who are from out of town. You can still send them an electronic version of your newsletter if the newsletter is packed with tips & advice on gardening, basic skills, etc. The out-of-town customers will be your internet customers of the future.
- Your strategic advantage against the big box competitors in your market is your ability to drill down to the customer level. The big boxes have no customer level tracking whatsoever. If you capture POS data for every customer, you’ll soon have a treasure trove of demographic and buying data that will help you refine your product/service set as well as target very customized offers to your customers based on their historical buying habits.
- Web-based sales should be a high priority and acceleration of for expanding sales/service via the internet is key. You indicated that they had already begun some minor commercial expansion of the website but I would make it a much higher priority than it is. Internet sales may or may not overtake your in-store sales but the goal is to add incrementally profitable revenue streams.
- Your ‘girls night out’ program sounds excellent and we discussed creating a similar package for the men too.
- I highly recommend reducing or cutting completely any marketing spend on flyers or ads in free distribution periodicals. As I noted, it might be better to spend that money on more ‘one-to-one’ marketing programs like your demographically target events, targeted direct mail offers, and more investment in commercializing your website.
- We also discussed the alternative of possibly empowering your sales team to offer an instant X% discount for buyers who need just a slight push to make the sale that day. It may be a much more constructive way to offer a discount ONLY IF NECESSARY to keep a customer from walking out. It might be more effective than the constant “gotta sell everything today at a discount” mentality. The caveat is that if the “deep” discounting works and your profit margins remain stable, then it may make sense to keep doing it.
- To get more mileage from your PR marketing efforts, especially for your special events, I’d call and develop a relationship with the business editors at the major paid circulation newspapers and other periodicals.
- One of the best ways to help ‘sell’ a marketing proposal is focusing on the benefits (not the features of the program) and use real examples from other high performing businesses to demonstrate that the concept has a track record of success.
Based on what I heard today, you are on the right track and are doing the things that will provide you with the recession-resistent flow of business. It will take time but it will come. Keep up the great work!
Have a burning marketing and/or sales issue? Feel free to email me at email@example.com and see if together we can come up with some ways to solve it.
Increasing Revenues & Profits: Podcast May 23, 2008Posted by David Dirks in Big Dogz Podcasts.
Tags: increasing profits, increasing revenues, increasing sales, revenues, sales
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This is our first BigDogz Podcast! In this podcast, Dave discusses the marketing/sales concept of less is more. It’s all about narrowing your marketing and sales efforts on focusing only on attracting your most profitable customer groups to help you stabilize and grow your revenues and profits.
Increasing Deli Foot Traffic in a Declining Market May 15, 2008Posted by David Dirks in Building Foot Traffic, Retailer Store Strategies, Sales Strategy/Tactics, Solving Business Problems.
Tags: economic slowdown, fighting business recession, increasing foot traffic, increasing revenues, sales slump, the deli business
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In the building I work in, there is a nice little deli that serves breakfast and lunch. While they have the advantage of being a monopoly service business within the building, the also suffer from the not-so-infrequent moves of tenants. Right now, the building tenant situation is that they are losing tenants and therefore, a good chunk of their existing deli customer base. Having talked with them, the deli owners have taken a big hit in their daily revenues.
So what did they do to counter this sales trend? First, they reduced expenses wherever possible. They reduced staffing to the size necessary to adequately service the current flow of business. This is a good and basic counter to lower revenues. Then, in order to stabilize revenues they did the next worst thing: dramatically raised prices on common items. The prices of coffee, soda, and other commonly purchased items have been raised by 50% to 75%. Like no one would notice!
Why is that the wrong policy? Well, they weren’t underpriced to begin with. They were always considered a bit more expensive than the deli you’d have to drive 5 minutes to from the office. Premium pricing was their deal…why not…they have a monopoly in the building, right? Not so fast bucko. The remaining customer base that has always frequented the deli notice right way. When a bottle of flavored water goes from 1.50 to 2.00 overnight, people notice. I’ve talk to a bunch of folks here that have decided not to frequent the deli anymore. The deli owners have reached what I call the maximum elasticity of their pricing…they have gone over the line in trying to desperately stabilize their revenues in the face of significantly lower foot traffic.
So, what could they do differently to stabilize their revenues? Three things come to mind for this posting:
1) Reach out to the many who do not frequent their deli or don’t use it at all. Never assume you have 100% market penetration. In this case, there are still several hundred people in this building. My guess is that only a small percentage actually use the deli on a regular basis…less now with more tenants moving out or reducing headcounts. This calls for creating a compelling reason for folks to venture out of their cubes and come to the deli. Outside of being the only deli in the building and having high prices on everything, there’s not much to compel the brown-bagger to come in and buy a sandwich once a week. Once they have created some compelling reasons for people to visit them, then the task is to insure you have ways to communicate those compelling reasons.
2) Stop the price increases. Making your remaining customer base pay for your lack of foot traffic is not a winning strategy. In fact, I’d be willing to bet that in the long run, the higher they raise their prices…the less revenue they’ll get. In stead of keeping customers, they’ll drive them away. It’s cheaper to go down to the local grocery store and buy in bulk what you need for drinks, snacks, etc. if you don’t want to pay those ridiculous prices.
Raising prices in the face of dwindling foot traffic and sales is the easiest and dumbest thing you can do. It’s like hitting the panic button without realizing that there is still plenty of business to mine from the area. In this case, there are plenty of people still here in the building to more than make up for what sales they have lost.
3) Now’s a good time to start a simple customer loyalty program. How about a card that gets punched everytime you make a purchase over $5? Or get 10 coffee’s on your punch card and get a free (you fill in the blank)?
Delivering Superior Customer Service: The Grand Hyatt of Tampa December 14, 2007Posted by David Dirks in Buzz Marketing: Lowest Cost/Highest Payoff, Increasing Your Profitability, Keeping Your Customers, Uncategorized.
Tags: , buzz marketing, customer service, grand hyatt, hyatt, increasing profits, increasing revenues
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I’ve just witnessed/experienced a text book example of delivering on superior customer service. At the moment, I’m in Tampa awaiting a flight back home, wrapping up a three day business trip. I’ve been staying at the Grand Hyatt in Tampa during this time. The hotel is a living & working model of creating and delivering consistent superior customer service. By the way, ‘superior’ customer service is defined in my book as that level of customer service that is so obvious that you’d have to be dead to miss it. It’s a level of customer service that you recognize the moment you’re picked up at the airport to the hotel until the time you check out.
Any business, large or small, intent on delivering superior customer service quickly recognizes that it’s your ability to pay attention to the ‘small things’ that makes the difference. It’s the ability to continuously aggregate small but significant ‘moments of truth’ that build on one another during a customers experience with you.
Here are a few examples of the Grand Hyatt in Tampa delivering on superior customer service:
1. Every, repeat, every interaction with any level of Hyatt employees in this hotel was delivered in a consistent fashion. The always friendly smiles, personal & friendly banter, and the constant scanning for opportunities to serve are just a few examples of superior customer service. On the last point of scanning for opportunities to serve, everyone on the staff is trained to find ways to help hotel guests enjoy their moments there. Hotel employee’s are not hiding from guests. Some are even strategically posted around the common areas of the hotel and are constantly scanning the area for opportunities to help customers.
2. The Grand Hyatt has figured out how to insure that all employees are trained effectively to deliver customers service when they are in the line of duty. That’s not an easy thing to do but the Big Dogz do it all the time and invest in it deeply. You can’t create a superior customer service experience by skimping on constant training.
3. It’s clear to me, as a guest of the Grand Hyatt, that they have figured out how to monitor customer service levels constantly. They have to be great at spotting team members who could become the weak link in the customer service chain. Their response to less than superior customer service performance is probably two things: a) retraining the team member and/or b) showing them the door.
4. There were no lulls in the delivery of superior customer service. I noted that no matter what the time of day, early morning or late at night. They, like many of the Big Dogz who are best at this game, have built into their people, culture and business processes, the ability to deliver superior customer service CONSTANTLY, 24/7.
We have choices in our business models:
– deliver awful customer service all the time
– deliver mediocre customer service all the time
– deliver inconsistent customer service all the time
– deliver superior customer service inconsistently
– deliver superior customer service all the time
I could go on and on but you get the idea. There are no ‘secrets’ to consistently superior customer service. It takes a coordinated, dedicated, and well invested focus on the part of everyone in your business, no matter how big or small. By the way, superior customer service has many advantages. Here are a few:
– Creates a ‘buzz’ around your business. The Big Dogz who execute on this are able to create such a high level of service that their customers are a key part of their marketing and sales process. Built in. No extra cost other than your investment of time, money, and intellectual capital on keeping your customer service ‘superior’.
– Allows you to keep your pricing at higher levels. Your customers will come back again and again for the experience. They won’t generally take the next lowest cost provider. They value the customer service experience they get. It’s a loss to them when they can’t get it, for any price.
– Attracts the best and the brightest. No one wants to work with a second rate provider of customer service. Who wants to work for a business who doesn’t care about providing superior customers service? Answer: People who don’t get hired by places like the Grand Hyatt in Tampa.
Is it easy to create superior customer service? No. However, if you want to build a business that will stand the test of time and profitability, you have no choice. Do it.