Obvious Really

Just came across this and it has a useful set of articles for any start up web marketers: http://www.webmasterfort.com/

The Recession is a Huge Opportunity – Don’t Waste It!

Much of what has been reported and the advice given about the recession is wrong, dangerous or grossly misleading.  However, if you think about it carefully, and you are not in one of the very few sectors of industry or commerce that is actually bearing the brunt of it, the recession offers real opportunities to grow your business and improve its profitability.

There are five key things that you must understand and respond to:

• The Real Implications of the Recession for the Economy
• How Buyers have Changed their Behaviour
• New Sales Propositions for Changed Times
• Changing and Stepping-Up Sales Activity
• Finding The Resources

Understand the real implications of the recession for your business

Make no mistake, recession is a major problem for government because two things happen, income falls but expenditure rises. Less tax, more unemployment! And the government dominates the news!

However, for most companies when income falls so does some of the expenditure.  So on average it is not nearly so bad for most companies. Unfortunately, for some companies it is very bad; if you are in the automotive sector, financial services or in building it is really bad.

But many sectors are still actually growing, even retail sales in the year to June 2009 grew by 2.9%.

If you examine figures carefully it becomes obvious – the decline in the three worst hit sectors accounts for more than the total decline in the economy. Which means there must be growth in others.

Yes, I know when you are trying to sell things to other companies they all tell you its tough and you must reduce your prices.  So what’s new – the buyers have simply found something else to beat you with.

Read the brief overview of the meaning of the figures at Essence of Business. It will put them in perspective

Now some of you will be saying, “It’s all very well for you to talk, but our sales are down and we are not in one of those sectors.”

Before you do read the next section!

Buyer Behaviour

Buyers in all sectors have changed their thinking!  Have you changed yours to match?

If you haven’t you will be losing customers to those that have.

Buyers are creatures of habit.  If things are largely all right they don’t change their habits, primarily because they see the potential risks as outweighing the potential gains.  Actually the psychology is more complex, very interesting and worth studying but that will do for now. (It doesn’t matter whether you are in the business to business or selling to consumers this fact is largely true in normal times.)

But these are not normal times and almost all buyers are looking for better deals!  They are open to doing business with new suppliers.

So you must be doing two things:

• Cementing relations with existing customers
• Seizing the opportunity to grab market share

Sales Propositions

“Its all very well telling me to get new customers but they all want lower prices!” is the standard response.

Of course they ask for lower prices. We all do. But what we actually want is to make more money.  Have you asked yourself how your sales proposition helps your customers make more money?

No? Well consider this; I frequently ask clients why I should buy from them and the answer I get- over 90% of the time – is that they offer excellent service. So I then ask them to define excellent service and most can’t. And in those cases where they can we tease it out and it amounts to “Well we give the customers what they ask for and we talk nicely to them.” If that is you then all you can offer is cheaper prices

One way you can help them make more money is to reduce your prices. Doesn’t help you and if you think it through you will see it doesn’t actually help the customer very much.

Suppose you supply 30% of a manufacturing company’s raw materials and material cost represents 30% of turnover. If you reduce your price by 10% you would actually reduce their costs by 0.9%.

Three ways to help the customer

There are actually three ways you can help a customer make more money:

• Help them increase their sales (Increase volume and/or sales price)
• Reduce the amount of money they have tied up (Capital Employed)
• Reduce their costs

Cutting your price contributes to only the last of these and even then there are generally many more creative and effective ways to help them reduce costs

I am always seeking a decisive competitive advantage and for that I need an unbeatable sales proposition.  I know I’ve got it when it passes two tests:

• Does it provide a significant increase in the customers Return on Capital Employed (ROCE).
• Does the customer understand it and its benefits.

Sales Activity

During the last recession I heard an MD say there were not enough sales to justify the size of sales force so he was making half of them redundant.

That’s right, at a time when buyers were more prepared to change suppliers, more willing to listen to new propositions and more willing to leave you, their existing supplier.

The circumstances have changed. Have you changed your sales activity?

Or are your sales people – or you trudging out to potential customers convinced that there is no chance of new business and avoiding existing customers because it will only give them an opportunity to ask for a price cut?

Existing Customers

You must secure your existing customers!  What new steps have you taken to get close to your customer and really understand them.  If you are in the B2B world and you do not know your customers, goals, strategy, tactics, fears and concerns you do not know your customer.

And more to the point you cannot construct those killer sales propositions.

If you are in the Consumer world then you will have to reappraise your customers. Talk to some of them if you can’t talk to all of them. Also take a look at the Report by the Centre for Retail Sales

New Customers

Now is the time to built market share. Many of your competitors will also have identified that this is the time to build market share. Most of them will attack the problem by simply attempting to undercut existing suppliers taking the view that since they have spare capacity as a result of losing customers themselves they may as well fill the spare capacity.

You could follow this approach but do you want customers who are prepared to drop an established relationship that has worked well for many years? Probably not – they’ll drop you just as quickly.

Would you like a customer who recognises the benefits of your carefully thought out proposition and is prepared to pay for it.

However, having developed that new proposition you must also recognise the Mousetrap Fallacy.  It is not enough to build a better one – you have to get the right message to the right people.  What have you changed in the way your marketing works to:

• Find more prospects
• Get you message in front of them
• Communicate the message more effectively
• Close those you convert

If you don’t know where to start then consider:

• Awareness
• Actual needs
• Perceived needs
• Customers definition of better
• Ease of purchasing

Money and Time

But all this costs money and time.  So what’s the problem, you have spare capacity! That’s why you are doing this. Actually you had spare capacity before the recession but you probably didn’t know it – but more of that in another blog!

Start looking for ways to redeploy it!

Get engineers and production people to talk to customers!  Not as sales people but as genuinely interested members of the company.  This will have dramatic effects on both customers and your own company. Customers will get the message that you are really interested in them – they’ll ask searching questions and strike relations that sales people don’t reach – and by getting production people close to customers you will open their eyes and make them far more responsive.

But don’t simply send them out or put them on the phone until you have given them some basic training and put the right support in place.

Seize the Initiative

It will do your company good and will help the rest of the country!

There are many ways to exploit the recession if you are prepared to think hard about it. Focus on those listed above and you will have taken major steps. But you do have to work at it, think hard and creatively about it.

Visit our Website at Essence of Business where you will find other resources to help you develop approaches to exploit the current situation or use the contact form by clicking here.

Very short one this – but it is too valuable to let go by.  I saw it yesterday, added it to my favourites and put it in my routine.

We like to think we do a pretty good job for our clients on web marketing but we do it on a client by client basis.  However if you want a really good source of tips, tricks and software on Pay Per Click  campaigns then visit   http://www.ppchacking.com/ . They will be a regular source of ideas for us!

This morning I learned that the “Met Office” (UK weather forecasting organisation) is paying bonuses to their staff for the accuracy of their forecasts!

Those of you who live in the UK and recall the forecast of a “Barbecue summer” will probably find this hard to believe. You shouldn’t when you recall that the standard British barbecue involves eating a half cooked half, burnt sausage while sheltering under an umbrella on a small patch of damp grass. On that basis they got it spot on!

However, that’s not what concerns me. Just what were those who introduced the bonus scheme hoping it would achieve?

I raise the issue because almost every bonus scheme I have ever seen fails to produce the result intended!

The Logical Jusification

I suspect the Met Office logic follows the same pattern that initiates most bonus schemes. It goes something like this:

• We are not delivering what we need to deliver.
• The people who are responsible are (by definition) not doing a good enough job.
• We must encourage them to do better
• We will offer them a bonus if they achieve a better level of performance

This has immediate satisfying effects for those that implement the policy, they have recognised “the problem”, they have done something to rectify it, that something appears to be logical and in this particular case it probably will result in fewer incorrect forecasts.

The problem with this logic is:

The first statement is not a problem but a symptom; the next is tautology – a straight statement of fact although it appears to be a step in a logical chain. Then we come to “We must encourage them to do better”. How can they do better? Are they lazy, sloppy, lacking in training, fundamentally incapable? What is it in their behaviour that we need to change by offering a bonus?

If it is laziness or sloppiness we have a leadership/management problem and we should be addressing and not simply paying people more to tolerate the bad management that and the other two have absolutely nothing to do with bonuses.

So the bonuses are a waste of money.

But they will produce fewer incorrect forecasts!

I am a keen sailor, which means I listen to the weather forecasts, particularly the shipping forecast, very carefully. I used to hear the line “Southwesterly force 4”. I knew it meant that I might experience Westerly force 5 or Southerly force 3 both of which make the forecast wrong.

So now I hear the words “South to southwest 3 to 5”. Far less likely to be incorrect but I now do not know if it means I will experience force 3,4 and 5 and might experience 2 and 6 which is almost useless.

In common with almost every bonus scheme I have seen it has the tendency to drive people to look at how they maximise their earnings instead of trying to work out how to produce the best result for the organisation (and then actually do it). The saving grace is that in many cases people are naturally keen to do what is right and actually don’t get distracted from doing a good job. The downside is that they feel a sense of frustration and alienation from their organisation as a result

It is almost impossible to develop a bonus scheme that is really in complete harmony with the organisation and they rarely actually address the human problem they were designed to resolve!

Before you embark on a bonus scheme think very carelfully about the real problem you are tryng to address and if it still seems to make sense then think very carefully about the potential consequences.

See the video - Dolphins

I sail a small boat!  You will I am afraid hear a lot more about it – I find sailing offers a range of experience that nothing else can match!  Calmness, challenge, fear, exhilaration, new friends made in the most unlikely places, comradeship.  But nothing can compare with the friends I met in Lyme Bay off the Dorset coast.

On channel 16 I had heard there was a submarine operating in the area.  Wind was gentle, the sea state slight when I spotted a torpedo heading towards my small 30 foot boat.  Then it grew a fin!  I had a dolphin with me.

His first trick was to dive under the boat and put himself directly under my echo sounder.  I had turned it on while leaving Salcombe close to low tide (on neaps, for the sailors).  My shallow alarm was set at 3 mtrs and began to sound continously.  He kept streaking away and returning to swim directly under my transponder – I guess he was talking to me and getting pretty stupid answers.  Giving up with what was clearly a very one-sided conversation, he left.

About 40 minutes later he returned with a friend!  I don’t know for sure that it was the same one but the manner of his return seemed to suggest it.  A huge leap right beside us in the cockpit produced a yelp from my wife.  It was almost as though he had returned and was saying “We’re back – now watch the show.”

For the next 20 minutes we were treated to a stunning display – swimming close by the boat – diving under the bows – leaping across the bows – or simply leaping beside us. For a large part of the time we could have reached down and touched them as they swam beside us apparently looking up at us.

My camera was below and there was no way I was going to miss any of this so it stayed there.  Then after 15 minutes in company I decided I would grab it.  I tried to photograph them but all I got was the splash of disappearing dolphins.  Then I realised I could video them.  Still not easy  - they are so fast.  But I did get some and you can see it by clicking on Dolphins.

I cannot describe the feelings both Trish and I experienced.  We were privileged, blessed, honoured!  They were having fun, I think they were probably showing of to each other while still working in harmony together.

I am not starry eyed.  I know they are simply fairly intelligent sea mammals.  But it was one of the most magical experiences I have ever had the privilege to enjoy!

When I decided to start this blog I looked for a domain name.

Since I’m not particularly creative I decided to borrow from our clients.  I keep hearing the expression “Obvious really – it’s just common sense” when I have helped them gain a new perspective.

I use a set of concepts developed by a guy who is far cleverer than me (more about him in a future blog). These concepts are very powerful; they highlight fundamental flaws in much of business thinking.  The curious thing is that, once someone has followed the logic through, the conclusion really is obvious.  Prior to following the logic it is entirely invisible – a bit like an optical illusion.

So I thought “commonsense” or “justcommonsense” would be good domains.  Of course, somebody would already be using them, I presumed.

Well try it!  Actually, before you do I’ll tell you about it.  Most of them have been stockpiled in the hope that somebody would regard “commonsense” as something worth paying for or they default to something else.

The one that actually works however is “justcommonsense.com”.  It takes you to another blog where the blogger is currently offering the advice:

• Stock up on 100 watt Bulbs
• Buy a Gun

So I conclude:

• Lots of people consider “commonsense” may be worth having
• Nobody is able to use it

Obvious Really!