Last week following a rare (these days) squash triumph I was chatting to a couple of players behind the courts who pointed out that having looked like the Xmas turkey at one point, in their words, I’d refused to panic and managed to pull myself into the lead point-by-point and held on until the end.
I was reflecting on this conversation a while later and realised that the “not panicking” thing also has parallels in business. Most organisations go through rough patches at some point in their history, but what separates the men from the boys is the way they rise (or don’t) to the challenge.
Even rock bottom is no time for knee-jerk responses, unless your instincts are flawless (and if that were the case, you probably wouldn’t be having lean times in the first place). Failure is more often a case of the business not keeping to strategy than it is the strategy itself, so, first off, take an honest and close look at your business to be sure that you are staying true to your aims at every point in your delivery process.
Don’t make the mistake of switching all your resources to the front line either. You have to remember that sales have their own gestation period. If your sales ratio is one in twenty leads, doubling your sales resources will only give you the ability to follow up twice as many leads. You may get twice as many sales for a limited period this way, but you’ll very quickly realise you’ll need twice as many leads to keep going and that’s about the rest of your marketing machine. In fact, best practice is firstly to focus on activities earlier in your marketing process to increase the quality of the leads that you generate, improving your sales ratio and thereby increasing the efficiency with which you use your sales force.
Failure to maintain your strategic initiative will quickly find you on the kind of expensive and labour-intensive tactical mill-wheel that just about every business in the developed world is trying to stay away from. Not only are you unlikely to influence your sales ratio, your lead-generating initiatives will have stopped, so nobody will have set up future sales opportunities and you’ll be back to square-one, condemning yourself forever to door-knocking for sales, which, as we all know is very inefficient indeed.
There are a few other things that you can do too. Look at your sales process model and dinterrogate the links where the fall-out occurs. If people seem to be interested in your product, but don’t end up buying, work out why this is. Maybe its a pricing issue? It’s amazing how many businesses still try to sell parity products at premium prices, but, when times are hard, these are the businesses that suffer. Being more expensive than your competitors isn’t always the end of the road as long as you are offering at least equivalent value. If the price you are asking buys more features or benefits than your competitors’ emphasise your advantage at every point in the sales chain. However, you’d be wise to make sure first that the added features are ones that your market cares about. Don’t start by kidding yourself that just because your bundle is bigger it is worth any more to your customers – ask them.
When all else fails your only option is to reduce your price, which means taking a close look at your delivery system and cutting out inefficient practices. If you think you are running lean already, think again. A good marketer can usually find ways to improve the efficiency of even the most streamlined business.
Of course, it could just be that you need to be more creative in the way you stack the deal. For example, payment plans can be cut and diced many ways to suit specific customer needs. Consider what you and your customers need and tailor your offer accordingly. If you need cash-flow, structure your offer with an incentive for up-front payment or introduce a sliding scale payment plan that covers your liabilities, but makes your product more accessible. Conversely, if shifting dated inventory is your problem maybe you need to create a deferred payment scheme that will enable customers to get hold of your stuff whilst tying them in to you for longer. If you manage to resist the knee-jerk, you could even come out of your bad patch in better shape than before.
December 28, 2010