How do you position your business within a customer problem, and not through product and service features?
Entrepreneurship has many attributes ascribed to it. Passion, creativity, interest in knowledge, adaptability, industriousness, and the list goes on. Over the years, we have developed an entrepreneurial assessment that looks at 14 attributes.
We use it for a number of purposes that can be roughly divided into two camps:
In service of the entrepreneur (your attributes; how they work for you and against you in your everyday life), and in service of building a business (the process of building a business into an asset of value requires particular support structures to achieve the end goal of a successful sale in three, five or even 15 years from today).
We build our business in the image of our personality, with all the attributes impacting on the end result. Being aware of them makes the difference between moving forward and remaining in one place, irrespective of how smart or hard you work. Being aware of them helps prevent self-doubt creeping in where awareness of an unproductive, personality-driven pattern of behaviour should be.
Separate your business from yourself
Andre has an interesting entrepreneurial profile. His attributes are weighted heavily in favour of interest in knowledge, innovation, adaptability and industriousness.
Backed by his technical skill set, these attributes fuel his desire to make his products better. And make more products. However, 16 years on, business growth eludes him.
His business seemed stuck in an annual turnover band of R18 million to R23 million. For the last seven years, the turnover bounced within this range. His furniture was well priced, well made, well designed and very competitive with many wonderful features that, as he explained in detail, set him apart from his competitors.
After further discussion, we agreed to work together to tackle this problem. The market opportunity in the furniture industry is in the billions. Doubling his turnover in two or three years should not be a hard task.
When I asked him why he did what he did, he spoke with excitement about his products. He was elated by the new CNC panel saw that he had recently acquired.
His meticulous nature had seen him break up his production process into neat, well-defined activities making up four business units of design, production, promotion and dispatch. This new investment would increase the efficiency of his operation by 13%, he proudly explained and showed me how the CNC machine would hopefully improve his sales performance.
I was doubtful about the acquisition and also struggled to see the link. He went on to explain that his sales staff could then take the multitude of briefs from clients and translate them quicker than his competitors into quotable, better priced designs. I continued to ask questions about the machine’s necessity.
Service, he said, better service builds trust and confidence in our ability to deliver, he told me with pleading eyes whilst he stood by the CNC machine, resting a hand lovingly on the control panel as if it were his star performer. I could see that Andre was not even that sure about his argument himself!
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Productive allocation of resources
We ran a business diagnostic on his operations. The results were not surprising. His business systems were heavily weighted in favour of the back-office activities of design and production capability. The front-office was very light in sales and marketing.
It was clear that Andre had built his business in the image of his personality, both consciously and unconsciously. He found his greatest meaning in design and production and his thirst for innovation, new product development, industriousness and conscientiousness had resulted in directing all his investment, time and energy into the part of the business that fed his personality attributes.
Immediately we knew where to look and went out to the market. He had a very exciting group of clients. Andre served corporates, big, medium and small business with office furniture. In some cases he secured work from the companies’ CEOs and designed and built furniture for their homes too.
He had a number of independent retailers on his books, some historical sales with a big brand discount retailer and had recently opened up business with a competing retailer group that served the middle market with furniture credit sales. Andre proudly told me how this left him with a well-diversified customer base to counter the risks of an uncertain economy.
Like Andre, many of us have to operate with limited resources. Directing these resources to give us the best result is one of the single biggest challenges we face as business owners. Andre’s ‘spray and pray’ selling strategy was tearing him, his staff and his business apart.
He could never build momentum in any one direction. His sales staff were all over the place and seldom was the same product sold more than three times. His design and machine repurpose costs were consuming the profit he was making and the business started and ended every year as it had started that year. There was no real progress being made.
One of the first tasks that I set for Andre was to segment his market. This required him to define the multitude of people and businesses that needed furniture.
Once this was done, we organised them into groups with common features. For example, businesses were broken up into corporates, big, medium, and small businesses and small-office-home-offices (SOHO). We further broke them up into regions and type. Some of the types were service businesses, manufacturing business and retail businesses.
Regions located the businesses — provinces and then proximity to Andre’s factory. We indulged ourselves further by organising these businesses into groups that included more features such as ‘care about design or don’t care about design’ and so on.
We landed up with 47 groupings all in all. The next step was to assess the sizes of the groups in market potential. Once done, we combined groups that had 80% similar features and settled on 15 groups of which eight were sizable groups in terms of market potential.
The fight began. Andre wanted to serve six of the eight and include three of the remaining seven since the work would be interesting. I locked the door of the meeting room. At 3am the next morning we had agreed on the single group Andre would focus on. It was to be the SOHO.
With the recession on hand, retrenchments likely and job growth slow, we believed that this would be a growing market. It was already sizable and Andre was getting 37% of current sales from this market. Full of enthusiasm, Andre started to create designs on his pad that he thought this market would love. We produced a ‘research questionnaire template’ for Andre to take to his current customers. It was designed to ask them what design features they wanted.
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Want to Grow Your Business? Just Let Go
Repositioning to achieve focus
What he came back with astounded him. The designs that he had played with three weeks before, after we agreed on the SOHO, were all ripped out of his file and torn up. Back at the drawing board, Andre created final designs that went well beyond furniture features.
They included the method of selling, now that he understood the problems of his SOHO clients. They incorporated annual sales calls to touch up the furniture at no additional cost, giving Andre a long-term relationship from his previous once off sales. It also gave him sight of which SOHO clients were growing; the leap from a SOHO to a medium-sized office for any of his clients was a small one. So too was the design capability that Andre offered and that his factory could deliver.
The designs were also exciting. They gave his clients versatility. A set of three tables could double up as a board room table as well as three separate workstations maximising the use of small spaces. The materials he used gave the furniture a very classy feel, something important to a SOHO entrepreneur who wants to lift his image for clients.
Three and a half years on from our first meeting, Andre’s business is approaching R49 million in annual turnover. He does one thing very well; design, produce, promote and deliver furniture suited to the SOHO market. He is now looking at the early stages of increasing his range to accommodate some SOHO clients moving into medium sized offices.
The lever to get Andre’s business to grow annual turnovers from R20 million to R50 million was largely one thing. He positioned his business to solve the problems of a well-defined customer group.
Have you considered the following when choosing your market segment:
- Separate your market into categories. Now give each category a % of your sales. Who is your biggest segment, and where is there room to grow?
- If you were to narrow your focus, which segment offers the biggest growth opportunity?
- Have you created a questionnaire for that segment asking what they want and need from you? You might be surprised by what they say.
- Based on the above questionnaire, does your product or service offering deliver on these needs?
- What can you change to meet those needs?
- What value adds can you offer that will make the lives of your clients easier
How Feyi Olubodun Uses The Enemy To Create Winning Campaigns
People don’t buy from companies, they buy from people. If you really want to build a successful business, you need to consider the human element in purchasing decisions.
- Player: Feyi Olubodun
- Company: Insight Publicis Nigeria
- Position: CEO
In 2013, the Malaria Consortium approached Insight Publicis Nigeria to help them drive the rapid purchase of Long Lasting Insecticide-treated Nets (LLIN). Ordinarily, this should be easy, given the high rate of malaria cases and deaths in Nigeria — 100 million cases of malaria reported each year, with 300 000 deaths per year. People should buy mosquito nets.
There was just one small problem — in order to stimulate trial of the product, the Malaria Consortium had given away free samples of LLIN — one per household.
Instead of purchasing more nets, families merely put as many of their family members as possible under one net. The Malaria Consortium had unwittingly created a barrier to further uptake.
Here’s what Insight CEO, Feyi Olubodun and his team did: They ran a seven-day campaign promising consumers that they would watch the first live broadcast of a live birth on TV. It was scandalous, and earned hundreds of millions in free media coverage. Government even got involved, trying to shut the project down, so the team had to let them in on the strategy.
Social media became heated, debating the morality of watching a live birth on TV.
Consumers watched a woman, Blessing Madaki, for six days leading up to the birth of her baby. On the seventh day, they watched her being wheeled into the labour room. Millions of Nigerian viewers across the country held their breaths. And then they saw an animation of Blessings’ unborn child refusing to be born, unless his father bought an LLIN. The child’s reason was simple: He didn’t want malaria to withhold him from fulfilling his destiny in life.
- 95% of viewers were willing to buy
- Purchase of LLINs went up over 10%
- 42% of traders said it was a result of the campaign, because 32% of buyers mentioned the campaign at the point of purchase
- Usage went up by 12% and remained high, even after the rainy season
- The client’s objectives had been to raise awareness by 20% and purchase by 10% over nine months. The campaign was a resounding success.
What caused the shift?
Consumers perceived on a subliminal level that malaria was the enemy of the destinies of their children and loved ones. Malaria was the enemy; LLIN the solution.
What can brands do with this? It’s simple. Brands must answer the question: What is the enemy of my target consumers, and how is my brand positioned relative to this enemy?
The success of the LLIN campaign was based on a deep understanding of consumer psyches and the fear triggers that will lead to a purchase.
In his book, Mastering the Complex Sale, Jeff Thull explains that successful sales are the result of navigating the psychology of change, bringing your customers from the positive present to a negative future in absence of your solution. In other words, highlighting the risks of not purchasing. The LLIN campaign is an excellent example of this theory in action.
However, as Feyi and his team soon learnt, while fear can be an excellent motivator, it isn’t always the best way to approach a campaign.
“We tried to use the same approach for another brand and it didn’t work,” he explains. “The team presented to the client and half the client team started crying. It’s a delicate approach to navigate. Fear is a powerful motivator, but you can also strike too deep. This pitch was for an NGO trying to raise awareness for supporting children and preventing infant deaths. Our idea was to ask parents if they’d like to save money for their children’s tombstones — if you wouldn’t do that, why not use the money for something else that preserves your child’s life? But the response was so heart wrenching, it actually didn’t work.”
So, what can you learn from these examples that you can use in your own business and marketing campaigns?
First, fear is a human emotion that can be used in marketing — but it has to be used wisely. “It’s important to remember that although we all love to use terms like consumers and target groups, at the end of the day we are all humans, and as such we have the full complement of emotions that come with being people — fears, hopes, dreams — we need to recognise that humanity when we market our solutions.”
Feyi understands that everything we do comes from a place of happiness, anger, fear or hope — even the most rational business decisions have an element of emotion, from where we choose to spend our money, to who we want to do business with. “One of the campaigns I’ve always loved was a Volvo safety campaign. As the car hit a barricade, the driver’s family’s hands all reached over his seat to hold him in place and save his life — that’s why we wear safety-belts — for the people we love. It was an incredibly powerful campaign, because it tapped into our emotions.”
Understand your customer
Whether your focus is on consumer products or B2B solutions, Feyi believes too many marketing elements are focused on the surface, pushing products. “We need to start looking deeper at the motivators behind purchases,” he says. “Why does your customer buy airtime? Who do they need to speak to? What’s the emotion behind what that airtime allows you to do?
“Marketers shouldn’t be afraid of tapping into emotions. You’re selling to human beings, and that’s why they will buy your products — not because they are consumers, but because they are people.”
But as Feyi’s own experiences have shown, you can’t just push for emotions without really understanding who you’re speaking to. “Businesses need to really analyse their communities: Who are you focusing on? What are their fears? What do they really care about? And how do you figure this out without making assumptions?”
Another big lesson is that the more you can listen to your customers, the more you can subtly adjust your product until you’re offering something your customers really need.
“If you have a product that touches directly on the humanity of your target, you’ve already gained a lot of mileage — media campaigns only amplify what your product already is. They can’t sell something no-one wants — at least not with any longevity.”
Feyi advises that if you have a clearly defined target audience, the next step is to take an ethnographic approach to really understanding them. “You need that,” he says. “If I want to sell to people in Soweto, I need to go and visit Soweto. How do they consume the products that may or may not exist in my category? What do they care about? I need to get a real feel for how they live and work. You’ll be amazed by what you’ll learn simply by immersing yourself in your customer’s environment.”
But take care. Feyi advises that if you take the time to go and speak to people, you need to do so authentically. “I can’t arrive in a rural area in a suit and expect the community to treat me naturally. Respect the community you’re entering, and blend in. Take a participatory approach. You get non-participatory observation and participatory observation, and participatory observation is always of more value in a marketing environment.
“Participatory observation breaks down barriers. Take language for example. Even if you only try and speak a few words of someone else’s language, you’ve already broken down an important barrier. You’re showing a willingness to learn and a respect for the people you’re conversing with.”
This is as true in a consumer environment as it is in a business environment. “If you’re going to pitch to a client, you need to speak their language. You need to understand their landscape and industry.
“There are so many ways to connect with people, you just need to find your similarities. You need to find what touches you both. Find the commonalities in your humanness.”
When Feyi Olubodun, CEO of Insight Publicis Nigeria, one of West Africa’s leading creative agencies, witnessed one too many cases of brands failing in the African marketplace he began to ask himself questions: Why did brands, both global and local, so often fail to connect with the African consumer? What was it about the African market that brand owners were not seeing?
The result of these questions is Feyi’s recently published book, The Villager: How Africans Consume Brands.
The Villager is available on loot.com and at all leading booksellers.
How To Immigrate With Your Family By Starting A Business In The UK
The simple way to make your entrepreneurial dreams come true in the UK.
Many people, especially those with families, are reluctant to up sticks and move to the UK. These would-be movers are often worried that they will not be able to secure employment in the hugely competitive UK job market. This source of stress alone is enough to discourage some from pursuing their dreams of living in the UK. But, there is an innovative and accessible solution.
The UK has several visa classes aimed at individuals who wish to invest in the country. These give an individual the right to live and work in the UK with their families, if they make a defined investment. A visa that interests South Africans is the Tier 1 (Entrepreneur) visa. We have developed our UK Tier 1 Entrepreneur Investment Programme to help South Africans looking to immigrate to the UK alone, or with their families.
The basics of the Tier 1 (Entrepreneur) visa
To be awarded a Tier 1 (Entrepreneur) visa, you will need to invest at least R3,5 million (£200,000) in an existing UK business or one you start up. There are certain other requirements, but these are not particularly onerous, and most investors will qualify if they submit their application correctly.
The entrepreneur visa allows you to live and work in the UK, and take dependant family members with you, defined as your partner and your child under 18. If you have the capital, or are willing to liquidate your assets in South Africa to raise it, the Tier 1 (Entrepreneur) visa is a great way to relocate your entire family to the UK.
Do note: You will need to make specific applications for each dependant, so it is vital you consult with an immigration expert before beginning the application process.
You’re not just immigrating, you’re investing in the UK
By starting or investing in a UK business as part of our programme, you will be granted the right to live and work in the UK, and earn an income from that business.
The business you invest in will want you to play an active role, not just contribute seed capital. If you want to invest in a business without being an active director you will be allowed to do so, but you may not be eligible for the Tier 1 (Entrepreneur) visa.
Another restriction is that you cannot hold this visa and work for a business other than the one you are invested in. But, your partner will be allowed to work in whatever field he or she pleases.
How do you choose the right business to invest in?
There is always an element of risk when investing in a foreign business, particularly when you’re thirteen thousand kilometres away from the country you’re investing in. It’s important to understand exactly what you’re investing in before you take the plunge.
That’s why our UK Tier 1 Entrepreneur Investment Programme is hugely beneficial. It matches your investment capital with a pre-approved investee business. We’ll make sure that your skills are matched with an appropriate venture so you can be an active director of that business.
We’ll also handle your visa applications, providing you with a comprehensive immigration and investment solution. Our partner’s list of investee businesses is over 200 strong, giving you an array of choices in various industries. This allows us to pair you with the business that best suits your investment goals and skills.
But what if you have a successful business in South Africa?
It’s no secret — emigrating from South Africa is difficult for many families who have deep roots and thriving operations. There’s no reason why you can’t keep your business in South Africa as well as relocate to the UK.
Nothing restricts a Tier 1 (Entrepreneur) visa holder from owning and overseeing businesses in other countries while they are on this visa. Many clients choose to relocate to the UK while ensuring that their original business continues to operate. In this way, you will be supplementing the income from your UK investment with revenue generated by your South African business.
You can hold British and South African passports if you apply for your British citizenship in the correct manner. You must obtain permission from Home Affairs in South Africa to avoid having your citizenship revoked. Retaining your South African citizenship will make it much easier for you to continue running a business here.
Talk to us today
There are compelling reasons to move to the UK — a brighter future for your children and a more stable country in which to retire. Our comprehensive solution will ensure you get the most out of your relocation.
If you’re thinking of immigrating to the UK or investing offshore — either or both — we can help.
8 Negotiating Tactics Every Successful Entrepreneur Has Mastered
How you would negotiate if you were talking for the other side? Now you know how your offer looks to them.
Deep down, we’re all a little greedy. We all want the best outcome for ourselves. We can’t help but consider what’s in our own self-interest any time we negotiate a deal.
But to become a truly successful negotiator, you have to learn to put aside pure self-centeredness. Because if all you care about is serving yourself, you’ll blow the deal before you even start.
Negotiations are a delicate balance of give and take. Learning to strike this balance is necessary for any entrepreneur hoping to build a prosperous business. It takes time and practice and whole lot of patience to hone a winning strategy. And yet each deal is unique and needs to be approached correctly, which is why a one-size-fits-all approach will never work for long.
Here are eight of the most important skills every entrepreneur should learn to become a master at negotiations.
1. Do your prep work
Successful negotiations are built on solid prep work. This means you know something about the parties involved, you’ve done a little background checking, you know about their business and maybe you’ve even talked to others they’ve worked with to get an idea of their strengths and weaknesses.
The same is true if you are on the other side of the table and are looking to invest in a product or service. You should have a solid understanding of the pros and cons of the commodity they are selling. The bottom line is, you need to have a good idea of who you are dealing with and what they can offer.
You should always go into negotiations with your best foot forward. You should be well rested. You should have eaten something (being “hangry” can swiftly detonate any negotiation). You should show up on time – maybe even early, so you aren’t walking in feeling rushed.
If you’ve done the above, you should be feeling positive and are going in clear-headed and confident. You will have the stamina and energy to get this deal done.
2. Consider all the details of the opening offer
The opening offer usually acts as an anchor for negotiations. It’s also where the details get hammered out, so it’s important that it’s done carefully and thoughtfully.
The basic elements of an offer include the offer price, the work being proposed, what goods or services are included, when it will all be delivered and if there are any performance incentives, warranties or terms and conditions. Obviously, price is a key component to any deal, but keep in mind the other details. They can matter nearly as much in the long run.
If you are the one initiating the opening offer, this is your chance to set the stage for the negotiations ahead and start with the upper hand. You won’t get what you don’t ask for, so be bold! If you’re on the other side of the table, the offer is key to seeing how close together you are.
Know your bottom line – what are you willing to accept? And remember to take a close look at the details. What else are you getting for your money and what else are you potentially signing up for?
3. Check your ego and emotions at the door
While you should have confidence and assurance because you’ve done your prep work, you also have to check your ego at the door.
Letting your emotions run the show will never serve you well. In fact, you should be going in feeling as neutral as you can about the situation. Leaving your ego behind will free you to think objectively during intense bargaining. You can then negotiate from a standpoint of flexibility.
To be successful you have to be able to think clearly in stressful situations and be willing to work to find common ground. If you walk in with a middle-of-the-road attitude, you’re more likely to strike a balance between getting what you want and not giving away too much.
On the other hand, you don’t want to give something away without getting something in return. Losing your ego and putting your emotions aside will help you find right path forward.
4. Play the game rather than letting the game play you
If you’re entering into high-stakes negotiations, it may be helpful to run through possible scenarios with a friend or colleague.
This will help you feel less nervous, and it may also show you objections to the offer that you hadn’t thought of, or help you see a side of the deal that you hadn’t considered.
Playing through the scenarios, even if it’s just in your own mind, may help you feel less attached to the outcome. In order to treat the whole thing as a game, you should care…but not too much!
Having a little apathy will help you stay neutral and keep your feelings in check. And remember, negotiations are like anything else: the more you practice, the better you’ll be.
5. See your strengths and weaknesses clearly
Self-awareness is key when you begin negotiations. You are essentially looking for the other side’s strengths and weaknesses. Not in a cruel way, but to help you determine your next play.
At the same time, you must also be aware of your own strengths and weaknesses, so you don’t allow yourself to be exploited. Try to take an honest inventory of your strong points and vulnerabilities.
If your company is small, what is its growth potential? Are you able to be more responsive to the market than a larger company? In short, what can you offer that the other side can’t, and what can the other side offer that you can’t compete with? Knowing where you stand on the negotiation chessboard will help you determine how to land the best deal.
6. Know when to walk away
When you enter into a negotiation with the knowledge that you are willing to walk away if things don’t go as planned, you come from a position of strength. That’s why staying neutral is key to a successful negotiation.
You can’t be bullied into a deal if you just leave. But often we tell ourselves that this deal means everything to us. Our ego is involved, and that weakens our position.
It’s about mindset. You have to believe that if this deal falls through, you aren’t losing an opportunity. You are keeping that space open so when a better opportunity comes along you can snag it. If you force a bad deal to happen, you are stuck.
Related: Let’s Make A Deal
You are no longer able to grab hold of something better. And there is no shortage of business out there. So if you are pinning all your hopes on one deal, you may be killing future business.
7. Negotiate in good faith
Whether you’re negotiating a long-term business deal or setting up a quick sale, it’s natural to feel on the defensive when you begin negotiations. We are all protective of our interests and we want to cut the best deal in our favor.
But if you are hoping to walk away with your reputation intact, you need to practice negotiating with compassion and good faith. Engage in active listening and really hear what the other side is saying and asking for. What are the issues that are making them hesitant? Then make sure that you relay your own priorities.
This is the basis of a “win-win” solution, when both sides explore each other’s positions and walk away feeling heard and comfortable with the deal that was struck. Even if it appears that you are on opposite sides, there’s usually common ground to be had. Maybe the other side has a different goal or an opposing position. But if you look for it, you can usually find mutual gains both sides will accept.
8. Know how to close
Negotiations may feel like a game of chance, but they’re more like a game of chess. A successful negotiation requires a good sense of timing and the ability to sense the other side’s next move.
If you’ve done your prep work and are bargaining in good faith, you should have a solid idea of what they’re looking to get out of the deal. And of course, you should have a clear idea of your own bottom line. So you’re either working to bring the sides progressively closer, or the deal is going nowhere.
Ask yourself what the endgame is. Can the difference between both parties be split? If both sides are close but a few numbers are hanging up the process, what will it take to shake things loose?
If you can strike a bargain that makes sense, it doesn’t need to be perfect. It just needs to work for both parties involved. If you can get to that point, you have set the stage for the final handshake. If not, you have to be willing to walk away knowing it just wasn’t the right time.
This article was originally posted here on Entrepreneur.com.
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