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Sales Strategy & Management

The Lost Art of ‘Up’Selling

The good news for entrepreneurs is that upselling works.

Steven Viviers

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A recent study in the US concluded that it is 70% easier to get additional sales from existing customers than to get new customers to buy for the same value. In these tough trading conditions with customers becoming increasingly despondent, it’s reassuring to know that good old-fashioned selling can still bring results.

I worked for a major retailer several years ago that had as its main sales driver ‘selling that extra item to every customer’. This wasn’t intended as a hard sell. The retailer, a household name in South Africa, wanted to create an exciting shopping environment on the sales floor. It wanted to encourage its ‘merchants’ to interact with customers in a unique way, so that they would buy an extra product each time they shopped and keep coming back time and time again. The so-called ‘tips’ and ‘techniques’ the merchants used proved the difference between success, staying ahead of the competition, and survival.

Consider for a moment the impact of ‘selling that extra item to every customer’. The example below illustrates the potential. Assume that the average price of an item sold in a shop equals R15 and that the average number of customers in the same shop per month is approximately 2 500. It follows that the net result of selling one extra item to every customer would result in extra turnover of R37 500 per month OR a welcoming R450 000 per annum.

But can this kind of sales growth really be achieved? We think so and here’s how.

What do customers really want when they go shopping?

There are some clear reasons why customers shop at some businesses and not others. Usually it’s because they want value for money. They want to know that for every R1 spent on a product and / or service they are getting the most for their money. As small business owners your goal is to provide customers with a range of prices without necessarily going ‘head-to-head’ with the big majors.

Customers also like choice. Some large supermarkets carry product ranges in excess of 40 000. That doesn’t mean small independents should stock a large range. It does mean asking customers exactly what they want and then giving that to them.

Customers love new things; they love innovation, but if you can’t give them ‘newness’ all the time, then make sure you move what you have around, presenting it in a new light. Constant change is the key.

Nowadays customers want ‘convenience’ most of all. Everyone has heard the retail saying “there are three main things in retail success – location, location, and location.” If customers had their way they’d want your business right outside their front door. But other factors are also important, such as easy access to your business and hassle free shopping. Customers want your business open as late as possible and don’t keep them waiting in queues, in car-parks and at check-outs, and especially don’t disappoint them with empty shelves when they’ve taken the trouble to come to you in the first place.

Service and selling are contact sports

The first thing to remember is that customer service and selling are contact sports and if you don’t want to spend the time interacting with customers get out, NOW. For those who accept the challenge the rewards can be hugely satisfying.

‘Upselling’ to customers should really be a soft sell. The extra sales come through hearing the voice of your customer, knowing the business you’re in and your competitor’s business, by applying some basic shopkeeping & merchandising principles combined with some good old-fashioned selling. None of which is out of reach of small entrepreneurs that have the heart to try something new and “go the extra mile” for customers.

Entrepreneurs and small business owners can learn a lot from the giants. Deregulation in the health care sector for example has meant that independent Pharmacies found themselves competing head-on with some of the larger retail chains. Both New Clicks and PnP have their own Pharmacies in-store and the Dis-Chem Chain offers an impressive ‘one-stop-shop’. Pharmacists specifically trained to dispense medicines and sales people walking the aisles to assist and sell to customers. In response the ‘front-shop’ of the traditional pharmacy has taken on a new life and is a hive of opportunity.

Shopkeeping principles are not well understood by small business owners.

Shopkeeping principles are often not understood by small independents leading to a host of purchasing, pricing and promotion problems – the proliferation of product ranges, over and under stocks, a lack of ‘newness’ and innovation and poor merchandising disciplines.

As we’ve said already customers are demanding more and more convenience. In fact, the convenience format is the fastest growing format in the retail industry worldwide. One has only to look at the growth of garage shops in South Africa. Woolworths’ ‘Foodstops’ into Engen Convenience Centres, PnP ‘Express’ Stores into BP Service Stations are just two examples of this phenomenon in South Africa.

Furthermore independent business owners tend not to leverage their strengths. Unique strengths such as personalized service, narrow targeted ranges, assisted shopping and home deliveries.

There is only one boss: the customer

Service and selling need to exceed customers’ expectations. In the words of the late Sam Walton (the legendary businessman and entrepreneur, founder of the Wal*Mart Chain of Stores in the US), “There is only one boss: the customer. And he can fire everybody in the company, from the chairman on down, simply by spending his money somewhere else.”

It all starts with a vision and selling strategy that helps to align the whole business, especially line managers with frontline staff. Then targeted strategies to address amongst other things the following‘, ‘Developing a True Customer Focus’, ‘Responding to the Market-Place, ‘Optimising the use of Selling Space’ (if you have a physical premises) and ‘Developing Measures & Tools’.

In the next few articles we will cover some of the more important strategies in detail, but what follows is a brief summary of what to expect.

Hearing the voice of your customer is the starting point

The first subject we’ll cover is ‘Developing a True Customer Focus’. One of the more common reasons businesses fail is that entrepreneurs grow complaisant over the years. They stop walking on their sales floor and talking to customers. We’ll cover topics such as identifying your customer, managing customer ‘moments-of-truth’, understanding your value-proposition, engaging with and keeping loyal customers, hiring the ‘right’ sales people and product knowledge training.

The second subject ‘Responding to the Market-Place’ will cover topics such as learning from your competition, identifying trends & benchmarking best practices, knowing your strengths / weaknesses, identifying your unique offering, planning your marketing and promotional effort (including specific promotion strategies).

The third subject ‘Optimising the use of Selling Space’ will covers topics such as the location of physical premises, street & window displays, shop layouts, ‘sweating’ merchandising space (merchandising gondolas, front-ends, shelves, dump-bins, check-outs) and the use of in-store signage and ticketing.

The final subject ‘Developing Measures & Tools’ will cover specific measurement principles / measures and a variety of tools for gathering, analyzing and presenting sales information. A key principle here is ensuring measures are tangible for staff.

Next time you go shopping at your favourite shop ask the owner / manager where their office is located. If it is ‘in the back’ you have a vital clue to their customer service approach. Make sure yours is on or close to the sales floor (preferably the tills) and that your overall approach to customer service is ‘management by walking about’.

Steven B. Viviers is a partner of Customer1st, a change management consultancy operating in Cape Town, Johannesburg and Durban. He has worked in retail most of his life with British Petroleum, Chesebrough-Ponds Co., Edgars Stores and Woolworths Ltd. He has consulted to various governmental and business organisations in South Africa, Namibia & Zimbabwe on the subject of Service Improvement. You can contact him at customer1st@iafrica.com.

Sales Strategy & Management

Know Your Value As A Business

Do you have a unique selling point?

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Developing your unique selling point and value as a business often become the cornerstone of your competitive advantage and growth strategy.

Your competitive advantage is that what makes your business different from the rest. It is so important that Jack Welch, past chairman and CEO of General Electric said:

“If you don’t have competitive advantage, don’t compete.”

There are two types of competitive advantages:

  1. Cost advantage
  2. Differentiation advantage.

Cost advantage means you provide reasonable value at a lower price. This is achieved by continuous improvement of operational efficiencies and using economies of scale. The low-cost strategy requires a close watch on profit margins and monitoring your competition for price changes.

Your competitive advantage may be easier and more effectively achieved for long-term success, by differentiation. A business with a differentiation strategy can charge better prices with higher profit margins.

Related: Here’s How To Value Your Business

How to achieve value through a unique selling point in your business:

  • Bend over backwards: Go out of your way to impress and assist your customers. Focus on their needs, making their experience a pleasant one.
  • Be the best: Provide a unique or high-quality product or service.
  • Be innovative and bold: Meet your customers’ needs in a new way. Strive to be the first to offer new products or services to attract them and keep them coming back.
  • Specialise, specialise, specialise: Instead of aiming to meet the needs of an entire market, rather specialise in one aspect. Establish yourself as an expert in your field and carve out your own growth path for a niche market.

“Don’t try to be all things to all people. Concentrate on selling something unique that you know there is a need for, offer competitive pricing and good customer service.” – This is the advice of Lilian Vernon, a U.S. businesswoman whose company was the first women-found company to trade on the American Stock Exchange.

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Sales Strategy & Management

Don’t Promise Service Excellence If You Can’t Deliver It

In a world characterised by fierce competition for market share, the quality of the services an organisation provides is often its only differentiating factor. The truth is, while most organisations preach service excellence, few deliver it.

Jennifer de Mata

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While companies that sell sought-after brands may well be able to get away with poorer-quality service, the services industry relies on service excellence to create a good impression and ensure repeat business.

A word-of-mouth industry

It’s accepted that the service industry operates largely via word of mouth. While competing organisations may offer similar services on paper, it’s how they deliver them that makes all the difference. When clients receive excellent service, they will refer the business to others.

Organisations must, however, ensure that if they punt their service as a differentiating factor, they need validation from their clients i.e. Do they offer the personal touch; do they build strong relationships with key players in the organisation; are they strategic partners; and is their service better than anyone else’s?

Service excellence needs to be a top-driven value

Organisations are often quick to point out that client facing staff must provide excellent service. The reality is service excellence should start at the top of the organisation and be a clearly defined value for every employee, from the CEO to the office cleaner. This will ensure it informs all the activities and interactions of employees at every level.

Recruit the right attitude

It’s often said ‘employ for attitude’ because you can develop the skill. While some organisations may need a minimum professional qualification, employing for attitude is an important consideration.

Employees should take pride in their work and be passionate about their careers. A high performing team lives, breathes, eats and sleeps service excellence. It’s second nature for them to go the extra mile to ensure their clients’ satisfaction.

Related: See You At The Top: A Guide To Winning At Customer Service

Induction is not a quick fix

How new employees are inducted sets the tone for how they will perform in the long run and informs the quality of the services they will deliver to clients. The concept of service excellence is different from organisation to organisation. It’s critical that new employees understand and buy into the various nuances of what defines service excellence in their new roles.

In our organisation, induction is not a one-day session in the boardroom. It includes an initial induction process combined with ongoing coaching on how to translate every action and activity into service excellence. We want our people to understand and align themselves with exactly what we mean by service excellence.

Train for high performance

How employees are trained is critical to the quality of service they deliver. If we accept the premise that service excellence differs from one organisation to the next, it’s self-evident that someone who was employed as an attorney at one consultancy will not automatically understand how the same role will need to be fulfilled — from a service excellence perspective — at another consultancy.

This is where ongoing training comes into play. It needs to constantly evolve. This allows service excellence to become deeply entrenched in employees’ everyday working lives and ensures you develop high-performing teams.

Employees need to feel valued

Happy employees translate into happy clients. Happy employees are not necessarily people who are never reprimanded or don’t experience stress. They work long hours and go out of their way to deliver on massive projects because they buy into what the organisation stands for and feel valued, recognised and well remunerated.

Only when employers treat their staff well, remunerate them fairly and invest in their development, can they expect the highest quality of service from them.

Leaders need to have the right discussions with their people. These should not only be about targets and how much money needs to be made. They should also centre around service excellence. Good leaders explore topics with their employees and check in with them to see if they are still aligned with the organisation’s values.

Related: When It Comes To Customer Care – Don’t Be Good, Be Awesome

Internal service levels are as important as external ones

The quality of services that employees provide internally, is directly correlated to the service they will provide to clients externally. The way they view service within the business sets the tone for how they view service excellence at large.

Get support structures right

Organisations need to ensure their internal structures, processes, procedures and policies support service excellence.

Sometimes a procedure or process can create a bottleneck, which obstructs employees’ efforts to deliver excellent service and disappoints clients. Continually re-evaluate your internal structures to ensure seamless service delivery.

Know thy client

This is the first commandment of service excellence. Many organisations say they provide superior service, but do they understand their clients’ businesses? Do they take a personal interest in the people they interact with? Do they get their views on how they perceive service excellence?

Following up with clients is paramount. Are their expectations being met? Do they have unrealistic expectations? Are some employees delivering and others not? Are there issues that need to be addressed? Is the company over-promising and under-delivering?

These can only be determined if you are close to your clients and communicate with them regularly.

Commit to agreed deliverables

Time is money. Our technology-driven economy means clients expect superior service, delivered within quicker timeframes. To meet clients’ expectations, turnaround times need to be agreed on and met.

It’s critical that all employees deliver a standardised level of service. If only one or two people deliver service excellence, a perception of service excellence can be shattered.

When deadlines won’t be complied with, communication is key. The reality is that sometimes service expectations cannot be met. Your client should not have to chase you for an explanation of why something has not been delivered. It’s up to you to keep them informed.

Don’t sell what can’t be delivered

Often the sales process sabotages service excellence. When there is no congruence between what sales people promise and what employees can deliver, there is a very real danger of not being able to meet clients’ expectations. Ensure your sales people are equipped to sell your offerings and have in-depth knowledge of what you can or can’t do.

Respond to clients’ complaints

The way service providers deal with clients’ complaints differentiates top performing businesses. Clients need to know their complaints are taken seriously and dealt with at the highest level. Communication is key and the more information you glean, the easier it is to solve the problem.

Consistency is key

The services companies deliver to their clients should be reliable, consistent and underpinned by integrity. By building strong relationships with clients, and understanding their needs, service providers can position themselves as invaluable strategic partners.

Ultimately, consistency of excellent service delivery builds trust and trust keeps clients coming back for more and strengthens brands.

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Sales Strategy & Management

Five Ways To Stay In Control Of Selling Your Business

Even when you are ready to sell your own business, you need to maximise your benefit by keeping control of the sale process.

Andrew Bahlmann

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Each and every one of the many hundreds of business owners that I have engaged with over the years has always identified immediately with one key business strategy – the need to have control. After all, they became entrepreneurs to have control over their own business and business ideas, to control their cash flow and the growth of their business.

Yet, curiously, they often apply a different set of standards when the moment comes to sell that business. They do not seem to realise how quickly and how dangerously they can lose control.

The all-too-common scenario is that one day, out of the blue, a business owner is contacted by a “would-be” acquirer who is interested in buying the business. It is probably only in hindsight that they would pinpoint this as the moment when entertaining the approach meant that they lost control of the sale process.

From that moment, the potential acquirer will define the hoops through which the seller must jump before a serious offer is put on the table. The acquirer insists, for example, on full due diligence before a detailed offer is submitted. This leaves the business owner feeling overly exposed for an extended period of time.

But worse is often to come. Eventually, at the eleventh hour, the potential acquirer puts a ridiculous offer forward, based on all the “risks” they believe they identified in the due diligence.

The acquirer conveniently concentrates on the negative. They forget about the embedded value and future growth potential that the seller’s business will offer.

Or sometimes, they complete their due diligence and walk away. That leaves a baffled business owner watching them drive away from the premises – and left with nothing to show for the process but raised blood pressure and the haunting question, “WHAT happened there?”

These are unpleasant truths indeed – but ones that you can avoid. Such scenarios underline why keeping control is critical when selling your business.

This control is not about taking ego and arrogance. It is about taking an approach that is calculated and structured. That way you will drive the process on your terms and according to your agenda. And that critically will mean that you will be able to protect your confidential information along the way so you are not left feeling exposed at the end of the process.

Related: Never Lose Control When Selling Your Business

Whether you are approached to sell your business or are proactively going to market to find an acquirer of strategic partner, always protect yourself with these five key tips:

1. Always have a plan

Your plan should encompass: the timeline, the terms and the rules of engagement between the acquirer and yourself moving forward. By putting your plan into place, you take and keep control of the process.

2. Interrogate the acquirer

Make sure that as early as possible in the process, you understand these factors driving the potential acquirer:

  • What is motivating their interest in buying your business?
  • Have they bought a business before?
  • How would they value your business?
  • How would they fund the acquisition?

If your potential acquirer has bought a business before, insist on speaking to the business owners who sold to them so you can find out about their experience of working with the company to complete the sale.

Ensure that a potential acquirer gives you a valuation formula upfront so that you can be sure you are both batting in the same ballpark. If you are able to speak with a previous seller, find out how the deal was valued and structured in that instance.

If your potential acquirer has to raise funding, insist on speaking direct to the funder to make sure they are fully committed – and that their valuation methodologies are aligned with what the acquirer is telling you. If there is a mismatch, it is the funder’s valuation that ultimately counts so you may need to engage with the funder.

3. Secure your offer before due diligence

Always make sure that your potential acquirer puts forward a non-binding offer before commencing with due diligence. Doing this will give you comfort that the acquirer is serious. It will also identify for you where the acquirer sees value in your business and what risks they perceive – and what risks there might be for you.

4. Ensure due-diligence terms are agreed

Always make sure that the terms of the due-diligence process are defined and reconcile back to the offer. Due diligence is another point in the process that confirms where your potential acquirer sees the value of your business and identifies risks. Commercial reality and practicality must drive the sale process so make sure you are not manoeuvred into being bogged down in the due-diligence list, which often consists of hundreds of requirements.

5. Always have a timeline

Your time is valuable so make sure that both you and your potential acquirer realise and respect that. Protect yourself with a timeline – you should define the milestones and deadlines of the sale process for your acquirer.

These five strategies will ensure that you retain control of the sale process, just as you have controlled your business development. That will mean that it is less gruelling for you and that you can be confident about selling on terms that you will look back to happily.

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