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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.

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Sales Strategy & Management

5 Reasons Why Your Business Is Losing Customers

Ever think about why people keep buying iPhones, even though they’re so darned pricey?

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Like it or not, your business is losing customers. Recent research from McKinsey & Company revealed that only 13 percent of customers surveyed said they were loyal to a single brand. The research found that 87 percent of customers surveyed said they shopped around, and 58 percent had switched to a new brand.

Why do people shop around? What motivates them to abandon the businesses they know and buy products or services from competitors? It’s time that you take a close look at why your business is losing customers – and, what you can do to fix it.

Here are five common reasons why customers leave small businesses … and effective tips you can use to start turning the tide.

1. You’re guilty of poor customer service experience.

Few things can sour a customer experience more quickly than poor customer service. To a customer, your support team is your business. Shauna Geraghty, a clinical psychologist and head of talent at the global customer support innovator TalkDesk revealed on the company’s blog that over 90 percent of customers who are dissatisfied with your customer service experience will — rather than telling you that something is wrong and how you can improve it — just not come back.

So, if you’re not paying attention to your customer-service policies and performance, there’s a good chance that neglect is costing you customers.

This is one reason why some companies, including Comcast, create create support-focused accounts like @comcastcares on Twitter. These accounts are public and are known for helping customers to resolve problems quickly.

Related: How to Lose Customers through your Website

What you can do:

Outline thoughtful, positive customer service practices. Start with an internal audit of the policies that govern your team. Conduct interviews with customer-support managers and representatives.

Assess what company policies have led to customer dissatisfaction. What internal issues are preventing your reps from supporting customers quickly and effectively? Use this data to improve your customer service practices.

Then, bear in mind these three golden rules of customer service:

Respond quickly. Acknowledge when a mistake is made and make it right.

Treat the customer with respect and empathy.

Support your customer support team. Give your customer service team the resources they need to provide your customers with awesome service. This includes the technical infrastructure as well as the autonomy to make choices that will benefit your business and support your customers.

2. Your product or service failed to meet expectations

Disappointed customers are likely to share their disappointment with friends on social media. And angry customers will post angry reviews for other prospective customers to see.

What you can do:

Design and build a quality product or service. Don’t think that marketing magic or any amount of other business trickery is going to make up for a poor product or badly executed service. So, work with a talented product designer.

Test. Build with quality materials. Adapt your service based on customer feedback.

Do whatever it takes to create and deliver a service or product that is worth paying for.

3. You didn’t show the value

valuePrice is what a customer pays. Value is what a customer gets. Sales expert and emotional intelligence coach Liz Wendling pointed out on her blog that customers don’t necessarily choose only “the lowest price or the cheapest in town.” Customer preferences, she said, have nothing to do with price and everything to do with the value you are conveying. When your potential customers tell you it is about the money, wrote Wendling, that is actually customer code for “show me the value.”

This is certainly one reason why Apple continues to dominate when it comes to smartphone profits. In Q4, 2017, Apple captured 87 percent of smartphone industry profits but accounted for only 18 percent of total units sold. Customers, clearly, are buying iPhones because they believe that Apple products deliver more value, despite the higher price.

What you can do:

Identify your unique value proposition. What awesome value do you bring to your customers that other businesses don’t? This is your unique value proposition.

Clearly articulate your unique value proposition on all platforms. Publish the benefits of your product or service on your website home page.

Educate your customer support and sales staffers so that they can speak fluently about the value included in your pricing.

Feature your unique value proposition on the landing page for every offer. (Check out https://www.crowdspring.com/blog/landing-page-guide/this article to learn more about creating effective landing pages.)

Related: 3 Ways To Stop Taking Your Most Loyal Customers For Granted

4. Your business is Inconsistent

In business, and in life, consistency breeds trust. Things that are consistent can be relied upon. And, things that can be relied upon don’t need to be worried about. Inconsistent branding, including using your company’s name or logo differently on your own site and on social networks, plus inconsistent quality or service, all have the potential to drive customers away.

United Airlines learned this lesson the hard way when young women wearing casual wear were not permitted to board a flight unless they changed out of Spandex leggings. Yet any traveler is going to see many, many women at the airport wearing leggings. And there’ was no previous record of United barring others from flying for wearing leggings. That’s why this particular decision created a social media firestorm and lots of confusion.

What you can do:

Deliver an experience customers can rely on. This starts with you and your employees.

Educate all of your employees about what a good customer experience should look like.

Create a branding guide to establish uniform branding guidelines and share it with your team.

Hold your employees accountable for delivering a consistently positive customer experience.

Create strong customer interaction policies. Whatever your policies are, make sure that they will serve your customers well before you implement them. Then stick with them! Be consistent.

5. Your sales tactics are out-of-date.

Aggressive sales techniques are more likely to drive customers away than lead to positive results. Leslie Ye, for HubSpot, wrote that the old sales playbook — dragging prospects through a sales process and strong-arming them into a purchase — worked only because there was no better way for buyers to buy.

If your sales techniques focus on manipulating or coercing a sale, your business is actively chasing customers away.

What you can do:

Employ value-based selling techniques. Take the time to learn what your customer actually needs. Then offer value-based solutions that address those needs. Show how your product benefits the customer and allow them to decide if it’s the right fit for them.

Build relationships with your customers. If you’re trying to sell with every single customer interaction, you’re doing it wrong. Instead, focus on establishing trust with your prospective customers.

Have honest interactions and provide value through useful content and entertaining social media engagement. Then, when a customer needs the product or service you provide, he or she will turn to you, a trusted resource.

The key to growing a business is to maintain the customers you already have while acquiring new ones. So, stop leaking customers. The success of your business depends is at stake.

This article was originally posted here on Entrepreneur.com.

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Sales Strategy & Management

How To Find The Right Salespeople: And Attract Them To Your Business

A key part of finding star talent to join your business is to start the process much earlier than you need to, by building a strong talent pipeline – also known as a Virtual Bench.

Andrew Aitken

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In a previous article, we discussed the 3 things business owners and sales managers should be concerned about when trying to increase sales in a systematic, more sustainable manner. The first of these is to hire a sales team consisting of A-players, and as the owner of a business, you’ll know how hard it is to find this kind of talent.

A key part of finding star talent to join your business is to start the process much earlier than you need to, by building a strong talent pipeline – also known as a Virtual Bench.

Related: 3 Ways You Should Use Data Science to Skyrocket Sales

What is a Virtual Bench?

A virtual bench is the concept of building a pool or pipeline of strong, A-player talent before you need it. Like sports coaches in team sports who always have players on the bench that are ready to play when needed, you too, need to have a pool of people that can fill new spots and substitute existing players on your team when necessary. A virtual bench is about ensuring that you don’t only think about hiring when the need arises – as doing so can have painful, costly effects on your business.

Always be recruiting, even if you don’t yet have a position to fill.

How to build a Virtual Bench of A-player talent

1. Use your existing contacts

Go through your existing contacts – on your phonebook, on LinkedIn, etc. and shortlist, from your past experiences, which of them are A-players that you would like to have working with you one day.

  • Keep in contact with the people on this list – let them know that you believe they are talented and have a great attitude, and that you are always looking for great people to join the business. Make an appointment to meet with them to discuss where they are in their careers and what their future plans are. Use this meeting to get to know them even more and unearth possible synergies where you could potentially work together in future.

2. Keep an eye open at social functions and networking events

Use regular social interactions to identify people you could work with one day. Speak to the people you meet about what they do and about their future plans. Also ask mutual friends or acquaintances about your new contacts, so that you have a clearer picture of who they are. Then keep in touch to nurture your relationships with them.

Related: How To Structure A Fair Salary That Will Motivate Your Sales Team

3. Work with your marketing team

Most of the support you need when building your virtual bench should be from your marketing team and not necessarily your HR team.

Sit down with your marketing team to see what content and campaigns they can run to attract the right people to your business. A-players are attracted to organisations that have a clear mission, distinguishable energy and drive, as opposed to merely seeking a job and a regular paycheck. So, create content that portrays:

  • Who you are as a business and what you stand for
  • Who your customers/clients are
  • The wins you are getting
  • What the working culture is like in your organisation

If you think about hiring in this forward-thinking manner, you’ll be sure to not only prevent a scramble when you need new talent to join your business, but it could help you prevent a lot of costly mis-hires.

Keep an eye out for our next article in this series: What core skills do your salespeople need to have?

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Sales Strategy & Management

5 Lessons On How You Can Deliver A Product Your Customers Actually Want

By learning quickly and failing fast, yourself, you’ll be better able to keep in step with customer expectations and respond to their needs.

Victoria Lawson

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When Zappos.com founder Nick Swinmurn had the initial idea to launch an online shoe retailer in the ’90s, he sought out the leanest way possible to test whether customers were willing to buy shoes online. Instead of spending time building an infrastructure and inventory systems, Swinmurn went to local shoe stores, took pictures of products and posted them online.

If a customer purchased the product, Swinmurn bought the shoes from the brick-and-mortar store at full price to ship to his customer. When the concept actually worked, he knew it was go-time.

Almost 20 years later, in today’s retail environment, adopting this type of low-risk, lean-startup mentality, with a “fail fast, fail cheap” approach, is the number one strategy for success. Here are five lessons to help you nail product innovation through an agile approach.

Take lean to the extreme

Forget about scaling at the beginning. Instead, identify and embrace the bare minimum you need to develop an end-to-end solution, even if it’s manual.

Then build out a basic product infrastructure to mimic a more scalable process and iterate as you progress through development and validation.

This is called the “garage phase” of innovation. Thought leader and author Marty Cagan explained a similar “light-weight” process to product development in his book, Inspired: How to Create Tech Products Customers Love.

Related: What You Need To Know About The Lean Start-up Model

By embracing a lean approach, Cagan wrote, you’re making room for the next great idea and continuing to discover and improve with each step you take along the way.

Don’t overcomplicate

Consider simple solutions that are as innovative and personalized as they are valuable for your customer and business objectives.

Related: Saab Grintek Defence’s Strategies For Staying Lean and Competitive

Recently, our company, CarMax, launched 360-degree-camera technology to allow shoppers to interact with 360 photos on carmax.com and experience the inside of a prospective car as if they were sitting in it.

The goal was a more optimized and personal online customer experience, and it started with a selfie stick. This basic low-cost solution required little time, training and resources, and was quickly scalable.

Starbucks is another example: The company excels in creating a simple customer experience because of its focus on seamless personalization: Baristas serve coffee ID’d by the customer’s name, and each location has the same look and feel but is personalized to the geographic location.

Recognise that innovation doesn’t happen in a lab

Don’t isolate your R&D in a lab; instead, send your team out to the field while developing your solution, in order to deliver real-time adjustments and build your awareness of variables you may not have considered before.

Test different approaches, speak with customers and stakeholders and understand all the possible challenges or failures that could happen.

When Nordstrom was attempting to develop a digital way to help sunglass shoppers make a purchase decision, members of the innovation team embedded themselves at a Nordstrom store for a week, talking to real customers, showing prototypes and adjusting those product samples based off those customers’ feedback.

Innovate for both internal and external audiences

Remember the two “customers” you’re innovating for — both the end user and the associates who will be using the product.

By finding a simple solution that works for everyone and training for the rollout, you’ll be setting yourself up for success.

Qualitative testing and immediate feedback can also help your team better understand usability and the overall customer experience the product is delivering. A product just might fail if there’s a lack of understanding about its functionality.

Avoid product remorse

By starting with a minimum viable product, you’ll be able to get something in front of customers as early as possible before you’ve invested too much time and energy into it.

Related: How To Determine Your Minimum Viable Product

Take a page from Jeff Gothelf’s book, Lean UX, and don’t sit on value or wait to arrive at a perfect solution before implementing at the level of “good” can be good enough and be your starting point for further iteration.

You’re not going to learn everything and anticipate every problem before you introduce a product. And, if you wait too long, the market may shift.

Before co-founding Groupon, Andrew Mason spent almost two years working on a product called The Point, an online platform for social activism.

While The Point never gained steam, Mason did observe his customer base using a featured offering for a group discount on products. Because of good timing and openness to learning, he was able to pivot and create Groupon.

By learning quickly and failing fast, yourself, you’ll be better able to  keep in lock step with customer expectations, to leave behind the ideas that aren’t helping your customers and to deliver the experience your customers want today.

This article was originally posted here on Entrepreneur.com.

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