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Sales Strategy & Management

The Word-of-Mouth Trap

Word-of-mouth referrals are great, but be aware of the negative side of this sales strategy.

Axel Rittershaus

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Do you like selling your services or products to unknown people? Or do you prefer having new customers calling you, because one of your clients told them about you?

Many people love the idea of ‘word of mouth marketing’. It makes life so easy because the new client has already been influenced in a positive way by their referring (and trusted) friend.

It sounds like the perfect strategy to avoid that unpleasant task called ‘sales’.

The danger of word of mouth

Businesses with great products and happy customers believe that their happy customers will tell others about their experience. Sometimes this really happens, nurturing the belief that word of mouth it the best way to get new clients. These companies stop investing money into marketing and reduce their sales activities.

But this is a very risky move. It could be the beginning of a slowly dying company with happy clients that is nevertheless running out of new customers.

If you only rely on word of mouth, you’re putting the destiny of your business into the hands of someone else; into the hands of someone who doesn’t even know that he has become responsible for your success and your future!

It’s like owning the world’s best football team and hoping for the fans to tell the players what to do, while you’re sitting on the sideline not saying a single word.

When you don’t get referrals

Think about yourself: I’m sure you’re quite happy with some companies you are the client of. Do you run around all day long telling other people how great their stuff is? I’m sure you made some recommendations in the past, but how many? I assume that even if you’re happy with ten companies, you might have mentioned just one or two of them to your friends; even if the other eight or nine are great as well.

This doesn’t only happen to you – it happens to all of your clients as well regarding your company!

There are several reasons for not getting referrals and some of the most common ones are:

  • They don’t know that their friends are looking for your product/service
  • They know that others might need your service, but the last time they met you was two years ago and they simply forgot about you
  • If the other person’s issue is not exactly the same issue you solved for them, you won’t come into their mind
  • They don’t know that you are looking for new clients
  • They don’t want the other person to hire you

And there are many more reasons…

But it can get even worse: In some businesses you might be the best in the world and never get a single client through word of mouth.

Let’s assume that you are a top executive coach or consultant. You are only hired by the CEOs, VIPs and A-list celebrities. You think: “They are well known and are surrounded by other successful people that could potentially be my clients. They like my services, because I really help them become more successful. I’m sure they will tell their friends more about me and I’ll get more VIP clients.”

Unfortunately, this doesn’t happen for one of these reasons:

  1. Your client is scared to let other people know that he needed help. He regards this as a weakness and he will never ever tell anyone that he is weak.
  2. Your client sees you as his competitive advantage and doesn’t want to let others become more successful, because he knows you will be able to make others soar as well.
  3. Your client doesn’t want to create a shortage of your services, and they don’t want to make you too busy so you wouldn’t have time for them anymore.

The recipe to make ‘word of mouth’ work

Since you’re aware of the fact that word of mouth is not reliable and should never be the single source of new clients, I don’t deny the fact that it is an outstanding way of getting new clients.

Instead of just waiting for new clients, you can become a ‘word of mouth-superstar’ by following some of these rules:

  1. Be a well-known expert/be the provider of unique tools solving clearly defined problems, so your clients know exactly for which special topics you are the best one to send their friends to.
    (If you’re a ‘Life and Executive Coach’, people might not think about you if their friends want to lose weight. If you are the ‘Weight-loss-expert’ they will!)
  2. Position your services or products in a way that your clients use it to show off or to label themselves with.
    (Nobody needs a 720 horse power Lamborghini on a public road, except for making a statement about their wealth.)
  3. Stay in touch with your clients all the time; send birthday cards, new information and success stories on a regular basis.
    (The best sales man ever, Joe Girard, sold 13 001 cars within 15 years – that’s a staggering four cars/day. Every single day! How? Because his customers always came first and he sent post cards to each client every month (This equals thousands of cards/month to ensure that none of his clients would ever forget him.)
  4. Depending on your business, you can offer referral gratifications for your clients. But you have to be aware that this is just the icing on the cake! If your client doesn’t love your service or product, he will never recommend you, because the value of his friendship with someone else is much higher than your gratification!

Word of mouth is one of the best ways to find new clients, but you mustn’t be sitting on the sideline waiting for it to happen. You have to work hard and make it easy for your clients to refer someone to you while you continue running sales activities.

Axel Rittershaus is an internationally renowned C-Level / Executive Coach & Author who started as an entrepreneur in the IT industry in 1993. He knows that success is the result of hard work and determination even more than innate talent. A master of maintaining focus and follow-through, Axel supports C-Level leaders globally in achieving goals. Axel is dedicated and passionate to see clients succeed beyond their expectations. Axel is also the president of the International Coach Federation South Africa and a multiple Two Oceans and Comrades finisher. You can follow him on twitter.

Sales Strategy & Management

After Losing A R280 000 Deal, Here’s What I Changed In My Email Follow-Ups

Looking back, these are the things we could have done differently to win the deal.

Kwesi Sakyi-Gyinae

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A while back, I spoke with a potential customer who had an interest in working with us. We met a few times to review the proposal. We narrowed down the project scope and showed how our team could execute. There was definite interest. If we signed the deal, it would be worth $21 000 (R280 000).

But, there was one challenge: The time was not right. The prospect’s team was restructuring their business. That meant they would only move forward after that was complete. So, I put a note on my calendar to follow up with a call every month.

But, then a few months later when I called him, he said, “Kwesi, we just signed a contract with another vendor. You should have called me earlier.”

“What?” I said. “I had spoken with you a month before.”

“I know, but I didn’t remember,” he said. It was a punch to the gut.

What I learnt from the loss

That loss would become a significant learning for our team. When we reviewed why we lost that potential customer, we realised one thing; the key was in the prospect’s response. He didn’t remember us, even though I had ‘followed up’ a few weeks earlier.

We did not have enough compelling top-of-mind awareness. Yes, we followed up, but we were not sticky enough. We didn’t dominate the prospect’s mind share. If we were going to dominate, we needed to nurture, not just follow up.

Related: How soon should I follow up on a quotation?

Three things we do differently now

professional-email-tricks

1. Make it (feel) personal

If you plug your prospect’s email into a fancy email marketing template, it rarely feels personal. Emails with fancy images and fonts don’t connect on a personal note. Instead, write your emails in plain text. Would you write an email to a friend or colleague using fancy email templates with bright colours? An email that feels personal is trustworthy.

Another smart way to do this is to start your email by referring to an ‘undeniable, confirmable truth.’ Communications strategist Ray Edwards describes why this is important in his book How to Write Copy That Sells: “One of the hurdles we have to overcome is scepticism and the fact that our readers often don’t believe us… or aren’t sure if they believe us.”

When you’re nurturing a prospect, you want to build trust. The more trustworthy you are, the more likely you are to get the deal. For example, we now start our nurture emails with: “Hi Joe — it’s Kwesi here.”

2. Tell a story of value

This is one of the critical email follow-up techniques we developed after losing that deal. Most of our nurturing emails tell a story. We tell stories about new ideas the prospect can use. We tell stories about lessons we’ve learnt from failing. We tell stories about our fears and hopes. Great stories evoke emotions that build trust. Humans have been telling stories for more than 20 000 years.

Researcher Paul J. Zak found that stories with great characters cause the release of oxytocin, the brain’s shortcut to ‘it’s safe to approach others.’ The more oxytocin your prospect’s brain releases, the more willing they’ll be to help.

Discussing his findings in the Harvard Business Review, Zak noted that “character-driven stories with emotional content result in a better understanding of the key points a speaker wishes to make and enable better recall of these points weeks later.” That’s why storytelling is sticky. It makes you more memorable.

Related: How can I manage my email inbox?

3. Be credible

The key to being credible is to show social proof. Nurture the prospect by sharing specific recent results of a similar client. I’m not talking about sending a lazy, generic email about a new client you signed. Craft a thoughtful story about a client’s challenges and how your team helped them.

Your social proof story can include these: What was the specific challenge? What were the emotional effects of the client’s challenge? How did your service or product help solve that challenge? What are the new emotions after the results you helped them get?

These three principles have become the foundation of our follow-up emails. We use them to build a nurturing sequence with prospects who are a fit, but not yet ready to buy.

The point is: Have a system to continue adding value to prospects who say it’s not a good time. You spend enough time to get prospects to meet with you. Put in a little more effort to engage with them with value until they are ready. Invest in your relationships for the long term. That way when they are ready to buy, you’ll be the first who comes to mind.

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Sales Strategy & Management

How To Pull Off A Business Turnaround With The Team You Have

With a management approach that unlocks the full energy of the organisation, CEOs can turn around a failing business with the people they already have.

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Many turnaround efforts begin by firing people and bringing in a fresh team. It’s easy to understand: This is the group, after all, that’s presided over the downturn. Clearing the decks is not always an option, however. Company history may stand in the way. The external environment may make it impossible. Other limitations may be in place.

That’s not necessarily a problem: CEOs can turn around a failing business with the people they already have. It just requires a management approach that unlocks the full energy of the organisation.

The recent experience of a venerable but struggling South African retailer illustrates this powerful lesson. The chain of 200 stores had lost sight of what it stood for, expanding too far beyond its original mission. Sales and profits had begun to drop fast.

To fully understand what the issues were, the incoming CEO started with a rapid but holistic review of business performance — something that any new leader can do as part of his or her ‘100-day plan’ — assessing the strength of the team and the health of the business while at the same time working to set overall strategy.

Related: Sales Leadership: The New Frontier

Once examined, the retailer’s data pointed to a solution that was quite straightforward and practical. The company needed to do what it used to be good at, and do it really well.

Getting back to basics

The CEO brought together people from across the organisation to craft a vision for what their future stores should look like. Using a graphic artist, they were able to translate this into a visual image of the store of the future that they could all connect to. While unconventional, the approach was substantive and convincing.

So much so that the illustration was used on its own to explain the strategy to key stakeholders, including staff from the head office and stores, the chain’s marketing agency and strategic suppliers. Another creative touch involved using role-play instead of a standard presentation when it came time to address the chain’s parent company executives. Top management bought in.

Setting out to execute on the vision, executives didn’t start handing out pink slips. Instead, they asked employees for their thoughts on what wasn’t working and how to fix those problems. They established guardrails, including spending limits, around what teams could do, testing them in specified pilot stores, and set up a streamlined veto process for the CEO to use if necessary. Then the CEO stepped back and began to push the authority to make the fixes down to the operating teams.

Related: As An Entrepreneur, Be A Motivational Leader To Your Staff

Existing employees, expert in the systems in place, quickly identified key opportunities for improvement. They questioned the need for time-consuming bureaucratic processes such as filling out paperwork in triplicate and suggested a smart digital alternative.

Marketing teams dropped once-obligatory annual print advertising campaigns and began to innovate with guerrilla marketing tactics, such as placing massive interactive versions of products in public areas of the mall for shoppers to explore, linked to a promotion of the products in stores. Store managers were given discretion over their budgets and began to stock what local customers wanted, based on sales data.

One key point in all this is that employees were not asked to step into roles foreign to them, but rather to engage in tasks they could already do quite well. One longtime buyer was initially skeptical. She’d become deeply frustrated by years of being told what to do from above.

Once she was given the chance to make her own decisions, the product assortment improved, and sales went up. Equally important, she became a cheerleader for the change initiative, a marked reversal that brought a lot of credibility to the whole turnaround effort.

Enthused that this was ‘their’ business, employees helped the retailer make rapid strides in a short time period. Pilot stores showed a 10% upswing in profit in just five weeks. And costs did not increase because knowledgeable team members were able to zero in on marginal spending, covering additional expenditures by smartly trimming maintenance and stock costs. The staff didn’t change, but management’s approach certainly did.

Getting started

Any CEO or senior executive looking to emulate these good results can start with three essential steps.

  1. Frame the problem. Quickly get to the heart of the key issues facing the business.
  2. Create a clear vision. Work with the organisation to create a clear picture of where the company is heading.
  3. Empower the team who will actually do the work. Explicitly communicate that the team is free to do things their way. Then back that up by backing off. Avoid interfering and undermining individuals on the team. Instead, work to remove any constraints that get in their way.

Companies that are good at empowering their people tend to share the four common priorities of Agile management.

  • Individuals and interactions over processes and tools: It’s people who respond to business needs and drive to meet them. They can be more flexible and effective when they are highly valued.
  • Working product over comprehensive documentation: Streamlining documentation frees employees to focus on the work at hand.
  • Customer collaboration over contract negotiation: Rather than exclusively negotiating with customers up front, make them an ongoing part of the process. That will greatly improve the odds that their needs will be met.
  • Responding to change over following a plan: Change is not something to be avoided or ignored. It improves a project, offering a chance to provide customers additional value.

If you are coming into a business that is under-performing, chances are you’re going to have to fix it with the people already in the trenches. So, what are you going to do with the team you have?

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

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Sales Strategy & Management

Will Anyone Buy Your Product Online?

You’ve got a great product idea and you want to start an online store but you don’t want to invest your time and money if nobody is going to buy your product…

Warrick Kernes

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After nearly 12 years of selling online I’ve refined my 5 best ways to test the market demand for any particular product so that you can know for sure if people are willing to buy your product.

1. Google Keyword Planner

Google offers this tool to help advertisers understand which keywords to use in campaigns but you can also use it to see how many people in your area are already searching for the product or brand. If there’s already a high number of people searching for your product then there’s a good chance of you capturing those searches as sales.

However, if you’re selling a high-value or niche product then just a few searches can give you the confidence to know that there are people looking to buy from you.

2. Ask Friends & Family

This seems obvious but some people are nervous to talk about a new business idea as they are concerned that someone may steal their concept. However, you’ll most likely find that your friends and family are tied up in their own lives and businesses to drop everything and mimic your product idea so don’t worry too much about this. If you are concerned then have them sign a nondisclosure agreement.

The upside of asking your friends and family is that they’ll give you the feedback you need before you commit your time and money into the product. They might also surprise you by pointing out similar products in the market, possible alternate uses for your product or they might just point out flaws which you hadn’t considered. It’s worth talking to whoever will listen as this initial feedback is invaluable. And, if you’re up for it, post on all your social media platforms too to get even more feedback from your network.

Related: 6 Steps To Building A Million-Dollar Ecommerce Site In 60 Days

3. Amazon Customer Reviews

Find your product or a similar product on the Amazon website and scroll down to the customer reviews section. You’ll see that you can filter the reviews so you’ll first want to look at the 1/5 star reviews to see what people are unhappy about. Assess if they are pointing out critical product flaws, which would be serious red flags to you.

Next filter the reviews to only see the 5/5 star reviews. Find out what people are loving about the product which may uncover new market uses or it can help you refine who your best target market is.

4.  Find relevant groups and forums

There are forums and Facebook groups for just about every topic, concept and hobby available so find the ones related to your product and your intended market. Similar to the Amazon reviews, read through the comments and garnish information about what people want and what they don’t want. If you look carefully you’ll find the pain points of your customers and this can help you to form your marketing copy so that you speak directly to the solution that they didn’t yet know they needed.

Related: Watch List: 15 SA eCommerce Entrepreneurs Who Have Built Successful Online Businesses

5.  Competitor analysis

Look at local and international websites in the same industry to see if they have your product or similar products listed for sale. You can tell if this is a good seller for them if the product is promoted on their homepage, in their newsletters and on their social media accounts.

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