Imagine the scenario: You have a great idea about a new product or service that you want to launch. You work incredibly hard for a long time to get the product to market and when it eventually arrives, no one is buying.
For many people the gut reaction is to think that the price point is too high. Then you go on for a few months with low or no sales and you begin to think that it’s time for a sale.
You might have new products coming on the market and want to make some cash back on your initial stock investment. So you go ahead with it and launch your first ‘SALE!’ event.
Things pick up, the money starts to flow, albeit at a smaller profit margin now that prices have been slashed. But it worked and you have some money coming in.
Now you begin thinking that if one sale worked, another is bound to do the same. So you plan your next sale.
Related: 5 Mistakes To Avoid In Sales
Teach your customers about value
This is the trap that many retailers find themselves in. Huge fashion brands like Michael Kors started to teach their customers that if they wait long enough, a sale will arrive and they’ll get discounted pricing. So customers wait. They stop spending and save up for a sale event. Then the sale comes and the habit is reinforced: If you wait for it, the sale will come.
In this situation, customers have learnt that their favourite brand that was once premium is now accessible if they wait. After a while, the brand lowers its pricing and eventually the customer wins out and the brand is now more affordable. Can you guess what happens next?
The customer has been trained to wait for sales. In spite of the price point coming down, sales don’t increase, customers aren’t shopping and profit isn’t increasing. So the brand goes on sale again, discounting its newly lowered price to move stock.
This is a retail cycle that doesn’t end well for most brands. If you have the ability to play the volume game, you can go for more outlets, more product and cheaper price points because you’ll be selling more products to more people. Even at this point you think you’re winning, but the problem is that you’ve now pitted your business model against the giant in the room.
Globally that giant goes by the name of Amazon. In South Africa, Takealot is doing something similar. Unimaginably low profit margins that lead to huge customer acquisition and competitive advantage. Once they acquire all the customers and destroy all their competitors they will be able to adjust prices to create more profit.
You don’t want to play that game. Trust me. You want to play a game of quality and big margins, not volume and low margins.
Price defines brand
It’s important to understand your brand positioning and target market. Once you identify what you sell and who you sell it to, stick with it. It takes time to build momentum. Just because people aren’t buying what you are selling now doesn’t mean they never will.
There might come a point when you realise that your competitors are cheaper and provide better quality. This means you’ve made a mistake somewhere along the line. Either you are overvaluing your product or service, you have incorrectly priced your product or your cost price is too high which means your retail price is too high. Then you can assess and move to solve the issue at hand.
If you’ve decided that you’re going to be a sale brand and offer discounts, then that’s great. Stick with it and plough ahead with your strategy.
If you’d like to be a premium provider then set it up that way and again, stick with it. Chopping and changing your strategy and approach to your customer too frequently can leave them confused and frustrated.
Purchase sets price
When you set a price then discount it and someone buys the product at the cheaper price, that’s the price they have decided your product is worth forever. It’s a tough sell to then get them to pay an extra 30% to 50% once you’ve told them it’s okay to pay a discounted rate.
Self worth applies to brands, not just people. It’s key to know what your product is worth, know what your brand is worth and then find customers who agree with you and are happy to pay.
If you can’t find customers with your current product or service, with your brand positioned the way it is and your price point established, one part of the equation has gone wrong. Stop, reassess things and make a change if need be.
Take Your Sales Skills To The Next Level With These 5 Simple Steps
Learn to sell nearly anything.
Entrepreneur Network partner Brian Tracy says one of the most valuable skills a person can have is the ability to sell anything to anyone.
The motivational speaker provides a few tips to help even the most beginner of salesman to improve their skills dramatically:
- Understand the needs of your customers.
- Sell yourself.
- Do research on the client.
- Ask questions and engage in a dialogue with your customers.
Finally, keep in mind that you should not only be selling – but also helping your customers. Selling is part of a relationship and the more established the relationship, the more effective your sales tactics will be.
To hear more about selling from Tracy click on the video below:
This article was originally posted here on Entrepreneur.com.
Boost Your Business With Smart Delivery
Differentiate your business in the one way that customers value the most: deliver the goods on time.
It can be difficult to carve out a competitive advantage in today’s cutthroat business environment. For some companies, investments have been focused on creating digital advantage through measures like apps or fancy websites, or improved processes with clever technology to make things run faster and better. While all those strategies have their place, there could be a far simpler way to put your business ahead of the competition. Deliver the goods, in a very literal sense.
The Internet revolution has made today’s markets very competitive in all sorts of ways. Barriers to entering many markets have tumbled and new competitors are everywhere. Consumers have greater choice than ever and can easily compare prices and service. That is good for consumers, but it makes it hard for companies to attract and retain a loyal following.
By now, it should be no secret that people are willing to pay for convenience. In fact, many of the digital initiatives we see today are succeeding because of the convenience they provide. Take the Uber example: Using technology services, it brings together willing sellers with willing buyers, with the ultimate convenience of being able to see where your Uber is, who the driver is and what car to expect. Even more convenient, your Uber shows up when you need it.
Extend the same concept to physical goods, no matter what they may be and it is not difficult to see how a delivery service can easily put a big smile on your customers’ faces. Whether you are selling horse saddles, operate a bicycle store, run the local grocer, hardware outlet or restaurant: bringing your goods to your customers saves them time, makes it easier to buy and has the added effect of establishing further rapport to build trusted relationships.
According to Forbes, the Internet has habituated today’s shoppers to instant gratification. While physical goods obviously cannot be accessed at a click, there is no doubt that speedy delivery has become a driver of competitive advantage.
Getting a delivery service set up can be easy and low-cost provided your market is fairly local and your product relatively easy to transport. There are a range of options for vehicles, from a versatile bakkie or minivan capable of handling large loads or bigger items, through to a delivery motorbike or scooter. For those providing smaller items, scooters or motorbikes are a great option, as they enable convenience when your customers might most need it: during rush hour. A bike can zip through the traffic, impressing your customer by ensuring that they get what they need, without wasting time stuck in the car due to traffic or lack of parking.
A big question would be whether your deliveries are handled in-house or by a third party. There are pros and cons, but there is an increasing trend for many smaller businesses to make use of specialised logistics/ delivery operations. After all, this means you do not have to make the capital investment in a vehicle or scooter, pay a staff member to do the job and take on the insurance and management issues. Not only are you engaging an expert, you are also doing your bit to support another business.
Third-party delivery partners also work well for deliveries in far-flung areas, or if your product is bulky.
It is a good idea to see what other businesses of your size are doing and who they are using. It is important to choose a delivery partner whose service ethos matches your own.
Whatever option you choose, make sure you understand the risk and have the right kind of business insurance in place. It is also a good idea to have the ability to monitor where your deliveries are in real time. If you have a third-party partner, they should be able to provide this for you.
With most big stores offering delivery services as part of their value proposition, adding this choice to your service offering increasingly makes good business sense. Customers are quite prepared to pay a slight premium to get what they want, right to their front door – and they will keep on coming back for more.
MiWay is an Authorised Financial Services Provider (Licence no: 33970)
5 Reasons Why Your Business Is Losing Customers
Ever think about why people keep buying iPhones, even though they’re so darned pricey?
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.
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
Price 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.)
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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