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Be part of the conversation by helping, rather than selling

Word of mouth referrals from friends, family and other trusted sources have always been the best possible type of inbound marketing, but they’re truly brought to light in today’s social economy.

Referrals vs. traditional marketing
If you market your business the old-fashioned way, you’re probably using broadcast and outbound marketing, such as a commercial on TV or the radio. You’re hoping that: the masses watch (or hear) it, have the problem you solve, remember your name, and then go to the store and buy it.

The worst part? Besides the tremendous expenses of production and airtime, most of your customers won’t see or hear your message. And the ones that do, they won’t appreciate it. Outbound marketing has got to be the least effective form of communication. I don’t know many people who deliberately watch and pay attention to a sales pitch.

But today’s modern marketers are using the power of social referrals to put content and information about their goods in front of customers already shopping for an answer to their problems. For example, you could write a few articles, shoot informative videos and then optimize this content online. You get free traffic from both social referrals and organic search, driving well-qualified prospects to your landing page. And all for a fraction of the cost of traditional marketing!

How to cultivate referrals
The fastest and most effective way to build your referral business is through social media. But to participate, you’ve got to be part of the conversation. When I need buying advice, I immediately turn to social media—Facebook, LinkedIn and others—since I know my friends, family and business associates will give me unbiased testimonials about the brands they like.

Effective social marketers are part of these conversations already, offering advice, tips, and other informative content. They help, rather than sell. And that’s the difference between success and failure.

By creating great content, they are marketing the way people search for information. And it doesn’t have to cost tons of money to do it.

Technology advances have forced companies to change their marketing strategies.  From traditional methods, they get to embrace modern ways to carry out their marketing campaigns. Companies have spent billions to strengthen their marketing strategies. They have adapted several new methods of promoting their products and services to compete with the rising market. Although many have relied to modern marketing today, there are still businesses who opted to use the traditional methods to do their marketing.

Traditional marketing is used by businesses to get the word out about their product or service, whether it is by pushing a cart load of wares around, distributing flyers or advertising in newspapers.   Anyone that is trying to sell something used some sort of these to get their products noticed.

Door to door sales also constitute the traditional marketing.  In some industries some form of knocking on doors is the best way to do business even today.  Another one is by using Yellow Page.  The yellow page is a very thick book filled with thousands of business listing of business owners throughout a specific area.  People would often look through the book to search for businesses that interest them.

Now, there are a lot of other traditional marketing methods that people use to market their businesses, yet because of the emergence of new technologies, they don’t respond to these methods like they did before.  Instead of a business spending millions on television advertising or on other traditional marketing strategies they can save on using some modern marketing strategies like SEO, B2B telemarketing and email marketing and promote just as effectively.

E-marketing is another name for web marketing or online marketing.  It is a business strategy that is increasingly being adopted over the traditional forms of marketing.  For businesses that aim to establish an online presence in a cost-effective way, then this is a much preferred solution.  One of the advantages of e marketing is that it can reach a wider client base for it uses Internet as medium to connect with millions of potential customers.  Unlike with traditional marketing strategies, e marketing can undertake all sorts of tasks like customer service, information management and public relations at low costs.

Some businesses die because of their weak marketing strategies.  Success in business requires careful and longer research of the market, product and service.  Really it takes time to learn what method works for your business.  You will constantly need to find and adapt methods that will meet your needs.  Take a step now.  Outsource your marketing activities to reliable call centers before your competitors eat their way into your potential customers.

The same is true in lead generation. It is necessary that every little thing is qualified, not a mere illusion. Sales leads must be qualified in order to have higher chances of closed sales. The installed technology ought to be qualified according to a company’s specific needs. The outsourced telemarketing company should be qualified in order to wrap up qualified appointments that their clients want.

Every company aims for qualified appointments. They do not want their sales representatives to arrive empty-handed after an assumed qualified appointment setting with a sales lead. After all, they pay a price to get what they want. However, when a business entity outsources a business-to-business  B2B telemarketing, every penny paid is returned in double or more.

Let us uncover the costs and rewards of a qualified appointment setting.

1. Cost Per Appointment

How much does a company pay for every qualified appointment? Does the payment worth the outcome of the appointment? Or is it overpaid?

Cost per appointment depends on the agreement between the telemarketing company and its client. Another thing that has been considered is the specific decision maker that an appointment setter has targeted.

The telemarketing firms have trained and educated their professional appointment setters to provide their clients with a list of qualified appointments, which targeted those decision makers who are at the top management. When client’s sales people delivered well during the presentation, sales come in a hundredfold.

2. Cost Per Quota

Aside from cost per lead, another cost scheme used is the cost per quota. Meaning to say, clients pay when the telemarketing service provider has reached the requirement in the number of qualified appointments. This is no problem for both partners. In the case of the client, an aggregate payment is lower than a cost per appointment. On the telemarketing firm’s side, there is no pressure in meeting the requirement since such agreed demand has been based primarily on the appointment setters’ experiences and capability.

3. Other Service Costs

An appointment is the start and not the end of customer relationship. This is to be followed with lead nurturing. This is so because it is crucial to keep in touch with the customer so that loyalty will exist. The business organization is obliged to keep their customers aware through constant updates.

A life-time value should be established relative to the customer. If a company is content with one sale to one sales lead, then such firm ought to think seventy seven times. It is to be remembered that one closed sale is a big no-no in doing business.

4. Opportunity Costs

When appointment setters pick up the wrong prospects, the opportunity costs foregone is high. The time, money and endeavor that should have been used to generate qualified appointments are wasted when the wrong ones are chosen.

The good thing is that this is not an issue with telemarketing service providers. Through their pre-qualification processes and specialists, no appointment is set until it has been accurately determined that a sales lead is qualified, sales-ready and within the company’s criteria of targeted prospects.

Can you afford to make price your main selling point? Here’s five really good reasons why I believe you should not be discounting:

The big boys have the money to outlast you
It hurts any small business owner to see big retailers or big business in general coming out with a heavy schedule of advertising, promoting discounts and undercutting your products. But trying to combat this by matching the discounts is really dangerous because the chances are, they have bigger margins because of their buying power and they have more advertising dollars to promote their sales.

Consumers come to expect it all the time
In a frugal environment we as consumers are more than often researching online to find the best prices, or even visiting various stores to assess prices before purchasing. So it goes without saying, once we find the cheapest price for something then we will continue to go back. The only thing we’re loyal to at this stage is price. Once that price goes back up, then it’s back on, we’re searching again. This means you will have to find something else to keep them coming back otherwise they’re gone, or continue discounting.

We’re becoming immune to discounts
There was a time and it wasn’t that long ago when 10% or 20% off actually meant something. But now, anything less than 20% isn’t that special and to be honest 10% off or less is just embarrassing (maybe 10% off a BMW). This perception will not be changing overnight and worst case, it might continue so whilst you’re happy to discount 25%, have you got the margins to go to 40% and further?

It devalues your product and your service
Unfortunately we tend to perceive value by cost. Everything in a discount store is cheap and nasty and basically very poor quality. Is this really the case? Do we know for fact? No. But because it’s all cheap that’s the perception. So there is every chance that once you’ve been discounting for a an extended period of time, consumers will start to devalue your products and your service. This affects your brand and your business.

It cuts your margins and your profits
Business is tough. The overheads are increasing, consumers are cutting their spending. Can you afford to cut your margins in an environment like this? Obviously many see no other way. If you discount 50% then think about it, you’re going to need to sell twice as many units.

Of course it’s real easy to turn around and say don’t do it but you need a solution right? Please check out some of my other posts for some ideas or if you prefer to just keep discounting then hopefully these ideas should help:

• One Day Only Sales - Identify what is your slowest trading day and introduce discounts for that day each week. It will encourage the people looking for bargains to come in during the week and it will ensure your margins are still healthy on your busiest days.
• Encourage Loyalty - Ask for your customers mobile numbers to run small SMS campaigns, get their email address so you can send them an email newsletter, ask them to ‘Like’ you on Facebook. The point is, it’s OK to give a customer a discount if you know you’ll see them again and again. So get their details and provide exclusive discounts, it encourages loyalty.
• Minimum Spend - Only apply discounts on a minimum spend to ensure that you are doing what you can to increase revenue.
• Offer a Freebie - Is it possible in your situation to give away a freebie instead of a discount? At the end of the day, the consumer is looking for value. If you can source cheap, relevant gifts that perceive value this may be a better strategy. Perhaps this might even be branded to help encourage them coming back. For example, if you’re running 25% off and someone comes in for a $100 item, you’ve essentially handed them $25 in discounts but what if it was a $10 gift? As long as it weighs up in the customer’s mind.

Discounting has a place in any marketing strategy, but it can be dangerous and it should not be done hastily. Think about some of these options I’ve noted and be creative. You will be much better off if you do not compete for a customer based purely on price.

Photo credit by linder6580.

There’s a better way to grow your business – it’s called The Marketing Equation. With this simple formula, I’ll show you how to change end results, such as net profit, by focusing on the variables that influence each one.

The only numbers you’ll ever need to know:

• Prospects X Conversion Rate = Customers
• Customers X Transactions X Average Sale = Total Revenue
• Total Revenue X Margin = Profit

It’s important to understand that results cannot be changed. Everything before an “equals” sign is a variable to improve upon; everything after an “equals” sign is a result. The only way to influence a result is improve upon the variables that make up the result.

So, if you’re a business only focusing on Margin, you’re missing out on several other ways to improve your bottom line.

Step 1: Prospects X Conversion Rate = Customers
Let’s start with the first variable, Prospects. Since this is technically a result, we can influence and increase Prospects by marketing directly to a select group of suspects (people who demographically match your typical customer). You’ll also save money on wasteful “image” advertising, which cannot be tracked and only serves to make your advertising sales representative more commissions.

Successfully implement a unique selling proposition (USP) – the reason why someone should buy from you – and you’ll instantly improve upon the Conversion Rate of prospect to customer.

When you multiply Prospects and Conversion Rate, your result is Customers.

Step 2: Customers X Transactions X Average Sale = Total Revenue
When marketing to your Customers, maximize your follow up marketing, community relations and direct mail to make your business the obvious choice when Customers are looking for what it is you sell. Along with your USP, this is the only surefire way to increase both Transactions and Average Sale.

Multiply Customers, Transactions and Average Sale together and your result is Total Revenue.

Step 3: Total Revenue X Margin = Profit
In the final step, multiply Total Revenue by Margin, to calculate your Profit. If you’ve implemented all 7 steps of my marketing system, you’re no longer competing on price – you’re competing on value, and can easily increase your Margin.

The Marketing Equation, Illustrated
Let’s take a look at how slight improvements in one area to small improvements in all areas stack up:

This example shows how small improvements dramatically change your bottom line.

Let’s say your business has 100 prospects, and you convert 20% of them into customers. You then sell them 10 times throughout the year an average of $10 per transaction. You’ll make $2000 in sales. On your 10% margin, this results in $200 of profit. Not bad.

What happens if you improve just one variable?
If you’re like most businesses, you’re really only focusing on one area for growth. If you look at the second column, we’ve increased only the number of Prospects by 10%, to 110. This results in an additional $20 net profit, for a total net profit of $220. So, by improving just one variable by 10%, you’ve added an additional 10% in profit. Pretty good.

Minor improvements in all variables = dramatic results.
But you’re not just any business. You’ve gone through and implemented all 7 steps in the marketing plan, and you’re able to increase all factors by 10%. This returns greater than 61% in profit! It’s incredible to see the power of making minor improvements work together and build upon the small success in each variable to return a sum greater than the individual parts.

What does Google+ mean for your business?

Google+ has been gaining steam in the social media world since the beginning of its test prelaunch in early July. Gaining upwards of 1.7 Million Google+ accounts in its first week, and rising to an estimated 4.5 Million accounts the following week.  All before the social media site has even officially gone public! Holding accounts for some well known names such as Seth Goden, Myspace’s Tom Anderson, and even the social media bad boy himself, Mark Zuckerberg.

Google+ is currently only offering accounts for people. Business profile pages are still in the works. But while the numbers continue to rise, and people start to “check out this new Google social site everybody is trying to be invited to,” businesses should be busy licking their lips at the SEO possibilities.

Here are a few reasons why your business should be preparing for Google+ business pages.

Combining Google+ Pages and Search Engine Rankings

It is quite possible Google will integrate the amount of feedback a +1 button on Google+ posts receives into their search rankings algorithm.  Helping Google sort out the relevant and quality content from the irrelevant.

What does this mean for your business?

This means there will no longer be a separation between a business’s social media presence and its search engine rankings.  The two will then be one in the same. Providing quality and engaging content will, in real time, affect a company’s search engine presence. Helping give hope for smaller businesses everywhere!

Keeping Your Customers Organized

Google+ offers a more aesthetically appealing way to keep your friends organized with “Circles.”  Easily allowing people to click and drag their friends into different categories such as: Closest Friends, Family, Work Buddies, etc.  Allowing certain posts to be only seen by circles predetermined by the user.

Google+ business pages can categorize their fans into the different stages of the customer cycle.  For example: Top Customers, Need More Information, Recently Purchased, etc. The ability to categorize your fans and then post content to that specific circle will be a huge advantage.

Google Offers and Maps

With Google’s answer to the growing success of Groupon, Google Offers­ would be a realistic integration into the Google+ business page. Supplying a very user friendly daily deals service.  To compliment this feature would most likely be the feature of Google Maps.  Displaying directions to your business, or the closest business franchise locations.

What does this mean for your company?

It would be wise to incorporate a Google+ promotion that leads to a Google Offer for your business.  Allowing you to again keep what would normally be separate entities, one and the same.  Also, Google Offers would then be linked to a convenient Google Map of all the closest business locations where the offer can be redeemed. Take all extra steps out of the equation.

These are my thoughts into the wonderful minds of Google and their future development of Google+.  If you have any thoughts on your own of how you see Google+ growing, please leave them in the comment sections below!

But wait! There's more!

Most companies (on and offline), after the effort to entice a sale, conclude with a “thank you” and escort them out of the store or website sometimes never to make a sale again.  Giving ourselves a pat on the back and a job well done head nod to our co-workers.

The reality is this is the perfect time to ask for follow up sale. Your customer is where you want them and in the “buying mode.”  Your customer is satisfied enough with your product selection to make a purchase.  They are accepting your business as worthy enough for their attention.  Once that customer walks out the door, they are now subject to be victim to other advertisements or enticing deals.

The job is not done at the conclusion of a sale, rather just beginning.  When a customer makes a purchase, they are saying to the business “your products or services are worthy of my time and money.”  This should be seen as more of an agreed upon business contract.

Let’s take a look at some enticing ideas to draw further sales from your present transaction.

Limited time coupon:  Instead of a coupon being valid for a month, make the time period much shorter.  Creating a limited time offer only a couple days will give the customer a large sense of urgency.  The customer begins to realize that in order to use this coupon, it would make most sense to use it immediately.

A list of related or complimentary items:  Obviously this customer is in the mood to purchase certain items, so why not showcase more items just like it? Or, give them items that can be accessorized along with their purchase that most customers enjoy purchasing together.

Surprise bonus: Daniel Pink states in his book “Drive” that people obtain more pleasure when they receive an unexpected reward rather than an expected one.  When you reward your customer for making a purchase with small but generous surprise gesture after the sale, you create motivation for that customer to make immediate repeat purchases.

Of course, what strategy you choose will depend on the type of business you’re in.  But there is always a chance to create an up sell.

Choose one or choose them all for business growth

Now that we’re into the back half of 2011, it’s time to take a closer look at your business growth plans.

Here are four simple ideas (some would say the only ways you can grow a business) you can use to increase the revenues your business makes in 2011:

1. Bring in more customers. Of course, they have to buy something for this to work!
2. At each transaction, get each of your customers to buy more. Fast food restaurants have perfected the art of the upsell with their simple statement, “Do you want fries with that?” or “Would you like dessert?”
3. Once you’ve got them to buy more, create continuity by encouraging them to purchase more often. Think of ways to package up different items or make your service more consumable.
4. Finally, and the easiest of the bunch for any business owner, is to increase your prices. But beware — most goods and services are relatively elastic, meaning that changes in price have relatively large effects on the quantity demanded (sorry for the Econ 101 lesson, but it’s important to keep this in mind).

Which one of these will you focus on first? Which one will you ignore?

Photo credit by svilen001.