I was listening to an interview a few days ago between Rachael Elnaugh, successful entrepreneur, Dragons Den-ner and founder of the mutli-million business Red Letter Days and Michael Gerber, legendary US multimillionaire and author of the seminal book The E-Myth. Incidentally, the “E” in the tile of the said same book stands for Entrepreneur and not, as is commonly mistaken, related to the modern phenomenon E-commerce, i.e “electronic”(digital/internet etc etc)
The interview, whilst being well conducted and free flowing, followed a typical pattern. A series of questions from Rachel responded to by Gerber with typical gusto and enthusiasm followed by several questions posed directly to Gerber from telephone participants. It was no great surprise that Gerber was ebullient and self-promoting; that’s a major contribution to his success I am certain, but two specific statements stood out to me as warranting further deliberation. Firstly, that he had “found” Anthony Robbins “living in and out of his car” and taken him under his wing, steering and developing him into the global motivational “product” that he is today – not being a massive aficionado of Robbins I was not aware of this relationship; secondly and more pertinent I felt was his statement that “there are only 2 things important in business, innovation and marketing”. Whether Gerber was quoting from his mentors or whether it can be attributed to him is a moot point. It is the content of the quotation that generated consideration.
I understood this as to mean the following; innovation, whether that be innovative product, method, techniques, etc has been covered in a previous article. My slant in that previous discussion being that innovation can be interpreted in many ways; that if we consider innovation to be any way in providing something unique or in a unique manner, and that unique manner can effectively be you and your staff as much as your product. Your USP (unique selling/service proposition) being the innovative element of the equation.
So, I = innovation, whether your product, your service, your people, your processes, be unique, innovate.
With respect to marketing, well I feel that little elaboration is required. Whether by traditional means or the increasing internet based tools, Twitter, social media or internet marketing methods, marketing yourself and your product is essential to its success. In fact, knowledge and effective use of the growing array of internet marketing tools seems to be increasingly critical to business success and I strongly recommend that you consider training or outsourcing to specialists immediately to ensure that you are at least familiar with all possible benefits.
So, M = marketing, necessary evil or modern creative art, if it’s good and enough and necessary enough for Coca Cola, Persil, Ford, etc, then it’s probably something you should do!
It is with some humility and respect to these proven icons that I wish to elaborate upon the statement. Innovation and marketing alone will not secure ongoing success. What else is required, I feel, is the ability to convert the marketing into customers and to develop customers into ongoing revenues; to do this I suggest two more terms be added to the Gerber tenet; namely those of sales and support.
Clearly, the only way to monetise your innovation (your product/service) is through selling it. It may be possible that after completing successful activities in the M and I areas that you can sell the “product” to investors or a competitor and therefore avoid the responsibility and requirement of establishing a selling operation yourself but in most cases, sales to customers is the normal way to secure revenues. What I wish to elaborate on here is not the necessity of selling, that seems to me to be common sense, but more on the quality of selling and by this I include targeting, added value, customer management and customer value.
Targeting of your sales staff is critical to their effectiveness. Too many times I have seen unreachable targets, targets that move once achievement is neared, targets too low so that achievement is reached too easily. I have seen product targets that have no deliverable product, targets that pay more than they return to the business. Think and be clear about what you want your sales force to achieve, understand their ability to do so with the customers, products and areas that they cover, make sure that you have sufficient cover in your business planning to cater for shortfall, sales leavers, training and holiday leave. Targeting is motivation in action and to ensure that sales staff stay motivated for the whole period you must make sure that you target effectively and consistently.
Added value is more subtle. It requires you to have knowledge of the value of the sale to your business as a whole. If a particular client requires more staff to manage his orders, frequent sales visits per sale, expensive wining and dining, excessive merchandise, or if his sales require constant follow up and service visits or if he is a regular non-payer the you must factor these hidden costs into the value of that customer. Clients that “cost” more than they generate can discretely erode your initial sales price and margins. A sale is the start of the sales process but the cost of the whole process must be understood and managed.
This leads nicely into customer management. A sale will remain just that, 1 sales, if you do not provide effective and efficient customer management. Understand why he has bought from you and you have more chance of selling again. It is often more appropriate to sell the benefits and not the functions of the product but do not let it stop there – if you know the benefits then you can exploit that with follow up call, increased revenues from add-on products and potentially service revenues. Don’t le the sales be the end of the relationship. Finally, when all this is understood, it is the lifetime value of the customer that becomes important. A one off customer is all well and good but developing a relationship, delivering value not just price, is more likely to retain clients and retained clients are like your best sales force – they will sing your praises, refer you, pay on time and make you their benchmark for your competitors. Make sure that he has compelling reasons NOT to leave you and over the lifetime of the relationship your revenues will grow as much as your reputation. So then, accepting the fact that I have only touched on the intricacies of selling I want to briefly address another critical success factor – that of support.
If you cannot support your sale, you are unlikely to make many more. Support of your sales activities is more critical than given credit for and responsible for more lost clients than I care to recall. Support encompass every other activity behind the sale and so is far to enormous to deal with in any detail so in order to stimulate the business juices, so to speak, I will summarise as best as possible the key areas for your consideration:
Technical support –
do you have enough technically competent support staff?
Are they trained to the latest requirements?
Are they aligned correctly to the sales team?
Are they rewarded effectively and similarly to encourage teamworking?
Are they available for direct contact by your clients?
Are they available to pass on their expertise to incoming recruits?
Order processing –
Are you sufficiently staffed to deal with order volume?
Can these staff process orders effectively without the involvement of 3rd parties?
Do they understand the financial and contractual restrictions of the product/service?
Are they aware of any financial restraints on the client?
Do they have access to resources(installation, project management, service) to complete the sales transaction?
Can they see/manage the stock?
Can they order on suppliers?
Are your systems integrated?
Are there gaps between process and systems?
Are there duplicate activities?
Are roles and responsibilities clearly defined and understood?
Are your documents manually generated or system generated?
Do the correct people get the correct information at the correct time?
Are your systems just effective or efficient?
Does everyone in the sale process know the financial status of the client?
Are there sufficient controls to ensure shipment is managed in line with credit facilities?
Are your authorisation protocols in harmony with your lead times?
Is your supplier payment terms supportive of your customer payment terms?
Do you know the actual profit per job/client/region/division?
Are your actual business results in line with your planed/forecast results?
I shall stop there suffice to say that business survival is more than just marketing and innovation! It requires skilled sales and support planning, resources and management and permanent assessment, review and development if you are to avoid being another of the short-term good idea companies that drifted into costly extinction. I do not suggest that the above list is exhaustive nor that you are required to be an expert in every field.
I do suggest however that innovation is a start and an ever present, that marketing is required and important but also that without effective selling and efficient infrastructure you will lose as many clients as you attract and at the end of the day, the customer is king.
Treat him like one through ALL aspect of the business cycle and He could also be your loyal servant.