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Techniques To Double Revenue

In preparing for our Sales and Marketing Summit and visiting with some of the world's top sales and marketing thought leaders, as well as CEOs whose firms are seeing dramatic increases in revenue during this downturn, several actionable ideas have emerged which you can act on immediately.

 

The first is from Dr. Victoria Medvec, negotiations expert from Northwestern University and author of the series High stakes negotiation: ten steps for maximising outcomes and building relationships. Nothing improves cash flow (CFOs are fans) and revenue more than reducing your sales cycle time.

 

And an important technique to dramatically reducing it is to use synchronous communication throughout the sales process. "This starts with NEVER presenting a sales proposal to a customer without being on the phone or in person with them," notes Medvec. Emailing a proposal to a customer ahead of a meeting doesn't give you the opportunity to react immediately to potential concerns and objections that might arise as they read through your proposal. And the more time the customer the more difficult it will be to move the sales process forward. Even if the customer is adamant about receiving a proposal ahead of a physical meeting, suggest it will save them time if you can review the proposal over the phone and that you'll email it to them a few minutes before a scheduled phone call. Of the four P's of marketing, price is the only one which directly puts money in your pocket. Yet I find companies setting price with very little strategy behind their decisions. And panicked decisions about pricing in turbulent times can be costly in both the short and long run.

 

For answers, it's imperative you read Pricing with confidence: ten ways to stop leaving money on the table by Reed Holden and Mark Burton. Pay particular attention to Rule Three in their book where they outline three simple pricing strategies all firms can use. Noted Burton in a recent conversation, "too many firms have gotten caught flat-footed and are using price discounts in a panic to try to keep demand that is going away no matter what they do. The firms that do this are creating two very significant long-term problems. First, they are destroying the integrity of their pricing and the value of their brands. Second, they are training their customers to negotiate for every last penny thus undermining their most valuable asset trusting customer relationships." Burton suggests the way around this is to look objectively at pricing as a strategic tool that must be managed systematically based on value, market demand, cost structure, product lifecycle, and firm capabilities.

 

This view leads one to make decisions on the basis of preserving and gaining pricing power be it through reducing capacity to match demand, introducing low price - low value offerings, or making systematic adjustments to price lists so that list and street prices are more in line.

 

Source: Gulf News

 
The Audacity of Thinking Big

Ninety nine stores supporting 99 villages is Thomas Lundgren's 2020 vision for his Dubai-based company, The One Total Home Experience.

 

Reaching 10 per cent of all Australians with a "gifted experience" is Naomi Simson's 2015 goal for her Sydney-based company Red Balloon. Averaging $1 (Dh3.67) revenue from every man, woman, and child in the US per week is Fred Deluca's 2010 focus for Subway. What mountain are you climbing? This is the question Jim Collins poses to companies as he pushes them to articulate what he and Jerry Porras call a Big Hairy Audacious Goal (BHAG), a trademarked term from their breakthrough book Built to Last. The BHAG serves as a North Star (or Southern Cross if you're down under) for you and your team as you continue to drive the business forward on a day to day business. It provides a vector along which all other decisions will be tested, helping everyone make the critical "yes/no" decisions that drive strategy. And it stretches the organisation to look beyond the day to day challenges that can consume tremendous amounts of emotional energy and help it remain focused.

 

99 Stores

Lundgren enjoys explaining that he launched his home furnishings company after an angel visited him with a mission to save the world from IKEA! Though his initial goal was to crush IKEA, he's chosen to focus his people on a more important goal of launching 99 stores in support of 99 villages by 2020. The big idea is a One-on-One Store-Village adoption programme where each of their stores supports one village in a neglected part of the world. I would encourage you to go to www.theoneplanet.com to read about their initial successes in Kenya.

 

Red Balloon

Simson's firm, Red Balloon, helps individuals and companies gift someone a unique experience, like an F1 formula racing experience or hot air ballooning experience.To provide her people with a tangible long term goal, in 2005 she set a ten year goal to provide 10 per cent of Australia's 20 million citizens with a gifted experience. With an annual growth rate exceeding 50 per cent they have a goal to be over a third of the way by 2010 representing 750,000 experiences.

 

Subway

In 1965 seventeen year-old Fred Deluca had a 10 year goal to have 32 submarine sandwich shops. Not only did he beat the goal, but he recognised early on the importance of keeping a long term goal in front of himself and his team. In 1995, after crushing their latest 10 year goal (5,000 stores by 95), he sought another bigger goal but realised that he needed to change the overall focus of the organisation from growing merely by adding new stores to driving more business into his existing stores. He particularly liked the emphasis on "every man, woman, and child" which meant they would need to broaden their appeal (their 6 grammes of fat campaign helped tremendously). Now that Subway exceeds McDonalds in number of units in North America and other countries, their strategy appears to be working.

 

Verne Harnish is author of Mastering the Rockefeller Habits and founder and CEO of Gazelles Inc. Gazelles is represented in the Middle East by Dubai-based biz-ability

 

Source: Gulf News

 
The Customer Still Comes First

In preparing for our Sales and Marketing Summit and visiting with some of the world's top sales and marketing thought leaders, as well as CEOs whose firms are seeing dramatic increases in revenue during this downturn, several actionable ideas have emerged which you can act on immediately.

 

'Place' is one of the other four P's of marketing. And research by Neil Rackham reveals that companies with more sales channels trump competing firms with less. This means giving your customers as many options for purchasing your product as you can. In the end they all have different preferences and will find competitors who give them these options. In turn, it's up to your various sales channels to earn their right to distribute your services.

 

The customers will use the channels that best suit their needs. Read Changing the Channel by Michael Masterson and MaryEllen Tribby as they detail how to utilise a dozen different marketing channels for your business. Case in point - as I'm writing this column on a flight to Australia, I've been visiting with a Sydney-based entrepreneur who has seen his revenue jump 70%.

 

One key is a website he's launched that is set up for do-it-yourself customers to purchase products direct from his factory versus through his normal agency channels. His use of multiple channels is driving revenue. Though a repetition of Neil Rackham's advice, you need to identify your best customers and shower them with twice the attention. Chet Holmes, author of mega-hit The Ultimate Sales Machine, drives home this point in Chapter 4 of his book. Holmes, who doubled sales three years in a row for nine divisions of Charlie Munger's firm (Munger is Warren Buffett's partner), encourages firms to focus on their Best Buyer or Best Neighbourhood and then create a nurturing marketing campaign that touches these customers 10 to 15 times with educational information. If you're not familiar with nurturing marketing, also read Jim Cecil's book Nurturing Customer Relationships.

 

It starts with doing a thorough job of researching the benefits of your product or service. For one major roofing company, Holmes' market research firm found that a large percentage of the time a roof is replaced when it only needs repaired. In turn, greater than half of all building maintenance problems emanate from problems with the roof. Armed with the research, the company structured an educational campaign which dramatically increased warm leads for the sales team to close.

 

The third P of marketing, "promotion", has taken on a new twist given the power of the web to reach customers. Given the confusing array of terminology and options, read David Meerman Scott's best-selling book The New Rules of PR and Marketing: How to Use News Releases, Blogs, Podcasting, Viral Marketing and Online Media to Reach Buyers Directly. His book is the first to explain the options in a way I find non-tech growth company executives can understand and implement.

 

Verne Harnish is author of Mastering the Rockefeller habit and founder and CEO of Gazelles Inc which serves as an outsourced corporate university boasting a faculty of well-known business experts. Gazelles is represented in the Middle East by Dubai-based biz-ability. This is the second half of Harnish' column Five techniques for doubling revenue.

 

Source: Gulf News

 
The Most Important Tool of the 21st Century

John Stepleton realised a 28% productivity improvement in his call centers within a week; Jeff Booth was able to dramatically speed up the time it takes to get a vendor up on his building materials website; Mike Jagger saved $60,000 in IT costs from his first session; and Ken Sims was able to handle a 100% increase in business in 2008 without adding any headquarters staff.

 

These CEOs and many other mid-market leaders are embracing the Toyota Production System referred to as LEAN. Often misunderstood as a tool exclusively for manufacturers, Toyota’s methodology for eliminating waste is having a huge impact on large and small companies in all sectors of the economy. In fact, I’m so bullish on the power of these simple, yet powerful tools, that I’m confident the first company in any industry that fully embraces the LEAN methodology will dominate their industry over the long run – as Toyota has the auto industry. And for those thinking LEAN is synonymous with the overly complicated and expensive Six Sigma approach to quality improvement, you can relax. LEAN, though it requires a real change in mindset, uses a few very simple tools to drive dramati  improvements.

 

Biggest Bang for the Buck

John Stepleton, who built RDD, a 500-person, three-time Inc 500 winning research company, was the first CEO to turn me on to LEAN as a powerful tool for mid-market service firms. So successful was his implementation, his firm was recognized by the Northwest Shingo Prize for its innovative implementation of the LEAN principals. “What better time to take the plunge,” notes Stepleton.  “With the economy struggling, it is the perfect time to begin integrating LEAN into your business.  I began my journey more than four years ago and of all the strategies I’ve implemented over the years -- and I’ve tried a lot of different things – LEAN proved to deliver the biggest bang for the buck.” If you’re not sure it’s right for your business, Stepleton emphasizes, “I implemented LEAN into my call center business where I had $10/hour employees engaged in continuous improvement programs that realized productivity improvements of 28% in time periods as short as one week.” One of the keys to LEAN is objectively modeling and measuring productivity and then using simple visual systems to eliminate costly mistakes. In Stepleton’s case, they color coded research forms to make sure the appropriate number of subjects for each campaign was called.

 

Operational Excellence

“One of the things that a company can control in a market like this is operational excellence by removing waste in a system,” notes Jeff Booth, CEO of Vancouver-based BuildDirect.   In doing so, Booth has dramatically sped up the time it takes to get a new vendor up on his building materials website. Booth engaged Guy Parsons, early partner with Jim Womack at the LEAN Institute, to help him with his initiatives. Booth also produced a five minute video interview of Parson as a way to explain to his team and others how they are using LEAN. You can Google Jeff Booth’s blog to view the video.

 

Eliminating Waste

“LEAN describes waste as anything that happens in a company that a customer would not want to pay for,” explains Mike Jagger, CEO of Provident Security. “So our first initiative was to divide all of our costs into two columns, things that add value to our clients and things that don't.”  “For instance, we have a huge IT investment that we require for our monitoring business, which adds client value,” continues Jagger. “However, our clients don't care who hosts our email...so we cancelled our scheduled server upgrade for our exchange servers and are migrating the entire company to Gmail.” First year savings on the hardware, software, management and support is just under $60k. Summarizes Jagger, “we've got another great tool now to help us look at the business in a very different way.”

 

Bored Billing Accountant

Ken Sims, co-founder of the award-winning franchise Nurse Next Door, sent me a partial list of dramatic outcomes from their first year implementing LEAN, including growing the business by 100% over the last year with eight less head office people. Guy Parsons warns, however, that LEAN is not about reducing headcount, it’s about reducing waste. In turn, you take the time your people get back from eliminating wasted efforts, steps, and activities and you re-purpose people to serve customers, make sales, and grow the business. Case in point, Sims’ payroll and billing accountant’s biggest challenge this year is boredom since she has nothing to do half of her time because her job has become so easy -- the year before she was working evening and weekends. Sims is now teaching these LEAN techniques to his franchise partners so they can work on growing the business vs. doing payroll all day.

 

Gains Everywhere

Additional gains include doubling the current volume of Sims’ call center without adding headcount while reducing fees to his franchise partners; eliminating process steps to help franchise partner’s workflow easier and make more money; reducing inventory levels to almost zero so franchise partners require much less capital to start and run their business; and streamlining the process for adding new franchise partners. Notes Sims “two years ago it was a challenge to add one new franchise partner each quarter.  Now we add two per month and can add up to five per month without breaking a sweat! More importantly, our lean initiatives are a major (but not only) reason why we and our franchise partners have been able to thrive in this terrible economic period.” Now’s the time to jump on the LEAN bandwagon. Take a look at Guy Parson’s two-hour webcast and see if the time is right for your company

 
Tips To Protect Your Business

Recession or not, during these volatile economic times it's worth taking a look at the playbook of turnaround specialists.

 

And for many growth firms, who face the normal challenges of managing constant change, it can feel like a perpetual turnaround situation even during boom times. One of my favourite turnaround stars is Greg Brenneman, founder of Houston-based TurnWorks. Credited with the phenomenal turnaround of Continental Airlines, he's now working his magic on sandwich franchise Quiznos. In every case, turnarounds revolve around just a handful of key strategic moves:

 

Stop Unprofitable Activities. Brenneman immediately uncovered that Continental had 18 per cent of their routes that were badly unprofitable and draining cash. He shut them down. What products, services, territories, or customers are draining you? Do you even know? The first step is to analyse profitability as granularly as possible. A huge weakness in small to mid size firms is the lack of accounting data and support. It's a natural instinct for entrepreneurs, given a marginal dollar, to want to spend it on either making/buying more stuff or selling it, that is, fund sales and operations. Accounting, in turn, is often underfunded. Hire an extra accounting clerk, have them pore over your specific numbers, and then deliver to you the calculations of profitability by product/service line, customer, territory, store, sales person, etc...... Then make the tough decisions. Pruning your operation is a healthy ongoing activity.

 

Focus on your Best Customers/Opportunities. Neil Rackham, the famous sales researcher, studied sales teams during hard times and found that the less successful sales teams chased every deal they could, acting almost desperate at times. Instead, the successful sales teams focused on their best customers and opportunities. As an interesting side note, his research found that customers do not buy on price during a recession but buy more based on safety. Why? Because during tough times decisions are often made more by committees and they seem to choose the safer options. And for this safety customers were willing to actually pay 12 per cent more!

 

Study What's Worked in the Past. It's never more important than during a downturn that you return to basics. And since the 2001 recession wasn't that long ago, take time to consider what worked and what didn't work.

 

Finally, communicate, communicate, communicate. Above all, keep the communications flowing. Brenneman and Gordon Bethune, Continental's Chairman and CEO, made it a point to talk to every employee they could, getting out to airports and in planes, loading baggage, and working the ticket counters.

 

The writer is author of Mastering the Rockefeller Habits, founder and CEO of Gazelles Inc, an outsourced corporate university with a faculty of top business experts. It is represented in the Middle East by Dubai-based biz-ability.

 

Source: Gulf News

 

 
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