Acumen Management Group Ltd | Sales Management Blog
Ken provides keynotes, consulting services, training and products designed to improve business and revenue performance. Sales leadership and sales management guidance from sales management thought leader Ken Thoreson of Acumen Management Group.
The sales and marketing departments within an organization are inextricably linked.
While the marketing function within an organization aims to establish the requirements of actual and prospective customers and promoting the company’s products or services, the sales department actively sells the company’s products to customers.
The fundamental distinction between the two departments is that the marketing department’s efforts cost the organization expenses whereas the sales department generates revenue to the company.
The Sales Process
A sales event involves the customer directly, where he or she can buy goods or services directly or order a specific product via a sales quotation.
Typical sales processes involve the customer approaching a sales person with a specific requirement while the salesperson attempts to convince the customer that the specific product offered by the company offers the best value offer.
The sales process will terminate successfully when the salesperson manages to make a sale. Making a sale refers to the situation when a potential customer becomes an actual customer.
Sales Process Training
Training the members of the sales team are crucial to empower the staff with the essential skills and closing sales techniques that assist them to close sales and turning a potential sale into an actual sale. Training sales staff usually involves training the sales team about the products or services they are selling and be in a position to explain complex and technical issues to the prospective customer.
Product Marketing Process
The product marketing process is a vital element in an organization whose aim is to attract customers since the marketing of products or services can ultimately determine their success and failure in the competitive market.
One of the most salient activities in the marketing process is the advertising and the promotion of a product or service. The aim of an advertising campaign is to entice a potential market into actual demand.
Market Research Services
The purpose of the marketing research process is to identify new markets and prospective customers and analyzing the demand for a product or service in the business market. The information collected from an effective marketing campaign will determine how a marketing strategy to promote a new or existing product is carried out in different locations and to attract new customers.
The market research also yields significant benefits in identifying purchasing trends. For instance, in the last years, the Internet witnessed a steady increase in online shopping since more and more customers prefer to purchase products online.
Sales and Marketing Skills
To summarize the aims and functions of the marketing department is to promote products and services based on thorough marketing research into customer demands. The sales function is to support the marketing department and it ensures that customers are provided with a quality product in a timely manner.
Neither function operates in a vacuum and both functions rely heavily on each other to achieve sales and marketing effectiveness in an organization.
Will your small business survive should a global economic downturn happen again? Will it thrive when the economy dips?
Reconnecting with the Customer
When things are tight, companies should be reappraising their markets and really looking at who they are selling to. Businesses owners should be reconnecting with their consumers and figuring out how to add value to the customer experience.
Small businesses cannot compete with large and overseas companies on price so they need to think of ways that they can add value in other ways. This could include diversifying their product range or streamlining the way that they deliver their goods. Customer loyalty schemes are also an effective way of adding value without cutting prices.
Getting to Grips with Cash Flow
Cash flow is something that many small business owners have problems with, even when the economy is booming. However, when the economy is struggling, it is even more vital that business owners get to grips with this aspect of business management.
Business owners can regain control of their cash flow by ensuring that their invoicing process is quick and efficient and by requesting deposits for bigger jobs. There are also a lot of extremely cost effective services available, which can assist businesses with tasks such as managing their debtors’ ledgers.
Looking after Employees
It is not only the financial side of things that can cause headaches when markets are cooling. Deterioration in employee motivation, largely due to job uncertainty, can also have serious repercussions for a company’s productivity.
Firstly, employers should think long and hard before slashing personnel numbers. Companies may find it much harder to hire quality staff after the economic slump is over if they become known for having a high turnover. Layoffs will also affect the motivation and morale of the remaining employees.
Keeping the lines of communication open with employees is also recommended. Being as honest and transparent as possible will reassure staff members, who may be feeling insecure, and will put a stop to any rumours flying around the workplace.
In addition to this, business owners should make sure that they give employees positive feedback. Verbal acknowledgment for a job well done, along with non-cash incentives for more senior staff members can make a huge difference to employee motivation. Alternatively, if employees are not performing to their full potential, a good and simple performance appraisal, encouraging input from both employer and staff member, can be useful.
The Key to Surviving an Economic Downturn
Periods of economic decline can be stressful and challenging for small business owners. However, there are many things that can be done to ensure that companies remain intact and profitable during these times. If business owners stick their heads in the sand and consider themselves too busy to make improvements, it is unlikely that they will survive a significant slump in the economy. However, if the head of a company takes the time to review and improve every aspect of their business, from the operations to the advertising, they will give themselves a fighting chance and may even come out of the downturn a better and stronger company than they were before.
Before getting into a business partnership arrangement, a meeting of the minds must exist before signing a contract. Business partner roles must be clearly written in the contract. Each partner must fully understand their responsibilities as they apply to their situation.
Experts recommend that the members of any business partnership agree first on who will handle management duties, financial responsibilities, advertising, marketing, even equipment concerns. This will corner any future concerns which might arise over who is responsible for what duties.
The percentage of the profits each will receive also must be written into the contract. A specific clause in the contract should state how the partnership will terminate or what terms should be present to end the business.
Now, let’s take a look at another form called limited partnership. In a limited partnership the business partners only risk an agreed upon investment in the business. This is a popular form of partnership with much lower risk factors.
Business partners should seek the services of an attorney to draw up the partnership contracts. This will protect all members of the partnership in the long run.
Business Partnership Advantages
Partnerships are more flexible than dealing with corporations although less flexible than a sole proprietorship.
The business partnership pays no federal or state taxes. The profits obtained from the business go directly to the partners in the business.
Business partnerships like proprietorships pay no state or federal tax. Although, partners are required to pay personal tax on all business profits.
Money to invest in the business is easier to obtain for a partnership than a sole proprietorship because there are multiple partners with money to invest in the business.
The experience of all the business partners only adds to the advantages.
Business Partnership Disadvantages
If one partner dies or wishes to leave, the partnership will terminate. Buy out issues might arise. This is one reason why buy out issues should be covered in a written contract before entering into the partnership.
Business partnerships often find it difficult to obtain financing as easily as a major corporation.
Each partner is liable for the business debts incurred by other business partners or the business transactions. So if one business partner makes a bad decision which cost the company plenty the other partners will also be liable for the debt.
Issues pop up suddenly when the partnership terminates. This concern must be covered in the contract agreement. And the contract signed by all business partners.
In conclusion, a business partnership might be the best alternative for you if the advantages outweigh the disadvantages in your business situation.
What do customers really find valuable? Where is the assurance they will know a good deal when they see one?
It wasn’t too long ago that historical relationships dominated. In business, trusted brands always prevailed. People typically went for brands they have known for years. When it came time to buying something, they always went back to the same old stores without considering other alternatives. Today, these historical relationships have diminished dramatically. Instead of historical relationships, what is driving success today is the ability to demonstrate superior value.
Clear Value at the Source is Not Necessarily Clear Value to Customers.
There are numerous examples of companies that invest substantial time, resources, and effort to provide their customers with what they see as premium quality and service. Often though they see their customers yawn in response. The only value that counts is value that customers are prepared to pay for.
In the retail book industry the business was once populated by independent bookstores that were generally owned and run by people with a passion for books. They selected books they thought their customers would appreciate and provided a high degree of personalized advice and attention.
This worked until lower priced and more convenient alternatives presented themselves such as Amazon.com. The independents were providing value in their own eyes but not value that their customers were prepared to pay for. When lower cost alternatives presented themselves, they fled.
In the Absence of Apparent Value, Price Prevails.
The domination of Amazon and retail chains have had corresponding effects. In each case, customers took a very hard look at the value they were getting from who they were doing business with and, in the absence of a clear reason to pay a premium, shifted allegiance to new, lower cost relationships. If it was cheaper, they would go there.
Value Winners Today can be Value Losers Tomorrow.
In the past, independent financial advisors were very successful. The share of mutual funds held by the banks declined though and during the same time period, the mutual funds sold by independent financial advisors who were not limited by their firm and free to sell any fund they chose to rose. Much of that change arose from the fact that the banks offered little or no advice with only marginally competitive products.
Despite the advantage of incumbency, customers moved away from banks as advisors who went after their business attracted them. These new players offered them superior advice and service and better performing alternatives.
Today these banks are going after these clients. They have introduced dedicated financial advisors who are well qualified and trained. They now have the ability to sell outside funds as well as the banks’ internal solutions, which, in response, have become more competitive.
Only Concrete Value is Seen as Real.
Customers are increasingly resistant to paying for value unless it is clearly visible. Even with all kinds of systems in place to provide high standards of service there will be no benefit unless customers notice them clearly.
Lessons About Value and Today’s Customer
The first step to having customers perceive value is to actually deliver value. Once that’s done, the next step is to communicate that value in an understandable way. The customer needs to be very clear about the value being provided.
About half of all small businesses fail within the first five years.
The U.S Dept. of Commerce tells us that about half of all new employer firms survive five years. The half that don’t survive often fail because of business mistakes caused by their owners.
Each of the errors discussed here has been the cause of business failures, but thankfully there are ways to avoid every one of them.
Poor Cash Flow Management
No matter what a business makes ‘on paper’ it takes real cash to pay the bills. Income and expenditure cash flows don’t often coincide, and there can be times when a business doesn’t have enough cash on hand to meet its commitments.
Ensure the business can always access enough cash to meet regular outflows like salaries, loan repayments and taxes that must be made on predetermined dates. Arrange a source of finance for those times when extra cash is needed.
Ignoring Employee Concerns
There is a legal framework within which every company operates. Employee concerns about issues such as sexual harassment, safe working conditions or discrimination of any kind have the potential for disaster.
Resolve HR issues without delay, and get expert advice if needed. It might seem expensive, but the cost of ignoring employee concerns can be a lot higher.
Good records are a useful decision-making tool. Some key records include equipment maintenance histories, personnel information, and details of income and business expenditures.
Without these a small business owner has no way of knowing how the business is performing or what needs attention. Every business needs to keep relevant, timely and accurate records.
Too Much Inventory
Inventory is an expense. It’s a common business mistake to have too much stock on hand. Inventory levels should be high enough to meet anticipated demand, but know suppliers’ lead times and keep stock at minimum levels.
Not Collecting Outstanding Debts
Without a systematic plan for collecting outstanding amounts a business can amass debts that are too old or too expensive to collect.
Successful businesses have a firm credit policy and make sure their customers understand it. Initiate collection efforts as soon as a payment deadline is missed, moving from diplomacy to demands the longer the debt remains unpaid.
Offering What the Market Doesn’t Want
Make sure that the business is offering what the market wants. This is especially critical when developing or considering new product lines. Too many resources can be invested in a ‘loser’ and the company never recovers.
Market research is vital, even if it’s conducted informally. Trade publications, business magazines and even lunches with suppliers and major customers can be sources of valuable market information.
Allowing Costs to Blow Out
Too often the focus is on increasing income and not enough attention is paid to costs. Costs have to be controlled regardless of how much money the business is bringing in.
Successful small businesses know what their costs are and don’t have to tap into profits to meet unexpected expenses.
Being Unwise with Marketing Dollars
Create an integrated and ongoing marketing plan and work to it. Marketing is not successful if it’s done in an unplanned, haphazard fashion.
Have a marketing plan that’s affordable and stick to it. Trying to ‘make a splash’ is a common error that can leave a business with inadequate marketing support the rest of the year.
Small business owners can’t and shouldn’t do everything in the company, including making all the decisions. Turn some of the work over to staff members and let them get on with the job.
It’s an old maxim but a true one – business owners need time to work ON their businesses. If they spend too much time working IN them there’s not going to be enough time directed to developing the business and making it grow.
Not Planning for Emergencies
Every business needs financial resources to keep it going if disaster strikes. This can be a natural disaster, the failure of a key supplier, or some other unforeseen event.
A source of funds should be available that will cover the expenses of staying in business when something happens that stops the company from trading.
The right kind of insurance can provide the money needed to keep a small business going but only if it covers the exact circumstances that have closed the doors.
Planning for a successful business has distinct dimensions and you can do a better job if you tackle each of these separately.
Firstly, you have to develop your general business idea into a viable business proposal. Secondly, you have to add specifics to the proposal by crystallizing and describing the details of what, where, who, when and why. Finally, you have to get ready to implement the proposal through scheduling the implementation steps with details of resource and time requirements, and setting milestones to measure progress.
The Business Model
Business modeling involves developing your initial business idea into a complete business proposal that can make money. During this process, you answer critical business questions such as:
What value will the business deliver to its customers?
Which specific segment(s) of the population constitute the ideal target group for this value?
How will the business be organized to create, market and deliver the value? This involves deciding upon your specific role in the network of suppliers, partners and distributors, and identifying the processes and activities that you will focus upon
What resources in terms of know-how, people and physical facilities will you need to function effectively in the selected role and carry