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10 Questions to Defuse Discount Requests

Today, more than ever before, small business owners of all types are hearing four potentially dangerous words from clients and customers: “I need a discount!”

What do you do then? Many businesses already have an established yes or no answer. But if your past response to discount requests has been to fire back a firm “no” or simply offer a price break, there’s definitely a better way, says Robert Sobel, a customer loyalty expert and co-author of the book “Power Questions” (Willey, 2012). By simply asking the right questions, you can gain valuable intelligence on why the customer is seeking a discount, and thus have ammunition that helps you preserve your profitability.

There are four types of discount seekers. The first are in genuine financial trouble and really might need a break. Others simply want to negotiate the lowest price on absolutely everything, and some just like to feel like you’ve given them a deal. A fourth type of discount seeker likes to complain about how much things cost, no matter what.

Asking the right questions helps you discover what kind of discount seeker you are dealing with, and how to respond. Here are the 10 key discount-diverting questions, and when to ask them (note the questions are phrased as if you are the one asking):

  1. To kick start the conversation: “Before I respond, would you mind if I asked you a couple of questions so I can better understand your request?”
  2. To dig deeper: “Occasionally a client requests a discount, and I find I am able to be more helpful if I understand why they’re asking for one. Can you tell me why you think the price is too high and a reduction is warranted?”
  3. To size up your competition: “I know you are talking to other service providers about this project. Do you feel my price is dramatically out of line with the market?”
  4. To say “no” while identifying possible terms for a positive negotiation: “I am able to reduce the price when the scope and breadth of the proposal are also cut back. Would you like me to prepare an option for you that would do that?”
  5. Or you might also say, “We are able to reduce price in exchange for terms and conditions that help lower our risk and long-term cost of doing business. Would you like me to develop a proposal for a long-term supply arrangement with built-in discounts for guaranteed volume levels?”
  6. To learn more about your client’s buying process: “Where will the budget come from for this? Who can give this final approval?”
  7. To accentuate the value you are offering and clarify what is most important to the client: “I’m not sure we had a thorough discussion about the benefits you expect from this. Can we review those, as you see them?” Or you might ask, “What parts of this proposal are most important to you? Which aspects of it do you find less valuable?”
  8. To differentiate yourself from the competition: “Would you mind if I briefly reviewed several aspects of my proposal that I think represent value above and beyond what our competitors offer? I’m not sure I articulated these very well.”
  9. To tie your proposal to your client’s higher-level goals: “Can we review one more time what your goals are here? What are you hoping to accomplish?”
  10. To go toe to toe: “Do you give your own customers discounts?” And if they say “Yes,” you respond, “That’s why you need me.” And if they say “No,” you respond, “So why should I?”

The goal, of course, is to preserve and strengthen the customer relationship —assuming it’s a customer you’d like to keep. If you’ve priced your services properly, you probably cannot afford to discount. But if you simply say ‘No,’ the customer might leave and never return.

By using a question approach, you can delve deeper into the situation and discover the customer’s true needs. You might find another way to show them the value they want. In the long term that will be viewed much more positively than a one-time discount and is a better option than refusing the request out of hand.

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10 Inside Secrets to Grow a Business in Tough Times

How do some small businesses manage to grow and thrive while others perennially struggle and miss opportunities that come their way? According to Alex Castelli, who heads the Growth Markets Practice of consulting firm Reznick Group, the most successful business owners display some clear patterns and habits.

Reznick has built its reputation working with companies through challenging times, helping analyze opportunities and tap into tax savings. Castelli says his group – which includes many former entrepreneurs – sees business owners making the same mistakes that are often avoidable.  

Based on Reznick’s years of experience helping businesses grow from the inside, here are 10 secrets for achieving growth even in a poor economy: 

  1. Grow to survive Many small or local businesses assume it’s best to reduce offerings to survive tough times. While this seems intuitive, sometimes the answer is to do just the opposite – to grow. Before cutting back and shrinking your business, consider first whether additional funding might help.
  2. Check your ego – You know your business inside and out, but that doesn’t make you an expert at running it. Smart business owners know what they don’t know. Don’t be afraid to ask for advice and then, take it.
  3. Remember your first fans – Many entrepreneurs seem to forget who helped them get started. If you have investors, keep them apprised of what’s going on. Good communication is key.  A good investor group can provide mentoring and other resources, so keep them involved.  
  4. Share your knowledge – In today’s business world, success and influence are in the hands of those who share their ideas and information. Yes, you might lose a little competitive edge by sharing your secrets.  But you will gain influence, and possibly success. So when you’ve found a great tool or solution, or gained insight, tweet it, blog about it, author an article, post it to Facebook.   
  5. Hire someone to watch your money – Lack of strong accounting and finance can be the only thing keeping you from reaching your financial goals. Find well qualified people who share your vision and then step back and take their advice.  
  6. Know when to persevere – Stick to your mission. Many would-be success stories end prematurely because they give up when challenges mount. Don’t let hurdles stop you. Arm yourself with market knowledge and an expert team and push through.
  7. But recognize when to change direction Still, there are times you may need to change direction or call it day, and having the courage to do so can be liberating. You may end up with a clearer picture of what will or won’t work.
  8. Keep cash on hand – One of the biggest mistakes growing businesses make is to run out of cash. While the sun is still shining on your business or before your financial picture has a chance to turn sour, meet with lenders and/or landlords proactively to see if there are opportunities to restructure debt, payment terms, etc. Having cash on hand is critical for staying afloat and continuing to grow.
  9. Get more when you have more – Don’t wait until cash balances get low to secure more funding. The best time to get more is when you have more. Securing a line of credit while you still have money in the bank gives you the ability to negotiate a larger line and better terms. It also gives you the ability to make payroll during slow times and to have access to cash as needed. In addition, it gives you an opportunity to develop a business relationship with a bank. Waiting until you really need money takes away your negotiating power and leaves you at the mercy of the lender.  
  10. Sell when you get the chance – Many business owners miss, or worse – pass up – incredible chances to sell their company because they are not prepared to adequately evaluate the opportunity. Know where you stand in the marketplace at all times.  That includes what your potential is, and what it will take to reach your potential.  That way, when opportunity knocks, you’ll know what to do.

Copyright © 2000-2011 BizBest® Media Corp.  All Rights Reserved.

New Help for Small Business Exporting

In 2006, total sales were just $64,000 at Loudmouth Golf, a small golf clothing company based, well, nowhere in particular.  (The company has no official headquarters; Founder Scott Woodworth still works out of his house in Sonoma, CA.) Now sales have topped $10 million at the 32-employee firm thanks to an approach of sourcing materials and selling finished goods globally.

Loudmouth has clothing made in China and sells it in golf-happy countries all over the world.  Employees are widely disbursed and all of them have Skype addresses on their business cards because international video calls are routine.

And Loudmouth isn’t alone. Thousands of other U.S.-based small businesses are busting into global markets thanks to a bevy of new tools, tactics and resources that are helping small American companies gain an edge overseas. They include all types of businesses, from family-owned hops farms in Washington, to a small Michigan-based firm that makes steering components for cars.

One major source of both money and advice is the Export-Import Bank of the United States. Earlier this year the “Ex-Im Bank” (as it is known) launched a new Global Access for Small Business program that aims to provide $9 billion per year in small business export financing so small firms can export more goods and services produced by U.S. workers. Over 1,000 small businesses new to exporting joined the program in its first six months and thousands more are expected to join.

The two Ex-Im Bank products most used by small business exporters are export-credit insurance and working capital loan guarantees. The insurance protects the business from risks of an overseas buyer not paying, and helps small U.S. firms extend credit to international customers. Working capital loan guarantees cover 90% of the outstanding balance of working capital loans to exporters, backed by export-related inventory and accounts receivable.

The Export Business Planner, a new and free online tool developed by the U.S. Small Business Administration (SBA), is also helping small business owners who are interested in starting or expanding overseas sales.

The Export Business Planner can help with these key tasks:

1)    Determine if your business is really ready to start exporting, and how to get ready if you’re not.

2)    Learn about export training and counseling services.

3)    Access global market research and trade data.

4)    Connect to export financing opportunities.

5)    Create a customized export marketing plan for your business.

6)    Tap into other exporting resources.

You can access Export Business Planner at www.sba.gov/exportbusinessplanner. It’s a PDF file that you can download, customize and update regularly as you develop your own export plan. 

The SBA website (www.sba.gov) also has a wealth of helpful information on importing and exporting for small business. Click on “Find exporting opportunities…” on the home page for access to these topics:

  • Exporting or importing specific products.
  • International trade loans for small business.
  • Explore Exporting.
  • Trade Agreements.
  • 6 Steps to Begin Exporting.
  • Financing Your Small Business Exports.
  • SBA Export Express for Small Business.
  • Export Working Capital Program.

For details on how your small exporting firm can benefit from Ex-Im programs visit Ex-Im’s small business website (www.exim.gov/smallbusiness). You’ll find all of the basics plus helpful videos such as “Ex-Im 101 for Small Business” and “Intro to Exporting.”  Or contact the nearest Ex-Im Regional Export Finance Center at (800) 565-EXIM. Ex-Im also sponsors regular webinars which you can locate in the “Training and Education” section of exim.gov.

Another good resource is the export.gov website which is dedicated to helping U.S. companies export goods and services of almost any kind. This site is packed with export info, including extensive sections of export opportunities, licenses, regulations and logistics, problem solving solutions, basics of documents and paperwork, foreign market overviews, state and regional trade groups and an FAQ.  You’ll find opportunities broken down by industry, along with trade leads and lists of international trade events.

Copyright © 2000-2011 BizBest® Media Corp.  All Rights Reserved.

6 Ways to Improve your Sales IQ

In today’s small business world, the art of selling is changing rapidly.  In order to adapt and succeed, your business may need to overhaul its sales skills and adapt new methods to meet the changing trends. Here’s how you can respond to trends that are transforming the sales landscape, and improve your own sales IQ:

  1. Know what Customers (Really) Care About: First, know what they don’t care about, like how “great” your service is; how “low” your prices are, and whether they might have been your customer in the past. Loyalty runs thin these days, and old sales platitudes fall flat. What customers do care about is how smart you are about their business; how you can lower their risk; and how strong of a reputation you’ve built with people they might know.
  2. Become a Research Racehorse: Given the multitude of information available online, you must come to the table equipped with a depth of information and knowledge about you target customers that proves your interest and attracts the prospect’s attention.
  3. Create Contagious Content: Increase your credibility and build awareness of your products or services by publishing content relevant to your customers. This is easier than ever to do online.  Start a blog, or contribute to community sites in your industry or profession. Regularly post comments and participate in web communities and forums where your customers also participate.
  4. Sync up your Messages: Email, voicemail, Facebook, Twitter, LinkedIn and other messaging methods must work in tandem. In fact, prospects expect it.
  5. Find the Real Buyers: Especially in the business-to-business world, more people today are involved in the decision-making process — but fewer of those individuals actually have the power to make a purchase decision. Learn to recognize the decision makers and bypass others without making them mad. One trick is to avoid leaving “tracks” such as emails and voice messages that can be forwarded back to the non-decision makers. Once you contact a decision maker, always mention the name of the non-decision maker and compliment their efforts, but say why you are working around them.
  6. Become an Expert at Online Presentations: Web conferencing tools have replaced in-person meetings, but holding audiences captive through a Death-by-PowerPoint presentation almost guarantees a lost sale. Taking the time to organize, design and build strong online presentations will quickly convert prospects into buyers.

Copyright © 2000-2011 BizBest® Media Corp.  All Rights Reserved.

New and Affordable B2B Leads and Lists Online

A BizBest 30-Second Solution: 

Hoover’s – which  has the biggest and best database of business contact information anywhere (85 million contacts and counting) – has launched two new ways for small businesses to find leads and build B2B lists via affordable “view only” and pay-as-you-go services.   For the first time, the new “Essentials” and “Lead Builder” services give small business owners on a budget a way into this lead gen goldmine on affordable terms.

The new web-based platform lets you build lists to match your target markets and access them online in minutes.  You can search the entire Hoover’s business database, save and edit contact information online, access social media feeds for thousands of companies and purchase lists on demand or by subscription.  And the Lead Builder product gives you unlimited use of the lists you buy.  Hoover’s is a division of D&B.

Copyright © 2000-2011 BizBest® Media Corp.  All Rights Reserved.

7 Sales Slump Survival Tactics

As a tough economy lingers, many small business owners find themselves stuck in a sales slump that just doesn’t seem to get any better. Under those conditions, it’s easy for a business to find itself floundering for solutions that seem perpetually out of reach.

“Many businesses are paralyzed in today’s difficult and increasingly competitive economy,” says David Mattson, CEO of Sandler Training, who helps businesses with just such problems. “They don’t have a system for success or forget what they actually know, and are merely reactive.”

But sales slumps can actually be a time for renewing and refocusing a sales effort if you can avoid key mistakes and knee jerk reactions that will keep your company in a rut. Here are seven sales slump survival tactics that can make your business stronger for the year ahead:

1. Stick with your sales process. When sales slow, many small business owners panic.  They suddenly forget what they know and start throwing ideas against the wall to see what sticks.  They jump from activity to activity, neglecting their sales process. Stop there. A sales process tells you exactly what needs to happen in order to complete a sale. “Imagine an emergency room,” says Mattson. “When a patient comes into triage the hospital doesn’t try multiple check-in procedures and leave their process to chance, or things would be chaos.  There are procedures and orderly steps that need to happen every single time in order to correctly treat a patient.  The same is true in sales.”

2. Don’t focus on revenue only. Focusing only on top line numbers can frustrate a sales team. What you really need to consider is behaviors as well as revenue.  To achieve your sales goals, your business needs to know which behaviors need to take place in order to provide favorable sales results down the road.

3. Keep prospecting. If you only pay attention to current customers you will sacrifice long-term sales.  When a business gets to a certain size, employees feel like they can relax and that they are past needing to prospect all the time.  Don’t fall for this trap. Very few people like to prospect.  You don’t have to like it; you just have to do it. While it is important not to neglect existing customers, you always need to be on the lookout for new customers in anticipation of the peaks and valleys throughout the year.

4. Maintain marketing and advertising. When businesses see a decrease in sales, the first costs they tend to cut are marketing and advertising. That’s a mistake. Now more than ever small companies must create mindshare with customers and prospects.  But it doesn’t have to cost money. An often missed opportunity is simply following up on all leads you receive. For instance, research shows that only two percent of leads at trade shows are followed up on.  Just by pursuing existing leads you could come out of the slump stronger than your competitors.

5. Ban “Loser Talk.” If you really want to kill sales, create an atmosphere of learned helplessness.  In fact, many business owners do this and don’t even realize what they’ve done.  Stop blaming the economy or other things out of your control, and set a positive tone going forward. Empower sales people to close deals within parameters, and be responsible and accountable for their own progress.

6. Remember your roots. If you want to drive a business into the ground, forget what you did that made the business successful in the first place. Remember what made clients and prospects fall in love with your company; then go back to that.

7. Plan for seasonal slowdowns. Planning ahead for seasonal slowdowns can help pull you out of future ruts.  Leaders should anticipate specific months or times of year when sales trend down and feed the sales funnel before these occur.

Copyright © 2000-2011 BizBest Media Corp.  All Rights Reserved. 

Building Real World Fans

As more and more small businesses embrace social media in general and Facebook in particular, getting online “fans” has become yet another item on the “to-do” list. But beware. While fussing over online fans, businesses sometimes forget that making customers fans in the real world should come first.

Turning someone into a fan of your business means more than convincing them to click a link or check a box online.  Maribeth Kuzmeski, founder of Illinois-based Red Zone Marketing, uses sports analogies to make her point that customer loyalty can be similar to team loyalty. In order to get customers or clients to become true fans of your business they have to develop a strong emotional connection similar to one you might feel for your favorite sports teams, says Kuzmeski. “Success is all in what you offer and how you offer it. You can get others to connect to your company, product or service by passionately delivering whatever you offer.”

The passion part is something that can differentiate a small business. Because so few businesses act with real enthusiasm toward customers, when you apply passion to what you do, people take notice. In short, you develop fans!

Here are four essentials for building real world fans:

1. Offer something unique. Whatever you offer customers can’t be merely better; it has to be different. To gain die-hard fans, offer or do something that no one else dares. Consider Buc-ee’s Beaver in Texas. Customers rave about it online; they write glowing blog posts, Facebook items and Yelp reviews about Buc-ee’s.

And all this for a gas station!  Google it and you’re likely to see a quote like “Buc-ee’s is the coolest gas station I know!” So how does a humble gas station earn such kudos? They’re different. For example, they’ve focused on one thing people dread most about gas stations: the bathrooms. Every Buc-ee’s has super clean, over-sized bathrooms, and full-time attendants to keep them in shape.

Think about what people dislike most about your industry, service or product. What solutions can you offer? It’s a great way to differentiate yourself from your competition and create buzz in the process.

2. Create something valuable. This has two parts. First, you need something valuable to say — a message, tip or other piece of information your customers will want to pass along. Now make it easy for them to share that message.  The rule is this:  When it’s really easy for customers to share stories about your brand, they will.

3. Separate features and benefits. Too many small businesses still highlight product or service features rather than the benefits.  Customer aren’t interested in features – they want the benefits those features bring. Benefits are value statements about your product or service, with an emphasis on what’s in it for the customer. For example, “open 24 hours” is a feature. The benefit to customers is knowing you’ll always be open when they need you.

Small businesses routinely point out features and leave it up to customers and prospects to connect the dots and fill in the benefits blanks.  But remember: You’re an expert on your products and services; they aren’t. When you sell features alone, you’re asking the customer to do all the work.

4. Don’t just talk, act. Often, the things you can do to turn your customers into die-hard fans are right under your nose. They’re things you do daily or simply because you want to provide customers with the service they deserve. One of Kuzmeski’s clients, a financial advisor, did this.  One day he got a call from a pastor who said an elderly woman at his church was having difficulty,” relates Kuzmeski. Her husband had died and she didn’t know where any of the important papers regarding her estate were located. The advisor went to her home and helped her find everything, and didn’t charge her a penny. Later he created a program to help others in the same predicament and started receiving referrals from all over his community.

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