On the Other Side

A red fleck in the sky tonight reminded me of the time my wife and I were driving back from a friends with my three year old daughter in the back of the car. "Mummy Mummy" she suddenly screamed "The Sky is bleeding". Sure enough the sky over Bristol was as red as I have ever seen it. Wonderful what polution will do sometimes!

Don't Rely on Public Service Contracts

With significant cuts in public service already in place and the possibility of more in the future those businesses that are heavily reliant on such contracts could be in for a shock.

I don't want to be a profit of doom but many of those businesses that have been, at least to some degree, insulated from the full effect of the current economic climate are beginning to suffer. A close friend of mine runs a building company with more than sixty percent of his business tied to local authority and public service contracts. In the last few weeks he has had three contracts postponed and suspects that two of them will be cancelled. I sincerely hope he's wrong but I'm afraid he's probably right and may be underestimating the overall effect on his survivability.

If you are in the same position or know of someone who is in the same position you, and they, can't afford to wait. You need to be looking at ways in which you can broaden the base of the business and or reduce costs. You may not have to act right now but you should certainly be working on a contingency plan to make sure you minimise the effect of a sudden and catastrophic reduction in revenue.

For assistance in developing such a plan get in touch with your local Business Link on 0845 600 9 006

Generating New Leads

Generating new leads is probably the number one issue that businesses face. Certainly a very high proportion of the businesses I visit say its their number one problem. For some there is also the issue of having too much of the business tied to one or two customers; a very precarious position in times of economic turmoil.

The following are just four methods of generating new leads that are tried and tested in all manner of businesses. What you will have to do though, is adapt them to your own specific circumstances.

First though can I take this opportunity to outline a few of the key 'triggers' or 'imperatives' that encourage people to buy. Understanding them will help you achieve greater success.

Generating qualified leads is simply a matter of psychology. At a basic level, and to start developing a successful sales strategy, its important to understand that fundamentally people don't buy things but what the things - products and services - will do for them. I'm not going into detail in this, that's for a sales course to handle. But taking that statement on board will help you increase success.

Back to those triggers or imperatives.

1. I don't know anybody who can truly resist a free offer. Its the oldest and most worn out 'trick' in the book but it works and i can't think of any business that can't use it in some way. Free means no risk, no cost, no trouble and that leads me to the second imperative.
2. Almost all of us are risk averse, at least we need to know that any risks involved with a decision to buy have been minimised. At the same time we are all natural consumers so if you can demonstrably take the risk away, customers are much more likely to respond favourably to your offer.
3. People are inextricably attracted to things that directly affect them particularly if the 'thing' will reduce some manner of 'hurt'. For instance if my van has just failed its MOT then I'm likely to take much more notice of signs and offers promoting van sales. Even more so if the vans offered will save me fuel cost, carry more etc.
4. Taking the example above my Fourth imperative is that people are naturally curious and will goes to great lengths, at times, to obtain information that others don't know. 'Call to find out how you can save money...'
5. People are much more sophisticated in their buying than they used to be. We have become resistant to traditional 'Don't you think all sensible people should save' types of sales approaches and advertising. What people want is good reliable information that enables them to make an informed decision about buying and smooths the path to the final purchase.
6. And Finally. there is an old formula used in advertising known as AIDA. Its an acronym which stands for Attention, Interest, Desire and Action. When you are putting your pitch or an advert together remember it and the imperatives given above.

Now, where do you find those elusive leads?

Mining for Gold

Even if your business is only a few years old you should have, in your customer files, details of quotes, purchases and a whole lot more information about customers and their plans for the future. If you don't then you are missing a trick that can deliver relatively warm leads at no cost. If you have built something or supplied equipment for a customer but not heard from them for some time, it is time to contact them for maintenance or annual check. You might offer that free in order to 'get in' to enable you to discover new opportunities. I used this technique to get into see a notoriously difficult chief engineer at a large printing works and persuaded him to take me around the plant. My intention was to find issues that my then business, a general engineering company, could help him with. I found three distinct opportunities and offered to provide a quote for his approval. Less than a week later I had an order for about £3,500. That was the start of a very profitable relationship all for the cost of a phone call.

Past customers are a golden opportunity to generate new business limited only by your imagination. Find reasons to contact them again but initially to find out how they are doing and what their plans are. Only then can you find solid business reasons for them to trade with you again.

Your Cast Iron Guarantee

Perceived risk is always an issue for customers and prevents many from taking the final step of handing over their money. But what if you could take the risk away? In most instances the greatest perceived risk is the customer losing their money because the goods or service supplied does not do what is expected. There are two elements to this. The first is that there is potential in any transaction to not listen sufficiently to the customer and thus sell them something that will not meet their need. The second is that the customer under current UK law has an unequivocal guarantee for repair or replacement of faulty goods for six - yes that is six - years. Now what do you think might happen to your enquiry rate if you started to offer that information to your customers.

You have to provide a guarantee under the law anyway so why not shout about it.

Packages make Perfect!

Microsoft and Dell do it. Virgin does too. ASDA has been known to do it as has Tesco and for that matter so has B&Q. Amazon does it all the time and even Boots on occasion. So Do What?
Sell packages of course. And why do they do it? Because the customer sees, and gets, a better deal and the vendor increases each sales value, sometimes greatly, and often volume to boot. When you look around at the techniques used by the big boys to generate sales leads this is one that really stands out because it works, and works and works.

Take a look at the products and services you offer. How can you put a deal together for your customers that will outshine what your competitors are offering?

Make an Exclusive Offer

There are two ways to approach this. The first is to limit the supply of your goods or package to a certain number of buyers. The first 50, 100 and so on. This can't be a particularly high number because as the number gets higher the 'value' of the exclusivity diminishes. I can't tell you what that number is it depends entirely on the potential within the market place so you will have to make a judgement which in turn may be influenced by the number of packages you can physically put together. The second is to limit the offer in time as either an introductory offer or some other enticement, say pre season. By the way the world and his wife does end of season sales. Why not promote your business, increase awareness of what you do and take the opportunity to bag big sales by getting in first. you will still get season sales - possibly at a higher volume than you would have done.

So now having decided which method or methods you will adopt you can sit back and watch the orders roll in. WRONG. That's the mistake too many people make. You have now to promote your business like you have never done before. Having a method to generate leads is one thing but it will not work if you don't get out there and sell it.

Take advantage of PR

I never cease to be amazed at the number of businesses that don't take full advantage of what can be one of the lowest cost methods of generating new business - Public Relations or PR.

I recently visited a business that has to my mind one of the greatest 'Killer' products you can imagine yet it struggles to sell, even in its prime market. To be fair the market is plagued by bureaucracy but nevertheless in the last couple of years they have failed to take advantage of a total of 69 opportunities to sing the praises of their business and products and that's criminal.

To get the best from PR opportunities I must always recommend the use of professionals. It is a black art in many respects but more to the point professionals have the contacts to make it work better and can probably open more doors for you than you can yourself. Having said that if you can't find the budget to engage a pro there is nothing to stop you having a go yourself providing you take a sensible approach to it. But first why should you?

I still remember the words of wisdom my marketing lecturer used repeatedly when taking about PR. "There are three reasons" he used to say "you need always to consider when thinking about a PR campaign. Costs, Cover and Credibility".

Costs

PR is just one element of marketing activity but when times are tough it can be a very effective, low cost method of increasing interest in your products and services especially when the objective is to generate new leads. In most instances it involves writing an article, a news release or encouraging a reporter from the media to come and interview you about the exciting things you are doing. In exchange you get exposure to potential customers that you might otherwise not have and its easy to measure the effectiveness of the campaign. All it costs you, if you do it yourself, is time.

Cover

If you use a mixture of traditional media - trade or specialist magazines, newspapers and broadcast media. Plus the Internet including social media like Youtube, Facebook and Twitter your cover can become global. Such exposure builds awareness of you and your business which can significantly affect your bottom line.

Credibility

Whatever you think about the media in any of its forms in most instances its coverage is viewed as credible, objective and independent. Getting such coverage is therefore the kind of advertising you just can't pay for. Even better, once you are accepted as someone who can provide 'industry comment' you are likely to find people from various media seeking you out to get your views and that can do an enormous amount to build your credibility.

So here are my five rules for developing DIY PR.

Rule 1

There has to be a compelling story.

To be truly effective PR has to have human interest. You therefore have to present information in a way that engages with and has effect on all those people you are trying to reach. To do that you need to 'get into the customers shoes' and understand what is important to them or what they will get out of working with you not just flog them your wares.

Whatever story you are telling you must always include examples of how others have gained from working with you. Anecdotes, testimonials and direct quotes add to your credibility.

Your story will impact, in some way, on all your readers. The trick is to ensure it impacts in the right way. The 'benefits' of working with you has to improve the lot of the customer so how can you demonstrate what your contribution will do. Above all you have to leave the reader wanting to act on the information you have presented.

Do something newsworthy!

You do this far more often than you think. A quick list of newsworthy events to start you thinking includes:

New Premises, New Facilities, New Staff, New Partnerships, New Products, New Services
Reaching a Milestone, Exhibiting at an Event, New Web Site, Newsletter, Winning Significant Customer, Getting Industry Award, Getting Nominated for Industry Award - even if you did it yourself, Speaking at Event...

You know your business better than anybody else. The issue you have to get over is recognising that you have a story to tell and who to tell your story to.

Rule 2

First make a list!

Public Relation does what it says on the tin. It is designed to develop your relationship with your existing and potential customers via mutually beneficial communications. But there is more. We talk in terms of stakeholders these days. They include everybody who has a vested interest in the success of your business from staff and existing customers to suppliers, financiers and the local community. So who are your stakeholders and what are their interests in relation to your business? Once you have your list - or lists - you will be ready to take the next step.

Rule 3

How can you reach your Stakeholders?

What you need to know is how do your customers and prospects get their information. What papers or magazines do they read. Do they subscribe to social networks like Facebook and Twitter, use YouTube. Use the web to source information. Don't know - well ask them. Don't dismiss the social networks. Type a general description for your business in YouTube's search facility and stand to be surprised. As my good friend and colleague Andy Poulton http://www.andypoulton.com/, a self professed IT Geek and web Guru, always reminds me the Internet is revolutionising the way all manner of businesses do business.

Rule 4

Having found what media your customers and prospects use you need to take a close look at them to see exactly what kind of news and articles are covered. This will also tell you much about the so called 'house style' that is the way articles and news items are put together. Having that information enables you to put your material together in a way that will be much more acceptable to the editors that will review your submission. A simple and very cheap way of getting hold of copies of obscure magazines is to call them and ask for their media pack and a sample publication. You will also get a copy of their reader profile which should help you better focus you work. When looking at these publications take a note of the journalists names on articles that relate most closely to your business. You can send copies of your material to them direct as well as the news editor responsible for that section.

Rule 5

Develop a relationship with your media contacts. Check their articles and news items to see if they also have a blog or mail address then add comments to their blog or new item. Journalists are always looking for good contacts so offer your expertise and ideas about stories you are sure his or her readers will be interested in.

Even when you don't have a newsworthy story keep in touch you never know you might be able to help them with an item they are working on.

If you have your own web site then add a news page to the site and provide links to interesting articles written by your journalist contacts as well as your own work. By the way, contacting in these circumstances gives you the opportunity to massage their egos a bit.

Finally you should be ready to put your material together and pitch it to your contact list so a final list of things to remember:

Write an outline and pitch it to somebody you know will give you objective assessment. But before you start ask yourself whether your story is current, you have an interesting angle and possibly a bit of humour. Above all else does it have human interest.

Be prepared to answer probing questions about your material especially if its contra to current thinking. And always be ready to back any assertions you make.

Have a look at the media pack to see if the publication is planning any features relating to your business. This might give you a particularly opportune time to get your material published and may, as once happened to me, turn a short news release into a two full page spread plus a half page in a sister publication and ultimately two articles in national newspapers.

A good high resolution photograph will always help sent as a jpeg and even if you are promoting a particular product try to get a human in there. It not only adds 'Human Interest' but also gives relative size.

Covering the Costs

I'm often asked how to work out how much additional income has to be made to cover the additional cost of employing another member of staff or any other increase in overhead. The calculation is critical to ensuring you stay in control of your business and simple if, of course, you have the right information to hand.

In this example the gross profit percentage [(gross profit £ / total sales £) x 100 = GP%] is 30%. You will get the information from your last set of annual accounts and in some cases your accountant will have done the percentage calculation for you. Lets say you are about to start an advertising campaign which you calculate will cost a total of £5,000 over the period of the campaign. This additional cost needs to be covered by increased income which in this case will be (£5,000 / 30) x 100 = £16,667. Of course if the gross profit percentage is lower then there would need to be a significantly higher level of revenue to cover the cost and if it was higher then not so much revenue needs to be made. Try it for yourself.

The question for you is whether you believe the new truck, member of staff or advertising campaign will generate sufficient to cover the costs - and a whole lot more - or not.