THE BENEFITS OF UNDERSTANDING YOUR CUSTOMERS

Understanding your customers helps you to sell more. The more you know about them and their needs, the easier it is to identify opportunities to sell them new products and target them with appropriate offers.

Profiling existing customers also makes it easier to find new ones. You can look for similar prospects, and sell to them in a similar way.

However, you must make sure that you comply with data protection regulations for any personal information on existing and potential customers that you collect, keep and use. There are specific rules for e-commerce.

You can use the information you have on customers to improve efficiency. Keeping a central record of customer details and sales reduces errors and speeds up transactions.

You can also improve customer service. Better access to information helps you deal with customers more quickly. You can tailor product offerings and provide personalised treatment. The right information makes it easier to identify and resolve any problems.

Finally, understanding your customers helps your planning. You can predict what they will buy, and estimate how much stock you need. Linking customer management to purchasing can dramatically improve profitability.

LEARN ABOUT YOUR CUSTOMERS

Your customers are a valuable source of information, so you should aim to collect data that lets you identify your customers and how they behave. This will vary depending on your customer profile. If you sell to individual consumers, you might want to know about their age, gender, income and so on. For businesses, you might want to know what industry they operate in and their size.

You should also try to find out what they think about you and your products and services. For example, learn what they like and dislike and why they choose to use you.

If you have just a few important customers, it's worth getting detailed feedback from them. Companies that sell to individual consumers sometimes use customer surveys.

If you sell online, you can use your website to capture some information automatically.

Of course, as well as collecting the information, you need to store it. The most effective way is to use a central database.

However, you must make sure that you comply with data protection regulations for any personal information on existing and potential customers that you collect, keep and use. There are specific rules for e-commerce.

 MAKE CUSTOMER INFORMATION AVAILABLE

Making customer information available to employees can make them more productive. For example, you could give sales staff access to financial systems so that they can check orders and payments. You need to decide what information different employees might need, and how to make it available to them.

Technology can help. For example, you can share correspondence and other information on your computer network. Using caller recognition, staff can view an incoming caller's details and purchasing history before even answering the phone. Integrated IT systems help different parts of your business to share what they know.

It's important for information to be accurate. It's a good idea to update records regularly, taking care to delete duplicate entries. You could also consider giving customers online access, so that they can update their own details themselves.

You must ensure that any confidential or important information is protected against misuse or accidental deletion.

Remember you must also comply with data protection rules for any personal information on existing and potential customers you collect, keep and use. This may affect your IT systems and those staff that have access to the information.

Chris Wilkinson.                              

Certified Business Behaviour & Attitudes Analyst.               

Business Coach.

Tel: (905) 275-2907 (Mississauga).

E-mail: buspilot@bell.net

7 Common Sales Objections and How to Overcome Them…..

Selling doesn't come naturally to many small business owners, but that doesn't mean they can't do it effectively. Often the key is understanding what is stopping your potential client from making a decision in your favour. Once you know why he or she is hesitating, you can reply directly to that specific objection.

Here are seven common sales objections you may hear during the selling process, as well as some ideas on how you can overcome each one.

1. Price

Example: "Your services cost too much. I can get the 'same' service from someone cheaper."

When the bottom line is the biggest hurdle for a client, you need to help him or her justify the cost. Try breaking down your total cost into smaller amounts that are attached to smaller services so the client can see why your price point is what it is. And make sure you focus on the unique value of your products and services that the client won't be able to get from any other provider.

2. Complacency

Example: "I'm okay with the way things work right now."

When complacency is the culprit, you can try to use just a touch of fear to get the client to see why he or the needs to start thinking about the making changing. Share some research about the competition and some of the changes they have made in their businesses. There is often nothing like a look at something your competitors are doing that you are not yet doing, to move you to action.

3. Fear of Change

Example: "I don't want to change the way we've been doing things for 15 years. Too much can go wrong."

Often related to complacency, having a fear of change can make the decision-making process a difficult one for many business owners. One way to overcome this objection is to demonstrate past examples of change and how it was positive. For example, show the client a list of different ways the industry has changed over the past 10 to 15 years, and how the potential customer has adapted to those changes for the better. This can help him or her be less fearful and more confident about changing things up.

 4. Trust

Example: "It seems like you know what you're doing, but how do I know you really have the necessary experience to do this?"

Trust is something that takes time to build, so if it is a hurdle for your potential client, you need to be honest and consistent across the board to overcome the objection. Be forthcoming with information and share testimonials, case studies and references that will take away some of the uncertainty and give the client confidence in your ability to get the job done.

5. Personal Politics

Example: "I told my brother's friend's wife I'd use her company for my next project."

Sometimes there's not much you can do to usurp a family connection, but you can get yourself in the position to be the next in line. If this is an objection you're hearing from a potential client, think a few steps ahead and show the client what you can do in phase two of the project or in an off-shoot that will likely come about from the work being awarded to a family member.

6. External Input

Example: "I need to run this by my wife/business partner/mentor before I do anything else."

This can often be a positive outcome, assuming the client is truly consulting with others and not just using it as an excuse. One way to make sure it doesn't end up as a deal-ending sales objection is to attempt to stay in the process. Try suggesting a joint sales meeting between the client and their counterparts in order to answer any questions and help facilitate the decision.

7. Timing

Example: "It's too much for me to take on right now; I'm too busy; Call me again in 6 months."

If time management or lack of time is an issue for the client right now, chances are it will still be an issue in six months or a year. To overcome this objection, you need to make the decision to hire you an easy one. Start by listing all of the benefits of working with you, outline the value of the products and services you offer, and explain how easy it is to get started. Make the decision to hire you a no-brainer and you will remove this objection.

Keep in mind that your potential clients may have more than one objection so it's important to be able to identify each one as you see it occur. Once you know what is stopping the sales process, you can arm yourself with the right arguments that will tip the scale in your favor.

Chris Wilkinson.                              

Certified Business Behaviour & Attitudes Analyst.               

Business Coach.

Tel: (905) 275-2907 (Mississauga).

E-mail: buspilot@bell.net

When Employees Become Disengaged……

 Do you know for certain that all of your employees are “engaged employees?” The benefit of having engaged employees is that they are fully involved in and enthusiastic about their work, and they will act in a way that furthers company interests. But what if some of your  key employees are not engaged? And what can you as a business owner, CEO or hiring manager do to ensure your key personnel remains engaged in the work of your company?

While there are profound repercussions to employee disengagement, there are tools that can help ensure the right people are in the right jobs. By hiring people who are naturally rewarded by the type of work they perform, they will be more engaged and, therefore, more productive.

 When I took my first motivators assessment, I was finally able to put into words what I valued in an employer. I learned that I was a high Utilitarian and that my Social concerns, while not my highest motivator, were quite high above the national average. In laymen’s terms, I enjoy investing my time and energy into a project, and value a healthy return ($$$) on the sacrifice that I am making. Furthermore, being able to see a higher social use to my work, encourages me forward on the project.

In a former position at another company, despite the fact that I was qualified for and enjoyed the work I did, I was unhappy. I served on a team, but the environment didn’t feel like a team, and I was responsible for doing much of the work on my own. While my work was strong, the company’s leadership never really knew what I was capable of because my team leader consistently took credit for the work I was producing. Unfortunately, it didn’t seem to matter how hard I worked, or how much I tried to expand my education, because the company traditionally rewarded those employees who had the most seniority. If I worked harder, put in extra hours, and continued to develop my education, I would not be compensated in any manner for doing so. I learned that promotions were for those with the greatest number of years under their belts. Without any control over my own career path, I began to feel frustrated and unfulfilled, and I started to wonder how I was going to grow in my field and develop the expertise I desired under these circumstances. I knew then that this company was not the right place for me.

How many potential “star employees” are you losing each year because their motivators are unfulfilled and they become disengaged? With the expense of replacing an employee at three times that person’s salary, how many employees can you afford to lose this year?

Chris Wilkinson.                              

Certified Business Behaviour & Attitudes Analyst.               

Business Coach.

Tel: (905) 275-2907 (Mississauga).

E-mail: buspilot@bell.net

If your profit margins aren't rising, chances are your company isn't thriving.

Here are five solutions to the problem....

I believe that your profit margin trend is the single most powerful indicator of your company's health. As margins decline, companies cut their sales and marketing efforts. Manufacturers postpone plant upgrades and delay research and development. And it becomes a lot less fun to own a business. Obviously, something needs to be done.

Here are five bold solutions to help increase your profit margin:

1. Fire Your Customers.

Getting rid of the 20% of your customers who provide the lowest profitability frees up capacity and resources to do work that is more profitable.

2. Go for Mailbox Money.

"Mailbox money" is what I call checks that show up even though you're not doing any extra work. To get mailbox money, license your intellectual property to another company. I know a small automotive parts maker in Alberta who licensed out his unique manufacturing technology to two companies, one in Europe and one in the U.S. Royalties from those deals have kept him in business even though orders from U.S. customers have declined.

3. Set yourself apart.

Focus your energy on products that are meaningfully unique. A business owner I met in the Nova Scotia used to manufacture more than a thousand different types of ceramic tiles and accessories. He voluntarily discontinued about 80% of his products, focusing his sales and development efforts on products that gave him a competitive edge. The result has been a rebirth of the company. He has doubled his profit margin and increased sales.

4. Export.

Look for opportunities beyond our borders. Take advantage of the freedom the North American Free Trade Agreement provides. Use your network of suppliers to find international opportunities. Visit industry trade shows in other countries to seek potential distribution partners. Avail your self of  'freebie' assistance programs offered by both Ontaio and Federal Governments.

5. Love Your Product Again.

Reinvent your products and industry. Unique products command higher prices and greater profits. This requires that the leader of the company—you—become genuinely passionate about discovering and developing new ideas, innovations, and inventions for customers.

I'm continually amazed at the passion and energy that some entrepreneurs have reinventing their businesses. In Ontario I met Tom Lee, co-owner of Lucky's Tomatoes, whose life mission is to grow and deliver better-tasting tomatoes to Toronto restaurants.  Out west I met Bonnie Swayze of  Union Rubber Co. Her family's mission—for 85 years—has been to find new uses for rubber bands. In Mississauga I met John Cronier, the owner of Crown Industries, which makes bakeware and pizza pans. He captivated a dinner party I attended with his passionate explanation of how the pan improves pizza quality. It wasn't the business that was captivating—it was his enthusiasm. Could you do the same talking about your business?

Chris Wilkinson.                              

Certified Business Behaviour & Attitudes Analyst.               

Business Coach.

Tel: (905) 275-2907 (Mississauga).

E-mail: buspilot@bell.net

Securing your receivables....

Are these steps worth the effort?

Let's assume that you have terms of “30 days net” with most of your customers but that they generally drag out payment to you so that on average they take 60 days from invoice date to pay you (i.e., 30 days overdue). If you can convince just 25% of your customers to pay on time and 25% to pay after 45 days, you will reduce your total receivables by 18.75%. This is usually a very achievable target. Apply that percentage to your receivables balance and that is the amount of additional cash that you will have in your business. If your receivables are usually about $1m, you would generate $187,500 in additional cash.

So, what are some of the management issues that need to be addressed to achieve this? Not all approaches are appropriate for every business or every customer but all should be considered:

1. Do you have a credit policy for the granting of credit to customers? If not, implement one and make sure that your customers are aware of it. Many customers will adhere to the policy once they are aware of it even if some will delay a few days beyond the limit. This is almost always better than allowing the customer to set the terms. Ensure that all new customers are made aware of the policy and expressly agree to abide by it or negotiate an “exception” as a special for that customer. If most of your customers take 60 days and you ask for 30 days and settle for 45 days, you are way ahead.
2. Both existing and new customers should be screened and credit limits set. Do not get into the trap of extending credit beyond a set limit to a customer, without negotiating terms for them paying you and staying within that limit or a newly revised limit. Nothing is worse (other than a default on payment) than having to cut off a customer without some warning if they do not manage to pay according to an agreed schedule. Consider your reaction if a supplier were to cut you off without warning. Also, offering extended terms shows a willingness to work out a payment schedule with your customer and makes them much more likely to stick to the terms.
3. Ask slow paying customers what you can do to facilitate faster payment. They should at least be aware that you are watching them and are prepared to work with them. What a great opportunity to show your good faith to a slow paying customer. There are so many situations, especially with big companies (where bureaucracy often prevails), where a simple win-win can be achieved by sending the invoice to the appropriate staff member and/or a copy to a second person, etc.
4. Remind the person dealing with your payments of your credit terms. Often the accounts payable clerk is not aware of your terms and a gentle reminder can be helpful.
5. Pester them (very politely) to pay more promptly. Your accounts receivable should have a relationship with every customer’s accounts payable and should phone them regularly, especially if they are not paying strictly within the terms. This should almost always be the nicest, most polite and friendly “squeaky wheel” in town. Developing this favourable relationship will often facilitate your account being settled expeditiously.
6. Consider cutting lagging customers off from further business (until they are within your credit terms). Doing this once often has a magical affect on their willingness to stick (closer) to the terms in the future. Of course, it is also a very powerful risk management tool. If they cannot pay, at least you have limited your exposure. It goes without saying that this must be used with a lot of discretion, especially if your customer can easily obtain the supplies elsewhere.
7. Consider whether you wish to continue doing business with them at all. This is especially effective if you have a shortage of supply in your industry. If it is known that the product is not readily available your customer should understand that prompt payment is required.
8. Consider whether you are dealing with the correct person to facilitate payment. In many companies accounts payable determines the amount to pay and to whom, based on general directions from the Controller. Create an exception by calling a senior person in your customer’s organization, someone you know, or can develop a relationship with, to ask that you be paid promptly.
9. Consider increasing your price to the slow-paying customer. Multiple price lists exist in many industries and there is often no reason why you cannot move a customer to a slightly higher pricing formula.
10. Consider offering a higher discount for prompt payment. Many businesses offer terms for prompt payment such as “2% - 10, net 30.” Some customers will stay within these terms and pay promptly to benefit from the discount. For those that do not take advantage of the discount, consider a phone call to offer them an even better discount. Tailor this to suit the occasion. Call a customer (who normally pays after 45 days), after 10 days have passed and explain that although they have missed the 2% discount, you are prepared to extend this, on a one-time basis, and give 2% for paying within the 30 days. A particularly effective method if you are in a cash crunch is to call a customer who owes a large balance and offer a discount of 5% if they pay within two days. This should be set at a level that it is so tempting that they will almost certainly take it. Of course one has to take into account the reputational impact of such a move.

Chris Wilkinson.                              

Certified Business Behaviour & Attitudes Analyst.               

Business Coach.

Tel: (905) 275-2907 (Mississauga).

E-mail: buspilot@bell.net

Tips to negotiate the best trade discounts.....

Someone once said that everything in life is negotiable and this is certainly true when it comes to getting a trade discount. I'm always happy to discuss and negotiate deals with our customers, because not only do we usually reach a win:win outcome, but I also get great insight into what our customers really want!

There’s a subtle art to negotiating a discount and I've put together a few pointers for you to point you in the right direction.

• Know your market. Do some research, look at competitors’ prices and ask for attainable realistic discounts. Know why you should have the discount and be prepared to put your point across.
• Understand what motivates the seller and give out the right selling signals. Mentioning repeat business is always a good way to negotiate a more favourable price, you’re more likely to get a discount when you’re ordering in bulk.
• Always be polite and courteous when you are negotiating. Taking a hard line may get you the result that you want, but any future relationship is going to be soured by your attitude.
• Make sure that you have some prices fixed in your mind before you start negotiating. Have an acceptable price and a walk away price. Be prepared to walk out of the shop with nothing if your expectations were not met.
• Always make it appear that you have lots of alternative options. Telling the salesperson that they are the “only stockists”, or that you’re really desperate does not put you in a strong position for negotiating that discount.
• Don't only focus on price - you've got a basket of items to negotiate on. If you can’t negotiate on price, you may be able to negotiate on the level of service. I’ve recently negotiated free delivery and installation of some new equipment even though I was unable to get the price down.
• It’s all about how you ask. Phrases like “Is this the best price you can do?” and “It’s a bit more than I wanted to spend really” are good ways of opening negotiations for those who aren’t used to asking for discounts. And you'll get better at it the more you practice - so the more you do it the better long term effects it will have on your future negotiations.
• Don't negotiate for a win:lose outcome. Your negotiation might be successful in the short term but a business that goes out of business because they fail to negotiate above their bottom line will only give you grief in the future.

At the end of the day, just keep in mind that a sales person will only ever give you a discount that they are happy with, so you have nothing to lose and everything to gain by asking to discuss the price. A salesperson will generally rather take a small hit in their commission rather than lose the sale altogether.

Chris Wilkinson.                              

Certified Business Behaviour & Attitudes Analyst.               

Business Coach.

Tel: (905) 275-2907 (Mississauga).

E-mail: buspilot@bell.net

7 tips to reduce warehouse costs…..

Cutting your warehouse labor costs can improve the organization’s overall efficiency and increase earnings. The key is to devise ways that produce an impressive return on investment instead of simply reducing staff. Warehouses generally claim a large amount of real estate on the premises. Therefore, reducing labor costs could make a big difference in overall expenses.

Step 1

Train your current staff how to work smarter using forklifts, devices for communicating across warehouse space, order-picking processes and cost control related to damages and breakage. Provide opportunities for employees to exchange tips for more efficient warehouse processes, and offer cross-functional training for warehouse, purchasing and shipping department employees so they understand their interdepartmental responsibilities and work flow.

Step 2

Award employees incentives for completing training, such as recognition, certification and, if feasible, cash bonuses. Also, provide cash bonuses for warehouse employees who work diligently to prevent on-the-job injuries. This ensures that a larger percentage of your workforce participates in efficiency-enhancing activities.

Step 3

Review your warehouse scheduling and employee hours. Unless your company’s shipping and receiving occurs on a 24/7 schedule, you may be able to create compressed schedules that accommodate your business needs as well as warehouse employees’ needs to achieve work-life balance. Reducing the number of shifts you run will significantly cut labor costs. Maximizing your employees’ work times can improve job satisfaction and, consequently, reduce turnover. Reducing turnover will save a considerable amount on labor costs — the cost to recruit, hire and train new employees can eat up a chunk of your warehouse budget.

Step 4

Select experienced employees to train new warehouse employees. Employees who actually perform warehouse duties are better able to provide on-the-job training for workers who may not have worked in a warehouse environment. For example, use current staff to train on inventory and supply chain management, managing inventory, industry practices for inventory audit, packaging, shipping and receiving.

Step 5

Install technology solutions for supply chain management to improve work flow and employee efficiency. This might result in lower labor costs through reducing staff; however, the training that warehouse employees receive may help them advance in other areas of the company. Supply chain management technology can be customized to meet your company’s specifications, as can warehouse management system solutions.

Step 6

Implement warehouse safety measures. Mitigating company risk associated with warehouse injuries automatically cuts your labor costs because you aren’t paying for workers' compensation expenses and potentially reassigning workers for areas with which they might not be familiar. According to the U.S. Bureau of Labor Statistics, in 2010, for every 100 warehouse employees, there were 4.1 work-related injuries that incurred additional labor costs such as absences or moving employees to other departments.

Step 7

Obtain employee input on warehouse and inventory best practices they believe will make their tasks and duties easier. Asking your employees for their opinions conveys the message that you value their opinion and, in turn, makes them happier employees.

Chris Wilkinson.                              

Certified Business Behaviour & Attitudes Analyst.               

Business Coach.

Tel: (905) 275-2907 (Mississauga).

E-mail: buspilot@bell.net

Management by objective....




Definition

Management by objectives is a dynamic system which seeks to integrate the company's need to clarify and achieve its profit and growth goals with the manager's need to contribute and develop himself. It is a demanding and rewarding style of managing a business.

Explanation

Since the best managers have always practised management by objectives, the cynic's view that it is merely old wine in new bottles is perhaps valid. However, it is timely and useful to restate basic principles and to demonstrate that there is a practical approach which will help all managers to improve their performance. Companies are meeting increased pressures of competition and rising costs and management’s task is becoming more complex with accelerating changes in markets, technology, and social environment. Yet, many companies are content to follow tradition based on past success. The explosive growth in knowledge had led to more specialization, with the result that fewer general managers and entrepreneurial types are being produced. Moreover, the time span and range of objectives set by companies is often dangerously restricted. Management by objectives must create a climate of opinion in which these and other problems are recognized as well as providing the framework of techniques for solving them.

Illustration

When a worthwhile system of management by objectives (MBO) is operating in a company there is a continuous process of:

1. Reviewing critically, and restating, the company’s strategic and tactical plans.
2. Clarifying with each manager the key results and performance standards he must achieve, in line with unit and company objectives, and gaining his contribution and commitment to these.
3. Agreeing with each manager a job improvement plan, which makes a measurable and realistic contribution to the unit and company’s plans for better performance.
4. Providing conditions in which it is possible to achieve the key results and improvement plans, notably:
   1. An organization structure which gives a manager maximum freedom and flexibility in operation.
   2. Management control information in a form, and at a frequency, which makes for more effective self-control and better and quicker decisions.
5. Using systematic performance review to measure and discuss progress towards results, and potential review to identify men with potential for advancement.
6. Developing management training plans to help each manager to overcome his weaknesses, to build on his strengths, and to accept a responsibility for self-development.
7. Strengthening a manager's motivation by effective selection, salary, and succession plans.

These techniques are interdependent and the dynamic nature of the system can be shown as in the diagram above. It follows that the development of managers, which is a matter of vital importance to every company, only makes sense if it is integrated with the purpose of the business. Looked at in this way, management development is a valuable by-product of running a business efficiently.

Chris Wilkinson.

Certified Business Behaviour & Attitudes Analyst.

Business Coach.

Tel: (905) 275-2907 (Mississauga).

E-mail: buspilot@bell.net

Statements that Influence the High ‘S’ Supportive (non aggressive) team buyer type….

*   “I feel you are open to a number of possibilities, and I want to recommend this plan of action.”

*   “There is so much potential success here in what you can do. It is important to keep abreast of what others

are doing.”

*   “Make some calls to others who have anticipated a similar change. I have a comprehensive list that will assist you in this activity.”

*   “While you will not change just for the sake of changing, you can readily see how this will add to your already effective system.”

*   “You will have an opportunity to see the way in which I work with the plan. That will provide you with an opportunity to get some additional clarification.”

*   “By accepting this system, you are really buying insurance for yourself and your family. There is a great deal of security involved.”

*   “A number of individuals and organizations have already found the system to be very reliable. Here is a list of those groups.”

• “The factual information and the conclusions will be of real interest to you. Check it over to see how it works.”

Presentation Tips for your presentation.

1. Take it slow and easy; if you go too fast, you’ll lose the sale.
2. Provide plenty of proof and statistics.
3. Earn their trust and friendship by visiting about family and hobbies.
4. May require additional visits for reassurances before the sale is made.
5. Emphasize your proven products.
6. Earn their trust with facts and figures.
7. Take it slow and easy.
8. Make repeat visits and be sure all questions are answered.

Chris Wilkinson.                              

Certified Business Behaviour & Attitudes Analyst.               

Business Coach.

Tel: (905) 275-2907 (Mississauga).

E-mail: buspilot@bell.net