Archives for March 2008

We’re going to travel back in time today … all the way back to 1968 and the release of the album “Beggars Banquet” by The Rolling Stones.

Why? To understand a little bit more about sales and marketing. You see, when something like a song becomes a classic, there’s a very good reason why. It’s because it strikes a chord with us. It tells a story. Imparts great knowledge.

It contains ideas that fit neatly into the collective consciousness.

Finding Success in Success

The formula goes like this: It takes a certain mindset to be successful (and The Rolling Stones have been very successful). And so, anything that comes out of a successful person’s mind has the great potential to create more success.

Knowing that, I’m going to take the first four lines of the song “Sympathy for the Devil”, and apply them to sales and marketing …

1. Please allow me to introduce myself

Okay, pretty straight forward. If you don’t network, if you don’t get out there and knock on doors, you can’t make any sales. Sitting and waiting for customers to magically appear just doesn’t work. You have to go out, introduce yourself, and create the opportunities for others to buy from you.

2. I’m a man of wealth and taste

And when you’re introducing yourself, you want to put your best foot forward. The old “pity pitch” never built a million dollar business. People want to be associated with success and they want to do business with other successful people … sort of like “birds of a feather, flock together”.

3. I’ve been around for a long, long year

When you’re marketing yourself, your products, your services; you need to have answers. Potential customers will have questions. It’s your experience, your preparation, and your creativity that’s going to get you through smoothly. Trying to make a pitch and getting bombarded with questions you can’t answer can quickly turn into a sweating session that makes you look like you just got water-boarded.

4. Stole many a man’s soul and faith

Knowing your competition and what they have to offer is essential. Because, you’re basically competing with them and everything your customer knows about them. You’re competing against another brand, another deal, pricing, extras … and your job is to find the sticking points that bring the customer closer to you, and the deal-breakers that move them further away from your competition.

So there you have it. You can find successful strategies in many instances of success. The more examples you find in the world, the more overlapping patterns you’ll find that just always seem to hold true.

And just for the record. No, I’ve never been to St. Petersberg.

Always remember: Smart people make money when times are good. Rich people make money when times are bad.

It’s pretty much all people have been talking about; Bear Stearns, the fifth largest investment bank in the U.S., whose stock was up at $160 last year, got blown out in a firesale deal to JP Morgan for $2 a share.

Playing the Patience Game

A lot of people that get into trading stocks jump in, buy a bunch of stocks, and then sit and watch the ticker hoping for the best. Or, they get into the game because they’re girlfriends’ second cousin’s husband is a trader and gave them a (not so) hot tip.

The smart way to play is to follow some basic “market truths” and exercise the patience you need to jump on the smart opportunities. Here’s a quick list of what to look for:

• Extreme devaluations on bad news
• Small caps than can leverage big gains (percentage wise) on good news
• Kick-butt IPOs
• Buy while people are selling and the price is dropping
• Sell while people are still buying, and this is important; before the price peaks because you can’t predict exactly when that will be

So, while everyone was reeling from the talk of a financial system meltdown, my buddy Tom (Trader Tom), jumped on Bear Stearns yesterday like a fat kid on a smartie at $4. This morning, he jumped out at $6 and made a quick 50% on his money. Not bad for a days work.

He could have done better ($8), but greed will kill you in this game. If you’re patient and conservative you will more often than not, make money.

And the best part … he’s buying lunch.

No matter what you’re doing - communication, networking, and having the ability to “sell it” is key to success. Your ideas, discussions, speeches, ramblings, sales pitches; they all have to have an impact. They have to stick.

Well, Chip Heath and Dan Heath wrote the authoritive book on the subject. It’s called Made to Stick: Why Some Ideas Survive and Others Die. In the book, they map out 6 principles for making your ideas stick and it’s filled with great stories, real experiences, urban legends; the works.

So here’s a 6 day challenge for you. Take the principles from Made to Stick and concentrate on one of them each day; throughout the day. Whatever you’ve got to say, write, or convey to others, use the principles to do it and make your ideas stick …

The 6 Day Made to Stick Challenge

1. Simple. An idea has to be simple if it’s going to stick. People have to be able to understand it, focus on it, and relate it to things they already know. Simple ideas are short and sweet; they get past the confusion and right to the core of what you’re saying. Sell it in a sentence.
2. Unexpected. An idea with an unexpected twist is extremely powerful. It stops people in their tracks and it’s the secret behind great comedy (the unexpected punchline) and thrilling never-saw-it-coming endings in movies like The Sixth Sense. Keep everyone on their feet and give them something they’d never expect.
3. Concrete. Relating your ideas to “real world” things makes them just as real. It makes them concrete. If you can take people to a place or show them an object, you can make the idea that much more real. You can also paint a mental picture that relates your idea to something visual. Or a smell, a taste. A place they’ve been or a common childhood experience that most people have gone through.
4. Credible. Albert Einstein once said … well, Einstein could pretty much have said anything and it’d be credible. Because he could prove it. Prove your ideas; cite expert testimony, show the figures and statistics. And best of all, demonstrate it; if you can provide indisputable real-world proof your idea is real, it’ll stick.
5. Emotional. If you can make people care about it, they’ll get it. Emotions are all about change. And if you can inspire and motivate, create a call to “right a wrong”; if you can compel people to take action to make change, your ideas will stick.
6. Stories. Since the beginning of human history, stories have been our most powerful vessels for knowledge. Stories paint the whole picture; heroes, villains, triumphs and tragedies. Stories combine the simple, the unexpected, the concrete, the credible and the emotional. Turn your ideas into stories and they’ll not only stick. They just might become legendary.

Good luck with the challenge. And don’t worry, if all else fails …

There’s always duct tape.

The idea behind a loss-leader is that you sell something super cheap; in fact it’s such a deal that you lose money on every unit you sell. The idea behind this is to get customers in the door and it’s the other items they buy while they’re there that make you money.

And of course, customers love the idea of flaunting the deal they got at an obvious loss leader price. Loss leaders used to be quite popular. And promoting something like it is one is still really popular. But usually they’re not loss leaders at all …

The Business Landscape Has Changed

The first thing that most businesses have come to understand is that selling loss leaders doesn’t necessarily mean you’ll get any other business from a customer. This is especially true in business-to-business deals. And bringing on a loss leader doesn’t mean you’ll keep a contract you already have or that you won’t get the deal in the first place if you don’t take the hit.

This is partly why most successful businesses don’t sell loss leaders any more. There’s just no money in it.

But what’s really changed is the amount of sheer competition in the marketplace. Most companies can’t afford to take a hit with a loss leader. And the fact is, if you want to sell blue widgets at a better price than the next guy, guaranteed there’s a company out there who can supply you with “off-blue” widgets at a door-crasher price. So there’s no need to sell them at a loss.

To survive in such a competitive environment, you’ve got some choices to make. And here they are:

1. You stay in the premium “pure blue” widgets market. Build your brand; offer your best price and that’s final.
2. You start grinding your suppliers for a better price or find more cost effective suppliers.
3. You jump into the “off blue” widgets market where the buying and selling prices are much lower.
4. Some combination of all of the above (which is what most companies do). There’s one key advantage to getting into a high-volume, low-margin market and that’s volume buying. Getting better pricing on everything you buy can significantly increase the margins on your premium products even though you’re still making thin money on the stuff that moves the most.

Note … none of these options involves you taking a hit on a loss leader. You’re in business to make a profit. Profit is non-negotiable.

And loss leaders just aren’t cool anymore.

First off, welcome to all of you who are recent Zoomstart subscribers. This post, in a roundabout way, is about you. Read on …

After starting Zoomstart last year and blogging away for about 9 months, I managed to gain about 200 subscribers. I stopped writing for a few months because of other commitments, and then about a month ago I started writing again. And in the last month my subscriber count has rocketed up to around 300.

Okay, those don’t seem like earth shattering numbers, but a 50% gain in subscribers in one month compared to the results of the entire previous year is very significant. Annualized, it’s a 600% increase year over year.

Don’t Focus on the Goal … Focus on the Result

The reason for this big increase in Zoomstarters is because I focused the blog (theme design, etc) on results rather than goals.

Err … what’s the difference?

The difference is small. It’s subtle. And it’s extremely powerful. An example goal is “I want to increase my subscribers”. But the difference that comes from focusing on results goes more like this: “I want more people to subscribe”.

Did you see it? The difference. Subtle isn’t it.

A goal gets your brain into the mode of thinking ‘Here’s what I want to do’. But a result; a beautiful, wonderful, amazing and just maybe earth shattering result gets your brain thinking in an entirely different mode. You start thinking ‘Here’s how I actually do it’.

A result is more action oriented and “where you want to go” is already built in to it. And that lets you focus on solutions to the real question which is “How do I get there”.

No matter what you’re trying to achieve, goals can steer you off course. Goals can be cliche. They can be all glitz and glam. Self indulgent. Egotistical. They can even be simply unattainable. The point is, goals have a way of selling themselves as great ideas.

But only results get results.

Some friends of mine are starting a painting business. Initially, they found it difficult to get contracts as most small businesses do. The best way is to just go out and start knocking on doors to introduce yourself. I suggested they hit small businesses where they can talk directly to the owner and just drop off 20 or 30 business cards a day.

It’s pretty much guaranteed in this market that you can line up 2 or 3 jobs just by doing that kind of networking for half a day. But most people, for whatever reason (lack of confidence in their own business), just won’t do it.

The Subcontracting Trap

So, as a lot of entrepreneurs do, they started talking to a contractor to get work. The good thing about being a subcontractor is they go out and get all the sales, do customer service, etc. Which takes that burden off you.

The bad thing is they usually take up to or over 50% of the pie. It can still be good money, but it’s little more than a glorified job. And it doesn’t make your business the killer cash you need to grow your business; it’s more like earning a wage.

Now, subcontracting can be a great way to get started. It’s paid training and experience. But at some point you have to cut the cord and go out on your own.

Just Put a Bigger Number on the Table

After some discussion, my friends decided they didn’t like the idea of earning 40% of the pie and put a plan together to go out and start networking their own business. And then my buddy said something really strange to me …

He said, “Those guys would charge $6k for a house and only give us 40%. And we could do that house ourselves for like $3000″.

Eeeeeerrrrch! … now hold on a second. That’s still only 50% of the pie. It’s only 50% of the going rate. There’s that confidence thing again. And you know what … let’s go with it …

But let’s do it the right way to get the business rolling. And it’s all in how you frame the proposition. So here’s the deal; for a $6000 job, you charge $5500 BUT you give your customer a $1000 business-launching discount for a limited time only.

That’s an easy way to get your business rolling, get a bigger slice of the pie, give your customers a savings incentive AND give your confidence-meter some slack too.

Don’tcha just love pie.