You Must Educate to Motivate

Many businesses make an assumption that potential customers know who they are, what they do, how they do it, why they are better to deal with than competitors, and more.  Further, they also assume customers know and understand everything offered by that business. In most cases, this simply is not true - this can literally be a ‘curse’ on sales for that business.

Uneducated buyers are often left with no choice but to purchase on price. By working through this issue for your business, you can make sure you’re properly educating your customers.

You see, if customers are educated and, because of that better understand the benefits your business offers, price and other issues become far, far less important. Quality and value, experience, and other benefits become more important.

You also give the impression that you know what you’re doing, care about the customer, and want them to have the right information on hand, instead of showing arrogance by assuming they know how good you are!

You have to sell & ‘educate’ your way to business success or out of a business problem—you can’t just cut the price

An important point—your customers and prospects won’t understand or appreciate the value, your products or services, a bargain, the way you do business, or the benefits unless and until you first educate them to appreciate it.

Merely offering a product or service at a specific price (even the best price) doesn’t compel excitement or a response until you tell people what they’re getting, its value compared to other products and services, and why or how you can offer such value.

And that’s because customers buy the differences they perceive about your business.

Given that, it’s critical that customers understand the differences between you and your competitors—specifically, why what you offer is better than your competitors.

In fact, it is pivotal to tell every potential customer, in a benefit-oriented way, what your business does AND explain the way your business does it, so customers can more easily spot those differences. Otherwise they just won’t know why they should buy from you!

Co-operative marketing is a great way to increase business. It gives you access to a ready-made market of ideal potential customers; customers you otherwise may have missed.  Co-operative marketing is where two or more non-competing businesses join together to save time, money, and increase their access to their ideal potential customers at very little cost.

How much has it cost to grow your customer base? The answer is hard to define.  It has cost you every single dollar you have spent on marketing and other areas of your business, like training your team. Now, think about another business—a non-competing business, whose ideal customer or client is very similar to yours.  They have invested a similar amount of time and money to build their customer base.

At this point, both businesses have a choice. You can go out and spend all that money and take all that time to build your client base and double its size again, OR you can access each other’s and in an instant double your client base. There a many non competing businesses who have the same customer demographics - hairdressers and cafes, panelbeaters and mechanics.... whom might you market with?

 A business owner approached me recently about encouraging businesses to “shop local”.  In his words – “we would just like the chance to quote”. 

 Always keen to support local businesses and looking to replace my car in the next few months I braved the wet winter weather to visit a local dealer to see if I could test-drive a car I had my eye on.  Sadly this dealership is unlikely to get my business – the sales person couldn’t bring himself to get up from his chair to introduce himself, did not ask for my contact details and failed to give me either a business card or literature on the two models of car I have been considering.  Any information I did get was solely from the questions I asked.

Clearly this sales person is unaware that women make 60% of buying decisions and they influence a further 30%.  In this case the decision is solely mine – and that decision is now to go elsewhere.

I thought customer service was quite straight forward really - treat the customer the way you would like to be treated. Either some people have very low expectations for themselves or they have never considered what it would be like if they were on the receiving end.  

How does your business rate?

Running a business without a budget is like navigating a ship without a compass. As the financial year end approaches you need to set aside time to examine and revise your budget and cash flow to know where your business is now going and what challenges lay ahead.

Think about the key business assumptions and drivers and whether they have changed - in particular, your sales expectations and margins based on your current pricing.  Analyse your spending trends and plans for purchasing and overheads over the remainder of the financial year.  Identify and cost special projects that will take place, consider the impact on sales and costs of seasonal fluctuations.

How will the Canterbury disaster and the unrest in the Middle East impact your business?

Now that you have a realistic budget and cash flow do you know what it means?  What are the implications on your cash reserves or lending facilities?  Do you need to revise expenditure and projects to a time when there is improved cash flow from customer receipts?

It’s important to stay on course and stick to it, and compare it to what actually happens.  Sharing it with your team, financial advisors and accountant can help you ensure greater success in achieving it.

Retail is a tricky business at the best of times – in the good times everyone makes money, though not always a lot.

When times get tough, retailers need to be on their toes. 

So how do you survive the tough times and get ready for the good times…

1.                              Know what sales you need to do to make a profit – calculate your overheads and work backwards to calculate sales.  If you need to do $600,000 in sales and your average sale is $50 that means 12,000 sales per year, 230 per week. 

2.                            Manage your stock well – if it is not selling reduce the price and clear it out.  Money in the bank is far better than stock on the shelf.  If your stock is seasonal clear out as much stock as you can at the end of the season even if it as cost or below.

3.                           Don’t go in to sale too early. Malls tend to drive discounts early in the season but if you are not competing with them don’t discount.  If your stock doesn’t go out of fashion do you need to go into sale at all?

4.                           Understand your customer – if they are buying in the medium to low price range that’s what you need to stock.

5.                           Become a destination store – this comes by providing exceptional service, understanding customer needs, adding value by being knowledgeable about your product range.  If you do this, your business will grow by word of mouth and you can save money on advertising.

6.                           Keep your eye on the costs – when times are tough don’t spend on anything the business doesn’t need.  Save money whenever you can – if it doesn’t add value to the customer it isn’t necessary. It is amazing what is available second hand, in good condition as other businesses fold.   Turn off unnecessary lights, reduce staffing in quiet times, there are always places to save money.

7.                           Negotiate hard – your suppliers are businesses too, they want sales.  Can you negotiate extended credit terms, better discounts for bigger orders or paying on time, rent relief?

 Keep your eyes firmly on the business and know your customers to make this a better year for you.