Why Continuous Learning Matters
Written by Dora Cheatham, Program Manager, Emerging Enterprise Center
“It does not matter how slowly you go as long as you do not stop.” Confucius
When I first entered the world of business more years ago than I care to remember, it was a very different place. Word processors were just making an appearance and sending a fax was the ultimate in high speed communication, the internet barely existed, and Amazon wasn’t even a glimmer in Jeff Bezos’ eye.
Fast forward to 2018 and while the basic principles of business remain the same, the way we DO business is infinitely different. Technology has changed how we make decisions and embark on a strategic direction, how we execute on strategy, how we transact business, how we communicate. Equally, we have access to more informational and educational resources than ever before. For the small business owner today – more than ever – to ignore the need for continuous learning is to remain stagnant at best, fail at worst.
The Emerging Enterprise Center’s Business Growth Workshops hone in on business processes that every small business and entrepreneur needs while tying into the ever-evolving business environment. Among these:
Marketing & Communication: 30 years ago, sales and marketing were almost synonymous and advertising represented the main thrust of the marketing and sales effort. Today the world of sales and marketing couldn’t be more different, yet too often small business owners still believe that, as long as they market their product or business “customers will come”. This couldn’t be further from the truth, so it is critical that new entrepreneurs as well as small business owners are clear in their own minds of the differences between strategic marketing, marketing communications, advertising, and sales so that they can develop and implement a sustainable business growth plan.
Selling Value: Probably the toughest thing for first time – and sometimes serial – entrepreneurs to grasp, is the difference between selling a PRODUCT or SERVICE and selling VALUE. Entrepreneurs and innovators, rightly, are passionate about their product and their passion is reflected when they speak about it. What it can do, how it can do it, how it was developed, the features, the benefits. The more clearly those features and benefits can be articulated into end user value, the less important price becomes as a part of the sales equation. This translates into a more valuable business model that generates greater revenue. To quote Warren Buffet: “Price is what you pay, value is what you get.” Are you clear about the value that you are providing to your customers?
Innovation: “Innovate or die” has become a 21st century mantra and rightly so. Failure to innovate led to the slow demise of companies like Eastman Kodak, Blockbuster, Sears and, more recently, Toys ‘R’ Us. In today’s world of rapid technological development, changing tastes and increasing competition, product life cycles are becoming shorter and shorter. Businesses that fail to update are gradually squeezed out of the market. Innovation doesn’t have to be disruptive – it can be gradual and incremental. The key is to remain relevant!
Globalization: Globalization can be a hotly contested topic but has nevertheless had a profound impact on business with increased competition, expanded markets, increased resources, technology transfer. The increased ease with which business can be transacted internationally means that even the smallest of businesses can access customers and markets which in the past may have seemed unreachable, either directly or through strategic business alliances.
In the end, while ignorance – at times – can be bliss, when running a business, it can be fatal. As a business owner, I’m all too aware of the fact that the first step to growing a business is the ability to acknowledge that “I don’t know what I don’t know.” So I make sure I continue to learn.
For more information on the Emerging Enterprise Center’s Business Growth Workshops, contact Erica Crell at (302) 294-2063 or via email.
The (Internal) Marketing Plan: Bridging the Gap Between Product Development & Sales
Written by Dora Cheatham, Program Manager, Emerging Enterprise Center
An ideal product launch should not only focus on marketing the product to the customer, but also on “marketing” the product internally to assist the Sales Team optimize its sales efforts. Too often, focus is placed on selling to the customer, without effectively training the sales team in the nuances of a product that requires more than just the presentation of features and benefits.
As technologies develop and products become more complex, the more information the Sales Team has on the product, the better they will be able to answer questions knowledgeably and overcome obstacles when working with their customers. Similarly, data gathered by the Sales Team should be cycled back to Marketing to ensure that product is being received and is performing as expected, and any potential issues or improvements can immediately be fed back to the Product Development Team.
Remember that the sales team is on the front line, so a Marketing Plan or Commercialization Plan should include an element that arms the sales team with as many preemptive answers as possible so that he or she can present the company’s expertise effectively and deliver a consistent product message. So what should be included in this Plan?
Product Positioning
Make sure your sales team understands how and why your product is positioned the way it is. If the product was developed as the result of a recurring problem expressed by several customers, make sure the whole team is aware of it. Just because a customer hasn’t expressed the particular problem, doesn’t mean they haven’t experienced it! If it was developed as the result of a new technology that makes the customer’s job easier, make sure they know it.
If you want your sales team to sell on value rather than price, then you need to make sure they understand the intrinsic value of the product and its benefit to the customer, not just its features and price. What problem does it solve? Will it make the customer more effective? Will it save time or labor?
Target Market
Make sure everyone is on board with precisely which customer segment(s) constitutes the target market, and that the sales team understands the criteria on which the potential market size was developed. If the numbers were developed based on a specific application, and a particular customer ends up using the product differently (it has been known to happen), this is critical information that should be fed back to Marketing and Product Development for further evaluation. Was the original data based on a false premise (hopefully this is never the case), or is this a viable alternative application? If so, can this application be extended across the entire market in which case the potential market has just increased and the information should be distributed to the entire sales team!
Competitive Landscape
What competitive products is your sales team likely to come up against? How does the product perform against these products? How are competitive products used versus pricing? Having spent many years in the chemical industry, I have learned that one of the first things to check for is the dilution rates of chemicals: if a product costs $10.00/litre and needs to be diluted at 1:2, it is NOT cheaper than a $50.00/litre product that can be diluted at 1:12 and offers comparable performance!
Sales Tools
Don’t just send the sales team off with a data sheet and price list. Testimonials, value calculators, editable presentations, how-to’s and trial protocols (if applicable) all help the sales team present a professional, polished image of a company that understands its market and is working with their customer to help them make an informed purchase.
Product Availability
If the product or service you are offering has customization options, make sure your sales team is fully aware of the criteria for customization: options, minimums, lead times and other requirements. As Carla O’Dell once said, “If you don’t give people information, they’ll make something up to fill the void”, and too often it’s something along the lines of “Of course you can have that in 2 weeks!” This not only creates chaos for the Product Development and Operations teams but can set unrealistic expectations as far as the customer is concerned. Most customers would rather have a realistic 6 week lead time, than constantly be given reasons why an unrealistic 2 week lead time could not be met!
As a final note, while many companies focus on training upon recruitment, they fail to continue this training as products and markets evolve, yet studies have shown that proper training can boost a salesperson’s productivity by 20% and profit margins by much more!
Market Segmentation: Understanding Your Customers
Written by Dora Cheatham, Program Manager, Emerging Enterprise Center
“Any color-so long as it’s black.” Why Henry Ford’s famous quote is no longer relevant.
When we utter Ford’s words today, they are often said in jest. Ford lived in a time of limited competition and his goal was straightforward: minimize costs through mass production. And the consumer was more than happy with the deal. Today’s consumer is different: he wants choice, lots of it, and with the proliferation of brands and channels, it’s there for the taking. Whether you are a business or non-profit organization, selling a product or a service, by segmenting your market and customers into groups with similar needs and buying criteria, then adjusting your marketing mix to meet the needs of each group, you enhance
THE 5 CRITERIA FOR EFFECTIVE SEGMENTATION
- HOMOGENOUS—the needs within each segment should be homogeneous within the segment and different from the other segments.
- IDENTIFIABLE– the customers within the segment must be identifiable and specific.
- PROFITABLE—The more segments identified, the greater the opportunity to offer a targeted high value offer. However, the number of segments identified should be balanced against the cost to serve those segments.
- ACCESSIBLE—the customers in the segments should be readily accessible in order to be able to serve effectively.
- ACTIONABLE—the segmentation should be such that the company can act on the segmentation to implement appropriate programs for each segment.
Once segmented, the business can then determine its business and marketing strategy on the segments themselves—their size, growth and profitability—the competition and the capabilities of the business. Which segment(s) will you focus on? Which segment(s) offer the greatest growth/profitability/maximum barriers to entry? Will your marketing mix (product, price, distribution, marketing message, processes, people) be the same for each segment or will they differ? The chart below shows the various marketing strategy options for business development based on market segmentation.