The world is changing. Are you positioning yourself in front of the curve or behind it?
We have all heard about the information age. We all bought computers and created web sites and figured out how to use email. Then we waited; and waited for the great change that was predicted. Finally we decided that we have waited long enough and this great change that was predicted was nothing but hype. Sure we now have to move faster and we have to spend additional time filtering out the spam from the email we have to answer but in general the predicted change was a dud. Or was it?
Companies began to assume that if they were not technical firms, the information age had merely improved their accounting and reporting while changing the way we communicate. But what about our customers? How have these changes impacted the needs and wants of our customers? In our firm we have seen a significant difference. We used to be a consulting firm—we could provide information, forms and procedures that the client didn’t have. Now a client goes on the internet when they need a cash forecasting system and download three of them for free. The value added of the information has dropped as it has become more of a commodity. As a result we are no longer a consulting firm—we are an executive coaching firm. Our clients will pay for a relationship with an outside expert who can help them work through issues and provide perspective and “coaching” for them and their firm. In other words, they are willing to pay for the expertise but not for the information. This same metamorphosis is now apparent in places you would never expect—construction, services, and many other small businesses.
As we have counseled thousands of firms, your first responsibility in building a sales plan is to identify your USP—unique selling proposal. Identify in 25 words or less what is unique about your business that should cause a customer to buy from you instead of from a competitor. That USP is what you should be selling. The advice has never been timelier. The explosion of information available to your customers has “commoditized” many things that were formerly unique. Commodities are price-sensitive and carry lower margins. Small businesses cannot compete on a commodity basis.
The sales efforts of small businesses go through three stages. The first stage is the Survival Stage. In the Survival Stage business is attracted by price and the ubiquitous claim of Quality. Ask these people for their USP and the first thing out of their mouth is “price” and “quality.” There are two problems with this response: first, building your company around price is a recipe for disaster; second, “quality” is claimed by everyone and therefore has no meaning in the marketplace. These companies must learn to sell without selling price and they must more clearly define “quality” and sell that from the customer’s perception—not their own.
The second stage is for companies that are established in the marketplace and are now in a growth mode. This we call the Growth Stage. These firms tend to use phrases that focus upon their customers—“customer first” or “we treat our customers better” are recited. They have learned to sell without selling price and understand that their USP has to focus upon the customer rather than themselves. You can reach this level and have a comfortable existence, but it does not take you to your full potential. That is reached at the third stage.
The third stage is a complete shift. At this stage customers come to you. You attract more “negotiated” work. You are able to increase both your volume and your margins. You now control your volume through your margins. This is the Market Leader Stage. The Market Leader Stage has been greatly affected by the information age. In our current environment the requirements of this stage have shifted. What was formerly the distinguishing “value-added” that moved firms to this level have become commoditized. The internet has created commodities out of many functions that were formerly the highly sought value-added. To reach this level you have to understand what you are selling.
Almost without exception, the product of all firms in the Market Leader Stage is the ability to solve the problems of their customers. You no longer are selling the hardware or the service, you now recognize that you are in the business of solving the problems of your customers. To accomplish this there is a sequence of realizations which must be reached:
- Who are your real customers and what are your customer’s problems? When was the last time you asked them? It is no longer “all about you.” It has to become “all about them.”
- What will solve their problems? This might require going beyond your current products—is it a “turnkey” approach? Is it a billing or invoicing change? Is it financing? You better find out.
- Combine this solution with expertise. You need to become the place where your customers go for answers. You become who they turn to for information—advances in advances in technology or advice in unique information.
- Lastly you must adapt your sales and marketing to this level.
We are in the information age and we have to take advantage of it. This does not mean gimmicks or making simple things complicated. It does mean being the information source for your customers. Through a series of exercises we help you move your organization to that “next level” but, true to our focus, our “value-added” is the facilitation of the change. You don’t need consulting to get there. Consulting would write up the systems, procedures and controls for you—coaching causes you to do it yourself. Isn’t the information age fun?