Articles



Introduction to Marketing Articles

In this series of articles I will be suggesting some practical, value for money ways to generate more enquiries and close more sales. These articles will include effective use of the telephone, direct mail, press releases and your website. Later on, articles will cover exhibitions, seminars and open days. As different marketing communication opportunities are covered, this Marketing Forum will look at the reasons why they could fail.

Whichever marketing communication opportunities you use, you will require marketing collateral such as a brochure, fliers, product brochures, case studies, direct mail material and, possibly, reply cards. You will also need a website. Websites can be simple brochure type websites that cost £200 or so, up to website costing thousands of £'s for full e-commerce. This Marketing Forum will look at all of the above marketing communications opportunities.

As the world becomes more competitive, marketing will become crucial, yet few companies measure how successful their marketing is. This makes it difficult to justify further funds or fine tune consecutive campaigns for success. So this Marketing Forum will look at how success can be quantified and measured and how marketing theory can be applied to control costs as well as increase sales.

The role of marketing communications is to produce quality leads so sales staff can close profitable business as easily (and inexpensively) as possible. As it takes time for any marketing campaign to produce results, it is important to have a continuous plan of activities. Simply throwing a campaign together because sales forecast have taken a down turn is not good enough in this competitive World.

Inertia can be further enhanced by integration of the different marketing communication opportunities open to your company. As an example, the benefit of integrating direct mail with a telephone canvassing campaign, and an open day or seminar, is greater than running each campaign individually. The Marketing Forum will look at the different balances that are possible and which balance is best in which set of circumstances.

If your products are good and your marketing effective - your prospects will feel comfortable about your company, the staff, products, services and the prices you charge. The prospect will have no objections to placing his business with you. The prospect will simply require the sales person fine tune the offer to his needs, before a deal is finalised. Good marketing ensures the easiest option for your prospect is to place the business with you. This philosophy recognises the importance of building credibility, for your company, in every marketing communication opportunity. All forms of marketing are expensive, but some manufacturers and distributors claim they will help the channel market their products by providing marketing funds and facilities. The Marketing Forum will look at how marketing assistance can be claimed.

To start a direct mail or telephone marketing campaign you need a database of companies to communicate with. Lists of companies include Yellow Pages, Chamber of Commerce directories and other business directories. You will have to pay for professional directories such as the Law Society Directory.

Spikes Cavell, Dun & Bradstreet and Profords provide lists at varying costs. Such lists have the advantage that they can be selected by a number of criteria such as vertical market, geographic area and size of company by turnover or number of employee's.

One reason why direct mail can fail is because it is not specific enough to warrant being read. So vertical marketing is more effective and is usually lower cost.

Even if your products are not vertical, you may like to consider selling them into vertical markets. This will give you an in depth understanding of the problems your prospects are facing, and prospects will be more likely to buy from you.

Although we work in the IT industry it is extraordinary how hard it seems to be to design a database and load it with details of target companies. Some of my clients want to design the most elaborate database systems which would do everything a professional marketing department could possibly want. However, the time spent to get them to work never ceases to amaze me and can become a constraint to progress. Unless the database is practical, easy to use and always available, staff may get fed up with using it.

Sales staff need to be motivated and, for them, there is nothing worse than their access to the database being restricted because a `techy' is working on it or because someone has borrowed their terminal!

Alternative, low cost approaches to building a database include using a Windows based sales tracking system or, even easier and cheaper, simply loading names into the database of an integrated office suite. Because my requirements are simple, I use Microsoft Works. I have a list of companies interested in training services and a list of companies I think may be interested in my marketing services. It may be simple, but it has never stopped me from sending a direct mail campaign on time!

The database you build will become the life blood of your company. You will be feeding off it for the next few years.

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Database

Your company's database is the life blood of the future.

This Forum will look at the role of the telephone in extending and working your database. Sources of companies were covered in the last Forum but you should also consider incentivising your staff to find companies to add to the database. A monthly competition and a prize such as a meal for two can raise the profile of how important it is to add names and can provide some fun. If all the companies in your market sector are on your database, you have three choices. Either you can develop new products and services to sell to your existing market or you can sell your existing products and services to new markets. In practice, it is common to develop both the product and the market at the same time, but if this becomes to radical the risks are high. In this case you should use market research to determine the size of the potential market prior to making a substantial investment. The third alternative is to milk the base for cash and either invest in a new business, or your early retirement!

Databases can be serviced in a number of ways, but first you have to be clear about the objectives. Clearly, you are interested in finding companies with an immediate need, but marketing can also ensure prospective companies are aware of your products and services prior to their need being recognised. Your marketing is so good that it would never occur to your prospect to call anyone but you!My first direct mail campaign was aimed at Solicitors. After my third mail shot many Solicitors would say to me `Chris - I know your company - you have been writing to me for years!' Three well designed mail shots and the market thought we had been going for years! As part of your overall marketing communications plan your database should be telephoned once or twice a year to confirm the companies details, who is currently responsible for IT, and to find out whether they have an immediate need. But this can be developed further.Because of the personal nature of the telephone, it is an ideal medium for research.

Research can be extensive and include;-

• Who the directors and decision makers are
• What the company does
• What processes are used
• How many staff are employed
• The number of sites and turnover
• What IT systems are installed
• What is their IT strategy for the future
• When will the IT strategy be reviewed
• Are there any current requirements
• What are the hot spots

No doubt the information required will depend on which market sector you wish to address. You want to know; how big is the market, how big is your share of the market, who the competition are, which companies will be spending money this year, and how many of them will buy from you.

Ideally, much of the information gained should be recorded in a database so you can select who you will send what information to. This enables you to personalise the benefits of your products and services to the needs of the individuals within the Decision Making Unit. Details of the financial benefits of your system can be sent to Financial Directors whilst Managing Directors are more interested in information for controlling direct and indirect costs and increasing sales and profit margins. The IT man might be interested in Open Architecture whilst users are more interested in ease of use.

This is what marketing is about. Not just communicating an offer (telephone canvassing) but finding out about your market, its characteristics, the problems the market is facing, and the markets requirements for the future.

In depth research is rarely carried out more often than annually.

Telephone marketing must be structured. List cleaning can be completed by junior staff but identifying need requires maturity and knowledge. Even if you do not want to use a script it is a good idea to design one as this makes you think all the issues through logically.

Sales staff tend not to like routine telephone work. As soon as a prospect, or two, have been found many sales people will abandon the telephone work. So if you do use sales people, agree the number of calls to be made, when they are to be made, and the duration of the campaign.

Clearly defined telephone marketing campaigns can be contracted out to specialist companies. To ensure a successful outcome, you should prepare a brief which describes your company, the products and services sold and what the objectives of the campaign are. The criteria for the success of the campaign should be defined and agreed with the sub contract company. You should be involved in the campaign on a daily basis, to make sure it stays on track and is successful.

Direct mail can also be used to find immediate need, but it is a better medium for building credibility. A well presented letter, with a reply element, is cheap to produce and can get results. A corporate brochure can be included and this can add further credibility

Rules for Telephone Marketing

• Have clear objectives
• Agree all targets with staff
• Always include a research element
• Record information in a database
• Have clear criteria for measuring the success of a campaign.

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The Role of the Telephone and Direct Mail

The telephone is ideal for keeping databases up to date and for identify immediate need. It is an excellent tool for market research. The disadvantage of the telephone is that it does not leave a strong mental image in the recipients mind. Direct mail can plug this important gap. A well presented letter, with a reply element, is cheap to produce and gets results. You can add a corporate brochure to increase credibility.

No doubt many brochures will go in the bin but not before they have left a mental image in the mind of the recipient. The more often the recipient sees the image, and the more relevant your message, the more time will be given to studying the offer. It is for this reason that regular direct mail campaigns work better than a mail shot in isolation. People often describe direct mail as junk mail, but properly designed direct mail will get read.

Suppose you suffered from headaches and you received a letter which opened; `Do you suffer from headaches? We have the answer!' would you read on?

Of course you would! If your direct mail is well written, identifies with the prospects needs, and includes a reply mechanism, a high percentage of your mail will be read. One of the advantages of vertical marketing is that your communications are more likely to address the markets needs, and therefore be read. If you use direct mail to put across a dull story, the response will be low.

This can be a problem with selling (for example) accounting systems. Where the subject is dull, why not consider incentivising your offer?

Consider this; if you received a letter with a cheque for £100, would you read it? More realistic incentives include corporate entertainment, seminars and open days. For the later to work you should consider a quality buffet and a well known personality. Perhaps a talk from a recognised expert in the market could ensure a real benefit for all those who attend. On the other hand, the indirect offer may have no connection with what you sell, except that it provides an opportunity to build relationships with prospects in your market place. For a direct mail campaign to be successful you need three ingredients. An attractive proposition, a quality database to offer the proposition too, and you need a well designed letter to communicate the offer.

Marketing is a numbers game. T he bigger the campaign and the more often you run campaigns, the more replies you will get.

There is no doubt that telephone canvassing and direct mail are more direct and usually less expensive than advertising or exhibitions. Advertising and exhibitions can be an excellent sources of leads, but most companies rely on entering the leads in to a database and then working the database using the telephone and direct mail. Another advantage of the telephone and direct mail is that progress can be measured quickly. This enables the offer to be fine tuned for best results, prior to large sums of money being invested in a campaign.

Clients often ask me how often should they service their database by telephone and direct mail and other marketing communications opportunities. The answer lies in the products sold and how long it takes a purchaser to make a buying decision. Wherever prospects are in the buying cycle - they should not be far from receiving information or a telephone call from your company. They should not be able to make a purchasing decision without considering your company and its products and services. Reply cards add credibility to your direct mail campaign and make it easy for the prospect to reply. The reply card can be designed so that if the recipient does not keep the letter or brochure, they will keep the reply card until it is required. For this reason it is important to print your telephone number on reply cards. Brochures can have a reply card element built in to their design, but the disadvantage is that there subsequent use spoils the brochure. A Business Reply Service Licence can make a small company look big and professional. The cost is minimal, so why not contact your local Royal Mail office for further information.

All reply cards should include well chosen research questions.

This is your opportunity to ask qualifying questions or to find out the hot spots. If you provide product and service headings, with tick boxes, your prospects can indicate the areas of most interest. As well as including space for their address, include space for their telephone number so you can call them back when you receive the enquiry. This will help you particularise the information you send, to their needs.

Rules for direct mail

• Have clear objectives
• Write a clear and concise letter
• Indicate a clear benefit or offer
• Mail to a quality, accurate database
• Include a reply element with research questions
• Consider incentivising the reply card or offer

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Collateral

Collateral is the term used to describe marketing communication items such as:-

• Corporate & product brochures
• Product fliers
• Short form brochures and catalogues
• News letters
• Reply cards, etc.

Collateral implies `in support of’ and is used to support marketing communications such as direct mail, exhibitions and personal contact.

Corporate brochures are about who you are and what your company does. They are particularly useful where a company wishes to build a quality image. The IT industry is moving towards added value and service so the objective of your corporate brochure may be to move the image of your company in that direction. Such a brochure will incorporate a strong visual identity and may describe the markets evolving needs and how your company intends to address those needs.

Corporate brochures should be designed for a long life and the chosen style should be incorporated into all the companies collateral and stationery, whenever possible.

Product brochures are usually about function, facilities and specifications and are less expensive to design than corporate brochures. Vertical market products are more likely to focus on benefits but the benefits of horizontal products can be difficult to particularise in a broad market. Here, personal contact may be required to fine tune the benefits of a product or service, to the particular requirements of a prospect.

Personal contact is expensive so you should consider how collateral can help reduce the cost of sales. This may be by careful consideration of the questions the item answers, and by indicating the profile of a typical user of the product or service you are communicating.

Remember, good marketing is as much about reducing the cost of the sale as generating leads.

To help any creative or production company you may use to design and produce your collateral, you should first prepare a brief. The brief should include details of your company, the products and services sold, a profile of the market the company works in, and the objectives of the brochure. Key sentences and copy can be included but the trick is to allow creative thinking and not set to specific criteria.

For cost sensitive projects why not consider a standard A4 format, of two or four sides, for brochures. One or two colours can be considered. One colour can look surprisingly effective if you use two or three tint values. My first product brochure used one colour (Reflex blue), with three tint values, and was received well in a critical market. Two colours, with tints, can be very effective. For those who have seen my book Communicating..., blue and green are used on a white card cover, which is laminated to give a gloss finish.

Two colour, plus tints, is ideal for product brochures, except those products with a very high volume or very high value. Remember, two colours can appear as more if you use coloured paper or card.

Where budget permits, a four colour print process provides the ultimate creative appeal and is ideal for corporate brochures and high value or volume product brochures. If you wish to include photographs, you will require a four colour print process.

Good quality materials should always be used and are preferable to using more colours on cheaper materials. The exception to this might be high volume short term offer brochures, for commodity type products.

After you have established a quality image for your company, you can occasionally use less expensive collateral. Faxed mailings can incorporate a simplified version of the companies identity and be humorous. Product fliers can be on a single A4 sheet, perhaps folded to DL. You could incorporate a perforation and have a third of the flier as a reply element. Such communications can be simple and inexpensive to design and produce, and be fun.

News letters are excellent for keeping in contact with a large user base or giving the impression your company is bigger than it actually is. News letters can help develop market penetration by having case studies of users who have incorporated new technology, or upgrades, in their systems. Stories should parallel the experiences of successful users, with prospects who should be thinking of upgrading. Prospects often view case studies as references and this adds credibility and helps reduce the cost of sale.

I have a client who uses direct mail to communicate the quality and dependability of his company and to build long term relationships. They have three or four direct mail campaigns a year and supplement these with monthly fax mailings. The fax mailings are geared to special offers and new product announcements, and are sent to only those companies who may be interested in the offer.

Each direct mailing costs around 70p and a fax mailing costs under 10p. This strategy has doubled their turnover every year since I have been working for them.

Actually, the cost of their marketing is much less because they have excellent relationships with their suppliers and obtain co-operative marketing funds for their marketing activities.

Rules for collateral;

• Be clear about what you are trying to achieve.
• Quality materials are generally preferable to more colours
• Always establish a quality image before using low cost collateral or humour

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Co-operative Marketing Assistance

Whilst co-operative marketing assistance is often thought of in terms of financial assistance, it could also include the provision of equipment, collateral, manpower, or access to databases. For example, more than one distributor claims to offer Vars telephone canvassing staff for special promotions.

In order to obtain assistance you should have a strong rational to justify your claim and you must ensure that your proposed marketing campaign is in line with the vendors current marketing strategy.

Co-operative marketing funds can be obtained for advertising, telephone canvassing, direct mail, exhibitions, open days and seminars, product launches and promotions. Because most vendors (and the biggest dealers) rely on advertising as their main marketing activity, advertising seems the easiest one to obtain funds for. I think this is a shame as whilst advertising is often perceived as creating the market, it is the process of adding value and providing service which sustains a market. And this is mainly accomplished by Vars getting on the phone, mailing people and visiting prospects and users.

Co-operative marketing funds are most easily obtained where a vendor recognises the importance of the Var in developing a market. However, it must be remembered that vendors are interested in developing new markets and not converting existing users to different Vars.

Co-operative funds may be available direct from a vendor or via their distributor. Where funds are obtained via distributors, do not forget that you must continue to build relationships with vendors in order to obtain other benefits such as leads, loan equipment and technical support.

One of the advantages of working with a distributor is that they can obtain co-operative marketing funds from several vendors. As an example, one of my clients buys Macintosh computers, Claris and Adobe software, Epson printers and Agfa scanners from Frontline and their field sales representative helps obtain co-operative marketing funds from all our vendors.

Budgets for funds are usually available on a quarterly basis beginning in January, April, July and October of each year. Applications should be submitted just prior to new quarter funds becoming available. The amount of money available to a Var is usually expressed as a percentage of the turnover of finished goods supplied and is usually around 2%. Where services other than money are supplied, such as access to a database or telephone canvassing, negotiations are more flexible.

The best way to obtain funds is first to formalise your companies marketing strategy for the next couple of years. A marketing strategy report will usually consist of 10 to 20 pages and include details of the companies history, staff and resources, the products and services sold, the markets serviced, the companies strengths, how the company sees the market developing in the future and how the company intends to maximise sales opportunities. The report should include an outline marketing communications plan for the next 12 months.

For the period in which the application for funds is being made, the communications plan should itemise all the marketing activities for each month including how many direct mailings, faxed mailings and telephone calls will be made. If advertising and press releases are to be run, the plan should include a list of journals and the editions that will carry advertisements. Details of all costs should be included such as creative and art work costs, as well as the cost of the advertising. Enclose a copy of the art work for any proposed advertisement.

For each marketing activity specify the exact costs and then summarise the costs by month before providing a total for the period. Normally a percentage of the total cost of the campaign is applied for, and an amount not exceeding 2% of purchase value, in the period, is negotiated from the vendor or distributor.

Not all applications will be successful initially, and often negotiations will be required in order to obtain a percentage of the monies applied for or to fine tune the agreed marketing activities. However, once vendors and distributors start to receive quality applications your credibility will rise and this may bring other benefits such as more leads, better support, advanced knowledge of new products, improved terms, etc.

The first application may seem horrendous, but once it is successful the whole process becomes straight forward and much less time is required for future applications!

One form of marketing which costs very little and yet can produce good results is the use of press releases. Press releases can generate leads and help re-enforce your companys’ image. Once a system for sending press releases is set up it is no trouble to keep the press informed of your companies activities and successes.

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Press Releases

Press Releases are the means whereby editors of local, regional and national newspapers, journals and the specialist press hear your news and decide whether it is of interest to their readership. If it is viewed as interesting, editorial space, and the position of that space, will be given in proportion to the level of interest.

The difference between advertising and editorial is that, as advertising is paid for, you have control over it. With editorial you have no control over what is published, or when it is published.

Public Relations agencies exist to maximise not just editorial and advertising but all forms of public relations. Whilst these specialist agencies have much to offer and are very professional, they are expensive and this can be prohibitive for many Vars and ISV's.

There is much that Vars and ISV's can do to maximise editorial coverage for themselves. Understanding what media your customers and other publics read is the key to success. Ask your customers what they read and see what journals are lying around their company. Most senior staff read journals dedicated to the market they are in and they may belong to a profession, or institute, with their own journal. Different media will be interested in different types of story. Local papers may be interested in your five aside football team or the roundabout you are sponsoring. The computer press may be interested in the size of your last order or the latest technology you are installing. Regional papers will be interested in plans for investment and expansion.

Lists of journals and their editors, can be entered on a suitable database. Editors are busy people but they do read press releases. Provided what you say is news worthy, and presented in a way which is easy to read and edit, you will get coverage.

Whilst getting to know key editors, what their deadlines are and how they work, is good practice, it is not mandatory for small companies. Having to leave the compilation and distribution of press releases to a specialist public relations agency because only they know the editors, and can wine and dine them, is rubbish.

Most journals will provide a features list for several months ahead. This details forthcoming features by month and forewarns you of what will be topical. If you are about to launch a new product or win an interesting order relevant to a feature, then public interest will be higher. Coinciding your press release with such a feature is good practice.

Press Releases should follow a plain style whereby only necessary information is given. They often look stark, but this is the preferred style that makes an editors job easier. The story should be printed double spaced so it is easy to edit. A punchy heading followed by a paragraph which outlines the whole story, followed by paragraphs which further develop the story-line, enable an editor to choose the paragraphs of interest. If an editor can simply select the paragraphs he likes, you have made his job quick and easy.

If a press release is controversial, a journalist will telephone you. Journalists are on the look-out for something sensational and have been known to develop a story beyond that envisaged by the author. So if you think your press release is going to be controversial you should think the issues through, work out likely questions, and have prepared answers. Make sure your staff know only you speak to the press. If your story is going to be very controversial, it might be best to employ a PR professional, otherwise it is easy for things to get out of hand.

Another way of gaining editorial coverage is to write articles. On board Canberra, during Comdef `94, I had the privilege of dinning with the managing director of a company who supplies warehousing systems. His company is the market leader and I asked him to what he attributed his success. His success comes from understanding more about warehousing than his customers or competitors, and by his company guiding customers to the future. Such a man can gain much credibility by writing articles for specialist press, and by speaking about the issues that will affect the future of an industry.

In fact, this is a characteristic of market leaders in our sector of the market. Most of our customers suffer the same problems that we do, they are so busy dealing with day to day issues that they have no time to plan for the future. As the providers of IT systems we are in an ideal position to help our customers extend their competitive advantage and stay ahead of the game.

Rules for Press Releases:

• Your story must be of interest
• Your press database must be up to date
• Press Releases must be clear, concise and uncluttered
• Use double spacing throughout * Let your staff know only you speak to the press
• Fax or E-mail your press release to the editor

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Marketing Models

Marketing models, and their use, have evolved over the years to provide a better understanding of a business. A clearer understanding, or view, of a business improves the decision making process and increases confidence in future success. Most marketing books describe marketing models and how to use them, the purpose of this Clinic is to indicate which models might be useful in which circumstances and to provide insight into the philosophy of using models and getting a benefit from them.

In many companies marketing models are used solely by senior management. Yet companies will not enjoy the full benefits unless most staff can share in the improved understanding models bring to a business and the improved communications which should result from there use.

As an example, a company in South Africa had marketing problems and convened a meeting of General Regional Managers to discuss them. The quality of communications was not very good due to their wide mix and level of skills. The directors decided to use a SWOT analyses as the basis for discussing and planning the next years resource and training, but differences of opinion existed as to marketing strategy. My contribution was to identify problems and give talks on Ansoff’s Market/Product growth matrix and Porters Portfolio Management matrix.

I was pleased how quickly the Regional Managers picked up the models and used them in communicating their ideas. Moreover, they applied the models in different ways to that originally envisaged. Whilst there were problems with product and market development conflicts, the biggest problem was the means of distribution. The Regional Managers quickly sorted their areas into Porters model of Cash Cows, Rising Stars, Problem Children and Dogs and devised strategies for each.

What happened was that a way of looking at the business had been found which made understanding it easy. Because everyone was involved, the quality of communications improved dramatically. The company has never looked back. The lesson I learnt was that models and tools should not be confined to the few, but should involve as many staff as reasonable.

Though not strictly a model, but more of a tool, the objective of a SWOT is to analyse the strengths and weaknesses of a company on the one hand and the opportunities and threats of the market in which the company operates, on the other hand. Therefore, a SWOT is a four quadrant matrix of strengths and weakness (internal attributes), and opportunities and threats (external attributes). Those participating in a SWOT will decide the key attributes but may disagree as to whether an attribute should be in one quadrant or the other, however, an attribute may be classified in two quadrants.

SWOT’s are useful in think tanks. SWOT’s can be applied to a company, division, product or service. They are a means of viewing a situation (a snap shot in time) and of getting as many people as reasonable involved in the thinking process.

Michael Porters Product Portfolio Management matrix divides products, services (or divisions - if you wish) into four categories. Those generating cash (Cash Cows), those that will produce cash once they are established (Rising Stars)(but are currently consumers of cash whilst getting established), those which could become Rising Stars or Cash Cows but require management input, expertise or other resources in order to become so (Problem Children), and Dogs which are consumers of cash and for which no profitable future can be seen. Dogs can be other peoples Cash Cows and so could be sold off, producing cash. However, the important thing is that having recognised a Dog, a decision must be made before it consumes any more cash (unfortunately old dogs are often a favourite pet).

The objective of product portfolio management is to achieve a balanced portfolio of products so the company has Cash Cows now and in the future.

Ansoffs’ Product - Market growth matrix is used where a company has to decide how to increase sales. The safest option is to adopt a market penetration strategy of gaining more usage from existing customers and gaining customers from competitors. A slightly higher risk may to adopt a market development strategy of gaining new channels and geographic areas. Of higher risk is a product development strategy of producing new products, or different versions or quality levels of existing products, but still selling them to existing markets. The highest risk is a diversification strategy where new products are developed for new markets. If this is to radical - the risks will be much the same as starting a new company.

To summarise a model in a paragraph is an insult to the authors, but I hope this brief description of popular models inspires you to pick up that marketing book and read it with a new perspective. You do not have to use a model in exactly the way the book says - you can use it in any way you like, provided it helps give a clearer view of what is happening in your business.

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Continuum of Behaviour

It is not what you know, but who you know, or (more accurately in marketing terms) who knows you and what their perception of your company is.

Marketing communications is about your target market knowing you, your company and the products and services you sell, so when they have a need they automatically think of you and would not even consider looking elsewhere.

The Continuum of Behaviour is the model which assists understanding of the stages a prospect goes through, prior to making a purchasing decision. On the one hand you want to ensure the prospect moves along the Continuum of Behaviour, whilst on the other hand you do not want the cost of marketing and selling to be unnecessarily expensive.

A typical Continuum of Behaviour model might be:

• Prospect recognises need
• Initial enquiry
• Receive information
• Telephone call
• Visit
• Proposal
• Demonstration
• Place order
• Install system
• Use system
• Become an advocate
• Purchase services, upgrades, consultancy

The Continuum of Behaviour does not stop once the order is placed. Profit potential goes on after the order has been fulfilled, but relies on a happy user. Happy users spread the good name of your company and are also prepared to pay premium prices for quality service. Happy users are easier to sell too, and so the cost of selling comes down.

As the computer market becomes ever more competitive marketing costs are rising, particularly the cost of finding new prospects. Thus it will become increasingly more important to retain existing users and maximise income from them. The Continuum of Behaviour recognises this.

The first thing to do is analyse the Continuum of Behaviour for your company and formalise this with the appropriate staff. From this you can measure how many leads your marketing produces and how many prospects your sales department has on the Continuum of Behaviour, and at which stage they are at. You can compare month on month and see where the weak stages are in your sales cycle. This will help your sales forecasting and provide the means to analyses why prospects are not moving to the next stage of the Continuum. Such dynamic analyses enables you to spot the trends in advance of sales increasing or decreasing.

Further analyses will enable you to calculate the number of enquiries you need in order to obtain a particular number of demonstrations or proposals or to calculate the value of proposals required in order to achieve the required level of sales. In other words, how much marketing is required to generate a given level of sales. Such information is vital for business planning and with marketing costs rising, is essential information for the bottom line.

It does not matter how good the product or service may be, if it cannot be marketed at a reasonable cost, it will not become a cash cow. Analyses of expenditure on each type of marketing activity and the number of prospects generated, and number of prospects moved on to the next stage, will soon show which marketing communications opportunities are the most effective and efficient. In truth a combination of marketing communications opportunities will be the best and so intuition can still be helpful! Particular forms of marketing communications will be better at generating leads, such as advertising, direct mail, faxed mail and PR. Other forms of marketing communications will be more effective further along the Continuum, where credibility may be important, such as corporate and product brochures, open days and seminars, in house news papers and, most importantly, personal contact. Clever marketing recognises what is required to move each qualified prospect on to the next stage and does not waste time or resources unnecessarily.

As an example, the way many companies waste money is in sales staff (the most expensive form of marketing) going around in circles of prospect visits, whereas they should be travelling in straight lines of prospect commitment, and getting prospects to the next stage of the Continuum. Analyses of the Continuum identifies this trend sooner rather than later. Clearly, prospects should be re-qualified at each stage to sort the wheat from the chaff. Do not cast your pearls before swine! A good understanding of the Continuum of Behaviour should be an excellent aid in understanding and analysing the role of marketing and sales in your company. Like all marketing models, the Continuum of Behaviour is simply a model which provides a view of your business. Adapt the model, and your use of it, to suit you and your business.

Rules for a Continuum of Behaviour;

• Formalise the Continuum of Behaviour.
• Set targets for each stage of the Continuum of Behaviour.
• Monitor progress so you can see where progress is good, and not so good.
• Where progress is not so good, analyse why and formulate a strategy for improving performance.

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Product Life Cycle

Companies often state their marketing is aimed at Innovators or Early Adopters. Rarely do they say their marketing is aimed at the Early or Late Majority or Laggards. These are the 5 phases of a product life cycle and are divided into percentages.

Innovators represent the first 2.5% of those who will adopt the product or service. Innovators are obsessive about trying new products and are not particularly concerned about cost, ease of use or reliability. They can afford a higher standard of living than average and view experiencing new products as the essential education which keeps them ahead of the game. Such people are often leaders, are focused, and are less sympathetic to those who do not share the same aspirations or views as they do.

Early Adopters represent the next 13.5% of purchasers who will adopt the product. They are less likely to purchase on a whim and more likely to seek other opinions before committing to purchase. Often, they will not purchase until the press have written reports on the product they are considering adopting. They will be concerned with cost of ownership, reliability, return on investment etc. Whilst Early Adopters will be opinion leaders and peer group leaders, they will rarely be as single minded as Innovators.

Early Adopters are critical to the long term success of a product or service. In the past, many companies have considered the important thing is to be first in the market. But the companies that succeed are those who have a successful strategy for Early Adopters.

The Early Majority represent the next 34% to adopt. They will not adopt until the press have written reports about people or companies who have used the product or service. They will be impressed with case studies and want to speak to reference sites.

Often, the Early Majority will not purchase a new product until another company has entered the market with a similar product so that a comparison can be made and, perhaps, some horse trading can be done on price. In the case of components and chips, an Early Majority purchaser will not purchase until the product can be second source’d. The Early Majority are important for long term success and profitability as they represent the start of the next 84% of the market.

The Late Majority are those who are sceptical and only adopt the product after their friends and colleagues have adopted the product and can report the benefits in a personalised way. It may be that they purchase when they have no choice but to purchase (or be left behind by their peer groups).

Laggards are those people who buy products when they are so old they have been superseded and are thus available at tremendous price savings. They take comfort from the fact that everyone else has got the product and therefore understand it well and they can easily get assistance in using the product, anyone can help. Laggards like second hand Ford Sierra’s because they are cheap to run, you can buy spares anywhere and anyone can fix them.

Innovators are usually animated and energetic. In business they are more concerned about starting things than the attention to detail to sustain the success of a product or service. Because they like new ideas, are so keen, energetic and enthusiastic, they tend to be good at winning sales. However, they are not interested in whether the system sold will actually do what the customer wants at the mundane level! So whilst they may start companies and enjoy success during the Innovator and Early Adopter stages of growth, they may not adapt to managing the latter stages of the product life cycle or adapt the profile of the company to sell products which become established.

Innovators build companies based on a gap in the market fulfilled by a new product. They may like the product so much, that they never seek replacement products to sustain the company. As profit margins decline so the company declines.

Spend some time looking at the people employed by your company and see if you can identify the Innovators, Early Adopters, Early Majority, Late Majority and Laggards.

In my experience, successful Vars have the Innovators looking at new products and developing the products and services to be sold by their company. They are often the product leaders. The Early Adopters are usually in senior management and understand what the Innovators are trying to achieve. They act as a moderating force, keeping development on track and within budget, they are the ones who ensure established products are managed well so the company remains profitable, producing the cash necessary to develop new products and services. They ensure the company’s stability.

The Early Majority are key employees who know much about the company and the way things are done. They take care of the routine and much of the administration and mundane work, leaving the Innovators and Early Adopters free to do their thing. The Late Majority are the plodders whilst the Laggards take care of deliveries, premises, vehicles, so on and so forth.

Understanding the adoption process of your target market enables you to determine your pricing, and plan your marketing communications. Understanding where in the life cycle each of your products is, helps you manage your portfolio of products, so you always have new and profitable ps, or they do not have the time.

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Marketing Communications

Successful marketing is a question of identifying your market and using good communications so potential purchasers remember your company, and its products and services, in preference to any other company.

Good communications means regular communications using all the marketing communications opportunities available including, but not limited to, advertising, direct mail, exhibitions, seminars, public relations, etc.

Marketing communications opportunities can be maximised by having a strong corporate image and approach for your company and products. Message clarity and repetition help. The more often the market hears your message and the more uniform your message is, the more people will remember you. Hence the large sums of money spent, not only to establish a brand, but to sustain a brand.

To this end, your marketing can be more effective if you devise a message, key sentence or strap line which is unique and therefore a first, in your market or sector of market. From a marketing view point it can be better to be the first in the market rather than the best, though obviously it is better to be both.

For Var’s, horizontal markets may appear to have the biggest potential, but you may be better off selling into a vertical market or niche markets. The advantage of this approach can be that you become an expert in that market knowing the lingo, culture and the way things are done. This increases your credibility and improves your chances of getting an order by helping your prospect feel more comfortable.

If you have a clear idea of which segment of a market your product addresses, and you develop a key sentence, strap line, or company statement for that position in the market, you can add considerable impact.

“Warehousing systems for the pharmaceuticals distributor” tells prospects more about your company than “Warehousing systems for the modern company” or “The best warehousing systems” and is better than my favourite which is “We specialise in everything” (my local garage!).

By targeting your products or services at a niche, you can create an impact at less expense. Having established a profitable business in a niche you can either develop new markets for existing products or develop new products for existing markets, on the back of the success and good will earned.

If you decide to develop new products you will have to consider your approach to marketing. Lexus cars are manufactured by Toyota but Toyota knew they would have to create a new brand to sell the Lexus range of luxury cars. This was necessary as Toyota had an excellent name for producing small cars but no reputation at all for luxury cars. As the Lexus name has become established, and the Toyota range of cars has moved up market, a merging of the brands has become acceptable at some outlets.

Software developers are used to producing product literature which outlines the features of their products and the benefits. Sometimes the lists can be quite long and this can dilute effect and impact. If you prefer the narrower and more focused approach, you might like to consider reducing the number of features and developing the benefits of the features you do retain, further. For instance, show how savings can be made and give working examples. Perhaps working examples can be shown in case studies. Certainly, the closer the example to the target market, the more comfortable the prospect will feel and the more credible you will be. This will reduce possible objections at the close and reduce the cost of sale. Where credibility can be maximised further, higher gross profit margins can be won.

Once a clear and unique benefit is established the ‘Halo effect’ will work for you and other benefits will be attributed to your product or service with little or no effort.

Markets have evolving hot spots and the closer you are to a particular market the more in touch you are likely to be with the hot spots. Even if your brochures cannot be changed every 10 minutes, your direct mail can. Each direct mailing should identify the hottest hot spot for that market and indicate your company’s solution.

All direct mailings should include a prepaid reply card and these are cheap to change and produce. All reply cards should ask questions to help you identify the prospects hot spots and qualify the prospect.

Marketing is about focusing on the needs of your market in the same way as a good salesman focuses on the needs of his prospect. This means that before you can communicate, you have to listen to your market. The more you understand your market, the better you will be able to service it. That is not to say that you should turn down other business opportunities, but it does mean that clarity of thought and effective communications is what you should aim for.

Good marketing communications is based on:-

• Clear understanding of a markets needs
• Clear understanding of how the product meets that markets needs
• Clarity and simplicity of message
• Message repetition
• The use of all available marketing communications opportunities.
• Marketing is about focus

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Marketing Strategy

Marketing strategy is about how your markets are changing and, having recognised the trends, how your company must evolve to maximise profits from that changing market.

Types of strategy

Various types of strategy emerge as a matter of course and these can include the entrepreneurial strategy which is based on the personality of the owner of the business and his personal ambitions, the ideological strategy which is based on the owners moral values and beliefs whereby if you do the right things success will follow, the random strategy where different people or departments or divisions of a company do their own thing, the imposed or umbrella strategy where a strategy is imposed from above without those below having much of a say, a democratic strategy where all those involved have a say, and finally, the planned strategy.

Can you identify which type of strategy is employed in your organisation? One thing is for sure, really successful companies have a planned strategy, so you better get one too!

Planned Strategies

Planned strategies are those that analyse where the market is now, how big the market is, how the market is changing and whether the market is growing or in decline. It may be growing but splitting in the process, like the PC market did in the good old days. Planned strategies attempt to ask the questions ‘How is the market changing and how can the company evolve to maximise profits in the future?’

Market research is a good way of seeing how a market is changing and much published work exists to help identify how markets are changing. Specialised market research is expensive but can determine much more accurately what is happening in a given market. Specialist research can ask in depth and detailed questions of a market, perhaps questions which no other company, other than yours, would have an interest in.

A basic form of market research, which can at least produce some results at little cost, is to ask your customers how their businesses are changing and how they see the trends and what they intend to do about those trends. It does not cost much to talk to your customers and they will be so delighted they will think the level of service you provide has improved as well!

Clearly, if you have an idea of how your customers see the future, you can develop products and services to meet their needs.

Of course, you may be so knowledgeable about the changing markets your business operates in, that you actually know more about your customers markets than they do. In which case you will be able to lead them into the future, which must be a powerful USP for your company.

Whatever form of research you use, the point is to understand how the market you are working in, is changing. Successful businessmen are those who have a vision of the future and how to get there. Understanding where the market is going is extremely import, as without such knowledge it is impossible to have a vision of how to get there. Having formed a vision of where the market will be, perhaps in 5 to 10 years time, you need to think about the size of your company at that time and the composition of staff and the skills necessary in order to service that market and make a profit.

Your marketing strategy is your plan of how you will take your company from where it is now to where it should be in 5 to 10 years.

Businesses are like fruit machines

Businesses are like fruit machines, but instead of having to get three cherries up to hit the jackpot you have to have 10 cherries up. And the cherries have to stay up all the time! The 10 cherries represent, compared to your competitors, the best research, the best products, the best services, the best marketing strategy, the best marketing communications, the most efficient means of distribution, the best staff, the best prices and access to capital at the lowest possible rate, etc. If just one cherry is down, your business is at risk, though probably a small risk. If several cherries are down, the chances of your business remaining profitable are much reduced. The reality is that you will never quite get all the cherries up all of the time, but the most successful businessmen have an action plan to keep as many cherries up as possible. Ignore even one cherry, at your peril!

Businessmen and Consultants

Most business people are, quite naturally, proud of the cherries they have got up, but Consultants look at a business not from the number of cherries that are up but from the point of view of which cherries are down and what, if anything, needs to be done to get them back up. His interest in the business will be directly proportional to the number of cherries he believes he can get up.

Constant changes are required and changes require funding. Normally funding for change comes from todays profits, but in a competitive business, if you have to build in profits to fund change then it is difficult to compete with the companies who do not plan for the future.

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Middle East Markets

There are many areas throughout the World which provide opportunities for British companies but one of the most over looked areas is the Middle East.

The Middle East, according to the Dti, consists of 21 Countries, and has a population of in excess of one billion people. The average age is in the twenties and in Countries such as Kuwait, Saudi Arabia, Bahrain and the United Arab Emirates, the average income is astonishingly high. This high disposable income is rising at a rate in excess of 5% PA and the area, as a whole, is enjoying a growth rate in excess of 5%.

As a result of global communications, and branding, the Middle East has a strong desire for Western products and their desire for British products is particularly strong.

The English language is the language of international communications as is evidenced by its use in shipping, aviation and the computer industry. Almost all those using computers, in the Middle East, have an understanding of English and British software is much preferred to American software, for obvious political reasons.

Prior to the advent of oil the nations making up the region were trading nations. The inherent desire to trade has never left the people. The tremendous wealth enjoyed by so many people now means that many are looking for trading and investment opportunities. The problem is that with so many people enjoying so much wealth, they are running out of trading and investment opportunities. This may seem bizarre to you and me, but if you were sitting on Billions of $, you would find it difficult to find investment opportunities.

The Middle East, therefore, presents two opportunities for the enterprising British company. Firstly, the Middle East is particularly interested in investing in high technology companies and secondly, there is a market for British high tech products in the Middle East.

It may be easier to get into these markets than one might otherwise think.

The resources of Dti’s Overseas Trade Services are available through your local Business Link and they provide a number of services, as follows:

Export Market Information Centre (EMIC)

The Export Market Information Centre is a reference library in London. They hold a large selection of trade directories and market reports and can provide researchers for around £30 per hour.

Sector Reports

Sector reports are published by the Dti and cover specific industry sectors.

Country Helpdesks

Country Helpdesks are based at the Dti in London and provide general background information including free Fact Sheets and trade briefs. They advise on forthcoming promotional events and can arrange exhibitions on a shared cost basis, subsidised air fares and accommodation.

Technical Help for Exporters

This is part of the British Standards Institute and they can advise on the technical requirements of products in different countries.

Tailored Market Information

Tailored Market Information provides the services of commercial officers at Embassies and other overseas outposts in the preparation of tailor-made reports. The cost ranges from £50 to £1,000 and, in my experience, this has always been excellent value for money. The key to success is to ask for specific information with regards the particular products and sectors of the market you are interested in and to prepare a comprehensive a brief as is possible. Very often the report will include the names and addressees of interest parties and if you ask for lists of names and addresses of competitors or suppliers you will be surprised and what can be obtained. The key to success is to know exactly what you want.

All of the above services are available through your local Business Link.

Marketing Communications in the Middle East

When communicating with people in the Middle East it is important to remember their culture is very different from the UK. When you are communicating with Middle Eastern people who have a lot of experience in dealing with the British and Americans it is not so much of a problem. When you visit the Middle East, or start to communicate with technical people who may not be so well travelled, you should avail yourself of the differences in culture which includes the way we dress, the way we speak, our body language and the way we conduct ourselves.

When writing to the Middle East, or designing marketing communications materials, it is important to remember that their interpretation of colours and shapes is different from ours, and more profound. The use of colours and shapes is surrounded by tradition, superstition and religion. A few years ago a public relations company was asked to design a new logo for a Saudi airline. They picked the wrong shade of green and the wrong type of Palm tree. Although the Palm looked like any other to a westerner, to an Arab the Palm tree was obviously Mediterranean and an insult!

The way meetings are conducted appears much more relaxed. You spend hours discussing nothing in particular. Business men in the Middle East are paranoid about causing offence and so they take their time getting to know you and will not approach important issues until they feel comfortable. They base many of their decisions on how they feel about you and one often stands a better chance doing business on the third or fourth attempt.

The cultural differences also vary Middle Eastern country to Middle Eastern country and even area to area within a country.

When conducting business in the Middle East remember:

• Be a good and patient listener
• Money is not the only motivator
• The way business is conducted is as important as the business
• Find out as much about the people, the market, and the way of doing things in that particular family, company, region and country as possible
• Research planning and preparation are everything.

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Direct Mail

Of all the marketing communications opportunities available, the one which seems the most misunderstood is direct mail.

For a direct mail campaign to succeed a number of considerations must be taken into account and these include:-

• Who the target market is
• The product or service which is to be offered
• The way in which the message is to be communicated
• The frequency with which the message is to be communicated

The more focused the target market, and the greater the research into what that market needs, the more successful your direct mail will be. Your mailing has to stand out from the crowd, it has to be noticed and read. Your direct mailing has to land on the right desk at the right time.

In business to business communications the decision to purchase is usually made by a Decision Making Unit and good marketing will be sensitive to the needs of each member of that unit. Users want a user friendly system, managers want useful information so they know what is going on, and directors want a system which will provide low cost of ownership and reliability over a period of years. Directors also want reports to identify if their managers or profit centres are meeting targets and if not, why not. A direct mail campaign must address these issues, if it is to achieve its objectives.

People like to buy from those who know what they are talking about and those that have experience in the market they operate in. So, even if you sell horizontal products, such as Microsoft products, you may like to consider presenting your company as experts in a particular field. Your knowledge and your natural empathy, when communicating your product or service to a prospect, gives the credibility you need to close the deal at a higher gross profit margin. You do not have to give the deal away to get the business. Your prospect is happy to pay a premium price to buy a system from you because he likes you and believes you and your company will look after him.

The way the message is communicated

The way the message is communicated is as important as the message. Any marketing communications piece must be appropriate to the market you are operating in. Do not send expensive gaudy brochures inappropriately as they will put some people off. On the other hand if you were selling systems to ad agencies, marketing companies and sales promotion agencies, they are more likely to appreciate and read an item which shows artistic creativity!

Some of the most successful direct mail campaigns I have run have been based on a nicely presented letter with a well designed reply card. These look more personal, are easy to read, immediately identify with the problems the recipient is likely to be facing, and offer a benefit.

When I ran a direct mail campaign for an Apple Mac dealer, I used a brochure. I went to a top London creative agency and they produced a very clever design which could be produced at low cost. The campaign worked well as the Apple Mac users (all creatives!) wanted to open the piece because the design appealed to them. The cost of design was £1,000. A bargain.

Sell a dummy

Instead of using direct mail to generate leads for a dull product, why not consider offering a series of interesting seminars? You will find the uptake is better. Seminars are a soft sell and people are happy to respond. But once the lead is in, your job is to sell a system!

Message repetition is boring

At the risk of talking myself out of a job, let me say that message repetition might be boring for you, but its what the market wants to hear. So if you develop a good marketing piece, work it! When you develop the next piece, re use the content that worked well.

Long lead times

The sales cycle tends to be long in the Var and ISV business so it is important to use direct mail to warm your market up before they have a need. You can do this on entry in to a market by frequent direct mail. Do not forget to support your direct mail with other marketing communications opportunities. The trick is to mail people sufficiently frequently that they will get a mailing from you whilst in the purchasing cycle. But more than that, it is important to use direct mail, and all forms of marketing communications, to build warm feelings towards your company so that when a prospect recognises a need, they automatically think of your company and yours alone! Your company is the established supplier!

Rules for successful direct mail include:-

• Identify a profitable market and mail everyone in it
• Maximise the features and benefits of your product to that market
• Design appropriate and attractive mailing items
• Design a good reply card and include a research element
• Tick boxes on reply cards are excellent
• Mail your target market often
• When you focus on target market segments you are able to focus your direct mail and marketing communications opportunities to their needs

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Market Segmentation

Market segmentation is the identification of those target market sectors who’s needs can be serviced by your company’s products and services, and from which your company can derive a healthy return.

The advantage of segmenting your market into target market sectors is that the more closely defined your target market, the more you can understand that markets needs and the more efficiently you can communicate and sell to it. Additionally, market segmentation assists product development as you focus on the specific requirements of the chosen target market sectors.

Focusing on target market sectors also protects your company in the long term as competitors are more likely to leave you alone in your chosen sectors.

The question is how can you segment the market and identify those sectors which your company should invest in, and how can you develop and service those market sectors to derive the highest market share?

Broadly speaking, potential computer purchasers fall into the private and public sector and individuals.

The Public sector can be divided into the NHS, The Executive Agencies, Local Government, Housing Associations, Education, Fire, Police and Ambulance etc. Each sector can be sub divided by Principality, Region, or in the case of Local Government, by District or County Council etc.

The Private sector can be divided into manufacturing, services, utilities and retail. Another way of segmenting the private sector may be by industrial or commercial classification.

The way you focus does not matter provided it is the best way for you and your company, with its own unique range of products and services.

As an example, if you look at manufacturing that could be segmented into electronics, metal, wood, plastic, or could be segmented by what they produce such as electronics, automotive, furniture, audio, kitchens, bathrooms etc. In the case of electronics you can further segment the market into; test equipment (military, commercial, consumer), automotive (instruments, engine management, wiring looms), consumer (washing machines, dryers, calculators, games).

Each of those companies could be further segmented by location, the number of employee’s, the turnover, whether they import or export, whether they have a large percentage of indirect costs or whether they use chemical processes or other processes. Each stage further narrows a target market sector and differentiates organisations from other organisations in terms of their needs and how to communicate with them.

To be a market segment worth targeting, the segment must have say, at least 50 companies who should be considering your company’s products and services.

The clever thing to do is to look at all potential target market sectors and all the modules, or features, of your product offering and identify a number of target market sectors which have the same requirements and characteristics. This makes your potential market larger and reduces product development costs.

To identify and match target market sectors with the modules or features of your product, you could draw a matrix table with product modules or features down one side and target markets sectors along the top. The idea is to match market sectors with your products modules or features in order to identify and provide as large a target market sector for your products and services as possible. Of course, you must also bear in mind such things as; can you reach the target market sector, and by what means. If one sector necessitates advertising to reach it, whilst the other sector requires direct mail, it is questionable as to whether they should be regarded as one sector. Even if two markets required direct mail to reach them, would the terminology and benefits in the direct mail piece be the same for two sectors?

A number of companies provide lists of organisations and can select lists according to an amazing number of criteria. In the old days selection was by SIC code but these days the selection criteria can be size of company within a SIC code or group of codes, geographic location, turnover, number of employee’s, IT in use, processes used etc. etc.

As you focus on target market segments you are able to focus your direct mail and marketing communications opportunities to their needs. Imagine you are the purchasing director for a bank, you are a member of the Chartered Institutes of Purchasing & Supply and you sit on various strategy committees. Your main worry is the cost of indirect purchases such as paper, furniture, pens, pencils etc. You are also worried about the administration time taken up with requisitioning and purchasing.

You now receive a letter which starts:

Dear Mr Robinson, As a member of the Chartered Institute of Purchasing & Supply, spending more than £5M a year on indirect purchases, would you like to:

• Reduce the cost of indirect purchases
• Reduce the time it takes to process requisitions
• Reduce the time it takes to consolidate req’s to orders?
• Would like to increase the amount of time available for negotiating strategic relationships with suppliers?

Would you read this letter? Of course you would. This is not junk mail - is it?

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Problems of Voice Mail

Many companies now use voice mail to such an extent that it can be difficult for sales staff to talk to a prospect. The problem is that people use voice mail to screen calls and if they do not know you, or perceive they do not want to talk to you, they will not call you back.

Once you have established telephone contact with a prospect your objective will be to build a good relationship with them so they will be pleased to return your calls in the future. But how can you overcome this initial hurdle?

Once an enquiry has been received by your company you probably follow this up by sending literature or telephoning them. One of the advantages of sending literature is in the fact that if the literature is good, and the covering letter prepares the prospect for your telephone call, they are more likely to want to return your call. The way you follow an enquiry up can have a big influence on your success rate.

As an example, suppose you enquired about my services and I wrote to you enclosing literature and offering you £100 if you accept my telephone call, to talk to me about your needs. Would you receive my call? Yes you would. However, if I sent you poor quality literature, with a dull letter, and neither addressed your needs, you would not.

To get through to prospects it is vitally important that the preliminary information and covering letter are designed to achieve specific objectives. Your literature should be bright and airy to read, full of interest and with lots of benefits. The more specific the literature and letter are to the prospects needs, and the higher the quality of the communication, the more credible your company, products, prices and staff. The higher your credibility, the lower the cost of the selling process and the higher the price and gross profit margin that can be attained.

However good the literature and covering letter are, the problem still remains that the first time your prospect hears your voice, it will be on his voice mail!

The objective of your message must be to get the prospect to call you back and this objective is different from the objective of the call if you get through. Your message must be sufficiently attractive to get the prospect to call you back. Whilst it is difficult to make a call attractive, it is not impossible, and certainly you can avoid some pitfalls.

Strange to say people will either want to talk to you, or not, as the case may be, not based on what you have to say, but on the way that you say it. What is important is the tone of your voice. You may be selling a serious system but if your message sounds serious or dull, prospects are less likely to return your call.

Prospects, like anyone else, are wary of salesmen, especially heavy ones! So the reason for your call must not require commitment of time or effort and must not be in any way perceived as possibly intimidating. The only way you can achieve this (we’re talking prospect perceptions here!) is by specifically stating the opposite.

“Hi - my name's Chris Robinson, the company is Communicating, 01703-282366 and I’m calling to make sure you received the information you requested on our marketing services. Please call me back to let me know you have received the information or to let me know if I can do anything else for you - Thanks, Chris Robinson, Communicating, 01703-282366”. Keep it light and keep it bright.

This message has a number of attributes. Firstly, even if the prospect does not call me back he can plainly hear I’m a nice, friendly, pleasant guy and that my call is perfectly reasonable - therefore when I phone next, he is more likely to receive my call or return it, if I leave another message.

Secondly, I am opening the door to further discussion in a very pleasant and non committal way. Thirdly, because I have repeated my name and number (slowly!) twice, he is more likely to write my number down correctly, first time!

By asking one or two specific (but light and non committal) questions the door is open for the prospect to call me.

If I am not available they can leave a message with my staff, or on my voice mail. Whilst this would seem to miss the objective, and is less than ideal, every interaction helps build credibility and establish a relationship. Some beautiful relationships have started with voice mail messages. Whilst patience is required some big orders have started this way!

Rules for voice mail:

• Do not be put off by voice mail
• Keep the message bright and non committal
• Keep the content and objective simple
• Repeat name and number twice and slowly

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Marketing and Sales - Where is the Balance?

Many companies seem to find the balance between marketing and sales hard to judge.

On the one hand if you had one sales person and invested all the other cost of employing sales staff into marketing communications you could cherry pick the best prospects and deals. On the other hand you could argue you do not need much marketing, what you need is lots of sale staff, on the phone and visiting prospects, bringing orders in. You do not care how much it cost to employ sales staff because their income is mainly commission anyway.

Somewhere between the two is the truth of it. The answer varies from company to company, product to product, market to market and people to people. Another complication can be in the role of marketing managers. Many small Var’s and ISV’s spend as much on marketing staff as they do on marketing communications!

• It helps to recognise a number of characteristics in our type of market.
• The indirect and direct cost of Sales staff is high
• Sales staff are usually good face to face
• Not many sales staff are good at marketing

Apart from the clever bit of marketing strategy and marketing communications planning, the majority of marketing is an administration function.

Sales staff are not necessarily the best people to generate new leads. Even if they are good at generating leads, sales staff are an expensive way of generating them.

The best way of generating leads is to plan the required marketing communications activities for the year, well in advance, and get administration staff to carry out the routine work. What you need is a company procedure for marketing. Of course, the company procedure should include the ability to measure the success of the marketing communications and see what is going on. Such information is vital and allows modifications to the plan if the expected results are not realised. Perhaps you find one particular form of communications is producing better then expected results. You might find certain market sectors are hotter than others. You will want information so you can constantly fine tune the plan to produce the best leads at the lowest cost.

Unless you spend £100k + on marketing communications, or work in a particular market, the role of Marketing Manager is part time. Even if you include strategy, once the strategy is in place you would be struggling to make a full time job of it. Most marketing staff in Var’s and ISV’s have a sales or some other role to play.

A simple guide, but not a rule, is to only employ sales staff if you have more enquiries than you can handle and that if you do not employ a sales person you will not be able to win all the business you might otherwise be able to win. And, that having won that extra business, a profit can be derived from it, after paying out the extra costs of employing that sales person. An exception to this might be where a sales person brings their prospect list with them. However, if you are an ISV and if a sales person can bring leads to your company, it does beg the question ‘How good is your marketing?’ for, clearly, if your marketing was good, you would know all the prospects in the market for your kind of system.

It is difficult to give answers to a question with such a broad perspective but I hope the points raised stimulate thought and help you identify where you can improve your marketing and sales function.

Points for consideration:-

• How much does it cost to generate leads?
• How much does it cost to generate sufficient leads that one sale is made?
• What is the ratio of marketing direct and indirect costs?
• Who produces the most leads; sales or marketing?
• Which leads are the best quality and lowest cost?

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Raising Funds

If you wanted to raise money for a business 10 years ago, it was said you needed a past, a present and a future. If you sought equity funding early in the development of your company you probably had to give up a lot of control and pay a high price.

These days the situation is quite different for a number of reasons. With World interest rates in decline there is a lot of money chasing lower returns. Price/earnings ration’s are going out and if you have a lot of money to invest you will know it is not easy to find good investment opportunities. This means that high risk, high technology investments are more attractive because of the highly publicised possible returns and the glamour attached to them.

Moreover, as the World is changing so quickly, modern high tech start up companies have the added advantage that they have no past to constrain them. An MD of one fairly new ISV actually boasts they have no legacy systems to hold them back or drag them down! So there you have it; 10 years ago you needed a past, present and future in order to have some credibility and these days the last thing you want is a past which, apparently, will hold you back!

There are many companies looking for finance and you must have a sound business plan and strong marketing strategy to win major investment. You must understand the size of your market, what share can be won and what that share is worth over the next few years. A strong gross profit potential is essential.

Business Angels can be found through advertisements, Chambers of Commerce or your local Business Link, Bank or Accountant. Business Angels are more interested in helping companies at the start of a business plan because they do not invest huge sums. Quite often they like the idea of investing in a business which they can identify with, and possibly make a contribution towards, perhaps as a non executive director. Because of the personal nature of a Business Angels involvement, any proposal will have to appeal to their particular interests and not just the figures. People like giving advice and are amazed if others follow it, so finding a Business Angel who can make a positive contribution can be very good.

Strategic investors are those people or companies that are important strategically to your company and welcome some of the protection and insight that being a shareholder can bring. These days, as companies try to reduce the number of suppliers, and the supply chain is shortened, the relationship between supplier and customer is more critical. In such situations there may be much benefit in one company having a financial interest in the other. This can be particularly important where a supplier has shared some of the development costs of a new product or service.

Venture Capitalists are much more interested in a company once it is established. Venture Capitalists like funding growth, which should be less risky. They are more likely to invest in market development than product development. Generally the sums of money will be larger and the time scales will be longer than the previous investment opportunities. Any representation to a Venture Capitalist will be to a higher and more complex standard and will have to appeal to a decision making unit consisting of different interests, skills and criteria. The criteria for judging investment potential will be more analytical than opinion based. Venture Capitalists look for a strong management team which can preclude companies in the early stages of development. They want high gross profit margin potential.

The London Stock Exchange and Alternative Investment Market (AIM) may be more convenient for UK companies, but NASDAQ appears to understand ultra high technology companies, and markets, better. For a traditional company the LSE or AIM would perhaps be first choice. For large sums of money in high technology companies, where the inefficiencies of listing in another country are less of a problem, NASDAQ may be more attractive. Certainly, any company wishing to trade in America or Canada should consider the advantages of listing on NASDAQ.

EASDAQ is a pan European exchange which is not dissimilar in many ways to NASDAQ and should be considered for those companies wishing to have a strong presence in Europe.

The London Stock Exchange recognises it has not met the needs of ultra high technology companies and has launched TechMark which is more suited to the small high tech company.

One disadvantage of a listing is in the administration of a company. Exchanges have different reporting criteria and different frequencies of reporting. Where the reporting criteria is alien, or more frequent, there will be a management overhead to satisfy their requirements. Hopefully Techmark will reduce the administrative burden and provide an exciting base for high technology companies. Who knows, Techmark could become the driver which makes Britain the high technology centre of the World that it once was.

The larger the investment and the more noise your company makes in the market, the more attention you will attract from analysts and pundits. The cost of managing communications should be added to the administrative overhead. Markets can be made or broken by opinion, and communications must be managed by an experienced team.

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Segmentation and Positioning

Get big, get niche or get out are words we have all heard. Many ISV’s and Var’s went niche but the market is still evolving and so how can your marketing develop and evolve to meet the challenge of the future?

Niche markets fragment further over time and it is understanding this process, in your market, that enables you to further develop your product, your market, your product proposition and your marketing communications.

Take the motorcycle industry. When I was a lad there were commuter bikes, tourers, racers, scramblers and trials machines. These days there are many more segments and each of these segments is further sub divided. Custom bikes are segmented into Harley Davidsons, Harley Davidson lookalikes, Japanese Custom bikes (4 cylinders), European custom bikes, high performance custom bikes, street racers and commuter custom bikes. You could further segment the market by chain, shaft or belt drive. And so it goes on.

One of the advantages of segmenting the market is in the efficiency you can communicate with that market. If you sell accounting systems to Solicitors you could segment Practices by the number of fees earners, the number of branches, the number of office accounts, the matter types, geographic area, etc. Thus having chosen the segments you wish to target you can now develop the message for that particular segment. Your message should be as specific to the chosen sector as possible so that your product proposition is stronger than your competitors and your company gains a reputation for being THE supplier in that sector, with the best product, best service and best price.

Unique selling points (USP’s) are those attributes of your offering which are unique to your company, product or service. Your company USP’s should be developed and matched to meet the needs of your target market sector. The problem today is that is difficult to continuously develop and evolve USP’s. You need more than just USP’s to differentiate your company, products and services.

Positioning is another approach to identifying your company, products and services in a complex market. Positioning narrows and strengthens the appeal of your offering, for the chosen target market sector. Provided the net market size, and your share of it, is sufficient to provide strategic growth, the narrower the target market you communicate with the fewer the enquiries you will generate but the enquiries generated will be higher quality. This will result in focused product development, more efficient marketing communications, increased credibility and an easier sale at higher gross profit margins.

Focused product development will result in more benefits for your chosen sector which should lead to a further developed competitive advantage. This competitive advantage will strengthen your position and lead to further sales of standard product.

The car industry was the first to use product positioning. BMW’s are positioned as a drivers car, Volvo’s are positioned as the safest cars, Mercedes as prestige cars. You can have a primary market position and a secondary position. Volvo’s secondary position varies. It was performance but is currently design. Porches secondary position is reliability and durability. Thus Volvo combine safety with performance, Porche performance with reliability and durability. Combinations which manufacturers hope will appeal to their chosen sectors like no other.

You can have a brand position with product sub divisions. Thus Volvo produce the safest cars whilst some models are sub positioned for performance, others for design. If I said ‘Think of a high performance estate car’, the Volvo T5 would probably spring to mind.

You can position your company, and or your product, by looking at where your strengths lie and by looking at the market segments which are the most attractive to you. From this you can create your position statements and strong position statements are a key to success.

One Apple Mac dealer I worked for positioned itself as ‘The friendly Apple Mac dealer’ with the secondary position of technical competence. They had years of experience and knew which version of an application would run on which version of the operating system, hard ware, chip set and which type of printer was required and how it should be connected etc, etc. All I had to do, as the marketing man, was find frustrated Apple Mac users! Not difficult! Turnover doubled in my first year.

Thus positioning led to defined marketing communications objectives which were easy to achieve at low cost. And this is the key to success for small to medium ISV’s and Var’s. In this continuously changing World you have to look at the evolving markets you wish to service and think how you are going to develop your products and services to meet those markets evolving requirements. You must then use creative and imaginative marketing communications to establish mind share and keep your company ahead of the competition. From mind share will come market share.

Segment your market into niches

• Match product features to the chosen niches
• Match the total product offering to your niches
• Carefully position your company and products
• Create strong positioning statements
• Develop creative and strong marketing communications
• Communicate regularly with your market

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Marketing and Services

Var’s and ISV’s are moving towards services in order to compensate for poor margins on products and the question is how can services be marketed in an innovative, effective and attractive way.

Products are tangible, they can be photographed and brochures and advertisements can be compiled using photo’s and a description or specification of the product. The description might include a list of features and benefits and if pricing is not published in the brochure or advertisement, then pricing information is only a phone call away.

Services are intangible, they are produced and consumed at the same time, there is nothing to photograph and services provided are usually negotiated on an individual basis. Pricing is negotiated according to a number of characteristics such as the skill and availability of staff, the service level and duration of the services, how much money is on the table and how demanding the customer is likely to be.

Profitability from services is a question of what services are you going to offer and to whom are you going to offer them. The higher the expertise and the more vital the systems for which the services are to be provided, the higher the potential margins. You may need to undertake research in order to identify the most profitable markets for your services or to identify which services you should, in fact, provide.

The place to start is with existing customers, and the question is ‘What services do our customers want?’ Herein lies a problem in that the majority of Var’s and dealers are so used to having to negotiate the best possible price in order to get product sales that their perception is that customers either have no money, or if they have, they will not spend it. But when it comes to services the external pressures on price are not as severe and customers will pay for services, provided the services keep their systems running reliably.

Many Var’s and Dealers find this shift in pricing policy difficult to cope with. Thus when a customer phones with a problem Support staff assume the customer wants the cheapest fix and do not even bother to offer better alternatives such as upgrades, consultancy, training etc.

He who pays the lowest price will get the poorest service and both the customer and the dealer end up by not thinking much of each other. Where the shift in pricing policy can be achieved it is possible to make good profits from services, even from existing customers. Moreover, once the customer is used to getting quality solutions, and paying for them, they will be happier customers and may even become advocates!

It is of vital importance to differentiate between products and services as early as possible in the sales cycle, so the customer has a clear understanding. Some customer re education is inevitable.

The transition to marketing services is not so difficult. The key to success is to package the services in such away that you can communicate them in more or less the same way as a product. The way to package a service will depend on what services you offer and to whom you offer them. A brochure describing your company, the market you service and their problems, and the services you offer, (not necessarily in that order) can look much like a product brochure. A brochure should be an inviting glossy that people will pick up and read and if it identifies with the problems the reader has, they will respond.

Having gained new leads for the services you offer, no doubt the services will be tailored to meet the customers exact needs. So the brochure or advertisement describing the offer has achieved the aim of generating leads, even if you never actually sell what you offer!

Direct mail campaigns, telephone canvassing campaigns or advertisements, will target the markets you wish to service, will identify with their particular problems and will offer a solution. Indirect offers are just as valid so seminars and open days have their place as do press releases etc.

Most services can be packaged and offered in a similar way as products and as time goes by you will perfect an approach which is most suited to your services and the markets you work in. The success of any campaign is dependant on accurately targeting your market and having a quality offer for which there is a strong demand. Provided those two criteria are met, good quality communications will follow.

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Revenue Streams

For the modern company to prosper it is important to retain as many customers as possible. Retaining customers is cheaper than finding new customers and happy customers will usually pay a premium price if they are satisfied with the service they receive. Customers that are really pleased with the service you provide become advocates and these customers make good reference sites and provide referrals.

Often suppliers think that customers are more price conscious than they actually are. If you think your customers are price conscious, you need to test your assumption and ask yourself how much money is on the table for the products and services you provide.

One of the most common reasons for unhappy customers is because the supplier thinks the customer is more price conscious than they actually are and many problems are logged as support problems because it is perceived that that is the only way of resolving them.

Often customers do not realise that alternative solutions exist. If they did realise other solutions existed, they might be prepared to invest in upgrading the hardware, software, operating system or networking necessary to solve problems at the route source.

All potential sources of revenue should be reviewed for each customer and your company’s strategy should ensure that revenue streams are maximised in the future. The following list of revenue streams is not exhaustive and others should be added:-

• New sales
• New product developments
• Support and maintenance contracts
• Consultancy
• Training
• Bespoke work
• Product development
• Development work done for one user could be sold to other users
• Create upgrade path to maximise revenues from existing users

Many customers actually use Support to solve problems which should be resolved by training or consultancy. The sorts of problems which require training or consultancy are not easily resolved by Support and this leads to Customer perception problems whereby they believe the Support service they are receiving is not up to standard.

The best way to avoid this kind of problem is to recognise its potential prior to it arising. Once the problem has arisen it is difficult to resolve and will almost certainly require management involvement, whereas the problem can be avoided by educating the Customer as early as possible in the sales cycle as to the services available and the exact role of Support. All quotes and pre and post sales correspondence and quotes should provide a budgetary figure for ongoing services, including consultancy and training.

As soon as support problems arise which should be resolved by other means, the support department should notify the account manager or sales person. Prompt action and an explanation by the account manager or sales person should forestall the problems which can only cause a deterioration in relationship if not resolved sooner rather than later.

Points to remember:-

• Recognise non support problems as soon as they arise
• Deal with non support problems promptly
• Maximise income by selling hardware or services to resolve problems
• Make sure money spent results in improved performance or other benefits
• Do not assume the customer has no money
• Provided the customer gets improved performance they are usually happy to pay
• Make it easier for the customer to have you resolve the problems than for your competitor to resolve them.

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The Telephone Preference Service

It is now possible to register companies, partnerships and other organisations with the Telephone Preference Service. The original idea of the Telephone Preference Service was that people could register in order to prevent unsolicited sales calls from nuisance companies and bogus organisations.

The service has now expanded to companies and organisations. The following bulletin is designed to give helpful and practical comments to clients of Communicating who use the telephone in their business.

Please be clear - This bulletin does not give legal advice.

The first thing to point out is that the TPS website Home Page states their objective is to prevent “unsolicited sales and marketing telephone calls”. List cleaning and research calls appear not to fall within the TPS remit.

Secondly, what does unsolicited mean? If you network and collect cards and referrals presumably those providing their cards do not object to being contacted. Even if the person registers with the TPS, the fact they have given out their card while networking means they have given their permission to be contacted and this takes precedence over the TPS registration provided you do not contact them once that permission has been withdrawn.

Thirdly, if a person belongs to an organisation such as a Chamber of Commerce, and publishes the fact in their journal, are they not giving permission to be contacted by other local organisations? Why else would they wish to join and have their details published?

Fourthly, if you have had previous contact with a company, and the company has not asked you not to contact them again, then they have given their permission for you to contact them.

Fifthly, for those of us who network, when giving a referral, the idea is to inform the person whose name you are giving, and this principle should be adhered to where possible.

Possible ways forward

If someone takes exception to being called, they usually state their objection right at the start of the call. In this case you should apologise for inconveniencing them and terminate the call. Do not divulge further information (such as your company name) as this may antagonise the situation further.

It may be best to make outgoing calls from a telephone with the call line identification turned off.

Always work to a script so in the event of a complaint you can evidence the content of the call. The script should include a sentence towards the end of the call that asks if it would be acceptable for you to contact the company, by phone, from time to time. Calls should be based on cleaning your list and asking simple research questions such as “Are you experiencing any problems with your….”, etc.

Once you have established dialogue with someone, you can be more direct in your approach, questioning and offer.

Why not let Communicating write a company policy and procedure for you, so you can evidence a policy, procedure and script.

In Summary

It will be interesting to see how the TPS develop their service and define the calls they feel fall within their remit. Provided calls made are local, not nuisance calls and the caller is polite and terminates unwanted calls (and updates the database), it is difficult to see what interest the TPS could have.

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