Category Archives: Sales

Rolling Ten Letter

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Rolling Ten Letter

“Breakthroughs come from an instinctive judgment of what customers might want if they knew to think about it.” –Andrew Grove, Intel

Many people consider marketing to be promotion, advertising and all the selling techniques used to get someone to buy a product. However marketing is much more. The Rolling Ten Letter is a systematic way of marketing to specific marketing targets.

It’s important to understand that marketing is not the same thing as advertising, selling or promoting. Those are separate tasks. Advertising, selling and promoting are essentially the implementation of your marketing plan. That is, once you have identified your customer prospects and determined how best to reach and serve them, you then have to go out and make it happen.

A marketing approach to business begins with the customer’s needs and involves designing the entire business around fulfilling those needs through benefits.

One great need of small business managers is to understand and develop marketing programs for their products and services. Long term small business success depends on the ability to maintain a strong body of satisfied customers while continually increasing this body with new customers. Modern marketing programs build around the marketing concept, which directs managers to focus their efforts on identifying, satisfying, and following up the customer’s needs – all at a profit.

The Rolling 10 as a Marketing PROGRAM

What is the Rolling 10?

It is a systematic approach to contacting a specific number of prospects, during predetermined timeframes and to follow-up effectively.

The Rolling 10 is based on the fact that every prospect needs to be contacted at least 4-8 times to establish your name recognition and to possibly make a sale.

There are two ways to construct a rolling 10 program.

Option 1 –Letters/Marketing Pieces with Phone Follow-up

Step 1 – Identify best prospects for your product or service.

Step 2 – Compile or buy a list that includes complete company data including the decision makers name.

Step 3 – Write 3-4 letters or marketing pieces that stress the key BENEFITS that a prospect can expect to receive from doing business with you.

Step 4 – Determine time frames:

That you can comfortably support for sending out 10 letters to prospects.  A week is a timeframe that is most used.

That you can comfortably make phone follow-up.  A week between letters and follow-up is a time frame that is most used.

That you will use to send each consecutive letter.  4-6 weeks is a time frame commonly used.

Step 5 – Begin sending letters at the rate of 10 per week.

Step 6 – One week after sending first letters begin making phone calls to follow-up on these letters.

The process then becomes automatic.  Send ten letters and follow-up by phone on the letters that were sent the prior week.  You will have ten NEW phone calls to make every week to NEW prospects and follow-up phone calls to prospects who might roll-over for some reason from week to another.

Step 7 – Send additional 2nd, 3rd, and 4th letters or marketing pieces and repeat the follow-up process.

If you have contacted a prospect 4-8 times (a combination of letters and phone) and they have not responded or become a customer drop them from you list.

What is it you’re selling?

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What is it you’re selling?

One of the struggles that entrepreneurs and many others seem to have is the answer to the simple question, “What is it you’re selling?”

In a major marketing text, McGraw-Hill Publications starts a chapter out with these telling words:

I don’t know who you are.
I don’t know your company.
I don’t know your company’s product.
I don’t know what your company stands for.
I don’t know your company’s customers.
I don’t know your company’s record.
I don’t know your company’s reputation.
Now–what was it you wanted to sell me?

The reality is that you are selling yourself first, followed by your service or product, followed by your company or organization.

As far as selling yourself, the cornerstone is that people must like you to purchase from you. It is very unlikely that, given the choice between buying from someone they like and someone they don’t, a buyer will select the person they don’t like. The key
is to get the buyer to like you, and that is done by finding out about them, as quickly as you can. Your buyers are just like you–complex, interesting, hardworking, personable and friendly. They are worth getting to know!

Harvey MacKay’s book “Swim With The Sharks Without Being Eaten Alive” provides some great examples of how an individual can overcome many perceived obstacles and learn a great deal about a potential or current customer. This book is an excellent
investment that you should make at any stage of your life.

The second area to tackle is to define the product that you are selling. It might be you, as a job seeker, a person wanting a promotion within an organization, a consultant selling services, or someone marketing a service or a product. Ask yourself this
question when defining your offering: What problem do I solve by providing this good or service? You may have to fine-tune your offering as you discover the various kinds of problems buyers are seeking to solve.

Focus on benefits when you sell. What benefit will you bring to the buyer when he or she has purchased your service, hired you, promoted you, or is using your product? In the competitive marketplace that we all operate in, you can no longer afford to
say, “Here I am, here is my offering, take it or leave it.”

A third method in this process of defining your offering is to take a somewhat more radical approach. Tony Robbins, the great motivator, understands that “we will do far more to avoid pain than we will to gain pleasure.” Give some thought to how your
offering will help the decision-maker to avoid pain. Do some simple research to determine what kind of pain your potential buyers have, and then work to clarify what you offer to remove the pain both now and in the future.

A third area to focus is on your personal reputation. This comes from having good work habits, dressing the part, returning telephone calls, being on time (if not early) and prepared for all meetings, being professional with all that you encounter, and by
going the extra mile for your customers, internal or external.

Each of us recognizes the reputation that large, well-known firms have. Take an organization that you respect and write down the specific things that you enjoy about that reputation. Ask yourself if there isn’t something that you can do to make your own firm a little more like the firm you admire. Is there a policy that they have that might be adopted by your company? Is the quality they have superior, and if so, what can you do to upgrade or change the quality that your organization provides?

It has been argued that one individual cannot change the reputation of a company. That argument is countered by the fact that when you are communicating with a customer, you are the company, and by acting as if that customer could solely decide your professional fate, you can change or maintain a reputation that an organization has based on how you deal with that customer.

Increasing sales has been determined in a national poll to be the number one concern of business managers and business owners all across America. Knocking on doors or making telephone calls may get you an appointment, but as you can see, there is a lot
more to answering “What is it you’re selling?” How ready are you to answer the eight statements made at the beginning of this article?

Advertising and Selling mix depends on Channels

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Advertising and Selling mix depends on Channels

It is axiomatic that as channels lengthen, the need for advertising to the end user increases and personal selling effort declines. Thus, long channels and heavier advertising effort are  inseparable. Or, it may be said that since product sales effort (or quality of communication) decreases as the channel lengthens, the firm’s need for direct communication with the end user increases accordingly, for the personal sales effort is diluted by local and personal economic interests and distractions.

 

Decisions regarding channels, sales talents required, and advertising effort are dependent on the requirements and demands of the purchaser for technical information, display and merchandising aid, and the amount of money involved in the typical transaction. The results are these, simply stated: highly complex and big ticket items are sold (and serviced) directly by a sales engineer while standard low priced goods purchased in small quantities go through longer channels and are “sold” by a good-will builder, an order-taker. The selling is actually “preselling” which is done by advertising.

 

Planning the Persuasion System-The Sales Promotion Mix

The sales promotion mix should be based on the following considerations:

 

Be realistic in terms of purposes to be achieved.

Respect the effectiveness of advertising, selling, and display separately and in coordination.

Respect all parties of interest, including middlemen and salesmen.

Involve all marketing management personnel, permitting early participation.

Permit a general plan which can be tentatively approved before final details and cost are determined.

Permit individual and group judgment to be employed in conjunction with quantitative techniques.

 

The following steps are needed to create a sales promotional distribution effort. This pattern can be based as much on judgment as experience will permit and can utilize modern models and systems methods as desired.

 

1. Analyze and determine customer attitudes, company and product “image.” Consider company age, stage of product life cycle, channels of distribution.

 

2. Review customer buying motives, desires of middlemen, salesmen, all parties involved, as customer-users or participants.

 

3. Establish resulting objectives, purposes of “persuasion system,” and parties to be influenced, including middlemen.

 

4. Summarize attitudes to be developed or created by the program or system (with no indication at this point as to which promotional medium is expected to achieve each purpose).

 

5. Rate the product as to its technical complexity and amount of typical sale; determine approximate balance of advertising, selling, and display required.

 

6. Outline the purposes of advertising (and possibly display) in terms of objectives to be achieved by each medium for each participant or group.

 

7. Outline the purposes of personal selling in terms of objectives to be achieved by each salesman (or type of salesman).

 

8. Draw up general recommendations, including probable effectiveness of advertising, selling, display.

 

9. Develop reasonably reliable estimates of costs of advertising, by types, media, time period, purpose.

 

10. Same, personal selling. Define the salesman’s job.

 

11. Same, display.

 

12. Review marketing department organization, in terms of its appropriateness for general plan.

 

13. Review general program with participants and with parties influencing budget.

 

14. Draw up program in detail, present it for final general approval.

 

During the training period, it would be an excellent idea to see that all salesmen are grounded in the details and objectives of the marketing plan. Additionally, the role of the salesman in making the plan work should be emphasized.

Specifics For Evaluating Advertising

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Specifics For Evaluating Advertising

If you don’t have a plan that includes specifics for evaluating advertising, you might as well put your money in a Ponzi scheme.

Check store traffic

An important function of advertising is to build store traffic which results in purchases of items that are not advertised. Pilot studies show, for example, that many customers who are brought to the store by an ad for a blouse also bought a handbag. Some bought the bag in addition to the blouse, others instead of the blouse.

 

You may be able to use a local college or high school distributive education class to check store traffic. Class members could interview customers as they leave the store to determine: 1. which advertised items they bought, 2. what other items they bought, and 3. what they shopped for but did not buy.

 

Testing Attitude Advertising

When advertising is spread out over a selling season or several seasons, part of the measurement job is keeping records. Your aim is comparing records of ads and sales for extended time.

 

An easy way to set up a file is by marking the date of the run on tear sheets of newspaper ads (many radio stations now provide “radio tear sheets”, too), log reports of radio and television ads, and copies of direct mail ads. The file may be broken down into monthly quarterly, or semiannual blocks. By recording the sales of the advertised items on each ad or log, you can make comparisons.

 

In attitude (or image-building) advertising, the individual ads are building blocks, so to speak, which make up your advertising over a selling season. The problem is trying to measure each ad and the effects of all of the ads taken together.

 

One approach is making your comparisons on a weekly basis. If you run an ad, for example, each week, at the end of the first week after the ad appears or is broadcast, compare that week’s sales with sales for the same week a year ago. At the end of the second week, compare your sales with those of the end of the first week as week as year-ago figures.

For web marketing using a tool like Google Analytics is, in my opinion, the best way. If you also run “internet specials”, your sales volume at a specific price can be evaluated. These evaluations need to be done on a weekly basis.

Factors Affecting Sales

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Factors Affecting Sales

After categories have been selected and current sales divided among them, the various factors that can affect sales in each category must be considered. The factors affecting sales could be either internal or external. Internal factors are those that you can influence. External factors are those that affect the market served by your business, but are generally beyond your control.

 

Internal Factors

The following are typical internal factors that could influence your sales forecast:

  • Promotional plans
  • Expansion plans
  • Capacity restrictions
  • New product introductions
  • Product cancellations
  • Sales force changes
  • Pricing policy
  • Profit expectations
  • Market expansion to new customers or territories

 External Factors

Among the external factors that must be considered are the following:

  •  Business trends
  • Government policies
  • Inflation
  • Changes in population characteristics
  • Economic fortunes of customers
  • Changes in buying habits
  • Competitive pressures

Selling

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Selling

Whether you operate a factory, wholesale outlet, retail store, service shop, or are a contractor, selling will be required for success. No matter how good your product is, no matter what consumers think of it, you must sell to survive.

 

Direct selling methods are through personal sales efforts, advertising and, for many businesses, display – including the packaging and styling of the product itself – in windows, in the establishment, or both. Establishing a good reputation with the general public through courtesy and special services is an indirect method of selling. While the latter should never be neglected, this brief discussion will be confined to direct selling methods.

 

To establish your business on a firm footing requires a great deal of aggressive personal selling. You may have established competition to overcome. Or, if your idea is new with little or no competition, you have the extra problem of convincing people of the value of the new idea. Personal selling work is almost always necessary to accomplish this. If you are not a good salesperson, seek an employee or associate who is.

 

A second way to build sales is by advertising. This may be done through newspapers, shopping papers, the yellow pages section of the telephone directory, and other published periodicals; radio and television; handbills, and direct mail. The media you select, as well as the message and style of presentation, will depend upon the particular customers you wish to reach. Plan and prepare advertising carefully, or it will be ineffective. Most media will be able to describe the characteristics of their audience (readers, listeners, etc.). Since your initial planning described the characteristics of your potential customers, you want to match these characteristics with the media audience. If you are selling expensive jewelry, don’t advertise in high school newspapers. If you repair bicycles, you probably should.

 

Advertising can be very expensive. It is wise to place a limit upon an amount to spend, then stay within that limit. To help you in determining how much to spend, study the operating ratios of similar businesses. Media advertising salespeople will help you plan and even prepare advertisements for you. Be sure to tell them your budget limitations.

 

A third method of stimulating sales is effective displays both in your place of business and outside it. If you have had no previous experience in display work, you will want to study the subject or turn the task over to someone else. Observe displays of other businesses and read books, trade magazines, and the literature supplied by equipment manufacturers. It may be wise to hire a display expert for your opening display and special events, or you may obtain the services of one on a part-time basis. Much depends on your type of business and what it requires.

 

The proper amount and types of selling effort to use vary from business to business and from owner to owner. Some businesses prosper with low-key sales efforts. Others, like the used-car lots, thrive on aggressive, hoop-la promotions. In any event, the importance of effective selling cannot be over-emphasized.

 

On the other hand, don’t lose sight of your major objective – to make a profit. Anyone can produce a large sales volume selling dollar bills for ninety cents. But that won’t last long. So keep control of your costs, and price your product carefully.

Pricing

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Pricing

Much of your success in business will depend on how you price your goods and services. If your prices are too low, you will not cover expenses; too high and you will lose sales volume. In both cases, you will not make a profit.

 

Before opening your business you must decide upon the general price level you expect to maintain. Will you cater to people buying in the high, medium, or low price range? Your choice of location, appearance of your establishment, quality of goods handled, and services to be offered will all depend on the customers you hope to attract, and so will your prices.

 

After establishing this general price level, you are ready to price individual items. In general, the price of an item must cover the cost of the item, all other costs, plus a profit. Thus, you will have to markup the item by a certain amount to cover costs and earn a profit. In a business that sells few items, total costs can easily be allocated to each item and a markup quickly determined. With a variety of items, allocating costs and determining markup may require an accountant. In retail operations, goods are often marked up by 50 to 100 percent or more just to earn a 5% to 10% profit!

 

Let us work through a markup example. Suppose your company sells one product, Product A. The supplier sells Product A to you for $5.00 each. You and your accountant determine the costs entailed in selling Product A are $4.00 per item, and you want a $1 per item profit. What is your markup? Well, the selling price is: $5 plus $4 plus $1 or $10; the markup therefore is $5. As a percentage, it is 100% ($5 markup = $5 cost of the item). So you have to markup Product A by 100% to make a 10% profit!

 

Many small firms are interested in knowing what industry markup norms are for various products. Wholesalers, distributors, trade associations and business research companies publish a huge variety of such ratios and business statistics. They are useful as guidelines. Another ratio (in addition to the markup percentage) important to small firms is the Gross Margin Percentage (GMP).

 

The GMP is similar to your markup percentage but whereas markup refers to the percent above the cost to you of each item that you must set the selling price in order to cover all other costs and earn profits, the GMP shows the relationship between sales revenues minus the cost of the item, which is your gross margin, and your sales revenues. What the GMP is telling you is that your markup bears a certain relationship to your sales revenues. The markup percentage and the GMP are essentially the same formula, with the markup referring to individual item pricing and GMP referring to the item prices times the number of items sold (volume).

 

Perhaps an example will clarify the point. Your firm sells Product Z. It costs you $.70 each and you decide to sell it for $1 each to cover costs and profit. Your markup is 43%. Now let up say you sold 10,000 Product Z’s Iast month thus producing $10,000 in revenues. Your cost to purchase Product Z was $7000; your gross margin was $3,000 (revenues minus cost of goods sold). This is also your gross markup for the month’s volume. Your GMP would be 30% . Both of these percentages use the same basic numbers, differing only in division. Both are used to establish a pricing system. And both are published and can be used as guidelines for small firms starting out. Often managers determine what Gross Margin Percentage they will need to earn a profit and simply go to a published Markup Table to find the percentage markup that correlates with that margin requirement.

 

While this discussion of pricing may appear, in some respects, to be directed only to the pricing of retail merchandise it can be applied to other types of businesses as well. For services the markup must cover selling and administrative costs in addition to the direct cost of performing a particular service. If you are manufacturing a product, the costs of direct labor, materials and supplies, parts purchased from other concerns, special tools and equipment, plant overhead, selling and administrative expenses must be carefully estimated. To compute a cost per unit requires an estimate of the number of units you plan to produce. Before your factory becomes too large it would be wise to consult an accountant about a cost accounting system.

 

Not all items are marked up by the average markup. Luxury articles will take more, staples less. For instance, increased sales volume from a lower-than-average markup on a certain item – a “loss leader” – may bring a higher gross profit unless the price is lowered too much. Then the resulting increase in sales will not raise the total gross profit enough to compensate for the low price.

 

Sometimes you may wish to sell a certain item or service at a lower markup in order to increase store traffic with the hope of increasing sales of regularly priced merchandise or generating a large number of new service contracts. Competitors’ prices will also govern your prices. You cannot sell a product if your competitor is greatly underselling you. These and other reasons may cause you to vary your markup among items and services. There is no magic formula that will work on every product or every service all of the time. But you should keep in mind the overall average markup which you need to make a profit.