Total Pageviews

August 29, 2010

More Marketing concepts - Part I

Silent sales person: The sales person is the most important link in the sales process. He is the interface between the company and the customers. In many cases the product’s unit value is very less and individual salesman can’t be present at the POP (Point-of-Purchase). The role of the sales person is thus taken over by the product packaging. As the packaging can’t talk (in most of the cases) it is referred to as the silent salesman. In retail shops being picked up and examined by the customer is the final frontier. In that split second packaging has to seduce the customer and shout ‘PICK ME UP”. If the customer takes the product in his hand half the battle is won. That is why packaging is an art. The display has to be bright and shining. It should have interesting copy and enticing visuals. All in all packaging can play a very vital role on making the product reach the shopping basket of the customer.

One innovative promotional display that comes to mind was seen at Kids Kemp in Bangalore. A Shopper preoccupied with thoughts is strolling down the aisle. He notices the Pepsi display. He is not overtly interested. But when he is within five feet of the display a can (not a bottle) jumps out of the display (micro-processor controlled). Taken by surprise the shopper catches the Pepsi can. He looks around - there is no one he can approach. He can’t push the can back into the machine. Not knowing what to do he is left with two options - to keep the can in his shopping basket or consume it. At the payment counter much to his delight he is told that the Pepsi can is a new flavor of Pepsi and that it is complimentary. Talk about enticing and effective promotional displays!

Iceberg principle: Observation that in many (if not most) cases only a very small amount or the tip of information is available or visible about a situation or phenomenon, whereas the 'real' information or bulk of data is either unavailable or hidden. The principle gets its name from the fact that only about 1/10th of an iceberg's mass is seen outside while about 9/10th of it is unseen, deep down in water. Used in the control function of management the take away is - what is visible is important and warrants your attention. But what is not visible is more important and is very dangerous to ignore the invisible part of the situation, or problem.

Looking at the trees and missing the forests: This term is used when a person is overly concerned with details of a particular issue or problem, not understanding the whole situation. When expressing that a person is focusing too much on specific problems and is missing the point that is very important.

Pounding a square peg in a round hole: meaning that one is trying to do something that does not "fit" or is inappropriate to a situation. It is making a person who liked being outdoors to work an office is  like "pounding a square peg in a round hole". In many cases we try to adjust people and situations to the jobs rather than making jobs and situations suitable for people. In this case the use of "pound "rather than "put" suggests a more vigorous attempt to do something that, at best is not a very good solution to a situation, and more likely is doomed to failure or will never work.

Efficiency and effectiveness: One of the things that is always asked. What is the difference between efficiency and effectiveness? Efficiency is the art of doing things right and effectiveness is the art of doing right things. Let me clarify. When a student comes to the class in time, listens attentively, takes the notes, does not make noise and leaves after the teacher leaves we call him as being efficient. That is he has done the things right. But if the student does all these things and asks questions, intellectually challenges himself and the teacher, internalizes the concepts and asks himself the question” how is this going to be helpful in real life?”, we call that particular student as being effective that is he is doing the right things.

August 27, 2010

Sales myths busted - Part - III

15. Marketing is replacing selling. Selling is part of the marketing process. Sometimes, professionals use the term 'marketing' instead of selling, believing it is more acceptable. There is also a mistaken belief that marketing can replace selling and eliminate the need for direct, one-to-one customer contact. This may be true for some products or services where the salesperson acts simply as an order taker. For most products and services, however, selling is a necessary and valuable part of the marketing strategy.

16. All successful salespeople are hard closers. Surveys show that today's top salespeople seldom spend much time on closing. Instead they focus on finding customer needs, demonstrating benefits and asking for customer feedback. The professional salesperson, after making sure his client has all the information needed to make a decision, simply asks if they would like to take the next step.

17. Product knowledge is what separates the mediocre salesperson from the outstanding salesperson. Product knowledge is extremely important in professional selling. But product knowledge is isolated information, which has really no value to anyone. Facts, data, and statistics about products or services do not create sales. However, what really is the key to most sales is the proper understanding of the problems of a prospect or a specific business. To understand a business problem is to properly analyze and then to provide solutions to the customer is the essence of professional sales. Product knowledge is only a small part of this process.

18. A career in sales is usually near the bottom in terms of status and income. Selling is the highest single paid career in the world. Furthermore, many CEO's and other executives started in sales, which has always been one of the fastest tracks to upper management.

19. Women are only effective in certain types of sales positions. More and more companies are asking to interview women candidates as well as men in such fields as industrial equipment, chemicals, construction, etc. Success in sales has nothing to do with gender but everything to do with that person's ability to reach well defined goals within a certain time frame. We are seeing more and more women entering the selling profession as more awareness is created about this dynamic profession.

20. The most effective salespeople are more extroverted than introverted. Actually, high performance salespeople are quite analytical and the majority of studies indicated that the top salespeople lean more to the introverted side than the extroverted side. For example, in the strategic consultative sales process, a winning salesperson has to pick apart a complex problem to come up with a workable solution often in a very competitive environment. The emphasis here is on thinking and problem solving skills versus being a real socially inclined person. The art of selling is the art of problem solving.

Sales myths busted - Part - II

8. Successful salespeople use a lot of tricks and gimmicks. Tricks and gimmicks are the tools of the old style salesperson. Today's buyers are too sophisticated to put up with these tactics. Tricks and gimmicks may still be used by some salespeople in some industries but these techniques are not the skills used by today's sales professional.

9. Successful salespeople are aggressive. The best salespeople are not aggressive, by the usual definition of that word. They are self motivated and enthusiastic. The irritating pushiness that the public perceives as part of buying is the trademark of the un trained, unprofessional salesperson. Top sales people in any field are sincere, knowledgeable, considerate, helpful and empathetic.

10. Great salespeople are born, not made. Great salespeople are not born, they are trained. Desire, training, practice and experience will enable anyone to reach a successful level of sales performance.

11. Selling is something you do to people. Selling is something you do with people, not something you do to them. A sales presentation is conversational in style. It should be comfortable, not confronting. The client needs information and looks to the salesperson for guidance and advice. The salesperson is helpful and supportive as the client considers the presentation and makes a decision.

12. Selling a professional service requires a compromise in ethics. The salesperson is motivated only by a desire to satisfy their customer's needs and wants. Professionals always place their client's best interests ahead of their own. Trust is essential to a successful sales relationship and a professional never compromises his/her integrity to achieve success.

13. The public does not trust or like salespeople. People do not like or trust poorly trained, poorly informed, ineffective salespeople. They often share stories about unethical and pushy sales service, but  also praise the experience of dealing with their stock broker, real estate agent, or car dealer. They say, "He's different, you can trust him." Today's consumer wants sales service they can trust and rely on, and they will remain loyal to salespeople who provide it.

14. To be effective in sales you must adopt a new personality. Not really true. The more open the sales person is with the client, the more effective he will be. The more he shares his values, feelings and experiences with his clients the more comfortable they become.

Sales myths busted - Part - I

1. Buyers are liars. Do buyers mislead salespeople? Many a times. This usually occurs when the sales person has failed to earn that person's trust. Gaining someone's trust means not pushing them into making a buying decision. It means focusing the sales person’s attention on customer’s situation rather than trying to close the sale.

2. Anyone can be persuaded to buy. This may be true of impulse purchases but in today's business world, buyers are more savvy than ever before. The real key is to determine whether or not the person or company the sales person is speaking has a genuine need for the product or service. If they do not, then the best strategy is to move on to someone who does need and want that particular solution.

3. Price is the primary reason people make a buying decision. Price is important in the sales process but it is not usually the primary reason, unless, of course, if the sales person fails to establish the value of his products or services. And If he does not clearly show how his solution will help the customer, price will become the default decision-making criteria.

4. It's critical to close the sale as soon as possible. Yes, it's important to move people towards a buying decision and it is important to gain commitments along the way. It is important to include a call to action in the proposals and conversations. But, it is also important to recognize that not every sales decision will be made quickly. Decisions can be delayed for a number of reasons, and in certain situations, trying to rush the customer to a commitment will cost the sale.

5. Close the deal at any price. Too many people feel they have to close every deal, even if it does not make good business sense. Many sales people will accept a sale that has virtually no margin. Many sales people match the prices of the competitors in order to prevent people from going to their competition. However, this seldom creates loyalty and only conditions that customer to continue asking for a better price. If the sales person are not making the desired gross profit on a particular sale, then he needs to consider whether it makes good business to accept it.

6. Do whatever it takes to get the sale. Manipulative, aggressive, high-pressure sales tactics work. But, they don't create loyal customers and clients. The sales person may win the sale, but in the long run, the customer is lost.

7. A salesperson can sell something that is not wanted: People buy to satisfy needs and wants. A salesperson may help a customer to identify their needs and wants but customers only buy when they believe the product or service they are offered will satisfy them. Selling is not about seducing or coercing the client into buying something for which they have no use or desire.

August 26, 2010

The Fine art of selling

Elmer wheeler the sales guru had said “Don’t sell the steak sell the sizzle” The steak in any decent restaurant would cost a bomb. A steak is a simple dish. It has some well cooked meat pieces in the centre of the dish and the meat pieces are surrounded by a generous potion of vegetables. Why would any sane person spent so much money for a small potion of meat and vegetables? Wait and watch.

Order a steak in a restaurant and wait for its arrival. The entry of the dish is benefiting the entry of a chief guest of a function. The steak is wheeled in; The dish will be piping hot. It is sizzling and makes lots of noise. The waiters would be wearing cotton gloves. The scene is so captivating that the entire restaurant would be gaping at the spectacle unfolding in front of them. For the next ten minutes you would be equated with royalty. So what if you have to spend lavishly for the experience!

Don’t sell the steak sell the sizzle. Customer love stories. Make your pitch as exciting as possible. Make your product or service appear so good that the customer should feel privileged to buy it. Look as if you are doing him a favor by offering your product/service. Get excited about the product, Sell it with enthusiasm. A salesman without enthusiasm is as exciting as yesterday’s coffee!

Some useful tip to make sales line more easy and effective:

General benefit statement: Always say “Mr. Ram we have been given your reference by Mr. Reddy. Mr. Reddy has purchased our product and is very happy with its performance. Would you also care to look at our demonstration?” Disarm the customer. Customers are naturally suspicious of sales people. Make him comfortable by saying that his name has been refereed by his friend. This would make him more confident.

Ask for reference: All of us have a bloated image of ourselves. Ask a satisfied customer to give his friends’ phone numbers to you. Also tell him that you would tell his friends that he has referred their names. A customer would be tickled pink. Being seen an opinion leader and as a leader among men is a dream that all of us cherish.

Magnify benefits: Always magnify the benefits. For example if an electronic typewriter has a three months warranty period don’t say so, say our electronic typewriter has 90 days warranty! It appears to be more than 3 months. It is same as saying your money would get doubled in 5 years. It is the same as 15% compound interest per year and for five year term. But customers get excited about the doubling part. You are not cheating, only creating healthy excitement for the customer.

Minimize the cost: In the same vein minimize the cost. For example if the annual maintenance contract for an electronic typewriter is Rs 1,000/- don’t say so, say “sir our company will charge Rs 3/- per day for maintaining you’re your electronic typewriter. The cost per day is not even half the cost of a single cup of tea. For that amount you will have hassle and tension free functioning of your office automation product”. The end result is the same but you are making the customer feel relaxed about his outflow of cash.

Never belittle the competition: gone are the days of pressure selling. The world has moved from a sellers’ market to a buyers’ market. The buyers are spoiled for choice and have become very finicky and choosy. In the present scenario never belittle the competition. If the customer is harping on the competitor’s product, you can firmly say “yes our competitors also have good products but they do not have our benefits and our range of features” Tell him how he would benefit by buying your product. Tell him your range of service and what makes your product so special.

Some customers are adamant. They want to buy competing product only. Then what? It is better to lose a customer who insists to buy a competing product rather than pressurizing him to buy your product. An impulsive buyer may regret his decision later. He would inevitably blame the salesman for the high pressure selling tactics. You have lost the customer for ever. It is better to lose today so that you can win tomorrow. Haar ke jeet ne walonko hi Baazigar kehethe hai (a guy who loses now and later wins is the real winner)!

August 25, 2010

Advertising agency related terms Part - II

In-house agency: An in-house advertising agency is owned and operated by its one and only client: the advertiser. Instead of a company outsourcing its advertising to an agency, its ad campaigns are mainly handled by its own in-house agency. The best example is Mudra which started off as an in-house agency for Reliance Industries and later went on to become one of India’s best known advertising agencies.

The big issue that a company has to address is: should it save the 15% commission by having its own in-house agency or should it try to maximize its 85% of its advertising spend by making its campaign open to all the advertising agencies. Once outside agencies are given a chance the survival of the fittest principle would kick in and the company will get a great advertising campaign. Some advertising may still be directed to outside agencies, usually on a per-project basis.

Bleed advertisement: Reproduce a drawing or photograph so that it covers the entire page (or poster), leaving no margin. An advertisement that runs to the edge of a page is called a bleed advertisement. It may bleed on three sides, two sides, or one side, leaving the white space on the other side(s) open for copy. Whether the ad bleeds on one, two, three, or four sides, most magazines charge a 15% premium for its use, since the size of the plate needed to print a bleed ad is necessarily larger than that for typical advertisements. Designed to get attention, a bleed ad allows the artist greater flexibility in expressing the advertising concept, because the printing space is larger.

Teaser campaign: Brief advertisement designed to tease the public by offering only bits of information without revealing either the sponsor of the advertisements or the product being advertised. Teaser advertisements are the frontrunners of an advertising campaign, and their purpose is to arouse curiosity and get attention for the campaign that follows. In order for a teaser campaign to be effective, the advertisements must have great visibility in print, broadcast, and out of home media so as to reach a great many people. Teaser advertisements are often used in the introduction of a major motion picture or a new product.

ASCI: The Advertising Standards Council of India (ASCI) (1985) has adopted a Code for Self-Regulation in Advertising. It is a commitment to honest advertising and to fair competition in the market-place. It stands for the protection of the legitimate interests of consumers and all concerned with advertising - advertisers, media, advertising agencies and others who help in the creation or placement of advertisements.

Deceptive advertising: is defined as "a representation, omission or practice that is likely to mislead the consumer" and "practices that have been found misleading or deceptive in specific cases include false oral or written representations, misleading price claims, sales of hazardous or systematically defective products or services without adequate disclosures, failure to disclose information regarding pyramid sales, use of bait and switch techniques, failure to perform promised services, and failure to meet warranty obligations.

Advertising agency related terms - Part - I

ABC: Audit bureau of circulation: of North America is a non-profit circulation auditing organization. It is one of several organizations, operating in different parts of the world that audits circulation, readership, and audience information for the magazines, newspapers and other publications produced by their members.

Rate card: Information cards provided by both print and broadcast media, which contain information concerning advertising costs, mechanical requirements, issue dates, closing dates, cancellation dates, and circulation data, etc. Rate cards are very creatively made as they have to catch the eye of the creative people in the advertising agencies. The media planning department in the advertising agency compares the rate cards of different publishers and broadcasters and prepares a competitive media plan which can maximize the advertising spend of its client. As a rule the publishers are not supposed to furnish the rate cards directly to the final customer but this rule is only being observed only in the breach.

Agency commission: the money paid to advertising agencies by the media (broadcast or print) for purchases of time or space made on behalf of clients. Since the ad agency saves the media the expense of direct sales and billing, the media allows the agency a 15% discount (16.67% for outdoor advertising), based on the gross advertising rate billed to the client. (The discount also serves as incentive to the agency.)

For example: If a company spends Rs 1,00,000 on advertising placed through a recognized ad agency, the agency commission is Rs 15,000 and the balance of Rs 85,000 is paid to the media. The agency commission system represents the basic financial structure of the ad agency business. The company has nothing to lose as it would have paid 1,00,000 whether it approaches the media directly or through the advertising agency.

INS: Indian news paper society: acts as the central organization of the Press of India, an independent body authenticating circulation figures of newspapers and periodicals in India. It is an organization which plays a major role in protecting and promoting the freedom of press. The society was founded in 1939. Its headquarters are at Rafi Marg, New Delhi.

INS membership comprises the owners, proprietors and publishers of print media who discusses and suggest various measures to the government regarding the problems related to the newspaper industry. It is a kind of pressure group which works to protect the interest of newspaper industry in particular and print media in general.

Accredited advertising agency: All the advertising agencies have to be accredited with the Indian Newspaper society. Accreditation is very important as it confers some special status and benefits to the concerned advertising agency. All accredited agencies get the full 15% commission that is paid by the publisher. They also get 60 days of credit from the concerned publisher. Accreditation is very important as blue chips, Government managed organizations like Indian railways and public sector companies get their advertising work done only by accredited agencies. Accreditation is the route a small agency takes to announce that it has arrived and joins the big league of national level advertising agencies.

oh MAN!

I had worked as a Sales Executive in a company called Indian communication Network Limited. Indian communication Network Limited was a market leader in the field of electronic typewriters. Network as it was called was a very sales driven organizations and the entire sales team was full of beans and vigor. In the evening as the sales team was returning from the field they would have to face this quip from our Regional Sales manager “Have you met the MAN today?” Let me clarify. MAN is not gender specific. Our RSM is refering to Money, Authority and Need. It is quite impossible to find a single person who has all the three qualities to be termed as a MAN. It is very rare and almost miraculous to find a single individual who can play all the three roles seamlessly.

The sales executives at Network would target the typists (NEED) in the organization. The sales person would convince the typist that procuring the electronic typewriter would make his/her life easier. Once the typist is convinced the sales executive would zero in on the typist’s boss (AUTHORITY). The boss would be told about the obvious advantages of the electronic typewriter and how it would enhance the office productivity. Once the boss gives an affirmative, the purchase order is procured from the commercial department (MONEY). The entire sequence of activities is a proof to show that sales as a profession is a series of planned activities that have to be executed with meticulous planning.

It is often seen that many sales executives make lots of sales calls but the end result is a big zero. They are effective communicators, possess adequate product knowledge and are good at product demonstration. Sales call analysis show that the concerned sales people are not making effective sales calls. It is a catch 22 situation. They are calling on people in the organization who are easily approachable and accessible. In 99 out 100 cases the most easily accessible people in the organization are the least powerful as far as decision making is concerned. In most cases the most accessible person is probably the gate keeper. He is put in that position to act as a filter. The gate keeper restricts the flow of sales people to the decision maker or the MAN.

The challenge that is faced by the sales person: how to approach and convince the person who is the most inaccessible. This is where a smart sales person comes in. He needs to have all his wits and resources in seeing that he breaks the defense of the MAN and see that his case is at least heard. I know of many sales people who have waited at the car parking area and got the break through when the decision maker was getting out of the car. I also know the case of a persistent sales person who almost way laid the decision maker when he was relieving himself in the rest room to fix up an appointment!

August 23, 2010

Media - really too much!

The media especially television media has become very obstructive and in the face. Even though one can understand the plight of the television channels and their management the antics of the TV channels are becoming too much to bear. I remember the television channels goading a man who was threatening to commit suicide to do it as soon as possible. The stringers finally persuaded the man to pour kerosene on himself and gleefully filmed the same. The poor man was consumed by fire and died.

What was the role of TV in the above incident? Don’t the media have a responsibility in stopping the suicide and informing the police about the same? The media and the sensation mongers seem to be feeding on each other like parasites. The media has no self control nor follows any censoring. The media follows the crime scenes like a peeping TOM. It shows the death scenes very graphically and shows dead bodies and people hanging from ceiling fans. All gut wrenching scenes.

But that is not the end. The crime scenes are packaged and they are dramatically presented in the crime series that are aired every night. These nicely packaged and edited crime specials (some of them even have re enaction of the crime scenes with models acting as roles of the victims and the perpetuators of the crime) are very popular. The channels owners say that they are fulfilling their social responsibility role but are they not glamorizing the crimes! Blood and gore has become so common that children have become desensitized and are becoming apathetic towards crime, blood and violence. It is just another TV news item for them.

We can learn so much from the coverage of CNN and BBC. CNN covered the entire September 11th attack on the twin towers without even showing one dead body. Same is the case with BBC which covered the London bombing without showing blood and gore. The Indian media should remember that so that of blood and gore can be revolting. The black and white picture of the small girl who is about to be buried and her father gently wiping of the dust off her face brings all the horrors and the trauma of the Bhopal gas tragedy flooding to the mind. And to think that Bhopal gas tragedy is 25 years old! There was no hounding media presence at that time. Thank god for small mercies in life.

The media sensationalizes even the most trivial of the incidents. A man keeping more than 40 dogs in the compound or a film star celebrating his 54 birthday is treated as more news worthy than all the deaths of the farmers in rural India. It is indeed sad to note that no major media house has done a in-depth analysis on the farmers' suicides in India. A sorry state of affairs. The media should realize that it has a great responsibility and that it should not confine itself to the narrow band of customers that it thinks represents India – the urban middle class Indians.