Posts tagged "value"

Sales

The Sales Pitch

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“It takes one hour of preparation for each minute of presentation time.” Wayne Burgraff

We have all,over time, been pitched something or the other. Some pitches have been good, others could have been better, and some had you looking for the nearest exit. The sales pitch is the amalgamation of your collected information and value proposition in less than 60 minutes. First impressions are critical and in most cases, the deal closers or breakers. Think of the times when you were pitched something, be it a business idea, a product or a service. What were the factors which influenced you into making the decision to buy?

Two steps need to be taken to get to that buying decision. The first is a pre-demonstration pitch, this is where you break the ice with the customer and build rapport. This is a technique all great closers use as it lowers the internal barriers we put up when someone is pitching to us. Building rapport is an art which is learned over time and is a skill which you continuosly need to hone. Once you get good at it, you will be able to shift the customers mindset to a more accepting one, to a point where you are more likely to close the deal.

The second step is when you actually begin the sales pitch. This is when you show the customer what it is that you are actually selling and how it is going to help them. All the information you gathered about the industry and the client must be reflected in your pitch. An attention to detail will help create a much closer connection with your prospect. This allows both of you to look at the concept from the same wavelength.

This is when you arrive at a point when the customer is faced with a buying decision. If you have showcased your product/service confidently and have clearly shown how it is going to add value, closing will be much easier. Whichever method you use, whether it be a power-point presentation, a story board or a simple discussion, remember, keep your pitch simple and to the point.

Sales

The Customer

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“A professional salesperson’s most valuable asset is reputation.” Zig Ziglar

Once you have identified an industry and collected as much macro information about it as possible, you begin the process of focusing in on specific companies. To funnel down to this stage, it is helpful to identify those companies with whom you have existing links or can gain easy access to through your professional network. Many entrepreneurs and sales individuals get stuck at this stage. This is primarily due to the fact that we do not focus on continuously building our professional network. This topic will be discussed about in much detail in the coming weeks. If you lack a wide professional network you will have to work on developing leads through traditional lead generation methods, these require a lot more  time and effort.

Once you have a primary list of companies, you must study them intently through their press releases, websites, annual reports, new products and any advertising they may be involved in. This will help you get a pulse on how the company is positioning itself in the market, who their target customers are and what products/services they are focusing on. It will also help you gauge who their competitors are and how they differentiate themselves from them. This will provide you critical insight on how to position your product/service to the prospect.

You will have to show how your product will add greater value to their company, whether it be through greater efficiency, increased ROI, wider exposure, customer acquisition or brand awareness etc. You must do your best to outline measurable results that will be produced through your product/service. If developed correctly you will surprise the customer with your in-depth knowledge of the industry, local market place, their current strategy and their current pain points. Along with an attractive NABC value proposition you will have developed a very convincing argument.

Sales

Industry Identification

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“We miss 100 percent of the sales we don’t ask for.” Zig Ziglar

Having a product or service to cater to a host of industries is always a good thing. It gives you the ability to scale your business across several industries in the future. However, where do you start a web development company where just about anyone could be your client? What has worked for me has been to firstly identify an industry to which I have the strongest links and relationship and then do some in depth research about this industry. This process helps bring focus to your business and allows you to become an expert in a particular domain, in which you could then leverage to reach out to other domains in the future.

Think about it, if you are a web developer and Toyota saw that you had created web identities for 3-5 major automobile brands successfully, they would be a lot happier working with you rather than another developer who had created all sorts of websites. By becoming an authority in a particular area, allows you to expand your business in a more structured manner which is essential for early stage companies. Focus is a key aspect for any company whether you are a single person entity or a multinational company. You will be able to create sustainable competitive advantages which will help you fend off new entrants in your space and help expand your business at a much faster pace.

When I am looking at a particular industry I look for any data I can find on the trends taking place in it. This involves a lot of research and reading to bring yourself up to speed with who the major players are and the strategies they are employing, as well as give you an idea of how the smaller players are positioning themselves. When you have sufficient data on the industry as a whole you can successfully zoom onto the companies where you can leverage on your network and build stronger value propositions for them.

The next time you are deciding whom to market your product/service to, look to your personal network first and do your homework on the industry where you are the strongest and have a higher probability of closing the deal.

Sales

Closing the deal

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“You don’t close a sale, you open a relationship if you want to build a long-term, successful enterprise.” Patricia Fripp

Closing a deal just seems to be a whole lot more satisfying when you are running your own show. There are very few things which compare to the euphoria of signing the document and getting the sale. Undoubtedly it takes a lot of hard work, patience, persistence and a little luck, but it is definitely worth it. The process of closing a deal is however one which is severely under estimated by most individuals.

It starts with  proper identification of your target customer and collection of as much data about your prospect as possible. Once you have this, you work towards developing a value proposition for your prospect, present it to the prospect and then you finally reach a point where you need to close the deal. When done correctly you have a much greater chance of success through this process than by just picking up the phone and going through a list prospects who you think “may be” interested in whatever it is you are selling.

Sales, is where you need to show your prospect where and how you are creating value for them. It is not about volume discounts, collaterals or last minute deals to get a buyer. Trust me, I have been down that road and price wars are just about the worst place you want to be as an entrepreneur. It is a game where there are no winners and the entire reason why we set out to do business is lost. Over the next week I will talk about certain topics on how you can do a better job with your sales cycle and get that “yes” with  much greater frequency.

Partnerships

5 steps to get better strategic partners

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“If we are together nothing is impossible. If we are divided all will fail.” Winston Churchill

Strategic partnerships have been an integral part of all the business ventures I have been, and am part of. They can be made with suppliers, customers or distribution networks. What is essential when selecting them is to ensure that you put effort into the evaluation and selection process. Partnerships are very easy to get into but very sticky to get out of. The following 5 steps will allow you to minimize the number of unsuccessful partnerships considerably;

1. Value Creation: All partnerships begin with the premise that together they can create greater value for their clients, partners or suppliers. The impact of the value has a magnified effect which makes the companies involved stronger and more competitive in todays cut throat market place. To learn more about how to identify ways in value creation please click here.

2. Common Vision: Identifying a common vision requires you to answer three questions, “Why are we wanting to embark on this partnership?”, “What do we hope to achieve through the partnership?” and “What changes need to be made to the current business models to execute this venture?” Once you have got detailed answers to these question you can construct a concise and specific vision statement. To learn the answers to these questions please click here.

3. Common Trust: To grow, any partnership requires you to establish a strong level of trust between those involved. This requires you to be honest, open and reliable when dealing with your partners. Trust needs to be earned and once you have, it can be leveraged to become a very strong competitive advantage. To learn more please click here.

4. Common Value Systems: These are integral in creating long term partnerships. They provide a common thread which both sides can relate to and work towards. Finding out about a partners value system requires you to dedicate time and resources towards researching it diligently , this effort is worth every cent. To learn more about value systems please click here.

5. Clear Contracts: Contracts are a critical component in any business deal. It is the document which binds two or more parties to an agreement they have reached. these contracts have to be written clearly, concisely and in an unambiguous manner. To learn more about writing effective contracts please click here.

True partnership is a two sided relationship where both companies strive to create value rather than making a quick buck. It is a strategy which has a long term impact on the bottom line rather than a quick fix. To make them work requires hard work and a mind set which is very different from the traditional “what can I get out of this partnership?” view. Choose your partners carefully and build visions together on how you are going to help each other reach your goals.

Partnerships

Common Value Systems

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Common Value Systems

Value systems are a key metric which should be carefully evaluated when selecting a strategic partner. These systems are not always clearly displayed or disclosed by either party. When talking about the core value systems of a company I do not mean the superficial coating. They are those values which are key drivers involved in decision making, product development, quality and customer service.

When evaluating a potential partner you first have to assess whether or not they have a win-win attitude. This is a critical requirement, without it the partnership is destined to be short lived or will not reach its potential. In my experience this is a mindset which is not present in a lot of organizations. They still use the traditional methodology of thinking which is to maximize their gain in any potential deal. The next time you are evaluating a potential strategic partner think win-win and see how a mutually beneficial solution can be found.

Secondly a partners view of product quality and cost is an important aspect to take into account. If you are a high quality producer and you are thinking about partnering with a low cost distributor who has national presence you will probably not be able to provide a win-win situation to your distributor, as the price of your products will be too high. The reverse scenario is where a high cost distributor will not want to distribute low cost products. Other key aspects such as aesthetics, customer service and human capital development should be some of the other indicators to be looked into before making a decision.

Common value systems are integral in creating long term partnerships. They provide a common thread which both sides can relate to and work towards. Finding out about a partners value system requires you to research diligently and needs you to dedicate time and resources towards it , however the effort is worth every cent.

 

Partnerships

Value Creation

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“The true mission of a business is to create value. Any business muddled enough to believe that its real purpose is producing profit is probably not long for this world. Profit is absolutely essential, to be sure, but it is a downstream outcome of creating value, and so it functions very poorly as an objective in itself.” Frederick F. Reichheld

Partnering is all about creating value. Organizations have begun to recognize the fact that by strategically partnering with companies who complement their core focus results in achieving greater sustainable competitive advantages and higher levels of productivity. For example Intel’s partnership with Microsoft shows how two very different firms strategically partnered together to push each other’s products and services more effectively.

When two companies make a conscious decision to adjust their strategies to complement the partnership that is when true value is created.Both companies must have the mindset when they go into this agreement it should be with a win-win attitude. If only one partner is adding most of the value the imbalance will result in a rapid deterioration in the relationship. When negotiating successful partnerships analyze how both companies can add substantial value to each other. You have to enter the agreement with an objective of increasing the overall market size that you are operating in. In this way both you and your partner will get a large piece of the pie.

Partnerships are all about focusing on your core competencies and leveraging off your partners competencies to make your product or service offering more attractive. We have to constantly strive to achieve a level of relationship where tasks will not be duplicated in either organization and the focus will be on creating new opportunities and value for your customers or clients.Next time you are looking at adding a strategic, start with a win-win point of view. Think a lot less traditionally and focus on the bigger picture to achieve maximum impact.

Finance

Source #2: DIY

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“The great majority of men are bundles of beginnings.” Ralph Waldo Emerson

Todays source will talk about a common scenario which comes up when you have your NABC proposition in hand but unfortunately don’t have the funds to get your product off the ground and have been unable to secure funding from friends and family. At this point many begin to lose heart. They begin to doubt themselves and their belief in their idea gets shaky. An entrepreneur who has complete belief in his concepts and ideas will not lose hope at this point in time. We have several options still available to us which include angel investment, venture capital or even getting some leverage from your bank. The advice I give to individuals in this space is to get some funds together yourself or with your team mates the old fashioned way with a plan with specific goals.

In todays day and age angel investors are becoming more sophisticated and a proof of concept or prototype has becoming a necessity. Plans look great on paper and if you are an A-grade presenter you may make it through at the angel investment level. However, it is becoming increasingly more difficult to make it through without a prototype or proof of concept. The other day a friend called me asking for advice on an online stock photo website he wanted to launch. He had a lot of new twists to the conventional business model and he was essentially looking for some seed capital to convert this concept into a reality. Being a professional photographer with a good team I told him that they should raise money themselves and get a prototype of what they want to do together. This would make it easier for them to approach angel and VC investors.

Here is when things get a little blurry. Say you have skills in flash based development. You set up a home-based consultancy to promote your services with the goal to raise $10k to create your prototype. Things start to go reasonably well and you find yourself making relatively decent money without having to work at a full time job. You need to keep things in focus now, consulting work is highly customized and cannot be scaled. A lot of angels and VC’s would not be very interested in funding a project which does not have a viable exit strategy. Stay focused on creating a standardized product which can be used by millions of individuals rather than custom work developed for a specific individual. Falling into this trap is relatively common. Staying focused on the bigger picture is a vital key.

Once the prototype is developed get back out there and get some serious investment into your project to get it kick started. When you use this sourcing method to raise funding for your project remember to stay focused on the bigger picture. If you are developing a stock photo website ask your clients whether they buy photo’s online and if they don’t, how much they would want to pay for them. If you are a software programmer continue to take on projects which help you in developing modules for the larger project. Use this as a platform to get traction on the idea and to help you refine it along the way. Just remember to work with a specific goal , do not get sidetracked and lose sight of the ultimate objective .

Finance Inspiration

Is it all about the money?

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“You must not for one instant give up the effort to build new lives for yourselves. Creativity means to push open the heavy, groaning doorway to life. This is not an easy struggle. Indeed, it may be the most difficult task in the world, for opening” Daisaku Ikeda

I hear it all the time….”I will start up my own company when I have enough money” or “I can’t start a new business because I don’t have the funds”. I used to think along these lines once upon a time as well. The reasons why some think this way are purely psychological. We set up sub conscious barriers which inhibit us to go into unchartered territory. We fear that we may fail or that we wont have the confidence that is needed. Since nothing can really prepare anyone for this deep dive I just ask the question “Do you believe that your product/service has the potential to become something huge?”. The answer to this question helps you break down any internal barriers you may have. It will strengthen your resolve and make you think deeper about what you are actually wanting  to achieve. I sincerely believe that money should not be an hurdle when you believe that you have something unique to offer the world coupled with the confidence you can deliver it .

I have been part of and have created quite a few companies in the last couple of years. I don’t recall a time when money was the primary hindrance in wanting to execute what we had in mind. Don’t get me wrong, money is a great thing to have while running a business, its just over reliance on it which causes a blur. Over the next week I am going to be talking about some of ways that you can look into raising funds for your startup. Pre-requisites would be, the belief that you have a potentially value adding service/product, have part of your team in place and a burning passion to succeed  to bring about positive change. Without these factors I am certain that even if you raise capital, chances of success are reduced.

The fact of the matter is that when you want change in your life or you do not want to go down the the beaten path you have to want it bad enough. Stuff like finding the right team and the right investment partner become much simpler feats. I had mentioned this before, when you are looking for success it has mysterious way of creating pathways for you to find it. Letting the world tell you that it is too difficult is just its way of testing your resolve. If you truly believe that you have what it takes to make it,  I am very sure that you will have no problem crossing this hurdle.

Ideas

Are you different?

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“Price is what you pay. Value is what you get.” Warren Buffet

Coming to stage 2 you have identified and quantified  customer and market need. Now is when things begin to get interesting. For any new venture to succeed it requires a value proposition. Without it you will find yourself lost. This has happened to me in the past and it still does sometimes. The typical situation is you identify and quantify a need,  then you assemble a team as fast as possible and execute the plan based solely on gut feelings. Further down the line, if you have not constructed a valid value proposition, you and your partners  have to restructure the business to make it work. So the key is “create greater customer value in comparison to the value being created by your competitors” and document it extensively before starting the venture.

Being able to quantify this value and bring it from being an abstract thought in your head to reality is not the easiest of things to do. I list down the following four factors when breaking an idea down.

Need: “What is the important customer and market Need?

Approach: “What is your unique Approach for addressing this need?”

Benefits: “What are the specific Benefits per cost that result from this approach?”

Competition: “How are these benefits per cost superior to the Competition?”

I realize that initially creating a value proposition based on these four factors is difficult. Sometimes you can’t identify a direct competitor, calculating benefit vs cost gets complicated or a host of other issues. The important aspect is that you have to start thinking about these factors and over the passage of time you will incorporate many permutations to come up with a winning value proposition. To go about this effectively here are a couple of helpful tips:

1. Talk with your prospective customers and clients about your new concept and get feedback. Remember your customers are out there in the real world and not your office. Get out there and get to know them a lot better.

2. If possible create a prototype for your service which will help your target audience to visualize what it is that you are selling or providing. Also let your customers take it for a spin and see how they interact with it.

3. Do a thorough competitor analysis to document what are the alternatives out there. This will also help you to understand where it is, that you have to create value for your target customer.

4. Study the market or the industry that you are wanting to operate in. Deep market knowledge and understanding the dynamics between the players, government and competitors is critical. There are a lot of great market research reports on the web. Get as much information as you can to make an educated decision on the future growth and scalability prospects for your business.

Your first draft for the value proposition will be far from perfect. However, remember that the journey to success is usually not a straight line. IDEO a leading design firm states, “Fail often to succeed early.” I think that should be the motto for all entrepreneurs. I have started businesses which were headed in one direction when we started and are operating in a completely different space now. The most important things needed to help make this journey worthwhile is a great team, get your NABC proposition pat down, be passionate and proactive and then……enjoy the ride!


p.s Stage 2 requires a lot of time and dedication to so make sure you do this step properly. Don’t be in a rush now because it will cost you dearly in the future.