In our Industry, we can identify a brand with a logo, a color, a certain type of visible air filter on a piece of equipment.
But how often do we stop to realize that we are our own brand? Who we are and what we do, the ways in which we do our work, reflect our individual brand.
Your brand matters. It matters to your customers, to your team, and to your store.
For this week’s Socrates Says, we are sharing some words of wisdom on your own brand in the video below.
The time is now.
There’s always some crossover between our industry, and the automotive industry, the aviation industry, trucks, trailers, and so on.
When we think about marketing, we automatically think of the end result of all of our marketing endeavors: a sale.
But in order to make a sale, we have to know our market. This means more than having a script or having general knowledge. Who are your customers? What, exactly, is it that they need from you? What relationship do you share with them currently?
Remember, people sell. It is a relationship.
The time is now.
Welcome to Marketing Basics
It’s all about your customers and you.
It’s a new year and a fresh start. With that, I want to start with some basics. Basic marketing is the science of choosing markets through the use of market analysis and market segmentation. Marketing has evolved in the 21st century into a series of complex functions and activities that recognize everything matters to the customer and the customer has to be the primary focus of business. That would seem to be self-evident, but the evidence provides us with a different answer. Every aspect of marketing is driven by customer needs and wants. Through the past decade products have changed dramatically. There has been an almost manic introduction to technology in products from telephones to computers to everything. But I believe it is time to go back to basics.
Start with the Customer
The Harvard Business School and others introduced the “balanced scorecard” in the 1990s. This was in response to 90% of American businesses being less than successful at achieving their strategies. The primary reason was found to be a failure of employees to understand the strategy of their businesses. Communications is critical, isn’t it? There are four basic areas of study in the balanced scorecard:
That’s the sequence I use to teach the theory. The normal approach is to start with finance and then move around. I say everything starts and ends with the customer, which is why I start with the needs and wants of the customer.
When you know the needs and wants of your customer base, then you know what you must do to excel. If you know what it is you have to excel in, then you also know what tools, technology, and training you need to provide to your workforce. From that you will make as much money as you want. Money, or profit, is the result of being in business. It is never the reason to be in business. Marketers want to find the needs and wants of customers so they can provide the customer service delivery systems that are required to attract and retain these customers. They will design a sustainable differential advantage for your business. However, at this time of year it is also good to review the results of your previous year. This leads us to producing two critical reports. The first I describe as a stratification report. The second is customer retention.
Stratification
This is quite simply a review of the percentage of your customers vs. the percentage of the business they provide for you. The old 80:20 rule is no longer applicable. We need to obtain a list of your customers in descending sales sequence. The largest customer will be at the head of the list and the smallest will be at the bottom. Get the total number of customers and divide the number by 20. That will give you 20 sectors of your business. Do the arithmetic and add up all the sales within each of those 20 segments and make a table out of the results. From this you will be able to see the percentage of business each 5% sector provides. Have a look at the results. The smaller the number of customers with a larger percentage of the business, the more vulnerable you are to customer defection.
Defection
At this time of year it is much easier to determine the number of customers who have defected from your business over the previous year. Depending on your business system, access the purchases by customer for each of the past two years and put the list in alphabetical order. Have the 2013 list on your left and the 2014 list on your right. Put a red felt pen in your left hand have a green felt pen in your right hand. Go through the list alphabetically. When you find a customer who purchased in 2013 and didn’t in 2014, put a red line through the name. When you find a customer who purchased in 2014 and didn’t buy in 2013, put a green line through the name in the list on the right hand side. At the end add up the reds and the greens.
Divide the reds by the total number of customers who bought in 2013 and that is the defection rate. Divide the greens by the total in the 2014 list and that is the acquisition rate. The Harvard Business School did definitive work on customer retention in the 1990s. In their book The Service Profit Chain, three Harvard professors expose the critical nature of the retention management measure. If you can increase your customer retention by 5% in the industrial distribution business, the profitability of the business will increase by 45%. Move from 80% retention to 85% retention and you will increase your business by nearly 50%! That is astonishing, isn’t it?
Let’s look at a table of customer retentions. If you start with 100 customers and your customer retention rate is 80%, that means you lose 20% each year. If you start with 100 customers and your retention rate is 85% (an improvement of 5%), you lose only 15% each year. This means over a five-year period you will retain 11 more customers for every 100 customers. The only thing missing is the lifetime value of your customers. With your knowledge of your business I hope you do this exercise and the calculation. What is the lifetime value of one of your customers? Once you have that value, then apply the table above with your details and you will see that the 45% improvement in your business profitability is extremely substantial. I don’t believe there is anything that will measure up to this improvement. So let’s welcome in 2015 making a new commitment to customer retention. You won’t regret it.
The time is now.
This article was originally published by Water Well Journal, waterwelljournal.com, January 2015.
It’s that time again, here at Learning Without Scars. It is time for a new post on our upcoming events and this week it is all about webinars.
Next week, beginning on Monday, June 8, 2015, we are continuing our Product Support Selling and Parts & Service Marketing Program.
We will be hosting webinars on Monday through Thursday, at 9:00 a.m. PST and 11:00 a.m. PST. All Product Support Selling webinars are at 9:00 a.m. PST, while the Parts & Service Marketing are at 11:00 a.m. PST.
In Product Support, we will have a one hour webinar on each of the following: Presentation, Overcoming Objections, Customer Retention, and Territory Potential.
In Parts & Service Marketing, we will offer a one hour webinar on each of the following: Market Coverage, Customer Retention, Compensation Programs, and Territory Management.
This will wrap up the spring webinar series in its entirety. We will return in the fall of 2015.
Don’t miss your opportunity to finish your coursework with us!
The time is now.
Parts & Service Marketing – Market Segmentation
Marketing is the process of identifying and satisfying customer needs. That process becomes impossible with the thousands and thousands of customers that you have in your assigned area of responsibility (AOR). As a result of that truth, it becomes important to be able to find out what the customer needs and wants, and then to be able to find common elements of their business that will allow you to group them with other customers of common needs and wants.
That is the aim of market segmentation. Market segmentation is the process by which marketeers divide potential customers into smaller groups that are looking for similar benefits from a product or service. The goal is to isolate a group that prefers these features and benefits, and to develop a sustainable differential advantage that satisfies their needs. All of the methods and processes that are required to perform this are covered in the webinar.
We cover the industrial focus, the individual demographics, and the psychographics. We also have to assess the dealer strengths and weaknesses, as well as reviewing the same strengths and weaknesses in the competition. All of this and much more is covered in this comprehensive webinar.
The time is now.
Parts & Service Marketing – Basic Marketing
Our Parts & Service Marketing series of webinars begins this Thursday, May 14, 2015, with the introductory course: Basic Marketing.
Marketing is a broadly misunderstood sector of business. It is much more than mailings, promotions, and tradeshows. It is all of the aspects involved in influencing the customer to purchase your products or services.
Marketing is the science of choosing target markets through the use of market analysis and segmentation. This webinar exposes all aspects of marketing: Relationship Marketing, Business Marketing, Social Marketing and Internal Marketing. In Relationship Marketing, we focus on suppliers and customers, and the goal is to build loyalty. The Business Marketing is all aspects of the traditional marketing functions: advertising, promotion and communications. Social Marketing looks at everything that impacts society. For instance, the impact on the environment from the use of clean engine technology. Internal Marketing, is the broad communications to all employees of everything that we are doing in the business.
This webinar covers all the basics of marketing: from the four P’s to the more current addition of SIVA. We cover it all. Without creating the environment where your product or service is understood, you make the job of selling much more difficult. This webinar aims to provide you with the tools to use to make selling more successful.
Our seminar on Product Support Selling – The New Frontier is coming up in Dallas, Texas on April 15 and 16, 2015. This 2 day seminar encompasses 4 elements:
This program is geared towards Product Support Sales, Customer Service, Instore Sales, Supervisors, and Managers.
This course covers all the theories and applications necessary for Product Support Selling in the 21st Century.
The time is now.
Our Parts & Service Marketing seminar will be taking place in Dallas, Texas on April 13-14.
Back by popular demand, this course is geared towards sales personnel looking to make a difference.
Material will cover:
This seminar offers the fundamentals of Parts & Service Marketing for any personnel that deal with your customers.
For more information, and to register for the seminar, please visit https://learningwithoutscars.org/classes/parts-service-marketing/making-a-difference/.
The time is now.
American Express coined the phrase “Membership has its privileges.” This is entirely true. Most of us have professional memberships to various organizations: the Associated Equipment Distributors, the National Trailer Distributor’s Association, the National Groundwater Association, the National Trailer Equipment Association, just to name a few.
We are inviting you to become members of our own group, Learning Without Scars, because we want to recognize individuals and businesses that want to participate in their personal and professional growth. We discussed doing this by means of special promotions and loyalty programs, amongst many difference alternatives.
We settled on the membership approach.
By joining Learning Without Scars at the nominal cost of $35,00 per year, we have found that we can offer more to you for less.
All members receive a price reduction of 30% on all LWS learning products. That means that all webinars, self study programs, and classroom programs will be offered at a 30% price reduction to our members. For those of you who know me, please note that this is NOT a discount! I still hate discounts.
So, what are you waiting for? Spend $35.00 and start saving.
The time is now…
Training has long been a problem for many businesses.
Management and Leadership have conflicting views on personnel. Edward Gordon, in his book “Future Jobs,” points out the threats posed by under-skilled employees. He goes on to challenge the education providers to deliver more on their promise of providing a skilled individual.
One side of the conflict for leaders is traditional thinking:
On the other hand, there is a growing number of leaders who are changing their views:
In the years since 2008 – which I will label “BBS” – “Before Bear Stearns” businesses have reduced their expenditures on employee training dramatically. That results in under-skilled personnel. So the result is that we are choosing to reduce training costs, and therefore providing customers with under-skilled personnel. I am sure you don’t think that this is a sustainable position to take.
We have been offering management training since the early 1990’s. We have done this in combination with Industry associations, as well as directly with manufacturers and dealers. We have provided learning opportunities for Parts Management, Service Management, Parts & Service Marketing and Product Support Selling. Today we do this via a new Company called Learning Without Scars. You can visit our website at www.learningwithoutscars.org to learn more about training and creating an environment of skilled personnel.