This week, in Friday Filosophy #2015-22, let’s go back to an earlier era. Some of us might want to return to yesteryear – the times of Ronald Reagan.
We can’t help everyone, but everyone can help someone.
Freedom is never more than one generation away from extinction. We didn’t pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same.
Peace is not the absence of conflict. It is the ability to handle conflict by peaceful means.
When you can’t make them see the light, make them feel the heat.
Government’s first duty is to protect the people, not run their lives.
If we ever forget that we are One Nation Under God, then we will be a nation gone under.
Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.
There are no limits to growth because there are no limits of human intelligence, imagination and wonder.
The most terrifying words in the English language are: I’m from the government and I am here to help.
There are no constraints on the human mind, no walls around the human spirit, no barriers to our progress except those we ourselves erect.
We are never defeated unless we give up on God.
We must reject the idea that every time a law’s broken, society is guilty rather than the lawbreaker. It is time to restore the American precept that each individual is accountable for his actions.
Life is one grand, sweet song, so start the music.
Within the covers of the Bible are the answers for all the problems men face.
My philosophy of life is that if we make up our mind what we are going to make of our lives, then work hard toward that goal, we never lose – somehow we win out.
All great change in America begins at the dinner table.
The time is now.
Welcome to Marketing Basics
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.
Friday Philosophy #2015-24
For Friday Philosophy #2015-24 I wanted to share with you some ideas that came to me from one of the events of this week.
I was at a graduation ceremony earlier this week and heard the Headmaster talk about reading a biography of Albert Einstein. It moved me to share some of his quotes with you this week.
The true sign of intelligence is not knowledge but imagination.
You have to learn the rules of the game and then you have to play better than anyone else.
Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning.
Look deep into nature, and then you will understand everything better.
Education is what remains after one has forgotten what one has learned in school.
Try not to become a man of success, but rather try to become a man of value.
We cannot solve our problems with the same thinking we used when we created them.
The difference between stupidity and genius is that genius has its limits.
It has become appallingly obvious that our technology has exceeded our humanity.
If you can’t explain it simply, you don’t understand it well enough.
If a cluttered desk is a sign of a cluttered mind, of what then, is an empty desk a sign.
There are many more. For those who are interested you can do a search on the man.
The time is now.
Friday Filosophy #2015-23
For our Friday Filosophy #2015-23, we are back to quotes by multiple people. Unfortunately, we missed Friday.
Education is the mother of leadership.
Wendell Wilkie
A competent leader can get efficient service from poor troops, while on the contrary an incapable leader can demoralize the best of troops.
John J Pershing
One of the tests of leadership is the ability to recognize a problem before it becomes an emergency.
Arnold H Glasow
The time is now.
Upcoming Events: All About Webinars
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.
Friday Filosophy #2015-22
This week, in Friday Filosophy #2015-22, let’s go back to an earlier era. Some of us might want to return to yesteryear – the times of Ronald Reagan.
We can’t help everyone, but everyone can help someone.
Freedom is never more than one generation away from extinction. We didn’t pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same.
Peace is not the absence of conflict. It is the ability to handle conflict by peaceful means.
When you can’t make them see the light, make them feel the heat.
Government’s first duty is to protect the people, not run their lives.
If we ever forget that we are One Nation Under God, then we will be a nation gone under.
Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.
There are no limits to growth because there are no limits of human intelligence, imagination and wonder.
The most terrifying words in the English language are: I’m from the government and I am here to help.
There are no constraints on the human mind, no walls around the human spirit, no barriers to our progress except those we ourselves erect.
We are never defeated unless we give up on God.
We must reject the idea that every time a law’s broken, society is guilty rather than the lawbreaker. It is time to restore the American precept that each individual is accountable for his actions.
Life is one grand, sweet song, so start the music.
Within the covers of the Bible are the answers for all the problems men face.
My philosophy of life is that if we make up our mind what we are going to make of our lives, then work hard toward that goal, we never lose – somehow we win out.
All great change in America begins at the dinner table.
The time is now.
Friday Filosophy #2015-21
Vision is the art of seeing things invisible.
Jonathon Swift.
Happiness is when what you think, what you say, and what you do are in harmony.
Mohandas Gandhi
The purpose of life is a life of purpose.
Robert Byrne.
Think about it.
The time is now.
Training Tidbit v2015-3
As you can see, we haven’t yet written many of these this year, as this is Training Tidbit v2015-3.
The first of the spring webinar series is just about completed. We have conducted 58 webinars, with another 8 before July 1, 2015. 64 in total. I am extremely pleased with the attendance. We are averaging over ten for each webinar.
I am also pleased at the response from Industry associations and software providers who are starting to promote our webinar products. This will be a long process as we work towards bringing high quality, low cost training to the Industry.
The participants are also indicating on which subjects they want to receive more training and we have so far determined another 11 webinar subjects we will create before the start of 2016.
We are also in the process of responding to the participants. We offer two webinars a day for four consecutive days this year. People would like more flexibility. They like the content and the delivery but would like to be able to control the schedule more. We are in the process of putting all of the webinars up on the internet. That way you purchase a time slot the webinar and then you can schedule when you want to take it. This will be in place prior to the start of 2016.
There are still miles to go before we rest.
The time is now.
Friday Filosophy #2015-20
We have reached our Friday Filosophy #2015-20 and are focusing upon our rights and pursuit of our goals this week:
Nothing can stop the man with the right mental attitude from achieving his goal; nothing on earth can help the man with the wrong mental attitude.
Do you want to know who you are? Don’t ask. Act! Action will delineate and define you.
We hold these truths to be self-evident: that all men are created equal; that they are endowed by their Creator with certain unalienable rights that among these are life, liberty and the pursuit of happiness.
Honesty is the first chapter of the book of wisdom.
I like the dreams of the future better than the history of the past.
Our greatest happiness does not depend on the condition of life in which chance has placed us, but is always the result of a good conscience, good health, occupation, and the freedom in all just pursuits.
In matters of style, swim with the current; matters of principle, stand like a rock.
The care of human life and happiness, and not their destruction, is the first and only object of good government.
The glow of one warm thought is to me worth more than money.
A Bill of Rights is what the people are entitled to against every government, and what no just government should refuse, or rest on inference.
There is not a sprig of grass that shoots uninteresting to me.
I never considered a difference of opinion in politics, in religion, in philosophy, as cause for withdrawing from a friend.
Some thoughts from Thomas Jefferson to provoke thought..
The time is now.
Parts & Service Marketing – Market Segmentation
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.
Product Support Selling – Preparation
Product Support Selling – Preparation
Everyone everywhere sells. That is a truth that is little understood. We sell ideas at work and we sell manners at home. There are many things that we sell over the course of our lives. Sales personnel sell for a living, and the skills that they have as individuals are enhanced when they know the proper tools and methods involved in being a professional salesman.
All of the various steps in selling are discussed in this webinar which is the first of two parts. This part deals with the set-up of the selling process: the research, the objectives, and the questions that need to be asked. There is a lot of work that goes into being a professional salesman and it starts with research. This is not dramatic or exciting work, but it is necessary. What the research needs to cover is discussed in detail. With each and every customer there needs to be objectives. These goals and objectives will take on many forms: from calls to parts business, to service business, to profitability. Finally, in selling everyone knows about the “talking” aspect of selling but more important is the “listening” part of it. In order to get the customer talking, the professional salesman must know what type of question to ask and how to ask it.
Selling is much more a science than an art and this first part covers the first three elements necessary in becoming a professional salesman.
The time is now.