Sunday, July 26, 2009

"Are You Being Pulled Into Price Wars?"

G'day friend,

90% of retailers are going to fail. They will crash, burn, and die. But why? What's the reason these companies will go under, their only memory being the occasional patrons reminiscing later, "Man, I sure do miss Jim's Friendly Corner Store."

It's very easy to understand. You'll notice if you pay close attention; just look around.

They Have Decided To Wage Price War
On National Super Powers!



Today, I happened to have been reading "Up The Loyalty Ladder' By Murray and Neil Raphel (I highly recommend this book). The first section goes into detail about prospects. And how they choose where to shop for a variety of reasons. Few have to do with price.

Along these lines, I recall a particular marketing guru (can't remember which one) saying, "If the customer is a price shopper, you haven't given them anything else to measure with." (This might be paraphrased, but you get the point).

You can't fight Wal-Mart. Or Staples. Or even Walgreens. If you're a marketer, or in some service business, you can't fight Servicemaster, Orkin, or Sears.
You can't fight them on the one front you approach instinctively: price.

These are monsters. The Raphels illustrated it perfectly:

"If a large retail corporation with $1 billion in annual sales loses ten Customers who spend $1,000 each, it has lost .01 percent of its business, a number that will barely impact sales. But if a company doing $200,000 a year in sales loses ten Customers who spend $1,000 each, it has lost 5 percent of its business. And that 5 percent may account for 25 percent of its net profits." (Emphasis is mine).

These companies can afford the loss. They can take the blow. You, as a small business owner, cannot. And you WILL lose if you fight them on price, precisely for that reason.

So stop being a price company.

Don't sell because you are a "bargain" or the "cheapest, lowest price" in town. Because I promise, someone like Wal-Mart will cost less and will have a larger inventory. Just like, for carpet cleaners and Sears, they will be able to charge less. They will do ridiculously low fees because it's in their power.

You have to start selling on value. If someone wants cheap, well, you can direct them to Wal-Mart, or the other discount stores in the area. But YOU, you are in the business of value, or selling worth.

So, Wal-Mart has fruits for $1.00 a pound? Great. We charge $3.50 for a pound of bananas, because ours are organically grown, have a proven health benefit because they were not raised in an environment of pesticides, had quality soil and fresh spring water to nurture them before being ripe. They have a clean, soft yellow exterior without degradation. We also take the time to meticulously clean and remove all dangerous micro-organisms which "hitch a ride" on fruits.

Tell me, does Wal-Mart do that for its bananas?

How about Staples? Sure, they have paper, ink, staples, etc, but you have an outstanding "replenishment" program. If someone pays $x for their stationary items, they can receive a x% discount on later purchases, and even set up an "auto delivery" system every month. Every 2/3/4 weeks they receive a package in the mail with a new batch of pencils, ink, paper, staples, etc.

PLUS, because of your joint ventures with printers in the area, your business customers can receive discounts at local printing companies for direct mail campaigns, brochures, etc.
Voila. We just repositioned your office supplies company into a "cater to the busy entrepreneur" company. Now you're the "office assistant.

Try this exercise with your company. Check and see if you are constantly marking down your prices because someone said, " is cheaper."

Over and Out,

Angel Suarez

Friday, July 24, 2009

Are You Afraid To Face The World?

G'day Friend,

This is something not so related to marketing. But extremely important, as a concept regarding mindset, to understand. All entrepreneurs should have a firm grasp of it.
See, this "mindset" is what separates the business owner from the employee, the underling from his superior, the chieftain from lowly thrall.

Perseverance and Courage

That's all. Not wit, not humor, not even mathematical skill. Having the ability to persevere and show courage, in the face of great risk, is the "entrepreneurial trait." I've noticed this lately.

My very good friend and mentor brought it up the other day.

How many people do you see complaining about unemployment? Don't they all say, "Wellll, I ain't makin' no money... cuz' there ain't no jobs!"

This is total BS. And I mean it: that is the type of crap that stinks up a room.

Because It's Totally Untrue!

First off, there are plenty of jobs. Sure, most are sales. And, my friend, there's a reason: everyone wanted those comfy, sit behind the desk, $10/hour jobs!

So guess what happened? Everyone took them. But Hel, those jobs are still around. I've seen a local company hiring by the hundreds.

Second, like my friend said, in the day of our grandfathers, there was no room for "unemployment." You couldn't be employed by somebody? You went out there and STARTED something. You have the ability to take initiative and improve your life.
Nobody owes you anything.

Despite what our new President says, you are entitled, frankly, to nothing. Not the clothes on your back or the food in your stomach.

Guess how you acquire these things and achieve your life's luxuries? Work.

Perseverance - not giving up, even if they kick you in the knees and Pepper spray you.

Courage - approach, knowing they are going to kick you when you're down, Pepper you, taunt you, and tell you there's no hope.

And you know what? You just let all those mockeries roll off your back. Remember them, so you can look back decades from now and have a good chuckle.

You can have it while sitting on the patio of your summer villa, sipping a mug of warm Amaretto with your spouse, enjoying the summer breeze.

Over and Out,

(And To Your Many Successes),

Angel

Wednesday, July 1, 2009

Lead Junky 'R' Us - Why You Should Try To Avoid Cold Prospecting, Calling, And "Leadless" Sales Work. Period.

G'day Friend,

Recently, I offered to work for a sales company. I figured, "Heck, why not? I like to become familiar with a company's strategies and 'what's going on.'"

So I sent them an e-mail with the best time to contact me and two questions.
Now, I like to think my questions were very reasonable. Here they are:

"How Much Is The Commission Worth? How Qualified Are The Leads?"

ANY and EVERY sales person should ask these questions. Without exception. Ever.
Why? One, you need to determine whether the cold prospecting you may do is worth it. For example: I think cold prospecting for less than $300 is ridiculous. You could find a thousand different ways to fill that void twice as effectively.

With your leads, you should see if they really are leads. Not just names that fit the criteria. If you're going out to deal with someone, they should WANT to deal with you.

If you have under-qualified leads for little commission, I suggest you quit. Your own skills are not in decline - the company is just robbing you of time and money.

Which brings me to the company in question: the response I received was outrageous. Enough so to spur my into writing this entry.

"If you are a lead junky, you're in the wrong spot."

WHAT! If I read that correctly, the man is saying to me, "If you like to waste as little time as possible, only speak with super qualified leads, and make huge sales by dealing only with those who want to deal with you, you're in the wrong spot. This isn't about efficiency."

Now, let me add this: I do understand prospecting. It's fine to do if you have no cash to finance anything else. Hel, getting out there and knockin' on some doors is SOMETHING.

And if he had just said, "Well, not TOO qualified, but the commission is fairly large. That would compensate the time." It might have been more agreeable.

Look, let me tell you something: sales is about wasting as little time as possible and making the most from it.

As Gary Halbert put it: "Maximum Money In Minimum Time." I don't want to speak with 1,000 people who are not interested and waste all that time. These are people who have to be sold. They don't already see the benefit of associating with you.

Anyway, thought I would give my two-cents. Expect another post in the near future, folks, about creating a unique "purpose" for your business.

Over and Out,

Angel Suarez