MARKETING BASICS FOR MBA

MARKETING BASICS FOR MBA

MARKETING PLAN

˗     MARKETING PLAN COMPONENTS

˗     TARGET MARKET

˗     TARGET CUSTOMER

MARKET RESEARCH

MARKET P’S—MERKET MIX

˗     PRICE

˗     PLACE

˗     PROMOTION

SALES

˗     SALES STRATEGY

You can't sell a product or deliver a service if you don't know who your customer is. Simply put, your customer is the individual or business who pays you. But it's more than that, your customer is the segment of a market that needs your product or service most because it solves a real problem he or she is having. Because if a customer needs what you have, the sale will be easy.

There is no secret to understanding your customers needs all you have to do is ask. What a concept. Yet interacting with customers is something many businesses do very badly if they do it at all. Why is that? We can point to two fundamental reasons.

1)     Owners assume that because they started the business, they must know what their customers want. Wrong.

2)     They assume that if they're getting their products or services out on time and with good quality, they've done all they need to do to satisfy customers. Wrong again.

Today, just keeping your customers satisfied isn't enough. You have to build long-term relationships with them. Why? Because the world has changed. Today's customers are jaded: they're bombarded with an endless variety of products and services, so many in fact, that they end up frustrated and ultimately choose based on the best price; couple that with the power that the internet search engines have given to customers by enabling them to compare products online and find the best price anywhere in the world. And you have a challenging situation for businesses trying to stand out from the crowd. Even if you do manage to stand out with your product, a competitor that can sell your product more cheaply may win the customer. Competing on price alone however, is a no-win situation for everyone.

Your best bet is to show your customers that your company offers intangible benefits that make it a better choice than the competitors. To do so, you need to understand who your customer is and what his or her needs are. You can't meet a customer's needs if you don't know who the customer is. If you agree that the customer is the person or business who pays you, the one who controls the purchasing decision, defining who your customer is will be easier.

Customers want benefits not products. We're amazed at how many companies take the field of dreams approach to the products and services they offer. They figure that if they build it, the customers will come. Nothing could be further from the truth: customers are very smart people, they know exactly what they want, when they want it and how they want it and the main thing they want are benefits.

Remember! Assuming that customers buy based on the features of your product or service, is a mistake. Customers are more interested in what the product or service can do for them. They want to know “what's in it for me”.

 

MARKETING PLAN

A marketing plan is really just one part of your overall business plan. A marketing plan is a living guide to your goals for starting and building a loyal and sustainable customer base. It contains your marketing goals and the strategies and tactics you'll use to achieve them. But don't think that you can write one marketing plan that will be good for the life of your business or even for a year for that matter. Rather, an effective marketing plan should evolve with your business, your customers and the market.

Before you sit down to outline your marketing plan, do some preparation to make your job easier. First of all it's very important that you include all the members of your management team as well as key frontline employees in the planning process; people from marketing; finance; manufacturing and distribution. More input you get from all the functional areas of your business, the more successful your plan will be. And don't forget to include the customer in your planning: ask some of your best customers to give you feedback by inviting them to participate in the planning process; let them know that what they have to say is important.

A kickoff meeting is probably a good place to start at the meeting. You can share ideas and assign duties that individuals or teams can undertake on their own. But be sure to regularly meet as a large group, to make sure that everyone is on target. Here are some tips for getting started:

·        Brainstorm a list of possible marketing strategies and tactics.

This list can help you see all the possibilities before you narrow down the choices. You need to have a good understanding of which previous strategies have been successful and which ones have not. You can gain that understanding by looking at other companies in the industry, find this information in popular business magazines such as inc and fast company. It's some of the major business resource sites on the internet.

Your goal is to collect as many strategies and tactics as you can. At this point, don't worry about whether they're feasible for your company. You really want to make sure you haven't missed a great strategy or a tactic. You can judge feasibility after your list is complete.

·        Tried to think like a customer.

Look at your company, its products and services and its employees from the customer's perspective. In other words, step outside of yourself for a bit and look objectively at your business and what it offers.

·        Know your competition as well as you know your own company.

Look at what your competitors are doing right and what they're not doing, that maybe you should be doing. Can you think of ways to improve on what your competitors are doing? Begin analyzing your options and ranking them. Start by eliminating quickly those options that aren't possible for your company: at this time perhaps, they cost more than you have in your budget or maybe they just aren't appropriate for your customers. For example if your customers aren't regular television watchers, you probably don't want to waste money advertising on that medium.

After you've followed these tips, you can begin to write your marketing plan

 

MARKETING PLAN COMPONENTS

Your marketing plan can be as elaborate as a complete 50-page business plan or a Spartan as a one paragraph plan. In fact, starting with one paragraph that says it all isn't a bad idea. Many very experienced marketers suggest using this approach because it forces you to keep your plan focused and to identify the key components. A good one paragraph marketing plan has the following seven components:

1)     Purpose, what's the marketing plan supposed to accomplish

2)     Benefits, how will your products and services satisfy the needs of your customers

3)     Customer, who is your primary customer and what's your strategy for building long-term relationships with that customer

4)     Company, how will the customer see your company. Remember, customers are some of the many people who will contribute to positioning your company in the marketplace.

5)     Niche, what's the niche in the market that your company has defined and will serve

6)     Tactics, what specific marketing tools will you use to reach customers

7)     Budget, how much of your budget will you allocate to marketing efforts

 

TARGET MARKET

You've probably heard the term target market before. Target market represents the segment of the marketplace whose needs your product or service will satisfy. To put it another way, the target market consists of the customers who are most likely to purchase your product or use your service.

It's important to target a specific market rather than try to hit the whole market at once. Why is this? The answer is simple: marketing to customers is a very costly undertaking for any business. So you want to be sure that you reach the customers who will actually buy from you. And who are those first customers? The ones in the most pain because they have the problem that you're solving; they're the ones who have their credit cards out when your product or service hits the market. This section helps you identify and serve your target market.

In your search for your target or customers, you'll encounter many types of potential customers. So it won't always be obvious which group you should target first. One quick and easy way to help segment all your potential customers is to create a customer matrix. A customer matrix is a table that compares all the categories of customers you identify across several characteristics or variables. The typical characteristics used to compare customers are:

·        The benefits that a particular customer seeks from your products and services

·        The distribution channel you can use to deliver those benefits

·        The marketing strategy that's appropriate for that customer

Of course you can add any other type of comparison category you want. These three categories however, will get you started. Likewise, it follows that if you're reaching different customers through different distribution channels, you'll probably also use different marketing strategies and tactics to create awareness and motivate them to buy.

After you pinpoint your potential target customer, it's time to create a customer profile. An in-depth description of the customer market research can help you find out more about that customer and the size of the market for that customer.

 

TARGET CUSTOMER

Before you do your market research to learn about your Target customer and possibly reinvent the wheel, it's a good idea to find out what others have said about your customer. There are four broad ways to segment a market which i outline in the following list. These methods are guides for you, don't forget that the best way to understand and Define your customers is to get out there and talk to them.

1)     Demographics

Demographics are the most common type of segmentation. Good market research firms can tell you down to the precise neighborhood: what people buy, when they buy, how much they buy and how much they earn. These firms also can give you information on standard characteristics such as sex, age, disposable income, ethnicity and so forth.

2)     The benefits of the product or service

Market research can tell you which types of customers are seeking convenience, wanting to save time or looking for superior quality and are willing to pay a premium for it. If such a benefit is what you're selling with your products and services, you want to know about these customers because they're your most likely purchasers.

3)     Location of your customers

Customers in various parts of the world have different purchasing habits and different needs naturally. Then the location of customers will affect your distribution and marketing strategies and probably even the design of your product.

4)     Psychographics

When you look at the personality traits, Lifestyles and behavioral patterns of customers; you're looking at psychographics. Psychographics are very important in deciding which types of marketing tactics will catch your customers attention.

Remember! If you describe your customer by using the four segmenting variables we discussed in this section, you'll have a better picture of whom you're dealing with.

 

MARKET RESEARCH

Market research is about gathering information about potential customer and market segments that can help you understand your customers and their needs. Market research is a lot like doing your taxes: you dread doing them, put them off to the last minute and then revel in what you learn about your finances as a result of doing them. If you can discipline yourself to do marketing research, it can reward you with customer intelligence that will get that revenue stream flowing.

In the early stages of market research, your target market description will be quite broad and based on samples of the population done by others. But as you get out in the market and talk to your potential customers, your definition of the target market may actually change and you may find that your potential customer is really someone quite different from what you originally thought.

Another important reason to do some of your own market research is that you know best what types of information you need for your business. In fact, defining the kind of information you require is actually the first step in doing effective market research. This section explains what information you need to gather and how to find it.

Smart market researchers always identify the information they need before they go out to talk to customers. Think of how frustrating it would be to have to finish a bunch of customer interviews only to discover that you forgot to ask a very important question. Remember, here's a list of the kinds of information that most businesses need. Of course you should modify it to suit your specific needs.

·        What do your potential customers typically buy?

·        How do they hear about products and services?

·        How do they like to buy your particular type of product or service?

·        How often do they buy?

·        How can your company best meet their needs?

Also make sure that you collect data that gives you a sense of trends in the market and the level of demand for the product or service you're offering. The toughest question facing any company introducing a new product or service to the market is: how do we figure out how much we'll sell? Unfortunately there is no totally accurate way to get the answer. You have to triangulate, come at it from three different directions to get a number that seems to make sense. Trust me, no one gets it right all the time. The following list presents some tips to help you get as close as possible to the real demand for your product or service.

·        Look at substitute products.

If your product or service isn't unique or one of a kind, and most aren't, you may be able to find a similar existing product. Study its demand patterns and extrapolate that information to your own situation. Be sure when choosing a substitute product or service that you choose one that uses your distribution channel. The number of intermediaries a product goes through to reach the customer affects the final price.

·        Talk to industry experts.

The people who deal with your type of product or service every day. Have a good handle on demand, so talk to distributors retailers, suppliers, anyone that deals with your category of products or services.

·        Do a test market.

Many companies particularly those dealing in consumer products do test markets in cities where the population is generally representative of the united states at large, denver for example. Manufacturing a limited production, run and employing limited advertising, enables you to see whether the product catches on before you incur the huge cost of large-scale production and advertising.  

When you add your own experience and understanding of the customer and the market to this list, you've probably done the best you can to predict demand.

 

MARKET P’S—MERKET MIX

We know that marketing texts refer to the “four Ps” of marketing: product, price, place and promotion. But it has always seemed a little odd to us that the four Ps never include the most important P of all: people, namely the customer.

·        People (Customer)

If you don't understand the customer, all the rest is just a waste of time. The customer determines the price, how you deliver the product, what the product looks like and how you promote it.

·        Products 

Products include features and benefits. Your product or service is really a bundle of features and benefits in the eyes of the customer. Recall that features, include such things as Quality Service, warranties options, characteristics and so forth. Benefits are the intangible aspects. In other, words what's in it for the customer.

Remember! If you take these advice and include customer input when designing your product or service, you'll have a big jump on the product side of marketing. The fact that customers design your products and services is in and of itself a strong marketing message about your company.

·        Positioning

You need position not only your product or service, but also your company. One helpful tactic is to write a positioning statement that explains how customers see your company relative to your competitors. After you've written your statement, test it on your customers, make sure that it is really how they view your company. If you find that you're off base, go back and revise your positioning statement and test it on your customers. Again, you want to make sure that the image you present in all your advertising and promotion reflects what customers expect to see.

·        Packaging and labeling make a difference.

Maybe you never thought of packaging and labeling as part of your marketing strategy, but the way you package your products says a lot about your company. Particularly if you're selling consumer products, packaging should reflect: the culture of your company; the nature of the product you're selling and the channel through which you're selling it. But remember! When you Market on a global basis packaging takes on a whole new meaning because what's acceptable in one country may not be in another.

 

PRICE

No matter what else you're doing right, if you don't price your product or service correctly, it won't sell in enough quantity to allow you to make a profit and survive. Pricing is a real challenge for most businesses especially when you introduce a new product.

Customer price tolerance determines where your price should be, but the customer isn't the only arbiter of price. Here are some other things to consider:

·        You usually can command a higher price if demand for your product or service is greater than you can supply. If you're distributing a product or service that people will buy no matter what it costs. In economic terms: the price is inelastic, you're free to charge more. A simple example of this type of product is milk.

·        You may have to hold your price down if you have a lot of competition. In this case, you can show intangible benefits to your customers. They may pay more for your product just to get benefits that they can't get from your competitors. You usually can charge more for added features but only if customers perceive them as value.

·        If you're introducing new technology, you probably want to charge a higher price. Initially to recover your development costs and then bring it down as competitors enter the market.

·        If you successfully position your product among higher priced items you may be able to command a higher price.

Remember! The strategy you use, the price your products, may change over time depending on where they are in the product life cycle:

·        Cost based pricing is based on adding a profit margin to the cost of producing the product. Of course you also need to consider how competitors are pricing their products as well as market demand.

·        Sliding on the demand curve is a strategy in which you introduce a product at a high price and then as technological improvements let you achieve economies of scale, you reduce the price. This strategy enables you to maintain an advantage over competitors.

·        Penetration is a strategy that's effective in a very competitive market with similar products. Employ it when you need to gain quick acceptance and broad-based distribution. Penetration involves introducing the product at a low price which produces very minimal profit then you gradually raise the price as customers accept the product. This strategy requires huge expenditures for advertising and promotion.

·        Demand based pricing focuses on finding what customers are willing to pay for the product.

·        Loss leader pricing calls for you to price your failing or obsolete products below cost to attract customers to other products in your line.

Choose a strategy that reflects the type of customer you have; your costs related to the product and the competitive environment.

 

PLACE

Place is more than location. In marketing terms, place has to do with where your customers find your products and services. Having a good product or service isn't enough. You need to get it to customers in the manner that's best for them: whether that be a retail outlet, mail order, direct from the manufacturer or via the internet.

Just because your business is located in a particular place doesn't mean that customers will automatically seek that location when they're looking for your product. Talking to your customers will tell you where they want to find your product or service. Doing anything other than what the customer expects is a recipe for disaster.

 

PROMOTION

The purpose of the promotion part of your marketing plan is to firmly establish the identity and vision of your company in the customer's mind. Promotion is perhaps the most creative and important aspect of marketing. It includes: personal selling, public relations, gorilla advertising (usually limited resources and creative methods), sales promotion and publicity.

You can't plan an effective promotion strategy if you don't know your customers. Talk to your customers. I say that a lot don't i? Doing so will pay big dividends and save you a lot of time and money.

 

ADVERTISING

At its heart, advertising is communication with consumers. More specifically, advertising is non-personal mass communication intended to encourage potential customers to buy a company's products or services. Why advertise? For one thing: companies lose on average 25% of their customers every year. This lost creates an ongoing need to encourage new customers to buy products or services.

Companies spend billions of dollars each year to advertise their products and services for other reasons as well. In addition to attracting new customers, here are the key objectives of advertising:

·        Improve brand recognition

·        Persuade potential customers to buy from you rather than from a competitor

·        Generate sales leads

·        Promote special events and sales

·        Improve the image of the business

·        Increase the quality of items or services purchased

·        Increase the amount spent per order

The right advertising viewed by the right people at the right time and place can achieve all the goals in the preceding list. However, you have no guarantee that the right people will see your ad or that they'll see it at the right time and place; but making this happen is critical to advertising success and it's central to the focus of advertising agencies and clients alike. This section shows you how to place the right message with the right people where they are most likely to notice it

 

AD CAMPAIGNS

Companies spend billions of dollars and Powerful advertising agencies work thousands of hours to fine-tune ad campaigns for consumers. Advertising has evolved into a fine art of creating a response from people who are a company's potential customers.

Advertising usually is an expensive proposition and if it isn't done properly, it can be an incredibly easy way to waste money. Just like owning a boat, an advertising budget can become a big hole in which you dump all your money. Don't let your company's money go to waste and your customers slip through your fingers and into the competition's hands. Plan your advertising efforts and Target your best audiences. Be sure to follow these steps:

1)     Set goals for your advertisement

Are you trying to create a good feeling about your company among people who view your advertising? Are you trying to get people to buy more of your products or services? Are you trying to convince readers that you put quality at the very top of your list of priorities? You should develop your advertisement after you understand why you're advertising, not before

2)     Develop a budget

Before you advertise, decide how much money you can devote to the effort and create a budget based on this estimate. After you decide on a budget, stick to it. Avoid the temptation to load your campaign full of unnecessary extras at the last minute.

3)     Choose a target market

Who are your most likely customers or clients: stay-at-home moms and dads who watch soap operas on television? Golfers who love to spend loads of money on vacations to Exotic destinations? Tech files who absolutely must have the latest and greatest Gadget? Whatever it may be, people in your target market should be your number one priority when it comes to advertising.

4)     Pick a medium

No not a fortune teller, we're talking about picking which of the various kinds of media you'll use for your advertisement. Your decision will be based in large part on your target market.

5)     Create your advertisement

Although you can design your own advertisements, you'll likely be well served by bringing in a professional advertising firm to take on this important task. The best firms can work closely with you to ensure your input into the creative process and your ultimate satisfaction with the final result. This is a case where getting a referral from a colleague or other trusted source is a very good idea.

6)     Place your advertisement

Although designing an effective advertisement, isn't necessarily an easy task. Placing the ad Generally is quite easy members of the media. Place a very high priority on Advertising sales and they'll be quite happy to take your money. As a result, most media Outlets have made placing ads simple: they'll provide ample sales, people and customer service to help you through the process.

7)     Track your response

Closely track the results of your advertising campaign to find out whether it has the desired effect. In most cases, getting results means people buying your product or service. Is there an uptick? In sales, after your advertisement runs for a week on a local radio station, are you getting lots of click-throughs on your web-based ad and are these people actually purchasing your products? These kinds of results tell you almost immediately whether you've taken the right approach. They also reveal whether you should continue with a particular ad or whether you should dump it and move on to something else.

8)      Adjust and repeat as necessary

After you have the results of your advertisement, you can adjust your ad: including the ads design and where and how often it runs and then repeat steps one through seven. Ads that run more frequently for example, on television once every hour or once a month in a monthly magazine get a better response from consumers. However, this effect is offset by your budget and how much you can afford. When you assess your campaign, a positive change tells you that you're on the right track; a negative response tells you that you've got your work cut out for you. Remember! Running a successful advertising campaign isn't an accident. If you take the time to create a plan to organize your own efforts, your advertising dollars will go further and your money will hold out longer.

 

AD PLACEMENT

The answer to the question where's the best place to advertise is simple. Advertise where your potential customers are. If your target customers are buyers of cutting-edge computer equipment, chances are you'll find them surfing the web or reading a variety of computer magazines that cater to their particular tastes and interests. If you spend your advertising dollars in places where you have no potential customers, you're wasting your money. Surely one of these places will work for your company's advertisements based on where your potential customers are:

·        Internet

websites are currently the hottest but also the most uncertain places for companies to advertise and despite early indications, banner ads those pesky advertisements at the top side and bottom of many websites are only marginally effective with click-through rates of no more than 0.5%.

The internet can be the least expensive place to go for advertising: with programs such as google adwords you pay a small amount of money often much less than a dollar each time a potential buyer clicks on your ad. Expect advertising on the internet to continue its dramatic growth into the future but be aware that this form of advertising may be the most appropriate for brand building that is when you are trying to increase customer awareness of your brand.

·         newspapers

Although newspapers traditionally have been the first stop for many company advertising campaigns, their popularity is declining as a media outlet. Which means, they're also becoming less popular as an advertising medium. More people than ever are getting their news directly in near real time from the web or from 24-hour cable news networks such as cnn and msnbc.

Many newspapers have established a strong online presence to retain old readers while attracting new ones and tapping into new sources of advertising money.

·        Magazines

Magazines are terrific places to advertise because they're typically targeted to specific audiences. You can choose from among car magazines, sewing magazines, news magazines, stereo equipment magazines, sailing magazines and many more. Each publication has its own unique demographic of readers just waiting to read your advertisement and don't forget that many magazines are also online and you may be able to leverage your advertising money into both venues at a nominal additional cost

·        Direct mail

With direct mail you get to choose who receives your marketing piece and you get to decide exactly what message to send and how often to send it. Although not particularly effective by itself, the response rates for successful direct mail campaigns are measured in the low single digits.

Direct mail can play an important role as part of an overall marketing campaign. Email direct marketing has much higher response rates up to 15%. So many companies are choosing this less expensive route to reach potential customers.

·        Radio

When you have a good idea of who your prospective customers are, you can target them through the selective use of radio ads. Different radio stations have different kinds of listeners: a station that plays classical music all day long for instance, has a much different listener profile than a station that plays alternative rock all day long.

·        Television

Television advertising can easily be shown at specific times and days of the week. Depending on your audience's demographics, a company that advertises on a midday television game show may never advertise on a late night comedy show and vice versa. Keep in mind that television advertising is the most expensive form of advertising. So try the other forms first if you can.

·        Outdoor signs

Billboards: the sides of buildings and buses, baseball stadium outfield walls, all are examples of outdoor advertising. At its best, if you can put an ad on it you can bet that someone already has somewhere.

 

PROMOTIONAL MATERIALS

Whether you focus on advertising campaigns or not, the bulk of your company's marketing efforts and cash probably go into creating and distributing promotional materials. Promotion is the conveying of information about your company and its products and services. Although most promotional materials are written or printed for inexpensive and easy distribution, they can also take the form of email messages and websites.

Chances are, you've already used one or more of the following promotional items in your business:

·        Sales letter

A sales letter is a written appeal to a customer to consider buying a company's products or services. A sales letter may contain information about the products or services as well as special offers for buying sooner rather than later: a sales letter often is accompanied by brochures product sheets or other promotional materials.

·        Brochures

Brochures generally present detailed information about a company product or service. They can take the form of a simple piece of paper folded in half or in thirds or they can be slick full color multi-page marketing pieces or reports.

·        Product sheets

 got a product? If so you should have a product sheet to go along with it. A product sheet is a one page often front only but sometimes front and back description of a product along with a photo and key specifications. A product sheet should be complete enough to answer your customers initial questions without overwhelming them.

·        Publicity photos

Publicity photos give your customers and the media a good idea of what you and your products or services look like. Generally, publicity photos are accompanied by other promotional literature: perhaps brochures or press releases

·        Audio or video

Although brochures product sheets and publicity photos for instance are static, audio tapes and videotapes are dynamic. Which means they can convey much more information than a simple piece of paper can. Today, audio or video promotional materials usually take the form of cds or dvds. However, with the rise of high quality streaming video on the web, the use of online promotional materials is surging.

·        Promotional kit

A promotional kit is a folder that contains some or all of the preceding items in the list. A kit for your company's latest disposable camera for example, may contain a sales letter, a brochure, a product sheet, a publicity photo, a video and a working sample of the camera. The purpose is to give potential customers an in-depth look at your product. Which hopefully will generate interest and sales.

·        Websites

Many companies are transferring their promotional materials to their websites for a couple reasons: first, doing so costs little or nothing because you've already invested the money to create the promotional materials; second, a website is on 24 hours a day, 7 days a week, it doesn't sleep and it doesn't take breaks (well unless the server goes down). However, because websites depend on people making an effort to discover and visit them, you need to find ways to help consumers along: plaster your url everywhere possible on your products, in your advertising on blogs where your prospective customers hang out on, the side of the goodyear blimp wherever people might see it and be compelled to take the time to visit your site.

Remember as with all marketing materials, you should tailor the use of your promotional material specifically for your intended recipients. Figure out what kinds of materials your target customers will most likely respond to and then provide them with these materials.

 

SALES

In transaction marketing, buyers and sellers usually have no ongoing relationship with one another and Communications are limited: the primary goal is short-term sell something and sell it now. What? You don't like that pink Cadillac, how about if we repaint it for you? What do we need to do to get you to buy this car right now? Many sales people and the companies that employ them including car dealerships are now trying a new approach. Because people are becoming less responsive to the old one

This new approach is based on relationships, not transactions. Indeed, more and more companies are discovering that creating ongoing long-term relationships with clients and customers can pay off. In increased sales and in decreased marketing costs over the long run and these results mean a much healthier bottom line.

With this new approach called relationship-based selling, the focus is on building a long-term relationship with a customer: selling the benefits of your product or service; providing medical customer service; being totally committed to the customer; talking to the customer continuously.

Why the change in emphasis from transactions to relationships? It's really quite simple: people prefer to buy from companies with which they have relationships. They want to do business with companies that show they care about their customers. You can show that you care through: your commitment to your customers; your Superior customer service and the importance you place on maintaining a relationship rather than simply selling a product.

So suppose that you want to change your company's sales approach from transaction based to relationship based. Exactly how do you do that? Here are the Four Keys to building relationships with your clients and customers. Put these to work in your organization right away:

1)      Build trust

The first step in developing long-term relationships with your clients and customers is to build trust by doing what you say you're going to do. Trust is the glue that holds business relationships together and makes them stronger and deeper over time.

2)     Create bonds

Long-term business relationships depend on the creation of bonds between organizations and customers or between two organizations. Bonds are formed when organizations and people find that they have mutual goals and interests and they decide to work together to take advantage of them. As relationships grow, these bonds get stronger.

3)     The empathetic

Being empathetic means that you see a situation Through The Eyes of another party. If you're empathetic as a salesperson, you'll develop an understanding of a customer that goes much deeper than a relationship focused only on a transaction. Empathy is an emotional link that builds trust between parties.

4)     Encourage reciprocity

Sometimes you have to give a little to get a lot. Reciprocity is giving up something that you want to get, something that you need. When reciprocity is present in the business selling process from customers to suppliers and vice versa, the result is a stronger business relationship that's built to last.

5)     Customer relationship management (CRM)

Is the latest and greatest way to manage your business's relationships with your customers. In essence, a CRM is simply a computerized database that tracks information about customers. In the old days, customer information: names, addresses, phone numbers and so on was filed away on index or Rolodex cards or on sheets of paper stapled into file folders. Today, digitized CRM systems are light years ahead of those old approaches to doing business and a number of computer systems on the market specialize in capturing storing and analyzing customer information. Here's a list of the functions you'll find in a typical CRM system:

·        Company and contact management

·        Lead management

·        Activity management

·        Opportunity management

·        Charting

·        Reporting

·        Email marketing and mailing list management

·        Sales forecasting

·        Microsoft Outlook

·        Email integration

·        Notes

·        Business intelligence management

Remember! Computerized CRM systems offer the following benefits to the businesses that use them. Enables companies to provide better customer service by centralizing customer information and making it more readily: available to those who need it; makes it easy to share customer information throughout an organization, just down the hall or around the world (you can quickly Share info because of its ready availability on most any company computer or even data enabled phones such as Trio and blackberry); help companies give customers exactly what they want, when and where they want it.

As customer ordering information is compiled over a long period of time, sales people can better anticipate future customer needs, makes the entire selling process more efficient, it saves both time and money that used to be wasted in trying to coordinate a variety of customer. Information systems often paper-based in scattered offices, helps companies retain their current customers by keeping them satisfied while they search to find new ones

6)     Identifying your best customers

Remember! Who are your best customers? Very simply, they're the customers who account for the greatest percentage of your sales: the loyal, repeat customers who cost you the least to maintain and send more dollars to your bottom line. You like these customers.

If you adopt a good customer relationship management (CRM) system, finding the best customers and the worst ones will be easy. Tip: you can devise your own measures for determining who's a valuable customer but one way to do it, involves statistics. This suggestion is for people who like to crunched numbers. For the rest of you, look at the total revenue generated by the customer and the frequency of its purchases compare those figures against other customers. You may decide to take the top 25 percent of your customers and see what they contribute to your totalrevenues.

 

SALES STRATEGY

After you identify your best customers and do what you can to reward and keep them in the short term, you should consider how to keep them happy for Life. The strategy i recommend is based onthe characteristics of this new business world we live in. If you apply this win-win strategy in your business, you'll sell to satisfied customers who keep coming back for more. Specifically, the strategy is centered on four principles of the new Marketplace:

1)     Owning your Market

To be successful in business today, you have to create your own niche in the market and be the leader. When you're the market leader, people look at you differently: you have an automatic Edge over your potential competitors, you set the standards in the market and can encourage others to develop products and services that are complementary to yours. That was Microsoft strategy when it carved out a niche in computer operating systems with its Windows product.

If you find that competitors aren't meeting certain customer needs in your industry, you found a niche that your business can serve.

2)     Positioning your company

Products come and go but if you run your business correctly, your company will last for a long time. Therefore, it makes sense to spend as much or even more time positioning your company in the market than your products and services.

Positioning is attempting to control the way customers perceive your company and its products and services. Taking a proactive approach to positioning your company is important because if you don't position it your customers, Distributors, suppliers and competitors certainly will and they may not position your company the way you want.

Remember! With positioning, perception is reality. Whether what's perceived is true or not, the customer makes decisions based on his perceptions. So it's important that the perception of your company and its products and services is a positive one. Customers can perceive two identical products differently depending on how they're marketed. For example, you've probably seen a brand name product in a store located right next to a generic brand that has the same ingredients. Many consumers purchase the name brand for more money just because they perceive a difference, even though one doesn't exist.

3)     Mass customizing

No this isn't an oxymoron. One great benefit of technology is that it allows businesses to customize their products and services to meet the specific needs of customers. Mass customization is giving your customers what they want, when they want it and in the specific way they want it. Anything that can be digitized can be customized. Manufacturers that use computer-aided manufacturing techniques for instance, can program in customer changes by pushing a few buttons. Here's another example: companies that produce written documents can easily customize wordingto speak directly to specific customers.

Remember! The fundamental requirement for Mass customization is a good relationship with your customers. When they trust you, they can guide you in your efforts to give them exactly what they want.

4)      Focusing on things you can't touch or see

Businesses often become so product or service focused that they can't see or they ignore. What's really significant? The most important things about your company and its products or services are the things you can't see or touch the intangibles. In other words: quality, customer focus, reliability. Remember! When your competitors start competing based on price alone, the only way you can gain an advantage is by adding value with intangibles. Customers tend to buy from businesses with which they have ongoing relationships and where they perceive value. Because they've invested time and effort.

5)     Getting rid of bad customers

It may sound harsh to encourage you to get rid of your bad customers but the reality is that they're holding your business back. They're: the ones who have a bad debt history with your company; they buy infrequently and in so little volume that if you ran the numbers you'd fine; that keeping them actually is costing you money. The most valuable customers on the other hand, are making you money. Every company has good customers and bad customers. Your goal is to keep the good customers and get rid of the bad ones there are two key ways to get rid of your bad customers:

·        Convert your bad customers into good ones. ideally it would be great if you could simply convert your bad customers into good ones. In some cases, you may want to give it a try how sometimes you just need to give a bad customer a wake-up call to let them know that the party is about to end. For example, you can say if you know an order at least ten thousand dollars worth of coffee beans? Within the next month we'll have to ask you to take your business elsewhere or you can try giving your bad customer special incentives to buy more of your products or services such as a one-time discount for signing on to a long-term buying program. Fire your bad customers by refusing to do business with them.

·        Unfortunately some bad customers aren't worth saving. These customers will be bad forever no matter what steps you take. Do what you can to identify these customers, as soon as you can and then simply refuse to do business with them. You don't need to be nasty about it, just tell them that they need to find other companies to do business with.the breakup may sting for a little bit but short-term hurt is well worth the long-term gain to your business