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Sunday, 25 March 2012

Why Do Your Customers Love You? It’s Your DCA That Makes Them!

US Vistage speaker. Walt Sutton, introduced a very valuable concept in his session to my group when he suggested as one of the core tasks of leaders that they should “discover the nature of the Secret and then exploit it”.

Every business has a secret within itself that says, this is what we are good at and this is what our customers like about us.

Illustrate that, then, in some well known businesses. For example:

·       Microsoft makes or buys relatively good software AND they are very adept at marketing it and consequently making money.

·       Google offers a free way to interrogate the web, and the secret is that it gives users the ability to solve a problem of fact or knowledge in an incredibly short space of time.

·       Warren Buffett’s secret is that he understands the guts of businesses, he knows how to value them and then turn that knowledge into money.

Please note: this is not the same as that cliché of all sales and marketing people, the USP or Unique Selling Proposition, which defines (or hopes to) the reasons that customers buy the specific product or service.

I was reminded of the Secret concept this week during a brilliant Vistage session with Australian Vistage speaker, Nick Setchell, who proposed the concept of the DCA, the Dominant Commercial Advantage which, in essence, is much the same as the Secret.

Over the years I have heard some leaders say that they are in a very competitive industry, it is almost impossible to persuade customers to deal with the company, the competitors are crazy, price is everything and so on ad absurdum.

If we then ask them some questions such as:

·       What is your turnover and profit?
·       How many customers do you have
·       How long do they stay with you?

and so on, we can point out that they must be doing something right to encourages the customers to deal and to continue to deal with them

The real questions to ask are:
Precisely why do customers buy from us?  What is it that encourages them to deal with us when they could easily go to another supplier who may, for example, offer lower prices or faster delivery?
The level of turnover alone says that somebody loves us and it behoves us to discover precisely what that mysterious DCA component looks like.
So how to do it?  Probably the best way is through a good brainstorming session with the top team.  Remember that no suggestion should be discarded however strange or even bizarre, as the final selection will define the answer.
Make sure that you are not looking for the USP which is a different animal.  The DCA is hidden in the inner recesses of the business and needs to be uncovered and, most importantly, exploited for the benefit of everyone.
So, what is your Dominant Commercial Advantage and what are you doing to exploit it?  In other words, what are you good at?


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Sunday, 18 March 2012

Sales Force Not Performing? It’s All About Building Relationships!

As a business subject, there has possibly been more written and spoken about sales and selling than any other.  What is still the case, sadly, is that plenty of sales forces are nothing like as effective as they should be.

I was lecturing to some very senior businessmen and women at an august educational establishment some time ago and I asked them their frank and honest opinions of their sales forces and their selling abilities.

Almost without exception they said that they were very happy with the performance and that they considered that their sales personnel were well trained, were good and in some cases, very good.

“That’s excellent”,  I said: “Now, most of you see sales people from other companies from time to time.  In general, how good are they?”

The answers ranged from adequate through terrible to disastrous including “We have asked the company not to send that joker in to us again”.

Rather than say anything, I let silence allow the obvious to sink in and there were at least one or two in the room who looked slightly shamefaced.

On the other hand I was sitting in the reception area of a client’s business waiting to go in when I overheard an interesting conversation on the telephone.

The company sold products door to door mostly in darkest Salford and the customers were often the more mature variety.  In this case, the conversation ended with the receptionist saying:

“Of course, I will, I am sure he will be glad to help you”

She turned to me and said:

“That old lady wanted to know when her salesman was calling as she had to fill in her census form and she needed help”.

That was one of the most pertinent lessons that I ever learned; that far and away the best way to generate great  sales performance is to build relationships.  My old sales mentor, Phil Copp, the Sage of Wythenshawe, once described it as “building a wall round our customers”.

The fact is that many sales people think that selling is a matter of telling the customer about all the products or services and how wonderful they all are, when they should be asking questions and then letting the customer talk. 

There is nothing so satisfying as having a willing listener and as most business people are very happy to talk about their companies and what is going on, they do need someone to listen and make the appropriate noises from time to time.

There is no doubt that good sales people are good questioners and very good listeners which makes them an attractive visitor and one with whom the customer feels they have a rapport.

The fact is that selling is not telling; it is not a matter of beating the customer over the head with facts; it is not about the features of the products; it is all about questioning, listening and then offering a solution to a problem.  That way trust is engendered and the wall starts be built around the customer.

Totally irrelevant quote of the week:

“I am an old man and have seen many troubles.  Most of them never happened”  Mark Twain

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Sunday, 11 March 2012

Assertiveness, aggressiveness or bullying? It’s a very fine line!

The true leader who has the best interests of the business and its people at heart is generally a person of understanding, compassion, and sensitivity among other traits.

These enable the leader to relate to the team and, perhaps more importantly, for the team to relate to the leader.  

Ideally, the leader needs to encourage the team to think about their jobs, to put forward ideas however odd or bizarre, to give praise when due, to limit as far as possible the need to reprimand and to build a "no-blame" culture.

There is no question but that people react favourably to praise and negatively, in some way, to reprimand so it must be used with great discretion and care.  Essential at times, of course, but only sparingly.

Remember that most people are decent and honest and don’t come to work to cause trouble or be disruptive.  The percentage of their time where they are performing well or even adequately invariably outweighs the time that they are causing a problem.

 However, at some point in time, the leader needs to make his/her opinions transparent and clear.  In general a good leader does not give instructions but from time to time it has to happen when the occasion demands.

This can be a really difficult problem for the leader.  Instinctively, the desire is to be inclusive, to discuss and to solicit opinions, but in this case perhaps, quick action is essential and the leader has to be decisive on behalf of the team.

My great friend and renowned Vistage speaker, Lynn Leahy, taught me long ago that there is a huge difference between being assertive and being aggressive.

Assertiveness requires that the instructions are given with respect to the feelings of the team member whereas an aggressive approach rides roughshod over anyone’s feelings just to get the job done.

In these days of employment tribunals, sexism, racism, and general unpleasantness, there is also a fine line to be drawn between assertiveness, aggressive behaviour and worst of all, bullying.

Whatever the leader thinks about his/her behaviour, the only criterion is the perception of the recipient and while the leader may consider his/her approach to be reasonable and assertive in the circumstances, if the recipient perceives that he or she is being bullied, then that is the fact.

Perceptions are reality in the eye of the beholder and there is a real potential problem here for the leader.

Somehow the leader needs to engender a culture which helps the team to understand that in certain circumstances, decisions must be taken at speed and instructions from above must be acted upon with alacrity; all this without any semblance of aggression or bullying, and that is not an easy task.

If you ask any leader if they bully their people, most of them would react with absolute astonishment at the suggestion.  On the other hand, ask the team and you might just get a different answer.  It is a signal for a little self-assessment.

Totally irrelevant quote of the week:

"Whenever I hear music by Wagner I have an overwhelming desire to invade Poland" - Woody Allen

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Sunday, 4 March 2012

Want a Really Successful Exit Route? Make Sure You’re Well Prepared!

One of the pleasures that I have experienced during my time as a Vistage chairman has been working with family businesses both with the family members and sometimes with “hired guns” in the business.

At the same time, I have experienced just as much angst simply because of the emotions which swirl around virtually every decision where people are involved.

Rationality seems to fly out of the window, feelings run high, decisions are made and not communicated, cliques form while in the end the family would probably come together to defend any attack.

There is, of course, no ideal route to any solution.  All family businesses are different and the problems are different.  The only real link is the emotional component which doesn’t necessarily apply in other businesses.

However, the SME sector has one issue which is common to most owner managed and family companies and that is succession.  Perhaps the owner founded the company and has run it successfully (or otherwise) over a number of years. 

Sadly, immortality is not an option and at some time the brutal fact must be faced.  Something needs to be done about the business when he or she decides or has to retire.

The options are many and varied.  For example, appoint a Managing Director from outside with some shares or options, then sell the business to him or her after a suitable time.  Alternatively a trade sale or a straight forward MBO could be considered.

In the end, the question will be, how easy is it for the owner to exit the business?  For how long, in a trade sale, would he/she be expected to stay on?  Would they want to stay on?

It is often a painful experience to leave a business which has been part of one’s life for years, to leave the people, and to have to readjust to the fact that we are no longer involved and other people are running the business.

While staying on is a viable option in certain cases, experience shows that it doesn’t often last and the original owner begins to realise that working for somebody else is not always a very enjoyable experience.

And of course emotion comes into it yet again.  I recall one of my Vistage members negotiating to sell his business to a multi-national corporate for a substantial sum, and they wanted him to stay on for two years to run the business and to assist in succession.

He had started the business with his father and he said to me:

“They want to adopt my baby and then to stay on to wipe its bottom”

The most important criterion is to keep looking at exit routes over a period of time and go for the one for which one feels most comfortable and which shows an acceptable return – not perhaps the maximum but the optimum.

It is a tough decision but it must eventually be faced and it is far better to be well prepared than to have it thrust upon us.

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