How to Choose Your Customers

joh11a_conversionrateWhen I just started out in marketing, someone told me:

“Your prospects need to earn the privilege to be your clients”

At the time, I thought this is a nice psychological trick to increase the perceived value of my service.

Years later I found out, how dead wrong I was. Choosing the right customers is not a sales trick. It is a profound requirement for any business, and if you fail in that your business will not be fun – and by far not as profitable as it could be.

Here is a presentation explaining the concept:

Success by Selling with Integrity

Why is Porsche’s Return on Sales rate for 2014 15,8%, while Volkswagen Passenger Cars posts only 2,5% Return on Sales? What is the secret behind Amazon’s seemingly unstoppable growth?

 

 

Video length: 21 minutes


This video discusses the impact good or weak customer relationships on growth and profitability of a business, using Amazon, Volkswagen and Porsche as examples.

What do you think, why can Porsche charge almost 20% more for a car, which is sold only with little modifications as Volkswagen for a much lower price? Is it indeed customer relationship, or is there another reason?

Please share your thoughts in the comment section.

Selling with Integrity – Part 1

This video discusses an Amazon product page offering a book for sales to find out how they are selling.

Is Selling with Integrity a pipe dream? Or is it the way of the fastest growing and most successful businesses? Leave a comment with your thoughts:

The Sales Process – Building Trust and Relationships

I hear scores of people calling themselves “internet marketer”. But an online sales person? This must be a very rare species!

Selling –  Not Marketing Generates Cash

It is true: marketing activities support sales by researching markets, helping to design products which people want, helping to know  here to look for prospects and how to talk to them.

Although marketing activities are useful and important, they incur expenses. On the other hand, sales generate cash. And without cash, ergo without sales, your business will die rather quickly.

It seems to me that many “marketers” don’t like to think of themselves as a salesperson because they feel shameful of selling. Many seem to think that selling is the same as playing with the minds of their prospects, misleading them and pushing them to buy things they do not need. They think of selling as just another way of picking money from people’s pockets.

This is unfortunate, because businesses need to sell their products and services to customers. They need to convince them that they are better off with the product, even if they have to pay hard cold cash for it. Unlike government and organized crime, as a businessman you cannot rely on force to peddleyour product or service.

Negative Emotions Kill Relationships and Trust

But if you think that selling involves misleading  prospects, you probably will…

  • just try to use deceptive practices when selling.
  • and – if you are a decent person -you will feel shameful for that.

The bad news is: If you try to deceive somebody and feel shameful about it, your prospect will notice. He will dislike you, even to the point where he avoids to talk to you. If that happens in the context of sales, your closing rate – or in direct marketing terms you conbversion rate – will tend to be zero, and you will have a very hard time to generate the cash you need. Success will be elusive.

This suggests the conclusion that you have to be a hard nosed and cynical guy to be successful in sales. But this is not true. Although you will sell more if you are deceptive and cynical than somebody else who feels shameful about his actions, t the deceptive and cynical guy will be only mediocre sales man.”

“Know Your Trade” Applies  to Sales, Too

The masters of sales use a step-by-step approach to selling. Here are the four most generic steps in a sales process. Obviously every step can be divided up into more sub-steps.

  1. Prospecting (Lead Generation): You look for people who migh be interested in your product, and for whom your solution makes sense.
  2. Qualifying: You seperate those leads who are likely to buy from those, who will probably not buy. Reasons could be that they have already a similar solution, they do not have money, they would not profit from your solution etc.
  3. Presenting: You open a two-way conversation with those who survived the qualification process. You discuss the problem at hand, and how your solution can help them to be much better off.
  4. Closing: After you presented to the prospects all relevant information and helped them to imagine how much better off they were with your solution, you ask them to make a decision. If they cannot make a decision immediately, you set a deadline.

Selling does not involve pushing people, or telling them what they should do. Instead you give them all the information and tools (like samples) to come to an informed decision and ask them to decide. You gear the prospecting process in a way that you get those leads who might be interested in your solution, and you use a sharp qualifying process to weed those leads out of the sales process who would not buy anyway, or who would create a lot of headache for you after the purchase, because your solution would be not very helpful for them.

Careful targeting of the prospecting process, and a sharp qualifying process are as essential as a professional presentation and a strong call for action. Without the first two steps you will waste your money and energy with people who will never buy, or worse, with those who will have no real use for your solution and then spread everywhere that your product is not worth the price.

Selling to the wrong prospects leads to low sales conversion rates and small profits. Such lack of earnings lets some sales people conclude that they have to deceive people and try to trick and bully them into purchasing their product or service.

But deceiving and bullying prospects sets them on a slippery slope. Over a short time conversion rates will further erode.   Trust and respect for such a salesman in his audience will suffer badly. If he does not reverse his behavior quickly, he will end up pushing cheap but useless merchandise  onto stupid people, living a life of scarcity, but with an abundance of hassles.

Trust and Relationships Are a Salesman’s Main Asset

This approach will grow trust and relationships even with those people who do not buy this time, because you provided through the sales process itself a very valuable service to them: You showed them a problem possibly from a fresh perspective, presented a possible way to tackle that problem and left them either with a potential solution, or the knowledge why that solution is not for them and for what they have to watch out if they want to solve the problem at hand.

Related books:

About Learning

Johannes Stockburger writing about  learningForgetting learning was the one huge mistake I did a few years ago. I was just content with the system that was working for me. I was building a travel agency using Google Adwords, and it worked fine for me. I got new customers, albeit for a price. But through repeat purchases the expenses were coming back.
Next came the meltdown of the financs system 2008. I added money to increase the exposire, but the return was shrinking. This bankrupted me almost, before I just stopped advertisements and worked only with the customers I already had. I improved the service and concentrated on the customers who appreciated my work. Business was growing nicely, and with it profitability. But then in 2012, the crisis of the Euro zone flared up, shrinking the activity of my best customers. Now, I had foreseen this and prepared to add another income stream from publishing. Here I could reach the whole world, depending less on the Euro Zone and its problems.

In Two Years Back to the Newbie-Level

But when I returned in 2011 to build a business using the internet as main communication media, I found that not a single one of my old methods and techniques from the time prior to 2008 was still working. I found myself reduced to the position of a newbie. And worse, it tokk me some time to realize this. There were so many new things:

  • Government regulations have changed. Today it is in Germany courts even raise questions about the double-opt-in routine. Some judges classify the first email sent after a user requested to join a mailing list through a web formas SPAM. There have also been big changes around the use of testimonials and endorsements.
  • Email deliverability and click-through-rates are dramatically down.
  • The way search engines evaluate and rank websites has changed dramatically.
  • Social media like Facebook, Twitter and Google+ are now hugely important.
  • Video is in everybody’s reach and absolutely necessary, if you want to build an audience.
  • Publishing ebooks and even printed books is now in reach for everybody.

These are huge changes, and all happened just in a few years. This dynamic is full of opportunities. But if you ignore learning and fall into the trap of doing things the way you always did, this fast flow of change is deadly.

How to Embed Learning into the Daily Work Routine

The only way to survive and thrive is to stay on top of the game and adapt constantly. The question is: how to do this without getting paralyzed and overwhelmed?

Here are some of the answers:

  • Stay connected to the top people in each field, listen to their discussions and whatch what they are doing.
  • Select people with a strong desire to learn to share your working day.
  • Join a mastermind group. Share your observations and brainstorm for solutions.
  • Observe your customer’s feedback closely. Do not rely only on words, watch their behavior.
  • Automate mechanical tasks and processes to avoid being eaten up by daily chores. This allows you to keep learning.
  • Consider outsourcing tasks which can be done better and cheaper by specialists.
  • Develop several income streams. This allows you to react flexibly on sudden changes.
  • Do not allow stress ruling your work experience.

This list is by no means exhaustive. There are many more possible ways to integrate learning into your day. But I think, the key is to create a working environment fostering an open mind, curiosity and happiness.