Welcome to our September 2008 newsletter
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If the customer is king, how do you find the right 'monarchs' to grow your business? Practical advice about choosing just the right customers (podcast and free pdf).
Why you must keep marketing in the credit crunch: Top tips on how to stay visible on a tight budget.
Real-life case study on coping in tough times.
Plus
» EB likes » things we like (predictably enough)
» EB reads » a book about subtle ways to make people do things
» EB listens » to you
EB talking... If the customer if king, how do you find the right 'monarchs' to grow your business?
Do you say 'yes' to all the customers who come to you? Is it too scary to turn any of them away? Then you need to make sure you are in control of your customers and not the other way around. Our marketing director, Jane Priddis, tells you how to go about choosing the right customers for your business.
Listen to Jane's podcast and download our free Choosing your customers PDF for the top tips on 'managing your monarchs'.
EB sharing... Why you must keep marketing in the credit crunch
''If you're attacking your market from multiple positions and your competition isn't, you have all the advantage and it will show up in your increased success and income.'' Jay Abraham
Sounds simple enough. But many companies are already slashing budgets in an attempt to stay afloat during the economic downturn. Many businesses still think of marketing as the obvious first area to stop spending.
Imagine if all your competitors, except you, do that. What do you think will happen? There is a very good chance that you will retain your existing clients, who will feel reassured by your continued brand presence and the fact that you are actively promoting yourself (which implies you must be doing well). There's also a significant likelihood that you will win new customers and actually increase your market share. By sticking your head and shoulders above the line, you remain visible and potentially memorable.
If you’re thinking that sounds great but expensive, think again. Try our top tips for marketing on a shoestring:
Love your customers!
It’s easier to sell to an existing customer than to win new business, so make sure you stay in touch with the customers you already have. Customer retention is always important but you want to stick in their minds even more when budgets are sparse. There are little things you can do that don't cost a lot, but often make a big difference. Talk to your customers, find out or anticipate their needs. Make life easy for them. Give them free stuff such as downloads or giveaways, or even just make them smile. This will all help to remind them of the value you add to their business. Never forget, people buy from people. No matter how great your service or product, if you don't care for your customers, they'll walk away (often grumbling to lots of other people as they go!)
Communicate creatively online
Whilst blogging and social networking isn’t for everyone – or even appropriate for some businesses – this could be a good time to explore new ways of getting and staying in touch. Can you get a bit more imaginative with emails, newsletters and web-based interaction? This can help you maintain and increase your brand awareness and reach new customers without breaking the bank.
Getting to know how social media works and how it can benefit your business can only be a good thing, as this technology is going to be used more and more. Plus, a lot of what's on offer is free.
Check out Nodestone for some ideas about social media and unleash your creative communications: www.nodestone.com
Testimonials, referrals and recommendations
Now that you’re thinking of all the ways you can communicate creatively, this is an ideal opportunity to get some up-to-date testimonials from your customers. Use them in your next fabulous newsletter or case study.
If you're chatting to a customer and blushing because of all the lovely things they are saying about you, seize the opportunity: Ask them if they know of anyone else who might benefit from your services. Don’t be scared to do this as long as you do it in a sensitive and professional way. Make clear the type of customer you are looking for and, where possible, try to get the contact details; it's better to contact them directly than leaving it to chance. Oh, and always remember to thank people for recommending you. It’s that feel-good factor again – it stays with people.
Network
Fay MacDonald of marketing consultants, Diosa Media:
'Whoever said the best things in life were free obviously didn’t work for themselves. Networking events are not usually free, but the cost of networking is an investment. Networking can be a fabulous way to build relationships and meet influencers and referrers. Notice that I didn’t say that networking can be a fabulous way to get new business. It can be, but it’s not usually direct; you don’t go along to an event and blatantly sell yourself in the hope of immediate results. A clever cartoon I once saw summed this up perfectly: ''If you talked to people the way advertising talked to people, they would punch you in the face.'' Enough said.
'So, look upon networking as a way to open doors. You might meet people you could do business with, but you're more likely to meet someone you could have a coffee with. And they might remember you when they're having coffee with another friend who asks for a recommendation…
'Be friendly, open and honest. Be interesting but be interested. There is nothing more boring than listening to someone talk about themselves for 20 minutes even if they are Brad Pitt’s stunt man.
'Another way to make the most of such events is to volunteer to get involved. Help the organisers, give time, share skills, offer to be a speaker. This helps to raise your profile in a hugely positive way and costs little more than time (as long as you avoid the temptation of the pub afterwards!)
'I can speak from experience as probably 80% of my current clients have come via referrals from people I’ve met whilst networking and through volunteering at my local Chamber of Commerce.'
Check out www.britishchambers.org.uk to find your nearest chamber.
EB people… CASE STUDY: Keep smiling in tough times
We caught up with Kate Davies of Hodnet Stores, who features in the Money section of the new edition of the Essential Business Guide.
Kate and her husband, Howard, took on Hodnet Village Stores in 2003. They almost immediately faced a downturn in sales, as a bypass was built around the village, diverting much-relied-upon passing trade. After some hard months, Kate and Howard decided to face their challenges head on, so Kate went on the Bestways Retailer Development Programme in 2005. This two-day course equipped them with increased knowledge on how to get the best out of their business. They entered Hodnet Village Stores for the National Bestways Retail Development Award. To their delight, they won.
Following good publicity, sales grew. The local paper shop and the other village grocery store closed, paving the way for rapid growth. Kate and Howard's sales quadrupled, but they almost became a victim of their own success as they struggled to cope. It took until 2007 for Kate and Howard to get everything under control, take on staff, become profitable… and to have a life!
We wanted to find out, following their rocky first years, how Kate and Howard were coping. Kate supplied the news from Hodnet…
How long have you been in business now?
Since August 2003, so just into our sixth year.
What have been your toughest challenges?
On a day-to-day basis, just trying to get the right mix of products. We also struggled with suppliers who did not do what they promised. If suppliers let me down on stock, I had gaps on the shelves.
Secondly, we had to cope with the increase in sales when we became the only shop in the village. That took its toll on my health. Finally, I found more good staff, and stopped working so many hours. I still don't get holidays but that is another story and hurdle to overcome!
How are you coping with the credit crunch?
It is hard. Sales are down 10% and have been since about April this year. We are a 'top-up' shop, with people doing their main shop at the supermarkets. With bad weather, we didn't pick up on traditional summer sales of ice-cream, or food and drinks for a spur-of-the-moment BBQ with friends. We noticed that folks weren't coming in to hire so many DVDs (and picking up chocs & drinks as well!)
The money we are taking through the Paypoint/ Payzone machines for electricity and gas payments is continuing to increase, but we make only the smallest of commission on this. If folks don't buy anything else, the 'hype' of increased footfall and spend does not happen.
We have introduced a new range of budget-priced food and household goods which are excellent value and good quality. We moved the shop around to make a whole area dedicated to the range, and it's now selling well. It could be argued that it takes away from more premium brands, but we wanted to show that we were trying to give good value to help people who are struggling. The feedback from customers has been good.
What advice would you give to businesses coping with a recession?
You have to keep coming up with ideas that will entice folks to buy your products. We run monthly special offers and advertise these in leaflets delivered to over 700 homes in and around the village. People can perceive a small shop such as ours as expensive, so we have to show that we provide excellent value on the lines that we can. We only do the offers that we know will sell and try to encourage people to give us a go if they have not used us much in the past.
What resources and support networks do you turn to, to help you when things are tough?
We are members of the Association of Convenience Stores and I have built up a network of other retailers. It is good to email each other and see that you are not the only ones struggling on!
What is the best business advice you have ever been given?
One of my best bosses (when I was an employee rather than self-employed) always said ''Thank you'' as if he meant it, and took time to show me new procedures. I try to make sure, however hassled I am feeling, that I do thank my staff, and take time with them when some new product or procedure comes in. They are my ambassadors, after all, so I want them to be happy with it.
What is the worst business advice you have ever been given?
Don't believe the 'sales speak' from any financial person. We did once, and it nearly ruined us. Always get it checked out.
To keep the cash flowing in your business, you must make sure you have a tight system of credit control. It doesn’t have to be complicated but it's vital. Here's why:
- The total of late payments has increased by £2.6bn to £18.6bn over the last year
- Small firms are each owed an average of £30,000 at any one time
- 1 in 4 businesses go insolvent due to invoices being paid late
Still can’t be bothered?! Follow these easy steps to ensure you are paid on time and avoid bad debts.
- Ask your customer to complete a credit application form. Make sure it has contact and bank details and is dated and signed.
- Check credit worthiness of new customers; references from banks or existing suppliers should suffice, or go to a credit agency for a detailed report. (Some banks, such as Barclays, also offer a credit checking service. Ask your bank manager if your bank offers this service.)
- Agree payment terms in advance, and ensure they are clear and included on any paperwork.
- Send your invoice when the goods are dispatched. The sooner the invoice, the sooner you get paid! You can email a PDF version to speed things up.
- Check all invoice details – especially the address!
- Send a statement of account – customers normally pay on time when reminded.
- Develop a 'friend' within your customer's company – they can help when chasing invoices.
- Chase late payers promptly – a phone call, then a formal letter if no response and a final reminder with the implication of legal action.
- Don’t allow customers to exceed credit limits – limits are there for a reason!
- Set up a 'stop list' – make sure your staff are aware of any customers who are currently not allowed to place any orders until they've paid up!
EB reads…
Nudge by Richard H Thaler and Cass R Sunstein (Yale University Press)
Hailed as one of this year’s must-read books, Nudge is worth reading if only to be able to join in all the conversations about it.
An interesting and thought-provoking read, it gives an insight into behavioural economics; a subject most of us would expect to find tricky (and probably a bit dull).
However, according to Thaler and Sunstein, it is possible to affect the way people behave by 'nudging' them in subtle ways. Familiar examples can be seen in shops, with displays at eye level and on the aisle ends encouraging higher sales than products displayed in less appealing locations.
Obvious? Well, yes. But what happens when you use the same techniques to nudge school children into picking the healthy options in school canteens? Or nudge men into using urinals more tidily? According to the authors, the same techniques start to have a social value and can make people behave better. Interesting stuff, considering David Cameron gave a copy to every Tory MP!
Perhaps this book might inspire some creative marketing ideas for nudging customers into choosing you rather than your competitors.
EB likes…
www.kiva.org
Kiva makes it possible for you to lend money to a specific entrepreneur in a developing country. How does it work? According to Kiva, you simply choose an entrepreneur, choose the amount you wish to lend, make the payment by credit card... and wait to be repaid.
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