Sales: A Guide for the Small Business Owner
You have a great product or service. Now you have to sell it. This course will give you an overview of sales plans and other tools to get your product or service into your customer/consumer’s hands.
1.2 Course Objectives
The course has four key objectives:
1. Explain the importance of a sales plan and how to create one for your business,
2. Identify different sales strategies that will work with your business,
3. Explain how to use marketing techniques to improve your sales, and
4. Explain guidelines to follow when hiring sales employees.
1.3 Course Topics
This course provides a sales guide for small businesses. Some of the questions answered in this course are:
Why make up a good sales plan?
What role should research play in planning your sales strategies?
How can you use blogs, community web sites, and email to generate sales?
Why is it important to track marketing effort results?
What are realistic expectations for hiring sales employees?
Let’s begin.
Introduction
You can have the greatest product in the world, the most reliable and effective service available, or the most efficient manufacturing process known to man – none of which mean a thing if you don’t have sales. Selling your product or service is what generates revenue, and without revenue, you do not have a business. This lesson will cover the fundamentals of planning and establishing a sales mechanism that works for you.
Sales Planning
You usually plan activities and events of your life – whether it is a birthday party for a child, a vacation for the family, or a major purchase such as a car or a house. Most people can’t imagine not having some sort of plan when they start something important. Yet many small business owners plunge into sales without any kind of sales plan at all. A sales plan is a critical tool for setting goals and identifying where and how you should work to generate revenue. Select each tab to learn more about components of a good sales plan.
A sales plan is a strategy that identifies potential customers, establishes goals, and lays out the sales and marketing tactics you will use to meet those goals.
An overall company sales goal defines what you are trying to achieve and provides a focal point for your business ‘big picture.’ It also helps your sales personnel better understand where they fit into your operation. You also need to establish individual goals for salespeople based on his or her skills, knowledge and abilities. Both your overall goals and any individual goals need to be achievable – setting an unrealistically high target can backfire by making failure seem unavoidable.
What tactics will you use to make sales? Are you going to market products through retail stores or sell directly to consumers using a web site? You must determine which sales activities will work best for your particular product or service and make sure to explain them to your sales staff so that they know how to best use them.
How will you focus on the customers you’re targeting? A wholesale market will require different strategies than selling direct to end users. Your sales plan should identify potential avenues of contact, such as media advertisement, classified listings, or direct mail.
What is the schedule for your sales plan? You need to lay out the steps of your sales plan within a realistic time frame and keep that timeline flexible. Be ready to adjust if one portion of your plan bogs down, or another is completed ahead of schedule.
Customer Relationship Management Systems
A Customer Relationship Management (CRM) System is a robust software-based process used by businesses to identify new customers, automate and track various sales or trend activities, and develop sales opportunities by forecasting and/or providing insight to help satisfy and retain existing customers. Once considered to be a business trend, CRM has become an industry standard needed to maintain your competitive advantage. Thanks to social media and other internet tools, you can create, operate, or outsource CRM system’s and services at little to no cost while increasing profitability and increasing customer loyalty. Some potential CRM approaches include customized mailings based on known customer buying habits, or sending out e-coupons on customer birthdays.
Knowledge Review
It’s time for a quick knowledge review. For the following question, select the correct option, and then click Submit.
What is the strategy that identifies potential customers and tactics, establishes goals, and lays out the process you will use to meet those goals?
Sales goal
Customer Relations Management
Sales plan
Account targeting
CORRECT ANSWER: C
The Four “P’s”
When you are putting together a sales strategy, you need to keep in mind the four P’s of marketing. These are key areas that have a direct impact on how you sell your product or service. Click each tab to learn more.
While you won’t be changing your product each time you make a sale, you may target specific products to different areas. As an example, you may sell custom notebook binders, which can be marketed in specific school colors. If you are selling custom made products, understanding what your customer wants will be key to making the sale.
Can you be flexible on pricing? Balance the value of getting customer volume against profit margin. This can be a critical factor where you have competition in the same market.
What kind of promotions are useful for your product or service? Can you use coupons or discounts? Are you advertising where your target market will see and notice you?
Where are you selling your product or service? Are you using a web site, a traditional retail store, direct marketing, or some other location? Where does your target market look to buy your product? The answer will help determine what strategies will work for you.
Research Methods
What next? After you’ve identified the Four P’s, you will need to find out what your customer wants or expects from you. By “listening” to their needs, you will be in a better position to sell.
There are two basic methods of marketing research: primary and secondary.
Select each of the folders to learn more.
Primary research is gathering information directly from potential customers using surveys, focus groups, or other methods. You can perform primary research yourself or hire specialists to do it for you. Hiring a specialist is best suited to larger businesses because of the cost involved.
Secondary research is information that comes from business studies, statistics, reports, and other data from government agencies, trade groups, and other business associations. Secondary research will provide the biggest resource, and can often be found for free. Your local library and the Internet will provide a wealth of data on related trade associations and organizations, local population demographics, and other critical information.
Researching Your Target
There are many avenues of research available to you through the Internet. Online search engines can be used to identify market trends, regional and local competitors, and available marketing avenues.
Informal conversation is the oldest marketing tool there is, encompassing not only word-of-mouth between friends and neighbors over coffee, but also the much broader spectrum of social media marketing. Direct contact can be made by speaking at local civic league meetings or community business leagues. You can use social networks to establish open and informal lines of communication for customers to express opinions and ideas.
Find out what the bottom line is for the people who actually do the buying of your product or service. Price is not always the most valuable asset to a customer – you may be able to offer delivery or service scheduling options that better meet his or her needs, or provide unique solutions to existing issues.
Look for special programs – many large retailers, and Federal, State, and Local governments have purchase programs or minority set-aside initiatives that allow managers to more easily buy your products and services. Some of these may be identified by Internet research, but your best bet is to talk to regional and local managers of retailers who might have interest in your products or services, or consult a business development specialist with knowledge of your area.
Surveys
One of the best ways to get specific information is to ask directly. And one of the easiest ways to do this is to use a survey. There are a number of marketing survey services and even free online examples available to help you come up with your own. Here are some guidelines to keep in mind as you begin developing your survey:
Know how you plan to use the survey data: This will play a big part in how you target the survey, what questions to ask, and how to set up the questions.
Coordinate with other stakeholders: Make sure that your survey gets input and buy-in from the people you will be working with. They may come up with questions you had not thought of, and they will be more receptive to results.
Keep it short and simple. Ask someone to answer five questions and they are likely to fill out your form. Ask them to spend an hour plodding through dozens, and your survey is likely to fall victim to the delete key or trash can. Edit your survey ruthlessly, paring it down to the absolute minimum number of questions required to get the information you need.
CORRECT ANSWER: A, C, D
The Elevator Pitch
Once you’re done with your research, you can begin to use the information to shape your marketing and promotion strategies. The ever-popular “elevator pitch” is an important component to your success.
If you had a minute alone in an elevator with a prospective customer, could you come up with a complete summary of your product or service that entices them? The scenario may seem limited, but there are many instances where you may only have a minute to snag someone’s interest: parties, a business conference, even a chance meeting in a store. If you are well-prepared, that minute can end with an exchange of business cards, or perhaps even a continued conversation.
Your elevator pitch should:
Include who you are, what you do, and what the customer will get out of it,
Be relevant to the customer,
Provide an example of why your product or service is valuable, and
Include the contact by ending with a question, “Would you like to hear more? We can set up a time for a meeting or an online presentation.”
Sell Without Selling
We’ve all seen the stereotypical ‘used car salesman’ on television. High-pressure tactics usually alienate potential customers by trying to force products or services on them. An effective sales strategy should explain how your product or service will benefit the customer while giving them the sense that they are making a choice based on information, not stress. Here are some tips on how to sell without selling.
Let potential customers talk about themselves: Ask questions tied to how they might be able to use a product or service like yours, or have them explain experiences they have had in the past with similar items.
Use humor: Much of the most successful marketing ever produced is designed to make people laugh. In the 1960’s, Volkswagen advertisements used humor to emphasize the quality and economy of the cars. Fifty years later they are still considered to be some of the best automotive advertisements ever made.
Use the “80/20” rule: Italian economist Vilfredo Pareto observed that 80% of Italy’s land was owned by 20% of the population. This principle has been widely adopted for many other industries to suggest that 80% of your results stem from 20% of your efforts. For example, you may find that eighty percent of your sales will come from twenty percent of your customers. There are no finite rules, whatever your percentages, you should identify and focus your efforts on the most lucrative prospects.
Give your audience a reason to like you: Talk about things your audience cares about, help them with topics you’re an expert in, and let them share their thoughts with you. An engaged customer will be much more willing to listen to you when you talk about yourself.
Provide your expertise: Take the opportunity to demonstrate your knowledge about your product or service and build relationships with your customers. This can take the form of community newsletter articles, talks at civic league meetings, or including useful information in your marketing.
Using Multi-Media Avenues
Use multiple media to create content to drive sales. Social and web-based media offers a tremendous opportunity to market your product or services at little to no cost. However, it can also require more personal involvement and time. You need to focus your efforts so that you are not overwhelmed with work maintaining your information.
Make sure your message is clear and consistent! Regardless of whether you do your own marketing or have others do it for you, make sure that your marketing says what you want it to. Write out a ‘mission statement’ and if applicable, come up with a theme for your marketing. Use of slogans, logos, even a special color scheme can unify your marketing efforts and help establish brand recognition. And remember that not everyone is a good writer – your strengths may lie in other areas.
Multiple Media Types
There are many different types of social and web-based media you can use to market you product or service. Here are some of the most popular. Click each tab to learn more.
One of the newer avenues of marketing is the use of a personal or business Internet Blog. This is a web site, usually updated regularly, that serves as a public journal where you can express opinions, offer advice, or just talk about your product or service. Blogs can be a low or no-cost marketing option, but you need to keep it interesting and keep it fresh.
Forums are Internet sites that allow users to discuss specific topics, such as consumer products and services. A good number of Americans now research purchases using blogs, and make comments and recommendations on their purchases. You can establish a positive presence participating in forums by providing accurate, honest answers to consumer questions. Spending time on Internet forums also can reveal relevant marketing information about products and services in demand and the strengths and weaknesses of competitor’s products and services.
Many local neighborhood groups such as civic leagues and business development councils maintain public web sites and social media pages that offer you a direct line of communication to your customers. You can also make use of local commercial or classified sites to market your products and services free of charge.
Web Sites
Web sites offer a way to not only provide information on your product or service, but to also make direct sales and gather contact data from potential customers. Your web site can be one of your most effective marketing tools, but you need to follow some basic guidelines. Click each tab to learn more.
Potential customers can get frustrated with overly-long or tricky web addresses. You want a name that creates a mental link with your product or service, but that is also short and easy to remember.
Your customers should know they are in the right location as soon as they open the page. Have your name, logo, and some sort of brief description at the top.
Navigation around your site should be obvious and easy to use. Clearly label links and buttons.
One of the most valuable marketing tools offered by a web site is the ability to have visitors create accounts to get special offers. This provides you with email addresses and other information on persons who have already indicated interest in your product or service.
Selling via your website is a great way to get customers. However, before you set up any kind of direct sales, you will need to determine what legal requirements there are. These include tax collection for local and out-of-state customers and potential fees for using credit cards and online payment services.
Using Email
Of all the social media available to you, one of the most cost- and time-effective tools is email. Unlike web sites or blogs that require the customer to find you, email allows you to send your message directly to the customer. This tool can be used in many ways.
You can mass mail special offers or other promotions, target specific customers based on previous purchases, or send out congratulations for individual events such as customer birthdays or anniversaries. However, you need to avoid oversaturating your customer’s mailboxes with marketing.
This can result in having all of your emails relegated to the trash before they’re even opened. Consider something like a weekly email newsletter that provides tips or advice related to your product or service, with special offers included.
Making Sales Calls
The basic sales call can be an important tool for your business. Let’s take a look at some basic types.
Cold calls are the hardest type of calls to make. Essentially you are picking numbers at random and calling in hopes of finding a potential customer. A key element here is having a product or service that can be marketed to a wide range of customers. Do you build custom dog houses or restore pianos? One is much more likely to return positive cold call results than the other. The other key element is persistence. It could take twenty calls to get past your greeting, and even more to connect with a potential customer. Still, if you get one customer out of a few dozen calls, it is one customer you did not have before.
Not all cold calls are random – you can target certain businesses types that typically buy your product. Although they don’t know you and aren’t expecting your call, they are more likely to respond to your sales pitch.
Marketing to an existing customer is usually much easier than cold calling. The customer already knows who you are, and is more likely to listen to your message. You need to key your marketing message to a known customer need or interest. Maybe your customer fishes for a hobby and you just got in a new line of freshwater lures. Or there is a sale on the brand of copier paper their company uses. Remind them of your past business dealings and let them know what you can do to help them.
Preparing for a Successful Sales Call
Preparing for the successful sales call: As with any endeavor, proper preparation for marketing calls is critical to success. You can prepare by putting together a script for marketing calls. This helps you present a consistent message to customers, and also serves as a valuable tool for new sales persons. Here are some points to consider when you prepare your script.
Develop a professional greeting: Don’t start your marketing presentation the moment the other person answers the phone. Greet the person by title and last name, not the first name, as in ‘Mister Jones’ or ‘Ms. Smith.’ Allow time for them to respond, just as you would in a face-to-face conversation,
Introduce yourself and the company: State who you are and who you represent up front, but avoid mention of specific products. That makes it too easy for the person to say ‘I don’t need one of those’ and hang up,
Express gratitude: You are taking up their time – make sure to thank them and explain that you would like just a minute of their time,
State the purpose of your call: Frame the purpose of your call in a question, such as “Would you be interested in saving twenty percent on your heating bill?” Sell what your product or service will do for the customer rather than selling the product itself,
Schedule a meeting: If you are not making a direct sales call, establish a convenient time and location where you can make a more thorough presentation. This might be a face-to-face meeting or simply a better time for an extended teleconference,
Thank them: Confirm any details from your conversation, including contact information and any scheduled meeting time, and give them your contact information so that they can let you know if they have further questions, and
Follow up: Do not take a business appointment for granted. If there is time, send a written letter of confirmation to the person that is short and positive. For immediate appointments, send a confirmation email.
Tracking Results
If you’re going to invest time in marketing channels, you also need to know if they’re worth your time and actually producing sales. It is important to know which approach was the most effective for your product or service. You need to know not only if you met your goals, but what sales method was the most effective use of your time and money so that you can better focus your marketing efforts.
Ask Customers: “How did you hear about us?” is an easy question to ask, and it can provide valuable information on how different marketing strategies work. Keep a record of responses and see where your message is getting through,
Use coded coupons: Put a unique code on coupons used for different marketing efforts. For example, use one code for newspaper coupons, a different code for mailers, and a third code for coupons you hand out at meetings or seminars,
Website Tracking: Most Internet hosting companies can provide automated reports on how many times your site was accessed and which pages were looked at the most, as well as time spent on each page. You can also track customers who came to your web site or blog by giving them a special discount code, and
Customer Relationship Management System (CRM) -CRM system reports can be used to analyze how customers heard about your product, what they purchased, and where. This information should be invaluable in determining what marketing efforts are the most effective.
Sales Tips
Here are some general sales tips to remember no matter what kind of marketing you are using.
You can only sell if you’re convinced – If you don’t believe in your product or service, no one else will either.
Be clear and direct – Avoid the use of jargon and rhetoric – get your message across in plain language.
Pressure is an art – use it, don’t overdo it: There is a fine line between what is and is not too much sales pressure, but once you overstep that line you will have to fight to regain trust and respect of your customer. It is better to err on the side of caution and avoid high pressure tactics as much as possible.
Have a convincing presentation: Your marketing presentation should be informative, direct, and brief.
Be passionate and exciting: Be enthusiastic about your product or service, and present it in a way that will get the customer to share your excitement.
Answer questions directly and clearly: If you don’t know the answer, don’t guess: Guessing or making up an answer can come back to haunt you later. It’s always better to say “I don’t know, but I will find out.”
Use humor where appropriate: Use humor with extreme caution, especially when dealing with someone you do not know well. A joke that you think is funny might be irritating or even offensive to someone else. Also, keep in mind that you are conducting a business transaction, not a comedy routine. Maintain a professional demeanor.
Always improve: No one is perfect. As good as your sales techniques may be, there is always room for improvement. Review your marketing message, and analyze any sales efforts that failed. What can you do differently? What can you add?
Common Sales Mistakes
Although there are many ‘Dos’ in marketing, there are also some ‘Don’ts’ you need to keep in mind.
Don’t ignore the customer: No one likes to be lectured. Give customers the opportunity to ask questions, and involve them in your presentation. Respond to what your customer is saying.
Don’t profile the customer without talking to them: ‘Don’t judge a book by its cover’ is a critical lesson when you are dealing with people you don’t know. Basing your marketing message on someone’s physical characteristics or social relationships is likely to get you into trouble. Each person is an individual – make time to find out about who they really are.
Don’t be ignorant about your product: You need to be able to answer any questions about what you are selling. The customer is going to expect you to be an expert.
Don’t make assumptions: Denying the customer’s concerns are important. It can be easy to plunge in on the merits of your product without determining their actual needs first. You are there to meet their needs, and if ignored, you are unlikely to even know what those needs are, let alone show how your product can meet them.
Don’t forget to follow up: You need to follow up with a customer, not only to confirm scheduled meetings beforehand, but also afterwards to thank the individual for sharing his or her time with you. Following up with a potential customer not only avoids confusion and wasted time, it helps punctuate the customer’s importance.
Hiring Sales Employees
Hiring your first sales employee can be traumatic. As a small business owner you have probably continued as the primary sales representative long after bringing on employees to handle administrative and logistical duties. It can be surprisingly difficult to turn over the responsibility for generating income, but there comes a time when your efforts are better directed towards overall management of your business. Here are some guidelines to consider when you are ready to bring on a sales person. Click each tab to learn more.
Be realistic: Remember that a new salesperson is usually an employee, not a stakeholder. You can expect them to work hard and be loyal to you, but they probably will not have the level of commitment or passion for your product or service that you have.
Set realistic goals and give them the resources they need to meet them: You should not expect a new salesperson to have the same success at sales that you enjoyed. Talk with associates in your company to establish realistic goals for your new sales person with minimum standards and incentives for extra effort. You can make adjustments later if the goals turn out to be too difficult or too easy.
Don’t hog all the large accounts. You need to pass the torch. It’s normal to be nervous about turning valued customers over to a new sales person. For some accounts, where you have a special relationship or connection, it may even make sense for you to continue as the primary contact. However, you should release as many of your customers as possible. If it helps, you can go along on the first few sales calls to introduce the sales person and provide your customer with a transition period.
Check in, but don’t compare their performance to yours: You need to monitor the performance of your new sales person, but don’t compare their performance to yours. Stick to the goals you established, and do everything you can to help your sales person meet them. You have the advantages of intimate product and customer knowledge – share them, don’t flaunt them. Your sales person’s success is your success, too.
Summary
Sales are the backbone of any business – we hope that this overview of sales fundamentals will help you plan and establish a sales mechanism that works for your small business. In this course, we:
Explained the importance of a sales plan that identifies potential customers, establishes goals, and lays out the sales and marketing tactics you will use to meet those goals. We also looked at the importance of establishing sales goals, identifying sales activities, targeting marketing efforts, and establishing timelines,
We identified different sales strategies that will work with your business, starting with primary and secondary research to identify potential customers. Some of the common techniques were explained, like having informal conversations, talking to decision makers, and looking for special programs with major retailers. We also covered various methods of getting your message across. Remember the importance of a one-minute ‘elevator’ pitch, and letting the customer make a decision based on your information, not high pressure. Keep in mind the critical role of consistent multimedia marketing, including community web sites, blogs, forums, and email, and track results of your marketing efforts to determine which is the most effective,
We also looked at small business marketing do’s and don’ts that will improve your marketing abilities. Do be clear and direct, have a convincing presentation, and use humor where appropriate. Don’t make assumptions about your customer, and don’t forget to follow up afterwards,
We explained guidelines to follow when hiring sales employees, advising you to be realistic in your expectations, and be willing to share responsibilities for major accounts. Support and encourage your sales people – their success is your success too, and finally,
Remember that sales of your product or service are what generate revenue, and without revenue, you do not have a business,