Categories
Sales & Marketing

Your Customer’s PIR: Price Investment Ratio

Article Contributed by Mark Hunter

Have you ever really considered how price affects your customer with regard to their perceived benefit?  Too often, we use a simplistic approach to determining a price – figure the cost to produce a product or service, tack on some arbitrary percentage, and call it good, right?

Price, though, is consequential in ways we may not initially consider.  The price a person pays for something goes a long way in determining the perceived benefit they expect to get from it.  The perceived benefit cuts two ways. First, the expectation of service goes up the more a person pays for something. Second, the perception of what they’re gaining also goes up with the amount they pay.   The two are not opposites; they work in tandem, and in nearly all businesses, this tandem relationship can and does work to your advantage.

Many companies, hopefully including yours, are known for delivering incredible service.  This quality service may be what your customers comment upon and why they are willing to refer you to other customers.  This level of service comes at a price. One of the things you always should be doing is explaining to and showing your customers how your level of service helps them.

The more you share this type of information with your customers, the more comfortable you become in seeing the value of what you offer.  Having confidence in your service allows you to increase your “Price Investment Ratio” (PIR). This all has to do with what you expect customers to pay.

For the customer, the PIR is revealed when you help frame their expectations.  To help explain this best, let me refer to what I call the “IBM paradox.” This is the belief people have that although you will pay more for anything you buy from IBM, you will never be fired for using IBM.  What this means is there are plenty of companies that sell the exact same items and services as IBM, but at a less expensive price.  Although other vendors will be less money, there is a level of safety and confidence in using IBM – so much so that it translates to a premium price that customers will pay.

The “Price Investment Ratio” (PIR) is the amount over the minimum amount a person would have to pay for something. They are willing to pay it to feel confident in what they are buying.   You might say the PIR should really be the CP – the “Confidence Premium.”

There are no two ways about it – when you have great service but do not reflect it in your PIR, then you are underselling.   If you are underselling, you are not making the profits you could be making.

I can hear some of you at this point thinking, “What if we don’t have a solid sense of how good our customer service really is?”   In other words, maybe your company receives very few complaints, but at the same time, you are not sure if your service is at a higher caliber than what your competitors bring to the table.

In order to find out your “Price Investment Ratio” (PIR), you must do a deep dive with your existing customers to get them to tell you what your service means to them.  Once you do this, you can then match up what existing customers are telling you with what prospective customers are asking you to do.   When you grasp this, you begin to understand what the PIR really should be.  How much “investment” is the customer willing to make in going with you instead of your competitor?

As I have often said, in the B2B arena, companies don’t buy anything, they only invest.   If your customer can’t see the return on investment, they won’t invest – they won’t pay the price you want to get.   When they do see the value, though, then you can feel very confident in charging a price above what your competitors charge.  Don’t settle for a lower price when doing so is detrimental to your bottom line.

About the Author:

Mark Hunter, “The Sales Hunter,” is a sales expert who speaks to thousands each year on how to increase their sales profitability.  For more information, to receive a free weekly email sales tip, or to read his Sales Motivation Blog, visit www.TheSalesHunter.com. You can also follow him on www.Twitter.com/TheSalesHunter, on www.LinkedIn.com/in/MarkHunter, and on www.Facebook.com/TheSalesHunter.

Categories
Entrepreneurs

Support to Build Business: Guidance for Three Types of Female Entrepreneurs

Article Contributed by Michele DeKinder-Smith

Most women business owners are on their own as they create, grow and run their companies – but by finding expert and community support, they can accelerate their business growth process and shorten their learning curves, reaching their greatest potential more easily in less time.

Research by a trusted authority on female entrepreneurs shows there are five distinct types of women in business. Each type of business owner has a unique approach to running a business and therefore each one has a unique combination of needs. This article describes three of those types and outlines various ways each of them can seek that support effectively.

Jane Dough is an entrepreneur who enjoys running her business and generally, she makes a nice living. She is comfortable and determined in buying and selling, which may be why she’s five times more likely than the average female business owner to hit the million dollar mark. Jane Dough is clear in her priorities and may be intentionally and actively growing an asset-based or legacy business. It is estimated that 18% of women entrepreneurs fall in the category of Jane Dough.

With her fast pace and quick-growth style, Jane Dough will welcome expertise and will devour it eagerly. She will be a serial consumer of information as she acquires expert guidance so she can quickly and easily implement new strategies in her business for maximum potential. From marketing and social media to hiring and team development, Jane Dough’s entrepreneurial style will allow her to  find the right mentor, until she is moving towards her business goals at a breakneck pace.

Merry Jane is building a part-time or “flexible time” business that gives her a creative outlet (whether she’s an ad agency consultant or she makes beautiful artwork) which she can manage within specific constraints around her schedule. She may have a day-job, or need to be fully present for family or other pursuits. Representing about 19% of women in business, she realizes she could make more money by working longer hours, but she’s happy with the tradeoff she has made because her business gives her tremendous freedom to work how and when she wants, around her other commitments.

Thanks to Merry Jane’s myriad roles and responsibilities, systems are key. Therefore, she will benefit most from experts or support people who can help her increase her efficiency using systems that tie to her business and require very little time from her. Also, Merry Jane would benefit from a mentor or expert who is well-connected to other resources in the community so that she can quickly identify solutions to her needs, and then connect with them so her needs are met just as quickly.

Tenacity Jane is an entrepreneur with an undeniable passion for her business, and one who tends to be struggling with cash flow. As a result, she’s working longer hours, and making less money than she’d like. Nevertheless, Tenacity Jane is bound and determined to make her business a success. At 31% of women in business, Tenacity Janes make up the largest group of female entrepreneurs.

Because a Tenacity Jane business owner will want to get her businesses on solid financial footing as quickly as possible, she should seek an honest mentor or expert who knows how to make a business profitable. This person must be willing be straightforward – to tell Tenacity Jane the apparent cause of the business not being as profitable as it needs to be – and then teach her how to repair the business so it can thrive.

Although running a business may feel like a solitary operation, a female entrepreneur who seeks support and guidance from experts and community members will find her journey is much easier and more enjoyable – and her business is more successful.

About the Author:

Michele DeKinder-Smith is the founder and CEO of Linkage Research, Inc, a marketing research firm with Fortune 500 clients such as Starbucks, Frito Lay, Tropicana, Texas Instruments, Hoover Vacuums and Verizon Wireless. She parlayed this entrepreneurial knowledge and experience into founding Jane Out of the Box, a company that provides female entrepreneurs like YOU with powerful resources, such as educational blogs, teleclasses, newsletters, and books. Take your Jane assessment to determine your own business type at www.janeoutofthebox.com Also, she is the author of two successful books for female entrepreneurs, “See Jane Succeed” (at www.seejanesucceed.com) and “See Jane Collaborate” (at www.seejanecollaborate.com).

Categories
Entrepreneurs

It’s Better to Be Different than It Is to Be Better

Article Contributed by Jeff Beals

From an outsider’s perspective, she was leading the ideal life.

She made the Dean’s List in law school and was in her tenth year practicing at a respected firm in the middle of Toronto’s bustling financial district. If that wasn’t enough, she had four beautiful daughters, a rich personality and an impossible-to-forget name: “Tsufit,” a Hebrew word for “humming bird.”

Indeed, she had it all, but something just wasn’t right.

Tsufit was restless. One day she thought to herself, “there’s got to me more to life than this,” so she made the monumental decision to leave law and follow her dream of being a singer, comedian and television actress.

It was certainly a radical change.

As it turned out, it was also a profitable change for Tsufit (yes, she goes by a one-word name just like Cher or Madonna). She did well as a performer, taking advantage of her natural penchant to entertain others. She was energetic, colorful and damned funny on stage, on camera and in one-on-one conversations.

But she was more than just an entertainer. She brought a business-like approach to her new profession, and more importantly, she was a savvy marketer. Tsufit had a knack for getting exposure in newspapers and in other media.

Eventually, entrepreneurs and other professionals started asking her how she earned so much publicity especially from major media outlets. In answering such questions, she found an even better career.

Today Tsufit is an internationally renowned marketing consultant who coaches clients how to be stars in their professions. She’s the award-winning author of Step Into the Spotlight: A Guide to Getting Noticed, as well as a popular radio talk-show guest, keynote speaker and seminar leader both in Canada and the United States. Her coaching fee is now substantially higher than the legal fees she earned years ago. Her clients, who come to her from around the world, are entrepreneurs, executives, authors, professional speakers, independent professionals, fellow coaches – anyone who is the “directing mind” of a business.

Tsufit coaches the type of people who want to be experts or stars in any business. Suffice it to say, she is an expert when it comes to building one’s personal brand and marketing it in today’s precarious economy.

Her clients learn how to brand themselves and become well known. That leads to so many professional benefits for them.

“You get to charge more,” Tsufit says, “I help them raise their rates. Part of that whole process is getting them well known among the people who pay their rates. My coaching rates are now five times what they were eight years ago. It wouldn’t have happened if I hadn’t become so well known.”

Tsufit argues that well known people are more credible. “It’s bizarre, really, but because they’ve heard of you in the marketplace, they trust you more. They’re much more willing to give you large amounts of money. They trust that well known people deliver on what they promise.”

While there are so many theories of personal branding and so many ways to brand oneself, Tsufit believes you must start with your own uniqueness.

“It’s better to be different than it is to be better,” she says, “If you focus on creating differences and distinctions between you and everyone else, you don’t have to focus on boasting or showing that you’re better.”

To build your brand, drop the excessive professionalism and simply be yourself, Tsufit advises. But as you do that, “be the best version of yourself.” People who come across as too perfect or too smooth turn others off. That’s why you should show your vulnerabilities, or as author Harry Beckwith once said, “show your warts.” Research shows that if you show some vulnerability, you’re actually more credible.

As you brand yourself, you want to do it the right way. Tsufit believes the biggest personal branding mistake is not standing for anything, not having a slice of the market that is yours and yours alone.

“If you say you’re for anybody, you’re really for nobody,” she says, “because there’s no way to find you among the sea of other people, who do what you do.”

On occasion, a professional may desire to change his or her personal brand. That’s okay if the change is made for the right reasons.

“I wouldn’t change every five minutes,” Tsufit warns. “Some people have a totally new thing every month or two or every year. After too many changes, people write you off as a flake. Your new brand should grow out of something you’ve done before.”

If you want to change how you appear in public, start by appearing in front of a different public. To borrow from the world of theatre, try it out off-Broadway first. When Tsufit was a singer, she would test new songs at a small coffee house before debuting in front of large audiences. Similarly, professionals, should test market their new brands, making sure the brand fits, is comfortable and not fake.

Many people will admit that personal branding is an effective way to bolster a career, but they’re simply not comfortable doing it. Specifically, many people worry about going too far. So, if you’re worried about crossing the line from “healthy personal branding” to “egotistical boasting,” you’re not alone.

“For me, it’s humor,” Tsufit claims. “I could never get away with half of what I say without humor. Otherwise, I’d come across as arrogant or conceited. The other thing is confidence. Know that you can demonstrate that you really do what you say you do.

About the Author:

Jeff Beals is an award-winning author, who helps professionals do more business and have a greater impact on the world through effective sales, marketing and personal branding techniques. As a professional speaker, he delivers energetic and humorous keynote speeches and workshops to audiences worldwide. You can learn more and follow his “Business Motivation Blog” at JeffBeals.com.

Categories
Starting Up

8 Office Location Tips for Small Business

Article Contributed by Tom Walker

Starting a small business can be quite an undertaking; often naïve first-time business owners believe that the hardest step is discovering what sort of business they want to start – not so! Although choosing a business can be challenging, it is a very easy and even unimportant compared to your choice of location. Many a small store or office has been forced to close because an owner didn’t not give proper attention to the area in which they were basing it. This article will help you to tackle the hard decision of what location you should choose to start your small business.

Meet the needs of employees and clients: The first thing you need to realise is that the location of a small business is ultimately only important to you, the customers, and any present or future employees. To run a good business, it is vital that you reach the needs of all three groups.

The location should work for you: When picking an area to base your business, it is important that it will work for you. Don’t choose something that doesn’t mesh with your dream. For instance, if you want to open a clothing shop and have visions of women looking at your selection of dresses through the window, don’t let yourself be shoved into a shabby back room. If you are unhappy about the location of your business, others are likely to be too.

Accessibility: Choose a location that will be accessible to the public and will stand out yet not clash with the surroundings. For instance, if you are opening a pool supply store, try to open it somewhere nearby the local pool rather than a restaurant. Or, if you are going into practice as a counsellor, veer away from scary neighbourhoods, and instead locate in a cheerful, up-beat part of town. Take into consideration the easy access of your customers; will your customers be able to reach your business by foot, is there plenty of parking space, is the area too congested to make your place seem reachable? Take into consideration the type of people you will be serving and strive to meet their needs with the location of your building.

Locate in a good area: Although a rushed, frantic area is not the ideal location for a business, neither should you choose a forlorn or depressing part of town. No matter how nice a business may be, customers are not going to frequent it if it is located between a dilapidated liquor store and an abandoned apartment building. If it is creepy or located in a neighbourhood that doesn’t feel safe, immediately cross it off your list of possibilities.

Find a location where you can be an original: If you are opening a coffee shop, don’t rent a building squeezed between two other places that serve coffee. Unless you have a product that is off-the-charts spectacular, it will be hard to compete in a business setting where the competition has added experience and a good reputation.

Don’t blow your budget: While we would all love to just forget about it, cost is a factor that plays into almost everything. Before settling on a dream location, make sure that you will actually be able to pay for it. If the building is for sale, do you have the funds to buy it, or would it be more sensible to locate somewhere else and pay rent? Also, don’t forget to consider seemingly unimportant details like the cost of taxes and insurance.

Check out all the details before you sign any papers: Before buying or paying rent, make sure that the area of your future business is not zoned as residental only. Also, make sure that your business will have access to important things like internet, phone service, and electricity. Check to see if the area is prone to flooding or bad weather conditions.

Space for expansion: Although your business maybe a one-man operation now, all businesses that survive thrive; before long you will be hiring employees. Try to think like a future employee when deciding on a location; think about the individual needs they may have and how the building in question could make life easier for them. If your business is located minutes away from apartments and schools, employees may thank you!

The location of any business is likely to have it’s pros and cons; however, by taking the time to consider all your options and all of your priorities, you can be certain that location will help your business to thrive rather than hindering it.

About the Author:

This guest article was authored by Tom Walker who works as a full-time writer and a reviewer for Cartridge Save, providing the best ink cartridges.

Categories
Customer Service

Did You Ask? How Customers are Key to Unlocking Your Company’s Success

Article Contributed by Art Gould

Having worked for several years as a division manager for a busy self-storage facility, it didn’t take me long to realize that the key to success in my business is having a complete understanding of my customers. There are several factors in play that might cause a present or future customer to choose me over one of my competitors. But every person is different and it is up to me to find out what each client considers important.

  • Location. They want a place that is close by and they don’t even consider price. Others don’t mind traveling far as long as my price is the lowest.
  • Cleanliness
  • Security.
  • Unit Size
  • High-Tech Access. They want keypad control and don’t want to mess with keys and locks.

The point is that everybody is different. And the only way I am going to make my customers happy is to get to know each one of them well enough so that I know what makes him or her tick.

The kind of business that I manage is not defined by set transactions, where the customer comes in, buys something, pays for it, and leaves. Yes I am selling a product (storage unit rentals). But the storage unit is only part of the story. In reality what I am really selling is myself. The type of customer I need to please is someone who is going to stay with my company over a prolonged period of time. Therefore it is vitally important that I build and maintain a strong and lasting relationship with that person. Over many years of striving to make this happen, I have refined what some might call a “sales strategy” even though it seems nothing at all like what most people think of as a typical sales approach. The strategy consists of two basic elements: lots of questions and lots of listening! Let me explain.

My typical workday is not spent behind a desk. Instead I spend most of my time walking the floors, wandering around the storage units where my customers are. And when I see a customer, I never hesitate to seize the opportunity to build and nurture that relationship I talked about. This is also my chance to put my sales strategy to work. It starts with a small-to-medium dose of familiar small talk which soon evolves, almost imperceptibly, into a line of questioning that I try to conduct in a very gentle and unobtrusive way. While trying to make the questions flow as naturally as possible from the drift of the conversation, I am also careful to make sure the type of questions I ask fall into one of three categories:

  1. The open-ended question: This is the type of question that induces my customer to answer it by doing a lot of talking. In other words, I make sure to ask questions that can’t be answered by a yes, no, or maybe. Instead, my questions elicit a detailed response; for example, “What kinds of things do you use your storage unit for?”
  2. The clarifying question: In response to a statement my customer makes, I will often ask her to clarify by asking a question like, ‘Are you really saying such-and-such?” Sometimes I do this even when I understand perfectly what my customer just said. My goal is to demonstrate that I not only am listening intently to what my client is saying but that I am doing my best to completely understand it.
  3. The sympathetic question: This one is easy because all I do is listen to something my customer says and then clarify their point in the form of a question. By re-stating his own thoughts, my customer gets the clear message that I am not only listening but am also sympathetic to his feelings.

Asking questions is one key facet of my sales strategy but the other is doing a LOT of listening. And believe it or not, this is even more important than asking the questions. Keep in mind that getting the customer to do most of the talking accomplishes two goals: (1) it helps me get to know my customer better: what he likes, what he wants, how I can best help him, etc.; and (2) it makes my customer feel important, which only serves to strengthen the bond between us.

My sales strategy has proven to be as successful as it is simple! Why? Because it provides me with a complete understanding of my customers and it cements a bond of trust and loyalty between us. In my business, nothing is more important because customers are the key to my company’s success.

About the Author:

Art Gould is a division manager with Self Storage Company, which operates a group of websites, including a Colorado Springs self-storage locator. Though busy, Art enjoys meeting new people and clients when traveling to sites, like Lakewood or the Denver self storage center.