Beliefs are powerful drivers of our behaviour and our results when it comes to business. The following 5 beliefs are common place in small business and are responsible for wasted time, money and angst. Read through them and see if you are suffering from any one of these that may be blocking you from experiencing success in your business.
I Reckon They Will Love This Product/Service
The entrepreneur has developed a new product or service offering that he/she is positive will be eagerly accepted by their prospects. It must good because they spent months creating it and a whole lot of money for components, printing and graphic design. The launch is planned and executed – advertising kicks in, flyers are flown, networking is performed, a social media campaign is unleashed….and very few prospects are interested in the product.
Why not? Maybe because it doesn’t solve a real problem, or there is no demand from the market segment targeted for this product. It could be that it is too expensive or any number of reasons. The point is that the entrepreneur created a product or service in isolation of their prospects input, and then attempted to sell it. This occurs frequently and is a painful way to start or run a business.
Better to do the research and look for a problem (that has the market volume and potential profitability) calling out for a solution, and then craft a solution (product or service) that satisfies that problem. If this approach is taken the demand is already present and there will be less effort required to gain attention and sales.
Sales Are All About The Number Of Leads
Is that so? Well if you are generating lots of leads there is nothing wrong with that. Unless they are leads that are not targeted to fit with your value proposition. If this is the case then you will be outlaying marketing dollars and your effort busily attracting prospects, who may never buy.
Not only is this soul destroying, it leads to burn out without any reward in the form of sales. Make sure you identify and document a very detailed profile (avatar) for each of your market segments. You will then go after only those ideal prospects that you know your marketing message will resonate with.
Your lead generation activities should focus on the quality of leads rather than just numbers. This way you have a much higher probability of converting those leads into customers.
Big Revenue Equals Big Profits
Not necessarily. Many businesses have impressive revenues but puny bottom lines. The idea is to generate revenue that is profitable. This means knowing your operating costs, any cost of goods and what that is as a percentage of your revenue. If these two figures amounted to 97% of your revenue, then your net profit would be 3%!
That’s pretty slim, unless you are turning over 100 million dollars. Even then, it would only take a few percent increase in costs to realise a loss. Always cost you products or services so you can make a decent profit. Also regularly review and improve your operating expenses.
Marketing Is An Expense
This is a belief based on not understanding how to measure and improve your marketing budget spend. Of course, if your marketing is unplanned, scatter gun and inconsistent, your results will be poor.
If you plan your marketing strategies and measure the amount of spend to the number of sales that’s a start. If you also adjust your marketing message and the channels you use, whilst documenting what works and what doesn’t, you are on your way to turning marketing from an expense to a profitable investment.
Once you know what works, and the cost of acquiring a customer for each strategy, it is a matter of ramping up the budget to bring in more revenue and profit.
One Price Fits All Customers
If you want more business, then have more than one product to offer. Also, have several levels of pricing to allow prospects some choice. Car manufacturers cater to those on a budget, as well as the customer who is looking for an exclusive (expensive) vehicle. You should consider perhaps three choices.
You could have a standard, mid range and high end offering that may provide a path for your “standard” customer to move up as they require, and can afford, more solutions.
The one price for your one service may not appeal to the prospect at that time in their “buying journey”. Customers demand choice now, and giving them that choice could differentiate you from your competitors.