The 5 Stages in a Business Restructure- Taking Your Business to the Gym

Most Businesses at some time or another will need to restructure their business. In times of recession this becomes an important priority as a business restructure is often the key to survival. In truth all businesses should plan a restructure review to keep their organisation "light & agile" to quote Jack Welch. These past 8 years business conditions have been particularly benign and as a result many businesses have not felt, sufficiently, the cold wind of competition to encourage them to restructure. Now faced with a veritable storm of fierce competition the need for a business restructure becomes urgent.

Stage 1 of a Business Restructure is to establish a baseline. Before imposing change the company would need to understand what is working well and what is not. So to confirm this it is important to perform an audit on the business covering all the main operational functions and in addition we'll look at Strategy, and management strength.

Stage 2 of a Business Restructure is to prioritise the issues identified and set out a timeline for their implementation. At this stage of a business restructure its important to achieve some quick wins as this builds confidence in the process.

Stage 3 of a Business Restructure is to revise the business strategy based on the outcomes from Stage 2 which will identify weaknesses and gaps in your current strategy. This part of the business restructure process is critical as it will lay the foundations for the long-term success of the business. The difficulty, particularly in a recession is that there are serious time pressures. In order to prevent a long drawn out soul searching process we have developed techniques to get to the nub of the matter in a few short hours and within a couple of days we can have a new and more relevant strategy in place.

Stage 4 is the most difficult part of any business structure and that is implementation. This is the point at which most businesses fail, why? Because it is at this stage that the rest of the business experiences significant change. Everybody, with the exception of a few souls, is resistant to change. It is at this time one needs to be clear about what individuals say and what they do. To improve your chances of success a detailed implementation plan needs to be established.

Stage 5 of a Business Restructure is to assess the success of the restructure by measuring the results of decisions made. This review and measurement system should cover all aspects of the business but concentrated on a relatively small number Key Performance Indicators. In addition the company should seek to ensure that the benefits identified that the beginning of this process are achieved.

Exigent Consulting specialises in providing Business Turnaround, Sales, Marketingand Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business

Taking Your Business to the Gym – Pricing for Profit

I was giving a seminar recently and it included a section on pricing. What really shocked me was how few people understood how to price properly and just how many businesses were almost paralysed with fear about raising their prices. Now i understand that we're the worst recession for at least 20 years, but at least 50% of my audience had not increased prices for more than 2 years. Their argument in a nutshell was that they couldn't increase their prices because they'd lose too many customers. I asked them if any of their suppliers had increased prices to them in that time, not surprisingly many of them complained just how many times suppliers had raised prices over the period. When I asked if they had changed suppliers as a result of these price increases they said, without exception, no. In fact they seemed rather surprised that I should even suggest it. My question was then if you've accepted price increases from your suppliers why won't your customers accept price increases from you. At this point there was a lot of murmuring and a few brave souls suggested because they were small companies there would be less loyalty and their customers would move. I simply can't except that as a valid argument and experience shows that most customers are immune to price increases.

I decided then to demonstrate how raising your price delivers more profit even if some of your customers leave.

No of units	10	9	11
Price per unit	10	11	9
Sales Total	100	99	99
Fixed cost	30	30	30
Variable Cost@£6 per unit	60	54	66
Profit	10	15	3

The table above explains what I mean. Let's assume you sell ten units of a product at £10 each giving you a sales income of £100. Of that £30 was fixed cost and the variable cost was £6 per item sold equalling £60 which when subtracted from your sales total gives a profit of £10. In our second case we raise our prices by 10% which leads to a fall in demand of 10%> So we now sell 9 units at £11 pounds each total sales are £99, fixed costs remain at £30 and variable costs are only £54 leaving a profit of £15. In our third scenario we reduce prices by 10% which in turn leads to a 10% increase in sales. We still only have £99 in sales however variable costs have gone up to £66 leaving a paltry £3 profit.

So what conclusions can we draw from this situation, well firstly to price for profit you MUST increase your prices, if you hold you prices whilst your suppliers increase their you are in effect offering a hidden discount and putting pressure on your margins as your variable costs are increasing. In the example above a 10% discount means you have to increase sales by 33% to maintain your profit. By contrast if you increase sales by 10% sales have to fall by more than 20% for profits to suffer. The most important thing however is to understand is that in reality most people are price insensitive, for example on Accountant client I worked with increased their prices on simple tax returns by 100% and lost only 5 out of 80 clients delivering over £15000 in extra profit.

Exigent Consulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business.

Cold Calling Is Alive And Well - Its Just Got a Bad Name

I was very interested to read Jeremy Millers article “Sales People Don’t Cold Call”. Now I agree with much of his views in particluar if you're late into the buyers purchasing process, you're pretty much wasting your time and you really should be engaging with your prospects much earlier in the sales process. It seems to me that the core of Jeremys argument with respect to cold calling is predicated on accepting his stats, which I don’t, and so with a few small changes we generate vastly different success rates, to wit:

Industry standard numbers are for a contact with a prospect (in the UK) is every 4 -5 dials not every 8.4. Lets call it 5 as a compromise

The metrics I used for my sales force was 1 meeting for every 10 prospect conversations, not 1-50; frankly that’s just a rubbish number and if you think that’s representative of sales staff generally, common sense should slap your face and tell you that it would be impossible to sell the number and variety of products or generate anything close to a developed countries GDP at 12.5 customers per year. So my recommendation is, Jeremy, fire them then fire yourself and get some decent sales staff and a half decent sales manager to show you how it’s done.

Enough of my rant; let’s move on to see what else might change. I’d expect a close rate of around 30% not 25%, plugging in these numbers you get a vastly different outcome of 1 sale for every 165 calls, at 50 calls a day that’s 1 sale every 3 and a bit days. So with those few small changes cold calling becomes, as it always was, a viable option. I know it’s increasingly fashionable to pooh-pooh cold calling but it is a fact of sales life and particularly in tough economic times it stands up well to the “lets never make a cold call again” brigade. There are also industries where cold calling is the expected method of selling and connection. In the UK this is true of the construction sector and much of the manufacturing and engineering sectors and where, frankly, using other marketing techniques as the primary source of lead generation would be about as useful as a chocolate teapot.

Now being over 50, I might be a bit of a dinosaur, but, what’s clear is that even with all this new technology led marketing, lead generation and networking, sales results are no better than they were 25 years ago, and in many cases worse. One of the reasons for this, I submit, is because sales people and their managers have let themselves be seduced away from cold calling, not because it doesn’t work, but because it’s the most unpleasant part of the job.

Your comments please.

Exigent Consulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business.

Take Your Business To The Gym – Managing Staff Costs

Even the most well run businesses will have to face the prospect of having to lose staff as a way to reduce ongoing costs. This is even more likely in businesses where salary costs represent a high percentage of overheads, typically this would be in service industries like IT, manned guarding and finance. Faced with this situation what options does a business have? Most likely, only two, making staff redundant or getting staff to accept a temporary reduction in salary. Even this limited choice is dependent on the employee profile of the business. The relevant parameters are the level of staff salaries, the length of service of the higher paid staff and the ease with which redundant staff could be replaced.

So taking an extreme position a manned guarding firm is likely to have no option but to go for staff redundancy, this is because the vast majority of staff will be low paid, many of whom will be at national (UK) minimum pay. You cannot, therefore, ask these members of staff to take a pay cut. It is also true to say that it would be relatively easy to recruit replacement staff when the upturn comes. An aeronautical engineering business, by contrast, will have very many highly paid staff and asking staff to accept a pay cut is the much preferred option. It also has the added benefit of keeping highly skilled staff within the business. This was a harsh lesson that we in the UK learned in the recession of the late 80's and early 90's where our manufacturing sector was decimated. The wholesale redundancies made in this sector resulted in highly skilled staff finding other work and consequently they were not available when the upswing came preventing those businesses left from taking advantage of increase orders because they were unable to re hire suitably skilled staff.

So how should a company consider when making this difficult decision? Firstly, it should be taken sooner rather than later, procrastination is the biggest killer of businesses I know. Secondly, the business must look at its mix of staff, the severity of the crisis facing it, the speed of implementation and their view on when the upturn will arrive. Salary reductions are quick to implement but there is a limit to how much you can reduce people's salary, this is especially true if you're a smaller business you couldn't, for example, ask staff to take a 50% pay cut, realistically the maximum is likely to be in the region of 20%. Thirdly, get detailed numbers on the cash flow implications of your decision as this will help them decide what is the best course of action. Fourthly, any decision needs to be couched in terms of what is the best way to save £'sX and not what can we save, as the latter course almost invariable leads to a watering down of actions because businesses always find reasons why they shouldn't make person A or B redundant.

This is one of a series of articles about dealing with the downturn and what you can do to get your business fitter to survive, whilst many of your competitors may fail. The idea of Taking Your Business to the Gym comes from the view that over the last 8-10 years things have relatively speaking been easy. Company liquidations have been at low levels both consumer and business to business markets have been strong and companies have had no real pressure to look at themselves and seek improvement. Many have but most have become a little complacent over optimistic and so flabby. This recession has through an assault course in the way and you've got to get fit quickly to make it through.

See more at www.exigent-uk.com/business%20restructure.html

Contact me at Laurence@exigent-uk.com

Who's Making Money from Twitter - The Results

This was one of the most frustrating polls I’ve undertaken, mainly due to the length of time it’s taken to get a reasonable response to my question. It did occur to me that one of the reasons for the poor response was people’s reluctance to admit that they’d made little or no money from Twitter; particularly given the hype surrounding Twitter as the place to be for cutting edge Social Network Marketing. More realistically, however, we shouldn’t be surprised at how few respondents actually made any money from Twitter as it is still a new medium and most of us are still learning how to use it.

The bald facts are that 63% of all respondents have made no money from Twitter, and a further 23% less than 1000. Only 14% of respondents have made more than 1000 and 8% have made more than 10000. I'd be interested in your comments.

Exigent Consulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business.

Take Your Business to the Gym - Pricing

This is one of a series of occasional articles about dealing with the downturn and what you can do to get your business fitter to survive, whilst many of your competitors may fail. The idea of Taking Your Business to the Gym comes from the view that over the last 8-10 years things have relatively speaking been easy. Company liquidations have been at low levels both consumer and business to business markets have been strong and companies have had no real pressure to look at themselves and seek improvement. Many have but most have become a little complacent over optimistic and so flabby. This recession has thrown an assault course in the way and you've got to get fit quickly to make it through.

Pricing is perhaps one of the most misunderstood issues in business, if used properly it's one of the simplest ways to help you maximise your profits. Easy then, so what's the problem?

Simple question: who sets your company's prices is it determined by you or the market?

All those who said the market – Your Wrong – it's YOU! It's one of the most basic misconceptions about business whilst the market might dictate general pricing levels individual companies set their own prices. The problem with owner managed business is that they assume that they must be the cheapest to survive. If I had a £1 for every time I've heard this I'd be very rich – sadly I'm not.

Why do so many people think like this? It's conditioning, let me give you some examples

You're visited by a salesman who can't articulate the benefits of his product. What do you tell him when he asks for the business, I'm sorry but it's too expensive.

You're visited by a salesman who you just don't like. What do you tell him when he asks for the business, I'm sorry but it's too expensive.

You're visited by a salesman who just doesn't get the point you're trying to make. What do you tell him when he asks for the business, I'm sorry but it's too expensive.

You're visited by a salesman who's too pushy. What do you tell him when he asks for the business, I'm sorry but it's too expensive.

You should be getting a message by now pricing is rarely the issue, price objections are mostly a cover for some other objection. So why is it we know we're not telling the truth when we hide behind price, but assume others are telling the truth when they tell us we're too expensive. I really can't explain I can only assume that we just don't want to face the real issue so we accept pricing as the issue.

So now you know let's look at what you can do. Well one thing you could try is to increase all your prices by 1% immediately. Why, because you can; if you're selling something for £100 pounds people aren't going to stop buying it because it now costs £101.

I can't we're in the middle of the worst recession in living memory you must be nuts – you say.

I say – no, its your conditioning that says that. I can in all honesty say that in almost every company I work with; one of the first things I do is to get them to increase their prices and having done so they are surprised that they don't lose any customers in the process. Yes even in the worst recession in living memory. Why? Am I a genius – I hope so – but no. Am I a magician – no. The answer is almost invariably, because companies are selling their product or service too cheaply because they've been conditioned that "Cheap is Good".

Realistically as a small business owner you should understand that whilst price a factor in purchasing its by no means the main factor, people tend to buy more on quality brand capability and service. Your price therefore, should reflect your costs and be sufficient to give you a decent profit. So in order to price correctly you should have a detailed analysis and understanding of your costs. This is something that many businesses don't have, only by understanding what and how your costs are made up in detail can you accurately set your prices over the long term. Whilst the general rule the sales price is 2.4 time manufacture costs, it's still a rule of thumb and likely to lead to a gestimation of costs which will almost always be less than the real costs.

As a general rule you should be increasing your price at a minimum annually to keep in step with inflation and also when there is a major change in the price of components. Don't worry if you are not the cheapest because it is rare that you will be as there is always likely to be a business with a lower price. Anyway you don't want to be the cheapest because at those levels there is no customer loyalty.

Finally your price should reflect your product position. Simply put you can't offer a Rolls Royce product or service for the price of a Ford, unfortunately many business owners believe that's the only way they can survive which is often the very reason they don't.

You can contact me at www.exigent-uk.com for more information on how I can help you manage your pricing more effectively.

 

Twitter is not for Accountants – Yes it is

I just had to write this after a response by BookMarkLee to my previous blog "Can Twitter work for the smaller business?" I'm grateful to Mark for writing such a controversial blog and setting off this healthy debate. His response was to refer me to an article he wrote here.

It should be obvious by now that I disagree with the contention that Twitter is not for accountants and here's why.

Marks first assertion is that there is no pressing need for them to use twitter, so therefore why bother. They don't need it, true, but the same argument has equal validity with Tax Advisors or commentators, or like, me consultants. Following this line of argument; just who does have a pressing need to use Twitter? - well, not many actually, which rather defeats the object of a social network marketing site.

We then get list of business issues where Twitter won't help; well to assume that Twitter was ever designed to address any of these specific issues is tantamount to putting it in a blue cape and red underpants. So lets be clear Twitter is a social network not a panacea for company issues. I would say further, having coached a number of accountants as well as other businesses that the list could be applied to almost any business. So is Mark suggesting that virtually no business should explore Twitter as a business tool, seems a bit extreme to me.

So why should accountants use Twitter? Well firstly lets not forget that Social Networking is big, really big.

More than two-thirds of the world's online population now use social networks and blogs, according to research firm Nielsen Online. This makes it the fourth most popular online category after search, portals and PC software, putting it ahead of personal email for the first time. More importantly, their usage is growing more than twice as fast as any other of these leading categories: last year it accounted for 9.3% of all times spent online around the world, which is half as much again as the previous year.

The UK is one of the most enthusiastic adopters of social media: Facebook has a greater market penetration in the UK than anywhere else, while social networks and blogs more generally now account for one in every six minutes spent online in this country. We're also more likely to access these sites via our mobile phones than anywhere else in the world. If you think this is hype, note that ASDA, Debenhams, Carphone Warehouse, Ebuyer, Dixons and Ebay UK have very recently entered this market, especially in using Twitter. It is now in the mainstream.

You use social networking to build your brand, reputation and build a community, by increasing your profile you'll also encourage recommendations and business. On the specific point about gaining more business I ask why not. If you set out to have fun and play then you'll most likely have fun. If you set out to get more business then you'll get more business. The results from Twitter depend on your focus not Twitter itself. Fortunately because of its ease of use and simplicity there are a number of add on programs which can help users make the most of Twitter; to name two there Twitter Local an application where you can monitor activity in say a 25 mile radius from your business office, and the recently launched exectweets which focuses on business rather than social Twittering.

I can't say how successful people will be using because it depends on how you use Twitter and if you use it in isolation or in conjunction with other social networking activities like blogging (something else Mark doesn't think is for accountants) or articles. It will be a difficult transition for many accountants who are actually artisans rather than business managers but the world and future clients are moving to social networking, they should not be as so often happens on the trailing edge of this change.

How We Use Twitter

Following a number of comments recently about how we or others use Twitter I set up a simple poll asking four questions. Do you use twitter for Purely Business, Purely Social, Mainly Business or Mainly Social. This is how you answered:

Not surprisingly it seams that half of us use it mostly as a business tool, whats interesting I think is that that it is only 50%. The hype around twitter would suggest more. 5% of us use it purely for business which is significantly larger than some commentators have suggested and 32% use it as a purely social network.  Admitedly the sample was small only 120 participants. However I intend to run the same poll next year to see how we might have changed our usage patterns.

I look forward to your comments

What Is Quantitative Easing?

As it is the topic of the day, I thought you may like to see this explanation. It is kindly provided by Peter Kelly of Pegasus Funding a finance brokerage specialising in providing financing options for SME's in the UK.

 

What is quantitative easing?

 

Usually, central banks try to raise the amount of lending and activity in the economy indirectly, by cutting interest rates.

Lower interest rates encourage people to spend, not save. But when interest rates can go no lower, their only option is to pump money into the economy directly. That is quantitative easing.

The way the central bank does this is by buying up assets - usually financial assets such as government and corporate bonds - using money it has simply created out of thin air.

The institutions selling those assets (either commercial banks or other financial businesses such as insurance companies) will then have "new" money in their accounts, which theoretically should boost the money supply.

 

How would it work?

 

Even economists who agree with the quantitative easing policy often disagree on how exactly it will work. But there are two main ways it could boost the economy, which are really two sides of the same coin.

The first channel is through the direct effect on the banks' bank accounts. With more money sloshing about in their accounts, the banks may decide to lend more to businesses and individuals, and increase the amount of activity in the economy that way.

The second channel is through the effect on the cost of borrowing. When the Bank buys bonds, it reduces the supply of those bonds in the economy. That should increase the demand for new bonds and, at the same time, make it cheaper for businesses to borrow.

Having taken very short-term interest rates as low as possible, the idea would be for the Bank to push down longer-term rates as well (which are the rates that companies and individuals borrow at).

 

Are there any risks?

 

Quantitative easing is a high-risk strategy. If it is not done aggressively enough, banks will remain unwilling to lend and the crisis could drag on. To some extent that is what happened in Japan when this was tried 10 years ago.

Like old-fashioned money printing, QE also runs the risk of going too far: pumping too much money into the economy and causing high inflation - even hyperinflation - as seen in 1920s Weimar Germany and modern-day Zimbabwe.

But in those cases, the government was printing money simply to pay the government's bills. They were not responding to the risk of deflation as the Bank of England is today.

 

Is this printing money?

 

Of course, these days the Bank of England doesn't have to literally print money to do QE. It's all done electronically.

However, economists would still argue however that QE is the same principle as printing money as it is a deliberate expansion of the central bank's balance sheet and the monetary base.

Why is it different from Weimar and Zimbabwe?

Printing money can be defined as the central bank financing of government debts. This is what happened in both Weimar and Zimbabwe and what the British government will insist it is not doing, although the short-term effect is similar.

According to the Maastricht Treaty, EU member states are not allowed to finance their public deficits by printing money. That is one reason why the Bank of England will buy government bonds from financial institutions, not directly from the government.

The Bank believes this form of QE is different because they are "printing money" as part of monetary policy - to prevent deflation. They are not printing money to help the government finance its deficit. Also, unlike Zimbabwe, this is a temporary policy: the Bank expects to sell the government bonds back into the market when the economy recovers.

How do we know if it has worked?

If QE works, credit growth will pick up and businesses will find it easier to get credit. That, in turn, should help stimulate the economy and help push inflation back up to the Bank of England's target figure of 2%, thus staving off the threat of deflation.

 

Pegasus Funding Resources,

01932 244810

www.pegasusfunding.co.uk

Thanks, look for further updates soon Laurence Ainsworth www.exigent-uk.com

Can Twitter work for the Smaller Business?

When I started using Twitter I had two objectives. One was to see how Twitter functions as a social media marketplace and the other was to get a sense of how smaller businesses could use it as a channel to market.

Despite the hype around it Twitter still seems to me to be a niche product. That is based on the composition of its members. It reminds me of all those speed networking events that were so popular, their limiting factor was that it was predominantly sellers who attended and what we really need is buyers. I don't pretend to suggest that Twitter will die out as speed networking has but it does suffer from this phenomenon of too many sellers.

There are some areas where Twitter is well suited. The B2C environment for one, and there is certainly anecdotal evidence that companies have generated real revenue from Twitter and those providing digital products have found it a regular source of new business. It is however fair to say that this is not a quick win, it does take time and effort to build up a reputation and presence on Twitter. Mostly however its time; for those who are involved in delivering digital services, this is not an issue since using online environments is their natural marketplace. For those offering physical products and services it's a more challenging environment. However, if you're selling into the B2B or SoHo markets then it can still be an effective route. Essentially the fact that you can readily communicate with the decision maker and that the sales process is simple and short means that using Social Media Marketing (SMM) works well and having good visibility on twitter will certainly generate interest.

At the other end of the scale major corporates' have the time and resources to dedicate the man hours necessary to regularly insert their message and build that vital link of trust with their customers and prospects. So you can see many of the worlds largest businesses using Twitter including, Dell, Ford, etc. Dells assertion that it obtained $1million in revenue from Twitter has been well publicised. We must however accept that larger businesses already have an advantage since they've built a level of "trust" around their brand long before Twitter came along and they leverage that advantage further now.

One should not forget also that Twitter is more attractive to business because postings are necessarily short and unlike Facebook, You Tube or MySpace is text based. Interestingly this will make it more readily adopted by the professional in a higher age group and therefore more suited to today's decision makers.

The more difficult question is how "Fred Bloggs of Bloggs Joinery" can use Twitter. B2B business is not necessarily well suited to Twitter and many owner managers don't have the time to devote to develop a network, and quality is still as important as quantity. This is ignoring the import question of whether they "get Twitter" which is likely to be a major hurdle in itself. I have spoken to a number of small business owners who just don't "get it" and have subsequently stopped using it before they really had a chance see what it could do for them. So what options are open to them, well firstly assuming there is sufficient marketplace on Twitter for their product (something that is seriously open to question), they could encourage all their staff to join Twitter and use a collection of voices to build up a following or secondly, outsource. This may seem an extreme step or even heresy in Social Marketing, but to me it's an inevitable consequence of how social marketing works. SMM agencies will naturally develop enormous power simply by having several clients each with several users promoting several products. With that infrastructure its becomes almost inevitable that they would harness all the voices from all the clients to cross promote each new product growing in power and effect each time they add new clients. The next logical step is to dispense with real voices and create surrogate voices after all it's relatively easy to create persona's which people can use as templates. If true it would completely undermine the concept of Social Media Marketing as we know it.

These are surprisingly radical conclusions but supported, I think, by strong logic. I dont presume to know that this is true and I'm looking to you to tell me what do you think? Let me have your thoughts.

Laurence Ainsworth www.exigent-uk.com

UK/possibly Global - Cambridge Who's Who Invitation A Scam??

I thought I'd share this with you not only as a warning

on a possible scam, and I'll let you decide on that one; 

but also because its explained in such a pleasant 

and engaging way.

Latest Social Network Rankings – Worrying Times for MySpace

Compete.com has just released its traffic survey on social networking sites. The biggest climber by far is Twitter shooting up from 22^nd in 2008 to 3^rd in 2009. Interestingly the biggest looser is Bebo.com dropping 9 places to 14^th.

Myspace continues to exhibit a decline having hit a peak in 2007 and fallen 1% in 2008 and a further 13% in 2009. This must be a worrying trend for its owners and suggests, despite its obvious popularity, that it is somehow not meeting the needs of the new internet generation. It may be that it is a victim of its own success and that it has never quite managed to capture the imagination of users outside of the US. This is supported the fact that Facebooks' growth is now almost exclusively driven by users outside the US and its US subscriber numbers has also stagnated. Perhaps more worryingly for MySpace, is its drop in marketshare as a percentage of the top 25 social networking sites from 61% in 2007 to 33% in 2008, which perfectly illustrates that it hasn't enjoyed any of the 61% growth in traffic for the top 25 as a whole.

It clear that MySpace is in a difficult position, and if it doesn't to something soon it will find its position further eroded as other sites enjoy continued growth at its expense.

Find us also at www.exigent-uk.com

Googles New "AJAX" Search Invalidates All Non Google Keyword Searching

I discovered this article on Twitter. If true it is very worrying and puts Google potentially in the same position as Microsoft vis exploiting its Monopolistic position.

In short if this is being rolled out by Google all non Google analytics programs will be rendered useless. I like many people use non Google sites to look at keyword analysis and keyword searches and its probably the most important items I track.

This article puts it much more sucinctly than I ever could... read the full story @ http://tinyurl.com/c5uv8e

Find us also at www.exigent-uk.com

Why You Must Increase Marketing in a Recession or How Recessions Destroy Sales Metrics

I have of often read, and had heard many a pundit declaring that in a recession you must reduce your marketing spend. Based on my experience with previous recessions I have strongly opposed these views. I do have to say, that it is often very difficult for businesses to maintain their sales and marketing spend when times get tough. However, as you will see, the impact of a downturn in the economy plays havoc with established sales and marketing metrics. The effect of this should be to demonstrate clearly that in fact a company needs to increase its sales and marketing activity if it wants to survive a recession.

Philosophically this has always made sense, as for at least as long as we are going on a downward curve, there are more sellers than buyers. Those buyers, because they are short of money, will spend less on purchases to help them balance their reduced income. What I have tried to do is to quantify the effects of a recession on sales activity. I have made some simple assumptions which are as follows:

1. To continue trading the company needs to achieve three sales in a month.
   
2. Its success rate from prospects to sales is 33%.
   
3. To get a meeting with a prospect requires ten cold calls.
   

So in a normal sales environment our simple model would deliver this:

Phone Calls	to	Prospects	to	Sales
100	0.1	10	0.3	3

Essentially what we are saying is that you need to make 100 calls to get 3 sales. Now let's assume we get some softening of the economy and things get more difficult so instead of getting 3 sales for ten prospects we only get 2. So to keep up our 3 sales per month we now need 15 meeting. Because the conditions are a bit tougher it gets a bit harder to get meetings and we now need to make around 16 calls to get an appointment. Suddenly our model looks like this:

Phone Calls	to	Prospects	to	Sales
250	0.06	15	0.2	3

 

The result is that we now need to make 250 calls for our 3 sales.  Lets now go one step further and accept we're in a full blown recession rather like we have now. Our success rate is half what it is in normal times (These new metrics based on the evidence from some of my clients and further anecdotal information) . You end up with figures that look like this:

Phone Calls	to	Prospects	to	Sales
400	0.05	20	0.15	3

You can see that the implication in this simple model is quite devastating. It clearly impossible to go from 100 call per month to 400 overnight if at all or in the longer term find a regular 20 prospects per month. Typically sales will go down; just how far down depends on how well the sales team is managed and the local market (sector) conditions. Many companies would soon exhaust they’re prospect list at that level of calling, which partly explains why it doesn’t happen.

So how do we protect ourselves in these difficult times? Well first of all, don't panic! Secondly, before you go rushing off to contact people, you need to understand where you are. What I mean by that is you have to have some of information about the current performance of your sales and marketing activities. Your baseline should be to understand what your current sales of metrics are. If you don't have that information one simple way of creating some is to take the total number of bids, quotes, proposals you have made divided by the number you have won.

Also, make your marketing accountable, that is critically analyse the return on investment you get from your various marketing activities. In some cases this will be easy, for example if you use yellow pages or Yell.com you have their invoice which tells you the cost and you should be able to work out how much business you got from that investment. In simple terms than if your return is less than your investment, stop it. Stop it now if you can. If you can't, stop it as soon as you can. With those more fuzzy situations where you spend time and effort rather than cash you can still assess where you get the best or least reward for your effort.

Only now that you have this information in your possession should you go out and up your marketing and sales. This simple exercise will have done two things; firstly it will have told you what your baseline is which will enable you to understand your effort to sales ratio. Secondly, it will have identified your most productive marketing channels. You now need to go out using those channels and communicate with your best customers, your good customers, and then the rest of your customers to identify sales opportunities. From here you need to move it into new business development. Choose your best channels first as they are most likely to deliver the quickest results. And set yourself targets for activity to see what your new sales metrics are, and if you can, pursue them relentlessly.

It will be tough in the early days, but if you stick at it while others fall by the wayside you will have created a stronger sales and marketing base to take you into the next upswing.

Find us also at www.exigent-uk.com

Twitter for Beginners

I have recently started to use Twitter, and being a relative novice with blogs, I wanted to see how easy it was to use and why people would want to use it. Essentially it appears you can use Twitter for two reasons, firstly; for purely social objectives or secondly; and more commonly as a way of promoting your business your ideas and your brand. The easiest way to describe Twitter is that it is text messaging on the Internet. You only have 140 characters to post a blog so there is an art in itself in getting your message over with this limitation. To quote Winston Churchill "I don't have time to write you a short note so I will write to you a long one". With such a limited number of characters you do have to think quite clearly about what you're saying, which in itself is no bad thing.  

So I'm assuming, as I do, that you want to use Twitter to build up your network and promote your business here are a few tips on how to get started. Firstly, I would say that Twitter is incredibly easy to use. But before you start you need to decide on your persona. That is to say do want your tweets to be of a personal nature or of a business nature. Perhaps we should look again at it in a slightly different way and ask yourself the question do you think that some of your personal messages would be inappropriate for your business contacts two receive, if you think the answer is yes then you should open two twitter accounts. If the answer is no, or probably no, then one will be sufficient.  

Getting started is easy once you have signed up get your home page and hit settings. Let's not worry about pictures and suchlike at the moment, and concentrate on settings. The most important section is the one line bio. Give some thought about what you want to say, as potential followers will read this bio and use it to decide whether to follow you or not. A poorly written bio will not encourage followers.  

Right, we are now ready to go. So what do you say, at this point it's a learning curve for you so just try a few different posts to see how comfortable you are with them. The most important thing is to be yourself, remember this is not a 5 minute wonder, potentially you'll be using this medium for years to come. To build up your network you need to find some people to follow, and you need some followers. The best way to start, if you can, is to connect with some of your friends who already use Twitter, that gives you a place to start.  

Go to one of your friends pages, and on the right hand side you will see the word following and underneath that will be a number of mini pictures, choose one at random and click on it. This will take you through to that person's home page, read their Bio and if you like it, just below their picture you will see a radio button which says follow. Press it and you are now following that person and they are part of your network. Repeat this process as often as you like and you will quickly build up an understanding of those individuals who are of interest to you and those who are not. The current etiquette is that if you follow somebody, they will for the most part follow you back.  

For the first few days, don't worry too much about growing your network, your best spending your time understanding how Twitter works. You'll get a sense from reading of the submissions and from that you should start to understand the best way for you to communicate via Twitter. A couple of other ways to speed up building your network is to use something called "Twitter local", download it and use it to identify people close to you who are on Twitter. Follow them and as you are local they are more likely to follow you back.  

Contact me on www.twitter.com/laurenceexigent. If you refer to my blog I'll guarantee to follow you back.  

Find us also at www.exigent-uk.com

The 5 Stages of a Sales Call

You might be a business owner or self employed or someone who through force of circumstance has moved into sales and has had little, if any, formal sales training. This blog article will give you a structure to work from which will help you be more successful in sales. 

First a bit of Psychology, when people meet for the first time, there is always some stress particularly for the potential buyer. Stress levels which start at a high level at the beginning fall throughout the call only to rise to a peak again during what we all know as "The Close". What this 5 stage approach does it to try to make this psychology work in your favour to improve your chances of making a sale.

Stage 1. The Ice breaker

This stage relates to the first key minutes of the meeting at this point stress levels are high and we need to bring them down. It's a conversation which takes place between the two parties but which has nothing to do with business. It helps to establish ease and rapport before the business meeting proper starts. It literally breaks the ice. Obvious isn't it, well why do we often not use it. Well it's that word stress again which pressures us to get on with it, and don't you know it - when we rush straight into the business content we're less successful. What do you talk about? Well look for clues, people tend to publicise what they're interested in, even if they do so unconsciously. So if you see lots of golf pictures on the wall, guess what; he likes golf, there's your starter for ten.

Stage 2. The Opening

As it suggests, this is the start of the business portion of the meeting, it's a series of opening statements which should outline the agenda for the meeting, make sure you always have one. At this point you won't know what specific issues your prospect faces so you have outline the list is issues that a typical prospect for your product or services might face and relate that to the specific benefits that your company's product or service provides. This is the most talking you should do at the meeting.

Stage 3. Qualification or Questioning

By now and in a few short minutes by following these simple steps you'll have managed to reduce much of the stress levels, both you and your prospect will feel more comfortable and they will be ready to discuss the issues surrounding their business. There an old saying in sales which goes "you have two ears and one mouth use them in that proportion", basically and especially during this stage only ask questions and let your prospect do the talking. Qualification is a much undervalued part of the sales call, but if you don't qualify properly and understand your prospects issues and rationale you've dramatically reduced your chances of a successful close. This section is by far the longest and should represent at least 75% of the time you spend with your prospect. Don't at any point during the qualification stage offer any solutions; just make note of the issues and problems raised and how your solution can solution can help. Start with easy questions like "how did you start your business?" and "who do you sell to?"or "why did you buy this machine?" Then ask more searching questions once you've uncovered some issues like "why is that a problem for you?" or "what are the implications of not addressing this problem?" Having gathered your information and understood his problems we go to...

Stage 4. The Close

It's the term that strikes fear into the hearts of many sales people, just the mention of the word has probably increased your heart rate and you're not even at a meeting! So as we enter the close our stress levels really start to spike. One of the side effects of high stress is that we have a tendency to talk too much and frankly just babble. 

This is a real danger because by talking too much we let our prospect off the hook and leave without a sale. So as we move into the close keep calm, try to deliberately talk a little slower, then sum up the qualification session by identifying each issue and how you can help. You then ask for the order and stay quiet and you stay quiet until your prospect answers. Don't worry if it takes what seems like an eternity for him to respond it's only likely to be 5-10 seconds, and remember your prospect will be feeling just as much stress as you. If you start speaking first you'll have lost; the conversation will avoid directly the issue of purchase because you'll have given your prospect a chance to talk anything other than the most important - will he buy.

Stage 5. The Consolidation

Congratulations you've held your nerve, you've asked for the order and you've answered a couple of objections and he's said yes. So what do you do next? Well you could run around waving your arms in the air saying Yes! Yes! - but that's probably not the right thing to do. 

Let's look at the stress levels, they've collapsed you've both taken a huge sigh of relief and there's a great tendency to get out of there just as fast as you can. Don't. Stick around the consolidation stage is there for you to allow the prospect to be comfortable in his own mind that he's made the right decision. There is something called "buyers blues" which relates to circumstances where after a purchase the buyer becomes disillusioned with what he's bought. It often manifested by the unexpected cancellation of an order. The Consolidation is designed to minimise this, you need to find a reason to stick around for 10-15 minutes, if you can, get him to fill in some documentation relating to the sale, alternatively if you haven't already suggest a look around the factory or site, your intention here is to get them back into their comfort zone, I've even suggested a celebratory cup of tea.

So there you have it, a simple five step model for being more successful sales, happy selling!

Find us also at www.exigent-uk.com

If You wont take advice from me, What about from "The Sage of Omaha"?

This article is by the legendary Warren Buffett, whose simple homespun philosophy has made him the worlds richest man. His company Berkshire Hathaway has a price per share of a staggering $100,000 per share, thats right, $100,000.

This article demonstrates, if ever we needed reminding, that there are opportunities for us, even in the darkest of times.

New York Times Article by: Brad Holland Times Topics: Warren E. Buffett


THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.


So ... I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.


Why?


A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.


Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.


A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.


Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.


You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.


Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.


Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”


I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.


Warren E. Buffett is the chief executive of Berkshire Hathaway, a diversified holding company.

Qualification, Qualification, Qualification 4 critical steps to successful selling

Fed up with closing too few sales? Keep coming up against surprise objections? Use qualification best practises to improve your close rates.

The qualification process in sales calls seems to have fallen out of favour recently and there’s an almost unnatural preoccupation with “the close”. Whilst there’s no denying the importance and the sheer pull of closing. If you don’t qualify properly “the close” will tend to become a painful and an increasingly fruitless experience. Simply put; by qualifying better you’ll close more business.

Step One - Do Some Planning!

Now before you roll your eyes and think to yourself “here we go again”, do you really think that this article sprung miraculously out of my head just as it sits on the page. No of course not; I planned out what I was trying to achieve working on the structure and presentation before I put a word down on paper. You know your product or service; think about what questions you’ll need to ask to properly qualify your prospect. Take a prepared crib sheet of questions if it helps.

Step Two – Understand your prospects issues and their consequences

Too many untrained sales people on hearing an answer that indicate the prospects needs their service or product rush straight to “Well Mr prospect our XYZ thing can solve your problem because it does....”. Don’t do it, just resist that temptation. Back to bit of Psychology, we all have problems, how do we deal with them? Mostly by putting them to the back of our mind and closing the hatch on them. That way for the most part we can try to ignore them. What you want to do is to keep asking questions such that this problem you can solve is unlocked from the back of your prospects mind and the full horror of it is brought home to him. This is best done by asking him questions about why it is such a problem and what the consequences are if it doesn’t get fixed. The more questions you ask like this and the more your prospects talks about it, the bigger his problem becomes and the more valuable your solution will appear to be.

Step Three – Act as a (responsible) journalist

Your prospect will in all likelihood, not have the answers to all your questions so he’ll “guess” some of the answers. Your problem is you won’t always know when he’s guessing. Furthermore there will be some issues which he will not want to talk about so he’ll adjust the truth to make his responses more palatable (at least to him). To identify this you need to be able to ask for the same information in different ways rather as a journalist does by using separate sources. This is an important but largely ignored part of qualification. After all you don’t want to find out that the critical information on which your subsequent sales pitch rests is based on either guessed or incorrect information.

Step four – Summarise your prospects needs

You’ve now spent a large portion of the meeting (say 40 minutes in an hour) uncovering the consequences of his problem. You should now be able to list a number benefits that your solution will offer and demonstrate how it’s going to take all that pain away. You can now head for “the close” with confidence, but that’s a subject for another time.