Overcoming Complex Sales Complications

Another element adding to the complexity of the selling process today is the sale of services and product systems rather than items. You probably don’t sell a line of widgets; you sell “widget-based interior manufacturing process solutions.” You don’t sell a bookkeeping service; you sell “digital financial management decision and accounting information systems.”

The more complicated the product, the more “experts” required to make a decision about buying it. And the greater the number of incremental or interim decisions that have to be made before the final order is placed.

One of the many pitfalls in a complex sale is the “whisper down the lane” problem. You’ve probably played that parlor game where one person whispers a phrase to the next, who repeats it in the ear of another person until “Mary is going down to see Phil” becomes “Mary’s gong rang on Sea Hill.”

This is going to happen to you and your proposal when a flak catcher says to you, “Mr. Big is too busy to see you now, but I’ll explain your proposal to him for you.” This is not a good thing. Not only is the flak catcher unlikely to get your proposal right, it’s a given that he or she won’t deliver it with the same enthusiasm and positive energy as you would. In fact, he’s very likely to start his pitch of your idea with, “I don’t know if you’ll like this, but.…” and go downhill from there. Remember, it’s the flak catcher’s job to say “no” to proposals, so he has to at least imply that answer to Mr. Big.

That’s if he takes your proposal into the inner sanctum at all, of course. Most of the time, he’s giving you that routine for the same reason a prospect says, “I’ll think about it” rather than giving you a simple “no.” It’s a convenient, low-risk way to get rid of you for a while. In fact, when you call back to see how Mr. Big liked the idea, the flak catcher can tell you “no sale” and blame it on Mr. Big. And you have no way of knowing for sure whether Mr. Big actually saw it or not.

This same problem is magnified when you’re forced to deal with a buying agent of some sort. They really have a vested interest in keeping Mr. Big in the dark about your proposals. And they will go to great lengths to make sure you don’t even think about going around them.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

Selling Past Gatekeepers, Flak Catchers, and Other Obstacles

Many times you’ll have to fight your way through an army of flak catchers to get your proposal in front of the people who matter. Flak catchers, by the way, are those people noted author and social commentator Tom Wolfe identified as the ones sitting in the outer office whose job it is to intercept incoming shrapnel, complaints, and sales pitches to protect the real decision makers inside.

There’s a great temptation to try to blow right by the flak catchers and get to Mr. Big. The problem with this tactic is that it backfires too often. You never know just what the relationship between the two may be. Many a busy executive will take cues from an administrative assistant because they work so closely together day after day. And the assistant will know just how much power they have, too, and not hesitate to use it if they feel slighted in any way. Remember how much trouble Marie Antoinette got into because she brushed off the concerns of the little people.

You have to be careful, too, about job titles. Does the Senior Vice President of Marketing make the final advertising budget decisions? Does the Operations Manager buy the production line equipment—or does that job belong to the Purchasing Manager? Maybe. Maybe not. It all depends on the company and their practices. You obviously need to do your homework and ask lots of questions as you’re working your way through the maze.

The decision influencer that will really drive you crazy is the invisible one. I don’t know how many times I’ve worked for months on a prospect, making endless presentations to person after person only to get a final “no” because there was an unidentified decision influencer I missed along the way. You just never know and unfortunately you can’t count on the prospect to offer you all the guidance you’d like to have. Ask, ask, ask.

Another source of sales insanity is the self-appointed expert. Every prospect seems to have someone on staff whose main job responsibility is to pass negative judgment on every sales proposal. They always seem to be hardest on those proposals that didn’t start in their office, too, which is an interesting coincidence.

Some product and service lines draw these experts worse than others. More than two-thirds of American homes have computers, so you can count on at least half the prospect’s employees having an opinion on your product if you sell information systems. Everybody is an expert on advertising too, of course, since everybody is exposed to it every day.

The strategy I’ve adopted to deal with all these contingencies is to make the presentation to anybody who will listen to it, whether I think they’re directly involved in the decision or not. With a complex sale, you can never be sure who’s doing what or who has the stroke, so cover them all. Since a complex sale can take time (weeks, months, or even years) to complete, it’s not unheard of for someone you’ve pitched to get promoted, transferred, or terminated before the final decision is made. So cover all your bases and make the presentation to anybody you can corner long enough to hear it.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

Closing Sales To Empowered Employees

Companies who "empower" their employees will proudly tell you that you don’t have to pitch your product to Mr. Big because any number of subordinates can make the final decision. Mr. Big will go along with anything they decide. Did you notice that Mr. Big still has the final word? To me, just saying that he will go along implies that he also has the option to not go along.

Unfortunately, at least in my experience, many of the employees who have been empowered don’t want the responsibility that goes along with the territory. Some people subconsciously feel threatened by the responsibility that comes with decision-making. They may even believe that upper management is copping out on their responsibilities by pushing decisions down in the organization. They’re much more inclined to say “no” than “yes” because keeping the status quo is almost always felt to be the safer decision. And a great deal of second guessing goes on, too, especially among those who live to please upper management and as such are mostly concerned about what Mr. Big really wants them to decide. There’s a tendency to push the decision back up the corporate ladder—or worse, not make any decision at all—if they can.

It’s not a pretty picture, but it’s one that you have to deal with constantly when you're in sales.

The biggest reason you’ll constantly be involved in complex sales is that the fabric and structure of many industries have become more complex. The Mom and Pop grocery store has given way to the hypermart. The independent local realtor is now a franchisee of a national financial conglomerate. The local lumber yard has been replaced by a big box store and the neighborhood hardware store is under siege. Waves of consolidation have swept through every industry from toy stores to funeral homes.

And with size almost always comes complexity. The management of a nationwide chain of service stations has a vastly more complicated structure than the one running your local two-pump corner gas station. There are local managers reporting to regional managers reporting to division managers who draw on the resources of the corporate marketing, finance, legal, engineering, and administrative staffs. The decision to buy a new digital sign, for example, may have to be approved by a dozen individuals. At the local sole-proprietor gas station, one person—the owner/operator—will make that decision alone.

Since creative sellers focus on the larger potential accounts, they almost by definition pursue the national organizations rather than the mom and pops in their industry. You must develop a set of tools and tactics to reach and persuade the multiple decision influencers in your prospect’s company.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

Selling To Decision Influencers

Have you ever heard this sales adage: Never take “no” from someone who can’t say “yes?” There’s more than a kernel of wisdom in it, but this truism undoubtedly pre-dates the age of virtual corporations with horizontal organization charts describing the functions of an empowered workforce. In most complex selling situations, the first hurdle to overcome isn’t “no,” it’s identifying all the various players with something to say about the decision.

When it comes to identifying the people involved, I refer to decision “influencers” as well as decision “makers.” That’s because there are many people in the modern business structure who don’t have the authority to say either “yes” or “no” but whose opinions are solicited by the final decision makers. Even seemingly simple decisions often go through the influencer mill. This happens for a variety of reasons.

For one, a large number of executives today practice consensual management. The old autocratic “buck stops here” decision maker is out of sync with the latest in management theory. These modern executives believe (and rightly so) that involving more people in a decision improves the ultimate acceptance of that decision. If you’ve ever sold consulting services, for example, you know that the client staff members who are going to be affected by the project can destroy it if they don’t “buy in” early in the decision-making process.

There’s also a widespread belief that the more people involved in a decision, the better that decision will be. It’s a safety procedure practiced by decision makers who prefer to spread the risk among a larger group. Of course, decision making by committee has its downside, too. It tends to produce “safe” decisions because a group tends to grind all ideas down to the most acceptable level.

Group decisions may be safe, but they’re certainly not necessarily better. Each member of the group has his or her own agenda and will act to carry it out within the group with varying degrees of success. I’m sure you’ve heard the story of the committee charged with designing a horse. Every member added the features they wanted. One suggested the beast have four legs and another made them long and added large, flat feet for traction on soft surfaces. Another insisted on a tail to shoo away flies while yet someone else modified it to not be bushy so maintenance would be lower. And so the process went through meeting after meeting until the committee to design a horse produced instead a camel.

Here’s a scary number: 27. That’s the number of “yes or no” interim decisions that need to be made in a situation where a committee of just three people is deciding whether to buy an item with three specifications (like size, color, and quantity) and where each person has to consider and agree/disagree with each of the others on each possible combination of specified features. And what’s really scary about that number is that it does not include the final yes or no buying decision! Unfortunately, sound management practice or not, decision-making committees are often part of the complex sale.

That’s one reason I suggest eliminating as many of the interim decisions as possible when you put your proposal together. If you give the committee just one decision to make (buy or don’t buy), you’ve eliminated all of the interim decisions they have to debate.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

Perpetual Change Marks Business Strategy

Nothing is so permanent as change. The customer you deal with today will not be the same one you see tomorrow. Your employees will have a different outlook on work when they get up in the morning and your vendors will come through the door with new products, new prices, and oh, by the way, new corporate owners with new credit requirements. More of your tools will have LCD screens and many of them will talk wirelessly to your customer and to each other. You can only hope they keep talking to you. In every type of business—change happens.

Some of us fight change and some of us embrace it, but we all have to deal with it. “You have to respond to the market,” says Michael Young, owner of Street Rods by Michael in Shelbyville, Tennessee. “If you can’t adapt, you’re not going to be here in five years.”

Consider your customers. Most company owners are justifiably very proud of having a base of loyal customers. If they rely exclusively on those loyal customers to support their revenue stream, though, it won’t be long before they see their sales decline. Why? Because customers change. Consider just one simple fact: twenty percent of Americans move every year. While not every one of them moves across the country and therefore out of your market area, many do. And even those that just move across the street put a dent in their disposable income with moving expenses, etc., that cut into their budget for other things—like what you sell. Those lost sales have to be replaced by sales to new customers just to stay even.

Even the customers who do stick around change. Their tastes evolve, they learn new things, they get bored and want to do or own something different. If nothing else, they get older. The baby boomers, the generation that gave us the Rat Fink and American Graffiti, has started cashing Social Security checks. How will that change their propensity to spend money on hot tubs, designer denims, or flat screen TVs? And will the younger customers who hopefully come along to replace them be looking for the same things? Not likely. That’s one reason you see more muscle cars on the street and fewer ‘34 Fords; more Hondas and fewer Chevrolets. It’s not just a change in fashion—it’s a change in the customer.

Don’t fight it

So how do you deal with change? To start with, don’t fight it—you can’t win. Instead, open your eyes to the inevitability of change, make yourself and your company ready for it, and embrace it when it comes. The first step, if you want to keep up with changes in the marketplace, is to make a conscious effort to listen to what the customers are saying to you about themselves and what they want.

“Customers are more knowledgeable,” observes Sales Manager Tom Dickinson of AP Tuning in Lebanon, PA, a company that specializes in high-performance automotive work. Not too many years ago, hot rod magazines and mail-order catalogs defined media for that market. Today, enthusiasts can learn about the sport from an ever-growing number of media outlets—everything from the Internet to entire television networks devoted to it. Enter a term like “torque converter” into Google, and you’ll get 743,000 listings. When Dickinson’s customers see somebody on TV winning races or shows with a car like theirs, they become a more informed—and generally more demanding—customer.

“It used to be that you learned about cars by talking to the guy in the next pit stall at the track,” according to Darrick Klima, also in the automotive performance business as owner of Belleville Motorsports in Belleville, KS, where they build over 100 race cars a year. “One of the bigger things these days are race car workshops and driving schools. People are spending money to become better racers because they’re spending more money on better race cars. It puts a lot of pressure on everybody.” Klima attends schools and seminars himself so he will know what his customers are being told.

Klima also spends a lot of time getting feedback from customers. “We meet change by listening to our customers,” he says. “All I do all day is talk to people who are racing our cars.” He says he and his staff listen to the drivers’ ideas, bounce them around internally, then try them out to see if they work. If they do, the new concepts become incorporated into all their products. “We have to definitely spend more time and money trying to come up with a better mousetrap.”

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

More Retail Selling Methods

In retailing, as in all types of selling, a customer with pricing on the mind may insist they can get by with a cheaper product even when you know they are ultimately going to be dissatisfied with it. It’s important to sell this customer the right product the first time if at all possible, because they will probably blame you for their dissatisfaction later—even if you sold the cheap product to them under protest. Even worse, they may spread the bad word to their friends. Selective memory is a powerful force for evil.

One way to up-sell them is to play up the differences between the cheaper and the better products while you stress the very small differential in their prices by breaking it down into smaller amounts. Over the life span of two brands of high performance tires, for example, how many pennies per mile does the twenty-dollar price difference amount to?

Good salespeople always have their eyes and ears open looking for opportunities to up-sell their current customers. Here are some good ways to find more of them:

● Be alert to changes. Has the customer bought a new car? Of course, that’s an obvious opportunity to start selling. But how about if they’ve moved to a new house with a bigger garage? Can’t you envision that rack full of tools they have room for now?

● Disappointment breeds more sales. Let’s be frank: if your customers won every race they entered, they wouldn’t need you, would they? So when you hear one grousing about coming in second all the time, make a few well-chosen suggestions about how they can move up a notch while you’re empathizing with them.

● What’s new? New products are coming into the vibrant performance market every day and you owe it to your customers to tell them about them! An email newsletter can do the trick—and so can a simple telephone call.

When you take the sales initiative, opportunity knocks a lot louder.

Seller Reluctance

You and your other salespeople may be reluctant to use these tactics because of expected customer resistance or even resentment. But as long as you watch how they are reacting, listen to what they’re saying to you, and don’t try to cram something down their throat, that problem won’t be nearly as bad as you think. Remember, you’re dealing with somebody who has already decided to spend some money with you, so they must be pretty comfortable with the way you do business.

The biggest obstacle to increasing your sales this way, however, is simple laziness. It’s a lot easier to just give the customer what they ask for, take their money, and say goodbye. When you do that, though, you’re actually doing the customer a disservice because you can’t be sure that what you sold them will really meet their needs. How much do they know about what they are buying? Do they really understand what alternatives they have or what the differences are between various products? Up-selling is a good way to get to know what they truly need, which puts you—the professional—in a position to make sure they buy the right thing.

When you understand it that way, you realize that you are creating value for the customer while you are bringing more dollars into your store. That’s about the best formula for business success I’ve heard since someone advised me to buy low and sell high.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

Retail Selling Success Is All About Up-Selling

Back in the good old days, when retail stores had living, breathing employees who helped customers choose their merchandise, it was standard procedure for the salesperson to try to increase the size of each individual sale. They did this very effectively in several ways that can be adopted by today’s retail shop owners who are interested in increasing the top line on their income statements.

One of the first is simple up-selling, where you guide the customer to a selection with a higher price point than the one they came in to buy. In an extreme example, let’s say that the customer came to your hardware store to buy a wrench. An up-seller would make at least an attempt to sell him or her a complete set of wrenches instead. Outlandish? Maybe, but you never know until you try. And, as long as the suggestion is done quickly and without pressure, the customer won’t mind.

A good way to manage this kind of interchange with the customer is to ask them what problems they’re having while you’re getting the item they came in for. That’s also the time to get some basic information like what kind of project they’re working on so you can give them accurate advice. Then, even if they say “no thanks” to the suggestion, you can reply with “Let me at least give you a price so you can think about it.” There’s no pressure on the customer in up-selling this way.

Add-ons

Another sales-building strategy is to suggest add-ons to the original purchase. Back when men wore coats and ties to the office (is anybody besides me old enough to remember that?), you couldn’t buy a jacket in a men’s store without the salesperson offering you a shirt, a couple of ties, and a pocket handkerchief (now I’m really dating myself). The modern shop owner can and should do the same thing. At a garden center, for example, once you’ve sold the customer a rose bush you should suggest new pruning shears and maybe some long gloves.

Add-ons should be, but don’t necessarily have to be, related in some way to the customer’s original purchase. It’s also helpful if they have a lower price point. They are truly impulse purchases for the customer, although the impulse originates with the shop salesperson.

There is no reason these same tactics can’t work for service revenues, too. The garage customer that buys a set of adjustable shocks, for example, might also be interested in a chassis tune. One incentive for the customer to make the additional purchase might be that you can save him or her some money by doing both jobs at the same time. It can also save the customer something else that’s valuable—time.

Up-sell Bargain Hunters, Too

There are some situations where you might think that up-sells and add-ons aren’t possible, like when a bargain-hunting customer comes into the shop and says, “I’m looking for such-and-such, and I only want to spend X dollars.” There are several ways to deal with that kind of low-baller. The first is to call their bluff and see how serious they are about their budget by telling them you don’t have anything in that price range and offering to show them secondhand merchandise or a cheaper job. Note that you’re not refusing to meet their needs, just their price. You’re also sending them a not-so-subtle message that their expectations may be too high without telling them flat out that they’re an idiot.

Another way is to just ignore what they say about their budget and start at the high end of the market and work your way down. One advantage of this approach is that it gives the customer a chance to see options they might not even know exist. What’s more, after they’ve seen that royal banana split, it makes their plain vanilla cone look a whole lot less appealing.

Yet a third approach is to give them alternatives and let them choose. Even if Product A and Product B are both priced higher than they say they are willing to pay, it’s always very possible that their budget will change if you do a good job of selling the higher-priced options. This is also a good way to find out what’s really important to them, both in terms of what they are looking for and how much they are really willing to pay.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

Closing The Complex Sale

Selling the way it’s usually described is a pretty simple affair. You find the prospect, research their needs and develop a proposed idea, pitch the decision maker, manage the objections, and close the sale. Straight forward, isn’t it? Nice and linear.

But selling in the real world isn’t quite that simple. The “normal” sale is about as linear as a basket of eels. You may be able to find something that looks like a beginning, but which of the squirming bodies leads you to the other end? We all operate in the world of the complex sale.

The complex sale is easy to identify but hard to complete. You know you are in the middle of one when Mr. Big says, “I really like this idea, but I have to run it by my boss.” And then his boss, Mr. Bigger, says, “Good idea. What does production have to say about it?” And then production says, “Interesting. Can we change these widgets into woudgets—if the new assembly line we’re installing next year calls for it? Better check with the vendor.” So the vendor of the new assembly line says, “We’ll set it up any way they want. Besides, what’s a widget?” Get the picture?

There is a decision maker, but there are also multiple decision influencers. There is ultimately a “yes” or “no” decision, but there are also multiple interim decisions to be made before that point is reached. Multiple decision influencers making multiple decisions. It’s a recipe for mass confusion.

The dollar size of the buying decision doesn’t necessarily dictate the number of decision influencers involved. One of the more interesting sales I ever made was a multi-million dollar communications tower to a company in Saudi Arabia. The situation had all the hallmarks of a complex sale. The purchasing company was a joint venture operated by two other companies, one French and one Saudi, and the item I was selling was a very high priced component in a much larger complete system to be operated by a ministry of the Saudi government. The construction manager was an Egyptian subcontractor to the Saudi/French joint venture.

Even the payment wasn’t linear. The customer’s funds were coming from an insurance settlement that was still in dispute. The payment to us was to be made in the form of an Irrevocable Letter of Credit, which had to be approved by the Saudi bank, our bank, and a transmitting bank in Switzerland. There was an endless chain of meetings, referrals, studies, and opinions offered, countered, and negotiated by phone, fax, and snail mail that went on for six months and involved engineers, bankers, and various functionaries on three continents. Finally, the sale was closed after a single 90-minute meeting I held with the president of the joint venture and his construction manager. That meeting was basically a formality, however, since all the details had been ironed out in the months before.

On the other hand, I once sold a small-market television advertising package worth $300 that required four weeks of study and deliberation by an advertising agency’s media planner, buyer, and account supervisor, their client’s store manager, regional manager, and advertising director, and the co-operative advertising manager of one of the store’s vendors. The Federal Express and long-distance telephone bills were greater than our profit on that sale!

Watch out, a complex sale could be lurking anywhere out there.

Successfully completing a complex sale requires tremendous patience and perseverance, two qualities often in short supply among salespeople, who often chose sales as a career in the first place because they like the instant gratification of closing a deal. If the reason you get up and go to work each morning is to see how many sales you can make that day, I suggest you find something simple to sell—like Girl Scout cookies—and a simple market to sell it in—like sole proprietorships with fewer than two employees. Selling just about anything else to larger organizations requires the ability to navigate through a complex sale.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

How To Make Interviews Meaningful

From the hirer’s standpoint, the purpose of the job interview is to learn things that will hopefully predict the potential employee’s future success (or failure). Some things I learned while hiring hundreds of salespeople over the years:

• The applicant should do most of the talking. If you spend more time speaking than listening, you’re not learning as much about them as they are about you.

• What they say may not be as important as how they say it. Do they speak clearly and convey a positive outlook? Do they get defensive?

• Communication goes both ways, so do they listen well? How much attention they pay to your questions may reveal how much attention they’ll pay to those of your customers.

• Appearance isn’t everything, but who wants to work with a slob? To find out how neat an applicant really is, go outside and look in their car. If the back seat is full of junk, they may not be as well-kept as they appear.

• Follow-up counts, especially in personal sales. Give the applicant your phone or fax number or your email address, then a day or two to see if they send you a thank-you after the interview. If they do, it will not only show that they’re polite, but that they care enough about the job to go the extra step.

Starter Questions

The goal of an interview is to listen to the candidate talk so you can learn about them. Here are few open-ended questions to start the process:
• Tell me about your work history. Which job did you like best? Why?

• Did you enjoy school? What was your favorite subject? Why?

• Is there anything I should know about your career that doesn’t show up on your resume?

• What part of your current (or last) job do you like best? Least?

• Do you like your boss? Why? Why not?

• Describe for me the most difficult problem you’ve ever faced and tell me how you solved it.

• What do you do best?

• What do you want your employer to do for you?

• Who is the person you most admire? Why?

• Tell me what you do to improve yourself.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

Negotiation Success Is Planned, Not Accidental

Mention negotiating to some people, and the first image that comes to mind is a table full of lawyers and accountants haggling over a billion-dollar contract. In most small companies, you seldom get involved in those kinds of deals, but you do conduct negotiations of many kinds all day every day—sometimes without even realizing it. You negotiate with suppliers, customers, service providers, even employees. You give and take over everything from delivery dates and financing terms to whose turn it is to clean the coffee pot in the break room. Perhaps the most important negotiations, though, are the ones you conduct with vendors and suppliers. How well you perform there can make a major impact on your company’s success.

Obviously, being a good negotiator can improve your bottom line. Less obviously, though, when you improve your negotiation skills you also reduce some of the stress that comes along with running a business. You’ll enjoy both wider profit margins and fewer headaches if you’re prepared for the negotiating process and ready to use your skills when the need arises. Before you begin a negotiating session, you need two things: information and a game plan.

Information is something you can’t have too much of. You need to know as much about the other person’s needs and wants as you do about your own. If you are negotiating with a vendor, how’s their business? Is this sale important to them or just routine? Are they operating under competitive pressure in the marketplace or do they have a monopoly? Is their plant running at full capacity? Is their warehouse bulging with unsold inventory? Is the rep over quota or desperate for a sale? Some of these things you can find out by asking them directly or just listening closely to casual conversation; others will take a little research in the trade press or a reading between the lines in your dealing with competitive vendors. In either case, the more you know in advance, the better off you’ll be.

Look at your own situation ahead of time, too. Get the facts and figures straight about what you need, when you need it, how much you’re willing to pay for it, and so on. The more solid information you have, the more confident you will be in making decisions—and such confidence will greatly influence the way the vendor responds to your offers.

Remember, too, that this information is as confidential as your bank account numbers. You don’t need to reveal it to the vendor unless it’s going to help you get something you want.

Successful negotiation is by definition a matter of give and take, which is where the planning comes in. Preparing a list in advance of the possible concessions you can make as well as a list of things you’d like to have in return is often a good idea. The list will help you prioritize your requests and make sure you don’t overlook any possibilities. As you’re drawing up your list, remember that negotiation isn’t just about price. Delivery schedules, payment terms, packaging and displays, advertising allowances, return policies, and many other elements can add (or subtract) value to the transaction. And nearly every one of them is negotiable, so it never hurts to ask.

You can also offer the vendor some items he or she might want besides a higher price, too. The size of the order comes to mind right away, of course, but what’s it worth to them to get a quick decision from you? Or how about payment in advance? While you normally don’t want to tie up your capital, if the price of the parts or merchandise you’re buying can be slashed below the cost of the money (the interest you would earn if you kept the money in the bank for the time it takes to sell turn the inventory, to look at it simply), it might make sense.

One of the preparatory steps I always found useful was to think through my final position—my least acceptable alternative—before I started negotiating. This might include the highest price I could afford to pay, the largest quantity I could justify ordering, the longest delivery date I could accept, and so on. I would try to include every factor that might come up and decide—in advance—the worst terms I could accept before walking away from the deal.

What we’re talking about here is my “take it or leave it” offer. I would certainly never reveal it to the vendor, but knowing where I stood gave me a scale on which to measure possible concessions that I was either willing to make or that the vendor offered as the negotiation continued. Knowing the ultimate bottom line ahead of time also kept me from making costly mistakes in the heat of the moment.

The other thing to prepare in advance is a wish list of everything you could possibly want from the vendor. Don’t keep anything off the list just because you think “they’ll never go for that.” You don’t know unless you ask!

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

Attention To Business Details

Ask anybody who spends their day in a furniture finishing spray booth, and they’ll tell you ninety percent of success in a paint job comes from attention to detail. Proper sanding, masking, tacking, priming, and so on are mandatory. So is a clean gun, properly mixed paint, and the right temperature in the spray booth. Skip a step or give it a half-baked effort, and you’re going to find sags, clouds, over-sprays, fisheyes, and other ugly features in your finish coat. Your attention to detail is what matters.

The same is true when it comes to running your business. Just as a perfectly-applied finish coat depends on what came before it, a successful business depends on dozens of factors other than the ability of the company to produce eye-popping work. Profit doesn’t just magically appear. It’s the result of constant attention to the large number of details involved in running a successful business. Unfortunately, like sanding between finish coats, most of these details aren’t things many people consider fun.

How much do you enjoy bookkeeping, for example? About as much as you like root canal, right? You know it has to be done, but you’d just as soon not do it yourself. I know plenty of company owners who approach the job of keeping their books by throwing all their receipts, invoices, and bank statements into a big box. When tax time rolls around, they dump the box on their accountant’s desk and wait for the bad news. This approach is about as effective as throwing an old sheet over a sofa and calling it re-upholstered.

As tedious as it is, keeping a timely set of books will help you run a company with much higher profits. And with the availability of easy-to-learn software, you don’t need to be a CPA to master the basics. Even if you’re lucky enough to have an office manager who handles the task, it’s a good idea to personally review the results every month. Good, timely bookkeeping will help you spot profit leaks before they become floods.

If you review your books in detail, you can plot the costs of materials or labor over time to see if there are any negative trends developing. You probably have a good sense of what’s happening, but it’s never a bad idea to have the specifics in front of you before you make any decisions. You can also spot cash flow glitches and accounts receivable problems before they occur so you can take the appropriate steps after considering all the alternatives. It’s always better to talk to your banker about a loan before you’re in crisis mode.

You may also have a nice surprise in store when tax time rolls around. If your accountant doesn’t have to wade through your box of dusty documents, he or she should charge you a lot less to prepare your tax return. And who knows? Your diligence throughout the year may actually enable you to lower your tax bill by shifting expenses or revenues—quite legitimately—from one year to the next, by making a timely retirement plan contribution, or by using other time-sensitive strategies of the tax-wise. You can only do those things if you’ve paid attention to the details of your bookkeeping.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

Hone Your Interviewing Skills

Making a great impression—not just a good one—is the key to landing a job in this economy. I will lead a workshop on how to give an impressive interview at the Harrison Library on Wednesday, September 21, 6:30 - 8 PM.

The event, which is free and open to the public, will focus on short practice interviews followed by critiques designed to strengthen the job seeker’s presentation skills. Participants will learn

• How to make a great first impression
• How to sell your skills and yourself
• How to stand out from the competition

The Harrison Library is at 2 Bruce Avenue in Harrison, NY. For more information, call (914) 835-0324 or visit www.harrisonpl.org.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

Make Money With Facebook?

Can you make money with Facebook, Twitter, LinkedIn and other social media? Five experts answer that pressing question and several more at the Social Media Panel Discussion and Business Breakfast presented by 914Inc Magazine. I'll be moderating the panel and asking the social media pros the things business owners need to know in order to use these tools effectively--and profitably.

This FREE event is Tuesday, September 27, 7:30 to 9 AM at Antun's of Westchester, 35 Valley Avenue, Elmsford, NY. Tickets are limited, so RSVP by September 20.

Here's the panel that will answer your questions about making social media work for your business:

Tara Carraro
Senior Director, Corporate Communications, Heineken USA
In this capacity, she is responsible for developing internal and external communications strategies and programs, reputation management, crisis preparedness, consumer affairs and executive communication. Tara is also responsible for providing strategic counsel and guidance to Heineken USA's brand teams on the use of social media consistent with the Company's guidelines and marketing codes, and she successfully managed the Company's first crisis involving social media. In addition, Ms. Carraro oversees the use of social media in responding to consumer inquiries. Prior to joining Heineken USA, she served as Director, External Communications for Altria Corporate Services, Inc. In this role, she was responsible for developing external communications strategies and plans, along with the execution of both the paid and earned components. Ms. Carraro was also responsible for the development and day-to-day management of programs and strategies to enhance the reputation of Altria Group, Inc.

Chris Cornell
“The Twitter Professor” and Owner of BaseballArt.com
Chris S. Cornell was named “Social Media Guru for 2010″ by Westchester Magazine. Here is what they had to say: Can’t tell your Twitter from your Tumblr? Through his website, twitterprofessor.com, Chris S. Cornell helps people and businesses not only make sense of the crazy social media jungle—but he teaches them how to have fun there, too, by trying to get us all online together as a community. “My original goal with social media was to use it for the benefit of my business, BaseballArt.com,” he says. “Along the way, I saw how useful social media could be for individuals, organizations, and businesses. There has been a surge in the use of social media in the Westchester area. I believe we’ve hit the tipping point.” And Cornell is leading the way!

Michael Perry
Chief Product Officer (and “Social Media Guru”) of House Party, Irvington
As Chief Product Officer, Perry is responsible for House Party’s product vision, design and development, as well as product marketing and management. He has extensive experience in marketing and product development, as well as technical training in analytics, with a specialty in econometrics. He combines this experience and training with a strong research background in human behavior and human cognitive development. This unique talent set is the basis from which he has developed truly innovative marketing strategies and programs for some of the world’s largest brands.

Prior to joining House Party, Perry spent over 20 years on the client side, leading strategy, product, marketing and data analytics teams. Most recently, he served as Senior Vice President of Marketing, Brand Strategy and Emerging Technology at Story Worldwide, a global content marketing agency. He successfully implemented new branding and business initiatives, which resulted in building new revenue and retaining current receivables of $17 million for the agency. He has also established himself as a leader in the social media marketing space, creating social media and storytelling approaches, tools and methodologies at Story, and as a major contributor to the Online Marketing Blog Network. Prior to his experience at Story, Perry held strategic marketing positions at Wyndham Worldwide/Group RCI, JPMorgan Chase & Company, Bertelsmann AG (BMG), Citibank and Time Warner.

Kris Ruby
President of Ruby Media Group, LLC

A Social Media Marketing & Public Relations agency, RMG “socializes” businesses for Web 2.0 and helps companies adapt traditional marketing into social media platforms. RMG specializes in social media optimization, personal & corporate branding in real time and optimized PR. By utilizing various social media platforms including Facebook, Twitter and LinkedIN, RMG creates online visibility for her clients and increases overall branding awareness by enhancing their brand image in Web 2.0 communities.

Kristen founded RMG with the goal of opening the vast potential of Social Media on the web to companies wishing to build relationships, grow and profit from Web 2.0. Kristen is at the epicenter of the social media marketing world and frequently speaks to businesses and associations on new media and viral marketing. She also presents social media workshops for CEO groups to empower business owners to utilize social tools for their networks. Kristen was honored by Columbia University’s Business School to lead a social media workshop for its alumni organization and was chosen to speak on personal brand authenticity at Microsoft.

Kristen graduated from Boston University’s College of Communication with a major in Public Relations and a minor in Sociology. She is also the Director of the” Girls In Tech” social media mentorship program, created to encourage girls to enter the field of social media marketing. She has partnered up with some of Westchester’s most reputable PR and marketing agencies as their New Media Specialist on social media campaigns, including Giles Communications and DataKey Consulting. Kris has filmed segments on personal branding, social media overload, and how social media is impacting dating on ABC Good Morning CT and NBC. Kris is also a columnist for JMAG & Inside Chappaqua Magazine on social media/ branding and was chosen by the Business Council of Westchester as the youngest “40 Under 40″ Rising Stars for 2010.

Nancy Shenker
Founder/CEO, theONswitch

Since starting theONswitch in 2003, Nancy A. Shenker has helped a wide range of businesses launch, re-brand, and flourish. Prior to starting her venture, she worked in various business development and marketing positions and is experienced in all media and in small- and large-scale marketing. She started another business, a publishing venture called www.nunumedia.com in 2010.

Her expertise is in business start-ups and transformations and she has an extensive track record in growing businesses through creative new solutions. Although Nancy was raised in the “traditional” media era, she has embraced the web and social media and is fluent in all forms of online media and uses them to build brands and revenue. theONswitch has succeeded in using combinations of “old and new media” to deliver huge increases in lead volume and sales for a variety of businesses, including real estate, food, retail, and others. Her process is based on four key steps — Imagine, Focus, Buzz and Profit.

Among her corporate accomplishments is the launch of Citibank’s Connecticut branches. She also developed a proprietary database system to identify new retail customers, researched and launched numerous new products/services, played a lead role in MasterCard’s “Priceless” campaign roll-out and managed event marketing for the world’s largest producer of business trade shows, spanning 40 industries.

She holds an AB in English and Psychology from of the University of Michigan in Ann Arbor and a Graduate Diploma in Book Publishing from New York University. She also completed Kellogg’s Executive Communications program at Northwestern University.

Nancy is a Contributing Editor for the New York Enterprise Report and Canada Camps magazines. She has been published and quoted in The New York Times, Smart Money TV , aol, Business Week, Entrepreneur.com, the Associated Press syndicate, The Stamford Advocate, the Westchester Business Journal, AT&T’s and Lowe’s websites, and other publications. She also publishes three blogs – theONblog, Hippy to Wiki and Show Girl Talk and a series of marketing and business tips, which can be found at www.10volts.com. She serves on the Board of Yonkers Partners in Education.

RSVP via email to pr@westchestermagazine.com or call (914) 345-0601 ext 146. Hurry--tickets are limited!

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

How To Finance Your Business With Bank Loans

“It takes money to make money” may be the truest axiom since “measure twice, cut once.” But look at that first statement closely. Nowhere does it say whose money it takes. If you need capital for your business (and who doesn’t?), for new equipment, materials, or to even-out the spikes in your cash flow, there are several places to get it other than your own wallet.

Let’s start, though, with the single worst source of funds: your credit cards. Unless you are sure you can pay the balance off in full before the end of the month (and if you could do that, you probably wouldn’t need to be borrowing the money in the first place), the interest is going to kill you. You won’t last long if you borrow money at 18% (or more!) to build a product where the net after-tax profit margin is 10%. And, no, you won’t make it up on volume.

Many entrepreneurs look to family and friends for loans, especially when they are starting up their company because it’s tough (although not impossible) to borrow money from a bank or credit union to start a business. Ignoring the personal relationships involved, personal loans are viable options not to be overlooked. They often carry lower interest rates and generally have a less formal approval process than those from standard financial institutions. There are a few IRS rules to watch out for, though, and there are about a thousand reasons to have a legally-binding written loan agreement signed, so consult with your attorney or tax advisor before Aunt Sadie reaches into her cookie jar.

For larger or longer loans—or if you want to avoid the psychological quagmire of borrowing money from your brother-in-law—you’ll want to turn to the people whose purpose in life is lending money: banks, credit unions, and savings & loans. The thought of going through the loan application and approval process can be very off-putting, but it’s kind of like spinach; you may not like it but you’re a better person for eating it. The process of compiling the necessary information and thinking through your proposal will help you focus on some important shop management factors.

It may not seem like it, but banks are actually eager to loan you money because that’s where they make their profits. These institutions will grant your loan if you can show that your business proposal is sound. They will turn your loan down, however, if they judge you to be a bad credit risk. While your personal credit history may be a factor in the decision, most of the time bank loans are denied because the proposal was inadequate or poorly presented. Your shop’s financial history alone is generally not sufficient proof that the loan you’re requesting is secure. For that, you need to show that the future of the business is rosy enough to make the probability of repayment very high.

Don’t even think about applying for a loan unless you know exactly how much money you need, what you need it for, and how you will pay it back. Every one of those items will need to be substantiated in some way, too. How much money you need is directly related to the amount of cash your shop generates now, so you’ll obviously need up-to-date financial statements (backed up by a CPA’s analysis and/or tax returns). What you need it for comes from your marketing plan and answers questions like who is going to buy the product you are going to make and the likelihood of their purchase based on competition, pricing, the economy, past purchases, etc. The question of how you will pay it back is answered by your cash flow projections.

Assuming your proposal answers all the pertinent questions, your financial institution is probably still going to ask for some sort of collateral and/or a personal guarantee. The collateral, of course, may include the assets (equipment and inventory) of your business, real estate, marketable securities, or other tangibles the financial institution can sell if they have to. They probably won’t consider as collateral the value of your company as a going concern—because they don’t want to operate it, which is what the bank would have to do if they took over your business in the event of a failure.

The personal guarantee is slightly different. A lien against your home, bank account, or other personal assets assures the bank not so much that they can recoup their money in the event of a failure, but that you have a strong incentive to keep running your shop and living up to the terms of the loan. They know it’s much easier for the borrower to walk away and leave the bank holding his unsold inventory than it is to give up his car.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

Every Business Needs A Plan For Success

A business plan is your map to the money. It tells you where you’re going to get it and how much of it you’re going to be able to keep. And just like any map, the more detail the plan has, the easier it makes it to get to your destination.

Do you need a business plan? Would you hire someone to remodel your kitchen who didn’t have a set of blueprints? I’m sure you wouldn’t think of it. So why run a business without a plan? Unfortunately, it happens all the time, which may be the reason well over 500,000 businesses fail every year.

Most of the small business owners I deal with really know their craft. They know what materials to use, which vendors offer the best terms, which customer is most likely to complain, and so on. They’re also pretty good business people. They understand controlling expenses, tracking labor and material, and pricing their product to make a profit. They work hard and are justifiably proud of the results.

Their business plans, though, all too often sound like “If I build it, they will come.” That may work in the movies, but it stands as much chance for success as a plan to install a tonneau cover that doesn’t include the model number of the truck.

If you expect to run a profitable business, you need a business plan for many of the same reasons you need a plan to remodel a house. It helps you focus on the important factors that contribute to success. It helps you make key decisions on everything from the types of work you look for to the number of employees (if any) that you hire. A sound business plan is also an absolute must if you are looking for capital, whether it be from investors, banks, or even suppliers.

A concrete business plan identifies the customers, quantifies the sales they will produce, and analyzes how profitable those sales will be. It’s like a job estimate that begins at the end of the process (the sale to the customer) and works backward. It helps you determine how much material to order and how much labor to plan on, project the costs, and figure out whether the job will be profitable at the price quoted. Only, instead of doing it on a job-by-job basis like an estimate, the business plan does it for your company as a whole over a period of time.

A business plan isn’t really about what kind of work you’re going to do or how much shop space you need. Those are elements of it, but they are so minor that they’re almost footnotes. There are five basic components:

1. Business Description – A short statement about why the business exists and what it hopes to accomplish. Generally, the more specific—and shorter—the better.

2. Marketing Plan – Answers the questions about how the business will be successful. Who is going to buy the product or service? Why? What need does it satisfy? How many potential customers for it are there? How often will they buy? What are their competitive alternatives? What price will they pay? How will they know about it? How will you get it to them?

3. Financial Plan – Shows the expected financial results of the marketing plan. How much income will be produced? What net worth will be generated? Who will receive that income (you or the bank)?

4. Cash Flow Plan – The step-by-step instructions for generating cash and keeping it. How will the working assets be acquired? When will operating cash be needed? How soon will profits appear? What happens until then?

5. Management Plan – Describes the shop owner or manager’s role in the business. Who will do what? What are their qualifications? How much training expense and time is required? How much time will be devoted to production, marketing, and administration? It also includes contingency plans for events like natural disasters, up- and downturns in the economy, and competitive changes.

This very brief description of each component is not at all complete but it should give you a flavor of what kind of information, hard data, guesstimates, and reasoning go into the business plan. Most of all, a good business plan needs to be grounded in reality, not wishes. I like to say that it should produce an optimistic outlook based on pessimistic expectations.

Preparing a good plan doesn’t happen over a lunch hour. It requires research and thought. Sound business plans can come in many forms, but they all have one thing in common: they are in writing. Whether you use one of the many good software packages available or fill up a loose-leaf binder with pencil-written notes, the act of writing it down forces you to give your plan the time and thought it deserves.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, motivating personnel, financial management, and business strategy.

Sales Brainstorm To Energize Your Performance

Creative sellers seldom become bored with their jobs, but occasionally you may need a little something new in your routine to invigorate your performance. How about creating something new to sell?

To come up with new ideas, try continual brainstorming. You’ve probably been in brainstorming meetings with your management and other salespeople. The creative selling brainstorming techniques are the same ones you’d use in a group meeting but you use them on an individual level. It’s great to participate in group sessions, but you can’t rely on them alone to generate the large number of ideas you’ll need as a creative seller.

The first step is to choose a prospect need from your research into them. Write it down and, on the page below it, make a list of possible ways your company’s products or services could help the prospect reach that goal. And follow these ground rules of successful brainstorming as you’re writing down those ideas.

1. There’s no such thing as a bad idea. Write it down even if it’s impossible. Especially write it down if anyone in the room says “We’ve never done that before.” Reserve judgment until later.

2. See how outrageous you can be. Free-associate and put it down on paper. The wilder the idea, the better. Crazy ideas spark more ideas—mundane ones are dead ends.

3. Fill the page—then start another one. Quantity is your goal because the more ideas you list, the better the odds of finding a good one.

4. Don’t stop when you come to the “right” idea. There could well be a better one waiting to come out.

You don’t have to have a group of people to brainstorm, either. You can do it by yourself if you just open your mind and let it create.

Step two is to review the ideas and combine or extend them, creating new ideas through the interplay of the elements of other ideas. Again, don’t be judgmental. It’s not yet time to throw out bad ideas. This combining and extending process should add ideas to your list of possibilities, not remove them. As you’re doing it, you’ll probably come up with some entirely new ideas, too.

There are several ways to stimulate your brainstorm production. Look internally to see if there are any company-generated solutions that could possibly apply. Many companies package their products or create bundles of services that are designed to meet the needs of certain categories of customers. You certainly don’t want to ignore those. The only caution is to be sure the pre-packaged offering exactly fits your prospect’s particular goal. You may need to “tweak” the package to make it work.

Another source is free association with non-related concepts. This is a fancy term for stealing the germ of an idea from someplace else. One of my associates who is in the marketing business will often monitor television commercials or thumb through magazine ads to see if there’s a slogan or concept he can “borrow” to serve as the springboard for his own idea. He’ll take a character like Kellogg’s Tony the Tiger, for example, and see if he can create a version of it for his client. Maybe an animated cat named Karla the Kitten who purrs “You’rrre grrrand” when it’s owner feeds it Brand X. Or he’ll lay out a slogan like “You’re in good hands with Allstate” and plug in his client’s name and products to see if they fit. He may come up with, “You’re in good form with Diet Rite.” He’s not exactly stealing the other person’s idea, just using it to spark his own.

Another place to start this process is to examine past sales to like customers. Don’t look at the dollars and cents or the unit volume. Look deeper and see if you can determine or surmise why the customer made that purchase. Talk to the salespeople who made the sale and pick their brains about the circumstances and events that led to it. The veterans in the sales department (and the managers, too) are usually full of stories about their many battles and victories. Next time you’re subjected to a war story, see if you can detect the idea that sparked the battle instead of politely nodding through it. Sometimes a polite “Why?” will prompt the story teller to reveal it you.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, hiring, firing, and motivating personnel, financial management, and business strategy.

Advertising's Nasty Four-Letter Word

Back in the good old days when parents actually corrected their children’s behavior, your mother might wash your mouth out with soap if you used certain four-letter words. Today, you should do the same to whomever writes your advertising (even if that’s you) if your ads contain the most offensive four-letter word in advertising, “have.”

It’s scary how often we hear this terrible, nasty word. “We have name brand merchandise.” “We have friendly, knowledgeable personnel.” “We have the latest equipment.” “We have everything from soup to nuts.” You don’t need to look very far to see how prevalent the "have" approach is in retail (and other) advertising. Newspaper ads tell readers what the store has with pictures of items with prices next to them. TV spots show pictures of items with prices superimposed on them and an announcer telling the viewer what they are seeing. Radio commercials do the same without the pictures.

Why is it a bad practice to tell the customer what you have? Because that takes up expensive space and time that could be put to much better use giving the customer a reason to do business with you. Good ads don’t tell the customer what you have. Instead, they answer the key question, “What’s in it for me?” That’s an important distinction to make when every advertising dollar needs to produce maximum results. The lack of worthwhile information in advertising is one of the main reasons people tune it out and why so much advertising doesn’t produce results. When customers stop listening to your advertising, it’s money down the drain.

Learning how to demonstrate product benefits instead of features is one of the most important skills a salesperson can master. The same holds true for good advertising. A benefit is something that satisfies one or more of the customer’s needs. A feature is simply a component of the product. People don’t buy features and products; they buy benefits.

Keep in mind that prices in your ads are nothing more than features of the items you’re selling. And like other features, prices don’t mean much out of context. So the same principle holds true: Don’t just tell the customer how much it costs; tell them what benefit that price delivers. Instead of saying “All gloves are 50% off,” tell the customer to “Buy two for the price of one.” Or, even better, “Protect your hands two times for the price of once.”

There are two exceptions to the “have” rule. The first is when you want to announce something new or exclusive—and even then a benefit should be included. The second exception is in the print or online Yellow Pages. Customers usually use this medium to find specific items, so you do need to tell them you have what they’re looking for. These customers are generally knowledgeable about what they need and want—-they’re just looking for a source. That’s also why it’s a good idea to spread your listings among many headings—-you increase the chance of reaching someone looking for a specific type of product or service.

Communications expert Dorothy Leeds says that every customer listens to their own personal radio station, called WII-FM. That stands for “What’s In It For Me.” Good advertising is like a song that gets played often on that radio station. So stop using that four letter word “have” and start telling the customer what you’re going to do for them. Give them a reason to get in their SUV, drive to your shop, and open their wallet. Tell them how they will benefit from doing business with YOU.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, hiring, firing, and motivating personnel, financial management, and business strategy.

Grab Attention with Unusual Advertising

The sounds of a baby crying or a telephone ringing are impossible to ignore. Can the same be said about your advertising? Getting your prospective customer’s attention is the crucial first function of every ad, whether it be in print, broadcast, or on the side of your delivery truck. People pay attention to the unusual and the unexpected. As advertising legend David Ogilvy once wrote, “When you advertise fire-extinguishers, open with the fire.” There’s nothing wrong with the blunt direct approach as long as it accomplishes the task at hand without undermining the rest of your ad’s message.

Each advertising medium has its own repertoire of techniques to help you capture the prospective customer’s attention. In print ads, headlines and illustrations help pull the reader in. The Newspaper Association of America, citing a study they commissioned by Roper Starch Worldwide, says that showing the product attracts readers 13% more than not showing the product. Multi-product visuals in ads are 25% more likely to attract readers and, in ads where three-quarters of the space is devoted to illustrations, recall rates improve by 50%. Using full color in an ad increases its recall by 20% over black and white.

Pictures aren’t everything, though. At one time, David Ogilvy estimated that five times more people read the headline than read the body copy in a print ad, so attention to the big, bold type at the top of the ad pays off, too. After all, it’s the job of the headline to make the reader want to continue looking at the rest of the ad. There are many standard headline-writing techniques you can use. Making it read like a news bulletin is one. Another is to offer “congratulations, you’ve won” and entice the reader to dig deeper to discover the prize. And don’t underestimate the power of the ever-popular word “free” to motivate someone to try to learn more. Just make sure when using come-ons like these that they are legitimate; a deceived reader makes a lousy customer.

Many of the same principles apply to getting attention in radio. Instead of pictures, though, you use sound effects, music, and high-impact copy. Regardless of the methods you use, it’s essential that your radio commercial sound different from the programming on the station on which it’s playing, since radio is often in the background of the listener’s consciousness to start with. If you’re advertising on a talk station, use music. If you’re running on a country music station, try spots that sound like news. Whatever you do, make sure it doesn’t just blend in with the sound of the station.

Television advertising presents a dilemma. On the one hand, it’s hard to get the viewer’s attention because of the cluttered ad environment. On the other, it’s easy because you have so many different and effective tools to use. You not only have an illustration, it’s in color and you can make it move. And, with today’s digital effects technology, you can make it jump, jiggle, dance, or morph in very unexpected and unusual ways. You get to use sound effects, music, and dialogue, too.

Don’t be afraid to try unconventional tactics to get attention with your television (or any other) advertising. Sometimes, an offbeat approach pays unexpected dividends. The single most important factor in gaining attention is being different. The crying baby always draws a response--unless it happens to be in the newborn room at the hospital where there are fifteen others crying the same tune. To make your ads work, make them stand out. It pays to pay attention to attention.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, hiring, firing, and motivating personnel, financial management, and business strategy.

Image Advertising: Is It Worth It?

Let’s talk about your advertising. Why it works and why it doesn’t work a lot of the time. There are three basic advertising functions, which you must keep in mind. These are the goals that advertising can accomplish for the advertiser: image goals, sales goals, and positioning goals. They are not mutually exclusive and certainly many ad messages accomplish or attempt to accomplish more than one. But for now we will focus on image goals.

Image advertising goals are those sort of warm, fuzzy, amorphous ambitions that many advertisers have. They want people to feel good about their business or good about their company. There is no question that television is the great image medium. But keep in mind that those kind of images don’t sell a heck of a lot of merchandise, so image advertising needs to be used with great care. The key to doing this kind of advertising is to start by answering the question, who are we trying to influence? Who is the intended recipient of our message?

Legitimate image advertisers almost always have a very specific and narrow intended audience. These will tend to be companies like financial institutions, public utilities, health care companies, certain manufacturers or others who have very specific image problems. The people they are trying to reach will have some influence on the success or failure—the economic health—of the advertiser’s business. The root of addressing an image need through advertising isn’t to enhance the image—it’s ultimately to affect the bottom line, which can mean either profit or loss.

A company’s employees are a frequent target audience for advertisers. If the employees feel better about their company, they’re less inclined to do nasty things like go on strike, more apt to work harder, and less likely to leave for greener pastures, among other things. That’s why you’ll often see companies advertising on TV a year or so before their union contract negotiations begin. They want to soften up the opposition. They can’t very effectively address employees directly with messages about company love, but they can obliquely get the message across through such image ads on TV.

Sometimes advertisers spend to influence even smaller groups, like government regulators. If you’re in one of many kinds of regulated businesses, like public utilities, insurance, or telecommunications, your ability to make a profit is highly dependent on the attitudes toward you held by the public service commission or insurance commission or other regulatory body that governs your business. That group of five, ten, or fifteen citizens holds your fate in the palm of their hands.

Lastly, there’s another audience that image advertisers sometimes try to influence, but it’s one that they don’t talk about much. In fact, they’re usually not even conscious of their attempt to reach them. Many times, image ads are directed at the advertiser’s friends and acquaintances! If you’re the only bank in town that doesn’t advertise on TV, you may feel somewhat self-conscious at the country club when your peers and competitors are talking about their TV campaigns. There’s some keep-up-with-the-Jones’ in business life, too.

The danger of all image advertising is that it doesn’t directly influence the sales or other revenues of that company. But it can be profitable when it comes to getting the word out there about your small business.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, hiring, firing, and motivating personnel, financial management, and business strategy.

Beating The Competition Through Profitable Sponsorship

When it comes to sponsoring sports teams, it’s all about ROI: Return on Investment. Put another way, what’s in it for me?

The marketing essence of sponsorships—-whether you put your money into race teams or the PTA bake sale—-is the endorsement value that the investment gives you. There is, hopefully, a halo effect in which the potential customer’s good feelings about the sponsored entity transfer to your shop or product as well. And if the customer admires and wants to emulate them, all the better. That’s why golf club manufacturers shower golf pros with free clubs, balls, and shoes. But is the halo effect enough?

“It’s essential to show the sponsor that you gave them value for their money,” according to Tony Thacker, VP of Marketing for So-Cal Speed Shop, which is headquartered in Pomona, California. “It’s very difficult to quantify the return on sponsoring somebody else’s race team effort,” he says, “unless you know that they’ve got the wherewithal to give you the return that you need.” So-Cal’s high-profile involvement with racing dates to 1946. Thacker points out putting a decal on the car is just the tip of the iceberg when it comes to giving value to the sponsor. “In our own race effort, we send regular reports out to all of our sponsors and we try real hard to get stories on the race car in different magazines. Typically, other people don’t do that. Professional racers do, but the typical people calling us don’t realize that that’s the more important part of the job."

A productive sponsorship will also generate publicity outside the track environment, with personal appearances, endorsements, and other news-worthy events. That’s what drives the maximum return on investment.

Here are some suggestions of things you can ask for when sponsoring a team:

1. Pictures of the team in action that you can use in your advertising.

2. A letter from the team thanking you for your support that you can post in your business, use in other advertising, and attach to proposals when you give them to potential customers.

3. Personal appearances by the team members—and their equipment—at your shop. You can promote the appearances with direct mail, email, or even newspaper ads as events where fans can “meet the pros” while they inspect your business.

4. Distribution of frequent press releases—identifying your shop as a team sponsor—on event results and team developments.

All of these things will help the team, too. Remember, sports teams depend on fans just like a business depends on customers. The more fans the team attracts, the greater the value of the sponsorships it sells.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, hiring, firing, and motivating personnel, financial management, and business strategy.

Buying Good Word Of Mouth

Plenty of small business owners consider advertising a total waste of money. According to them, word of mouth is the best advertising and that’s something you can’t buy. They’re right, but only partly: word of mouth is the best, but you can buy it. That’s what good advertising does-—it buys word of mouth. Keep in mind, that “advertising” doesn’t have to be a million-dollar TV commercial on American Idol. A fifty-cent postcard announcing your new selection of life-enhancing widgets mailed to a targeted list of a couple of hundred potential customers is advertising, too. It’s the kind of advertising that buys some word of mouth.

When to advertise, how much to spend on advertising, even whether to advertise at all are questions that are at best difficult to answer for businesses in the automotive performance industry (or any other). On the one hand, you like to think that your reputation for good work and fair prices will draw people into your shop. On the other, you have to realize that if they don’t hear about you in some way, that elusive new customer isn’t going to even know you exist, much less that you have a strong reputation. And when you factor in all the competition you face, advertising becomes much more imperative.

Linda Hietala, who owns Reliable Welding and Speed in Enfield, Connecticut, with her husband Brad, agrees that you have to keep trying to attract new customers. “The best form of advertising is word of mouth and referrals,” she says, “but you can’t totally rely on that. You need to be in different publications so people can find your name and phone number.”

So how do advocates of small business advertising go about it? Hietala believes in the scattergun approach, using as many different promotion vehicles as she can afford and not relying on any single medium to hit all the targets. “We try to reach everybody in every different way,” she says. Reliable advertises in Speedway Scene and regional racing papers and also does track programs and similar publications. She’s also a believer in the Internet.

Like many speed shops, Reliable is also a heavy supporter of the local race scene. “We have a forty-foot parts trailer that we bring to one of the local race tracks,” Hietala explains. “That’s a good way for us to advertise because the track (Stafford Speedway) has, in addition to their weekly racing, special events through the year where they’re bringing in other touring series like the featherweight modifieds and the Busch North. Being visible there with a trailer, we’re reaching a lot of people.” Constantly assessing how well advertising performs is also vital Hietala believes. But she also gives each promotional outlet plenty of time to prove itself.

While these advertising opportunities are specific to speed shops and other automotive-related businesses, many similar ones exist for small business owners serving other markets. Many pet shops support their local animal shelter, for example, and clothing retailers are often big sponsors of local fashion shows. Of course, as with everything, one of the keys to success in advertising is consistency. This will require large amounts of time and money but in the long run it can pay off.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, hiring, firing, and motivating personnel, financial management, and business strategy.

Friend And Follow Marketing

Did you know that more Americans use the Internet than read a newspaper every day? That’s bad news for publishers, but great news for business owners and managers looking for ways to reach customers. If you’re like most business operators when you think of the Internet, you visualize a website for your company—and plenty of them have been built at considerable cost and effort. But there are other ways to use the ever-evolving online medium that can be just as (if not more) effective—and costs a whole lot less.

One way to market in cyberspace is with a blog, a type of web presence that has many interesting possibilities. A blog can be nothing more than a simple collection of written entries about anything (or nothing) that’s posted on the web for the curious to read. There should also be a place for you to advertise and write about your company’s history and the things you do. You can also link to your shop’s conventional website. You might even be able to sell advertising on your blog to other local businesses as well as to your vendors. Blogs are cheap (often free!) and very, very easy to create. I got started at www.blogger.com (a service owned by Google) and just followed the easy online instructions.

Another approach is to sign up for Facebook or Twitter or one of the other rapidly proliferating social networks. While there are some major differences between blogging and marketing through social networks, many of the same principles apply. The main feature of both is a sort of message board where you make diary-like entries about topics of interest. The entries don’t have to be long or even particularly literate just as long as they’re about subjects you think your customers care about. The biggest added feature of a social network page is your ability to reach customers (and potential customers) who have signed up to “friend” you. With luck, they’ll keep their connection to you and see your messages every time they visit their own social site page.

But how do you use a blog to market your business? By making it the centerpiece of an online community of your customers and potential customers. What makes either one a “community” is your customers’ ability to post their own messages along with yours, either in response to the ones you’ve posted or about subjects that they’d like to discuss. In fact, it’s this interactive feature that sets a blog apart from a traditional website (although you can have similar features there, too). A blog or social network site also gives you opportunities to help the physical community as well, which most business owners consider good for business. A substantial side benefit is that your business enjoys some of the same “halo effect” that an event sponsor gets—at considerably less expense.

If putting your business into cyberspace has seemed like more trouble than it’s worth, maybe now is the time to reconsider your decision. A Facebook page or blog is cheap, easy, and can be a very effective marketing tool.


Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, hiring, firing, and motivating personnel, financial management, and business strategy.

Selling In Cyberspace

Many business owners have considered how much - if any - time and money they should devote to marketing online. The Internet does offer many exciting business growth possibilities, however. The marketing possibilities are limited only by your imagination, your pocketbook, manpower, and patience.

Art and craft galleries, just one of the many types of businesses on the net, have been marketing online for many years. The website is essentially another complete business location--which happens to draw customers and artists from around the world who shop with their keyboard, mouse, and credit card. Artique Galleries' owner, Mike Stutland, put his Lexington, KY, galleries online in 1999 and says, “The web site has attracted customers from beyond our normal market area. It has brought people into our stores, especially through our links with many tourist information sites.” Those customers may well not have been reached otherwise and therefore represent new sales.

In order to compete for the attention of online customers, the former Chairman/CEO of Valentine Radford Advertising in Kansas City, Mo., Chuck Curtis, offers some tips based on the agency’s survey of 1000 online shoppers.

1. 89% of Internet shoppers use the Internet for product information. Make sure your web site is rich in product details.

2. 45% of Internet shoppers click on their local newspaper and 32% click on their local television station site. This is good news for businesses who can inexpensively buy advertising just on the local media’s web site.

3. Also buy advertising in the email news updates that local news media send out. About half of online shoppers have signed up for these.

4. 58% of these shoppers have signed up for an online loyalty program. It’s a smart idea to reward your best customers with a frequent buyer plan (like the frequent flier programs run by the airlines.) For example: Get a 10% discount on your next purchase when you spend $50.

5. More than a third of the survey (38%) use a wish list feature on the site for their purchases. These are items they would like to buy, but can’t purchase at the moment, and they register their desires online.

6. About two-thirds of the time a shopper will research a product online and then buy it in the store.

7. Many retailers will publish their coupons for in-store use online because the distribution costs are so much lower than putting them in the newspaper or on direct mail.

8. Between 40% and 60% of shoppers (depending upon the amount they spend) strongly object to shipping charges. Many retailers build the price of these into the products, or offer free shipping above a certain amount; e.g., “Free shipping when you spend $50 or more.”

9. 81% of shoppers expect to find a wider selection of products online. Remember that your market online is worldwide. If you find items that you can’t display in your store because of limited retail space, put them on your web site.

With these essential tips from the pros you can take your business to the next level when it comes to online marketing, business growth, and sales.

Dave Donelson distills the experiences of hundreds of entrepreneurs into practical advice for small business owners and managers in the Dynamic Manager's Guides, a series of how-to books about marketing and advertising, sales techniques, hiring, firing, and motivating personnel, financial management, and business strategy.