Independent Strategic Partners for high potential individuals and businesses 952.937.8687
Increase your rack!
In the hotel industry, published rates are called “rack rates.” These published rates are typically the highest rate you would ever have to pay for that particular room. It is from these top rates that all discounts and “deals” are determined.
As a business advisor, I am often hired to help struggling businesses improve and one of my most successful strategies is not to “lower” rack rates but rather “raise” them...
...Here’s the psychology. Every product/service can be sub-divided based on quality/value.
For example, if you were to purchase a new “clock radio,” you could find a budget model which has no additional features, a mid-tier model with a few features, or a high-end model that has all the bells and whistles. Now, within each of those 3 quality tiers lies a separate and distinct “buyer.” The demographics for each of these buyers is separate enough that typically they do not venture out of their “quality tier.” So for example, the “budget” clock radio shopper is probably a “budget” CD player shopper, and a “budget” cell phone shopper.
SO---even if Sony came out with a fully-loaded clock radio for the same price as a budget radio, but placed it on the shelf with all the other fully-loaded clock radios, it most likely would be overlooked by the “budget” shopper. Unfortunately for Sony, instead of attracting a new customer into the “high-end” tier, they probably just undersold their product to an already “high-end” buyer. Most struggling businesses believe that if they continue to drop their rates, they will drive demand for their product making up for what they lose in dollars for what they drive in volume. With a few exceptions, this rarely works.
Jumpstart to a “One Page Marketing Plan”
Answer these 10 questions in 1 sentence:
1.What do you do?
2.What are your Strengths, Weaknesses, Opportunities and Threats?
3.Who is your competition?
4.What are their Strengths, Weaknesses, Opportunities and Threats?
5.Who are your ideal customers?
6.Where can you reach them (where do they hang out, what do they read, watch, hear, eat, etc.)?
7.Why do they need/want your services/products?
8.What are your top 3 goals (i.e. more customers, higher rates, better service, etc…) for the next 3 months?
9.What do you need to do daily to achieve those goals?
10.How will you measure success?
Capture those results on one page (adding graphic design can make it more visually interesting…)
Track your activity.
Measure your results.
This all may sound a bit over simplified---and it is, but give it a try and let us know if it helps you stay focused!
Understanding Decision Makers
Remember when decisions were made by the people who used the services? Those were the days...all you had to do was a simple four-step sales process and how could they say "no?"
Many of us climbed the sales ranks in the days when “sales activity” meant face-to- face “appointments.” In today’s world, that no longer applies.
Today’s decision makers are...
Time strapped: They would rather stay with their current vendor then try to find time to build a relationship with someone new (even if you have a better deal)
Pressure driven:They need to get results fast…day trading has sped up the world of business…financial analysts measure results in much shorter time frames than in the days before PC’s…
Sales cynics:Decision makers know that salespeople are paid when they make a sale, not when the customer is satisfied…meeting someone new means having to wade through all the ______
Value sensitive: If you don’t have a solution to their pain, save yourself the pain…your one and perhaps only shot at their business just went down the drain
6 tips to getting through to decision makers
Save them time:
Know their pain before you call for an appointment
Peruse recent press releases/industry trends/customer data and look for “triggering events” that may be a catalyst for change
Be a professional ~ friendship will come later:
Save the chummy talk for later, respect the decision makers intelligence by presenting yourself as a solution provider
Reference your research as an icebreaker…For example: “I understand there is a piece of legislation that was recently passed that will require companies such as yours to…
Be prepared:
Prepare your questions in advance
Research the target company so that you have a general understanding of their position---For example, if in addition to the recent changes they’ve also been battling a court suit, they may be in a different position than a company that just recently went public
Present them ONLY what they need:
Don’t feature puke…this is an old saying that still applies…Even though a company may benefit from other services you provide…if they aren’t feeling pain in that area, they aren’t going to change…over-selling will make them think you’re a jack of all trades and master of none…
Share testimonials, not sales pitches:
Research examples of other companies that were in the same situation and the results of their actions
Present a number of possible solutions and let the client choose what they think is best…
Show them the value:
Quantify their pain… (For example: The cost of turnover of an unskilled worker is approximately $5000 per person for the service industry)
Quantify the solution… (Reducing turnover by 5% would save their company $100,000/year)
The most important thing to remember whether you are a sales person or you manage them… Most decision makers in today’s world are NOT the end users. They typically are a point person that reports to someone in finance. Their job is not necessarily to make the best decisions for the company, but rather the best decisions for the budget.