4 Questions businesses frequently ask and 1 they don’t!

In my most recent conversations with small businesses – who it must be said remain quite resilient despite the difficult trading conditions - here’s what I’m hearing:

(Interestingly, there’s not a lot about rules, regulations and compliance unless you’re in that business!).

1.       How do I get more sales?

There’s a lot of talk at the many workshops I go to about differentiation and ‘unique selling propositions’ (USPs). This is a compelling piece of marketing theory which (unless you are Apple or Richard Branson) is very difficult to put in to practice.

It’s difficult because you have to define your product or service in the customer’s language as a set of benefits – faster, quicker, easier or if you must, cheaper. This isn’t a ‘one off’ exercise. The benefits may change over time, customers may be buying for reasons you didn’t think of.

Action: Talk to your customers face to face as regularly as you can. Ask them what they like, what they don’t like, what you could do better. Ask your staff too; after all they need to be advocates too.

2.       How do I make my marketing as cost efficient as possible?

Most markets are highly competitive offering customers more and more choice. Customers are becoming increasingly thick skinned and resistant to marketing messages. Consistency is key – your branding, proposition and also where customers might expect to see your advertising and promotion. A rule of thumb seems to suggest that a potential customer will have to have been exposed to seven messages – how many ways are you using to reach them?

One of the major influencers of your marketing spend should be a good understanding of the cost of acquiring a new customer. Experiment to find out what mix of activity delivers you the best result.

Action: Plug and play with your marketing activity to understand what activity generates the best results. Use multiple channels and be meticulous in capturing the results to justify further marketing investment.

3.       How do I get my pricing right?

You can’t get your pricing right if you don’t have a good handle on your costs. Whilst a cost plus approach will keep your bottom line above water much will depend on your margin and how often you have to concede on price. Narrow margins mean you have to drive turnover – is that realistic for your business? Price has to start with an understanding of the value of what you provide to customers. They buy emotionally as well as rationally – what are the emotional triggers and what value is put on them?

Action: Think about the emotional benefits you offer– avoidance of risk, esteem, kudos, the buying experience, after sales support - as well as the more functional capabilities. Don’t be overly influenced by what the competition is doing. Sometimes being more expensive works really well.

4.       How do I grow my business?

This is not necessarily just a question of getting more customers and more sales. It very much depends on how you want to grow and over what. Firstly –although it may seem a bit bizarre - how do you get yourself out of the business? Because until you can find the space for a helicopter view, the business will – to use a gardening term – be ‘pot bound’. What elements of your business are scalable and sustainable?  Would people pay real money in the form of license or franchise fees for your Intellectual Property (IP)? Would an outside investor provide much needed funds to boost growth? Are there other businesses you could merge or joint venture with?

These issues need careful consideration - they are generally are quite time consuming and fraught with pitfalls. Here, undoubtedly, there is a strong case to be made for getting external advice.

Action: Growth can come in many forms but they generally all take time. Think carefully about what options are available to you and have a good look around to see what others in a similar situation have done. Don’t hesitate to get good professional advice – it will pay for itself in the long run.

And the question I’m not hearing?

5.       Where do I want this business to end up?

 It’s always very powerful when setting up a new business to start with the end in mind. This is particularly important if you go in to business with others – what they want may be different from what you want – a good lifestyle, a legacy to pass on to the family, a trade sale. As the business grows, how will your role develop, can you handle the personal challenges that this might entail?

It’s never too soon to think about this issue because the outcome you implicitly or explicitly track towards will hugely influence both the strategic and tactical business decisions you make.

Action: Talk to your business partners and your personal partners too about your ambitions for the business. A shareholder or partners agreement is a good way of structuring the business side of this conversation – although bear in mind that they are no better or worse than many legal documents.

About Chris Farrance

Chris Farrance is a Senior Practitioner in Coaching and Mentoring who has worked in businesses of all shapes and sizes in the UK and abroad. He is particularly passionate about helping businesses deliver a world class customer experience whilst maintaining bottom line growth. He is an intuitive and engaging business coach who focuses in a positive way on the ‘can do’s’ for businesses.

Outside of his working life he enjoys time with his four grandchildren and is a fair weather supporter of England’s cricket and rugby teams