Digital Business

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Previous generations thought that moving jobs was a sign that someone could not stick at a job which made them less employable. How different it is now when people move jobs regularly and it is thought of as being normal.

The two jobs where I have spent the longest in my career were the British Army (5 years) and with Microsoft (5 years). The rest of my career has been spent with a number of companies in a number of roles and running my own ventures. By moving roles numerous times and starting my own businesses, I have learned a number of skills including sales, marketing, vendor management, product management, finance and operations.

Many of the lessons have been very valuable. Some of them have been costly. A few lessons have been painful. The big lesson I wished I had learned far earlier in my career was about money. My parents certainly didn’t teach me about money. School had no lessons about money. Business, yes, but, money, no.

Today, I listened again to ann audiobook, ‘Rich Dad, Poor Dad‘ by Robert Kiyosaki. It’s a good, down to earth tome questioning how we are brought up, in the majority, to think about money and pointing out the difference between how a rich person to someone in the middle class or who is poor. It teaches these simple lessons.

And the lessons they needed to teach at school or at home yet didn’t are simple, which is why they probably did not deem them necessary. The first lesson was this: Assets. Assets put money in your pocket. The second lesson is this: Liabilities. Liabilities take money out of your pocket.

Schools are geared for supplying employees and not entrepreneurs. They teach you to have an employee mentality which includes thinking that your house is an asset. But a house is a liability. It takes money out of your pocket through interest charges, maintenance and taxes.

Unfortunately, I am still in the ‘middle class’ with more liabilities than assets. I am in the process of reducing my liabilities as quickly as I can so I can begin to buy assets, which is the only way you can become rich. I have downsized my house, I am not planning to waste money on new cars and I am planning to do more of the things which give me freedom.

Time has been wasted by me. Thinking differently about money should be something we all know about.

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Will Hawkins

Will Hawkins started working aged 19 as deckhand on an American yacht in the Mediterranean earning a whole $25 a day. Since then, he has been a British Army Officer, serving in Northern Ireland, and also on the ski slopes of France occasionally.

In 1991, he cycled down Africa, from the UK to Cape Town with this brother, Dan, for a year. Since then he has worked in sales, business development and marketing for several companies including Blackwell’s in Oxford, Microsoft and HP.

Will has set up businesses doing cycling holidays, an online delicatessen and a live, online training company.

Will now helps businesses and organisations make use of digital technology to cut their costs, connect with new customers, increase their sales or raise their profiles. He’s an regular speaker on radio talking about technology. You can listen to some of the recordings on this blog.

Will is married to Penny with two children and lives in Lincolnshire and is hoping to get a motorbike soon to go with his bike licence.

You can email him here: will@digi-business.co.uk

Will appears on BBC Radio Lincolnshire from time to time talking about technology on William Wright’s show.

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Four keys to attracting customers

I wrote some time ago an article called ‘How to Win – Focus and Speed‘ which was about strategy in business. I use it all the time in my business life and it does work. I read an article today by John Sviolka which reminded of that approach in business planning which talks about an online voucher company in the USA which has differentiated itself very clearly from its competition by doing  just that.

It has been so successful that it has accumulated 675,000 subscribing customers to its service since November 2008 and it is growing them at a rate of 40% to 50% per month. It has a very clear proposition and it works. The lessons it teaches in this competitive market are clear and can be used by any consumer facing business.

Read the article here. You won’t regret it.

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Here’s an interesting article. Dan Brown, the author of The Da Vinci Code, has released his latest book and it is selling ‘like hot cakes’. But, the interesting fact is that the ebook version designed to be read on Amazon’s Kindle device is outselling the printed version.

This might be just one of the moments in time when all of the hype about the book and the Amazon device turn into reality. The twist in the tale is that the book is also set to become the most discounted book in history too.

Kindle edition outselling print version on Amazon.com | theBookseller.com http://ow.ly/pLC5

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Spot the pyramid

One of the challenges of any business is dealing with its reputation. Reputation is very important to success. A good reputation is something that most business people aim to achieve and to keep. A bad reputation can break your business. That’s why people protect their reputation. Brands are built upon reputations.

Some industries have bad reputations which have come about through the unscrupulous practices of a minority. Estate agents have a bad name, in general, but most of them work hard to sell your property. Double glazing companies have a bad reputation for sharp sales tactics and over-inflated prices, but not all double glazing companies behave like that.

Business models which are well known for being scams and are illegal as a result include ‘Ponzi’ selling schemes and ‘Pyramid’ selling schemes. The financial crisis we are in has revealed one massive fraud through Bernard Madoff’s Ponzi scheme where people are taken in by large confidence tricks. Pyramid selling has been banned because it involved persuading people in their team (their ‘downline’) to buy products for resale for which there was no market. The products were purchased on a ‘no return’ basis which meant the purchaser was stuck with this worthless stock.  But people confuse network marketing for pyramid selling.

Network marketing works on a completely different basis. It is based upon an individual building a team of motivated people who also build motivated teams. If you start a network marketing business, you gain from other people’s sales. It is a highly leveraged method of building a business and it is a very efficient form of distribution.

But, the teams of motivated individuals are not infinite in depth. The most successful network marketing firms only go three deep. Nobody has to buy a whole load of stock up front which is difficult to sell because it has been marked up so much by the numerous people above you in the chain. The price of the products are controlled centrally.

However, it is common for people to misunderstand network marketing. They think it is ‘pyramid selling’. However, the point I want to make is that we live in a business world which is not so far off ‘pyramid selling’ and it is hard to see why network marketing as a model is so looked down upon when it is so different from ‘normal’ distribution methods and illegal pyramid selling.

Our ‘normal’ distribution model relies on a manufacturer producing their products which are then purchased and resold, perhaps, by a national agent. The national agent sells the products to distributors who might sell it to wholesalers or retailers. All the way down the line, each party takes a cut of the recommended retail price. A pyramid of stock is spread throughout the chain.

Each one of them holds stock and gets a better deal on the products they buy based upon the risk they are prepared to take in knowing how much they can sell. Often, the manufacturer sells their product based upon a limited amount of unsold products that can be returned. This transfers risk from manufacturer to the agent who then might pass this down the line to the distributor to the wholesaler to the retailer. Unsold stock is often sold off cheap, hence the wave of ‘end of season sales’. Sometimes, the retailer is able to return all of their unsold stock to the wholesaler or distributor.

Compare that to network marketing where the distribution channel consists of the manufacturer who is also the distributor, that ships products directly to the end customer or sometimes through the person who is the local networking marketing agent. No stock is held in the pipeline. The networking marketing agent and their team is supplied directly by the manufacturer/distributor.

The team of networking marketing agents are all paid by the manufacturer and the person who built a team below them is rewarded for doing so and paid on their results.

So, why is networking marketing believed to be pyramid selling when traditional distribution methods are far more akin to that sales model? It comes down to reputation. Pyramid selling caused such a scandal that it tainted a very good, efficient and reputable business model. People cannot separate network marketing from pyramid sales models. And, ironically, illegal pyramid selling schemes are far more like mainstream distribution models than you may care to believe.

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Focus on the outcome

Several years ago when working for one of the world’s largest software companies, I was having a conversation with a colleague whose background was software development but who was now in marketing. He was extolling the virtues of the latest version of the company’s software development tools.

It was interesting to a point, and I pointed out that I was probably not the best person to try and excite about the details because I was far more interested in what the tools did rather than how they did it. He was shocked at my attitude. I remember the look on his face. His expression looked as though I had just blasphemed. How could I work in that company and not be interested in the nuts and bolts of the ‘how’ of the software rather than the ‘what’ of the results of using the software?

The advertisements of the time for that product had a theme of moon landings and a line which went something like “Just imagine what could have been done in 1969 when getting those now famous Americans onto the moon if they had this product“.

The problem with that campaign was that most people who would be using the software were not trying to get astronauts to the moon. Most software developers wanted to do far more basic things in their daily work lives and do them slightly faster than previously possible. The launch of that version of the product was a flop and it took them another two to three years with the launch of a new version and more down to earth ambitions for the product to take off (if you’ll excuse the pun).

This story is commonplace in businesses which have technical products. Often, the technical people become wrapped up in splendid details and features but become detached from why their customers would benefit from them. That’s basic sales and marketing knowledge but it is surprising just how much it continues to happen.

Last night I ran a presentation at the Hull Digital networking event about 2-D codes which is a technology that enables people to scan a code on, say, a poster using their mobile phone which then might take them to a mobile web site, or which will dial a number for them, or send a text message.

This is all very well, but I focused on the opportunity that the technology represents rather than the technology itself in my presentation. 2-D codes happen to be good at connecting offline marketing (e.g. an ad in a magazine) to online resources (e.g. a mobile web site). But the opportunity which is more interesting is, for example, that of enabling two different companies with different specialisations in marketing to work together in partnership to offer clients new solutions.

This is approach is far easier for people to comprehend than an approach which talks about features. I know you need people who are good at understanding the features of a product or service. I couldn’t do my job without a team of expert web developers who know how it works. But clients don’t care too much about the ins and outs of a product. They just want to know if you can help, what the outcome will look like and when you can do it by.

It’s simple to understand, but often people forget to do it and end up losing opportunities to help their clients and to gain new ones.

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Network marketing companies are strong, profitable and growing

If you run your own business, I expect there have been times when you wondered why on earth you started it. You might even be in a business where you are responsible for bringing in new customers and sales. The pressure is on to perform and you have moments of self doubt. “Can I do this?” “Am I good enough?”

The times that make you wonder why you are putting yourself through this pain often come down to one of two things. Money and people.

With the money, you are worrying about getting sales, whether they are profitable sales, whether you have enough money in the bank to to pay your current bills while you wait for the money to come in from the sales, chasing debtors and then working out whether you have made any money at all at the end of each month.

With people, it can be that you have tough customers who do things like ask you to show them exactly how you do what you do so that they don’t have to use you anymore. Or you have some tricky relationships at work where you feel as though you are not entirely on safe ground because your boss is being particularly distant from you.

The hardest thing that people have to deal when they are running their own business and selling for the first time is the fear of rejection. Getting turned down by the customer who you thought would buy your product or service without doubt is a hard thing to deal with in business when you are not used to it. That’s why cold calling is loathed by most sales people. Rejection after rejection, day in, day out is not only demoralising, it’s boring.

But dealing with rejection from prospective customers is one thing. Dealing with rejection from friends or family is another. When you start your own business, you start it with optimism, enthusiasm and fear. You are giving up that regular salary  and the certainty which that brings. The support that your friends and family give you is vital to making you feel as though you are not entirely on your own.

But when you don’t get that support, it can be very difficult to deal with. Belief in your products or service is what holds you together and the determination to win against all odds is one of the characteristics of an entrepreneur.

Someone I know well has started their own business and that person is one of the most determined people that I know. In five years, they have taken their business from zero to £500,000 in turnover having started it part time. That person is now being joined by their spouse in the business who has given up their highly pressurised but well paid nine to five job.

But their family does not see their business with the same enthusiasm as they do. In fact, they don’t see it as a proper business because it is a network marketing business. And that’s not really a ‘proper business’. Network marketing is regarded with quite a bit of snobbery in this country. People think you are selling them some sort of ‘pyramid-ponzi’ scheme where they will have to buy a load of ridiculous water filters or similar which you can’t sell.

But this is old thinking. For sure, some network marketing schemes in the past have given the model a bad name. But this is not the same. Network marketing is becoming a phenomenally successful and influential route to market for many companies who do it well. If network marketing is bad, why do you see so many brands using social networking to get their name out there to help them sell products?

The plain fact is that the world has become wise to the effectiveness of networking, network marketing and social networking. The days of brands marketing at you are declining rapidly. We no longer accept what marketers tell us about their products. We tell them what we think about their products and not just by refusing to buy them.

Networking is a people-centred activity. People buy from people they trust. People buy from people who sell good products. Network marketing is built upon that principle but people seem to think that just because the product was purchased in this way that it is less than legitimate.

You know what? If that’s the way you think then all I can say is “Get over it”. The best network marketing companies are strong, profitable, growing and they are quietly making the people who work in the businesses a lot of money. In fact, I might just join them.

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Be genuinely interested in what other people do

Networking is an essential activity for anyone in business and it is especially important for people in small businesses to carry out. Small businesses should be very wary of gambling precious resources on buying lists, running advertising campaigns, or carrying out mass mailings.

Networking in its face to face or internet forms is effective, it is easy to measure results and builds strong business for the present and future.As a part of the marketing mix, it has to be near the top of the list for allocation of resources for small businesses.

Nevertheless, it has to be carried out in a professional, targeted and considered way. If you network in an amateur way, you will immediately present your business as one which is less than credible. I network a lot and it is fruitful. I meet a lot of people and some of them become clients and some of them become contacts.

Some events are clear that networking is a definite part of the structure. Some events do not stress that networking is part of the structure but it is implied by the fact that everyone eats and drinks together at the event and if you are not using the time to network then you that’s your bad luck. Some events are well organised for networking. Some are poor.

The more I attend networking events, the more I learn about how to make them work for me and other people. I follow some rules which make the time productive and increase the return that you gain from it. If you are thinking about whether to do more networking as part of your marketing mix, these rules might help you.

Read the rest of this entry →

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Show your boss the evidence and make it real

I realised that I first learned how to sell a few years after I first did it. I was a young British Army Officer and one of my jobs in the Mess was to have all of our dining room chairs restored. The chairs were getting battered by many functions and daily use by thirty blokes and their occasional guests. I took one chair as a sample to a local furniture restorer to be restored and took it back into the Mess to gain the approval of the senior officers before having all of them restored.

But I didn’t just show them the restored chair. Firstly, I showed them a chair which had not been restored and which was probably the worst one of our set. The unrestored chair was rickety and had had much of the varnish chipped off. I showed the group of senior officers how bad things were but how good that they could be by investing in having the chairs restored. Having the chairs restored was a whole lot cheaper than buying a complete new set. Approval was gained.

One of the biggest challenges that some employees or even business directors face is having to convince their boss or fellow directors that they need to invest money into their project. Most people fear the rejection or fail to persuade their boss or bosses on why the investment is an investment and not a gamble.

I met someone recently who is facing this challenge. Their business is a web based news site which focuses on a science and technology. It has grown its unique visitors to the site from 6,500 per month to nearly 15,000 in the last year. It has benefited in the economic downturn, it would seem, as people seek more knowledge and information.

On the outside, it appears that this is a good news story. But, the underlying trends on the site show that people are spending less time on the site. The site is very much a ‘broadcast’ site meaning that it does not have capabilities for viewers to interact with the site by way of leaving comments, sharing articles with friends or colleagues, or even posting other content onto the site such as photographs.

Its competitors are large. One of their competitors has fifty times the number of unique visitors per month to their site. The competitors’ site is more advanced by way of tools which allow visitors to subscribe to the web site through RSS feeds, to read blogs, or to download and listen to podcasts, for example. Not only are their competitors larger, they are competing more effectively for the visitors by providing reasons for them to keep them coming back.

Herein lies the problem with the smaller news site. They have an infrastructure to their site which is bespoke and they are finding it nearly impossible to change. Furthermore, the owners of the web site do not see the problem. They see rising visitor numbers and they have achieved their original aim of setting up a successful web site providing the specialist news. “Why should we change the infrastructure?”

The infrastructure they have is bespoke and there very few people who can develop their system to customise it and add new features. They are stuck with a single supplier who charges them a lot of money to maintain but not develop and expand the capabilities of the site.

The owners are not seeing that their web site will become soon see the number of visitors declining because they receive better services and news elsewhere. The people in charge of marketing and running the site don’t have the support of the owners to make changes because the owners don’t think there is a problem. So, the status quo prevails and when the number of visitors and subscribers decline, they won’t be able to react. This is a classic case of people not worrying about what a rising tide covers up until the tide turns.

How do you deal with this inertia? How do you show that something is wrong when all seems to be rosy when your boss doesn’t believe it? Think back to the chairs earlier. Everyone in the mess was uses to the chairs being a bit battered or wobbly. Nobody was really complaining about them. But, by showing them how good they could be and how much more presentable and professional our Mess would appear, the senior officers approved the investment. They did not care how the chairs were restored as long as they were done professionally.

This is similar to the situation with the contact I met who was struggling with their bosses to see that their web site was not competitive. You have to show them evidence and keep showing them and not just accept the status quo and the inevitable pain they would go through again if they did not change their infrastructure. You need to show them what their competitors are doing. You need to show them what real people want and then how that will help their business survive. It’s tough but evidence and outcomes are very persuasive. You need to be bold, strong and persistent.

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Getting leads does not have to be costly

All businesses need sales. It’s probably the most important activity to keep a business alive. With profitable sales, cash flow is the next most important aspect to get right. Most large businesses (e.g. Microsoft and HP) I have worked in have the luxury of being able to test marketing initiatives and they have vast armies of sales and marketing people to develop, test and refine them, along with the budget to do it.

In a small business, you don’t have such luxuries unless you happen to be swimming in cash. Most people start their own business with plenty of determination, some cash to keep themselves afloat, a great idea and the experience to be able to help other people with it, and, perhaps, a list of contacts who they can approach who might want to buy their product or service. Resources for sales and marketing are limited so every penny has to count towards getting sales.

Learning how to sell can often be the hardest part of starting your own business. The fear of rejection. The fear of failure. These are all common anxieties that occur when you are about to either pick up the phone to speak to a prospect, run your first show stand or talk to people at an event who you don’t already know. But you can break these fears and anxieties down by following simple steps in your business planning and not be tempted into sales and marketing activities that don’t fit into your plans.

When it comes to marketing, I hear plenty of worrying stories about business owners who have been recommended to get a web site for their business to bring in sales which, in the end, brings in no leads and, of course, no sales but takes vital cash out of their business. Also, people are often tempted to buy lists of names who are supposed to be qualified prospects in their target market at great expense but which can often be found for free on the internet using business networking sites like LinkedIn.

Often this comes down to a lack of experience in sales and marketing, which is understandable when these are not your main skills. But, when you start your business, you have to become good at sales and marketing to survive and get yourself into a position to grow your business and make profits.

When you have limited or near-zero marketing funds, then you need to be laser targeted in how you use them to bring you fruitful leads which convert into sales. You need to be clear about the objectives for your marketing. You need to be clear about your sales objectives too. Once you have determined your sales and marketing objectives, then you can begin to work on your sales and marketing strategies.

Sales objectives might sound like this: “To cover my costs each month and to pay myself a living wage, I need to bring in £5,000 of sales per month”. And it might follow on like this: “In order to bring in £5,000 of sales per month, I need to sell two of my widgets per month”.

Sales strategies might sound like this: “To sell two widgets per month, I need to send ten quotes out per month”. Sales tactics might sound like this: “To send out ten quotes per month, I need to make fifty contacts with new prospects or customers per month“.

Marketing objectives might sound like this: “I want to become the first choice when clients need an HR consultant in my local town within two years”.

Marketing strategies might sound like this: “I want to meet one new prospect a week who is in my target market”. A marketing tactic for this strategy might be “To meet one new prospect per week I am going to join my local business networking group”.

Only when you have planned your sales & marketing objectives and strategies, can you start to decide on the right tactics to achieve them. This is where many people starting up their own business start. They start with sales tactics and marketing tactics without fully understanding how they support their strategies and objectives.

For instance, you might say I want to build a web site to sell to new customers. But do your customers buy your type of product or service through the web? This is where your precious resources can be wasted in an instant.

So, before you spend anything, ask yourself how sure am I that I will get any business from this? If, for instance, you are buying a list, check on the web to see if your potential clients can be found for free. Before you build your web site, make sure it supports your strategies.

In my experience in owning and running small businesses, you should keep everything simple, focus on what you do best and learn how to sell. You need two types of lead generating tactics to get you sales. Tactics which can offer you quick access to prospects (e.g. your existing contact list or contact details from tools like LinkedIn), and tactics which can offer you an opportunity to build long term networks of leads (e.g. networking at events or business clubs).

These two are the cheapest and most secure ways to get leads and sales into your business and they are based upon relationships. You need to convince people that you are trustworthy. With short term tactics, it is good to have a nice logo and a well designed web site. They instill confidence in prospects that you are serious.

But, you should not spend more than you can afford until you have enough money to develop them into more sophisticated tools. Keep it simple. Use the great tools which are out there on the web to help you connect to customers which are free and adapt them cheaply. Keep the cash in your business for as long as you can.

You don’t need to spend lots of money on marketing at first. You need to spend lots of time finding prospects and working with existing clients. Always ask yourself how sure you about the return you will get from your sales and marketing investment and whether it supports your plans. Trust your instincts and be firm about how you invest your resources.

If you keep these principles in mind, you can generate good business without spending lots of money.

If you would like to contact me for further consultancy on how you can get leads to your business at low cost, then please email me: will@digitalbusinessblog.co.uk

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