How to gain and keep customers, and other advice from a Selling Expert
For business brokers or other solo professionals, the most valuable resource is your time.
Outsource, outsource, outsource, was the recommendation of Christopher Lemley, the director of the Georgia State University Professional Selling and Sales Leadership Program, who spoke on Tuesday, Jan. 26, to the Georgia Association of Business Brokers.
Gaining and keeping customers was the topic of Lemley’s presention, which also covered the tension between sales and marketing and social media. Lemley opened by citing Peter Drucker, founder of modern marketing: “There is only one valid definition of business purpose – to create a customer. Companies are not in business to make things … but to make customers.”
Things tend to be relatively easy to sell, Lemley said. “Services are a bit more difficult to sell, as most of you know.”
The reason services are more difficult to sell is that “we are all in competition with each other, but at a high enough level, in firms we have all worked with one another and have somewhat the same background” he said As such it is hard for potential customers to see what differentiates one service firm from another.”
So how can you market commoditized services and get customers to stay with you over time? You must overcome four things: intangibility, perishability, inseparability, and variability.
Intangible items are harder to evaluate. The minute a service is created, it is consumed, meaning the producer cannot warehouse it.
“In your business, if you don’t fill your capacity today, the opportunity to make that money is gone,” Lemley said. “You can never recapture that capacity.” A movie theatre can never recoup the revenue lost from showing a film to a half empty theatre.
Inseparability means “the customer sees us making the service, the customer is part of us making a service.” A factory can “hide all the nastiness,” but in the service industry, the customer sees “every little twist and turn.”
Invariability means that customers experience the service in differing ways depending upon their circumstances. Lemley figured he enjoyed his favorite Italian restaurant more on nights when the traffic getting there wasn’t as bad.
Lemley presented a sample worksheet (See: Gaining and Keeping Customers) on how to calculate the lifetime value of a customer, including revenues, cost and referrals. Showing his academic credentials, Lemley also demonstrated Porter’s Arrow, a graphic developed by Michael Porter of the Harvard Business School. The arrow, also displayed in the Gaining and Keeping Customers PDF, covers five dimensions of competition, including inbound logistics, operations, outbound logistics, marketing and sales, and service. Although marketing and sales are listed in the same group, and SHOULD be friends, Lemley argues that, “They ain’t, They ain’t.”
Why? Lemley says the reason is as old as the story of Cain and Abel. When two people are “doing the same thing, with discrete resources, they will always get in a fight. They are competing to get resources to get their job.”
It’s basic economics. Marketing and sales are competing for scarce resources in many, if not most, business organizations.
The key to avoiding conflict is to recognize their differing strengths, which Lemley went on to discuss in relation to the roles of producer, entrepreneur, administrator and integrator. It’s important to know when a company is considering a move, and not just to get a call when the RFP comes in.
Marketing and sales are the strategic tools firms and individuals use to strive to create a sufficient number of transactions so the firm has the potential to survive and prosper in the short- and long-term, Lemley said.
In a coordinated marketing plan, tools such as social media help “soften the market” so that when “the sales troops come through, they know who you are and will be receptive to a call from you.”
Social media is a key, cost-effective way to market, Lemley said. He cited a company that spent millions on advertising, and gave $100,000 to a social media project. The social media turned it into one of the internet’s most popular business-to-business sites.
“Any business that doesn’t have a social media presence is already five years behind,” said Lemley. Some of the best in social media have a PR background.
Companies should develop a sales force targeted at what business needs, not with what the sales force wants. For example, most universities have been scheduling classes when it’s convenient for faculty members to teach. However in the next few months, GSU will be unveiling an innovative, new project based upon a robust analysis of data, aimed at scheduling classes when students want to take specific courses.
Lemley worked through undergraduate school writing advertising copy at a radio station. Tiring of the “tyranny of the empty page,” he picked up an MBA. Lemley is a 28-year veteran in the marketing field where he has served in senior management positions for two of the largest international advertising agency networks. He is also the former managing director of the Professional MBA program at the J. Mack Robinson College of Business at GSU.
Lemley has worked with major national and international clients including Sara Lee Corporation, Twentieth Century-Fox Films, Universal Pictures, The Hoover Company, the Southern Company, Los Angeles Times, Newsday, Wrangler Jeans, Polygram Entertainment, Bertelsmann Music Group, Siemens, Federated Stores and Jack Nicklaus Development Corporation. In addition to his teaching duties, currently he consults with CEOs in turn-around and high-growth companies on many marketing areas including organization, sales, marketing communications, strategic marketing planning and the use of new media in commerce.
The Georgia Association of Business Brokers (GABB) maintains a website that lists hundreds of businesses and franchises for sale throughout Georgia in a variety of fields, including automotive, business services, child care, cleaning, construction, electronics equipment, fitness, flooring, floral, food, gas stations, landscaping, manufacturing, medical, shipping, restaurants, retail, security, signs, and businesses related to the internet.
For more information about GABB, email email@example.com or call 404-374-3990.