In business, all strategic planning is market planning. The customer is not only king, the customer must be the center point of all thinking and planning in the setting and achieving of business goals. What the customer wants, what the customer needs, what the customer likes, what the customer dislikes, what the customer will pay for, and what the customer is being offered by your competitors are the critical factors that deter- mine profits or losses, success or failure, especially in tough, competitive markets.
As Dun and Bradstreet concluded after fifty years of studying businesses of all kinds, the entirety of business wisdom can be summarized in one statement: “Businesses succeed because of high sales; businesses fail because of low sales. All else is commentary.”
Whenever you have financial problems of any kind, think exclusively in terms of making more sales and generating more revenues. Cash flow is king. The ability to generate the top line is the decisive ability in modern business.
In a recent survey, corporate executives were asked, “How important are sales to your organization?” Virtually every executive replied that sales were extremely important, if not the most important element in their businesses. The executives were then asked, “How much of your time do you spend on sales- and marketing-related issues?” The average amount of time spent by business owners and executives turned out to be approximately 11 percent! All the rest was consumed by non-sales activities.
A business cannot “cost-cut” or save its way to success. The only way to survive and thrive in any market is to focus intensively and exclusively on producing and selling products and services that people are willing to buy and pay for and that make a profit for the company.
In strategic planning for organizations, consider the core questions in sales and marketing: “What is to be sold, to whom, and by whom, and how, and at what price, and how is it to be delivered and paid for?”
The failure to ask and answer these questions accurately is the primary cause for declining revenues and cash flow, and often the failure of the enterprise. The ability to ask and answer these questions correctly is the primary reason for business success.
Here are the key questions that a salesperson, business owner, or sales executive must ask and answer repeatedly:
1. Who is our customer? Define your ideal customer in terms of age, education, income, position, tastes, experience, background, and psychology. What are the trends? Who will be your customers of tomorrow? What do you need to do to make your products and services more appealing to your ideal customer?
2. What does my customer consider value? What is your customer willing to pay for in a competitive market? What benefits does she expect to get from doing business with you? Of all the benefits that you offer, what is the most important benefit that the customer must be convinced that she will receive before she will make a buying decision? If you don’t know the answer to this question, you need to go back to the drawing board.
3. Who are my competitors? What are all the different businesses (or alternative uses for the same money) that compete with you? Since customers can only purchase a limited number of products or services, who else is trying to acquire your same customer, and what are they doing differently from you?
4. Why do my prospective customers buy from my competitors? What benefits do they perceive in dealing with my competitors? What is it that they like about my competitors that causes them to prefer my competitors’ offerings to my offerings?
5. What is my competitive advantage? What is it that we do better than anyone else? What is our unique selling proposition? Every successful business is built around a unique competitive advantage that no other competitor can offer. What is yours? What should it be? What could it be? This is a key question for business success.
6. What do we need to do differently to attract more customers in the future? Remember, whatever got you to where you are today is not enough to keep you there. What do you have to do better, faster, or cheaper to win the customers of tomorrow away from your competitors? Your ability to answer this question accurately determines your business future.
7. What is your value offering? If past customers were to be interviewed, what would they say about you? How would they describe you? What words would they use to describe your products or services or their experiences in dealing with you? Most important, how could you influence your customers of the future so that they think and talk about you in the way that would be most helpful to you in a competitive marketplace?
Sales are the lifeblood of the business. “Nothing happens until a sale takes place.” Whatever your position in your business, you are still in sales. Everything that you do contributes either to the making of a sale or to the fulfilling of a sale. The greater the impact you can have on sales and profitability, the more valuable you become. And the more you think about marketing, sales, and profitability, the more likely it is that you will do the critical things that improve those functions in your organization.