by tradesmeninsights | Jan 13, 2016 | Uncategorized
This post originally appeared on INSIGHT2PROFIT.com
It’s a common knee-jerk reaction for salespeople to focus on increasing volume by offering discounts on every sale – even if it means sacrificing margins. One way to mitigate the risk of excessive discounting is to establish a pricing system that balances volume incentives with well-defined boundaries that sales staff must operate within.
Ideally, in an effective pricing system, the framework should provide guidance for as many as 80 percent of sales. This guidance should consider a comprehensive range of factors, including the type and size of the customer, the market and the nature of the opportunity. The direction should be clear and unequivocal, providing sales staff with “guardrails” that establish minimum and maximum prices or margins. Sales staff can bounce between these guardrails as appropriate, but they should not be allowed to go above or below the established boundaries.
For the other 20 percent of sales, be prepared to manage the pricing exceptions. For these outliers, the framework allows pricing managers to enter the conversation and work with the sales staff and perhaps even the financial team to develop a strategic price appropriate for a specific situation.
By limiting exceptions to no more than 20 percent of the time, you’ll be able to equalize the competing interests of volume versus margin far better than a one-size-fits-all pricing system. Sales staff will still have the flexibility to manage the majority of sales on their own, allowing them to meet the needs of specific customers as well as their own particular quota goals. But the boundaries you set will prevent those individual goals from overriding your company’s high-level goals.
Every business is different, so the 80/20 framework that’s right for your organization will depend on the type of selling you do. If your business is list-price driven, your pricing system may be able to accommodate higher volume incentives. If you’re in a business where price is highly customized, then your framework may need a more aggressive margin component. Implementing this system may take some time, as well. Achieving the right balance of guidance and exceptions is a process that often requires fine tuning. It also requires an extensive amount of data and knowledge in order to put together a sustainable system that produces actionable, accurate and real-time insights.
Whatever the framework you decide upon, the 80/20 structure will provide sales staff with the latitude they desire, while protecting the profit margins your organization needs.
For more details on how to develop guard rails for your team and establish an 80/20 structure, check out this article.
by tradesmeninsights | Mar 22, 2011 | Marketing Tips, Social Marketing, Traditional Marketing
If you’re into social media, you’re doing it with a purpose in mind. You have a story to tell and you want to tell it to a certain type of person. This holds true no matter what type of marketing you’re doing (traditional or social).
But when you’re developing your content, do you ever consider at what stage your reader is at in the buying cycle? By segmenting your content to include all stages of a buying process (awareness, consideration, evaluation and purchase), you’ll be sure to hit all your potentials at their stage in the buying process.
I recently read a post from AdamHolden-Bach from Mass Transmit called Using Content Marketing to Understand Your B2B Audience that I thought was spot on.
Here are some highlights on segmenting your markets:
- Awareness – These folks have just begun the process. Provide educational content (blogs, white papers, webinars) and make it easy for them to receive it (do make them register to get it).
- Consideration – Once they know about you they want to know how you stack up against the competition. Provide them product comparisons, case studies or other material that shows why your product is better.
- Evaluation – They want to understand the solutions you provide and how they would benefit their business.
- Purchase – Use social channels to broadcast new products, upgrades, special offers to help incentivize the customer.
As you’re creating content, identify which stage it falls into. Use tracking methods over time, for instance to gauge interest and tell you at what stage most of your audience is at in the sales cycle.
What are you doing to segment your marketing?
If you liked this post, you may also like:
2011 Trends: Content Marketing is Critical for Social Media Success
2011 Trends for B-to-B Bloggers
by tradesmeninsights | Jun 16, 2010 | Marketing Tips, Social Marketing
I believe LinkedIn is one of the most under-utilized social media tools, and I’d like to share with you my thoughts on how you can make the most of it.
- It’s a way to stay in front of your connections on a regular basis.
- It’s a way to build thought leadership and credibility.
- It’s a way to talk to people who share the same interests that are not in your network.
The LinkedIn webinar shows the ins and outs of LinkedIn for businesses. The webinar shows manufacturers and marketers how to harness the power of this social media tool by teaching how to grow contacts, join groups and use it to promote your thought leadership and ultimately generate leads. If you are in sales, customer service or general management, LinkedIn knowledge is a must in the toolbox of business tools
The webinar will be Tuesday, July 13 at 2 PM EST. Registration is closed.
Please pass this on to business associates.
by tradesmeninsights | Mar 31, 2009 | Marketing Tips
In their marketing to tradesmen, manufacturers are always looking for cost-effective ways to reach out to both existing and potential new customers. E-mail marketing is one tool that can do both.
Manufacturers who sell through a distribution channel have the most difficult challenge in that they sell their product to a middle man, who in turns sells it to the ultimate end user. Distributors for the most part are very protective of their customer list, so the challenge for the manufacturers is to get their names.
One way is to use product warranty or registration forms to develop a database. This also helps you segment your list for addressing specific issues, either on the product or industry application.
Other ways of generating e-mail addresses is to sponsor e-newsletters from trade publications, inquiries from your web site and trade advertising, as well as trade show and distributor open houses and counter day promotions. A note: when having someone fill out a form, make sure somewhere on it you have them OK (opt-in) so you can send them stuff via e-mail.
Research from Datran Media shows e-mail is still important:
- Driving incremental sales
- Reinforcing a company’s brand position
- Improving customer relations
I read an article from GlobalSpec that outlines ways you can improve your e-mail marketing. Here are some highlights from the article:
- Manage your list. You need to segment and grow your opt-in list. We talked a little about ways above on how you can do both. The key here is to make sure we have permission to e-mail to them. The last thing you want is to be black-listed because of spam.
- Be relevant. Don’t say something for the sake of saying it. We talked above about segmenting your list. One of the reasons is so you can talk specifics about a product or process that is relevant to the reader.
- Deliver on your promises. If you say you’re going to put out a monthly newsletter, you’d better deliver. There are no right or wrong answers on frequency other than being consistent. Unless your products or services change often, I’d suggest starting them quarterly.
- Use e-mail to generate leads and sales. Even if you don’t have new products coming out, you can use white papers or case studies to generate interest.
- Look beyond your own list. Partner with respected third parties in your industry to expand your reach.
Read the entire article: Five Practical Ways to Improve E-mail Marketing
