In this Issue:
- Forward
- Recession Proof Business Strategies to Help You Grow
- Resources for Building Your Business in Slow Times
- Shameless Self Promotion
- Discover How to Focus on Real Issues Facing your Business
It seems that economist's worldwide cannot decide if we are in a recession or not. Does it really matter? The fact is each industry experiences recession like cycles every month-- so while you read this, remember, these strategies can help improve your companies local economy and ride out the periodic storms.
business to business companies who work on an international scale may experiences slowdowns at any given time because their customers represent a greater dynamic of markets. This newsletter reaches readers around the world, it is highly likely someone is experiences these challenges. While this might not be you, know these strategies will work for you.
Pay close attention to what I write here today -- you learn how to recession proof your business, ways to stabilize your income, and increase your market share no matter the economic condition.
Sincerely,
Justin Hitt
Strategic Relations Consultant, Author & Speaker
https://iunctura.com/
P.s. This Labor Day (for readers celebrating Independence Day, Constitution Day, United Arab Republic's Day, this edition is also for you) -- this edition of Inside Strategic Relations is long, in fact, it is over 14 printed pages. I encourage you to print out this special focus on solutions for slow economies and share it with your team. Write me at feedback-newsletter (at) iunctura.com with your comments and opinions. Have a great holiday however or whatever you are celebrating!
By Justin Hitt, Strategic Relations Consultant, https://iunctura.com/
Whether you are reading this in the middle of a nightmare recession or during the best years your industry has ever seen--recession proof business strategies can help increase your profits or expand your market share.
In fact, you are probably already doing some things suggested here, but for those things you have not considered, this is a great opportunity to take your business to the next level. No matter your situation, this article will help you get on the right track with simple to implement strategies.
First, let us make sure your customers have some money to spend. Many businesses have fabulous strategy, extremely talented people, but still fail and lose money daily. Why do companies that have everything going for them still fail to produce the revenue they desire? In many cases, it is because the customer they seek does not have the money or interest in purchasing what they offer.
The first step you should take is to document the characteristics of customers who are already buying your products or services. Why spend your efforts on targets that even if you do hit, would not matter anyway.
Second, let us look at how your company already makes its money. Where is your money coming from? With a pad of paper, jot down your three key income channels. Complete this exercise from memory then set aside the sheet for later. (I want you to use a note pad here, do not distract yourself with someone else putting this information together for you, or going to the computer to extract the details.)
Now that you have some ideas about where your income comes from, you must now identify how customers purchase and what triggers that action. On the back of the same sheet jot down ten things, you are already doing to contribute to your income channels, including reasons customers purchase what you offer. While these notes may seem simple at first, over the course of this article you will discover your own profitable practices and produce the baseline necessary for measurable improvement.
In your first iteration try to list as many items as possible for each of the three categories: customer characteristics, income channels, and contributing actions. Use a brainstorming session with a small group or even a distributed exercise with team managers. The key is to document everything in the clearest and most descriptive statement--a statement that can easily be understood by others in the organization.
When describing customer characteristics it is helpful to look at your current best customers. Who purchases your offering at the highest profit? What about these customers make them ideal or identify them in a group?
It is important to be specific in describing customer characteristics, but right now just stick to demographic related information. These details should categorize your customers into specific segments based on common identifying characteristics.
For example, you might find a large percentage of your customers are in a specific industry. That may represent a segment of customers because they have a specific desire addressed by your organization. Focus on describing a customer fully. Use the following formula.
[Who is the customer], [what is it they feel they are purchasing], [what specific benefit do they seek.]
Some example descriptions of customer characteristics:
"Our customers are excavating contractors who desire reliable equipment with a long service time between scheduled maintenance, and a return on investment in 12-months."
"Frequent buyers are technical manufacturers shipping small parts who want second-day delivery and a guaranteed on-time delivery."
"Primary customers include government facilities who want lower overhead costs, without duplication of effort and bureaucratic processes that delay project turn around."
You do not want to specifically mention your product, but describe the results these individual expect from doing business with your company. Later when you describe your income channels, you will go into more detail about how these customer segments interact with actual products.
Describing your income channels is a bit more complex because you are matching specific customer segments with the products they purchase, then expanding on their specific reasons for selection. This goes beyond describing the customers themselves and describes the revenue produced for your company.
Quite often with others are asked to do the exercise they write simply notes, like "sell products or services," "generate income on cash reserves," or "provide maintenance services." This is not at all acceptable.
For example, when you describe your income channels use a specific statement based on one of the following formulas:
"Product X contributes to income Y, by solving problem Z, for customer segment A."
"Widget X contributes B% of our gross income by reducing our commercial customer's replacement costs on machine Z."
"Our Y service produces B per month by addressing customer X preventive maintenance needs, enabling team to get more from machine Z."
"Primary product X generates B each quarter, specifically addressing customer segment Y solving problem Z."
Just replace the variables X, Y, Z, A, and B with the appropriate words for your organization. Your statement should specifically describe the details of each income channel as it applies to you. Consider some examples of specific income channel statements:
A simplified formula for documenting income channels:
[What product/service does what for income over a period], [for which customer segment], [solving which specific problem.]
Here are some examples of income statements:
"Contract administration services generate $54,000 per month while helping federal agencies reduce their paperwork burdens."
"Our 50cc gasoline engine sells $67,000 per gross addressing scooter manufactures needs for inexpensive but reliable engines."
"Raw silicon produced generated $127 million per quarter filling the needs for microchip manufacturers who desire purified raw materials."
By documenting these clear statements describing your income channels you do two things, (a) you identify your key product value, and (b) you identify market segments who are currently contributing to your income. Most often, you will find your three top channels generate as much as 80% of your total revenues.
Contributing actions describe specifically what you do to earn the income you produce. This step describes your marketing and sales efforts inside your organization, in a respect, how you interact with your customers. You may even discover that some of the actions your company takes do not actually produce any revenue--but that is all part of the power of this exercise.
As you may have guessed, many who do this exercise note vague and meaningless (at least to others) statement for what they are doing to contribute to income channels. Statements like "sales force cold calling lists," "reselling existing clients," or things that mean a lot to you but do not say anything to your people.
It is not the action you take that sells products; it is the way you deliver solutions customers are willing to pay for that generates income for your organization. In the business to business market place, customers experience real problems that if you can demonstrate you have an adequate solution at a reasonable price, they will buy it. Your matching solutions with problems, most buyers already know they have a need so you do not have to convince them to buy, just convince them you are the right solution.
Do the research you need to rewrite your ten income contributors below the other things you are already doing. Use the following formula to frame your statements.
[Who does what and why], [what qualifying triggers that purchase], [what lead product or action desired]
Those factors contributing to your income channels must be specific in describing qualified customer, identify lead products, and address specific buyer's needs. Consider these statements:
"Our sales people call on prospects who responded favorably to a survey identifying their need for X, they are experiencing Y, and have already purchased Z. Schedule an appointment to offer product A."
"We send introductory materials to prime contractors who have uncompleted contracts worth $500,000 or more in award value, then follow up with a scheduled interview."
"Marketing places ads in newspapers where prospects that use our product X read, sales people follow on responses to determine who purchases preventative services and offer those individuals a free consultation."
Each of these examples uses a simple formula that identifies "who does what and why" followed by "qualifying triggers for purchase," and "lead product or action you offer." This part of the exercise shows you exactly what you are doing to create the income you need -- while further developing the qualifications of customers identified in your income channels.
This whole exercise is supposed to be hard work. The statements you produce will be clear enough that anyone in your company will be able to understand them. They will mean something to the people on the front line--you cannot make this strategy work if you cannot share your profitable practices with everyone involved.
Now that you have ten contributors to the three income channels here are more strategies you can test against what you are already doing. Frame these actions around the model above (as it contributes to your income channels.) Test these strategies against your profitable practices keeping the action with the greatest results:
Not all of these strategies will apply directly to your business, but for those that do, test them for their value and validity. Keep the strategy that significantly improves your results; make every effort prove itself as you move toward business objectives. Growing your business in recession is a matter of tuning--not necessarily changing what you do already.
While you will not see improvements overnight (no one can ever promise you that that), you will see a gradual improvement in the volume passed through your income channels.
Revisit your list several times during the year; regularly clarify your statements to create the most accurate picture of your organization. It is even helpful to have others try this exercise and compare results. For maximum results, you will want a consistent message that your people can follow to focus on growth.
© 2003 Justin Hitt, All rights reserved.
/ recession-busting | profitable-customers /
For a special report, "How to Keep Revenue Growing Even In a Slow Economy," with more strategies you can apply today to boost revenues, increase market share, and produce a more profitable, write recession-busting (at) iunctura.com
You do not have to be in a recession to experience slow times, perhaps a key client reduces purchase volumes, a competitor launches an overwhelming marketing campaign, or material costs are higher than usual. Whatever event is constricting your cash flow; you will be better to focus on securing revenue, to understand how your own behavior can influence this change, and seek to retain those customers who are still buying.
The following resources will share how you can do just that:
Of course, you could just read these resources and do nothing. That is exactly what many people do, but a successful relationship builder will do the following:
It only takes one new idea to move your company to the next plateau of customer engagement, employee satisfaction, and reliable strategic partners. By implementing new ideas through your key managers, you are cultivating their ability to produce better results without your direct intervention. You also receive insights that may not be directly available to you in your position.
These steps demonstrate your trust of employee skills, and reinforce the importance of choosing high quality people (or at least creating better ones from those you already have.) You will find your people can grow your business even in slow times, especially
Justin Hitt helps executives strengthen business relationships so they can increase sustainable profits, in any economy. For recession busting strategies that can improve your position in a tight marketplace, visit https://iunctura.com/recession-busting
Grab a sheet of paper to jot down three challenges facing your business. As you look at these challenges, do you see one that if removed, would bring you closer to your business objectives? As you circle this key limiting factor, think about the places that your organization can reach once you remove this barrier.
Every company has a major challenge that limits market share, places constraints on cash flow, or even contributes to stunting your growth. Some companies hire expensive consultants, while others just accept the problem losing hundreds of thousands of dollars a year. While the problem you identified is holding your company back, are all these expenses necessary?
Look again at the major challenge you have circled on that simple sheet of paper, what actions could reduce this problem. After all, if you chip away at the problem long enough it can be overcome. Rewrite your major challenge on the backside of your sheet, but this time describe it in full detail explaining how this achievement will influence your value to existing customers, how it will change your organization, and what overcoming this challenge will mean to your organization.
If you've read this far and HAVE NOT jotted down your major challenge and rewritten that challenge in terms of desired results--then you're not ready for the next step. You have two choices, (a) start at the beginning of this note to specifically address the issues facing your business, or (b) stop here acknowledging you really aren't committed to improvement--you might be at the point that you are happy were you are at.
If you decided to say "Yes" to putting your major challenge down on paper and to work your way through this exercise then you are half-way to a solutions. Only 5% of companies take a structured effort to identify the key issues limiting their business. More often than not, businesses continue doing what they have always done because it is familiar and predictable. The sad fact is that over 25% of today's businesses are suffering financially and will not be around 5 years from now.
With your challenge and desired results in hand, let us move to the next step.
When organizations are under pressure they tend to stick to a small set of options even when other resources are available to try different things. They do this because the internal individuals trying to solve the problem are so close to the issues at hand that they cannot see around the problem. How do you know what new actions you should take?
You can discover new actions to solve old problems; after all, "if you keep doing the same things, you will keep getting the same results." You discover these new actions by asking questions.
Back to the single sheet of paper that will change your business forever.
Under the desired results you outlined in the previous message, compile 20 questions you must have answered to achieve those results and overcome your major challenge. These questions do not have to make sense now, you do not even have to know where you will find the answers, and the key is that you "ask" the questions on physical paper.
By writing out the questions you need answered, you bring other obstacles to the surface to realize that you are bigger than the problem. The more questions you ask the smaller the challenge becomes. Why questions work? You will find that common questions keep coming to the surface, these questions are the critical questions whose answers take big chips out of that challenge you circled earlier.
Questions also highlight those areas where you will need additional help or that it is more cost effective to use outside expertise.
Now on a new sheet of paper write your major challenge on the top line of the page, below that skip down two lines to note your statement of desired results. Again, skip down a two more lines and list your top twenty critical questions. You probably had more than twenty questions, so just pick the ones that if answered would do the most to bring you closer to the results you desire.
This page of statements and questions is even more powerful than the one you have created previously--it focuses your attention to only the most important questions that define the actions you will need to take. As you answer these questions, you will be able to take positive steps in the right direction. How much is this list worth to your business?
While all this has been useful to identifying the challenge most critical to reaching your business objectives, you cannot stop here without answer these tough questions. Fortunately answering these questions will be the easiest part of this whole exercise. Several options are available:
You already know answering these key questions will move you forward to your business objectives, but which method is the most cost effective for your long-term success.
By far coaching services is the most cost effective means of getting the answers you need to move your business forward. Interactive coaching services in particular provide the best value because you can benefit from both a library of how-to resources and interactive tools like message boards.
Coaching services are designed to focus on a single specific objective, just like on-site consulting and internal initiatives, but without the interruptions that often come with visitors on-site or taking employees away from daily responsibilities. They provide the answers you need and the knowledge you need to bring in outside support if necessary.
Most often corporate executives, business owners, and key managers participate directly in a coaching program then convey the practices as part of their regular business activities. This allows your organization to implement tailored solutions as part of regular business, seamlessly integrated in a way that reduces change issues.
Private coaching is more practical because of its low initial costs, and can be utilized for other challenges the company might face over the course of implementation. Unless you hold a consultant on retainer, you are not likely to get this kind of flexibility and most often take heavy penalties if corporate objectives change.
More questions will arise as you get closer to the desired results, and with a subscription service, you can keep asking them without the expense of a consulting retainer. Most coaching services also provide pass along materials for your team so you can supplement self-training initiatives without the high cost of custom training programs or seminars.
Coaching services are not a substitute for bringing live experts on-site or training your staff, but coaching services can provide you the decision-making tools to get the most out of these other programs. In fact, many use coaching programs as follow on support to tailor other programs into actionable strategies for a particular solution.
However, you answer these questions; you will spend more time with actions that generate income, than untested strategies developed in a vacuum. Let us face it, if you were already doing what needed to be done, you would not have the challenges you have. Go beyond what your competitors are dreaming and learn how to identify what your customers will pay a premium.
If you developed your major challenge sheet by yourself, consider having members of your team take this same exercise with their people. Even compare results and see if your companies thinking are all in the same direction. You might find departments that see different major challenges than corporate--with your desired results, they can even frame their own contribution.
See your company five years from now cornering the market. When any person in your industry is asked who provides what you offer, is the answer they provide your company? Now see revenues chart smoothly upward. It would be naive to promise skyrocketing profits, but you will avoid losses unforeseen at this time.
However, each time you apply this strategy of focusing on your companies major challenges you will be able to come closer to the results you desire. The mere exercise of documenting your concerns makes you more aware of their existence; it removes the naive actions that frequently cause major players to drop in value.
When you utilize a coaching service or other cost effective means of finding the answers you need, you will be able to reduce your costs while blind siding competitors with practices that increase market share. Just take one-step at a time, answering the questions with the most impact for your organization, seek those who can shed new light on your challenge and stay focused.
Through practice you will learn techniques that will help you identify future trends based on current relationships; you will understand how systems of business can work in your advantage. It will take real effort on the part of your people, and by doing something each day you may even receive insights about the latest in inter corporate relationships-- and how to use them to produce greater profits.
While this might seem a little pie-in-the-sky, you do need to hold yourself and your people accountable for real results. This means:
You may even consider becoming accountable for your actions to an outside party. Make a few copies of your major challenge sheet to exchange with strategic partners, even give a copy to your board of directors, you feel compelled to move forward on them.
With the right motivation and expert advice, you can accomplish most anything. So what is it that is challenging your company and what answers do you seek to reach your desired results?
© 2003 Justin Hitt, All rights reserved.
/ applying-strategy | magic-one /
Fax or mail your Major Challenge Sheet complete with desired results and questions to:
Fax:+1 (877) 207-3798
Major Challenge Sheet c/oCenter for Strategic Relations, Dept BD-00,PO Box 3123, Martinsville, VA 24115
All details received in confidence and will not be shared with anyone.
By return mail, you will receive a complementary information package with more resources to answer the tough questions in your business. You will also be contacted 6-months after your request to follow up on your results.
This package will contain a special report called "Strategies to Discover Useful Answers That Solve Problems" which contains insights about incremental progression, problem solving skills for your team, and relationship building skills for executives. You will receive other bonuses; this total package is valued at $273 dollars for just sharing your Major Challenge Sheet created in this exercise.
Justin Hitt is a strategic relations consultant providing executives ethically ways to improve corporate profits while enhancing business relationships. To experience a risk-free trial of Applying Strategic Relations, a coaching service that help you focus your organizations competitive edge, build stronger relationships with internal customers, and provides new insights to tough questions--visit http://ApplyingStrategicRelations.com/
