The functional roles of Sales and Marketing activities have increasingly become a necessity to both large scale and small scale businesses worldwide. Sales and Marketing are two sides of the same coin in that they are both aimed at earning a business more revenue. It is only through proper marketing that a business can achieve greater sales. Previously, most participants in the field of marketing have only been large scale service or production firms. However, with increased competition and customer awareness as a result of technological advancements, even small business entrepreneurs have been pushed by circumstances to introduce various marketing strategies into their businesses in order to remain relevant and profitable in their specific industries. Marketing is a management process that seeks to identify, anticipate and satisfy customer needs profitably, with both the buyer and seller benefiting from a transaction. Therefore, there exist tricky equations of striking balances between the benefits to be accrued between the business and its customers. In seeking to increase sales through the expansion of customer base, entrepreneurs have to exercise absolute professionalism by observing and adhering to basic marketing rules and procedures. Practical application of these strategies is not as simple as they sound.
More often than not most sales and marketing strategies usually sound too obvious to many aspiring and practicing business people. However they are actually the most important pillars for any small business enterprise that aims at flourishing with greater sales and expanded customer base. One important strategy that is always overlooked is the idea of selling wide and selling deep. This timeless strategy is full of ideas and inspirations that can enable you to work smarter rather than working harder to fatten your pocket book tremendously. By selling wide, it means offering quality products or services with multiple utilities that follow basic themes. For example, different printers have different features that can be utilized concurrently according to a customer’s needs. Such may include features like color printing, normal printing, photocopying, scanning, faxing and memory functions. Therefore your business stands to reap more if you offer a range of printers that bear a combination of some or all of the above utilities. This way, you will tap many customers who prioritize different qualities of a product as a benchmark for their choice and preference. On the other hand selling deep refers to the provision of closely related variations of a successful product or service. This is trend has widely been exhibited by mobile phone manufacturers such as Nokia. Let us assume that you have a product or service that customers are ready to plunk down money to buy in masses. You need to be creative and think harder about different scenarios under which an adoption of a particular strategy would possibly increase the volume of your sales. For example if you could provide ten other products or services like the fast selling item, will you not fetch a lot of money from increased sales? If you operate a café that sells regular coffee as the fastest moving item on the breakfast menu, then why not exploit the advantage by introducing other closely related breakfast items? This may involve introduction of other breakfast delicacies like herbal coffee, decaffeinated coffee, brewed coffee, coffee from roasted beans, instant coffee, brewed tea and hot chocolate. Therefore the creation of varieties of a successful product to suite the needs of different buyers is what selling deep is all about. Such practices of product and service differentiation are key ingredients for increasing sales volumes. Whatever the characteristics of your products or services, there are always niche markets that will be attracted to your business through carefully crafted manipulations of appropriate sales strategies.
Strategic introductory pricing is an effective means of boosting greater sales. This is a method whereby businesses seek to increase revenues through the introduction of customers to low priced products with the aim of stepping them up gradually to increasingly more expensive products or services. Customers will be ready to spend more for more advanced products and services once they build their trust and reliability to your business. This is what marketing pundits refer to as relationship marketing. Strategic introductory pricing enables your business to develop and nurture relationships with both frequent and new customers. With time the customers will be transformed into friends and regular purchasers who will always provide ready market for more advanced and expensive goods or services. Such reliable customers also provide you with free advertising services either knowingly or unknowingly, by recommending your business to their workmates, friends or relatives. In addition, excellent customer service at the point of sale is a mandatory requirement in seeking to achieve customer satisfaction as it transforms the whole purchase transaction into a great experience. In recent times, shopping has evolved into some kind of fun and adventure for lovers, families and couples alike. Consequently a trend has emerged whereby people crown their outings with shopping sprees that are characterized with nostalgic tendencies which prevail them to repeat the same again and again and most likely at the same place. Excellent customer service therefore creates proper attitudes in the minds of your customers thereby assuring you repeated visits.
A small business venture can further expand its sales by being conscious to customers and their prospects. Once customers raise complaints, such should be taken as hints for other products or services that can be introduced to eliminate the problems. It is prudent for your business to be pragmatic in terms of identifying the needs of customers and other prospects at all times. For those businesses which cannot provide extra products or services due to capital and resource constraints, contracting other businesses to provide them can be the best solution. You can conveniently provide your customers with a variety of products and services offered by others at very little costs, thereby increasing the overall volume of sales of your small business enterprise. Expansion of distribution channels and trading networks qualify as innovative ways for selling more merchandise and filling existing gaps. One of the biggest mistakes you can commit is by referring both your faithful regular customers and new customers to other business competitors for products or services you do not provide. Wisdom requires that you sincerely admit the immediate unavailability of demanded products or services while at the same time promising and assuring customers as to when the products or services will be available. Such action will spell convenience to your customers in that, even if the customers seek alternative providers for products or services, they will come back to you the next time they will require the same, knowing that this time round their needs will be available at their favorite shopping joint.
Creativity and innovation come in handy as measures to sustain a high selling power. You should always strive to embrace and apply new ideas to your business to achieve desired customer satisfaction levels. Empty words are of no consequence in business arena. Constant market research and consultancy advices always result to new strategies for ambitious entrepreneurs. Devotion must be exercised in applying new strategies aimed towards achieving the main objectives of increased sales and expanded customer base. For instance, if a goal is to introduce a new product or service, a proper analysis must be done as to what it might take for the sale to happen. However it must be noted that new strategies do not always achieve desired results and it is at this point that entrepreneurs are often reminded to learn from mistakes that arise from such strategies to improve on their skills and tactics for future planning. Creativity and innovation spans further than the usual use of telemarketing to use of new media and technologies such as the Internet. Business can effectively exploit blogs and social media networks to reach new clients through the Internet, by use of articles, video and audio sharing to present new products to the market. In efforts aimed towards niche marketing, creation of social causes relevant to activities of a business can be adopted. A show of real and genuine interest to such social causes impacts on target populations, building communities round the initiatives, who eventually transform to potential groups of customers.
Over the years however, small businesses have developed tendencies of ignoring the importance of advertising as an effective tool for marketing their products and services. There has been a general assumption that advertisement is a reserve for big business organizations only. Contrary to this belief, research has proved that every business, regardless of size, will always have something different from its competitors. This aspect of uniqueness can only be achieved through proper advertisement campaigns. Small businesses can place small advertisements on daily newspapers or even local vernacular radio stations at affordable rates. Business cards, posters, small hand bills and visiting cards are also effective advertising tools for small businesses. It is also worthwhile to conduct indirect marketing through friends, neighbors and family, whereby they inform prospective customers about your products and services at work places or social functions. Such advertisements generate long term benefits for a business by paving way for expanded customer base, increased sales and good profits. Bearing in mind that large business firms do spare no efforts at penetrating all the market strata and segments, small business entrepreneurs are left with no alternative but to fight for space and share of the market activities.
Saturday, September 8, 2007
Business is Cash Business
The subject of accounts receivables has increasingly become a very delicate and thorny issue in the competitive business sector. Consequently, this has left many players in the business industry wondering why there has been such a great shift in the level of attention focused on accounts receivables as a core activity of business organizations. More often than not, most businesses are established on the fundamental principal of: BUSINESS IS CASH BUSINESS. However this principle has been reduced to a mere wishful thinking if the current trends adopted by many businesses are anything to go by. Therefore the big question is; why have many business owners openly flouted their own rules by introducing credit facilities to their businesses?
The increase in competition has made it a very important necessity for organizations to conduct business on credit terms. This enables a business entity to increase volumes of sales as well as establish long term business relationships with customers. It also enables institutions that provide specialized goods and services to expand and sustain their customer base. Customers also benefit from various types of discounts due to large volumes of accumulated business. However credit business also comes with very many demerits which are very challenging in nature. The most important aspect that is affected by credit business is the cash flow factor.
Why does the cash flow factor stand out as an important aspect? For one, it must be realized that as much as a business may offer its goods and services on credit, it is also obliged to pay its suppliers in good time. Though a creditor could also be a debtor; he has to pay for some of his business on cash as well as service bank loans where necessary. A creditor is also required to pay the salaries and wages of the staff. The frequency, with which the wages and salaries are paid, be it weekly, fortnight or monthly, also impacts heavily on cash flow. It is therefore very challenging to maintain a striking balance between the money being collected and the money being paid out. Otherwise a creditor could easily land in the precarious position of having to seek bank overdraft facilities.
Accounts receivables management has evolved to become an integral part and parcel of any business institution offering credit facilities. Any faltering by accounts receivables arm of an organization may lead to crippling of business activities of the organization due to cash flow restraints. In some cases, cash flow restraints can be very damaging on the image of a business entity as well as its credit worthiness due to possible cases of issuing bouncing checks.
It is of paramount importance that once an entrepreneur decides to offer his goods or services on credit, he must establish an elaborate credit management policy. Credit policies serve the purpose of providing guidelines and mechanisms for an organization’s mode of operation on matters that concern accounts receivables. It must be taken into consideration that every debt collection process depends heavily on the type of credit management policies that every institution has in place in preparation for the eventual process of collecting debts.
Despite being a high risk undertaking, there is no doubt that credit facilities are important tools in the modern day business. But the fact that they must be carefully managed is very much inevitable. Good credit management policies are essential as revenue is only earned when money is received and banked. It is therefore discreet that credit is extended only to customers with authorized credit facilities entered into through signed contractual agreements. An effective credit policy is one that ensures the following: Maintenance of good cash flow; Proper management of debtors as a company’s major asset; Minimization of the costs of granting credit; Promotion of good customer relations as well as perfection of debt recovery efforts.
Therefore given the complex nature of accounts receivables, proper considerations must always be applied in determining the debt collection modes. Debt recovery processes, whether by creditors, collection agencies or lawyers, are often emotionally charged, expensive and lengthy. In cases where the debtors being collected against are in serious financial problems, then debt collection becomes an added indignity and cost to the creditor. The creditor must choose the means for collecting outstanding debts. Such means may involve invoice factoring, debt assignment, debt collection agencies, security realization, garnishee proceedings, bankruptcy proceedings, security realization, recalling of guarantees, examination of directors, alternative dispute resolution, no win no pay and winding up.
The increase in competition has made it a very important necessity for organizations to conduct business on credit terms. This enables a business entity to increase volumes of sales as well as establish long term business relationships with customers. It also enables institutions that provide specialized goods and services to expand and sustain their customer base. Customers also benefit from various types of discounts due to large volumes of accumulated business. However credit business also comes with very many demerits which are very challenging in nature. The most important aspect that is affected by credit business is the cash flow factor.
Why does the cash flow factor stand out as an important aspect? For one, it must be realized that as much as a business may offer its goods and services on credit, it is also obliged to pay its suppliers in good time. Though a creditor could also be a debtor; he has to pay for some of his business on cash as well as service bank loans where necessary. A creditor is also required to pay the salaries and wages of the staff. The frequency, with which the wages and salaries are paid, be it weekly, fortnight or monthly, also impacts heavily on cash flow. It is therefore very challenging to maintain a striking balance between the money being collected and the money being paid out. Otherwise a creditor could easily land in the precarious position of having to seek bank overdraft facilities.
Accounts receivables management has evolved to become an integral part and parcel of any business institution offering credit facilities. Any faltering by accounts receivables arm of an organization may lead to crippling of business activities of the organization due to cash flow restraints. In some cases, cash flow restraints can be very damaging on the image of a business entity as well as its credit worthiness due to possible cases of issuing bouncing checks.
It is of paramount importance that once an entrepreneur decides to offer his goods or services on credit, he must establish an elaborate credit management policy. Credit policies serve the purpose of providing guidelines and mechanisms for an organization’s mode of operation on matters that concern accounts receivables. It must be taken into consideration that every debt collection process depends heavily on the type of credit management policies that every institution has in place in preparation for the eventual process of collecting debts.
Despite being a high risk undertaking, there is no doubt that credit facilities are important tools in the modern day business. But the fact that they must be carefully managed is very much inevitable. Good credit management policies are essential as revenue is only earned when money is received and banked. It is therefore discreet that credit is extended only to customers with authorized credit facilities entered into through signed contractual agreements. An effective credit policy is one that ensures the following: Maintenance of good cash flow; Proper management of debtors as a company’s major asset; Minimization of the costs of granting credit; Promotion of good customer relations as well as perfection of debt recovery efforts.
Therefore given the complex nature of accounts receivables, proper considerations must always be applied in determining the debt collection modes. Debt recovery processes, whether by creditors, collection agencies or lawyers, are often emotionally charged, expensive and lengthy. In cases where the debtors being collected against are in serious financial problems, then debt collection becomes an added indignity and cost to the creditor. The creditor must choose the means for collecting outstanding debts. Such means may involve invoice factoring, debt assignment, debt collection agencies, security realization, garnishee proceedings, bankruptcy proceedings, security realization, recalling of guarantees, examination of directors, alternative dispute resolution, no win no pay and winding up.
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