I regularly talk with executives in a number of different industries, and while I’ve heard a variety of reports about sales trends so far this year, one consistency is this: Virtually everyone I’ve talked to recently has said they’re hoping things will get better.
Well, I’ve got news for you:
Hope is not a strategy.
Successful companies don’t sit around waiting for circumstances to improve. They take action to create improvements.
So what are you doing to make things better? Because whatever the state of the economy, you as a manufacturer or franchisor have enormous potential to impact the sales of your retail or franchise network, which of course spurs your own sales.
Here are six specific strategies you can implement immediately to help your sales channel sell more of your products and services.
1. Increase Your Corporate Marketing Efforts
Whenever things get tough and companies are looking to slash costs, one of the first line items they cut is the marketing budget. Which is one of the dumbest things they can do.
Because effective marketing generates sales. Conversely, when you reduce your marketing efforts, your sales drop.
Marketing is an investment, not an expense. For every dollar you invest in marketing, you should see a return of two, five, ten (or more) dollars in sales.
If your marketing isn’t providing a substantial return, it doesn’t mean marketing doesn’t work—it means your marketing doesn’t work. Either your message is wrong or your tactics are wrong. Possibly both. Don’t cut it—fix it!
Study after study has proven companies that maintain or increase their marketing budgets during recessions see higher sales both during and after the recessionary period. Where do their increased sales come from in a shrinking market? From their competitors, who cut back on their marketing!
2. Launch a Publicity Campaign
Publicity has two distinct advantages as a sales and marketing tool:
1) It’s free.
2) It carries more credibility than an advertisement.
While you can’t say the same things in a press release that you can in a sales letter or commercial, you can use publicity to increase your company’s name recognition and create awareness of your products and services.
The key is to recognize that the media needs you. An editor’s job is to fill space. A radio or TV producer’s job is to fill airtime. Both are looking for entertaining stories or useful information that will make people want to watch, listen or read what they produce.
That’s where you come in. You can create press releases about anything as long as it’s of potential interest to that media outlet’s audience.
So what’s your story? What information do you have that would be of interest to potential buyers? What have you, your retailers or your franchisees done recently that people should know about? What tips can you share that could improve people’s lives? What newsworthy ways have your customers used your products or services?
Whatever the answer, that’s your press release. Write it down and e-mail it to every media outlet that might possibly be interested in your story. Don’t restrict yourself to industry-related publications. Since there’s no cost, you may as well include non-industry media to reach the widest possible audience.
And make it easy for your retailers or franchisees to do the same. Provide them with copies of your press releases for them to send to their local media outlets. Send them templates they can use for a variety of occasions. And encourage them to send you their stories.
Once you’ve begun, keep your publicity generator running! Don’t plan one publicity campaign and expect to ride that wave forever. Make a publicity calendar and plan something every quarter, or more often if you can manage it.
3. Optimize Your Web Site
When someone does a search for the type of product or service you provide, how high up in the results does your corporate web site appear? Do you know the terms people use to search for the types of products and services you make, and are those terms integrated well into your site? Are you making the best use of pay-per-click ads? When prospects visit your site, what percentage of them actually contact you or one of your channel partners, and how many leave your site never to return again?
If you don’t know the answers to these questions, you’re missing out on sales. And if you do know the answers but you’re not happy with them, you’re not any better off.
Optimizing your web site so it’s easily found by potential prospects and then converts those prospects into actual leads is tricky business. Do it right and you’ll have a never-ending supply of qualified prospects for your retailers or franchisees to talk with. Do it wrong and not only will you not get those prospects, you’ll waste huge sums of money in the process.
To complicate matters, the field of search engine optimization (or SEO) is constantly changing. Which means you don’t want to trust your site optimization to your web designer, in-house IT person or web hosting company. Hire a person or a company with proven SEO expertise and success.
4. Increase Co-op Funds
Just as it’s critical for you to bolster your corporate marketing, it’s critical for your retailers or franchisees to bolster their marketing. Unfortunately, like most businesses, independent retailers and franchise owners eviscerate their marketing budgets whenever things get tight.
To counter this knee-jerk reaction, encourage the marketing efforts of your retailers or franchisees by increasing the available co-op budget. Co-op funds are an investment in your sales channel’s success as well as your own.
5. Educate Your Channel Partners About Co-op
No matter what your co-op budget is, odds are most of your channel partners aren’t using all of it anyway. That’s because most independent retail and franchise owners know nothing about marketing.
So teach them.
Have your marketing director conduct a seminar, teleseminar or webinar for your channel partners. Buy a copy of Guerrilla Marketing (by Jay Conrad Levinson) for each of your retail or franchise owners and send it to them with a note promising additional co-op dollars when they send you an action plan based on what they read. Direct your district reps or regional managers to help your retailers or franchisees devise actual marketing plans and campaigns. Create a space on your internal web site where owners or managers can share their best marketing tactics and offer prizes for the best ideas.
6. Train Your Sales Channel’s Salespeople
More often than not, the sale doesn’t go to the business with the best product or the best service (or even the lowest price), but to the business with the best salespeople. If you want your retailers or franchisees to sell more, doesn’t it make sense to train them how to sell better?
Training has been proven to provide the best ROI of any sales investment. In fact, a 2000 study of 575 U.S.-based, publicly traded companies by Laurie Bassi, Jens Ludwig, Daniel McMurrer and Mark Van Buren found that companies that spent more on training (per employee) experienced a total shareholder return (change in stock price and dividends issued) in the following year 86% higher than companies that spent less, and 45% higher than the market average. Further, companies in the top quarter of the study group enjoyed an average of 26% higher price-to-book ratios, 24% higher profit margins and 218% higher income per employee than companies in the bottom quarter.
Findings like these make perfect sense when you think about it. Salespeople who get regular training are more adept at finding quality prospects, delivering effective presentations, holding their margins and closing deals.
(And such improvements can be immediate. I’ve had attendees of my seminars report back to me that they used what they learned the very same day to close sales.)
One Thing NOT to Do
You’ll notice there’s one strategy I didn’t include in the above recommendations: Slashing your prices. This is typically the first action companies take in tough times. However, it’s typically the worst thing a company can do.
Dramatically cutting prices rarely increases sales volume significantly, and even when it does, total profits still go down because every dollar shaved off the price was profit. Which means you’re worse off than if you hadn’t cut prices in the first place.
Worse still, dropping your prices sends a message to the marketplace that your product or service wasn’t worth what you were asking in the first place. That damages the perceived value of your offerings—damage that can take years to undo.
Instead of slashing your prices, take the money you would have given away in discounts and rebates, and invest it in marketing and training instead. You and your retailers or franchisees will see better results faster and it will set you up for increased sales down the road as well as right now.
You can’t control what the economy does. But you can control what your company does. Don’t just hope things get better. Employ these six strategies and make things better.