By Steve Young, director at Winning Pitch (winning-pitch.co.uk).
While companies have ‘streamlined’ their factory floors and operations as the credit crunch continues to hit hard, few have dared to put sales and marketing under the same scrutiny – usually for fear of what they might find.
However, in the vast majority of sectors, there is a huge amount of waste in marketing, which few companies have even noticed, let alone tried to address.
In today’s economic climate, your only real competitive advantage is to learn faster than your rivals. This is a quality you need to see at every level – and especially in sales and marketing, from where your new business should be driven.
Marketing more efficiently would, clearly, save costs, and the impact of these savings on net profit could be far greater than you ever imagined.
If a company making three per cent profit margin managed to save three per cent on costs in that year and retain the same level of sales, it would have the same effect on the bottom line as a doubling of turnover.
It seems that half of what marketing professionals do is hugely wasteful. For example, a paltry two to three per cent response on a direct mail campaign is seen as successful and a one in twenty conversion rate in telesales is seen as phenomenal.
Many advertising campaigns are based on the ‘drip effect’, and, despite an enthusiastic launch, most websites are rarely updated and often under-promoted.
To compound the issue, most marketing and salespeople are driven, measured and even incentivised by sales volume – not profit volume.
There are seven ways in which most marketing is wasteful.
This could be waiting for returns from a customer questionnaire or leaflet, waiting for another person to complete some other work, waiting for someone to make a decision or waiting for a call or meeting with a customer.
2. Wasted effort
Too many people make appointments with people who will never buy, spend time checking others’ work, do a mailshot of 500 when they can only follow up 50, retype proposals that you have on file, and many other duplications that could so easily be avoided.
3. Making mistakes
This could be as simple and careless as making spelling errors in a leaflet, or as costly as recruiting a salesman who, it turns out, can’t sell.
4. Poor admin and communications
Jargon puts people off, as does inviting prospects to an event taking place the same evening or not responding to enquiries quickly enough.
5. Inconsistent ways of working
Not having standard ways of doing things can lead to unpredictable timings and performance levels, trial and error and difficulty in training staff.
6. Unnecessary inventory
It’s no use being a jack of all trades – don’t hold an extra wide product range just in case, don’t print an extra thousand copies of a leaflet just in case, and don’t hold on to too many qualified prospects.
7. Untapped human potential
Not taking advantage of an individual’s latent talent or listening to new ideas from staff is a critical mistake for too many businesses.
To eliminate these wastes, the key is to evaluate in terms of both effectiveness and efficiency at every stage of the process – it’s no good having one and not the other.
First off, effectiveness. Did the sales and marketing process deliver the targeted results? Did it do the right things? For example, if we had set a target for a campaign to generate two new customers but it only resulted in twenty unconverted enquiries, we can safely say it was not effective.
Then, efficiency. Did the sales and marketing process deliver the results with minimum resources? Did it do the right things, right first time?
If the same campaign did, in fact, generate the two new customers but took months to plan, the brochure design was expensive, several thousand were returned as ‘not at this address’ and we had to fly prospects to Barbados to close the deal, then it’s unlikely to have been efficient.
The surprisingly simple answer is to cut all the marketing mumbo-jumbo down to three key processes: finding customers, winning customers and growing customers.
It’s then a matter of finding out how each process is performing currently, how it’s being measured, at which steps it goes wrong, where and how improvements can be made, and how to make these improvements a way of life.
In the vast majority of cases, sales and marketing processes are both ineffective and inefficient. To maximise results, however, the detox exercise is much more than simple cost-cutting.
You must be skilled in mapping and re-engineering techniques, and have the people skills to ensure that the team buys into the new approach, owns the new approach and continues to improve the new approach.
But when you get it right, you will be stunned by the results.
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