Opportunity: The Mirror Image of a Customer

The ever changing market trends and varying demands of customers have propelled companies to think out of the box and foray into market each time with new, updated or upgraded offerings that would outplay its rival products/services. In an attempt to capitalize on market, companies deploy numerous instruments and analytics to measure their efficacy level in several aspects of business. The latest being what we call “Opportunity Analysis”. As marketing professionals say “every non customer is an opportunity and it remains an opportunity till he/she becomes your customer.” So basically every customer as well as non-customer is opportunities. So if a casual conversation converts into sales conversation and that ultimately turns into a lead and further a customer/client, it’s called winning a customer and vice versa.

Customer win/loss analysis is a process of understanding why sales opportunities are either won or lost. A careful win/loss analysis is a cost-effective and less time-consuming tool to understand how customers perceive value. The perceived value by different customers is the deciding factor whether you win a customer or lose.  While customer need analysis is the most basic arena where sales people are often taught upon, but marketers argue it is not always the need that gives rise to a sale.

The process for win/loss analysis starts after a sales opportunity has been won or lost. A meeting is held with important stakeholders and includes the sales, product, account management, and customer service team members. After this meeting, the win/loss analysis interviewer must know the details of how the lead was generated, the events that took place during the sales process, and the product or products discussed. Customer interviews also need to be scheduled immediately after the opportunity has been won or lost to ensure maximum recall from customers about their experience in the sales process.

Here comes the customer feedback which is of utmost importance as the resultant responses devise the sales strategy for future. The customer feedback may be collected regarding customer perception in the areas such as

  • Performance of the corporate sales team: Company must know what role its trump cards played in the sales process. After all corporate sales team is the interface between customer and the company and loopholes in the same might result in downfall of future sales.
  • Marketing materials: Here the focus in on marketing assets that the company has. Feedback on the same helps in improving quality of Marketing Assets, Company has to offer.
  • Sales process: Feedback on the sales process is the stepping stone for future sales strategy. Profiling, generating leads, presentation, negotiation are some of the major areas where customer feedback counts a lot.
  • Product features: Customer feedback on product features informs seller analyze the product’s sales value proposition and whether seller needs to reposition the product with additional features or continue the existing one with regular up gradation.
  • Comparison with competition: This is something where the customer’s feedback drives the marketing strategy experts contrive better action plan to deal with competitors.
  • Pricing: Negative customer feedback on pricing can only be partially side-lined if the company is offering optimum value in comparison to its competitors at a given price and the product has some unique sales value proposition (e.g. i Phone). But if the customers feel availability of another product with same features and utilities at a cheaper price, then it is nothing less than a warning bell for the seller.

Customers change and so does their perception and demand. It’s important for sellers to consider each potential customer as an opportunity.

“To learn more about Customer Win/Loss analysis and related analytics, visit “www.SMstudy.com”.

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Out with the old, in with the new

20 years ago people had to be convinced to use the Internet. How often did we hear the question, “What would I use it for anyway?” It’s comical to think that people needed to be convinced to use the Internet considering nowadays people can’t survive without it.

The first smartphone was released in 1992 by IBM. It was considered a smartphone because of its virtual assistant capabilities, but the smartphone of today is light years more advanced. The timeline is a little blurry, but many would say that the first actual smartphone was the Sidekick, released in the early 2000s. Smartphones in existence prior to the Sidekick were for corporate professionals, but the Sidekick advertised to a younger market. Teenagers no longer had to wait until they got home from school to sign on to AIM to speak to their friends, the capability was right in their pockets!

In the last 15 years the smartphone technology has increased rapidly. According to Monica Anderson at the Pew Research Center 68 percent of adults in the United States use a smartphone. 88 percent of 18-29 year olds own a smartphone while only 78 percent of the same age group own laptops or desktop computers. As the use of smartphones increases there is less of a need for a laptop or desktop computer. And why would you need one, when a smartphone is just a smaller computer?

Mobile technology has been advancing at a very fast pace. The average American uses a smartphone to view product reviews, make price comparisons, and find information about products while they are shopping in-store. With consumers increasingly using technology on the go, a company’s Digital Marketing Strategy must be designed to take full advantage of this consumer trend, especially in consideration of a recent study released by the Daily Mail stateing that smartphone users check their phone 85 times per day on average.

Google coined the term Micromoments for all the times smartphone owners use their device. This could be to a simple check of a notification that popped up from a news organization or using the phone to check reviews before purchasing a product. Companies must capitalize on these moments if they are looking for consumers. The trick is to ensure customers and potential customers have access and are able to land on a company’s mobile version of their website when they are using their mobile devices. So, businesses must ensure that they have a mobile-friendly website.

The following factors will ensure a company’s website has the right design for their consumers:

Usability and Design – Organizations with established large scale websites have recognized the growing need for compatible tablet and mobile-accessible content and have implemented updates to their websites to reduce and streamline content and website size in order to be more suitable for mobile-accessible devices. Nevertheless, this approach is sufficient only for sites that provide static, one-way dissemination of information. As more customers demand interaction via mobile devices and tablets, the usability of these updated sites could diminish.

Performance – The advent of these devices has also provided companies with an opportunity to gather more personal data from their users, and in turn, push relevant, context-driven content. Such mobile-optimized content must load quickly on mobile devices to ensure that the performance expectations of consumers are met.

The rapid rise in smartphones, tablets, and Internet-enabled wearable devices has led to a shift in web design approaches, with web development for these devices becoming a much higher priority than it has been in the past. The advancement of technology only brings more opportunities for businesses and consumers, so join in!

Sources:

Victoria Woolleston, “How Often do You Check your Phone?” October 26, 2015. http://www.dailymail.co.uk/sciencetech/article-3294994/How-check-phone-Average-user-picks-device-85-times-DAY-twice-realise.html

Brad McCarty, “The History of Smartphones,” http://thenextweb.com/mobile/2011/12/06/the-history-of-the-smartphone/#gref

Jason Duaine Hahn, “The History of the Sidekick: The Coolest Smartphone of All Time,” September 11, 2015. http://www.complex.com/pop-culture/2015/09/history-of-the-sidekick

Monica Anderson, “Technology Device Ownership,” October 29, 2016. http://www.pewinternet.org/2015/10/29/technology-device-ownership-2015/

Aspects of Sales and Marketing

There are six Aspects of Sales and Marketing, and you can read about them all in the SMstudy® Guide.

  1. Marketing Strategy
  2. Marketing Research
  3. Digital Marketing
  4. Corporate Sales
  5. Branding and Advertising
  6. Retail Marketing

These six aspects are based on the six most common and distinct career fields related to sales and marketing. You can see here how they interact with each other.

The dotted lines encase the “Essential Marketing Aspects,” both of which are mandatory and should be used to define, measure and provide direction for the overall marketing efforts of a company.

The other four Aspects are “Optional Marketing Aspects” because one or more of them could be used by a company to reach its marketing goals and, in some instances, not all are applicable. For example, a small company creating phone apps or online games might only use Digital Marketing; another company manufacturing heavy equipment might use Corporate Sales only; and a large consumer goods company or global fashion chain might decide to use all four Optional Marketing Aspects to reach its marketing goals.

Marketing Strategy describes how the Aspect of Marketing Strategy aligns with a company’s overall Corporate Strategy and acts as a unifying framework to define and analyze the other Aspects of Sales and Marketing. It also helps align all the marketing resources among all Aspects.

Marketing Research explains the concepts of Marketing Research and provides a framework for conducting marketing research and to analyze Sales and Marketing data. It also demonstrates how marketing research findings can help the marketing team conceptualize and finalize product features and other components of a company’s Marketing Strategy.

Digital Marketing includes all marketing activities that use electronic devices connected to the Internet to engage with customers such as computers, tablets and smartphones. These include activities related to creating and managing effective websites and mobile apps as well as promoting a company’s products and brand through various online channels that help meet the company’s marketing objectives.

Corporate Sales outlines the best practices and processes to be followed for effective business-to-business sales. It provides guidance on activities related to building and maintaining strong business relationships.

Branding and Advertising includes concepts of product branding, consumer behavior, marketing communication, and public relations. Branding is the process of creating a distinct image of a product or range of products in the customer’s mind. This image communicates the promise of value the customer will receive from the product or products. Branding should remain consistent across all channels of customer communications.

Retail Marketing presents concepts of all marketing activities related to persuading the end customer to purchase a company’s products at a physical retail outlet or store, and efficiently managing the supply chain and distribution channels to improve the reach and sales for a company’s products.

How Price Elasticity Impacts Product Pricing

Price Elasticity of Demand (PED) is a measure of change in quantity demanded with respect to change in price of the product under consideration when other factors of demand like price of other goods, income and taste kept constant. This is a very important aspect of marketing as it gives a quantitative measurement of the responsiveness of consumers to fluctuations in pricing. Companies use past sales data, competitor data, and primary market research  to analyze the price sensitivity of customers in their target market segments.

Mathematically PED is calculated as follows:

PED = (% change in quantity demanded)/ (% change in product pricing)

Since for most of the products, increase in price leads to decrease in demand, PED is almost always negative. But for convenience, economists use the absolute value i.e. a positive number although it is technically a negative quantity. Depending on the absolute value of the PED or degree of elasticity, the demand for a product is classified as “Elastic”, “Inelastic” or “Unit Elastic”.

Elastic Demand – A product or service is said to have elastic demand if a change is price significantly impact the change in demand. In other words a small change in price leads to a greater change in quantity demanded. Hence, demand for a product or service is said to be elastic if the PED coefficient has an absolute value of greater than one. Consumer goods normally show elastic demand as customers either postpone their purchasing decisions or reduce the quantity purchased (e.g., television, computers etc.). Presence of substitutes or competitive products increases the elasticity of demand as consumers have alternative options if a company increases the price of its product.

Inelastic Demand – A  product or service is said to have inelastic demand if a change is price does not significantly impact the change in demand. In other words a greater change in price leads to a smaller change in quantity demanded. Hence, demand for a product or service is said to be inelastic if the PED coefficient has an absolute value of less than one. Necessity products such as milks, toothpaste, fuel, water etc. normally show inelastic demand as these class of products are required on a day to day basis and they do not have appropriate alternatives as most these products are provided through government regulated industries.

Unit Elastic Demand – A  product or service is said to have unit elastic demand if the percent change in price is directly proportional to percent change in quantity demanded. Thus the PED coefficient for a product or service with unitary elasticity is exactly one. Wine and some other spirits, clothes  typically have unit elastic demand i.e. if the price of such product increased by say 30% then the sales will drop by 30% or in other words there will be 30% decrease in demand.

Price elasticity is a major factor in determining the pricing of a company’s products or services. An inelastic demand often allows for a more varied mix of pricing, including promotional pricing and discounting. Marketing research can be conducted using various price points to identify corresponding demands for a product or service. Based on the required profitability and desired market share, the specific pricing for a product or service is then decided.

To learn more about price elasticity of demand, visit www.SMstudy.com/articles

How Information Finds You: Hyper-relevant Content Marketing

“If the news is that important, it will find me.”

This (in)famous declaration was made by an anonymous college student in 2008 during a focus group conducted by Jane Buckingham, founder of the market research company Intelligence Group.

Since 2008, this remark has made the rounds. It’s been quoted and discussed in both media and marketing worlds. It’s even been cited by the New York Times. And if you have to ask why, you haven’t been paying attention. This statement, which seems like a throw away (let’s be honest) has proven to be the number one guiding principle in both media dissemination and marketing in the new digital age.

As Joshua Benton remarked in a recent piece for NiemanLab, “If the news is that important, it will find me. I can’t tell you how many conferences, how many symposia, how many gatherings of worthies I’ve been at where some version of that line has been tossed around.”

It’s true! I’d heard it mentioned during a class on 21st-century journalism in 2009. At the time, old time journos scoffed at the student’s “laziness” or “lack of interest” in the wider world. But today, no one scoffs at the idea of providing valuable, relevant content, served up directly to viewers through the various social media channels. This is now the expectation. If it’s important, it will find you.

Marketers, like the media, have adapted. And one of the methods hyped over the last few years is content marketing. But with massive quantities of information bombarding us daily, we are reaching what is referred to as “Peak Content” or “the point at which this glut of things to read, watch and listen to becomes completely unsustainable,” according to author Kevin Anderson in 2014.

With Peak Content looming and with the understanding that a story (or content) MUST be important enough to reach the reader/viewer, successful marketers are turning to extra relevant, extra valuable content that will cut through the fracas. As this happens, the question then becomes “what’s relevant?”

Relevance often depends on individual circumstances and numerous other factors that may be at play at any moment in a person’s life. But there are some general assumptions that can be made. For example, most people will be thinking about breakfast in the morning. Or, if someone is awake late at night, information on insomnia might be something they’d like to see.

Enter the hyper-relevant content marketing plan, predicted by some to be a major social media marketing trend in 2016. Hyper-relevant content marketing takes into consideration the season, time of day or other societal factors that may be affecting a person’s need for a specific type of information.

One such marketer, Amanda Todorovich, manager of Digital Engagement for Cleveland Clinic, is achieving major success producing hyper-relevant content by fine-tuning her organization’s marketing to maintain “evergreen” value for everyone and then offering it wisely within marketing channels.

“We are trying to put content in front of people at the right time,” Todorovich said. “We try to marry the best times of day on each channel with the best content and what people are using those channels for. Not everything gets posted on every channel we’re on.”

By assessing the relevance and value of the content being used within a marketing strategy and utilizing the channels as well as season or time of day effectively, a marketer can be sure to hit the target more directly and at the same time find they’ve contributed something of genuine value to the online community.

For more resources and information on sales and marketing visit http://www.SMstudy.com

Sources:

Peak Content: The collapse of the attention economy, Kevin Anderson. Jan. 4, 2016. ehttp://www.themediabriefing.com/article/peak-content-the-collapse-of-the-attention-economy

“If the news is that important, it’ll find me.” But what determines if it’s important?, Joshua Benton, Feb. 20, 2014. http://www.niemanlab.org/2014/02/if-the-news-is-that-important-itll-find-me-but-what-determines-if-its-important/

Behind the Scenes of the Cleveland Clinic’s Content Marketing Strategy, Brianne Carlon Rush, Dec. 2, 2014. http://www.kunocreative.com/blog/cleveland-clinics-content-marketing-strategy

Its All in Your Head: A Brief Introduction to Psychological Pricing

Have you ever tried to sell something quickly (desperately) by lowering the price well below market value only to discover no one will bite? If so, your frustration is not unique. You’ve just experienced the quirky, seemingly-counterintuitive nature of the human consumer.

It’s long been known that pricing can make or break your sales, even when the value and quality of the product or service hasn’t changed. To the consumer, it matters not that you’re offering them the deal of a lifetime. They’ve already decided that the price is too low and, therefore, something is amiss. Of course, it’s all in their head, but the effects of pricing have real-world outcomes, such as a loss of sales because the set price doesn’t seem to match the perceived value. This is just one of the reasons why it’s wise to know a few basics of psychological pricing and how it contributes to a product’s perception and, in turn, sales.

Psychological pricing is one component of a much broader and more complex pricing strategy for a product or service. TheSMstudy® Guide defines a product’s or service’s pricing strategy as “focused on creating a sustainable brand perception and sustainable profitability for the product or brand, while growing and maintaining a healthy market share.”

All aspects of a pricing strategy are important to the success of a product, but psychological pricing can have a very significant influence on how consumers perceive a product’s value. In a recent post titled “Focus on the Why,” we noted the critical function emotional responses play in consumer buying decisions. Why a product was created or why a company does what it does speaks directly to consumers’ emotions and creates a strong call to action as well as brand loyalty.  According to Shelley Frost of Demand Media, psychological pricing works on the same level, by tapping into a customer’s emotional responses to promote sales.

“Instead of appealing to the rational side of the consumer, this strategy appeals to their emotional side. The pricing may aim to strike a thrifty note with a bargain or stir up feelings of prestige with a high-end item,” Frost said.

There are many forms of psychological pricing that may be employed by marketing departments (and individuals), including the value perception pricing example noted above. Others you may have encountered include these five provided by Psychology Pricing:

  1. Odd Pricing – Quite simply, it’s the illusion of the difference between .99 and $1. We humans perceive a real value difference between the two even though we understand logically the difference in price is a mere .01.
  2. Prestige Pricing – The opposite of odd pricing, prestige pricing creates the perception of higher quality by pricing a product or service to a rounded number. For example, $1 instead of .99.
  3. Buy One, Get One Free – Same as 50% off, right? But somehow it looks so much more alluring when a product is marked “Buy One, Get One Free.”
  4. Comparative Pricing – Similar to the straw man definition, comparative pricing sets up a false comparison so the consumer finds one offer decidedly more attractive.
  5. Product Bundle Pricing – The gift basket of marketing ploys, product bundle pricing offers a discount on a group of items packaged together. A win-win situation for marketer and customer.

Psychological pricing may have a touch of the “dark arts” about it (it is, after all, a system of psychological manipulation), but it’s been proven effective and is at this point nearly ubiquitous. So the next time you are selling an item and feel the temptation to set the price low in order to turn a quick buck, consider that you might be selling yourself short. A higher price tag, whether fair or not, creates the illusion of greater quality and value and may actually stir up the deep psychological urge to buy compared to the friendly bargain price you thought would create a fast sale.

For more articles on sales and marketing, visit http://www.smstudy.com/Article

Sources:

“5 Psychological Studies on Pricing That You Absolutely MUST Read” https://blog.kissmetrics.com/5-psychological-studies/

SMstudy Guide, Digital Marketing, Pg. 53.

“The Ultimate List Of Psychological Pricing Strategies” http://www.psychologicalpricing.net/ultimate-list/

“What Is Psychological Pricing?” Shelley Frost, Demand Media http://smallbusiness.chron.com/psychological-pricing-11862.html

“Lessons From the Biggest Pricing Strategy Failure of 2012,” Patrick Campbell, Jan. 2, 2013. http://www.priceintelligently.com/blog/bid/168572/Lessons-From-the-Biggest-Pricing-Strategy-Failure-of-2012

Fragmented New-Age Marketing

In recent times, the media has become increasingly fragmented with several hundred television and radio channels, as well as a large variety of print media, including newspapers, magazines, and trade publications.

Moreover, since the late 1990s, with the increased popularity of the internet and, more recently, smartphones, many options now exist for advertisers to reach a global audience using digital media marketing methods such as mobile phone apps, Google, Facebook, Twitter, LinkedIn, YouTube, QR codes, gamification, and proximity marketing.

With all of these options, many marketers find it beneficial to use an integrated approach to marketing by leveraging the strengths of various types of media. Companies must evaluate all media in terms of who the target audience is and what media resonates with them best. In many cases, assumptions will need to be made and incorporated into the media-testing framework.

It is a fact that people now spend more time on the internet using smartphones, tablets, or computers than they spend through conventional mass media, such as television, radio, or newspapers. This is especially true for the thirty-year-old and younger market segment. Since Sales and Marketing is most successful when it meets the demands of consumers, this change in consumer preferences is significantly altering the Sales and Marketing landscape for established companies.

Businesses are discovering that conventional mass media marketing has limited effectiveness and some customer segments are not even reachable using these traditional media forms. Fragmented new-age marketing generally supports new, small brands with much smaller budgets targeted directly to customers in a global marketplace. This represents a significant distinction from conventional mass media marketing, where achieving a global reach for a small company may have been prohibitively expensive.

While mass media marketing is less targeted and primarily focused on affecting emotional attitudes about the brand, new-age marketing is data-driven and more focused on driving specific calls to action.

Also, while mass media marketing typically involves interruption, new-age marketing is about engagement. Unlike older media options where Sales and Marketing communications were primarily uni-directional, communications have increasingly become multi-directional.

Although generally a benefit to both producers and consumers, this trend can make brand management challenging for companies if actual or potential customers perceive that a product does not reflect the brand message intended by marketing efforts.

Due to the nature of new-age marketing, consisting of multiple media forms and the ability to generate significant information, huge amounts of data commonly referred to as big data are now available to companies. The ability to process this data through proper marketing analytic, and assimilate such data to generate valuable insights, can become a significant differentiator for ensuring that companies engage in smart marketing.

Refer a friend!

Word-of-mouth referrals are the ultimate endorsement for a company, its products, services and staff. Referrals are therefore considered the gold standard of customer acquisition in many fields. But what can be done when the excellence of your salesmanship isn’t equating into a steady stream of referrals? When you’re giving it 110% and still not feeling the referral love?

When referrals aren’t being generously doled out by past or current customers, a smart referral program can be just the right form of encouragement they need to extol you and your company’s virtues. According to the SMstudy® Guide, Corporate Sales, referrals may happen on their own, but companies can also influence referrals through appropriate online marketing strategies.

The book states, “The key to a good referral program is not only to drive customer acquisition in the short term, but also to engage new and loyal customers, encouraging them to act on their brand advocacy.”

Incorporating a smart creative program can definitely be a win-win-win situation, benefiting the existing customer, potential customer and sales team.

The pluses of incorporating a referral program are noteworthy:

A reduction in marketing costs. Satisfied customers are now incentivized to sing your praises and steer potential customers in your direction.

An improvement in customer satisfaction. Existing customers can engage and benefit from a referral program.

An all-around better Return on Investment (ROI).

After deciding to embark on a referral program, it’s time to put on the proverbial “thinking cap” and figure out what can be offered as a worthy token of a customer’s loyalty and how it can best be presented to customers. Every company is different but many find that offering what is within their wheelhouse enhances brand recognition and builds an ongoing conversation with customers.

For example, the cloud-based file hosting service, Dropbox, ran a very successful referral campaign that offered 500MB of free storage to both the referrer and the referee. Sited by ReferralCandy as their #1 Best Practice Referral example, Dropbox experienced a 60% increase in sign-ups, beginning in September 2008 with 100,000 users to 4,000,000 in January of 2010. In addition, Dropbox noted that 35% of its daily enrollment was via their referral program.

In their article, “How Referrals Built a $10 Billion Dropbox Empire,” ReferralCandy places Dropbox’s program at the pinnacle of all referral programs for a few distinct reasons. Besides the general benefits noted above, smaller details helped set Dropbox apart, including:

A built-in referral process. Step 6 in the Dropbox sign up process… “Invite some friends to join Dropbox.”

Offer a gift, don’t ask a favor. Dropbox offers more free storage space to new members instead of asking them to refer a friend.

Make the referral process painless. Offer convenience with a choice in referral methods. Simple social media and email options are optimal.

Let the customer behind the curtain. Dropbox allows users to check on referrals via their dashboard.

Keep the train running. A confirmation email indicating when a referral has responded includes the option to refer another person. So, instead of being a one-time only affair, Dropbox has created a referral loop and as long as it maintains its appeal, it will continue to draw in referrals.

We’re always hoping well-earned referrals will be forever flowing in, but when they’re not, referral programs such as the one used by Dropbox have the potential to fire up our customers.

And as a final thought, consider this…ReferralCandy suggests that if advertising had been their only means of acquiring customers, Dropbox would have failed.

Not only did referrals allow Dropbox to escape death, it allowed them to avoid all traditional ad spend. That in turn would have allowed them to focus their resources on making a better product- further cementing their competitive advantage,” they said.

For more articles on sales and marketing, visit smstudy.com.

Image courtesy of JD Hancock, Flickr. https://www.flickr.com/photos/jdhancock/6023780563/

Sources:

SMstudy® Guide, Corporate Sales, pg. 172-173.

“8 Proven Steps to Double Your Referrals from Other Attorneys,” Stephen Fairley

http://www.attorneyatlawmagazine.com/phoenix/8-proven-steps-double-referrals-attorneys/

“Referral Program Examples – An Epic List Of 47 Referral Programs,” ReferralCandy, http://www.referralcandy.com/blog/47-referral-programs/#best-practices

“How Referrals Built The $10 Billion Dropbox Empire,” ReferralCandy, http://www.referralcandy.com/blog/referrals-built-dropbox-empire/

PESTEL Analysis

Market analysis can serve as a flashlight to help you get a glimpse of what might be ahead for you and your business. As a part of this, PESTEL Analysis is used to examine macro-environmental factors that are sources of opportunities and threats, and therefore positively or negatively impact the organization, its customers and suppliers.

There are six factors to PESTEL analysis: Political, Economic, Social, Technological, Environmental and Legal.

Political Factors—These factors describe how the government and the political system may influence the company’s Corporate Strategy.

Examples of Political Factors:

  1. Government incentives for industrial development in certain regions may impact decisions related to location of factories.
  2. The annual financial budget of the government may significantly impact a company financially. For example, a parts supplier in the rapid transit industry setting revenue projections for a particular geographic region must consider the current political position and the expected government financial support for transportation and infrastructure improvements.

Economic Factors—These factors are related to the economic structure and policies of an economy and its interaction with other economies. They influence how businesses operate and grow.

Examples of Economic Factors:

  1. Interest rates for borrowing may impact funding and investment decisions of a company.
  2. Inflation rates impact input costs (that is, salaries, cost of raw materials, property costs) and should be considered when planning the Marketing Strategy.

Social Factors—These factors reflect the social and cultural state, attitudes and behaviors prevalent in a market. Changes in these factors may impact the demand for a particular product or product category.

Examples of Social Factors:

  1. An aging population creates a growing market for products targeting senior citizens.
  2. A growing trend toward nuclear families necessitates services such as day-care facilities for children.

Technological Factors—These factors describe the technologies and R&D efforts that are relevant to a company and the ecosystem within which such technologies function. They may help the company gain sustainable advantage in its market through product or process innovation.

Examples of Technological Factors:

  1. A faster mobile network enables real-time video conferencing with the company’s field sales force.
  2. An increase in Internet availability and the growth and efficiency of e-commerce and its distribution channels enable more people to shop online.

Environmental Factors—These factors are related to the ecological environment and include aspects such as climate change, deforestation and pollution, among others, which may affect how some companies function.

Examples of Environmental Factors:

  1. The appliance industry manufactures CFC-free refrigerators to prevent further damage to the ozone.
  2. Automobile manufacturers reduce vehicle emissions in order to decrease air pollution.

Legal Factors—These factors are related to the legal and regulatory framework of the market in which a company operates or is planning to enter. Companies need to adhere to the laws and regulations that exist in their markets, irrespective of how restrictive they may be. At the same time, the legal framework may also give rise to additional opportunities.

Examples of Legal Factors:

  1. Laws that mandate the use of bike helmets provide a boost to helmet manufacturers.
  2. In several countries, anti-monopoly laws make it difficult for large companies to acquire competitors.

On the pathway to success, you will find these factors may be a benefit or an obstacle, but without a detailed and comprehensive PESTEL analysis you end up stumbling in the dark.

Understanding the Sales Process

In this competitive age an effective sales organization is supported by marketing assets and includes a proper sales structure. The sales organization and governance must be designed to optimally support sales targets and create visibility into the sales team’s performance to allow for adjustments and course corrections as necessary to ensure that the business meets its sales revenue objectives. Since sales targets are directly linked to all sales and marketing and financial objectives, they are essential components in the achievement of company’s overall objectives.

Most experienced sales teams have an existing sales process. If this is the case, it is important to constantly evaluate, improve, and fine tune different components of the process. A new company, however, must define a sales process by adapting established frameworks to suit the specific needs of the business, leveraging identified strengths, and identifying and filling gaps.

Five Basic Steps in Sales Process

  1. Pre-sales—This first step in the sales process involves reviewing the current activities and selling processes. These activities include those carried out from the initial contact with a customer to the final delivery of a product or service. This step allows a developing company to assess its organizational capabilities to carry out the sales process. It includes understanding and strengthening the value proposition for customers. The different channels required to sell products in the future are also determined. Planning sales governance, setting sales targets, setting up the incentive structure for the sales team, and creating the marketing assets is also done at this stage. The sales team is also trained on products as well as the sales process and negotiation to prepare for selling activities.
  2. Profiling of Target Customers—The first step in the prospecting stage, profiling target customers and decision makers, involves identifying and benchmarking profiling criteria for prospects, as well as decision makers. Characteristics of ideal customers, such as annual budget, are used to benchmark the profiling criteria.
  3. Lead Generation and Qualification—The second step in the prospecting stage, lead generation, is the act of identifying prospective customers and generating ways to gain new customers. Profiled criteria and benchmarks are used to generate better leads. Lead generation uses various offline and online techniques and can be inbound or outbound.
  4. Needs Assessment—Conversion starts with understanding customer needs for products or services. This understanding of needs is vital in the conversion process and enables the sales team to demonstrate to the customer how their product can fulfill the customer’s requirements.
  5. Presentation, Negotiation, and Closure—This is the final stage in the conversion cycle. The corporate sales team presents the features, benefits, and advantages of the proposed products or services that can fulfill the needs of the prospects. At this stage, prospects present their objections to the sales proposal. It is the job of the corporate sales team to overcome these objections to close the deal.

Understanding these five steps and adapting them to suit the business requirements will help establish a framework for a comprehensive and effective sales process.

To learn more about the sales process, visit www.smstudy.com