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New Year....New You?
New Year....New You?
Firstly, a happy New Year to you all you sales people out there. This
article is for sales people only!!
I hope you enjoyed your end of year break.
The end/start of a new year naturally provides us with both the
opportunity for reflection and the catalyst for doing new things.
Those of you able to take a few days off may have used it to
review/take stock (professionally and personally), make decisions
about the future and are already attacking the new year with
renewed vigour and enthusiasm. Good on yer.
How long will that last?
Sorry to pee on your chips but a few days off re-charging the
batteries will soon be replaced by the usual demands, pressures,
irritations. Unless you working to a structured plan of some sort you
face the prospect of losing that burst of renewed enthusiasm fairly
quickly.
The good news is this is a great time to get selling. That
psychological line in the sand that is December the 31st applies
to your customers and your prospects – there is a window of
opportunity that exists you can/should attack. What are you
waiting for? A reason?
There are lots but here’s one. In the office supplies market January
invariably means new catalogues and supplier price increases. What
are you going to do about that? Absorb them? Pass them on?
Resist them? Ignore them? Or a mixture of these? What’s your plan?
What effect will these have on, your key customers, your area?
Price increases mean a chance to re-negotiate, re-sell single source,
plug sales and service gaps – things we’ve talked about in earlier
articles (downloads on the P1 website still).
New catalogues also mean new products. Maybe you have new
services too. Maybe you have existing products or services that you
haven’t managed to sell in to all your customers and want to try
again. Maybe you now have the opportunity to switch sell products
and increase your margins.
Ok, so where do we start? You know me by now don’t you? We
start with a plan!!
I will share with you in this article a format for business
development that will help you. I use these two models for every
client I work with; it’s a simple approach and it works.
Boston Product Matrix
Cash Cow
Get a blank flip chart pad and a pen. Draw a large square and
split it into four boxes. The first model I want to talk to you about
based on the Boston product matrix and focuses on your product
categories and their market potential. I want you to split your
products/services into four categories and give them the following
names: cash cow, rising star, problem child and dog. Write that in
each of the four boxes as a title for that box.
Simply put this are the product categories where you currently
enjoy consistent and continuous income streams and you are
accepted by your clients as an established supplier. The market/
opportunity for these product categories isn’t really growing but
they contribute a significant proportion of your current income
so they can’t be ignored, in fact they need to be maintained and
managed both from revenue AND margin perspectives. Write those
categories or lines that you think suit in this box.
Rising Star
Or ‘star’ products, are those which have good market share in a
strong and growing market. As a product moves into this category
it is commonly known as a ‘rising star’. When a market is still
growing, competition is not yet fully established. Demand is strong;
saturation or over-supply do not exists, and so pricing is relatively
unhindered. This all means that these products produce very good
returns and profitability. The market is receptive, which optimises
selling efficiencies and margins. These are great products and
worthy of continuing investment provided good growth potential
continues to exist. When it does not these products are likely to
move down to cash cow status, and the company needs to have
the next rising stars developing from its problem children. Do the
same as cash cow. Write your rising stars in here.
Problem Children
These are products which have a big and growing market potential,
but you have a small share just now, normally because they are
new products, or your business is not yet accepted as a supplier
of these products. This is likely to be an area of business that is
quite competitive, gross profit margins are likely to be high, but
overheads, in the form of costs, advertising, sales effort, marketing
are normally high, and can cause initial business development in
this area to be loss-making until the product moves into the rising
star category. Again add these into this box.
Dog
This is any product or service of yours which has low market
presence in a market that is going backwards. There is no
point in developing products or services in this quadrant. Many
organizations discontinue products/services that they consider fall
into this category. Businesses that have been starved or denied
development find themselves with a high or entire proportion of
their products or services in this quadrant, which is obviously not
very funny at all, except to the competitors. Add dog categories/
products into here.
If you are not sure a good way to think of the above is to take
practically any technological product over the last 5 or 6 years
(CDR’s for example). They would have moved through this model.
Another example is perhaps digital print – for a long time a problem
child but in most people’s opinions now a rising star (not yet a cash
cow).
Have a go at this with all your product categories - see where you
fit them into the model. Now ask yourself are you applying your
efforts appropriately? Cash cows need maintenance, rising stars
need to be driven, problem children need careful nurturing (but are
likely to take longer to establish) and dogs? Let them lie.
Don’t be fooled into thinking this stays this way forever. It changes
all the time. I usually carry out this exercise every year to set mine
and my clients sales strategies - but it can be done more often in
fast moving markets such as technology markets.
Ansoff Matrix
The second model I want to share with you is what’s called the
Ansoff Product Matrix. I use this to help decide on your selling
priorities/efforts.
Firstly think about your products and divide them into two
categories – existing and new. Right now take your ‘sales markets’
and do the same - existing and new. ‘Sales markets’ can be
determined by either your geographical territory or your industry
sectors you work with maybe. Now put them together. Take
another sheet of flip chart paper, four boxes and off you go.....
Priority 1 - Existing products/existing markets – this box is known
as market penetration. Ask yourself a really simple question – ‘am
I selling all my established existing products to all my existing
customers?’ You should think about your cash cow products here
for example. Market penetration should deliver you the quickest
success as you plug gaps in your existing clients with products and
services you know are proven.
Priority 2 - New Products/existing markets – known as product
development. This is where you take your ‘rising stars’ and problem
children and start trying to sell them to your existing customers.
You should see quicker success from rising stars of course but don’t
ignore trying to establish problem children.
Priority 3 - Existing products/new markets –known as market
development. New business. Focus on selling your existing and
proven products (cash cows and rising stars) and services to new
markets.
Priority 4 - New Products/ New markets – diversification. This
should only happen when you have done the other 3. In fact, in my
opinion, it should rarely happen but may be when you are asked to
source/supply a ‘special’ for a client you haven’t supplied before for
example.
The above takes a little bit of time. A couple of hours maybe? Get
that flip chart pad out and take the time. Do it with your colleagues
or boss. It really will give you clarity on where you are focusing your
efforts and it will save you wasted time chasing rainbows as I like to
say.
Next year is forecast to remain a challenging year for the UK
economy and business in general. Personal effort will need to
remain high, focused selling efforts are paramount and personal
productivity will be under constant scrutiny. Take this time, whilst
your energy levels are high, your mindset is switch to ‘new me’ and
plan effectively.
Most of all make the most of the New Year and the opportunities it
brings.
Good luck.
Gary Naphtali is the Managing
Director and Co-Founder of
Performance 1st. Gary is a
proven professional at all levels
of sales and performance
management.
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