In the office—and on this blog—we throw around the term “effective communication” a lot. In a previous post, I talked about how your entire chain of dealing with suppliers, employees, and customers should be centered on effective communication—that is, clearly explaining your products and requirements and listening and understanding others.

Do we effectively communicate with our website?

You may think you do a good job of the latter. You have a method for collecting customer requirements and feedback. You have open channels of communication with your employees and suppliers.

But what about the former? How clearly do you explain your own products and services?

We’re working on a new website that will more explicitly state the services we provide to other companies. It’s a big part of our product offering, but until recently, it’s been a small part of our website. In formatting the homepage, navigation, and other design aspects, we’re constantly asking ourselves “What would make the most sense to the customer?” It doesn’t matter what you think about your products or services. What are they looking for?

This can be very difficult to use the right words when you’re selling customized services. But when you make sure the focus is on the customer—or flat out ask the customer for their opinion—it makes things easier.

When was the last time you asked your customer whether your communication is clear to them? Have you changed text or visuals based on customer feedback?

Times are tough, the economy is struggling, and your customers just aren’t buying.  So what do you do?

Let’s take a hard look at your sales and marketing processes to find the top ten ways you can close more sales:

1. Increase Your Customer’s Life-Time Value (LTV).
   How profitable your customers are over time defines your LTV and is a key component of your strategic growth.  Companies spend ten times more to acquire a new customer than to keep an existing one.  Your current customers already know you, which means they are more likely to purchase from you again, spend more money with you, and therefore are likely to be more profitable.  If you don’t know your LTV, then how do you know how much money to spend and on which customer segment?
2. Improve Your Demand Forecasting.
   Every customer buys on a cycle. So this means you should track cycle times and variance to increase the accuracy of your forecasting and the loyalty of your customers.  If you don’t know when your customers need to reorder, then you may just lose them when the time comes for them to reorder.
3. Increase Your Sales Cycle Efficiency.
   There is an old sales adage that time kills deals.  The speed at which each prospect converts into a customer and the number of prospects required for conversion determines your sales cycle efficiency.  So ask yourself – are you taking the right steps to measure and reduce lost sales?
4. Improve Your Follow-up.
   Only about two percent (2%) of sales occur on the first contact.  Eighty percent (80%) of your sales will require five to eight contacts or touches of some type before you close the sale.  In other words, if you are contacting the prospect less than five times or more than eight times, then you could have a problem with follow-up in your sales process.
5. Increase Your Company’s Awareness.
   To keep the sales pipeline full of good quality leads you must continuously increase the awareness of your company and the solutions that it provides. Public relations is more efficient at building awareness than advertising, yet many companies spend wildly on advertising and trade shows while neglecting to fund public relations efforts. Increase your name recognition, not your budget.  Use more cost effective public relations.
6. Improve Your Lead Quality.
   Do you have methods in place to measure the conversion potential of each lead?  Lead qualification activities should pre-qualify every lead to ensure you take the right follow-up actions for the marketing offer. Strong leads produce strong sales.
7. Develop Your Lead Generation Process.
   Lead generation is a process, not an event.  So you need to ensure that you have a regular stream of article publishing (blog) activities occurring.  In today’s web 2.0 connected world, you should be using social media sites like Twitter, Facebook, or LinkedIn to increase your exposure and connect to your community.
8. Reduce Your Sales Discounting.
   Discounts represent deficiencies in your sales & marketing processes, which means you should be careful how often you discount. Instead, look for the root cause of your sales or marketing deficiency and you will reduce the need to discount. Customers believe opportunity costs outweigh operating costs. If you show your customers your value (more marketing), they won’t focus so much on price.
9. Train Your Sales and Marketing Personnel.
   Provide your sales and marketing people with more regular formal training.  Arming them with better product knowledge, as well as presentation, negotiation and selling skills, will improve their effectiveness and boost both employee morale and your bottom line – a win-win for everybody.
10. Understand the Problem You are Solving.
    Know what problem you are solving (as the customer sees it) to create an accurate value proposition.  Don’t pretend to understand the customer… ask them.  Obtain the voice of the customer through interviews, focus groups, and real two-way communication.  Ask probing questions to ensure that you have an accurate definition of your product.  Remember, a product encompasses everything that customers experience, including all the people the customer comes in contact with to make up the experience itself.

Proactive vs. Reactive Customer Focus

Focus only on your customer and you may develop a reactive focus.  Your customer’s customer provides you with information that can increase your reaction time and move you to a more proactive focus (Figure 2.).  Why?  Think about your customer’s changing needs.  Why are they changing?  If only you knew what your customer knew, then you could plan for the change before your customer even tells you about it.

Figure 2. Proactive vs. Reactive Customer Focus

For example, when you shop at the supermarket, the checkout person scans your items into the register for your total, but the register also transmits the data to various vendors for automatic replenishment.  This is one form of vendor managed inventory that allows companies like Proctor and Gamble to sync their production with the end-user (their customer’s customer).

This technique works for any company in the entire supply chain.  You can improve the effectiveness of your whole supply chain by linking the companies together to share information and improve customer satisfaction.  How familiar are you with your customer’s customer?

There is “effective” communication—the kind that happens when one person says something and the other person understands and acts accordingly. Then there’s just talking and talking and never getting your point across, resulting in discontented colleagues and lack of project realization. There’s also talking and talking until your point changes completely, resulting in utter confusion and rework. The latter two equal waste (i.e., lost time and money). And I bet you can probably name one or two people in the office who fall glaringly into each category. But what about you?

Image by Smile My Day

Do you have clear communication channels with your employees? Your suppliers? How about your customers? You may be tempted to say yes, but when was the last time a project went over budget, or the paper company shipped you the wrong stock, or—hello—you processed a returned order? Look in the mirror, buddy, because clearly, you had a communication breakdown. I’m not saying it’s always on your end, but if there’s a pattern of these breakdowns, there’s also a common denominator.

It’s easy to “correct” these breakdowns. Discuss your employees’ lack of time management skills. Return the shipment of paper. Refund the customer’s money. Easy, right? But that doesn’t solve the problem. Those are simple corrections. Corrective actions—or digging to find the root cause of problems and then correcting them—are the right avenue (nice blog post on understanding root cause). But then you have to actually communicate the results to make sure it doesn’t happen again.

It’s all about communication, both internally to your employees, and externally to your customers and suppliers. Your system should reflect that.

What are your ideas for increasing the effectiveness of business communication? I’d love to hear your stories.

We’ve made several web-related changes at Bizmanualz in the last few weeks. Some are subtle while others are more pronounced. These changes are based on direct customer feedback or as a result of our effort to make the shopping experience more convenient.

The first change we made was to add download option. In the past, customers would have to call us to setup a download if they purchased one of our policies and procedures manuals. But now, that option is available right on the product pages. And, depending on customer response, we plan to add that functionality to our management procedures series in the near future as well.

The second change is not directly on the Bizmanualz website. Earlier this month we launched a Spanish website, to make the shopping experience friendlier for our Spanish speaking customers. The new Spanish website – www.politicasyprocedimientos.com – showcases our products in Spanish – Manual del Empleado and ISO 22000 Seguridad de los Alimentos.

We also added the latest book from Steve Page, an acclaimed policies and procedures expert. Writing Exceptional Policies and Procedures helps you create in-depth and practical policies and procedures that are easy-to-read, clear, consistent, and require minimal training.

As always, the idea is to add small improvements one step at a time with an aim to continually improve. The primary goal is to meet or exceed customer expectations. If you have any suggestions or ideas for improvement we’ll be happy to note and look into them.

This is exciting! We are putting our Social Media presence to test. The last couple of weeks we’ve been blogging about our successful ISO 9001 audit. Yesterday we got our ISO 9001 registration number and certificate. Bizmanualz is officially an ISO 9001:2008 Certified Company!

We’d obviously like to promote our ISO certification in various ways, including our product covers. After much deliberations, we’ve settled on an emblem signifying our ISO registraiton. Now we need your help to figure out which placement of the emblem on our product cover makes more sense. Here are two cover images, the first one (A) with the emblem placed right next to the Bizmanualz log. The second one (B) has the emblem placed on the right of the main image.

We’d like your feedback on which placement looks better. Please click on the poll that follows the pictures to give your opinions. We greatly appreciate your feedback.

Update 4/15/09:
This is great! The results are very encouraging. Along with the votes, we also got an excellent suggestion about using a golden starburst to house the ISO Certification emblem (gold stands out on the blue) and placing it next to the main image. Everyone here loved the new emblem and I’m presenting the new cover here as Cover C.

We are doing some rework of web page content here at Bizmanualz. One thing we try to be consciously aware of is not filling our web pages with “we.”

We all like to talk about ourselves, even in business contexts, like how much expertise and experience we have. And we like to talk about our product’s great features.

But that is not usually the main thing customers want to know. What they really want to know is how it helps them. So whether you are writing web pages, product brochures, or sales sheets, minimize talking about yourself. Plus, when you talk about your product, focus more on how the product will benefit the reader and less on the technical features of the product.

For example, if you produce a cordless drill, it may be appropriate to mention that you have been manufacturing drills for 50 years, but it should not be the primary focus. Also, telling potential customers the drill has a 24 volt nickel-cadmium battery and a titanium case may be great, but it would probably be more meaningful if you tell them it will hold a charge for eight hours of drilling and stand up to the roughest use.

Experienced sales copy writers seem to agree. It is okay to tell customers about yourself and to list product features. But first tell them exactly how these things will benefit them.

Lean is a journey.  Most companies start the lean journey with something simple like a 5-S program and then move on to more difficult lean tools like analyzing your value streams and then eventually reorganizing your whole supply chain.  This is all great stuff but when are you done?

You are just getting started in lean once you have “leaned out” your supply chain.  Now don’t get me wrong this is no small accomplishment.  An organization may take 10 years or more to get to this point.  But implementing lean tools, advancing lean thinking throughout your organization and starting to get your suppliers and customer to act lean is just the beginning.

Most of what you see in lean implementation affects manufacturing or production operations.  To really drive lean home you have to get into design, development and engineering using agile development methods, concurrent engineering, or perhaps critical chain from theory of constraints.  What’s next?

How about talking to accounting about your costing methods, how financial statements are used in developing management profitability metrics, and of course budgeting.  Implementing lean accounting will get management to “see the waste”.  In lean, inventory is considered a liability but accounting sees it as an asset.  Everyone wants to see a profitable business, yet profit is an accounting number.  We pay employees and suppliers in cash not profit.   Cash flow is everything!  Your absorption rules (depreciation, accounts receivable, and inventory) need to be examined to understand their influence on management decisions and budgets.  This is heady stuff for non-accountants.  But wait, there’s more on the lean journey…

How about sales and marketing?  Do you think there is any waste there?  You bet, there is a lot of waste in your sales forecasting, sales cycle, and your  sales conversion on your sales calls.  But wait, did you ever stop and think that your customer service operation is mainly a waste handling operation.  After all, if the customer got what they wanted the first time, would they need to call your customer service to complain about there bill, ask for technical support, or to place an order because your website is so confusing?  But let’s not forget marketing.  You know the old saying – half your marketing is wasted only you don’t know which half.  Yes there is a lot of waste in sales and marketing operations.  What’s next?

Lean strategy is what we arrive at when we have leaned out the organization because lean strategy is about taking advantage of all of that capacity that we are releasing and putting it to good use.  How do we do that?  By finding new markets, new uses for your products, and new customers bonded to your forward looking products.  Strategy is about vision, driving your competitive advantage that lean has sharpened, and using quality’s sharp edge to slice the competition into pieces.  If you terrorize your competition with quality then you have the weapons of the future that your competitors will have a hard time fighting.  A lean strategy is a circle acting as both the beginning and the end of your lean journey.

This post is about effective deployment of Voice of the Customer (VOC), quality-speak for taking action to reflect what your customers want in your products and communications. This is a continuation of yesterday’s post. Yesterday, Company ‘A’ failed to adjust its product offering and marketing messages to match customers’ desires, and suffered for it. Today, Company ‘B’ gets it right.

When Company B got its foot in the door of some big-time potential accounts, it heard what customers said, and reflected those perceptions of value in its product offering.  Company B took action to sell what customers wanted right away, and then set out to increase the value of their services over time as their customers came to trust them. 

Company B also listened to the language that potential clients used to talk about their problems, and then employed that language when describing their services.  Company B took to heart what it learned in half a dozen customer interviews to focus its product development and marketing message on recognized benefits.

As the selling proposition shifted to incorporate the voice of the customer, potential clients quickly recognized the value of the service that Company B offered.  They could get exactly what they wanted and needed from Company B, and they were willing to pay for it.  More and more frequently, when Company B got their foot in the door, they settled in for a nice long stay.

 Listen to Customers, Sell More of What Customers Are Buying

When interviewing our client’s customers, we listen for what they value. We listen for what they are paying for today. Then we help customers focus their product development resources on what they can sell today. With increased sales, we can help our clients build organizations that deliver value consistently, thus building trust with their customers. Trust is a solid platform on which to deliver increasingly valuable and unique services, thus achieving our strategy. Without first building trust, strategy is simply an aspiration with no concrete steps.

Truly hearing the voice of the customer means reflecting back to them in your own language what customers truly value. Adjusting your products to provide that value demonstrates that you are truly listening.

Company A’s corporate customers thought they were buying the time of skilled installers and customer service troubleshooters on demand. In an effort to be different from its competitors who also sold skilled labor hours, Company A offered additional benefits that its skilled workers brought to the table such as cross-training and process improvement.

At first, “differentiating” the marketing message seemed like a good idea.  Essentially, Company A was offering higher levels of service that it said would help customers improve operations and save money. But when interviewed, customers didn’t seem to get it. They resisted the idea that contract hires were in a position to influence substantial changes in business practices within their companies. Instead customers said they would rather pay less and get just the services they valued.

But customers did say that Company A provided rapid availability of highly skilled, highly specialized technicians. And they would even pay a little more for what they perceived as consistent well-managed delivery of the right skills at the right time.

But Company A was unwilling to change its story. Rather it persisted in a story that was out of sync with the voice of their customer. Company A failed to separate its aspirations for the future with the current perceptions of its paying customers. But you can only ignore the voice of the customer for a time.

When the recession hit a few months later and corporations sought to cut expenses, services they did not immediately value were hard to justify, and easy targets. As a result, Company A lost several customers and a double-digit percent of its revenue.

Tomorrow, read about Company B.  Because sometimes, listening means changing your story.