If you saw the 1989 Kevin Costner movie “Field Dreams”, you will recall the ghostly proclamation “Build it and they will come”. If you haven’t, you really should see the movie. It is one of my top 10 all time favorites.

Unfortunately, the ‘build it and they will come’ mentality has become the sales and marketing strategy of far too many small businesses.

Most small businesses initially develop their client base from friends, family and business associates. They then rely on referrals from this core group to expand their sales. This is an effective initial approach to developing a customer base, but eventually the referrals begin to dry up. Sales flatten out or even begin to decline. The customer base dwindles as customers go out of business or are courted away by the competition.

The business has been built, but they (customers) have stopped coming.

Even in the best of times, companies need to be proactive in their approach to sales and marketing. In the present economy, word of mouth isn’t sufficient. With reduced opportunities and increased competition, only those that aggressively market and sell their products and services will survive.

But before you rush off to pound on doors, you need to step back and take stock of your business.

WHAT KIND OF BUSINESS ARE YOU?

Easy question? The typical response is I am a plumbing contractor or we are a plastics fabricator. Those are the products or services you produce. But is that the type of company you are? No, not really.

Regardless if they admit it or not, all companies are sales companies. That includes your company. Without sales, it doesn’t matter whether you are the best plumber or plastics fabricator in town. The business cannot endure without sales.

This is the first change in mind set that has to occur. First and foremost you are a sales company. Sales cannot be allowed to just happen. Selling has to be a prime activity in the business.

So what kind of company are you? A SALES COMPANY

WHAT DO YOU SELL?

Seems like another easy question. Most business owners would quickly rattle off the specific products or services they sell. But is that what they really sell? No. There are actually three components or elements to every sale: Quality, Service, and Price. And the kicker is you only can sell two out of the three. It is impossible to sell all three and be profitable. You can sell the best quality with superior service. You can sell the best quality at the lowest price. You can sell superior service at the lowest price. But you can’t sell the best quality with superior service at the lowest price.

Many of my clients claim to be selling the highest quality and the best service at a price comparable or lower than their competitors. Is there any wonder why they require consulting assistance?

Take McDonald’s for example, what do they sell? Service and price – an inexpensive meal served quickly. Don’t get me wrong. I like McDonald’s. Nothing hits the spot like a McDonald’s double cheese burger. But their business model is not based on selling you the best burger you ever ate.

Let’s look a little more closely at these three components.

Price

Price is the easiest component to sell. It is said that any fool can sell price. And this is basically true. Selling price is like playing that old game show, “Name That Tune”. The fewer the notes (or the lower price) it takes to name the tune (make the sale), the better are your changes of winning.

Now there is nothing wrong with being the low cost provider. You must recognize the fact that customers driven by price will quickly move to your competitor if your competitor offers a lower price. Price does not always breed customer loyalty.

If you choose price as one of your selling components, you must be able to match or better your competitor’s price and you will have to reduce the quality or service in order to do so.

Quality

During the quality movement of the 1980’s and 1990’s, it was frequently claimed that “quality is free”. Whereas I do agree that there are various means to increase the quality of products and services which do not add to the cost of production, I disagree that quality is free. There is a cost associated with continuously providing quality superior to the competitors. Better quality materials typically cost more. State of the art equipment and highly trained workers, also are generally more costly.

If you choose to sell based on quality, you have to be able to define and demonstrate this difference to your customers and potential customers. What makes your quality superior?

While in college, I attended a bid opening on behalf of my uncle’s sporting goods company. The company was bidding on the uniforms and equipment for the youth baseball league in the town where I was attending school. I had worked in the company throughout high school and college, so I had a good understanding of all of the items contained in the bid. We were the highest of the three bidders invited to the bid opening. After reviewing the bid item by item, we were awarded the contract because I was able to demonstrate the superior construction and durability of the items contained in our bid.

The town was willing to pay more for the items once they understood the differences and the benefits they would derive. Your customers will be willing to pay more for quality too, as long as you take the time to educate them.

Service

Service is in the eye of the beholder and can take a variety of forms. For a retail establishment it could mean, evening and weekend hours of operation. For a contractor, it could mean on time completion. For any business, it could mean quick response to inquiries or the knowledge and courtesy of the staff.

If you choose service as one of your two components, you have to be able to quantify it. Choose performance measurements that you can easily track, such as on time delivery and incorporate those measurements into your company’s culture. Everyone has to be committed to meeting or exceeding the service standards you establish.

When it comes to service you have to be careful what you promise. If you can’t consistently delivery on the level of service to which you commit, your customers will view you service negatively even if your overall service still surpasses the competition.

In the late 1970’s, I was living on Long Island. There was a large savings bank that decided to make a foray into commercial banking and decided to take on the largest commercial bank in the area. The savings bank decided to offer better service to customers than the commercial bank. Now this is prior to on-line banking and when ATM’s were a novelty. The commercial bank’s commitment was to respond to all account inquiries by the end of the business day. The savings bank committed to respond to all inquiries within 3 hours. This commitment to service worked as a marketing strategy. The savings bank successfully courted hundreds, if not thousands, of customers from their competitor. Unfortunately, it couldn’t routinely deliver on its service commitment. Account inquiries were not being responded to within the three hour window. It wasn’t long before, the customers the saving bank had gained returned to the commercial bank. Even though its average response time to account inquiries was still far superior, the savings bank had created the perception of poor service by not meeting its own self imposed standards. Eventually, the savings bank dwindled in size and was easily “gobbled up” by the commercial bank.

Remember: When it comes to service, it is always better to under promise and over deliver.

WHERE DO SALES COME FROM?

There are only three sources of additional sales.

1) Existing customers – can you sell more to your customers than you currently are.

2) New entries into the market place – Have new potential customers moved into your market.

3) Your Competitions customers – if they aren’t buying from you they are buying from someone else.

You have to decide which of these opportunities exist for you and establish a plan to take advantage of these opportunities.

Your current customers may be the best and easiest source of new sales. You already have an established relationship and they have knowledge of your capabilities. Are there other products or service you could be providing them?

Your competitors’ customers are also a good source of additional sales. Unless you have a monopoly, there are potential customers in your area buying the same or similar products and services from other providers. These potential customers are fair game. You have to have a good understanding of what your competitor is selling, however, to effectively court these potential customers.

New entries to the marketplace may be a rather limited opportunity in the current economy. But larger companies are still relocating to new areas to take advantage of cost savings and small business are still “opening their doors” everyday. To take advantage of these new opportunities you have to maintain an awareness of what is going on in your marketplace.

Now that you know what kind of company you are, a SALES COMPANY, what you really are selling, and where customers come from, it is time to look a little more deeply at your company.

You need to examine your company, your customers, and your competitors.

YOUR COMPANY

Very few of my clients sit down and take the time to evaluate business. If you don’t know what you do well, where you could improve or the factors in the marketplace that could affect your business, you are less likely to be able to market your business and take advantage of opportunities that exist.

You should perform a S.W.O.T. analysis of your company. S.W.O.T. stands for Strengths, Weaknesses, Opportunities and Threats. Strengths and Weaknesses are internal factors. Opportunities and Threats are external factors. Strengths and weaknesses should be in reference to the competition.

The beauty of a S.W.O.T. analysis is the ease of conducting. You merely split a page or a whiteboard into quadrants as pictured below.

List your strengths, weaknesses, opportunities and threats in the respective quadrants. Be as specific as possible. Often my clients list “our people” as strength. What about these people that is your strength? Is it their training? Is it their experience?

Here are some examples:

Strengths

• Years experience in the business
• Most current technology

Weaknesses

• Poor name recognition
• Lack of Internet presence

Opportunities

• Expanding geographic area.
• Offering new products or services

Threats

• Increased competition
• Shortage of qualified labor

When conducting S.W.O.T., I have found it best to include as many employees as possible. Not only will offer an expanded prospective of your business, they will also be more willing to accept the changes required by including them in the process.

Once the analysis is completed you need to develop action plans for how you will communicate your strengths, what actions are required to reduce or eliminate your weaknesses, what needs to be done to take advantage of the opportunities you have identified, what can be done to minimize the impact of threats.

Sometimes you can use a strength to offset a weakness. A while back, I did a project for a General Contractor. There were two partners with extensive experience in the industry, but their company had only been in business a few years. They had develop a nice little business but we having problems increasing sales because they weren't well known in the market. One of their strength was over 50 years of project management. One of their weakness was name recognition. By including their combined experience in all of their marketing material, prospective customers began to take more notice of them and consider them as qualified providers.

YOUR CUSTOMERS

Who are your customers? I often hear - anyone who will pay for our products or services. This may be true, but you need to be more specific. You need to develop a customer profile. What are the common attributes that your current customers share. Where are they located? What is their average household income or age group, if residential. What size company? What are their buying tendencies? The more you can detail about your customers, especially your repeat customers, the better able you are to target prospective customers.

YOUR COMPETITION

Who are your competitors? Want is your competition? They are different. Your competitors are companies against which you sell the same products or services. Competition is alternative products or services that compete against your products or services. For example, you sell carpeting and wood flooring. You compete directly against other companies that sell carpet and wood flooring products. You also compete against other flooring products such as tile or vinyl.

Just like with your customers, you need to develop competitor profiles. What do they do well? What do they sell - price, service, quality? Do they compete across all market segments?

The better you know your competition, the better able you are to compete against them.

Now, it may take time for you to develop customer and competitor profiles, but you should initiate the process as soon as you can and be diligent in keeping these profiles up to date.

Now, you are probably thinking that I referenced sales early in this hub, but have yet to say anything about selling. There is a good reason. Until you have gone through the exercises above, you really aren't in a position to effectively sell. You may be selling price but your customers are all high end and are more interested in quality. You may be missing opportunities because prospective customers do not know your capabilities because you haven't identified your strengths. You may be unnecessarily under pricing you services because you don't understand your competition's pricing tendencies.

SO NOW LET'S TALK SALES.

Sales is a numbers game. The more opportunities you have to sell, the more sales you will make. The trick is creating a sufficient volume of opportunities to generate the sales you need.

How do yo create these opportunities?

There are several ways, but the best way is personal referrals. But you need to proactively pursue these referrals. Ask your customers directly for referrals. Call you customers and ask them to provide you with three referrals. Better yet include a questionnaire with your invoice. As part of the questionnaire, ask them to list three referrals. Using a questionnaire allows you to accumulate data on how your customers feel about your services, as well as, serving as a vehicle to solicit referrals.

Use your network to develop leads or referrals. Don't under estimate the power of networks. Everybody knows somebody. Your friends, relatives,and business associates may be able to provide with just the contacts you are looking for.

A number of years ago, I was assigned to a project at a client providing software applications to the banking and insurance industries. The business had grown solely on referrals, but those referrals had dried up and sales had been flat for the past few years. As I was leaving to travel home on a Friday. I asked the client what he was doing on Saturday morning. He mentioned he was getting his hair cut and picking up his dry cleaning. After I confirmed that the owners of both establishments would be present, I instructed my client to solicit the name of their insurance agent and their banker from each. He was a little skeptical, but I asked him to indulge me. Each of the business owners was more than willing to provide the names. We contacted the four individuals that had been provided and they provided us with six key contacts. After six more phone calls, we ended up with two meetings; one with a national insurance carrier; the other with a large regional bank. (As luck would have it, both were located in the same city - a short a relatively inexpensive airline flight away). The two meetings resulted in one sale - $300,000. The power of networking.

When soliciting contacts from your network and the network of others, make sure to be specific in the type of contact your seeking - a decision maker or influencer. Getting the name of the janitor at a prospective customer does no good - unless he can put in touch with the purchasing manager or the plant manager.

Other ways to increase your contact network and lead sources:

1. Local Networking Groups - attend sessions for multiple groups. Select the one that fits your needs best.
2. Vendors & Subcontractors - The people you buy from and the people that work with you are a good source of prospects needing the types of products or services you provide. Don't be reluctant to ask them.
3. Cold Calls - don't expect to get too much out of cold calling. Use cold calling to identify the name of the decison maker(s) you need to contact. If possible leave a packet of material behind for the contact.
4. Lead Services - these can be a good source of leads, but also can be expensive. If you decide to subscribe to one, do so on a trial basis.
5. Industry Associations - attended social functions scheduled by your trade associations or related associations. These are good opportunities to meet and develop relationships with decision makers at prospective customers.
6. Newspaper - Although newspapers are dwindling in popularity, they still are a good source of information on the local marketplace. They contain news that typical the TV and radio broadcast do not cover. If your local paper has a weekly business insert or daily business section, scan it for what is going on in your area.

Advertise - Advertising can be a costly and a somewhat risky proposition. You can spend a significant amount of money on advertising and see limited or no increase in sales. So, you should use your advertising dollars wisely.

The following are my do's and don'ts of advertising

Do's

1. If you have company vehicles, make sure they are all equipped with company signage. This is a relative inexpensive form of advertising and goes a long way to creating name recognition. Your vehicles are rolling billboards. Don't leave them blank.
2. Company apparel - Provide your employees - even office employees - with company shirts, ball caps, etc. This is another inexpensive way to get you name out.
3. If you are a contractor, the use of job signs is an ideal way to advertising. Not only do they enhance name recognition, but they also show you at work.
4. Website - a website is an ideal medium to tell your story and demonstrate your capabilities. More and more consumers, both individual and commercial, are using the Internet to locate suppliers of goods and services. A properly constructed website will lead customers to you.
5. Direct Mail campaigns- Direct mail campaigns can be effective at reaching a large number of potential customers. The rate of return is usually pretty low. I prefer postcard mailings. They are less expensive and usually are more visual distinct.
6. Email campaigns - You should accumulate email addresses from your customers and prospects. Blast email campaigns have virtual no cost and email is become the preferred means of communication.You can use email for a variety of types of communications, from announcing a sale to sending a quarterly newsletter.

There are other forms of advertising that may be appropriate for your company.

Don'ts

1. Yellow Pages - Don't spend a lot of your advertising dollars on a big multiple color ad in the Yellow Pages. A study performed earlier in the decade that 80% of the people that locate your ad in the yellow pages already know you and simply are using the the Yellow Pages to retrieve your phone number. Take out a small ad if you must.
2. Local "Shopper" & "Penny Pincher" publications - Don't use these publications for information ads like those you would place in the yellow pages. They may generate some interest, but usually not enough to warrant the cost. If you do use them, use them for specific purposes, i.e promote a special. You usually can get monthly or quarterly rates.

CLOSING THE DEAL

Now if you thought I was going to provide you with a magical method for closing a sale, you were wrong.

There are so many different approaches to selling. And each one claims to be the best. The most success approach to selling is the one that best suits your personality and the one with which you feel most comfortable.

I suggest you go to Barnes & Noble or Borders and look over the various books available on sales and selling techniques. Pick one that seems to fit your style. Take down the title and the author's name and go to your local library. You don't want to invest $20-$30 on a technique that doesn't fit you. You may need to try a few different approaches to find the one that works best.

Regardless of the technique you select, you need to be making sufficient contacts to generate the number of sales you need. If it takes 10 contacts to generate 1 sale and you need 10 sales a week to survive, than you better be making a 100 sales contacts a week. And quality contacts at that. Leaving voicemail messages to cold prospects does not count.

And don't be afraid to ask for the sale. If you have gone through the exercises above, you know what you do well, you know what you competitor has to offer and you know what you customer needs and wants.

You have built that field of dreams and you have gotten them to come take a look. Now you are ready to ask them to pay the admission charge.