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Strategic Guidance to Build Your Business
Volume 3, Issue 2, November 2008

"The Business Builder" is brought to you by VSA, Inc. in collaboration with Rink Consulting. VSA, Inc., founded by Valerie Schlitt, builds and implements B2B prospecting programs for businesses and professional service firms. VSA has a team of professional telephone callers who open doors to new business opportunities for VSA clients. Linda Rink, president of Rink Consulting, specializes in B2B and consumer marketing and research. Both Wharton MBA graduates, Valerie and Linda often team together to help clients identify and reach new customers. In this newsletter, they share some of their business development insights.
In Today's Economy, It's All About Cost Savings
by Valerie Schlitt, President of VSA, Inc.
Valerie Schlitt photo

I have a nugget to share with all of you. This nugget can help you prospect and sell in today's downward economy, especially in the B2B world.

At an October meeting of a regional marketing association, a high-level economic analyst was the presenter.

After his lengthy and detailed remarks, someone asked, "So, what does this mean for the marketing industry?"

Here's the nugget.

He said that the most successful companies will be those who position their products and services to help their clients cut costs. He also said that the most effective companies would probably be those with well-substantiated arguments to support their selling proposition.*

*I have taken some liberties in paraphrasing his response, which was purely his opinion and not based on economic research.

What does this "nugget" mean to cold calling?

Anyone who has ever cold called knows that we have 20-30 seconds--tops--to capture someone's attention.

If today's companies are concerned about expenses, they will listen more closely if our messages involve cost-cutting themes.

Equally important, we need to be ready to demonstrate and quantify our money-saving promises.

In today's world, it's all about expense reduction.

Some hypothetical examples

If you are a software development firm, you should:

  • Stop saying how you help clients prepare for future growth
  • And start promising a system that works faster and more cheaply than the manual process
If you are a speech trainer, you need to:
  • Stop promising to help your clients connect better with the audience
  • And instead say you help clients reduce marketing expenses by relying less on expensive advertising and attracting new clients through their own speaking skills
What about substantiation?

It's important to quantify whatever promise we want to make. Let's take the speech training company. That organization could offer the following points:
  • 95% of our clients have built their customer base almost solely by speaking in public
  • 50% of our clients get paid speaking engagements in the first 6 months of working with us
  • We have trained 2 of the 10 highest paid speakers in the printing industry
  • Our clients say that speaking engagements are 100% more effective in attracting new clients than direct mail and e-blasts combined.
Of course those are just examples. But listening to them, you see how credible you become with quantitative examples.

Conclusion

Cold calling continues to work in today's economic environment. It's the old messages that no longer work. In this downward economy, we all need to show how we can save our business prospects money, using facts and data. Then, prospects will listen! And buy!
Risk Management
by Linda Rink, President of RINK Consulting


Valerie shares some great "nuggets" in her article this month about demonstrating cost savings to potential customers.

Let's talk about how research can produce cost savings for you. What? How can that be, you say--conducting research costs money. But look at the cost/benefit ratio: the value of the information almost always outweighs the cost of obtaining it. It helps if you look at it in terms of risk management rather than cost savings.

Research as part of RISK MANAGEMENT

Simply put, research reduces risk--and can therefore save you significant dollars by enabling you to make smarter decisions. Most of us operate in a competitive, constantly-changing marketplace. Change is inherently risky, but keeping up with change is the only option we have if we want to stay in business long-term.

What is the cost penalty of not keeping up with change? Or of making the wrong strategic decision? It's impossible to quantify for such a general audience, but one thing is certain: Reducing risk is about more than just saving money (although that's very important!)

Reducing risk is also about:

  • Not wasting time.
  • Conserving resources.
  • Preserving your reputation.
  • Protecting your market position--and growing it.
  • Building employee morale.
  • Satisfying shareholders.
  • Finding dependable suppliers.
  • Keeping clients happy and loyal.
  • Knowing who your best prospects are, and what motivates them.

Having the right information is essential in all these areas.

Let me give you an example

In an MIT Sloan Management Review article on new product failure rates, Susumu Ogawa and Frank T. Piller state:

"New products suffer from notoriously high failure rates. Many new products fail, not because of technical shortcomings, but because they simply have no market. Not surprisingly, then, studies have found that timely and reliable knowledge about customer preferences and requirements is the single most important area of information necessary for product development"

(Susumu Ogawa & Frank T. Piller, "Reducing the Risks of New Product Development," MIT Sloan Management Review, Winter 2006, Vol. 47, No. 2, pp. 65-71.)

Let's assume you are developing a new product or service for your business.

  • What if you overestimated market demand?
  • What if you didn't understand your target market?
  • What if your product didn't deliver on customer expectations?
  • What if you didn't know what your competitors were doing?

Your risk factors would increase significantly. Research cannot eliminate risk. But if done properly, it will reduce it.

That's what we call risk management.

RINK Consulting
1420 Locust Street, Suite 31N
Philadelphia, PA 19102
215-546-5863
lrink@lindarink.com
www.lindarink.com
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Here is the survey link:

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