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Strategic Guidance to Build Your Business
Volume 5, Issue 2, November 2010

"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.

Why I Bought From Cold Callers
by Valerie Schlitt, President of VSA, Inc.
Valerie Schlitt photo


I purchased three items from cold callers in the past six months. I almost purchased more.

Here are the items I purchased:

  • Headsets (8 at $250 each)
  • Temporary Staffing Services
  • Toner Cartridges (1 at $200)
Here are the items I almost purchased:
  • A predictive dialer (multiple thousand dollars)
  • Top placement Google ($250/month)
  • Salesforce.com ($60/seat/month)
Of course I get lots of cold calls, but these 6 items are those I seriously considered from a cold caller.

Why I considered purchasing from the cold caller:

Pre-existing Need
In all cases, I had a pre-existing need, and had already begun thinking about purchasing the items. I hadn't yet started shopping. So, when the cold caller contacted me, I was ready to listen.

Established a Bond
In the case of the temporary staffing agency, the cold caller established a bond with me immediately. She was a woman, sounded about my age and lived in my town. We had a lot in common.

Establishing a bond is critical in cold calling. While the staffing firm's bond was unique, I felt comfortable with all of these cold callers. They were all professional and friendly.

Clear Benefit to Me
In each case, the cold caller provided a strong value proposition that I could understand immediately.
  • Cost savings
  • Best quality
  • Flexibility, responsiveness
  • Knowledge, support, consultation I couldn't get elsewhere
Repeat Calls and Emails
In several cases, the cold caller pursued my business over multiple months, with call-backs exactly when I requested them. Never did the cold caller sound exasperated when I told them I needed more time and they should call back 4 months later.

Lack of fit: That's why I didn't purchase from 3 cold callers

Yes, I purchased from 3 cold callers. But, what about the 3 cold callers I didn't buy from?

Here's the interesting part.

In fact, in all 6 cases I ended up making a purchase. I just didn't buy from the cold caller in 3 cases. I found a better fit elsewhere.

But, these callers prompted me to buy about
2 - 3 months earlier than I would normally have done so.

How I translate my personal experience to my business:
My personal experience serves to reinforce these key mantras of cold calling:
  • The list is the most important predictor of success. Target prospects who are likely to need your product or service.
  • It's often a numbers game. If you know some percentage will need your service, keep calling until you find them.
  • When you talk, sound professional
  • Establish a rapport with each prospect. Make them feel comfortable with you.
  • Have a very quick way of communicating "what's in it for them."
  • Be persistent. Follow-up. Send emails and make calls. Stay top of mind.
  • When they don't purchase, don't consider yourself a failure. Maybe there wasn't a strong enough fit. You may well have succeeded in encouraging your prospect to make a purchase.
  • Most important: Take risks. Don't worry about being rejected. If you have all of the above ingredients, you'll find someone who will buy from you.
And that's how my personal experience reinforced that cold calling works!

The Cost of a Bad Decision
by Linda Rink, President of RINK Consulting
Linda Rink Photo


Do you have some important business initiatives planned for next year?

  • Perhaps you want to launch a new service or product idea in 2011, but you're not sure if it's quite ready yet. You need to do some more homework: talk to prospects, check out competition, identify some suppliers.
  • You plan to update your marketing tactics--start a newsletter, revamp your website, launch a direct mail campaign--and need input from customers or prospects first.
  • Or you'd like to broaden your base of target prospects, but are unsure of how to define them and reach them.
November is not too early to start work on your 2011 business and marketing plan. That includes fleshing out your marketing research budget. Do you know how much to budget for research?

Here are some guidelines for market research budgeting :
If you aren't sure exactly what research you will need, you can base the annual research budget on a percentage of gross sales. Be sure to calculate research costs as a percent of next year's forecasted gross sales.
  • The Small Business Administration recommends setting a research budget of about 2 percent of gross sales for an existing business. This assumes, however, that you have been doing ongoing research to keep up with market trends, customer needs, and so on.
  • If you have not done research recently, you will need to increase that percent significantly in order to play "catch-up." And if you are launching a new product or business, upfront research can be as high as 10% of gross sales or more.
But a better way to budget is to look at research requirements, project by project. If you know the types of research you will be doing, you can do a much better job of estimating expenses.
  • For each initiative, list the kinds of information you need: industry statistics? A competitive review? Customer feedback? A prospect list?
  • Then think about the various ways to obtain that information: from published articles? Government websites? Phone interviews with customers? An online survey?
  • Finally, identify what you think you can do in-house and what will be out-sourced to a market research company. If necessary, call around to get cost ranges.
You should also consider the financial impact of your planned initiatives. Ask yourself how much is at stake? What is the upside potential if everything goes according to plan? Or how much would you lose if you made a bad decision?

What's the cost of a bad decision?
Easier asked than answered, because it depends on any number of factors, including:
  • The size of your market. The larger the market, the greater the upside (and downside) potential.
  • What actions you take: nothing (you don't launch the new service) or a move in the wrong direction (you launch it and it bombs).
  • How much money and other resources (time, personnel) you have already spent or will spend on the product/ service/ issue.
  • What your competition is doing in the meantime.
It may not be possible to calculate the cost of a potential bad decision, but it is important to understand the magnitude of what's at stake. And what better time than when you are developing your plan and budget for next year?

Remember, research cannot guarantee that you will always make correct decisions. But if done properly, it will increase the likelihood that you will. That's why smart businesses always include an adequate provision for research in their annual marketing budget. Because sometimes the cost of a bad decision is just too high.

RINK Consulting
1420 Locust Street, Suite 31N
Philadelphia, PA 19102
215-546-5863
[email protected]
www.lindarink.com

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