Entice Nervous Buyers With Added Value
Even in an uncertain economy, you can still get prospects to spend money on your business.
Q: I'm in IT contract staffing, and lately the IT industry has really been struggling. I'm trying to prospect for new customers, but they want to be called when things pick up, not before. I would love to call on these prospects and offer to bring some sort of value to their day along with my service, but I don't know how. Any ideas?
A: It's not just the IT industry--the "perched-pen" syndrome is showing up everywhere. Here are a few tips on finding ways to add value to your prospects and customers' businesses while the economy gets back on its feet.
Take a serious look at the way your existing customers are using your products, services and solutions and ask yourself if you can impact one or more of the following areas:
- Return on Sales (ROS): This simply refers to the amount
of net income expressed as a percentage of revenues. If sales
increase, and expenses related to sales stay the same, then ROS
increases. If sales are flat, and expenses related to sales go
down, then ROS decreases.
Organizations can increase ROS by employing one or more of the following strategies:
· Increase prices.
· Control the cost of raw materials.
· Increase the effectiveness and efficiencies of the sales force.
· Reduce salaries and other expenses.
· Cut cycle time.
- Return on Knowledge (ROK): This is harder to measure at
times, but just as important as ROS.
About 80 percent of today's employees are knowledge-based workers, and organizations spend somewhere around 15 percent of their company's revenues in direct support of these knowledge-based workers. Anything that eats up 15 cents on the dollar is considered a big deal.
It stands to reason that anything that can be done to get a greater return on the output of knowledge-based workers (that is, make people more efficient or allow them to get information more quickly or accurately) is likely to get top-of-mind focus from your prospects.
- Net Working Capital (NWC): It takes cash to run any
organization. There are a lot of ways to get this cash; some are
more attractive than others.
I'll assume here for a minute that you're not a banker or a venture capitalist. Given that, the very best way for you to help your prospect's organization generate cash is to find a way to compress their accounts-receivables file. In other words, find a way to help your customers collect their money more quickly.
If your ideas can help reduce time-to-collection periods, and if those ideas can be sustained over a long period of time, you'll have a positive impact on NWC, and that, in turn, will enhance the company's value. If it's a publicly held company, you'll be enhancing shareholder value.
Now ask yourself: Can my products, services and solutions create ROS, ROK or NWC? If so, make sure you can articulate your ideas in a way that your prospects can easily understand.
The bottom line? Begin to find ways to create greater value to your prospect's top, middle and bottom lines, and you'll get them to do business with you faster than you would have ever imagined.
Tony Parinello is the author of the bestselling book Selling to VITO, the Very Important Top Officer. For additional information on his speeches and his newest book, Secrets of VITO, call (800) 777-VITO or visit www.sellingtovito.com.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.
Tony Parinello has become the nation's foremost expert on executive-level selling. He's also the author of the bestselling book bearing the name of his sales training program,Getting to VITO, the Very Important Top Officer, 10 Steps to VITO's Office,as well as the host of Club VITO, a weekly live internet broadcast.