Entice Nervous Buyers With Added Value
Even in an uncertain economy, you can still get prospects to spend money on your business.
Opinions expressed by Entrepreneur contributors are their own.
Q:I'm in IT contract staffing, and lately the IT industry hasreally been struggling. I'm trying to prospect for newcustomers, but they want to be called when things pick up, notbefore. I would love to call on these prospects and offer to bringsome sort of value to their day along with my service, but Idon'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 findingways to add value to your prospects and customers' businesseswhile the economy gets back on its feet.
Take a serious look at the way your existing customers are usingyour products, services and solutions and ask yourself if you canimpact one or more of the following areas:
- Return on Sales (ROS): This simply refers to the amountof net income expressed as a percentage of revenues. If salesincrease, and expenses related to sales stay the same, then ROSincreases. If sales are flat, and expenses related to sales godown, then ROS decreases.
Organizations can increase ROS by employing one or more of thefollowing strategies:
· Increase prices.
· Control the cost of raw materials.
· Increase the effectiveness and efficiencies of thesales force.
· Reduce salaries and other expenses.
· Cut cycle time.
- Return on Knowledge (ROK): This is harder to measure attimes, but just as important as ROS.
About 80 percent of today's employees are knowledge-basedworkers, and organizations spend somewhere around 15 percent oftheir company's revenues in direct support of theseknowledge-based workers. Anything that eats up 15 cents on thedollar is considered a big deal.
It stands to reason that anything that can be done to get agreater return on the output of knowledge-based workers (that is,make people more efficient or allow them to get information morequickly or accurately) is likely to get top-of-mind focus from yourprospects.
- Net Working Capital (NWC): It takes cash to run anyorganization. There are a lot of ways to get this cash; some aremore attractive than others.
I'll assume here for a minute that you're not a bankeror a venture capitalist. Given that, the very best way for you tohelp your prospect's organization generate cash is to find away to compress their accounts-receivables file. In other words,find a way to help your customers collect their money morequickly.
If your ideas can help reduce time-to-collection periods, and ifthose ideas can be sustained over a long period of time, you'llhave a positive impact on NWC, and that, in turn, will enhance thecompany's value. If it's a publicly held company,you'll be enhancing shareholder value.
Now ask yourself: Can my products, services and solutions createROS, ROK or NWC? If so, make sure you can articulate your ideas ina way that your prospects can easily understand.
The bottom line? Begin to find ways to create greater value toyour prospect's top, middle and bottom lines, and you'llget them to do business with you faster than you would have everimagined.
Tony Parinello is the author of the bestselling book Selling to VITO, the Very Important TopOfficer. For additional information on his speeches and hisnewest book, Secrets of VITO, call (800) 777-VITO orvisit www.sellingtovito.com.
The opinions expressed in this column are thoseof the author, not of Entrepreneur.com. All answers are intended tobe general in nature, without regard to specific geographical areasor circumstances, and should only be relied upon after consultingan appropriate expert, such as an attorney oraccountant.