“So long as new ideas are created, sales will continue to reach new highs.” – Charles Kettering
A reader, MR from South Africa, wrote in to ask a question about marketing.
He has a 13-person consulting company that provides engineering and agricultural advice to governmental and quasi-governmental agencies. They get their clients by “normal” means, including registering on service-provider rosters, scanning newspapers for tenders, sending in proposals, submitting tenders (prices are prefixed by the government, so there is no opportunity there), making presentations, and closing deals based on those presentations.
When his company goes after a job, they get it 40 percent of the time. When they are “short-listed” and get to present their proposal in person, they get the contract 100 percent of the time.
Do I have any marketing advice, he wanted to know, for a company like his that can’t use conventional marketing techniques to stimulate sales because of the tender process?
Not much. He’s doing just fine. Getting 40 percent of the jobs you go after is a very good ratio, and closing 100 percent of in-person presentations is unheard of.
But MR won’t be able to maintain that record. In fact, the more proposals he sends out, the more likely it is that his perfect closing percentage will drift down.
His overall goal should be to increase the business he does, but not at the expense of quality or profitability. Based on the success he is already enjoying, I’d guess that a slow-and-steady approach to business growth is the right strategy.
If your business is already successful – but you want to propel it toward more sales and more profits – you can follow the same recommendations I’d make for MR.
One goal you can set for your team is to become known as the best in the business for some particular quality or skill that you excel in. Figure out what that is, and then find out if your customers are as impressed by it as you are. You can do it by talking to them. It isn’t hard to do … but it’s important.
Once you have identified a saleable unique selling proposition (USP), make it a part of every communication you send out. Turn it into a tagline for your logo, and feature it prominently. Let people know why they should pick you rather than a competitor. Give them a reason to call you, to put you on their short list. (In MR’s case, it won’t be his price – government regulations prevent him from charging less – so he’ll have to find something else.)
Having a website is a must, but if it is verbose and complicated (as I suspect MR’s is), it will diminish sales growth. Revamp your website, making sure that everything about it – from the typeface to the copy to the color selection – reflects and supports your USP.
But a website is not enough. Communicate with potential clients by offering them a free e-letter that gives general advice. (MR doesn’t need more than a once-a-month communication for the kind of business he does.) Make your e-letter professional in appearance but personal in tone. It should come from the company CEO. It should sell the USP and back that up with examples and testimonials from satisfied customers.
You should also use your e-letter to keep in touch with past clients so that when they are ready to start a new project they will think of you. And encourage them to send you names and addresses of their colleagues and competitors so you can send them complimentary copies of your e-letter too.
As your reputation as a specialist grows, make speeches and give seminars. Write articles for trade journals. Get yourself interviewed. Take out small, discrete ads. Make your presence known. Make sure everybody who might one day be your client knows your name. (For MR, the idea would be to become South Africa’s number one expert in providing a unique sort of advice on rural development.)
It might pay to hire some junior marketing person to work full-time on the phone, making friends for your company and sending out free publications – anything and everything to make your company’s name pop favorably in the imagination of everyone who may one day need your services.
As I was writing this article, Andrew Gordon walked into my office. While you may know Andrew only through his articles in ETR and investment publications like The Wealth Advantage and INCOME, he has a long history in business. He’s been involved in infrastructure in Indonesia, port development in Russia, road construction in Malaysia, and environmental services in China. He’s also authored six books on the global markets. With his background, I asked him if he had any marketing advice for business-to-business companies like MR’s.
“Since MR’s company is 100 percent successful whenever they’re short-listed,” Andrew said, “it makes sense that they can increase their overall success rate by increasing their rate of getting short-listed.”
How can they do that? Andrew came up with six ideas.
1. Increase proactive marketing. Right now, it sounds like MR’s marketing is mostly reactive, responding to RFPs (requests for proposals). Identifying an opportunity before it becomes public isn’t easy. It takes a lot of legwork – but it has big advantages:
- It will help orient the RFP to your strengths/unique capabilities. If the specifications include requirements that only your company has, you may end up with no competitors. At worst, your special relationship should get you short-listed 99 percent of the time.
- You can create opportunities by finding out what your potential customers want or need through informal conversations, and then offering it to them without waiting for an RFP – again, based on your strengths and unique capabilities.
- Reaching out to your customers is always a good idea, whether you’re in business-to-business or retail.
2. Get high-level people from pertinent government agencies or business associations to champion you. The right person can give you amazing leads and support your bids/proposals through their contacts. And they can help you get invited to seminars and conferences. MR would be wise to pursue this strategy on both a national and local level.
3. Every time your company is not short-listed, you should find out why. It’s just a matter of asking. Then use this invaluable information to increase your win ratio.
It sounds like MR’s company is technically very qualified at what they do. But maybe they’re going after projects they’re not qualified for. If that’s the case, they need to do a better job of pre-qualifying. Or maybe they’re going after projects where the technical “fit” isn’t ideal but they feel they still have a shot at winning. If that’s the case, proactive marketing (my first suggestion, above) could fix a lot of that.
4. Above and beyond getting customer testimonials, you must document the results of past projects. Track record is very important to government agencies.
Ideally, you should have two sets of marketing literature on hand. For techies, the literature would be heavy on documentation but with some testimonials thrown in. For the marketing people, it would have lots of testimonials with key technical capabilities highlighted.
And don’t get suckered in by conventional thinking – thinking that documentation is about meeting standards and testimonials are about exceeding them. Documentation should always strive to capture results that go beyond standards. For example, if the results are supposed to last one year, and your company’s results last two years, document that not as “at least one year” but as “at least two years.” That way, your documentation backs up your testimonials, and vice versa.
Exceeding customer expectations puts you ahead of the competition, which is where you always want to be regardless of the market you’re in.
5. Try to get as many sole-source projects as possible, because bidding is time-consuming and costly, and the results are uncertain. Are small projects exempt? Emergency projects? Fast-track projects? Projects offered without solicitation? Projects under certain broad budget umbrellas? Set an aggressive target for yourself, but at least 15 percent of your revenue should come from sole-source projects.
6. Break out of the “small projects for small companies” mode. Go after a couple of big kahunas as a subcontractor. It’s likely that there are plenty of bigger companies that lack some of your expertise. This would give you access to a part of the market that has been off limits. But you must choose your partner carefully. A bigger company would see firsthand what you do and how you do it and try to develop your expertise in-house.
Andrew added that – like all companies – MR’s has to take advantage of repeat business. If a government agency has used his company and likes their work, that agency has the power to keep going back to MR for future projects. Government agencies can be very creative in giving their favorites a steady stream of work. MR’s job is to become that favorite company for every government agency they work for.
Even if you have the same kind of success as MR – and especially if you don’t – you can make your marketing work a lot harder for you. Become the very best at one particular element of your industry. Implement the suggestions we’ve given you today … and you should see your profits soar.[Ed. Note: Get Michael Masterson’s in-depth insights and practical advice for how to earn more, save more, and get rich faster than you imagined by picking up a copy of Automatic Wealth for Grads… and Anyone Else Just Starting Out, one of Amazon.com’s Top 10 Finance and Investing Books of 2006.] [Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]