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A-Z of Business: R – Return on Investment (ROI)

Return on Investment (ROI)

You’re in business to make money, so understanding the return of your investment is critical.  You can do this in advance of your decision to invest and also to see how your investment is performing over time.  A related measure is the timing of your break-even point.  Can your business bear that delay as you wait for the returns to roll in?

A simple ROI calculation is the amount of financial gain divided by the amount invested multiplied by 100.  So, if you invested £10,000 to develop, manufacture and sell a new product, and the sales of that product achieved a revenue of £11,000 in year one, that would give you an ROI of £11,000 ÷ £10,000 = 10%.  That return is quite modest and, with related costs could signify a loss for your business.  What would it take to increase that to, say, 25%?  Or 50%?  And what about the potential sales year-on-year?

Sometimes the returns are less tangible, or less direct.  Instead of focusing on increased revenues, the return may involve a reduction in cost, an improvement in quality, an increase in customer satisfaction levels, enhanced employee morale, etc.  These should all have a consequent effect on your bottom line in time, though it is difficult to determine whether this improvement is as a direct result of the investment, or some other measure such as improved hiring decisions or the introduction of sales incentives.

These days a lot of marketing decisions have a longer term view.  For example, free applications being built as a loss leader to attract users to upgrade to more profitable versions of a product.

When planning the return on your investment, do be aware of the hidden costs which can erode your profits.  Costs such as legal fees, administration costs, equipment, maintenance, staffing, training, office space, design, manufacture, packaging, advertising, warehousing, distribution and also the cost of delays.  When budgeting and contracting services, do think about having project-based quotes with penalties for delays to preserve your investment.

Those of you that know me well will also know that I couldn’t write about ROI without mentioning the importance of thinking about the return of investment of your time and energy into a particular activity.  I wonder how much time and energy you spend on things which have little or no impact on the success of your business?  Just busy-ness getting in the way of business?  This impacts your bottom line too.

© Tricia Woolfrey 2013

About Tricia Woolfrey – click HERE to find out about the author.

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A-Z of Business: EQ – The Difference Which Makes the Difference

Emotional Intelligence

In this A-Z of Business series, we have reached the letter Q.  Now, I could have talked about quotas, quoting or questions if I was being a purist.  But, if I look at the balance of what’s been written and what’s missing, I think that EQ (Emotional Intelligence) is far more important.  Anything which omits this key area of business success is lacking.  So I decided to break my own rule and hope that’s OK with you?

In case you haven’t come across this before you may be wondering why it’s called EQ when it refers to Emotional Intelligence (EI)?  The Q refers to “quotient” which is the amount of a specific quality or characteristic, in this case, emotional intelligence.  But, what does it mean?  It is the capacity for self-insight, for understanding and managing your emotions and having empathy for others’.  In this way you can better manage your relationships and your stress levels.

It is such an important skill that it is thought to be more important than IQ in helping to get you promoted, in creating sales and in building collaborative effort.  Research suggests that it accounts for around 90% of managerial success as opposed to IQ which only accounts for 20%.  Not that IQ is not important.  Of course, it is.  But you need both.  The ability to put your knowledge, your expertise, your skills into effect in the most  constructive way possible is said to be the difference which creates the successful business person whether you work for yourself of for an organisation.

So, ask yourself:

  • How well do you respond to setbacks?
  • How well do you understand people’s different motivations and behaviours?
  • Do you have a balanced view of your own strengths and weaknesses?
  • To what extent are you able to control your responses in situations which challenge you?
  • Are you good at building collaborative relationships?
  • Could you be described as someone who is level-headed, positive and flexible?
  • Do you inspire trust?
  • Do you manage conflict well (rather than avoid it)?
  • Are you self-motivated?
  • How good are you at bouncing back when things go wrong?

You can learn more HERE on our website.

Emotional intelligence is one of those concepts where you need a lot of it to know you have it.  So if your EQ isn’t as high as you think it is, it will almost certainly be inhibiting your progress.  To be sure what your level of EQ is, why not book an assessment?  It’s well worth it and can put you on track for success like nothing else.  Call me on 0845 130 0854.

© Tricia Woolfrey 2013

About Tricia Woolfrey – click HERE to find out about the author.

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A-Z of Business: P – Product: Ten Questions You Need to Ask Yourself

Products and Services

If you don’t have a product or service which delivers value to your customers and prospects, it makes building a profitable business almost impossible.  Having an inferior product isn’t something you want to risk your business or reputation.  In this day and age, competition is very tough, consumers are fickle and markets are constantly changing, so it’s important to make sure you are delivering what your customers want.

Having the best product or service isn’t enough in itself if you don’t have everything else right.  However, it is an essential component.  When looking at your products, consider what are you offering and how does it benefit your customers?  What need is it fulfilling?  What are the strengths and weaknesses of the product or service?  This is where you really need to listen to your customers.  It’s easy to acknowledge compliments – they make you feel good.  It takes a lot of strength to be open to negative feedback.  However unreasonable it may seem, there is always at least a grain of truth in in it.  Be gracious in receiving negative feedback because you can really turn around a negative situation and create a raving fan out of a disenchanted customer if you handle it right.

Customers can fulfil a need in a number of ways.  For example, if your business sells washing machine repairs, then your customer has the option of either repairing their washing machine, getting someone else to do their laundry, buying a new washing machine or resort to hand-washing.  So it’s important that you get your product right so that you become the obvious choice.

If you want your product to be a best-seller, you need to ask yourself the following questions:

  1. What need is your product (or service) designed to fulfil?
  2. What are the strengths of your product (or service)?
  3. What are the weaknesses?  If your customers were being really picky, what would they be saying?
  4. What are you doing to address those weaknesses?
  5. Who are your top 5 competitors?
  6. What do they offer that you don’t and how can you address this?
  7. What is another way your prospects might fulfil the need?
  8. How can you make your product a better option?
  9. What feedback about your product (or service) have you been ignoring and what are you going to do to address it?
  10. What processes do you have in place to make sure your product (or service) is the best?

Steve Jobs, one of the greatest innovators of our time, talked about surprising and delighting the customer by looking at how to excel, not just meet the competition.  He thought in terms of simplicity, elegance and sexiness (of the product, of course!).  By contrast, I know of a man whose business failed because he insisted on providing his service using old, outdated technology and old, outdated principles.  You have to constantly re-invent and improve if you want to thrive.

 

© Tricia Woolfrey 2013

About Tricia Woolfrey – click HERE to find out about the author.

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A-Z of Business: O – Objection Handling – The Ten Essentials

Objection handling

 

Objections are an inevitable part of any selling process – whether you are selling products, services or an idea.  It is the part of the sale which leaves all but the very best sales people, influencers and negotiators trembling behind a façade of the “this-doesn’t-bother-me-at-all” faux-smile.  It’s what keeps most would-be sales people hiding under a duvet of busy-ness so they never get to make the call which could result in the rejection they fear so much.  And this is because they personalise the “rejection”.  They make it about themselves rather than a legitimate (or smoke-screen) concern. 

Sales is really a numbers game and you need to get through so many rejections before you can make one sale.  Objections are often a signal for more information and here are a few ideas to help you through with greater ease:

  1. First and foremost, don’t take it personally.  You can no more be an effective salesperson without objections as you could be an effective car without wheels.  Think of objections, instead, as “feedback”.
  2. The second “secret” is to build emotional resilience.  That’s a big subject to which I devote a whole chapter in my book 21 Ways and 21 Days to the Life You Want.  However, one quick way of building resilience is to view every experience as a learning opportunity.
  3. Prepare by listing all the objections you think you may receive – here are some common ones:
    • Price
    • Delivery terms
    • They already have a current supplier
  4. Practice active listening so that you really understand what they are saying, not what you want to hear or what fits into your well-prepared script.
  5. The easiest objection handling technique (and there are many) is the shopping list technique.  It flushes out any possible objections up front.  To do this, you need to elicit all their wants in advance and write them down.  When they have finished, ask “Anything else?” until you are sure you have everything.  Then say “So, if we meet all these needs, you will want to go ahead?”  This, of course, is assuming that you’re actually speaking to the decision maker.
  6. Think of your offering in terms of features and benefits.  Let’s say that you are selling a gardening magazine.  The feature may be that it is full of interesting articles by some of the country’s top experts.  The benefit might include some of the following: that it will provide easy-to-follow answers to all their gardening problems right when they need it so that they can enjoy a beautiful garden all-year round; they will spend less money on plants which were never suitable for their garden in the first place; they will be able to enjoy a hobby rather than be frustrated by the lack of progress; they will learn new skills, and create a space where they can relax/have fun with their kids/entertain friends/grow organic vegetables to make healthy meals for their families; they will have more time to enjoy being in their garden rather than working on their garden, etc.  The idea is to find out what they want and sell to those rather than have a blanket list.
  7. Avoid giving too many benefits because you dilute the message – just focus on their specific wants and needs.
  8. Move them through negative states into the positive state you want them to experience, ie. from cynicism to curiosity to openness and finally to enthusiasm.  I cover this in my Influencing for Better Business course.
  9. Once you have taken them through each of their shopping list items, ask if there is anything else they need.  Then, for any ongoing objections ask “If I could deal with this, would you be ready to go ahead?”.  Then come up with a solution to the problem that they are happy with. 
  10. When all objections are handled, ask for the sale.  You will be surprised how many people miss off this important element. 

I couldn’t finish this article without my bonus tip – limit your sales calls and sandwich them in between enjoyable activities that give you a sense of achievement.  This helps you to stay resourceful and to maintain your energy levels and resilience. 

If you would like to learn more about how you can handle objections, why not book for a coaching session, or onto my next Influencing for Better Business course?  Investing in yourself in this way can really yield exceptional results.  Call 0845 130 0854 for more information on how to accelerate your success.
 

© Tricia Woolfrey 2013

About Tricia Woolfrey – click HERE to find out about the author.

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A-Z of Business: N – Negotiating With Integrity

Negotiation

Being able to negotiate with integrity is vital to profitability and also for relationships. Effective negotiation is less about winning as it is about creatively finding a way in which both parties get what they need.  Sometimes this will involve compromise, where each party makes concessions to the other.  Sometimes it will involve backing down in the interest of maintaining a positive ongoing relationship – short-term pain for long-term gain.

There is an art to knowing when to concede, when to power- through at all costs, when to collaborate and when to compromise, or even withdraw altogether.  Here are my top tips for negotiating with integrity:

  1. Be clear about what you want and the minimum you will accept but don’t talk about your minimum too early as it will weaken your position.
  2. Create a resourceful state prior to the negotiation.  Useful states are powerful, calm, creative, respectful and influential.
  3. Listen more than you talk so that you can ascertain what’s important to them and where you might be able to seek leverage.
  4. Always find points of agreement first.  This creates a “yes-set” which makes it easier for the other person to continue agreeing with you.
  5. Show the value in what you are offering so that the negotiation is not just about price.
  6. Use positive language such as “My price is…”.  Too many people use softer language such as “I’m looking for…” which is subtext for “I am expecting less so push me as much as you want – I will give in really quickly”.
  7. Use silence positively.  Once you have stated your price (or your condition, wants, needs), be silent.  Over-explaining weakens your position.
  8. Be clear about the specific need of the other party, sometimes we negotiate on the wrong thing.  They might be concerned about cash flow or speedy delivery over price for example.
  9. Price is just one area for negotiation but also consider discounts for volume, including training in the price, payment terms, contract periods, etc.  This adds value to the negotiation so that price becomes less of a block.
  10. Use “If you …I will” when talking about concessions.  Much stronger than “If I … will you” which tells them that you are ready to concede first, thereby reducing your negotiating power.

Negotiating is a powerful tool which can be very effective when used correctly.  However, applied clumsily, it can damage relationships and profits.  If you would like help, why not book some coaching by calling 0845 130 0854.

In the meantime, you might want to check out our Influencing Skills Course on 19th September, which also has some powerful techniques to help you.

© Tricia Woolfrey 2013

About Tricia Woolfrey – click HERE to find out about the author.

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A-Z of Business: M – Marketing for Success

Marketing for Success

Marketing is the activity which creates awareness of your products or services and brings new business in.  However, it does require you to spend time on your business rather than in it.  This means, creating a cohesive and sustained marketing strategy to create awareness and desire for your services or products.  A mistake a lot of people make is to try something once and, if it doesn’t yield the desired result, drop it and move onto something else.  That’s understandable but means that you are never leveraging off that effort.

Imagine that you decide on an advert.  You spend a fair amount of money, but nada.  Not one single enquiry.  Is advertising wrong for you?  Not necessarily.  There are lots of factors which could affect its success:  Was it the right publication?  Is your branding attractive and in keeping with your product or service?  Was the advert professionally designed?  Is your USP clear?  Is the wording enticing?  Does it have a call to action?  Does it clearly state how they can contact you?  Is it on the right page?  Does it lend itself better to radio or TV?  Is the timing right for you?  With advertising, one insertion is rarely sufficient.  It needs to be part of a campaign, but before committing to that, you need to make sure you have everything right.

Advertising is just one of many different marketing methods from seminars to networking, newsletters to referrals, direct mail to PR, internet to telemarketing, direct selling to alliances.  Social media is extremely popular but it is so easy to waste a lot of time if you don’t do it right.  How do you know which will be right for you?  How do you know where to invest your hard earned cash?  Marketing is an art, not a science, and it very much depends on your product, your competition and your available budget.

There are certain areas that you shouldn’t scrimp and save.  For example, I have seen many businesses who describe themselves as selling a quality product but whose business card is cheap, flimsy and ill-designed. Yet others who have hired telemarketing people who do not understand their product at all, and who follow a script which does not fit the conversation.  And yet more who spend a lot of money on a beautiful website, only to have no-one see it because it hasn’t been optimised.

Points to consider are why someone should buy from you?  What are the strengths and weaknesses of your competition?  Where can you differentiate?  Who is your ideal customer?  What problems are you solving?  Remember that people don’t want a washing machine – they want clean clothes.  Speaking directly to your customer and their needs makes all the difference – you want to inspire them to buy and have a brand which is suitable for your target market.

Once you have your campaign in place, it is important to monitor all your enquiries to see which effort is yielding the best results for you.  This lets you know what works and why, what doesn’t and why, so that you can refine, refine, refine.

Of course, once you have attracted a customer into your business, it’s essential to keep them happy. Happy customers bring more prospects to you.

If you would like help in navigating this minefield, do call me on 0845 130 0854.  I would love to help you make a success of your business.  After all, my success is your success!

© Tricia Woolfrey 2012

About Tricia Woolfrey – click HERE to find out about the author.

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A-Z of Business: L – Leadership-v-Management: Are You a Manager or a Leader?

How do you know if you are a manager or a leader? 

There are few job titles with the word “leader” in them.  Manager or Director (depending on your level of seniority) seem to be the titles of choice – Customer Services Manager, Finance Director, Marketing Manager, Human Resources Director, etc.  Yet, the title is not an indication.  Being a manager is as important as leadership.  However, without leadership, you are missing a crucial element in business success – winning people’s hearts and minds.

Management can be thought of as being the ‘nuts and bolts’ of your role, with duties such as:

  • Planning
  • Allocating resources
  • Organising and co-ordinating
  • Controlling and directing
  • Measuring and evaluating
  • Solving problems
  • Short term thinking for managers, medium-term thinking for directors
  • Managing systems and procedures
  • Maintaining
  • Concerned with the “when” and “how”

All of these are absolutely essential and create a framework, structure and systems to achieve results which are monitored and course-corrected on a regular basis.

A leader, by contrast will be more of a visionary and will motivate and inspire people to follow.  Their focus will be on the long-term and they will be concerned with:

  • Establishing a vision
  • Inspiring co-operation and trust
  • Developing ideas and people
  • Concerned with the “what” and “why”

Creating a vision will usually require change and a good leader will inspire the team to be motivated for that change which might otherwise be met with resistance.  A leader paints a picture that people want to be part of and want to help make happen.

Managers deal with “shoulds” (the realms of necessity) while leaders deal with “coulds” (the realms of possibility).

Of course, leadership and management are not mutually exclusive.  There is a lot of overlap between the two.  A good leader will need good management qualities.  A good manager will require good leadership qualities.  If you tend to be a good leader but are not good at the planning, implementation and problem solving, it’s essential to have a very good, reliable and loyal team to do this for you.  If you are a good manager without the leadership qualities, you will need a good leader managing you to help you pass on the vision to your team.  Both skills can be learned and, with both skills, you will be a rounded professional contributing fully to the success of your team and your business.

And, to close, off, the wonderful Stephen Covey said “Management is efficiency in climbing the ladder of success; leadership determines whether the ladder is leaning against the right wall.”  You have to have your vision right, otherwise you are managing the wrong things.

If you would like to have greater insight into your leadership and management skills, book a psychometric profile session.  This helps overcome blind spots and highlights development opportunities for you.  Call 0845 130 0854 to find out more.

© Tricia Woolfrey 2012

About Tricia Woolfrey – click HERE to find out about the author.

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A-Z of Business: K – Knowledge – Your Competitive Edge?

It is estimated that 15% of success is from your technical skills whereas 85% is through gaining trust and respect.  So, what has knowledge to do with this?  Plenty, as it happens.  Knowledge covers the whole spectrum.  Good technical skills are, of course, important.  But not if the knowledge is out of date.  Technology is changing all the time – as are trends – and it is essential to keep abreast of what’s going on in your market place and in your profession.

Solicitors and doctors go through years of training in their profession before they are able to practice.  Yet, how much training have you had to run your own department, or your own business?  How much knowledge have you acquired to help you be successful?  Whether you are running a department or a business of your own, the knowledge you need to be effective is extremely broad and most people simply muddle through.  In the meantime, what happens to the trust and respect essential to 85% of your success?

The following table helps you to understand some of the fundamentals for trust and respect and the kind of knowledge you need for them:

TRUST AND RESPECT KNOW-HOW
Good people and rapport skills Influencing and leadership
Doing what you say you will do Planning and organising
Doing an excellent job Technical and delegation
Managing complaints effectively Problem solving and conflict management
Meeting your obligations Business acumen and resource management
Emotional intelligence Understanding of people and yourself and how to manage yourself and your relationships in times of stress

 

 

 

 

 

 

 

 

Business knowledge – such as sales, marketing, finance, operations –  is important whether you run your own business or manage a department as you need to see how everything fits together.  These will help you to exploit strengths, minimise weaknesses, seize opportunities and handle threats from a point of strength.

So, how can you increase your knowledge?  Through coaching, training, reflective learning and study.  Often, you don’t know what you don’t know (in the case of business, ignorance is not bliss) and it is helpful to have someone there who can help you see your blind-spot. Having your own coach and mentor is an excellent step to take to help you stay on top of your game.  For more information call 0845 130 0854 for a no obligation chat.

© Tricia Woolfrey 2012

About Tricia Woolfrey – click HERE to find out about the author.

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A-Z of Business: J – Judgement: The Key to Effective Decision Making

 

Judgement is your ability to assess a situation and to draw sound conclusions.  This is a key factor in your decision making process.  How do you judge whether something is right for your business or not?  And how do other people judge you and your business?  When you understand this, it can really help you:

a) make decisions which serve your business well
b) help you to help other people make judgements in your favour

There are various ways in which we may be convinced of something-

  • Number of examples – ie the third time you see something, you are sure it’s right
  • Automatically –  you don’t take too much convincing, you just automatically trust that something is right
  • Period of time – you need to think about something for a while before deciding, even if it is an obvious solution
  • A trusted source – if you hear it from someone you trust, or know they are doing the same thing, that’s enough to convince you
  • Logic – you need to evaluate the facts before deciding if something is right for you
  • Emotion – you tend to trust your gut
  • Impact on the bottom line – you will not be convinced of anything unless you see how it will affect the bottom line
  • Tried and tested – you need to see something working somewhere else before you think about it for yourself
  • Cynics – you are never truly convinced of anything

None are right or wrong in themselves.  However, it’s possible to rely too much on a particular method which could leave you vulnerable.  For example, going on gut instinct without checking the effect something has on your bottom line could affect the profitability of your business; relying on a period of time may mean that an opportunity is lost; being automatically convinced can be dangerous as there is no evaluation of the possible impact something may have; cynics can fail to take opportunities because they always find fault; depending on tried and tested methods can mean you are behind the curve in terms of your competition; relying on logic alone can mean that you are ignoring the not inconsiderable power of your intuition; depending on a trusted source requires that the trusted source be right 100% of the time or that their circumstances are the same as yours.

Ask yourself, what other factors do you need to consider when you are formulating your decisions?  Do re-read the decision making part of this series.

Finally, what to do with this information when considering your customers and prospects?  You will be well-advised to consider an example of all the above criteria in relation to your products and factor in where appropriate.  For example, Jack has a strong gut instinct but likes to back it up with number of examples, so you might want to either find three ways of proving your product, or expect to make your case over three appointments, and follow that up with “What does your gut tell you about the suitability of our product for your business?”

Or, Sally may make her decision solely on the bottom line.  So you may want to take the approach of showing the cost savings your product will give her, or the revenue potential, or perhaps some other way of impacting the bottom line.

If you aren’t sure about what someone else’s convincer strategy is, ask them how they decided to buy their latest car, computer system or even holiday.  This should give you a lot of clues.

Even the most successful business people have made bad judgements in their time. However, you can minimise yours by considering all of your options to make a more informed decision.

If you would like to discuss you own business decision making strategy, or change the way others judge your business, please contact us on 0845 130 0854.

© Tricia Woolfrey 2012

About Tricia Woolfrey – click HERE to find out about the author.

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A-Z of Business: I – Influencing Skills

The ability to positively influence others with integrity is a key skill in business.  It affects your ability to have people buy into you, your business, your product and your ideas.  It impacts your leadership style and your ability to build constructive relationships.  It can also be incredibly stressful if you are unable to influence people constructively, impacting your productivity, your sales and even your profitability.

Influence is about your ability to have a positive effect on someone.  It differs from manipulation in that it is undertaken with integrity and regard to the interest of the other party.   It’s about having people buy in to your ideas and perspectives, so that they say ‘yes’ to you more.

 

The talent for influence requires flexibility in style, clarity of outcome, the ability to understand a situation from several perspectives, and creating and maintaining a resourceful state, particularly during times of conflict, or when the stakes are high.

It is not about imposing but inspiring someone to take a particular action, while maintaining strong rapport and building positive relationships.

There are numerous language patterns which enhance your capacity to increase your powers of influence which are too numerous to go into in this short article but which I teach to many of my clients and which I include on my Influencing Skills training course.  The issue, though, is not what the skills are, but the effect that they can have on your success.  They can help you deal with objections and concerns so that you are able to transform potentially negative situations elegantly. It’s the YES factor!

 

Whether your intention is to create change, elicit support or diffuse potentially contentious situations, influencing skills can be a real boon to you in your business.

For further details, please contact Tricia Woolfrey on 0845 130 0854 or see www.pw-consulting.co.uk.

© Tricia Woolfrey 2012

About Tricia Woolfrey – click HERE to find out about the author.

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