Everyone in the organization must do an effective marketing role irrespective of his department, function, role, or designation. Internal communication between marketing and other departments of an organization is important so that all employees share their genuine concern towards enhancing customer experience, and satisfaction. Customers’ needs, wants, behaviour and satisfaction including their joys, frustrations, feelings in personal settings (even subtle messages) must be captured.
Here’s what Jay Baer,an American motivational business growth expert, has to say:
WHAT DO YOU THINK?
Let me know in the comments section.
In this ongoing series #GreatMinds on my blog, I am shining a spotlight on the important ideas that some very successful people keep talking about in their public life.
“Try not to become a person of success but a person of value.” — Albert Einstein
This is a story that will help you create value for yourself and others, both in your personal and professional life.
Today, I want to share an interesting story! It is about a young entrepreneur named Shubhankar Parthasarthy. Twelve years ago, he had started his professional journey with meagre resources. However, today he successfully manages a business empire of over INR 1000 million. Shubhankar has never been my student but I have known him for several years in the role of a mentor. Whenever he has faced any problem in his business, he approaches me to discuss possible solutions.
I have always found Shubhankar hardworking, dedicated, focussed, and sincere in whatever he does! He is astute in planning, executing, negotiating, mobilizing resources and leading his team effectively. I am impressed by his ability to manage the total value chain as well as his resolve to take care of the interests of all his stakeholders.
I take pride in mentioning that Shubhankar always remembered and acted upon all my business and entrepreneurial advice. He always remembered my words that business is all about creating, communicating, and delivering value to all stakeholders, particularly to customers, employees, and shareholders. But then, Shubhankar always held the words of his grandfather close to his heart, which I did not know about. I often heard him credit his success in business to the million-dollar advice he got from his grandpa.
Fondly called “nana” by him, Shubhankar’s grandfather was neither highly qualified nor had any worthwhile exposure or experience in business or industry but had seen life! He had been, one could say, “part of life’s rich tapestry.” He was nourished by different perspectives as he weathered the different phases of life.
I was always curious to know about it and one day while I and Shubhankar were enjoying our coffee together at a popular coffee shop. I instigated Shubhankar to tell me in detail the business/life advice he got from his grandpa. And, to my utter delight, Shubhankar agreed.
Here’s how the conversation unfolded:
KT – Shubhankar, you always speak highly of your grandpa. I am curious to know what he has said to you that has stayed with you till now.
SP– Sir, My nana gave me a piece of great life advice which is also great business advice, if you think about it. He told me that, “If you aim to offer value instead of taking value, people will be naturally drawn to you. You will attract more people if you provide them with an immense amount of value.”
KT – That is 100% true, Shubhankar! We should create value in our offerings (products and/or services) and deliver a compelling value proposition to our customers. We should also strive to create more value and deliver the same to various stakeholders like our employees, shareholders, suppliers, society, and the Government. That is an important philosophy in all businesses.
SP– You are right, Sir but then my nana’s perspective is somewhat different.
KT – OK Shubhankar…. Please elaborate on that…
SP – In my nana’s words, “your long-term goal should be to create relationships and provide a sense of fulfilment. More success is attributed to those who contribute value to others than those merely seeking glory.”
KT – Interesting! I agree! How do you interpret his words?
SP – I think, if you want to be a great leader and influencer, you must start adding value to others through insights, ideas, and inspiration. Everyone wants to be treated well by clients, peers, friends, and family members. This powerful mindset will change how you work and pursue success in all areas of your life. It can not only change your career, but it can also change your relationships with many people who surround you.
KT – Shubhankar, I think you have made a good point. Rather than engaging in self-glorifying behaviour or displaying an attitude of self-aggrandizement, we should think about others. We should position ourselves as givers rather than as takers and try to be a person of value. Something amazing happens when givers succeed: it spreads and attracts more people.
(I was now enjoying the conversation with Shubhankar and the life philosophy of his grandpa was already taking roots within me. Without waiting for Shubhankar to interject, I continued.)
KT – Shubhankar, if you are not sure where to begin, seek to add value to yourself! Improve your skills! Help yourself first, then figure out how you can create value for others!!
SP (smiling) – Yes Sir, that is perfect! That is one way to go about it. But I also believe that when you are too focused on yourself, people become disinterested in you. They start avoiding you and ignoring you. They feel frustrated when they are with you.
KT – Exactly! Balance is the key. Conversely, when others around you know that you created value for them – they trust you, your brand, your service or your product. They want to engage with and support you in your work, in the same way, that you have supported them in theirs!
I could see that Shubhankar’s words (or should I credit his grandpa for this?) had certainly had a profound impact on me. I have been an advocate of value creation, but this conversation with him had created a new revelation for me! I started expanding the scope of the concept of “value creation and delivery” in my mind. Now, I found myself accepting his contention that it actually was more than just a bit of business advice, it truly was a life lesson!
I decided to learn more. I, therefore, started surfing the internet for more information. I began reading several posts and quotes on this lovely concept of earning and becoming happy by helping and providing value to others. I have included a few of my learnings from the internet here in this article for the benefit of my readers.
“Wherever and whenever required – speak up. Add your voice. Someone can benefit from your opinion. Share what you know. The world needs you to make an impact in your way. There is value in helping others improve or do better.”
Here’s another one I loved,
“When you provide value to others, your success grows organically. People seek more from you, talk about you to others, and share your amazing resources with their connections. By striving for value, you will be successful no matter where your journey takes you.”
This is the essence of the advice I would want to give businessmen:
“If you always think about making more money you get distracted. You think of optimizing profits, rather than adding new value. The only way to create new wealth (for everyone) is to create more value.”
All said and done, I have realised that offering value is an excellent method to be successful and improve your personal or professional relationships. Providing value means becoming a creator instead of a consumer. Creating value is one of the secrets to a happy life (also to a successful business). The only way you can become happier is to create more value for others. There is immense satisfaction in making a difference in someone else’s life!!
I shall like to end the article with a quote by Hal Elrod, an American author and success coach:
There are two very important assets of your business that your balance sheet does not show – these are your reputation as an entrepreneur and the reputation of your business. There are chances of your incurring losses because of practices or incidents that are perceived as dishonest, disrespectful, or unethical. The term, “reputational risk” is used to describe the risk of a serious loss of confidence in an organization. The entrepreneur therefore must make relentless efforts to build and sustain his own as also his organizational reputation at any cost.
Here’s what Warren Buffet,an American business magnate and investor, has to say:
WHAT DO YOU THINK?
Let me know in the comments section.
In this ongoing series #GreatMinds on my blog, I am shining a spotlight on the important ideas that some very successful people keep talking about in their public life.
According to my personal belief – the entire art and science of business can be summarized as – creating value, communicating value, and delivering value to all the stakeholders of the entrepreneur’s business. Somehow, I always found this definition of a business to be the best. Alternatively, we may say that the purpose of any business is to create value (through work), sell or trade it to customers, and capture some of that value as monetary surplus that results in profits for the entrepreneur.
Here’s what Robin Sharma,a Canadian writer and leadership expert, best known for his The Monk Who Sold His Ferrari book series, has to say:
WHAT DO YOU THINK?
Let me know in the comments section.
In this ongoing series #GreatMinds on my blog, I am shining a spotlight on the important ideas that some very successful people keep talking about in their public life.
“Marketing is not only much broader than selling; it is not a specialized activity at all. It encompasses the entire business. It is the whole business seen from the point of view of its result, that is, from the customers’ point of view. Concern and responsibility for marketing must, therefore, permeate all areas of the enterprise.” – Peter Drucker.
Marketing and Sales are somewhat intertwined whenever we think of a business enterprise. We all know well that for a business to achieve great sales, it needs to have a high level of marketing. When marketing and sales work together – the business can easily achieve its profit goals.
Have a look on the righthand side of any firm’s Profit & Loss Account – you see the Rupee Value of Sales. All the expenses on the left-hand side are deducted from this sales revenue and we arrive at Gross Profit (EBIDTA). This is the magic of sales. Increase your sales volumes, realise an attractive unit price for your product, you have a handsome sales revenue. And the more the sales revenue, the more will be your profit.
Price is the most important element in the Marketing Mix
PRICE
PRODUCT
PLACE
PROMOTION
We all know the concept of the marketing mix. The marketing mix comprises 4Ps, namely, Product, Price, Place and Promotion. Of these, Price is the most important component because it relates to selling and obtaining profits. The other three Ps (Product, Place and Promotion) are indicative of expenditure in product creation, distribution, advertising, and promotion.
Marketing & Sales are not the same:
Whereas we generally use the word marketing and sales interchangeably, there is a big difference between these two concepts. Marketing creates an environment where the customers/prospects get interested in the product. Excellent marketing can potentially negate the need for sale. If marketing is strong, lesser sales efforts may be required. We see many examples in this category like several branded products from famous companies like Phillips, Apple, Samsung, and others. On the other hand, if marketing efforts are average, more efforts may be required for selling the product as is the case with many non-branded products from micro, small, and medium enterprises.
Whereas sale is linear, marketing is exponential. Whereas sale is immediate, marketing is long-term. Whereas sale relates to asking questions, marketing relates to telling stories. Another important point – while marketing focuses on the customer and the product, all the focus of sales is on the skills of the salesperson.
The Way Forward:
We can conclude from the foregoing that marketing and sales together contribute a great deal to the success and the profitability of any organization. Let us now discuss, how we can make the best use of our knowledge about marketing and sales to effectively manage our business operation and achieve sustainable profits. As explained above, a well-developed marketing plan and situation-specific marketing strategies will go a long way in generating excellent sales leads. We should also work appropriately on brand development and positioning aspects. It is said and believed that marketing is the battle of customers’ perception of the product. And therefore, we must work hard to create a positive image of the product in our customers’ minds.
Along with effective marketing interventions, we must focus our attention on the following to effectively handle and manage the sales function:
Educating and training our salesforce on product knowledge, presentation, and negotiation skills, handling objections, and closing sales.
Initiating steps to improve sales team performance.
Streamlining incentives and rewards.
Developing sales processes and flow charts, documenting, and uploading these on the company’s intranet.
Taking necessary steps for grooming of salespersons; developing suitable dress codes.
Providing sales team members with necessary marketing collaterals, catalogues, order forms, etc.
Creating a database of old customers, current customers, and our prospects to ensure our regular interaction with them.
Taking adequate initiatives for up-selling and cross-selling of our product/offerings.
Obtaining continuous feedback and referrals from our customers (and consumers).
Ensuring that our current customers remain happy and satisfied. They can later become our loyal customers and do advocacy towards our products.
We must try to find reasons as to why our past customers stopped patronizing us.
Carefully identifying our target audience, their needs, wants and pain points.
Recently, I attended an interesting seminar on “Business Freedom,” which included an engaging module on sales and marketing. Immediately after the conclusion of the seminar, I was inspired to write this post on the importance of sales in business.
We all know the adage that change is the only constant in life. Before accepting and implementing change, we must consider the tangible impacts of change including the impact on people who will be affected and their journey towards working and behaving in new ways to support the change. Approaches to managing change vary widely, from organization to organization and from project to project. Many consultants and experts are available who provide toolkits, checklists, and outline plans to manage changes successfully.
Here’s what Kent Beck,an American software engineer and the creator of “extreme programming”, has to say:
WHAT DO YOU THINK?
Let me know in the comments section.
In this ongoing series #GreatMinds on my blog, I am shining a spotlight on the important ideas that some very successful people keep talking about in their public life.
Building a customer-centric organization will comprise: mapping the customer journey and life cycle; incorporating customer feedback into processes and behaviours of our marketing and sales team personnel; refining operating model to enable customer centricity; aligning technologies and processes to support and drive customer engagement, integrating contrasting business unit cultures; and transforming culture from top to bottom.
Here’s what Howard D. Schultz, chairman and CEO of Starbucks, has to say:
WHAT DO YOU THINK?
Let me know in the comments section.
In this ongoing series #GreatMinds on my blog, I am shining a spotlight on the important ideas that some very successful people keep talking about in their public life.
The person who holds the steering wheel may not be the owner of the business. In fact, anyone, who is responsible for day-to-day business operations and controls all crucial aspects of business, should be positioned as the CEO.
Have you ever experienced driving a car or a four-wheeler? As the driver who is controlling the car – you must hold the steering wheel in your own hands and then decide where you want to go and what speed you take. There can be others sitting in the car either on the backseat or by your side but these people can only assist you with the road map, maybe guide you with directions; they cannot hold the steering wheel along with you.
Likewise, in any endeavour in your personal or professional life – like managing a small event or a project, managing a family, managing a small or medium enterprise, or a large corporation – let there be only one person at the helm – who manages and controls the business with the functional assistance, guidance, and support from other team members. So, who gets to hold the steering wheel?
Given below are certain guidelines to help in steering your business effectively so that your organization makes sustainable profits and makes all its stakeholders happy.
The Business Head
You may own a business or a company but may have no interest in operating it on a day-to-day basis. In such a scenario, you may assign a paid CEO who may be running and controlling your business. Whosoever takes the lead (let us call him/her as the Business Head) in handling business operations should be accepted and positioned as the leader.
Every other member in the organization must abide by, comply, and follow the directions (or suggestions) coming from the Business Head. Proper organizational arrangements should be instituted to create clear responsibility, authority, and accountability lines in the organizations.
Top-down and bottom-up communication
The Business Head will be exercising his/her authority and directing (communicating, coordinating, guiding, motivating, and inspiring) all members of the organization to attend to various activities and functions. He/she can also call upon organizational members either individually or in groups to obtain their advice, inputs, and suggestions on certain important aspects. This way, the Business Head will make use of the group decision-making style to seek opinions from everyone and build consensus on matters of crucial interest to the business.
In the above arrangement, all information, ideas, knowledge, and suggestions from various organizational members flow UPWARDS to the Head who gets the benefit of knowledge and wisdom from everyone to make his own best decisions and get these executed in the best interest of the business. We call this BOTTOM-UP COMMUNICATION. However, everyone in the organization gets commands, or instructions from the Business Head only and this communication is strictly DOWNWARDS. We call this TOP-DOWN COMMUNICATION.
Unity of Command
Further – no one other than the designated Business Head can pass on any command or instruction to anyone in the organization We call this rule: “UNITY OF COMMAND.” Enforcing unity of command helps in ensuring that no member gets multiple commands from different superiors or seniors only to create confusion and chaos.
Organizational Structure
Next, we must make suitable provision so that the Business Head can identify few dependable persons from his larger team who can be given responsibilities for certain major functions or group of functions. These members can be designated as Heads of the respective departments or functions – like Head (Manufacturing), Head (Marketing), Head (Finance) and so on. These Heads can also be provided necessary support staff and physical facilities. They should also be given commensurate authority (matching to their responsibility) in terms of the delegation given to them by the Business Head.
Best Practices for effective steering!
The aspects discussed above are the main guidelines but there are many more principles to abide by. I have listed them in the box below. These can be used to your advantage if you want to steer your organization towards success.
Formulating vision, mission, goals, and objectives for the organization.
Effective Value Chain Management: creating, communicating, and delivering value to all stakeholders.
Building Sustained Competitive Advantage – through cost leadership, product/service differentiation, and focus strategies.
Effective execution of all events and projects without any time overrun and cost escalation.
Striving to achieve 5 operational performance criteria: cost of production, product and process quality, speed of performance (ensuring fast and prompt deliveries), building flexibility and dependability in our dealing with customers.
Building world-class processes
Instituting effective risk management.
Strong marketing and sales network.
Effective monitoring, Control, and MIS.
Being customer-centric – taking good care of customers, looking after their specific needs, and keeping our commitments and promises to them.
If you want to earn profits from your business, you must focus on a few essential things.
Do effective Value Chain Management:
To start with – examine your total business value chain from beginning to end. Identify various primary and support activities in the chain and explore how you can transform each activity into a value-creating activity. Also, look for the cost drivers and product/service differentiators in the value chain.
Remember that unless you create value, communicate value, and deliver value to your customers and all other stakeholders – you are not going to make profits from your business.
Cost-leader or Product Differentiator:
You can work on two different perspectives — Either take the position of a cost leader or a product/services differentiator.
If you take the position of a cost leader, you make cost savings through economies of scale, better supplier relationships, and process efficiencies. In this strategy, you offer your products at much lower prices to your customers and still make profits. But if you take the other position of a product/services differentiator – you can charge a premium price from your customers for offering them an exclusive product. To attain this status, you will have to invest in technology, R & D, and intellectual capital.
Creating and Delivering Value to Stakeholders:
Irrespective of the fact whether you take the position of a cost leader or a product differentiator – you must create, communicate, and deliver value to your customers, employees, and other stakeholders as explained earlier. Let me explain this with a few examples. Can you improve the inbound and outbound logistics to enhance the experience and satisfaction of your customers and suppliers – and reducing the cost of these operations at the same time. Can you introduce certain changes in your manufacturing processes, systems, and shop floor practices so that the effectiveness and efficiency of your operations are enhanced. Can you do something to deliver more value to your customers for their money? Have you thought of strategies like attractive cuts, discounts, and freebies, high product quality, better delivery schedules, reliability, and flexibility in your services?
What is your customer-value proposition? Deliver more value to your customers for their money!
Cut Frills & Control Expenditure:
As a financially frugal/prudent entrepreneur, you must keep an eye on all avoidable expense items – particularly sales promotion, advertising, and interest costs. These may adversely impact and/or erode your profitability if not provided for judiciously.
Initiate proactive measures to cut frills and avoid all unnecessary expenditure — particularly expenses with respect to sales promotion, advertising and interest costs.
While there is nothing wrong in spending more on promotion and advertising if your business plan justifies the same – decision to indulge in such expenses must always be supported by proper cost-benefit analysis. By the same logic, an entrepreneur must try to minimize the interest burden on his/her borrowings. An entrepreneur should avoid the temptation to raise all kinds of secured and unsecured loans unless the same is necessary.
Salaries and wages once started cannot be discontinued. It will therefore be necessary to build the organizational team in stages. Unless and until the enterprise can afford a full-fledged salary and wages bill, one should try to manage with retainers, part-timers, and outsourcing options.
Strengthen your Marketing Organization:
You should also do an internal audit of your marketing and selling functions. This will help you in identifying areas where you can cut expenses and add value. Engage with good agents, distributors and dealers who are resourceful, have an incredible track record, good payment history and are reasonably honest in day-to-day dealings. If you selected dealers with good life values and principles (like honesty, integrity) then the rest is easy. You can always train your dealers in your line of business, but you can never teach life values and honesty to them if they are inheriting a dishonest and fraudulent culture.
Remember that your dealers are your business partners, and they must be chosen with all possible care.
Product pricing policies, margins allowed to channel partners, agency commissions, the pricing structure for distributors, dealers, whole-sellers, semi-whole sellers, and retailers are also crucial as these can improve or erode the bottom line significantly. Abundant care must be exercised while working out policy details with regards to volume bonuses, cash discounts, prompt payment discounts, goods return policies.
Customer Centricity:
Another important aspect in marketing will be customer-centricity.
Any unsatisfied customers should be compensated to ensure they will still consider you for future business. Happy customers are everything.
Purchase decisions almost always come down to value as explained earlier. Effectively providing value is integral to the long-term success of your company; not only does it assist in retaining your current customers, but also provides the highest-quality referrals you can ask for when attempting to gain new business.
There are no shortcuts when it comes to getting out of debt.
—Dave Ramsey
Cut your coat according to your cloth
It may seem like an obvious advice but— Capitalize only to the extent necessary! While you should have adequate capital with a healthy operating cushion (to take care of unforeseen factors/contingencies) – the temptation to overcapitalize and borrowing more should be avoided. Overcapitalization may increase your borrowings and increase your interest burden.
New entrepreneurs during the start-up phase can avoid buying land and constructing buildings – they can instead work from leased premises or factory sheds.
Major plant, machinery, and equipment can also be leased out to save on initial capitalization cost. Entrepreneurs can also work from a well-established and recognized incubation centre to start with.
Bootstrapping start-ups
Entrepreneurs may also resort to bootstrapping during the start-up phase. Bootstrapping is a situation in which an entrepreneur starts a company with little capital, relying on money other than outside investments. An individual is said to be bootstrapping when he/she attempts to found and build a company from personal finances or the operating revenues of the new company. Bootstrapping helps an entrepreneur conserve funds (cash) till he/she reaches the stage of external funding from the Banks and/or DFIs.
It is a well-known fact that many entrepreneurs fail or are forced to exit from the business during the initial period of risk— which may vary from few months to 2-3 years! Bootstrapping is an excellent concept to insulate the entrepreneurs against such risks.
Once the entrepreneur has crossed the initial vulnerable period of risk and uncertainty and has learnt the art and science of doing business and handling money, they can always plan to build their assets and terminate all lease arrangements in stages.
Don’t be miserly. Be financially frugal!
For an initial period of 2 to 3 years – you, as an entrepreneur, must be very critical while spending money – your own money or borrowed money. Even after 2 to 3 years when your business is well established and is running well – it is nice to remain financially alert, frugal, and prudent. I am not suggesting that you be a miser and/or have a narrow focus or short-term perspective of things. All I want to say is that you must always do the necessary cost-benefit (either a quick verbal check or a structured study) of any aspect, offer, or proposal before making any financial commitment. The application of the cost-benefit concept should not be limited to only fixed assets. It is a versatile concept and should be applied in all situations whenever and wherever a cost is involved.
Always ask – What is my cost? What benefit do I get?
Any business or project must be adequately funded with a judicious mix of own (equity) and borrowed funds (debt). The equity portion will comprise the contribution of the promoter(s), investments from relatives, friends and associates, few private placements, and from the public if a public issue was envisaged. The debt portion can come from many sources like term loans from national level banks and development financial institutions, SFCs, SIDCs, and many more sources including international institutions. The main promoter must have enough means to mobilize his contribution to hold a worthwhile stake in the business. S/he may do so through the support of his family, friends and associates as indicated above. Additionally, the promoter may also approach angel investors, private equity firms, and venture capital funds for support.
A word of caution
And finally, before I end – a piece of advice to all those qualified professional entrepreneurs who resign their cushy jobs to enter business and land into a trap soon – only and purely due to their over-ambition to grow fast and becoming rich overnight. They borrow heavily out of sheer enthusiasm to take advantage of higher financial leverage and consequent quick growth – most often – to land into trouble. Such entrepreneurs, apart from paying higher interest on their huge borrowings also lavishly spend on swanky offices, cars, overstaffing, advertising, promotion, and other items.
Most of the times, many such expenses are not justifiable when you look at their original business plan – but then these are done because of lifestyle reasons or the ego of the main promoter/ entrepreneur. Whereas there is no harm in building up all such expenses if these follow the original business plan and can be absorbed in the projected cost of production. Expenses that result in improvement of the value chain, can offer a competitive advantage to the firm, and result in improved bottom line through higher value addition should be welcome.
One must however exercise adequate caution against random and unplanned (at times – arising from whims and fancies of the entrepreneur) expenses which only erode the bottom line.
Do you have a habit for spending money that you do not have?
Are you planning to borrow to acquire some assets? How about the interest you will be paying on these borrowings? How long will it take you to repay the entire loan? Are you comfortable with these questions?
Most importantly — Are you trying to fit in your lifestyle with that of others?
