I have been directly involved in sales and marketing activities for the last 20 years. When I was in university, my lecturer taught us Michael porter 5 forces, SWOT analysis etc, and we are being taught of how to analyse a brand value, the 4 P of marketing etc. Is it useful? Yes indeed! Theoretically all of these theories are absolutely useful.
But when trying to implement these theories in the real life (at least to SME context), personally I think the theories remain as theories. Here are the reasons why.
First, to implement such theories, you need to have cash. And a lot of cash. But what SME really concern is, cash flow. What most of the SME are worrying every month is usually cash flow, to be more exact, operational cash flow, i.e, rental and staff salary. You don’t need to attend a degree course in order to understand the importance of Place (i.e the importance of location) in 4P. But in actual fact, most of the SMEs couldn’t afford such rental.
Second, before worrying about cash flow, we need to understand why operation cash flow is always an issue for SME. And why most of the MNC, Banks, do not face such operation cash flow issues? The key difference is brand. To be more specific, the business model. Business model creation has been a hot topic recently, it creates disruption to certain economy or market. Car sharing disrupted taxi market. Taobao and many other online e-commerce disrupted brick and mortal retail business. And the list goes on and on. Seriously I believe TaoBao, which owns by Alibaba Group, do not face operation cash flow issue at this moment right?
Therefore, how a small business or SME can do to solve the operation cash flow issue? Without spending such huge marketing budget? How a SME can compete effectively with another SME or even MNC? Here are the key ideas.
- Make your Unique Selling Point (USP) stand out. And let as many potential customers know as possible. As SME, we are not talking about spending $20,000 to advertise in newspaper. I would suggest you start creating your USP and print it on ALL your marketing collaterals, communication channels such as email signature, on your name card, on your website, on your corporate brochure. (Tips! Avoid the keyword “Service”. Excellent Service is vague. It is pointless to tell your potential customers that your service is extremely good).
- Redefine your product offering and making deep impression in your customer’s mind. Be creative!
- Sell the benefits of the product! Many companies fail to do so simply because they couldn’t sell effectively to their potential customers. You need to start selling the benefits, not the function of the products.
- Start gathering testimonials, good comments from customers and let the world know about it!
- Increase Total Customer Value. So what is Customer Value, or perceived value of certain product? You need to create the value of the product, the value of your customer service, value of your brand etc.
- Now, this is really crucial! After answering all the above 5 questions, your customer might ask you this, “Why should I buy from your company and not company ABC?” You need to provide a very clear and strong message to your customer! Our product is worth buying because of…”. In short, this is the differentiator between your product and your competitor product. (Tips! Create meaning differentiation is far more significant than creating the best product!)
- Assuming you have answered all the above, and your customer is convinced. And the next moment, your customer say “Let me consider first, I will get back to you soon”. What is your respond then? You can not force a customer into buying your product, isn’t it? Therefore, how to encourage your customer from hesitating to making decision fast? You need to create urgency.
I hope you will benefit from my sharing! Similar to 4P of marketing, the above steps are proven methodology. As long as you create a system out from the above points, you will soon realise that your cash flow will start improving!
Good luck to your business!