Marketing/cold calling

[ptbeast]

I am looking for ideas on improving the marketing program for my security business. I am good at managing the security force and at customer service, but not so good at sales. Even that is not precise. When someone hears about my company and calls me, I virtually always walk away with a contract. When I approach the prospective client (cold calling), however, I almost never make the sale. We are growing steadily through referrals and word of mouth, but I would like to be a little more proactive in our marketing. Any tips on cold calling or alternate approaches to marketing would be greatly appreciated.

Thanks,

Dave

[AusSec]

In my old life I did a bit of this.
1. Research your client. Cold calling doesn't mean you don't know them, it means they don't know you. Find the name of the decision maker, not just their position, your call is more likely to go through.

2. Research the opposition. Give the target a reason to switch. Sometimes money is not enough. Don't bad mouth the opposition, just draw comparisons - "They do xyz for you, but we can do xyz+1 for 5% less because of ABC." This gives confidence in your quality of service as well.

3. Don't call on Mondays or Tuesdays. Wednesday afternoon or Friday afternoon work best.
Monday morning is all about catching up email and figuring out the coming week, Tuesdays are about meeting to fix the problems found on Monday, Wednesday afternoon is Hump Day, Thursday is planning for next week the things that didn't finished this week, and Friday afternoon, just after lunch, is winding down for Beer O'Clock.

4. Be persistent, but not nagging. Leave them with facts and figures to think about. Get an email address or fax number to send more info, then follow it up in a week, 2 weeks, etc.

These have worked in the past for me, but your mileage may vary. Different industry and all.

Good luck!

[FireRanger]

Cold calling will not work with medium to large sized businesses in most cases. Usually these companies have already determined in their own minds (read legal and risk management decided what they can afford as far as loss) and usually have a list of vendors who can meet their security needs. The client I work for does this, and I hate having to deal with cold calls and walk ins (it is my site policy to refer all outside parties inquiring about security to myself). Actually I take that back, I don't hate cold calls if the company only calls once and listens to what I tell them. What I hate are repeat cold calls, especially from one competitor in particular (but then again I already have a distaste for them). I suggest that you do as AusSec said, research the company. Find out who does the actual procurement for that business, is it the corporate security manager? Or is it is a procurement/purchasing department who determines who gets the contract with input from the corporate security manager. Once you figure this out, contact that person/department and give them your information. Simply say something like "I understand that you are in charge of (or you are part of the group who) selecting your companies security provider. I would like to send you more information on my company so when you are in the market for finding a new service provider you can be aware of my company's services and capabilities. If you want we can meet sometime so I can present this information to you in person". That way you are not being hostile or forceful, but you are getting your foot in the door.

Another thing is look to see how your competition is marketing itself. If say there are no TV or radio ads for them, place some radio ads on NPR and the local AM news radio stations. Also look at putting ads on buses, at bus stations, on craigslist, school buses (my local school district rents advertisement space on the bus), etc. Be creative and standout from the crowd. If money is tight don't do TV ads but put together a marketing video and place that on your website and on DVD's that you can send to prospective clients. Also focus on customer retention, in our industry word of mouth can hurt us or help us.

[SecTrainer]

Excellent points from both replies above. B2B sales can't be carried out like you're selling breakfast serial to consumers. One point that I'd like to make in addition - and this is not nitpicking at words - but "marketing" is not "sales". Sales is something you do after you've done the marketing. Unfortunately, most companies don't do the marketing first or properly, if at all.

"Marketing" is the process of differentiating your company, in part by identifying, creating and pricing the specific unique* services that you will offer, how you will package them, and to whom (to what market segments) you will offer them. It also implies doing market research. And none of this is nearly as obvious as people who run security services seem to believe. They just run out and start "selling our services", which haven't been differentiated, and that means they join the "me-too" crowd and there's not one blessed reason for anyone to listen to their sales pitch.

The failure of marketing effort is largely responsible for price-driven competition. If you can't think of any other way to stand out, at least you can try to be the CHEAPEST, right? That's good, right? Well is is right up until your equally misguided competitor decides that he'll out-cheap you, and then you have to...ad nauseam. I can save you all the aggravation and mileage. If you haven't identified a market segment where the name of the game is unique value instead of the lowest price (and there's a difference between "value" and "cheap"), go back through the marketing process and look harder.

Do the marketing work - then do the sales. "We do security stuff for anyone who will hire us" is not a successful marketing strategy and will not form an adequate basis for sustained sales and growth. The question isn't how to get prospects to listen to you. The question is, what the hell do you have to say that would possibly interest them if and when you do get their attention? Without marketing, all you have is a bunch of guff that they've heard a million times before. They're thinking "yada, yada, yada" before you sit down. When you leave, they promptly go and fire their secretary for letting such yahoos into their office.

And all of this, of course, implies that between the marketing and the sales, you have actually done the organizational work necessary to create the differentiators that you've chosen. If one of your differentiators is a guarantee that the client will receive a call-back from someone who has the authority to fix a problem and will receive that call within five minutes, you have to CREATE the conditions that will MAKE THAT HAPPEN EACH AND EVERY TIME, 24 X 365, WITHOUT FAIL. And what that means is addressing the questions of communication, availability and authority that are the underpinnings of that differentiator. You might have to create a special position within the company, for instance. And it means finding out what it will COST you to do this (everything has a cost). Just because the marketing study has shown instant call-back to be important to clients doesn't mean that you can then go promise it to them without first actually doing the organizational work needed to incorporate that feature into your service package. Differentiators aren't mere sales blither...they really have to exist!

1. Do the market studies to identify segments, the services they use, competitors and their offerings, etc.
2. Decide which segment(s) you will serve.
3. Decide which services you will provide to those segments.
4. Identify potential differentiators for those services.
5. Select the differentiators that you will use.
6. Create the differentiators. Determine their cost.
7. Package and price your differentiated services.
8. Plan and implement your sales effort.


*A service is unique (differentiated) if it is measurably better than similar offerings from competitors, and in a way that is important to clients. The key words are "measurably better" and "important to clients". If it doesn't meet both criteria, it isn't a differentiated service.

[ptbeast]

Thanks for the advice guys. Sec Trainer, I agree with most of what you said, though I view marketing in a much broader sense, of which sales is only a part. In the case of my particular business, we have identified a niche which is not well served (at least by reliable, reputable companies), have differentiated ourselves from the crowed (not by price, we are one of the more expensive companies in town), and have created a unique and effective menu of services.

Our clients have been extremely satisfied with our services and have recommended us to others. That has been our primary means of growth, which is good. Nothing beats word of mouth. And, honestly, up until now very little emphasis has been placed on sales as we have been focused on growing slowly and keeping our clients happy.

The problem is that just as we were growing to the point of needing new facilities, adding more supervisors, etc., our biggest client changed locations such that we are no longer able to provide services to them. That leaves me in an awkward spot. I can take a major step backward, downsize, cut hours, etc., or I can drum up more business in short order.

So, it is likely I was not clear. What we have been doing has worked well, but we need to get more aggressive about sales, at least in the short/medium term. The cold calling that we have done has not been effective for us, and I am simply looking for advice on how to get the word out.

Thanks for the advice on cold calling. It is largely what I have been trying to do, but I will keep it in mind as I revise my approach.

On another note, I have been approached by a referral service. Not simply a list of consumers of security services, but -- supposedly at least -- companies actively shopping for services that we provide. Fees are based on the stated budget of the client and are to be paid regardless of whether or not a contract is eventually signed. In fact, they provide 3-5 competitive referrals to each prospective client. Has anyone used a service like this? did you find it effective in providing legitimate clients? Was it worth the cost?

Thanks again,

Dave

[SecTrainer]

There's a little theoretical hair-splitting as to whether sales is part of marketing, although I get what you're saying. Potayto - potahto. Speaking of "P's", the three "P's" of marketing are Product/Service - Price - Positioning. None of these are actually directly related to sales. Two different skill sets. Related, but different.

1. I presume you've already explained the situation to your remaining customers and "mined" them thoroughly for any referrals they can come up with.

Go back to the marketing drawing board:

2. Your market niche has now shrunk by the departure of this client. Have you reexamined the niche to determine whether it can still support your company strictly on the basis of new business - i.e., without making any assumptions about taking market share from competitors (which is the most difficult, time consuming and expensive)?

3. Are you providing every possible service to your existing clients that they need, or, put another way, are you leaving any dollars on the table with those clients?

4. Would it make sense to use this situation as an opportunity to "follow" your departed client into a new/expanded service area? Usually, you don't already have a client in a new area when you expand your operations, so having this client could be a "leg up", or a "springboard" , if you prefer that metaphor. The caveat, of course, is that this client alone wouldn't justify doing so - there would need to be others - so don't make the mistake of following them into no-man's land.

5. Is there a different niche in your existing service area that you could easily serve, or start to serve, with your new spare capacity?

One word of caution. As unpleasant as it might be, don't wait too long to make the layoff decision. The question is: How likely am I to get what amount to "lucky" sales in an amount that will fully and reliably replace the revenue I've lost with this departed client? The answer is probably going to be "not very likely" simply because of the inherent nature of B2B "relationship" services (little or no "impulse buying", "special sales", etc. like you have in B2C sales).

Just do the math - how many unserved potential clients still exist within your service area and what kind of revenue could you expect if you were fortunate enough to land, say, as many as 10% of them? And how much time would all of this take - from first contact to the sale, contract, etc...to actually starting to generate revenues?

This is why companies from the biggest to the smallest are usually forced to pull back a bit when they lose a significant portion of their business and do the recovery work on a smaller budget with a smaller force, rather than trying to maintain the same level they had before losing the business. Those that do maintain the work force understand that they are doing so at a deliberate cost which they usually view as an investment in future operations that they have some confidence in being able to restore. And, they have determined that they can afford to absorb that cost.

Alternatively, they ask everyone to "share the pain" and take fewer hours, etc. This hasn't always been successful as there are always some who simply can't take any cuts and leave anyway. This might seem to solve the problem "naturally" but, unlike a layoff, by this form of attrition there's no way to have any control over who leaves. They might be some senior people that you need and wouldn't have laid off.

The layoff decision - probably along with other reductions - is about financial management (cash flow, budget, etc.) - not marketing. And when it comes to financial matters, time waits for no man.

[SecTrainer]

Our clients have been extremely satisfied with our services and have recommended us to others. That has been our primary means of growth, which is good. Nothing beats word of mouth. And, honestly, up until now very little emphasis has been placed on sales as we have been focused on growing slowly and keeping our clients happy.

Dave

With all respect, this is not a sustainable strategy. There's also a false dichotomy here (growing rapidly versus satisfying clients), and perhaps a little bit of self-delusion as well.

1. It's very pleasant to have business "drop into your lap", so to speak, but that's not selling and it's not a growth strategy. It's serendipity. It's jam on the bread, but it isn't the bread. What's involved here is the delusion that such sales can sustain you. You wind up most closely resembling the rabbit hoping that the horse will drop a carrot. And no client will ever be as interested in growing your business as you should be, no matter how "satisfied" they are.

2. WOM "sales" have a natural limit, which is the circle of influence of your existing clients. It is unlikely that their circle of influence is coextant with the circle that represents your potential market, and is likely much smaller.

3. Small businesses don't have the luxury of "growing slowly" - at least, on purpose. Ever notice how things grow in nature? The rate of growth of an embryo is orders of magnitude more rapid than any other period of development. There's a reason for that.

4. There is no inherent dichotomy between growing rapidly (or, really, whenever the opportunity to do so arises) and satisfying your existing clients. Indeed, that IS the challenge of small businesses - to grow as fast and as aggressively as they possibly can WHILE satisfying their customers. That's why the new small business owner will put in those 100-hour weeks.

"Growing slowly" is often an excuse made by owners who hate to do selling - something that most of us can understand - but an owner of a small business really should be concerned if his business is "growing slowly" and doing something about that - not embracing it as a management philosophy! Growth should be controlled, but that doesn't mean "slow". Growth should be just as fast as opportunities present themselves, and as fast as an aggressive sales effort can possibly make it.

The control part of growth is exercised in the operational end of things, not sales, meaning that new business drives what happens operationally. What this means is being prepared to do everything humanly possible to incorporate any new business you might get - and whenver it comes along - into the existing operation, or you expand the operation, etc. You are ready to spring into action to do whatever is necessary to "absorb" that new business WHILE continuing to serve your existing clients. And the hunt for new business is relentless. It doesn't ask "can we handle new business?"...the strategy is to make sure that you CAN handle new business without adverse impact on existing business. This is an operational commitment and skill set. Letting your operational capacity (which is what "satisfying clients" is ultimately all about) drive the growth effort is letting the tail wag the dog.