MODULE 509EXPANDING YOUR BUSINESS
POTENTIAL Contact Person
Dr. Mario Denton
Crown Financial Ministries Marketplace Programme Director for Africa
Africa Director for FCCI (The Fellowship for Companies for Christ International)
CEO STRONG MESSAGE BUSINESS CONSULTANT
Let's keep the good marketplace vibes alive. Let's network. Tel (w) + 27(0) 82 88 29903. E-mail address: [email protected] Website: www.crown.org.za and click on
marketplace
E-mail address: [email protected] website: www. strongmessage.co.za
Skype: mario.denton
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Table of Contents1. Effectively setting goals
2. Focus energy on opportunities
3. Developing and understanding your competitive advantage
4. Developing customer loyalty
5. Plan for tomorrow, but take action for today
6. Success in sales
7. pricing your product or service right
8. Forming strategic partnerships
9. How technology impacts outsourcing and service business
Introduction—Benefits from reading this book!• Learn how to effectively set goals!
• Discover the SMART method of goal setting and understand how to count the
cost in every area of your business!
• See how to really focus your leadership on business strategy rather than on
continually fighting fires!
• Get away from problem-focused thinking!
• Take advantage of unanticipated opportunities!
• Learn how to uncover opportunities!
• Better understand your business advantage!
• Learn how to further develop your business advantage!
• Understand how to use your business advantage to gain customers!
• Learn your business from the customers’ point of view!
• Discover how to develop customer loyalty!
• Distinguish between true customer loyalty and repeat use!
• Learn how to solicit effective customer feedback!
• Know how to take action today that meets your goals for tomorrow!
• Learn how to analyze current market trends for future predictions!
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• Know how to respond to shifts in the current business environment and take
advantage of new opportunities!
• Be successful in sales!
• Discover how to price your product for maximum volume sales and maximum
profit!
• Know how to well-form partnerships that will maximize your business potential!
• Understand how technology impacts outsourcing and service!
• Learn how to keep technology an asset and not a weakness!
• Understand how to adapt to technology and allow your business to change with
it!
1. Effectively setting goalsEvery year, millions of businessmen and women make New Year’s resolutions,
often covering the very same issues they resolved to correct last year. Despite
their best intentions, what is often lacking is a specific plan for how these
resolutions can be accomplished. Are these goals even achievable? “For which
one of you,” Jesus asked, “when he wants to build a tower, does not first sit down
and calculate the cost, to see if he has enough to complete it?” (Luke 14:28).
The only way that a business can solve its problems, achieve its objectives, and
move itself to a higher level is to devise a plan and develop a process for
accomplishing its goals. The answer is the same for any size business, from
multinational conglomerate down to the humblest one-person operation. King
Solomon, the wisest man who ever lived, wrote, “The plans of the diligent lead
surely to advantage, but everyone who is hasty comes surely to poverty”
(Proverbs 21:5). Effective planning and goal setting is required to achieve the
maximum success possible. Many businesses stumble along without planning,
but effective planning always improves results.
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Start by objectively assessing where your business is today, and then determine
where you would like to be by this time next year. Set realistic goals that match
your expectations and will move your business up to the next level.
Effective goals are SMART goals: Specific, Measurable, Accomplishment focused, Realistic, and Timed or Tied to the business.
Specific and Measurable go hand in hand: If you can’t define your target, you’ll
never hit it. If the target can’t be measured, it isn’t specific enough. It’s not
enough to say that you want to increase sales, reduce customerbilling errors, or
open a new store. General statements may sound good in January, but how will
you measure your results in December? If sales increase by one percent, will you
be happy? Examples of specific goals would be to increase sales by nine
percent, reduce customer-billing errors from six per month to zero, and open a
new store in a specific location by the end of June.
“Accomplishment focused” means to build some stretch into your goals, without
overreaching. For example, if the population of your town is growing by 15
percent per year, to increase your business by only 15 percent might actually be
disappointing, since you would have only grown commensurate with the
population. An accomplishment-focused goal would be to achieve a rate of
growth higher than the increase in population. On the other hand, if your
customer base is decreasing, due to a drop in population in your area, it might
not be realistic to expect a 15 percent rate of growth, but a ten percent increase
in sales might be great. Know your market and set your plans accordingly, but
don’t forget to stretch.
Goals, in order to be useful, must be realistic. The optimism you feel in January
will give way to depression by the third week in March if your goals are clearly
out of reach. Carefully evaluate each objective, and the resources required for
achievement, then set your goals within the range of realistic. Reducing your
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billing errors to zero or increasing sales by 75 percent may just not be possible.
Again, SMART goals will be a stretch, but achievable.
Additionally, your goals must be tied to your business in order to be effective.
Some goals sound nice, but if they’re not tied to your overall business
performance, they won’t make a lick of difference. For example, adding a new
line of soda pop in a convenience store wouldn’t make much sense unless you
can show how it will increase your overall sales and improve your profit margin.
There’s no point in changing merely for the sake of change. Smart goals will
always be tied to the success of your business.
Timing is also essential to your success. Setting a goal to increase sales by 15
percent is all well and good, but it must be timed to fit the rhythms and cycles of
your overall business strategy. Will sales be flat until December, then rocket
through the holidays, or will they grow steadily throughout the year? Establishing
reasonable expectations for timing helps you to allocate your resources wisely
and become accountable for your results.
Once your goals have been established, you must formulate a strategy for
accomplishing your objectives. A strategy is simply the method you will use to
reach your goal. Effective strategies will include a clear and concise statement of
the goal, a series of action steps required to achieve the goal, and a timeline that
describes when each step must occur in order to achieve success.
Smart goals and effective strategies will always be written down. When Samuel
the prophet was instructing the people, he “wrote them in the book...” (1 Samuel
10:25). If you want your plans to be effective, write them down. Once you have
recorded your goals and plans, add due dates for each step in your action plan.
Allow sufficient time in your year-long schedule to accomplish each key task.
Break down large projects into bite-size pieces. Small steps are more easily
accomplished in the course of a week or a month, and the satisfaction that
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comes from “finishing something” builds momentum into the larger process and
avoids discouragement.
The final piece of the planning puzzle is accountability. If you don’t already have
established reporting relationships, ask a fellow businessperson to hold you
accountable for your progress toward achievement of your goals. If you work
within an organization, share your plans and goals with your supervisor. Effective
change comes when we plan, strategize, and then follow through to success.
Asking and allowing someone to hold you accountable for results is an exercise
in humility, and also a profitable strategy.
As you approach the new year, establish SMART goals, implement a strategy for
achieving your objectives, and allow yourself to be held accountable. Then watch
your business grow!
2. Focus energy on opportunities
Business leaders can tend to get dragged down fighting fires and dealing with
problems at the expense of having the time and energy to pursue opportunities.
These opportunities come and go; if they’re missed, they will keep a business
from growing. King Solomon wrote, “The wise look ahead to see what is coming,
but fools deceive themselves” (Proverbs 14:8, NLT). Problems focus our
attention on the past, whereas opportunities focus our actions on the future.
When we make problems our focus, we may fail to take advantage of
opportunities. We all face problems, which must be identified and addressed
effectively— but then we need to move on. Otherwise, dealing with problems can
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overwhelm our time and energy. Often, when difficulties arise, we do just enough
to get by, without fixing the root cause of the problem. Instead, we should find a
solution that will stop the problem from coming back again.
Bill’s company manufactures automotive stamping parts and operates on a
narrow profit margin. He bought the least-expensive steel available, which often
failed to meet specifications. Although the supplier always replaced the sub-par
steel, the time and energy required to return the defective raw material took 30
percent of Bill’s time. When Bill changed suppliers, he received better quality
steel at a slightly higher cost, and it freed up 30 percent of his time, which he
then devoted to calling on existing customers and new prospects. The net result
was growth in his business.
Joe was a brilliant landscape architect who did award-winning design work.
However, he supervised most jobs himself and struggled with managing crews
and contractors to get the work done on time. As a result, he spent 65 percent of
his time managing projects, rather than creating landscape designs and
developing new business. He also turned away many jobs because he didn’t
have time to follow up with inquiries. When he hired an experienced crew boss to
supervise the installations and manage most of the follow-up details with the
contractors, Joe was able to focus most of his own energy on working with clients
and designing new landscapes. Within eighteen months, his business more than
doubled, and he had two new crews working regularly.
Effective leaders ask key questions to uncover new opportunities. For example,
what is the biggest unexpected success that has affected your business? Often,
building on an unanticipated success can be more effective than starting from
scratch. One independent pizza restaurant started receiving orders from a large
new apartment complex near the store. The apartment building catered to young
single adults. When the pizza shop started to market specifically to those
apartment dwellers, business grew by 20 percent as a result.
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Changes in demographics may signal an opportunity. When the owner of a small
chain of auto parts stores noticed that one of his seven locations was
experiencing a decline in sales and was losing money, he asked his best
manager to take over the store. Over the next several months, the decline in
sales slowed but the trend continued. The manager worked night and day, but
nothing seemed to turn the store around. A study of the surrounding
neighborhood revealed that a demographic shift was underway, with a large
increase in Spanish-speaking residents.
I suggested to the owner that he treat the situation as an opportunity rather than
a problem. First, he transferred his star manager to another location, where he
did his customary great job and improved sales. Meanwhile, the owner hired a
bilingual manager and several bilingual customer service representatives for the
failing location, and they immediately added some signs in Spanish. Virtually
overnight, the store’s sales increased by 50 percent and it once again became
profitable.
The apostle Paul warns us not to be like children, “tossed here and there by
waves” (Ephesians 4:14, NASB). In business, if we focus only on problems, we’ll
be “tossed here and there” as we try to react day-by-day to changing
circumstances. If we’re not careful, our problems will manage us, rather than us
managing them, and the result will be missed opportunities.
3. Developing and Understanding your competitive advantage
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Every business has—or had at some time in the past—a competitive advantage
that attracted customers. In order to be successful in today’s marketplace,
business leaders must strive to understand their competitive advantages and
then strengthen them.
One nursery decided to build its business around selling herbs. When the
company began to advertise its extensive selection and the expertise of the
owner, customers were attracted to buy these plants—and they also bought
other garden plants and products. The nursery was able to leverage its
competitive advantage in herbs into more sales across the board.
For some companies, size and strength are competitive advantages, but smaller
companies often have to rely on skill and creativity. When David fought Goliath
(see 1 Samuel 17:40-48), he understood that a direct assault would be fatal—for
him! Even though David had previously demonstrated courage and effectiveness
in fighting and defeating bears and lions, he knew that his competitive advantage
against Goliath would be his skill in using a slingshot. By targeting his strength,
with God’s help, David defeated the much larger and stronger Goliath.
How can you, as a business leader, understand your competitive advantage and
utilize that advantage to gain customers?
First, identify and write down three major strengths that you believe give your
business a competitive edge. What are your core competencies—what do you do
best as a company? Take time to validate these strengths with your staff and
customers. Be open to discovering that your competitive advantage is different
than you think. A riding stable in Michigan prided itself on having the highest-
quality horses, which they believed was the key to attracting more customers.
However, after completing a customer survey, they found that being the closest
stable to Detroit and having great beginning riding instructors were the most
important factors, not the quality of their mounts. When they changed the focus
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of their advertising to highlight their location and tout the quality of their
instruction for beginners, they increased their business. Don’t assume that you
know what your competitive advantage is. Test and verify.
After identifying your true competitive advantages, be bluntly honest in evaluating
how you stack up in the marketplace. One of Wal-Mart’s competitive advantages
is low prices, and they constantly use comparison shoppers to maintain their low-
price advantage. Establish benchmarks to validate how you compare with your
competitors, and find a way to get honest feedback from your customers. You
may believe, for example, that you provide top-flight service, but validate your
perceived advantage to make sure it’s real.
One cable television company believed that its service was great, but in reality
their customers were generally dissatisfied. When satellite TV became available,
many customers switched to the new service. What was perceived to be an
advantage was actually a disadvantage. As it turned out, the only advantage the
cable operator had enjoyed was a monopoly. Honest, direct feedback is the only
way to avoid a similar mistake.
Identifying your advantage is only the first step. You then need to validate that
your customers will be motivated to buy based on that advantage. One company
that has succeeded in this is Orvis, makers of top-quality—and expensive—
fishing equipment. The quality of Orvis’s equipment entices serious fishermen to
part with up to $1,000 for a fishing pole. Because their customers continue to
respond, Orvis continues to market the advantages of its top-quality
merchandise.
After assessing your strengths, determine whether those advantages need to be
strengthened. The first banks that offered Saturday service developed a
competitive advantage based on customer convenience. However, as other
banks began to offer Saturday service, these institutions needed to further
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expand their hours and establish more convenient locations to maintain their
advantage. I know of a law firm that built a competitive advantage around their
expertise in tax law cases. However, when other firms in town began to
strengthen themselves with excellent tax attorneys, the advantage enjoyed by
the first firm was diminished. Realizing they were losing their edge, the firm hired
a top IRS official to join the team to help reestablish their advantage.
Finally, focus your advertising and marketing campaigns to highlight your
competitive advantages. When you build a better mousetrap, people will buy it,
but only if you share the information about your product’s superiority.
A plumbing contractor offered true 24-hour service, with immediate response to
major emergencies. However, most homeowners were unaware of the first-rate
service and response time. The plumber was bearing the high cost maintaining
his staffing levels around the clock, but he was not attracting many new
customers. When he launched an effective advertising campaign, highlighting the
service, he increased the number of emergency calls and established many new
long-term customers. As your business determines, validates, strengthens, and
then acts on its competitive advantages, it will grow and prosper.
4. Developing customer loyalty
True customer loyalty is perhaps the greatest asset a company can develop.
Loyal customers provide repeat business and—equally important—referrals of
new customers. Word-of-mouth advertising may be one of the oldest and most
effective methods of developing new customers.
Customer loyalty is difficult to build and measure. Some business owners
assume that all repeat customers are loyal customers, but that may not be the
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case. Other factors—such as pricing or convenience—may contribute to repeat
sales. The deeper and more important issue is to determine why customers
come back before you conclude that they are truly loyal.
For example, I fly regularly with one particular airline, based entirely on schedule
and pricing. The airline might conclude that I am a loyal customer, but I am not. If
a competitor offered a lower price or better schedule to a destination where I was
traveling, I would switch. I used to shop at a pharmacy near my home based
strictly on location. Service was sloppy and frustrating, but I remained a customer
for seven years before dissatisfaction drove me away. Based on my repeat
business over several years, the pharmacist could have wrongly concluded that I
was a loyal customer.
Wise business owners develop ways to build true loyalty that not only holds
customers but also turns those same customers into a word-of-mouth marketing
department. Several simple steps will help you get started.
Any time your product or service falls short and a customer wants a refund or
adjustment, act quickly. King Solomon observed, “Fools mock at making amends
for sin, but goodwill is found in the upright” (Proverbs 14:9 NIV). Solomon also
understood that “Hope deferred makes the heart sick” (Proverbs 12:13 NASB).
Acting quickly to correct problems, with a cheerful spirit, strengthens customer
relations.
A customer that needs to pull teeth to receive satisfaction won’t tell many good
stories about your business, whereas those who receive prompt and easy
corrections will become sold on your business. Look at every customer complaint
as an opportunity to build a stronger relationship.
Consistent follow-through in every aspect of service is the key to success. Jesus
said, “He who is faithful in a very little thing is faithful also in much” (Luke 6:10
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NASB). A distributor of promotional items gave less attention to smaller orders,
and often shipped these orders after the promised delivery date. Customers
continued to order, but only because the price was the lowest in town. Others,
who were fed up with late deliveries, sought new suppliers for future orders.
Referrals, if any, were always prefaced with the caveat: “The price is good, but
the service stinks.”
One question will determine if you have been successful in developing true
customer loyalty. Ask your regular customers, “Would you recommend our
product or service to others wholeheartedly?” A good follow-up question would
be, “Have you ever recommended us to others?” Focus on these two key
questions, and avoid the temptation to develop a longer questionnaire. A
sandwich shop offered a free drink for a week to customers willing to answer the
questions. Responses were received in a closed container to encourage candor.
The best way to evaluate responses to your two-question survey is with blunt
honesty. If more than one-third of respondents would not endorse your business,
you need to dig below the surface, understand the reasons, and take immediate
corrective action.
Consider rewarding customers who make referrals. A health club might offer a
free membership month; a carpet cleaner might clean one room for free; and a
pizza store might give a $5-off coupon for each new customer referral. Your
business will benefit in two ways: You’ll obtain new customers, and you’ll have a
convenient way to measure the effect of word-of-mouth advertising.
A loyal customer is one who is willing to invest in the relationship by sticking with
your business even if your price is not always the best, because they believe
that, over time, you offer the best value for the money. These same customers
will become the most effective sales team you could ever build, spreading the
good news about your business to everyone in their network.
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5. Plan for tomorrow, but take action for todayForward-thinking business leaders spend considerable time, energy, and
financial resources determining which emerging trends and future developments
will shape the business landscape. Looking to the future is both wise and
necessary to keep a business on track and avoid disaster. As Jeremiah wrote
regarding Jerusalem, “She did not consider her future, therefore she has fallen
astonishingly” (Lamentations 1:9, NASB). However, the bigger questions for most
businesses are how to assess, understand, and respond to changes that have
already occurred in the marketplace, and how to take effective action.
According to an old investing axiom, a shrewd investor buys on rumor and sells
on news. In business, we need to plan for the future (which amounts to buying on
rumor because we cannot guarantee the future), but we must sell our products
and services today based on events that have already happened. When we
focus on responding to the changes that have occurred in our marketplace, we
can take advantage of current opportunities that over time will create our
business future.
The cities of Phoenix and Tucson, Arizona, grew dramatically throughout the
1970s, 1980s, and 1990s. The key catalyst for that rapid growth was the
development of effective and affordable air conditioning during the 1950s. Some
real-estate developers who understood that affordable air conditioning would
make the 100-degree summer days bearable for more and more people began
developing properties early. However, most developers reacted to the rapid
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growth only after the ball started rolling, but they were still able to capitalize on
the expanding population trend.
During the 1960s, a significant increase in households with both spouses working
outside the home, the rise in single-parent households, and increasing numbers
of teenagers with disposable income fueled tremendous growth in the fast food
industry. Companies such as McDonald’s and Burger King tapped into a market
that was there for the taking. They did not create the market; they simply filled it.
Other companies such as A & W Root Beer and Dairy Queen, two fast-food
pioneers, missed the trend. They failed to see the significance of the changing
marketplace and continued to promote themselves as snack places, rather than
as regular dining destinations. As a result, McDonalds, Burger King, and others
passed them by.
Today, in many parts of the United States, Spanish-speaking customers have
become a sizable segment of the market—and a marketing niche that is likely to
continue to grow. What steps should prudent businesspeople take in order to
develop this market? A large auto repair shop in the Southwest began to
advertise in Spanish-language newspapers and radio, added bilingual customer-
service staff, and printed customer information in Spanish. Their non-Hispanic
customer base has continued to grow at a rate of 5–10 percent per year, but their
overall business is growing at a 30 percent rate, fueled by the growth in their
Hispanic customer base.
Many businesses do a good job of being customer driven. They understand their
customers’ needs very well, and they respond quickly to their customers’
demands. However, focusing too narrowly on one’s existing customers can
cause a business to lose sight of the broader market. To be market-driven rather
than only customer-driven, a business must strive to understand the entire
market rather than just its own customer base.
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A generation ago, for example, many department stores failed to spot the
societal trend toward more two-wage-earner families. As families began to have
more disposable income, time became more important than selection. Mass
retailers such as Wal-Mart and others began to take market share away from the
department stores. The department stores had done a good job of understanding
their own customers, but they had failed to understand the changing
marketplace.
Innovation often occurs first with non-customers. For example, four years ago,
Larry Taylor, president of Desert Pacific Printing in Tucson, began receiving calls
from non-customers asking if he could print from a computer disk. Responding to
this new trend, Taylor quickly learned how to move from disk to finished product,
gaining many new customers in the process. Now Desert Pacific employs a full-
time electronic-printing specialist and most of their business is accomplished by
electronic means. Identifying and then acting on this opportunity was a key to
growing in a shrinking market.
Forty percent of the adults in the United States today are not married. That
equates to 82 million people—and 50 million of these singles have never been
married. What business opportunities can be generated to serve this © 2005
Steve Marr. www.businessbuildertraining.com 15 emerging market? One group
that might respond is the many dentists who are struggling to maintain their
practices. Perhaps by establishing evening and Saturday hours while reducing
their weekday hours they could build practices based on serving these single
working adults.
Every business is different, but you can effectively shape your business future by
identifying key trends that have already occurred, and then take action.
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6. Success in sales
Successful selling is the lifeblood of any business. Every salesperson and
business owner wants to close as many sales as possible. By developing five
key habits, you can dramatically improve your closure rate.
To succeed in sales, you must first learn how to present strong, compelling
arguments quickly to your customers. “‘Present your case,’ the Lord says, ‘bring
forward your strong arguments’” (Isaiah 41:21, NASB). A salesperson has one or
two minutes to connect with a customer.
If you miss that window of opportunity, the prospect is often lost. Develop a one
or two-sentence opening statement designed to establish rapport with your
customer. Be prepared to state what you and your company do well. Know your
competitive advantage and hit it solidly. As you make your statement, watch the
customer’s reaction. Experiment to see which phrases connect the best in your
client’s understanding.
Sue knew her product line well, but she could see that prospects lost focus after
a few minutes. When she developed an effective opening, she was able to hold
her customers’ attention, present her products, and close more sales. Ben had
developed what he thought was a good opening, but he became frustrated as
sales continued to elude him. “I seem to get customers on the hook,” he said,
“but then I lose them at the last minute.”
What Ben needed to do was develop the habit of effective listening, the second
key to closing more sales. Your customer is often your best source of
information, but to get that information, you have to listen. Often, even when
we’re trying to listen, we spend more than half our “listening time” thinking about
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what we’re going to say next. As a result, we miss the clues and cues that the
customer gives us.
King Solomon wrote, “He who gives an answer before he hears, it is folly and
shame to him” (Proverbs 18:13, NASB). Develop questions designed to draw out
information that you can use to offer the best possible service or product. If the
prospect hesitates, ask, “What do you think?” The more questions you are able
to get answered, the better information you can develop.
Another key principle is to keep the conversation on target. King Solomon said,
“The fool multiplies his words” (Ecclesiastes 10:14, NASB). Fewer, well-focused
words hit the mark far better than endless chatter. Practice making your key
points clearly and concisely in one or two sentences. After you’ve made your
point, stop. Better to allow a moment of silence than to start rambling. Don’t let
your key points get lost in the clutter of too many words.
Develop several key questions designed to get a “yes” from your customer.
Often, the process of closing a sale involves getting the customer to agree to
several preliminary or intermediate points. Ask questions such as these: “If I can
deliver the product and save you money, would you be interested?” “If I can
improve delivery times, would that improve your operation?”
“Since quality is an issue, if I can show you how we can improve quality, would
you be interested?” “If I establish that our new press will reduce your labor time
by 20 percent and pay for itself in eighteen months, would that help your bottom
line?” Develop your own set of questions, but remember that the best path to
closing a sale is often to bring the customer along one step at a time.
Finally, ask for the sale. Jesus said, “Ask and it shall be given to you” (Mathew
7:7, NASB). Though Jesus was speaking about spiritual matters, the same
principle applies to closing sales. Most often, sales are lost by an ineffective
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introduction or by failing to ask for the business. Kindly, gently, but directly, ask
for the sale, and then be quiet and wait for an answer. If the answer is
noncommittal, determine what additional information is needed to help the
customer make a decision. If the answer is no, endeavor to find out why. The
more information you can gather about lost sales, the more effective you can be
in the future.
7. Pricing your product or service right
A convenience store raised the price on a single can of pop from $1.09 to $1.19.
One block away, another retailer was holding the line at $.99 each. One pizza
shop continued to offer free delivery, even though his competitors had instituted
a $1.00 to $1.50 charge per order. Establishing the best pricing strategy is
always challenging, but considering a few guidelines may help.
First, know your customers. King Solomon wrote, “Know well the condition of
your flocks and pay attention to your herds” (Proverbs 27:23 NASB). In business,
your customers are your flock. A gas station that thrives on repeat customers
may want to keep prices lower on bellwether products like candy and pop to
encourage more stops for gas. Increasing sales of those extra items will enhance
revenues and build up the bottom line. A station that caters to mostly transit
customers may not lose business by charging a few extra cents—in return for
convenience—and the higher prices may bring in extra dollars without affecting
volume.
A second principle is to know your competitors well. Be keenly aware of how your
products, customer service, and prices stack up against the competition. Moses
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sent out spies to check out the opposition (Numbers 13:2), and so should you. If
your prices are too low, you may be leaving money on the table and struggling to
cover your expenses. At the same time, high prices will often drive customers
away. Determine realistically how your service or product is different from the
competition, and then determine if you can and should charge more for superior
service, or if you need to cut prices to attract more business.
Matching a competitor’s price is wise only when there is little difference to the
customer in location, quality, or service. Starbucks offers specialty coffees and
lattés at a higher price than, say, McDonalds. If Starbucks were to try to match
prices with McDonalds, the result would be little gain in business but a large loss
in revenue. Customers are willing to pay more when they perceive that they are
receiving something more of value. In the gasoline business, price and location
are the key factors. Regardless of appearance, a gas station will attract few
customers if their price is a nickel higher than the place across the street.
Many retailers use a standard markup approach to setting prices, adding the
same percentage to every item. Although this is an easy approach, it often fails
to yield the best results. Consider keeping prices lower on items that customers
buy regularly, and take a higher margin on products that are likely to be an
impulse buy. You will keep your volume moving with sharp pricing on the faster-
moving products, but you’ll also increase your profit margin on slower moving
merchandise.
Some companies add surcharges to boost revenue. For example, airlines charge
more for paper tickets and checking overweight baggage. Many hotels charge
extra for Internet connections, room safes, and room service. That way,
customers who desire added services pay more, instead of everyone. Based on
the additional work or overhead invested in customers who require more service
and attention, businesses can justify charging different prices. But charging
different prices to different customers for the same product or level of service is
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wrong. Moses wrote, “You shall not have in your house differing measures, large
and small” (Deuteronomy 25:14 NASB).
A rug-cleaning business charged by the square foot. Pickup and delivery was
included in the price. The owner soon discovered that he was losing money on
jobs with only one or two rugs. In response, he adopted a two-part pricing
strategy. First, he added a delivery charge for smaller orders to offset his cost of
providing the service. Second, he offered a discount to customers who sent in
four or more rugs. As a result, smaller orders became profitable and customers
who had more rugs were given an incentive to provide more business.
Working through a well-crafted pricing strategy will help you maximize your
business potential.
8. Forming strategic partnershipsIn today’s complex business environment, relationships between customers and
suppliers are ever changing. Outsourcing has become more prevalent as
businesses seek to control costs, but effective outsourcing often requires a
company to train its vendors to ensure quality of service and on-time delivery.
When outsourcing is handled well, both the buyer and seller benefit.
The key is for managers to clearly establish the type of training needed, who will
pay for it, and how training will strengthen vendor relationships, increase sales,
and improve customer service. With cooperative training, vendors are better able
to meet their customer’s requirements and customers often see improvement in
quality and productivity. Clear communication between customer and vendor is
essential, because “through presumption comes nothing but strife” (Proverbs
13:10, NASB).
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Celeste Medina manages a telephone center in Phoenix that employs English
and Spanish-speaking telephone operators. The call center represents many
companies—taking orders, answering customer questions, and handling
complaints. “When customers call, they often have questions about the
products,” says Medina. “Many of our customers provide training material to
answer the most common questions. We also have several customers that send
representatives to our facility to provide onsite training for our operators. Our
customers pay their own traveling expenses, and we cover the cost of our staff
while in training.”
The training curriculum is determined by the customer, and Medina has learned
to appreciate King Solomon’s advice: “Take my instruction, and not silver, and
knowledge rather the than the choicest gold” (Proverbs 8:10, NASB). As a result
of the training they have received, call center business has increased rapidly
over the past three years.
Medina’s call center provides customer service that may include accepting
merchandise returns.
However, before a product is accepted for return, the operator works through a
troubleshooting list with the caller (based on training received from the
manufacturer). Each time a problem is resolved without requiring a return, both
the operator and the call center earn a small bonus. Medina says that “over time,
sales have increased and customer relationships have been strengthened. Both
parties achieve winning results when we collaborate on training, and we both
experience a great return on the time and money invested in mutual training.”
Bill Baxter manages a temporary employment agency in Houston focusing on
clients that require seasonal, temporary, or sporadic office assistance. In a tight
labor market, Baxter works to balance current and future customer needs with
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the available workforce. “I often do not have people on call whose skills match
those demanded by my customers. Customers expect to receive a person with
all the skills necessary to become effective immediately on the job.”
Baxter arranges for specialized training to prepare his pool of temporary workers
to meet future requirements. Some receive generalized training in software
programs such as Quick Books, Microsoft Word, or computer graphics design.
Others require specialized training. “One customer that does Web page design
needs people with specific skills in graphic design to work 20-40 hours per
month,” says Baxter. “At my own expense, I have trained three people in that
specialty to meet the demand. No competitor of mine has people with those
skills, so I have a regular customer.”
Baxter covers the cost of training, but he expects the prospective employees to
learn the skills on their own time in order to share the cost of the investment.
Baxter believes that each dollar invested in training has paid handsome
dividends, proving that “he who sows sparingly shall also reap sparingly; and he
who sows bountifully shall also reap bountifully” (2 Corinthians 9:6 NASB).
Anthony Bell’s company in Detroit assembles overseas components into finished
products. When he heard about an automotive product that was assembled in
Germany using many U. S. parts, he approached the German manufacturer and
offered to assemble the components in Detroit.
At first, the German firm was reluctant to relinquish control of the assembly
process, due to concerns over final quality. To allay their fears, Bell agreed to fly
a team of German experts to Michigan to train his entire staff and ensure that
product quality would meet the company’s standards. In return for absorbing
these expenses, Bell received a long-term contract, established a new customer,
and increased the German supplier’s profit margin.
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Embracing opportunities to form strategic partnerships can help companies
develop new business lines and strengthen old relationships. The prophet Amos
wrote, “Can two walk together, except they be agreed?” (Amos 3:3 KJV). Wise
business managers understand that finding strategic partners and forging
effective training agreements will pay future dividends.
9. How technology impacts outsourcing and service partnershipsMany people are alarmed by the increasing number of American service sector
jobs that have been outsourced in recent years, and they complain that
“someone should do something” to stop the trend. Individuals who call for some
type of restriction or government intervention, however, miss the key point: Most
outsourcing is driven by the rapid rate of change in the marketplace. Instead of
complaining, we must assume responsibility for managing change in our
businesses. As the prophet Ezra told the nation of Israel, “Arise! For this matter is
your responsibilitybe courageous and act” (Ezra 10:4,).
I would define outsourcing as any time a company transfers work to another firm
—inside the U.S. or internationally—or shifts the work to “technology.” When you
consider that many more jobs are outsourced to technology than are transferred
overseas, businesses owners ignore these trends at their own peril.
In a fluid, ever-changing economy, some jobs simply disappear while others are
radically changed and others are transferred. For example, consider the workings
of a gasoline station. Those of us old enough to remember “service stations”
recall driving up to the pump and waiting for the attendant to pump the gas, wash
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our windows, check the oil and tire pressure, and take our payment. Today, most
people pump their own gas, using a credit or debit card in the automatic gas
pump to fill up and go. The entire process takes a minute or two, compared to the
old system that could drag on for five or ten minutes.
As a result of these changes, tens of thousands of gas station jobs were lost and
are gone forever. These jobs were outsourced to technology. Gas station owners
benefited by lower costs and fewer employees to manage, and customers
benefited through lower prices (this was before the recent run-up in the price of
oil) and faster service, but at a cost of thousands of jobs.
A similar change took place in the airline industry with the introduction of
automated check-in terminals, ticketless travel, and online reservations.
Checking in for a flight used to require standing in line waiting for a ticket agent to
shuffle your paperwork. Today, many of us go straight to the gate, increasing our
convenience and decreasing the number of airline employees required to staff
the terminal.
Given a chance, should the government have tried to “save” these jobs by
mandating the use of gasoline service attendants and airline ticket agents?
Clearly not. Technological advances—and their results—are part of the ebb and
flow of a healthy economy. Business owners and employees must accept these
changes as a fact of life, and adapt rather than complain.
Technology has made many services into commodities that are very difficult to
differentiate from the competition. Many services that used to require specialized
knowledge and skill have been transformed by advances in technology. For
example, mortgage brokers used to manage countless details before a mortgage
could be approved. Today, a few clicks on the Internet can bring together several
financing offers, and some loans are even closed by mail. Given that most
consumers see little difference between one mortgage company and another,
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speed, convenience, and competitive interest rates have become the determining
factors. Once again, technology and automation have increased the convenience
for consumers and kept prices down.
In the field of medicine, Dr. Paul Sangster the Northern Arizona Radiology sees
many changes that affect the practice of radiology. “Today, images are captured
electronically, and those images can be read anywhere,” he says. Consequently,
much of this work can easily be transferred between companies or outsourced
overseas. Dr. Sangster foresees that insurance carriers may start requiring
patients to use lower-cost imaging centers that have X-rays read by interns or
even by overseas radiologists. Procedures such that require hands-on treatment
are not at risk, but other elements of radiology are.
Technological changes can be beneficial when utilized effectively. For example,
according to Dr. Sangster, one of the challenges in radiology is the need to
provide service around-the-clock to cover emergencies. In the past, a radiologist
would be on call to meet this need, creating increased costs and a strain on
staffing. Paying a doctor to work an overnight shift to read maybe two X-rays is
not productive or cost-effective. Dr. Sangster knows of a practice in an Arizona
small town, that sources the reading of images taken at night to Australia, rather
than keep a staff member on duty.
Just as manufacturers have been forced to get lean and mean by examining
every step in the manufacturing process and implementing efficiencies to remain
sensitive and responsive to price competition, service providers today must
realize that price and efficiency have become very important factors. To remain
competitive, service providers must break down their processes step by step,
and standardize wherever possible.
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Analyzing services in the same way as manufacturing may seem difficult, but in
today’s competitive marketplace, efficiency is king. Understanding this principle
allows a business to keep its competitive edge.
Aside from maintaining your business, look at where you have a definite
competitive edge, and exploit that advantage to build more business. For
example, a large general medical practice developed a very effective system of
submitting and managing insurance claims for patients. The practice used that
expertise to set up an insurance submission and management service for other
doctors, thereby increasing revenue.
A goad is a strong, sharp stick used to prod along an animal, such as an ox. In a
business sense, goads are those “sharp sticks” that prompt us to action. As
Jesus told Saul, “It is hard for you to kick against the goads” (Acts 26:14, NASB).
Likewise, fighting technology changes in today’s economy is like kicking against
the goads. Far better to adapt, change, and continue to grow your business.
Dig deeper and learn more (Optional)
This section includes various support material for further inspiration and
encouragement and relates to the material covered in this section
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Progress Report
James 1:22-25 “Do not merely listen to the word, and so deceive yourselves. Do what it says. Anyone who listens to the word but does not do what it says is like a man who looks at his face in a mirror and, after looking at himself, goes away and immediately forgets what he looks like. But the man who looks intently into the perfect law that gives freedom, and continues to do this, not forgetting what he has heard, but doing it-- he will be blessed in what he does.” (NIV)
Name and Number of Module ________________________________________
Participant’s Name: ________________________________________
The Biblical Truths (Principles) I learned from this module:
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I intend to apply this Truth (Principle) in my business by:
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Acknowledgement
Steve Marr consults with business and organizations bringing a national and
international perspective to achieve improved vision, focus, quality, and
management effectiveness in today’s competitive environment. Effective practical
assistance is provided to the business person or ministry leader. Steve’s radio
feature “Business Proverbs is heard on worldwide, including armed Forces
Service radio
For more information visit www.stevemarr.org
Material adapted by Dr. Mario DentonMario is the International Field Continental Programme Director – Market-place
for Crown Africa, the Africa Director for FCCI (The Fellowship for Companies for
Christ International) and the CEO of Strong Message Business Consultancy. He
is an international teacher and industrial psychologist and uses his strong
academic and corporate background and his uniquely effective coaching to help
people tap into their inner being; to utilise their strengths and expand their skills
to make a difference in the workplace. He and his wife, Mariene, are based in
Cape Town, South Africa, and are blessed with three grown sons.
Servant29
Copyright. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by an information storage and retrieval system without permission. Regarding permission to reprint material from this material, please write to Dr Mario Denton:
Unless otherwise noted, Scripture quotations are from The Holy Bible, English Standard Version, copyright © 2001 by Crossway Bibles, a division of Good News Publishers. Used by permission. All rights reserved
and a lot of it.
We can help you through:
Educating your leaders.
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Starting and sustaining a High Performance organisation
requires time and money …
But … serving as the Leader of God’s business requires much more
Assisting with small groups in establishing direction for your organisation.
Doing workshops on your purpose for being in business, ownership, avoiding financial bondage and integrity in the workplace.
Delivering seminars on improving performance and achieving higher levels of significance.
Biblical teaching and prayer support.
Let's keep the good marketplace vibes alive. Let's network. Contact Dr Mario Denton today to become a member of the
Crown Companies Marketplace Coaching TEAM.
Crown Companies Legacy Leaders
Providing mature business leaders an opportunity to continue to use their skills
productively for the Glory of God.
Do you desire to pass on the baton to business leaders to transform their
business?
Legacy leaders are business leaders who have a desire to continue to use their
skills productively to mentor, coach and train the other business leaders, as well
as train the next generation of business leaders for the glory of God.
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Crown Companies exists to equip and encourage business leaders to operate
their business and conduct their personal lives in accordance with Biblical
principles.
Legacy leaders Are experienced in business
Understand and are committed to the vision of CROWN Companies
Have implemented biblical principles in their own personal life and
business
Are mature in the Christian faith and are of proven character
Have a passion to see other business leaders succeed as determined by
God’s standards
Legacy leaders may possess: The capability to be an encourager, coach, mentor and disciple.
The ability to provide wise business counsel to other business leaders
The time and or resources to come alongside other business leaders
"Teach us to number our days that we may present to you a heart of wisdom.”
Psalm 90:1.
Legacy leaders serve in a wide variety of capacities, including:
Mentoring individual business leaders
Working with groups of business leaders
Serving as an ambassador for CROWN Companies in your church and
community
Travelling abroad to assist business leaders in other countries
Do you want to make a difference in the lives of others for eternity?
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How can you serve the Lord as a legacy leader and begin sharing all that the
Lord has entrusted to you?
1. Pray now where the Lord will use you in the lives of other business
leaders to impact the Kingdom of God for His glory.
2. Contact Crown Companies at [email protected] or the Crown
companies office at +27 21 975 0226
3. Visit our website at www.crown.org.za for more information, tools and
resources and become a member to enjoy the support, counsel and
fellowship of other members and the extensive material available.
Crown Companies: Reclaim the workplace for Christ
Is the vision of your church also to bring the people of your community into a life-
transforming encounter with the Kingdom of God?
The workplace is a key battle ground for achieving the above vision. Mature and
equipped believers should live their faith in the workplace. But many need help in
understanding what that means, as well as support in carrying it out. If you want
to live your faith in the workplace, helping to make it more effective of God’s
Kingdom on earth, then we at Crown Companies want to come alongside you to
support and equip you.
Our mission and intention are to develop flexible training programmes and
processes to assist you in this regard.
Imagine a workplace where …..
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There were biblically based, explicitly defined values Ethics and integrity are paramount Love and servant leadership governed relationships Pursuit of excellence was the norm Collaboration was sought but obedience and commitment to final
decisions were followed Selfish ambition was non-existent Accountability was enforced – in a supportive manner
START WITH A WORKPLACE MINISTRY IN YOUR CHURCHEquip your workplace leaders to become ministers.
Help them to become sensitive to the lost.
Help the workplace leaders of your church get a vision for joining God in the
workplace ministry.
Crown Companies: Become the business leaders God intended
you to be
Sometimes it is a matter of survival, but you have to become the business
leaders God intended you to be.
The purpose of Crown Companies is to help business leaders:
Draw closer to God
Establish a committed and vibrant relationship with the Lord
Develop deep, meaningful relationships with like-minded peers
Learn what it means to run a company for Christ
Help other workplace leaders to do the same
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This is accomplished through
Monthly leadership groups
Workplace conferences
Materials, resources and training on our website
"Love the Lord your God with all your heart and with all your soul and with all
your mind and with all your strength. The second is this: Love your neighbour as
yourself. There is no commandment greater than these." Mark 12:30-31.
Search the untold riches of the Bible to find scriptural perspective for operating a
company as a steward of Christ with like-minded peers and colleagues. Join a
small group and facilitate discussions relevant to:
Sales and marketing strategies
Effective time management
Cash flow and profit
Planning goals and implementation
Motivating people
Problems solving
"For my thought are not your thoughts, neither are your ways my ways, declares
the LORD. As the heavens are higher than the earth, so are my ways higher than
your ways and my thoughts than your thoughts." Isaiah 55: 8-9.
START WITH A SMALL GROUP DISCUSSION IN YOU AREADo you need someone to pray with you – someone who understands the pressures of running a company, someone who cares?
Do you desire to integrate your Christian faith into the daily operations of the business God has entrusted to you?
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For more information on a small group in you area contact Dr Mario Denton at [email protected].
"And I say unto you, Ask, and it shall be given to you; seek and ye shall find;
knock, and it shall be opened unto you. For every one that asketh receiveth; and
he that seeketh findeth; and to him that knocketh it shall be opened.". Luke 11: 9-
10.
Crown Companies: Every believer a minister in the
workplace
Common dilemmas in the workplace Isolation: Feeling the pressure of being responsible for many people
Need encouragement but rarely receive it
Need people with whom they can communicate honestly
Equipping the workplaceYou have an opportunity to make a difference in the workplace to which God has
called you. Meet monthly with other business leaders to receive instruction and
training from other top business speakers on how to integrate your Christian life
into your business.
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Form a small group of leaders who serve one another in a well-informed, support
group where burning issues like the following can be discussed:
Develop a strategic plan tailored for each member’s business Developing an action plan for ministry Developing your company’s mission and vision Product and service excellence Giving back to the Lord Long-term financial planning Building a high-performance team Hiring smart Sharing your faith in the workplace Problem solving Customer service
START WITH A LIFE-CHANGING SMALL GROUP DISCUSSION IN YOU AREA.
Do you desire to integrate your Christian faith into the daily operations of the business God has entrusted to you?
For more information on a small group in you area contact Dr Mario Denton at [email protected].
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