Category Archives: Jill Johnson

Understand the Impact of Your Profit Per Sale

Make Sure You’re Dedicating Your Resources to the Right Clients

By Jill J. Johnson, MBA

Jill Johnson-profit per sale

Few enterprises truly understand the actual profits generated by the individual sales they make. Most metrics for sales effectiveness are monitored by reviewing top line revenue results. Yet the most critical determinant of on-going business viability is to understand what revenue actually drops to the bottom line after all costs have been taken into account. You must understand what profit is generated by sales to each of your clients. Then consider the benefits and vulnerabilities the cumulative impact these sales mean to your business. Knowing the breakdown of the profitability by the individual sales to your clients can have a significant impact on your ability to achieve your business goals.

The impact of the true profits generated by each individual sale takes on greater importance. Click To Tweet

1. Understand the Impact of the Profit Per Sale

There are many expenses that go into determining profitability for a company. The same is true for determining the profitability of a sale. Each sale has multiple components impacting its final profit. You should consider your total cost of goods sold, including investments in promotion and delivery expenses. Factoring in the costs associated with the staff time required to generate a sale is a must, too. Unfortunately, few companies consider all these expenses when developing their marketing and sales strategies. Whether you are working on growing your business or you are struggling financially, the impact of the true profits generated by each individual sale takes on greater importance.

2. Know Your Profit Per Client

Frankly, not all clients are worth the effort to generate the sale. Sometimes your growth goals for your business mean you also are growing beyond clients you have historically served. This transition period is a very vulnerable point for any enterprise. It is also very stressful because you might be wrong and wind up losing a client that could have provided even revenue value if you have not been afraid to maximize your relationship.

Carefully study the costs associated with serving each client.  Perhaps you have long-term clients you like personally, but if you have not taken the time to explore the costs of the sale, their value to your business may have changed dramatically over the years. Before abandoning these clients, try to identify options to trim your expenses without jeopardizing your quality. But it may be time to move on if they are not generating any real profit to your company.

3. Review Your Customer Segments Revenue

Using a target marketing approach to grouping your customers into similar client segments provides you with a more detailed understanding of what is working and what is not. The key to effective target marketing is to focus your sales activities and expenditures toward those type of customers who can best be served by your enterprise, who will stay with you over the long-term and who will generate solid profitability. 

4. Evaluate Individual Sales Profitability

There are two ways of looking at your sales profitability data. One is by the individual clients. The other is by combining clients using some specific target marketing components. Grouping clients by similar characteristics makes it easier to identify trends in the data that you can use to assess the profitability of each of these major segments.

There are many options for grouping your customers into segments. For a B2B client, you could group them by their industry sector, number of employees, location, etc. For a B2C customer, you could group them by where they live, personal attitudes, age, family size, income level, etc.

If Client Segment A generates solid profits for you, but all of your marketing efforts are being devoted to Client Segment B who are barely break-even, the choice is obvious. You must retool your marketing and sales activity to attract more prospects from Client Segment A.

5. Monitor Individual Client Profitability

A complete review of the mix of your customers and sources of sales will reveal your potential vulnerabilities if market conditions change. It is not enough in today’s complex and competitive marketplace to look only at your total overall sales. If you have one customer that generates more than one-third of your sales, you are in an extremely vulnerable position if you lose that client to a merger, change of staff or if it goes out of business. Controlling and monitoring your client profitability and cost of sales allows you to take corrective action before your business’s survival is at risk. This takes on even greater importance if you are overly dependent key clients for your profitability.

6. The Impact of Pricing on Profitability

A close companion to client profitability is to understand the impact of various pricing strategies on the perceived value of your goods and services, and how they intertwine in attracting the customers who will buy from you. Engaging in discounted pricing strategies often attract customers who are buying from you based on price, not your value. If you are in a service-oriented business, this can be a slippery slope. You may get clients who keep you busy, but who do not generate the profits you need to build a sustainable enterprise or build your net worth. It is a delicate balancing act, but one you must realistically consider given your business objectives.

7. The Impact of Strategy on Profits

You must also consider the financial consequences of your business direction and your vulnerability to setbacks. This assessment allows you to make better business decisions and to set a more realistic strategic vision for your organization. “Finding a lane” or picking your niche through target marketing must also incorporate a true understanding of the costs of reaching them, as well as their ability to add to your bottom line in a meaningful way.

Final Thoughts

Reviewing the trend information for each of your major client segments is a highly impactful approach to revaluating the effectiveness of your sales and marketing efforts. It removes your emotions and relationships with your clients to allow you to be more detached in considering their impact on meeting your business objectives. They are no longer become just people you like, but a bigger grouping of customer segments who impact your future costs and business growth. If you are not attracting the kinds of clients generating the profitability to move your enterprise forward, it is time to reconsider all of your sales and marketing efforts.

Jill J. Johnson is the President and Founder of Johnson Consulting Services, a highly accomplished speaker, an award-winning management consultant, and author of the bestselling book Compounding Your Confidence. Jill helps her clients make critical business decisions and develop market-based strategic plans for turnarounds or growth. Her consulting work has impacted more than 4 billion dollars’ worth of decisions. She has a proven track record of dealing with complex business issues and getting results. For more information on Jill J. Johnson, please visit www.jcs-usa.com.

Stalled Sales? 

Get Unstuck by Engaging in a Strategic Market Analysis

Jill Johnson-target market

By Jill J. Johnson

If you are struggling with sluggish sales, there are two critical areas you must review to address the situation. The first is determining if the slowdown is due to changes in your target market. The second is determining if your sales and promotional approaches are ineffective. While there may be complicating factors beyond your control, most of the time a sales slowdown can be attributed to one or both issues. This type of analysis reviews your demographics, competitors and the effectiveness of your marketing messages to provide a comprehensive evaluation of the demand potential for your business. When combined with a marketing audit, you have a powerful opportunity to turnaround your sales.

Strategic Market Analysis is a powerful approach to uncovering the true reasons for your revenue slowdown. Click To Tweet

Conduct a Demographic Analysis

A demographic assessment is the foundation of determining if your products or services remain feasible. Understanding your target market demographics provides insight regarding the impact of any changes in market volume. A demographic review can help you determine if you are in a short-term sales slump or if a more significant market decline is expected over a longer time horizon. All too often the cause for a revenue decline is evident in the demographic data. The key is to allow the data to show you objectively what is going on in your market.

A well-executed demographic analysis evaluates shifts in the variables of your consumer’s age, gender, income and other economic variables impacting the market you sell to and identifies potential market risks impacting your business survival. Business client demographics include company age, revenue, number of employees, or number of locations.

Be careful in defining your market area boundaries. Too many businesses use wider geographic areas for their market than they realistically serve. Overly optimistic boundaries will overstate your market potential. Think of your customer demographics as you would a doctor looking at your vital signs. Demographics will help identify new opportunities. Or they will confirm your market has shrunk to a level where you should re-consider your offerings.

Conduct Market Interviews

Some organizations conduct probing interviews of customers, employees, key community leaders, industry associations, and vendors to gain insight on what is changing within their marketplace. Interviews provide you with insights into what makes your competitors tick or help you understand what your key target audiences really think. Interviews can help you understand what is going on and provide you with insight to refine your marketing messages to improve sales.

Study Your Competitors

While the Internet has made it easier to gather basic information on competitors, competitive intelligence involves deeper methods. Look at what products and services they are promoting. Evaluate how they are positioning these resources including how they address pain points to meet customer needs. You can use primary research techniques including networking with industry experts, customers, suppliers, key referral sources and even competitors to better understand your market environment. Combine this information with the use of secondary research sources such as news media or subscription databases to help you gain additional insight. Researching your competitors will provide you with a deeper awareness of opportunities or the need to revamp your offerings. Competitor insight also can help you develop more effective strategies to address the impact they might be having on shaping your consumer attitudes or restricting your market area.  

Secret Shop Your Sales Team

Secret shopping allows you to better understand how effective your salespeople are at sharing your brand message with your target audience. You can assess their conversation approaches, closing techniques and positioning efforts when responding to contacts from a prospective customer. You can combine this approach with secret shopping your key competitors. Secret shopping your team and competitors will give you greater insight into identifying opportunities for improvement and enhancing sales effectiveness.  

Complete a Marketing Audit

Effective marketing strategies balance the critical interrelationships of the elements of the marketing mix with your organization’s strategic plan to reach identified target markets and generate desired sales results. A marketing audit evaluates the effectiveness of your marketing and promotional tactics to identify what needs to be maintained or improved to support your organization’s strategic vision and plan. This would include a review of your website and sales approaches (phone, drop-in, Internet, etc.). Review all of your marketing collateral materials to assess improvements to enhance consumer decision-making. Carefully evaluate how you utilize your social media channels to identify more effective tactics for sharing your marketing message and engaging with your prospects or key referral sources.

Provide Sales Coaching to Your Team

Sometimes your team needs outside support to review their sales approaches to improve overall performance. It is not uncommon for novice sales people to be given a few books and some sales manuals with the expectation they will intuitively figure out how to sell. Closing deals, whether to a consumer or a commercial client, can be a much more complicated effort, especially if it involves a complex sale. Complex sales do not resolve in a single interaction and they often involve multiple decision points before the final decision to buy. Sales professionals often have to tweak how they converse with prospects. Developing better skills and questions for probing prospects can help isolate decision criteria and move the sale forward.

Final Thoughts

Engaging in a Strategic Market Analysis is a powerful approach to uncovering the true reasons for your revenue slowdown. The goal is to determine if your marketing approaches or your lack of a viable market is the cause of your situation. If it is your marketing, you can adjust your sales and marketing messages to better align with your customers and their decision triggers. If it is the market, you can review your pricing strategy and geographic market area boundaries to better optimize those elements impacting your target market.

Sifting through the data you gather will help you reassess your market trends, growth factors and competitive dynamics. You gain an understanding of the implications of this information relative to your organization, as well as an assessment of how well you are positioned for long-term success.

Jill J. Johnson is the President and Founder of Johnson Consulting Services, a highly accomplished speaker, an award-winning management consultant, and author of the bestselling book Compounding Your Confidence. Jill helps her clients make critical business decisions and develop market-based strategic plans for turnarounds or growth. Her consulting work has impacted more than 4 billion dollars worth of decisions. She has a proven track record of dealing with complex business issues and getting results. For more information on Jill J. Johnson, please visit www.jcs-usa.com.

Target Marketing: Enhancing Your Sales and Marketing Effectiveness

By Jill J. Johnson

Jill Johnson - target marketingYour customers can be grouped according to a variety of different identifiable characteristics that reflect their specific needs and interests. These needs and interests impact their attitudes toward purchasing decisions. Each of these groups is called a target market. Target marketing is the response to identified market needs. These needs will differ for groups within the total population and they can change over time. Target marketing can turn challenges created by changes in our economic environment into opportunities to better achieve your organizational goals.

While it may seem very limiting to narrow your market, the truth is you cannot be all things to all people. It is difficult and costly to develop effective promotional messages or reach your most likely purchasers if your target is too broad.

There are three major components to developing effective target marketing for sales results. First you have to clarify your market segments. Then you have to engage in data mining to verify the market opportunity really exists. Finally, link your target market to your operating, sales and promotional strategies.

1. Clarify Your Market Segments

A solid framework for evaluating your target market incorporates many different variables to develop your customer profile. The key is to begin to identify the distinctive patterns of attitudes, desires, concerns, and decision-making criteria for them. By understanding these elements, you can focus your marketing approaches to more effectively reach your target audience and to influence their purchasing decisions. Customers are more likely to identify with messages specifically tailored to their individual needs.

Target marketing typically incorporates an assessment of the demographics of your customer base. There are many demographic variables that can be easily identified and measured. A few examples for a consumer market include such aspects as age, gender, income or marital status. Business customers can consider aspects such as employees, revenue, or years in operation. Knowing where your customers live or work is another method for evaluating your target market. Geography is typically combined with demographics to measure market size.

The psychological profile is an exceptionally important variable in target marketing. Understanding your customer’s personality, buying motivations and interests provide powerful opportunities to develop communication messages designed to trigger a buying response in your customer.

Other variables may influence your customers’ purchasing decisions. These can include generational differences or customer brand loyalty. They may be highly influenced by other people being involved in their purchasing decisions. Do you need to position your marketing messages to influence decision influencers too?  Clearly assessing these target market segments provides a gateway for creating better marketing messages to ensure your customers and their decision influencers are compatible with your options.

 2. Data Mining

The second critical step to developing your target markets is to quantify your market size. You do this by data mining. Data mining involves analytically reviewing your internal customer and comparing it to external market information. Look for patterns and relationships to help understand your customer’s buying patterns and opportunities to influence them at each stage of their buying decision cycle.

Start by reviewing your Internal Customer Data. Prepare historical summaries reflecting several years of data. Most people only look at one year of data—this is not sufficient to help you determine if your market has achieved its maximum potential or is on a decline. Look for trends and patterns. What types of profiles can you create of those who buy from you? When do they buy? Who is most profitable to you? Start evaluating how effectively your marketing approaches reaches them and matches their purchasing decision approach.

Then, conduct a detailed review of the available External Data. Assess how your current customer profile matches up with the real market opportunity. Do the demographics show a potential for long-term growth? Does the data show anything else that might impact your sales success?

3. Tie Your Target Market to Your Promotional Activities

Promotion must be customer oriented and matched to how, why and when they buy. Where do they look for information to solve their problem or meet their need? It is not about what you want to sell them. You will need different marketing messages for those who are at the awareness stage gathering information than those who are ready to make a final purchase.

Match each of your promotional efforts to your target market. Clarify in detail how it benefits or provides value to them. What needs of theirs does it meet? How does it meet their needs in ways your competitors cannot?

Make your prospective customers understand how you will help them solve their problems or meet their needs by using your target market insight to customize your promotional messages! Tie your promotions to their decision-making cycle and move them through their purchasing decision-making stages in a deliberate and effective manner. Heal their pain points!

There are numerous promotional options beyond sales activities that can help you communicate with your target market. These include advertising, public relations, social media, collateral materials, direct mail, email campaigns, website, tours, presentations, networking, participating in community events, open houses, trade fairs, using giveaways and generating referrals from satisfied customers.

The effectiveness of how you communicate your value to your customers and key referral sources will determine your ultimate sales success. Communicate with them in the ways they expect. Develop a matrix to clearly define each target market you want and need to influence. Then identify how you will use each promotional opportunity to communicate with and influence each market segment.

Final Thoughts

Using target marketing provides you with a disciplined approach to crafting highly effective marketing messages that have the potential to drastically influence your sales. The process of target marketing is on-going and dynamic. You have to work hard to keep up with your market and discern when it is changing. Changes can be subtle. You will need to adjust your strategies to change with them or you may have to find new customers to remain a viable business.

Jill J. Johnson is the President and Founder of Johnson Consulting Services, a highly accomplished speaker, an award-winning management consultant, and author of the bestselling book Compounding Your Confidence. Jill helps her clients make critical business decisions and develop market-based strategic plans for turnarounds or growth. Her consulting work has impacted more than 4 billion dollars worth of decisions. She has a proven track record of dealing with complex business issues and getting results. For more information on Jill J. Johnson, please visit www.jcs-usa.com.

Strategic Triage

The Keys to Surviving a Significant Strategic Disruption

By Jill J. Johnson

Jill Jhonson-strategicDespite the best of intentions and a solid strategic plan, leaders can sometimes find their organizations in the throes of an unexpected major crisis that threatens their enterprise survival. Whether it is the culmination of changing market forces, a self-inflicted incident or the result of a catastrophe brought about by an unexpected event, enhancing opportunities for enterprise survival are paramount. The most effective crisis management strategies focus on addressing the critical elements that will enhance the survival potential of your enterprise during a significant strategic disruption.

In a medical disaster, health care professionals use a triage process to assign degrees of urgency to patients to establish priorities for treating them in order to maximize the number of survivors. The same principle of using triage in your enterprise can be a powerful approach for effectively dealing with a crisis situation in any business setting. The goals of Strategic Triage are the same: to determine the priority of your actions to make a significant difference in your outcome.

There are three critical elements of focus to weather an extinction level event. You need clarity to make rapid decisions. Your leadership activity must identify the most significant priorities necessary to stabilize your immediate situation so you can act on them. Your conversations need to engage candid dialog with your team.Determine the priority of your actions to make a significant difference in your outcome. Click To Tweet

1. Clarify the Key Decisions to Be Made

 Once you recognize you are in a strategic crisis, focus your critical thinking on the key decisions that will matter the most to resolving it. This includes gaining clarity to understand the underlying dynamics that led to the crisis. To do this, you need to rapidly obtain candid information about your true situation. How serious is this? Do you have the proper data to understand the magnitude of the crisis, and the options you have for addressing it?

Planning in a turbulent period requires a deep assessment of your business environment. This may be the time to bring in trusted advisors to provide you with insight about options to consider. Just make sure they have the depth of expertise to truly offer you options to resolve your crisis. You do not want to be part of their learning curve when the stakes are high.

Identify the critical strategic information you need to make decisions. Be clear about the outcome you desire. Do you want to save lives, save jobs or save money? This clarity will serve as your guide when you evaluate your options and choices. Assess your assumptions and understand the market forces at play that will determine your ability to resolve the crisis. Concentrate your critical thinking to focus on the things that matter most to resolving the short-term issue without blowing up your entire enterprise. Focus on the very heart of the key decisions you will need to make. Everything else is extraneous and a potential distraction when you are in the throes of a real strategic crisis.

2. Establish Clear Priorities

The success of any Strategic Triage effort is to clarify the most significant short-term priorities. Developing clarity among all participants will help them stay focused on the activities which will work to immediately stabilize the situation. All too often, without a clear focus, if left to their own devices, team members will use their own judgment to focus on activities they deem important. Unfortunately, if they lack good critical thinking skills, they are likely to focus on efforts with minimal impact.

Establishing clear priorities for your leadership team and employees provides each of them with a clear focus for engaging in efforts that improve the potential for your enterprise survival. These priorities establish a framework for decision- making and minimize any focus on irrelevant issues or activities that will not resolve the problem.

Ensure all your team members and corporate assets are in proper alignment. Everything that is essential to addressing the issue should be deployed toward resolving the crisis. Use everything.

3. Engage in Candid Dialog

Engage your key leaders in a candid dialog to identify what they immediately need from their key employees to stabilize the situation or resolve the crisis. Ask your team members to identify your potential options to work-around the gaps caused by the crisis. Use your clarified priorities to give them guidance. By taking control of your communications you will also be better able to manage your message and focus your talking points during the emergency.

In times of strategic crisis, candor is paramount. This is not the time for pretending and wish-crafting your troubles away. Identify what you need from each of your stakeholders to resolve the crisis or to stabilize the immediate situation. Identify the most crucial leadership skills you need to deal with the most pressing issues. Do you have the talent in-house or do you need outside resources?

Evaluate your team’s willingness and capability to step-up to fill the leadership void. Assess your team’s resolve and commitment to turning the situation around. Are they willing to do what it will take to solve the crisis? You need to know who you can rely on when the stakes are high.

Be sure to engage with your key stakeholders both inside and outside your organization. By having a candid dialog with your critical stakeholders, you optimize your potential to gain their support and influence to work with you in addressing the crisis. They may have additional ideas and insight too for how to best address the situation or minimize disruptions.

Final Thoughts:

Whether it is the loss of your primary customer, the death of a key employee or surviving the zombie apocalypse, maximizing your options and prioritizing your efforts are essential. Managing your own panic and terror will help you focus your critical thinking on the key decisions you need to address and finding the right advisors to assist you in weathering the storm. By doing so, you will maximize your options for weathering the storm and then recalibrating your strategies to optimize your future outcomes.

 

Jill J. Johnson is the President and Founder of Johnson Consulting Services, a highly accomplished speaker, an award-winning management consultant, and author of the bestselling book Compounding Your Confidence. Jill helps her clients make critical business decisions and develop market-based strategic plans for turnarounds or growth. Her consulting work has impacted more than 4 dollars billion worth of decisions. She has a proven track record of dealing with complex business issues and getting results. For more information on Jill J. Johnson, please visit www.jcs-usa.com.

Preparation Breeds Confidence: Four Strategies to Prepare for Success

By Jill J. Johnson, MBA

Most people want to take shortcuts; however, the more thorough your preparation, the greater the likelihood is that you will have success. Preparation is essential to having confidence in yourself no matter what setting you are in—this will build your confidence when you are in high pressure situations such as interviewing for a job or dealing with higher-level bosses.

It takes time to build your skills to a deep level of mastery. It does not happen overnight. With practice, you will build deeper awareness of yourself. You will develop greater confidence. You will demonstrate your emerging growth in mastering your new skill. This preparation will prepare you to maximize your opportunities for success.

1) Daily Efforts are Essential for Success

If you aspire to leadership in any area of your career, you need to invest time in each of the many components required to be effective. By engaging in your practice on a daily basis, you create a more manageable method to prepare yourself for success.

Breaking your skill development down into smaller components so you can practice your progressions in more manageable chunks is essential. This is especially true with all the demands we have on our time and attention.

Each day you must determine at a micro level what you need to do to be prepared for your advancement to your next level of success. How you then practice those required skills is your preparation.

As you elevate, your opportunities will get tighter. Fewer people move on to reach the highest-level leadership roles. Those who decide they will progress to higher rungs of success figure out a path to get there, and beyond. They’re confident in what they know because they are prepared.

2) Build Your Skills Before You Need Them

You know the saying, “Luck is what happens when preparation meets opportunity.” It is so true. If you’re not prepared, you won’t have any confidence in yourself when the opportunity to move forward toward your dreams presents itself.

You must always be preparing so you have developed your skills before you need them. To be prepared to progress to a level beyond where you are now, you need to look ahead. Pay attention to what others at that level are doing. Ask yourself, “What else is going to be needed from me as I move up to my next level of success?”

You can practice your skill development anywhere—at home, at school, in your job, in a church group. You can even practice while you are interacting with your children, shopping at the grocery store or coaching soccer. Anywhere.

Finding opportunities to practice new skills are all around you. You should plan to practice your new skills both inside and outside of work.

3) Volunteering Accelerates Your Preparation For Success

You probably think you are too busy to volunteer for a leadership role in an association, community group or non-profit organization. Work and family responsibilities likely leave very little room in your schedule for taking on any kind of outside leadership role. Yet this view limits your opportunities to accelerate your potential for success. The truth is, engaging in volunteer leadership experience can have an exceptional impact on your entire career.

By agreeing to serve in any leadership role, you will have an opportunity to practice skills you need to work on and helps you gain exposure to new skills you will need for long-term career success. Confidence comes to you faster when you practice in a lower risk environment when you volunteer.

Whatever you need to practice, you can do this when you volunteer. You can practice some element of a skill you will need to prepare for your next promotion. You can use a volunteer role to practice speaking up with confidence.

Your confidence will compound because you will have multiple opportunities to develop your expertise. Volunteering allows you a venue to learn to work more effectively with different generations. You will expand your network of contacts, as well.Make the effort to find people who can provide you with new insights about other possibilities you may not have considered. Click To Tweet

4) Working Through Learning Curves

As you build your skills, you will have learning curves. There will be times when you’re going to fumble and bumble. Mistakes happen to everyone. You must always be willing to learn from the experience. No matter what the skill, you will need to practice.

Sometimes you’ll blow it. It’s okay. Chalk it up to a learning curve. Resolve to do better next time. Don’t make a habit out of the failure. Don’t let a mistake or lack of expertise shatter you. Move forward and learn from it.

You cannot take big leaps toward success unless you first take small leaps to build your confidence. The success you learn in those leaps compounds over time. By repeatedly testing yourself, and by preparing yourself for your next opportunity to win, you’ll be ready because you’re practicing and you are progressing in your skill development. These two confidence keys are now intertwined.

Final Thoughts

Always have an ongoing focus as you practice. This will deeply embed your skills so you can call on them with growing ease every time you need them. Then you can work on mastering them to develop your skills to a highly refined degree of finesse.

Consider how you will prepare for your next level of success. To consistently move forward, you need to intentionally develop new skills and probe for deeper insights of understanding as the issues you address become more complex. The search to understand what it will take to propel you toward your next leadership challenge never stops. Each one is a progression for you.

Make the effort to find people who can provide you with new insights about other possibilities you may not have considered. As you see the greater possibilities for your life, you will begin searching for opportunities to make them real. As you practice and prepare for your future, you will build more confidence, and the sky can be your limit.

Jill J. Johnson is the President and Founder of Johnson Consulting Services, a highly accomplished speaker, an award-winning management consultant, and author of the bestselling book Compounding Your Confidence. Jill helps her clients make critical business decisions and develop market-based strategic plans for turnarounds or growth. Her consulting work has impacted more than $4 billion worth of decisions. She has a proven track record of dealing with complex business issues and getting results. For more information on Jill J. Johnson, please visit www.jcs-usa.com.