Sales and Customer Relations

Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ Business Operations ■ Customer Relations ■ Marketing ■ Risk Analysis 1

Social Enterprise Sales and Customer Relations Toolkit

Putting sales and customer service in a social enterprise model

Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ Business Operations ■ Customer Relations ■ Marketing ■ Risk Analysis

This toolkit has the essentials of sales planning and customer relations, which will help you develop a sales plan, sell more, build relationships and make a profit.

Presented by ENP and Octopus Strategies

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A social enterprise must sell, make a profit and have customers who

believe in their cause and products – all while doing good.

Otherwise, it’s just a good hobby!

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Sales

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Social enterprise and sales

o A social enterprise uses business as the primary means of achieving its social mission or purpose.

o Selling in a competitive marketplace is central to a social enterprise.

o This is unlike non-profits, whose market activity is not the primary means of achieving their mission.

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Different ways of selling

o Direct Selling: when products/services are sold directly to customers. It helps to build relationships with customers: Direct communication creates opportunities to understand the needs, opinions and experiences of the customer.

o Selling Wholesale: when not selling directly to consumer, but through a supplier. Supply relationships, prices and choosing the right wholesaler are crucial here.

o Online (or Tele) Sales: when sold online or over the phone. It’s cost efficient and a good way of selling to repeat customers.

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How to sell more

A good sales person will:

o Sell with enthusiasm, for what your social enterprise is offering and accomplishing.

o Communicate your belief in the product/service to potential customers.

o Follow a sales plan, phased over time, that explains sales targets, how sales will be made and to whom.

o Understand your customer because meeting their needs and expectations is the foundation for any small business.

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5 ways to increase revenue

o Cut your costs

o Sell more

o Change your product mix

o Increase your prices

o Combine one or more of these elements

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Both social enterprises and non-profitswork to create a positive social or

environmental impact.

But the models are very different.

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Sales is not fundraising: What’s the difference?

• ...Positioning

Fundraising Sales

o Potential funders?

o Frequency of funds?

o Donor engagement?

o Funder reporting/control?

o Deserving?

o Demand?

o Pricing?

o Communications?

o Distribution?

o Partners?

o Customers?

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o Many social enterprises mistakenly assume that they can get away with a lower service level because their customers appreciate that they’re a worthy cause.

o However, a good cause cannot make up for bad service or an inferior product.

Working for a worthy cause does not guarantee business:

The Four P’s

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A social enterprise can achieve its mission if it makes a profit. The more it earns, the more it can support its

work and social impact.

A smart sales plan is key here.

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Market segmentation Resource development and allocation Advertising strategy Marginal cost analysis

14Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ Business

Operations ■ Customer Relations ■ Marketing ■ Risk Analysis

A robust sales plan has the following four key elements:

Each will be discussed in detail in the following slides.

Market segmentation

A market segment is a group of customers, users or supporters. They

have similar needs. Each segment is different from the other and

needs tailored treatment and a customized communication plan.

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Market segmentation

The market can be segmented based on the following parameters:

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Geographic

Demographic

Behavioural

Psychographic

“Customers within X

kilometres of your

organization ”

“Customers within X

kilometres of your

organization ”

“Male Indo-Canadian university students”

“Male Indo-Canadian university students”

“Customers wanting value for money”

“Customers wanting value for money”

“Customers who prefer to buy fair trade food”

“Customers who prefer to buy fair trade food”

Customer location

Region

Urban/rural

Income groups

Age

Gender

Occupation

Socio-economic

group

Rate of usage

Benefits sought

Loyalty status

Readiness to

purchase

Personality

Lifestyles

Attitudes

Class

Social Enterprise Sales and Marketing Toolkit

Exercise #1: Customer profiling worksheet

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Demographics Psychographics Behaviours

Age Conservative Price

Gender Liberal Quality

Profession Conformist Brand name recognition

Education level Experimental Customer service

Income Environment friendly Discounts and sales

Marital status Socially conscious Attractiveness of packaging

No. of children Fashion forward Convenience of store location

Geographic location Family oriented Guarantees/warranties

Who is your customer?

Once you have identified your market, understand your customer.

Think specifically about the relationship that you want to have with

your customers. How do you want them to perceive your social

enterprise? Understanding who they are, their needs, expectations; can

help you communicate well and sell more.

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Answering the following questions will help you know your customer:

oDo you know who your existing customers are?

oWhere do they live or work?

oWhy do they use your product/service? What needs does it meet? Is there a particular benefit that your product delivers?

oHow do they use your product/service?

o Are your customers satisfied?

o How do you communicate with them? Do they share their feedback with you?

Social Enterprise Sales and Customer Relations toolkitExercise #2: Know your customer

Resource development and allocation

Based on your organization’s profile, you need to decide the

resource commitment to the sales plan, staff, material assets

and finances. Questions that you have to answer:

o Will people need training?

o Will you need a bank overdraft?

o Will there be a need for an internal reorganization?

o Will you need to use external consultants?

o Will extra production, sales or administrative staff be required?

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Advertising strategy

Advertising strategy determines how you reach your customers

and what the message will be.

It depends on:

o Brand positioning

o Brand proposition

o Brand strategy

o Creative

o Media planning

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Advertising strategy

Your business goals determine where you should advertise. Different

mediums reach and impact the market differently. For example, radio

generates interest in your product/service but it’s reach is narrow. In

contrast, television grows the market broadly.

Please refer to our presentation ‘Medium and Message’, a part of the

Marketing toolkit, to understand how different mediums reach different

audiences.

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Marginal cost analysis (MCA)

MCA consists simply of a calculation of what extra sales are generated at what cost in terms of the advertising budget and wage costs. You have to assess how much extra income is generated and the degree to which this generates a gross profit or ’margin’.

It is not necessary for a marketing drive to generate a profit since it may have other purposes: to increase market recognition prior to introducing a new product or to clear a warehouse of stockpile, for instance. But the ’marginal cost’ or ’marginal benefit’ of the marketing drive (i.e., what is lost or gained compared to the situation now) must be calculated.

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New product Market Cost-plus pricing

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There are three broad pricing strategies:

Each will be discussed in detail in the upcoming slides.

Pricing strategies

Different factors determine how you price your product or

service:

o New product: You could either take advantage of demand for a new product/service (Price Skimming) or set a fairly low price to gain market share (Penetration Pricing).

o Market: This is important too. You need to understand your market, the competitors and how it affects your product/service.

o Cost-plus pricing: Most businesses use the total of their overhead costs and add a margin to fix prices (after all, you can’t operate at a loss).

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Prices and the market

In a competitive market, the price of your product or service also

depends on the competition. The following parameters will help you

determine the pricing strategy:

o How does your product perform?

o What is its quality? How does it look?

o How is it packaged and presented?

o How does it compare to the competition?

If your product or service quality is better than your competitors, then charge a higher price.

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Remember:

Pricing strategies can change people’s behaviour. More expensive is sometimes perceived as better quality, which can help the reputation of your organization. Meanwhile, low prices could persuade people to buy more from you.

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Market segmentation Marketing mix Marketing objectives Research Plan

28Governance ■ Leadership ■ Blended Value Design ■ Products & Markets ■ Business

Operations ■ Customer Relations ■ Marketing ■ Risk Analysis

It’s important to do your homework well before you reach your customers. Here is what you need to consider:

The following slides will explain this in greater detail.

Market segmentation

This concept has been explained earlier. Please refer to slides 15 and

16.

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Marketing mix

The four Ps: product (or service), price, place and promotion inform

how to market your organization.

The concept of marketing mix has been dealt with in great detail in the Social Enterprise Marketing Toolkit.

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Marketing objectives

A well defined set of measurable and quantifiable marketing objectives

is essential before you move out in to the market with a marketing

plan. You must know what you wish to achieve - more customers, users, sales/visits, loyalty, increased support, higher prices or more profits/resources.

Your marketing plan will be governed by your objectives.

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Research

Let’s face it - you are not the only one in the market. Competition is

real. Understanding market dynamics and knowing what’s current is

essential to any business.

You must look at both the external situation (demand, supply, trends,

legislative or technical change, attitudes amongst other factors) and

internal issues (ability to deliver, effect of marketing, costs and

organizational change needed).

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The Marketing Plan

The outcomes of market segmentation, marketing mix, objectives and

research, lead to a marketing plan.

To implement one, you will need to assign responsibilities, allocate

resources, set a timetable, organize systems for monitoring and report

back.

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Develop a Sales Plan

Your Sales Plan will be determined by the features of product or service

you want to sell, its price, the skills of your sales team, your

distribution network, key partners, your customer service and retention

strategy.

As a start-up, you must think through if you will sell directly to

your customers on your own or will you outsource it and sell through

partners.

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Your Sales Team

Your sales team is the face of your social enterprise. It’s the link

between your organization and customers. As you build a team,

remember your sales team must:

o Know your customer as well as you do

o Be passionate about your product/service

o Never commit to something they can’t deliver

o Develop an emotional connect with your customers. A phone call over an email can make the difference.

o Never belittle your competition

o Always follow through

o Focus on goals rather than individual sales target

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Train your Sales Team

Right coaching will make your sales team effective and efficient. A good training

programme must:

o Help them learn to engage the customer better

o Develop their questioning and listening skills. This often leads to sales rather than a good pitch

o Make them independent. This will make them feel confident and hence more effective

o Help the team build trust and rapport with the prospects

o Prepare the team to handle objections and prepare appropriate responses to overcome them

o Develop their skills to spot buying signals and to ask for business

o Cultivate the principles of customer service in their behaviour and follow up after the sale

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What your sales team should do

Qualify customers: The salesperson who asks the right questions to the right people,

at the right time, at the right place, will have many qualified prospects.

o Who:

- Who has a need for your product/service?

- Who has the money to buy it?

- Who has the most urgent need for it?

- Who has the influence over the prospect?

o Where:

- Where does your prospect live, work, socialize?

- Where can you find a suitable mailing list to reach them?

- Where will you go to contact new prospects?

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What your sales team should do

o What:

- What will the prospect find most beneficial about your product/service?

- What questions can you ask that will get the prospect to talk about his needs?

- What information you must gather about your prospect before you meet him?

- What is the single biggest problem the prospect has?

o When:

- When is the best time to contact the prospect?

- When to contact the prospect again if your first efforts were not successful?

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What your sales team should do

Closing: One of the most important stages of selling is closing the deal.

Here are some interesting closing techniques:

o Alternative close: Offering limited set of choices

o Bonus close: Offer delighter to clinch the deal

o Empathy close: Empathize with them

o Yes-set close: Get them to say yes and they will keep saying yes

o Save the world close: Buy now and help save the world.

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Social Enterprise Sales and Marketing ToolkitExercise #3: Sales team

You are as successful as your sales team. Before you build one,

consider:

o How will you recruit and build your sales force? Hiring the right person can make or break the team.

o How will your sales people sell? What are their skills? How well do they understand your product or service?

o What is the team reporting structure?

o If the members have authority to negotiate?

o If they solve problems? How do they respond to demanding situations?

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Customer Relations

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Value is created by building relationships, addressing

customer needs and focusing on continuous improvement.

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Customer relations

Customer relations for any business means:

o Customer loyalty

o Managing communications and addressing complaints

o Building long-term relationships

o Building a strong reputation

o Linking “Internal” and “external” customers to all stakeholders - staff, customers, outside vendors, shareholders and others

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What social enterprises do wrong

o Some focus only on social side of their business, at the expense of the commercial aspect

o Others spend an inordinate amount of time managing relationships with funders, beneficiaries and stakeholders

o Result: little time is left to run the business

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Who is your customer?

To build relationships with your customers, you need to know them

first. Refer to slide 17 for tips on how to better know your customer.

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What do your customers think about?

o Image: Includes first impressions, openness, reputation, positive values and physical appearance of premises and people

o Products/Services: Are they up to scratch, well priced/good value? How can they be improved? What new features do customers want?

o Delivery: How do you deliver your products/services? Do you care for your customers? Are you communicating well with them? How good are you at customer services?

o Loyalty and attachment: The willingness of customers to continue using your organization’s products and services, and recommending the organization and its products or services to others are key to your organization’s sustainability

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How to understand your customers’ need and expectations?

The best way to know more about your customers’ needs is to collect

information about them.

Why ask? To improve your product or service, to develop newproducts, improve delivery and promotion.What to ask? Begin with the end in mind. It should have a clear

purpose.What to do with it? Once you have measured how satisfied yourcustomers are, make use of the results to improve your organizationand the products and services you provide.

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How to understand your customers’ need and expectations?

Who will you collect information from? Directly from customers

or internally from within the organization.

What information should you collect? The right questions which cover

the facets, concerns and values of most importance to customers.

How will you ask? Request feedback from customers or monitor internal

performance indicators that demonstrate either customer satisfaction

or quality of customer service.

When should you ask? At various, milestone times, throughout therelationship.

What type of information should you collect? Qualitative, demographic /

psychographic, behavioural and geographic.

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Social Enterprise Sales and Marketing ToolkitExercise #4: Customer research planning table

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What do you need to know

Who do you need to ask

How will you use the information

How will you seek the information

When are you going to find out

Who is responsible for finding out

Keeping Customers Happy

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It’s important to understand why your customers have chosen to do

business with you. This will help you retain them over the long run.

Look at the whole customer experience:

o Deliver value, everyday

o Act promptly to fix problems

o Review service at the highest level

Build Customer Loyalty

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It is crucial for any organization to have loyal customers. This leads to

repeat purchase, word of mouth advertising and hence reduced

marketing costs. To earn customer loyalty:

o Hire intelligently. Get those who are friendly, naturally good at getting to know others.

o Be positive and personal towards your customers. Listen to their needs. Obtain their feedback.

o Prevent a complaint. If one arises, resolve it immediately.

What social enterprises can do

o Strive hard to make their customers happy

o Fit their brand and message to the target market

o Develop the right marketing mix

o Negotiate good deals

o Focus on the quality and delivery of products and services they offer

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