Sales leads
Sales leads can come from a number of different sources such as:
- trade shows and events
- industry association members
- referral and networking events
- identifying potential customers and approaching them directly
- your in-market activities
- your suppliers
- your customers.
Make sure you evaluate leads to find out:
- Are they serious or just ‘kicking the tyres’?
- Could they be a potential competitor looking for information?
- Are they interested in on-selling your products?
- Are they looking for a long term relationship or a one-off purchase?
Plan your approach for each lead and follow up regularly, particularly if there is a good potential for profit. Sometimes it can take months or years of perseverance with a large customer before a sale is made.
Dealing with sales queries
It is important to respond quickly to queries from potential customers whether they contact you via email, phone or post. Ideally give an initial reply immediately, even if just to say more information will come. Don’t be too quick to give pricing information, unless your sole advantage to customers is a cheaper price.
Follow up queries if you don’t hear back. Plan your approach for each lead and follow up regularly, particularly where there is potential for ongoing profit. Try to get them to commit to another follow up call, quotation, or trial.
Sometimes it can take months or years of perseverance with a large customer before a sale is made.
Closing the sale
The final buying decision will depend on your ability to communicate the value of the product or service to the buyer.
Perceived value includes:
- The ability of the product to answer their needs and solve their problems.
- Specific features and benefits that set your offering apart from the competition.
- Your willingness to adapt to the client’s needs.
- How committed you appear to be.
- Your business history and reputation.
- Your ability to provide after sale service.
- Your relationship with the buyer.
If they say no to a sale, ask them why. Keep a record of the reasons for customer refusals (bearing in mind that the reason given will not always be accurate). A pattern of similar responses may indicate the need to change sales tactics.
Setting prices
When setting prices, take into account the additional costs of exporting. Examples of additional costs include:
- Freight and insurance
- Partner margin
- Translation costs
- Tariffs
- Regulations compliance
- Protection of intellectual property
Exporting always costs more than expected. Allow for the fact that it will almost certainly take longer than you expect to get your product or service into the market.
The correct price will:
- make a profit for you
- meet the expectations of the marketplace
- support the product’s positioning.
If it cannot do these three things, you should reconsider your company’s entrance into that market.
Pricing strategies
There are a number of pricing strategies including:
- Static pricing – selling at the same price to all consumers.
- Dynamic pricing – you adjust your price to what a particular consumer will be prepared to pay. For example airlines will charge you less if you book ahead than if you buy a ticket on the day of travel.
- Premium pricing – this suits products where the customer is prepared to pay a premium over lower positioned alternatives. This is achievable when your product is perceived to be of higher quality or prestige.
- Full cost-based pricing – you account for the costs of production and add an acceptable profit margin.
- Penetration pricing – setting a low price may quickly gain you market share if you are new to a market. Please note that it can be difficult to raise prices later.
- Market skimming – if your product is innovative and new to the market you may want to set a high price initially enabling you to make the maximum profit, then lower it gradually. This strategy is common for new consumer electronic product launches.
Any pricing strategy, or strategies, needs to align with your marketing and business plans. You may also find that an approach that works in one market may not work in another.
Issues affecting pricing
Don’t assume you can set any price you like. External factors can impact your ability to set prices such as:
- Restrictive trade practices laws – some countries legislate against some pricing practises they consider anti-competitive or predatory.
- Dumping – if you are selling at a substantial discount to what you charge in New Zealand you may be accused of dumping your product in an offshore market.
- Currency devaluation and revaluation – overseas currency fluctuations may force you to increase your prices in order to maintain an acceptable profit in New Zealand dollars.
- Administered pricing – some product prices may be set by the government of the overseas country or influenced through taxes and duties on imports.
- Competitor response – you must keep up to date with the activities of your competitors in the market and be ready to quickly alter your offering and/or price to remain competitive.
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