Archive for September, 2007
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It has been one year to the day since I discovered the amazing county of Nicaragua and I look forward my return very soon. The people and the culture are what makes this such an amazing little country and they are what won me over. During the 8 months I lived here I grew an appreciation for Nicaragua’s various traditions and complexities, but what I found to be its most valuable resource is its people. It is the poorest of the Central American countries due to the idiotic socialist ideologies of the Sandinista regime. Despite Nicaragua’s turbulent past, there is a certain amount of charm to be found in this that you don’t find elsewhere in the region which is why I love this country so much. Their population’s ability to maintain a positive outlook on life during adverse times is what I find gives these people the warmth that is unique to this nation.
I will be posting a detailed critic of the country in the near future discussing the unfortunate turn towards socialism the country has recently undertaken. I am of course also going to discuss the business environment and why it is full of amazing business opportunities although maybe not to the risk averse.
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The Quick and Painless Guide To Selling
The common myth about selling is that selling is difficult. Most people believe this and think that to be successful you need to be an actor change your personality. This is absolutely false and the kinds of people who do are horrible sales people who come across as sleazy, self-serving and fake. The best way to sell is to act naturally as if you were talking to a friend and telling him about the benefits of something that you have. To be successful as a salesperson you need to take on an advisory role and lead your customers through the process of understanding the benefits your product will bring them (needs based selling). Make sure that your role as an expert and adviser is credible by knowing everything about your product and industry and by being honest. Sincerity is vital in being highly successful (discussed in “The Problem With Outsourcing“) therefore it is important that you believe in your product and in most of its features. If your product is mediocre and has no real redeeming qualities compared to your competition’s you are better off cutting your losses and dumping the product before your reputation is tarnished forever.
It is hugely important to take a tailored approach to selling and to adopt the mentality that every customer’s needs are different. A scripted approach will only lead to your customer either feeling alienated or annoyed by your sales pitch. What is vital at the beginning of every sales pitch is a Q&A with your customer to find out more about them and to see whether your product can indeed help them out. If it cannot then don’t waist too much time on seeking an impulse purchase, but rather focus this time on qualified buyers who are going to benefit from what you are selling. Once you have enough information about your client from the Q&A, you want to move to your tailored sales pitch that will lead to his understanding of the benefit he will specifically get from your product. A lot of sales people when they sell tend to not gather enough information about who they are selling to and will often promote product features that the consumer is completely uninterested in. This leads to either consumer impatience (sales pitch too mundane) or consumer intimidation (sales pitch too technical) which means the client will walk.
The last important step is to ask for the close. Never expect that the client will tell you that he wants X amount of what you are selling. You have to ask the client directly how much he may want so that the sales pitch can move further down the funnel. If you know the amount that will maximize their utility then take the role as an advisor and suggest the amount they should buy and back it up with your reasoning.
Note: If you get a rejection when you ask for the close do not walk or run away from your pitch and the time you have invested in you consumer’s education. Instead quickly re-evaluate your consumer and your approach and then start from a different approach. It is important to note that if you have gotten far enough into your pitch that you have asked for the close, it means that you customer is genuinely interested and contemplating the purchase of your product. It is up to you to find out what the barriers to that close are and to address those as quickly as possible. You’ll know if there is a lack of interest in your product if you get a rejection soon after you start your pitch. If manage to get to asking for the close though sometimes you will receive several rejections from your client before you finally succeed in closing them.
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A fundamental necessity in selling yourself, your ideas, your products, or your services is to have answers to all the questions that the recipient of your sales pitch might ask. Especially obvious question!!! Last night I was solicited by a local politician named Kate Holloway of the Ontario Liberals who is running in the upcoming election in my riding (Trinity—Spadina). When I heard the knock on my door the first person to greet me was a gentleman whose job it is to cordially break the ice with the tenants. He is charged with the duty of informing the tenants of the upcoming elections and to keep them engaged in conversation until the time that Mrs. Holloway is done answering the previous tenant’s questions and arrives to engage the new tenant. So last night when the gentleman arrived at my door he quickly answered my question about the ideological stance of the Ontario liberal party (unfortunately unlike British Columbia’s Liberals they are left of center) and my other questions pertaining to the elections. Shortly after Mrs Holloway arrived and asked if I have any questions for her, and I responded by asking what the party’s political platform was.
Starting from the moment she opened her mouth to answer, everything she said worked to her disadvantage. She immediate when straight into a scripted response opening with, “Well we are going to be opening up new daycare facilities…” (Wrong answer)! In my mind as soon as she said this I thought to myself, in what way have I given her the impression that I even remotely care about day care spending (At the present time I neither have a wife or kids). She then went on and on and on about various unbudgeted social programs…”$130M of new street cars, $670M for subway expansion, $620M for Highways…$200M there…$1B there…$3.6B there…” The image I had in my mind while she was telling me this was little 18 year old Kate Holloway at the mall with a brand new credit card. “I am sorry”, I responded after a while, “but what are you going to do for business…”? Her reaction to my question completely caught me by surprise. She was completely dumbfounded, at a loss for words, and kept repeating “ah” and “um”. The gentleman with her interjected to give her the time to think, and brought the question completely off topic and into an illogical loop. Finally about a minute and a half later she proceeded to give me an answer about how a few years ago their party (still currently in power) fixed the price of renewable energy alternatives to remove price fluctuations. I felt like telling that price fixing actually hurts the overall business environment but instead I just thanked her for her time and wished her good luck.
Now the reason I brought this up is that she made many fundamental mistakes while selling herself to me that led to me not trusting her with my tax dollars. They include not qualifying me through a quick question and answer period (Q&A) to giving me a scripted pitch, to not knowing the details of her service, to not asking for the close. In my next post I have put together a guide that will address all of these fundamental mistakes. I talked a bit to her campaign manager in the elevator about 20 minutes later and told him that they have a lot of work to do. Well at least they now know what they have to work on for the debate.
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These 3 videos (at the bottom) explain exactly why Google is so amazing at marketing and what Microsoft need to learn. These are by Eben Pagan, founder of Double Your Dating and getaltitude.com. I suggest you watch all 3 of these videos because they contain a lot of free valuable information. I have made a few notes that follow the key points if you don’t have the time to spend 25 minutes watching them.
Notes on the Videos
- It is easier to get $10 out of someone if the perceived value of what you are selling is $100 than it is to get $1 out of someone if the perceived value is only $1.
- People are too narrow minded to let go of an immediate deal that they perceive as greater in Value than what it is on sale for. Monkey trap example: In Africa hunters make a hole in a tree and place a nut that is the same size as the opening of the hole. Monkeys will put their hands in a grab the nut, but will not be able to take it out because their hand is too big to exit the hole while holding the nut. Monkeys will stay clutched on to the nut and will not let go, which allows hunters to walk up to the monkey and kill it.
- Wealth is in the mind. Wealth is a mindset. If you don’t think with a wealthy mindset you will never become wealthy.
- Love getting the short end of the stick. It will make you money. (Reference to selling $100 of perceived value for $10)
- Psychological Experiment: There are 2 people: person A and person B. Person A is given the opportunity to decide how to divide $100 between the two of them. Person B was given the opportunity to decide if both of them would get what person a decided or nothing. Through this experiment psychologists found that there was a threshold at $80 to person A and $20 to person B where person B would rather see both of them get nothing that to walk away with $20. The experiment was repeated in a third world country where $100 was worth months of income, and psychologist found the exact same thing. People will walk away from a month’s income for free, just because they could not stand the thought of someone getting a better deal than them.
- If you keep your ideas secret and don’t show the value in your ideas to others, then you won’t get any attention at all. Eban Pagan’s view on this is that if you give away these amazing ideas for free, then people will ask themselves, “How much better is the product that they are selling, if they are giving this away for free.”
- Move the Free Line: Give away what are entry level products for free, and build your customer base. This will allow you to sell more profitable products to more people. Giving away information products for free with your main product is the best way to increase you conversion rate. They have the lowest cost and highest perceived value.
- Move the Depth Line: The more value you give on the bottom the deeper the relationship you build with you customer (Sounds similar to what the manufacture I talked about in my last post did with me. Gave a lot of free development and deepened the relationship with me). The more you deepen the relationship with the customer the more demand you will find for higher value products. Therefore create higher quality and higher margin products to offer you consumers that you have deep relationships with.
- Naming is the area where business owners and marketers spend the least amount of time, but is one of the most important. Create a name the plays well on the phonological loop such as alliteration or rhyming and juxtaposition. Example: Coca Cola and Palm Pilot and Blackberry, Marilyn Monroe, Capitan Crunch.
Video 1 of 3
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Plain and simple: the problem with outsourcing is that you don’t always get what you are asking for. I have been dealing with a manufacture in Costa Rica for the past 2 months and they have been great. They are very professional and have been really easy to work with, even saving me thousands in development costs. There is one outstanding issue that has retarded the launch of my product for about a month and a half now, which is the fabric. I chose to use a full package manufacture (they do everything from A to Z) which is something that I suggest for any new entrepreneur. The only resounding problem with this specific manufacture thus far has been that it seems to have trouble giving me the exact fabric that I am asking for. I have provided them on three separate occasions with fabric samples of the type of fabric I would like to use in the production of my first line of clothing. They have promised me every time that they would easily be able to replicate the fabric and everytime the results they have sent me were not even close.
The last sample I sent them two weeks ago was significantly closer to one of the previous production samples they had sent me so that it would be easier for them to replicate. As a result the sample fabric I received back today was even further off the mark that the previous attempts at fabric replication have been. What I have noticed is that they keep sending me what ever is closest in their fabric catalog and don’t even try to replicate the fabrics that I ask for. These kind of manufactures are specifically tailored to replicate any type of fabric, and as I saw on my tour of the factory, they have all the required equipment to do so. The second to last sample they sent me was suppose to contain a blend of 90% polyester and 10% cotton with a weave that would make the fabric resemble cotton but have the wicking properties of polyester. After I ran a couple tests on the sample they sent me, I noticed that the fabric retained water just like you would expect in 100% cotton. I decided to put it to the ultimate test: a flame. Sure enough it did not melt like it should have if it were 90% poly, but it rather disintegrated which is characteristic of 100% cotton. This lie was very troublesome and I am getting increasingly weary of the company I have been dealing with. Even though they had won an immense amount of loyalty through their other services, their failure to provide me with what they promised has nearly crushed their loyalty advantage. They obviously have a significant weakness in the production of fabric and this needs to be rectified if they plan on competing in this global market. Here is a marketing and customer relations rule that every company will want to follow: Never promise your customers something you cannot deliver on, because one lie will erase countless favors in the past. Thus it is better to be honest and lose a customer for one contract, than to lie and to lose him for life.
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I just recently started a blog 3 weeks ago in order to document the building of my apparel business, and I have to say that it has helped keep me really motivated. I link all my posts on my Facebook account so that my friends can see what I’m up to. I find that I am holding myself accountable, during times of potential distraction, to what ever I post on my blog. This I find is due to the the social pressure of making sure I keep the integrity of my word in all my posts. Let’s hear a cheer for Wordpress (for those of you who do not know, it is the software that I am using to blog).
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Anyone wanting to become an entrepreneur will find this series very interesting. I have to say that this interview of Eben Pagan (founder of getaltitude.com) is really interesting. I had previously watched his videos on marketing which I suggest you watch and which I’ll post after this post. Click the link below to see all 7 videos…
Video 1 of 7
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One of the reasons that I love Facebook and that I hardly use Myspace is because of the “legitimacy” and “truthfulness” of everyone’s profiles compared to Myspace. When I browse one of my friend’s profiles on Facebook I always find what I’m looking for quickly and I know that it is more or less accurate. It worries me that Facebook is slowly turning into another Myspace and opening it up to Google’s crawlers might invite many unwelcome changes. What I don’t like with Myspace is that a majority of the activity in my profile constituted of annoying people trying to cheaply pawn their mediocre products, services, parties, bands, or what ever on everyone… I became inundated with messages by people who seek to annoyed the majority around them with their self serving message. I draw a parallel between these type of Myspacers and pyramid marketers or religious zealots who try everything to push their products, services, or ideas onto you. Myspace has really lost a lot of credibility with me. Within the first week that I started using it I had about 30 friend requests, of which only 3 were actually legit requests from people I actually knew. It was enough for me to stop using Myspace, and I hope that Facebook will not become the same. I am Already very annoyed by some of the new applications that have been created and send out invites to friends of the person adding the application to their profile. What I find even more irritating is that some of my so called Facebook “friends” actually think I would even slightly be interested in an application called “Vampire”, “Superwall”, or “Free Gifts”. What people don’t realize is the more that they blanket the digital social landscape with their plugs, the less effective these plugs become. We are now at the point where the ‘interuption marketing’ causes such a minute impact that it only serves to irritate those around you. For those people wanting to learn more about how to successfully market your products, services, and other junk you think I’m interested in, I suggest you pickup Premission Marketing by Seth Godin and learn how to get my permission to market to me.
Now there is some positive in the fact that Facebook will be indexed by the various search engines other than making it easier to browse and find information you are looking for (A.K.A. Facestalking or Facecreeping as some of my friends like to call it). By indexing Facebook it will be possible to increase the clout that your SEO efforts on Facebook have in impacting your keyword rankings and pagerank. This of course is a great thing for web entrepreneurs, and will lead to increased profits, but as stated above it will ‘I believe’ lead to the degradation of Facebooks legitimacy.
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Employer Identification Number “EIN” - This is what any US corporation needs in order to open up a bank account, hire employees and do a multitude of other business related activities.
So today I dialed the IRS in order to get an EIN for Silverback Apparel Inc with a lot of reservations about having to deal with the “BIG” and “ScArY” IRS. Well I do have to say that things did not turn out the way I had expected they would have. I did start off by dialing the wrong IRS department, but this was quickly rectified by being transfered over the the Business department, where I was quickly connected to an agent. I am astounded at how friendly, informative, and curtious the gentleman who helped me out was. I was even more amazed by the fact that he told me that I would have my EIN number within 10 minutes. He asked me all the questions that you find on the SS-4 form (the form needed to apply for an EIN) and within 5 minutes of having answered those he had my number. He informed me that an official document (needed to open a bank account) will be sent to Canada for my records and the it would arrive within 2 weeks. All in all I have to say that so far dealing with the US government so far has really been a lot quicker and less painful than I thought it would be. My advice to Canadian business men wanting to do business in the US is to actually phone the IRS because they will help answer your questions right away, as well as expedite you EIN application.
Internal Revenue Service
irs.gov
Telephone Assistance for Businesses
Toll-Free 1-800-829-4933
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