New Business Revolution

A blog by Peter Stinckens

A great idea to boost your sales

lamp bulb tulipsIn the last post, we’ve talked about how important it is to include just about any brain in your organization to build great ideas and strategies. Here’s a real life example of how it can grow your business beyond your wildest dreams.

Ronny runs a small carpenter shop. He specializes in furniture for shops and showrooms. In these troubled economic times not the most evident investment shop owners will make. He employs seven people and had come to the place where his costs rapidly grew bigger then his income.

First he invested in cooperation with a marketing company. The initiated campaigns, newsletters, social media actions, a new website, leaflets, brochures, catalogues, targeted direct mail actions and all the other things marketing companies do.

After a big hole in his pocket and a result that couldn’t even pay for 10% of the investment, he contacted me. He asked me if I knew a low-investment solution that would work. So we had a first meeting and discussed what he could do and how much he could still invest.

Low investment solutions

Most professional service companies do not like low cost solutions. Not because they do not work (more often then not they outcompete the high investment solutions), but because there’s not so much money to be made with a low investment solution.

A low investment solution does not mean that you can do it fast and without thinking. On the contrary, it takes a bot more thinking time and a different perspective, to build a low investment scheme that works.

So we planned a two-day meeting with the entire group. There we would entertain just about any idea anyone had. The first day we would spend getting as much input as possible. In the evening they planned an outing to a nearby city. I would make a report on the ideas that where offered. The next day we would try to take the best of all the ideas and shape them into a plan.

The ideas

To help you understand the process, here are some of the ideas that where offered;

Hire a real sales force. (Until then, Ronny and his wife where running the sales. They both had over ten years of sales experience in other companies and both where interior designers).

Have a contest for their existing customers, for who had the best and most pleasant shop and get some nice press and media attention this way.

Organize a design contest for shop owners and offer the winner the free realization of his design.

Create a design it yourself module on the website and allow potential customers to see the total project price immediately after they had finished their design

Find a new sales channel by working with some mayor suppliers for the shops they worked for. Thy could offer a package at a fixed price for new shops or existing shops that needed to be redecorated and so get the producers of products to do their sales.

Start building dedicated furniture and displays for the large suppliers of the shops.

The list goes on. In just one day, they created about sixty ideas to improve their business. The group consisted of me, Ronny and his wife, 3 carpenters, one administrative worker and a truck driver. No big marketing hotshots, expensive media experts or other specialist.

The plan

The next challenge was to narrow down the number of ideas. To do this, we decided to use two simple criteria;

Expenses: the total cost of any idea that we would withhold could not exceed a certain amount of money.

Structural impact: we decided not to use any idea (at this time) that would be a one-time shot. If we would consider an idea, it had to be something that we could use over and over again.

Most brainstorm session use no specified criteria to eliminate ideas. The work on personal intuition or take ideas that the boss or the majority of the people likes. That never works! That’s an open invitation for failure.

The result is usually a plan that’s not consistent and disgruntlement amongst those people who’s ideas are not chosen. So use some objective criteria like we did. This way people know that their ideas are not judged on personal feelings.

Make sure everyone understands that the ideas outside these criteria are not wasted. Keep them at hand for later. That’s the extra bonus, you always have a new idea at hand when you need it.

The results

After careful deliberation, we could build a plan consisting of three ideas offered. First we would start cooperation with three major suppliers that frequented almost all of the customers we had. They would be offered a commission on every project they could sell with their new or existing customers. They could only earn this commission if they agreed to let us build specifically designed furniture for them. They didn’t have to sell them to all their customers, but they would have to offer them in their catalogue.

Second part of the plan was to initiate a yearly contest that would allow any customer to win back the total cost of their project. Every year, every shop that they worked in, could take part. The one that was judged to be the best maintained would win. This way, every shop they decorated would be a true ambassador for the quality and beauty the company had to offer.

And as a finishing touch, we’ve decided not to market our own products and services, but to spend the entire marketing budget on marketing our customers. We would spend a certain amount of money per customers (about 1,5% of the project price) to market the shops we had worked for. The only condition was that the shops would ad one webpage on their site, promoting the new interior decorating and linking back to our site. These testimonials would remain in place for at least one year.

At the end, about six months later, Ronny’s business is booming. They are working with nine carpenters, two drivers and have their order book filled for months in advance.

The profit and loss

It’s always a good idea to measure your investments. In total the entire project costed about € 7.500 (the two day session, my fee and everything else included). The operational costs where all paid for by the projects they gained this way. The plan contained no fixed cost at all.

The turnover had increased by 79% in six months and was still growing fast. The margin they worked on had dropped by 1,2%, which was acceptable, and instead of losing money, the company was now making money.

All this, by using no more then all the brains available in the company. So if you’re looking to grow your business, perhaps this could work for you to. Just try it, you have nothing to lose!


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This entry was posted on 29 August 2014 by in Management and tagged , , , .


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