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Your EnterQuest Bulletin - 26 October 2005
| Thought for the week: "Fear begins to melt when you take action towards a goal you really want." Robert G. Allen |
In this week's issue:
Small business answers
If
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or need help tracking down a grant, subsidy or business support
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To
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Weekly stir 
Getting more sales from your business 'back end'
Do you know the difference between front-end and back-end sales in a business? Have you heard of these terms but were unsure about what they really mean, or have you even heard of them at all?
A lot of new and existing small business owners haven't come across these sales terms or just don't recognise the importance of the distinction between the two. So let's examine this in more detail, provided you're still awake and are willing to learn something new about making more sales.
Many small businesses focus their marketing and selling efforts on getting their first sale from a customer. This is often referred to in business terms as the 'front-end' sale.
But businesses that have a strong focus on their front end, especially those in retail, can spend a disproportionate amount of time looking for new customers, and fail to grasp that the real goldmine in their business lies in getting a continuous stream of regular repeat sales.
Which are known as 'back-end' sales.
Your back end is where the real value lies for many businesses. A new business can spend a lot of money on acquiring new customers and convincing people to do business with them, but then totally miss out on additional revenue by ignoring them. They are also throwing away their return on investment from acquiring those new customers via their front end.
The main point to remember here is that if you've successfully convinced someone to do business with you, it means you've gained their initial vote of confidence. If you've also provided a level of service that meets or exceeds their expectations, it's highly likely that you'll get their vote a second, third and fourth time or more. And if you're really good at what you do you might even get the ultimate by achieving lifetime back-end sales from your customer.
Of course, this is all provided you have a back-end marketing strategy, which unfortunately most small businesses don't have.
The simple step that's missed by a lot of new businesses when they get their first front-end sales is that they don't capture or record their new customers' contact details.
You see, in order to market to your customers again and again, you must be able to contact them. A simple point, but a point that's missed by too many business owners.
Many small retailers are now becoming more switched on to this and will ask for your name, address and telephone number at the point of the first sale. They sometimes don't give a reason for doing this as most customers are quite willing to do it, but it's a good idea to point out to your customers that you're doing this as part of your after-sales service, or so that you can let them know about new products and special offers that will come up in the future.
Every small business in the UK should be doing this and making it an automatic part of the purchase process. If your service is good, the majority of your customers will expect this to happen anyway.
But to go one step further you should be capturing your customers' e-mail addresses, if they have them. This is even better for marketing your back end, as you will have the ability to market to your customers again and again, through your e-zine or with new and special offers, at no cost.
If your customers are reluctant to give you their e-mail addresses, you can try to offer them an incentive, such as a money-off voucher for their next visit or purchase.
One note of caution though, before you start capturing phone numbers and e-mail addresses.
Privacy and marketing communication laws are very strict, and have been put in place to ensure your customers' details are kept safe by you, and that they are not unreasonably contacted by you other than for genuinely promotional or educational purposes. You should make sure you read about and understand these laws before you begin this process, and a good starting point is our factsheets about the Privacy and Electronic Communications Regulations 2003 and complying with the Data Protection Act 1998, which you can find on our Scavenger small business research website.
Once you've managed to establish a list of customer details that you acquired through your initial front-end marketing efforts, your job is to exploit this goldmine, continually developing back-end sales by promoting your business and your products and services to these people.
Don't make one of the biggest mistakes in the book by ignoring your existing customers, especially the ones who have bought from you for the first time. Business owners that ignore their back end will not do themselves justice and won't get the returns they could have achieved from the investment and efforts they put into their front-end sales.
If you paid a lot to acquire your customers, why not go on to earn a lot from them by educating and pleasing them over and over again?
For hundreds more practical tips and tactics to improve your sales and marketing efforts and results, read the UK
Small Business Marketing Bible.
Marketing
tip
How to write an effective tender proposal
A tender proposal is a document that you will probably have to create to bid for a contract to supply another business or organisation. It should set out, clearly and concisely, what your business does and how your product or service can help the other business.
Things to think about when writing a proposal include:
- Formatting - use a clear font, like Verdana or Arial, and print your proposal on good-quality paper.
- Writing style - keep things simple, and avoid using technical or industry jargon. Strip out redundant phrases and superlatives like 'excellent', 'superior', 'unique' and 'unsurpassed' - use measured terms to describe your achievements instead, such as 'We reduced customer complaints by 95% in 2004'.
- Checking for spelling and grammar mistakes - it's essential to get the proposal proofread by someone who hasn't been involved in pulling it together.
- Including the price you are proposing, and the deadline for when you will deliver it (see September's tip on 'Getting the price right' for advice and tips about this).
The following resources and tools provide more tips about writing proposals, as well as places where you can identify potential tenders.
Finally, it may be worth bookmarking an online dictionary to give you instant access to spelling checks, definitions of commonly confused words, a thesaurus and a jargon buster. And you can also read our practical factsheet on writing public sector tenders for some more tips and ideas.
Legal
tip
Chasing up the slowcoach payers
Many small businesses are willing to offer credit terms to their customers, perhaps of 30 or 60 days, as this flexible attitude can help encourage people to do business with you.
But problems can arise when customers fail to pay within the agreed timeframe, as it can mean you are unable to pay your own suppliers when bills fall due.
Business regulations offer a very useful way of persuading customers to catch up with their unpaid invoices if the friendly approach doesn't work.
- The important law to be aware of is the Late Payment of Commercial Debts (Interest) Act 1998, which allows you to charge interest at a certain rate on long-standing unpaid debts. If you haven't agreed a credit period with your customer, a debt is taken to be late after 30 days. You can apply the law to any customer that owes your business money, including limited companies and sole traders.
- There's a useful guide to the rules, written in plain English, at the Better Payment Practice Campaign site. The site also has a wealth of information on how the law works and what you can do to apply it.
- Our factsheet covers dealing with late-paying customers, providing an overview of your options for collecting the debt and a number of sources of further information.
Finally, you can check out the UK Red Tape Buster for hundreds more factsheets, scenarios and frequently asked questions on the law for small businesses.
IT
tip
Are you autoresponding?
By using an autoresponder, you can automatically respond to people who e-mail your business, send them e-books or software, provide tutorials over the space of several weeks, or automate subscriptions to a mailing list.
- You'll find the most basic autoresponder in Outlook or Outlook Express. Click on 'Tools', then 'Out of Office Assistant', to set up a standard reply letting people know you've received their e-mail and will contact them as soon as possible. This simple assistant is useful for when you're away on holiday or if you run a business which depends on speedy responses.
- Autoresponders can also be more sophisticated, allowing you to target people who have shown a genuine interest in your business. It's possible to set these up using a CGI script, but if you're inexperienced at computer programming there are services that will do the hard work on your behalf.
- Check out QT-Pro or SendFree for two examples of such services. Marketing research shows that it takes an average of five to seven exposures to your product or service before you convert a prospect to a customer. These autoresponders are a good way of making sure you keep your business at the forefront of people's minds.
And if you're looking to develop your own business website to sell to customers via the Internet, why not check out the Small Business Builder, a unique tool to enable a complete novice to set up a website or online store.
New business idea
Each
week we provide you with summaries of some popular or emerging business
ideas in the UK.
Here
is this week's idea:
Just one word
Regularly improving your vocabulary is not just about learning a new word and its meaning. It will improve your general knowledge and make you feel and act smarter in all sorts of personal and business situations.
Do you know what the word 'obstreperous' means?
a) stubborn
b) unhelpful or awkward
c) noisy or vociferous
d) forgetful or ignorant
Answer at the end of the Bulletin.
Website review
The Chartered Institute of Personnel and Development (CIPD - www.cipd.co.uk)
This is the professional body for anyone involved in the management and development of people, from recruitment and HR professionals to small business employers. So how user-friendly and accessible is the organisation's website?
- Navigation
and presentation - an impressive homepage, with good use of colour, user-friendly drop-down lists to find your way around the site, and key tools and resources clearly highlighted. Little touches - like a drop-down list to find your local CIPD branch directly from the homepage, without having to drill through endless regional 'Contact us' pages, make a big difference.
- Accessibility - you've got to be intuitive enough to realise that clicking on 'About this site' is where you will find the accessibility options. But once you get there, the array of options is good: you can enlarge text size, there's help with downloads, and the site meets most RNIB accessibility criteria. It has even been approved by the Plain English campaign, which means it's jargon-free and easy to follow.
A very useful site - and one which small firms may bypass owing to the perception that it's just meant for large companies with HR departments. The tools, courses, events and guides on key employment law issues are of practical benefit to businesses of all sizes.
Our rating - 19/20
Did
you know?
Problem patch puts Microsoft users at risk
A security patch recently released by Microsoft has been targeted by hackers, who have bypassed the patch to exploit a vulnerability in the Windows operating system. Antivirus firm Symantec discovered the problem and warned that similar attacks are likely to follow. It has also transpired that the flawed patch, released in Microsoft's security bulletin for October, could potentially lock users out of their PCs or prevent them from running certain applications.
Local food is cheaper than supermarkets
National Market Fortnight is running between 15 and 29 October, and to mark the occasion, the National Market Traders' Federation (NMTF) has released details of a survey showing that a basket of goods bought from the UK's traditional or historic local markets can be up to 27% cheaper than in Tesco. Cheese, meat, washing powder and toilet rolls saw the biggest price differences (up to 50%), and in terms of regions, the single biggest mark-up was on a bottle of Coca Cola in the north - the NMTF says it cost 50p at a market and £1.32 in Tesco.
Worth
a visit
Catering supply heaven
The Restaurateurs' Guide has been developed by the British Hospitality Association, the trade association for the eating out industry. It contains comprehensive listings, usefully categorised by product, location and business name, to help catering businesses locate the cheapest and best kitchen and food supplies for them. In addition, you get an online tutorial on finding the right supplier, and can also browse catering and hospitality businesses and premises up for sale or to let.
The VoIP lowdown
A new service is offering a fresh perspective on the development of Voice over Internet Protocol (VoIP) technology through a new bulletin, the VoIP Digest. The newsletter will chronicle developments in the technology and ways in which businesses can use it, and the site also offers useful reports and downloads explaining what VoIP is.
Local, national and trade publications online
Media UK is a web directory providing links to, contact details and information about all the UK's publications, from local newspapers to national titles and magazines. There are also listings for local radio and TV stations, if your advertising budget can stretch that far. Used in conjunction with this trade publications directory, it's an indispensable resource for small firms looking to plan a print advertising campaign.
Worth
a read
This newly published book covers the holy grail for every small business owner: how to win a big client. Written in a practical and detailed how-to style, the book explains that securing the business of a major customer is not beyond the grasp of small firms, despite what they may think. Packed with valuable advice and useful case studies, you can find out more about the author's other work at his website, www.differencemaker.com. The site includes a newsletter and free toolbox covering the same subject considered in the book. Check out:
Just one word answer
The answer is c).
Obstreperous means noisy, vociferous or disruptive.
A key customer service skill for sales staff is the ability to defuse situations where complaining customers are being obstreperous. |
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Good
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The EnterQuest Team
This information is meant as a starting point only. Whilst all reasonable
efforts have been made, the publisher makes no warranties that the
information is accurate and up-to-date and will not be responsible
for any errors or omissions in the information nor any consequences
of any errors or omissions. Professional advice should be sought
where appropriate. |
