Four Secrets Of Successful Sales Diversification
Four Secrets Of Successful Sales Diversification
What a week! Seven speaking engagements and sales training in five cities in Washington, California, and Texas, and five flights provided for an exciting but tiring trip. When my wife picked me up at the airport, the last thing I wanted to do was dine out. However, she had had a long week as well. She was prepared to have a quiet dinner at home, but I surprised her by suggesting we go out for dinner.
Jensen's Caf in Burnsville, MN is a wonderful breakfast and lunch restaurant, open from 7 AM to 2:30 PM. The Jensen's are third generation restaurateurs, with another store called Jensen's Supper Club in Eagan, MN. On my flight home I read that they were diversifying their business by using the Jensen's Caf location to launch Jensen's Wine & Dine, which uses the same facilities and opens at 4:30 PM. They have an entirely different crew that comes in to provide a warm, upscale, but reasonably priced dining experience with fine wines, an excellent menu, and an entirely different feel than you would find if you showed up earlier in the day for breakfast or lunch.
What does this have to do with sales? Jensen's is growing their business using four principles of successful diversification. To be successful we must focus on what we do best, but when we become successful, we can diversify our business, and add exponential growth to our bottom line. To diversify your sales business you can use the same strategies, which are:
1. Stay in your area of experience and expertise
2. If possible, use existing business assets and resources
3. Provide better service to and more profitability from existing customer relationships, and/or...
4. Use diversification to expand your customer base
Stay in your area of experience and expertise
Many salespeople (and businesses) create success in a particular business and then diversify into an entirely different area of expertise in which they lack experience. Too often the new offering of products and services creates a drain on the original business. Old customer relationships become strained with "growing pains" being the excuse. Diversification becomes "deworseification." Be cautious when expanding your offerings outside of your area of expertise. However, if you see sales opportunities in products and services that are related to what you currently sell, you may be looking at a logical and profitable business expansion. When your experience removes some of the learning curve related to new products and services, profitability show up more quickly.
If possible, use existing business assets and resources
If you sell related products and services out of the same location or process, you have the potential for successful diversification. Examples of this include selling a new product on an existing sales call, adding a product to a catalogue or website, and including new sales materials in existing promotional mailings. The mantra of up-selling is McDonald's "Do you want fries with that?" You can do the same thing with when you up-sell in existing space and process.
Provide better service to and more profitability from existing customer relationships
Sometimes new product offerings make sense when you consider the impact on existing client retention. In the old days, the "Three 'L's' of Banking" were 1) Loans, 2) Loans, and 3) Loans! In the 1980's, banks started to offer non-traditional financial services, such as investments and insurance. Today banks derive a much greater percentage of their income form non-interest income than in the past, and thus improve their profitability with better customer service through broader product offerings.
Use diversification to expand your customer base
Common sense dictates that your existing products will not appeal to every prospect. However, a related or slightly different service converts prospects that have said "no" to old offerings into new customers. Investment brokers found that when they offered guaranteed or insured investments in addition to investments with market risk, they could attract new clients. With time, these new clients might also consider the brokers' traditional offerings.
Diversification equals growth
Don't forget to focus on the profitability of expanding your offerings; it has to make sense from a business perspective. Once you have established yourself and become a solid presence in your marketplace, offering additional products and services allows you to increase your profitability and take advantage of scale. Take a look at what you can offer that will build on and strengthen your existing business. Build a plan to grow...and execute your plan!
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