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Sales Strategies

The 10 elements to develop an effective purchasing department

We have already made it clear in another publication what supply is , so now we are going to review in detail what the purchasing or acquisitions department is, what its functions, objectives and characteristics are, as well as its importance within any company, its processes and best practices to develop an efficient purchasing department.

So let’s start from the beginning.

What is the purchasing or acquisitions department?

The definition of the purchasing or acquisitions department is understood as the area responsible for carrying out the purchase or acquisition of all the necessary goods that the company requires for its correct operation, at the correct time, with the specified quality and at the best cost.

purchasing or acquisitions department

Regardless of whether you work in a transnational company or if you manage a SME, you must find that the material you need to carry out your operations is obtained in a structured and planned way , and for that you must understand that the purchases (acquisitions) of a company They are a key piece to achieve higher profits and improve your production cycle, regardless of whether your company makes a product or provides a service.

The first thing we must do to develop an effective purchasing department is to define our policy and our processes, and for that you need to know the following.

What are the responsibilities of the purchasing department?

The responsibilities of the purchasing department are based on the process how the goods that the company needs are acquired, and these are:

. Procure the products and services that the other departments of the company require in order to carry out their activities.

. Negotiate prices, delivery conditions and payment terms with suppliers.

. Manage an effective relationship based on honesty with suppliers.

. Manage contracts and agreements, thinking about the best interests of the company.

. Achieve savings of at least 3 times what is invested (salaries, equipment, benefits) in the purchasing department.

What are the functions of the purchasing department?

functions of the purchasing department

The purchasing functions are closely related to the way in which the areas that need a supply make their request, since this will be the one that triggers the entire purchasing process. The functions of the purchasing department are:

  1. Process the purchase request in a timely manner
  2. Choosing the right suppliers to supply
  3. Get at least three quotes to compare prices and delivery conditions
  4. Negotiate with suppliers
  5. Issue the purchase order (including purchase specifications) to the supplier
  6. Track delivery with suppliers
  7. Provide feedback to applicants on the status of their order
  8. Facilitate payment to suppliers
  9. Analyze market trends
  10. Negotiate contracts and agreements
  11. Find alternative suppliers to the supplies that are considered necessary
  12. Evaluate the performance of suppliers before and after making a purchase

We will see all these functions in more detail in other articles due to their importance.

What are the purchasing objectives?

These objectives will largely depend on the results you want to achieve for your company, since these will be the watershed to know if your purchasing department is working efficiently, therefore, the objectives of the purchasing department are:

. Reduce purchasing and storage expenses.

. Generate purchase orders within the established time limit.

. Ensure the delivery of materials and the provision of services, in the time established in the purchase order.

. Minimize quality defects in purchased materials.

. Develop new or existing suppliers that contribute to reducing costs and / or delivery times.

. Ensure that providers are up to date with their payments.

. Decrease the number of “one-stop shops” to avoid supply shortages.

. Increase the participation of suppliers in internal projects of the company.

. Ensure that suppliers have current qualifications or certifications.

But remember, you must develop your objectives based on the SMART methodology (for its acronym in English) to ensure that your objectives are met:

. E S pacific: clearly define what you want to achieve

. M edible defines amounts or percentages of the result you want to achieve

. A licensable: that is something that can be made objectively consider

. R elevating: that is of importance to your company or internal clients

. A T time: date when your goal must be met

Example of a purchasing goal

purchasing goal

Reduce expenses by 8% (2,000,000 MXN) of all company departments during the next 12 months, generating new contracts and purchasing catalogs through better structured negotiations.

Buyer

The buyer is responsible for carrying out all the transactions necessary to make the purchase of a material or service, such as the requisition process, the quotation, generation of the purchase order and the monitoring of invoices, and will also be in charge of generating contracts and agreements, as well as, it will be the first point of contact for the duration of the business relationship with suppliers.

Expeditor

The expediter is responsible for making sure that the suppliers are aware of the order and its characteristics, it will also be who will follow up between the priority orders of the company with the orders that are pending with the suppliers.

Sourcing

The developer is responsible for searching with existing suppliers in our company, and outside of this, different products, designs, components, services, that offer the company a cost reduction or a better service provider, and to achieve this, they must consider a variety of factors such as location, logistics costs, novelty of the product or service, risk, and the vendor’s state of maturity.

Procurement Engineer

The supply engineer is responsible for measuring the quality of the products and services purchased, in addition to supporting any of the positions to develop suppliers, this engineer must know in detail the entire supply process, since he will be the one Make sure that a supplier has everything necessary (certifications, qualifications, conditions of your company and its workers) to perform the service or product that we are going to buy in the best possible way.

Leader shopping

The purchasing leader is responsible for planning, organizing, directing and controlling the strategies to be followed by the department, and will also be responsible for reporting to senior management on the fulfillment of the purchasing team’s objectives. Among its main functions will be to motivate, guide and listen to your team, as well as to develop new ways of working that speed up and facilitate the team to meet its objectives.

Since we define the main jobs within a purchasing department, it must be clarified that if the company where you work or if your company is not large enough to hire 5 people within the department, then the buyer can perform the 5 positions (only if they do not affect your performance).

And on the contrary, if your company has more than 5 people in purchases, then your organization chart will have these same positions, but it will also have supervisors or more leaders, and with more specific positions, such as a buyer of materials and another services, or buyers, developers and supply engineers segregated by “commodities” or “products”, which is the best way to classify your jobs, but we will see this topic in more detail in another article.

If you review the organization chart, the buyer and the expediter are at the same level, because they will be in charge of handling purchase orders, communicating with their internal customers about the status of their orders, and following up with suppliers about the status of their purchase orders, so they maintain a close working relationship.

On the other hand, the developer and the purchasing engineer are at the same level, because each complements the function of the other, when the developer finds a supplier, the purchasing engineer must evaluate it and share certain improvements to be made, and the developer must In charge of carrying out the follow-up with the supplier, so that it achieves these improvements, so that both positions can develop strategies to improve the quality of the suppliers, sharing the responsibility and the tasks to be performed

It is very important that you have a specific mission and vision of the purchasing department, since these will be the pillars on which you are going to base yourself to manage your purchasing department, just make sure that these missions are integrated with the mission and vision general of your company, so that you achieve total synchrony between the purchasing department and the management of the company.

Purchasing Policies

The purchasing policy is a document that is intended to facilitate our staff to carry out the purchasing department’s strategy, since we will rely on the policy to achieve the commitment of the team, and of the areas that maintain contact with purchases, to reinforce the commitment and participation of all those involved.

The purchasing department policy serves to provide an accurate guide for leaders and employees to develop action plans that allow them to achieve their objectives.

Purchasing department policies should be as clear and simple as possible, so that they are easy to understand, and, in addition, it should be disseminated both among the department members and with our internal clients, so that they also know the work being done. In the department and the responsibility they hold.

How to develop purchasing policies?

To develop an effective purchasing policy , we must ensure that it can be done on a single page , that it maintains a language that everyone in the company can understand and, above all, that the purchasing team can really use the document as a guide to know how to perform the functions of the department.

develop purchasing policies

In my opinion, there are 3 fundamental requirements that any purchasing policy must have:

. Mention the objective of the policy.

. Define the guidelines and considerations to follow.

. Establish the responsibilities of the department and its internal clients.

Regardless of whether you want to generate purchasing policies for a private, governmental or industrial company, you must ensure that it at least meets the 3 requirements already mentioned, and try to make them brief and concise, if you do not do so, I can guarantee that no one in your department or in the company you will be able to remember them, much less take them as a guide to carry out your functions.

To make it clearer and have a better idea, I looked for a purchasing policy that meets these requirements, so if you click on this link PDF purchasing department policies (although they could have made it even easier) you can review the example and it will be easier for you to develop your own policy.

Purchasing Policies and Procedures Manual in a company

The purchasing policies and procedures manual is part of the company’s internal control system, said manual should be created to obtain specific, structured, systematic and general information on the instructions, processes and responsibilities within the purchasing department, in addition to serving for information on policies, functions, systems and procedures that are needed to perform the operation

This purchasing regulation is made in order to group all the documents necessary to develop the tasks that the purchasing department must perform in a company, but it is not mandatory to create a manual, you can maintain procedures and instructions as independent documents, but these must be easy to locate and must maintain a sequence between them, ensuring that anyone is able to understand them.

The basic elements that a company’s purchasing policy manual should contain are:

. Purchasing policy: every manual should start with the policy, and with this direct the expected behavior that any collaborator in the purchasing department should develop.

. Rules of the purchasing area: they must indicate the actions that are prohibited, the appropriate way to act and the way in which the functions of the department should be developed.

. Workflow: in this section all the instructions should be delimited so that any person in the company or new member of the purchasing team knows how to perform key tasks such as requisition, selection procedures, purchase order, approvals, and reception of goods.

. Type of purchase: the processes to meet the different types of purchases will be defined, whether they are purchases of goods or services, and the sub-classifications that the company has made of them.

. Purchases by transaction amount: define the guidelines depending on an established purchase amount, it can be a guideline for purchases of less than 29,999 MXN, another guideline for purchases of between 30,000 and 49,999 MXN, and so on to the extent deemed necessary depending of the company.

. Records: define which records to keep digitally or physically such as quotes, requisitions, purchase orders, contracts, bids, etc.

Importance of the purchasing department

The usefulness of the purchasing department lies in the ability of your department to not only be a department of control and management of expenses (reactive), but a key unit that offers your company a competitive advantage within your sector (active).

What do I mean by the above? Because normally the purchasing department works to process purchase orders, negotiate some of these, generate the occasional contract and get a few savings, all this due to the poor structure of the department, the lack of categorization in the products and / or services, and the mismanagement and communication of the departments that make the request, which results in a reactive purchase or “put out fires”, which is the most common in companies.

On the other hand, when I speak of an active purchasing department, I mean a department, which, in collaboration with the other areas, plans the supply of resources, also has a detailed structure that allows tasks to be simple and avoids bottlenecks. Bottle within the purchasing process, which allows the company to obtain its supplies at a better price, with better deliveries and with time to solve problems that were not contemplated in the plan;

Purchasing department characteristics

The main characteristic of the purchasing department is that it is the only department capable of saving and contributing to the profits of the company, since whatever the company “invests” in the salaries and services of the purchasing department, it must be able to pay himself and to get higher profits, all this through the savings generated.

That is, if a company “invests” a total of $ 200,000 monthly in the purchasing department, it must be able to achieve savings for the company of $ 600,000, I would say that the correct ratio should be at least 1 to 3, where for each peso that is “invested” in the purchasing department, and it must get 3 pesos in savings.

Other characteristics that we can find are that the department can be divided by the 2 types of purchases, which exist:

. Direct purchases: acquisition of raw materials and goods for production. An example of this would be the purchase of metal bars and machined components.

. Indirect purchases: acquisition of goods and services that allow your company to carry out its daily business activities. An example of this would be the purchase of spare parts for a machine, travel and IT services.

What are the stages of the purchase process?

Within the supply, the purchase process or cycle can be divided into 5 stages , which must be developed in the best possible way, and improve over time, to keep this important cycle running smoothly; these stages are:

  1. Requisition or purchase request.
  2. price.
  3. Purchase order or order note.
  4. Receiving supplies.
  5. Payment to suppliers.

What is the purchase requisition or purchase request?

The purchase requisition is the document or digital format (it should never be done “on paper”) with which the purchasing department is authorized to supply any good or service, which must be previously authorized, based on the amount of the request, and must be issued by the users responsible for making the requisition correctly.

. Utility: the requisition is used to communicate the need of a department of the company to the purchasing area, regarding any supply that is required for its operation.

. Function : the function of the requisition is to indicate all the requirements such as quantity, date it is needed, specifications, characteristics and / or properties that the supply must have in order for it to be useful for the company.

What is the quote?

The quote is the document or format (it should not be received “on paper” and it is acceptable to receive them by email) in which the price of a good or service, its availability and the characteristics of the offer are stipulated, to participate in the process of purchase. In some sectors, instead of calling it a quotation, they will call it a budget or an estimate, but the most commonly used term is quotation.

With the new purchasing tools, this document should remain in the past, and any quotation should be made within the online system to manage purchases (E-procurement) of the company, but as this is still out of reality, the buyer will be responsible for the proper handling of these documents, so that you can make reports that compare the quoted supplies.

. Utility: the quotation serves to communicate to the seller (through a request for quotation or RFQ) the characteristics and quantities that are needed from the supply, and also, to group all the similar needs of the company to facilitate the purchase of the supply.

. Function: the function of the quotation is to indicate all the requirements that were made in the requisition to the suppliers that can supply the product or service us need, and also serves as a guide for the buyer when choosing the supplier, since, with this we can compare prices, characteristics and delivery conditions.

What is the purchase order or order note?

The purchase order or purchase order is an agreement (it should not be issued “on paper”) that the purchasing department makes to a supplier to request a good or service, with which the supplier, depending on the payment terms, can begin to provide the service or carry out the product, without receiving a payment at that moment.

A purchase order must clearly mention the date of issue, quantity, description of the supply, identification number (if any), specifications, purchase price, payment terms, delivery method, taxes, and name and address of the buyer and seller. When the purchase order is sent to the supplier, the latter is expected to confirm receipt of the order and the date on which the order will be delivered.

purchase order or order note

Everything that is bought in a company should be done through a purchase order (there are a few exceptions), through a unique registration number, with which its use can be controlled.

. Utility: the purchase order is used so that the supplier has a document that allows him to know what to sell, it is also a promise of payment, so that the supplier begins to manage the sale, without having to pay him (in most cases)

. Function: the function of the purchase order is to confirm the price and delivery conditions, of the requirements that were made in the requisition to the suppliers.

How can I make a purchase order?

To make a purchase order, the ideal would be that you have a purchase management system that allows you to make a purchase order from the information provided in the requisition, and that later, it will take the quote data and transfer everything this to the purchase order in a semi-automatic or automatic way, and thus, minimize the error and facilitate the control and measurement of all the purchase orders.

But if your company does not have that, you only need either Excel or Microsoft Access, but as the most widely known and widely used tool is Excel, we suggest that you at least have an Excel format.

Example of a purchase order

If you need an example of a purchase order, you can download in this link a format of a purchase order with taxes, so that you only have to enter the information indicated there, but remember to add a new purchase order number each time. Make a new document. The employee’s signature can be digital.

Receiving supplies

The receipt of supplies is the process by which one or more supplies manufactured, distributed or made by a supplier arrive at our warehouse to be inspected, validated, classified and entered into our “stock” or inventory, to be able to store it until the company I needed it.

In the process of receiving supplies, we are going to carry out 2 types of receptions, the receipt of physical material, and the receipt of services, which also need to be validated to confirm that they were made and guarantee that something is paid performed.

. Utility: the receipt of supplies serves so that we can ensure that the material or service that we buy complies with the conditions in which we request it from the supplier.

. Function: the function of the reception of supplies is to receive the materials that I send or that we collected from the supplier, and to compare what the purchase order requests against what was physically received, and to prevent the transfer to “stock” if there is any difference.

Payment to suppliers

Payment to suppliers is the process where after the merchandise or service has been validated and accepted, we make a bank transfer or cash deposit according to the credit days stipulated in the purchase order, based on the invoice delivered during reception. Of the material;

We can find different types of invoices, such as:

. Ordinary invoice: it reflects in detail all the deliveries, prices and the supplier and buyer identification data.

. Commercial and preform invoice: they are only informative and serve to confirm the value of a transaction, especially in international trade.

. Electronic invoice: It is done the same as the ordinary one but its difference is that it will not be delivered physically but will be sent in electronic format.

Since we define all the stages that make up the purchase cycle in a supply chain, it is necessary to know which is the stage that can cause us the greatest problems, so it seems important to explain in more detail about the problems we can find in the supply receiving cover;

Terms and conditions of a purchase order

conditions of a purchase order

A very important point within the preparation of the purchase order, are the terms and conditions of purchase, which should be stipulated in the order, they are usually added at the end of it, and although they are often overlooked, they are a fundamental part, since the purchase order acts as an agreement and it is with these conditions that we can make our claims if necessary.

Confirmation of receipt of the purchase order

Having said that, you can imagine the importance of the supplier confirming that the purchase order has been received, previously the order had to be signed and sent back to the buyer, but now what can be done is to receive a confirmation through the system purchasing management, by email, or failing that, the simple fact of having some evidence that the supplier is processing the order, even if it is a partially finished job.

At the beginning of the work, the supplier understands that he agrees with the terms and conditions, and that is why he has started to do the work, or that for that reason, he has confirmed receipt. It is important that as buyers with each new supplier and even every certain time, a “refresh” or review of these conditions is carried out with the suppliers, so that they have no excuses when we make our conditions valid.

External records in our purchase order

It is advised that for no reason the supplier’s quote number or any other identification number of a supplier’s process should be entered, since by doing this we may harm the terms and conditions of our purchase order, by including a number of supplier registrations we are validating the conditions linked to that registration number.

This is why I recommend issuing quotes under your own registration numbers, and thus not having “loopholes” when enforcing our conditions.

How to make the terms and conditions of purchase?

The terms and conditions must be prepared by your legal department, in conjunction with the purchasing department, to know exactly what conditions are needed, we can add conditions to protect and ensure that the supply will be delivered on time and in the conditions agreed upon, so you can add some penalty for late deliveries, some penalty for low quality, or like him not disclosing information that is intellectual property of the company.

Quality in purchases

As I had already mentioned at the beginning, the receipt of supplies plays a key role in the purchasing process, since it is where the receipt inspection process is carried out, during which the quality of purchases will be reviewed, therefore It does not matter if you are a large or small or even a micro company, you must have a process that allows you to define what are the parameters to accept a good or service.

The key points to take into account during the quality review in purchases will depend on the line of business of each company, but it does not matter if you are a grocery store or a large information technology (IT) consulting firm, Everyone must have a checklist or blog, either digital or printed, that serves as a guide to know what to check when receiving a good or service, and for this, the purchase specifications are normally used.

What are the purchase specifications?

The purchase specifications are the description and the precise characteristics of the requirements with which the purchased material or service must meet, mentioning the tolerance levels allowed (minimum and maximum).

Depending on the business of your company, the specifications may be provided by the engineering area, the quality area, the user requesting the material or a standard of services or products, but these must be as clear and understandable as possible, in order to avoid setbacks with your suppliers.

Also make sure to hold talks every so often with your suppliers, where you share tips that help them better and more easily understand your specifications.

What should the purchase specifications include?

Within the purchase specifications must include relevant information such as size, weight, unit of measure, physical or chemical properties, the use of material, technical specifications and performance and specifications brand if you can only use certain suppliers to make that component you want to buy.

The Inspection Plan

The Inspection Plan is a detailed program that contains the necessary information about the tests, services and parameters that must be reviewed of a material, machine, product or service, this will help us to define the characteristics that must be inspected in each operation only from the purchased materials, but also from those produced, but here we will focus on the purchased ones.

The Inspection plan is divided into the following elements:

. Inspection Operation: indicates the actions to be carried out during the inspection of the different goods or services received.

. Inspection Characteristic: indicates the unique qualities that a certain good or service possesses, and thus, ensure that they are inspected with the appropriate instrument.

. Inspection instrument: it is the tool that the inspector will use to validate that the characteristics of the good or service have been met.

Non-Conformities

Now that we have carried out all these actions, we can confirm whether or not the good or service is in accordance with the purchase specifications, and in the event that it is not in accordance, a Non-Conformity would have to be raised , which must be notified to the department. of purchases so that they can claim the supplier, and thus, get the replacement of the material, perform the service again or, failing that, make a credit note.

Regardless of the case, all these Non-Conformities will have to be measured and it will help us to evaluate the suppliers, this will be discussed in detail later.

Conclusion

Now you know the 10 elements that make up an effective purchasing department:

  1. Understand what a purchasing department is
  2. Understand your responsibilities and roles
  3. Define your goals
  4. Structure department positions
  5. Establish purchasing policies
  6. Identify the purchasing area as a competitive advantage
  7. Analyze its characteristics
  8. Correctly develop all the stages of the purchase process
  9. Establish terms and conditions to protect the interests of the company
  10. Evaluate quality within purchases

If you carry out each of the points in your company, you will go from a purchasing department without structure to a department with defined bases and functions, but that does not mean that you can already sit down and rest, this was just the beginning.

Now we must know how to manage a purchasing department, that is, now we have to direct and manage the efforts of our department (which we already have well structured), and thus, obtain greater savings, better deliveries, and better relationships with suppliers. . We will see this in the following articles.

 

Categories
Sales Strategies

5 Changes in Digital Marketing Strategy during the Coronavirus Pandemic

While no one knows what the post-coronavirus reality will look like for marketers, one thing is certain: In an environment where physical interaction is expected to be reduced for an extended period, digital channels are now more important than ever.

Learning from the country’s most severely affected by the pandemic so far, online channels will play an increasingly crucial role as more people are required to seclude themselves at home. In Italy, where the overwhelming number of cases has necessitated a complete lockdown, Internet traffic has been on the rise. During the early stages of the response to the coronavirus, Internet traffic in Italy increased by between 8% and 20%. Once the government ordered quarantines across the country in mid-March, online traffic soared 30 percent above regular levels.

DIGITAL MARKETING STRATEGY

This is where marketers can make a difference. When it comes to providing consumers with personalized, relevant and current information online, marketing technologies will play a key role. The same applies to responding with empathy to a new set of needs and constraints imposed on consumers.

Brands and companies are rushing to change their marketing strategies to meet business objectives in this new environment. To help marketers make the right decisions, we offer the following 5 Changes to the Digital Marketing Strategy during the Coronavirus pandemic:

1.      Redefine your business goals

An altered landscape requires a deep reassessment in terms of marketing strategy and overall business goals. Marketers can use their work-from-home time to reflect on their brand purpose and define a new set of messages.

Start you’re brainstorming process with questions like: What do your customers expect from you at a time like this? What do they need to hear? Can you make life easier for them by offering longer pay and return periods? Does your brand satisfy a critical need in these uncertain times?

If so, make your critical contribution the central focus of your messages. If not, will your brand need to redistribute marketing budgets and redirect consumers from physical stores to online stores? So updating your marketing plan and budget allocations is the next step. The funds needed could come, for example, from events, which 41% of US B2B marketers planned to increase in 2020 before the virus spread.

2.      Save messages for critical communications

Before sending a coronavirus-related email to your entire database, remember: you are communicating in a highly message-overloaded environment right now. Consumers are overloaded with messages from their employees, doctors, mayors, governors, and schools. They have to install new apps that allow them to work and study at home, so make sure your message counts, and use targeting to your advantage during this time.

Canceling an event, product launch, or service offering? Do you have critical information about product inventory or delivery times? A new policy to aid COVID-19 relief; Of course, a message to all affected consumers will be justified. However, silence is golden when it comes to addressing the pandemic by email right now. It is not a marketing trend or a must have, although many companies are joining.

In that sense, carry out a thorough audit to control the frequency of your regular marketing automation. How much is too much? How often do your clients want to hear from you in a time of crisis? Crossing the line can annoy customers who have to deal with massive disruptions at a rapid pace, perhaps even souring your brand reputation for life. Let them come to you, making sure that consumers can easily find answers to your questions (see 4. Reception)

3.      Use Omni channel to your advantage

Redefine your company’s goals and help identify the strengths of your brand’s Omni channel offering. All brands with physical stores are having their hands tied by the current state of mandatory government closings of their stores and have to redirect their customers’ traffic to their online stores. Even before these closures, US shopping malls were already suffering, with 40 percent of consumers avoiding them, so marketers had some time to respond.

Make sure that marketing automation – including geo-fenced triggers – no longer sends push notifications for visits to physical stores. Instead, create campaigns to reward online purchases, for example by doubling reward points on digital purchases or creating discounts and BOGO offers. Do you have the key data to identify your most loyal customers outside the network? If so, how can you specifically convert them into online customers?

While people wait at home for the situation to be resolved, a little personal recognition goes a long way. Using consumer data from profiles on your customer data platforms (CDP), offer personalized experiences across channels and devices. Although the actual shopping experience is difficult to replicate online, individualized product recommendations created with AI engines and delivered at scale or special offers will make your message stand out from the rest.

4.      Put your inbound marketing to the test

Considering the expected increase in online traffic, are you prepared for more consumers to proactively find your business? Or come indirectly through the magic of SEO and SEM? Take the guesswork out of testing all of your inbound marketing strategies – including websites, chatbots, resources, videos, how-to content, brochures, and more. For a wide range of search journeys;

Has your geographic marketing been updated to redirect localized searches to your online store instead of physical locations? Do your stories and video blogs offer answers and strategies to the current questions? And what about voice search?

Bearing in mind the above, keep in mind that it is a good time to update the frequently asked questions on your website, which also benefits your positioning in voice search, with new information regarding COVID-19 and the current one; Discontinuation of the sale in physical stores. Use data from web sessions and customer service centers (see 5. Data) to see what your consumers need specifically at this time;

5.      Analyze and measure everything

In this reality disrupted by COVID-19, new search patterns and trends will emerge almost daily. That’s why data analysis and reporting are more crucial than ever. Knowing which pages your consumers visit and what kind of searches they perform will help you fine-tune your marketing message on the fly (see 1.) and deliver relevant content that resonates.

Ask yourself questions like: Who are your most valuable offline customers and how can you push them towards online conversion? What emails and messages are creating the most engagement right now and can you create more? Do you have locally relevant information for consumers who live in a specific area? Can you identify nurses, doctors, cashiers, police, firefighters and others who keep critical services running while everyone isolates them, and maybe you want to send them a coupon or a token of gratitude?

For us at Selligent Marketing Cloud, having actionable data about consumers is key;

In times like these, it’s about harnessing that power and combining it with smart ideas for specific campaigns based on real-time data. While you’re at it, maybe it would be a good time to make sure you’re up to date when it comes to complying with CCPA, GDPR, and other data privacy regulations (you can always visit our Data Privacy and Security Center).

Outlook

The coronavirus pandemic is causing alarming levels of uncertainty and frustration for everyone. But marketers are already responding with empathy and creativity. As theaters in the United States close their doors to the public, major movie studios are making the switch from releasing current blockbusters directly to streaming platforms. Live streaming of events and concerts is also underway and new marketing and advertising models will emerge in the process.

On the bright side, we collectively face this crisis in a world that is more digitally connected than ever. Can you imagine how the COVID-19 pandemic would have developed in 1995, when the Internet was in its infancy and critical information traveled much more slowly?

Today we have the tools to understand what consumers need right now and respond with personal relevance on an unprecedented scale. This will be key, as long as consumers physically distance themselves but remain digitally connected, perhaps closer than ever.

In the coming days and weeks we will provide more useful content around the coronavirus (COVID-19) and digital marketing. Also be sure to read our explanation on how Selligent Marketing Cloud is supporting efficient digital communications amid the fallout from COVID-19.

Categories
Sales Strategies

How you create a successful advertising strategy that maximizes sales potential

Do you want to increase your sales and drive more visitors to your website? How about a promotion? When marketed well, promotions are ideal strategies for reaching out to both existing and new customers.

A promotion creates an explicit buying incentive for your target group. It creates a sense of urgency for casual visitors to complete their purchase. It attracts bargain hunters and encourages the undecided to finally click on “Buy Now”.

You can also achieve long-term growth with a promotion. With the right marketing plan, your promotion can attract a new group of buyers and turn them into long-term customers. But first you need a strategy to create and publish your promotion.

How you create a successful advertising strategy

8 tips for developing a strong advertising strategy

Most promotions have 2 main goals: increasing sales and maximizing market presence. When developing a strategy that is aligned with these goals, here are some tips to keep in mind.

1.      Keep promotions simple

A high response rate is likely if your promotions are easy to understand and actionable. The simplest strategy is to discount the item for everyone. If you cross out the original price on your website and add the new price, perhaps in bold, the benefits of the promotion will be easy for everyone to see.

Another option is to use discount codes. If you choose this option, you need to make sure that the discount code is easy to use. Customers don’t want to have to search for the code when they’re on your website.

The discount code should be clearly visible in an email so that recipients can easily find it again if they forget to copy it. Think about posting the code on your website too so it’s easily accessible.

2.      Combine products

One way for businesses to sell more products is to offer two or more products at a combined price that is less than the total cost of each item if purchased individually. Merchants often use this strategy to bring a product that is not selling well to the customer by combining it with a popular product.

Let’s say you sell jewelry at $ 20 per pair of earrings and bracelets at $ 10 each. The earrings sell themselves, but nobody is interested in the bracelets. If you were to sell a pair of earrings in a set with a bracelet for $ 25, you could reduce the inventory of bracelets and potentially attract more loyal customers.

A famous example is Nintendo, which sold 100,000 additional consoles as well as more than a million game cartridges when it bundled the two items.

3.      Reward customers to drive orders

You can increase the average value of your orders by offering a free item when a customer reaches a certain purchase threshold.

A popular version of this strategy is conditional free shipping – the “Free shipping from $ X” offer. One article explains that free shipping would increase the likelihood of buying online for around 80% of US customers. If you’re getting a lot of orders valued at $ 60, you should consider offering free shipping over $ 75.

If you can’t afford to offer free shipping, that’s fine. Choose a small free item that will be added when a certain threshold is reached.

4.      Reward top customers with special offers

Some analysis of the data suggests that existing customers spend 31% more than new buyers and that they are 50% more likely to try a new product. You can strengthen this loyalty by rewarding your most spending customers with tailored offers.

4. Reward top customers with special offers

To get even more out of this strategy, encourage your best customers to share their experiences on social media. This is a great referral reward opportunity.

5.      Change products and homepage

Many retailers view merchandising as a strategy for local trading, but it’s just as important for e-commerce. Your customers get used to your side. If you rearrange them and add new visuals, you will draw attention to your promotion.

Consider moving your home page and product pages when you start your promotion. A good place to start is to revise your homepage and put the advertised products in the foreground. You can also revitalize each category and individual product pages, highlighting not only the advertising, but also accessories, add-ons or popular related products.

6.      Promote product reviews

Reviews are important to many customers. A study shows that nearly 95% of consumers read reviews before buying. Compared to a product with no reviews, showing five reviews on the retailer’s website can increase conversion rates by up to 270%;

Before posting your promotion, make sure that your products have good reviews. In the meantime, start collecting original reviews. A particularly effective technique, especially when introducing new products, is sending products to customers and asking for reviews. With their permission, you can publish them on your product page.

Buyers can also give you reviews. Through automated product follow-up emails, makes it easy to collect reviews from current customers. All you have to do is add a review request to a recently purchased product, perhaps with a link to the reviews on your website.

You can also include links to third-party review sites. Don’t worry if not all reviews are great – studies show that negative reviews can help build trust and lead to up to 85% more conversions .

7.      Try different promotions

Different target groups respond to different promotions. Consider doing A / B testing, a simple and effective way to understand how your audience is reacting.

In the A / B test, 2 versions of a campaign are sent, e.g. B. a percentage promotion versus a monetary promotion.

8.      Make yourself unforgettable

Consumers have advertisements in their inboxes and social media feeds on a daily basis. It’s important to stand out as a brand, preferably with a personal touch. You may want to include a thank you card or a free sample in the package to please your customers.

Promote promotions

Now that you have the inside knowledge to develop a strong marketing promotion strategy, you can focus on promoting the promotion. Raise awareness to maximize your sales growth.

Email marketing may have decades of history, but it hasn’t lost any of its clout. A 2015 research study found that for every $ 1 spent on an email campaign, an average return of up to $ 38 could be achieved.

You can use advertising to make your e-mails even more attractive to customers.

Promote promotions

Expert tips: As an added benefit, offer your most loyal customers early access to the promotion.

Social media

Social media ads and organic posts can spread your promotion among new and existing customers. Address existing customers and look for new customers with similar interests. Mostly important, your customers are active on social media. Therefore, you shouldn’t miss any opportunity to make your offers stand out.

Retargeting

In the age of automation, it is easy to set up messages to address customers who have not ordered in a long time. Maybe someone filled a shopping cart and then decided not to buy it, or maybe the person just browsed and then changed their mind. A promotion can bring many of these people back. These people will then receive special emails encouraging them to complete their purchase.

Postcards

In today’s digital world, postcards can make a big impression.  You can easily create promotional postcards and send them to your loyal customers. Postcards don’t get lost in their email inboxes and the sensory engagement makes the buyer feel special. Postcards are also a great way to target an audience with personalized offers.

Turn new customers into existing customers

Promotions are tried and tested strategies for attracting new customers, but it shouldn’t stop there. Now that you know how to get people to buy, it’s time to get them regular customers.

Loyalty is an important factor in making repeat purchases. Here are some key tips you can use to convert new buyers into repeat customers.

Tagging new customers

The more you know about your new customers, the better you can personalize the messages for them in the future. Make sure to tag all new customers who visit your website during your promotion. Tag them based on what they are buying and consider adding an “Engages with Promotions” tag.

Expert tip: Use your audience tags for better conversions to personalize future communications. Segmented, targeted, and personalized email could generate a significant amount of revenue, and conversions can increase even further with more personalized page views.

Send welcome emails

Welcome emails are a great way to build relationships. If you don’t already, add an option on your checkout page where customers can give you their email address and sign up for future emails. Send a welcome message to everyone who registers. Think about how you can make a great first impression on your new customers.

Expert tip: If you set up automation to send welcome emails to new customers, you can be sure that those messages will be sent consistently. Better still, it will happen with no continued effort on your part.

Maintain communication

Your new customers should keep hearing from you after the promotion ends. Use the tags you’ve set up for these customers to send personalized product recommendations.

Through your connected store, you can predict what your customers will like so you can send emails with product recommendations and encourage them to make repeat purchases.

Put your latest products and bestsellers in the foreground to generate interest. This invigorates the interaction with the customers and ensures that your brand is present with the buyers, which helps you to increase your sales.

Get started with your promotion

With these tips you are ready to start designing your promotion and spreading it.

Start with your Audience dashboard. See who your customers are and which segments you want to reach with your promotion.

Then go to your website and add promotional content. If you have a website on you can create an unlimited number of landing pages for the promotion.

Get started with your promotion

You can create effective multichannel marketing campaigns. You can use these campaigns extensively with you reporting functions. You will find out where the most engagement arises, who reacts and what your customers have in common. By reviewing this information after your campaign, you can continue to optimize your advertising strategies.

Promotions are a powerful way to increase sales. The key is to come up with an attractive offer, market it intelligently, and follow up in such a way that customers old and new will stay loyal to you.

Your customers are waiting. It’s time to create a promotion that you can’t resist.

 

 

Categories
Marketing Sales Strategies

10 marketing strategies to launch your product

A new product launch   can be the beginning of a beautiful friendship or a total fiasco. This is a key moment that you have to pay your full attention to.

In recent years the term “growth hacking ” has become fashionable, which refers to   non-traditional digital marketing strategies to ensure accelerated growth;

10 marketing strategies to launch your product

Many start-ups use these types of resources to ensure rapid market penetration, but growth hacking can be beneficial for companies of any size and age. Therefore, today I am going to tell you 10 marketing strategies based on growth hacking to get your new product off the ground

1. Pre-launch marketing strategy: run a giveaway

For a product to quickly jump into marketing, you need to build buzz around its launch, starting weeks or even months in advance.

One of the most popular techniques to achieve this is through giveaways and pre-launch contests. Offer your product exclusively to a handful of the lucky few, in exchange for helping you spread the word about what’s coming. There are many options: photo contests, prizes for the most original idea.

Whichever you choose, try to find a system that increases virility as much as possible, for example, by making users have to share their participation on social networks. Get creative with your messages to avoid being perceived as spam and offer extra points for bringing friends.

2. SEO marketing strategy: increase your organic visibility

Or in other words, fine-tune your SEO.

Having a well-positioned website in search engines gives you a “base” of traffic to which you can communicate your new products, which makes things much easier for you than if you start from scratch every time.

For your   search engine marketing strategy to work, you need to give users information that is truly useful to them. Focus especially on optimizing these three areas:

The keywords; don’t think about what you call your product, but how a new user would search for it.

The Meta description (or the first words of the text); Users see the Meta description as the summary of your page in search engines, so it should be attractive. But beware: sometimes Google ignores it to show the first lines of the page, so make sure they are descriptive.

The first paragraphs of the text; the objective is that the user is well informed of what your product is and what it does with the least investment of reading time possible.

Web loading time: improve the loading time of your pages, so that search engines position you better.

3. Content Marketing Strategy: Create Shareable Content

Regular content creation is one of the   most solid digital marketing strategies, especially in the medium and long term.

Spend time creating a   quality blog about your business or related topics that may be of interest to consumers. The goal is to get users to share them, generating traffic to your website on a regular basis.

The Inbound Marketing methodology   is ideal for these cases. With it, you create valuable content that attracts your potential audience, to convert it to a lead and then a customer.

4. Remarketing strategy; dare yourself!

A smart marketing strategy involves recognizing that it is not just about impacting users blindly, but about guiding them step by step through the conversion funnel.

Consumers can find themselves at different times in the buying cycle, and the first time they hear about you they may not yet be ready to buy. But that’s no reason to let them pass. What you have to do is get them to leave you their data to start nurturing your relationship with them.

Similarly, don’t neglect your regular users. Keep in regular contact with them (for example, through a newsletter) and of course, don’t forget to notify them of your launch.

5. Buzz marketing strategy: get recommended

The word of mouth is still an incredibly effective system to provide a product. Users naturally talk to their contacts about the products they use and make recommendations. But you can also give the wheel a push so that word of mouth or buzz marketing starts working in your favor. How? Very simple: create an incentive system for recommendations.

Everyone likes to get free stuff, so all you have to do is offer a discount coupon or “free shipping” offer in exchange for bringing a certain number of friends. And then follow the chain!

6. Optimize the speed of your site

A trick as simple as it is effective: make sure your website works at lightning speed.

There is nothing that makes users more desperate than a web page that takes centuries to load. On the contrary, a fast and fluid website improves the user experience and the perception of the brand.

There are many things you can do to improve the loading times of your website, so be sure to consult an expert. In the meantime, a quick tip: make your images quality enough to be seen clearly on a desktop computer, but no more.

7. Influencer and blogger marketing strategy

Influencers are the new kings of digital marketing strategies. As experts in a subject or sector, they usually have a loyal audience that is willing to follow their recommendations, which you can exploit in your favor to publicize the new product.

To get bloggers and influencers talking about your brand, the most common strategies are hosting events and sending free samples. But keep in mind that you can’t “buy” their opinion, as they owe it to their audience to be honest about what they think. To avoid disasters, do a good job of   preliminary research to select the bloggers that interest you the most.

8. Take care of customer service

In recent years, users have become accustomed to receiving responses from brands 24 hours a day, 7 days a week. Therefore, you have to be available online to help them.

Customer service is probably one of the areas where good staffing is most important. Your company ambassadors must be patient, have empathy and be decisive in order to offer the customer experience that your brand deserves.

9. Prepare the FAQ before launching the product

When you launch a new product on the market, users often have a lot of questions about how it works. The more innovative it is, the more explanations you will have to give. Therefore, my recommendation is that you save as much work as possible in advance by creating a complete and highly visible “Frequently Asked Questions” section. Ideally, you should encourage users to visit it before contacting the company with questions.

10. Email marketing strategy

Email is that digital marketing strategy that seems old-fashioned, but is still as effective as ever. Use it!

To use email marketing effectively, the first step is to create a database of your customers. The more information you can associate with each of them, the better. Think about things like age, place of residence, children and of course, previous purchases or products in which they have shown interest.

From this information, you can create a highly personalized message strategy, where the user perceives that the emails he receives have been written especially for him. The automation of marketing can be of great help in managing all this information efficiently.

Categories
Sales Strategies

Strategies to sell

Most entrepreneurs start their business with great enthusiasm. There are many sacrifices made to start and grow’s activities, it focuses attention on every detail, from production to packaging, from pre-sales service after-sales service. Unfortunately, a large proportion of entrepreneurs is focused on short sale real and poses the following questions: how to sell the product, which proposes to offer commercial customers, such as raising awareness of the product and the company. In short, it pays little attention to planning an effective marketing strategy.

Regardless of the size of your company, your marketing strategy has to do with all the ideas and techniques to use with your clients to know and buy the product.

At this point you’re wondering how to plan an effective marketing strategy, and here we list some tips to get started:

  • Establish sales targets: Plan sales targets for the short, medium and long term. Obviously not enough to want to sell now and then, the goals must be realistic and objective. Also should be studied so as to enable you to assess both the human resources (sellers) and the promotional activities undertaken.
  • Establish the necessary resources to achieve goals. Once you have defined objectives, it is necessary to quantify the necessary resources (human and financial) to achieve those goals. It is therefore necessary to plan a budget to promote and publicize the activities in order to attract potential customers.
  • Review your progress monthly. As part of normal sales activities should monitor progress monthly. If for example you have 3 and each trader has monthly sales target 10 should be monitored monthly to achieve the target. This assessment will allow you to have the situation under control and to face the market quickly if sales differ greatly from the objectives. Obviously, this process contemplates that the seller is enabled to be able to sell the product (offers, brochures, etc.).

What resources are available?

In order to develop a good marketing strategy needs to consider the use of resources that will enable you to achieve sales targets:

Market Report

This involves the application of marketing techniques in place to determine what customers are looking for, where you are looking for, where to find it, what is their buying behavior and consumption, etc.. Etc…

Advertisement

Advertising is an important tool to attract the attention of your customers. There are many ways and means to get publicity (newspapers, radio, TV, internet, etc…) Some more expensive than others, some more successful than others.. However, it is said that half expensive is necessarily the most effective for your product.

It ‘s very important to the message transmitted, how it is transmitted and product details to highlight. This is why contact with professionals can help you choose an effective message that reflects not only on sales but also on product recognition.

Business Contacts

They have to do with human relationships that revolve around your business. They are needed to strengthen and to publicize your business. Thanks to the “contact” you can build alliances, find clients, suppliers and find helpful information.

Public Relations

Public relations should be part of the strategy. Through Public Relations will have the opportunity to present your product / service to the media? Periodically prepare press releases to be sent to the media, someone might give way to your company and attract consumers’ attention on you.

Categories
Sales Strategies

The share of sales

One of the goals of man is the share of sales selling a particular product or product line. The share serves as a reference point of sales and marketing policy of a company. His achievement is a function of several factors, among which we can mention the following:

  • corporate image in the market
  • product quality
  • in service delivery and more
  • price at least equal to the competition.


The term of share of sales also identifies the sales budgets, considered both in terms of quantity and value. The first data meets the production requirements (should be placed on the market that has been produced by the establishment) the second addresses the need for financial data (cash receipts).
A good agent not only looks at business budget is reached in terms of quantity, but also better achieved at the price, the so-called Gross Margin.

In order to determine what could be the share of sales due to a sales agent must be made through the analysis of the following three factors:

  • Sales potential in that area
  • Sales in the last 3 years (if any)
  • Economic prospects in the future 3 years.

The focal point of the situation lies in the ‘analysis of future prospects.

It is almost pointless to think that: given a potential area of ​​100, as sales of the last three years have had a steady annual increase of 10%, it will consequently an increase in the fourth year of at least 10%. If economic prospects are not good or because the consumer propensity to buy is poor (because of the tax burden or other reasons) or because the factors mentioned at the beginning of this topic (corporate image, product quality, etc.. ) are not good, it almost goes without saying that the share of sales in ‘Year X must be Y.

Categories
Sales Strategies

Area Sales

From a practical standpoint, the sales area is the set of actual and potential customers fall within a given limited area. This area can be understood as a political-administrative division: region, province or municipality, and within these areas, market segments to be assigned to different agents.

After defining the area of operation, the sales person can arrange their work tours, preparing a rough itinerary that allows him to reach the equation:

Minimum effort = maximum performance

This result, however, it can only be achieved through the following phases:

-Determine the actual number of customers;

-Prepare a ‘route to be flown each day to reach customers at the lowest cost programmable effects of time and money;

-Insert into the program of visits to customers even some actual visit to potential customers, and this for two reasons:

  • increase the customer base and consequently the turnover;
  • Failure to replace a visit to an existing customer with a visit to a potential customer located in the same itinerary. Regarding the number of customers can be managed, you can not tell precisely, since it depends on several factors :

Operating in a market segment with products intended for mass consumption, the number of daily visits can vary from 6 to 10;

When operating in a market segment with products for the industries, the number of daily visits possible range from 4 to 6.

However, you should keep in mind a very important rule: no matter the quantity but the quality of visits. If the agent has in mind to make 12 visits a day at all costs will be forced to constantly watch the clock, the result will be disastrous because they are forced to deal with the issue with the customer thinking about the next visit and not to the satisfaction of customer’s need in front of him.

Categories
Sales Strategies

How and When to Sell

The term “sell” means to convince the customer the convenience of the deal proposed. To achieve this goal may not be baseless; it should be familiar with the technical characteristics of the treated products, the present or latent needs of the customer, when this need can present this competition. Another very important aspect is its mood; it is not advisable to visit a customer on that day if you are not in perfect shape. In other words, when you want to sell a product should be prepared in all material respects, the sale is not improvisation.

One of the most difficult points of sale is the approach with the client. There are several ways to contact a customer, including those made mention only a phone call or a direct visit:

A) The approach to Phone

The phone is a very difficult to use because the partners do not know. Everything depends on the voice at that time can be more or less influenced by mood. In this case, it is best to introduce yourself and ask politely for a meeting to circulate the products of the company represented. If you know that the customer uses that product and the answer is no, do not get discouraged, but insist on moderation, gave an overview of the benefits that could be achieved only take a few minutes. If the answer is still negative, greet the customer with the understanding of resent after a while ‘time. Often, the constancy of harassing phone call leads nell’OK for the first visit.

B) The approach with direct visit

Here the problem is split into two cases: approach with customers who already know or approach with customers who do not know.

Regarding the first case, there are big problems because there is already an interpersonal relationship.
For the second case, however, if you’re lucky you got to the office of the person authorized to buy and therefore the approach is established and if you have not received it without an appointment or for other reasons, it is always advisable to leave a brochure with the your business card telling the secretary or the person who carries on the concierge to have them delivered to the person concerned (if possible to get the name) with the cartel to call him tomorrow morning. In this way, the person receiving the brochure and business card sets in a psychological process that leads to a propensity approach. If, after the first examination, the result is negative should not be discouraged, even have to reload and continue the visits. Consistency is often rewarded.

From the foregoing, it is clear that the sale is based on communication: speaking – listening – to conclude. To achieve this it is essential to have the security of topics, be aware that what they say is of interest to those who are listening. After talking for a very short time you have to listen carefully to the customer and counter any objections with positive phrases (never negative). The most frequent objection is the price: it is expensive, it is out of business, I pay less, and so on. Well, in these cases there is only one solution: “maybe it is a bit ‘expensive, but the product has features that I am offering the following advantages that give it …”.

At this point nothing else but to conclude with a trial order to prove that what was said or done to see is true.

Since there are plenty of art to sell books, I would like to give one advice to sellers: to be technically minded and always be yourself approach with others.

The professional integrity and naturalness are the best gifts.