Zellers Consulting Group

Questions for 2010

Is s u e 06 J a n ua ry 2 0 10

Management focus
Build More

As we emerge from the ugliest business year since the Great Depression, many business owners are asking:

in you Business!
The Zellers Consulting Group provides consulting and manage me nt services to a growing list of small business clients. We offer our clients customized solutions linking business information with technology, strategy and execution. Simply put, we make our clients:

“What Do We Do Now?”
In an article published earlier this year, Bruce Wedderburn of Huthwaite, Inc. (the creators of “Spin Selling”) contrasted the questions their organization was hearing in the 4th quarter of 2007 (when the economy still appeared relatively strong) and the questions they heard at the beginning of 2009. A look back at the 2007 and 2009 questions may provide insight into creating effective strategies for 2010. The Huthwaite article pointed out that in Q4 2007; companies were looking for growth strategies and searching f or any competitive advantage. Business plans for 2008 were still projecting double-digit growth and territory expansions. Companies were investing in both technology and human capital in order to accomplish their goals. Even though the selling climate was tough, there was existing demand.

The 2007 Questions
    
How best can we expand our product line? How do we capture new markets? Where can we hire new sales reps to expand our coverage? How can we come up with creative compensation plans to keep our best people? How can we better leverage technology to drive increased growth?

  

More Efficient More Competitive More Profitable

...and we

Guarantee our work!

Fast forward to the beginning of 2009
Existing demand in virtually all market sectors had shrunk dramatically. Potential buyers were more than willing to live with existing products, services, plants and equipment. In fact, industrial production capacity—the ability of businesses to make products—fell every month last year (2009), according to Deutsche Bank chief U.S. economist Joseph LaVorgna. By the end of 2009, US industry was using only 71% of the shrunken capacity, compared with a long-term average of 81%. Page 1 of 3

Zellers Consulting Group

Is s u e 06 J a n ua ry 2 0 10

Our Expertise
Strategic Planning Productivity Improvement Management by Objective Sales Team Management Business Development Gross Margin Improvement Process Re-Engineering Leadership Coaching Company Branding Product Marketing Management Training & Development Lead Generation Program Creation Inventory Management & Re-Alignment Performance-Based Compensation Plans


The 2009 Questions
    
Where can we scale back on spending? Can we get away with not spending what we’ve budgeted (or get out of contracts we’ve already signed)? Can we get by with what we already have? If we have to make a change, will it increase revenues or cut costs, and do it quickly? If we have to make a change, can we do it internally?

A Winning Strategy for Selling?
Huthwaite pointed out that in the 2009 environment a selling strategy based on proving to a buyer how and why your solutions are better than the competition was irrelevant, because potential customers were not buying – from anyone. Huthwaite concluded that to sell in 2009, successful sellers were creating demand, not simply responding to it. Instead of a marketing strategy based on “Who we are and what we do”, the successful strategies focused on provoking clients to think differently about their problems, needs and priorities.

Top-performing salespeople in 2009 were those individuals who could:

   

Ask questions to uncover unrecognized problems Increase the size, urgency and severity of the buyer’s problems Present offerings to meet previously unacknowledged problems Conduct value-based conversations around the buyer’s most pressing issues

Finally, top performers were better at securing executive-level appointments where they have a better opportunity to impact a client’s budget.

What Do We Do Now?
We have entered the era of small business. Onetime GM president Charles Wilson once said "What's good for the country is good for GM, and vice versa." Now, it is safe to say that what is good for small business is good for the country. Small businesses now:

Coming in future issues:
Where’s the Cash? Fundamentals of Inventory Management Direct Mail Marketing Basics
Page 2 of 3

   

Number almost 30 million Employ more than half of all workers Constitute 99.7% of all employers Constitute 97% of all exporters

Create the majority of business innovations (Source: U.S. Small Business Administration Office of Advocacy, 2009)

Zellers Consulting Group
Cautious Optimism

Is s u e 06 J a n ua ry 2 0 10

From the desk of Ted Zellers
“To truly become a high performing company with greater profitability, you must plan for it, evaluate f i n an c i a l p e r f o r m a n ce and take action to address problems as they arise. To do this, you must have accurate and timely financial i n f o r m a t i o n, which you understand and use to measure the p e rf ormance of y our business.”


The state of the economy will continue to be the most significant trend effecting small business, the small business outlook is both more optimistic and calmer - because things are slowly getting back to, if not normal, at least something comprehensible. On the part of many entrepreneurs, there is new optimism because out of the 2009 rubble, an exciting, innovative startup economy is being born. More than ever before, small business will lead the way. Access to credit will be a determining factor – as many banks maintain tighter lending standards and continue to redline companies that focus on the automotive sector.

Cash is Still King…
Preserving cash will undoubtedly continue to be the #1 concern for many companies. Until sales show sustained improvement and banks start lending at the local level, companies will continue to manage their liquidity in a very conservative fashion.

The New Frugality
The bad economy, the burst of the housing bubble, continual high unemployment rates, and a variety of other factors have coalesced to create an era of frugality. People are spending less, saving more, and if they are shopping at all, they are looking for bargains. This pattern isn't going away any time soon. For the small business, this new pattern has several ramifications: First, it's tougher to get people to spend, and to spend more. Second, you have to give people what they want, and what they want are bargains.

Less Liquidity
Increasingly small businesses will have to learn to get by on less, even while their financial burden grows. Fewer customers with less to spend, banks who won't make loans, tighter credit generally, the end of the home equity ATM and more. The trend is less money to go around (although it will undoubtedly be better than 2009), and the financial demands on small business – from taxes to compliance – will continue to grow.

For those of us in the business of helping other businesses survive and prosper, the greatest challenge may be initiating this discussion with our clients. At the Zellers Consulting Group, we believe making clients more efficient and competitive is our primary goal. We can assist virtually any client with a careful and objective evaluation of their direction and performance – and if warranted – provide them with the expertise to implement marketing, sales and operational improvements that will make their business more efficient and more competitive. Let’s make sure that our businesses (and our clients) stay strong and healthy.

Information is still Queen
While preserving cash will probably continue to be the #1 concern for many companies, the 2009 questions illuminate a plan that many companies will continue: A Consultative-Selling approach where your salespeople are actively engaged in helping customers identify and solve problems.

Transforming the information you have – and then levering that information into the decision cycle to increase efficiency and effectiveness – is one of the greatest business opportunities we see.
Questions or comments? Email us at: tzellers@zellersconsultinggroup.com or call

Page 3 of 3

© 2009 Zellers Consulting Group. All rights reserved.