Monday, 16 January 2012


Doing transactional Marketing
Transactional marketing focuses on short-term profits rather than building long-term value. Focuses on a single sale unlike building a brand using relationship marketing. The difference is simple, one retains customers, and the other one loses them. Don’t let your business run like prostitution, where the lady in question has few or no regular customers. Small business owners are in dire need of closing a sale, they need the cash, and this leads to a lot of pressure to the sales people. They will promise more to the customers but the company cannot deliver on the terms. When that happens, the customer never comes back to you, better still never refers anybody to you and to make it even worse he speaks ill of the company!
 It’s important to be profitable, but NOT when short-term profits come at the expense of the long-term value of the business and the lifetime value of the customer.
It’s important to consider the lifetime value of a customer. Repeat business is way more valuable than short-term profits. Well here’s the difference between the two;

Transaction marketing

·         Focus on a single sale
·         Short-term orientation
·         Sales to anonymous buyers
·         Limited customer commitment
·         Quality is the responsibility of production department
·         Sales person is the main interface between buyers and sellers
Relationship marketing

·         Focus on customer retention
·         Long-term orientation
·         Tracking of named buyers
·         High customer commitment
·         Quality is the responsibility of all

·         Multiple levels of relationship between buyer and seller

Bad feedback.
 Unfortunately, when it comes to business, friends and family members don’t always give the best advice. 
Small businesses owners always tend to employ their family, relatives or friends. Maybe to save on costs of hiring qualified staff. This is the biggest challenge I have faced by working in family run businesses. The CEO’S brother could be the head of sales and marketing, yet he has no clue of how things are done. What then happens is when you tend to be more brilliant, he shuts you out. Criticism of ideas is strictly prohibited; nobody listens when you have suggestions or advice. Nobody wants to be corrected. These guys keep on making poor decisions, feels threatened by you and finally office politics throw you out on flimsy grounds. I have seen a small publishing company launched with 12 employees,7 were relatives to the boss and spoke same vernacular language. The other 5 were qualified guys but couldn’t work there.8 months down the line, the company cannot afford to pay employees, run broke and is almost shutting down!

It’s a big challenge for small businesses to afford good talent however hiring totally inexperienced and uneducated people is unacceptable. For example you hire form four leavers or college students as your sales people. Offer them just product training, no sales training on Prospecting, sealing deals, handling inquiries and such then give them hard targets! They will never hit those targets. Threaten them, motivate them to work harder or call for meetings daily. They will never deliver. They just DON’T KNOW!
In Nairobi guys are desperate and take up any jobs that come up, however if you underpay qualified hires, they will never be loyal, always looking for jobs elsewhere. Offer competitive salaries to qualified people give them an achievable target, reward results with commissions and bonuses. This will lead to competition among them and finally they will work very hard for you. The truth is if you shortchange people, they always feel conned and cheated. They will gang up and hit back! A firm must have a compensation policy attractive enough to prevent people from being dissatisfied and looking elsewhere for career development opportunities.
The truth is PR efforts expose the business to some unwanted publics. The sugar coated and laced PR stories are good on improving your corporate image but they are read by everyone.KRA for example might get interested in your business, so if you don’t file tax returns, they’ll be on your neck. Creditors too will show up, just because you inflated your turnovers to impress, they took it serious. They will come for their money. Finally if you lied, said things you cannot handle, you will get the good word out there, but if you don’t deliver on the few clients that come your way, they will also give word out there. Finally PR efforts bring conmen, old flames, long lost relatives, fake friends and consultants willing to help! Don’t be so impressed and carried by the calls of people saying they saw you the media and forget to monitor such pitfalls.
This may sound a bit weird, but i have faced them and they just don’t give business to anyone! This is what happens. Multi national companies have a long chain of command ,this means that decisions have to be subjected to a meeting and finally one guy up there approves the order. This takes roughly three weeks to forever! They are also not that prompt with payments. They all do LPO’s and at times they don’t give a deposit up front. Picture this, you are a small business owner, you get a deal with safaricom worth 5M.You supply whatever they need and you get your 5M bucks. Sounds interesting, right? The truth is you don’t have that money to finance the order. Your bank too wont give you money because your assets and savings do not allow. Your family too may chip in but might not raise the money needed. You then run into the infamous shylocks. You do the job, deliver and wait for payment. Cheques take forever. There are maybe 3 signatories and approvals. One could be out of the country, the other one leave!!!You probably wait for another month. The shylocks will put under so much, interest rates on their loans are normally very high. The pressure they put on you is huge, they will auction your office furniture, take over your business, sell computers and other bad things. By the time you get the 5M to clear up with them, do your math, the profit shall be swallowed in the interest payments. My advice to you is to take up orders you can finance, focus on the SME sector, you land deals much easily, get paid promptly. As you grow, with enough financial muscle and capacity then get to the sharks!
My point here is some businesses try to do what the rest of companies in that industry are doing. Well there’s a fad now, you make branded uniforms, caps and polo T shirts for staff, branded company car, print loads of fliers, do activations and such. For some small businesses these costs are huge for a company without a marketing budget.
Others even put up a quarter page ad on daily nation…Do you know how much that is on Friday? make such mistakes and all you get are inquiries and questions. Lots of going up and down meeting the ‘prospects’. The truth is, if someone got interested in an advert and gave you a call doesn’t mean that they really need the product asap! You waste so much fuel and time, sending emails, quotations and doing site surveys on people that actually didn’t want to buy your stuff.
Understand your market well, where do you get most clients from, what do they read or watch, likes or dislikes.etc. With that you can choose the most visible and appropriate medium to communicate to them.

The truth is our small businesses do not have the capacity to handle huge contracts or some client specifications. The easiest way to go about it is to simply tell the client the truth. Put it on the quotation or on the sales agreement. Stipulate what you will deliver. However small business owners are tempted to lie to get the deal. The sad bit is you will lose the client, secondly the matter may end up in court depending on what is at stake, the payment may be delayed or never paid and don’t forget the bad publicity this brings.

This is the worst of all, larger companies bet on value, the customer buys the value. If you do shoddy stuff and charge cheaply nobody comes back to you next time. Better still larger companies have economies of scale, buy directly from large suppliers on big discounts. So you can’t beat them there. Offer VALUE for MONEY. Simple…excite your clients, give them efficiency, excellent customer service, listen to their fears, handle their complaints promptly….furthermore your business has a few clients so you can give them time and excellent service. Your business will grow gradually and steadily through referrals.
When you compete on price you miss out on the profits, you can’t pay for costs of running the business and worse still you won’t pay your employees!

Some small scale businesses tend to have very high employee turnover rates. Well this maybe affected by factors beyond the organization’s control, but I know people who have worked for companies since they were founded.
Each time you fire or lose an employee she leaves with a bit of knowledge about the firm, weaknesses and all that concerns the business.
If he/she is influential a few people too follow suit and leave. When this happens you lose clients and prospects that the employee was pursuing. What follows is, employees who left your company receiving calls and taking business away from you to companies or friends other than you. You can do something about this, to ensure you don’t lose your employees on bad terms. Because these people still can be of great use.
Did all this make sense to you? What is your feedback, what are your experiences?
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    1. Thanks bro for checking it out.Appreciate your kind words