Tag Archives: Selling

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What are Pros and Cons of the Sharing Economy?

The sharing economy is an idea that is very much present in the zeitgeist, but many of us don’t really have a comprehensive understanding of exactly what it is and where it came from. Whatever your level of understanding, the sharing economy is going nowhere, so taking a little look at it and its potential triumphs and pitfalls can’t hurt.

What Is the Sharing Economy?
The acceleration of digital technology kicked off by the birth of the internet’s universal accessibility has birthed many a new concept. The growth of the sharing economy is one of those concepts. Sometimes referred to as collaborative economy, this economic model is defined by the sharing of personal assets and services between individuals using the internet. It allows people to share their own resources, whether material or skills-based, either in kind or in exchange for money or incentives.

The assets that you offer can be anything from your time to your car or even your home; for use by another person for a limited time period.  A famous example of a platform that depends on this model is Airbnb, the site/service that allows you to rent your home/property for temporary use. This economic model spans many sectors including technology, communication, lodging, agriculture, labour and finance. It is hugely popular for several reasons, one of the utmost being its flexibility.  The exchange of services can be agreed upon under any terms; one may ask for financial payment in return, but social and environmental based exchanges are also popular.

The sharing economy is essentially the closest thing we now have to the old tradition of bartering. There is a lot of confusion about what exchanges this economy refers to, as there are a lot of new economic models out there with which to get it confused. Here is a quick summary on just some of the economic models that the shared economy is not…

Gig Economy. Single projects or jobs for which a worker is employed. There is no skill or asset sharing here, it is a worker being employed in exchange for money in order to carry out a specific job.

Freelance Economy. Similar to the gig economy, except that jobs or projects tend to be more involved, in-depth and longer in length (sometimes lasting months or even years).

Peer Economy. Or P2P for short. This is where two individuals directly interact to buy or sell goods and services.

Crowd Economy. This refers to money making models such as crowdfunding or crowdsourcing; this generally results in an online community of people who participate with each other through a platform in order to achieve a single goal.

Now let’s look at some of the arguments for and against the sharing economy…

PRO: Recycle, Reuse, Repurpose
It is a great way to avoid waste. If you have an item or resource that you are not using quite as much as you used to, this model offers a great way for you to loan their use to others. You can not only make money out of something that you are not currently using, but you can also offer another person access to what they need for a reasonable, non-commercial price. Most importantly though, it prevents possessions and assets from going to waste.

CON: Scam Threats
One of the issues with this system is that buyers are more open to fraud and trickery, as there is no real protection against this kind of situation occurring. All you have to go on, with regards to the person you are dealing with, is their promise and the apparent character they present. Protection against this is slowly getting better, but the speed at which technology advances can make this kind of issue hard to regulate.

PRO: Opportunity
In a world where getting a job is increasingly difficult, many doors seem to be closed, and innovation appears to be very expensive, this economy gifts pretty much anyone with the opportunity to turn a dime, or simply be more productive.  It means that individuals can set their own terms, their own hours and have the flexibility to make their lives work for them.  It invites communication between individuals, which creates community, diversity, interesting ideas and ultimately brings people together. The presence of this economy offers liberation for those who are prepared to get into it.

CON: Lack of Benefits and Lost Revenue
Individuals who earn their full living in this economy do not have access to the benefits that those working for a company do. The benefits might include sick leave, pension schemes, maternity/paternity leave and bonuses. It can also impact on the success of other businesses. A famous example of this is the impact that Uber has had on the traditional taxi hailing services.

PRO: Employment
Unemployment is always an issue, but this economy goes some way to making a positive dent. Not only are there more jobs available because of the rise of companies such as eBay and Amazon (in many cases, these are jobs that can be performed from home), but the sharing economy offers a platform from which to advertise on a global scale. If you make ornaments, for example, you can access an entire global market, which is a huge change from the artisan and small business landscape of only a decade ago.

CON: Tax
As the laws around claiming financial gain from online platforms are not that tight yet, governments report a loss in tax revenue. Just like any economic model, there are arguments as to its success, fairness and validity on both sides. But one thing is for sure, like it or not, the sharing economy is here to stay! Where do you stand?

 

Photo by Pop & Zebra on Unsplash

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How to Sell Better

David-Falzani-President-SMF-MCP_3834-(landscape)
David Falzani
President of Sainsbury Management Fellows
Visiting Professor at Nottingham Business School

Sales is a subject almost never taught formally in business schools. This is undoubtedly because it’s such a broad subject, and many industries and sectors have very specific sales processes and requirements.

Nonetheless, there are a few basic concepts which can help the effectiveness of any sales process. An easy definition of sales is in ‘helping customers to buy’. In a little more detail, it’s ‘getting customers to better explain their needs so that you can make the decision to buy easy for them’. It’s this critical aspect of two-way communication that’s sometimes missed.

The starting point of any sales campaign is the USP analysis. The USP analysis will have compared the competitors, their product features and their benefits, to your own. This understanding is the starting position for a sales dialogue.

However, skilled sales processes take this starting position but then ask open questions to better understand a customer’s needs and problems to solve, and having listened and synthesised these answers, will only then make a considered value proposal.

This is opposed to the all too common ‘fire hose selling’ or ‘spray & pray’ techniques of showering a customer with information in the hope that something sticks. When I’ve helped clients develop sales staff I sometimes see inexperienced or unconfident sales staff adopt this approach. In one visit I witnessed a new sales manager talking immediately at the start of the meeting, and didn’t stop, for 45 minutes. Not one pause allowed one word from the prospect. The body language across the table went from alert, to relaxed, to resigned/sleepy. Making the prospect regret the meeting is obviously not a good strategy!

An obvious but sometimes forgotten point is to ensure you are selling benefits over features. It’s easy to talk about what the product is, but more useful to describe what advantage it brings to that specific customer and their needs. If you don’t understand their specific needs then you are not ready to make an accurate pitch.

Another key aspect is the importance of establishing trust in the relationship. If you choose a tradesperson for your home, your sense of trust in that person will be one of the key decision factors, and perhaps more important than price. Similarly, a skilled salesperson will establish a relationship, building trust and confidence. This can be sometimes expressed as having become a trusted advisor to the client; able to provide solutions to problems as they are encountered. In a sense, you need to decide what you need to give away in terms of expertise to develop this trust.

Lastly, progressing sales is often about overcoming objections. There are only a handful of common objections. Often these are used as ‘brush offs’ rather than being genuine objections, but if you can delve deeper and find the root causes, they can be valuable sources of more profound understanding. It’s worth listing to the common objections your company faces and possible approaches to overcome them. Common objections include:

  1. Lack of budget/price too high
  2. Lack of sign-off authority
  3. No established need
  4. Wrong timeframe
  5. Capability/credibility issue

One needs to dig deeper, but possible approaches include:

  1. Establish value recognition. Can you save them money?
  2. Collaborate on delivering a solution. Get a forward referral to a colleague
  3. What features do they find useful? Case studies and fact based analysis
  4. Underline the payback timeframe. Start savings now
  5. Offer proof. And, of course, build the relationship.

Found this blog helpful? You may also be interested in these:

LINKS TO THESE BLOGS TO BE ADDED
If You Build it Will They Come?
How to Find Products that Sell Themselves
How to Sell Better was first published by Entrepreneur Country and has been reproduced with the editor’s permission.

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How to Find Products that Sell Themselves

David-Falzani-President-SMF-MCP_3834-(landscape)
David Falzani
President of Sainsbury Management Fellows
Visiting Professor at Nottingham Business School

I increasingly look for products that sell themselves. After all, if your product or service does much of the sales work for you, then you have a business that can grow quickly and profitably.
If you can, try to find products that adhere to the following 3 steps:

  1. Customer sees product: not as obvious as it sounds, getting a customer to actually preview your product is easier the simpler it is, or can be easily encapsulated.
  2. Customer ‘gets’ product: products that resonate with customers will always be self explanatory. The less you have to say the better.
  3. Customer wants product: the crucial part. If the product follows these steps with the minimal amount of intervention, then you may have something that lends itself to a scalable business (subject of course to the usual cost and supply issues).

By contrast, there are products which have high educational and informational requirements. These have to be met before a customer is even in a position to decide whether it’s something they wish to buy. These sorts of products tend to be either new solutions in the marketplace, or have marginal USPs over the competitive products (think of all the failed “better mousetraps” launched over the years).

If new in the market, the risk is always in being able to predict whether customers will change their current behaviour. Or, to put it another way, will they be bothered enough to listen to all the reasons they should change, and then still be bothered enough to make the actual purchase. I call these products high burden sales products. By no means a dead loss, they can nonetheless be onerous to grow. Many products and services rely on high burden sales pipelines. Much of the B2B technology market works in this way, and it is all fine if the eventual conversion rate of leads to sales is sufficiently high to warrant the investment (in a real sense, for both parties).

However, if the conversion rate is too low for the time and money expended up to that point, or the USPs marginal, then a difficult future looms. Sometimes these situations are blamed on poor salesmanship. I’ve seen several technology businesses where the board believed that all that prevented success was getting ‘proper’ salespersons in, period. In actual fact, the product just did not resonate with the market and no amount of ‘push selling’ was going to change that fact.
As a side note, the passage of a significant length of time can sometimes be the missing ingredient that fixes things. We’ve all seen products described as ‘solutions looking for a problem to solve’ and sometimes being too early in the marketplace can only be fixed by time (for example, smart cards took 20 years to become widely accepted).

Today, I much prefer products or services that have an established purchasing behaviour which can be tapped into. Or, if a new and potentially disruptive technology, I look at whether the client propensity for purchase can be quickly validated, and once this has been done, the sales model can be successfully and quickly scaled.

By looking at this established purchasing behaviour carefully or by soft launching a minimum viable product it is possible to maximise the chances of having an easy sale product.

This blog was first published by Entrepreneur Country and has been reproduced with the editor’s permission.