Five Three-Minute Reads on Sales and Marketing a CEDIA

Home , Name recognition

WHITE PAPER

Five Three-Minute Reads on Sales and Marketing

A CEDIA Introductory Handbook

00 Introduction 3

01 SETTING GOALS | The Importance of the Breakeven Point 3

02 DEFINING YOUR BRAND | Quick: Can You Describe Your Company’s Brand? 4

03 LEAD GENERATION | The Three Ways to Get More Customers 5

04 DIGITAL MARKETING | Six Social Media Strategies for Your Home Tech Business 6

05 MAKING THE SALE | The First Step to Closing a Sale: Maintaining Your “Nurturing” Role 8 FIVE THREE-MINUTE READS ON SALES AND MARKETING

00 INTRODUCTION

First, thanks for your interest in CEDIA®. On the outside is essential for learning about your company and chance you’re new to who we are and what we do, planning for the future. CEDIA is the international trade association for 3,700 member companies that represent every facet of the Conducting a breakeven analysis is a critical step for ever-evolving technology market. CEDIA focuses on every business to determine the sales volume that is residential technology solutions — what are often necessary to cover costs. called “smart home” services and products. It’s especially crucial for start-ups that need to know The men and women who work in the CEDIA channel, their initial sales goals. which includes every occupation from running low- voltage cables and systems to advanced networking solutions and monitoring, are dedicated professionals who adhere to the highest possible industry standards. CEDIA offers both in-person and online training for its members, along with levels of CEDIA Certification that represent a home tech pro’s proficiency in a variety of areas.

The majority of our members are masters in the home technology field, from design to installation to troubleshooting networks. For some of our members, however, the business of marketing and selling those skills may be unfamiliar.

What follows is an outline of some of the basics in the realms of revenue generation and proper advertising and branding. While much more can be found at CEDIA.net (including white papers, research documents, and an extensive catalog of online training What Is It? courses), consider this a complimentary starter kit — a way for you to begin building the skills you need for the The breakeven point is where the business’ total business you want. revenue is equal to its total expenses. This means at the breakeven point, there’s no profit — it’s simply net zero.

01 SETTING GOALS How to Calculate It

The first step in selling? If you own your own business, Simply, the breakeven point is: it’s establishing a fair market value. What does the job cost me? What can I expect to make? How much can I Total Fixed Costs mark up material and labor? Selling Price – Total Variable Costs

One can begin to answer those questions (and those Where to Start very questions are the ones we hear the most at CEDIA when it comes to business operations) by determining If you have never conducted a breakeven analysis the breakeven point. before, you should start by assessing the company’s most commonly sold products and services. Business The Importance of the Breakeven Point owners need to gather a lot of information, such as the total fixed cost of making each product, the variable Financial information is the key to understanding your costs for each product, the sales price of that product, business’s profitability, and knowing the numbers and then the net profit derived from selling it.

Why It Matters the person who answers your phones, your onsite technicians, and more. This figure is important because it’s the simplest way for a business to determine if what it charges for its To begin to define your brand, you must be able to products and services will cover what it costs to make describe that brand and convey that description the products or provide those services. The higher the succinctly. fixed costs for the business, the higher the breakeven point will be, meaning the more offerings it needs to Quick: Can You Describe Your Company’s Brand? sell. Having a defined and recognized brand can be a The process of determining the breakeven point is a powerful tool for a business. Though the concept good time for businesses to assess their true cost of of branding may call to mind major multinational doing business and their prices. Many start-ups don’t corporations like Apple or Sony, the benefits of understand their direct and indirect costs very well. branding are very real even for small home technology Working on a breakeven analysis will help business companies that operate on a much more local or owners and managers learn these figures and gain regional scale. better insight into the accuracy of their prices and how realistic their sales goals are.

If the amount of sales a company needs to break even is more than it can realistically achieve in a year, then the business knows its products or services may not be priced well — or it needs to work to reduce costs.

Additionally, the business owner should know the total contribution each product and service makes to the company’s overall profit. This step is important because it can help businesses determine products and services that aren’t actually profitable, and the company can decide if it needs to raise the price, In fact, it could be argued that branding is even reduce the cost of offering it, or possibly discontinue it. more critical for small companies that lack the name recognition advantage of these large corporations. But a good brand isn’t achieved overnight. A lot of 02 DEFINING YOUR BRAND work is needed to develop a business into a trusted and associable name. The American Marketing Association defines a brand as simply a “name, term, design, symbol, or any other For home technology companies, it begins with feature that identifies one seller’s good or service evaluating your brand. The practice of defining your as distinct from those of other sellers.” Sounds easy, brand at every opportunity will build its cachet right? After all, you already have a company name and and value in the eyes of your existing and potential a logo. customers.

But your brand is more than just any one of these If your brand is defined from the top down, it becomes things, or even all of these things combined — it’s the much easier for each of these touchpoints to convey perception your customers and potential customers your brand message uniformly. What do you want have of your company based on these features as well customers to understand about your business as any other touchpoints they have with your company. within seconds when they hear your company name, That means your brand is conveyed by your website, see your logo, call or visit your office, look at your

business card, etc.? Perhaps competence, innovation, 03 LEAD GENERATION stability, longevity, forward-thinking, luxury, or even attainability? Ensuring that all customer interactions You’ve set your prices. You’ve got a full menu of goods are designed to convey your chosen messages about and services. You’ve built your messaging around your your company is the heart of brand strategy. brand — you’ve defined what you really do, what you’re best at. What Do You Do? If you were a fisherman, you’d right now be at a point As a service company, home technology firms need to where the gear is ready, the weather looks clear, and have a more complete brand arsenal than just a sleek the boat is gassed up. logo and tagline. That’s not to say everything needs to be over-explained, but the first objective is that your Now all you’ve got to do is find those fish. brand needs to clearly convey what it is you do. The different aspects of your brand strategy need Jason Falls has been finding those “fish” for years. to be aligned so they communicate exactly what the He’s a pioneer in the field of online marketing and a business does. An added level to this is highlighting presenter at the upcoming CEDIA Business Xchange. efforts toward mission goals in the brand. If your company prides itself on being trustworthy, the brand The 3 Ways to Get More Customers can reflect that as an attribute customers can relate to By Jason Falls and see in brand messaging. Whether your home Who Do You Serve? technology business is large or small, there Audience targeting is an ever-important technique in are three ways you overall brand strategy, and it needs to be sufficiently attract customers. clear in the brand itself. Who you serve must come Understanding just through in your messaging. This is important because what kind of business in an effort to develop a brand, it’s easy to cast a wide you own helps you net and lose sight of the customers closest and most optimize how you important to you. approach everything from sales to customer For small home technology businesses, the focus service — in other needs to be fixed to the brand strategy. This entails words, your marketing. identifying your target customer as part of your internal planning, maybe through buyer personas that In terms of marketing, inform marketing, and communicating that through your business can be classified as: other brand-building efforts. 1. A Relationship Marketing Business How is the Brand Upheld? 2. An Outbound Marketing Business 3. An Inbound Marketing Business The final action is cultivating a comprehensive brand experience — from first exposure through project These classifications aren’t mutually exclusive — your completion and everywhere in between. Make sure marketing can feature elements of each, and the most every part of the customer experience reflects and successful businesses certainly do — but grasping upholds the brand, including customer service, the where you are on the continuum of each is critical installation, the in-store setting, and every worker to understanding where you spend your marketing interaction with the customer. resources.

A Relationship Marketing Business The Inbound Marketing Business requires staff and resources devoted to creating content compelling Most small businesses begin by selling to people they enough for prospects to give you their contact know or capitalizing on recommendations and referrals information. It also requires a certain amount of effort from people they know. This is a Relationship Marketing to measure what works and what doesn’t so you can Business. You don’t rely on advertising much, but likely continually optimize what you’re doing. But it may not dabble in some sponsorships and business networking require as much financial commitment as Outbound groups. You know most of your customers personally Marketing. (or can immediately trace who referred them to you). This type of business doesn’t need a robust marketing What Type of Marketer Are You? staff, sales people, or fancy software or campaigns to be successful. But this type of marketing only goes so So which type of business is yours — or has your far. At some point you reach your relationship limit and firm blended these different approaches? In today’s need more. consumer-driven and digital-first environment, Inbound Marketing Businesses typically see better ROI. And An Outbound Marketing Business you would be surprised how simple it is to evolve from Relationship Marketing to Inbound Marketing. When relationships run dry, most small businesses turn to advertising to create more awareness that Think of it this way: How many customer questions do presumably drives people to consider their business. you answer every day? Whether it’s in person or via One can support the local sports teams, buy into a email, probably at least a dozen or so, right? Tomorrow, direct mail program or even do some advertising on a write them all down — then either post the questions local radio station or in the local newspaper. This type and answers on your blog or Facebook page, or pull of proactive outreach and sales is called Outbound out your phone and answer the question on video and Marketing. post to those social channels.

This type of business needs someone to focus a lot Congratulations! You just moved from Relationship of their attention on marketing (and perhaps sales) Marketing to the beginnings of Inbound Marketing. because you need to create resources and manage media buys. Plus, you need to know you’re getting Jason Falls has been named by Forbes as a “Top 10 something in return for those investments. Business Leader to Follow.” He’ll be presenting a workshop at the 2017 CEDIA Business Xchange entitled An Inbound Marketing Business “Moving Beyond Referrals to Lead Generation.”

The Inbound Marketing Business is a newer type of marketing. Also referred to as a lead-generation 04 DIGITAL MARKETING business, Inbound Marketing means a business provides something of value to its prospective Here’s hoping you’ve either a) built a fantastic, intuitive, customers in exchange for that customer’s permission and user-friendly website, or b) you’re hired a genius to market to them. to build that site and ensure that your SEO game is on point. The term “Inbound” comes from the notion that people are looking for resources, answers, and solutions If you haven’t, well, you’re going to need to. Too many online. If you’re providing that content, they’ll come to small businesses think that they can live by their you rather than you going to them. Facebook page alone.

Perhaps you write blog posts, post YouTube videos, or This isn’t to say that social media can’t be an effective even prepare home entertainment optimization tips in tool. It can be incredibly powerful as long as you’re a downloadable flyer on your website. But to get the using it correctly — and as long as it’s just one leg of content, people have to connect with you or hear your your overall marketing strategy. marketing message as an integral part of the content.

Six Social Media Strategies for Your Home Tech 5. Performing Research and Development. Listening Business to social media conversations can inform you By Jason Falls about what they think about your business, your competitors, and more, giving you consumer Understanding social media strategy requires first insight for innovation, experience enhancements, that you understand what the possibilities are when or even messaging and targeting. using social media for your business. Erik Deckers and I identified the six major business drivers of social media 6. Driving Sales or Leads. Social media can be used in our book, No Bulls**t Social Media: The All-Business, to sell directly to social network users. No-Hype Guide to Social Media Marketing (2011, Que). Once you know what the possibilities are, social media strategy is all about picking what you want to focus on. If you have a problem with name recognition, you can focus on branding and awareness. If you have challenges in customer service, social media can be used for that business function very easily. If you want to know more about your prospective customers, approaching social media with the strategic purpose of R&D is probably wise.

Easy on the Sales Pitch

While it is very tempting to zero in on driving sales and leads — especially since that’s the bread and butter driver that will make it easier to financially support a social media effort — you have to consider the medium. Social media audiences are more apt to be turned off by direct sales. You can sell using social media, but you Those six drivers — or reasons — one might use social won’t be very successful doing so if that’s all you try to media marketing are: use it for.

1. Branding and Awareness. Social media can make Think of social media like a networking event. You enter more people aware of who you are, what you do the room and migrate around listening to the various and how you can help them. conversations until you find a group of people talking about something you are interested in. You join their 2. Protecting Your Reputation. Social media can help circle informally until they pause and recognize you for you identify and resolve public relations crises, an introduction. You participate in the conversation, amplify positives about your company, and help build some rapport and trust with them, and then your ranking in search engines. perhaps trade business cards. But you don’t move in for the sale quickly, or even at that event. You nurture 3. Building Community. Social media can help you that relationship over time and move in to close weeks attract a community of fans and followers who are or even months later. more apt to buy your products or services than others, giving you a built-in audience or army of Ultimately, you have to devote your time and resources advocates. to the strategic focal points that best support your business. But keep in mind that starting with branding 4. Facilitating Customer Service. Social media and awareness or customer service will help you can plug you into active customers who have establish rapport and build relationships so that you concerns and questions to serve and resolve, and can eventually turn on the ability to drive sales or leads. sometimes in very cost-effective ways.

Social Isn’t Your Strategy, but Part of Your Strategy Simply put, we follow Adult behavior when we are solving problems in a logical, rational, and analytical Social media strategy should also be an extension manner. of your overall marketing strategy. Communicating consistently across touchpoints — the way you The Child is the six-year-old decision maker. It is that talk to customers who call you on the phone, your ever-young voice that influences your prospect’s radio advertisements, the flyers you circulate, the buying behaviors by demanding, “I want this” or “I newspaper ads you run, the content you post on your don’t want to do that.” Facebook page — they’re all important in establishing expectations of prospective customers and helping you The Parent behavior is an unedited view of actions deliver on that promise. Let your social media efforts observed in authority figures during the first five years flow from your overall marketing approach. of a child’s life. There are two models of Parent: the Critical Parent who may be judgmental or prejudicial, or the helpful, caring Nurturing Parent. In the role of 05 MAKING THE SALE business development or customer service, it helps to stay in the Nurturing Parent role as much as possible. Everything you’ve done to get face-to-face with your prospect has been critically important — but none of Too often, salespeople are in their Critical Parent role, it matters if they walk away without signing. To close which often comes across as telling a prospect what to the deal, you’ll need a practiced approach to each sales do rather than asking leading questions and allowing encounter. them to figure it out. It is the Nurturing Parent that The most successful salespeople are those who encourages buyers to open up, which builds trust understand a few fundamentals of human behavior quickly. that help them steer each sale toward success. Here, Rochelle Carrington, a perennial CEDIA show instructor Keep these tips in mind to stay in your Nurturing and presenter of the Using the Sales Force: Jedi Mind Parent mode: Tricks for Mastering Every Sale workshop at the 2017 CEDIA Business Xchange, shares some of the theory • Stay emotionally objective. A sales call is no that guides successful selling. place to get your needs met — it’s for going to the bank. The First Step to Closing a Sale: Maintaining Your • Preparation is key. The more prepared you are, “Nurturing” Role the more you can nurture your prospect. By Rochelle Carrington • Use your ears more than your mouth. Listen for what the prospect says between the lines and Have you ever ask deeper questions accordingly. wondered why you seem to connect with When you step into the role of a Nurturing Parent, you some prospects and not helpfully steer a prospect along a path of discovery. with others? Having a They will appreciate your caring guidance, discover handle on the theory of they are not the only ones experiencing issues, and Transactional Analysis because their six-year old decision maker trusts you, (TA) is the first step tell themselves, “I want that.” to understanding why. The TA philosophy Rochelle Carrington of the Sandler Training/Second states there are three Wind Advisory Group, Inc. will be conducting a ego conditions that workshop at the CEDIA Business Xchange (March 1-3, influence behavior: the 2017, San Antonio) titled “Using the Sales Force: Jedi Parent, the Adult, and Mind Tricks for Mastering Every Sale.” the Child.

It’s a kind of Parent who can best close the sale — but more on that in a moment. First let’s define the other two.

For more great sales and marketing insights, don’t miss leads in his workshop Moving From Referrals to the CEDIA Business Xchange, coming to San Antonio Lead Generation. March 1–3, 2017. The event includes workshops and ses- sions tailored to the home tech industry: • After each day’s workshop, attendees move into the Idea Xchange, a series of loosely structured • Rochelle Carrington will lead a workshop on how peer-to-peer roundtable discussions on critical understanding human psychology and behavior issues affecting your business. can help you close more sales in her presentation Using the Sales Force: Jedi Mind Tricks for Master- • The event also features CEDIA members sharing ing Every Sale. lessons from their years in business, along with plenty of time to network and learn from peers. • Jason Falls will examine how you can reduce your reliance on referrals by actively generating more Register today at cedia.net/business-xchange.