Great Business Ideas: Direct selling

Great Small Business Ideas to Start: Direct selling

Closely linked to the buyer’s cycle is the ability to sell direct to customers. Dell rose to be the best-selling computer supplier in the world by tailoring products to each individual need in a way that customers valued. Dell’s approach was very simple: understanding its customers and selling direct.

The idea

Dell believes that by selling computer systems directly to customers it can best understand and meet their needs. This direct business model eliminates expensive retailers that Dell feels may diminish its understanding of customer expectations. The direct model also allows the company to build every system to order at competitive prices.

In 1988, Dell Computer started competing aggressively with the market leaders, IBM and Compaq. Dell’s strategy was to provide good-quality personal computers at low (but not the lowest) prices, backed up with friendly and reliable aftersales service.

But the real key to Dell’s success was to carefully target this product offering by getting to know its customers in detail. Large amounts of advertising were placed in new (and unfashionable) magazines read by computer experts, raising the business’s profile with this key group. Combined with this was Dell’s direct response advertising method: to get the Dell product catalog, customers had to complete a detailed response card or call a toll-free number where they were asked the same, detailed questions. The Dell phone representatives were highly skilled, trained to ask questions and to listen to customers, recording

their preferences and requirements in detail, and then acting on them. Dell’s approach highlights the need to develop the relationship with the customer.

In practice

Adopt a singular focus on the customer by following four principles.

1. Finding the most efficient path to the customer. This means avoiding intermediaries that add confusion and cost. Also, organize your business around customers who share similar needs.
2. Making things easy—and being accountable. Customers want fast, streamlined access to your products: give them this, and give them someone who will take responsibility for helping them.
3. Building to order—this means understanding what your customers want, and delivering exactly this. The result is less cost for you, and potentially more business from your client.
4. Being a low-cost leader. By focusing on what customers want, your business is able to reduce expensive inventory costs and to streamline your supply chain. The result is improved customer service, a better price for the customer, and higher margins for you.