Sales Strategies for Social Enterprises with Michelle King Thomas - Ep 21

This episode of the Social Enterprise Alliance Podcast aired on Tuesday, May 23rd, 2023. This episode can be found on Apple Podcast and Spotify.

0:00:00.2 Michelle: Essentially, you need to think of it as you're trying to construct a living breathing thing. Like a brand is a living, breathing thing that's communicating all of the time with your supporters. If you're a non-profit, luckily you probably already have a pretty good network of people who are already supporting your organization and thinking of the brand is just thinking of how you would communicate the brand's value to these people.

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0:00:42.2 David: Today we welcomed Michelle King Thomas to the podcast. Michelle is a writer, activist, and social entrepreneur, and she specializes in sales and operations that help social impact brands and social enterprises stay profitable and strategize for revenue growth. As a senior sales and operations professional, Michelle brings experience facilitating a 20% increased revenue year over year, developing and implementing sales and operations strategies with a focus on social impact brands. With over a decade in the social impact space building Mata Traders. Michelle now does sales consulting to help organizations do two things. One, ensure current and future sales are profitable, and two, develop and implement sales strategies for revenue growth.

0:01:30.4 Lauren: Thank you so much Michelle for joining us today. We're so thrilled to have this discussion with you. Just kind of a good starting place. What is your story? How did you get involved in the social impact space?

0:01:43.5 Michelle: Yeah, so thank you for having me, David and Lauren. I have been working in the social impact space since 2008. I've been working with nonprofit social enterprises who do fair trade production in India and Nepal since 2008. And the story I always like to tell, what got me and my business partner started was we were on a trip in India and we were meeting with our jewellery producer group for the first time, Tara Projects. And they had shot an undercover video of some child labor. So they had shot undercover video inside a really small and dimly lit room with a table that was quite low to the ground.

0:02:30.3 Michelle: And it was surrounded by about a dozen children, probably 10 years old or younger working, constructing Christmas ornaments. Their fingers are small, they could do this really intricate work. And the children, they looked like caged animals essentially. They had a blank look in their eye and they were rocking and they were working and it was very upsetting. And Tara Projects said, do you know what these children are making? And we said, no. And they said, oh, well they're making Christmas ornaments for Walmart. And so we were like, if any consumer in the US knew who was making these ornaments, they wouldn't buy them. That was the impetus to launch a brand that sold consumer goods to the US market.

0:03:26.6 David: I can imagine the feelings that evokes in somebody. And I think to your point, one of the struggles that I think we have with current versions of capitalism is people that are making the projects are nameless and faceless people.

0:03:40.7 Michelle: Right. The reason we chose to do social impact work was just for the simple reason that we thought products produced in a fair trade manner or that had a social impact behind them, they would sell. If consumers knew the story behind the products, they would buy them just like they wouldn't buy a product made by child labor if they only knew. So it was about getting the story out there.

0:04:10.7 David: Right. So at that moment in time, did you have a background in sales? That's certainly one of your specialties now in helping businesses and organizations really look at that approach for sustainability and impact. I like, even how you framed it, there's kind of two halves to the story of one, if we knew what was going on, we would not want to buy these products. And the other being more positive, if we did know what was going on in products that we would be drawn to purchase those. What was your background in sales specifically at that moment in time?

0:04:43.7 Michelle: That's a great question. The driving force behind our brand was always that the product needed to be stellar. So I had sales experience and so did my business partner, but sales is really all about building relationships and I really enjoy meeting new people and learning their stories. You need to fund sales if you want to achieve sales, but your product needs to be stellar. The way we approached it was that we produce clothing, so if a woman, a shopper saw a dress hanging in a store that she loved and she had to have, she's probably gonna buy it regardless, but she would look at the tag, read about Mata Traders, which was the name of the company that I owned at the time, and learn about fair trade and social impact work that way. But the driving force is the desire to buy, which comes from the quality of the product. You need to do a product development. This is all part of sales in a way.

0:05:51.5 Lauren: Yeah, absolutely. And we see so many social enterprises asking these questions and digging into the heart of this, especially when they are trying to sell a product for the benefit of the people that they're serving. I'm curious, for an organization or a social enterprise that is first approaching this topic of product development, where do you start? How do you even know what to focus on when there are so many organizations with a lot of resources? And so how do you narrow in on what's a good fit for you?

0:06:25.4 Michelle: Well, I love that question and the best way I've found is you need to look for holes in the market. You just need to look around for what's out there that isn't being provided right now. And you need to marry that with your production capabilities. The population that you're working with, what can they produce? There's a dishware company called [0:06:48.1] __ Sobremesa. It was like they started just with doing cutting boards. There was just no fair trade or social impact, kitchen items that were not super-fancy, for example. So they just started doing every day stuff, cutting boards and things like that. But anyway, it helps if you can identify something that you think there's a need for. And then on the other hand, I think one of the questions you had for me were what are the biggest obstacles facing social enterprises when it comes to sales?

0:07:19.6 Michelle: And that can go along well with the question you just asked, Lauren, because if you're already producing a product, that's pretty good. Say you have people… You're making soap, or you're doing lotions, or things like that, you're already producing a product. A, it's good to be doing a consumable, that's something that people buy and use up and they need to buy again like coffee, and then B, if you have a really great product, the next step is to start looking at yourself as a brand and not just a cause. So, say you're making a product that you got a lot of competition out there, other brands doing what you're doing, the first thing you wanna do is get a look at your competitive set, like who else is doing what you're doing and where are they selling, who are they selling to, and how are they marketing their product?

0:08:12.7 Michelle: What I think the biggest challenge usually for a social enterprise is to view themselves as an actual brand that can't compete. What their main goal is is actually to serve the population that they're serving, so to look at themselves in another way. At Mata Traders, my clothing company, our strategy was always to increase our orders every year with our producer groups. So we had a long-term strategy of every… It was actually twice a year that we ordered, and every time we ordered, we wanted to order more than the time before, because our main goal was to bring more money back to our producer group. So, since that was our strategy, to always place bigger orders than we had done the year before, selling more became pivotal to our mission. So if you can look at sales in terms of being… Like in order to serve your population, you need to sell more. It's all the same mission. They're not separate.

0:09:21.0 David: Yeah, they're definitely related. Is that kind of what you're talking about too in this two-pronged approach when you use to connect sales to social impact, or maybe let's go a little bit deeper into that, what specifically is this two-pronged approach and how does the social enterprise really make that direct connection the way that you just did?

0:09:40.7 Michelle: The way I like to work that I found works well for more social enterprises, first of all, if they're gonna engage a consultant, it's the consultant's job to meet the brand where they're at, and usually social enterprises can be anywhere along the spectrum here. So the way that I work is, I like to come in and help actually do sales, tactical sales on the ground, try to sell the product. And while that's happening, we would work together to develop a more long-range sales strategy that's gonna work. That's my two-pronged approach, to come in and do sales and at the same time, be developing a strategy 'cause usually they don't have one in place. And you're keeping the sales work that you're doing, you're keeping that in line with the strategy as it develops. But the thing with getting someone who's actually doing sales is that is what exposes a lot of the cracks in the current model, like why aren't they getting sales?

0:10:42.4 Michelle: If you get someone to get in there and try to do sales, they'll figure it out, like what's wrong? Why aren't sales growing? For social enterprises, it's all about revenue generation. So you need to figure out where your revenue's coming from in the first place. So, for example, if you are a non-profit and you get most of your income, 50% of your income comes from development and 50% comes from earned revenue, if you're gonna invest in "Sales" quote-unquote, what I call… 50% of your investment needs to be in development. You don't wanna turn the money you're spending, you don't wanna turn it away from what's currently bringing you revenue. You have to be careful. So I love to do development work also hand-in-hand. I almost look at it as a sales channel of its own, even though it's not really. So you wanna be firing on all syllables, like you wanna be doing your sales, but you also wanna be doing your development.

0:11:47.0 Lauren: Yeah, that's great, that's great. You kinda covered this, but I was just gonna ask a follow-up question of, for people who maybe haven't developed a sales strategy, what are the components of that? I can imagine it would include marketing and branding and those kinds of things, but what are the different pieces that make up a sales strategy? What do you need to be looking at?

0:12:10.1 Michelle: So there's a couple of different pieces. I mentioned the first one. You really do need to know your competitive set, that means what other brands are doing, what you wanna be doing. They can be social impact or not, it doesn't matter. What matters is that the product is similar. You need to have a voice. That might also be hard for non-profits. It helps to have its brand voice. Essentially, you need to think of it as you're trying to construct a living breathing thing, like a brand is a living breathing thing that's communicating all of the time with your supporters. So if you're a non-profit, luckily you probably already have a pretty good network of people who are already supporting your organization, and thinking of the brand is just thinking of how you would communicate the brand's value to these people.

0:13:08.8 Michelle: Generally, the brand's value is the social impact work that you're doing. So the third thing you need besides a voice, is you need data, You need data on the changes that you've actually made. The financial data is the best, but how many people you've affected over the course of your lifetime. That's just an example. But then you take that data, and you spin it a little so that that's where you get your marketing material. And then once you have your competitive set, you have your brand voice, and you have your data, the next thing you would need is to identify the best customers. So you wanna be identifying potential customers who already are gonna be inclined to shop your brand versus customers who don't care about social impact, for example.

0:14:05.7 Michelle: And how you do that, [chuckle] that's kind of identifying potential customers. That's kind of like the work that I do. [chuckle] I can tell you that in the olden days when there was no internet or we didn't even have a website. We literally packed up our van and drove around the United States stopping in cities and towns, casing the town, looking for the best shop that we thought was gonna represent our brand the best. Going in, pulling out our samples, getting a meeting with the buyer. That's how you did it in the olden days. Nowadays, it's totally different. A, there's the internet, and then B, the second-best thing to do is to just engage with entire networks. That might include multiple customers.

0:14:50.2 Michelle: So that would be like joining the SCA, or there's many different other organizations out there where you can engage with multiple people at one time. So what I'm talking about now though, that's like a wholesale relationship. I'm talking about how to build wholesale sales relationships. To build retail relationships, which is individual consumers, that's a lot more difficult in today's environment just because you have to pay generally to play in that. If you're gonna spend around 9,500 a month or something on paid social, you could maybe start to make an impact, but if you don't have a hundred thousand dollars a year to do that with. It's a different story. But anyway, it's still possible, of course, but it's just a different way of going about it.

0:15:44.6 David: One, talk about how times have changed. I imagine for me, I thought of going into a store and just presenting myself and kind of that cold lead is really nerve-wracking. And I think in some ways the internet has at least helped that. That being said, at least I'm… I don't even know how many, at least 50 emails a day I get of people that are reaching out to say, "Hey, I've got this product to sell. Let me change your website. Let me do whatever." It also seems like it's very difficult to be able to stand out. So it seems like that there's some kind of magic still available that is in the cold lead and trying to figure out how to do that on a personal level. I'm really curious to know what that looks like for you today and the brands that you're helping coach and create this brand strategy. How do you get a cold lead into a sales funnel?

0:16:41.4 Michelle: Well, okay, the main thing is that the cold lead that you're identifying, I'm trying to identify leads that are already selling brands very similar to the ones that I'm pitching. So if you wanna know, just tactically, you would take at least three at very minimum, three outreaches. The idea is once you've identified a lead, you have to look at it in terms of you're not really trying to sell something, you're just trying to introduce something. I'm pretty confident that it's gonna sell for them and make them money and I'm not really doing sales, I'm just trying to increase the mission of the company that I'm working for, which is to bring money back to the producer groups where they are. So I'm just… It's more about information sharing, but the piece that's tricky is how you share the information.

0:17:44.8 Michelle: So, A, you have to be pretty darn sure that the product that you're trying to pitch is actually gonna sell for this customer. That has to be… That's up to you. Then B, you have to figure out how to introduce the product to them in a way that is gonna catch their eye. So say you've got a buyer, a store that sells a number of different things, but you have to think about, well, what might they not have? So right now I'm selling a brand that's a B Corp, and they do precious metals, which is pretty rare. There's a handful of brands that do precious metals like gold and silver in a B Corp social purpose. No one's doing that quite yet. So I can pitch to a jewelry store that most likely doesn't have precious metals coming from a B Corp producer, and I can fill that niche for them. That's how you do it. You have to find out how can you pitch what you have as what they're missing.

0:18:48.8 Lauren: Yeah. That's awesome. I'm curious, we've talked a little bit about just wholesale, and you were of course talking about just the barrier to entry when it comes to retail and that's crazy. I knew obviously that social media advertising is important and a big deal or… But that kind of a budget, it's just really interesting. So kind of with that in mind, a lot of our social enterprises in the SCA network are in kind of a startup phase. Do you tend to recommend for social enterprises that are making that decision of whether to start with B2B or B2C sales, going more of the wholesale B2B route?

0:19:35.6 Michelle: Well I mean, I would personally recommend the B2B route just because many, many different reasons, one of the reasons is you're dealing with professionals. As a brand, you're selling to a buyer, for example, versus selling to an individual who's just an everyday person. The idea is a wholesale sale, you have a minimum. So, yes, with the retail sale, you're making a much better margin, but with the wholesale sale, you're moving a lot more items per sale. Essentially, if you wanna sell stuff, you do need to have a public facing website. And I don't wanna discourage people from doing retail. I have just found that, especially for social impact brands, growing retail might happen organically.

0:20:31.6 Michelle: So I'm not saying it can't happen at all. I'm just saying as long as you have someone who's doing your social media with a genuine authentic voice, they might be able to grow that organically because that's what individual consumers are looking for. They're looking for more of an authentic, I think, relationship these days. But whereas with B2B, it's more about, like I keep saying, just identifying what your customers need and filling those, filling their needs. The other thing is they already have access to all of the individual retail buyers out there. It's like, why would you put in all the work to find each one individually where you could just find a buyer and then they already have all that access to all their customers.

0:21:18.2 David: It sounds like too that… Kind of going back to some of your earlier points, like if you have a data set to be able to say, hey, here's our demographic, here's the people who are buying, it's almost like if you wanna create a wholesale sales strategy and identify those future buyers, it makes sense to have a little bit of that direct to consumer transaction history so that you can present that information. So it's almost like they do relate so that you can give those data touchpoints.

0:21:47.6 Michelle: Yeah, sure. Definitely. Yeah, a lot of the social impact brands that I work with, I'm part of Chicago Fair Trade, which is an organization in Chicago that is made up of individuals and business owners, but it's business owners doing fair trade. And every year CFT does a pop-up shop. Physical location in Chicago. So most of the brands get a majority of their retail sales from doing physical sales like pop-up shops, holiday markets, or what I'm gonna talk about in June, like getting in a… The Mother's Day guides and stuff like that, versus just getting a random e-commerce retail sale from some stranger that doesn't know the brand. So even if you are gonna do retail sales, there's other ways aside from e-commerce where you can get that information, David, about who your end-by-end consumer is.

0:22:46.7 David: That's fantastic. Well, very good. I think that thinking through the sales strategy is, it's like when you have a social impact opportunity, I think many people's stories begin where your stories begins. You see this issue and you're trying to think through, how can I make an impact? How do we bring awareness to this thing and change that narrative, change the outcome? And so I think that that's one of the challenges that we have with sales for social enterprises, is your starting point is in this cause where then immediately after it has to follow the sales, versus if you're a strictly traditional business you're really thinking in that sales piece first. And so I appreciate kind of your story and how you've shared the importance of really being able to tie those two together.

0:23:38.0 Michelle: Yeah. Can I end with, I'll just say one other thing that we didn't talk about at all, but in order to make the social enterprises job easier at sales, a lot of times it just comes down to the technologies. So if you've got like Shopify, Klaviyo and a CRM, you'll be more ready to start getting your sales going quickly, because as you identify leads, you need to put them into this CRM, the database, and then you need to be communicating with them. And how you do that is by email marketing using something like Klaviyo. And the last thing I'll say is, one of the greatest obstacles, a lot of the social enterprises that I work with have is like their photographs. It's just literally, it's stuff like photographs of their products, doing lifestyle shots, things that I guess come from the more old-fashioned marketing world that they're not quite used to spending money on. That makes all the difference in terms of, that's why it's important within the sales strategy that they start thinking of themselves as a brand.

0:24:57.0 Lauren: Yeah. That's so good. Well, thank you so much, Michelle. Where can people keep in touch with you? Like obviously we've got the June webinar coming up. Obviously they could connect with you at the June webinar, but, where else can they find you? Where else can they get in touch?

0:25:12.2 Michelle: So I do have a website now. It's michellekingthomas.com and you can just email me at michelle@michellekingthomas.com.

0:25:23.7 David: Well, very good. Well, we look forward to seeing you in June again and thank you for sharing your wisdom with our network.

0:25:32.0 Michelle: Thank you very much.

0:25:35.7 Lauren: Join SCA and Michelle Thomas of MKT Consulting for best practices to prepare for the 2023 holiday shopping season taking place on Tuesday, June 13th from 2:00 to 3:00 Central Time. Join us for our discussion of the top five best practices for social impact brands, preparing for the holiday shopping season, focusing on how to get customers to commit dollars early to your brand. We'll discuss a seasonal marketing timeline, including the how of creating and marketing holiday assortments, and getting your products into social impact gift guides, as well as the pros and cons of doing in-person holiday markets, including how to determine which ones to use and what other promotional incentives to offer to increase brand engagement. Members of Social enterprise register for this webinar for free. To receive the discount code, please contact us at info@socialenterprise.us. If you're not a member, this webinar is still accessible to you for $35. To join SCA or to learn more about becoming a member, please visit us at socialenterprise.us.

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