It’s not surprising sales performance is top of mind with executives. Many are tired of the recession excuse as a reason for lack of growth. Excuses or blaming someone or something is the kiss of death because you no longer believe you are in control of your own fate. You need to take control and don’t accept excuses. Executives also need to help sales improve and yelling is not an effective improvement technique.
Recession can be a positive. Many of your competitors stick their head in the sand and wait for good times to come – if they survive that long. Identify cost effective marketing techniques to keep your brand in front of current customers and prospects.
Building a quality pipeline and closing sales is about doing the little things well and providing a consistent experience (positive as well) for prospects. Keep in mind prospects are evaluating how your team handles the sales process. They assume you are showing your best hand at this time. Prospects believe once you close the deal, attention is likely to degrade. Since you already have their money, they assume you’ll move on to the next deal.
Sales follow a process just like fulfilling an order. There are steps your team needs to go through and you need to ensure they follow the steps. Also, apply best practices within each step – the old adage garbage in – garbage out applies to sales management as well. When the heat is on, sales people will show deals progressing even when they aren’t. Surprises are sure to follow as projections don’t even come close to what actually happens. It’s imperative that your company not only implements a sales management tool, but requires sales team to record relevant information about the deal as well as key contacts. If they haven’t identified how your product or service can help a prospect, the opportunity is not qualified.
I’m not saying implement a rigid sales process and never change, but it’s impossible to manage sales if you don’t track and analyze the process. Identify your top sales people and determine what makes them more successful than the others. Use this as your starting sales process. Resist the temptation to alter sales management until you’ve given it enough time. Silver bullets don’t exist. Do the little things well and sales will come.
A couple of friends of mine asked me to help them improve their sales close rate. Sometimes another set of eyes brings a fresh perspective to the problem. One person is the CEO for a small software company and was spending a lot of time developing presentations, proof of concepts, and proposals yet was closing very few deals.
His company like many others has a five step sales process. The steps are introduction, discovery, presentation, proof of concept, and proposal. I asked him how an opportunity moves from one stage to another and when he is transferred to another person. In most cases, when you’re sent to another department – it’s the kiss of death. He usually targets senior executives, pitches his solution, and in many cases the executive sent him to someone in IT.
After examining a couple of deals, the problem became very clear. He is talking to executives about a solution before the executive understood the problem his solution addressed. For example, he was pitching a solution that allowed sales reps to enter orders via their PDA which saved them 2 hours a night. While most sales executives want to make their sales reps more productive, he probably didn’t understand how saving his reps 2 hours would really benefit him.
The key to sales is defining problems in manner that hits home with the decision maker. This company has about 2,000 sales reps and an annual churn rate of 25% – each year they lose about 500 sales people. Let’s assume an experienced sales rep sells about $100,000 more a year than a new sales rep. Recruiting and training costs are about $2,000 per rep. Based on these numbers, the VP of Sales has to find $5,000,000 of new business to make up for lost sales due to new sales reps. Annual training costs are $1,000,000 which directly impacts the bottom line. These kind of numbers would get the attention of most sales executives.
Giving sales reps tools that enable them to enter orders at the customer location and eliminate 2 hours of “homework” each night should reduce churn. Obviously, no one knows what the actual reduction will be. Let’s assume that churn is reduced to 20% (I would argue this is conservative) or 100 less people leave each year. By implementing this solution, the sale VP would generate $1,000,000 more in revenue each year and lower training costs by $200,000. If the solution is $250,000, it’s a great ROI. The sales VP will be very interested and remain involved rather than passing you off.
All sales processes have something similar to a discovery stage and this is the most important stage. All sales opportunities should remain in discovery until the problem is quantified and your solution demonstrates a clear ROI. If a prospect is unwilling to quantify the problem, you haven’t gained their trust and you are unlikely to win anyways. You gain trust by demonstrating value. In the example above, the sales VP may not even realize the cost of losing sales people. That’s huge value.
Your sales management tool should allow you to track this information and I recommend that you require each sales rep to document the problem, cost of the problem, and your solution’s ROI before spending time presenting solutions. Doing this will reduce false positives in your sales pipeline improving accuracy. Most sales VP would love a pipeline that reflects what is “real” rather than wishful thinking.
The title may be a little misleading – this blog entry is not about increasing the number of appointments. It’s about not receiving a reply from an electronic meeting request.
Over the last year, I began having problems with meeting request responses. When certain people accepted or declined a meeting request, it never made it to my inbox. The problem was becoming more of a nuisance over the last 3 or 4 months.
When I called people to confirm the meeting, they told me that they already responded and were surprised that I hadn’t received their confirmation. Since we offer a premium email service, Hosted Exchange, some people enjoyed giving me a hard time. I don’t mind jokes at my expense, but our company takes great pride in doing everything we can to ensure our customers are satisfied with our service.
Like many people, I have numerous email accounts and there are a few that I rarely check – one of those accounts is Gmail. When I checked this account recently, there were several meeting request responses which was very odd since I never schedule meetings with my Gmail account. I uncovered all the “missing” responses.
Every meeting response listed in my Gmail inbox came from a company that was now using Google’s enterprise Gmail service. Gmail somehow switches the meeting creator from my business email address to my Gmail address. I’m trying to get to the root of the problem, but I think the problem stems from the fact my Outlook display name is very similar to my Gmail address. The display name for my business email has a space between my first and last name and my Gmail account has a period. This problem does not occur with normal email, only meeting requests.
While this problem is not a huge deal, it is annoying – unless you’re in sales or business development. I now have to check another email account to determine if some has accepted or declined a meeting.
Is anyone else having this problem or determined the root cause?
It’s an annual event for many companies, and consumers for that matter, – renewing their security software. Most consumer security software requires that you renew your license every year. To do that, you need to remember – or remember where you put it – the license key. I don’t know about you, but I never remembered where I stored the license key. Rather than trying to remember, I would just buy it again.
Many small businesses have the same problem. Every year, the IT administrator (which is usually the most technical person in the company) has everyone bring in their laptop to get their security license renewed. While the license is cheap, companies spend an enormous amount of time performing this task. Even if you can remotely access your staff’s computers, it’s still a painful. For companies that chose not to bother, they significantly increase the likelihood of a virus infecting one or more company computers. Talk about a nightmare.
There are security solutions that renew automatically eliminating the need to annually update everyone’s computer. We offer McAfee’s business security solution and it renews automatically each month. If McAfee’s not your preferred solution, look for another solution that eliminates the renewal process. Unfortunately, security software is a necessary evil, but there are ways to minimize the pain.
I was discussing data protection/business continuity with an IT consultant the other day. He has a client that is balking at the price for reliable off site data backup. Unfortunately, this is not uncommon. Let’s face it, who wants to buy any more insurance than needed. Also, many businesses don’t believe a disaster will happen – what are the odds of our building burning down or hit by a hurricane or tornado? If that were the only reason to protect your data, very few businesses would bother.
Here are some interesting stats to consider before you decide not to protect your data (source: Pepperdine University – Cost of Lost Data):
- Hardware failure, accounting for 40 % of data loss incidents. These include losses due to hard drive failure and power surges.
- Human error accounts for 30 % of data loss episodes, which include the accidental deletion of data as well as accidental damage done to the hardware, such as damage caused by dropping a laptop.
- Software corruption, which might include damage caused by a software diagnostic program, accounts for 13 % of data loss incidents.
- Computer viruses–including boot sector and file infecting viruses–account for 6 % of data loss episodes.
- Theft of hardware, especially prevalent with laptops, accounts for 9 % of data loss incidents.
- Finally, hardware destruction, which includes damage caused by floods, lightning and fire, accounts for 3 % of all data loss episodes.
Survival rate for businesses that experience complete data loss vary so I won’t bother listing them – we listed them on our web site in case you’re interested.
If you are considering whether or not you need to protect your company’s data, just ask yourself one question – What would happen to my company if we lost all our data?
Unlike insurance premiums, your data protection insurance premiums do not go up when you make a claim.
Believe it or not, businesses evaluate your company during the sales process and you may be eliminated without knowing it before you submit your final proposal. While this seems obvious, most businesses are moving at 100 miles per hour and don’t take the time to analyze how they interact with potential customers during the sales process.
A couple of years ago, I did a consulting project for a client and interviewed several of their customers as well as companies that took their business elsewhere. There was a common theme among all companies – during the sales process they evaluated potential vendors based on the following criteria:
- Response time
- Quality of their response
- Company reputation
- Price
I was surprised how important the first two points were for these companies. But when they explained their reasoning, it made perfect sense. If a vendor takes a long time to get back to us during the sales process, what will it be like when they have a signed contract? I experienced this hand when I was looking for a telesales firm. I reached out to several firms via e-mail and phone. Only one firm actually got back to me and it took over a week. These are telesales firms specializing in sales! It blew my mind. Needless to say I went elsewhere.
What are the common causes for a slow response? For the sake of argument, let’s eliminate laziness because I’m not sure there is a cure for that. The main problems are poor communication and no proposal management processes.
Let’s talk about communication first. The Internet and PDAs (Blackberry, Smart Phones, iPhone) phones have significantly changed customer expectations. It is rarely ok to wait even a day to respond to requests from potential customers. Most businesses expect an initial response from potential suppliers within a few hours. Companies that wait a day or more to acknowledge a potential customer are usually out of the running before the race even starts.
If your initial response is quick, the next hurdle is quickly understanding the customer’s requirements and providing a quality proposal in a reasonable time frame. Most sales people either use one of their past proposals as a starting point or send out an e-mail to their colleagues requesting a proposal that closely meets the customer’s requirements. If a sales person’s past proposal is solid, no problem. The problem arises when they send out an e-mail asking a colleague if they have a proposal that meets their prospect’s requirements. Their colleagues are busy managing their own opportunities/customers and typically don’t respond for a day or more. Even if another rep does respond in a reasonable time frame, it usually takes several e-mails to get the right information. As a result, it takes much longer to produce a quality proposal than it should.
If your competitor responded in half the time, guess who’ll win.
The problem with the automotive repair business is they are not incented to fix the problem the first time or fix it in a cost effective manner. I’m sure I’m not the only one that was screwed by a mechanic. For some, the more problems you have the more revenue for them. Many mechanics are ethical, but it’s hard to be ethical when you need to pay your bills and put food on the table.
The IT industry, especially firms that focus on the SMB market, used (I’m using past tense because the model is starting to change) a similar model – billable hours. Companies hired an IT consultant to come in and implement the hardware and software businesses needed to run their business. They charged a hourly rate to do so.
After the project is complete, the only way consultants made money was when a problem occurred. Businesses call them up screaming that the system is not working and someone needs to come out and fix it right away. Assuming the consultant was available (the good ones rarely are available); they rush out and eventually correct the problem. If the consultant was not available, your system could be down all day or longer. You are charged a fee for this visit.
Think about this relationship for a second. After the initial setup, the only time the consultant makes money is when it breaks. Sounds like the auto repair model.
Most consultants want to do the right thing and do their best to implement a system that is reliable. However, it is difficult when someone has a morale code that is at odds with their financial incentives.
Another model that is gain popularity is managed services. Managed services have a broad definition depending on who you talk to. For most consultants, it means pro-actively managing the system you purchased. For example, you are charged $100/month for a consultant to make sure your server is updated with the latest patches from Microsoft, free of viruses, etc. This model is much better aligned with your goals (unless you enjoy calling our IT consultant to fix problems) since the consultant is incented to keep the system up and running.
However, managed services may not be cost effective for your situation. You must purchase the hardware and software, hardware failures are not covered under most agreements and software/hardware upgrades are not covered either. At a minimum, every 3 – 5 years you get the joy and expense of footing the bill for upgrades.
Wouldn’t it be better to have all costs included with your service eliminating the need to spend your hard earned capital to pay for new systems as well as upgrades?
What if you could buy a system that was much more reliable, included hardware, software, and upgrades, all maintenance (even unplanned maintenance) and easily scaled with your business – up or down – no long term contracts? Would you consider it? This model, Cloud Computing/Software as a Service, is clearly aligned with your company’s objectives. Companies offering Cloud Computing services must provide a reliable, secure, and cost effective service. High support costs and security problems are the kiss-of-death for cloud computing companies – they have the same goal as you do – keep your data safe and the system running so you don’t call. Unless you enjoy calling your IT guy or gal, you should consider cloud computing as an alternative.
Companies with successful email marketing campaigns know their buyers before they send their first email. If you are using email marketing to drive sales, it’s important to understand how well buyers understand your service.
If buyers understand your products and services very well, focus on why they should work with you (i.e. lower cost) rather than educating them about how your service can help them. They already know how it can help them. One of our clients generated $90k of new business in 3 months using this technique.
However, if buyers do not understand your service very well, your content should educate them on the problems your company is able to solve. Another client introduced a new financial service that he intended to sell to existing customers. He focused on educating customers on various aspects of finance positioning his company as an expert in this area. Within a year, sales soared.
Take the time to understand your audience before you start and open rates should increase over time. If you are just starting out with email marketing, take a few minutes to read Karl Ossentjuk’s, vice president of Comcast Business Class Services for Comcast Colorado, blog for his take on getting started.
I was talking with a gentleman who owns a carpet cleaning business a couple of weeks ago and he asked me what our company did? After spending a few minutes describing what we did, with a quizzical look he said “I have no idea what you just said. I’m not technical and it’s likely to stay that way. Can you explain it in a way that makes sense to me?”
At the time, I didn’t realize it but this gentleman did me a huge favor. He was kind enough to work with me to help me craft an explanation that made sense to him. I’ve used the analogy we created multiple times and the feedback is been very positive. People loved it and had a much better understanding of Cloud Computing and how it can help them run and grow their business.
I’m sure you’re saying to yourself, what’s the analogy? Click here and read this earth shattering tale. Let us know what you think.
When times are good, companies are busy growing their business and tend to lose sight of fixed costs. It feels like the good times will last forever, even though deep down we know it will end at some point. The United States has never gone longer than 11 years between recessions. When a recession hits, fixed costs stunt a company’s ability to grow.
The first thing companies do is kill their marketing budget which is the last thing that should go. Companies that market during tough times are survivors. While companies cut budgets and heads, they can’t reduce fixed costs such as office space because they are locked in – sometimes 5+ years. Unless office space drives sales, in some industries it does, companies should resist the temptation to lease more than the bare minimum.
Instead of requiring everyone to work in the office, evaluate each position to determine if tele-commuting is an option. I realize people are social and need to get together periodically to strengthen relationships and collaborate, but is it really necessary to drive to the office everyday. Most people are less productive in the office because of constant interruptions. Studies have shown that employees that work out of their homes are more productive; typically 15 – 20% more productive.
The real reason most companies avoid tele-commuting is management is uncomfortable managing people that they cannot see. Managers are more focused on the how rather than the what. If good employees understand what they need to do, when it must be done, and why – they can figure out the how. If they can’t, it’s most likely a management or training problem.
One of our customers is a completely virtual company. They don’t own any servers or software and they don’t lease office space leaving them very agile compared to their competition. Their staff works out of their house or at a customer’s location giving employees the freedom to leave anywhere in the country – sounds like a good gig if you can get. The president of the company lives on the East coast and has a condo near a ski resort. He re-locates his family for 5 weeks in the winter and summer to their condo and he doesn’t miss a beat running the company. How cool is that? Sounds like a better approach than paying for office space.