Sales Laundry

Posts Tagged ‘increasing sales’

I got some great responses on both the article and the survey at the end of the “How to get Referrals & get Them to Work for You” article, so I decided to share one more story that should motivate you to get moving.  This story is particularly interesting because this story takes place in economic conditions like we are seeing today.

 Salesman Joe Girard is our main character.  Many of you may have heard of him, but for those that have not, listen up.

 Joe never finished high school and bounced around from job to job until he ended up in Michigan begging a Sales Manager of a Chevrolet car dealership for a sales job.  Joe got the job and sold his first car that day and borrowed $10 from his Sales Manager to buy groceries on his way home.  The dealership owner fired him two months later after having sold an amazing 18 cars because the other salesmen complained he was being too aggressive.

 Based on his new found success, Joe found employment at Merollis Chevrolet and began a legendary career that would put him in the Guinness Book of World records and earn himself a spot in the Automotive Hall of Fame in 2001.   He is the only sales representative in the Hall of Fame.

 Joe Girard, according to the Guinness Book, sold more new cars and trucks on a one-to-one basis (that is retail, to people like you and me, not wholesale or fleet cars) than any other sales representative in the world, and then repeated that feat 12 consecutive times.

 Over 15 years he sold 13,001 cars or roughly 17 cars every week for 750+ weeks.  In his best year he sold 1,425 cars, or between 5 and 6 cars a day, depending on how many days he worked a given week.

Here is the best part.

 In 1974, during a major recession, unemployment at 9% (today it is hovering around 8%,) oil was in short supply, gas being rationed, not sold, (see picture) the consensus was you could not sell cars.  Joe only sold 1,376 that year, or roughly 27 cars a week!

 How did Joe sell so many cars?

 As you might have guessed, primarily by referrals.  Long before email and the personal computer Joe sent a handwritten card to every single person on his list, every month, just to let people know he was still out there selling cars and thinking about them.  No promotions, no advertisements, just hand written cards.

 Joe referral system was so successful he personally hired two assistants to help him pre-screen his customers, manage his appointment-only sales schedule, and assist him in writing 500+ cards every day.

 One simple idea, staying in touch with people and letting them know you care about them executed by mailing each person one card a month put a sales representative named Joe in the Guinness Book of World Records as the best car salesman of all time.

 Imagine what Joe could do with the technology we have today.  Better yet, imagine what you can do, and then do it.  What one simple step can you take to start building a referral generation system for your business?  It does not have to be impressive, worst case just send a card.

 Let me know what you come up with.

•  Want to see what the stock market in 1974 looked like compared to 2008, see the graphs here.
• Learn more about the best car salesman in the world, Joe Girard.
• Cartoon image courtesy of http://www.automation.com
• Gas coupon image courtesy of Wikimedia

When sales are difficult to come by, there is, I believe, a natural gut instinct to nudge a company toward broadening its services in hopes of reaching a wider swath of potential customers.  You typically have to look no further than the existing Sales Managers and Account Executives to find the source of this internal “Scope Creep.”

 While this idea may sound good bouncing around your head, in practical application this seemingly small leap in logic can very well destroy a company.

In electing to follow this strategy you are in essence trading some of your market depth for market breadth, and your competitors will love you for it. 

 Lose some focus on what you are best at and you run the risk of alienating some of your current customer base.  Experience any reduction in quality or service while your eye is off the ball and you just make it that much more difficult for a prospective customer to differentiate between you and a close competitor.

 Lacking depth and experience in you new expanded area of focus, you risk never establishing a customer base.

Lacking a specialization or something to hang your hat on, it is very easy for a company to succumb to “death by being average.”  Look no further than the recent death of Circuit City.

This is not to say a company cannot expand successfully.  They can and do every day with planning and new infrastructure to support the growth.

 In most instances, the better answer is to narrow your focus to what you are absolutely best at and where you hold the maximum competitive advantage.  Mine existing sales, established relationships and references to build sales leverage, making each new sale easier than the last.

If you are not known for something you will be known for nothing.

Times are tough. Sales are down and Management is cracking the whip on the sales team. Forecast meetings have turned into an exercise in pain management as the same weak opportunities get hashed and rehashed week after week as revenues dry up and leads exist only in legend.

Does that about size up the sales effort so far this year? Well grind no more my good man.

Simply put, if what worked yesterday does not work today for one rep, look at what has changed about the rep. If what worked yesterday does not work today for the entire sales team, look at what has changed about the business of doing business.

In those heady days before 2008 when sales reps were writing new business in their pajamas or while still wearing the cloths they wore to the bar the night before, many sales professionals were able to check their skills at the door and become order takers, often times stumbling across an order or two blowing across the parking lot on the way in the office.

Ok, so maybe I am exaggerating a bit, but it is only to make the point that instead of complaining about the market, now would be a good time to hang up the order takers apron, knock the rust off the sales armor and go jousting.

“Our clients are laying off staff, they do not have the budget to do anything this year.”

Do they still need your service in these difficult times? If you were providing staffing for them, ah, maybe not. Or, they might just need you more than ever. If you have the relationship in place maybe you can suggest temporary staff that are more cost effective to help them wind down their operation until their new reduced permanent head count can wrap their arms around the business. Maybe not, but it is a thought.

Maybe you expand your business by snapping up the best people being let go and using the power of their resumes to land them positions and you some new clients.

Maybe you expand by delivering severance package services like executive retraining, interviewing skills, or resume services.

Maybe all of these will work, maybe none of them will. The point is if business is not coming in the door the old way, think about creative ways to change the business.

“My client is saying she does not have any money to do anything.”

If the company still needs your service, it sounds like it may be time to think about ways to creatively finance your offerings or find a strong leasing or financial partner/bank that can buy the deals you write and give you some needed cash flow.

If you are in a strong position financially, see if you can bump your prices in exchange for time and terms with your client.

Think like a partner when you are talking with your client. Listen to them. What is it that their business really needs to success, or in some cases, survive? Ask questions to expose the bigger picture.

Why doesn’t your customer have any money? Are there sales down? Do they have clients not paying at agreed terms? Are they having cash flow issues in some other area of their business that is limiting the amount of inventory they hold and turn?

Think outside of the box on this one. Is there any service, deals, crucial contacts, reciprocal arrangement or vendor partners that you can marshal to help solve an underlying problem for your customer that will put your customer in a position to solve your problems by buying something.

What if your own sales team dedicated some time to finding opportunities for your best client through your own contact lists, effectively growing their sales force in the short term?

What if you developed some joint marketing efforts, effectively cutting both companies costs in half for the same ad/airtime?

What if?

The take away here is now is the time to think about problems at a greater depth than you are accustomed to doing, and frankly may not have strong enough relationships with your clients to allow those conversations to happen. You may need to solve a problem or two that is higher up on your clients list of issues than the typical problems you solve within the scope of your offering.

Got any creative ideas or stories of how you or your company bailed out a customer? Let me know.

Are you swinging a sledge hammer to kill an ant in your sales organization or are you taking a fly swatter to a tank battle?

Better stated, perhaps, have you taken the time to calculate the costs of your various sales tools vs. the revenue potential of your product offerings to make sure you have a sales strategy that makes sense?

When I am evaluating sales management and their sales organizations this is one of the first key metrics I look at to determine if sales resources are allocated properly.

Let’s say you have sales representatives costing you $60,000 in base that have on target earnings at $120,000/yr.

In simple terms, assuming this sales representative is working 40 hours a week (stop laughing!), and has two weeks off a year, he is going to work an average of 2000 hours a year. Doing the simple math, $120,000/2000 hours, this sales representative costs $60 an hour before you factor in benefits, cell phone, car allowance, etc. Let’s estimate his cost at $85 an hour to execute his sales work properly.

Subject Matter Expert: (Could be an engineer, analyst, auditor, etc.) $80k/yr; $80,000/2000 = a cost of $40/hr. We will keep it simple and skip the benefits add on.

Inside sales representative: $40k/yr; $40,000/2000 = a cost of $20/hr skipping the benefits add on here as well.

So let’s look at our costs for these sales representatives and their potential sales tasks.

Site Visit: (Assuming 1 hour of prep, 30 minutes of travel, 1 hour meeting) $212.50 + plus the literature he left, lets call it a cost of $215 for that sales call.

Technical Sales Call (Assumes Subject Matter Expert and Sales Representative) $215 for the representative plus $100 for the SME or a total of $315.

Telephone Call: Inside Sales Representative: (est. 5 minute call) $1.68
Telephone Call: Outside Sales Representative: (est. 5 minute call) $7.10

Mail: Inside Sales Representative: (Lit cost, plus postage plus time) $3.00 for lit + $.40 for postage + $3.00 worth of time.

Etc. etc. etc. You get the picture.

Now take these costs and apply them to the products you are selling and the revenue they produce in general terms.

When I do this I am mentally asking myself what is the most cost effective method of sales for this offering (that is not going to negatively impact customer service.)

I have seen situations where entire outside sales organizations were in danger of being fired and replaced because they were not hitting their quotas. After analyzing what they were being asked to sell vs. revenues generated it became clear that the company was swinging a sledge hammer (or using their most powerful/expensive form of sales) to kill a fly (some of their least profitable more commoditized offerings.)

The obverse is true as well.  I have seen inside sales teams and telemarketers trying to sell solutions that were far too complex for the tools available to make the sale.

In many cases I have been able to lower the cost of sales by making these kinds of changes and making individual groups (inside sales, outside teams, etc.) more efficient and more profitable as a result.