Sales Laundry

Posts Tagged ‘Lesson in Sales’

Recently I was talking with a small business owner enjoying a degree of success growing his business from a one-man-band to six person shop and achieving a degree of local business notoriety.  Our discussion centered on talk of hiring a sales professional for the company and the owners exciting growth plans to take the business to the next level.

The owner was convinced that the correct course to grow the business was through a large expansion in products, markets served and by targeting larger customers that could buy in bigger chunks.

His theory was that with a significant expansion he could grab more revenue and tap new markets to avoid the risk of his primary revenue source drying up and foundering the company.

It was a reasonable line of thinking that I identified with even though it was a poor decision that could not have been more wrong.  I know this because I was guilty of the same mistake in a similar situation at an earlier point in my sales career.

I could not persuade the owner to look at a more focused strategy of measured growth or any other option for that matter, so I knew it was something I was going to have to pass on.  With any luck, maybe I can help you avoid a mistake that your business just may not recover from.

The biggest lesson I got out of my own personal foray into this folly was simply this:

Be the Master of Something or you will be known for nothing.

As a little, growing, cash starved business there is usually a strong desire, at some point, to throw sales discipline out the window and bend your little company around any and every opportunity for potential revenue you can find to survive.

Making that decision would likely be one of the worst decisions you could make, but I also know that over 50% of you will take that leap anyway because the alternatives will be too ugly to even contemplate.

It may seem counterintuitive, but the solution is to go narrow and deep, not wide and shallow.  Narrowing your focus to your best product(s), best prospects, building your brand, your experience and credibility in a niche you can own is the best strategy for success.

Look to expand after you have become Master of your Niche and can successfully leverage your hard-won market credibility into sales of your new offerings.  Having too many offerings or serving a large diverse market where it is hard to get traction will leave you Master of Nothing, unremarkable, swimming in a sea of mediocrity.

As focusing sunlight through a magnifying glass gets the attention of the local ant population, a razor-like focus on what you do best is the best way to burn through all the marketing and sales noise that can water down your message and drown out a small company.

What is the worst that can happen?

Typically this story ends one of three ways.

1. The company expands and expands to a wider range of products and offerings in hopes of capturing cash flow and the company ends up eating the people it was supposed to feed.
2. Continued expansion occurs until the sales, support or management structure collapses, damaging customer service, reputations and sales to say the least.  With any luck the smaller but right-sized company will begin to grow again at a more measured pace.
3. Miracles happen.

Three tips for the road.

Create a sales strategy to go deep, building brand, customers, and loyalty as you attract sales.

Manage your cash carefully to avoid potentially being forced to make poor decisions in a crunch.

Get known for something before your company and bank account are worth nothing.

Want to know more on the subject?  Drop me an email with FOCUS in the subject line.  val {at} saleslaundry.com.  As an extension, click here to learn how to multiply your existing sales momentum into more sells.

Image courtesy of positivepsychologynews.com

I was recently asked in short interview if I could close a sale.  After 20+ years of direct sales or sales management experience and building companies through sales, I responded with a confident “yes.”

“What proof do you have to show for it?” was the gist of the follow up question, to which I responded with my historic close ratios and my historic sales rankings.

After completing the conversation and looking back upon it, I think that was a miserable way to answer that question.  Thinking about it a little more, I came up with the right answer for me.

Can I close a sale?

My proof?

• I have friends.  Friends I met through a cold call and a willingness to listen, understand and offer a solution that made some aspect of their lives and businesses better that I can still call today even though our paths have long since moved in different directions.
• A large charitable organization serving families that would otherwise fall through the cracks has been able to save money and reallocate thousands of dollars from operating costs directly to their aid programs, increasing their reach and giving them the ability to help more people in their community.
• A government entity mandated to change their technology infrastructure without any budget dollars to so, successfully met that mandate without impacting their users scattered across the nation or disrupting the systems responsible for generating pay checks for some of our soldiers.
• A vice president client had such confidence in his ability to manage his organization from anywhere that he was able to go on humanitarian missions around the world building houses and improving lives where running water and electricity are considered luxuries.
• Several small businesses have been able to open and serve their community and begin to rebuild a warzone neighborhood with loans made to them by a new bank that manages risk and responds to customer needs through infrastructure and security programs I helped design and put in place.

What the “proof” question made me think about, and what I have never really stopped to consider before, is what happens downstream once our work is complete and the sales deal gets done.

Can you close a sale?  What proof do you have?  How would you answer that question?

Take a look downstream from your own sales efforts and look for your own proof.  If you feel like sharing with the rest of us, I would be glad to hear your story.

Image courtesy of Isrealli.org

I have responded to several variations to questions like “Is cold calling still effective?” with a range of answers.

My long standing official position has been that there is always going to be a right time and place for cold calling no mater how advanced LinkedIn, Face book, MySpace, Twitter, texting, email, mail, flares and smoke signals get as communication tools.

The last two months have proven my point.

Cold calling is simply a sales tool and that is how you should look at it. I am not suggesting you roll cold calling into your mix of sales tools by default, I am just saying you need to understand where and when cold calling fits and makes the most sense.

For the last few months I have been working on sales strategies for an energy company trying to figure out the best mix of tools to reach new customers for them. (Their customer being anyone using electricity with a superset of products where one or more energy source is deregulated.)

The company had a solid referral model in place and a secondary simple lead generation system. Missing from the equation were websites, newsletters, white papers, opt in communications and a strong lead development engine.

To the company’s credit though, they had spent a great deal of time refining the sales forms, sales process and field sales to its simplest form on their operating budget. The field sales tools were truly outstanding and visionary when compared to other large and small field sales forces I have worked with.

The referral model in place was exceptional with a close ratio of 1:2 calls. The quantity and location of the referrals led to a lot of time being wasted with travel no matter how efficiently the call plan was setup. To mitigate the lost time I employed an extremely simple cold call strategy.

For every referral business I visited, I would cold call, or walk in, five businesses in the immediate vicinity with the hopes of at least getting some new leads and at best signing up new customers.

The company’s products worked well with this strategy, requiring no up front commitment or cost, played on the customer’s curiosity, and in the end would almost definitely save them money with a sub 30 day ROI.

All that was needed was a good simple but short explanation of how a company could benefit by our services and the cold call strategy was ready to deploy.

Walking in anything from a local SMB business to a large name brand global organization, at random with no contact name, led to a close ratio of 1:10 calls. For the record, none of the large national/global companies were signed at the time of the cold call, but the process was effective for finding contacts, meeting assistants and doing general sales groundwork that may or may not have been possible with Hoovers or other online tools.

In this particular situation it was effective enough to help me meet an established reps quota my first month in a city I had never been to before and talking to people I never met.

The point is cold calling is still an effective tool. The most effective? No, not by a long shot, but one worth keeping in your bag when your product or sales process works in short, initial meeting types of sales engagements.

Being effective as a field sales representative, trying to beat your quota and break the compensation plan in your favor takes some intelligent work and careful use of your time. As a rule, random cold calling would not be a strategy I would employ or even recommend for those two endeavors unless it just flat out makes sense in your situation.

I know Gitomer and a whole host of sales gurus and probably more than a handful of you would/will say cold calling is for suckers. All I can say is that the last two months cold calling earned me more suckers than the number of days I have been walking on this planet with plenty left over for you, too.

Sometimes it’s good to be sucker.

Image courtesy of http://www.hitched.ca

In training new people to become sales professionals and developing them into successful sales teams, or building sales engines as I like to call it, I have found that how you allocate your sales team is just as important as the training and development that gets them ready for a sales career in the first place.

The default way to allocate sales professionals seems to put the strongest relationship builders and highest income earners on the largest companies/named accounts in a territory, and then allocating the balance of the sales team in support of those large account representatives or scattering them across the remaining territory, engaged in outside sales, inside sales, or sales support typically based on their years of experience.

This approach can anger and annoy customers and prospects alike. This method can also be an incredibly inefficient way to field a sales team that unnecessarily raises Cost of Sales.

What if we divided sales teams not by the size of the customer but by the way a customer prefers to buy?

Your company has customers that could care less about your sales team or interacting with them because the customer knows your products and their applications as well as you do, perhaps better because they interact with your products every day. Does it make sense to deploy a “relationship building” sales professional or a dedicated sales team to this large customer and raise your Cost of Sales by providing your customer sales resources they do not want or value?

Nope.

Regardless of the client’s size, if they are ultimately only concerned about bottom line cost, then provide a method to purchase for them that meets their needs. Let them order through an inside sales representative or build a nice functional online purchasing mechanism that makes sense for you and will let them do business with you in a way they prefer.

For those clients that value the expertise of your sales professionals, big or small, deploy your relationship builders and subject matter experts, delivering the products your customer needs and the support the customer values and is willing to pay for.

If you are thinking ahead a bit, you might envision a scenario where a very expensive relationship building sales professional could be assigned to a small opportunity with a company valuing your expertise that could be as wildly unprofitable as anything we have mentioned previously.

Your right. So, don’t do that. You need more than a sledge hammer and a flyswatter in your bag of sales tools. Allocate internet sales, inside sales, junior account managers, senior account managers, Subject Matter Experts, Field Overlays and your Sales Top 10% where it makes the most sense for your customer and the most profit for you and your sales professionals.

The one guiding principle of this model that needs to be understood is that regardless of how sales people and resources are deployed, they must meet or exceed the accepted level of service the customer requires. Under deliver and you lose the customer, exceed their expectations beyond the point of where a customer cares and you are unnecessarily raising your Cost of Sales again.

Before you begin a full sales retreat and cut your head count or risk alienating your customers by trying removing some of the perks customers have come to expect from a relationship with you, I urge you to reassess how you sell your products. Is it possible to cut your Cost of Sales by reorganizing your sales team to sell the way your customer wants to buy and continue to grow your company while your competitors are running for cover? I don’t know, but I certainly hope you will tell me when you find out.

Image is the sales team for Microbizz and provided by Microbizz.

Yesterday I wrote about looking at what you sell with new eyes and finding ways to simplify the buying process for your customer.  To spur your creativity I am going to tell you what another company is doing to simplify a process they invented.

For years, I have written off Domino’s pizza as “college pizza” or the pizza you order when you are too broke to order anything else.  After looking online for pizza delivery one night, I decided to give Domino’s a shot for nostalgia purposes alone.

 What I found on their site was an evolution of Domino’s original pizza delivery model, making plain old pizza delivery arguably more personal, more consistent and flat out easier on the buyer.  I got my pizza and another great example of making buying easy all in 30 minutes or less and I am happy to say their idea was more innovative than finding a new place to stuff cheese.

Domino’s pioneered pizza delivery and in the process brought about the age old process of keeping a stack of expired pizza coupons in the drawer by the telephone, scouring the coupon sections of telephone books, calling in and asking about the specials, placing your order and getting the standard 40 minutes to an hour estimated delivery time.  Domino’s changed all that by integrating online ordering like their competitors, but unlike their competitors, they developed the “Pizza Tracker” (see image.)  

Click Thumbnail for Full Size Image

 I was able to build my pizza with a simple graphic interface; my coupon was automatically deducted from my purchase price, I confirmed my order and paid in less than two minutes.  It was an easy process that started delivering unexpected value for me as soon as the “Pizza Tracker” loaded up.

 The “Pizza Tracker” tells me that Li is doing the prep work on my pizza and shows my pizza moving from the Prep phase through the Bake phase and Box phase.  At 5:21 Li hands my pizza off to Scott who departs the store at 5:23 and arriving at my house at 5:33 with a ring of the doorbell.  

•  No more calling. 
• No more errors relaying the order. 
• No more coupons to track.
• No more wondering where your pizza is.
• No more calling back an hour later realizing they forgot your order or made it carry out by mistake.
• As a bonus, you get the names of the people that are working to make and deliver your pizza.

 The pizza met my expectations, it was the easiest order I have ever placed, and I got unexpected value out of the “Pizza Tracker” feature that was just part of the transaction.  Getting to see my order processed in real time by real people made me feel more confident that my order was going to be correct, and get to me on time.   More importantly, I will likely be back to order again.

Not resting on their success, Domino’s has found yet another way to simplify the pizza purchase process.  Forget the computer, that is so 400 words ago, now all I need is a remote and my TiVo.

 If Domino’s can improve the art of pizza delivery, how can you improve the process of buying your product for your customer?  Can you make a change that brings a measurable competitive advantage and wins additional loyalty from your customer base?

 *Domino’s Pizza is the world’s largest pizza delivery company with 19% of the domestic pizza delivery market, inventing the pizza delivery category.  Pizza Hut, largest company by sales, holds 17% of the domestic pizza delivery market, Papa John’s nails down third with a comfortable 10%.  Source: Domino’s Investor Presentation – April 2008

As a little boy I had a bicycle that looked like Evel Knievel’s motorcycle, at least to my young eyes. More than anything I wanted to go as fast as Evel did on his great jumps, but no matter how fast I peddled I could not achieve Evel speed. Heck, I could not even outrun the neighbor’s sheep dog with his perpetual desire to tear off my leg and eat my bicycle tire.

Then one day my brilliant friend Billy explained leverage to me with a single gesture. He pointed to a radio tower on top of a huge hill near our neighborhood.

Sitting atop the hill and looking down the road as it curved out of sight near the bottom, I still remember being very excited.  I was ready to swallow my fears and fly down that hill in a speedy white blur in my quest to be like Evel Knievel, a man I later discovered was in the Guinness Book of World Records for having 37 broken bones among other things.) I was so excited I never stopped to figure out how I was going to slow down once I achieved the Speed of Light before crashing through the dead end barriers at the bottom of the hill. My mother would have been horrified.

With a grin and a degree of terror I started peddling. Very shortly the leverage provided by the downhill slope pushed the speed of my bicycle beyond my ability to peddle any faster. I simply could not keep up. I was no longer the engine for my bicycle, I was merely a passenger experiencing a fantastic white knuckle ride.

I am not sure if it was the blazing speed or the sheer terror of the thrill ride, but somehow I failed to make the curve in the road half way down the hill and went zooming down a rocky cactus filled trail, straight through the trees, eating pine needles and small branches until I hit a very large rock which separated me from my bicycle seat and turned me into a rolling human boulder for the last 50 yards or so as my bicycle somehow managed to pass me, stay on two wheels and smash into the back of a house at the bottom of the hill.

Needless to say I lived. That was my first lesson in leverage. Lose focus for even a second and all that leverage you built will throw you in the bushes (scare a Chihuahua and smash a potted plant or two.)

My second lesson came later as I learned how to Sell Down Hill and multiply my own sales efforts to reach sales numbers I could not reach on ability alone.

What is “Sales Leverage” or “Selling Down Hill?”

Sales Leverage is art of making every subsequent sale easier than the last at an ever increasing rate of speed.

How do you “Sell Down Hill,” or use “Sales Leverage?”

Sales Leverage is accomplished by selling a product and using any or all “multipliers” like the buyer himself, his reputation, his influence in the market, his reference, publicity or message to sell the next product in that same market a little bit easier.

Sell a product into two different silos of customers and the two sales can’t help one another. Sell a product to two people in the same market with the same problem and you can leverage those sales to help you find the third. The recognition from the first two sales, used correctly, can act as a small multiplier for the third sale in the same group, solving a similar problem.

Simple Example of Leverage: Say you are selling paint. You sell a can of paint to a local portrait artist and a second artist, seeing the beautiful work of the artist that bought the paint, comes to you to buy a can of his own. You have established some leverage.

Example of a Sale with No Leverage: You sell a can of paint to a local portrait artist. Later you sell a can of paint to a house painter. You get no leverage because the reputations and opinions of the respective customers do not matter to one another.

Staying tightly focused in one niche will provide additional benefits that can also act as business multipliers in their own right. Achieve dominance in a niche and your margins improve and you establish an expertise gap between yourself and your competitors that do not share your focus.  Your expertise in one niche will allow you to expand organically into new markets as customers flock to your expertise, and eventually your name will become synonymous with your niche in your market.

It only makes sense to have your past sales helping you make new ones, especially at a time when sales can be hard to come by.

As always, I look forward to your own thoughts.

Image courtesy of gettyimages

Two minutes into a conversation with a good friend, who works for a major national insurance provider, our casual banter took a sharp turn into a series of rants about the technology industry, incompetent sales professionals, ignorant project managers and grossly inadequate deployment teams.

 I had some time to spare so I just listened until finally she took a deep breath, blinked, looked up at me and said “Sorry about that.”

 Two years ago her company decided to gut their technology infrastructure and start over with a major ERP software package.  The plan was to completely integrate their organization in one mass of technology and human efficiency.  Unfortunately, two years later it was still a work in progress, and missed milestones were being measured in quarters, not days or weeks.

 I am certain the account management team thought they had struck gold landing this marquis account, and were already looking for ways to leverage this win into their next opportunity.  In actuality, all they have really struck is one big fat nerve that has an entire organization throwing them under the bus at every opportunity. 

 So what turned a fantastic win for the sales team and the entire company into a life sucking vortex?

In a word, implementation.

 When the implementation team began mapping the existing processes in the organization to mirror in the software they made one fundamental mistake that derailed the entire project on day 1. 

 They built their process map primarily from the information collected from executive and departmental management not the actual people doing the work.  The only input from the front line users came by way of survey forms.

 If they would have interviewed the front line team members and mapped their work processes then confirmed with management and integrated new efficiencies, moving to pilot phase and final implementation would have been a much simpler affair.

 So what is the lesson?  Account Managers, stay engaged until deployment is complete because you have a vested interest in things going well as a hunter or farmer.  What should have been a great sales win leading to many more for this team is instead a disaster they cannot shovel dirt over fast enough.  The next big mistake would be to bury this, you should parade this “loss” and the lessons learned, but that is a different post.

 Sales Managers, the impact of this cluster will never show up directly on a forecast, but it can be an invisible force working against your team morale, your ability to leverage future sales, and your reputation.  Watch for the signs as you performance manage your sales team, evaluate their forecasts and committed numbers for the next few quarters.  I would advise pushing for bigger committed numbers over the next several quarters to counter any fallout or delays this black eye might introduce.

 For the implementation side?  Simple analogy.  Design the new wrench based on what the guy who actually uses the wrench says he needs, not what his manager, a guy that will never use the wrench, says he needs. 

Image courtesy of http://www.all4humor.com