Category Archives: Uncategorized

Stop Pissing Off 99% Of Your Prospects!

Research by Forrester, a company with a significant Sales Enablement business, did some research with executives on the effectiveness of sales calls. here’s what they found:

15% of sales calls added enough value.

7% of the executives surveyed stated they would probably schedule a follow-up.

In addition, the frustration executives felt at having their time wasted actually created a level of hostility towards the company whose sales person had made the call or presentation in the first place… enough to have a material impact on decisions, including being let to pitch for future business.

So, ONLY 15% of sales calls add value.

And ONLY 7% of execs in the survey would follow up.

Now, 7% of 15% is about 1%, so only about 1% of calls will result in a follow up… I know I’m playing a little loose with the numbers here, but it strikes me that the 1% success rate with ‘dialling for dollars’ like this fits well with our perception of reality… so maybe there’s an explanation for the low hit rate for this type of sales activity…

And if only 1% follow up, and there’s real frustration at the lack of value added in as much as the other 99%, it could be that you are actually annoying, if not ‘pissing off’ ALL of this 99%…

OK, it’s far fetched for many of you – I can already hear the ‘but’ comments from many of you!

But let’s not lose sight of the point here – prospective clients HATE to have their limited and valuable time wasted by sales people, no matter how good the products & services on offer and no matter how well-intentioned the sales person.

And people wonder why prospects can be so hostile to these approaches, and not even want to consider a new product or service that could really help them out…

No wonder sales people struggle – and it’s magnified 10x in a down turn, like the one we’ve been stuck in for some 5 years now.

So what to do instead?

Well, change the messaging for a start.

Don’t lead WITH your products and services, lead TO them, starting with the prospect and the challenges they face. Challenge them to see their world and business differently, then provide them with a frame of reference against which they can make a decision. Leading WITH products & services means this frame of reference is missing for them – how can they make an informed and therefore lower risk (in their minds) decision without a frame of reference?

  1. Question the status quo – and get them to recognise this, then…
  2. Redefine the situation – this is where the frame of reference is needed, built on contrast between how things currently are and why that’s painful, and how things could be and how that’s desirable & worth the risk of doing something about it, then…
  3. Present an alternative – and make sure they see the alternative in your offering, and that choosing you is in the end the lowest risk option for them.

I know this is easier said than done, but until this got said, it was unlikely it would get done!

So, you now have something to think on, AND act on. Get to it!

Oh… What’s that? You’re not sure HOW to move forward on that?

Well, give it a go, think about it – what is the status quo in your industry or target prospect, in relation to core business objectives? What benefits do your prospects get from staying with the status quo? What dangers lurk as a result of not changing?

Answer these initial questions and you’ll be well on your way.

And I’ll expand on the ‘how’ in my next post.

When you don’t know where you are financially…

I’ve just been down to the local CVS store to get some milk.

At the checkout, just in front of me, a young lady was having trouble paying for her shopping. She was using various credit/debit cards. None of her cards would let her pay, so in the end she had to leave without her shopping, and probably feeling just a little embarrassed, and worrying now about her financial situation.

I felt for her – I’ve been in that position before, admittedly some time ago.

And as she walked out of the store, shoulders slumped, head slightly down, I couldn’t help but think about parallels to sales situations.

How many times does a sales person (surely not you!?) go in to a discussion on price, delivery etc, and not really know what their situation is? Do they know what they can afford to do, business-wise? Do they know what aspects of a more complex proposal they can afford to do, or should afford to do?

Do they win the business at almost any cost, and then find it gets in the way of greater opportunities…?

So next time you, or one of your sales people is discussion the finer details of a deal, just spare a thought, ideally before hand, about just what you or they can and can not,sign up for.

Are you making these same dangerous mistakes with your business metrics?

Metrics.

A single word, a simple concept.

Or is it…?

A metric is simply a measure of something.

Almost every business I know, big or small, has at least a few metrics that it uses to help it make decisions.

And one of these metrics is sales. How much in sales was achieved yesterday, or last week, last month, last quarter, or for the year to date. We’re talking money here.

Quite a few businesses will also track volume – how many objects, items, or instances of a service, were sold. Here, we’re talking about simple counts.

And quite a few businesses will also track the average sale price or ‘ASP’ – defined as the financial value of the sales achieved in a given period, divided by the volume for the same period.

And of course there is the sales forecast – an estimate, hopefully based on some intelligence, of the sales and associated volume anticipated in a given, future period.

And that is pretty much it – sure, there will be some metrics relating to a few key processes, such as on-time delivery, waste, and so on.

But these aren’t enough – not from a sales perspective. Not from a business acumen perspective. And some are frankly, dangerously misleading.

I’ll explain why, with examples, and then show you what you can do to avoid the same traps, and so have a more useful and robust set of metrics for your business.

Let me start with a couple of basic principles. You probably know a couple of these, but perhaps not all.

  1. Metrics fall in to one of two types – leading indicators, and lagging indicators. Sales figures for example, are lagging indicators. They tell you about what has happened in the past. Now, this does not mean that sales forecasts are leading indicators because they tell you about the future – more on that in a moment.
  2. Only leading indicators are useful for helping you directly run your business. To be a leading indicator, a metric must meet the following criteria:
    1. It must refer to something that you can change – you can’t change last week’s sales figures;
    2. It must measure a quantity that exists today, and this quantity, what ever it is, correlates strongly with a future situation – e.g. for every 25 visitors who download a free tool or informational paper from your website today, 5 of them will spend at least $30 with you in the next 3 months.
    3. It must be unequivocal, clear – averages tend to hide extremes and concentrations that indicate something deeper at work;
  3. A key metric or indicator relates to things at the business level. You shouldn’t have too many. Any other metric will relate to a specific part of the business. Between them, your key metrics will also reflect the core values of your business.
  4. Have a balanced set of metrics – financial, customer, process and growth/learning/people – with clear definitions and target values.
  5. Regularly review your key metrics and the data that feeds in to them to make sure that
    1. The metric is still useful – you’re not simply measuring it because it’s easy to measure and measuring something is better than measuring nothing – so the myth goes..!
    2. The metric is (still) accurate – it actually does measure what you want & need it to measure.
    3. The people impacted by it (the metric) or whose activities affect it understand its existence and relevance to the business and to individuals.
    4. The metrics together tell the essential story of your business – nothing important at the business level, be it process, results, or values, is left untouched by any of the key metrics.

About my earlier warning that some metrics can be dangerous…

This almost always involves averages – for example, the average sale price. Add up all the prices you get for each individual sale, and divide by the number of sales. You can use this to forecast future income or sales revenue for a given value of volume. But how accurately?

If you have 10 sales people, you may have 2 or 3 who contribute say, 50% of the sales. You wouldn’t know this because averages tend to smooth these features out… so you couldn’t identify which individual sales people would benefit from extra support, or which sales people could help with that. You wouldn’t know who to go to out of these 10 to take their practice & methods and spread this through the others – sharing best practice…

Averages are useful, but not in isolation. If possible, also look at how the data points that go together to make up the average value, are distributed – look at their associated ‘standard deviation’ which is a measure of spread, and use metrics like this to help you target your continuous improvement efforts.

In earlier posts, I listed the core elements of business acumen – your set of key metrics should cover all of these – at the very least, the following:

  • Cash – grouped by the main sources of cash, including sales
  • Margin or profit – before & after taxes etc, with a track on costs, discounts, etc.
  • Return on assets – so you know fundamentally how efficient your business is at turning investments (usually your own money) in to cash
  • Growth – is your business fundamentally able to grow and is it – is enough of your sales coming from new customers and/or new products?
  • Customers – do they pay on time and in full? Do they come back for more? Are they recommending you to others?

So my call to action is a simple one: review your metrics, starting with a blank sheet of paper… and identify, using the pointers above, those few metrics that really tell the story of your business. Identify the data that goes in to forming each one. Make sure people who need to know about these, well, need to know about them – in full.

Then put a note in your diary to review them again in 3 months time – and change them as appropriate.

Passion – and how it can help YOU with success in business

Passion.

It’s an interesting word, for sure.

So what does it have to do with business?

More importantly perhaps, is what does it have to do with success in business?

Let’s find out…

Passion is a word that has several meanings, all but one of which are lost to every day use.

Did you know that one of the meanings is suffering?

Yes, you read that right – one of the meanings of ‘passion’ is ‘suffering’ – as in ‘The Passion of The Christ’.

And it’s this meaning, as well as the more widely known meaning, that together have something very useful to tell us about success in business.

You are in business, or thinking of going in to business in order to fix, achieve and/or avoid something. Chances are, it’s a combination of several of these. I doubt you are doing this simply to generate cash – you want that money for something!

Your business is not an end in itself… it’s a means to an end…

… so why not make that ‘means’ as enjoyable and motivating as possible?

So go in to an area of business, or service a market, for which you have some genuine passion.

The usual meaning of ‘passion’ certainly makes sense in this last sentence. But what about the part to do with suffering?

I think we all know that business can be tough – you will have some frustrating times and decisions ahead of you. Things won’t always go according to plan. Some days will be poor in terms of cash generation. What will help you stay the course is in the passion you have for what you sell, for how you sell it, for what it can do for your customers, and for their appreciation. That and the vision you have that your business will help you achieve…

Simon Sinek (see http://www.startwithwhy.com/) suggests in his ‘Golden Circle’ that all organisations and careers function on 3 levels:

  1. What you do
  2. How you do it
  3. Why you do it

It’s very easy to be clear about the first 2.

Not so much with the third – why you do it – and this is where the passion comes in…

Without a clear sense of ‘why’ – when the suffering part of ‘passion’ begins to dominate, it’s not so easy to rebalance, to get that other part of the passion back and drive through the challenges and get closer to success.

So where might you find this ‘why’ and your passion that goes with it?

Well, only you can really know, but where it connects to your business is in some combination of these areas:

  • The market you serve – it could be individuals, it could be organisations, there is no limit – your passion is in the ‘who’ that you sell to.
  • The products & services you want to offer – your passion could be in the ‘what’ that you sell.
  • The problem or situation your products & services tackle – your passion could be in the ‘why’ customers buy what they buy from you.

What is certain – if you have no real passions in any of these 3 areas, you are going to find it much tougher to generate the cash you want & need to achieve your vision.

So my call to action is a simple one…

Give thought to your ‘why’ and the passion that connects with it.

Where and how does it connect with your business?

What possibilities and opportunities become available to you if you move your focus to a different combination of market, product/service and problem?

Reflect on these questions. Check out Simon Sinek’s web site for further insights. All this takes time, so let it.

And if you’re up for a challenge, why not share your ‘why’ with me? I’d love to learn more about people’s ‘why’ – and perhaps help you out as you refine & clarify…