Archive for July, 2010
Sales research indicating:
- 50% of all sales leads are left to wither on the vine to die
- 80% of all salesperson stop after the 3rd contact
- 30%-70% of all sales targets are not achieved
What this suggests to me is there is a just a lot of plain laziness out there in the marketplace and very few people are talking about this using this word.
Laziness is so prevalent in our society (U.S.) I am surprised that anything gets down. The majority of people are born both mentally and physically fit. However due to a variety of reasons, laziness takes over. With the prevalent entitlement mentality, productivity suffers while other costs such as health care to the price of retail goods continue to spiral upward. The U.S. and even Britain’s obesity rates confirm this change in behavior and the additional costs.
Just look at the parking lot of any grocery or retail store. How many carts are left stranded in parking places because someone was just to darn lazy to return the cart to one of those cart holding stands?
This laziness also has a much deeper meaning and that is total, 100% disrespect for all those other shoppers who have to weave around those unintended shopping carts. (Think ethics and beliefs) Heavens forbid if it is a windy day and a sudden gust takes the cart and slams it into your vehicle or worse yet child! My sense is many of those lazy people would be the first to complain if their car damaged or their child harm by a stray shopping cart.
When people are lazy in sales, in business and in life, their behaviors affect everyone else because of their poor business ethics. This is why it is important to focus on what you can control and have an action plan to support that focus.
As one final note for this Friday’s editorial, if you choose to be lazy, then do not expect others to pick up your slack. For you have 100% of what actions you take from picking up that phone to call a potential customer to what food you place into your mouth. Personal responsibility and accountability are key attributes or talents not only for professional sales people but everyone else as well.Share on Facebook
Would you pay $20,000 for an engine (in this case a rotary one) for a plane that costs $3,000? That answer all depends on this one word – value.
For value is just simply defined as worth. What is something worth to you determines its value in sales. In some cases that value is priceless. I personally witnessed the value of a $2,200 30 minute airplane ride this past week.
No, it wasn’t me because I would prefer to be riding in the saddle of an easy lopping Arabian instead of being strapped into the second seat of the only P51 dual controlled flying pursuit airplane with over 1,800 horsepower. (Note: This airplane is part of the Wings of Freedom National Tour sponsored by The Collings Foundation of Stow, MA.)
One of the riders was a WWII veteran pilot who had flown 94 missions between the P40 (Flying Tigers) and the P51 (Mustang) in the Pacific Theatre. After listening to some of his stories including orders were not opened until they were 500 miles from the California coastline to other pilots not knowing where New Guinea was, I watched him climb into his memories of yesteryear. Then 30 minutes later, I watched him climb out and saw the utter joy in his face. For him the $2,200 was priceless and allowed him possibly the last time he will physically connect with experiences (he was able to actually fly the plane) and memories of over 60 years ago. (Note: Given this plane is valued at $1,000,000 and the plane’s engine needs to be completely overhauled after flying a specific number of hours to the cost of $750,000 helps to understand the $2,200 for a 30 minute flight )
Value in sales and your ability as a salesperson, be you a small business owner, an entrepreneur or a C Suite executive, to demonstrate that value begins truly before you have the opportunity to share your products or services. Your challenge is to determine the worth of you to your potential customers (a.k.a. prospects). For they are truly buying both you and your products and services. Value in sales is a packaged deal and is the deal breaker contrary to what many think that cost or price is what keeps them from earning the sale or closing the deal.
This leads to this obvious two part question:
What value do you bring when you meet with that potential customer for each of those five to 12 times before you earn the sale? Sales Training Coaching Tip: 80% of all sales happen between the 5th and 12th contacts.
What value do your products or services being to that potential customer? Sales Training Coaching Tip: Features + Benefits = Results determine Value based upon the buyer’s decision making process because what one person finds of value another thinks “$20,000 rotary engine for a $3,000 plane. What is he, nuts?”Share on Facebook
Not for profits differ from for profits in three ways:
- How they file taxes
- The words they use to generate revenue
- Where these organizations reside within the Revenue Hierarchy
All organizations require revenue. This is essential. Yet for not for profits appear to have some significant challenges beginning with the words they use to secure or generate revenue. One hears the word business development to foundation director, but never the word sales representative or sales director. In all of these cases, the main goal is to increase sales. Yet to say this word to a not for profit administrator is almost like using a swear word. This belief restricts the ability to increase sales or if you prefer the more neutral words of revenue or business development.
Having several not for profit clients I am always amazed at their reluctance to actively sell. Sometimes I think the belief that people should want to donate to this or that organization just simply overrides common sense.
People exchange their dollars for a real perceived value, not the belief held by not for profits that their organizations are worthy ones. Yes that belief of a worthy organization may be present, but it is secondary to value. [Note: I am not saying not for profits are not worthy, but the value must be shown to potential “donors” (buyers). This article is also not addressing religious institutions such as churches, synagogues, etc. as they are funded by a different belief.]
The other challenge is the availability of where to find potential revenue funds. Using the above graphic which I call the Revenue Hierarchy, once the following are subtracted from revenue:
- Direct costs
- Employees’ salaries
- Indirect costs
- Profits to shareholders
the DNP – Disposable Net Profit – is very small. This is a very real challenge especially during turbulent economic times. Even those who sell support services and products come before not for profits unless the not for profit can show a direct link to indirect costs. Grants are a viable revenue source, but there again must be a balance between grants and donations along with contracts according to U.S. tax laws.
Beyond the real differences is the belief focusing on delivering the programs or services first and not building the revenue base first. Revenue must be established first before any programs are delivered. By delivering programs first without revenue, the not for profit is always playing catch up and may eventually succumb to business failure.
Until not for profits understand this Revenue Hierarchy and actively work to “sell” the value of their products or services, these well intentioned organizations will continue to miss the business boat.Share on Facebook
All businesses be them for profit or not for profit have overhead. For single office/home office (SOHO) and independent contractors including realtors, financial advisors, lawyers, accountants (CPAs) this budgetary and financial number is much easier to determine than for the small business owners with employees and the much larger companies where it exists, but no one department wants to own even a part of it because it reduces profits within that department.
A recent post in the COO Bulldog by Kevin Callahan provided a simple explanation as how to calculate and subscribe overhead costs to employees. His last point reaffirms what Gary Sutton talked about in his book Corporate Canaries specific to you cannot outgrow losses.
Operating a business can either be from a short term or long term perspective. Data from the Small Business Administration suggests many small business owners appear to operate from a short term perspective given by year five, 50% of these organizations are not longer viable. By not understanding and properly allocating overhead can contribute to this small business failure rate.
One other variable in this mix is this one word – value. The inherent value within your products and services can help you in your overall pricing structure.
By knowing and being able to clearly articulate this value to your customers should allow you to raise your prices or sell more of your products and services at their existing price levels while building customer loyalty. Then provided you maintain your overhead costs along with direct costs because you cannot outgrows losses you should be able to increase your profits and not be constrained by your losses. Bottom line is you will then be the Red jacket in both sales and profits.
As always, please feel free to leave your companies or observations about the importance of this business practice.Share on Facebook
With so many small businesses in the market place, determine the price of your products or services respective to the value they bring is difficult. Under price and you may be operating at a loss. Over price and you may not increase sales and herein lies the selling yourself dilemma.
Ford’s recent new pricing strategy of having the hybrid Lincoln MKZ at the same price of the standard MKZ is an interesting approach to bridge this challenge. With hybrid vehicles generally costing more than their non-hybrid counterparts, Ford has taken an innovative approach specific to this luxury sedan.
Pricing if you sell services however is a bit more dicey. A great post at Training Zone actually provides a great explanation behind the decision making process as how to construct your pricing strategy. The author also included a doable formula.
One great point by this author, Verity Gough, is if you set your fees to low you may not be viewed as being credible. This is why being able to determine return on investment from past solutions delivered is necessary.
What it appears is that business people must know, understand and then articulate value to their potential customers. Yet, from my observations very few can accomplish this feat.
P.S. Read today’s business column on that critical customer experience and how it develops customer loyalty.Share on Facebook
Businesses from the entrepreneur to the multi-billion Fortune 100 organizations face challenges every day. Yet, there is one huge looming challenge that is currently not being addressed affecting business productivity.
This week when listening to the news, I heard about New England school districts that are giving As in efforts as part of the overall grading system. As a young child back in the dark ages when classes had 30 to 40 students, the effort (which is totally subjective viewpoint by the educator) was part of the report card. Of course for some students for example who found reading simple and easy, their efforts probably were not as strong as those who found reading complex and hard.
I know this to be true because I consistently scored As in the results from reading and Cs in the effort. These marks were fairly consistent from third grade to high school when efforts were no longer part of the overall grading process. (Note: My father and his entire family were avid readers. By the age of 12, I was reading about 1,000 words a minute with 95% comprehension and all without any formal reading course. So reading for me was literally effortless and remains the same today some 40 plus years later.)
Years ago one of my colleagues Doug Brown of Paradigm Associates made this statement that still resonates with me:
People confuse motion with progress and activity with results.
By just focusing on effort at the exclusion of results, can potentially create a very unproductive workforce. Given right now from employee productivity research (the most recent being a Gallup poll), the majority of employees are not giving 8 hours of work for 8 hours of page (8 for 8), then the future looks very dim indeed if the up and coming workforce believes efforts trump results.
This trend of rewarding effort appears much in line with the other public education trends such as eliminating Valedictorian and Salutatorian or worse yet giving multiple Valedictorian awards because some students or rather their parents are upset that they are not number one or two. Yet, these many of these same parents probably believe in the supporting the best player (number 1) in any given sport and probably engage in conversations with others about who should be ranked number 1 or number two.
As many have argued against this type of behavior is let’s eliminate any playoffs and give everyone the #1 award. Of course, this would significantly impact performance in future events.
How future American businesses deal with this challenge remains unclear. However if these small business owners, entrepreneurs to C Suite executives thought they had productivity problems in the past, they haven’t experienced anything yet.
The continued discussion about class envy does affect the business climate. This discussion only further harms the business climate and ultimately harms the citizens.
For years I have never understood this discussion about what some call the Green Eyed Monster. I am from a middle class background and I am a first generation Swede. My father’s parents lived on a farm in northern Wisconsin with an outhouse, no running water and by standards today would be considered living in abject poverty. However, nothing is further from the truth.
My grandma never spoke about those who had money any differently than those who did not. She understood that working hard and having no debt was important. Equally important was never every taking money from the government. During the Depression, the family moved from the farm to Chicago to pay the taxes so that they farm would not go up for a tax sale.
All she wanted was a better life for her family which did happen. All of her children graduated high school and became solid earning middle income citizens. Of her surviving grandchildren, 50% earned college degrees, one has a Masters (me) and another a PhD (my very bright cousin Karen).
Possibly years ago when wealth was handed down from family to family maybe I could understand all this wealth and class envy from the perspective of the have nots. However today, the majority of Americans (the haves) who created wealth did so by their own efforts. Andrew Carneige came to this country without money. Steve Jobs of Apple and Bill Gates of Microsoft as entrepreneurs created their own wealth. From the collective efforts of these individuals and thousands of more, jobs are provided and others now have the opportunity to earn their own wealth.
Personally, it is truly none of my business how much my neighbors make or anyone else. When I was employed in the corporate world, I truly did not care how much money my boss made because when the company was making money I was earning a salary. Even today as an entrepreneur, my financial goals are probably different than other entrepreneurs and that is Okay.
What I do know is taxes restrict freedom and hence affect business productivity which affects employees performance and ultimately profits. Yes we need them (government services) for basic services, but many governments from the local to the federal continue to grow fat in waste while the private sector that actually produces incomes continue to shrink.
From my little corner of the world, what I observe is government growing due to additional taxes from direct income taxes to indirect ones such as user fees recently imposed on the tanning industry. The U.S. federal salaries along with the benefits are higher than most Americans.
Maybe it is time for many American citizens to focus on growing their own financial wealth by their own efforts instead of expecting other to pay the way for them. This also includes saving some of their efforts and more importantly learning how to separate wants from needs. For example, if someone does not have the money for a cell phone then they do like those who have gone before – save for it and do not expect someone who has money to pay for it. (Actually there is a government program sponsored by taxes on cell phones signed by President Bush to provide cell phones to people of lower incomes.) Owning cell phone is not a right just like owning a car, a house, a plasma TV screen.
All of this uncertainty about taxes, additional looming imposed costs such as health care, etc. negatively affect the business climate. And bottom line is the middle class will suffer far more than any other economic demographic because more jobs will not be available.
P.S. On Fridays, the posting will be more of an editorial opinion written by me, Leanne Hoagland-Smith. These editorials will link what is happening within the business world with recent government actions and other current events.Share on Facebook
Technology has dramatically expanded business to business marketing through email. Now instead of typing that letter or retyping it, stuffing it into a #10 business size envelop, with a few strokes of the keyboard, any salesperson can whip off an email and send it to thousands if not millions of potential customers with the goal to increase sales.
Golly, gez whiz, this has to be the manna from heaven. Of course if it was, then FedEx, UPS and not to mention the US Postal Systems would be out of business specific to first class next day mail.
Every day it seems like (and especially since this blog debuted in February of this year) I receive an email message that uses my prime email address and then begins with some script as follows:
We can provide you the exact Industry Lists and if you are giving the target industry details we can run a campaigns to promot your products. (I left the incorrect spelling and grammar in place.)
Following are some of the sectors which we hand pre-package lists: –
- Aerospace & DefensePharamaceutical
- Metals & MiningMembership Organizations
- Education, Industrial Manufacturing
And possibly this mass email works, but for the savvy top performing salesperson he or she would not touch it with a 10 foot pole? Why? Because it is impersonal and that is the number one reason why employing this marketing strategy fails. This company is banking on quantity instead of quality as a demographic and desperation as a pyschographic.
People buy from people they know and trust. When an email does not even have the person’s first name and any additional information specific to her or his needs, this type of email sales letter will always fail and will not increase sales.
Additionally given all the grammar mistakes and spelling mistakes, my confidence in the accuracy of the information that I would receive from this company is non-existent.
Finally companies that deploy these types of sales letters are engaged in product or sales based marketing. They have no authentic desire to help you. All they want to do is to infect you with the 3Ps Virus of Product, Price and Proposal. Sales Training Coaching Tip: Education based marketing is far more effective and will increase sales.
So if you want someone to read your email, at least remember to use his or her first name.Share on Facebook
A recent media request that I received from Evan Carmichael asked to provide inexpensive tips to improving corporate culture and overall business operations. Numerous people in management positions from the small business owners to the entrepreneurs to the C-Suite executives are all seeking ways to reduce cost while improving the performance of their workforce.
S0 what does inexpensive mean? From a logical perspective, this word is almost the opposite of expensive. When we hear the word expensive many think big bucks. Conversely, when the word inexpensive is used, we may think cheap to actually free. However, is this truly accurate?
For example, employee productivity research from Gallup Poll suggests 70-75% of the workforce are disengaged to actively disengaged meaning 8 hours of work are not being delivered for 8 hours of pay. When an organization has a modest payroll of $100,000 this means $75,000 of salaries are not securing a positive return on investment.
Another example is the cost of employee turnover which is part of talent management to a business. When an employee leaves, the cost is estimated at 1 to 3 times the total annual salary plus benefits. If the total compensation package is $30,000 on the low side, then is investing 10% inexpensive to retain that employee. Hmmm…???
The words we think, write and use can affect our results. So the next time someone uses the word inexpensive remember that term is indeed relative to the big picture. And sometimes being cheap can hurt an organization’s corporate culture and employee productivity far more than management realizes.Share on Facebook
Getting customers is the goal because with customers are the individuals who actually purchase your goods and services. Their purchases will increase sales. This additional revenue helps your business to grow and to prosper.
In today’s marketplace, technology has become an integral part of getting customers. With the advent of Social Media due to the platform of web 2.0 marketing messages are flying fast and furious across cyberspace from TwitterFacebook to LinkedIn. Yet it appears the human element may be left somewhere in all this marketing activity.
John Jantsch in his Duct Tape Blog just recently posted an article titled Your Market is a Person. One of the key comments Jantsch made is about building a comprehensive date base about each potential customer. Years ago when sales professionals engaged in this activity IBM – It’s Better Mannually – they had detail information on each customer that they carried around usually in a very well worn black leather book. This information went beyond the basic contact information and include personal information from children’s birthdays to recent personal achievements.
Getting customers begins and ends with the human element. With 80% of all sales happening between the 5th and 12th contacts according to the National Sales Executives Association, a top sales performer can certainly secure quite a bit of information between all those open ended questions especially when the focus is on building the relationship. Technology can enhance the goal to increase sales or even interfere with it. If you wish to Be the Red Jacket (the person seen first on the street corner), then remember the human element because people buy from people they know and trust.Share on Facebook