Archive for October, 2010
Do you wonder why some of your employees expect the world but do not want to work to earn it? Or maybe you can’t find “good” workers. Possibly by understanding how we grade public education performance and how this affects workforce productivity will help you answer these two questions.
Recently I come across the following scale in a national research report to grade each state’s education performance within numerous areas. Do you see anything questionable about this scale?
Grading Curve A (93-100), A- (90-92), B+ (87-89), B (83-86), B- (80-82), C+ (77-79), C (73-76), C- (70-72), D+ (67-69), D (63-66), D- (60-62), F (0-59)
If you aren’t scratching your head yet, let me answer you another question. If you are an employer, a human resource manager or a quality control manager what expectations do you have toward the performance or productivity of your employees?
In other words, do you expect your employees to know 50%, 60%, 75%, 80%, 90% or 100% of their job skills or job description? At what level of knowledge and years on the job, would you consider that employee’s productivity and performance to be sub-standard and would not entitle her or him to a promotion or a raise and might be within the area of specific discipline strategies from suspension to termination?
Now you might be thinking what is this crazy increase sales coach talking about. Common sense dictates that every employee should know at least 75% or 3 out of every 4 requirements of their job and within a certain time frame progress to 100%. Errors are costly in business and employees’ errors are extremely expensive as they have a cascade affect within the organization.
Even though the above scale is for a national research report on education in America, this scale is present in many classrooms throughout this country. What has happened is that the low expectations within the classroom have migrated up and now are affecting research organizations that consider 60% as passing. F is failing and everything above F is passing. From a performance productivity perspective, if we don’t fail, we have success because success has been defined at 60%.
These low expectations have contributed to not only the low results that have been documented through such research as the National Assessment of Educational Progress where for example reading scores collectively for 17 year-olds over the course of 33 years have not changed.
The high standards of 40 years ago where anything less than 75% was failing are non-existent in the majority American schools. Many young people experience 12 years of conditioning where doing less than your personal best is OK and guess what you even get rewarded by promotion to the next grade. Now, these same young people go into the workforce with a belief that it is OK to just get by as long as you don’t fail.
If we, as small business owners to even C Suite executives, truly desire to improve the performance of today’s employees, we need to raise the standards within both the schools and the organizations that report on the schools’ and states’ performance. Until we stop this cycle of mediocrity, we will continue to receive employees who expect the world without working hard at acceptable levels of performance. Other employees will continue to view 60% as success.
Graphic – Courtesy of Bing ImagesShare on Facebook
Do you know what each client costs you to acquire and maintain? Do you know why you should know this? If you answer is No or Not Sure, maybe this sales blog posting may help you to grow your bottom line in now and in the future.
What does it cost you to acquire and maintain a client? During my 30 years in business, I am continually surprised that small business owners, entrepreneurs, crazy busy sales people and even executives in larger organizations cannot quickly identify what it is costing the organization to secure new clients and to maintain existing ones.
Ongoing efforts through a variety of vehicles including marketing, referrals and cold calling are never truly measured to accurately determine client acquisition costs (CAC). Without knowing CAC, you are ignoring return on your investment (ROI) for not only your fixed marketing costs, but more importantly your customer relationship management focus may be on the wrong customers.
So how do you determine client acquisition cost? Simply speaking for every client, you delineate all costs associated to initially acquiring that client outside of fixed asset costs such as utilities, rent, equipment, support salaries, etc. This becomes the initial customer acquisition cost and serves as a base.
Then you total up all the sales for the most recent year or quarter, if you prefer, along with the gross profit (total sales less costs of direct products and services). Also in a separate column, total up any new client acquisition costs. New client acquisition costs include sales personnel salaries and all those expenses associated with customer relationship management or CRM. Then add initial client acquisition costs to any new client acquisitions costs and subtract the gross profit from this total. The resulting sum whether positive or negative is your current return on investment in dollars.
Now you have established your baseline for return on investment. Next keep track of all referrals from each client including the gross profit as well as gross sales. What you will see that in many cases a client may have a substantial negative return on investment especially if you are trying to get your foot in the door or make a name for your company. However as sales and referrals grow that negative return on investment should turnaround and become a positive one. Sales Training Coaching Tip: You cannot outgrow losses. The goal to increase sales is important, but so is the goal to minimize costs.
The real purpose of this posting and activity is for you as the small business owner or crazy busy salesperson to begin to measure and then manage your ever growing customer base. Without knowing your CAC, you could be investing thousands of dollars in clients who have low return on investment and potentially ignoring those clients whose value was unknown. And in some cases, you may need to fire a client because the additional CAC is draining your bottom line. Again taking from a very old adage, if you can’t measure it, you can’t manage it.
Graphic courtesy of Bing Images – www.cksinfo.comShare on Facebook
What is your time worth as an independent crazy busy sales person or a small business owner? Are you really saving money by wearing all those hats from administrative to Internet marketing?
Do you honestly believe that you are worth at least $100 per hour? If you said No or I am not sure, then you maybe this sales blog posting may help you to re-evaluate your own worth a you look forward to growing your business and realizing your goal to increase sales.
Many small business owners and even independent crazy busy sales people are former executives or technicians who earned considerable money through employment. Their former salaries ranged from $50,000 to $250,000 plus not including benefits. Yet, when starting a small business, suddenly their own value appears to dramatically diminished.
Due to a belief that cash flow is limited when first beginning, these individuals wear many hats such as: accounting, administrative, human resources, marketing, sales, visionary and general “go-fer.” These hats are worn again because money is tight coupled with that entrepreneurial belief that “No one knows my business better than me” or that “I can do it better and usually cheaper than anyone else.”
Either of these beliefs contribute to a third mostly subconscious belief that my time has no value. This is probably the most detrimental belief that any small business owner can embrace. Why, please let me explain.
A Typical Scenario
The small business owner decides to file his own taxes because he can save $500 to $2,000 by not hiring an accountant. Since he has 6 employees including himself, he also takes care of all personnel issues. With an emphasis on the continued goal to increase sales, he believes that he can save another $5,000 a year by designing and developing all his marketing pieces.
His website is professionally designed, but he has the ability to make daily updates. He does allocate $5,000 for memberships in several organizations including a chamber of commerce, a professional association and a formal networking group. He also makes all the runs to the bank and post office. And to wear all these hats, he works long hours. At the end of the year, he looks at his bottom line and he made his previous salary and then some. Now, he feels anywhere from OK to really great.
So what’s wrong with this picture? Simply speaking, this small business owner is working harder not smarter. If he focused on his strengths that being developing a customer base, working sales leads and building productivity or profits, would he not have the money to pay for many of those other hats that he has been wearing?
The challenge is the belief that the small business owner’s time has no value. By applying a $100 an hour rate to every activity, he can then do the math and see an entirely different picture. That $100 an hour is what his expertise, intellectual capitol or sweat equity is worth and in all honesty it is probably closer to $200 per hour. Until this small business owner believes that he is worth at least $100 per hour, he will probably continue to work in his business instead of working on his business. The end result is that he is losing tens of thousands of dollars while trying to save a few thousand dollars.
By taking the time to assess where you are investing your time, you can determine your own value. And who knows, you may find you are even worth more than $100 an hour.Share on Facebook
Many small business owners and crazy busy sales people fail to identify and assess their marketing efforts. This can be very expensive and can counterproductive to achieving the overall goal of business growth (increase sales). Do you know what is in your marketing and selling tool box? Sales Training Coaching Tip: Marketing and selling are both part of the overall sales process.
If you are a small business owner, your biggest problem is getting customers. To secure new customers requires that you share or deliver your message to the market place. If you don’t believe that marketing is essential to your business, then don’t read any further because this blog on how to increase sales will have no value for you.
However, if you understand the importance of marketing, maybe now is the time to check out your marketing and selling tool box and assess those tools to ensure that they will deliver you sharp sales now and in the future.
Your marketing and selling tool box much like a traditional tool box and has 2 sections. The top section sits on top of the bottom section. Within the second section of your tool box or the bottom is the ““heavier” marketing and selling tools. Each tool has a cost and an estimated range has been provided.
Top Section – Lightweight Tools
- Business Cards – $20 to $200 for 1,000 cards
- Brochures – $.50 to $2.00 for 100 brochures
- Flyers – $.25 to $1.00 each
- Letterhead – $.05 to $.20 each
- Envelopes – $.05 to $.10 each
- Post cards – $.05 to $.50 each
- Postage – $.30 to $.50 each piece
- Giveaways – $.10 to $10,000 for 100 to 5,000 quantities
- CD’s or DVD’s – $5.00 each to $2,000 for 50
- Referrals – Free however in many cases there is an indirect cost
Sales Training Coaching Tip: If you as the small business owners or crazy busy people contributed to the design, development and production of any of these tools, remember to estimate that time at $100 per hour.
- Speaking Engagements – Usually free, sometimes can generate income (Does not include time to write or practice the speech. Estimate $100/hour.)
- Printed Book – $3,000 to $10,000+ for 1,000 copies (Does not include time to write the book. Estimate $100/hour.)
- Articles – Free submission to sites such as Ezine Articles (Does not include time involved in writing. Estimate $100/hour.)
- Paid Media Advertisements including Radio, TV, Newspapers, Trade Journals and Internet Adwords – Cost .05 pay through click to $10,000 plus per advertisement
- Website – $100 to $10,000 development cost with monthly hosting from $10 to $30
- Chamber Membership – $200 to $1,000 per chamber
- Professional associations – $100 to $500 per association
- Networking groups traditional – BNI, Leads, LeTip – $1,000 to $2,000 per group includes breakfast or luncheon fee
- Networking groups non-traditional
If you begin to add up the costs of all of the tools within your Marketing and Selling Tool Box, you can easily accumulate a value in excess of $50,000 or more on an annual basis.
As a small business and sales coach, my clients are always amazed when they start listing their tools and costs. When doing a simple strategic plan, there is always a tendency to lump marketing costs with other fixed costs such as rent, telephone, etc. By breaking out the marketing costs, you, the small business owner can determine what you need to do to work smarter and not harder.
Finally after this activity is completed, I ask them this two-fold question:
If your marketing is costing you $25,000 to $50,000 on an annual basis, what is your conversion rate or how much money is it costing you to acquire each and every client?
Then, what tools are sharper or giving you a higher conversion rate and why are you keeping any tools that aren’t effective?
Graphic courtesy of Bing Images – www.csocertified.comShare on Facebook
Getting your marketing message out is a top business goal. Many small business owners and crazy busy sales people utilize networking to achieve this goal.. Yet, do you know what your networking is costing you in your efforts to increase sales?
Each year time pressed small business owners, sales professionals to even C Suite Executives spend hundreds to thousands of dollars in the marketing activity known as business networking. This activity has multiple purposes including:
- To gain the attention of prospects
- To expand potential prospects’ list
- To build relationships with prospects
- To secure referrals
- Bottom line to increase sales
However, when looking at the use of resources employed to business network through local chambers of commerce, professional associations or specific networking organizations such as BNI, LEADS or LeTip, the two questions that need to be asked are:
- What is this traditional networking strategy delivering to me in terms of clients whether direct or indirect through these new business sales leads?
- And is there another way to achieve more clients and sales using fewer resources?
Let’s examine the traditional business event networking return on investment or ROI.
A business owner joins a local chamber for $200 and then attends 1.5 hour monthly luncheon meetings at $20.00 She then spends 3 hours each month on two chamber committees. Additionally, she joined a local association for another $200 as well as a formal networking group for $700. The local association meets monthly in the evening for 1.5 hours and there is no food bill, but the networking group meets weekly for breakfast that costs $10.00 and takes 2 hours. Additionally, she spends 1 hour per week on her reports for the business networking event group to preparing for the other events.
When we total her time, this active and time starved small business owner or crazy busy salesperson is devoting 18 hours each month not including drive time which could be easily add another 7 hours for a total of 25 hours. By placing $100 per hour on her time, she is investing $2,500 each month. Her monthly fixed networking costs are $60 for food and $40 for travel. When we annualize these costs combined with the annual membership fees, the total is a conservative $32,300.
Let’s also presume that her average client is worth $5,000. She would have to secure 6.5 clients from new business sales leads each year just to break even. For this marketing strategy to demonstrate a positive return on her investment, she would need to acquire at least 7 clients. Even if she acquired 20 clients, the cost would be $1,615 per client leaving her with $3,385 gross profit per client.
By embracing an education based marketing approach instead of the traditional sales or product based marketing approach allows the opportunity to integrate social media and other informal business networking groups including online ones. This inclusion may help to create a positive return on investment. However, that is unique to each business professional.
Yet from my experience and those of my sales training coaching clients, I have found that monitoring business networking and overall general marketing efforts increases the opportunities to demonstrate a positive return on investment (ROI). The major problem is the majority of small business owners and crazy busy sales people do not invest the time to determine what is generating a +ROI because they have simply failed to do the math.Share on Facebook
Social media groups such as LinkedIn provide a plethora of writing topics and opportunities for some great thought provoking discussions. One member of the group, Leaders and Thinkers, posted this very simple question: What is your best definition of successful leadership?
After reading other responses some which required several minutes of deep contemplation, I shared my thoughts.
The first step is how to define success. For me, “Success is a continual self-discovery of new positive attitudes and strategies that tap our limitless energy by connecting our passion, purpose and performance. Through written goals and action plans, we will direct our behaviors to achieve our dreams and support our core values.”
The next step is how to define leadership. Peter Drucker said leadership is all about results. I have since added through the demonstration of positive core values. Synthesizing these two definitions I would define successful leadership as:
Individuals who consistently demonstrate high positive core values (business ethics) while securing the desired results and being able to function both independently (self starter) and interdependently (team player) in any environment.
My definition did receive several positive feedback comments which reaffirmed to me that my higher order thinking skills were on target.How we define words or phrases is based upon our existing knowledge base and the continual expansion of that knowledge. Then we are able to proceed through Bloom’s Taxonomy of Learning as we work through the thinking process.
So the question to you is how do you define successful leadership? And if you are a professional sales person or small business owner, how do you integrate that definition into your daily operations? Please leave your comments for others to read and reflect.
Graphic Courtesy of Bing Images – www.trident-consulting.netShare on Facebook
Most small business owners have formal and informal business partners. These partners may include:
- Another individual with vested financial interest who works in the business
- A person with vested financial interest who does not work in the business
- A friend, spouse, child, relative, mentor
- Banker, financial advisor, CPA, attorney, etc.
Yet the majority of small business owners also have this silent partner – the Status Quo. “I realized this after reading a great post by Mark Green on the Five Reasons Your Business Will Underperform in 2011 However most businesses fail to acknowledge this silent business partner who needs to be fired right now before next year becomes reality.
Jeb Blount in his book, People Buy You, identified the status quo as the greatest competition for any top sales performer especially if you wish to increase sales. This is true within the buying process as most people are happy with the Status Quo.
Now there are always those forward thinking leaders who will shake things up and look to consistently improve their results. These are the calculated risk takers and my target market. Sakes Training Coaching Tip: Risk taker, forward thinking are examples of psycho-graphics and should be part of your overall ideal customer profile.
The Status Quo as a silent business partner will not only keep you comfortable, but may also hinder your ability to see abundance and opportunity (think increase sales) because the focus is on scarcity and limitations. Of course it is hard to fire this life long companion because in many cases his or her presence has kept you safe. Yet to expand the innate potential within your business, your profession or your life does require you to be more willing to embrace change.
As you, the small business owner continue to make those critical business decisions ask yourself if your business partner, the Status Quo, is hindering you from realizing your desired results to increase sales.
Yes change is hard. However, if you wish to increase sales, reach that next level of business success, you must fire the Status Quo as your silent business partner.
P.S. After you fire the Status Quo, let me know how that worked for you.
Graphic courtesy of Bing Images – www.examiner.com
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People judge us on our behaviors especially when it comes to our personal and business ethics. Here in Northwest Indiana, there is one political candidate who is having some real troubles specific to her behaviors. Then at the State Level there is another individual seeking the office of Secretary of State who due to his behaviors is being questioned and potentially investigated about his business ethics. In both instances, these political candidates should be questioned.
Every day we can see the disconnect between what people say (personal and business ethics) and what they do. We also hear excuses to justify these disconnects that range from being to crazy busy to blaming someone else.
Yes we are all busy. However, when one makes a commitment to do something, then failure to take that action reflects poor personal and business ethics.
For example, I write for several online sites including this blog, the Post Tribune, Sales Bloggers Union and printed business journals such as NBiz Magazine. Also, I have made a personal commitment at Ezine Articles to complete their fifth Hundred Articles in a Hundred Days (#HAHD) challenge. To help me honor these commitments, I have recurring dates posted in my calendar to ensure that my submissions are timely.
Then there are the other commitments such as sending information, following up on calls, making meetings and working with clients. All of these commitments and the ability to honor them or “make it so” as Captain Picard from Star Trek Next Generation said are demonstrated through our behaviors.
In business, people buy from people they know and trust. If your behaviors do not reflect high personal and business ethics, your ability to increase sales, to grow your business, to be recognized as a highly ethical individual is dramatically threatened.Share on Facebook
The word authentic has both Latin and Greek origins. This word means “one who does things himself.” In modern definitions, this word has come to mean:
When rereading these 3 words, trustworthy, reliable and genuine, what small business owner, sales professional, C Suite executive or individual would not like someone to associate their businesses or even their selves with these words? Yet, we know from past postings on this blog about bait and switch to poor business ethics being authentic is not as prevalent as it should be.
This week I attended several business to business networking events in my ongoing efforts to increase sales. I did met some new people.
One of them was very authentic and truly impressed me with his business ethics. He actually engaged me in conversation with simple yet very effective questions and demonstrated active listening skills. My sense is he is trustworthy, reliable and genuine. Sales Training Coaching Tip: Active listening is a sales skill as well as a excellent people skill and showcases you as an authentic individual.
Another individual who I already knew shared with me that he truly enjoyed not only this blog, but my weekly business column at the Post-Tribune. During our brief discussion, I learned the reason for his reading enjoyment – my writings were “genuine.” Sales Training Coaching Tip: If you wish, you can sign up to receive notice of this business column every week.
In business, being authentic is truly part of your business ethics. People make their own internal decisions or judgments about you such as what you are wearing before you ever open your mouth to share your effective or ineffective elevator pitch. Sales Training Coaching Tip: Read Breakthrough Networking as it helps to better understand how to build authentic relationships.
One way to truly be authentic is to invest some time to identify those behaviors that reflect “one who does things himself (or herself).” Here are a few to start your gray matter churning:
- Return all telephone calls promptly – within 24 to 48 hours
- Follow-up on all new business sales leads
- Send personal notes after meeting someone or receiving a referral from a client or fellow colleague
- Honor all promises made such as sending information, sharing a contact, etc. within the promised time frame
- Be on time for any meetings or appointments
- Do not make excuses when you fail to do something yourself such as blame your administrative assistant (Personal accountability is a key authentic talent and can be part of any performance appraisal process
- Remember “People buy from people they know and trust”
Harry S. Truman in these words demonstrated being authentic when he said “The buck stops here.” So as you venture forth into the weekend, how will you be authentic not only in your business, but also in your life?
Graphic courtesy of Bing Images – www.authenticdesigngroupShare on Facebook
Rules help us to consistently enhance our performance. Follow this formula such as length times width (lxw=area) to get the area of a rectangle. A complete sentence has a subject, a verb and an object. Stop at the sign with the words STOP. Each day we are confronted by rules.
In selling your products and services there are also rules specific to how your prospects or potential customers buy. Some of these buying rules will be different because the demographics and psychographics of your target market is different. However, I believe these 3 buying rules are present if the goal is to increase sales.
Rule #1 – People buy from people they know and trust. Sales Training Coaching Tip: Jeb Blount in his newest book People Buy You makes an outstanding case why this is Rule #1.
Rule #2 – People buy first on emotion and then justify their decision with logic. Since all information is processed first in the primitive brain which is the source of emotions, then this statement is also very true. After the primitive brain takes in the information, then it is delivered to the neo-cortex for further processing. Sales Training Coaching Tip: With people being crazy busy, possibly by understanding what they want may help you increase sales. Another good reference book is Jill Konrath’s SNAP Selling.
Last night a close friend of my husband and myself explained his buying decision (think purchasing process) for his new 2010 Jaguar 2 door coupe. He had always wanted one. (Want = Emotion) I must admit it is a beautiful looking vehicle and quite unique in its exterior style.
With a new position, new salary and a car at the end of its 3 year lease, he was starting to look at cars. Once a week he drove buy a dealership and finally the emotional pull was too much and he stopped in. Several of the cars due to “sun roofs” did not allow him to sit up. His emotions were dashed along side the side of the road.
The he was told about a 2010, 2 door coupe, which was much higher in price, but did have the 100,000 miles 6 year warranty. Even though intellectually he knew his wife might have a problem with the purchase of this expensive of a car, he let the salesman show him the car. After sitting in, he was emotionally sold.
Then a couple days later he took the car for a drive. Within a week, he purchased this vehicle. The intellectual justification was based upon the 100,000 miles warranty. However, the desire had always been present to own this specific type of car.
Rule #3 – People buy when the salesperson executes the sales process flawlessly.
Sales is truly a pull buying process especially if you wish to increase sales. Unfortunately far too though many salespersons engaged in a pushing selling process by focusing on their products or services. Sales Training Coaching Tip: Reread the first rule.
Just consider these 3 buying rules as you work that next prospect or potential customers through the sales process. And please feel free to share you results or your thoughts.
Graphic from Bing Images – www.ucsec.org
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