Helping to make management easier

Yesterday I discussed new business generation using the example of a landscape contractor who does residential lawn maintenance and was looking to increase revenue by $50,000.  They were using a mail campaign that required over 1,000 mailings in order to produce the $50,000 of revenue.  While the numbers I used were based upon a hypothetical company, they were probably pretty accurate for a company in my area of the country.  This was an example of a direct marketing program and converting 3% of the contacts into a customer is probably a pretty good conversion rate.  I think there are better ways to generate new business which we will discuss today.

Customer referral program:

Just about everyone would agree that a referral from a happy customer is one of the best new business opportunities.  Did I mention that you need a program to ensure your customers are happy?  That is another conversation.  How many of you have a formal customer referral program where you ask your customers for referrals?  If you are like most companies you have a few customers that feed you referrals because they like you and they are naturally inclined to do so.  More than likely, you are getting 80% of your referrals from 20% of you existing customers because you don’t have a formal program to ask the other 80% for referrals.   Think about how your revenue could be impacted if you had a good customer referral program.

Non-customer referral program:

If the best lead is a referral from a happy customer, the second best lead is a referral from someone who may not be a customer but knows your work product.  How many of you have a network of real estate agents, builders, landscape architects, etc. that refer business to you?  Do you actively work that network?

Self promotion:

I struggled with what to call this section.  Familiarity  is important to customers which is why referrals are so much more effective than direct marketing.  Another way to gain familiarity is by the way you present you company to the public.  Do you vehicles have your name and telephone number on them?  Is it easy to recognize your vehicles (consistent color and information on them)?  Do your work crews present a consistent image with your vehicles through the uniform they wear. The uniform can be as simple as a T-shirt but it needs to present a consistent image to build familiarity as people see your crews around town.

Direct marketing:

Direct marketing has its place but the benefits of it are generally long-term in nature.  It is another way of building familiarity over time.  You can increase your name recognition and your credibility using a long-term direct marketing program but the benefits are not short-term and you have to stay committed to the process.  Out of the four approaches, it is probably the most expensive and the least effective.  Present a professional image and go for those referrals first.

I read this article last night and I found it quite interesting. As an engineering recruiter, my most busiest time of day is between the hours of 4:00pm – 6:00pm. This is when I receive the most phone calls / e-mails from my customers regarding feedback on candidate interviews. If recruiting was such an important function to the company/hiring individual, wouldn’t you expect that a customer will call you back first thing in the morning rather than the last minute of the day. Most of the time,  I will have to follow up with the hiring authority to obtain the feedback I want. I understand that hiring authorities are busy individuals. They would rather serve the company, generate revenue, increase production/efficiency, re-engineer their plant processes, visit key customers rather than return calls from recruiters.

Maybe we (as recruiters) have not demonstrated how important our services can affect the company’s bottom line (i.e. how can we show hiring authorities that the services we provide (a successful recruit) can actually generate/save the company millions of dollars).  The article than summarizes that maybe recruitment is industry specific.  Many sports teams and entertainment individuals view recruiting as a ‘mission critical’ resource. How many times on the news do we hear that a famous hockey player (or baseball player etc..) has signed ’some kind of multi-million dollar contract’ with the competition. I’m sure the ’sports agent (recruiter)’ got paid a nice hefty commission cheque for closing one of these deals!

Making management easier

Yesterday we talked about revenue planning for your current customers.  Today’s conversation is new business sales planning.  This is a relevant issue regardless of whether your company does maintenance only, construction and installation only or some combination of the two.    In starting this conversation, there is an elephant in the room that needs to be addressed: how much income (money in your pocket) do you want to have at the end of the year?  This is really a budgeting question that will be addressed in a later conversation but we have to understand that at the end of the day everything you do is about how much money do I want to make (the budget) and how much did I actually make (money in my pocket).

Now that we have acknowledged the elephant in the room, we can have a simplified conversation about sales planning.  I am going to start the process by defining a few terms and then by asking a few questions:

Definition:

• New business suspect versus a new business prospect

  • A suspect is a potential customer that you may be aware of, may have even had some introductory conversations with but haven’t developed a working relationship with yet.
  • A prospect is someone you have a working relationship with and that has actual work to be performed.
  • In order to keep this simple and short,  a prospect is someone that you have made or are in the process of giving a proposal for work while a suspect is someone you are not in the process of giving a proposal for work. 
    • A good example of a suspect would be a purchased mailing list in an area where you want to do residential lawn maintenance.  You send out the mailing and possibly make follow-up calls to those home owners.  You know that they are going to generate $30 per mowing but you have no idea who is really interested in your service.
  • It is easy to debate that definition but for our purposes it provides a very easy to understand distinction.

Questions:

• Do you have any new business identified for 2010?
  • How much new sales revenue could they generate?
  • Are they suspects or a prospects?
• Do you know how often a suspect turns into a prospect? 
  • Going back to our example above, you know that some percentage of your suspects are going to be interested enough to get a quote which makes them a prospect.
• Do you know how often a prospect turns into a customer?
  • In or example, you know that some percentage of the quotes you produce will be accepted and you will have a new customer.
• It is important to know these how often a suspect turns into a prospect and a prospect into a customer.  If you track the results, you will find that both are generally very predictable.

Example:

Let’s stay with our residential maintenance example and assume you want to generate $50,000 of new revenue in this area. Let’s also assume that you typically do 50 mowings per year for each customer at $30 per mowing which means that a new customer will generate $1,500 of new revenue, if you get them as a new customer at the beginning of the year.  You would need 34 new customers in order to reach your revenue goal.

5o mowings per year x times $30 per mowing = $1,500 per customer

$50,000 goal / $1,500 per customer = 33.33 which rounds to 34 new customers

Now let’s assume that 30% of the quotes you produce turn into customers which means that you will have to producer 114 quotes in order to get 34 new customers.

114 quotes x 30% closing ratio = 34.2 which rounds to 34 new customers

Now let’s assume that only 10% of your suspects turn into prospects that you give a quote.  You will need 1,140 suspects in order to get your 114 quotes.

1,140 suspects x 10% progression to prospect = 114 prospects

This means only 34, 3%, of your 1,140 suspects turned into actual customers.  There has to be a better way!!!

by Ed Albertson,
Vice President – National Accounts
Carew International, Inc. 

The standard approach of using sales quotas to measure and reward sales representatives may motivate them to close as much business as possible. However, such a singular focus can often undercut efforts to support other corporate objectives (such as more profitable business, improved levels of customer service, etc.).

So in what other ways can a company measure and reward the performance of its sales force? From Sales & Marketing Management Magazine, here are four alternative methods that may help to better ensure alignment of sales efforts with larger company objectives:

Customer satisfaction: Measure customers’ responses to surveys about how they’re being treated by their sales rep, and whether they’re satisfied with the level of service they’re receiving.

Repeat business: Evaluate year-to-year customer retention rates, or how much per-customer revenue has increased from the prior year.

Profitable revenues: Calculate the average profit margin that reps maintain on the business that they develop, or on profit margins per customer.

Internal communication: Poll other company employees on how effectively sales reps communicate with internal organizations in getting things done.

Making management easier

I am a believer that your name should convey to your market what you are trying to accomplish in a fairly straightforward manner.  In my opinion, there is nothing worse than not being able to understand what a company does from its name.  In selecting the name for my company I was trying to convey that we are in business to help make it easy to manage your landscape business.  As I was puting the name together, I had some concerns about using the term “landscape management” in the name because it is a commonly used term in the industry.  I have gotten some input that the name may give the impression that the company is an actual landscape management (maintenance) company.  Any thoughts?  Does EZ Management or EZ Green Management make more sense?

• Who are your customers?
  • Do you have a listing of your customers? 
  • Does your list include how much money you received from each customer in 2009?
  • Do you know why each customer buys from you? 
    • Are they happy with the services you provide?
    • D0 you have some specialization that gives you an edge (competitive advantage) with your customers?
    • Is it price? 
    • If so, do you know what percentage of your customers you lose each year due to price?
    • If so, do you know how much you may have to adjust your price to retain the customers?
    •  If you are going to have to adjust price add a column to you list that  shows how much revenue you can expect from each customer in 2010.
• What customers do you have that your competitors would like to have?
  • Do you know why your competitors would like to have them? 
  • What will you have to keep those customers?
    • This answer may be price related or it may be that your competitor has a specialization that makes your customer attractive to them.
•  Are any of your customers growing or shrinking? 
  • What impact could that have on your revenue?
• Do you have the opportunity to sell additional services to your customers?

The questions are all pretty straight forward on the surface but it takes discipline to go through the process and to honestly evaluate your business and your competitors’ businesses.  Please remember that I would like input on my business plan that is articulated on the pages of the blog and input from the blogging community about my blog.  Thank you.

No such thing as a sales team!

Somewhere in the 1980s somebody decided that it would be a cool thing to do start calling all groups of employees in every department in every company a team.  There would be an accounting team, a human resource team, a project team, a legal team, and on and on.

Somehow sales got lumped in to this motivational quagmire which also included things like off-site meetings for team-building.  You might remember those if you were around back then. It was where the sales team would gather in some remote location and play “trust” games like one person falling backwards into the arms of the others.  Exactly how this improved sales results was and still is beyond me.

The fact is that the team analogy, obviously, comes from competitive activities like sports.  There are baseball teams and football teams and soccer teams which may have some loosely fitting similarities to sports teams but not sales people.

The thing that defines a team is that each individual has to contribute and do their job well in order for the team to succeed.   Take a baseball team.  You can have three great outfielders who all hit in the mid 300s and a great pitcher with who boasts a 2.5 ERA.  If the shortstop or third baseman can’t throw the ball into the glove of the first baseman, the team will likely lose a lot.

Likewise on a Football team.  The greatest running back in history can’t win a game if the quarterback can’t aim the ball to him or the line falls down on every play.

The common denominator is that the players have different jobs and they must each do their part for the others to succeed.  This is not so in a group of salespeople.

Each salesperson has the same mission – to sell the most stuff.  They are, on some level, in some organizations, competing against each other.  The guy who sells the most stuff wins.

There are, of course, certain comp plans set up where everyone earns a little bit more if the entire “team” hits a certain goal or sells more stuff than the other “teams” but ultimately the sales people are all doing they same job and they are rewarded for their individual success.

OK – here’s the obvious exception, the sales team where various functions are broken out by employee. You might have one person who sells the concept to the client, one person who develops the details of a specific recommendation, an implementation specialist and one who maintains on going contact post-sale.   These folks would be considered a team who all work with the same set of clients and who are measured on the revenue of that set.  As in the sports team, each individual has to do their own job well for the others, and the team, to succeed.

What’s the big deal?

So why I am I wasting bytes worrying about this.  What’s the difference if a group of sales people is called a team or a group or a gaggle or a herd?

It’s really about management kidding themselves.

If you have a group of 10 sales reps of varying skill and experience levels, you can encourage them all you want to “work together” when you hold meetings or contests or assign a newbie to shadow a top producer.  At the end of the day, sales people are driven by two things.   The adrenaline rush of bringing a deal home and compensation.   They simply are not there to care about the rest of the team.

So unless you’re going to compensate and reward your team members for helping and caring about the success of the others – they are all going to do their own thing.

This is a story of missed opportunities.

Some time ago I attended a trade show. This event was poorly attended and so there was little traffic on the show floor. Perhaps you have had the pleasure (ha) of attending one of these shows that are so dead that the sales reps outnumber the prospects. Trying to kill the boredom, reps sit and stare into their laptops playing solitaire or browsing the web. So while at this particular show, I walked the aisles to see what the vendors were offering and then stopped by one booth that caught my attention. The rep told me about a very cool software program that his company developed. He gave me his fairly compelling elevator speech, asked me some qualifying questions, and we had a nice chat for about ten minutes about my needs and his solution. He gave me ballpark pricing, which, at $5,000 wasn’t cheap but I thought it was worth the price given its capabilities. So I said, “I’m interested,” and we exchanged business cards. He told me he would follow up with me personally as he would be the rep handling my account. We were both pleased: me because I found an exciting software product that would fill a latent need, and him because he just got a hot prospect at a dead trade show and he would soon be $5,000 closer to his quota.

Little did I know that would be the last time I would talk to that rep. One week, two weeks, and four weeks went by and he never called me to pursue the order. What the heck?

I suppose there could be some acceptable reasons why this rep didn’t follow up with me, but I can’t think of them. I can only think of the unacceptable ones: Maybe he lost my card. Maybe he changed position or sales territories. Maybe he figured I didn’t want to be bothered by another sales rep and that I would call him when I was really interested. Maybe he didn’t think I was serious when I said I was interested. Maybe he didn’t take notes about our conversation and can’t remember the details so he is embarrassed to call me and ask me the same questions again. Maybe he is just nervous about selling and is subconsciously delaying his call to me.

No, none of these would be acceptable reasons for this rep to fail to follow up. Some of them are more likely and believable than others and if any of them are real, this sales representative may be damaging his company without knowing it (or without his manager knowing). His company probably spent a lot of money on that trade show exhibit and if the rep failed to follow up with a hot prospect like me, how could he have possibly closed any other sales from that show? Thousands of dollars were invested and not a single dollar in profit was likely generated from it – largely because this rep did not follow through properly. In addition to the hard costs of the show and the soft costs of time and labor, there is the hidden soft cost of the company’s diminished credibility and reputation with prospects like me.

If any of those listed above are the real reason this rep failed to follow up with me, then there a problem and someone needs to fix it. That someone is the rep and his manager. The potential “reasons” above can be considered as disorganization, poor management, or sales call reluctance. Losing a prospect’s card before recording into his contact information system is symptom of a disorganized rep. A territory or position change after a trade show and before following up prospects from the show is a symptom of poor management. Most of those other reasons are a symptom of sales call reluctance and should be addressed through sales training and sales management.

Sales opportunities don’t present themselves to reps often enough. When they do come around, don’t let them slip away before you’ve even had the chance to start selling. Do your job and follow through on a prospect’s interest in your offering – there’s no good reason not to.

4 Questions We Should Ask Ourselves To Have A Killer Year In 2010!

Hey folks! We just wrapped up our 2009 “Gladiator U” webinar series with our 4 Questions event and it was awesome! If you want to watch, listen to our download the recording just click on the image below. The short version goes like this!

To have a killer year in 2010 ask yourself, personally and professionally, individually and collectively (family or business) these 4 important questions …

#1 – What did we do this year that worked? How can we do more of it?

#2 – What did we do that didn’t work or deliver a solid ROI for our time and/or money? How do we get rid of it?

#3 – What do we want to try that is new?

#4 – What do I want to do that is big?

Again … to check out the recording just click on the image below! Let us know what you think …

Out of all the social media campaigns (facebook, twitter and LinkedIN), I find that LinkedIN is the most suitable place to increase my professional network and image. I have been following Amybeth Hale – “Research Goddess” for quite some time as she posts some very interesting articles on the importance of ‘research’ and how that relates to recruiting. I thought her newest article ‘What?! Don’t put ‘looking for a job’ in your linkedIN status’ was quite informative.

As a recruiter, I find that 90% of people are always on the hunt for new employment opportunities. Even if they are happily employed, most people would be happy to hear from an experienced recruiter presenting them with a new career opportunity. These are called ‘passive candidates’ and most of the time, these people are not actively looking for a change. Maybe they want something different in their career or a change in their lifestyle. LinkedIN is an excellent recruiter ‘tool’ to tap in to this market. Why? Recruiters and salespeople alike can actively search for certain keywords bringing up people within a specific niche industry. A customized private message (InMail) can be sent to these individuals presenting them with a career opportunity that might be more suitable than what they already have.

Understanding and leveraging LinkedIN can be an essential tool to tap into an untouched passive candidate market.

Today I called a vendor that for some time has been selling software to our company. The purpose of my call was to buy additional licenses so that more of our employees could use the software. I wanted to triple or quadruple the number of licenses we currently have and I had the expectation that it would cost me about $10,000 more per year to do so.

So I called the toll-free number on the company’s website and gave my company name and account number to the person who answered the phone. He told me he would transfer me to Lisa, my “account manager.” Lisa answers, introduces herself (pleasantly enough), and asks me how she can help. I tell her about my pain points of not being able to have all my staff be able to access her company’s software and how I needed to buy some more licenses (some would call this a buying signal.) I imagined her smiling gleefully on the other end of the phone: nervous, but thrilled about how fortunate she was to receive this call and get this order! I was prepared for her to swoop in for the kill (the way her sales manager trained her) and ask me for my credit card number or a PO number so she could get my team happily involved in her fine product as quickly as possible. Here it comes, I thought.

“Okay, give me your email address and I will send you over a quote,” she said.

What? Is Lisa in sales? Is she “managing” my account? Is she developing her accounts to bring in incremental and optimal revenue? Does she even care if I buy or not? Does her manager know how she is handling an opportunity for perhaps a $50,000 revenue stream for the next five years?

The answer to all these questions, I’m afraid, is No.

Lisa and I said our goodbyes and there was no mention of any potential follow-up conversation we might have once I reviewed the quote. I did receive her email in my inbox in few minutes later, plopped next to a couple hundred other to-do items that I would eventually get to (or not). Later, I reviewed the quote and it was in line with the $10,000 investment I had estimated. But I didn’t pursue it. The desire was lost, although perhaps just temporarily, as my mind was now focused on other tasks.

The ball is in my court. If I am going to get the extra software licenses, I am going to have to do some extra work to BUY it, because Lisa is apparently not going to SELL it to me. I don’t know if I will call her back. It might be too much trouble, I might get too busy, or some other software sales rep might call me and sell me on his product.

I don’t care for high-pressure sales tactics any more than the next prospect, but pressure wasn’t needed here. Lisa just needed to ask me for the order. If I had resisted or stalled her on her closing attempt, she could have tried to understand my concerns and perhaps resolve them. I would have appreciated that – and my software would be installed now.

I don’t want to be hard on Lisa or any sales rep who is afraid to ask the customer for the order. Sales isn’t for everyone. But it is for some and these missed opportunities happen everywhere every day. If a product or service has value and the customer has a legitimate need and desire for it, there should be a transaction. Sales reps should feel confident in knowing that they are providing some service or benefit to their customers and, all things being equal, there should be no good reason not to ask for the order. If the prospect or customer doesn’t want or need your offering, he or she will tell you so and you shouldn’t pressure them further. But you have to ask.

So if you have the words “sales representative, account manager, or account executive” in your title, then sell, represent your products with pride, and manage your accounts. Your company and your customers expect it of you.

Christmas is a time when the shopping malls are busy, holiday parties are plentiful and a light atmosphere is in the air. Everyday work normally comes second – as shopping for Christmas gifts, holiday events and meeting up with friends and family take over. As recruiters, we think that most hiring authorities are on vacation mode  – however, this is definitely not the case. Lou Adler’s article ‘How to recruit passive candidates and early birds‘ says it best.

December is the busiest time in terms of recruitment. Why? Most companies want their new hires/employees to start in January 2010. This means a lot of ‘prep’ work for the recruiter. Contracts has to be negotiated and signed, shortlist candidates has to be presented before end of year, hiring managers are already planning their hiring strategies (and more importantly – their hiring budget) for the upcoming 2010 year. What better way for a new president / general manager to start his new year off with a new company! For recruiters and salespersons, I would highly suggest this is the time to ‘kick it up a notch’ and actually be busy prospecting, drafting up new agreements or strengthening existing relationships. If all goes well, we can start to relax in January and have piles of invoices ready to be sent out by the end of this year and be bathed in gold when January comes around.

As we emerge from the recession of 2009, many companies are experiencing problems with low morale. In fact, a recent survey by CareerBuilder.com indicated that almost a quarter of all businesses were experiencing low morale.  To make matters worse, 25% of those surveyed reported no loyalty to their current employers. As part of a project I have been working on related to this subject, I have been researching what causes low employee morale.

The reasons for low morale are plentiful. In a 2006 survey conducted by the consulting firm of Challenger, Gray, and Christmas, it was poor leadership as the overwhelming leader, as reported by 73% of the respondents surveyed. Heavy workloads came in second at 16% and, surprisingly, salary and benefits only garnered 11% of the vote. In more recent surveys, such as the CareerBuilder survey cited above, workload and high stress over the fear of job loss (a combined 87%) have moved into the lead as causes of low morale over the past year.

The low morale epidemic isn’t just a problem associated with “rank and file” employees. A survey by American College of Physicians Executives reported that 60% of physicians have considered leaving the practice of medicine in the last year due primarily to high stress.  An examination of numerous surveys of government employees indicated levels of low morale even higher than the private sector. The reasons for low morale in the government sector tended to be related to poor communication and poor leadership more than fear of job loss or high workloads. It isn’t any better  internationally: surveys from England, Canada and mainland Europe were pretty consistent with U.S. based surveys on the subject of low morale.

So what do we do? How can employers turn around the serious and escalating problem of low morale? Here are some ideas for addressing the top offending causes:

Problem: Poor Leadership- This situation surfaced on numerous surveys in many different forms, from bullying middle managers to ego maniacal senior managers who were out of touch with how their decisions impacted morale.

Solution: This is a tough one because in most instances, the employees experiencing low morale have minimal influence over the behavior of managers who are driving the problem. The best solution is to find a way to go around the offending manager to either a peer of the manager or a more senior leader who has a stake in the impact of low morale. Often times, as related in an interview with Dr. Kerry Sulkowicz of the Boswell group, offending managers don’t have enough self awareness to respond to coaching. Unfortunately, in such cases, looking for a new job may be the best solution for the employee if the company doesn’t replace the manager.

Problem: Heavy Workloads- One of the most unfortunate side effects of an economic downturn is the loss of jobs that inevitably accompany the downturn. The loss of the job is not only felt by the ones who lose them, but also by those who stay on and inherit heavier workloads.

Solution: As business begins to turn around, it is easy for employers to inadvertently fan the flames of this problem by delaying much needed headcount additions. The best solution for this problem could be leveraging the services of a temporary employee until confidence is reestablished for the long term turnaround of the business. The worst thing that can happen is to take no action and let employees reach the breaking point before providing relief.  Leadership needs to be aware that as the economy improves, opportunities outside of your organization can and will become a viable option for dissatisfied and overwhelmed employees.

 Problem: Work related Stress- This broad subject manifested itself in many ways, but the stress of losing a job in a tough economy was the most common.

 Solution: As an employer, the best solution is to remember to show your appreciation to the members of your team and acknowledge their valuable contributions during the tough times. Adding flexibility to the schedule and perhaps some additional short term incentives are also great ways to help offset this issue. As an employee, it is critical that you have a strong support group of family and friends. It is critical to make sure you don’t lose the balance between work life and a fulfilling personal life.

 As the economy continues to turn around, more options are going to present themselves for employees with low morale who have been “riding out the storm.” Now is the time to address employee unrest and the key issues driving their dissatisfaction.  Companies that don’t will find the pain of this recession extended beyond its natural life via record employee turnover in the months to come.

Chuck Terry is the Executive Vice President and CSO of Carew International and is regular contributor to Carew’s blog – Executive Insights

Carew International is a leader in sales training and leadership development; specializing in comprehensive, proven training programs for sales, sales management and customer service excellence. For over 30 years, Carew has earned its reputation of delivering increased productivity and profitability to our valued clients world wide.

If you use independent contractors as your sales reps, you have little control over their actions and methods in the field. A major risk in this arrangement is that the rep may not invest the necessary time/effort to become properly trained and knowledgeable of your company and product line. If that’s the case, you need to make it as simple as possible for the rep to sell.

I recommend that you create a professional multi-media PowerPoint, video, or pitchbook presentation that the rep can deliver effortlessly. This presentation should cover the following:
–your company story
–who buys your products and why?
–how do your customers use your product and how do they benefit?
–customer testimonials and references
–product data sheets
–independent studies, lab reports, or white papers
–FAQs
–a cost-justification calculator
–service agreement
–warranty or satisfaction guarantee
–financing/payment options
–special offers and package promotions
–easy-to-understand pricing schedule
–samples (if appropriate)
–video of the product in use
–referral forms

In addition to those components, the rep needs the basics: a contact management system (with data that syncs with your server if possible), order forms, business cards, and other items that are too obvious to list.