Use a process for better sales results

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Sales is a process just like any other business function.There are steps that every salesperson must go through in order to be successful over the long term.

There have been numerous books and articles written about the pro’s and con’s of relationship selling but one thing to remember, sales activity invariably involves an interaction between people. We all have our internal thought processes, attitudes, and personality traits and that will spill over to both the buyer and seller in the sales process.

 A quote from Zig Ziglar says it very well, “If people like you they’ll listen to you, but if they trust you they’ll do business with you”.

So they have to like you enough to listen to your preliminary fact finding questions, and you have to use that opportunity to build trust.

The illustration below was discussed in my book, “Bottom Line Focus” relative to the steps in the buying process

The first step is you must develop a basis of trust between you and the prospective customer. They must trust and like you before they will even look beyond that.

Then they have to trust your company. Does your product or service have a solid reputation in the marketplace?

Third they have to have a need and understand that your product or service is the best solution for that need.

Then they will move on to price and delivery.

Taking a shortcut on any of these steps introduces doubt into the equation. If you walk in the door and cut price immediately you may get a quick sale but you will have cheapened you product or service in the eyes of the customer. Any effort to increase prices without establishing value and trust will be met with opposition.

Sales is like any other worthwhile venture, for better sales results, follow the process.

Use inbound marketing for better sales results

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First many of you are probably thinking what the heck is inbound marketing? It’s been around for a while but hasn’t had great exposure until recently.

Traditional marketing or “outbound marketing” is blasting your marketing messages outward. It can be in the form of TV commercials, newspaper and magazine adds, direct mail, email marketing and so on. The biggest question that surrounds this traditional method is how do you know your message is being heard?

Inbound marketing is establishing your company or yourself as the “subject matter expert” in your chosen field. You make relevant, timely, and current information,  that your potential clients are looking for, available, and they’ll find you. When they do you have a prospect that is directly interested in the products or services you’re offering.

As I said this isn’t a new concept, why then is this just getting exposure?  In a word, noise. There is such a glut of information thrown at us everyday it’s impossible to sort through the noise to get at the information we want. We are bombarded with email marketing, TV commercials that we all mute, direct mail that even if excellent provides a 2% hit rate. We are buried with stuff!

It is getting harder and harder to see an acceptable return on investment from traditional marketing methods.

If you can’t get the market’s attention, you can’t get them consider your products or services let alone buy them.

In my book, Bottom Line Focus, I talk about marketing being your platform to educate your market why they need the product or service you are providing, what to look for when they decide to buy in order to get the most value for their money.

The next step toward better sales results is convincing them that with all of the products or services available to them in your particular market, yours is the best value and the obvious choice.

Like someone said long ago, “build a better mousetrap and the world will beat a path to your door”. Update that and to say provide meaningful information and the world will beat a path to your website.

Small business planning must include health care costs.

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Based on what little is known about the new health care bill that was just passed it will have a huge effect on small to mid-sized businesses. One of the line items as reported in a summary by the Wall Street Journal is that in 2013 companies with over 50 employees must provide “affordable” health care or face a fine of $3,000 per employee. (Excluding the first 30 employees). It doesn’t state what “affordable” means.

In the same paragraph it states that the insurance industry must pay an annual fee of $8 billion starting in 2013 and rising in subsequent years.

I guess it’s lost on me how an industry can pay $8 billion in annual fees and still provide affordable insurance packages to small business.

I don’t know all of the intricacies of the proposed bill. I guess that makes me about as smart as the folks who passed it, they didn’t read it either. What I do know as a mid-sized company CEO for over 15 years affordable health coverage is in the eye of the beholder.

I cannot think of a single year where our health care costs were not increased to one of my companies. Every year we scrambled to try and balance plan benefits against rising costs while trying to keep employee contributions down.

Large corporations have bargaining power and volume, and are able to secure better pricing. The small and mid-sized business owner has no such advantage. While the new plan talks about Insurance exchanges to allow small business the opportunity to shop their coverage I don’t see that as any different than what they do currently. We had to shop our coverage every few years to keep costs in line.

The bottom line of all of this is costs for business will increase, and employers will take a harder look at hiring full time employees. Prudent companies will consider health care costs in their strategic planning process, deciding whether to make investments in automation vs. full time employees with an ever increasing cost base, It will make the playing field even more uneven with countries such as China where benefits and regulation are not a concern.

Health care reform is certainly needed. It’s unacceptable that so many Americans, especially the “working poor” as they are called, are without health care. The United States spends roughly twice as much as other developed countries on health care and millions are uncovered. There simply has to be a better way. But history has shown us that a government mandated and controlled program isn’t it.

One of the chief reasons why we spend so much on health care is the cost the insurance companies and health care companies absorb trying to deal with government bureaucracy. To see government health care effectiveness you don’t have to look any further than the VA and how our veterans are treated.

The full impact of this bill on business is unknown, even by those who passed it.

Better sales results often need a different look.

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If you do what you’ve always done, you’ll get what you’ve always got.

Or as Einstein is quoted as saying, “Insanity is doing the same thing over and over and expecting different results”.

Everyone has heard these phrases but many business owners and leaders simply don’t see it as applying to them. When looking at ways to improve sales results, or improve profitability they use the same processes over and over, with the same people and expect different results.

Often a leader and a management team will spend years within the same company and the same industry with little or no knowledge of other markets. While they may be experts in running their plants and making quality products they have had little opportunity to learn from what other companies are doing to improve operating results. Worse the management team often develops a “herd mentality”. Knowing what the boss wants to hear, and not wanting to rock the boat. This is especially true of past ideas have fallen by the wayside. The feeling is nothing is going to change anyway why make waves?

Unfortunately this situation is all too common in small to mid-sized companies, and failure to recognize this shortfall can result in lack of sales growth and decreasing profits.

Working to improve sales results is an area where outside consultation can be especially beneficial. A business coach or consultant with broad experience has seen many industries and markets, and has learned what works as well as what doesn’t

work in the sales process. A competent coach will challenge your views and will make you defend your assumptions while providing you with options to look at.

The world is changing rapidly, your ability as a leader to recognize the need to change is as important as dealing with change, since one must proceed the other.

What’s your job satisfaction rating?

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There has been a lot written about employee engagement and job satisfaction. What you never see discussed is the owner or CEO’s level of satisfaction.

It must be assumed that because he or she is on top of the pile everything is fine. Why wouldn’t they be satisfied?

Having sat in that chair myself for many years burnout, stress, loss of enthusiasm, fatigue, are all very real issues facing the top management team.

Facing the same issues everyday with no quick solutions, and fighting the same fires takes a huge toll on anyone. The top people however have little or no outlet to voice their frustration. Can you imagine a CEO or owner telling an employee, “you think you have it bad listen to all of my problems”?  There would probably be a mass exodus.

Running an organization is tough enough when you are charged, enthusiastic, and optimistic. When times are tough the job gets much harder.

The questions is what do you do about it? How do you handle it?

Based on my personal experience and the information I’ve gathered over the years from others in my position, the first step is to acknowledge you have issues. This may sound strange but too many leaders refuse to acknowledge their problems. It’s as if they think if I admit it’s there I need to deal with it, if I ignore it maybe it will go away. It doesn’t go away of course and it adds to the stress level.

The second step after acknowledgement is dealing with the issues effectively. I’m amazed at the commonality of problems I see, as I get involved with various businesses. In many cases the solutions are known, but the decision to execute isn’t made. It’s the devil you know vs. the devil you don’t thought process.

Lastly get help. It’s always easier to get help on your own terms before someone forces you to get it. Too often I’ve seen CEO’s and owners wait until a lender or the board of directors forces help on them and it creates a situation that is difficult for the CEO and the coach. Recognizing you need help is not a sign of failure. It’s a sign of logic and maturity. Today’s businesses and markets are complex, everyone needs help from time to time. Only the wise get it early.

For better sales results, find the pain

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Why does someone buy a product or service? Because they have a want or they have a need. If they have a want there is no need to sell them. If you have what they want they’ll find you. A need on the other hand is not as pleasant an experience. It’s not as easy to sign on the line to fill a need, as it is to satisfy a want.

One of the things I was taught a long time ago was find the pain, find the problem that is causing the prospect to lose sleep and solve it.

If the pain isn’t sufficient there is no motivation to buy. Many prospects are in denial, they don’t want to accept the fact that they need help and in some cases that there is even a problem to be solved.

If that’s the case, and you can’t illustrate their problem to them, walk away you’re wasting your time.

There are five components to facilitate a sale:

1.   The prospect recognizes they have a need.
2.   They feel a real need to solve it. (pain)
3.    They have he authority to solve it.
4.    They have the money to solve it.
5.    They are open to help in solving it.

If any of these are missing you can spend a lot of time and come away empty.

I read somewhere that people change only when the pain to change is less than remaining where they are.

For better sales results, find the pain and help them understand the solution is better, more cost effective, easier, than staying where they are.

Better sales results to increase bottom line profits

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I know this sounds obvious, but I’m working with four clients at the present time that have flat or decreasing sales over the past three years. While there are great economic reasons to justify slow or no sales growth it doesn’t change the equation.

Fuel costs, utilities, health care costs, are all rising, if sales don’t rise in the form of price increases or increasing the top line the only thing left to do is reduce internal costs. This is not an infinite source of dollars however and sooner or later you hit critical mass and cost reductions are no longer an option.

The clients I’m working with have all done a great job of reducing internal costs and have thus far weathered the storm. Now it’s time to put the focus on using their recently developed efficiencies to drive sales.

In an expanding economy it’s much easier to increase sales, dollars are flowing and everyone’s buying. How do you increase sales in a slow economy?

Remember the equation above doesn’t care if the economy is slow or not, so when you reach the point where you can no longer cut costs you either increase sales or go out of business. What do you do if the economy isn’t optimum?

You have to get innovative. You need to offer more value for the price than your competitors. Customers today are more knowledgeable and better informed than ever. You need to use this fact to your advantage.

Your sales strategy must be an integral part of your overall strategy, it can’t sit out there on it’s own and be low price one week and high service level another.

Decide who your customer is, what niche you will serve and align your internal cost structure, your compensation, your human resources to best support that niche. Become the subject matter expert, the obvious choice for your goods or services.

You need to be able to answer the question “with all of the goods and services available to my customer, why would they buy from me?”

Better sales results start with better strategic planning and are supported by marketing and execution. 

Look for cash internally while getting better bottom line results.

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Every business person knows money is tight, and the credit markets show little signs of helping anytime soon. Since businesses don’t have the luxury of the government to simply print money when they need it, they have to look for more practical sources.

One of the least expensive places to find of cash is internal. Make sure you have tightened up internal processes and exhausted all internal potential. This source of cash is the least expensive, the fastest, and it can give you better bottom line results.

Where are internal sources of cash? Some are obvious and some are tougher to spot. Here are a few examples:

Inventory – is cash sitting on your floor.  If it isn’t moving find a buyer for it even at a discount. Utilize just in time purchases to minimize cash tied up in inventory.

Accounts Receivable – money is tight for everyone, allowing your customers to stretch you out makes their problem your problem. One thing I found that works well is a small prompt payment discount. Especially larger companies are open to shorter terms such as 10 days for a 2% discount. The discount is cheaper than borrowing money.

Quality and rework- this is a huge cash burner. Scrap must be measured and controlled. If you are buying raw materials and aren’t using them to generate sales that’s waste. You’re spending cash and not recovering any.The same is true of poor quality. If you ship and bill something and have to accept a return and reship, it’s incurring costs without increasing sales.

Poor performing employees – they cost the same as top performers, but don’t produce as much. Demand a return on all of your investments including your investment in people.

All of this is made easier by having clear and timely data to support your decisions.

Bottom Line Results come with Risk.

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I had a very interesting conversation this week with a potential client about risk. This person was an entrepreneur in the true sense, in that he had built several businesses successfully, and ultimately failed at one. He went through a personal bankruptcy, started over working in a sales position, made a small fortune and recently quit the lucrative and secure sales job to work full time in another startup that he is currently self funding.

Since we both had the pleasure and experience of laying it all on the line through personal guarantees and risking our entire net worth on startup ventures multiple times we had a common platform from which to access risk.

His comment to me during the discussion was “most people could not live with the level of risk we accepted”.  I thought about that afterward and he’s probably right. Most people are content working for someone else and letting them take the risk.  However most small to mid-sized business owners and CEO’s accept risk as part of the price to play the game. How they deal with that risk however varies greatly.

Personal guarantees on bank loans and lines of credit are a fact of life for the small to mid-sized guy. Often between cash invested in order to satisfy other investors that you have “skin in the game”, and guarantees to lenders to “insure you’re committed”, they have most, if not all, of their net worth on the line.

Thinking back over my 35 years It seems that the successful ones are those that develop an attitude that they cannot fail, and do whatever is necessary to make the business work. Those that fall by the wayside are those that are slow to move and deal with issues, sometimes even the obvious ones. They both often have the same level of stress and risk they just deal with it differently.

The successful ones met issues head on. Even when they didn’t know how to resolve them, they asked for help, tried different things and ultimately figured it out. They seemed to accept the old adage “bad news doesn’t get better with age”.

They seem to have figured out that dealing with stress effectively is a direct path to better bottom line results. 

It seems the unsuccessful ones dealt with stress and risk differently. They often ignore obvious problems and stay busy with the day-to-day things they can control.

They hope these issues will go away on their own. They are reluctant to ask for help because many are afraid that accepting change means they were wrong in what they were doing. As I thought about this further I reflected on experiences I’ve had with clients and can think of numerous specific examples of these two scenarios.

How is your business doing? Are you satisfied with the direction you’re going and the results you’re getting?  Take that question one step further how are you dealing with the stress associated with the risks you’re taking?  Then ask yourself what am I going to do about it?

What’s the value of the strategic planning process?

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Maybe that question should be addressed to individualcompanies as “what’s the value of your strategic plan?

We’ve all read that the majority of small to mid-sizedcompanies don’t have a strategic plan. Of those that do have a documented planonly 10% execute them.

There must be a reason why strategic planning is such a lowpriority with the majority of businesses.

Since becoming a business coach I’ve had the opportunity to review numerous documents and work with many companies in developing their plans. The one common thread that came through from most of them was, they simply don’t know how to plan.

In many cases if they documented one it was poorly conceived and soon became lost in the day-to-day realities of business. Many are nothing more than a series of spreadsheets built to show increasing sales and profit year over year. Some financial forecasting is warranted in a plan but they area measurement of plan attainment, not the plan itself.

 A good strategy starts with a clear vision. This is the first step and one that is frequently overlooked. If you don’t start yourplanning process on a solid foundation, how can it ever be successful?

Most management teams have great difficulty committing wherethey want to go and what they want the business to look like in five years. Iusually get a response I want to grow X% or I want my sales to be X dollars bythat timeframe. That isn’t a vision statement, that’s an off the wall forecast.A clear vision is one you can articulate to all stakeholders and use as adecision tool by asking does this investment take me closer to or further frommy strategic goal?

A vision statement must include specifics, what will we looklike in 5 years? How many locations? What markets will we be in? What productswill we sell? What will we be known as within our chosen industry?

After you can answer questions like this and articulate thevision clearly then you are ready to begin the planning process.

Effective leadership needed drive change in your business in 2010.

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If you are like the majority of company leaders the short answer is not much until it’s forced to happen.

Just like the famous new years resolutions for weight loss or some other worthwhile goal frequently falls by the wayside the goals of business leaders for their organizations frequently go off track.

March is the last month of the first quarter of 2010. By now you should have a good idea of where your plans and goals are headed foe the year.

There is an old saying that people change only when the pain to change becomes less than the pain of staying the same.

Experience has shown this to be all too true.

We’ve all read that over 50% of business that fail don’t have a business plan. What is probably not as well known are the following facts:

• ·     90% of well crafted and documented strategies fail due to poor execution.
• ·     Over 70% of business improvement initiatives and programs fail due to inability to sustain focus.
• ·     Nearly 90% of leadership teams spend less than 1 hour per month on strategy.
• ·     On average 95% of employees don’t know or don’t understand the company’s strategy and don’t even have access to it.
• ·     92% of organizations don’t measure performance.

 The current recession has forced many companies to make changes. The question is, were those changes proactive or reactive in nature? Change is a constant, and how you plan for it and deal with it is up to you.

My role as a business coach gives me a broad inside look at many types and sizes of organizations. I like to tell people I have two types of clients, the inspired and the desperate. Unfortunate there are too few inspired and far too many desperate.

In my business I am constantly looking at programs and tools available to small and mid-sized business leaders. There is no shortage of information and products to choose from. What must be considered prior to buying a product or service is what is the desired outcome? Clearly sustainability is an issue in the majority of companies regardless of the challenge. The statistics above prove that.

 A seminar on quality, or motivation usually lasts as long as it takes for the participant to get back to the office and get hit with “business as usual”. The only thing that drives true change is spaced repetition of a new concept and accountability.

True change management starts with a clear vision, is supported by a documented plan that aligns people and processes to support that vision, and is sustained by leadership and accountability.

There just isn’t any other way.

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