Baker’s Dozen Marketing and Sales Mistakes…and Opportunities #6: No activity and performance measurement

When I went through Quality College at Philip Crosby Associates many years ago, I learned that all work is a process. Before I read his best-selling book, Quality Is Free, and attended the training, I had thought that quality was something only the engineering profession needed to be involved with. Probably because I like a certain sense of order and process, I identified with the core concepts being taught and understood the need for designing systems from a dual perspective- that of both preventing problems from occurring and in ensuring a predictable outcome. This is what Crosby calls, Make Certain. To my surprise, I discovered that as a sales manager I was already doing quite a few things in my management from a quality mindset base. But, I definitely turned it up a notch.

Since all work is a process that should lead to a predictable outcome, it makes sense to see sales activity (process) as leading to performance. And, the performance, or result, is the outcome. The outcome in sales is ultimately a measurement of sales revenue and sales profitability, what we might call the Big Measuring Stick. Sales people are paid to bring in revenue and do it at ever higher profitability levels. However, there are a number of other measurements to track to get to the BMS besides just sales $ and margin $ (or, %). Most sales people, especially independents, fail to track their activity and only focus on gross sales. This is a mistake, because it doesn’t allow anyone to evaluate objectively just how the sales number was arrived at. Jim Dunn and John Schumann, authors of Common Sense Selling, say that keeping score for yourself on a daily basis (and I would add, weekly and monthly) is critical to success- know what you need to do and track it, challenge yourself and set goals.

So, what are activities that you might track to get to the BMS? It depends on your business and industry, but here are a few to consider, and there are more:

• #people followed up within 24 hours vs. # not followed up with,
• # of phone dials, # of appointments set from phone calls,
• # of referrals from current clients, # of business events per week (networking,
• prospect or customer entertainment),
• # of marketing collateral pieces sent or delivered,
• # RFPs prepared and presented,
• Close Ratio % and actual # of No’s (as in, “No, we’re not going with your company.”),
• % selling margin,
• $/day sales vs. target.

So, take the time to figure out what it is you are going to measure. Make sure that whatever you measure is in line with your desired outcome. Measure the things that matter most. Put this in your daily planner as an activity that you do- it should only take 2-3 minutes each day to record your activity. Be disciplined and diligent in measuring activity. Analyze your tracking sheet regularly to see what you can be doing more of to get your result. Not getting enough in the RFP category? Do more phone calls, send out more letters and marketing collateral, meet more people. Not closing enough? Work harder on your sales conversation skills, study your wins and losses, study your competition, and increase your own knowledge of your products and services. Get the picture? Good!

Bakers Dozen Marketing and Sales Mistakes…and Opportunities #5: No Sales Plan

Planning is everything in business. The old adage, mentioned in previous commentaries, still rings true: Plan your work and work your plan. A Sales Plan is related to but not the same as having no Marketing Plan. Think about it this way- marketing’s job is to get the right fish into your fishbowl, so that sales can catch them. Marketing is about positioning the company to be seen as a viable and preferred choice and sales is about capturing the customers…lots of them!

A good sales plan has a number of elements and for a small business owner or sales manager it starts with a written summary of the coming year’s sales objectives and how they will be accomplished, including growth in dollars and percentage, growth in market share and units sold, the cost of sales as a percentage of sales revenue, training initiatives to improve closing ratios and improve customer retention, an assessment of the strengths and weaknesses of the team and individual sales people, resources and tools needed to assist in achieving the goals; among other topics. All of this must be aligned with and in concert with the marketing plan. They are not separate or acting in competition with one another. This is usually a problem for larger companies but never should be for smaller organizations.

Next is an overall plan for the fiscal year that captures the projected (forecasted) sales for each sales person, month by month. This is the top page of a detailed report. This summary shows the aggregate for all sales people and should be segmented by product type. And, it should show the projected gross selling margin by product type. It can be broken into territories or regions if need be.

Beneath this page are the plans for each individual sales person. Again, this is an account, by account listing with projected sales and/or units and selling margins by product type for each month. It should include projections for target accounts and a summary page of strategies and tactics to reach the goals written by each sales person and approved by the manager.

Digging deeper- how the heck does a sales person get an accurate forecast? And by accurate, I mean within 10% of reality, whether it’s aggressive or conservative. Talk to your customers! Get two to three levels deep with the customers who provide 80% of your business. Find out what they’re growth plans are for the coming year- where they expect to be up and why & when.

Even if you’re a solopreneur’ you’d be wise to spend time developing a formal sales plan. Why? Because when you go through the act of creation and writing things down, what you create becomes more real in your brain. It becomes something that you attach to and aspire to. To close with a twist on another saying, You Become What You Think About and What You Think About You Become. So, get working on your sales plan- even if you’re already well into the year!

BTW, I’ll be holding another teleseminar on April 16^th; check out the details at www.performabusdev.com.

Bakers Dozen Marketing and Sales Mistakes…and Opportunities #4: No prospecting plan, poor territory management

I was fortunate enough when I started my sales career to have guidance from some pretty sharp people on how to manage my time, territory geography and prospect base. I didn’t know what I didn’t know and so the simplest advice was often the best, and made perfect sense.

Now, when I train and coach others I often see a real lack of thought or planning put into prospecting and territory management. Really, it is not that hard to get organized and to be methodical in this part of the selling profession. But, what I see are sales people who have absolutely no process at all. They run after every opportunity and they will go see anyone who breathes or expresses even a mild level of interest in them. They drive all over the map and feel they’re productive because of a lot of activity. They show up at the office every week with no real plan. Yeah, they’re ‘star sales people’ alright…. Think of a star pattern- they drive from point A all the way down to point B and then across to point C, back up to point D and way back down to point E over the course of a day. In today’s congested urban landscapes, you cannot afford to be limited in your coverage by driving all over the place.

What is the simple advice that I got and still adhere to?
1) Plan your week- every day, every hour should be on your schedule. This not only includes ‘hard’ appointments but also time set aside for prospecting, phone calls, follow up and detail work and, contingency or catch up time.
2) To plan the week, use a calendar tool- an Itinerary form or planner such as Franklin-Covey, PDA with appointment calendar or other PC or web based calendar tools (Outlook, Google, CRM).
3) Make sure your schedule is available to at least one other person, even if you work solo. Why? Because you need to be held accountable (we all do!) and it allows that one person to track you down just in case…
4) Your schedule for an upcoming week should be firm at an 80% level, including the items noted in #1 above.
5) Your territory should be divided into four quadrants: NE, NW, SW, SE. Each quadrant gets its own day of the week for activity, i.e., Monday @ NE, Tuesday @ NW, Wednesday @ SW, Thursday @ SE, Friday as a catch up day.
6) Within each day allow some flex time if there’s an urgent need to attend to an account outside of the quadrant.
Wait a minute, you say, I can’t be that rigid. I can’t only be available to certain accounts! Sure you can. It’s amazing how many people you can schedule in an area when you let them know in advance that you’ll be there. It’s the 80% rule again- you can get appointments with 80% of your prospects and clients when you let them know of your availability on a certain day.
7) You should be planning two to three weeks out on a regular basis, as follows:

• Week 1- should be firm by the Friday before the start of the week.
• Week 2- should be 50% to 75% set within the first few days of Week 1.
• Week 3- should be 30% to 50% firm by the Friday before the start of the Week 1.

Your prospecting activity should be specific and focused on the industries and company demographics that will benefit your company and your wallet the most. Why waste time calling on everyone who might be a client or buys at minimal levels?

Of course, there are exceptions to this as every industry is different. Cycle times and the complexity of the sale can certainly influence how you use your time. But as a general rule, plan well in advance, condense your daily geography and be focused on your highest value targets.

Bakers Dozen Marketing and Sales Mistakes…and Opportunities

#3: Lack of product, company and industry knowledge

I talked a bit about this in my February e-newsletter. I conducted an informal on line poll: What is the one thing that annoys you most about sales people? Here were the results:
1. 25%They’re manipulative or pushy.
2. 25%They talk too much; don’t listen.
3. 6% They’re not prompt or responsive and are weak on details.
4. 32% They don’t know well their own products (or services).
5. 12% They don’t do their homework, they’re unprepared.
As I noted in my e-newsletter, I was quite surprised that choice #4, sales people don’t know well their own products (or services), turned up as the #1 annoyance. I think this also extends to not knowing their industry and/or not being really up-to-date on happenings in their own company.
Here’s why I was so surprised- most sales managers I encounter tell me that they spend eighty to ninety percent of their annual sales training time on product training. Eighty to ninety percent!! {As a side note, I’m not in favor of this amount of recurring training time spent on products. Most companies and sales people could use a 50-50 split between product training and sales technique (or, strategic sales or, consultative selling) training.}
OK, back to the issue and poll result…I have to ask myself the following: If so much time is being spent on product training, why aren’t sales people learning? What are they being taught? How are they being taught? Are they being tested on what they learn (and, I mean an in-depth, rigorous exam)? If tested, are they required to get an ‘A’? How often are they receiving training?
It’s no secret that professional buyers often know more about the products and industry than the sales person. They often know a lot about your company through sources in the marketplace and media. They know they have the advantage and can both test your professionalism and knowledge and, manipulate you as a result. If you don’t know your stuff, you can’t be trusted. If you can’t be trusted, you can’t be a supplier. If they can manipulate you, you’ll usually sell your products at lower process. Get it?
If you’re in sales, you have a simple choice: (1) either continue to be seen as someone who is not trustworthy because you’re not informed or (2) be dedicated to a lifetime of learning about business, your company, your products, your industry and trends. I know which choice I’d make.
One last thing, which I’ll address in a future commentary- knowing your stuff doesn’t mean you fall into the ‘telling is selling’ syndrome, one that leads to failure. Knowing your stuff is not about telling everything you know. That’s an outdated mode of communication where the sales person literally blabs and blabs and blabs in an effort to show how much he knows…that doesn’t work for a lot of reasons.

Observations from vacationland…

Next week I’ll continue with my Bakers Dozen Marketing and Sales Mistakes…and Opportunities. This week, I’ll share some thoughts from my vacation. I’m blessed to be able to take some time for a getaway with my wife. We’re soaking up some sun in Palm Springs and it is really welcome after the dark winter of 2007-08 in Seattle.
We went to the practice and qualifier rounds of the Pacific Life Open tennis tournament today. All of the top players in the world compete in this tournament and it stretches over two weeks (like a major, i.e. U.S.Open). So, it’s really a sub-major. Although we didn’t see any of the top stars today (and we may on Thursday), we were impressed with the high quality of skill the qualifiers exhibited. These young men and women are damn good. Winners of the qualifier matches get into the real tournament.
Not only was it fun to watch the matches today, but watching the practice courts was great too. Three things struck me: (1) these people would kick my tail on a tennis court, and not just because I’m old. They’re just too good. (2) They hit the ball like a machine, with beautiful form, technique, power and consistency. To me, that shows they are super dedicated and practice, practice, practice. (3) They all have a coach, someone who is nearby and observing, teaching, correcting, challenging, praising and encouraging.
So, what did I learn from my three observations that applies to business? (1) Don’t play in a game that you cannot be competitive in. If you have the potential to get your butt kicked, don’t go into a market or participate in a proposal that will waste your valuable time and resources. If you’re already in a market where you’re not doing nearly as well as you thought you could then maybe you’re really just not that good. Maybe you should get out and focus on what you really do well, to give yourself and your company a chance to win. (2) Dedication and practice are crucial to success, especially in selling. Are you dedicated? Do you make the time regularly to learn about your craft and profession? Do you take seriously the opportunity to practice, through rehearsal or role plays, the components of a great sales call or presentation? (3) Do you have a business coach or mentor who can provide you with experience, insight, teaching, correction and encouragement? This is something most people never investigate and my experience in seeing those who are super successful, is that they all had one or two key people to help them along.
Being in the right game, being dedicated and practicing and using a coach can greatly accelerate your growth.