30
Oct

Changing the Wheels on the Bus at 60 MPH Maybe Dangerous–Better Park and Take Your Time

In June of 2011 Forbes Magazine published a short article by Bill Fischer on the Forbes.com website: Ready, Fire, Aim!. Bill notes a familiar malady that infects many entrepeneurs starting new businesses, namely, a near compulsion to “move fast, seize the opportunity and even learn by failing“.

It is worth noting that Stanford University School of Business, in 2006, introduced the same concept of a unique and dubious connection between
startups and impatience, but with a suggested remedy in a research project completed by Mark Leslie & Charles Holloway titled The Sales Learning Curve.

I’m personally familiar with this malady, having worked with CEOs who’ve tried to use this approach to literally re-architect products “on the fly” based upon responses received from prospects and customers. Sad to say, I’ve rarely seen this type of strategy work. Sure, listening to prospects and customers makes sense. Nevertheless, the best time to listen is prior to going to market. The safety of operating under the radar, before products have been presented to the market, provides the time required to get products right, not to mention the time to carefully put together a marketing plan, if not a complete business plan. Skipping these steps can prove to be a catastrophic error.

The most common excuse that I’ve heard for utilizing Bill Fischer’s “Ready, Fire, Aim” approach is that a business is under capitalized. When this excuse is coupled with a CEO’s intention to retain full ownership of the business without recourse to outside investors (who, presumably, will want too big a piece of the pie) a spell binding mirage appears on the horizon, which, if left to captivate, can lead the fixated captain of the ship right over a cliff.

Consider, for example, the negative impact of selling hardware devices that are still in development as finished products. Certainly sales revenue is attractive, but at what cost? One client of mine developed a strategy nicknamed “ROM a day,” This “ROM a day” regime, basically a regular process of mailing out processors with bug fixes along with installation instructions directly to customers, did NOT keep the “doctor away.” Fact was that the bugs had been identified by the very same customers who were now being asked to embark, in some cases, for a third or fourth time on a remedy that still might not work. The engineering changes were made too quickly, in complete reactive mode. No one had thought out the big picture, nor had anyone noted the danger of using paying customers as little more than alpha testers without their permission.

The sobering effect of “ROM a day” was the loss of important customers who otherwise promised rich revenue streams. Further the reputation of this customer’s business was tarnished by public comments from these important customers who wielded considerable influence in their markets.

I always counsel to undertake any proof of concept activity from a position that is under the radar of the broad market. As far as revenue requirements go, better line up the funding you need before you go forward or else risk destroying the most important and promising prospects through your renovation process.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

30
Oct

Measure the Results of Sales Activity Over Time to Build Useful Predictive Sales Plans

I am a firm believer that most management plans only accrue value over time. Like a fine wine or a steak that improves as it ages, a management plan takes on relevance, accuracy and, of most importance, powerful predictive value as the density of information acquired from regular measurement of actual repeated activity acquires a body that can be rendered into a portrait of what is really going with a business. The business activity under measurement needs to be reasonably consistent and uniform throughout the entire period of scrutiny, else the analysis will be worthless. I hold this belief for sales plans, and marketing plans. No time? No gain from planning. Better not to start the planning process.

If, on the other hand, a business has the funding and the time to allocate to the planning process, then valuable information can be collected and built into, for example, a sales plan. Examples of valuable information include the following:

  • Length of the sales cycle
  • Number of prospect opportunities required to produce a sale
  • Average value of a sale

What is the measurement interval required to obtain accurate information about the three topics just listed? In my experience a minimum of six months. Anything less risks inaccuracy, irrelevance and, even worse, wrong thinking and worse planning.

I have first hand experience with business owners with ostensibly innovative business concepts who either planned too early, or wasted precious time attempting to plan and structure sales too early in the business process. There is no point planning sales for a business that is brand new. Better to spend time speaking with prospects. Collect (better yet, where possible, record) conversations, listen to what prospects tell you and then formulate carefully, over time, a sales plan.

Once you have established the typical length of the sales cycle; the number of prospect opportunities that a typical sales person will need to undertake to produce a sale for your product or service; and the average revenue value realized from a sale, then you can start to formulate a plan and implement metrics to manage your sales activity. As well, you will have acquired very valuable information for your product marketing plan.

In sum, it has been my experience that time spent on tactical planning early in a business cycle for a new, innovative product or service is time wasted. It is entirely possible to operate under rough plans while critically important information is collected and added to a realistic and plausible business plan that includes sales and marketing activities. Put the pedal to the metal where it belongs and not to the exhaust pipe.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

28
Oct

Top sales people fill large funnels with prospects and constantly manage volume to the upside

Top sales people feed off of pools of prospects. These sales achievers successfully maintain these pools of prospects at a constant, optimized level. This feeding process is referred to, in common parlance, as a funnel. The premise is that the right feeding interval (the phenomenon of gravity pulling material through the tube of a funnel) in conjunction with the right volume of prospects in one of these pools (meaning the amount of material added to the cup portion of a funnel) will result in a successful engagement whereby the sales person is paid an attractive compensation (commission) while the business realizes or exceeds the amount of revenue included in the sales plan.

Maintaining the funnel should constitute the majority of sales activity for sales staff. Sales management should take the steps required to ensure that funnels are in good shape across the entire sales organization. Monitoring funnel conditions can be as easy as keeping an eye out for high pressure sales activity and, conversely, inertia together with a lack of a sense of urgency.

The former condition is indicative of a lack of volume in the funnel and a need to force every “precious” opportunity through to a close. I’ve learned over time that a sales person who calls on the same prospect too frequently is a sales person who lacks the right number of prospects.

The latter condition, inertia together with a lack of a sense of urgency, is indicative of a sales person who has overestimated the prospect volume in the funnel; in other words, a sales person who has either over estimated the probability of sales, or a sales person who is marching to a different drummer, perhaps assuming that the firm will pick up the tab on compensation just to keep his or her at the job.

Generally it is much easier to manage high pressure sales people than the laggards. After all, high pressure sales people are, at least, adequately committed to the sales activity to deliver, under effective management satisfactory results. Better to jettison the laggards to keep the business afloat.

Above all, management activity must be largely directed to establish and maintain profitable funnel activity for each and every sales person. For a telemarketing operation this generally means monitoring outbound sales call volume together with the number of substantial conversations (generally conversations of 5 minutes or more on the telephone) on a daily/weekly/monthly basis. As a rule of thumb, for every set of 100 outbound calls, look for somewhere between 10 and 15 meaningful conversations. Any proportion less than a 10 – 15% prospect engagement rate should be analyzed. Keep an eye out for a poor call list or an ineffective sales person. Take remedial action promptly to avoid problems.

For an outbound sales staff the measure should be a top account list with an adequate flow of prospects into the list together with a reasonable close rate as predetermined by the sales plan.

For either type of sales staff, the method is to take remedial action promptly or else risk failure.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

27
Oct

Four Essential Methods for Successful Sales

There is a science to sales. Despite rumors to the contrary, sales is really not magic. True, certain personality types have a proclivity to sales, but no, personality types alone will not determine the success or failure of sales efforts. From the perspective of a business owner, or a head of sales and marketing, the success or failure of sales efforts should depend on a disciplined application of several methods including:

  1. Creating a formal sales plan that includes a realistic, achievable and satisfactory (meaning sustainable) dollar (or any other currency) volume of sales revenue to be achieved on a monthly, quarterly, semi-annual, and annual basis
  2. Plotting a useful chronological model of the sales cycle for the specific product or service sold by the business
  3. Calculating the number of prospect opportunities required to produce the volume of sales revenue required to meet the business plan given the amount of time (chronological length of the sales cycle for the product or service you are selling)
  4. Reporting regularly (daily, weekly, monthly, quarterly, semi-annually, and annually) on actual activity undertaken to deliver a successful result to the sales plan. These regular reports should include summaries of sales activity, prospect lists, lists of prospects who have expressed an interest in buying the product or service including a record of whether or not identified prospects went ahead and bought the product together with an assessment of why the sale did or did not happen

In my experience, merely the ability to deliver successfully on points one through four often spells the difference between success and failure for a business. Fact is that most managers and businesses lack the stamina and determination to follow through on each of these critically important steps. Realistically, simply following through with these steps can open an opportunity to redesign products or services that have not been thoroughly thought through, effectively buying time to “change the wheels” on the “bus” while you “drive”.

Of course, the question then becomes whether these methods will produce a remedy sooner, or later. The preference is always for sooner, but really the “heavy lifting” in the area of product management is the responsibility of marketing, not sales. The boon and the bane of it is that sales can continue to trudge along regardless of the success or failure of product marketing; hence the close alignment, as I see it, between sales and marketing for businesses with new technology that operate under the radar.

Over time, the practice of these methods will provide management with the most accurate picture of what it takes to successfully operate. Plan on the initial effort to be a crap shoot. Be willing to revise on the fly.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

26
Oct

Unique Dynamics of “Cold Call” Prospecting Telephone Sales Calls

Most sales people have a pavlovian reaction to “cold call” telephone sales — quick glances from left to right (anywhere but straight eye to eye contact) and a determined effort to vacate the premises. The fact is that “cold call” telemarketing tasks are uncomfortable and far removed from the type of ego inflating activity that most sales people require to gin themselves up to the task of hitting their numbers on a month in/month out basis.

But the truth is that “cold call” telephone sales provides a highly targeted, controllable method of expanding market visibility with precision. In fact, if properly managed and executed, cold calls can be utilized to increase market awareness of a product precisely as planned. Therefore, I regard this method of prospecting as the most precise and efficient method available to any type of business marketing any type of product or service. While the number of prospects contacted depends entirely on the number of telemarketers at work (I eschew any mention of “robo dialers”, which dialers I consider to be entirely useless and a waste of precious funds that could be better spent on buying a telemarketers time), the contact, itself, is highly effective.

In contrast, advertising (even inclusive of online, context-sensitive display ads) is inherently a broad market passive technique of juxtaposing text, photos, suggestions, etc (which may all have the very same forward, presumptuous characteristics of a cold call) alongside subject matter that attracts prospect interest but, nonetheless, irrelevant to the ads themselves. The return on investment for advertising, I argue, is far less and certainly not appropriate for tight lipped businesses with leading edge technology that need to operate under the radar.

Usually sales people break out into one of two character types–so-called “farmers” and so-called “hunters”. I like to refer to farmers as the guys with the address books, the nice guys who are well liked by their contacts who have usually bought different products from the same sales person (my nice guy) over several sales “lives”. “Farmers” do not like cold calls. It’s the “hunters” who can be taught to use cold call telemarketing techniques. These sales people are generally in sales not only for the money, but also to satisfy a need for competition and achievement.

“Hunters” may not do a good job of maintaining business friendships, but they certainly can be trained in “cold call” telemarketing for prospecting. With a new technique like cold calling firmly ensconced in their quiver of sales methods, “hunters” can relied upon to not only deliver the orders, but to open the market precisely as planned for a controlled, yet covert, expansion of business.

Don’t pass up on cold call prospecting.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

5
Oct

“Meet the New Boss, Same as the Old Boss” Usenet Groups Resurface as Social Media, Web 2.0 Discussion Groups

For those of you who either can’t or would prefer not to reflect back to the late 1980s/early 1990s, let me take a moment to introduce a phenomenon called “UseNet,” literally an enormous, often nested collection of discussion forums which, back then, were accessible via physical and virtual terminals connected to the “Internet.” Remember, there was an Internet before there were web browsers. With regard to Sales & Marketing, these forums were noteworthy in that they provided sales folk peddling people, (AKA “executive search” and/or “contract consulting” experts) with a rich venue to engage technology professionals in meaningful discussion–just the prescription for closing complex sales for staffing requirements, not to mention opening new client relationships.

Fast forward to 2011. A cornerstone feature of prominent Web 2.0/Social Media websites like LinkedIn, FaceBook, Google+ and Twitter is the ability to engage in discussions and in real time. With regard to LinkedIn, this feature is offered via LinkedIn “Groups”. At no cost to the Group Owner, this feature offers “under the radar” marketers and other purveyors of products requiring complex sales strategies a great tool to:

  • constrain market visibility, but nevertheless engage in meaningful product promotion
  • cultivate discussion with prospects, potential product evangelists, etc without digressing into hard core selling
  • learn more about target businesses and presumed decision-makers

LinkedIn Groups is a true “win win” feature. LinkedIn encourages Group Owners to invite any email contacts as well as “first” connections on LinkedIn. They grow their contact base and you use their feature to carefully leverage interactive media to build your business. Of course, do be sure to make your group “members only”. Be sure to check any/all applications to join to ensure that you get the members you’re after.

This same discussion feature is more prominent on FaceBook via the “wall” feature of FaceBook pages. It is nested into Twitter, as well, where followers can engage via the “reply” feature. Google+ has a similar feature to FaceBook, but do exercise care as what you add to your Google+ “stream” may post to the public, getting you much more exposure than I recommend if you’re marketing under the radar. Ditto for Twitter.

In sum, discussion groups provide a great way to generate leads and cultivate relationships with potential partners, prospects and customers. Meaningful dialogue can even end up as a useful means of saving money for your customers, thereby building the value proposition for your products. Check it out.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved