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Article 1: Win the Battle for Profitable Customers - Improve Your Sales Strategy     
This article describes basic strategies that you can use to gain an edge in the war for loyal customers and find the time to focus on driving revenue for your company.  We teach variations of these five strategies through all our work.

Article 2: Would you Believe you can Increase Sales by 48% Without Increasing Headcount?

In this article, we publish a well accepted formula to measure sales effectiveness and provide a strategy to increase your sales effectiveness and as a consequence gain greater adoption of your Customer Relationship Management or Sales Force Automation system as a bonus.  Our sales and management workshops teach the underlying skills it takes to increase sales velocity and produce a more accurate forecast you can rely on when you want to know you are going to make your numbers.

Article 3:  Money!  Money! Money! Cost Savings Strategies for Service Providers

Everyone wishes their customers were less cost conscious and at the same time, as business owners, managers or consumers we all would like to save some money.  This article contains dozens of cost saving strategies and ideas to turn around your business if you need one.  Frankly, if you implement these ideas, your business will be less likely to struggle.  We help our clients implement these strategies through our consulting and training services.

1.  Win the Battle for Profitable Customers - Improve Your Sales Strategy by David J. Pemberton

 

In 336 BC, the Oracle at Delphi is said to have offered Alexander the Great the choice of a short life filled with glory or a long life filled with mediocrity. 

 

History tells us that young Alexander conquered the known world at 23 and died at 33 so his choice was pretty clear.  Historians are unclear whether he died the victim of excess drinking at a Macedonian celebration or from being poisoned.  We do know that he was much celebrated by the Macedonians, much respected (feared) by the Persians he conquered and that his place in history is secure.

 

Far fewer small businesses make history than become history and hence, their owners come out on the wrong side of the battle to create and keep profitable customers.  My purpose in this article is to suggest a few simple strategies that can give you an edge in the ongoing war for customers and maybe, make history in the process.

 

The number one responsibility for early stage companies is to focus on driving sales revenue.  Not bad advice for companies at any stage of growth and particularly those in competitive markets and who isn't?

 

If your company is past the start up phase and entering a more stable phase, then the question becomes, "Is your company performing up to its full potential?"

I believe in most cases, the answer has to be no.  Here"s why.  I believe businesses fail outright or under perform because they are not focused on sales and sales development.  To me every business is a sales business and everyone in the business should be focused on creating and keeping customers.  To that end, everyone is in sales and everyone can be better at selling.

 

In many companies, the business owner does not know how to sell or does not like to sell or both.  They may have come out of their previous company having been responsible for some other area of the business.  If they held an executive sales position, it is likely that they were responsible for overall sales results and haven't  carried a bag or had to retire a quota for a long time. 

 

Successful companies have people with the ability to carry on sales conversations with potential prospects.  The most important person who must have this capability is the owner of the business - the Chief Sales Officer.

 

You can use the following ideas to increase your overall sales power and build your sales culture, one in which everyone is focused on selling and serving customers.

 

1. Look at the steps in your sales process and identify the associated skills that enable you to move smoothly and in control through your process.   Assess each person's ability in these vital areas and help them create individual development plans to address any vital skill gaps.

 

2. Ask this question, "If your prospects believed everything we said, would they buy more from us?"  Assuming the answer is yes go to work on eliminating the things that create doubt in your prospects mind and work on enhancing those elements that increase credibility with your prospects.

 

3. In an era of commoditization, customers want to deal with specialists who by their specialization are considered experts at what the customer needs done.  When your sales people demonstrate specialized expertise they outpace their competition and command higher margins.  Help your people become experts.

 

4. Stop calling your products solutions.  Anyone selling software calls his or her product a solution.  Most have difficulty explaining in simple language what the term means.  Your prospects hear "expensive and complicated" and who wants that?

 

5. Teach your people to get to the point quickly.  Most senior executives and owners have way too many demands on their time.  They appreciate people that get right to the point.  Once they understand how they benefit from investing their time, they will provide more time for a genuine business conversation.  It's easy to get in to see an executive and difficult to get back in.

 

Another version of the Alexander's story is that he arrived at Delphi to have his fortune foretold, just prior to setting forth to conquer the Persian Empire.  The Oracle uncharacteristically remained silent and could not be prompted to say anything, asking him to come back later.  Furious, Alexander the Great grabbed the Oracle by the hair and dragged her back and forth until she screamed , "Let go of me, you're unbeatable." 

 

Hearing that, he dropped her, saying, "Now I have my answer" and off he went to battle.

 

Hopefully you have your answer, sales is not for everyone but if you can make everyone aware of the need for and value of their contribution to your sales effort you will be well on your way to making history and maybe, even earn some glory.

Please use these ideas as much as you like and even pass them along.

____________________________________________________________________________

Pemberton Companies, Inc., 9855 E. Crestline Circle, Greenwood Village, CO 80111

 Pemberton Companies 2010  All rights reserved.   -  DJP@Pembertoncompanies.com    303-773-6997

 

 2.  Would you believe you can increase sales by 48% without increasing headcount?

Sound impossible?  Interesting?  Would you like to know how?  Of course you would. 

 

CSO Insights, a well-respected research firm polls sales executives of small to midsized firms each year regarding a variety of topics with 1500-1800 executives responding each year.  In their 2007, 2008 and 2009 surveys, these executives when asked what their top next year goals were, over 70% wanting to increase revenue, over 50% wanted to increase sales effectiveness and 40% wanted more market share. 

 

It’s not surprising that these executives wanted to increase sales revenue because they also reported in each year that from only 57-62% of their sales people achieved annual quota (2006-2009) and half of their people failed to attain even 50% of their quotas.  That’s impressive.  Not only did a large percentage of people fail to make their numbers, of the ones that missed their quotas, missed by a mile each year. 

 

If this is the case for the average company, what are successful companies doing to increase sales revenue at all, let alone by 48%?

 

Many companies have invested in Customer Relationship Management programs (CRM), Sales Force Automation tools (SFA), sales training and value added, solution oriented sales processes to improve sales team performance. 

 

Some report increased revenue but many complain their return took longer than expected and was smaller than hoped.   A consistent reason for lower results from any initiative is lack of executive mandate and incomplete buy-in from the folks who have to execute. 

 

We do know that companies that have an efficient way to measure sales effectiveness make better progress in this area.

 

The TasGroup, an international consulting organization that does annual Sales Effectiveness Benchmark studies recently published their formula to measure sales effectiveness for any organization. The formula is called the Sales Velocity Equation:

 

$ Revenue  = # of Deals x $ Value of deals x % Close or win rate

      Length of the Sales Cycle.

 

In the Sales Velocity Equation, # Deals represents the number of qualified sales opportunities being pursued, $ Value represents the average value of each sale, % Close represents the ratio of deals won to qualified opportunities, and Length of Sales Cycle is the length of time resources are being applied to a sales opportunity before that opportunity is closed.

 

For a growing company, if you increase the top line variables by 10% and you decrease the bottom line variable (length of the sales cycle) by 10% you increase revenue by 48% without any increase in headcount – which is the equivalent of adding half the number of sales people at no cost.

 

110% x 110% x 110%  = 148%

   90%.

 

As part of their report, the TAS Group analyzed the 502 companies who participated in their 2007 study and found that those who had higher sales effectiveness scores consistently had a higher percentage of their sales people achieve quota.  The firms that used a defined sales process, integrated this with their CRM/SFA system and had managers who followed up to see that these systems were used -- outperformed other companies by a wide margin.  

 

Here are four things you can do to influence your Sales Velocity Equation to increase your sales effectiveness and in turn, your sales revenue -- by as much as 48%:

 

1. Work to engage all your employees in creating sales success for the company.  Everyone must know they are part of the DNA of sales success.  They must know they have a role in creating and keeping customers and accept they are a vital to creating sales success.

 

2. Identify your sales process.  Ask your people to list the sequential repeatable activities they perform to move from contact to contract.  Describe these phases in common language everyone can understand and follow.  Include your criteria for placing prospects in each stage and for moving to the next stage.  If you publicize this information, you will increase the probability of reducing the time it takes to make a sale and improve the decisions your people make as to what resources to allocate to each opportunity simply because they share a common language and rules for choosing opportunities to pursue and for managing their opportunities.

 

3. Specify the opportunities your sales folks should be pursuing.  Describe the type opportunities that best fit your company’s capabilities, most closely match your competitive positioning and that give you the best chance to win.

 

4. Teach your Managers to help your people see the impact and benefits they receive from using your CRM/SFA tools to not only achieve quota but also to increase revenue production period to period.

 

If your sales leaders work on these elements, you stand a good chance of positively impacting your Sales Velocity Equation and could grow your revenue in 2010 by 48%!

 

Please use these ideas as much as you like and even pass them along.

____________________________________________________________________________

Pemberton Companies, Inc., 9855 E. Crestline Circle, Greenwood Village, CO 80111

© Pemberton Companies 2010  All rights reserved.   -  DJP@Pembertoncompanies.com    303-773-6997

3. Money, Money, Money makes the world ‘round! By David J. Pemberton

 

We are living in interesting times.  Everyone is and probably should be, more cost conscious.  At the same time, we wish our customers were less cost conscious even as we look for ways to shore up our margins and save money where we can.

 

Over the following pages, I have included dozens of cost saving and profit increasing ideas that you can put to work in your business and personal lives.  You could call them turnaround strategies for your business; however, if you apply them diligently, you won’t need to be worrying about a turnaround strategy. 

 

Here are some overall concepts that are good to keep in mind:

 

1. Everyone knows one thing they can do to improve the business right now.  The issue isn’t in knowing, the issue is in doing.

 

2. If you are clear about what you are trying to accomplish and why (purpose, vision, values, goals, objectives, strategies, plans and actions) you stand a better chance of sticking to your spending resolutions.

 

3. If you do run your own business, make sure you are keeping score.  You need to have accurate information (numbers) so that you can make good decisions about where to cut and where to expand.  On this point, check to see if you have leading indicators or lagging ones.  Ask yourself, what are the critical few things I need to track to stay on top of the business and predict necessary changes?  The real key is to have a plan that allows you to measure the critical few things that matter to your success – now and for the future.

 

4. Once you decide what you want to do, take action now vs. later and with dispatch. 

 

5. The short version of this article is to sell more, collect for what you sell and spend less than you make because in the long run, it’s not what you make, it’s what you keep.

 

The balance of this article has ideas organized around topics.   The idea is to select the ones that will make the most difference to you in the shortest timeframe and then implement them.  You are better off choosing a few and doing something right now with them than trying to do everything at once.

 

The good news is that as you implement ones that matter, you will be delighted how fast your savings build.  If you have more money, it is amazing how quickly other problems seem to disappear…stress, worry, indecision, procrastination…I wish I would have …!

 

 

Cash Flow (Collect more and faster):

 

You have to have cash when you need it.  Cash is more important than profit in the short term.

 

• Deposit payments immediately (banks may add time to process)
• Get invoices out promptly – invoice when you ship vs. waiting until month end.
• Use remittance envelopes, pre-addressed and stamped, and mail them with your statements.
• Make collection policies specific and friendly – follow up quickly
• Accept credit cards - Instead of waiting 30 days or more to collect customer payments, you can get paid in two or three days by asking them to pay you with a credit card (saves you having to bill them).
• Review customer lists for chronically late payers and eliminate them

 

Manage your customer base for faster cash flow

 

• Ask for deposits
• Ask for prepay
• Create a discount offer for current customers – buy before x and get y discount
• Re-contact past customers and offer new service
• Announce a limited offer – early product release
• Offer to work on a retainer basis - find customers or clients who will put you on retainer, paying you a guaranteed amount of money each month.
• Offer an ongoing service that allows you to employ a recurring revenue model

 

Smart spending

 

• Take advantage of quantity discounts (and prepay options)
• Pay down higher interest debt (cards) first, others at minimum until debt free
• Only charge what need to and pay off your balance each month (if possible)
• Check out Kayak.com, DING Alerts for SW Airlines and Spirit Airlines Red Light Specials to save money on airline tickets – some last minute great deals
• Barter where possible – but only trade for items you need or can use in a reasonable time frame
• First things first – spend on priority items before secondary items
• Calculate your return on investment (short term and long term)
• Start attending bankruptcy auctions

 

• Invest only where your return exceeds the interest on what you owe
• Bundle your purchases with other small business users

 

• Take advantage of early pay discounts
• Pay on time - Avoid late fees
• Ask for terms from suppliers / suggestions to save money
• File and pay taxes early (get refund faster)

Reduce operating expenses

 

Assuming you have a 5% profit margin, if you lower operating costs by 5% you can double your profit.  If you want to double your profit by increasing sales revenue, you must increase sales by 100% to achieve the same result.

 

Lower your fixed costs

 

• Cancel subscriptions (if you don’t read them, they don’t add value)
• Audit your insurance policies for higher deductible / lower premiums
• Review suppliers periodically for savings/service increases
• Review bank relationships (what is the bank capable of?)
• Eliminate service contracts (unless you use them)
• Audit your phone bills – cancel unnecessary items
• Ask for lower lease rates
• Ask for lower rent payments
• Offer lower salaries (rebalance wage vs. risk) but offset with incentive programs to lower costs, gain referrals, increase sales
• Consider offshore services (Elance)
• Call you local college about getting an interns (Because they usually get class credit, they will accept a small salary but, you need to supervise them and you need to be clear about what work they need to perform…it should be an opportunity for them to learn from you by doing work you want done…not just an extension of their study time.

 

Administrative measures:

 

• Develop a budget for each department and monitor
• Manage stockroom access/supply usage
• Monitor office supply usage (reuse paper/both sides for notes)
• Review software licensing agreements (drop unnecessary support fees)
• Review credit report and correct errors

 

Profitability:

 

• Raise prices (Depending on the numbers, it is possible to raise prices and lose 40% of your customers but retain the same gross profit amount.  In reality you may lose some, but not 40% of your customers.
• Challenge your own thinking about loss leaders and marginally profitable customers – most marginally profitable customers aren’t worth it
• Cut marginally profitable lines of business (Free up cash and Increase focus)

 

• A companion argument can be made relative to reducing pricing.  If you lower your price by 10% at a fixed rate of profit, you will have to almost double sales to make up the profit loss.

 

Make sales your number one priority

 

• Account Management:

 

o       Decide what new revenue you need to obtain this year

o       Determine what revenue potential exists within your current accounts/relationships

o       Project the probability of your getting that number

o       Create a plan to get this revenue

o       Contact key influencers

o       Survey additional account contacts for potential opportunities

o       Find out why they do not use your services (potential areas)

o       Create a stay in touch plan to predispose people to include you in future opportunities

 

• Set targets - Increase the number of New Opportunities:

 

• Calculate a reverse funnel to get at how much activity you are going to need

 

• How much new revenue you need (net of your current account projections)
• Think average value of a new customer
• Divide your needed revenue by your average revenue to see how many new accounts you need
• Look at your close ratio of opportunities to wins
• Calculate how many presentations you need (reverse funnel)
• Set this number as your goal

 

• Identify target prospect profile  - ideal client profile – just because someone does not buy your product now does not mean they are a prospect

 

• Find a list or create a list of suspects
• Create a market intelligence strategy to tell you when to contact folks
• Create a  hunter mentality to get “in on deals”  -
• Allocate specific hours each day or week to prospecting activities

 

• Implement sales lead generation strategy

 

• Network for a purpose
• Contact old accounts for referrals / introductions
• Hire a lead generation firm or an employee who specifically loves to make cold calls – loves to book appointments
• Employ PR strategy
• Become specialists / build your expertise which in turn builds credibility

 

 

Sales process and methodology:

 

• Identify your sales process (planned, logical, linear, sequential, repeatable) and make sure people are following it
• Identify the skills your people need to complete each step in the process and go to work on these basics
• Figure out how to sound different or you will be perceived as the same.
• Figure out how to quantify the value you provide
• Connect what your product or service does to solving your prospect’s biggest unsolved problems if you want to get on their priority list
• Help your people learn answers your buyer’s, “Most asked questions”.

 

Become a sales coach to your people or hire one:

 

• Help your people to set personal and business goals
• Teach your people to get to the point quickly
• Ask for commitment
• Set the next best step
• Ask, “Does this client need to do anything?”, If not, move on but stay in touch
• If your sales people are waiting for a prospect to get fired or die, they  may need to move on
• Create a community for reinforcement and accountability

 

For Real Turnaround Strategies

 

Companies do not get into trouble overnight so they can not expect to get out of trouble overnight.  It takes time, money and change (culture, executives and sometimes people).

The situation is probably worse than you think.  Being your own workout specialist is like arriving at the scene of an accident that you caused and you may have head injuries:

 

1. You may need help (get the facts so you can communicate the facts)
1. Get your books in order / book keeper or a good CFO
2. Get reliable info about your assets and liabilities
3. Get a good read on the people who hold key positions?
2. Tell everyone the truth
3. Don’t study things to death, most of the choices are clear (if painful)
4. Listen to the customers (they know what’s wrong)
5. Listen to your people (invite emails and answer them)
6. Practice calm realism.  Talk about problems and solutions.  Hire a good PR firm to help you communicate your messages and herald your progress
7. Try to hold on to your good people (don’t need all new people).

 

Please use these ideas as much as you like and even pass them along.

_________________________________________________________________________

Pemberton Companies, Inc., 9855 E. Crestline Circle, Greenwood Village, CO 80111

© Pemberton Companies 2010  All rights reserved.   -  DJP@Pembertoncompanies.com    303-773-6997