<h2><span style=”color: #2266a3;”>Revenue Through Referrals</span></h2>
“ I need more leads” is a common refrain heard these days. With strapped cashflows business owners correctly understand that cutting expenses can go only so far in generating needed cash. I’m not discounting the importance of closely monitoring your expense but an over dependence on reducing costs could materially hurt your company. I see companies reducing key employees, curtailing marketing, forestalling differentiating programs all to save money. In the long term, perhaps even in the short, these efforts can have dramatic and unintended adverse impacts on your business.
We need to focus your attention on the revenue production side of our business. Efforts to increase revenues and profits fall into 5 areas of focus: 1) lead generation, 2) conversion rate, 3) average dollar sale, 4) number of times clients buy from you, and 5) profit margin. For the next couple issues I’ll be focusing on what you can do to generate more leads.
<strong>Lead Generation – Referrals</strong>
Bob Burg in his book “Endless Referrals” points out that referred prospects are twice as easy to close and buy more in the first two years than clients who weren’t referred. There are two significant reasons why referred prospects are easier to close:
<li>It’s easier to get an appointment – the referrer imparts their trust on you</li>
<li>Price is less of a factor – you are differentiated by the referral</li>
So, certainly every business owner and sales manager must be asking clients for referrals…right? Surprisingly, the answer is no. Most businesses don’t actively ask their clients for referrals. The reasons vary, but two of the more common are:
<li>They don’t know how to ask for referrals</li>
<li>They are embarrassed to ask clients for referrals</li>
<strong>People don’t know how to ask for referrals</strong>
Early in the sales process make it known that your goal in servicing their relationship is to provide exceptional quality, and that you will be asking them for people they know who would benefit from the same service quality. This simple statement lays out your service quality goal while at the same time letting them know that in the future you will be asking for referrals.
When the time comes that you want to ask for referrals, tell your client “I’m never too busy to help any of your friends, colleagues or family members. Who do you know that would benefit from the service I provide?”
<strong>People are embarrassed to ask clients for referrals</strong>
Start by realizing that your clients are interested in helping their friends, colleagues and family members. When you provide exceptional service quality that is valued by your clients, their interest in helping others will compel them to promote you to their interested audience. View asking for referrals as offering to help others with your quality service and not pushing product. Change how you think about asking for referrals…you are looking to help as many people as you can by providing a valuable service rather than pushing products.
If a formal referral program is not part of your sales process you are missing an wonderful opportunity to increase your customer base. Reply to this e-mail if you would like to learn more about the advantages of a quality referral program, how to build a lead generating referral program, or how to raise the bar on your referral program.
You must be clear on the types of customers you want to work with because clients will refer people just like themselves. I bet that twenty percent of your clients generate 80% of your profits and conversely most of your clients take up time, nickel-dime you, complain often and only constitute 20% of your revenue. You don’t need more of these time wasting, low margin and complaining customers.
My clients have found it useful to classify their clients into “A”, “B”, “C” and “D” categories, with “A” being the most desirable customer and “D” clients being either asked to leave or re-priced with a higher fee.
Don’t ask for referrals from “C” and “D” clients. Referrals that are useless or, worse yet, cause you headaches and consume your time are not what you’re after. Focus your referral program on your “A” and “B” clients. By attracting more As and Bs and eliminating Cs (either move them to Bs or move them out) and Ds (move them out) you’ll increase your average dollar sale and will have more time to find these desirous customers.
<strong>“Referrals come through who you are, not what you sell.” </strong><strong>Bill Gates</strong>
<h2><span style=”color: #2266a3;”>Sales Process: Must Have</span></h2>
It always surprises me when talking to business owners and sales leaders to learn that they have not created a standardized process for their sales teams to follow when trying to convert a prospect into a client. Are well constructed homes built without blueprints? No, because experience has shown that it’s far more efficient, economical and results in better built homes if the framers start banging nails with a plan to follow.
Yet large and small companies are equally guilty of trusting sales of their products or services to the individual preferences of their sales members. We like individualism, but in some cases consistent conformity to a proven process by all involved trumps the benefits of individualism. Why trust one of the most important aspects of your business to the individual preferences and whims of your sales team?
In speaking with these owners it’s apparent that they have never thought about developing a sales process. So, the purpose of this E-zine is to encourage the development and use of a sales process that is unique to your business.
<strong>What is a Sales Process?</strong> Like any process, a sales process identifies the step-by-step tasks to follow to achieve a desired outcome, in this case converting prospects into clients. Therefore, a sales process defines what steps must be followed in moving prospects through your sales pipeline.
For example, I have seen a sales process that involves 13 steps starting with the initial contact and culminating with the prospect becoming a client. The eleven steps in between are designed to enable the sales member to build rapport with the prospect as well as to advance the effort to the next step. Noted sales trainer Tom Hopkins says that “people buy on emotion and justify on logic”. Therefore, the better you are able to build rapport with the prospect and learn their challenges, the easier it will be to make the sale. The number of steps within a sales process will vary by company and industry, as does the sales cycle. By following a process that has been proven to be successful, you greatly reduce the possibility of a “no sale”.
<strong>Establish Timing:</strong> In addition to identifying the individual steps, you should establish the effective timing for each sequential task. Often the next step follows some action taken by the prospect, e.g. returning a questionnaire. Failing to follow a well designed sales process can often result in a lost sale. This is one of the advantages of a turnkey or franchise model. Entire processes, including sales, have been built and continually updated to reflect best practices.
<strong>Why Is a Sales Process So Important?</strong> There are many reasons but several of the more important include:
• Increasing, often significantly, the likelihood of converting leads into sales. Effective sales processes are built on best practices used by your sales team, leveraging the process used by the best sales people for the benefit of all sales team members.
• Establishing a step-by-step process that sales people consistently follow positively supports your brand…thus enabling prospects to associate organization and professionalism to your brand
• Tracking prospects location in the sales process allows you to identify those steps where prospects are dropping out (i.e. they are no longer prospects). This enables you to pinpoint and analyze the causes of the failure, and make the necessary corrections to ensure more prospects become clients.
<strong>How Do You Build a Sales Process?</strong> Start by asking your most successful sales people what steps they follow in finding and converting prospects to clients. If you are the sales team, build your process based upon what has worked in the past and balanced between building rapport and moving the sale along. I have worked with clients who become solely focused on building rapport with their prospects, thus unnecessarily lengthening their entire sales cycle.
Whether you have a sales team or you solely fulfill that function, you may want input from several Raving Fan clients who are very interested in seeing your business succeed.
Do not underestimate the importance of building your sales process. Don’t let potential large sales drop out of your pipeline because of a mistake that wouldn’t have happened had you devoted forethought to designing a well thought-out process. Also keep in mind that a sales process does no good if you and your sales team don’t follow it with 100% consistency.
I coach owners on proven strategies that help them grow their business by overcoming challenges and obstacles that impede growth. Find out more at <a href=”https://actioncoachatlanta.com//”>www.actioncoachatlanta.com</a>
<strong>Business Tip: Sample Sales Process</strong>
The following is a possible sales process that might work well for B2B non retail transactions. By customizing to the specifics of your product(s) or services(s) you add more value to your sales team members.
Step 1: Prospect – Make initial contact with suspect to assess interest and to schedule initial appointment.
Step 2: Follow-up – If an appointment is scheduled, within 24 hours of initial contact send an e-mail to prospect with brief information about you and your company.
Step 3: Research – Search for information about the company that will be useful on your appointment.
Step 4: Conduct initial appointment – Rely on research conducted prior to meeting to ask thought provoking questions about their needs and their current challenges.
Step 5: Immediately after appointment – On the same day as the meeting, send prospect handwritten note expressing appreciating for the time and their ideas and suggestions.
Step 6: Solutions meeting – Reaffirm your understanding of their needs and present your solution. Close the sale, if possible.
Step 7: Sign a new customer – Get client to sign necessary documents and lay-out implementation process
<strong>Sales Process Insight</strong>
“There should be no reason our familiar principles of quality and process engineering would not work in the sales process” (Joseph Juran, quality expert).
I love inspiring stories. One such inspirational teaching involves Erik Weihenmayer. On August 20, 2008 Eric completed his quest to climb the highest mountains on each of the seven continents (fewer than 100 climbers have accomplished this feat). Is that inspiring? Yes, but there’s more. He has scaled the shear 3,300 foot granite face of El Capital in Yosemite National Park and a 3,000 foot ice waterfall in the Himalayans. That one man could have done so much is inspiring. But what’s really inspiring is that Eric is blind. That’s right, blind.
Can you imagine? What tremendous courage. What unbelievable training he must have persevered. Here is a man who despite losing his vision at the early age of 13, didn’t let that detract him in his quest for high adventure. But the story isn’t finished. In May 2004 Erik returned to Tibet to teach mountaineering to a school of blind children and five months later lead them up the Rombuk Glacier on the north face of Mt. Everest. These teenagers reached 2,500 feet, higher than any team of blind people have stood in history.
An extraordinary individual? Yes, I would guess that Erik is an exceptional person. But we are all “wired” like Erik and can accomplish amazing achievements if we set goals for ourselves, have complete faith in our abilities, remain fervently optimistic / positive, and work very hard often against potentially stifling counter-forces. Another man dreamed of flying and devoted the majority of his life, while overcoming innumerable potential reasons to stop, to achieving his goal. He succeeded by becoming the first American in space.
We are all capable to achieving greatness, perhaps not as jaw-dropping as Erik’s or Alan Shepard’s accomplishments, but greatness nevertheless. So why don’t we? Why do we often limit ourselves? I suggest that it’s because most Americans don’t set lofty goals nor do they have a vision of what they want to achieve. So we let the prevailing negativity stifle our passion for achievement. Hall of Fame football coach Vince Lombardi wrote “the difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather a lack of will”.
As business owners and leaders, take your business to unimagined successes by creating a vision for your business that inspires employees, customers and suppliers. Set goals that are aligned with that vision and remain committed to achieving your envisioned success. Think creatively. Hire someone to coach you through challenges. Whatever you do don’t become one of those leaders who make excuses by blaming conditions for the poor results of their company. Take responsibility and ownership to overcome these obstacles. Can that be harder than climbing a 29,000 foot mountain without seeing where you’re walking? Commit to totally embracing the “can do” mindset and then do it.
Quote of the Issue
“Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.” President Calvin Coolidge
“The two most powerful warriors are patience and time.” Leo Tolstoy
I use the term “being above or below the line” to differentiate those individuals who are always taking responsibility, ownership and accountability for what happens from those whose favorite game is making excuses, denying, and casting blame. Always strive to be an above the line person (take ownership, responsibility and accountability). The economy is imposing difficulties on many business owners, but those who will succeed are those owners who are taking responsibility for growing their businesses rather than blaming the economy for the lack of growth in their business. Who are you associating with? Are your business associates and friends above or below the line people? If below, I suggest you look to find other associates who are above the line to spend time with. Spend more time with friends and business associates who take ownership, responsibility for outcomes. Their attitude will help you succeed.
Do you remember the scene in Alice in Wonderland where Alice comes upon a fork in the road and seeking advice from the Cheshire cat asks:
Alice: “Which road do I take?”
Cat: “Where do you want to go?”
Alice: “I don’t know.”
Cat: “Then, it doesn’t matter.”
The cat makes Alice seem silly for asking when she didn’t have an idea as to her destination. Yet, when I speak to many business owners and leaders they also don’t have a clearly defined destination of where they want their business to go…a vision. Running a business without knowing where you want it to go is like going on vacation without any thought as to where to go. Name me one Olympic athlete who didn’t have a dream of competing for a gold medal. You can’t. Their dream of reaching the Olympics (their destination) is what gets them through their rigorous training.
It is common for business owners to get into business without establishing a vision for the business 10 – 15 years hence. Without a clearly articulated destination they default control of the company’s future to external forces. Perhaps this is why I hear so many business owners complain about the adverse effects the economic downturn has had on their business. If you know where you want to go, you’ll navigate your way through any rough waters you may encounter. They don’t rest attainment of their destination on excuses and blame.
Successful owners and leaders have a future – orientation; they know what they want and are constantly focused on what is necessary to achieve what they want. They are clear on:
Employees are very interested in the ultimate destination of the business. Simon Sinek in his book “Start with Why” states “average companies give their people something to work on…the most innovative organizations give their people something to work towards.” To truly inspire your employees and to achieve the growth you want from your business, you must articulate your vision for the business.
Begin by closing your eyes and thinking about your personal life that your business must support. Reflect on your community and what size business would most benefit your neighbors. Then, look to your potential customers and design a business that maximizes value to them. I’ll be glad to speak with you if you would like help establishing your vision for your business and your personal life.
The other day I was speaking with a neighbor who complained about a recent experience at one of our favorite restaurants. My family also enjoys this restaurant for its friendly service and good food. So, I was surprised with my neighbor’s comments. Unfortunately my neighbor experienced poor food quality and a very surly waiter who kept my friends waiting for mildly warm entrees. The experience was so bad that my neighbor and his family have sworn not to go back.
As bad as the experience was, my friend didn’t complain to the manager, so undoubtedly other patrons who had the same waiter left with the same experience – lots of dissatisfied customers.
Hearing this story reminded me of something I read weeks before in Bill Cates’ book, “Get More Referrals Now”. In that well written book he cites the results of a couple studies on customer complaints. For example:
A study conducted by The Strategic Planning Institute of Cambridge PA found that “the average business never hears from 96% of its unhappy clients”.
So, most business owners don’t hear from customers who have a negative experience with their company. Presumably those unhappy customers just leave and never come back with the owner wondering what’s happening to repeat customers.
That same study also found that of the clients who complained, 70% will do business with the company again if the complaint is resolved. These findings are confirmed by the Technical Assistance Research Program Institute, which found that complainers are more likely to continue doing business with the company that upset them than non-complainers.
The message is clear; business owners can’t adopt the attitude that the absence of complaints signals customer satisfaction. As we’ve seen, most customers won’t complain, they just won’t come back. As bad as that is, the even bigger consequence is that while they won’t complain to the owner or manager, they will tell their friends (just as my neighbor did). You may also read about their experience on Yelp or Facebook or other social media vehicle.
The key is to solicit complaints. Yes, as backwards as that may seem you want to receive complaints. Don’t consider complaints as bad. They will help you save customer relationships if you respectfully listen to the complaint, don’t get defensive, and don’t take their complaints personally. Quickly fix the issue with a smile and retain your customer. Hide your head in the sand for fear of hearing complaints and you’ll lose customers.
So, what are you doing to solicit honest feedback from your customers? Are you talking to them about their experience with your company…sincerely engaging with them to learn their thoughts? Sincerity is key. If you are just asking about their experience with little intent of taking action, it will be apparent and will do little to convey the message that you care.
Don’t wait. Take action. Begin soliciting feedback from customers. Don’t be afraid of what you might learn…view their comments as insights that will help you grow your business.
Ever heard of the Cricket Theory? I hadn’t until a couple years ago when I had lunch with Pam Nolen President of Nolen & Associates. Pam and her team were at a weekend retreat outside Atlanta during a hot sultry Georgia weekend. In the darkest moments of the evening the crickets were so loud they kept a member of her team awake. All he could talk about the following morning was how loud the crickets were. The theory says, “the more noise you make when times are dark, the better remembered you will be when it is light again.”
The racket made by the crickets was all the more noticeable because there were no competing noises. The lesson here is that when your competitors cut-back on their marketing investment due to a slowing economy, that’s a great opportunity for you to increase your chirping (advertising). The economic darkness will give way to light, and you’ll be the company remembered, not those whose marketing was absent.
I have spoken with many business owners who cut their marketing budget when the economy began slowing down. People were still buying, though spending less, but not from those companies who cut back on their marketing. Jeremy Gutsche in his book “Exploiting Chaos” provides a wonderful example of the power of the Cricket Theory. Prior to the Great Depression Post Cereal’s Grape-Nuts was the dominate cereal in the United States. As the Depression deepened, Post began cutting back on its marketing budget just at the time that Kellogg Company began doubling their budget. Kellogg successfully introduced the slogan “Snap Crackle and Pop” and “you’ll feel better” and sales began to grow, at the expense of Grape-Nuts. Gutsche concludes that “the upbeat impact of crisis is that competitors become mediocre and the ambitious find ways to grow.”
If you have curtailed your marketing waiting for the economy to return to strong growth, you risk becoming insignificant to your competitors, who like crickets, have been making noise even during the toughest of times. You don’t need to become overly aggressive in promoting your products/services, but you do need to begin opening up the budget and spending dollars in well-thought out marketing campaigns. It’s essential that you have absolute clarity around your target markets, their frustrations with problems that you help them overcome, what your competitors are doing, and a compelling message that causes your prospective customer to take action.
Don’t wait. Be proactive and get noticed like those chirping crickets.
I was at a networking event the other day and met someone who immediately launched into a product spiel. How many people do you suppose go to events looking to buy? None would be my answer. He is not alone in thinking that selling is about pushing.
Ever tried selling something to someone who didn’t want to buy? Even the best sales people are challenged in this scenario. Compare that situation to the ease of selling when the buyer wants to buy….much easier. People don’t like to be sold to, but they do enjoy buying.
This simple truth confronts many traditional sales techniques that rely on gimmicks and closing sequences to “trick” the buyer into buying something they really don’t want. Practitioners of these product-push techniques still abound in abundance. They’re the ones who think that you will buy once you hear about their product. They are selling, but I’m not buying. Their motives are solely focused on making a sale and not on adding value to the prospective buyer (require seller understand buyer’s needs).
Replace the product push technique with one based on problem solving…one that seeks to understand how you can add value to help your prospective buyer solve a problem. Though simple sounding, this approach requires a completely different approach to sales – asking questions and listening vs. telling. You must ask quality questions focused on understanding the challenges faced by the other person and the impact those challenges have on her business.
Your prospective customer will engage with you if you are genuinely interested in assessing how you can help the other person. Trying to pass-off sincerity when you don’t really care quickly becomes apparent to the prospective buyer, and they will stop listening and won’t buy.
So if asking questions is key, what types of questions are best to ask? Eighty percent of the buying motive is based on emotion with the remaining 20% being on logic. I recently bought a suit not primarily because of the material or the color but because it felt good when I tried it on.
It has been estimated that 35% of Americans are primarily left-brainers – they are logic oriented. But as we’ve said most of the buying motive is built on emotions. So for many of us selling to people’s emotions is a challenge; it requires that we expand our comfort zone. For example, I used to enjoy digging into the details of a prospective client’s account receivables rather than querying on the impact the raising receivables was having on the business and the employees.
Ask questions such as:
These are great questions to get at your prospective customer’s emotions.
SO, stop pushing product and recognize that to sell becomes so much easier when you understand the challenges faced by your prospective customer. Get to know them and their issues.
Many business owners consider marketing to be those activities associated with promoting their business to prospective customers. To them growth is fueled by continually enticing new buyers to purchase product or services. They believe that once an individual or business buys they become customers and thus the role of marketing has been met. Thus upwards of 90 – 95% of marketing budgets are spent on finding new customers.
Let’s explore a different approach. Yes, new customer acquisition is critical to growing a business, but which approach is more likely to generate interest from a prospective client:
I hope you selected option #4. Word of mouth referrals from family and trusted acquaintances is far more likely to excite prospective customers to check you out. Typically people don’t pass along referrals unless the service they receive is exceptional. Therein lies the problem with those owners who focus the vast majority of their marketing dollars and attention on finding new clients…they don’t invest money in continually exciting existing customers. They spend little time and money focused on creating exceptional service and those WOW moments that people talk about.
What would be the impact if owners re-allocated their marketing budget from 90 – 95% focused on finding new customers, to 65% on finding new, and 35% on building exceptional programs that create excitement amongst customers? Do Nordstrom’s, Ritz Carlton, Zappos come to mind? Create excitement amongst your customers and they will actively promote your business to their friends and acquaintances, and become customers themselves for life.
Consider the story of WestJet Airlines. Founded in 1996, this Canadian airline adopted the mantra that “just because you pay less for your flight doesn’t mean you should get less” (website). The company’s dramatic growth (now 9,700 employees and 88 destinations) is attributable to their approach of caring for the lives of their customers. Talk about delivering a huge WOW factor, check out this video http://www.youtube.com/watch?v=zIEIvi2MuEk on You Tube.
Do you think these disbelieving customers will fly any other airline to a WestJet destination? How many people do you think these excited customers told about their experience? Was WestJet’s investment in these gifts worthwhile? Heck yes. I’m guessing their return will be many hundreds times more in new profits from this single event.
Think about your business. What can you do to create excitement and WOW amongst your customers? Don’t hesitate to shift marketing dollars away from traditional marketing to create WOW. If you are interested in brainstorming ideas on adding WOW to your customers, give me a call.
Wishing you all the best.
Certified Business Coach
How many times have you heard people say “I don’t have enough time to do …” or “If only I could find the time to do …” Or “I am too busy to do …” Perhaps the person you heard saying these or similar things is the same person who stares back at you every morning in the bathroom mirror. Well, it is time to stop blaming time! Time is an absolute-there are 24 hours (1440 minutes, 86,400 seconds) in a day and that will never change. We cannot “manage” time. What we can manage is what we do during the next 60 minutes.
How we use time is one of the great determinants of how successful we are both as business owners and as individuals. Everyone from Bill Gates to the small business ownerr is given the same amount of time each day, 24 hours. Think of it like the auto races where they make all the drivers drive identically built and tuned race cars. The winner is then determined not by who has the fastest car but who can drive that identical car the best. Similarly in life the “winners” are those who learn how to drive their use of time the best.
So how do you take control of your time?
1. Accept that there is no such thing as too much or too little time. There is enough time available for you to be successful-others have been successful and they had no more access to time than you do. Take ownership of your situation. Be accountable for your results and responsible for your actions.
2. Decide what you want to accomplish. What do you want to be “successful” at? To some it may mean making a million dollars, to others it may mean being healthier while others may be looking to have better relationships with their family and friends. This is your goal. You must also understand the benefits to you of achieving the goal -how will it make you feel when you achieve it. Both the goal and your “why” must be written down with a timeframe.
3. Once you have decided the goal and your “why”, you must now determine the activities that will be necessary for you to accomplish that goal. What do I have to do? What time commitment will I make? What will I need to adjust/sacrifice/reduce/delegate in order to have the time to do the activities identified? Remember if it was easy everyone, including you would have already done it. What separates the successful users of time from the unsuccessful ones is the discipline and determination to obtain their goals no matter what. Winners never give up and they never quit on themselves.
4. Understand that life and business are about choices. You choose how you will spend your time- on what activities and how much on each. This is a marathon, not a sprint. Being successful in many different areas takes effort and time. Success comes from laser-like focus on one or two goals. Once they are accomplished you move on to the next set of goals and focus on those.
5. Prepare your calendar each week by creating “appointments” to do the activities that you have identified. These are defaulted into your calendar before anything else. Treat these as if the appointment was with your most important customer. Would you easily change your Monday 2-3pm “meeting” just because someone asked for that time slot? No, you would negotiate- “I am booked at that time. I can see you at either 1pm or after 3pm, which would work for you?”
6. Be militant about your schedule. If you don’t care how your time is being spent, why should anyone else? Learn to say “No”. In Stephen Covey’s book “7 Habits of Highly Effective People” he breaks activities into 4 categories- Not Important/Not Urgent, Urgent/Not Important, Urgent/Important and Not Urgent/Important. The danger for most people is the Urgent/Not Important category. This is when we are responding to other people’s urgencies, however the activity does not move us toward OUR goal- by definition it is Not Important. Beware of the time and effort devoted to those tasks. Conduct your own time usage study. Every minute that you can divert from not important categories to the important categories will move you closer to your goal.
7. Review your successes/challenges in meeting your schedule each week and adjust where necessary. Be honest with yourself and continually reinforce your “Why” – what are you trying to accomplish and how important is that to you.
8. Find an accountability partner or mentor to help keep you on track. We can all use help every now and then- it is a strength to admit this, not a weakness.
In summary, stop blaming time, take ownership of your time and commit to the discipline necessary to win the race by being the best “driver” of time you can be.