To Groupon or Not To Groupon That Is The Question

Image via Wikipedia

Groupon has been, and indeed still is, a business phenomenon. Its growth across the US has been explosive. It is now growing rapidly in the UK. Its message is to use the power of groups to get big discounts purchases of goods and services. In reality it is a careful repackaging of the discount  Coupon.  

For those of you who may be unfamiliar with the this company Groupon's business model is "group coupons": If enough people sign up, the deal "tips" into action (because Groupon is so large, and has so many followers almost all deals now tip).  Groupon now has more than 50 million subscribers and aims for 150 million by year-end. Its revenues—about half the value of total transactions—were an estimated $760 million last year and should hit $2 billion or more this year. In addition there are a growing number of "Groupon" like competitors springing up. The market for this type of promotion, currently at least, is huge.

Many companies have benefited from Groupon style promotions but it does present longer term issues for business and particularly smaller businesses mainly because it is purely a price based promotion. Typically Groupon will want you to provide a 50% discount on normal price as a promotion. Groupon will then take 50% of that discounted figure. So a £10 meal nets the merchant £2.50.  The objective is of course to encourage the Groupon diners to come back for a full price deal. The evidence for this is however patchy. A recent study indicates a growing number of "Groupon Customers" who only frequent establishments featuring Groupon deals and will only spend the minimum required. Still with those businesses with high fixed costs such as Restaurants and Spa's, getting additional customers in on slow days in the hope of converting them to full paying customers is relatively low cost marketing approach.

The longer term issue as I indicated earlier is that it is purely a price based promotion which will lead to a reduction in brand loyalty as customers recognise that they can return as new on the Groupon discount.  Leading to a steady fall in the number of true new customers, matched by an increase in the number existing full price customers converting to Groupon customers to obtain the deep discounts.

Evidence is appearing that Groupon is excellent as a tactical marketing ploy, but increasing repetition could have a significant negative impact on a businesses longer term profitability. 

For the smaller business a very careful analysis of the true cost of using a Groupon style promotion needs to be undertaken as getting it wrong could prove very damaging for your business

Related articles

• Does Groupon Erode Price And Is Groupon Right For Your Small Business? (toddstechtalk.wordpress.com)
• Groupon Down 30% (coverboom.com)
• Is Groupon a tool for price discrimination (iterativepath.wordpress.com)
• Why Groupon May Not Make Strategic Sense for Your Business (socialmediaexplorer.com)

Exigent Consulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business.

Maximising Repeat Sales Is Good For Your Business- Real World Data

I dont often use information from clients but in this case I have made an exception and I am not given away any confidential information. The reason I am using this this information because it perfectly illustrates the old adage that it is better and cheaper to look after your customers, than to continually chase new customer sales. More importantly it puts it more elegantly than I ever could and this is a "real world" example from an online retailer, which is why such detailed information is available. I am very grateful to my client to be allowed to use this information.

Hi Laurence,

Following on from our meeting, I've calculated some costs for acquiring new customers as well as some stats on new vs repeat customers which makes interesting reading as below.It would seem a disproportionate amount of time and expense is focused on gaining new customers, when clearly there is greater advantage in targeting existing customers.

New visitors = 78% (of total visits), Revenue Share = 53% (of total revenue)

Repeat visitors = 22%, Revenue Share = 47%, Average order value = +5%

Cost of acquiring new customers = £8.60 per customer

Results: 47% of the revenue comes from 22% of visitors (repeat) who also spend more per order. Acquiring new customers is relatively expensive compared to marketing to existing customers.

Conclusion: Focus on existing customers more and/or increase number of repeat customers.

Another e-tailer client of mine struggles to build profits despite rapid turnover increase because of their very low repeat order rate; in their case 9%. The moral of this story is don't neglect your customers. They are your best source of revenue and they already know and like the products or services you provide. 

Exigent Consulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business.

Not Understanding Your Obligations to Staff Will Damage Your Pocket

This post is about the importance of understanding the legal obligations a business owner has to his staff. It also illustrates that for Health and Safety and Employment Law there is little room for manoeuvre if the owner doesn’t get it exactly right.

The circumstances relate to a client of mine who ran a retail business. He had, as a result of an incident with a client, cause to disciple a member of staff which subsequently led to her dismissal. I should say at the point that the said staff member concerned was pregnant and we were all acutely aware that processes, procedures and actions had to be transparent and obviously above board. As I might add you should be with any disciplinary procedure. It is however well understood that with a pregnant lady involved additional close scrutiny is placed on the process by the tribunal and legal systems.

Following the dismissal an appeal process was followed and the decision upheld. The person concerned then sought to take the company to an industrial tribunal for unfair dismissal for discrimination because she was pregnant.  The twist came on receipt of the claim. It was not only for unfair dismissal but for breach of health and safety because no formal risk assessment was undertaken by management once she had informed them of her condition. This issue had never been raised by the employee at any time through the process. Although informal discussions and agreement took place legally it doesn’t appear to make a lot of difference, although it might provide some mitigation, so rather unexpectedly my client has moved from having what he and his advisers considered a solid defence to a position where he might expect a 4 figure fine.

Whatever the rights and wrongs of this case and indeed the fairness of the situation it is crystal clear that owners must be absolutely on top of their legal obligations to their staff. This is a significant investment for many small businesses but as this owner found out not doing it could be more expensive still.

Exigent Consulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business.

Do You Get Business From Social Networking - UK Poll Results

Do You Get Business From Social Networking

I have been operating in the social marketing world for over 2 years now and during that time there has been a dichotomy of opinion about the merits of social networking as a means of obtaining business. There are the well know stories from the likes of Dell, Zappo's  etc, but I wanted to see how Mr Small Business UK was fairing. So I put up a poll to find out.

I have been running this poll, aimed at UK based social networking activists to try to get an idea of how successful companies or individuals are at getting businesses using social media. My poll was posted on my blog and I was regularly referring to it via twitter and facebook. Over 3 months I got nearly 200 responses a small number I admit, but large enough to draw some conclusions. Broadly its 50/50. 50% are getting some business and 50% aren't. In order to to separate purely social users or those with no interest in business returns I separated the No's into No and No but I'd Like Too. It was this latter category that held the big surprise, 43% of people who'd like to get business from social networking are not. This left me wondering what was the reason for this, was it the fact that people hadn't been using it long enough to get results or was social networking a less productive marking strategy than has been touted.

To try to make sense of the results and to get a bigger sample I've put up a similar poll but made it more generic. That is relevant to social networking participants outside the UK. Hopeful I can have some more interesting results to report soon.

Related articles

• Social Networking To Play Bigger Role In 2011 (socialnetworkingwatch.com)
• Not getting recruited via social networking? Don't worry, you're not alone. (socialmediatoday.com)

Exigent Consulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business.

4 Simple Steps to Creating a 1 Page Business Plan

Image via Wikipedia

It’s that time of year again. No not Christmas, but a time when businesses should be measuring their performance in 2010 and putting in place plans for 2011. I hesitate at this point to bang on again about the need for planning but in my experience e

ven a simple plan makes a difference. Its not the plan itself, but the thought processes we have to go through to get there which is so valuable.  If you are a business owner then before putting together any kind of business plan you need to get your personal goals sorted before you start on the business goals. It’s stating the obvious but if you want to reduce your work down to 3 days a week, there is no point in setting challenging growth targets for the business.

That aside what are the 4 steps?

Step 1 work out your overall business goals for 2011, they could for example be headline revenue or profit numbers, market recognition, market share or finding a full time manager. Don’t set too many of these 2 or 3 is sufficient. Having done that, you now have a baseline on which to focus.

Step 2 is to identify the non-financial Key Performance Goals, ideally no more than 4 or 5, which need to be achieved to help achieve your overall goal(s). They might be: staff morale, attendance performance, expanding a range of products, identifying other profitable niches.

Step 3 is to identify cost reduction goals. These might include for example, reduction in debtor days, or dead stock, or seeking early payment discounts. These goals are there to balance the operations of the business and not to let the drive for revenue to get out of hand. They are also important in supporting profit centred objectives.

Lastly Step 4 which is to identify revenue objectives. This is the easiest to identify for most people, the difficulty of course is to identify the 4 or 5 which are the most relevant. It should be clear t

o everyone that having too many goals will only distract the business because it will lose focus on what is really important.

Image via WikipediaHaving completed those steps you have defined and clarified your goals and the key steps you need to achieve to get to your overall goals. This is not a plan to put in your bottom draw and forget, but something to use to review monthly performance with your staff. Its simplicity helps you focus on the key issues to keep conversations focused on what is important. You can also break the plan down into its constituent parts and use it for different parts of the business. So typically revenue objectives can be given to sales, cost goals to finance and administration and so on.  This simple plan has transformed the success of businesses who’ve used it so grab the opportunity and get a plan for 2011 now.

Exigent Consulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business.

Are You Worried That Your Business Will Fail?

For my last post of the year I thought I'd have another Guest blog. This is more as a help to an old friend who has recently published a book entitled “50 Essential Business Advice Tips To Help Prevent Your Business From Failing” This blog explains the thinking behind his book. You can get it as a free download and I'd encourage you to do so.

A happy Christmas to everyone and a prosperous 2011

Kind Regards

Laurence Ainsworth

-----------------------------------------------------------------------------------------------------------------------------------

There are over 4.5 million businesses in the UK and every year 400,000 are formed, with nearly as many failing. Most businesses stay small or plateau at a certain turnover without being able to grow - probably because business owners are working ‘in’ the business rather than ‘on’ it; making tactical day to day decisions rather than strategic ones.

No one wants to fail in business; however statistics show that 1 in 3 businesses fail in the first year of business and a further 50% of the remainder don’t progress after the third year.

So what distinguishes a successful business?

How about the following?:

●     Knowing your strengths and weaknesses

●     Having targets in place

●     A business plan covering all aspects of the business

●     Effective targets and measurements in place

●     Ensuring that product and service offerings meet the needs of the market

●     Ability to create a competitive edge

●     Efficient, clear and consistent business processes

●     Inspired and driven leadership

Whatever stage your business is at, you could probably benefit by getting back to basics and reviewing all aspects of your business to identify what is missing.

Consider that your business is covered by the following ‘pillars’ of business: strategy, finance, sales, marketing, operations, resources and personal issues - if you could look at each of these in turn and identify what changes are required to ensure the future success of your business, this could form the basis of a business plan for your business.

Once you  have identified those key areas in each ‘pillar’ that need addressing, the challenge is then to take action and improve the way that your business operates. The important thing here is to prioritise which actions to take from the list generated - what needs to be done ‘now’ and what can be done ‘next’? Then who is going to do what, by when and what is an indicator that this step has been achieved.

Finally put some appropriate targets and measures in place to ensure that this simple business plan is moving forward and impacting the profit and performance of your business.....leading to success not failure.

To help you with this task, a book has recently been compiled by Paul Green - “50 Essential Business Advice Tips To Help Prevent Your Business From Failing”. Available as a free download here: http://www.paulgreen.biz/success_tips.htm 

Why Web 3.0 Marketing Isn’t the Silver Bullet

Image via Wikipedia

You cant get to the top using the wrong tools

Almost every week I see some sort of marketing splurge about how cold calling is dead and how “web 2.0 or even 3.0” is the way to go. The latest and the reason for this article was the headline “Increase Cold Calling Success by 6-8 Hundred Percent” It’s message was by using Web 3.0 (can’t wait for Web 4.0) and social media best practises any salesman can increase their success by 6-8 Hundred Percent. At this point a stream of abuse and derision was about to leave my lips. However, I paused mainly in respect of those of a tender age and a delicate disposition, but realised that the writer had simply missed the point and was looking at the problem the wrong way, that is from the sellers perspective not the buyers.

I have recently been involved in selling a service to CEO, FD’s and Company Secretaries of the top 1000 businesses in the UK. What is abundantly clear is that using Web anything and social media as a way of contacting my suspects, is as likely to succeed in delivering orders as running backwards up Everest is likely to get you to the summit without falling off. The reason, simple, most senior executives of organisations of that size don’t use or need social media and many are surprisingly unskilled in the use of the internet. This is not only a function of their age but also the fact that they have been successful in establishing their own network using traditional face to face techniques. To them online techniques are irrelevant.

So what did work? Well cold calling, once we had made contact we could explain how our service was of benefit. We were able to generate a steady stream of meetings and sales. Why was that? After all according to many pundits call calling is interrupt driven and doesn’t develop the buyer seller relationship.  All of this may be true but for our market it (cold calling) was a communications method they understood and could relate too, consequently it was effective.

My point is that the mix of marketing and sales processes required to be successful changes in every situation. Your marketing mix must reflect the expectations of your targets. Whilst useful, web 3.0 or any other sub-variant of marketing is not a panacea. The hype that social networking changes everything is just plain wrong, it doesn’t replace common sense and it isn’t a Silver Bullet, its just another arrow in the thoughtful marketers armoury. 

Exigent Consulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business.

Taking Your Business to the Gym – Resolving Decision Overload

Image via Wikipedia

Decision overload condition, as I have described in an earlier article Recognising Decision Overload is simply where the business owner becomes so swamped by the amount of decisions and tasks he has to complete that it stops the business in its tracks.  This condition is often created by the business owner inadvertently training their staff that w

hen they come up against a problem, their best and/or safest course of action is not to make a decision, but, refer it to the business owner.

Having created, albeit unknowingly, this vicious circle the question is how do we create a virtuous circle?

The first step is to understand why business owners end up there in the first place. Often it’s because of the business owners lack of understanding that he shouldn’t attempt provide solutions for every problem, and second decision making should be “Fit for Purpose” and should not involve “gold plating the bathroom taps”. That is, don’t use a £100,000 a year man to make decisions on issues that can easily be made by a person paid £20,000 a year.

So how can this be achieved? The first step is to stop enforcing the vicious circle. Allow staff to make decisions. So when a member of staff says “I’ve got this problem; what do I do?” don’t rush to tell them but respond with “what do you think you should do?” Initially this will be met by a blank stare or even a look of amazement, but, fear not, this is the most important step. You could follow this up with  “why don’t you go away and think about it for a bit and come back with some ideas and we can talk about which one is best”

Initially it is going to make things a little harder and slow down overall decision making but it is critical to allowing you to work your way out of a job and to allow your staff to fill it. Once over the initial shock you’ll be surprised how quickly some of your staff will learn to take decisions. This is a difficult area for many business owners as firstly; they are uncomfortable delegators and secondly; are perfectionists (often confused with control freaks, although they can be that too) and expect that staff will make all the same decisions as they would. This won’t happen they will make more mistakes than you the owner; they may not be quite as good decisions but the additional time gained by the business owner in delegating these decisions will more than make up for these additional interventions.

Image by West Virginia Blue via FlickrThis simple act of delegation and management can be enormously liberating. I can quote a number of occasions where just applying this process has transformed the performance of small businesses. It has freed the owner from almost unbearable stress and allowed him to concentrate on issues more deserving of his attention and transformed employee from mere jobsworths’ to committed and hugely valuable assets.

Exigent Consulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business.

How to Build a Sustainable Sales Process—without a Rock Star

Occasionally I have guest blogs on this site when I think the article is interesting and more importantly relevant to owner managed businesses. I have been recently running articles on structuring sales processes and building effective sales pipeline reporting tools. I read this article from Barbara Weaver Smith on her mission to help small businesses sell to big companies - "to" as they say "land whales"

Laurence Ainsworth

Exigent Consulting

---------------------------------------------------------------------

Image via WikipediaPundits  are calling it “sales 2.0” or “the new world of sales.”  Whatever you call it, the story line is the same—Elvis is dead.  If you are going to make bigger sales to bigger customers, a rock star salesperson is not the way to go.

Chances are you built your company selling to companies with which you had some things in common—same region, shared friendships and associations,  maybe even similar size and years in business.  Almost like friends and family.

But to take your company to the next level, you need to venture out into new, unfamiliar territory, where you will meet tougher customers and much tougher competition.  To do that, you need a sustainable sales process  that rests on the performance of a cross-functional team, not a rock star.

Here’s why.

• ·     Big companies (we call them “whales”) are afraid to do business with small companies.  They are afraid you can’t deliver, that you will run out of capital, that you don’t understand how big companies work, and that your operations and customer service teams are just not sophisticated enough.  No matter how much they want your innovative solution, they won’t buy it unless you alleviate all of those fears.  And your sales person can’t do that!  It will require participation of key subject matter experts, deeply involved in the sales process.

• ·     The buyers in big companies (end users or purchasing agents) will never lose their jobs over a conventional choice of vendor.  But they can definitely lose their jobs if they award a big contract to an unknown provider and the project tanks.  You will have to win them over with the strength—breadth and depth—of your team.

• ·     The corporate environment is getting much more stringent about the nature of relationships between their buyers and all sellers.  They want to increase the distance between buyers and sellers and  reduce familiarity.  They want to avoid even the appearance of collusion or any improper value exchange.  Your rock star salesperson, charismatic hail-fellow-well-met, is likely to have serious difficulty in making this transition.

So, what is the alternative?  Go from a solo act to an orchestra.  You need to develop a  disciplined, systematic sales process, overseen by senior management, in which each pursuit of a large sale is directed by a skilled sales person who is not a rock star but a conductor guiding the performance of a cross-functional team.  

The Whale Hunters Process™ advocates a plan of three stages—Scouting, Hunting, and Harvesting.  The plan is designed to get your company positioned to sell deals at 10 to 20 times your current average account

The “scout” stage involves creating a Target Filter—a profile of your ideal customer—r researching the most promising companies, watching their behavior over time, and calling on them when they may have a propensity to buy.

In the “hunt” stage, train key subject matter experts to participate in the sale and develop a systematic process of discovery and disclosure that becomes your core sales process.

The “harvest” stage becomes important after you land a big account, but you can’t wait until them to implement best practices for bringing a new account on board.  Be sure your team is as ready to deliver the services as it is to make the sale.

By following these steps, you will develop a disciplined process for marketing,  sales, and delivery that will give you a considerable competitive advantage.  It will not accommodate a rock star but will elevate the performance of ordinary people, well trained and seriously committed to the growth of your company.

You will have a process that you can measure, replicate, improve, scale, and teach to a stream of new hires.

Barbara Weaver Smith

October 2010

The Whale Hunters is a strategic sales coaching company that helps small businesses achieve explosive growth by landing bigger deals with bigger customers.   The question is how can small businesses grow at a rate that will show results sooner rather than later?  That’s where The Whale Hunters comes in – and we invite you to register for a free account which gives you access to the wealth of information on the new expanded Whale Hunters website– http://www.thewhalehunters.com - Barbara Weaver Smith founder The Whale Hunters

Taking Your Business to the Gym – Recognising Decision Overload

The activity that most business owners find the most difficult is managing staff in particular delegating responsibility.  Firstly owners need to understand that the most if not all their staff see working for a living as a way of earning a living at not as most business owners see it as a calling. They are not going to work long hours of overtime for nothing or commit wholly to a business in which they don’t have a stake; nonetheless they have skills which are often overlooked by Owners. It is also fair to say at this point that most independent businesses owners are not professional managers and have no experience of managing people.

A typical scenario is asking your staff to undertake a task and then deciding that they’re not doing the way you’d do it and either take it back entirely or get so involved with it that the staff member feels like you now own it.  If this happens regularly then you the business owner are making the situation work by inadvertently training his staff to recognise that he is the solution to any problem. After all why make a decision on something that the boss may disagree with – better, don’t make a decision at all and pass it back to the boss. The result, the business owner gets more overloaded and ends up making decisions on all sorts of matters in which the business owner shouldn’t be involved. The result is increasing frustration on behalf of the owner who’s under pressure and now on a shorter fuse leading to more reinforcement to the staff that their best course of action is to leave it to the boss diverting yet more decisions and creating a paralysis in the business. This is what I call the decision overload condition, where simply the business owner becomes so swamped by the amount of decisions and tasks he has to complete that it stops the business in its tracks.  

This condition is surprisingly common in owner managed businesses, and is often allowed to develop because owners are interested in progressing the business, well naturally and that because when they started they did everything they lose the understanding of the relationship between the job or activity and the market price for a person doing that job. By way of an example I was with a company owner who insisted on doing the route planning for his collection vehicles, his argument was that his staff couldn’t do it as well as he did.   My response was to ask him would he pay somebody a salary similar to his (it was high five figures) to run route planning.

 “Don’t be silly” he said “of course not I’d only pay about £25,000.”

“Then why” I asked “are you insisting on doing that job when you pay yourself almost 4 times the going rate. Doesn’t that mean your expectations are based on someone massively over qualified for the job at hand? Its no wonder you’re so overworked, what other jobs do you do that your over-qualified for?

You know I could almost hear the clank as the penny dropped.

Like an addiction, acceptance is the first step to a cure, but this is the subject of another article.

Exigent Consulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business.

How to Build a Structured Sales Pipeline

Following on from my earlier article “Developing a structured pipeline – The Issues” this article describes how to build the all too elusive, structured pipeline.

So to recap: what should a structured pipeline report aim to achieve?

Firstly, it should enable you to view each sale in a consistent manner.

Second, it should clearly identify if a sales opportunity has progressed or stagnated.

Thirdly, it should contained a factoring index which will more accurately reflect the true value of the pipeline

Fourthly, it should provide sales and/or company management with a consistent and reliable prediction of business that should be closed in the forthcoming period.

Fifth, it should be simple and relatively easy to complete (salespeople as a breed are poor at filling in reports).

Sixth, it should be focused on numbers rather than opinion.

To build a consistent view of each sales opportunity take the sales cycle in your business and break it down into discrete milestones.

So for example,

Milestone 1 is a lead or an enquiry who has identified desire to purchase your product or service.

Milestone 2 to progress the sale you need to demonstrate the product

Milestone 3 they have the budget to pay for your product

Milestone 4 you have submitted a proposal

Milestone 5 you’re on the shortlist

Milestone 6 you have a verbal order

Milestone 7 you have a written order.

The next step is to put percentages against these milestones for example, 1) 5%, 2)10%, 3) 20%, 4)25%, 5) 50%, 6) 90%, 7)100%. This approach allows you to build a factored pipeline i.e. the value of the opportunity time the percentage milestone. Don’t get hung up about whether the percentages should be this or that number what we are building is something that will give you a consistent view across all your sales opportunities and not something which reflects the precise chance of winning per opportunity. The progress of the sale can be shown in any way you like; this could be as a table, a graph, or a set of traffic light colours going from red to green as you move along the sales process. Other information you need is simple the prospect name, if it is a new or existing customer, the value of the opportunity and a projected win date.

By constructing what I have described you’ve gone a long way to getting a grip on your sales performance, you’ve now turned sales reporting into a set of numbers which over time you can analyse. For example you’ll see which sales have stagnated because they wont have moved along the pipeline for a period of time, you’ll be able to identify how overoptimistic you sales force are by comparing the projected win date with the actual win date. Most commonly this is between 3-6 months.

Now that you have a factored pipeline you can start to build up metrics on the relationship between the size of your pipeline and your monthly sales. It also now enables you to look forward because as your factored pipeline rises and falls to will your sales, thus you can act early as soon as you see your pipeline numbers dip.

You’re now at last starting to get some sensible numbers to enable you to plan your business and you have moved from a jolly nice chat to a shorter focused and more effective sales meeting. As the Meerkat would say “simples”.

Exigent Consulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business.

Developing a structured approach to sales pipelines - The Issues

Of all the activities in the sales area this seems to be the most difficult for businesses to implement. I have to say I’m at a loss to understand why. Having consulted with organisations from very small to large, there appears to be a blind spot where building a structured sales pipeline is concerned. So what is a structured pipeline and why is it important?

Let’s go back a step and see what most commonly happens with pipeline reporting.

For many businesses, particularly small companies, it’s simply nonexistent which leaves them hopelessly exposed when business hits a downturn. They have no idea what shape they’re in or, more importantly, be able to quantify what sales they need to get back on an even keel, how much activity needs to take place to generate the requisite sales, or the length of time it takes to get from first contact to order. This lack of knowledge is a major contributor to why many smaller businesses fail.

Very many companies have sales reporting and even have pipeline reporting but these are often completely ineffective. They tend to be unstructured and soon degenerate into “a jolly nice chat” allowing sales people to waffle and produce lots of information which is partial, biased and is ultimately there to justify the salesman’s position whilst at the same time giving the sales(or company) management little useful information. I can’t tell you how many long, tedious and ultimately pointless sales meeting I’ve had to endure on a client’s behalf. Many lasting 3-4 hours when they could and should last about 1 hour. What you get is a long narrative from each sales person talking about who they’ve seen, why it was an interesting and/or important prospect and then at the end the sad unexpected of surprising reason why this company is no longer a prospect or at least why they won’t be making a decision to buy this month. Worse still each in turn feels it necessary to talk for longer about his or her prospects than the preceding salesperson.

Consequently the pipeline is just as unstructured with a loose general format being used which allows the salespeople to view their pipeline using their own judgement rather than a standardised approach. Typically under these circumstances the quoted pipeline is huge and the amount of business closed is a very small percent (less than 10) of the total. This is made worse because there is little or no correlation between the size of the pipeline and the sales closed thus making very difficult to predict future revenue streams.

So what should a structured pipeline report aim to achieve?

Firstly, it should enable you to view each sale in a consistent manner.

Second, it should clearly identify if a sales opportunity has progressed or stagnated.

Thirdly, it should contained a factoring index which will more accurately reflect the true value of the pipeline

Fourthly, it should provide sales and/or company management with a consistent and reliable prediction of business that should be closed in the forthcoming period.

Fifth, it should be simple and relatively easy to complete (salespeople as a breed are poor at filling in reports).

Sixth, it should be focused on numbers rather than opinions.
A subsequent article will give you a simple format in which to achieve all this so making your sales function more effective

Exigent Consulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business.

Are you Working for a Madman?

As the owner of a small business you are responsible for everything. You will have discovered by now that running a business is a lot more complicated than you first thought and producing your product is only a small part of running a business.

Typically businesses are started for two reasons firstly because the owner was made redundant  and secondly because the you thought you could do better than your current owner in making it, delivering it  or providing the service.

Now that you've started your new business you really start to get stuck in. You've got to find orders so you go out and sell, process the orders arrange to have you product and or service made and delivered. Next you've got to arrange to invoice for it the to make sure you get paid, chase debt, provide information to the authorities on profit and earnings; take on and manage staff (never easy), set manage and review the company strategy. To keep the company successful you must keep this cycle moving 

Pretty soon you're actively involved in all these areas, yes you've employed staff but they don't seem to have the drive or the enthusiasm to get it all done, so you cover.

You've had your business now for 2-3 years its bigger but your working harder and harder to keep on top of things, your get a reasonable salary but probably if you dare calculate it you are the lowest hourly paid in the company. You get less time off and your working weekends.

If this looks like you -  then you're working for a madman: and the madman is you!

So how do you bring back sanity?

Well the first thing to do is to find a way to change “insanity” as they say “is doing the same thing today as you did yesterday but expecting different results”

Change is what is required and it starts with you.

So the first thing to do is to put some clear structure down for your business and do some business planning. Next identify which functions you are best suited to best and give those your least able to do to others. Third get some structure and processes into your business, yes but you say I already have that. Then ask yourself can this process run smoothly without your intervention and is there a step by step guide. If the answer is no which I suspect it will be then you don't have a process.

Fourthly, work your way out of jobs, that is to say once you've got a structure and a process mapped out give that work and responsibility to someone else, your job is to manage them not do it for them.

Whilst this is straight forward it is not easy, the day to day problems caused by your lack of structure will not immediately go away but if you're persistent you'll see tremendous benefits.

Exigent Consulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business.