Featured post

What Do High Growth Businesses Do Differently?

Over the past 5 years the importance of the “High Growth Business” and how this relatively small group of businesses disproportionally impa...

Thursday 22 January 2009

Why You Must Increase Marketing in a Recession or How Recessions Destroy Sales Metrics

I have of often read, and had heard many a pundit declaring that in a recession you must reduce your marketing spend. Based on my experience with previous recessions I have strongly opposed these views. I do have to say, that it is often very difficult for businesses to maintain their sales and marketing spend when times get tough. However, as you will see, the impact of a downturn in the economy plays havoc with established sales and marketing metrics. The effect of this should be to demonstrate clearly that in fact a company needs to increase its sales and marketing activity if it wants to survive a recession.

Philosophically this has always made sense, as for at least as long as we are going on a downward curve, there are more sellers than buyers. Those buyers, because they are short of money, will spend less on purchases to help them balance their reduced income. What I have tried to do is to quantify the effects of a recession on sales activity. I have made some simple assumptions which are as follows:

  1. To continue trading the company needs to achieve three sales in a month.
  2. Its success rate from prospects to sales is 33%.
  3. To get a meeting with a prospect requires ten cold calls.

So in a normal sales environment our simple model would deliver this:

Phone Calls











Essentially what we are saying is that you need to make 100 calls to get 3 sales. Now let's assume we get some softening of the economy and things get more difficult so instead of getting 3 sales for ten prospects we only get 2. So to keep up our 3 sales per month we now need 15 meeting. Because the conditions are a bit tougher it gets a bit harder to get meetings and we now need to make around 16 calls to get an appointment. Suddenly our model looks like this:

Phone Calls












The result is that we now need to make 250 calls for our 3 sales.  Lets now go one step further and accept we're in a full blown recession rather like we have now. Our success rate is half what it is in normal times (These new metrics based on the evidence from some of my clients and further anecdotal information) . You end up with figures that look like this:

Phone Calls











You can see that the implication in this simple model is quite devastating. It clearly impossible to go from 100 call per month to 400 overnight if at all or in the longer term find a regular 20 prospects per month. Typically sales will go down; just how far down depends on how well the sales team is managed and the local market (sector) conditions. Many companies would soon exhaust they’re prospect list at that level of calling, which partly explains why it doesn’t happen.

So how do we protect ourselves in these difficult times? Well first of all, don't panic! Secondly, before you go rushing off to contact people, you need to understand where you are. What I mean by that is you have to have some of information about the current performance of your sales and marketing activities. Your baseline should be to understand what your current sales of metrics are. If you don't have that information one simple way of creating some is to take the total number of bids, quotes, proposals you have made divided by the number you have won.

Also, make your marketing accountable, that is critically analyse the return on investment you get from your various marketing activities. In some cases this will be easy, for example if you use yellow pages or Yell.com you have their invoice which tells you the cost and you should be able to work out how much business you got from that investment. In simple terms than if your return is less than your investment, stop it. Stop it now if you can. If you can't, stop it as soon as you can. With those more fuzzy situations where you spend time and effort rather than cash you can still assess where you get the best or least reward for your effort.

Only now that you have this information in your possession should you go out and up your marketing and sales. This simple exercise will have done two things; firstly it will have told you what your baseline is which will enable you to understand your effort to sales ratio. Secondly, it will have identified your most productive marketing channels. You now need to go out using those channels and communicate with your best customers, your good customers, and then the rest of your customers to identify sales opportunities. From here you need to move it into new business development. Choose your best channels first as they are most likely to deliver the quickest results. And set yourself targets for activity to see what your new sales metrics are, and if you can, pursue them relentlessly.

It will be tough in the early days, but if you stick at it while others fall by the wayside you will have created a stronger sales and marketing base to take you into the next upswing.

Find us also at www.exigent-uk.com

Monday 12 January 2009

Twitter for Beginners

I have recently started to use Twitter, and being a relative novice with blogs, I wanted to see how easy it was to use and why people would want to use it. Essentially it appears you can use Twitter for two reasons, firstly; for purely social objectives or secondly; and more commonly as a way of promoting your business your ideas and your brand. The easiest way to describe Twitter is that it is text messaging on the Internet. You only have 140 characters to post a blog so there is an art in itself in getting your message over with this limitation. To quote Winston Churchill "I don't have time to write you a short note so I will write to you a long one". With such a limited number of characters you do have to think quite clearly about what you're saying, which in itself is no bad thing.  

So I'm assuming, as I do, that you want to use Twitter to build up your network and promote your business here are a few tips on how to get started. Firstly, I would say that Twitter is incredibly easy to use. But before you start you need to decide on your persona. That is to say do want your tweets to be of a personal nature or of a business nature. Perhaps we should look again at it in a slightly different way and ask yourself the question do you think that some of your personal messages would be inappropriate for your business contacts two receive, if you think the answer is yes then you should open two twitter accounts. If the answer is no, or probably no, then one will be sufficient.  

Getting started is easy once you have signed up get your home page and hit settings. Let's not worry about pictures and suchlike at the moment, and concentrate on settings. The most important section is the one line bio. Give some thought about what you want to say, as potential followers will read this bio and use it to decide whether to follow you or not. A poorly written bio will not encourage followers.  

Right, we are now ready to go. So what do you say, at this point it's a learning curve for you so just try a few different posts to see how comfortable you are with them. The most important thing is to be yourself, remember this is not a 5 minute wonder, potentially you'll be using this medium for years to come. To build up your network you need to find some people to follow, and you need some followers. The best way to start, if you can, is to connect with some of your friends who already use Twitter, that gives you a place to start.  

Go to one of your friends pages, and on the right hand side you will see the word following and underneath that will be a number of mini pictures, choose one at random and click on it. This will take you through to that person's home page, read their Bio and if you like it, just below their picture you will see a radio button which says follow. Press it and you are now following that person and they are part of your network. Repeat this process as often as you like and you will quickly build up an understanding of those individuals who are of interest to you and those who are not. The current etiquette is that if you follow somebody, they will for the most part follow you back.  

For the first few days, don't worry too much about growing your network, your best spending your time understanding how Twitter works. You'll get a sense from reading of the submissions and from that you should start to understand the best way for you to communicate via Twitter. A couple of other ways to speed up building your network is to use something called "Twitter local", download it and use it to identify people close to you who are on Twitter. Follow them and as you are local they are more likely to follow you back.  

Contact me on www.twitter.com/laurenceexigent. If you refer to my blog I'll guarantee to follow you back.  

Find us also at www.exigent-uk.com

Thursday 8 January 2009

The 5 Stages of a Sales Call

You might be a business owner or self employed or someone who through force of circumstance has moved into sales and has had little, if any, formal sales training. This blog article will give you a structure to work from which will help you be more successful in sales. 

First a bit of Psychology, when people meet for the first time, there is always some stress particularly for the potential buyer. Stress levels which start at a high level at the beginning fall throughout the call only to rise to a peak again during what we all know as "The Close". What this 5 stage approach does it to try to make this psychology work in your favour to improve your chances of making a sale.

Stage 1. The Ice breaker

This stage relates to the first key minutes of the meeting at this point stress levels are high and we need to bring them down. It's a conversation which takes place between the two parties but which has nothing to do with business. It helps to establish ease and rapport before the business meeting proper starts. It literally breaks the ice. Obvious isn't it, well why do we often not use it. Well it's that word stress again which pressures us to get on with it, and don't you know it - when we rush straight into the business content we're less successful. What do you talk about? Well look for clues, people tend to publicise what they're interested in, even if they do so unconsciously. So if you see lots of golf pictures on the wall, guess what; he likes golf, there's your starter for ten.

Stage 2. The Opening

As it suggests, this is the start of the business portion of the meeting, it's a series of opening statements which should outline the agenda for the meeting, make sure you always have one. At this point you won't know what specific issues your prospect faces so you have outline the list is issues that a typical prospect for your product or services might face and relate that to the specific benefits that your company's product or service provides. This is the most talking you should do at the meeting.

Stage 3. Qualification or Questioning

By now and in a few short minutes by following these simple steps you'll have managed to reduce much of the stress levels, both you and your prospect will feel more comfortable and they will be ready to discuss the issues surrounding their business. There an old saying in sales which goes "you have two ears and one mouth use them in that proportion", basically and especially during this stage only ask questions and let your prospect do the talking. Qualification is a much undervalued part of the sales call, but if you don't qualify properly and understand your prospects issues and rationale you've dramatically reduced your chances of a successful close. This section is by far the longest and should represent at least 75% of the time you spend with your prospect. Don't at any point during the qualification stage offer any solutions; just make note of the issues and problems raised and how your solution can solution can help. Start with easy questions like "how did you start your business?" and "who do you sell to?"or "why did you buy this machine?" Then ask more searching questions once you've uncovered some issues like "why is that a problem for you?" or "what are the implications of not addressing this problem?" Having gathered your information and understood his problems we go to...

Stage 4. The Close

It's the term that strikes fear into the hearts of many sales people, just the mention of the word has probably increased your heart rate and you're not even at a meeting! So as we enter the close our stress levels really start to spike. One of the side effects of high stress is that we have a tendency to talk too much and frankly just babble. 

This is a real danger because by talking too much we let our prospect off the hook and leave without a sale. So as we move into the close keep calm, try to deliberately talk a little slower, then sum up the qualification session by identifying each issue and how you can help. You then ask for the order and stay quiet and you stay quiet until your prospect answers. Don't worry if it takes what seems like an eternity for him to respond it's only likely to be 5-10 seconds, and remember your prospect will be feeling just as much stress as you. If you start speaking first you'll have lost; the conversation will avoid directly the issue of purchase because you'll have given your prospect a chance to talk anything other than the most important - will he buy.

Stage 5. The Consolidation

Congratulations you've held your nerve, you've asked for the order and you've answered a couple of objections and he's said yes. So what do you do next? Well you could run around waving your arms in the air saying Yes! Yes! - but that's probably not the right thing to do. 

Let's look at the stress levels, they've collapsed you've both taken a huge sigh of relief and there's a great tendency to get out of there just as fast as you can. Don't. Stick around the consolidation stage is there for you to allow the prospect to be comfortable in his own mind that he's made the right decision. There is something called "buyers blues" which relates to circumstances where after a purchase the buyer becomes disillusioned with what he's bought. It often manifested by the unexpected cancellation of an order. The Consolidation is designed to minimise this, you need to find a reason to stick around for 10-15 minutes, if you can, get him to fill in some documentation relating to the sale, alternatively if you haven't already suggest a look around the factory or site, your intention here is to get them back into their comfort zone, I've even suggested a celebratory cup of tea.

So there you have it, a simple five step model for being more successful sales, happy selling!

Find us also at www.exigent-uk.com