Is This the Worlds Worst Sales Qualification Question?

Over recent weeks I've seen many businesses fall into this trap and rely on what I think is the world worst sales qualification question. It seems to be especially prevalent in micro businesses and in the creative industries.

In my opinion sales qualification is one of the most important aspects of closing sales. Unfortunately these days most experts seem to concentrate on closing, however proper sales qualification makes sales closing easier. Good sales qualification will help you identify early in the sales cycle those prospects most likely to commit to buy from you, and at the same time help you shorten the sales cycle. Something that we all want. Poor sales qualification, by contrast, results in the opposite leading to a lot of wasted effort and fewer sales.

 Priit Narusk in the qualification for the Tour de Ski in Prague.  (Photo credit: Wikipedia)

As we come out of our sluggish economy the number of sales opportunities increases as potential buyers prepare to invest. As providers of products and services we enjoy more sales conversations unfortunately this new found wealth of prospects is ruined by one single question which kills time and is our own work creation scheme. On the face of it this question seems quite sensible and for the inexperienced sales person a good one. Nothing can be further from the truth. 

The culprit for this colossal waste of time the question "Can I write you a proposal".

Why? The answer to this question is almost invariably "yes" so off you go thinking that you’ve progressed the sale because they want you to write a proposal. In reality you've done no such thing. Ask anyone if you can write them a proposal, ask your mates, your competition even the bloke on the corner, they'll all say yes because that question means nothing. Knock yourself out, write me a proposal, in fact send me three because that question commits me to absolutely nothing but creates a whole lot of work for you. What you have really asked me for is my permission to let you rush off and write something, so why I shouldn’t say yes? It has not tested in any way at all, my desire to purchase from you.

The result from his single question is many fruitless hours putting together proposals in which your potential buyers have absolutely Zero interest. That's why its such a poor question.

If you can't resist asking this question, then at least have a good follow up question. This follow up question will help you stop becoming a work creation scheme. It goes like this "Thanks for allowing me to provide you with a proposal, can we arrange a short meeting in a couple weeks time to review it"? If and only if they agree to that meeting is it worth your while writing them a proposal.

The next time you are tempted to ask a prospect "Can I write you a proposal?" remember on its own it’s probably the worlds’ worst sales qualification question. So don't waste your or your sales teams’ time pointlessly knocking out proposals, get a commitment from your prospect first.

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Exigent Consulting provides specialist services for Managing High Growth, Business Turnaround, and Mentoring to the Small and Medium Business. We help business owners improve the profit performance of their business. 

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Time To Review Your Value Proposition.

We can at last say with some confidence that we are seeing some "green shoots of recovery". Recent figures have indicated an acceleration in growth and this points towards a more buoyant economy. Let's not get carried away as we are still operating at levels below the pre 2008 crash. Nevertheless, the supply side of the economy is optimistic that interest in its products and services and hopefully sales will increase next year, as potential  buyers at last dip into their cash hoardings and start investing in their businesses.

A direct consequence of this improvement in sentiment is that many companies will gear up their sales machines in anticipation of improved demand. Collectively that means increased competition for sales.

Also, as buyers start to loosen the purse strings, their years in a very tight market will have changed their perceptions of what is important to them and their expectations of their suppliers and their solutions. This means that your product or service may no longer fit the market as well as it once did. As a result the value you bring to your market may be reduced resulting in a poorer take up of your services and offering your competitors a chance to get ahead.

Identifying your Unique Value Proposition (Photo credit: Intern. Forum Of Visual Practitioners ifvp.org)

New entrants into the market will also be seeking ways to differentiate their product to better reflect buyers changing needs. All these pressures should lead you to the conclusion that you need to review your value. More explicitly you should be reconsidering your value proposition and testing its relevance to a changing market.

Your Value Proposition

Your value proposition is a short statement which explains to your target audience what problem you solve and why they should buy it from you instead of your competition. What is different about your solution or offering compared to your competition. It is sometimes called an elevator pitch or positioning statement. However you want to describe it, now is the time to give it a review.

It's easy to become a little blasé about your value proposition after all you know and love your product. Your target market doesn't have the same attachment and will go after what they want and will not hesitate to ignore you if you no longer meet their needs.

I remember listening to an interview with Jack Nicklaus where he said every year at the beginning of the golf season he would go to his coach and go through the basics of his grip, his stance and his swing in minute detail to make sure that he hadn't picked up any bad habits that might affect his future performance.  Taking that analogy forward we should regularly review our value proposition to ensure its relevance.

Your Value Proposition Components

Lets just remind ourselves what should be included in our value proposition.

What is our target market? Has this changed? Is our market bigger or smaller than before?

What is the current problem we are solving for our target market? Is it an important consideration for customers in our market? For those of you who don’t have a formal value proposition, start with the biggest issue customers have with your industry and see if you address this. If your product or solution is less important to your market than previously, then you’ll have a tough time selling it.

What are we offering? Is it a new product or service? Can we explain it easily?

What is different about our solution? At this point many people talk about a unique selling point. For most businesses finding something that is unique is almost impossible. What you want to isolate is what you do differently or what additional capability you have, that will make them buy from you rather than your competition.

Which brings me to the last point what alternatives are there to what you offer? Why is your offering superior to the competitions? What is the Return on Investment from adopting your solution?

By asking yourselves these questions you should get a good understanding of changes in the market and how that might affect your value proposition. You may be affected by such things as changes in legislation, new products entering the market or your industry being more interested in other problems. Unless you answer these questions, you may well find your value proposition increasingly irrelevant at a time when your target market will be more active than it has been for years.

Exigent Consulting provides specialist services to the Small and Medium Business including Managing High Growth, Business Turnaround, and Mentoring. We help business owners improve the profit performance of their business. 

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Cold Calling or Lead Generation, Are We Missing The Key Point?

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Over the last few weeks it seems that the intensity of the debate about ditching cold calling and moving to digital lead generation has increased to a level of intensity where it is getting a bit absurd. It seems to me that proponents of both sides are trying to make unrealistic claims about the efficiency of their pet route to market, I decided it had all got a bit too extreme when I read the following quote: “And that’s when it hit me: Cold calling isn’t just a terrible idea during a recession, but may actually be contributing to the recession itself! Think about it…”

Cold Call (Photo credit: Alan R. Light)

Well I did and I thought it was just about the most ridiculous statement I had heard in a long long time. We have the collapse of Lehman Brothers, the Global Banking crisis, massive individual and corporate debt, and then we have cold calling. Nope, I just can’t get my head around that one.

So I thought I would go back to basics to try to bring some sense back into this debate. Cold calling as we know is a rotten job, I’ve been in sales and marketing for all the best part of 30 years and I can honestly count on the fingers of one hand those people who enjoyed making cold calls. Yes cold calling has its drawbacks; in particular cold calling in a B2C environment can be very difficult and counterproductive. Increasingly that type of intrusive marketing is getting a bad name, partly because telemarketing companies are having to make more cold calls per sale, and partly because of the damaging effect some of the “Cowboy” operators out there are having on the industry as a whole. Nevertheless the there are many situations when cold calling is effective.

Going right back to basics, a cold call, or lead generation through email marketing or even printed mail shots, are all attempting to achieve the same purpose; to identify if the recipient has a need for the product or service on offer. With a cold call you find out immediately because of the person at the other end will tell you “no” straight away. This is the essential problem with cold calling, as the vast majority of people can’t cope with being told repeatedly “no, I don’t want what you are offering.” We eventually get the same answer from a mail shot or an email but it is a much more comforting “no” as it is simply no response at all, that’s much less hurtful and much easier to cope with.

Also lead generation has volume on its side, it’s much easier to contact 10000 people by email than to phone 10000 people volume gives you a greater chance of success; and as George Bernard Shaw said, “God is on the side of the big battalions.”

What seems to have got lost in this argument is any form of analysis about what is the best way to contact your target market. In order to come to that decision, it seems to me, we just need to understand how people in our target market prefer to be contacted.  In the UK certainly many industry sectors work on the basis of cold calling, and this is particularly true of construction where main contractors will expect calls from a multitude of subcontractors who may be interested in using their specialist skills to deliver a small part of the overall solution. By contrast if you were to contact media companies many of the office based organisations, in particular, service companies, you might find that using lead generation techniques an effective way to contact your target prospects.

New Target Market (Photo credit: Intersection Consulting)

The essential point here is that we should be led by our prospects preferences and not be dictated to by the method of communication. So just remember put yourself in your customers place and try to understand what form of communication they are likely to respond to best. Now this isn’t easy and you will probably have to try a number of different routes which may involve using both cold calling and lead generation.

After all let’s face it, marketing, or at least getting marketing right, is hard. If it was easy we’ll all have very successful companies, and because it’s not we don’t. The trick is to engage your customer to either progress or close the sale, and from my point of view I don’t care which route gets me there as long as one of them does.

Exigent Consulting provides specialist services for High Growth Businesses, Business Turnaround, and Mentoring to the Small and Medium Business. We help business owners improve the profit performance of their business. 

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Get Profit from your Sales

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English: Cost-Volume-Profit diagram, showing break down of Sales into Contribution and Variable Costs. (Photo credit: Wikipedia)

A recent blog post on pricing reminded me that we tend to forget how important it is to make a profit and often how little room for manoeuvre there is when playing around with prices.

The average profit for all limited companies across the UK before 2008 was 7%, yes that's £7 out of every £100. I'll accept that many smaller businesses typically owner managed will depress their reported profits in order to reduce their tax liability.  Having said that there's not many businesses that regularly report profit before tax of 10% or better. What that really means is that pricing and getting it right is really important.

So point number 1 you need to understand fully what it costs you to produce your product or service. I don't mean guess it I mean know it intimately and in detail.  Recently I went to what appeared to be a reasonably successful retailer who were struggling financially. Superficially things appeared OK nevertheless I asked them to fill out a detailed spreadsheet itemising all their costs and not surprisingly their situation was much worse than they anticipated. What it had done was to get the business owners to focus on what it really took to run their business and that pricing was a much more important than perhaps they first realised, as a result now everything is priced on the basis that it makes a profit in its own right and in some cases that has meant a significant increase in individual product prices.

 For companies with a sales team, this message often gets lost, particularly as most sales people are rewarded against sales revenue and not profit per sale. Consequently if sales people are in a sticky position they automatically reach for the price lever and drop the price, after all a 10% discount on a 100k sale is only 10K  and that's relatively easy to find. The fact that it may have completely wiped out the profit on the sale is not on their radar.

So point number 2 get your sales team to focus on profit and not turnover. How can yo do this? Well how about giving them a little bit of training so they understand the mechanics of the business, and you could reinforce this by rewarding them on profit not turnover.

I've only be able to do this once but boy is the impact immediate. No more is there the argument that we had to sell this with a big discount to give us a foothold in this new account, nor is there the plea that "if I didn't give him that discount(and its usually a big one) we wouldn't have won the sale."  Why, because sales people don't want to go through all the effort needed to win a sale and end up getting no commission.

Interestingly what you do get are rather more searching questions like what does it cost us so much make this stuff, what else can we offer if we cant move much on price? This should lead both you and your sales staff to examine and really understand your company's value proposition and discover how to best promote them, which is no bad thing.

The important messages are that as a business owner, profit should be your prime motivator when selling. In order to do this you need to understand what your true costs of production are before adding in your profit and only after that setting your price.

Motivating your sales using profit has some beneficial side effects in forcing them and indeed to you really understand and to be able to justify why you sell what you sell at the price you sell it.

Exigent Consulting provides specialist services for High Growth Businesses, Business Turnaround, and Mentoring to the Small and Medium Business. We help business owners improve the profit performance of their business. 

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Pricing objections - what they really mean

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Pricing is perhaps one of the most misunderstood issues in business, if used properly it's one of the simplest ways to help you maximise your profits. Easy then, so what's the problem?

The problem with owner managed business is that they assume that they must be the cheapest to survive and are often very reluctant to raise prices, even in the face of ever rising overheads, just think of energy, fuel and courier(UPS) costs to mention a few. If I had a £1 for every time I've heard a company owner say "if I raise my prices I'll lose all my customers so I have to keep them as they are" I'd be very rich – sadly I'm not.

Gas Prices Are Up!!! Feelin' the Pinch... (Photo credit: Clan UiBriain)

Why do so many people think like this? Much of it is conditioning, whenever we are not satisfied with a company for whatever reason we complain about the price. 

Let me give you some examples:

You're visited by a salesman who can't articulate the benefits of his product. 
What do you tell him when he asks for the business,"I'm sorry but I don't see a reason to buy this" or do you say "I'm sorry but it's too expensive".

You're visited by a salesman who you just don't like. What do you tell him when he asks for the business,or do you say "I'm sorry but I just don't think you're trustworthy" or do you say "I'm sorry but it's too expensive".

You're visited by a salesman who just doesn't get the point you're trying to make. What do you tell him when he asks for the business, "I'm sorry but you don't understand my problem so I'm not interested" or do you say "I'm sorry but it's too expensive"

You're visited by a salesman who's too pushy. What do you tell him when he asks for the business, "I'm sorry but you're the last person I'd buy anything from" or do you say "I'm sorry but it's too expensive"

You should be getting a message by now pricing is rarely the issue, price objections are mostly a cover for some other objection. So what does this tell us? The first thing is that raising your price is nothing to be afraid of. The second is that if pricing is seldom the real issue, raising your prices even in a recession wont frighten off your customers. Why? because the reason they are staying with you are not price related, it could be that you're convenient, they like you, they love your brand, you've helped their business, you are reliable, and so on....

So now you know let's look at what you can do. Well one thing you could try is to increase all your prices by 1% immediately. Why, because you can; if you're selling something for £100 pounds people aren't going to stop buying it because it now costs £101.

"I can't we're in the middle of the worst recession in living memory you must be nuts" – you say.

I say "no, its your conditioning that says that". 

I can in all honesty say that in almost every company I work with; one of the first things I do is to get them to increase their prices and having done so they are surprised that they don't lose any customers in the process. Yes even in the worst recession in living memory. Why? Am I a genius – I hope so – but no. Am I a magician – no. The answer is almost invariably, because most small companies are selling their product or service too cheaply because they've been conditioned to this as those people who don't want to buy from him use price as the objection.

Realistically as a small business owner you should understand that price is only factor among many people assess before purchasing and its by no means the main factor. Your price should reflect your costs and be sufficient to give you a decent profit. In order to price correctly you should have a detailed analysis and understanding of your costs. This is something that many businesses don't have. Only by understanding what and how your costs are made up in detail can you accurately set your prices over the long term. Whilst the general rule with pricing is that your sales price is 2.4 time manufacture costs, it's still a rule of thumb and likely to lead to a guess-timate of costs which will almost always be less than the real costs.

You should be increasing your price at a minimum annually to keep in step with the inevitable rise in your costs and additionally if there is a major change in the price of components. Don't worry if you are not the cheapest because it is rare that you will be as there is always likely to be a business with a lower price. Anyway you don't want to be the cheapest because down there is no customer loyalty.

So remember that pricing objections are more likely a cover up for other deficiencies, so don't be afraid to raise your prices and ask those price objectors what they're really unhappy about.

Exigent Consulting provides specialist services for High Growth Business , Business Turnaround, and Mentoring to the Small and Medium Business. We help business owners improve the profit performance of their business. 

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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.

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.

Taking Your Business to the Gym: The 4 ways to Grow Your Business

There are only four ways to increase a company's revenues. They are:

1. Acquire another company
   
2. Find new customers to buy from you
   
3. Get existing clients to spend more at each visit
   
4. Get existing customers to visit more frequently and spend money
   

Option 1 is really only relevant in specialised circumstances, and most businesses with not acquire another at all during their lifetime. So businesses should concentrate on the other three. This option anyway is the most risky given that statistics suggest only 33% of acquisitions are successful.

Which of the remaining options you chose depends on who your customers are and what your business sells. For example many businesses offer products or services with a very low percentage of repeat purchases so Option 2 becomes critical to their survival. These kinds of businesses can only support growth by new business development. That is getting more new customers. This is the most difficult to achieve. It is generally accepted that it takes 7 -10 times as much effort to get a new customer to buy from you than to get an existing customer to buy more. Unsurprisingly this type of business is generally much more sales focused and tends to fair less well in recessionary times as conversion rates fall.

Get your customers to purchase more at each visit. This is very common strategy in a B2C environment and works best where the business has a range of products for purchase. Supermarkets are great exponents of this where they offer a discount for multiple purchases. This is very often for the same product but can often be used to cross sell related or complimentary products. These products are carefully analysed to connect products with high margins. If you can't do that; try offering more goods and/or services for the same price rather than giving away a discount. This is a common on big ticket items where for the purchase of a particular product you get another free. This strategy is based on the premise that the perceived value (sales price) of the free item is significantly more than its cost. For example mobile phone accessories which are purchased by the retailer at a very small fraction of their retail sales price.

Option 4 is about getting repeat sales more frequently; this may be achieved by visiting customers more frequently. An example of this is home delivery freezer food company Eismann. In our area they used to visit us every 4 weeks suddenly it was every 3 weeks. We tended to buy a little bit less on each 3 week visit but over the year we spent significantly more. In the UK you'll also have noticed the increased use of time limited discount vouchers by the big supermarkets; these are all designed to increase the frequency of your visit. B2B businesses use CRM data to manage the frequency with which they contact customers or prospects, as well as buying habits. If you haven't got one, even a very simple one, its going to make increasing revenues a lot harder and in these difficult times you need all the help you can get. So spend a little time understanding which of these options are best for your business and start implementing you approach 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.

Sales Success: Think like a Businessman not a Salesman

Whilst working with a client recently, I realised how important it is to get their sales team to think as business people and not just as salespeople. There are a couple of qualifying statements however, this need to think like business people is most relevant when sell to "c" level prospects and this is irrespective of the size of the buying organisation. It became obvious to me when we started discussing how the decision was going to be made. Their answers were all around the general business need and the benefits that the company's product would deliver to the prospect.

Selling to C level people requires the salesperson to put the potential purchase into a business context; these people rarely make decisions based on product capability and benefits alone. The more salespeople can understand and interpret the business context the more successful they are likely to be.

So what do I mean by this? Let me give you more details, the internal discussion was about why, despite assurances that we had the best technical solution the salesman couldn't progress the sale, we'd got access to the senior executives who were all reasonably accessible but still the sale stalled. So I asked the salesman to go back to the prospect and discuss the business issues surrounding this purchase, what if any were the competing business cases? Was a capital or revenue purchase more important and why? It turned out that the decision was either to buy or outsource. The salesman came back crestfallen and said there was nothing more he could do.

"No" I said "now we have to look at this in a different way, our job is to find out who are our supporters and help the put together a winning business case." To do this we need to think like businessmen, understanding the product won't help us we need to look work out a strategy to get them to manufacture in house. This is where the sales team really struggled because it was the first time they'd tried to look at the purchase of their product from a business perspective. Fortunately we were able to deliver a compelling case based around business risk and the rate of return on an internal purchase.

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.

3 Steps to Successful Sales Forecasting

In most businesses this (the 4^th) quarter is the busiest and much sales effort is focused on getting the best results from these critical weeks. However good sales managers are also preparing get to grips with next year's sales targets. This is an important activity because the earlier issues are identified the more time there is to adjust strategies to meet them. Whilst it is important to continue to focus on getting the numbers for this year, for sales management it is vital to understand the nature of the challenge for next year. This analysis is as relevant for the owner managed business where the MD is often the sales manager, as the larger organisation where is has a well developed sales function.

Often it takes a month or two to re orientate your sales activity and doing it now (in Q4) gives 12 months to shoot for next year's target rather than maybe 9 or 10 months if left till the first month of the New Year.

Putting together a simple forecast requires one to break projected sales down into 3 areas, Known, Seen and Unseen. So what do these 3 categories mean? What is their significance? Let us look at each one in turn. This forecasting method is really only applicable to B2B sales, retailers have to use a different method which will be the subject of a future article.

Known sales are those which come from your existing accounts, so you can, based on previous years, fairly accurately estimate your income for the coming period, whilst we all know that individual account incomes vary from year to year it should be possible to approximate the likely revenue. This number for most businesses this will represent a large % of the overall target

Seen sales relate to a category of sales which estimates income based on the long term pipeline and an estimate of what percentage of sales tend to come from new business. Typically this would be the total value of the pipeline factored by the likelihood of success.

Unseen sales comprise that proportion of the sales target where you have no indication of where these sales are coming from. These are, t0 paraphrase Donald Rumsfeld, "unknown unknowns" This element represents the risk in your forecast. The larger the percentage of unseen sales, the more risk there is in the forecast.

Once you have these figures it should also direct you where you need to concentrate your sales effort be that new business development or maximising revenue from your base accounts. If you're trying this for the first time don't be too cautious in forecasting revenue, there should always be an element of unseen in the forecast depending on the type of business it can vary between 10-35% as a norm, anything more than that would indicate that the forecast is too optimistic and is unlikely to be achieved.

Forecasts have to support management objectives but if they are too unrealistic the sales force will very quickly find this out and the target will be disregarded and there will be no real attempt to achieve it. Accurate forecasting is nonetheless an important component in managing your business and an important tool in how it will be developed.

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

Why Buyers Ask for Proposals to Pick Your Brains More Than to Buy

I have decided to add a guest writer for my latest blog post. It relates to that common misconception that by asking for a proposal a buyer is somehow predisposed to buy from you. Often nothing could be further from his mind.

Sadly, huge effort and intellect is wasted on proposals because the prospect has been poorly qualified. The most important point to recognise is that writing a proposal requires a great commitment from you (the seller), and no commitment from him (the buyer).

To make the most of a sales opportunity a proposal must be an integral part of your sales strategy. The more complex the sale the more important this becomes. Personally I never write a proposal without first having a date in the diary with the prospect to present it, and no I don't send it to him prior to the meeting.

So here it is. Its written by Dan Seidman at www.salesautopsy.com

Proposals are the foundation of business building for many salespeople. How many of us constantly invest precious sales time to draft a proposal, actually pouring years of experience and expertise into this written gamble at acquiring business? Too many of us spends lots of time proposing because we don't employ a qualifying system before designing these documents.

One reason most of us are so quick to accommodate potential clients is that we really do want to please people. Think of how ridiculous it would sound if you refused to provide materials to your prospect! So you and I are very likely to assume that a request for a proposal is a yes indicator. It reinforces our hope that we've just moved one step closer to closing the sale. There is, however, the prospect's perspective. If we don't understand what might really be going on with that request, we could spend endless hours creating and delivering documents for people who have no intention of buying our products or services. And here's why:

Prospects love free consulting. They give you their biggest smile and drain your brain of all its problem-solving knowledge before you understand their true intentions. And they love it even more in print than in person. If you don't have a strategy for dealing with proposal requests, you're at the mercy of every potential client. Over the past twenty years, I've analyzed many of the top sales training organizations (see some recommendations in the appendix). It's interesting to note that virtually all the great training systems have the wisdom to recognize and teach how critical it is for a salesperson not to give everyone proposals simply because they are requested. To help you understand the dangers of proposal writing, here's a list you'll learn from.

The Top Ten Reasons A Prospect Demands A Proposal (The impact to you is in parentheses)

10. They need to keep their current vendors honest (what a surprise—you never had a prayer of getting the business)
9. They want a fair range of prices for the type of service you offer (thanks for the quote, the business is going to the prospect's brother-in-law, at just below your rate)
8. They want to keep themselves up-to-date on the latest business processes and technologies (thanks for the education, goodbye)
7. They think your product or service simply sounds interesting (but they have no intention of buying!)
6. They need new and better ideas—to make their own changes (thanks for your free consulting; that really hurts, doesn 't it?)
5. They just wonder how much it would cost (wow, you're really expensive!)
4. This request will get you off their back (oops, you forgot to qualify the prospect, didn't you?)
3. They can look good when they pass your information to the real decision-maker (did you spend all that time with the wrong person?)
2. They honestly need their problems solved (too bad you don't know whom the other eight proposals are from, what they charge and maybe what they're saying about you)

And the number one reason prospects make you pour your blood, sweat, and tears into a proposal:

1. A prospect can lie to a salesperson and still get into heaven!

Final Thoughts:

Preparing proposals can offer false hope to all sales pros. Do you really believe that everyone asking for a customized, written solution is ready to buy?

Please, please, stop wasting your time jumping through hoops to design proposals for everyone that nods his head or grunts into your telephone. Qualify first, and then begin to work with your best potential clients. Your organization should have some criteria for what defines a good prospect. Use them, or immediately create your own to save yourself from sales heartbreak. If you don't quickly sort the good prospects from the time wasters, bad prospects can sabotage your income. Your expectations of who will buy from you will be inaccurate. One good method might be to charge a fee for a proposal. Obviously, a prospect who's not serious won't pay for it. If this works for you, implement it.

However, your organization might not choose to use this strategy, so get a grip on what looks like a realistic buyer and craft your plan without giving away all your solutions.

The lesson here is that you need to set guidelines to determine which prospects are worth investing your time in proposal design. Otherwise, you'll waste lots of time showboating in print for prospects who have no intention of doing business with you. If you don't weed out the weeds, you'll have very little time to find, smell, and pick the flowers.

Dont We Qualify Prospects Anymore?

I’ve been struck over the past few weeks how few people recognise the importance of properly qualifying sales prospects. The current vogue for focusing on closing has almost completely ignored the critical role qualification plays in managing the sales process and improving your chances of closing sales and more importantly stops you wasting your time with those companies that have no real intention of purchasing from you. I recall a specific example of a London based business that was struggling for sales going to Manchester to bid for a in a market that they never before won a deal. Surprise, surprise, they didn’t win the deal, when I asked them why they went their answer was well with the shortage of prospects we have to chase down everything.

How much did it cost you to go? I asked “well only about £300 in travel,”

"and the amount of preparation? “About a day each” was the response

“Did you spend much time in finding out what they wanted and how much they’d be prepared to pay?” They said “well we knew we were more expensive but we thought we might swing it.”

I then asked “wouldn’t you have been better spending the time and effort uncovering and nurturing prospects in an area where you could win rather than chasing prospects in an area you can’t.” Their response was a mixture of resignation and embarrassment.

In times of recession prospects are harder to uncover and you need more of them as with increased competition your win ratio declines. Under these circumstances a salesperson will have to choose from a wider pool of prospects to find the deal they can win. Also this has to take place in an environment of greater internal pressure on the sales force and greater external competition. In order to be able to survive in this climate a salesperson must qualify rigorously to separate time wasters from real buyers. It requires a real strength of character to ask difficult questions in this environment but in order to succeed you must ask them.

So what sort of qualification questions do we need to ask? The most important group of questions in this environment is about money, especially in a B2B sale if the money isn’t allocated then you can’t make the sale. The larger the organisation the more rigid the budgeting process is likely to be so the more critical it becomes to understand not only if the money is budgeted but what the budget includes when can it be released and what is the process for doing so. Next you need understand how important the purchase is to the business, again because of the recession the ROI has to be very strong if it’s not again it’s unlikely that the purchase will be made.

The two groups of questions above address the question will the prospect buy. Next you have to identify the likelihood of prospect buying from you.

Your questions now need to centre around the solution the prospect seeks and to get an understanding if their requirements put your product or solution at an advantage or disadvantage. Clearly the questioning needs to try to draw out circumstances where the prospect has issues but where you consider that your prospect or service has a competitive advantage. The more of these you can identify and more importantly get the prospect to accept as important them more likely they will buy from you. You should also get an understanding of the competitive landscape, what your seeking to identify is if there is a bias towards one particular supplier, the stronger that bias (assuming its toward another company) the more you should consider if it worth continuing with the sale.

Poor qualification is at the route of many a lost sale, and it comes from two areas firstly, from not asking qualifying questions systematically when meeting prospects and secondly; commonly weekly qualifying a prospect by avoiding asking those tough questions which might result in you qualifying out a sale.

I would recommend companies to be even more aggressive in their qualification process so they stop wasting time on business they can't win so that they can concentrate on business they should win.

ExigentConsulting 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

Cold Calling Is Alive And Well - Its Just Got a Bad Name

I was very interested to read Jeremy Millers article “Sales People Don’t Cold Call”. Now I agree with much of his views in particluar if you're late into the buyers purchasing process, you're pretty much wasting your time and you really should be engaging with your prospects much earlier in the sales process. It seems to me that the core of Jeremys argument with respect to cold calling is predicated on accepting his stats, which I don’t, and so with a few small changes we generate vastly different success rates, to wit:

Industry standard numbers are for a contact with a prospect (in the UK) is every 4 -5 dials not every 8.4. Lets call it 5 as a compromise

The metrics I used for my sales force was 1 meeting for every 10 prospect conversations, not 1-50; frankly that’s just a rubbish number and if you think that’s representative of sales staff generally, common sense should slap your face and tell you that it would be impossible to sell the number and variety of products or generate anything close to a developed countries GDP at 12.5 customers per year. So my recommendation is, Jeremy, fire them then fire yourself and get some decent sales staff and a half decent sales manager to show you how it’s done.

Enough of my rant; let’s move on to see what else might change. I’d expect a close rate of around 30% not 25%, plugging in these numbers you get a vastly different outcome of 1 sale for every 165 calls, at 50 calls a day that’s 1 sale every 3 and a bit days. So with those few small changes cold calling becomes, as it always was, a viable option. I know it’s increasingly fashionable to pooh-pooh cold calling but it is a fact of sales life and particularly in tough economic times it stands up well to the “lets never make a cold call again” brigade. There are also industries where cold calling is the expected method of selling and connection. In the UK this is true of the construction sector and much of the manufacturing and engineering sectors and where, frankly, using other marketing techniques as the primary source of lead generation would be about as useful as a chocolate teapot.

Now being over 50, I might be a bit of a dinosaur, but, what’s clear is that even with all this new technology led marketing, lead generation and networking, sales results are no better than they were 25 years ago, and in many cases worse. One of the reasons for this, I submit, is because sales people and their managers have let themselves be seduced away from cold calling, not because it doesn’t work, but because it’s the most unpleasant part of the job.

Your comments please.

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.