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| Market Player |
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| By Richard Fineman | |
| Thursday, 19 July 2007 | |
 Long-term growth depends on sales, but do your systems make sense? Success requires a defined process. • Sounds simple enough, but it isn’t. Selling is a numbers game. Yet, simply increasing the number of customers isn’t the answer to long-term growth and profitability. Many other key indicators contribute to sales success. • One key indicator of sales success is having a defined, tested or proven-effective sales process. Ask a few business owners what this is, and many will not know the answer. Yet, the purpose of having and using a sales process is to increase the closing rate of salespeople. When they follow a prescribed, well-defined process, they will sell and earn more. A solid sales process includes: • Creating a sales plan for each sales call, including a goal, as well as what to say and do • Developing and implementing a system for lead tracking and follow-up • Establishing a system for getting to know and tracking customer preferences • Generating well-written, professional correspondence that positions the salesperson and the company in the best light possible • Knowing when to write, call or make in-person visits to prospects or customers • Having the right presentation materials and leave-behind pieces, at the right time • Using effective proposals and easy-to-read contracts/agreements • Developing and promoting a consistent company brand • Using technology in order to become more efficient • Creating and using an effective sales reporting methodology The Sales System In addition to having a sales process, a sales system is equally important. Roy Chitwood, president of Max Sacks International, a Seattle-based international sales and sales management training and consulting firm, teaches “track selling,” a seven-step sales system. He believes that unless salespeople take into consideration how people buy and why people buy, they won’t be able to duplicate their sales successes. That makes sense. The seven steps in track selling are: 1. Approach – Build rapport; this is what the salesperson does to build trust, demonstrate professionalism, interest in the prospect and good listening skills, and make the prospect like him/her. 2. Qualification – Ask open-ended questions to identify needs, wants and problems to be solved. 3. Agreement on need – The salesperson should be able to restate what the prospect communicated. 4. Sell the company – Not only does the prospect have to like and trust the salesperson, but the prospect needs to know the company’s credentials and believe the company can deliver on the promises made by the salesperson. 5. Fill the need – Use features, benefits and reaction questions to make sure the solution offered represents what the prospect wants. 6. Act of commitment – Close the sale. 7. Cement the sale – People buy emotionally, but stay sold based on logic. Salespeople who want to improve their “numbers” can benefit from using a sales system. The results of a Pepperdine University study of 1,500 graduates of his selling system showed that 60 percent of participants experienced a 25 percent or more increase in sales, Chitwood reports. Marketing Strategies/Marketing Support “Selling is finding the people to sell and selling the people you find,” Chitwood says. Most businesses agree that finding the people to sell is a marketing function. Marketing functions include creating strategies and differentials in the areas of pricing, product/service development, promotion (advertising, direct mail, etc.) and production (delivery of services). The marketing numbers are important because they affect profitability. For example, selling more to existing customers generally increases profitability because there are virtually no marketing costs. On the other hand, generating new customers while adding to the revenue base can be costly. Traditional marketing initiatives such as direct mail, tradeshow participation, advertising and public relations can add several tens of thousands of dollars to the annual budget. Without a method of evaluating the ROI, this investment can be like a leaky faucet. It just keeps draining the company’s resources. When looking at a winning set of numbers for marketing, it’s critical to be able to calculate ROI. For example, a company places a full-page ad in a highly desirable publication, which costs $5,000. That means the ad needs to generate enough leads for salespeople to close business above and beyond that marketing expense to make the expense worthwhile. In addition to marketing costs, there are more numbers that can negatively impact the company. For example, compensation packages for salespeople, especially for those who are on salary and not commission. What happens when salespeople don’t reach their goals and they still get paid? Also, does the company consider employee benefit packages and expense accounts when trying to determine what makes for a profitable business? Pricing strategies represent yet another number in the sales game. Some companies offer significant discounts just to bring in business. Yet, pricing based on value can bring in more dollars and a higher profit. How Did You Hear About Us? Companies spend tens of thousands of dollars on ads in telephone books, yet most don’t track where inquiries and sales come from. Without this information, a winning set of numbers is virtually impossible. Sometimes, it’s as simple as asking, “How did you hear about us? Was it through the Yellow Pages, a coupon, a neighbor or somewhere else?” If the results show that 95 percent of the sales come from a source other than the Yellow Page ads, of course the company will want to re-examine the spending in this area. Another way to track the source of sales is to conduct a survey for customers to complete after the sales transaction.Typical survey questions include how the customers heard about the business and why they selected the company. The responses can be surprising. For example, one company found out that while it wasn’t the cheapest, the firm was selected because of convenience and a reputation for on-time delivery. This business also found out many of its customers heard about the company from coupons inserted in a grocery store packet. This simple tracking survey helped the company develop a stronger marketing plan. Today, off-the-shelf and custom software is available to help companies track their leads, manage the sales process and provide excellent customer service. Automated tools help the sales team become more efficient and prevent the steps of the sales process from falling through. E+P Richard Fineman is a consulting services director for International Profit Associates and Integrated Business Analysis (IPA-IBA). IPA and its related companies provide comprehensive business consulting, tax planning and business valuation services to companies in the United States and Canada. For more information, call 847-495-6786 or visit www.ipa-iba.com. |
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