Archive for August, 2010

Turning the Funnel into an Hourglass

August 31, 2010

In recent months, I’ve referenced the sales funnel as a way to track success in converting cold calls into closed business.  It looks like this:

The sales funnel, while tried-and-true, is fraught with inefficiency, often requiring a ratio of cold calls to closed deals of 20:1 or more to be successful.  The problem with this ratio is two-fold:  1)  You might not have enough prospects to support this ratio, and 2) a lot of your time is wasted on getting prospects into the hopper, only to find them fall out on their way down the funnel.

There are two reasonable fixes to this problem:  1) improve your ratio of closed business to cold calls, or 2) turn your funnel into an hourglass, which looks something like this:

As you might guess, I’m in favor of option 2.  Improving your close ratio has its merits, which I advocate in any case.  But once this fine-tuning is complete, you need to turn your focus on converting the funnel to an hourglass.  By doing so, you remove yourself as the bottleneck and increase your leverage.

Allow me to explain.  Suppose you have 2 existing customers who are reasonably happy with you, your product, and your company.  Now imagine that you spend all of your spare time converting these reasonably happy people into “super fans”, who would not only serve as a reference for you, but would go out of their way to solicit new customers on your behalf.  These super fans would be so pleased with your product that they would ask to speak at conferences, host a customer visit, blog about your product, tell their friends that they simply “have to take a look” at your solution.

Instead of burning up hours trying to convince strangers to hear your pitch, why not create super fans who will start the movement for you?

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Sometimes Now Is Better

August 27, 2010

Since childhood, we have been taught the virtue of delayed gratification.  We were encouraged to drop our allowance into a piggy bank, taught to save up for something we really wanted instead of wasting our money on trivial trinkets or short-term pleasures.  “Good things come to those who wait”, we were reminded.

This mindset has its merits;  it’s the reason we go to college after graduating from high school and the reason we eat dessert after dinner.  Waiting is admirable.  Waiting is good.

But sometimes, now is better.

  • Now is the time to cold call.
  • Now is the time to accept the promotion.
  • Now is the time to introduce yourself to the CFO.
  • Now is the time to fight for the business.

Because if you’re waiting for the right time, the right circumstances, for things to be perfect, that day may never come.  Today may be as good as it gets.

What’s Your Tagline?

August 24, 2010

I’ve been thinking a lot lately about what message I’m sending to my customers, and how that might contrast with what I want it to be.  Companies spend a lot of money trying to craft that message  – I’ll call it their tagline – in hopes that people see them as they want to be seen.  Mercedes’ newest slogan is “The Best or Nothing”, which I like.  It effectively says “We didn’t show up here to finish in second place, because second place might as well be last place”.  It’s cocky, for sure, but delivers a powerful message.

Have you thought about your personal tagline?  I’m not talking about some cheesy motto or a worthless mission statement.  I mean the distilled, refined version of who you are and how you want to be perceived by your customers, colleagues, and competitors. It’s a worthwhile exercise, because once you decide what your slogan is, you can use it to validate your actions and keep you on track.

Incidentally, mine is “Radically Over Deliver”, which I borrowed from a Seth Godin blog months ago.  I’m not there yet, but at least I’ve got a beacon that helps me keep the ship righted.  Any action I take (or decision I make) can be measured against that tagline and gives me clarity of purpose.  Don’t have a tagline yet?  Well, as the Avett Brothers sing, “Decide what to be, and go be it.”

Practice

August 20, 2010

Steve Nash has the highest free throw percentage of all active NBA players, and the second highest of all time, at 90.3% for his career.  And at only .6 percentage points behind, he has a very real chance of finishing in the number one spot (he’s trending higher as he gets older), ahead of current all-time leader, Mark Price.

It is no secret that Nash has become a prolific free throw shooter because he practices.  A lot.  I mean, it’s his job, right, to make free throws….so why wouldn’t he practice?  And it’s not just free throws, either.  Nash practices the jump shot, the bounce pass, dribbling, the alley-oop – all sorts of stuff.  And 82 games out of the year, that practice helps win games, helps fill seats, and earns Nash about $11 million a year.

How often do you practice?  Between the meetings, the cold calls, the presentations (all the game-time stuff), what are you doing with your time?  Are you getting better, or standing still?  Will you finish your career as the all-time “closing ratio” leader, or as someone who didn’t even make it to the professional ranks?  If Steve Nash has to do it (because it’s his job), why don’t you?

The Deal vs The Experience

August 17, 2010

We live in the age of the “good deal”…they’re everywhere to be had.  Amazon.com has good deals on books, Wendy’s has good deals on fast food, Home Depot has good deals on bathroom tile.  These deals have very little to do with people, and everything to do with price.

Contrast this with the noteworthy “experience”.  The experience has everything to do with people, and very little to do with the cost of the transaction.  It requires your conscientious effort, it requires your consent to over-deliver.  Dinner at Capital Grille, a honeymoon trip to Paris, a round of golf at Pinehurst #2 with caddies –  are all about the memorable feeling created by people who go the extra mile (even those you don’t see), to create something special.

Every day, you make a choice about how you engage your customers.  Do you focus on price, or do you focus on an encounter that they can only get with you?  And which are they more likely to remember….that they got a good deal on some faceless transaction, or that you gave them more than they bargained for: a remarkable experience?

Too Many Indians, Not Enough Chiefs

August 13, 2010

Once upon a time, the decisions on how to take care of customers were left to a chosen few – the chiefs.  The indians were not permitted to make problems go away… that heady work was left for the guys with the fancy titles and headdresses.  It worked pretty well.  The chiefs enjoyed calling all the shots, and the indians were thankful that they didn’t have to think.

The world doesn’t work that way any more.  In order to succeed in the new economy, we need more chiefs and fewer indians.  We need more cooks in the kitchen.  We need more people who are empowered to make decisions that impact customer service in a positive and meaningful way.

When organizations finally make this move (they must or they will be replaced by competitors that do), most of the indians will be pretty upset.  They like passing the buck; they like someone else being in charge when the invoice is screwed up or the maintenance contract has lapsed.

But like it or not, companies that push the power of controlling the customer experience to the far corners of the workforce, to the receptionist and the service technician, are the ones that will win.  We’ve got plenty of indians.  We need more chiefs.

Would They Ask for You by Name?

August 10, 2010

If you were a waiter or waitress, would they ask for you by name? Do you provide the type of memorable service that would cause people to seek you out, if they had a choice?

It isn’t that hard, really. Waiters who get asked for by name might exert an additional 5% of effort. Perhaps they remember your name, or that your child has a peanut allergy, or that you like to order the entree that’s no longer on the menu. Whatever it is, you get the feeling that they care about their job, in fact that it’s less like a job at all, and more like…art.

Seth Godin has written a wonderful book (Linchpin) about the creation of art, and how we all need to become “artists” in our own right, in this new economy.  I highly recommend it, but in the meantime, consider whether or not people would ask for you by name, if they had the opportunity to choose (which of course, they do).

The Hierarchy of Selling Value

August 6, 2010

In almost everything that is bought or sold, there are varying degrees of value tied to a particular product or service. These varying degrees create a “hierarchy” of competitive offerings that looks something like this:

The farther up the scale you go, the more value a customer will see in your offering, and the higher your margin will be. And as you descend this hierarchy, you eventually reach a point where absolute commoditization is achieved, a point where the supplier with the lowest price always wins.

Most salespeople fall somewhere between Meeting the customer’s needs and Giving personal attention. After all, it’s hard to draw a connection between a piece of software and earnings per share. Yet, if we want to achieve the trifecta of: 1. highest value to our customers, 2. highest margin, and (not yet mentioned) 3. highest value to our own organizations, its what we’ve got to do.

If you find yourself only competing on price, it’s time to start looking for another gig. Because there’s a good chance that a website could one day take your place, and they don’t need salespeople for that.


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