I reply to the prospect, “I’m going to have three clients call you and give you a reference on my services.  I’ll also provide you with their contact names and phone numbers, but because of your busy schedule I will ask them to reach out to you and hopefully you’ll avoid playing phone tag.”

This always impresses the prospect.  Some version of “Gee, she’s got clients willing to call ME and give me a reference.  She must be very good,” is what goes through their head.

Then based on the project,  I select the most appropriate three clients and ask them to be a reference for me.  If I get voice mail, I leave a message and follow up with an email saying something along these lines:

“I was hoping you could be a reference for me.  I’m being considered for an opportunity that is similar to what I did for you.  In deference to your busy schedule, and so you can avoid playing phone tag, I’m providing the contact info below for my prospect.  At your convenience, could you please call this person and provide a reference for me?  If you get voice mail, just leave your opinion of my services in the voice mail message.  If my prospect wants to follow up, s/he will. ”

Now my clients, who are happy to provide a reference, are able to do so at their convenience.  And if they get voice mail (a likely occurence), they are still able to leave a message voicing their opinion of my service.

Here is why this works – everybody feels like I’m being respectful of their busy schedule.  My clients are happy to give references, and usually leave glowing voice mail messages.  The prospect is impressed because I have obviously built relationships strong enough to ask my clients to pro-actively give references instead of waiting for a call.  On more than one occasion, I’ve been awarded a contract when the prospect never actually TALKED to one of my references.  But between the voice mails from my clients and the video testimonials on my website, they felt like they HAD spoken to several clients.

Try this for yourself some time, you’ll be amazed at how efficient and effective this can be as a sales tool.

One common complaint heard from CEOs time and again is centered around the pipeline (or lack thereof) and the shortfall that occurs every quarter.  The pipeline never seems to live up to its promises.  I’ve sat in enough sales meetings now to quickly figure out if a company has a real pipeline or a pipe-dream.  The four most common mistakes I see are listed below:

1.  Lack of a common sales methodology:

There are a lot of great sales methodologies out there and many are equally effective.  Whether you adopt Spin Selling, Sandler, or something else it is important that you make sure everyone is following the same one.  The strength of any process comes in everyone speaking the same language and following the same methodology.  That way every opportunity is being managed in a similar fashion and the entire sales team is moving in unison.

2.  Lack of common descriptions for stages of the sale:

As with adopting a common methodology, you want everyone on the sales team to use the same definitions and stages for the sales cycle.  It doesn’t have to be complicated.  Here is a five stage system we often set up for our clients:

Stage 1 – This is a “suspect.”  You have not begun the qualification process.  You got this contact from a networking event, participation in a webinar, an online inquiry, etc.  You “suspect” this company/person may need your services and want to start a dialog.

Stage 2 – The first level of a prospect.  You’ve had at least one conversation, you are starting to understand the prospect’s “pain” and how you might provide a solution.  The prospect is interested in learning more about what you have to offer.

Stage 3 – The second level of a prospect.  You are having specific conversations with the person(s) involved in making a decision to purchase your product or services.  You are gathering the information you need in order to submit a proposal.  You have information on the budget, time line for decision, your competition and you are formulating your solution.

Stage 4 – Proposal stage.  You’ve submitted the proposal.  Ideally, you presented your proposal in person or the phone and got an initial reaction from the buyer.  You have been told when a decision will be reached and you can “guesstimate” your chances of winning.

Stage 5 – Pending Contract.  You’ve won your proposal and you are now getting the signed contract, the deposit check, and setting up the first stages of implementation.  This is one of the most critical stages of the sales process.  Many things can go wrong even after you’ve received a verbal award or a signed letter of intent.  It is important to monitor your sale until the equipment has been shipped, or the first meeting has taken place and the initial check is in the bank.

Lost – If you lost the bid, you still want to track this prospect.  The company that won the award might not deliver.  Or you may have an opportunity to get back in the door with a different solution.  Your sales management should define how you recycle a lost prospect back into the sales process.

Using a common sales process and description for where a prospect is in the sales cycle can eliminate about 50% of pipeline confusion.  Once you’ve defined the stages in your sales cycle, make sure you also have defined criteria for each stage.  The criteria should be more than what we’ve listed above.  It should include information on the prospect (company size, number of employees, SIC code, etc.)  in addition to specific criteria such as “you can’t move to stage 4 unless you can tell your sales manager when the customer plans to make a buying decision and who will be involved in that decision.”

3.  Not tracking the numbers

Sales is a numbers game.  You need X amount of suspects to get X amount of prospects to get X amount of meetings which will result in X amount of proposals which will result in ONE new customer.  The task of marketing and sales management is to shorten the sales cycle by reducing these ratios.  But if you aren’t tracking the numbers you have no idea what you’re reducing (or increasing!).

It takes 6-12 months to get a good “read” on the ratios that apply to your company sales cycle.  Once you have these ratios you can quickly look at a pipeline report and determine how realistic your quarterly revenue projections are going to be.  If the ratios in the pipeline don’t match your pre-determined sales cycle then you have a problem.

4.  Not using a centralized sales tracking system

It doesn’t matter if you choose ACT!, GoldMine, Salesforce.com, or any of the other sales tracking tools on the market today.  You want all the data in a centralized location.  We highly recommend using something that is web-based so that you and your management team can access the data from any location.  For many sales people, their rolodex is a valuable asset.  It isn’t uncommon to leave a company and turn in a laptop that has been wiped of all contact information.  Then management has to go in and try to recreate everything.

With a sales tracking system, you can enforce the stages of your sales cycle, you can assess your metrics, and determine (on an individual basis) who within the sales team is driving their sales forward and who is filling their pipeline with dreams.

I can’t guarantee that eliminating these four mistakes within your organization will ensure you hit your revenue targets.  However, I can guarantee that if you implement a standard sales methodology, adopt common sales stages and enforce criteria for each step of the sales cycle, measure your metrics and use a company-wide online sales tracking tool that your pipeline reports and revenue projections will be realistic, credible and far more accurate.

With that said, here are some things we hope you’ve taken into consideration when finishing up your marketing plan for 2009:

1. Collaborate with the sales team.  Have you met with the VP of Sales and discussed the objectives for 2009?  Have you attended the sales meetings on a regular basis?  Do you know how the pipeline works and do you have a written agreement with the VP of Sales that describes exactly what qualifies as a lead from the marketing department? This way, you can avoid the conversation in July when you say you generated 2,000 leads and they say you generated 20.
2. Have a customer retention and growth plan.  Don’t even think about how you’re going to attract new business until you’ve figured out how you’re going to keep what you already have.  You’ve already made the major investment it takes to capture the customer.  Now you’ll want to develop a customer communication and retention plan that cross-sells and upsells your services to the existing customer base.  What is the lifetime value of your customer today?  How can you increase that number?
3. If you haven’t already, start developing your social media strategy. It can be overwhelming when you’re presented with all the different options for social media.   Blogging, podcasting, twittering, the list doesn’t end.  So don’t worry yet about what tools you’ll be using.  First start thinking about who you want to talk to, what is important to that audience, and what information you can share that will bring VALUE to your target audience and help them connect with you on a one-to-one basis.  Figure out the strategy first and then research the best tools you need to do the job.
4. Figure out how you’ll measure everything.  Do you have a CRM system yet?  Are you tracking your online analytics?  Do you have an inhouse mailing list?  Do you know how much revenue next year will come from existing customers versus net new business?  Do you know how many raw prospects it takes to develop a decent lead that ultimately ends up in a sale?  If you can’t measure your performance and justify your budget then you really are just a walking piece of overhead.
5. Develop three to five key marketing objectives for the year and put them on your whiteboard. Then make sure every activity somehow relates back to those key objectives.  Keep it simple and straightforward.  The key is consistency.

Finally, take the time to network with your colleagues.  There is so much to learn, the shared wisdom and collaboration that comes from meeting with your peers is invaluable.  It is easy to get so wrapped up in actually DOING the marketing for your company that you forget to look outside for fresh ideas, validation of your own and inspiration on how you can become better at your craft.

Elements of BD

I often get asked if I know of any best practices on how to compensate sales and business development professionals. This topic has been a moving target since the first sale of anything ever happened! How do companies balance their need for more sales against the motivations and drivers of their sales and business development people in order to get what everyone wants?

You won’t get the silver bullet in this post, however, we’ve made observations worth sharing. Part of the problem is that the One-Size-Fits-All-Sales-People Compensation Program that companies adopt creates that moving target that makes you crazy. If the “one size fits all” doesn’t work, then a more flexible structure could be explored.

More

I think a sales compensation system could be based on two things (HR and accounting folks will cringe because this will require more work for them):

1. Strengths of each sales/business development professional
2. The specific business development activities they accomplish

Let me tell you what I mean by these. Everyone has strengths and weaknesses. Some sales and business development people are excellent at building relationships, others at qualifying leads and others at closing the deal. What if a company would pay their sales people to do more of what each sales person is good at?

See if the attached graphic explains what I mean. When we do an analysis of the Business Development Function for our clients, we use a fabulous graphic, designed by Lissa Levinson, to highlight the many activities needed to complete the “race” of business development. (download it here elements-of-bizdev-flyer ) Each one of these activities is worth something to an organization. Perhaps the organization places a high value on information and intelligence collected on prospects. The test to gauge how much value a company places on information is to watch how comfortable management feels when sales people leave with all the data they collected on prospects while on company time.

Or perhaps the organization doesn’t care as much for the contact data or even for relationships built but just wants the revenue numbers to grow. Period. In every case, the compensation structure for each sales person could be built around the specifics of what management truly values. Those specifics would then be married to the strengths of their sales force. Different compensation programs for different strengths.

Is there a company out there doing this? I’d be interested to hear what others think.