Selling For Profit - Five Steps to Help You Focus on the Profitability of the Sale

1. Make Profit Important Get your people in line. All employees need to understand the rudiments of how they can behave profitably. Yes, you can behave profitably! Help all employees to have a regard for the costs they incur in their daily jobs. Share (in general terms) how much of the cost of running the business is represented in the cost of the product or service you are selling. Understand how easily this is given away due to inefficient behaviours, wastage, getting things wrong, letting customers down and so on. 2. Understand Costs As a business you need to know what to charge to cover all your costs and achieve your profitability targets. Whether you are charging for your time, a product or a service, you will need to know how to recoup all costs relating to making that product or service available and what profit margin will sustain your business. Check regularly what the costs of running your business are and your level of sales revenue. Then you can keep track of your viability as a business. It sounds simple and it is! Costs need to be in focus. 3. Define your Pricing Policy Define a process for managing the prices you charge. Many companies use an upper and lower limit as a guide for market pricing. Communicate clearly to your employees what their limits are and measure performance, rewarding good pricing management. It is too easy to let price slip when giving discounts and running promotions, so let employees know when they can stretch to their limits. Record your companies' adherence to pricing policy and take strong measures if you're letting good habits slip. 4. Find the right Price Position Find a position that sits well with your offer. Use the market as a guide in the first instance but intuitively you will know if your charges are about right for what you offer. You might consider the following three observations whilst deciding your price position: 1. Pricing is not going to differentiate your business. Service or quality will make you different, not price! 2. Prices, which to some look like good value, may look cheap to others. Not everyone likes cheap. 3. Try to be premium or low-cost; it's good to be one end of the scale rather than the middle. The centre ground can suggest no position at all! Find a price position and try it. If it doesn't work don't get stuck, look again and find another position that fits. 5. Understand your 'Hidden' Value Many products and services have become commodities and can become labeled with a price. Some businesses on the face of it do exactly what other businesses do. An accountant is an accountant after all. Not so! You may have to work hard to find differences but there will be some. Try hard to find these differences because you can charge for them! You may be bigger, smaller, faster or more experienced. You may wear the right kind of tie! Change your position to become the type of supplier they need. Your 'hidden' value is actually the ability to find what the client values most about your product or service. You will rarely need to be the cheapest if you can discover the 'hidden' value in your offer. KEITH PLACE DIRECTOROXFORD SALES CONSULTANTSHelping you to be better at selling - whatever you sell Article Source: http://EzineArticles.com/?expert=Keith_Place

Improving Sales Force Effectiveness Using Six Sigma

Abstract For effective sales, companies need to differentiate how they allocate their limited sales resources among existing customers, customer service and new business development (prospects). When ranking Customers and Prospects, the common metric is usually either sales or profits. This paper will show how you can blend multiple desirable sales characteristics including Sales Growth, Close Rate, Payment History, Unit Volume, Repeat Business, along with Sales and Profit, to create an "Overall Performance Factor" for each Customer or Prospect. This Overall Performance Factor can easily be sorted to create an objective ranking of best to lowest performance in which you can prioritize and assign the appropriate sales resources to meet the company's objectives. Background Sales Process / Performance Improvement Project Customer Ranking - Shortcomings of the 80/20 Rule Multi-Measure Approach Needed Created a New Customer Ranking System This Property & Casualty Insurance company needed to evaluate their Sales Process. While they were profitable, earnings were flat for the last 3 years and their investors were punishing them with a low stock price. The analysis led to an evaluation of their Independent Sales Force. They sold insurance through independent agencies. These could be sole proprietors who sell one company's insurance products exclusively or larger multi-agent firms that sell multiple, and even competing lines. At the time of this project they had about 2400 independent insurance agencies. These agencies were their "business-to-business" customers. Ranking their independent agencies based on Sales (traditional method) quickly showed itself as being an incomplete view. They were concerned about multiple measures including Sales Growth, Consumer Retention and Profitability. The company needed to do great in all of these measures, plus Sales/Revenue, to meet the earnings growth expectations their investors were demanding. A Multi-Variable-Pareto calculation tool was used to develop a single customer (or independent agency) ranking. This tool used the principles of Pareto Analysis but allowed them to calculate an Overall Performance Indicator based on multiple performance factors. Multi-Variable Pareto Method Pareto Charts were developed in the late 1800's by an Italian Economist, Vilfredo Pareto. He used this analysis to determine that wealth was skewed to a small portion of the population. In his time, 80% of the land in Italy was owned by 20% of the families in Italy. From Vilfredo we derived the Pareto Principal or 80/20 rule. This is commonly used in sales, with 80% of sales generated by only 20% of customers. Pareto Analysis is a great business tool, but there is more to increasing profit than focusing on just sales, or even just profit. There are leading and lagging indicators of profit growth from the customer base. Measures The first step was to determine what measures defined great customers (or great independent agencies). A cross functional Six Sigma Sales team was formed representing Sales Executives, Sales Representatives, Marketing, Finance and Operations. The Insurance Company Six Sigma Sales Team defined great agencies as having: High Sales $ High Gross Profit % High Consumer Retention High Year-Over-Year Sales Growth By defining Sales Growth as important a measure as Sales $ they were signaling to their Account Executives that focusing on smaller but growing agencies was just as important as focusing on larger, low growth agencies. As you will see in the data below, many high-sales agencies had flat to declining sales. Forced Ranking Force Ranking mathematically equates these different measures for the overall calculation. This process simply makes the largest number equal to a 10. Then all other customers are proportioned with respect to the largest. This Factor is used in the Overall Performance calculation. Overall Performance Factor The Overall Performance Factor is a combination of each measure's factor. You can also weight each measure and use this to calculate the overall performance factor. The last step is to sort the customer list based on the Overall Performance Factor. Then you can make prioritization decisions about how to allocate Sales and Customer-Service time. Top Customers - Get them the most focus, time and service Average Customers - How can we move them up? Below Average Customers - Can use multiple strategies such as using an inside customer service rep versus field rep to service this customer, or remediate them Insurance Company - Customer (Independent Agency) Ranking (Note; the data below is an approximation of the 2400 agents) Agent - Revenue - GP% - Retention - Sales Growth - Ranking Factor D: $1,594,302; 64.1%; 99.1%; 28.4%; 7.9 F: $854,831; 61.6%; 97.2%; 17.4%; 6.7 K: $605,476; 47.1%; 97.3%; 32.8%; 6.6 M: $437,846; 68.2%; 98.6%; 15.7%; 6.6 A: $4,832,484; 52.6%; 88.8%; -11.3%; 5.9 L: $550,957; 56.7%; 90.3%; 19.5%; 5.9 E: $990,329; 64.7%; 90.9%; 9.6%; 5.8 C: $2,874,903; 57.2%; 87.2%; -3.7%; 5.7 Q: $370,592; 53.9%; 98.5%; 4.6%; 5.2 B: $3,219,154; 49.8%; 83.2%; -5.9%; 5.2 X: $158,731; 53.2%; 99.0%; 4.5%; 5.0 O: $420,402; 50.3%; 92.2%; 8.3%; 4.9 G: $732,865; 51.8%; 87.5%; 7.4%; 4.7 I: $619,532; 45.8%; 94.1%: 2.1%; 4.5 P: $419,475; 60.1%; 84.7%; 5.1%; 4.4 W: $166,385; 53.0%; 85.4%; 9.4%; 4.3 J: $616,291; 44.6%; 86.8%; -0.3%; 3.7 N: $421,985; 45.4%; 83.0%; -2.0%; 3.2 R: $303,291; 32.5%; 85.9%; 1.6%; 3.1 T: $200,158; 41.1%; 82.0%; -1.8%; 2.8 V: $184,910; 39.4%; 82.2%; -5.4%; 2.5 U: $192,138; 43.3%; 82.9%; -9.6%; 2.4 S: $235,219; 35.8%; 84.2%; -8.1%; 2.3 H: $645,032; 42.7%; 82.6%; -14.2%; 2.3 Customer Differentiators The next step was to determine what characteristics statistically differentiated the best customers from all others. The team brainstormed all possible ways to segment customers. There were 72 different possible classifications. Three characteristics were common (based on statistical testing) amongst the best. These were: Did not already sell insurance Had a Business Plan Were in business for 5 - 10 years Results Instead of treating all customers equally, or rewarding sales agencies with high sales, but no growth, this company differentiated how they allocated sales resources to existing customers and prospects. Sales strategies were developed based on the ranking. Different ranks required different action plans to achieve improvement. Following the analysis, they recruited insurance agencies that were similar to the high performers, trained them to match the business techniques that were used by the high performers and provided marketing support that was most highly utilized by the high performers. Six months following the implementation of this project, this Insurance Company's earnings grew by over 26%. For more detailed information about this subject go to http://www.supplyvelocity.com/ for our white papers. Article Source: http://ezinearticles.com/?expert=Mitch_Millstein

What Can CRM Do For My Sales

Thanks to the large number of CRM software programs on the market today, most people have heard of CRM software. But many of those people have an incorrect or incomplete understanding of what CRM is capable of doing. This article will describe what CRM can do for your sales. After a brief overview of the concept of CRM, we'll identify some typical sales problems that CRM can solve. CRM became a buzzword in the 1990's. It referred to a technology-driven initiative to unify the efforts of a company's customer-facing departments. This new strategy would restructure these departments around the company's greatest asset - its customers! CRM would allow customer information from across the company to be available to any employee who happened to interact with the customer, enabling the sales team to sell more successfully, the marketing team to segment and market to customers more effectively, and the service team to provide more personal, more effective resolution to customer complaints or requests. Simply put, the technology available at the outset of CRM was insufficient to allow the concept to deliver on its promise. Today, however, the technology is available, and companies of every size and budget are realizing the benefits of CRM technology. Is your company one of them? Do you know what these benefits are? Why Do I Need CRM? Below are some typical problems that can be solved by implementing CRM.... "I want to improve the performance of my sales team this year." Well what do you mean, "improve?" How did you measure the performance of your sales team last year (meaning can you identify important metrics other than total revenue or number of sales)? Here are some specific questions you may ask yourself: o Can I identify the areas of performance in which my sales team did well, and those in which they underperformed? o Can I identify which of those areas has historically had the greatest impact on overall sales performance? o Which of those areas can be improved with the least investment of dollars, time, or training? o Which specific behaviors should I encourage to drive the performance increase I seek? For example, it may be that you had good lead generation and qualification numbers, but fell short in your more advanced sales stages. Or maybe your sales reps seemed to stall out in a certain part of your sale cycle, taking much longer than you would expect to achieve the objectives there and move into the next stage. There are many ways a sales team can underperform. But if you don't have a well-implemented CRM system, the odds are good that you can't accurately answer the questions that will help you improve. The truth is that measurable improvement can only come from measured results. Otherwise, your message to your sales team will continue to consist of frustrated admonitions to work harder or close better. "I think my sales team is doing a poor job of following up on the leads we receive, although I can't say for sure." There are two problems in this statement - the first is the suspicion that your valuable leads are falling through the cracks; the second is the fact that you can't measure the degree to which effective follow-up is occurring on the leads your team receives. CRM is designed to chain together a prospect's progress through the different stages of your sales efforts, from campaign to close. You can see exactly how many leads your sales team receives, and what actions are taken to pursue those leads. This information is available in high-level percentages and in detailed specifics about each lead. "I only know what's in the pipeline once a week - after spending hours calling my direct reports. By the time I'm done aggregating the data, things have probably changed anyway." It's hard to proactively manage your sales team in today's sales environment without knowing exactly how the pipeline for your team and for each rep looks. Identifying regions and reps that aren't performing well isn't possible without pipeline information. When this information is available real-time, you can use your valuable time for coaching and enabling your team rather than collecting their numbers. Opportunity management in CRM gives you and your sales reps and the ability to see what's in your pipeline in real-time. Information can be organized to show where each opportunity is in the sales stage, when it's expected to close, and what the rep expects it to be worth. Furthermore, if you know your sales process well enough to identify factors that indicate high chances of success or failure in an opportunity, certain opportunities can be flagged to help you take the necessary steps to close those deals or keep them from falling out of your pipeline. Over time and with enough accumulated pipeline data, you can begin to understand the probability related to pipeline values in different stages of your sales process. This understanding will help you forecast sales more accurately and identify the optimal pipeline numbers in each sales stage that will maximize pipeline through-put. "My sales reps don't execute the sales process properly. It's hard for me to identify the degree to which they're really following the process. It's also hard for me to mandate change in sales rep behavior." When CRM becomes the tool your sales team uses to manage the information relating to potential sales, it also becomes the medium through which you can mandate positive change. Your sales process can be integrated into the CRM system, allowing you to monitor the tasks and stages that each rep completes for each deal, or giving you high-level statistics to see the degree to which the sales process is being followed by your sales team as a whole. "My reps are not productive enough - they spend too much time doing things other than selling." CRM is designed to automate the tasks that take your reps away from selling. Whether it be · creating quotes or proposals · churning out follow-up communications · communicating internally with others involved in the sales process · saving or hunting for saved customer communications or the host of other tasks that cut into the time reps spend in front of potential customers, CRM can streamline or automate these tasks to free up more selling time for your sales team. "It takes too much time and effort for my reps to collaborate with other groups who could help in the sales process - we don't collaborate as much as we'd like to, and the collaboration we do engage in is inefficient." This is a CRM sweet spot. The whole concept of CRM is to allow information to flow across the enterprise in the instant it's created. Sales data will be made available to key players in your organization who can help move a sale to completion. This information flow can be automated, eliminating the need for manual communications. Tasks will be automatically created, both to remind your team members to complete assignments and to allow you to monitor and follow-up on tasks that aren't being completed. All of this drastically reduces the time your team needs to spend on the phone or sending emails to inform others of details relating to a sale. "My company's customer and prospect information is unreliable." Today is a great day to start reversing this trend. While you may or may not be able to improve the quality of the data you already have, you can certainly ensure that the customer data you create from now on will be complete and reliable. Good data keeping requires 2 things: a policy and a place. CRM gives you both. You define the policy by deciding what information is required for CRM records like accounts and contacts. Duplicate detection tools and other validation procedures defined by you can be created to ensure the purity and entirety of your customer data. And, of course, CRM is the place - the new center of all customer-facing information in your organization. by Andy Schultz Questions or comments? Invoc exists to help companies identify the ways CRM can contribute to measured, sustainable growth in sales, service, and marketing activities. Feel free to contact Invoc using the information below if you would like to explore the possibilities for CRM at your company. Invoc is a Microsoft Partner specializing in Microsoft Dynamics® CRM. 713-240-3549 http://www.invoc.net info@invoc.net Article Source: http://EzineArticles.com/?expert=Andrew_B_Schultz

What Do Customers Want Now?

As the Great Recession continues to abate, there are signals that companies are finally shrugging off the siege mentality of 2009 and cautiously looking ahead for opportunities to cultivate markets with new products and services. According to a McKinsey global survey, executives are looking for external funding and actively returning to planning medium and long term initiatives. This is in stark contrast to the "cut and cover" tactics of the past two years. What do these hopeful signs mean for sales teams working with these companies? One implication is that it is also time for sales teams to switch gears. Calling on customers can be more rewarding and productive for everyone if sales teams are in touch with what customers want from them as they plan for growth. So, what exactly do customers want from the sales relationship as signs of growth return? A recent study conducted for an industrial distributor provides some answers. Distributors and dealers were asked to rate what was important to them in the buying process and the frequency with which they saw sales teams demonstrating sales actions that delivered value. The results from 410 respondents paint a picture of customers looking for both basic efficiencies in getting things done as well as stimulating ideas and creativity. On the other hand, the data also reveals that many customers in the sample felt that a significant percentage of sales teams weren't delivering value beyond product and service transactions. When asked to rate what was important to them in the sales relationship, a set of sales actions which had a theme of "getting things done" percolated to the top of the list. The highest rated of these reflected taking steps within the vendor company to fulfill customer requests, solving problems effectively, making sure the customer were getting the benefits of the product or service, and knowing enough about the customer's business to understand their needs. Straight talk about the products and services and how different they were from the competition was also highly important. The customers seem to be saying that what is important to them, first and foremost, is a sales process that matches a need to the right product or service and gets it efficiently delivered and installed. This is a more or less transactional set of expectations that view the sales process as an ends to a means. Why is that so important to customers? One possibility is that this narrow focus serves a hunkered-down economy where expectations are lowered across the board to completing basic functions. Also, it could be that customers don't expect much more than that from sales teams. Have sales teams literally trained customers to view them as "order-takers" that old nemesis label? There is additional data to suspect that might be the case. When customers were asked how frequently these "get it done" sales actions were demonstrated, most of these were highly rated. That is, sales teams were responding to the transaction urgency of customers by performing sales actions that do, in fact, get it done. That's the good news. The not-so-good news is that it appears sales people are doing the obvious, the relatively easy and not much more for customers. Other important sales actions are seen less frequently; this is a red flag for sales teams, especially now. While still rated relatively important, this set of sales actions reflect a more consultative selling approach. What customers see less than the transactional skills-in some cases significantly less-are sales actions that revolve around offering unique and fresh ideas and advice, finding other resources, creating alternative approaches to problems, providing business advice, and exploring the future. These and other similar consultative sales actions require more skill, more sophisticated knowledge and business acumen, and perhaps most important, an attitude about the sales team's role as customer ally. The data suggest that at least half or more of the sales teams in the sample infrequently demonstrate these kinds of consultative sales actions. Bear in mind, these were still viewed as important to customers, only slightly less so than the "get it done" oriented sales actions. The risk for sales teams, especially in this fragile market environment, is to be absent from the planning table when those mid- and longer-range plans mentioned earlier are being contemplated and the opportunity to influence decisions passes by. If that is the case, the challenge for sales teams is to re-brand themselves as resources, not just vendors. If sales teams can position themselves as sources of advice and ideas, act as liaison to experts and valuable resources that are connected to industry networks and stimulate thinking about not only product application ideas, but future business solutions, then their immediate value and the value of the sales process goes up astronomically. Do sales people know they need to improve on these more idea-, resource- and network-oriented aspects of the sales process? In three separate studies, a total of 99 sales people were asked to rate themselves on the importance of sales actions to customers and whether they rated themselves as "Do It Well" or "Need To Improve" on each. Ironically, the highest Need To Improve scores provided by these self-ratings were given to many of the same sales actions that reflected a consulting orientation. So, sales people know there is room for growing into a bigger role. What can sales management do to close this gap? Sales people have to be both excellent facilitators, ensuring customer get what they need, but at the same time, they have to offer more than just a delivery service, providing additional value to the customer and differentiating both themselves and their products. There are three routes to the re-branding process. First, training has to go beyond pitching, questioning, objection-handling, product knowledge, and order-fulfillment activities. Specifically, sales teams need industry-oriented education where sales people are taught to think like customers, understand a customer's business priorities and concerns, and evaluate decisions from the other side of the table. Next, sales coaches have to step up to a critical development role. They have to be focused on developing customer-focused business skills in the sales team. Sales meetings can include customer application stories, cost justification models, product configuration examples that demonstrate how solutions can be more tailored to customer needs, and discussion of problems that actual customers are facing in their businesses. The task is to get sales teams to think through all these like a customer, sorting through what fits and what doesn't. Consistently practiced over the long haul, this customer focus will become a sales priority for all sales teams, not just a pocket of engaged sales people who have learned the importance of this point of view. Finally, sales and marketing must work together to create materials and processes that can be built into and delivered through the sales team. While not every sales person will be quick to learn and apply analytic skills, he or she can learn to use an analytic checklist or deliver industry news, present documented application stories and provide access to technical experts and resources. The combined focus of both sales and marketing on enriching the sales experience can be vital in giving ongoing value to customers in ideas, education and connections to industry networks. If the sales team finds itself stuck in the role of facilitator of deliveries and order fulfillment, then it is only providing a portion of what customers want. What customers also want now are sales people to help them engage with the problems and challenges of growing their businesses out of the Great Recession. Michael D. Maginn has been working with and studying selling for over 25 years. He has interviewed hundreds of sales people in many different lines of business in developing custom sales training programs, always searching for the behaviors that define high performers. As Vice President, Research and Development for The Forum Corporation, he completed one of a number of landmark sales competency studies and subsequent best-selling sales programs. Since then, as the president of Singularity Group, Hamilton, MA., he has worked with many sales organizations in defining how the sales process can add value to the customer's experience. He is the designer of C-Lens Index, a sales assessment tool which gathers data on the customer's view of the sales process as well as the author of 5 Skills of Master Salespeople, available from Amazon.com.For more information:http://www.singularitymanagerzine.comhttp://www.c-lensindex.blogspot.com Article Source: http://EzineArticles.com/?expert=Michael_D._Maginn

4 Essentials to Business Success

Attracting Prospects, Converting to Customers, Leveraging for referrals and Retaining as clients. Attracting prospects. Attracting Prospects is vitally important to the life blood of any business success. Whatever means you use to attract prospects, don't be boring and like everyone else. Be creative, bold, unique and exciting. What makes you business different and more appealing than your competition in the market place? When you answer this quesion you have the beginning of a great marketing campaign. The number one way of attracting new prospects is "word of mouth" from your present happy, satisfied and loyal customers. This is why the most important thing you you do in your business is to make sure your employees, your product and service are excellent. The Stew Leonards Grocery Store in Norwalk Ct has a sign etched in stone that reads, OUR POLICY Rule #1. The customer is always right. Rule # 2. When the customer is wrong, refer to Rule # 1. His employees are well trained, have a positive attitude, helpful and live by this rule. Go to his web site and see how he started and what taking care of customers can do for your business. Some ways of attracting prospects: Today you have to have a good Web Site. Targeted Direct Mail for your business and web site. Targeted E-mail campaigns. Newspaper, Magazine advertising. Radio and TV advertising. Coupons. Good Signage. Networking groups as well as internet social networking. Cold calling and it can be fun if done in the right frame of mind. Always, always and always capture and build a data base of your prospects, customers, clients or patients contact information including e-mail address. Converting - Prospects to Customers is the art helping them buy. Jeffery Gitomer, speaker and author of many books on sales says, and I agree, "People Hate to be Sold but Love to Buy". Sign up for his free ezine at gitomer.com. Most business owners don't like this part of the business, but this is so important to your success and you have to be constantly converting prospects to Customers ( Clients or Patients). Train all your employees in sales and excellent customer service. A great example of this is the Apple store. You can go into any Apple store and everyone is helpful, friendly, with up energy. They don't try to sell you anything but you want to buy. If you and your employees are helpful, friendly, have a yes attitude and believe in your product or service then this shouldn't be that difficult. When you think about it everything we do requires some form of persuasion, whether it's trying to persuade someone to your point of view, your suppliers/vendors for better terms or the Banker for a line of credit. Learn the art of persuasion or fail, so get good at it. And it begins with a great attitude. Leveraging - Customers for referrals. Once you have converted the prospect then the next step is to make sure your customers get what you promised when you persuaded them to buy or use your services. If their experience with you business is as good or better than you promised and you go the extra mile to make sure they are blown away, then they will be delighted to recommend your business to others. Don't shy away from asking customers for referrals even testimonials. Here is where the art of persuasion is important to your business again. Retaining - Customers, Clients or Patients. Stay in touch with them. "Out of sight, out of mind". Develop a survey form and send out or put in every package to find out how you did in their eyes. Give some incentive for them to return the survey. This is so important to the success of your business that it is amazing how few businesses do it. You will be surprised how many customers will returned them. Always call and thank them. If they had a great experience and tell you about it, you have the makings of a testimonial or referral. This is a good time to ask if you can use their comments in your marketing material. If the experience was bad then you have an opportunity to correct the problem, apologize, tell them how you corrected the problem and how much you appreciate their business. You might want to make an adjustment in their purchase or next order. Bill Glass is a Certified Business and Personal Development Coach and a Commercial Real Estate Consultant He was a manager with UPS, owned two very successful businesses and served three terms as an elected public official. He can be reached at bill@consultbillglass.com / http://www.small-business-resource.com/ Article Source: http://ezinearticles.com/?expert=Bill_F_Glass