If you are looking to increase your revenue per customer, here are some tips on getting your sales staff focused on inside sales, upselling, and marketing additional services.
Every business needs new customers, but don’t ever forget that your easiest and most predictable source of new revenue is right under your nose: It comes from the loyal customers who already know your company. Acquiring new customers is expensive (five to ten times the cost of retaining an existing one), and the average spend of a repeat customer is a whopping 67 percent more than a new one. So, sure, put some energy into new business development, but make sure your salespeople know that coming up with creative ways to sell more to your current customers is just as important. Here are 10 proven techniques to do just that:
- Think lifetime value, not transactional value. To keep customers coming back to Zane’s Cycles (and away from the superstores), Chris Zane offers a wildly attractive incentive to parents who buy their children’s bikes from him: He’ll credit the full cost of last year’s bicycle toward an upgrade every year up to a 20-inch wheel. “We won’t make money until they buy their second bike from us at full price,” says the Branford, Connecticut entrepreneur. In the meantime, parents buy accessories for their growing children and, predicts Zane, are impressed enough with his commitment to service that they become customers for life.
- Go for a no-brainer upsell. “We started noticing that our clients wanted us to store their media files because they had a habit of re-editing their sizzle reels several times over the course of the year,” says Scott Gerber, CEO of SizzleIt, a New York City company that produces short promotional videos. The process became time consuming and tedious for the company, so Gerber started charging clients monthly and annual fees to store their data. “This created a whole new revenue stream for the company,” he says, “not to mention it allowed us to get rid of large amounts of media files when clients didn’t want to pay.”
- Offer complementary products or services. Put a little thought into what your customers are buying and the other needs that those purchases might trigger (think printers/ink cartridges). For instance, Language International’s primary product is language study abroad programs. “But very often, our customers also need housing and travel insurance,” says Karen Ong, CEO of the Boston-area company. Offering those complementary products has “helped us expand our gross margins from 21 percent to more than 25 percent,” she says.
- Stay in touch. Sometimes you may not see your best customers as often as you’d like, so you need to work extra hard to keep yourself on their radar screens. Jack Mitchell, the CEO of The Mitchells Family of Stores in Farifield County, Connecticut, has his sales people contact customers by phone, email, and handwritten note “not trying to sell them anything, but letting them we’re available to do alterations, or to come to their home, look at their closet and see what is still wearable,” says Mitchell. He knows that if he keeps in touch with customers in a low-pressure way, his best customers will find their way back his four luxury clothing stores when the economy improves.
- Practice the art of the perfectly-timed pitch. What is a key day to reap additional revenue, and what can you do to capitalize on it? “We always have success with our yearly Black Friday e-mail blast,” says Zalmi Duchman, the CEO of TheFreshDiet.com, a healthy meal delivery service based in Surfside, Florida. So last year, on the day after Thanksgiving, the company sent an e-mail blast to its database of clients, and generated an additional $400,000 in revenue in three days. “For us it’s the best of both worlds,” says Duchman. “Everyone is looking out for specials, and it’s right after Thanksgiving so people are thinking about dieting and their New Year’s resolutions.”
- Help your customers sell more to their customers. If you’re selling to other businesses, the best way to get more revenue from them is to help them increase sales to their customers. Nick Villaume, the CEO of The Dev Department, an Atlanta-based company that provides white label web development services to graphic design firms, developed a free credentialing system for the designers who are his customers. “This not only gives them the knowledge and confidence to sell more and bigger contracts, but also positions them as experts in their market,” says Villaume. He launched the educational program six months ago and has since seen new client requests quadruple. “We are sending out many more estimates—20 to 30 per month—and about two thirds are closing,” he says. “It not only provides more sales, but more profitable sales. We are spending less time coaching designers and less time doing non-billable revisions.”
- Remind customers of everything you offer. Never assume that even your most reliable customers are completely aware of all the products and services you offer: you need to remind them regularly. Kelley Briggs, CEO of DesignWorks NY, a graphic design and marketing communications firm in Westchester County, New York, sends a personal letter to every customer once a year. She includes a list of her services with the ones they’ve used check off. “It reminds them of the types of projects we’ve worked on in that past year and shows them what services they did not use,” she says. “It’s an excellent cross selling tool.” In recent years, clients who received the letter have signed on for additional projects such as annual reports, website design, and marketing strategy.
- Create incentives for in-house referrals. Scott Gerber’s video production company, SizzleIt, often works with large companies, and he has found a way to effectively turn one client into multiple clients. “We inncentivized our current clients to recommend us to the project leaders in other parts of the company by offering them steep cash discounts for successful referrals,” says Gerber. At a time when corporate budgets are tight, that lowered the cost of doing business with SizzleIt, strengthened customer relationships, and generated more income without the cost of attracting new clients.
- Give customers a say in what you sell. Last October, ModCloth (No. 2 on our Inc. 500 list this year), started an initiative called Be the Buyer, which allows shoppers to vote online on clothing samples. If a garment gets enough votes, the online clothing retailer will add it to its offerings, and then send emails to visitors who voted for the item. The program allows the company to confidently gamble on items it might have thought were risky choices, plus it encourages a high level of customer engagement with leads to repeat sales. Co-founder Susan Gregg Kroger says the initiative has also significantly boosted web traffic to the Pittsburgh-based company.
- Put some skin in the game. Greg Alexander, the CEO of Sales Benchmark Index, an Atlanta company that helps clients increase the effectiveness of their sales forces, says that the percent of his compan’s revenue that came from existing customers jumped from 20 percent to a whopping 80 percent in two years. His secret: he started writing performance-based contracts. “We said if we don’t deliver don’t pay us. If we do deliver, pay us a percentage of the gain,” he explains. He also started compensating his team according to the results they delivered for customers. “The ‘skin in the game’ technique resulted in our firm doubling revenue,” says Alexander.
In your zeal to land new business, don’t overlook certain basic principles of sales management, or you may set yourself up for problems in the future.
Everyone makes mistakes, but missteps in the selling process can have especially serious consequences. Not only do they deprive your business of revenue, but they can erode confidence in your company among members of your staff as well as potential customers. The following mistakes are particularly common among start-ups, but even the most seasoned entrepreneurs can fall victim to them. Here’s how to identify them—and avoid them.
Neglecting to collect customer data. Every time you make a sale, it’s an opportunity to make another sale down the road. Remember that your existing customers are your best source of revenue. But you can only tap them if you have a method for keeping track of them. Sonny Ahuja, the CEO of Grandperfumes.com, learned that the hard way. “Five years ago I had seven stores selling designer perfumes and colognes in all major malls of Wisconsin,” he says. When he began losing customers to Amazon and eBay, Ahuja decided to close his stores and move his business online. But when he launched Grandperfumes.com, he had no money for online marketing. “That’s when I realized that if only all my sales people had collected all the names and addresses of customers that came to my stores for the past eight years — imagine the power of that database! I could have been back in business in no time.” Now, he’s diligent about collecting and segmenting customer data on Grandperfumes.com.
- Dig Deeper: 10 Ways to Get More Sales From Existing Customers
Relying too heavily on the Internet. So you’ve been exceptionally clever with your web strategy and your organic vegan dog food is at the tippity-top of the relevant search engine rankings. The stuff is practically selling itself. Good for you! Until, that is, Google gives you a nasty smack down. That’s what happened to Christian Arno, founder Lingo24, an international translation company with offices in London; Aberdeen, Scotland; and New York City. “In 2006, our high Google rankings for key search terms suffered, probably because of Google changing its search algorithm,” says Arno. “We suddenly dropped on Google search results for terms we’d always ranked highly for such as translation services and translation agencies. We didn’t have any proactive sales strategy in place, so our revenue suffered.” Since then, he’s hired several outbound sales people who proactively identify potential clients. “And our Google rankings are back up too now, so we have two strong avenues for sales,” says Arno.
- Dig Deeper: How Google Cost Me $4 Million
Failing to qualify leads. “When I first started in sales, I was an eager beaver,” recalls Jon Biedermann, vice president of DonorPerfect, a CRM fundraising software company in Horsham, Pennsylvania. “No lead went untouched or uncalled — I treated every opportunity as the sure fire next sale.” Big mistake. Early in his career, Biedermann got a lead from a large university. He called to assess their needs, customized the software for them, and worked on personalizing the demonstration for days. “The day of the demo came, and I presented our software in front of 10 people from the university. We had everything they needed — it was perfect,” he says. But when he asked about the decision-making timeframe, he was crushed. “Oh, we aren’t going to switch software,” they told him. “We were thinking about using this for our smaller satellite campus and we were hoping you would donate it to us.” Biedermann realized his error instantly. “In my zeal to get the sale, I completely forgot to ask the one crucial question: Do you have the authority and money to make this decision?”
- Dig Deeper: How to Qualify Sales Leads
Delaying sales until your product or service is ready for primetime. There’s a lot to be said for doing market research for a new product or service by trying to sell it while it’s still in development. That way, you’ll find out exactly what customers want before you spend time perfecting your offering in a vacuum. “Entrepreneurs should hit the streets, and talk to ‘friendlies’ to sell your product or service even when its still just an idea, and ask people what they are willing to pay for it,” says Kyle Hawke, co-founder of Whinot, a Charlottesville, Virginia-based virtual firm of independent consultants who work on small business marketing projects. Hawke learned that lesson after spending $5,000 on web features that he says “no one cared about.” He now knows that he should have tested Whinot out on low-risk clients who were willing to sign on for a discounted price – or a free trial – while he and his partners worked out the kinks. “The best way to figure out how much something is worth is to get someone to pay for it,” he says.
- Dig Deeper: How to Build a Bootstrapping Culture
Accepting every sale. “No” is not a popular word among entrepreneurs, especially during the start-up phase, and most especially as it pertains to sales. But maybe it should be uttered more often, because the wrong kind of sale is ultimately worse than no sale at all. “It’s a big challenge as a small company to say ‘No, thanks, this isn’t a good fit for us, please give your money to someone else,'” says Michael Buckingham, founder of Holy Cow Creative, a Midland, Michigan, design and marketing company that works with churches and ministries. “In the beginning I said yes to everyone; financially, it felt like I had to,” he says. “Next thing I knew I was involved in a project that was not good for me or the client. We pushed through it, we met our objectives but our work is about more than projects and invoices. I learned that relationships are key to sales. It’s why I now turn down nearly every RFP; it’s void of relationship.”
- Dig Deeper: Getting to No
Offloading the sales function. When Tom Greenshaw first started Cashier Live in Chicago, he wanted to focus mainly on product development and support for the web-based point of sales software that he sells to independent retailers. So he built a sales channel with affiliates and partners, hoping to offload as much of the direct sales function as possible. “This seemed to be working well and we quickly signed up a number of partners that were interested in selling Cashier Live,” he says. “But those partners weren’t as well versed in the software as we were.” Many of them over-promised customers regarding the capabilities of the software, or dragged Greenshaw’s staff into the sales process, which confused customers and ate up company time and resources. “I learned a lot from this experience, and we’ve since been very successful with our own sales efforts,” he says today. When he tries selling through channel partners again, he’ll make sure to train them thoroughly on the company’s software.
- Dig Deeper: Sales: When Is it Safe to Hire?
Fixating on big fish. When Scott Gerber first founded Sizzle It!, a New York City-based video production company, he admits that he “used to be obsessed with only going after home-run clients—those that had big names and huge wallets.” But selling to very large companies is time consuming and often frustrating since decision-making is slow and payments even slower. Sizzle It! ultimately landed big clients like Procter & Gamble, but closing sales would sometimes take six months or more. And frequently, Gerber’s staff would put months of effort into sales that never materialized. “The pursuit of these titans often put us in cash flow crunches,” says Gerber. “My biggest mistake in guiding Sizzle It!’s strategy in its earlier years was not going after more base-hit clients. Now, we have an even split of clients, which has not only helped us to spread the word about our company faster, but also helped us to maintain a healthy cash flow.”
This week’s guest submission is from Jeb Brooks, Executive Vice President of The Brooks Group, one of the world’s Top Ten Sales Training Firms as ranked by Selling Power Magazine. He is a sought-after commentator on sales and sales management issues, having appeared in numerous publications including the Wall Street Journal. Jeb authored the second edition of the book “Perfect Phrases for the Sales Call” and writes for The Brooks Group’s popular Sales Blog, “Sales Evolution.”
B2B sales professionals face conflicting demands.
First, there is a demand by prospects for a rapid response to their inquiries. Second, B2Bbuying decisions typically take a long time to make.
To add insult to injury — partly as a result of the economic climate — decisions have been pushed up and out. In other words, larger committees of “higher ranking” corporate officials are making decisions. And, every member of these committees has much less time than they ever had in the past.
Put simply, salespeople have to reply to prospects as quickly as possible, but their prospects are unlikely to return the favor.
Here’s an example. We recently proposed a complete sales training program, including the initial training, ongoing reinforcement, and measurement. Our proposal went to the VP of Sales who gave every indication that he had the ability to say, “Yes!” to the initiative. However, at the last minute, the company owners stepped in to provide a final review. Before the economic downturn, the VP would have been in the position to make a decision with no input from anyone. In other words, businesses spend money differently now than before. It’s all changed.
Today, being a salesperson has a lot in common with being a fighter pilot. It’s filled with periods of intolerable boredom punctuated with moments of unimaginable excitement. The secret is to keep a constant flow of fresh leads without losing track of any of your current prospects and customers.
The technology research firm, KnowledgeStorm produced a report in which they stated that a prospect’s receptivity to salespeople declines drastically as time passes. Their data shows, for example, that 88% of prospects were happy to hear from salespeople when their internet inquiry was responded to the same day. That means that salespeople who want positive reactions from prospects should respond to all inquiries immediately after receiving them.
However, quick follow-up is just the first step.
Marketing Sherpa released some research in which they said that 44% of B2B companies say the time between lead creation and customer acquisition is more than 6 months. Only 17% said it was less than one month. http://www.marketingsherpa.com/1news/chartofweek-07-27-10-lp.htm
Knowing that, salespeople must be quick to take action and very, very patient.
A SHIFT IN SELLING
Obviously, all of this upheaval means selling requires a unique mixture of skills. On one hand, a salesperson must exhibit a relative sense of urgency while, on the other hand, also displaying a certain degree of patience. Immediate follow-up and a need to address whatever specific needs a client may have should be combined with a willingness to move at whatever speed the prospect is comfortable.
The most extreme example of a traditional selling mentality comes from a clichéd “used-car pitchman.” However, less extreme examples of the unfortunate traits of traditional selling are all too common: Salespeople who engage in excessive small talk, bash their competition or simply “dump” features and benefitsare all guilty of exhibiting traditional traits. Prospects are busy and don’t have time for these wasteful activities.
The traditional salesperson’s role has been replaced. Today’s sales professionals can no longer “pitch” their product. Instead, they must ask questions, listen to answers, and advise. Sometimes that may even mean facing the difficult reality that their solution isn’t the right one for every person who is in front of them.
While it’s difficult and seemingly counter-intuitive, honesty really is the best policy. If you suggest a prospect use your product or service when it’s not really the right solution, you are setting yourself up for disaster. You might have an angry customer. And that means ongoing headaches for yourself. An unhappy customer will only leave you when they find someone else who can fulfill whatever need you’re there for. Until they find the replacement, however, they’ll be your worst nightmare. It’s a lose-lose situation.
Today, in order to advise a prospect appropriately about the implementation or use of a product or service it is necessary for salespeople to augment their knowledge of a customer with more intimate awareness of their customer’s industry and even their customer’s customer.
Consultative selling requires a salesperson to focus every ounce of attention on the needs and wants of his or her customer. Only after those are identified can a consultative salesperson discuss the product or service and its application to the client.
IMPLEMENTING A CHANGE
Transitioning a traditional sales team into a consultative one is no easy task. Part of the problem rests squarely on the shoulders of sales managers. According to a survey released in Sales and Marketing Management Magazine and conducted by Equation Research, 65% of sales managers say they focus on building volume rather than finding more profitable customers and 63% say they neglected personal skills development. Both of those statistics reveal startling tendencies toward traditional sales techniques rather than consultative sales strategies.
In order to see the maximum return, any change to the structure of a sales force must be accompanied by adequate sales training, evaluation and compensation. In other words, a unilateral decision to transition from traditional to consultative selling will fail.
Training is only one component of a successful transition. However, the most positive effect will come when training is coupled with follow-up and reinforcement components that extend what is taught in the classroom beyond those walls and into the field. Too often, sales-driven organizations believe that an annual sales conference and (supposedly) weekly sales meetings will be sufficient to upgrade the knowledge and skills of salespeople. While those are important pieces, by themselves, they do not complete the puzzle.
Today’s selling environment means that salespeople are thrust into situations where more people take longer to make decisions, but have ever-increasing expectations. Salespeople have to respond quickly and then wait for some seemingly interminable amount of time (depending on industry, offering, and other factors it’s between 6 and 36 months). At its core, the shift is from traditional selling tactics to consultative sales strategies; and it’s here to say. The unstoppable powers of technological advancement, broad market forces, and customer demands aren’t going anywhere. Sales teams that fail to make the transition on this new wave will be left behind by forces larger than any single organization.
There aren’t many things that come easier to a sales manager than being frustrated with their sales team’s results. Sales managers flip back and forth between wanting to “fix” their underperforming salespeople and wanting to fire them. According to S. Anthony Iannarino, neither approach is the right first step to improving your team’s performance.
Brian Dewil of RESULTS.com, Business Execution Experts, would like to invite you to a webinar particularly designed for directors, business owners, strategic decision makers and those who want to do business better. You will get great benefit from this webinar. It is complimentary, an hour long and is called “The Missing 98%”. Results.com started this webinar series at the beginning of the year with one every 2 months. The demand for more business education type webinars has allowed them to run this series more frequently, on a weekly basis.
Over the last couple of years, as a company, they have brought world renowned business leaders such as Tom Peters and Jack Daly to New Zealand. Their visits have been a tremendous success and a great contribution to NZ business. A follow-on of this contribution to the NZ business community is our seminar and webinar series where they partner with the likes of Westpac and Telecom and run throughout the year.
Recent research is clearly showing that following a recession, there’s a shift in market share positions. We’re also seeing unprecedented change in technology that is radically changing (and sometimes even eliminating) certain markets.
This 1 hour webinar will reveal the changes taking place in business – but more importantly, how you can grow your market share during this unique time. The key is to simplify your business strategy, and make execution your number one priority.
At the end of this webinar, you’ll come away with a 1-page Strategic Execution Template that maps the way forward for your business. You’ll also learn from real-world examples, both from NZ and overseas, of businesses who are executing these strategies with impressive results.
Please register at Business Execution webinar for 9am, Tuesday 19th Oct 2010. (Do not worry about the date displaying 18th Oct on the registration page– it is for international audiences)
Webinars have become a very effective and popular platform to run online workshops and seminars such as these. If you have not attended a webinar before and need assistance in how to set up please contact me. It is not too difficult at all. Once you register you will also receive an email on how to setup.
While the popularity of online job boards puts millions of jobs at one’s fingertips, it has also made the job applicant pool that much bigger. For this reason, national job search sites and the Internet as a whole have gotten a bad rap from some industry professionals as an ineffective job seeker tool; on the contrary, the Internet actually can be a great resource for job seekers — they just need to know how to use it.
When it comes to a fruitful online job search, successful job seekers follow these 10 guidelines.
1. If you build it, they can come.
Instead of simply posting your résumé on a Web site, take it one step further and design an easily-navigable Web site or online portfolio where recruiters can view your body of work, read about your goals and obtain contact information.
2. Check yourself to make sure you haven’t wrecked yourself.
Google yourself to see what comes up — and what potential employers will see if they do the same. If you don’t like what you find, it’s time to do damage control.
3. Narrow your options.
Many job boards offer filters to help users refine their search results more quickly. You should have the option to narrow your job search by region, industry and duration, and, oftentimes, you can narrow it even more by keywords, company names, experience needed and salary.
4. Go directly to the source.
Instead of just applying for the posted job opening, one of the best strategies to finding a job is to first figure out where you want to work, target that company or industry and then contact the hiring manager. Also, many employers’ career pages invite visitors to fill out candidate profiles, describing their background, jobs of interest, salary requirements and other preferences.
5. Find your niche with industry Web sites.
Refine your search even more by visiting your industry’s national or regional Web site, where you can find jobs in your field that might not appear on a national job board. More and more employers are advertising jobs on these sites in hopes of getting a bigger pool of qualified applicants.
6. Try online recruiters.
Recruiters will help match you with jobs that meet your specific skills and needs. Not sure where to start? Sites such as recruiterlink.com, onlinerecruitersdirectory.com, searchfirm.com and i-recruit.com provide links to online headhunters for job seekers.
7. Utilize video résumés.
Video résumés are just one more way to stand out to employers. Intended as supplements to — not replacements for — traditional résumés, video résumés allow job seekers to showcase a little bit of their personalities and highlight one or two points of interest on their résumés.
8. Run queries.
You run searches on everything else, from your high school sweetheart to low-fat recipes, so why not jobs? Enter a query that describes the exact kind of job you’re seeking and you may find more resources you wouldn’t find otherwise (but be prepared to do some sorting).
9. Utilize job alerts.
Most job boards have features that allow you to sign up to receive e-mail alerts about newly available jobs that match your chosen criteria. Or go a step further and arrange an RSS (really simple syndication) feed from one of these job sites to appear on your customized Internet homepage or your PC’s news-reader software.
10. Get connected.
How many times have you been told that it’s not what you know, but who you know? Thanks to the emergence of professional networking sites like LinkedIn.com, job seekers no longer have to rely on the old standby of exchanging business cards with strangers. These sites are composed of millions of industry professionals and allow you to connect with people you know and the people they know and so forth. (A word of caution: When you sign up for online social networking sites, you are in a public domain. Unless you are able to put a filter on some of your information, nothing is private, and it can be difficult to erase once it is posted.)