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Five Sales Mistakes You Can Avoid

| Author: Bob Wendt

Is your sales team effective? Is it as effective as it could be? There are five mistakes that should be on your sales manager’s radar. Correct these mistakes and your team will be much more effective.

1. Not knowing your ideal customer. Often sales effort is spent pursuing customers who aren’t a good fit for the company or who aren’t going to buy. Making the appropriate effort upfront to identify the attributes of the ideal customer and your ability to capture that customer will save you precious sales time. You need to develop a method of finding the ideal client. One idea is developing a scorecard that details what the ideal customer looks like, including sales volume, geography, product offerings, and market approach. Define how likely it is for you to start a new relationship with each client listed.

2. Spending time on unqualified customers. Without a methodology to qualify customers, your sales team will be wasting time on those that don’t have the budget, don’t have the authority to make a decision, or have misrepresented their need for your product. Help your sales force develop the skills to determine the gatekeeper’s level of authority. One way to polish these skills is by sending at least two people to initial client meetings. They can help each other decide if the customer meets your expectations as being qualified. Refining your sales process so your team can work on leads that have been qualified by lead-scoring increases your closing rates and creates more predictability for your sales pipeline.

3. Approaching a customer with no clear objective. Asking a potential client to meet so you can find out more about their business is not going to happen. Sales people must do their research to establish a reason for someone to meet with them or will never get those appointments that can lead to meaningful customer relationships. In today’s digital world there is no excuse for not understanding the company or contact you are trying to reach. Once research has been done, meetings can then focus on a client’s needs, new product, or expanding to new territory, and how your company can help, given that information.

4. Not measuring the right activity of your sales team. Activity is the driver of any sales organization and a good sales manager is constantly measuring it. Your products could be great, your value proposition right on target, but if you are not engaging enough customers your sales growth will stall. Limiting activity measurements to numbers of calls or meetings can easily be manipulated by a salesperson to create a perception of activity. More effective measures of activity should relate to activity that are more tangible, including estimates and proposals. These are directly related to an outcome that will impact sales. Not measuring these types of activity only create an illusion of progress but won’t lead to closing sales.

5. Thinking your customers are making a decision based on price. No one buys on price. Clients go through a value equation that measures different factors, including turnaround, technology, and risk mitigation, that all play into the decision to buy or not. It’s the salesperson’s ability to understand the buying criteria that will lead to improved sales. That understanding allows the salesperson to connect the dots, not only with how your product works, but with the value it can bring to the client organizationally. If salespeople are ineffective at connecting those dots, then price will be the only differentiating factor, and that’s what clients will use to say no.

Feel free to use this as a checklist for your team. Highlight what you’re doing right and use these tips to find ways you can improve.

Are you doing everything you can to create an effective sales pipeline? For ongoing access to additional resources, connect with me on LinkedIn or subscribe to get monthly updates on growing your business in your inbox from Cultivate Communications.

Robert Wendt
President
Cultivate Communications
www.cultivate-communcations.com
262-373-4000

Robert is a lifelong Milwaukeean and his passion to see our Milwaukee grow led him to launch Cultivate Communications in 2010. Cultivate thrives on bringing together inventive ideas and marketing technologies to drive sales growth.

Is Long Range Planning Still Relevant?

In today’s rapidly changing business environment, some argue conventional long range planning may no longer be relevant.

As background, here are the elements of a traditional strategic plan1:

  1. Mission – why you do what you do
  2. Vision – where do you want to be
  3. Core values – what guides you
  4. Driving Force – What is the nature of the products, services, customers, market segments and geographic areas that a company chooses to pursue?  What is it now?  Should it change?
  5. Strategic analysis
  6. The Five Forces2 – suppliers, customers, threat of substitutes (technology), ease of entry (potential entrants)
  7. SWOT – Strengths, Weaknesses, Opportunities and Threats
  8. Analysis of competitors SWOT
  9. Competitive advantage
  10. What should we continue, what should we change?
  11. Operating Plans & KPI’s (Key Performance Indicators)
  12. Budget, both capital and operating
  13. Balanced Scorecard – Finance, Internal Processes, Learning & Growth, Customer Satisfaction

Among those challenging traditional strategic planning is Clayton Christensen.  In his book, The Innovator’s Dilemma3, he questions traditional concepts of strategic planning in an environment populated by increasingly innovative and agile competitors.  His focus is on large companies who historically are not good at being agile and innovative and therefore lack the ability to respond to small, entrepreneurial, innovative competitors.

Rita Gunther McGrath, in her new book, The End of Competitive Advantage4, makes a frontal attack on accepted strategic planning methods designed, in her opinion, for another time. These are methods based on the presumption that competitive advantage is sustainable.

McGrath believes that the best one can hope for is “transient competitive advantage.”  Her prescription for achieving transient competitive advantage includes smaller, faster, more agile organizations where “management-by-consensus” is a thing of the past. Her emphasis is on marshalling rather than owning assets, including talent. To ensure the appropriate deployment of these assets from one opportunity to the next, it is necessary to recentralize control over the resource allocation process, moving it out of strategic business units (SBUs). This raises the question as to the relevancy of SBUs and suggests that they be replaced by transient teams as a primary form of organization.  They engage in a continuous process of creating and testing options, doing things fast and “roughly right” rather than relying on traditional strategic planning methods.

Like Christensen, McGrath’s message is aimed at large, historically slow moving companies.  So as a TEC member, is strategic planning still relevant to you?  What do you think?

Some closing thoughts:

  • “Strategic Planning is the single most important function of the CEO”, Patrick Below
  • “I have always found that plans are useless, but planning is indispensable.”, Dwight D. Eisenhower
  • “If you don’t know where you are going, any road will take you there”, Lewis Carroll

Click here to read more on this subject.  ( http://hbswk.hbs.edu/item/7341.html )

1”The Executive Guide to Strategic Planning”, by Patrick J. Below

2”Competitive Strategy”, by Michael E. Porter

3Clayton M. Christensen, The Innovator’s Dilemma (Boston: Harvard Business School Press, 1997)

4Rita Gunther McGrath, The End of Competitive Strategy: How to Keep Your Strategy Moving as Fast as Your Business, (Boston: Harvard Business Review Press, 2013)

A Quick Lesson in Business Communication

Communication Tip: If it’s not the project manager or the project team, then who?
By Tina Schuelke, Executive Director
Change Management Communications Center LLC | www.cmccfoxvalley.com

Most of our clients are surprised when we coach them about communication plans. The most unanticipated part of our conversation about communication plans is centered on revealing best practices pertaining to senders and receivers of communications.

Research about business communication and more specifically, communication about change, shows us that employees have two preferred senders. A sender is the person delivering the message. The preferred sender is determined by the kind of message being communicated. Surprisingly missing on the preferred sender list is the project team. Employees are not fond of, and are less open to hearing information and direction about changes from the project team assigned to the change. One of the most common mistakes we see in communication plans for projects and major changes is that communications are being sent or presented directly by the project manager or the project team.

Here are some research-based tips to help you use the best sender in your communication plans for leading change:

Contact Change Management Communications Center today to co-create a communication plan for your project that ensures your audiences are open to hearing and taking positive action with the messages you need to deliver about the changes you are leading. Effective change communication is our forte.

Change Management Communications Center is a business consulting firm that specializes in change management. We help leaders and organizations build their authentic leadership styles and change competencies so they realize higher profits from the changes they lead and invest in.

Leadership * Succession Planning * Strategic Planning * Business Model Design * Executive Coaching * Process Improvement * Teambuilding * Innovation

www.cmccfoxvalley.com
Oshkosh, WI | Milwaukee, WI
(920)651-1144

Organization and Staffing – Ground Rule #4 – Dealing with Advancing Age

This is the eleventh in a series of posts that will describe what the CEO of the Reliance Electric Company thought about basic commitments, how the organization was going to operate and ground rules for managers. Once again, all the content of this article is based on the work of B. Charles Ames as outlined in his management manifesto titled Basic Management Concepts dated January 14, 1974.

Organization and Staffing – Ground Rule #4 – Dealing with Advancing Age 

I am going to deviate a bit from my normal practice of simply repackaging the words Chuck Ames used in Basic Management Concepts for Ground Rule #4.  Ground Rule #4 deals with advancing age in the workforce.  Some of the content needs to be brought up to current EEOC standards.  Plus, there is some new research that suggests our opinions about the capabilities of older people in the workforce may not be quite accurate.  See “Why Everything You Know About Aging Is Probably Wrong” from the December 1, 2014 Wall Street Journal.

Ames wrote that some individuals, as they age, may reach a point where their job responsibilities exceed their energy levels and capabilities.  At some level this is certainly true and will indeed happen to us all.  Ames felt that the organization had an obligation to people who served it loyally.  He stated they should be paid fairly and given assignments where they could be successful.

He went on to say that older workers unable to make a continuing contribution needed to be removed from the mainstream.  He figured it wasn’t fair to the individual or the corporation to leave people in roles where they were likely to be unsuccessful.  An appropriate ground rule, regardless of age, I would add.

In conclusion he wrote that advancing age alone should not be a reason to exclude anyone from consideration for an assignment.  He stated there is nothing more wasteful than bypassing an experienced individual because of age even though that individual has the drive and energy to be successful.

Certainly an excellent ground rule whether it is 1974 or 2015.

B. Chuck Ames and his wife Jay currently manage the Ames Family Foundation.  They divide their time between a home in Vero Beach, Florida and a second home in a suburb of Cleveland. 

 

 

 

Listen Up, CEO’s! It’s That Time of Year . . .

It’s That Time of Year…

It’s coming to that time of year when things begin to slow down. Current prospects become unavailable.  More time is spent finding Christmas presents and decorations. Generally, many people begin slipping out of high gear. By the time we reach the week between Christmas and New Year’s we are almost in “PARK”.

So, wrap up whatever year-end business you can, make some plans and set your goals for next year. AND do what so many of us fail to do the remainder of the year. This is a great time to PROSPECT and CULTIVATE. You’ve been running at full speed most of the year (except, maybe, for that one week vacation you squeeeezed in).

Go back and review those prospects that fell off the radar in the first three quarters of the year. Look at those names. They seemed promising at one time. What happened? Why didn’t you sell them? Should some of them be renewed? Maybe it’s time to go back to your referral source and see what they know. If you lost an order, check back and see if the prospect is happy with their purchase of a competitor’s product or service. Last year you promised yourself you would be more active in your prospecting. Reach out to referral sources, set up a few coffee meetings, reconnect with past customers, maybe attend a networking event, or two.  Drop off some Christmas cookies.

Look at your current customer list; those people that you’ve done business with since the first of the year. Is it time to for a follow up phone call, or personal call. CULTIVATE that relationship. Ask for a referral or reference. Are they happy customers? Is there something a simple phone call will do to further enhance your relationship? Is there another problem you can solve?  Don’t just be another Christmas card hanging in their lobby.

Prospecting and Cultivating are very important aspects of selling. If you don’t PROSPECT you will have trouble finding customers. If you don’t CULTIVATE your competition may sneak into the account while you are not paying attention.  It’s that time of year to spread a little cheer. Be merry and cheerful.

We wish you a Merry Christmas and Successful New Year!

How to Be an Effective Group Leader

Why Dominating Leaders Kill Teams

Dominating leaders tend to stifle creative ideas that might otherwise emerge from group discussions thus making the teams less productive.

Francesca Gino is an Associate Professor in the Negotiations, Organizations, and Markets Unit at Harvard Business School.  In the November 13, 2013 edition for “Working Knowledge” published by the Harvard Business School, Michael Blanding discusses Professor Gino’s series of studies in which she and her colleagues, Leigh Plunkett Tost of the University of Michigan and Richard P. Larrick of Duke University found that when leaders are focused on their own sense of power, they can hurt the performance of their teams—but with an important catch. The effects only occur when leaders are actually in a position of power.

Usually when we think about groups, we think that a strong leader naturally improves the functioning of the team. Professors Gino, Tost and Larrick explore this in depth in their article “When Power Makes Others Speechless: The Negative Impact of Leader Power on Team Performance”. In their work they differentiate between a “subjective sense of power,” that is, when someone thinks they have control over others, and actual power, when someone has formal authority over compensation, promotions, how resources are allocated or how decisions are made. Actual power and as sense of power often go hand in hand, but not always.

Sometimes in a group situation without a formal leader, a leadership role can be assumed by a person who believes he or she has superior knowledge or skills. The researchers found that in cases when someone felt powerful but was not recognized as being in a position of authority, team members were able to override that person’s domination of the conversation and add their own input.

As I would expect, they found that in the best performing groups, the leader orchestrates the conversation, and gets everyone talking. In other words, strong leaders can and do improve team performance when they go into a situation with a sense of humility about their own relative power.

On the other end of the spectrum, poor performing teams were dominated by a leader who made his power known, controlling the conversation and stifling input from the non-leader members of the group.

In conclusion, Professors Gino, Tost and Larrick suggest there is a powerful opportunity to improve performance just by making leaders aware of the dangers of hogging airtime in a discussion.

“I want to believe that oftentimes we behave the way we do because we are not aware of the effects of our actions,” says Gino. “Bringing this type of awareness to leaders walking into group decision-making situations could set up a different process whereby they benefit from what others have to offer.”

They further conclude that being aware of the negative effects generated by an overpowering leader can make non-leaders feel more empowered to assert their own point of view—whether or not the person dominating the conversation is a formal leader.  I believe that this requires the non-leaders to trust that the leader with power will not exercise that power against them.

It is no surprise to me that getting leaders to listen to others and to facilitate a productive group discussion is powerful indeed.

Read the complete article, here.

Can You Lead Through a Disaster?

Headlines Read . . .

Violent thunderstorms. Fatal Flooding. Category 5 Hurricane. F-5 Tornado. Golf  Ball Sized Hail. 100 mph Straight Line Winds. Trees Uprooted. Power Outage for 12,000 Residents. Gas Line Explosion. Local Businesses Affected.

Leadership can be challenging when things are going well, there is always something you need to work through.

However, the rules of the game change when disaster strikes. Regardless of the cause, the best run businesses have prepared a plan to handle a potential disaster situation.

Are you prepared to operate your business the morning after a disaster?

Do you have a Disaster Recovery or Business Continuity Plan?

Up to 40% of businesses affected by a natural or human-caused disaster never reopen. (Source: Insurance Information Institute)

If your business is prepared you get an “A-Grade”!

If not, Ready.gov is a place you can get unbiased information and resources to help you and your team be prepared.

Company Tune Up | Mid-Year Business Review

While my TEC groups perform this business review at the beginning of the year, given the state of the economy it is prudent to revisit this again.

Situation Analysis: (The Current Reality)

  • Lessons learned in the past year are:
  • What decisions would I/we have changed in the past year?
  • How successful have I/we been in achieving goals and objectives?

Strategic Analysis: (Where, What, Why)

  •  What is my vision?
  • Our “Why”? (This will usually embrace all elements of your business and should be consistent with your personal goals, purpose and values.)
  • Our corporate mission is:
  • Our values and behaviors are:
  • Forces driving change in our industry are:
  • Our three most direct competitors are:
  • Our major strengths are:
  • Our major weaknesses are:
  • These major threats confront us:
  • These major opportunities are available to us:
  • Our critical success factors that have made us successful to date are:

***

When this business review is completed, running this past a peer group can result in a very dynamic discussion.

How We Will Operate | B. Charles Ames Series

How We Will Operate

This is the fourth in a series of posts that will describe what the CEO Reliance Electric thought about basic commitments, how the organization was going to operate and ground rules for managers. Once again, all the content of this article is based on the work of B. Charles Ames as outlined in his management manifesto titled Basic Management Concepts dated January 14, 1974.

Reliance Electric was a $1 billion conglomerate at the time our company was acquired.  They had been on a run of successful acquisitions for several years.  They owned about a hundred companies producing electric motors, power transmission equipment, retail food packaging and weighing equipment, telecommunications equipment, and more.

How do you run a conglomerate with a wide range of diverse businesses . . . effectively?  Ames wrote the following.

  • In light of Reliance Electric’s girth, the Divisions of the company needed to work together to take advantage of lessor endowed competitors.
  • The company centralized “certain functions” when it was economically advantageous.  The interests of the corporation trumped those of any individual Division.
  • Reliance followed a uniform set of administrative policies throughout all operations.  Human Resources, for example, would be managed consistently throughout the organization.

So far, so good.  Here is where it gets interesting. Ames was clear here:

  • The company would not force integration where it didn’t make sense or seek consistency among the Divisions without regard to individual differences of the Divisions.
  • The company would not impose corporate policies on decisions without seeking into from the Divisions.

What Ames wanted us to do was gain a competitive advantage from our size and diversity, without messing around with the basic integrity of the divisional profit center concept.  An interesting balancing act, to be sure.  And, the basic business strategy of the company.  Because Ames wrote it down and distributed it all of us, we knew what was expected.

B. Chuck Ames and his wife Jay currently manage the Ames Family Foundation.  They divide their time between a home in Vero Beach, Florida and a second home in a suburb of Cleveland.  

 

Getting Referrals Isn’t That Hard

As we work with sales professionals, we regularly preach about the importance of getting referrals. Many feel uncomfortable asking for referrals from new customers. As with so many things, the easiest way to get referrals is to ask for them. It becomes surprisingly easy the more you practice.

Let’s look at the last time you completed selling a solution to a new customer. You are wrapping up the conversation. Everyone is feeling really good about the process. They are pleased with you and your company, and you feel confident that they will be happy with the results.

Now that you’ve established a strong new relationship, this is the perfect time to capitalize on it.  But do NOT make the common mistake of asking “Do you know anyone else I should be talking to about my product/service?” More than likely, that will produce the typical response of “Gee, no, I don’t” or “Hmm, let me think about it and get back to you.”

It is so much easier for someone to make a referral if they know the type of businesses or people you want to add to your portfolio of customers. You’ve done this homework already and know the type of customers that have been most successful for you. You have targeted customers by job title, annual company sales, location, approximate size, and other factors. Now, just use these characteristics when you ask for a referral. Try something like this:

“Martha, my best customers are those I have found from a referral. I’d like to describe my preferred customer. Would you be so kind as to just jot down the names that come to mind as you hear those qualities? “

After you’ve finished describing your preferred customer and a list has been created, ask for some details. Don’t overdo it. Get basic contact information and permission to use your new customer’s name when contacting the referral.