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Goals setting – 2011

December 31, 2010 Leave a comment
It is the time of the year when we sit back, relax, take stock of the year gone-by and plan for the year ahead.

I read a blog by Kelley Robertson on goal setting and really loved it. You can read the blog @ http://www.fearless-selling.ca/blog/stretch-yourself/.

Kelly talks about setting 2 goals:

  1. One that you think you have about 85% chance to achieve
  2. One that is way beyond the above goal and what you really want – Your stretch goal
This is what my first boss also taught me. The only difference was that he also asked me to also decide and write down how am I going to reward myself if I were to achieve these goals (both regular and stretch).

The criteria being that the reward for achieving the stretch goal should be something you always wanted but is out-of-reach for you (something you want but cannot afford or something you cannot access, like having lunch with your CEO). I still remember the first reward for my stretch goal was to get a CROSS pen.

This helps a lot in focusing and keeping yourself motivated – to do one more sales call when everyone has left, to meet one more client, to send one more offer. This has helped me in my career more than anything else that I can remember.

So, go on have a blast and start the new year with a bang !!!!!!

What did you ship in 2010?

December 31, 2010 Leave a comment

Inspired by Seth Godin’s blog #YearInReview What did you ship in 2010?, I decided to do a little retrospection and list down all that I “shipped” in 2010. The list that I could come up with is the following:

  1. Achieved all the goals set for the year at work
  2. Started blogging in 2010 and I have 38 new blog posts this year
  3. Helped 3 start-ups decide their business model
Somehow, I get the feeling that this is just a small peck of what I shipped in 2010 and that there were much more that I did but could not remember. These are things that I should be proud of and here I am not even able to remember all that I shipped. I am sure if many of you also face this strange situation.

This brings me to my new year resolution for 2011 (as this is the time of year to set yourselves goals to gun for):

  1. Make a list of all that I ship every month (which also indicates that I want to ship atleast something every month).
This month-by-month retrospection of all my activities will help me in the following ways:

  1. I will know if I do not ship something at the end of every month à I will still be able to course correct and ship the next month
  2. At the end of the year, I will know exactly what all I have achieved month-by-month. I can then decide which of these wins need to go on my year end list of what I shipped.
Here I am, wishing everyone to bring to close 2010 in high spirits and a very happy and successful 2011!!!

May God be with us all !!!
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Overcoming the 5 basic obstacles in every sales transaction

December 27, 2010 Leave a comment
As Zig Ziglar said, every sale has 5 basic obstacles that need to be overcome:

  1. No need
  2. No desire
  3. No hurry
  4. No money
  5. No trust
I consider the most important of all the objections is the trust. Everything else will fail if there is no trust established between the sales person and the buyer.

One of the best ways to build trust is to listen to the prospect; understand his business, challenges and competition. Show them that you understand their world. Be honest about what your product/service can or cannot do for them. If required, even introduce someone who can solve their challenges if you can’t do so.

As in any relationship, building trust takes a lot of time and effort. Hence, it is absolutely critical that you do no lose it. If you have to decide to lose trust or an opportunity to make a sale, pls choose to keep the trust intact. This will always get you more business that anything else.

Once the trust is established, all other objections can be handled by following a set process as described in one of my previous blog – “To sell more, stop selling”.

Trust is also a key component in building relationships that last a lifetime of repeat businesses. Learn to build trust and you will never be short of loyal customers offering you repeat business for a long time to come. 

Fueling growth from existing customers

December 15, 2010 4 comments
It is a well known fact that it is much more expensive to acquire a new customer than retaining an existing customer. But as they say, common sense is not so common. We find that businesses are going out of their way to attract new customers by offering them great deals. I do not think there is anything wrong in this, but when you exclude the offer to your existing customers, you are inviting trouble. 

This is a very important reason for customer loyalty to become so rare. There does not seem any  benefit for customers to remain loyal anymore as they miss out on such attractive offers in the market that are only available to new customers. So, they keep changing loyalties.

In the short term, everyone is happy. The businesses are gaining new customers and the customers are getting attractive offers. However, in the long term all of them stand to lose. The customer has to keep negotiating with new vendors with associated risks. Constant change in the suppliers can also mean in-consistencies in the supplies/services which in the long run can hurt the customers’ business.

The businesses spend so much more to attract new customers and the cost of customer acquisition goes drastically up and hence the cost of sale and the profitability starts its downward trend as businesses will need to continually come up with more and more attractive offers to attract new customers and this becomes the only way for top-line growth as repeat business starts to shrink due to lack of loyal customers.

Once businesses realize that they are in this downward spiral, they decide that it is important to retain existing customers as well and hence start offering the attractive offers to existing customers as well in addition to new customers. Still they will find that retaining customers is a challenge.  

A clear example of this phenomena playing out currently is in the Indian telecom industry. All the players like Airtel, Vodafone, Tata DoCoMo, Idea, Reliance, Aircel and the other players are all creating very attractive offers for new customers and incentivize customers to switch from one player to another. This has led the profitability of the entire industry downward. These businesses will be able to sustain their top-line growth and profitability till the overall market keeps growing. Once this stops, then we will see a shake-out of the players in the industry.You will then start mergers and acquisition starting to be considered and there will be only a handful of player be left in the market and the same cycle will get initiated with a similar result.

Now the question is “What are the alternatives?”

I think that there are a couple of alternatives that they can consider:

  1. Incentivize your customers to bring in additional customers for your business. Make your customers your evangelists.
  2. Incentivize your sales teams more on bringing in repeat business than net new customers.
Let me elaborate on both the alternatives.

Incentivizing your customers to refer additional customers for your business:

There are a few things that you will need to put in place in order to turn your customers to evangelists:

  1. Deliver and delight your existing customers by the high standards of quality and service!
  2. Make them your raving fans!
  3. Create an opportunity for your customers to refer your business/products/services to their peers, friends and family!
  4. Make it much easier, simpler, and faster to do repeat business with you!
  5. Recognize/reward all your customers who have referred your business to their network
  6. Never show new customers are more important than the existing one’s!
As you can see that this is a cultural change that businesses will need to undergo. This focus on customer delight will take time and effort but is worth all the time, money and effort that goes into this as this will create a competitive advantage that will be hard replicate. You can even go on to.

An example of one such company is Apple. In this age of declining customer loyalty, Apple customers are still one of the happiest lots and do a lot of evangelizing for Apple.

Incentivize your sales teams more on bringing in repeat business than net new customers.

Businesses often realize that new customer acquisition is of paramount importance and hence expend a lot of their energies in acquiring new customers. Sales people are incentivized for bringing in net new customers for the business. Marketing is busy creating the next great offer to attract new customers. All of this leads to the state that no one is bothered about the potential business opportunity with existing customers and their networks.

  1. Set a rewards/recognition program for sales teams where they get more rewards and recognition for Repeat business generated from existing customers, Net new customers referred by existing customers and slightly less compensation for Net new customers who were not referred by existing customers
  2. Introduce a step in your sales process where sales people ask for the customers/prospects to refer you to people in their network. Request for referrals even in the opportunities where you have not won the deal.  
  3. Reward sales people who get more repeat business transactions (irrespective of the volume of transaction).
  4. Initiate a customer satisfaction survey for 2-3 customers of each sales person. Choose the customers randomly.
This will clearly give out the message to the sales teams that it is very important to provide excellent service to existing customers. They will also learn to explore options to generate repeat business and to keep their customers happy all the time.

I know that there are businesses that have customer referral programs in place that intend to achieve the same outcome but I have not seen any of them achieve it. This by itself is a deep topic which I will discuss in a separate post. 

I have not come across a business which has implemented this system for increasing business from existing customers yet!

Happy selling !


Social Media strategies for business

December 9, 2010 Leave a comment

There has been a great hype around social media and how businesses can benefit from them. 

As with everything else, one needs to decide the purpose for which the business wants to use social media and how will it measure the impact on business. A few strategies that have worked well are:

  1. Social media sites as an additional sales channel: Providing specific deals for a specific period for customers who follow your posts on the social media sites (could be twitter, facebook, linkedIn or any other such sites). Dell has been highly successful in using twitter to get additional sales by creating offerings specifically tailored for its twitter followers. You can follow Dell Outlet @ http://twitter.com/#!/DellOutlet.    
  2. As a marketing channel: Businesses can use these social media sites to get the word out on all the marketing efforts. These sites can serve as an alternate advertising medium for reaching out to customers. Businesses can inform their followers on socail media about various marketing activities. In this case, these social media websites become another option to reach out a specific target of people. Artists, especially musicians have been using social media sites to successfully market their concerts.
  3. For prospecting & business development: There is a wealth of information available on the social media sites about your prospects. Use these as tools to reach out to your prospects and start the business development process with them.
  4. As a tool for increased customer engagement and interactions: One of the most important use of social media that has become really popular and successful is to create customer fan pages and allow the customers to interact with each other over your product/service. Businesses can also use these to gather direct or indirect feedback (by tracking what is being said about your product/services) that can go as inputs to your product managers. Tata DoCoMo keeps searching for tweets mentioning them and reach out to customers who mention them (http://twitter.com/#!/tatadocomo)
  5. Brand building tool: Businesses can use these tools to build a brand image for themselves as a socially responsible business. For example SAP uses facebook to showcase activities that they do as part of their corporate social responsibility (http://www.facebook.com/pages/SAP-Corporate-Social-Responsibility/125855600791778).
One can employ multiple strategies to exploit the full potential of these tools. However, as in any case, this is just another medium to engage with your customers. So, all care should be taken to ensure that your customers do not get irritated with junk or spam.

Also, each activity that one does on social media should have a core purpose and also a pre-agreed KPI to measure the success of the activity.

Businesses that tend to benefit from these tools tend to understand that these are long term commitments and are serious about the usage.  

How to increase customer loyalty? First, Stop annoying them !

December 8, 2010 2 comments
Everyone in sales knows the importance of customer loyalty and the importance of repeat business. Still, we go out and make it difficult for the customer to do business with us. Worse still, we downright annoy the customers.

I had one such experience with a start-up: myPNRstatus.com. They had a novel idea which they are trying out. You can enter the PNR number of the railway ticket and they claim to send you SMS’s on the status of the PNR (if wait-listed, they claim to send you an update everytime there is a change in the status) and also keep you posted on the status of the journey.

I was travelling by rail and had a wait-listed ticket. I decided to try out their service and so registered by PNR with them. I got a couple of SMS as claimed when the status of my wait-list changed from 24 to 22. Then I did not get any further SMS. I did not bother to check the status online myself as I was under the impression that with every change i will get notified. However, just 2 days before my travel date, I decided to check the status myself and was surprised to find that I now had a confirmed ticket. This change in the PNR status was completely missed by the service. I never got the status update on this. I did not think much of it and boarded my train.

While the train had about 12 hours to reach the destination, I started getting status messages about the current status of the train and its expected time of arrival at my destination. In the beginning i was getting about a message every hour or so. But as i was nearing my destination, I started getting an SMS every 10 minutes. This got really annoying and i felt that my inbox was being spammed. The worst part was the fact that I got a status message about the time of arrival at the destination 30 minutes past my arrival. This was downright annoying.

I would have been happy if I continued to get a status update once a couple of hours or even once an hour at the max. Nothing more than that. And never 30 minutes after my arrival.

I am not sure if they are even aware of this issue. My assumption is that as with any other business, they are definitely not aware of this situation and hence will not be working on it either, which is rather un-fortunate for the start-up. Hope they are listening and sort this out.

One of the most important thing that a business can do to increase customer loyalty is to do the following:
  1. Keep using the product or service to experience it as a customer.
  2. Ensure that you do not annoy your customers.  
  3. Ensure that you do not put in road-blocks for repeat purchase.
Hope the folks at myPNRstatus.com are listening. 

Measuring sales-force effectiveness

December 4, 2010 Leave a comment

One of the key challenges that I have seen in senior leadership is to measure the sales-force effectiveness. This becomes even more important if we are in an environment where revenue growth is difficult to come-by. So how does one measure the effectiveness of their sales-force.

I think there are a few key indicators that show if the sales force is doing a good job or not:

  1. Revenue growth: The easiest and the most measured variable is the revenue growth. If the revenue is growing month-on-month, quarter-on-quarter, year-on-year, the sales-force is considered to be doing a good job. This shows the ability of the company to close sales. But this alone is not a good indicator of the sales force effectiveness. 
  2. Customer acquisition: This is measured by the total net new customers acquired. Ideally this should be measured and should either show a positive trend or at least stay within a specific range. This shows that the company’s product’s and the sales force is also on the lookout for new customers. This will ensure that the sales growth is not just dependent on a specific set of large customers. This also shows that your sales teams are not just milking existing customers but also are out building more relationships. 
  3. Repeat business (as % of total revenue): This is measured as a percentage of revenue from existing customers as against total revenue. This is very important and a steady trend shows that we are consistently getting new business from existing customers as well as new customers. This in a way shows the strength of the existing customer relationships. 
  4. No. of transactions: This is nothing but the number of transactions completed in a particular time period (usually a calendar month). This is an often ignored variable which can give early indicators to the management so that they can check if there is any cause for concern. This ability of the management to be able to check any issue at an early state can provide the management with enough time to course-correct mid-way. This ability is the difference between good companies and great companies.

All these indicators when viewed together can provide with enough information to the management on the effectiveness of their sales force and can also provide them clear direction for improvement. The compensation plan for the sales force should also have weightages for all of the above (albiet differential percentages depending upon the strategic direction.