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Q4 2010
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Q1-2011 5
Publisher’s Letter
Embracing a time-honored tradition: meeting prospects & clients face-to-face
SPECIAL FEATURE Maximize your Exhibiting ROI – 4 Articles from Canada’s Trade Show Expert – Barry Siskind
7 9 10 12
Your Exhibition Budget Exhibit Recall Show experience Do Promotional Products Add Value to your Exhibit Plan?
Features
14
Forecasting – Bill Sayers
16
23 Marketing Reasons Why Small Businesses Fail – Eric Gilboord
19
Price – What’s in a Number? – Tibor Shanto
22
The Evils of Micromanaging, and How to Overcome Them – Laura Stack
Sales Pros know the importance of accurate forecasting – here’s why
A bucket full of ways to sink yourself – BEWARE the “No Change” sign
Understanding price as the relative value - But what do you sell on?
The Productivity ProTM gives a clear directive: Stop covering for others
Q1 2011
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4 Sales KnowHow
Q1 2011
Copyright 2011 Scott’s Directories Scott’s Directories is a division of BIG Directories LP. Business Information Group (BIG) is a subsidary of Glacier Media Inc.
Publisher’s Letter
Trade Shows – A Time-honored Tradition Worth Doing Right
F
or a select few days each year, office-bound sales and marketing professionals can emerge from their detached environment of phone calls, emails and web conferencing and physically participate face-to-face in something refreshingly “old school” – the time-honored business event known as a trade show. Annual trade shows and their related conferences play an important role in every known industry. And despite all the internet-based methods of connecting and corresponding with our prospects and clients any time we want, trade shows (even though they run regionally for just a few days each year) can help form new connections and fortify existing relationships in ways which might not be possible at any other time, through any other means. These industry events can produce a rush of business activity as they congregate a wide audience of key people in a short period of time. They routinely bring together established companies and start-ups, they help showcase new services and products and cuttingedge new designs; and they also bring out the decision-makers and C-level executives who normally exist behind a wall of gate-keepers…and they’re all there to make the next business deal happen. They’re eager to talk business. So that sounds logical and easy enough, but to the uninitiated there’s more than meets the eye. Exhibit-
ing at a trade show is not an inexpensive venture, but with the right amount of planning and preparation the requisite expenditures of time & money can be great investments which deliver a solid return. But to get the most from every show you attend, you really need to be cognizant of the best practices and the rules of engagement, what you should expect from your staff and how to develop a smart strategy to effectively work a show to everyone’s benefit. Whether you’re an experienced trade show veteran or planning your first shows this year, you’re in good hands! Barry Siskind is a recognized trade show expert, an active conference leader and the author of several books on how to get the most out of trade shows and events. We’re proud to have Barry aboard every edition of Sales KnowHow – for this special issue we’ve included 4 of his latest articles on maximizing your ROI from trade shows. Wishing you the very best,
Paul Stuckey, Group Publisher pstuckey@scottsdirectories.com For More Articles by Paul Stuckey Click Here
4 Sales Book Winners: Susan Brown – W. F. Brown Accounting Services – Laura Stack – Supercompetent Maxime Burns – Lem Technologies in Longueuil, QC – Barry Siskind – Powerful Exhibit Marketing George Pawlus – GAP Machinery – Tibor Shanto – SHIFT! Harness the Trigger Events that Turn Prospects into Customers Khalid Eidoo, CEO – Mobile Capital Network – Barry & Barbara Siskind – Grab Success by the Horns
HRPA Trade Show draw winner: $100 Esso Card Chantal Cleroux – President C.E.M. Services Q1 2011
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Exhibiting
Your Exhibition Budget challenge with a trade show budget Step 1 The is that it’s hard to know where to start. O ne commonly used method to estimate your show budget is based on a ratio of your space cost times three. For example, if the average square foot cost for exhibits is $25.00 and, if you need 200 square foot (18.5 square meters), your estimated cost should be $25.00 x 200’ x 3 or $15,000.00. The validity of this estimate lies on the premise that you had calculated your space requirement correctly. So, the place to start is with a reliable formula for the actual amount of space you need. Once this is determined, applying a dollar amount to your exhibition budget becomes a lot more realistic. Let’s go through this calculation 1. It is crucial to stay focused. If you aim to reach 100 percent of the visitors (which exhibitors should only rarely do), then you are spreading your resources very thin. As a result, you will likely neglect some wonderful opportunities. For example, let’s say the show has a projected audience of 20,000 people. After talking to show management or reviewing the audited information from previous shows, you determine that 8 percent of this audience fit your profile, leaving you with 1,600 visitors. 2. Will all of these 1,600 people stop by your booth? Likely not. Every show is different. The number of visitors who actually stop at each exhibit varies. The Audience Interest Factor (AIF) calculates the number of highly interested people. If you don’t know your AIF, the rule of thumb is 16 percent. If you keep track of your show results, then over time you will learn your specific AIF. For now, use the 16 percent rule of thumb. Your potential number
By Barry Siskind
of visitors now is 16% of 1,600 or 256 5. The next step is to calculate the human element. How long will your staff potential high-value visitors. need to spend with each visitor in order 3. Next determine the number of ac- to accomplish their goal? For the purtive show hours. Every show will pro- pose of this exercise, let’s set a target duce a different flow of traffic. Often for each booth person to talk to six peothere are distractions where all del- ple per hour. If we have the potential of egates are drawn off the show floor to seventeen visitors per hour, then in our attend education sessions, hear a key- example we need 3 booth people. note speaker, or watch a floor show. At some shows, more people arrive 6. Another rule of thumb is that each in the late afternoon than early morn- booth person needs 50 square feet (4.5 ing. For our purposes, let’s say that the square meters) of unoccupied space to show is open for eight hours each day work in. This means that in a 10-foot by for three days, which means there will 10-foot (3-meter by 3-meter) booth, be twenty-four show hours. Based on two people can carry on two conversaconversation with the show organizer tions simultaneously with two visitors. you determine that the last two hours The key word here is “unoccupied.” of each day and one hour during lunch You need to include your product, disare slow, so your calculations of active plays, demonstrations, furniture, and so on. In our example, we would need hours will be: 24 show hours – 9 (3 slow hours each 150 square feet (16 square meters) of space for three booth people plus 50 day) = 15 active show hours square feet (5.5 square meters) for 4. Now divide the number of visitors product display. Therefore your total exhibit space is now 200 square feet by the number of active hours: 256 ÷ 15 = 17 visitors per hour (22 square meters.)
Booth Space Calculation Total number of potential visitors Percentage that represents target audience Total number of targeted visitors AIF Net potential booth visitors Number of show hours less inactive hours Active show hours Number of visitors per hour (a ÷ b) Number of minutes spent with each visitor is 10 or 6 per hour Number of booth staff (c ÷ d) Amount of booth space (150 square feet + amount of space for hardware, furniture, products, etc.)
20,000 8% 1,600 16% 256 (a) 24 9 15 (b) 17 (c) 6 (d) 3 (e) 200
You have now calculated the realistic amount of space you need and can now move on to create your entire show budget. Q1 2011
Sales KnowHow
7
8 Sales KnowHow
Q1 2011
Exhibiting
Exhibit Recall T
he highly anticipated report by the Center for Exhibition Industry Research (CEIR) titled, An Analysis of Changes in the Key Factors Affecting Exhibit Recall in the Last Decade, has been released. The report’s focus is on the issue of memorability. Since the majority of business transactions occur post-show, it is important that visitors can recall, in a positive way, the exhibitors they plan to do business with. Memorability is also important for brand awareness. In the 1980’s brand scored 4% on the recall scale. In this report it has grown to a whopping 53%. Reasons for remembering exhibits other than size Product Interest
Average 67%
Well Known Company
53%
Product Demonstration
49%
Stage/Theater presentation
24%
Booth personnel
24%
Color/Design
21%
Giveaway/Samples
14%
Literature
14%
Source: CEIR MC 46, October 2010
Booth size has always been the number one recall factor. This may be due to three reasons: • The physical dominance at the show • The repeated exposure created from their dominance • Exhibitor is usually a well known, large company However the past few years has seen shrinkage in the number of large dominate exhibitors due to budget restrictions and an increased emphasis on R.O.I. where companies often opt for smaller exhibit space. However the reduction in size can be overcome when other elements of recall are considered. As we see in the study, product interest and wellknown companies are the two crucial factors in exhibit recall. Visitors attend exhibitions to see new products or learn more about those products that they have previ-
By Barry Siskind
ously been exposed to. It is therefore important for the exhibitor to showcase their new offerings. Well-known companies are not just those with strong international brands but those who have made a concentrated effort to reinforce their name, brand promise and the solutions they offer. For small and medium size companies this is a strong justification to reinforce their identity through pre-show promotion, being active in the social network and participating in other show related activities such as the educational program or through sponsorships. Product demonstrations have increased in importance. More visitors want to see and experience new and interesting products and services. Product demonstrations that attract a large numbers of visitors who watch one presenter or one-on-one demonstrations are elements that savvy exhibitors should include in their exhibit planning. The importance of booth personnel has also grown in the last decade. This leads to the need for exhibit integration. This means exhibit managers must include a balance between the physical characteristics of the booth and the human resources. Exhibit recall can quickly turn from positive to negative as a direct result of poor interpersonal interactions between the personnel and the visitors. Literature and give-away items have decreased in importance. The drop in literature may be a result of companies attempt to green their booths. Excess literature is bulky, expensive to ship and often ends up not read. This creates a tremendous amount of waste. Most visitors today appreciate receiving the same information electronically with no waste at all. Give-away items have decreased slightly due to budget cuts and a lack of metrics to measure their benefit. Other research has shown that when give-away items are handled correctly there is a positive return and yet few exhibitors have been quick to embrace the true value of these items. The report concludes that “An exhibit is in reality an integrated organism of both physical and human systems working in concert to obtain maximum results.” Exhibit managers can no longer give lip-service to the importance of well trained exhibit staff while doing little to train them. Trade show organizers who sit back and let their exhibitors blindly struggle with the integration of these resources run the risk of lackluster results. The role for both the exhibitor and the show organizer is clear. Both need to work in concert to implement the technologies that ensure that visitors leave an individual booth and the show with positive recall. Q1 2011
Sales KnowHow
9
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Exhibiting
By Barry Siskind
Show Experience Here are some facts I am sure you have all heard: Trade shows are experiential marketing. Customers remember the experience long after they have forgotten the details. Technology is constantly tearing us away from this experience that we all apparently crave.
S
o, why do we consistently see exhibitors fill their booths with product information and encourage booth representatives to pitch product information to visitors who are unreceptive? The answer is that we simply don’t know how to interpolate the product messages into an experience. The online encyclopedia Wikipedia defines Experience as “a general concept comprising knowledge of or skill in or observation of some thing or some event gained through involvement… The concept of experience generally refers to know-how or procedural knowledge, rather than propositional knowledge.” This is a natural jumping off point for our discussion. Procedural knowledge is the knowledge one uses to solve problems. This is different from propositional knowledge which focuses on knowledge that is expressed in declarative sentences or indicative propositions such as a product pitch. Procedural knowledge differs from propositional knowledge in that the former creates a belief in an internal thought or memory which exists in one’s mind. The latter is simply information which may or may not be useful. Most people accept that a belief must be true. This distinction is crucial as it goes beyond the focus on features and benefits of a product or service. It delves into the heart of a customer’s motivation to buy or at least give it a try. The experience begins as visitors approach your booth. They see your display and your booth staff and immediately undergo some internal reaction. This is where your display and your booth staff can help create the experience you are hoping for.
Your display Step back and ask your self, “What is the experience I want my customers to feel?” Perhaps it will include such descriptors as: comfort, security, fun, confidence, taken care of, helpful, green and so on. Some of your descriptors will come directly from your brand statement. The next step is to put your descriptors in order of priority. That is if you have a list of three or four, which is the strongest feeling you are attempting to invoke in your customers. Let’s say you have chosen helpful as your prime descriptor. Now you need to do what is necessary to bring helpful to life in your display. You may include such things as: room within your display for people to talk without feeling crowded, areas where specific questions can be address or easy to read (not too many words) signs and graphics that tell your product’s story from your customer’s point of view. Your booth staff Using the same descriptor of helpful you now need to train your staff so that each one of them presents the same overall message of helpfulness. Don’t assume that they automatically understand being helpful. Working at an exhibit is different than working in their territory. At a show or event your staff does not have the luxury of time and often feel rushed or overwhelmed. So, being specific about what helpful means and providing them with the tools to bring helpfulness to life is crucial to your success. Some of the areas of training include: identifying a specific definition for the type of helpfulness that is appropriate for your organization; developing the basic standards that each booth person will perform at; giving them probing skills to understand what the customer is looking for and what their unique perspective is and rewarding those who can take helpfulness beyond the definition which is often looking for little things that seem inconsequential but really impress your customer. Creating a memorable experience is not rocket science nor overly expensive. What it often means is stepping back from the detail and asking the right questions. Q1 2011
Sales KnowHow 11
Exhibiting
By Barry Siskind
Do Promotional Products Add Value to Your Exhibit Plan?
A
while back I posted a question on the TSEA (Trade Show Exhibitors Association) Group on LinkedIn about the use of promotional products. There were 45 comments soon after and the discussion is still going strong. Comments ranged from those who thought promotional products were a waste of time and resources to those at the other end of the spectrum who found them very useful. Tote bags, pens, mouse pads, lanyards, CD’s, note pads, candy, gizmo’s for your computer, stress balls, luggage tags, buttons, pins, card holders, golf tees, sweat bands, mugs… don’t you just love it? Lots of people do. Ask visitors why then attend certain shows or what they remember best and they say - “all those cool giveaways.” Ask them what they remembered more, the give away or the exhibitor, and nine time out of ten the answer is the give away. So, does the investment in promotional products at a show make sense? Sure it does. But there is more to making a promotional product work. It’s serious business and requires some serious thought. A study by the Promotional Products Association International reported some interesting findings:
Advertising Specialty Institute found that bags topped the list with a staggering 1,038 impressions per month per bag given away. Caps were next with 476 per month followed in descending order by shirts (365), writing instruments (363), Business accessories (294), Glassware (251) and Calendars (227). The other noteworthy response was that in terms of wearables. The average respondent usually kept the article for seven months, bags were nine months and glassware seven. The study reported that the most commonly used products were writing instruments (54%), Shirts (45%), Caps (31%), Bags (29%), Glassware (23%), business accessories (17%), Calendars (17%) and other wearable’s (4%).
“Some love proportional products and swear by the benefits they receive while others avoid the discussion altogether”
Of the people who received a promotional product in the last 12 months, • 76% could recall the advertiser’s name • 52% did business with the advertiser • 52% had a more favorable impression of the advertiser after receiving the item. • 34% had the item on their person The advertising specialty people like to use cost per impression as their method of measurement. A study by the
12 Sales KnowHow
Q1 2011
How often does a respondent will use the product? • Nearly one third who receive glassware used it at least once per week, and another one quarter used it once per day. • 40% of writing instruments were used at least twice per day. One further noteworthy finding was that 42% said their impression of the company who gave them a promotional product was more favorable after receiving the item. The only exception here was bags where the number increased to 53%.
upcoming webinars Turn Your Trade Show Booth into an Experiential Environment Thursday March 24, 2011 - 1:00pm - 2:00 pm ET Create a Simple, Smart and Strategic Exhibit Budget Plan Wednesday April 20, 2011 - 1:00 PM - 2:00 pm ET
Here is a sampling of the positive and helpful comments that were posted on the TSEA Linkedin Group. • The promotional product should be a thank you item not a must have item. • Can be used effectively to reinforce the brand. • A great way to reward survey respondents. • Consider the environment and choose products with a longer life cycle and better quality. • Integrate the promotional product into the overall lead generating strategy. • Use as prizes in conjunction with a contest. This can motivate customers to spend more time in the booth. • Make sure the promotional product is tied to the overall messaging and theme of the display. • Don’t give away stuff for kids. • Train staff on how and when to hand out a promotional product. The debate rages on. Some love promotional products and swear by the benefits they receive while others avoid the discussion altogether. But, in an age when we need every advantage we can to make our show participation memorable, perhaps promotional products deserve another chance.
Develop Powerful Booth Staff Wednesday May 25, 2011 - 1:00pm - 2:00 pm ET Get ROI From Your Trade Show Giveaway Wednesday June 22, 2011 - 1:00pm - 2:00 pm ET In addition the webinars below are also available to download now so that exhibitors can listen at anytime and not wait for the scheduled webinar. Turn Your Tradeshow Booth into an Experiential Environment Get ROI From Your Trade Show Giveaway Turn Tradeshow Leads Into Sales Develop Powerful Booth Staff Turn Tradeshow Leads Into Sales Select the Right Trade Show The fees are the same for each. To Register CLICK HERE $99 per connection - Save 20% at checkout with this discount code: 47fbcda4
Barry Siskind is author of Powerful Exhibit marketing which is available at www.amazon.com or www.siskindtraining.com. He is also President of International Training and Management Company who offers a number of services to exhibitors including the creation and implementation of a mystery-shopping program. Contact Barry at barry@ siskindtraining.com for more information. For More Articles by Barry Siskind Click Here
Q4 2010
Sales KnowHow 13
Sales
Forecasting Forecasting is one of the most important functions for a successful sales rep. Accurate forecasting ensures a rep is qualifying prospects appropriately, managing her/his time accordingly and allows the organization to properly forecast to management. Forecasting will show management, which reps are in the field and those who are not. As a rep, forecasting needs to be looked upon as your barometer of how successful you are in your territory. Your forecast also becomes your guide to what your activity is generating in opportunities. My rule of thumb has been that you need to have 2-3 times your quota in your forecast and funnel at any given time in the year. If you honestly work with your forecast you know every day exactly where you are in your sales cycles with each account you are working on. You need to have a system that measures where each prospect is in your sales cycle. You need to show – Initial meeting, Demo of product or discussions of services, RFP and/or proposal stage, Decision to move forward, and Implementation date. By tracking each of these stages then you know what needs to be done to close the business, and more importantly to know how long this will take. If you have six prospects at the demo stage and it takes six months, on average, to close the business, then you are going to struggle for the next six months. I remember being on a sales call with the VP of Sales and all his managers for North America. We were doing the forecast for the month we were in. Everyone on the call was asked to commit to the number they would close that month. They were asked to put their reputations on the line as to the number they submitted. At the end of the call the number was set at 17M. Two weeks later at the end of the month we finished the month at 12M. We were off nearly 30% on that month. It was very clear that the managers had no system in place to manage their forecasting.
By Bill Sayers
If your organization does not formally do forecasts, you need to take the time to do a formal forecast for yourself each and every month. Without doing this you will struggle to be successful, as you will not know where you are in the sales cycle during the year. Your forecast becomes your road map to success. If you track your travels and manage the daily routes you
“Your forecast becomes your road map to success.”
take, you will know exactly what you need to do to be successful. If you do not track your travels then you go to places that you were never expecting to go. This means that you will not make the money you are expecting to. It will result in you having gut wrenching meetings with your sales manager each month, attempting to explain what you have done last month and what you will be doing next month or the next 90 days. I have been in sales for 20 years and during that period every time you get a new sales manager, you will get a new forecasting format to use. It will be important that you have your own system that you use and that works for you. You then take your consistent and known results and adapt them to the current tool that your company is using. By doing this, and doing it honestly each month, you will increase your success ratio threefold. You will have meaningful discussions with you sales manager and most importantly, you will have conversations with your customer that are relevant and focused, as you work together to close the opportunity you are working on.
Bill Sayers is an inspirational speaker and a visionary business leader. He has spent the past 29 years in the "Sales" arena. He started his career as an inside sales rep and worked his way up the corporate ladder to the level of VP of Sales at an IBM company. During that time he worked for Revelstoke Lumber, King Products, Linotype, Ryder Transportation, GE Capital IT Solutions and IBM. Bill is able to communicate powerful concepts in a manner, which enables practical application in the business world and drives profitable results for his clients. His goal is to help sales people ignite their passion for the game of sales. Passion - Process - Performance www.thesayersgroup.com For More Articles by Bill Sayers Click Here
14 Sales KnowHow
Q1 2011
Q1 2011
Sales KnowHow 15
Marketing
23
Marketing Reasons Why Small Businesses
Fail
16 Sales KnowHow
Q1 2011
I was walking past a convenience store the other day and noticed a sign in the window. The sign read ‘No Change’. It seems they were inundated with people who required change for the subway or for parking and they felt it was better to keep all these potential customers out of their store than to equip themselves with a supply a change. They were making a clear statement they did not wish to have my business. What they could have considered was a large sign that read ‘Change Available’. Chances are prospects may have come in only for change initially but could have been converted to regular customers with the correct attitude of the staff. It’s up to you to create a successful business or one that plods along or worse fails. Business can be tough enough without making it more difficult on yourself. Usually lists are made up of financial reasons for the failure of a small business. There are many sales & marketing reasons why a small business can fail. Fortunately there is a positive step to be taken for each one that will help reduce failure and increase chances for success: 1. Failure to face up to your weaknesses and a lack of effort to take advantage of your strengths can keep a business at a no growth mode. 2. Follow-through, implementation is the key. Plan all you want but be prepared to act on all the steps you have identified and then some you hadn’t planned on 3. Understand the difference between accountability and responsibility. Make sure your staff and suppliers recognize that by accepting responsibility it is their job to get the assignment completed. 4. A genuine commitment to the customer and the success of the business will get your through difficult times. It will also pave the way for much success.
5. No planning. Struggling along from 1 idea to another not thinking your complete marketing story through will typically end in failure. 6. Lack of buy-in by employees. When your staff does not support a marketing program you are usually destined for failure. Get them involved early in the planning process and incorporate their ideas. 7. There is nothing more irritating than when you walk into a business and the person behind the counter is on the telephone having a personal conversation. Immediately you are made to feel like you are interrupting them. Customers should be welcomed into your business and greeted with your full attention. 8. Failure to recognize trends, changes, marketing mistakes etc. Recognizing a trend away from your particular product or service offering is a terrific opportunity to present something new to a customer. New ideas refresh your staff as well. 9. If you suffer from the ‘not invented here’ syndrome, get it fixed right away. Great ideas can come from anywhere and anyone. Limiting yourself to only ideas created at your company is viewing life through a very narrow opening. 10. You may know your business better than anyone but thinking that all your ideas are right just because they were ‘invented here’ is equally dangerous. 11. No control over sales staff. Your sales reps have little direction or support and are off selling to whoever they choose to. Chances are they are missing large new opportunities and spending all their time with existing customers. 12. You have not created proper sales and marketing tools for your staff. 13. The sales tools you do have are unimpressive, out of date, poorly conceived and are damaging sales opportunities. 14. Marketing has been forced to live with a low or nonexistent budget. 15. Spend too much on marketing and do not get value for your investment. Spending dollars against marketing does not always guarantee sales. You may need to rethink the media and promotional offers that currently makeup your marketing program. 16. Failure to promote your website in outside traditional media. A key lesson learned recently by the big participants in the internet is the need to go outside the internet to traditional media. The key to success on the net after producing a well thought out web site is to let people know where your site is located. 17. Not answering the telephone properly or having an uninformed person answering for you is damaging. It is frustrating for the customer or prospect when they can’t get an answer to their questions. 18. Losing orders or not completing them on time is an easily resolved problem. Create a step by step fulfillment process with checking systems to make sure that an order is controlled from beginning to end. 19. Some business owners believe the product or service they offer should be as irresistible to others as it is to them. Therefore customers should just come to them with promotion. Not promoting yourself will only serve to keep your business a secret. 20. It is just as important to get others to promote you. If others have a clear understanding of your company and who your target group is they can promote you. 21. Negative word of mouth can have a negative impact on your sales that goes beyond one or two unhappy customers. Solve the problem and win them back. They will be your best salesman. 22. Use resources available: self help offices, consultants, internet and library. Talk to customers and suppliers, study competitors. 23. Don’t just try to be as good as the competition. Be better, offer something different, be more helpful.
By Eric Gilboord www.EricGilboord.com
Eric Gilboord is a specialist in making marketing easy for business owner/ operators and any staff with sales or marketing responsibility. He demystifies marketing so they can use it to generate sales today and grow their businesses faster. He demystifies marketing so they can use it to generate sales today and grow their businesses faster. Eric believes in blending traditional marketing with new media/social media. ROI is a must. Eric is a popular speaker, coach, columnist and author of many articles and books on moving a business up to the next level. The Expert Business Calls for Marketing Advice... That’s Easy to Understand. For more information call 416-686-2466. To sign up for his marketing tips newsletter and to read his blog please visit: www. EricGilboord.com Follow Eric on Twitter (ericgilboord) Find Eric on LinkedIn Eric’s ‘Get It Done’ Treasure Map Marketing Plan Workshop Show Me the Way For more information please visit: www.EricGilboord.com For More Articles by Eric Gilboord Click Here
And that’s According 2 Eric Q1 2011
Sales KnowHow 17
Objective:
Break through the $3, $5 or even $10 million sales ceiling before selling your business.
Action:
1. Call 416-270-2466 2. Visit TMMP Result:
www.ericgilboord.com
18 Sales KnowHow
Q1 2011
Marketing
By Tibor Shanto
Price – What’s in a Number? Price will always be a key component of any sale, but it does not have to be the only factor in a decision, unless you as a sales person let it. Based on the studies you read, price can be as much as 40% of the final decision; and with certain individuals, it could go higher. However, when you step back and examine things, what is price? At its most basic, it is the numerical value, nothing more. As with any number, there is no good or bad number, there is only the relative aspect it represents. It brings to mind the old joke explaining the concept of how numbers are relative by pointing out that three hairs on your head are relatively few, but those same three hairs in your soup, well. Just like +1 is not better than -1, they both represent a relative distance from zero; just as when it is zero degrees outside, it does not mean that there is no temperature, it is just a point between -1 and +1, slightly colder if you measure things in Fahrenheit.
It’s no different when it comes to the numbers that make up a price, the question of a good price vs. a bad price is not in the digits but in the relative value they represent. Which is why I continue to be surprised by both buyers and sellers and the relative importance placed on a set of digits with no context. Now it is easy to understand why some buyers fixate on price long before they should. Some do it because they are price shoppers and feel that if they can get you to put a number out there, it is then just an exercise of them “beating” that number down. It would be interesting to learn who started this downward spiral, the buyers pushing on sellers, or a seller deciding to short cut the sale, “throw a discount on the table”, in order to win the deal. In other instances it may be that the sellers and/or the buyer bring a consumer mind frame to a B2B playing field. Others go to price because they really cannot differentiate between one product versus the next. In many cases,
“+1 is not better than -1, they both represent a relative distance from zero”
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the top three or four products or offerings in a given space If a buyer looks at it purely on a price basis, the souped up have 90% overlap in capabilities, and therefore seem in- cell phone looks attractive, based on outcome, impact, imdistinguishable to most buyers. In that scenario, which is proved processes and other results, the seamless solution is more common than many like to admit, is it any wonder better value, and will deliver more upside. It is up to you to that price becomes the BIG differentiator. By the way, this manage the Discovery process to be able to Demonstrate Imis not something that is limited to “products” or to “com- pact. By executing the questioning routine highlighted above, modities”; it happens to “solutions” sellers too. While you can move the discussion from the cost bandwagon to the there information abounds, the sales person still needs to returns bandwagon. After all, what is better a $1 saved, or play a key role in helping the client $3.50 return on a $2.00 investment? understand the “difference” and If you can demonstrate that this the relative value of their offering. advantage will be in place for four Read The Article Avoiding the price trap takes years, you can contrast $4 dollars Listen to the Podcast work, but what in sales does saved with $6 net return. not? Using our EDGE model, with I am not minimizing the effort of the focus on ZONE Based Selling, provides a process and taking the discussion to returns, but it is doable if you focus framework for managing this. At its core is a simple con- on their business from a business perspective, not an “I need a cept, make the discussion around numbers relative to the sale” perspective. It also takes the will, knowledge and callousvalue to be realized, the impact you can deliver, not rela- ness to resist giving a number before you can build context. tive to the dollars invested or a competitor. As you would Recently I sat with a potential buyer, very early in the meetexpect this involves two specific things that have to be ex- ing she asked, “How do you charge?” I explained our two ecuted in concert. models (project or program). Remember we just got past the First, understanding the client’s business and the value small talk. She followed up: and impact that you can have on it; then developing quesBuyer: I need a number! tions that surface those factors, including follow up quesTS: No problem let’s look at what is involved, what we are tion to borrow beneath the veneer of knee jerk answers looking to achieve, project/program – scope, and then we prospects may provide at the outset. It is often these sec- can talk numbers, after all how will you evaluate the “numondary questions that get the buyer to really think through ber”, what will you compare it to? the issues. They may have been thinking about something Buyer: No, you don’t understand, I need a number so I in a certain way, and can respond to major aspects of the know what I am dealing with. subject, but the follow up questions not only cause them I was thinking I need to know what I am dealing with as to stop and think, but also put you in the light of a subject well, but did not say that; what I did say was: matter expert, and adviser. You can see the lights going on, TS: OK, number 1, that’s my number, number 1. How does “that’s a different way of achieving...” that compare? Second, as you Discover areas of mutual agreement/ Now I am not advocating that people use this approach, fit, quantify them. Quantify objectives and aspirations I don’t, but I had to make her understand that not only is that present themselves in the process, especially poten- the number meaningless, but there is also a risk that she is tial positive returns. Don’t hesitate to question how they encouraging her people to sell on price. (No, I didn’t get the arrive at certain assumptions or numbers. This will allow deal, yet, I did raise my number once we defined her needs, you to discuss price relative to returns the buyer has pre- and I do have a next step.) sented, not relative to price. Many people will “qualify”, Remember that price is relative; relative to the value the but you can do a lot more if you quantify, because you buyer is anticipating, the greater the value, the greater opcan now deal with real variables. For instance, you may portunity to base the sale on value not price; the level of be selling a true wireless solution connecting your teams value anticipated is relative to the way you sell it. in the field not only with one another, a scalable platform, which can at the same time communicate with systems What’s in Your Pipeline? back at the office, an ERP for example. Your solution offers seamless integration and delivers reduced errors, reduced Tibor Shanto – Principal - Renbor Sales Solutions Inc., is a recognized speaker, author, time to orders and invoicing, eliminate lost orders, reduce and sought after trainer. He is co-author of the book Shift!: Harness The Trigger Events That Turn Prospects Into Customers; his article “How to shorten your Sales Cycle?” the required level of inventories, increased the number was voted number one by readers of Top 10 Sales Articles. Tibor is a Director of and a of service calls you can do in a day, and other tangible contributor to Sales Bloggers Union, and his work has appeared in numerous of sales benefits. You are competing with a souped up cell phone publications and leading websites. Tibor can be reached at info@SellBetter.ca or 416offered by one of the carriers, probably efficiently achieve 822-7781. You can read our blog, The Pipeline with new material three times a week, some of the above, but not all, and would require both and follow Tibor on Twitter @Renbor. hardware and software upgrades as the buyers requireFor More Articles by Tiboor Shanto Click Here ments evolve.
Quantify – Don’t Qualify
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Productivity By Laura Stack
The Evils of Micromanaging, and How to Overcome Them For those of you who manage others, let’s begin with a quiz to do a quick check of your micromanagement tendencies. Please read through these questions carefully and answer them honestly, yes or no. What’s true of you most of the time? • Do you often find yourself standing over subordinates’ shoulders, directing their work? • Do you regularly redo your employees’ work, even as a form of instruction? • Do you second-guess employees on a daily basis? • Do you require sign-off on every task, no matter how minor? • Are you convinced of the truth of the old saying, “If you want something done right, you’ve got to do it yourself”? • Do you work 12+ a day, trying to put out brushfires and rechecking everything you’re responsible for? • Do you have a hard time focusing on the big picture? If you answered ‘Yes’ to more than a couple of these questions, then it’s “Danger, Will Robinson!” You’ve got micromanagerial tendencies, and you’ll need to actively fight them. If you answered ‘Yes’ to most or all, then I have bad news: you are a micromanager. Now, the hard truth is that many micromanagers – selfidentified or otherwise – just don’t care that they micromanage. They don’t see anything wrong with it, because in their opinion, they’re doing their jobs in the best way possible. I’ve even seen articles in which the writers sang the praises of the micromanager’s attention to detail and high professional standards. So who cares? What does micromanaging hurt? In my opinion, just asking that question displays some ignorance of the topic, and a chilling disregard not only for employees, but for their productivity. Simply put, micromanaging drives a stake through the heart of employee productivity. And if you don’t care about productivity, you’re setting yourself up for a fall—because eventually, your bottom line is going to bottom out.
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You may disagree with this statement at first blush, but I’ve heard many comments about it over the years from employees, so let me expand on their feedback here. Most of this article is based on extensive commentaries I’ve received since October 2010, when I ran a brief tip about the evils of micromanaging in my monthly newsletter as an intro to another, longer article. It was immediately clear that I’d struck a nerve, and interestingly enough, one of the points that kept coming up was that micromanaging is as much about fear as it is about control. It’s not that the micromanager is necessarily on a power kick; it’s more likely that they just mistrust everyone, and are afraid that if they don’t ride their team members, everyone will make catastrophic mistakes. So micromanagers hold on to as much of their power as they can, simply because they’re afraid of the consequences of letting go. But as one reader points out, “Any decision made based on fear will invariably prove to be a bad decision.” The result is a stifling, unpredictable management style in which the time of both the manager and the employee is wasted. The impact of micromanaging is detrimental right up and down the line, not just to individuals but to the corporate culture. Not only is it exhausting (emotionally and physically) to all involved, it’s ultimately counterproductive, and it ends up driving away the best employees. As another reader pointed out, good workers get “performance managed” right out of the company. Furthermore, even when done with the best of intentions and the lightest of touches, micromanaging is an interruptive process. If you poke people a half-dozen times a day and ask how far they’ve gotten on an assignment, you can’t expect them to get very far; after all, they have to answer your messages, which wastes their time and drags them out of their focus. Clearly, micromanaging must be avoided if productivity is to be maximized. But like so many things, that’s easier said than done. So where do attention to detail, intelligent oversight, and high professional standards start to break down, and mire you in the trap of micromanagement?
When those active in the business arena are asked this question, the same word comes up, again and again: trust. When a manager surrounds him- or herself with competent, well-supported people and trusts them to do their jobs, micromanaging is never a problem. When trust goes out the window, micromanaging springs up like a weed, the manager starts lurking and criticizing incessantly, and productivity and morale tank. So as a manager, how do you develop the level of trust in your employees that’s required to inspire productivity and empowerment? It starts with self-awareness. If your organization is suffering from low productivity, don’t automatically blame the workers; take a look at yourself first. If you don’t trust your people to do their jobs well, why is that? Did you make poor choices when you hired them, or is it that you inherited them from someone else and haven’t bothered to learn how to maximize their skills and abilities? Either way, you’re the one who’s failed. As the architect of your organization, it’s up to you to choose the right materials for the job, and to put them together in the most structurally-sound way possible. So in ridding yourself of your micromanaging tendencies and bringing your organization up to snuff, your first task (ironically) may be to take an even closer look at your team members and their abilities. Assess how each is contributing, and what can be done to maximize those contributions, and then develop an action plan to do whatever’s necessary to train or coach that individual to increase their productivity and tighten their fit into the general workflow of the organization. Ultimately, it may be necessary to replace some individuals who aren’t doing well enough, just as you’d put aside a low-quality tool for a better one. While it may seem callous to compare human beings to objects, at some level you need to do what’s best for the organization overall. By all means, do everything you can to retain them; but if they’ve advanced beyond their competence level, you can’t keep covering for them. That’s what micromanaging is all about, after all: trying to do someone else’s job because you think they can’t. You can’t afford to waste time or energy watching over people who are already supposed to know what they’re doing. The point is to trust that they can; when you achieve that trust, all you need to do is wind them up and let them go. As long as you delegate responsibilities appropriately, prepare employees their jobs, and provide them with everything they need to do it, you won’t need to ride them. Show
them that you have faith in their abilities. If they turn out to be unworthy of your faith, then yes, you’ll have to bring the axe down on them, and no mistake. But even if you fear that someone will fail when faced with the challenges of their job, stand back and trust that he or she has the capacity to solve those challenges on his or her own. That’s the only way they can ever learn and grow. Rely upon your folks, and prove that you can be relied upon to back them to the hilt, and you’ll establish a level of loyalty and productivity that can be truly astonishing. So establish your mission and vision and make sure that it’s clear to everyone. Set some basic ground rules, determine who reports to who and how, and then turn your attention to your own tasks. Learn to trust—but verify. Now, how much do you need to verify? Well, that depends on an employee’s previous performance, experience, and skill level. Basically, though, if you’ve done all you can to bring competent people on board, then believe in them and let them do their jobs, checking on them only occasionally and bringing them back in line when you need to. That’s not to say that you won’t have to do a little work to refine their abilities. In fact, one of the manager’s prime tasks is to coach their team members, and to tailor their approach to each member’s individual needs. Some people need or want more direction than others. Take that factor Q1 2011
Sales KnowHow 23
into account, and then carefully probe their capabilities; that way, you’ll be able to determine what they feel confident in and what they can use a little help with. If you don’t eventually develop a sense of what that may be, then ask flat-out. Developing good communication skills is essential to becoming a good manager anyway. Be willing to listen, to empathize, and to ask pertinent questions whenever you need to. You’ll find that you’re managing each individual more closely on some aspects of their job than on others, and that’s fine; nobody does everything with the same level of skill. But what you don’t want to do is push them too hard on any particular item, unless the deficiency is hurting the group. If so, you need to counsel them on what you expect of them in that department, and provide training or other support until they get better. It’s up to them to improve, but it’s not going to help anyone if you ride them constantly. If you hire capable, engaged people you can trust to do their jobs, then you’ve got the enviable position of being a hands-off manager. Like the savvy lieutenant, you can just point your soldiers at a task and say, “Get that done.” If they’re smart and know what they’re doing, how does it matter how they get it done, as long as it’s legal and not too costly? If they need help or advice, they’ll ask. If an employee falls flat on his face, let him. He’ll either learn better or wash himself out due to incompetence. You should be there to encourage him, but you can’t do everything—or even most things—for him. That way lies ruin for you both. It’s not that you’re abdicating your responsibilities when you do this; you’re just using other people’s talents to get things done. This is the heart of delegation, what one of my
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readers calls “the sweet spot between micromanaging and abdication.” As a manager, you’re not just another layer between consumer and product; your function is to direct and expedite the workflow, and to provide any necessary resources to stimulate performance in any way you can. That is, your job is to find what makes your people tick and to motivate them to perform as independently as possible within the framework of the organization’s requirements. Sometimes you have to push your team members… but not to the point where it hurts their performance and yours. That’s something that a lot of micromanagers forget, I think; that their own performance suffers when they ride someone else, or try to do a subordinate’s job for them. Give your team objectives and guidance when needed (and only then), and offer them the opportunity to improve their skills to the betterment of the organization. Once trust becomes a permanent part of your methodology, your biggest obstacle will be how to clearly communicate to the individuals on your team precisely what needs to be done. This may require different levels and types of communication for each person; and again, it’s up to you to determine what that might be. To wrap it up: ultimately, your true talent as a leader lies in your ability to recognize what you need to do to encourage, support, and motivate your employees to achieve the results you’re after—without strangling their initiative or engagement in the process. Find the right people, do what you must to mold them to fit into the organizational structure, trust them to do their work, and check in occasionally to verify. That’s how you achieve true, long-term productivity: not by standing over their shoulders, counting paperclips.
Make it a productive day! (TM) © Copyright 2010 Laura Stack. All rights reserved. © 2010 Laura Stack. Laura Stack is a personal productivity expert, author, and professional speaker who is dedicated to building SuperCompetent cultures by creating Maximum Results in Minimum Time®. She is the president of The Productivity Pro®, Inc., a time management training firm specializing in productivity improvement in high-stress organizations. Since 1992, Laura has presented keynotes and seminars on improving output, lowering stress, and saving time in today’s workplaces. She is the bestselling author of four books: SUPERCOMPETENT; The Exhaustion Cure; Find More Time; and Leave the Office Earlier. Her clients include Starbucks, Wal-Mart, Cisco Systems, Microsoft, Nationwide, and 3M. To have Laura speak at your next event, call 303-471-7401. Visit www.TheProductivityPro.com to sign up for her free monthly productivity newsletter. For More Articles by Laura Stack Click Here
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