I get asked a lot where I get my sales leads from. While there are plenty of standard answers – mine is typically “Where other salespeople aren’t looking.” Here are two quick examples.
For example, what industry to you sell into? Let’s say that it is in novel materials for semi-conductors. Why not monitor the semi-conductor patents that get issued and contact each and every author to pick their brain and see if they know who you should be talking to.
Staying on the same general sales lead path – get your hands on all the technical articles you can and call up all the authors. Typically these more technically-oriented people will talk to you and provide you with great insight and sales leads as well.
This example is a real-life one lifted from my own experience. We had an idea that recycling expensive metal used in the investment casting of aerospace parts would be a useful service to offer. Metal prices were at record high levels, and these guys used hideously expensive metals like rhenium and silver, to name two. Used parts were just stockpiling up everywhere because no one knew what to do with them. This type of project would have the potential to fill up the bottom of my sales funnel – the best part.
I called on the major aerospace players and asked them if this was a problem. YES. That was music to my ears. I decided to pick just one company to focus on initially to prove out the concept and the technology. We sketched out our solutions and got basic cost data put together for each process. The various solutions ended up being vastly different in cost structure.
One solution was very cheap and could be rapidly implemented – but the purity of the resulting metal was less than prime and it would have to be diluted with pure virgin metal to be used again. The alternate solution was very capital intensive and would take a year to implement, but the produced metal could be used as is – in fact it was purer than the incoming material.
I called on my contact at the company; his title was Technical Consultant, which at this company was the very top of the pecking order for the technical ladder, so he was the right person to be talking to. I asked him if it would be possible to put together a team from his side that could help evaluate our solution from both a technical and business point of view. He replied that he was the correct technical contact and he would put me in touch with the responsible buyer.
We had an initial teleconference where our team laid out the two solutions and talked about the pros and cons of both methods. At this point both paths made economic sense for them, but Option A was clearly less expensive if they could use the less pure metal. I suggested a trial run of Option A, since we already had that equipment on site.
A $50,000 purchase order was cut less than a week later.
Do you think the PO would have been so easy to get without the correct buyer in the loop? Note that I anticipated that this would be a possibility and had previously worked out the costs to arrive at the price.
As the work commenced, it was apparent that we needed to involve another of their vendors into the loop. They would be responsible for the initial melting of our recycled material into a usable alloy. Well, this group is now starting to get difficult to manage. Conference calls now had an average of seven outside people on the line in addition to our four or five. But this is the price to be paid for this type of collaboration. It got so involved that I ended up purchasing a Web hosting service to better facilitate the discussions via video – I even bought each of the major players a video camera and microphone to use. Talk about good will!
To cut down on the length of the story, the initial solution didn’t provide good enough quality for them to use, so we needed to further investigate the second option. Things get sticky here because your getting major quotes for capital equipment over $1 million and you really don’t want to tell your prospect what things cost or they will beat you down to unsurvivable margins. I was upfront and only told them what price we would need to charge to make it an attractive business to us.
They fought very hard to get more cost data, and sometimes you have no choice but to surrender. But in this instance, I had the upper hand. They had so much time invested with me that their switching costs to going with a competitor would be too expensive and time consuming. I ended up giving some detail about depreciation terms and usage estimates, but equipment pricing was never disclosed. See the article “Negotiating With the Bean Counters” for details about how to handle these situations.
The sale was actually pretty easy at this point. I went into a multimillion dollar and multi-year business opportunity with a one-page, zero-surprise quotation and won the business over others who submitted “proposals as thick as phone books”. If you’re curious about timing, from my initial contact to the $50,000 order was one month. It took another ten months to secure the multi year deal – no one ever said that complex sales happen quickly!
It should be noted here that since we initially thought of the idea, there was no competition up front. After getting into a bit and working with the team, I suggested to my customer that they begin to work up a competing quote.
Why would I invite competition?
Well, for starters, I knew that for orders of this magnitude, at least two competitive bids are almost always needed. If we waited until the end to realize this, it could delay the order process by months. Secondly, maybe the competition had a better plan that we did. I doubted it, but one never knows. And if they did have a better idea, perhaps we could share in it. Either way, I had the customer’s best interest at heart and it showed.
There are many more interesting intricate details that happened along the way with this project, but the soul of the relevant matters to this article have been laid out.
OK, this is the first venting post of this blog’s history – but it’s very appropriate to our sales discussions so here goes…
We were in the market for a new bedroom suit for my little boy who is moving out of his crib. My wife found what she wanted at Value City Furniture. Unfortunately they have no options to do anything over the Web (sales mistake number one), so she had to call to place the order for a bed, mattress set, end table and dresser – I’ll explain later why she can’t get to the actual store.
They told her that they aren’t allowed to take orders over the phone because of credit card issues. What??? I can pay for a bloody pizza over the phone! (sales mistake number two)
So now I have to run to this store with my 2-year old to order the bedroom set. I tell the salesperson, Bruce, that this was very inconvenient for me and asked him to explain why we couldn’t order over the Net or at least the phone. His response was that the “Privacy Act” prohibited them from taking confidential information over the phone. He stated it as such a fact that the President himself must have signed this Act into law. What???
He then made his major mistake and said that it isn’t a big deal to come to the store and it isn’t really inconveniencing me much. Now, what Bruce didn’t know was that my wife had been in the hospital for several weeks due to pregnancy complications and I was running ragged back and forth with work, daycare, and daily trips to the hospital with no family around to help – so this was a major, major inconvenience for me. (sales mistake number three)
He finally goes to ring me up and proceeds to tell me that his computer will only let him enter single unit sales and since I was buying a set, I had to go through the customer service department. What??? (sales mistake number four)
Since I’m extremely short on time at this point in my life, my only punishment was to not order the mattress set off of them. If I had more time, I would have blown out of that store completely.
So what can we learn from Bruce? Plenty.
Make it easy for your customers to order your goods through a variety of outlets.
Make sure your offerings are at least as easy to order as your competitors are.
Don’t make a mistake and assume anything about your customer because here is where you can mess with their deep emotions and really screw up a sale. So stay away from politics, religion and things like that.
Never tell a customer that you can’t take their order right now. If all else fails, write it down and enter it in the system later, but don’t pawn them off onto someone else to deal with.
Maybe we can start a list of our readers vents and put them together to deliver to sloppy salespeople that give us all bad names.
While on a recent outing to Home Depot, I happened across the line of Dremel products and a big sign caught my eye. It was a 1-800 customer service number that you could call right there in the store!
So if you were looking and had any questions at all, you just dial them up and they advise you on what Dremel accessories you might need.
Now I don’t have to tell you what that would mean to the salesperson going to pitch larger shelf space for Dremel’s products. A typical question that purchasing agents at big box retailers ask is “How will you support our sales efforts” (they are looking for what type of marketing you’re willing to do and then make you pitch in to pay for their ads – but that’s a different subject). How awesome would it be to answer, “How about if we give your customers live 24/7 access to our customer service department so that all their questions are answered right here in your store?”
Most of us are not fortunate enough to have such a customer service department as this, but what can you do to get closer to this goal? Well, I suggest talking to your customer service department if you have one and relate this story. Tell them that you realize they are stretched so very thin already, but this display was so motivating that you were hoping to work with them to install some systems that might get you closer to this.
If going up and asking these questions makes you uncomfortable, you must not have followed our previous recommendations to integrate with the CS department – so start now.
I pinged Dremel’s customer service department for a quote on their basic customer service philosphy several months ago and never got a reply, puts a bit of a stain on my theory of their busines model.
The Sales Funnel metaphor has its roots in the real world use of funnels. A large amount of liquid, or sales opportunities, can fit into the top wide portion of the funnel. However, as you move down toward the funnel neck, less and less opportunities can fit.
A sales funnel is constructed by stacking several layers together. These layers include:
The key to surviving in sales is to make sure that each respective layer in your sales funnel never dries up – it really is that simple. You should always know how many companies are in each layer. New Opportunities are put in the top and worked through the funnel (via a documented sales process) until they either issue a purchase order, or become a disqualified lead.
Knowing that it can take weeks or months to walk prospects through the sales funnel process, you better have multiple prospects at all layer in your personal sales funnel.
So the bottom line is pretty straightforward. Make sure that you have action at all levels in the sales funnel and you’ll never be desperate for a deal to close again.
Over the past two years, I’ve been developing an Excel based sales tool to automatically create sales funnels for my team and clients. As we saw in the proceeding sales funnel example post, sales funnels can tell you a lot about your business.
This sales tool allows you to:
Focus your efforts and make more money
Better track your current and future customers
Identify and secure repeat orders from current customers
Never be desperate to close a deal again
Identify top performers in your sales organization
Determine which customers aren’t worth your time and effort
Provide more accurate and timely forecasts
Stop wasting time preparing sales quotations on loser sales accounts
After seeing many salespeople successfully use this in practice, I’ve decided to offer it for sale to our readers. A quick look at the directions should help you decide if this would be useful to your sales efforts and how to properly make a sales funnel.
If you have any questions, please ask in the comments so that all can read the response.
It seems an appropriate time to look at an actual example sales funnel that we recently analyzed. Let’s call our salesman Sam since Sam the Salesman has such a nice ring to it.
A quick glance at Sam’s funnel reveals several observations, some good, some not so good.
Sam’s New Opportunities layer stands strong at 15. So Sam either has a fantastic marketing department that is feeding him a lot of leads, or Sam is great at uncovering his own leads. What we don’t know yet is the quality of those leads.
There is a large step down from New Opportunities (15) to Initial Communication (3). Something doesn’t smell right here. We need to talk with Sam. He either needs retrained on how to get in touch with his prospects or we need to help him get better leads.
The relatively low values for Fact Finding through Purchase Orders continues to point to a problem of converting prospects into customers. Is it Sam’s fault? We can’t really tell without talking with him. But we sure can tell that something is wrong somewhere.
Ah, ha – look at the high Account Maintenance number (12), that’s downright fantastic! Right? Look closer. With the large number of current clients, why doesn’t Sam have much more repeat sales in the upper layers? We’ve hit on a problem. Even if his new leads are garbage, he should be able to churn his current clients back through the sales process at a much greater rate than he currently is. This is where his efforts need to be focused.
This is the type of process you should go through on a monthly basis to make sure you have deals at all levels in the funnel and you don’t go hungry. In practice, Sam would couple his funnel with a brief document detailing each company in his sales funnel.
In the previous post, we talked about the basic sales strategy of playing hard to get. This post will look at an example pulled from a real-life sales call.
To set the stage, imagine that you have developed a manner by which to produce a material that no one else can currently manufacture. The competing material fails in service so often that designers are desperate to design it right out of service, but they are forced to use it because it’s all that’s out there.
OK, so you trot into your prospect’s office and lay out some parts that you made from your new material and their jaws instinctively drop to the ground in amazement, they rush out of the room to huddle and come back in much more composed.
You run the rest of the meeting and collect some cost data on their current practices and gather some forecasts for what a successful material could do in their market place. You leave them with the impression that you’ll get a formal quote to them in about a week but that they should be prepared for an expensive number because your processing route is very costly.
After about a week you overnight them a shiny proposal for your material at $500 per pound – knowing that the competition costs them about $125 per pound. You get an immediate call:
Customer: “This price is unacceptable and you need to resubmit.”
You: “I understand your frustration, but as we detailed in our last meeting, our manufacturing route precludes us from competing with the price of your current solution. Perhaps this isn’t a good fit for our material after all.”
Customer: “Please take another look at your numbers and get back to me next week with your best and final offer.”
A week passes…
Customer: “Have you had a chance to rework your numbers?”
You: “I reviewed our quotation with the production team and we really can’t do much. I could probably shave off about $3 per pound if it would help close the deal, but that’s it.”
Customer: “That’s not even close to enough, this deal is dead!”
You: “Very well then, please keep us in mind if you come across any applications that can bear this increased cost.”
A week passes.
A month passes.
Customer: “Uh, yeah, hi, it looks like we might have found a few applications where your high costs can be acceptable.”
You: “Great, let’s talk!”
A note of caution: this is a very delicate sales strategy that can easily backfire if you’re not completely in tune with your customer’s needs and your competitor’s offerings. It isn’t for the faint of heart.
In the base post of this series as well as a related post, we talked about many different aspects of a sales quotation and even put forth a sample quotation. In this post, we’re going to talk about what leadtimes you should put on your quote.
A quoted leadtime can mean different things to different parties. Oftentimes, on a quote a salesman will put a leadtime that refers to when the product will ship. The customer, however, will often view leadtime as when they can expect your widget delivered on their dock. So be careful to make this distinction clear.
Another typical item to carefully spell out is that your quoted leadtime is after you receive their order (ARO). So if you quote “3 weeks ARO”, it means that the leadtime is three weeks after they send in their order.
If your product is highly dependant on receiving raw materials, you might want to quote the that the leadtime also is after receipt of materials (ARM).
Finally, if your dealing with an unknown customers and you need paid up front, your leadtime needs to reflect that you won’t ship until after receipt of payment (ARP).
So a complex example would be: Shipment: 4 weeks ARP, ARM (note that raw materials won’t be ordered until payment is received)
In the above example, you are saying that after you get paid, you will order raw material and ship your product out in 4 weeks from that day.
Please CLICK HERE to download a sample sales quotation to use as a template in your sales efforts.
Happy Election Day everyone! I fought my instincts and followed my peers’ advice and stayed away from talking politics and comparing the two campaign’s selling style. I now regret that decision and wish I had put up some posts about how each campaign approaches selling their candidate. I was worried about offending 1/2 of my audience. In retrospect, I think I underestimated your understanding that I would be talking about selling and not politics (you can get that type of input from several other thousand blogs if you want it). At any rate, we must march on – see me in four years.
I’ve gotten a few emails over the past several months asking exactly what viral marketing is.
I typically explain what it is and how it can help your sales efforts. I’m finding an interesting pattern where the sales engineers get the concept and want to develop a campaign but upper management isn’t on-board.
We’ve all heard the term ‘viral’ before but it isn’t the easiest thing in the world to explain – until now. The folks at VM People created this awesome video that we can all understand.
It walks you through the process of using viral marketing and selling to sell more soap. The main point is to give your product advocates the tools and motivation to help you sell. Pretty cool stuff.
With so many different possibilities for lead generation, it was difficult to select a single illustrative example, but it had to be done.
Sally the saleswoman is responsible for growing sales for her company’s accounting software package.She knows the product inside and out and even passed her CPA exam recently to help illustrate her deep accounting knowledge and give her instant credibility.The company gave her six months to bulk up sales by 15%, a tall order for any product.Here is how Sally exceeded her sales goal and her commission expectations.
She called on her classmates from her CPA preparation class to ask for advice on finding referrals.Note that she didn’t ask for referrals, but asked for help on getting referrals – that’s a fine line, but an important one to take heed to.By asking for this type of help, Sally let her classmates relax their guard and offer advice.Her classmates are mostly practicing CPA’s, so there is no competition for software sales to worry about.
Next Sally poured through as many press releases as she could that dealt with companies that she already sells into and companies she wants to sell into.The releases that had anything to do with a need for an accounting package were treated as lead material.If there was good financial news, Sally called to congratulate them and see if their current software was up to the task.If there was bad financial news, Sally called to explain how her software helped another company save money and brought it back into the black.Expansions – does their current package have easy extensibility?OK enough, you get the picture.
She attended a trade show to gain insights into how her product stacks up against the competition.This allowed her to easily handle any objections where the competition was brought up as an alternative.Although, as discussed in another article, she was careful not to downplay or insult the competition to her clients.That strategy will get you no where fast.
At the same trade show, she presented a paper on using enterprise accounting software to streamline costs and minimize project cost overruns.
Sally bought ad placement from Google’s Adwords to help rapidly spread the word about her product.
Finally, she cruised LinkedIn for leads into companies that she wasn’t able to reach with the above methods.
The result of her efforts led to a 21% increase in business and the hiring of an assistant to help her manage all the extra business.
Here’s the scenario – I’m dealing with a major company selling a certain widget to them. This widget is quite difficult to make and we went through a six-month prototype/approval sales process with them. We agreed on pricing and delivery and got the order, along with their terms and conditions – therein lies the problem.
These T&C’s were so onerous that I couldn’t even pass them up the line for review. There were clauses in there that stated that they own any IP used on the project (even if you invented it 5-years ago), production couldn’t stop for price adjustments even though they had the right to refuse shipment at any time for any reason, and the list goes on and on.
I was on the line with the purchasing agent and she finally gets disgusted with me and blurts out that they already let a purchase order out to a competing firm. Now, I’m pretty good at doing my sales homework, so I know that the engineers haven’t talked to anyone else for at least five-months. I hide that knowledge and graciously accept her statement and tell her that I hope we can work together in the future.
I hang up the phone and immediately send an email to my three main engineering contacts wishing them luck with their new supplier and I wish them luck bringing their ambitious schedule in on time. This is no exaggeration – by the end of the day, there were over a dozen emails sent to me and the buyer asking how this was possible and saying that I’m the only supplier and finding another one will take several months and ruin their program, and on and on.
The buyer called me the next day and said that she misunderstood what was going on and she is now willing to work with me on the T&C’s. I of course was a gentleman and thanked her for her consideration and we’re now moving forward.
Bottom Line: Make sure that you are detached enough from your deals so that you can play the ‘walk away’ card when you think it’s appropriate. If this was the only deal in my pipeline, I probably wouldn’t have been as brave (stupid?) and might have caved in on some of the key terms of the deal.