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Incentive Pay Versus Bonus Pay For Your Sales Staff?

It really depends on the type of sales team you wish to build for your business. Incentives are effective at reinforcing behaviours and rewards are effective at reinforcing results. Most business owners would prefer to hand out bonus or reward pay connected to bottom line profits because it limits their risk. And yes, if results are imminent, then reward pay is a great way to go.

For most of us, results are not imminent. What if you are just starting out? Or repositioning your company and don’t have the brand equity or reputation you need to succeed in the market place? As a business owner you may want to take a serious look at providing your sales team with incentive compensation to drive specific behaviours that will work to develop a much stronger sales machine.

It takes a gutsy owner to put up cash to reinforce behaviour that may or may not be tied to certified financial gain. Here’s why it is a plausible plan.

If you are managing a sales team reinforcing specific behaviours can be really important. The manoeuvres involved in lead generation, creating a positive reputation and following-up are often tedious unrewarding activities that must be done with accuracy and tenacity to be successful. Incentive pay tied back to lead generation goals, data base building goals and follow-up goals can go a long way to paving success and momentum for a sales employee and their team. Paying for this behaviour is a clear indication of what is expected of the employee and works quickly to teach and indoctrinate new employees the habits necessary for a successful sales career. In results oriented environments where extra compensation or all the compensation is tied to a result – there is often a heavy staff turnover due to a lack of success.

Let’s face it, many business owners and sales managers are faced with the very large task of training new recruits. Why not give them an incentive to achieve smaller behaviour based goals that are strongly tied to company policies, procedures and best practices. This way you monitor performance by handing out incentive cheques. No performance? No incentive cheque this month. Nothing will drive home a message faster to a new employee than a miss on an opportunity to earn more money.

Are You Surviving Or Thriving? It’s Time To Develop New Business Goals For 2013!

Happy new year and congratulations for surviving another year in business. Are you just surviving or thriving? Or do you know? What are your goals? Do you have specific goals related to growing your business?

No matter what kind of business you own or at what stage (start-up, five years old, 20 years old) you will benefit from a detailed review of last year and a new or refreshed plan for next year. And the good news, it doesn’t have to take hours and hours of time to get re-focused and re-charged.

Debrief 2012:

– Top line and bottom line sales (gross sales and gross profit);
– Major earners by line item (what product or service were considered major earners?);
– Major losers by line item;
– What did you do well? List three things;
– What did you do not so well? List three things;
– What did you learn?
– How will you apply to next year?

Develop new business goals for 2013:

– Overall financial and non financial goals;
– Top line and bottom line sales (overall sales and net profit);
– What product or service will be a new earner in 2013?
– What will earn more in 2013 vs. 2012?
– How will you maintain a focus on your goals stated for 2013?
– Do you plan to measure your performance?
– When will you measure your performance and how frequently?

By the way, I really sit down and figure out new business goals for my own business. And in doing so, plan to share my findings and my new business goals with a selected and trusted group of colleagues (other business owners like myself).

With the help of my business group I got through this presentation and answered their follow-up questions. Moreover, it was valuable to hear their presentations using the same format as new ideas came up including their new business goals. This exercise forced me to articulate and defend my ideas. It also forced me to use accurate numbers, something that I am guilty of not always knowing consciously. Likely because there is too much swimming in my head at times.

Give this exercise a try and develop your business goals soon. Let us know how it worked for you. Or share your ideas, we’d really appreciate hearing from you.

Good luck in the new year!

Do You Follow Up With Your Customers After A Purchase?

If you don’t, you should. Following up is the single greatest opportunity a business owner has to build their business. Why is that? There are a number of reasons starting with:

1. Assessing customer satisfaction;
2. Opportunity to connect and learn why the purchased products or services helped the client;
3. Demonstrate a caring disposition;
4. Opportunity to make good with the client for a deficiency;
5. Verification of your promise. One thing’s for sure, weather you say it overtly or not. Promises to make good for a product or service malfunction are made at the time of purchase. No one I know, will purchase a product or service if they think the business will not stand behind it. By making a post purchase follow-up call, you are verifying in the client’s mind that you are going to be available and stand by your promise.

Not to mention the opportunity to rebook, up-sell or cross-sell a satisfied client when you have them on the phone. Think about it, if they are already satisfied, you basically have delighted them for a very good reason. And by delighting them the likelihood of purchasing more is very high.

In a nutshell, pro active post purchase follow-up (within two or three weeks after the service) is a fabulous strategy and a great way to build your business.

Good luck!

Customer Service Pitfall: Don’t Spoil Your Customers, Unless They Are Paying For It

Do you work your fingers to the bone for your clients? Do you always go way out of your way to delight your clients? Many of us do and yet, we don’t really know or understand precisely how much our clients appreciate it. If we all asked our clients to pay for the extra service we are providing – how many would say yes? My experience is that most would say no. If this is the case, then you are banging your head against glass by offering the extra wow factor.

Now don’t get me wrong, there are times when a wow factor can help your business, but if provided consistently the wow factor just becomes a promise that you need to maintain. Sustainable delivery of 5-star service for a 3-star price will eventually catch up to the business owner. The business owner in this scenario has committed the most common and fatal flaw I know — ”trying to be everything to everyone”. Giving 5-star service to everyone – when you are not sure your clients really appreciate it is just plain old dumb.

Consider what is being said this way. Does the Holiday Inn, a popular 3-star hotel chain have satisfied clients and make money? Yes, because it delivers on a set of overt and covert promises made to a very targeted client who appreciates the 3-star experience. Generally speaking the 3-star experience would be the promise of a clean, well run hotel that offers a healthy breakfast or meal for an affordable price (mainstream price). You can ad that the Holiday Inn specializes in welcoming families by providing amenities. This hotel chain would start losing money if it tried to offer services that exceeded the 3-star level. For example if the 3-star hotel had a 5-star restaurant located inside, the people would not be satisfied because they would have to pay premium prices for their breakfast or meals. On the flip-side, if the hotel offered the 5-star restaurant experience for a 3-star price the hotel restaurant would lose a lot of money and still likely have dissatisfied customers because it takes a lot longer to cook a gourmet breakfast or meal vs. a mainstream one.

Can you imagine the young family coming down from their hotel room to sit down for breakfast in a 5-star restaurant?My kids would have driven everyone else crazy because it would have taken an extra 15 minutes for the gourmet eggs we really didn’t want in the first place.

Bottom line. Don’t fall into the pitfall of offering 5-star service to a client who appreciates and values a 3-star experience. Instead of thinking about wowing them, put your effort into ensuring the consistent delivery of the 3-star service. There are always gaps to identify and improve, be an expert in understanding the gaps between the promises you are making to your 3-star clients and the actual service you are providing!

How Do You Gain More Qualified Leads More Consistently?

One of the best kept secrets in life is the fact that leaders have influence over others. Leaders in fact have followers.

A great strategy is to plan to gradually earn the respect of leaders via education and the sharing of valuable information. In time your new center of influence will provide you with the names of their followers. By virtue of this action you will have been given a warm lead.

For years, I was in the seed business in Western Canada. One proven tactic was to put new seed varieties in the hands of the farmers who are regarded as community leaders. This was a very effective way of getting your seed variety noticed and scrutinized by a respected local authority.

When I was a kid, I remember going visiting the small town my grandparents lived in. This small town had 1,500 people and even as a teenager I recognized this town was led by as few as twenty or twenty five people. You know, the two ladies who run the local community club – that if they didn’t work as hard as they did the club would shut down! The drug store owner, the family that owned the main gas station and hardware store, the local clergy perhaps and the gentlemen who seemed to coach all the kids in hockey and baseball and keep the local swimming pool open.

These leaders have influence and have deep connections within the the town or community. Their opinion matters to many. Why? Because their opinion is based on fact of observation and not emotion, prejudice or conjecture. Earn the respect of a leader and you will put yourself in a position to be given a chance with their followers.

Just one warning though – when you are given a chance, don’t blow it by not being a leader yourself, right?

Customer Service 101

To customers, the service they receive is the most tangible aspect of a company’s performance. Many experts agree that the quality of customer service first received by a customer heavily influences the initial buying decision, as well as, any downstream decisions to re-purchase. In other words, good or great customer service can help you acquire new clients and turn them into loyal clients who will purchase from you again and again.

So why don’t more companies shore up their customer service? Perhaps the answer is that most companies don’t know what good customer service is? Hmmm, it would be hard to believe that a business owner doesn’t know what good customer service is. After all, business owners are also every day consumers aren’t they?

A quick analysis of everyday consumers reveals that we are similar in our patterns for seeking out better customer service. For example, most of us will:

1. Go way out of our way to visit a favorite car mechanic. Why? Because we trust that they will fix our car properly the first time and not over-charge us for the service. Many people use an auto mechanic they found years and year ago and never leave them, even though they must travel the entire length of the city to get there.
2. Wait an extra three hours or an entire day or more to get a hair cut by a favorite hair dresser or barber. This is in lieu of getting a hair cut by someone else in the salon who is conveniently free. Why? Because we like they way our hairdresser cuts our hair. And if they are really good, our hair dresser will do the little things that make a big difference. For me, my hairdresser spends a lot of extra time making sure that hair does not get between my shirt and neck.
3. Spend 15 or more minutes in a drive thru on any given morning so our coffee will taste the way we want it. We know that our complicated coffee order will be done with precision and care, resulting in a cup of coffee that always tastes the same and meets expectations.

In a nutshell, it seems to me that people will go out of their way for people who really know their stuff and demonstrate care through the consistency of their service. Is it really this simple?

What To Do In A Room Full Of Strangers

When faced with a room full of strangers my goal is to engage people in high quality discussions. Ultimately, I would like to invoke the following response from the other person I am talking to – “Isn’t that interesting?” Yes, my goal is to be as interesting to the other person as I can be – in eight seconds or less.

By being quick about what I need to say, I don’t turn people off by triggering their wall. You know the wall, we all have seen it and felt it’s coldness as the person you are talking to turns from open to closed and is now rebuffing your approach and sincerely wishing you would go away.

After you have established interest – but only for a few moments – you can choose to take a leadership position by turning the conversation around and becoming more interested in the other person’s business.

One approach I favor is to introduce myself as an expert. This usually invokes a positive response – such as wow, isn’t that interesting. Keep in mind that I proudly and confidently introduce myself as an expert. Introducing yourself as an expert with any less than an aura of confidence is not a great way to make a first impression.

Once I am done with my intro of eight seconds or less, I quickly ask the simple question “What is your expertise?” ..quickly followed by another question …”And for you do you supply or provide these products or services too?. This approach usually spawns enthusiasm with the person I am talking to, which frankly is exactly the reaction I am hoping to get because eventually this person will ask me more about my business. Dramatically increasing the chances of this person remembering me and my business. Why? because when they ask, they are now ready and open to learn.

To clarify, here is my simple recipe when in a room full of strangers. Take the quality not quantity approach. Be an Expert for eight seconds, then be more interested in the other person by asking questions. If you simply follow this advice, I believe you will succeed in developing a valuable network and in doing so lay the foundation for a positive reputation in the marketplace you sell into.

Warm Up A Cold Call By Leveraging Your Network

I read an article in Harvard Business Review years ago that changed my mind forever about cold calling. Basically it said something to the effect that warm calling was 7 times more profitable than cold calling. Seven times? How do they know that? And then I thought… “Why am I arguing with Harvard?” If it’s not 7 times, it’s 6 times or 5 times. The fact is warm calling is way more effective than cold calling and we all know it.

So why cold call when you can warm call?

From that day forward I have made it a mandate to develop systems that “warm up the call”. The foundation of this system is my network. Instead of working hard at cold calling, I decided to work harder at developing a valuable network.

This network has helped by:

1. Providing the name of a decision maker;
2. Making an introduction (in addition to providing a name to drop);
3. Providing valuable background information on the prospective customer.

All information to take the chill off that first “cold call”.

The key to making a cold call warmer is to find commonality with the person at the other end of the phone. If your network is valuable enough, you should be able to uncover some kind of commonality, be it a name, a hobby, an association etc.

“Hello my name is Dan Debreuil of Sales Expert. On recommendation of “someone in my network who you know” I have just joined the Manitoba Food Processor’s Association. I noticed that you are also a member of the Manitoba Food Processor’s Association and was looking to introduce myself this morning”. As simple as that may sound, the commonality provided by name dropping in combination with the new association membership is most often extremely well received and welcomed. Turning what could be an awkward cold call into an instant coffee meeting or a warm telephone conversation with promises of follow-up.

Cold calling? The only cold calling I do now is when facing a room full of strangers at a networking event. The goal isn’t to get a sale, it’s to expand my network so that one day I can call upon these strangers to warm up my call.

Learn From 2011 And Refresh Your Goals For 2012

Happy new year and congratulations for surviving another year in business. Are you just surviving or thriving? Or do you know? No matter what kind of business you own or at what stage (start-up, five years old, 20 years old) you will benefit from a detailed review of last year and a new or refreshed plan for next year. And the good news, it doesn’t have to take hours and hours of time to get re-focused and re-charged. Here’s a real life example of the questions I answered and provided to a business group my company belongs to on the morning of January 5th during breakfast.

Debrief 2011:
– Top line and bottom line sales (gross sales and gross profit);
– Major earners by line item (what product or service were considered major earners?);
– Major losers by line item;
– What did you do well? List three things;
– What did you do not so well? List three things;
– What did you learn?
– How will you apply to next year?

Objectives for 2012:
– Overall financial and non financial goals;
– Top line and bottom line sales (overall sales and net profit);
– What product or service will be a new earner in 2012?
– What will earn more in 2012 vs. 2011?
– How will you maintain a focus on your goals stated for 2012?
– Do you plan to measure your performance?
– When will you measure your performance and how frequently?

With the help of my trusted colleagues in my business group I got through this presentation and answered their follow-up questions. Moreover, it was valuable to hear their presentations using the same format as new ideas came up. This exercise forced me to articulate and defend my ideas. It also forced me to use accurate numbers, something that I am guilty of not always knowing because their is too much swimming in my head at times.

Give this exercise a try and let us know how it worked for you. Or share your ideas, we’d really appreciate hearing from you.

Dramatically Increase Your Sales With Your New Trial Use Program

Lets face it, parting with people’s hard earned money is difficult even at the best of times. B2B and B2C buyers alike are fickle and each have a complicated rationale they go through when giving consideration to making a purchase. As business owners, we are often left disillusioned by the reasons given by prospective buyers for not buying. What can we do to overcome this? Firstly we need to understand what’s going on. In my opinion there are three factors at bay including:

1. Buyers remorse. This is the remorse a buyer feels after they make the purchase (too expensive, didn’t do what they thought it would do, too much work to make it work, etc.).
2. Too many choices. Sometimes offering too many choices or solutions can turn a person off from making a purchase at all.
3. The need to stick one toe in the lake vs. jumping in with two feet. This is a big one that business owners need to understand. Most people – say more than 90% of us – avoid risk. Hence, we want to try something before full adoption. This is especially true in B2B situations where the transaction value can be very large.

Trial use programs are designed to make it easier for prospective buyers to purchase by allowing them to make a smaller investment with less strings attached.

Trial use programs are just that – they allow the prospective buyer to try your services and by doing so garner a lot more knowledge about your company and the delivery of the products or services you can provide. Examples:

1. Download our software free for 60 days;
2. 100% money back guarantee if not satisfied after 30 days;
3. We will provide free delivery for the first 5 units you purchase;
4. Attend our seminar and learn about tax planning strategies that can save thousands of dollars;
5. Need a storm door? We are offering a limited time special on storm doors this fall. Our best selling door is now being offered at 25% off and installation is free. Call now for an appointment.

It doesn’t matter what business you are in. You need a trial use program to remove the natural barriers people have in making that final purchasing decision.

Your Brand Identity And Logo Need To Support Your Brand Promise

Too many business owners simply hire logo designers and provide them with the simple instructions to create something appealing. To me this is a giant opportunity lost. Your brand identity and logo if designed properly should firmly support your ultimate brand promise in the minds of your best clients. Here’s why.

Your brand vision is your ultimate promise to your most appealing and profitable customers. A good example of a simple brand vision is “to provide the best tasting pizza in Winnipeg”. This is a great brand vision if there are enough people in Winnipeg demanding tasty pizza.

Little promises your business makes to support your ultimate brand promise are called position statements. Position statements support the ultimate promise in the minds of your most appealing customers. For this example, supporting statements that position the ultimate promise could be tangy sauce, thin crust, oven baked and fresh ingredients.

Some pizza companies may want to be the most affordable in Winnipeg? Or they may want to be the quickest to deliver your pizza?

Should your pizza company’s logo and brand identity be different for differing brand promises made to clients? In other words, should the tastiest pizza company have a different logo and brand identity than the quickest? Yes, absolutely.

Conclusion:
In addition to being appealing to look at your brand identity and logo should work hard to support your brand promise to your most ideal customers and prospective customers.

Deliver On Your Promises – Branding 101

As business owners, we all seek a positive reputation in our market place. Why? Because our reputation helps us retain the business we have and acquire the customers we desire.

How do you get a positive reputation? In the long run, you should consider developing a branding strategy for your business.

In the short run, never over-promise to your customer and always “do what you say you are going to do”.

If your staff simply delivers on basic promises to customers, your reputation will eventually grow to be known as the business that gets the job done.

Eventually after the completion of your promises over time, your reputation will grow to be known as the supplier that can be relied upon for honest answers. As painful as it may be to refer a needy customer to another vendor, honest communications to customers will pay off in the long run.

Sticking to your promises is good for business and is your first and most important step in branding your business.

Face To Face Account Management Is Always Better

Last week, I got up at 5:30am to take two planes to get to Seattle for a 40-minute business meeting and supper with a client. And without question, it was absolutely worth it. The meeting was excellent and the client and her team have a renewed confidence and energy in our business relationship. Could this trip have been avoided? The answer is, it was avoided for five years. The last time I made this trip was six years ago. One thing for sure, it will not be six years until I get to Seattle again.

Would I do this for all of my clients? Should I do this for all of my clients?

The answer is no, to be successful in business you cannot be everything to everybody. You must focus on the customers who make you the most money or have the potential to make you the most money.

This is why you continually need to profile your definition of a great or profitable client and then prioritize them.

Customer prioritization is the next great sales (and marketing) strategy after profiling. By prioritizing customers and prospects you can manage your time much better. By prioritizing you can determine who you must give more attention to and who can either do without or can be serviced another way. For lower priority clients, I will telephone them or use video conferencing like Skype. This way, I either avoid time wasting traffic jams to get to their office or busy and congested airports if they are in another city. Lower priority clients are important – just not important enough to afford giving up two full business days for a face to face visit.

Are You Selling To Another Business Or Person?

Ask yourself if you are selling to another business or person? For most companies, selling to a business rather than to a person or resident has tremendous advantages. Most noteworthy is the fact that businesses tend to purchase more volume, more frequently. As a general rule of thumb, if you can sell to a business and not a resident – do it.

Biggest Waste Of Time For New Businesses

The biggest time waster for many new businesses just might be the fatal mistake of developing relationships with the wrong customers. Don’t do it! To prevent this problem, develop very specific profiles of your ideal customer and aim to make relationships with them. Why invest a lot of time in a relationship with a customer who buys from you once in a while? Or is struggling to pay your invoices on time? Start things off right by going after a select group of people or businesses who will pay you often and on time!

Part 2: Customer Profiling

PROFILING CAN BE SIMPLE

1. Do you have a customer that is nice to deal with and makes you a lot of money because they order a lot of your products or services? If so, a great strategy may be to think of that customer and focus on finding more just like them.
2. Looking back at your customer activity reports to determine the commonalities of highly profitable customers is also customer profiling. Who knows? You might find out that your best customers import furniture from Asia, or require refrigerated warehousing, or all live in the south end of town.

Start-up companies or new companies don’t have the luxury of identifying customers that make them a lot of money. These companies are pushed to predict a customer profile or profiles. Making this more than a simple process can pay off by predicting your prospective customer’s needs or desires. Defining who the customer is before having any customers, helps to predict the type of products or services you should produce and how customers prefer to receive information.

PROFILES REVEAL

1. The location, lifestyle, behaviour and demographics of your customer. These characteristics predict product demands and help you evaluate cross-selling or up-selling potential and methods;
2. Traits of a good and bad customer;
3. The future growth potential of your customer;
4. Customer criteria that is relevant information and not just general impressions. For example, your ideal customers may have the common trait of not having access to high speed Internet. Thus, your website should be simple and easy to download even via dial-up internet access.

DESIRABLE CHARACTERISTICS SUITABLE FOR MOST PROFILES

When creating your profile, don’t be shy in stating some of the more obvious desirable characteristics about your ideal customer, such as:

1. Purchases multiple times per year;
2. Purchases in volume;
3. Has good credit rating and pays on time;
4. Doesn’t price shop;
5. Places a high value on developing loyal business relationships with their suppliers;
6. Plans well and communicates effectively;
7. Is well organized and financed;
8. Is happy and appreciative of the products or services they buy from your business.

Part 1: Customer Profiling

In business, you should not plan to be all things to all people. It’s vital for any business to identify their ideal customer, and to focus on serving that customer. Doesn’t it only make sense to take the time to describe the character traits of your perfect customer? Customer profiling is analogous to creating your own target for the purpose of “attacking on a narrow front” versus a large front.

Why Profile?

A perfect customer is one that will have a healthy need for your product or service and will happily buy from you, allowing you to make money and grow. Obviously, for an individual business, there is a great opportunity to fine-tune the customer descriptions, but the overall principle is simple – you are profiling a prospective client you wish to attract, retain and profit from.

The process of establishing the detailed set of characteristics that determine a perfect client is Customer Profiling. For many businesses, it makes perfect sense to choose two or three specific target audiences to sell to. In this case, you would develop a customer profile for each audience.

To reiterate, customer profiling is the process of describing your perfect client. Why do this? So you and your sales team, as well as all the staff at your company, can easily recognize a top-notch prospective client when you see one. Did you know that top-notch prospects come into your shop or call you on the phone on a regular and consistent basis? The question is, do you and your staff recognize them?