Run a mental checklist over your client base right now.  Who fits into the ‘good’ client list and who falls into the ‘bad’ client list?

It all really depends on what you define as good and bad.

As we know not all clients are good for your business. Some clients are a wrong fit for your business but could be a good fit for someone else;  therefore in of themselves they are not necessarily ‘bad’.

However, others are just downright bad for your business.

It is important to consider how much your ‘bad’ clients are costing you in terms of time, money, frustration, people and product resources, lost productivity, bad press, angst, legal fees, and tarnished reputation?

If you have too many customers falling under the ‘bad’ column you need to ask yourself, “How did this happen?”

Have you set yourself up as a magnet for overly demanding, time consuming, nit picking, miserly clients who do not see value in what you do or offer and seem to want a slave rather than a legitimate business partner?

Have you set yourself up to be taken advantage of by unscrupulous and unethical people looking for victims?

It is difficult to focus on your best clients if you cannot shed your ‘bad’ ones.

For example, there has been recent media attention on the rise in Businesses Pheonixing; the act of Phoenixing is where a new company is formed to buy the assets, contracts, and goodwill of the failing business for a reasonable market rate. The legacy debt is left within the old business which is then liquidated thus allowing the new Phoenix business to trade on, debt free. Creditors and Suppliers to the old business are often left with unpaid debts which may in turn lead them to suffer their own financial difficulties.  I am sure no one wants to be put at the mercy of Businesses Pheonixing (‘bad’ clients) if they can help it.

Chasing the ‘easy’ or ‘quick’ sale may be more trouble than it is worth especially if the prospect or client is not properly investigated in relation to their legitimate needs or their intentions are clearly defined.

So, what constitutes a ‘bad’ client?

Besides the obvious impact of bad debts, there are other criteria which constitute ‘bad’ clients. Here are some examples:

• They are bad credit risks with a track record of always paying late or not at all – they can be checked out by using reputable credit agencies that keep track of people and companies’ credit ratings.
• They are a poor fit with what you offer and what they need thus leading to misunderstandings, poor relationships and confusion – this is usually due to a poor sales approach and not properly understanding your client and their needs in the first place.
• They are overly demanding on your QA or Customer Service departments – the ‘nothing is ever right’ syndrome and all they want to do is complain.
• They ask for expensive prototypes or very detailed proposals with little probability of a significant purchase – what is usually happening here is that they are siphoning you for your Intellectual Property at no cost to them so they can either do it in-house or get someone cheaper to implement your idea.
• They only want to deal with ‘you’ and expect levels of service that do not go with their purchasing level – they expect first class service when they are buying ‘no name’ or house brand products at very small volume.
• They complain loudly, often, and publically to anyone who will listen and usually only for ‘effect’ not fact.
• They do not keep their promises and break contract conditions regularly.
• They take your IP and claim it as their own.
• They say one thing and then another – you never know where you stand with them and they seem to play games, trick you or set traps.

Don’t be fooled by these types of clients they are not worth it, no matter how attractive they look on the surface and how desperate you might be to get a sale.  Unfortunately, when times are toughest we can fall prey to these types of prospects or clients which can lead to more stress and less return on investment.

An experienced business banker once told me a story about an entrepreneur and business owner who was looking for a new bank to work with. On the surface this individual and his business looked plausible, charming and sincere, but when the business banker did his investigation, he discovered a litany of evidence – failed businesses, bad debts, frequent changing of banks, poor staff retention and staff legal issues and a myriad of other things that did not bode well for this prospect becoming a valid business banking client.  As you could imagine the aforementioned business banker did not proceed with that prospect.

If these types of business people continue to behave in this manner they will eventually run out of legitimate business suppliers or partners to work with and sadly if they do, they will usually pull up stumps and go and find fresh victims to exploit.

Another tell tale sign is that they will not have a history of any longstanding, viable relationships of any value or substance.

Many people have slated the sales profession as being ‘shifty’ but in truth most sales people and their clients are out to do the right thing by each other.  So, it pays for the sales person to also be on the lookout for the potential ‘bad’ client and do proper investigations. So don’t believe everything you hear. Do your homework.

So why not have a conversation with your sales team and run your collective eye over your client base to see if you do have any of these types of ‘bad’ clients on board?  Then work out a strategy to let them go, learn from your mistakes and don’t get mixed up with these types again if you can help it.

Maybe it’s time for a client spring clean.   It might just free up your time to find and work with more productive clients

Remember everybody lives by selling something.

Sue Barrett is Managing Director of BARRETT.

Sales numbers and sales processes should be understood and owned by everybody in your organisation.   In today’s world if you are not directly in sales you are supporting someone who is.  This is why sales really is a team effort.

Rather than being just about a feel good factor and great staff alignment, this has practical applications as well.   For instance with the ability for customers (or anyone)  to find and connect with anyone in your organisation through many difference channels (i.e. social networks, Google, etc.) the whole business needs to be sales fit.

With anyone being able to contact anyone anywhere anytime it is critical that all your staff understand:

• What your company stands for (in language they and the customers understand)
• What  your company sells and how it supports your customers
• How they need to sell and service customers
• That everyone in the business either sells directly or supports someone who sells

If not problems may arise that cause more issues than they are worth.  For example imagine a customer, unhappy with a software product they have purchased, finds the name and number of the lead person who developed or designed the software and calls them directly to complain.

What happens here?  One of several things could happen.  Here are some examples:

1)    The Software designer/ developer actively listens to the issues of the customer, empathises with and understands their issues completely, helps the customer resolve their issues in the most effective manner possible, the customer feels heard, understood and able to work in collaboration with the person and the business. In addition the software engineer may take on board the new suggestions and consider them for future upgrades.
or
2)    The Software designer/ developer is stunned by the out-of-the-blue call and doesn’t know how to deal with the customer so after some mutterings hangs up on the customer.
or
3)    The Software designer/ developer tells the customer they don’t know what they are talking about and gets into an argument with the customer resulting in either the customer or software engineer hanging up.
or
4)    The Software designer/ developer tries to help the customer but gets too technical using jargon the customer doesn’t understand leaving the customer feeling more confused and perhaps frustrated or even angry.

This issue and others like it are becoming more common place leading to more customers voicing their disquiet in all sorts of public ways – just think Twitter for example.  Customer complaints are no longer residing in the domain of the customer service department anyone can read about them these days – thus leaving businesses brand and reputation exposed to ridicule rightly or wrongly.

How we handle difficult customer situations says a lot about us and our companies.

So how many of the key people in your organisation (read CFO, CEO, Operations Manager, Product Mangers, Distribution Manager, Sales Manager etc.) are skillful at communicating and handling customer enquiries, complaints, and feedback?

How many of them have been specifically trained in communication, customer service and selling skills?

How many of them can model these skills for the rest of your team?

The communications skills training most senior managers would receive is in how to handle the media but I think they would be better served if they were trained in contemporary customer service and selling skills first.

Not handling  customer issues, feedback or requests well leads to many of these media issues in the first place, so why not address it at the core?   Let’s train everyone in contemporary customer service and selling skills and processes and make sure we all understand how our actions can enhance or detract our company.

We all need to make sure that we have the sales and customer service processes in place that people can follow and apply effectively.  All our people need to be trained in the necessary sales and customer service skills so they are in the best position to handle and manage customers calls and ensure that our organisations are well placed to best serve our customers.   Even if the customer is wrong about something it’s all in how we handle it that means the difference between a positive and negative experience.

I was taught a valuable lesson early on in my career when I was working in recruitment.  The lesson was this: I was told you are going to tell more people they did not get the job than you will tell those who did so make sure that every contact you have with anyone is always done in a constructive and positive manner.  Try to be of help no matter what and ensure the person knows you did you best even if the best meant delivering bad news.  People will appreciate your honesty and the effort you took to be of service to them.

I would highly recommend that core sales and service competencies be defined and included in everyone’s job and person descriptions and be made a conscious part of all our roles through effective, relevant training and on-the-job coaching support so they become a way of life not just a fad.

So, next time you decide to train your sales staff in selling skills and processes, make sure they are the right selling processes and skills suitable for your business environment and do yourself, your team and your customers a favour by also including all your other staff in the same training.  The rewards are great in terms of teamwork, customer satisfaction, staff alignment, customer retention and, of course, better sales results and brand currency.

Remember everybody lives by selling something.

Sue Barrett is Managing Director of BARRETT

Following on from last week’s article about managing and measuring the right things in sales, I thought it would be worth looking at some of the key principles for effective sales performance management systems.

The first place to start is to align your sales performance management system and subsequent key measures to your organisation’s strategy and goals.  It’s then the job of the CEO and the Sales Leader to ensure the organisation (that means everyone else who supports the sales effort)  is aligned to the sales performance management system.   When this dimension is in place the organisation is best placed to sustain high sales performance.

Issues arise when the non sales teams impose their ‘numbers’ or ‘tasks’ on sales teams which are unrelated to the effective sales performance.   i.e.

• The CFO being critical of missed forecasts and not looking into or understanding the underlying reasons why
• The Executive team demanding more activity (i.e. make more sales calls) and not understanding the potential negative impact on effectiveness
• Marketing engaging in lead generation activities that either generate the wrong leads or leads that require out of scope qualification meaning they’re in the forecast prematurely.

This leads to competing motivation, confusion and reduced sales performance across the board.

Another key area worth noting is the importance of addressing and working with values and explicit behaviours.  This is now much higher on the agenda of many businesses now, not just the outputs of performance as we discussed last week.

While the focus of this article is directed towards sales, this principles presented here can be applied to any role in your organisation. As you read through the items below, bear in mind that this is not prescriptive in nature and you should use only what works for you.

Principles of an Effective Performance Management System:

• Reflect an organisation’s values and strategy.
• Commitment to the system should be obtained from top management and communicated to all employees. Ideally input should be sought from all levels to gain their engagement.
• Business objectives need to be linked to team and individual accountabilities.
• Performance measures are developed for each function and individual to ensure that their performance is aligned with the needs of the organisation.
• Feedback is provided on an ongoing basis, not just during the annual performance review. For instance, this would include coaching conversations.
• Expectations and communication should be transparent and consistent at all times.
• Employee development and future behaviour are the focus of attention, not just past performance.
• A partnership between the employee and manager is developed based upon open dialogue, two-way feedback, and shared responsibility.
• Employees are encouraged to take accountability for their own performance and success.

Benefits of an Effective Performance Management System:

• Encourages open, constructive communication between managers and employees.
• Provides feedback on how people are doing on the job.
• Allows for mutual understanding (between manager and employee) of each employee’s job responsibilities and performance expectations.
• Facilitates identification of individual capabilities, strengths and areas for development.
• Identifies factors negatively affecting employee performance (e.g. work environment, job design, organisational policies and practices, personal issues, external factors, etc) so that action can be taken to alleviate them.
• A structured and documented process encourages objective evaluation and fair treatment.
• Assists in the achievement of strategic goals.
• A consistent way of setting goals, monitoring performance and formally reviewing performance.
• Self-managing for proactive individuals.

Remember everybody lives by selling something.

Sue Barrett is Managing Director of BARRETT

Who wants to work with accountable, responsible, and self-directed sales people?  Of course we all want these types of sales people in every sales team.  Yet, most businesses do not support this by setting up their sales team to clearly measure and manage their sales performance.

Sales performance management begins with accurate role descriptions and perception, data collection, and measurement in line with set goals and strategy, however many organisations measure only one variable, sale results (outputs measures).

This type of approach leaves businesses and sales teams in the dark about how they arrived at their sales results making it hard to replicate good results and eliminate poor results.

What is needed in sales teams are clearer measures of what constitutes good sales performance and we need to be able to measure and manage the right things.

So, what is performance and why measure it?

Performance can be equated to behaviour, as it involves what people actually do. It is observable, measurable, and can be changed through the learning and application of new behaviours.  It is, however, important to select the right measure in a performance management system as performance measures can influence behaviours and attitudes within the organisation. A good performance measure will reinforce desired behaviours, while a poorly selected or incorrect measure can encourage behaviour that is unproductive and inappropriate.

An effective Sales Performance Management System measures sales results (output measures) and two additional critical variables, input and behavioural measures. The framework means this is done in a consistent and structured way.  The following diagram illustates examples of Input, Behavioural and Output measures for sales people.

By giving sales people access to explicit performance information about how they need to do their job they can begin to align themselves to organisational expectations.  With adequate training and coaching to support them we will now have sales people working consciously in their roles and on themselves to achieve greater, more competent performance.

Take this opportunity to check if, or how well, your sales people know their performance measures and are they on the path to being accountable, responsible, and self-directed sales people.

Remember, everybody lives by selling something.

Sue Barrett is Managing Director of BARRETT

It’s time to get back to basics.

I don’t know about you but recently I have found myself getting more and more distracted by the latest trend and fads, especially the social media phenomena. My reason for this is that I have been trying to get my head around social media and specifically, the impact on the sales profession.

As you may have gathered, I like to keep on top of what is current, what is emerging, and what is still an idea. This is why I make time each week to do research as it helps me navigate my way around the present and into the future. However, I am finding there is so much to read, so much to get my head around, and so much to integrate into my business that it can take up a lot of time… and it only seems to be increasing.

I read recently that 20 years ago information was doubling every 5 years, 10 years ago it was doubling every 18 months and today it is doubling every 9 minutes.  There is a plethora of information – the trick, however, is knowing the right information to access.

For example, getting your head around the social media space and how Facebook, Twitter, Linkedin, and other online groups impact on the sales profession is a big job. This is why I think it is timely to stop and review the information I have gathered so far, make sense of it (where possible), and determine whether it can be of value to me and my business moving forward.

This is why I want to get back to basics.

As I wade through all of the information on social media, I predominantly want to get answers to a few simple questions:

• How can it help make us more and better quality sales?
• How can it help forge better relationships with our clients?
• How can it help us be more effective and competitive in the market place?
• How can it help our competitive advantage?
• How can it support our business strategy and make our lives easier (work smarter not harder)?
• How can it support our brand and increase visibility?

From my observation, there seems to be a great deal more written about social media and the Business to Consumer (B2C) space (simpler, transactional sales) than has been covered in the Business to Business (B2B) space (more complex sales interactions). As is my nature, I am usually the first to want to incorporate new things into my business and learn how it can add value, however once all the hype and excitement boils down it is important that we weigh up energy expended and value added.

From our discussions with other businesses, I am finding that I am not alone in my enthusiasm for social media or alone in my reflection of the time spent. Now, I am not proclaiming that we should go back to the Dark Ages pre the internet and shut out social media rather that we take a moment and consider how we can integrate the regular sales activities such as prospecting, face-to-face meetings, building real long term relationships and social media

While there are fantastic benefits to social media, many of our B2B clients are reporting that their sales teams are getting distracted and ignoring the tried and true tasks required to grow sales.

Getting back to basics in the B2B sales space means:

• Defining what type of clients you want for your business
• Knowing: WHO you need to be in front of? HOW you need to make contact with them for? HOW OFTEN you need to do it?
• Use your networks (where appropriate) to research and target specific referral sources, prospects and industry contracts
• Prospect, prospect, prospect for new business opportunities– for most people that means picking up the phone and calling both new-to-business and existing clients directly to make an appointment and secure a meeting
• Meet the client or prospect– find out what they really need and how they want to work with you
• Deliver on what you say you will
• Follow up with a blend of purposeful phone calls, face-to-face meetings, emails and other valued add support that they can benefit from
• Don’t make assumptions– speak to people directly and regularly communicate in person
• Use resources such as Linkedin, social media and a CRM with purpose to help you forge meaningful connections and networks

Getting back to basics does not mean throwing the baby out with the bath water, it just means that while we integrate new methods into sales, we need to make sure we are still doing the necessary ‘basics’ to keep the sales momentum going. At this point, some of the main things we see social media adding great value in are building networks, getting a message out, getting access to information and opinions, getting your brand out there, and stimulus response activities.

But as yet (and quite possibly never), do I see social media as a replacement to purposeful prospecting, purposeful client meetings, and purposeful business relationships.

The key word here is purposeful. Social media is most effective in sales when it is applied with purpose and in context of a bigger picture and plan. So as we go back to basics, I think we need to question ourselves as to the purpose of our actions. For instance, with more people accessing Facebook and Linkedin are we building business networks that will lead to better business opportunities via qualified contacts or are we just building networks for the sake of showing off a large number of contacts i.e. I have the most number of ‘friends’ syndrome.

So, I ask you these questions:

• How purposeful are your social media activities to your business?

• How can we make social media work for us in business rather than becoming a slave to it?

• How can social media enhance or hinder the sales efforts of business, especially B2B?

The social media phenomenon reminds me somewhat of the early days of the dot.com boom and how businesses were jumping in and riding the wave only to come crashing down, some learning a great deal, others worse for the experience.

I am not suggesting this will happen with social media but perhaps we should hasten slowly and make sure we do not throw out good, sound business practices for the sake of the new.  I urge sales people to continue with the fundamental, basics that still give a real return and begin to integrate, where appropriate, these new tactics into sales push and pull strategies.

Does this mean ignore social media? No, not at all but it does mean that we need to put it into perspective. So, let’s get back to the basics that make us real sales, real money and real relationships with the clients we want to work with.

And remember, everybody lives by selling something.

Sue Barrett is Managing Director of BARRETT.