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Are you letting online leads go cold?

June 30, 2011 in CRM, Social Media

Middle of last year I wrote about sales training and social media and in particular the impact on car dealerships and their sales teams. In particular, their tardiness in responding to online leads.   Well it seems this is still a problem – only the other week one of my coaching clients told me about his dealings with a prestigious car brand where he contacted a dealership to arrange a test drive only to have someone get back to him 7 weeks later, well and truly after he had bought another car from another brand elsewhere.

The feedback I received from car sales industry sources in 2010 was that if a warm online lead was not followed up within 6 hours they were lost to that dealer.  Well how things have changed. This isn’t just   an issue for car dealerships, it’s now an issue for any business who is generating online customers leads. Harvard has highlighted this issue in their article – The Short Life of Online Sales Leads.

So are you confident that your company is effectively handling potential customers’ online queries? Think hard. Harvard research shows that most companies are not responding nearly fast enough.

This issue is not just a problem for automotive sales; it seems to be an issue for software, health care, banking and financial services, professional services and many other industries.  With many companies now using the internet and other associated technology to generate warm customer leads via ‘push and pull’ prospecting strategies such as direct and targeted online advertising, discussion groups, community forums and the like, as well as online brokers offering consumers group buying opportunities and access to a range of companies in the B2B and B2C space, warm lead generation has never been hotter.  New businesses are emerging that help other companies turn leads into sales by providing technology and services that help maximize this space.

However despite all of these wonderful sales opportunities, the sad news is that many of these warm to hot leads never get followed up by the sales people and companies who seek them out in the first place.

Harvard’s research showed that many organisations are too slow to follow up on these leads. Here are some of their findings:

“We audited 2,241 U.S. companies, measuring how long each took to respond to a web-generated test lead. Although 37% responded to their lead within an hour, and 16% responded within one to 24 hours, 24% took more than 24 hours—and 23% of the companies never responded at all. The average response time, among companies that responded within 30 days, was 42 hours.

These results are especially shocking given how quickly online leads go cold—a phenomenon we explored in a separate study, which involved 1.25 million sales leads received by 29 B2C and 13 B2B companies in the U.S. Firms that tried to contact potential customers within an hour of receiving a query were nearly seven times as likely to qualify the lead (which we defined as having a meaningful conversation with a key decision maker) as those that tried to contact the customer even an hour later—and more than 60 times as likely as companies that waited 24 hours or longer.”

This was a big wakeup call for Barrett as well.  This research has certainly put us on notice because we are seeing a steady increase in the number of enquiries we are getting from the web.  Have we missed the boat because we were too slow in responding to online leads? Probably in some instances, especially if we have been out on assignment and working on other projects and do not get to back to people quickly enough.  Working out what is the right time frame to follow up on is challenging and responding immediately can be problematic, for instance receiving an overseas inquiry overnight and not having a 24 hour helpdesk or customer service line.

So what do we need to do to capture these important sales opportunities?

If companies are making big investments in order to obtain customer queries from the internet and the expectation is that they should be responding at internet speed then why aren’t they? Harvard states: “Reasons include the practice of retrieving leads from CRM systems’ databases daily rather than continuously; sales forces focused on generating their own leads rather than reacting quickly to customer-driven signs of interest; and rules for distributing sales leads among agents and partners based on geography and “fairness.”’  Harvard states it is conducting further research to more fully understand the causes and identify possible solutions. But it’s already evident that most sales organizations need new tools and processes to meet the demands of the online age. With companies making huge investments in online marketing and lead capture we need to work out how we need to respond.  Watch this space.

Remember everybody lives by selling something.

Author: Sue Barrett, MD of www.barrett.com.au

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CRM as a business strategy

June 23, 2011 in Communication, CRM, Procurement

‘CRM as a business strategy’ was voted as the Number 6 Sales Trends for 2011. Looking at your Customer Relationship Management systems (CRM’s) as a piece of software? Think again. While CRM’s are getting better, easier and cheaper to use, this year more companies are positioning their CRM’s as a marketing channel to map the true value of their clients to aid their competitive edge.

For those unfamiliar with CRMs, it’s time to familiarise yourselves or be left behind. A CRM is a strategy to manage your company’s interactions with your customers, clients and your prospects. Long gone is the old trustworthy little black book. Today, CRMs use technology to streamline and automate information, enhancing your business processes. CRMs allow you to measure and record your interactions and keep your sales, marketing and business development system streamlined and efficient.

Not too long ago, surveys reported 70-75% of all CRM initiatives failed. That was yesterday. This is today.

Smart companies will position CRM as a strategy and corporate asset from the outset. This dynamic communication system will be your corporate memory and tactical delivery channel for targeted campaigns and will be used by everyone across the organisation, not just by the sales team.  Positioned and used correctly with all this valuable information tracked and mapped, your CRM can be valued as part of your asset register and eventually sold for premium.

How do you create the strategy/vision, manage expectations, organise around the customer and implement CRM best practice? And what are the latest trends in CRM?

According to www.CRMtrends.com the Top 5 CRM Trends for 2011 are:

  1. Branding is more important than ever. Brands are increasingly becoming a surrogate for value, making brand more critical as generic features continue to propagate in the brand landscape.
  2. Value is the new black: Consumer spending, even on sale items, will continue to be replaced by a reason-to-buy at all. The era of “because I said so” is over. This will more than likely challenge most companies.
  3. The rise of the Datarati. Google’s Chief Economist, Hal Varian once said that “Datarati are companies that have the edge in consumer data insight…Data is ubiquitous and cheap, analytical ability is scarce… The sexiest job in the next ten years will be statistician.” How true. There has been and will continue to be an increased focus on data analysis as companies continue to invest in measuring social media, understanding customer value and modeling customer behavior. If you don’t use your data to talk to your customers, others will. The investment in data aggregation and the hiring of “sexy” statisticians is a major trend in 2011 and will be for years to come.
  4. Customer Experience: Customers have more choices than ever, and are more frugal. This affords them the luxury to demand more. This is the year that the CRM Marketer will be charged with offering a consistent experience across all company touch points and developing the infrastructure to allow knowledge sharing and smart communication. Smart marketers will identify and capitalise on unmet expectations. Companies that understand where the strongest expectations exist will be the companies that survive and prosper. The customer’s mobile and online experiences will begin to evolve and rival the customer’s offline experience – attentive assistants and all.
  5. Personalisation and customisation: In order to be effective in 2011 and beyond, companies will seek to increase customer knowledge and use this insight to talk, engage and interact with their customers more often and more meaningfully in new and innovative ways (including dynamic content, blogs to other social networking). 2011 onwards will be up close and personal, like it or not.

So what is CRM Best Practice?

  1. CRM is about putting your customer at the centre or heart of your business
  2. CRM is about building better relationships with your customers
  3. CRM can give you a 360-degree view of the customer which enables you to improve the quality and satisfaction of each customer interaction and maximize the profitability of your customer relationships… a win/win for both you and your customers
  4. CRM can be practiced across all levels within a business from the ‘C’ Suite to customer service, product development, procurement, distribution, marketing, and of course sales.

So…

  • Do your senior managers, sales people and your broader business know why you have a CRM?
  • If so, do they know how to use it and why it will benefit them to do so?
  • Do they know what information needs to be captured and how it will be used?
  • Do they know how it will help them grow, develop and retain viable clients?
  • Does your CRM strategy and subsequent software make life easier for your sales people to make sales or not?
  • Does your CRM strategy and subsequent software support everyone in your business to make life easier for your clients and each other?

Your CRM needs to be a business strategy and a way of life not just a piece of software.

Remember everybody lives by selling something.

Author: Sue Barrett, MD of www.barrett.com.au

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Big Banks still don’t get it when it comes to working with SME’s

June 16, 2011 in Uncategorized

It didn’t surprise me one little bit when I read an article in the Australian Financial Review on 9 June 2011, titled ‘Big Banks deluded about small business’.  The article surmises that the vast majority of small business bankers are nothing more than product floggers trying to sell a product rather than providing consultation expertise to their SME clients, on their specific needs and working with them to get the best out of their business banking relationships.

Most disturbing is the bank’s illusion of their customers’ satisfaction with the service they’re receiving. The reality is of course entirely the opposite. Are the banks deluded about what they think they do for small business in Australia?

The answer is ‘Yes,’ if the research by Ian Freeman, of the business Non Executive Management, is anything to go by.  His research highlights the chasm between what banks think and the reality with their customers.

From a SME’s perspective desirable attributes of a business banker include:

  1. understanding and supporting my business when help is required
  2. being readily available
  3. Providing sound and constructive banking advice
  4. Interest in a long term relationship
  5. Understanding of key growth drivers of my business and ability and willingness to tailor products and services accordingly

The banks claim agreement with these attributes but their actual deliverables are very different.   For instance, banks thought 80 per cent of SMEs would agree with the first statement; ‘understanding and supporting my business when help is required’, when in reality the figure is less than 30 per cent.

These figures are backed by Ernst & Partners and research states that to engender loyalty the figure needs to be 90%+.

Worse still is that when SMEs were asked if the business bankers ‘Provide sounds constructive banking advice’ and ‘Understand the key growth drivers of the business and tailors products and services accordingly’ less than three per cent of SME’s agreed, yet the banks thought that 75% would agree.

Roy Morgan Research states the area of poorest performance across the banks is in understanding SMEs’ industry and poor knowledge of their business.

I’ve had experience working with business bankers and developing their consultative selling skills and sales capabilities. However, my work has been with corporates and with the upper end of SME business bankers, where investing in more professional business and sales practices is mainly supported, yet these same skills and capabilities are also needed at the small business end of the market where business are more vulnerable and in need of expert guidance and advice.

Many of the business bankers I have worked with are business savvy, experienced and able to work in a more consultative manner with their business clients.  For small business banking roles however, recruitment is mainly limited to young graduates with little business experience and often far less aware about how businesses are run.  Many are under-skilled or in a weaker position to offer real advice and experience about how to run and manage a business which makes me wonder why banks think they are doing the right thing by their small business clients.

Freeman’s research also finds that the small business banking sector is too ‘income’ focused while SME’s are ‘outcomes’ focused.  The banks think that because companies bought their products they were happy and loyal yet in reality many SMEs have nowhere else to go to have to buy their products and loyalty is not common place.  Simply because SMEs have no other choice than to buy their products from the banks does not necessarily mean they are happy with their service or loyal to the bank.

Worst of all, one of the banks performed a 10 week trial where their small business bankers were asked to genuinely model the ideal attributes listed above and find out what their clients really need rather than talk about product. Even though the result found the bank would boost sales by 94 per cent by working this way and customers were much happier with the approach, the bank in question abandoned the trial and went back to what they always did.

With 95 per cent of all businesses in Australia in the SME category, don’t we deserve better than this?  Banks would do well to rethink their strategy in serving the small business sector and transform their small business bankers from product floggers to consultative business practitioners. SMEs will thrive and grow from a consultative approach with bankers who know how to understand a client’s needs and business strategy, work with ambiguity and business complexity and facilitate access to the right business banking products and advice.  We would then see what a difference this could make to our business community and success.

Remember everybody lives by selling something.

Author: Sue Barrett, MD of www.barrett.com.au

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Why we should manage & measure Sales Inputs rather than Sales Results

June 9, 2011 in Coaching, Communication, CRM, Performance Management, Prospecting, Sales Training, Success

Do you leave your sales results to chance?  Well you might be if you are like most businesses that are too fixated on Sales Results – the Outcomes. Managing by numbers, sales managers can get blinded by measuring the number of sales made and revenue and profit margins achieved rather than focusing on the vital activities that produce these outcomes in the first place– The Sales Inputs.

Every outcome is the result of its inputs.  Every effect has its corresponding cause(s).

Consider the following questions:

  • Do you know how your sales people actually achieved their sales results?
  • Do you know how well they are identifying real opportunities with their prospective clients and current accounts?
  • Do you know how well they are planning and managing their sales portfolio and their time?
  • Do you know how well they are utilizing the CRM to help drive sales and manage relationships?
  • Could there be more opportunity in these accounts that is otherwise being identified by your sales people?
  • How easy is it for a new comer to learn and replicate what your top sales performers do?

These are just some of the questions that if examined for their content, would make the lives of sales managers and sales people that much better.  Sales people would know the vital activities they need to perform and to what standard and what knowledge they need to apply to add real value.  And sales managers would yield much better sales results all round if they devoted more of their time coaching and managing their sales people around these input activities rather than only looking for and reporting on their sales results.

Do you want to increase your sales team’s effectiveness and boost sales results?

Pay attention to the details because excellence is in the details.  Look at what you put in to see what you get out in terms of sales results.

Sales managers, sales people and business leaders could learn a lot from observing the Quality and Quantity of their actions each day.  We call these the Input Measures which are made up of Type & Quantity of Activity and Quality of Activity.   These are the areas that people can be trained and coached in.

Type & Quantity of Activities – the following are examples of types of activities:

  • Leads developed
  • Prospecting calls
  • Client meetings
  • Proposals developed
  • Deals in the pipeline
  • Up / Cross sales discussions
  • Customer inquiries
  • Account management calls / meetings
  • Account reviews had
  • Referrals requested

Quality of Activities – the following are examples of competencies or standards of activities:

  • Business acumen
  • Sales Planning skills
  • Prospecting skills
  • Selling skills
  • Communication skills
  • Relationship building skills
  • Negotiation Skills
  • Product knowledge
  • Company  and market knowledge
  • Problem solving
  • Client proposal development
  • Self-Management

Sales Managers can really make a significant difference to their sales results and the lives of their sales people if they invest the time in coaching, training and working with their people on the Input Measures rather than pointing out the results week in week out.  Results are important and need to be acknowledged but they can only be as good as the inputs. Once we understand the Input Measures then we can see their effect on the Results or Output Measures.

Output Measures / Results can include:

  • Overall Sales made including sales with new clients and existing clients
  • Sales revenue
  • Sales profitability
  • Sales growth
  • Sales quotas
  • Sales by product or region
  • Average deal size
  • Market share & growth

Let’s make sure that sales results are not left to chance; work on the inputs and get them right.  It will make a difference to your results.

Remember everybody lives by selling something.
Author: Sue Barrett, MD of www.barrett.com.au

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Why we need to sell results not solutions

June 2, 2011 in Sales Skills, Strategy

‘Results not Solutions’ was voted as the Number 5 Sales Trends for 2011. If  you’re business is about selling packaged or aggregated solutions you may be in for a rude shock – the world of selling has changed yet again.   The world has moved on from selling solutions to delivering results.  Selling solutions is a very “1990’s” approach, however even today much of the sales training you will see still hovers around selling solutions.  The truth is people find solutions pretty quickly but delivering real results, well, that takes skill.   People now want to buy ‘Results’. They are looking at how you can help them achieve results with your ideas, creativity and ingenuity.

In 2011 we are seeing more and more packaged solution offerings such as print solutions, financial planning, education and car leasing going the way of the product sale and becoming commoditised.  Especially if they are not part of a total offering that contributes to better business results.  Businesses selling packaged or aggregated solutions are at risk of losing their profitable edge because processes and systems are continually being automated and can therefore become like anything else that can be packaged and put online.  Even the bread and butter documentation of legal firms and end-of-year tax return work for accountants is now automated and readily available online, making professional services firms go after more complex work to maintain margins.

Welcome to the Evolution of Selling.

When I began my career as a professional sales person in the early 1980s, sales professionals were trained in product benefits and communication skills which focussed mainly on handling objections.  Our tool kit was simple. We were armed with a business card, product brochure, a geographic territory of clients to manage and grow and a car to get around in. The end goal? Make sales.

Yet, many people felt at odds with the way they were taught to sell because so little attention was paid to what comes naturally to people – how can I help you and be of use to you with my products, services and talents?

Instead in the 1970’s we fell for the product trap where we sold product features to curious buyers in a world of mass consumerism.  In the 70’s it was all about product features – if your product was distinctly different from your competitors and you could get first to market you were then granted lead time to make hay while the sun shone.

However, in the 80’s, technology produced by these great ideas sped up the manufacturing process allowing competitors to copy products quickly.  Now we were required to talk about product benefits.   However this did not release us from the product monologue with clients still treated as passive by-standers.  As technology sped up it also made it cheaper to produce product and the margins began to disappear as products became more commoditised.

Welcome to the 90’s; solving problems and creating productivity drives. Now we start to talk to clients about what they are trying to address, what problems they want to solve and what efficiencies they want to achieve. We sold in an aggregation of products which when combined solved problems and brought efficiencies and other benefits.

But now the margins are being eroded in the aggregated solutions space.  We are seeing more  packaged solution offerings such as print solutions, financial planning, education and car leasing, like products before them, become commoditised.  Companies who cut costs, reduce levels of service and move customers online and DIY are stripping away any real value and reduce packaged/aggregated solutions to price negotiations.  Selling packaged/aggregated solutions is at risk of losing its profitable edge.
So, where to from here?

If you only sell based on your product you are in a commodity space unless that product is so exclusive that people will pay a premium. Even some high end brands are at risk of losing their exclusive appeal.  Just see how fast new technology like iPads and iPhones have been copied to ‘smart phones’ and prices reduced allowing more access to what was once considered an exclusive brand.

Unless you want to stay in the world of low margin commodity selling, which can be easily done at very cost effective ways over the internet, you need to recognise that the product is only part of the sale.

Smart sales people and their businesses know the real value and what clients are prepared to pay for lies in the collaboration and production of real ideas and results.  Despite offering aggregated solutions they will look for ways to accelerate their clients businesses or personal lives to produce more outstanding results. This requires, amongst other things, business acumen combined with thinking outside the product and solution boxes and dealing with variables and ambiguities, which by nature are messier and less defined.  Working together to achieve real results will bring with it all new partnership arrangements.  In short, our jobs as high performing sales people is to help our clients map a pathway forward to the future.

This brings with it a whole new skill set. Think of the types of conversations you now need to have with your prospective customers where listening, questioning, resolving problems, collaboration, empathy and understanding are encouraged.

Remember, everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

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