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Ian Brodie

Ian Brodie teaches consultants, coaches and other professionals to attract and win their ideal clients by becoming seen as authorities in their field.


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Strategy

Reducing Switching Costs: A Key Strategy for Accounting and Other "Ongoing Service" Providers

Posted on 28th July 2010.

I exchanged a few emails last week with Direct marketing legend Drayton Bird (how's that for a name drop!).

I helped Drayton out with a little bit of advice when he wrote his huge book on Direct Marketing for Lawyers, and we were discussing the differences in business development for lawyers vs accountants.

Apart from the differences in stereotypical personalities (words vs numbers, for example) one of the key differences is that typically legal services are purchased as a one-off whereas accountants are hired as an ongoing service.

The typical challenge for accountants (or anyone providing these sorts of ongoing service like outsourcers, secretarial or managed services) when trying to win new business is that of unseating the incumbent.

It's often felt to be so difficult that many accountants focus their efforts on identifying “new blood”. New companies without an existing accountant, or companies who've outgrown their current service provider.

While there are some strategies to unseat an incumbent – such as entering in an uncovered niche and expanding, or leveraging a change in management – there's one aspect of this competitive situation that's often overlooked: that of the switching costs.

The sad truth is that most people stick with their current service provider not because they're delivering a fantastic service – but because the thought of switching seems so painful and risky.

It's actually quite difficult to be hugely different or better when providing basic accountancy services, for example. So often, even though an alternative provider might be a bit better than the incumbent, clients are unwilling to switch because the benefit is outweighed by the potential pain. They'd have to teach the new provider all about their business – all the little nuances their current provider has learned over the years. And if they get things wrong, the costs of incorrect tax submissions or an inaccurate report on the state of cashflow, for example, could be very costly.

So we generally stick with our current provider – even if we can see better alternatives.

The typical strategy in these situations is to try to persuade the potential client of just how wonderful and just how much better your services would be.

But in many ways, that's the wrong way to come at it.

A better strategy is often not to try to increase the perception of benefit (which is difficult to prove anyway) – but to decrease the perception of the costs and risks of switching.

Offer a dedicated switching team to take over the account and make sure everything happens smoothly. Show the client your detailed process for the switch which will make sure nothing goes wrong. Offer a guarantee to meet the costs of any errors caused by the switch. And show testimonials – not just of how great your services are – but of how easy and painless it was to switch to you.

That will usually have a far bigger impact that trying to make yet more claims about how great you are.

What could you do in your business to decreease the fear of switching? Drop me your comments below.

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Strategy

How to Escape Marketing Overwhelm

Posted on 11th March 2010.

Do you ever feel overwhelmed when you look at your pipeline and think about what you need to do to fill it?

You’re not alone.

I think it’s the curse of business owners and executives these days. You look at how many new clients you need to bring in to hit your targets and then you try to think about how you’re going to do it.

But it’s so difficult to know where to start. What will actually work?

Back in the day, you pretty much had the choice of networking, direct mail, telemarketing or advertising when it came to marketing. Each with their own established best practices and rules.

Today we’ve got organic and paid search, social media, social media ads, video marketing, email marketing. And it all seems to be changing all the time.

I’ve lost count of the number of “next big thing” emails I’ve had trying to convince me to buy the latest and greatest method for getting a so-called flood of clients with some newfangled technique.

And that’s just Facebook!

When you’re just starting out – or even if you’re fairly well established – it can all be so overwhelming. So difficult to know what to do.

It was a big issue for me when I set out on my own. In some ways because I focus on marketing and sales it’s worse – because I deliberately keep tabs on all the newest approaches.

Every time I tried to think of what I should do I couldn’t get a clear picture in my mind. And all the stories of other people succeeding with this method or that method just confused me further.

So how on earth do we figure out what to do without spending every waking hour networking, phoning, tweeting or blogging?

Well, what follows is an approach I evolved that worked for me to clear the fog of uncertainty and give me some clarity on what to do.

I can’t promise it will work for you – but give it a try – it’s been helpful to a number of people I’ve shown it to.

The key to is to break down your marketing into manageable chunks. Ones you can think about sensibly. Too often, when we think about how we’re going to get new clients we lump all our potential clients into one amorphous blob.

And you know what? You can’t market to an amorphous blob.

So I found it helpful to split my clients into Top Clients and Others. For me, Top Clients are the top 10 clients I’d really love to win over the next 6 months. Clients who – if I got to do business with just one or two of them – could set me up for the year. For you it might be a top 5 or a top 20. But essentially it’s a small number of ideal clients you can think about individually.

You could go more sophisticated and split into A/B/C or suchlike. But let’s keep things simple for now.

The “others” are clients I’m not going identify specifically or do a specific plan for – too many of them. But I do aim to win a number of them via more general marketing.

Then I split my marketing into short term and long term.

Long term marketing is all about building “gravity”. Doing the things that will attract clients to you so you don’t have to actively seek them out. Thought leadership, stuff with your website and the like.

But long term marketing takes time before it pays off. So you also need some short term activities to try to bring in clients right now. The kind of stuff that pays the bills while you work on the long term side.

Then – because I’m a consultant and it’s part of the union rules – I draw a little 2 x 2 matrix to represent this. Client types on one axis and time frame on the other. Rather like this:

Client Categorisation Matrix

Then I think through what marketing activities would be the most appropriate in each box for each client type/time frame combination.

Splitting it up like this makes it much easier. Instead of struggling to see what marketing will magically work for all clients in all circumstances, I can take a “horses for courses” approach. It’s much easier to see what marketing will work in the short term for my top 10 clients, or to nurture relationships with the thousands of “other” prospects who visit my website for example.

Usually, I end up thinking about referrals and extending existing client relationships for my top clients in the short term. And I develop unique, personalised nurture plans to build my relationship with my top prospects in the long term.

For the broader set of target clients, I’ll may pencil in approaches like webinars or direct mail in the short term – and I’ll focus on using email marketing nurture campaigns in the long term. Here’s an example of what the matrix might look like for a typical client:

Client Categorisation Matrix Example

Of course, your matrix will look different depending on your analysis of what marketing approaches will work for your specific clients – and what you’re good at.

But the key is that by breaking it up into this matrix rather than trying to eat the elephant all in one go, you zap the overwhelm.

As I say, I can’t promise it’ll work for you – but it’s worked for me and many others – I suggest you give it a go.

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Strategy

How to Use Linkedin to win new business: poll results

Posted on 28th January 2010.

My latest tips on building a Client Winning Profile for Linkedin are now on a free, short video – click here to watch it.

As you might know, as (apparently!) a Linkedin Expert, I've been asked by Cisco Webex and Linkedin to do occasional blog posts related to the European Business Awards they're running.

One thing I was interested in finding out was how people were using Linkedin to win new business. Many people, myself included (in this article on Linkedin tips for professionals), have written on the topic and given ideas and recommendations based on our own experiences and private research.

But I wanted to know how this was playing out in practice.

Never mind the theory, how are people actually winning business via Linkedin in the real world?

Webex were kind enough to run a poll for me in the Business Awards group asking people what they'd found to be the best way of winning new business via Linkedin.

We had 256 respondents. Of course, the results have an inbuilt bias as they're not from the full Linkedin population, but from those who have participated in the Business Awards group. But they certainly give a good picture of the different ways people are actually using Linkedin effectively.

The Results: Just How Are People Using Linkedin to Win New Business?

The poll question asked was “What has been the best way you've found to win new business using Linkedin?”. Like all Linkedin polls, respondents were allowed to pick one answer only.

First up: Overall results from all respondents

Overall Business Development Poll Results

That “Finding new connections” came out in 1st place is no surprise. The way Linkedin works makes it ideal for connecting with friends of friends. And that's been the main focus of most of the advice given about how to get new clients through Linkedin: using search and asking other to refer you.

But what was a surprise for me was that “Reconnecting with old contacts” was only just a few percentage points behind it in 2nd place. Remember, the question wasn't just about how you use Linkedin generally or for fun – it asked respondents about the best way they'd found to win new business. And nearly 30% of respondents were primarily getting new business from reaching out to old contacts they'd lost touch with.

When you think about it, this makes sense. Our old contacts (in the main) already know and trust us – whereas new connections don't. And the obvious initial question “what are you doing now?” can lead to interesting follow-ups: “oh really, funny you should say that, we were looking for someone to…” or “actually, I know someone who is on the lookout for…”. Although this is not something that's happened to me personally, a number of people I've spoken to have said this has worked well for them. the contacts they've reconnected with have often been in a position to pass on work to them.

Linkedin's pretty good at recommending names to reconnect with. And the more old contacts you connect with, the more it seems to recommend other, similar contacts.

So perhaps my biggest recommendation emerging from this survey is that if you want to use Linkedin to win new business, don't just focus on trying to find new connections: look at re-establishing contact with some of your old colleagues and clients.

Results by Company Size

There weren't really many differences between responses of different levels of seniority of respondents. But where there was an interesting difference was when you look at the results by company size.

Linkedin Business Development Poll Results By Company Size
You can see here a clear difference in the response of medium sized firms.

There were a significant number of responses from these firms (44), yet none of them found either contributing to discussions or deepending relationships to be good uses of Linkedin to win new business.

It's difficult to make a lot of sense of these results. Perhaps medium firms are less specialist than small ones – and hence don't get value from sharing their expertise in discussions. But then why would large firms and corporates firms see value in it?

Without knowing the answer, what is clear is that few medium sized firms have found value in this. Yet it's often a strategy recommended by experts in Linkedin.

My own experience is that I'd be wary of investing a lot of time in using Linkedin discussions (either in groups or the Q&A section) to try to win new business. Yes, you can establish yourself as an expert. But I've known many people invest a lot of time into building this expert status who've yet to see any work as a result from it. Not that no one has – but it does seem very hit and miss and difficult to predict in advance if it's going to pay off.

Results by Gender of Respondent: Stereotypes confirmed?

This is another area with markedly different results by group.

Linkedin Business Development Poll results by gender

Firstly, there were a lot more men answering the poll than women: 192 to 64.

But more interestingly, the big difference is that for men, the strategy they report as being the most effective at winning new business by far is finding new contacts. For women it's a much more balanced picture. They get new business by reconnecting with old contacts more than men. They get business by deeping relationship with existing contacts more than men. And they get business by having their profile found more than men. In short, it plays right in to the stereotype of men as aggressive hunter gatherers – going out and looking for new business. While women spend more time nurturing old and existing relationships to win business.

Now this may be because we're playing to our stereotypes and if we tried alternative approaches we'd have success. Or it may be that women really are better at ‘relationship stuff” than men (I'm sure a woman wouldn't call it “relationship stuff” either). Either way, it's worth testing further.

What Does it Mean?

The main thing I've learned from this is to challenge my own assumptions. I've written quite a bit on Linkedin, discussed experiences with many people, and read widely. But it was still a surprise to me to find out how many people were using the “reconnection” strategy so effectively, or the differences between medium sized businesses and others, or the differences between the experiences of men and women.

In future I'm going to be a little more wary of assuming that because a certain strategy has worked well for me that it's the best one for others.

And, of course, I'm going to start reconnecting…

So that's my interpretation of the results? What do you think? Hit the Comments below to share – it's much appreciated.

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Strategy

Focus, Focus, Focus

Posted on 12th January 2010.

Focus Your Business DevelopmentOne of the big weak spots in my own business development is focus. I'm a great starter, not a great finisher.

As soon as I hear of a new, promising approach I love to check it out, research it, try it out for myself.

It makes me a great resource for deep up-to-date knowledge on a broad range of business development topics. But I have to really force myself to follow through and keep going with certain approaches rather than move on to new things once I've got good at them.

In fact, persistence and focus are under-recognised hallmarks of great rainmakers.

Often when I look at the business development activities of some of my clients, the best advice I can give them is “do less stuff – but do more of it”.

Rather than joining 5 networking groups but only going occasionally – join 2 and go to every meeting. Rather than trying to run seminars, speak at conferences, write an article a month, a weekly blog and a podcast – pick one or two and do them really well.

You're on Twitter, Facebook, Linkedin and OnRamp? Think about focusing your activities on one or two.

Focus and persistence help you in two ways:

  • Focusing means you do a better job at each of the business development activities you perform. You learn the skills of the trade through repetition and feedback: be it networking, public speaking, writing or tweeting.
  • Your potential clients hear your message consistently. It takes multiple interactions with you before clients feel comfortable buying from you. If you focus on a smaller number of channels, the clients who use those channels will hear from you or interact with you on multiple occasions. If you alternate between many channels you'll hit more people – but you won't get the depth of interaction necessary for them to feel they know you well enough to hire you.

One of the most obvious areas where lack of focus and persistence shows is with blogs. I can't tell you the number of professional service firm websites I've seen (including a number of marketing consultants who should know better) where there are a dozen or less blog entries over the last couple of years, or it started in a blaze of activity, but the last post was 5 months ago.

How do you think this looks to clients? There are really only two interpretations they can make. Either you have nothing to say, or you can't be bothered saying it. Neither of those is a good message to be putting out into the marketplace.

If you are in this situation, a quick piece of advice: turn your longer blog posts into articles and replace the blog with an (undated) articles section on your site. If you haven't got any blog posts meaty enough to turn into articles, then just kill the blog – it's a liability. And seriously consider why on earth you were persuaded into starting one in the first place.

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Strategy

Keep out of the "Muddy Middle" when Selling Professional Services

Posted on 16th June 2009.

For many decades, perhaps the most successful client development strategy for both professional service firms and individual professionals has been one of focusing on a small number of high value clients.

As Andrew Sobel points out in “All For One”, a consultant or accountant only needs a handful of good clients to make a great career. And most successful professionals will maintain around 15 to 20 truly important client relationship over their business life.

Building a small number of deep, trusting relationships pays off much more than having shallower relationships with a broader group because there's a very high probability of converting each prospect into a client.

However, more recently, an alternative strategy has emerged. Fuelled by the ability of technology to allow relationships to be developed with large numbers of people via email newsletters, contact management software, Linkedin and other networks.

This strategy focuses on developing a very large number of shallow relationships: people who know of you, who have read your material, who may have interacted briefly via email. But not people you know very well.

This strategy pays off because – thanks to the efficiencies of the technology – very large numbers of people can be interacted with to a much deeper level than was ever possible before – and at almost zero cost. Someone who receives your email newsletter and who occasionally asks you a question on a forum is not a deep relationship – but it's much deeper than the non-existent relationship you would have had historically before the advent of technology. Even though the conversion of prospect to client is much, much lower than for deep relationship – it works because of the law of large numbers. A 1% conversion rate when you have only 20 potential customer will not lead to much business. A 1% conversion rate on an email list of 20,000 is pretty impressive. And it can open up your services to a global market (provided you can deliver globally)

Now obviously, different strategies work best in different situations. It's of no real value for an HR consultant focusing on clients around Birmingham to have a huge global email list of 30,000 prospects if hardly any of them are in her core market.

Conversely, it's highly risky to focus on a handful of prospects if you have a small one-off service to deliver which can't be repeated for the same client.

But as long as you find a good fit between your target market and your strategy (and also your own preferences and skills), then either of the strategies can be highly effective. And it's perfectly possible – even desirable – to run both in parallel. And the “broad net” approach can often identify high potential candidates to enter the “in-depth nurture” approach.

But where the problems occur is when you get stuck in the “muddy middle”. Where you build only shallow relationships – but with a small-ish number of people. This can happen in one of two ways:

  • A professional focusing on the in-depth nurturing approach can allow his target client list to expand too much and end up diluting his efforts with his real high potential clients.
  • A professional pursuing the broad big-numbers approach may fail to build his contact list enough – and as a result the low conversion rate combined with a small prospect list will mean he wins little business.

How can you avoid these mistakes? Make sure that in your marketing plan you have separate plans for each of these strategies. Make sure you are doing what's needed to make each strategy succeed.

The nurture strategy requires you to identify clearly your very high potential prospects then work diligently to make yourself as attractive to them as possible and to interact with them as much as possible.

The broad big numbers strategy requires that you build a large, targeted list and that you tailor your marketing messages to the segments in the list.

Do either or both of these strategies well and you will be on your way to having a growing and profitable practice.

But whatever you do, don't get stuck in the muddy middle.

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Strategy

Referrals: You’ve got to have a System

Posted on 13th June 2009.

Referral PartnershipsWe all know that referrals can be the most powerful and profitable source of new clients. Yet most of us find that we’re simply not generating enough referrals of a high enough quality to reach our practice growth objectives.

What's the problem here? Are we mistaken in our assumption that referrals are such an effective business development method? Or is it an execution issue – we're simply not going about it in the right way?

For most professionals it's a bit of both.

While all the evidence highlights that our clients rely on referrals as their most trusted source of information on new suppliers; we've got to remember that not all referrals are created equal.

Unfortunately, some referrals can be little better than random cold calls. You get the name and number of someone who may or may not need our services, may or may not be able to afford them, and may or may not see the referrer as a credible and trusted source.

So it's our ability as professionals to work with our clients and partners to deliver the quality – not just the quantity – of referrals that will make all the difference to our success with them.

Do Referrals Work?

“Referrals from Colleagues” and “Referrals from Other Service Providers” were identified as the #1 and #2 method used by buyers of professional services to identify and learn more about providers in the 2009 RainToday.com Benchmarking Study “How Clients Buy”.

Because of the complex and intangible nature of professional services, buyers look for help to assess two critical criteria for selection:

  • “Can the provider do the job?”, and
  • “Can I work with them?”

They take clues from their personal interactions with the providers (at seminars, presentations and sales meetings) and from the experiences of people they know and trust.

And despite the increasing prevalence of online “relationships”, the people they turn to for recommendations are their colleagues and other service providers they have worked closely with. In other words: people whose judgement they respect.

For infrequent or “distress” purchases which are bought because of an immediate or unexpected need (for example, many legal and consulting services) the reliance on trusted third parties is even bigger.

Buyers won't invest in building a relationship up front with a provider of services they don't know they'll ever need. So instead, they rely heavily on the opinions of those they trust with experience themselves.

So do referrals work? The answer is a resounding “Yes” – if done correctly.

You've Got to Have a System

In his classic work Creating Rainmakers, Ford Harding highlights that although successful business developers are very diverse in terms of background, personality, style and approach – they all share one common factor: <u>they all have a “system” for generating business</u>.

That system may be hugely different between Rainmakers, with one relying on networking, another on cold calling, another on writing and speaking.

But all of the successful Rainmakers had developed a method which <u>worked for them</u> which they could employ repeatedly and effectively without having to think from scratch of what to do.

When needed, they were able to “switch on” their system and carry out the steps which would bring them more business.

In contrast, less effective business developers either tried to “wing it”, or had to spend so much time reinventing a system – gathering contact details, developing a script, identifying networking meetings, or writing an article – that the opportunity was lost.

It's the same with referrals. Although we all know how powerful referrals can be, how many of us take a systematic approach to generating them?

Not many in my experience.

Professional firms wouldn't dream of investing marketing budgets and non-billable time into advertising, speaking campaigns, seminars, website development or thought leadership without a thorough analysis and plan for how that investment would pay off.

Good marketing plans identify target clients for each approach, refine the firm's positioning and specify the messaging to be used.

They identify clear objectives for each area and the sequence of activities and critical success factors necessary to achieve those objectives. They carefully allocate non-billable hours and budget to each activity to try to maximise the overall returns.

Yet when it comes to referrals – potentially the most powerful approach of all – most firms simply leave it to chance.

At best, they encourage and remind partners to “ask for referrals”. But no thought is put into which clients to ask, how to ask, what to ask for, how to “earn” a referral, etc. At worst referrals are simply not mentioned at all.

These firms are hoping that their good work will result in positive word of mouth and spontaneous referrals. Sadly, research by TARP in the US has highlighted that referrals simply don't happen spontaneously.

When it comes to dissatisfaction:

  • An unhappy customer will share their bad experience with an average of 12 other people (in my case, when it comes to bad customer service at John Lewis, I share it with thousands via this blog)
  • Each of those 12 people will in turn mention it to 6 others.

Unfortunately, when it comes to a satisfied customer:

  • A happy customer will share their experience with just a few friends;
  • Those friends will not remember much and will not share that information with anyone at all.

Essentially, without further proactive work from the service provider, positive “word of mouth” ends with a few friends and colleagues of the satisfied customer.

So professionals and their firms who want to get more from referrals need to get serious in their approach.

They need to develop and implement a plan to proactively address all the key elements which influence both the number and the quality of referrals received.

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Strategy

Three Painful Truths for Business Developers

Posted on 12th December 2008.

Business DevelopmentPainful Truth #1 – Your Customers are Busy

No, I mean really busy. Business executives today are overloaded, overstressed and over-sold-to.

We used to live in a world where business opportunities were in short supply. Today, business executives are bombarded hourly with offers from sales people offering to slash their costs, double their profits, turbo-charge their web traffic or one of a myriad of other seemingly attractive propositions.

What does that mean for you? Well, only you can work it out for your business, but there are a number of potential implications:

  • The old advice to “always sell to the top” may well not work for you. The top is where the crowd is. The top is screening out calls from almost everyone but the well-known and the well-trusted.
  • If you do get to meet senior people you must really respect their time. Do your homework. Don't bore them with a pitch until you've listened and know where they're at and what they're focused on. But don't be subservient either – you (should) have something they value.
  • Unless what you have to say is highly memorable – the chances are that your potential customer or referral partner will have forgotten it in a few weeks – maybe even less. Think about your own experience – of all the people you met at networking meetings a month ago – how many can you really remember? Despite all your initial interest and good intentions – can you really recall their “elevator pitch”? Could you really refer them with confidence to others? Even the ones who followed all the good networking practices and listened to you and made you feel good – how many of them can you remember? Probably not many.
  • What makes a message memorable? If it's highly relevant and targeted so that you potential customer really empathises with it. If you're able to tell it in story form (see Selling with Stories), if you're able to do something of value for them (such as introduce them to a valuable contact, or send them some really useful information afterwards) and if you are able to repeat your message over multiple occasions.

Painful Truth #2 – Most of the Time Your Customers Don't Need Your Product

Most significant purchases are made infrequently. How often do you hire a new accountant? Or buy a new computer?

This means that most of the time, your customer is not only not in buying mode, they're not even aware of having a need or a problem that your product can solve.

The implication: either you need to find a way of identifying potential customers who are approaching that time period where they start looking for solutions (for example, by leveraging Trigger Events, or by getting them to self-identify) or you must find a way of nurturing those potential customers over time.

Nurturing is more than just keeping in touch with potential customers (although that's a start). It means you must find a way of adding value for them repeatedly over time – so that when they do reach the point at which they begin to think about buying, you're first in their mind.

How can you repeatedly add value over time? Some do it through high quality email newsletters. Others do it in a more tailored manner by constantly thinking of the customer and how they can help – and then doing something about it: sending them useful news, linking them in to potential customers and partners, offering tips on their business or sharing insights.

Clearly, nurturing can be a big investment so you can only “manually” nurture prospects who have the potential to become have value customers. For others you need to automate the nurturing process somehow.

Some firms shy away from this automation – feeling it's too impersonal. But even a general email newsletter (provided it has high quality content) is better than doing nothing at all – that's the ultimate in impersonal.

Painful Truth #3 – People Don't Trust Salespeople

Years of dysfunctional selling behaviour has taught prospects to be very wary of salespeople. They've learnt that despite their fine words, salespeople really care more about themselves and hitting quota than they do about serving their customers and solving their problems.

Once your potential customers put you in this bracket, they start to put up their defences. They “clam up”. They don't really answer your questions truthfully – scared to give away “ammunition” you might use to “sell them”. They nod agreement and say yes just to get you off the phone and later cancel your appointment. They never return your calls or emails. They tell you “we don't have that problem” when they do, or “we're already working with someone” when they're not. All because they're frightened of “being sold” – of being manipulated into doing something they'll later regret.

Nowadays, salespeople are taught to “qualify hard” to avoid wasting time with people who are going to deal with them like this. But in reality, so many are distrustful of salespeople today that if you qualify them out you're going to be left with a tiny prospect list. Instead, you must learn to avoid defensiveness.

Once our potential clients pigeonhole us as “typical salespeople”, once those defences are up it's immensely hard to breach them. By far your best course of action is to avoid them going up in the first place. And to do that you must absolutely avoid behaving or sounding like a “typical salesperson”.

Even if your job title doesn't involve sales, even if you're a “consultant” or a “client partner” (and even if you really aren't in sales) customers will mark you as a “typical salesperson” if you do the things typical salespeople do:

  • Initiate conversation with them using an obviously pre-prepared script.
  • Talk more about how great your product is than listen to what they're interested in.
  • Ignore what they're saying and continue with your agenda: “you already use one of our competitors – that's exactly why we should meet”, “you don't need any of our services right now – that's exactly why we should meet”, “your entire family and friends were wiped out in a freak avalanche – that's exactly why we should meet”.
  • (Seemingly) exaggerate the benefits of your product and don't help them in an objective manner.
  • Push them for action faster than they're comfortable with.
  • Use transparent closing techniques: “when would you like delivery?”, “will you be taking 20 or 25?”, “Should I put you in to meet up on Monday at 3.15 or Wednesday at 4.30?”
  • Inject false urgency or scarcity – “my boss is on vacation, so I can offer these at half price for one day only”, “we only have one of these left and another customer is interested and will be calling me back in an hour”, “I can only give you this offer if you sign-up today”.

Unless you want them to deal with you like a typical salesperson, then you must differentiate yourself from the typical salesperson in how you act and what you say. You must eliminate these behaviours from your repertoire. And your primary weapon to do this: your mindset. If you set out to genuinely help your customers, the negative behaviours will begin to fade away.

Painful Truths – But Useful Guidelines

The truth may be stark and painful – but it's the only thing that can guide us to a better way. If you can understand and build an effective way to work with people who are incredibly busy, don't need your product very often, and who probably don't trust you – then your sales will really take off.

It's either that, or set off on a Quixotic quest for a “perfect” prospect who will respond to yesterday's sales techniques.

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Strategy

Book Review: Making the Number – How to use Sales Benchmarking to Drive Performance

Posted on 7th December 2008.

Making the Number is a new book focused on Sales Benchmarking by Greg Alexander, Aaron Bartels and Mike Drapeau. The book sets out a clear methodology for benchmarking sales activities and performance and shows readers what to measure, how to measure it, and how to use this information to improve sales performance.

There's a lot to like about the book – but also a number of points I'd disagree with.

Let's take the positives first:

A Book Whose Time Has Come
In many ways, this is a book that's long overdue. As the authors point out – almost every function of business is measured and benchmarked in some way – yet there is a reluctance in many organisations to use the same rigour in measuring sales. Sales is often regarded as more art than science. Yet is there any reason why sales should be less measurable and less “benchmarkable” than, say, R&D or HR?

Sure, there are a wide variety of factors which influence any sale – many of them difficult if not impossible to measure directly. And often there are many random and uncontrollable factors which affect outcomes. But there are equally as many imponderable factors in other business functions too. As long as measures are used intelligently – something we'll come back to later – then they can help improve business performance enormously.

A Clear Methodology
The authors set out a very clear methodology for sales benchmarking – right from initiating the project, to defining and collecting data, to analysing the data, making improvements and working to sustain those improvements. They cover both activity level and strategic level metrics, and include much information on how to overcome the obstacles to implementing sales benchmarking.

Details and Depth
There are many useful examples and case studies in the book – and many lists of typical metrics which can be used to benchmark sales performance. There are also details for the mathematically challenged on how to calculate standard deviations and percentiles. I also appreciated the detailed notes on each chapter with references and links for follow-up research.

Intelligent Use of Metrics through Hypothesis Testing
For me, the best chapter in the book is on “Focused Action”. In particular, the use of a hypothesis testing approach to intelligently use sales metrics to understand the true issues and take appropriate action. The hypothesis testing approach described takes understanding from the level of “bronze customer deal size is 32% below peers” to the reasons why. Perhaps the issue is lack of value being delivered, or perhaps it is not being communicated well enough to customers. The hypothesis testing approach identifies what the underlying issue is (and hence what the right corrective action to take is) in a data driven manner.

Concerns with the Book
Overall, I found the book very worthwhile – and would recommend it to all sales leaders looking to improve the performance of their function in a rigorous manner.

However, I do have a number of concerns which potential readers should bear in mind:

Selling What You've Already Bought
A minor concern – but a particular bugbear of mine – is that so many books nowadays seem to spend a large portion of their early pages “selling themselves”. In this case, there are 40 or so pages justifying why sales benchmarking is so important. To be frank, if I've just bought a book on sales benchmarking I don't need convincing why it's important. Fine, include arguments like this later on in the book as examples of what to say to convince others. But you don't need to sell the concept to me – I wouldn't have bought the book if I needed convincing.

Types of Sales Activities Covered
Most of the examples in the book are geared around a transactional model of sales activity – essentially a “call based” model. The basic underlying equation used is

revenue = activities x conversion x transaction x talent x time

The logic is that by carrying out more activities, converting more of those activities into sales, getting a higher value from each sale, having more sales resources, or more available time for selling – then revenue will go up.

This model is valid for some industries – for example the primary care salesforces of pharmaceutical companies mainly work in this way. Selling is done in short sales calls (“details”) where products are discussed with the physicians. These activities are clearly measurable – and that's exactly what the pharma companies do. In other cases, sales may be driven by running public workshops, or RFP responses – distinct, measurable activities.

But other sales activities aren't so measurable. When sales professionals go networking, or keep in touch with existing or prospective clients – can we really just measure the number of these activities? Or in reality, aren't sales primarily driven by the quality of these activities – not the quantity?

For me, where sales are driven primarily by relationships – as the majority of sales in my sector of professional services are – they become very difficult to quantify. Not necessarily impossible – but difficult, and benchmarking these qualitative factors is something the book steers clear of.

Comparability
Another area of concern I have is with the comparability of activities for benchmarking. The approach used in the book (and by Sales Benchmarking Index – the company the authors founded) is to group the salesforce to be benchmarked by size, industry, sales model (solution providers, missionaries, etc.), channel type and geography.

This is much better than taking a simplistic “one size fits all” approach – but is it really valid to compare metrics from firms even within the same categories?

For example, within the pharmaceutical industry again, the activities of salesforces selling to general practitioners versus hospital specialists are very different. In one model, sales are driven by short, standardised calls of a few minutes long. In the other, meetings are long, complex technical briefings and interactions. Metrics like the number of calls and the length of calls from these different models can't be validly compared. Even within the same model of selling to general practitioners – the activities when selling “new to the market products” are very different from selling mature products. Even when selling “new to the market” products, the activities can be very different for selling new products with similar properties and methods of action to existing products vs selling a completely new product which requires significant education of the medical community.

Even within the same company, selling exactly the same products and services, different salespeople can be highly successful using radically different methods. In his excellent book Creating Rainmakers, Ford Harding reports from his extensive studies of highly successful sellers of professional services that Rainmakers share very few common characteristics. They all had a “system” for generating sales – but the system varied significantly based on the skills, experience and preferences of the individual. Some rainmakers maintain extensive networks, others are experts at making cold calls, others nurture a small number of very close client relationships. All are successful – but simple measurements and comparisons of call rates, meetings attended, presentations made etc. cannot give guidance as to what the right levels of these activities are. Some salespeople will make very few calls – others will make many. Which approach is right? It's very much dependent on the individual – not on a universal measure of “best practice”.

What to do with the Numbers
Even if you do have exactly comparable situations – how do we turn the benchmarks into action? The main example from the book highlights some of the difficulties here.

In the example, benchmarking reveals that although Acme Corporation has a higher average deal size than its peers for its large (Platinum & Gold) customers; its average deal size for small (Bronze) customers is well below that of its peers. The book then goes on to analyse why that might be the case, and to propose actions to address the situation to get the Bronze customer deal size up to par.

But is this really the right way to proceed?  An alternative interpretation of the data is that Acme is really suited to working with larger clients. Perhaps its salesforce understand big company culture and decision-making well. Perhaps its products are particularly suited to big companies. So perhaps a better strategy than trying to get the average deal size up for small customers is to abandon those small customers and focus sales efforts on the larger customers it's already doing well with. It could well be that by playing to its strengths, Acme can become far more successful than simply trying to emulate its peers across the board.

And this highlights one of the main dangers of benchmarking. Instead of encouraging companies to think strategically and to focus on areas where they have unique capabilities, it encourages “me too”-ism. The basic path of benchmarking is to identify areas where your firm is “weak” and to attempt to pull those up to peer group level. But the risk with this is that you risk diluting and weakening the very reasons why you are strong in other areas. Companies – like people – have unique bundles of interrelated strengths and weaknesses. Often, trying to “fix” the weaknesses can damage the very things that give the company its strengths.

Of course, there's nothing in benchmarking generally or this book in particular that forces you to take this “fix the weak areas” approach rather than thinking more strategically about maximising strengths. But it's no surprise that that's the approach given in the books main example – and that's the approach almost always adopted when benchmarking. It seems to make sense – yet it can actually be quite dangerous.

Summary
Now please, don't take the above to mean I don't think this isn't an excellent book – it is. And it's really the only good book on sales benchmarking available.

But to all of you keen to embark on sales benchmarking – while lauding your enthusiasm – I must remind you to avoid the pitfalls I've mentioned:

  • Make sure that you have good measures for your most important sales areas – don't just focus on the easily measured ones
  • Make sure you have a valid comparison group to benchmark against
  • Make sure you apply the results intelligently – don't just unthinkingly focus on improving the worst areas. Think first about whether you need to do those areas at all – or whether you're better off focusing and improving what's already good than on trying to fix something you're just not good at.

Ian

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The Importance of Good Follow-Up

Posted on 20th October 2008. The Importance of Follow Up

For my new in-depth guide on follow-up strategies, click here.

We all know that good follow-up is vital in sales. According to the Gartner Group, almost 70% of leads are mishandled in some way. So great follow-up will give effective professionals, business owners and salespeople a huge advantage over less rigorous competitors.

But how many times have you come back from a meeting or networking event and received this sort of email?

Dear Ian

It was lovely to meet you earlier today. If you ever have need of our services in the future, feel free to contact me on xxxx xxx xxxx.

Yours, Mr Never-likely-to-get-a-call.

Have you sent out something similar? I hope not. How can anyone think this sort of follow-up is going to bring results?

Most people we meet casually, or at networking events tend to fit into the “might do business with, but might not” category. For most of us, we don't have time for a “follow-up coffee” with people in this category – we have to reserve our in-person follow-ups for people highly likely to give us business themselves or refer business to us.

And it's the same in reverse. Many people who we would like to build a relationship with may not immediately see the value in building a relationship with us. But we can significantly increase our chances of this if we follow-up effectively.

The best follow-up is one that adds value to the recipient. Perhaps some thoughts to help them, or links to useful resources. The more it's clear you've thought about them and how to help them, the more likely they are to classify you as “someone to trust”.

Of course, in order to do that, you need to understand what might be useful to them. And that means that you need to ask them questions during the event (and remember or take note of the answers) to identify what would be helpful. Understanding their business challenges or goals is critical to this.

If you can't add value straight away tell them you'll be looking out for them in future – and specifically name what you'll be doing. For example “…I found your ideas on growing your business through relationships with accountants in your local area really interesting. If I identify any accountants who fit the bill in future I'll be sure to pass on their names to you”.

And of course, you really must make good on your promise.

Personally, I keep a list of all my “interesting and important” contacts with bullet points on the sorts of things that would be useful and helpful for them. I review this list monthly so that my radar is always active and on the lookout for how I can be helpful. For high priority target clients I review this weekly and frequently build in time to my schedule to actively look for resources to help them.

It's not guaranteed to have impact – but it's a darn site more likely than the more common “…if you ever have need of our services…” email.

For my comprehensive guide to follow-up, click here:

>> The (Almost) Ultimate Guide To Follow-Up <<

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Strategy

Topgrading for Sales: A Review

Posted on 18th July 2008.

The folks at the Topgrading team (http://www.topgradingforsales.com/) kindly sent me a review copy of their latest book: Topgrading for Sales – so here’s the review.

A quick caveat: Topgrading focuses primarily on recruitment – and I’m far from an expert in that area. In fact, in my 15+ years working in consulting organisations I managed to studiously avoid the corporate recruitment process whenever possible, And when I was hired by others, it was always as a “done deal” result of headhunting rather than happening through a structured recruitment process. So this review is from the perspective of someone who is coming at it with a fresh pair of eyes.

Philosophy
The first interesting thing about Topgrading for Sales is its simple philosophy. The core concept of Topgrading is that you can and should hire only “A Players” – the top 25% of the population. Topgrading is very stark here; there’s no hiring of nearly-A’s or B+’s and hoping they will make the grade. Yes – try to coach your existing team if they’re not A Players yet, But when it comes to hiring – aim for the top.
There’s an unwritten assumption behind this, of course. It assumes it’s possible to do this. Theoretically, if everyone was Topgrading, there wouldn’t be enough A Players to go around. But my experience is that very few firms are really thorough in how they go about hiring – and certainly not as thorough as the Topgrading process. So in practice you don’t have to worry about a shortage of A Players – especially if you follow the first key piece of advice they give.

Maintaining an A Player “bench”
The first piece of advice in Topgrading which I’d not come across before is to maintain an A Player “bench”. Rather than do what most companies do – ignore the job candidate marketplace until you really need someone – their recommendation is to maintain regular contacts with a “bench” of high performers you would like to hire, and referrers who are able to put you in contact with high performers. This approach makes a lot of sense to me – rather than starting from scratch each time you want to hire you have an active pipeline of high quality candidates already at your fingertips. And if you’ve been keeping in contact with them regularly it will help you sell your organisation to them.

Rigorous Selection Process
The next differentiator of the Topgrading approach is the rigour with which the hiring process is carried out. For example, rather than relying on the candidate's CV/resume (which is likely nowadays to have been significantly massaged by one of the many career coaches and CV advisors available), the Topgrading approach is to ask candidates to fill in a detailed Career History form – including compensation details, exact dates for each job, the name of previous bosses (hinting that they will be contacted) etc.

The process also includes a detailed “Topgrading Interview” in addition to the normal competency-based interviews (which most people now know about and how to prepare for). This interview is a rigorous career history review – talking about specific accountabilities, achievements and learnings.

The next key step is to get the candidate to set up a call for the interviewer with each of their previous bosses for the last few years. Now, of course, you can’t force the candidate to get you these calls. But the authors' experience is that the A Players will be happy to set them up – knowing they will get good feedback.

At each stage of the process, of course, there is a filtering and narrowing down of candidates with the final decision being made after the calls with previous managers,

Overall
As you’ll have guessed from the review so far, I rate the book pretty highly. There were a number of new ideas for me – and they reflected my own personal experience of what seems to work and what doesn’t. And I really buy-in to the philosophy of taking recruitment seriously enough and rigorously enough to ensure you are only hiring A Players.

The book is pretty slim – 113 pages – which is both a good and a bad thing. It’s a quick and easy read – but in areas I felt I would need more in order to actually implement the ideas. Over half the pages in the book are forms and checklists which is really helpful. But there’s little information on building the skills needed for successful hiring. For example, there isn’t really anything about interviewing skills, and the coaching chapter really only focuses on the timetable for coaching rather than on how to actually do it well. I think that anyone who buys-in to the Topgrading philosophy should take recruitment seriously enough to invest in books and other resources to make sure they are an A Player at all the skills needed to recruit A Players. In this respect Topgrading for Sales is an excellent overarching philosophy and framework for the way you should recrti sales people – and a starting point for further building your skills at doing so.

Ian