I want more customers, Part 1: Marketing Step by Step.

In business the lingo can sometimes be a little unclear and considering this post is about Marketing I want to define what is it and what it isn't when I talk about it. Simply put, marketing is any action that is designed to generate interest in your product or service. It's goal is simply to get people in the front door who want to know more. It is not sales, which are the actions that take leads (those people who came to your door wanting to learn more) and gets a purchase commitment. The two should be divided as the tactics used are very different (for more on sales tactics <Click here>).

Marketing 101 will usually teach you the tools of marketing are the 4 P's,

Product- (Making a product/or service that is appealing and offers value)
Price- (Adjusting price according to how you want to position your product/service in the market)
Promotion- (Creating your message, brand, style and content promoting your product/service)
Place - (Putting your promotion in places where your market will see it)

These are very important tools but they are not exactly a plan of action. After working with others who have a track record of marketing success, studying the topic myself and doing marketing work on teams in several different businesses, I have come to see a general pattern/process that yields success for getting interested people in the front door, calling, or emailing you and it happens step by step.

Step 1: Create your brand: know yourself first. 

Usually when we think about marketing we think about going "outward" but the first place to start is to look "inward". Crafting your brand needs to go deeper than just creating some nice looking flyers and business cards with catchy phrases and colors. Its about creating and believing in your UNIQUE identity as a business. Ultimately, a lot of people probably do what you do, so they wont remember what you do, they will remember who you are. You need to understand who you are, what you have to offer and why you are different from the other options out there.

You need to have a COMPELLING STORY to tell that you have ready to go when someone asks you to tell them about your business or asks the proverbial question "so what do you do". You need to be able to tell that story in 1 minute, 3 minutes or 10 minutes and it needs to be a story that sets you apart from others. Think about it, practice it, write it down. Before you begin telling other people about your business you need to deeply understand who you are as a business, what you offer, your mission, your values, your tag line, your look, your logo and you should be consistent across all these things. Usually you want to have a basic website, business cards, flyers, a phone number, a business email, etc as soon as possible and all these things should be consistent with your identity and brand.  It starts with having a clear vision of your self before you begin looking to others. Also if you want to be successful in the long run you have to ensure you control who you are and revisit your identity regularly and ensure all aspects of your business are consistent with your mission, values, look and story.

I can't stress enough the importance of being unique in some way. If you are not different in some meaningful/interesting way to your target market, why they use you over the other guy? This is why you have to do all you can to make yourself stand out in some way from others and generate a competitive differential advantage. This is not always easy and sometimes it takes a lot of creativity (work with a mentor if you have trouble coming up with a way to be different). Here is a recent seminar I attended on this topic that was very insightful.
 

Step 2- Target your market, not everyone. 

The next step is figuring out who your product/service is designed for. If you say "everyone" that is generally not a good thing and marketing to "everyone" is usually not a good strategy. You need to try and be more specific if possible. The Marketing guru Seth Godin elaborates on this and many other great marketing principles in his talk below.

 In any marketing class you are going to hear a lot about market segmentation. This is where you break up "everyone" who might purchase your product or service into different groups by demographics. Focusing on one or a few particular strategically picked groups is generally considered much more effective than going after everyone. You should try and know how your target market thinks, what they look like, what they do for fun, what they like, what they hate, what they want now, what they will want tomorrow and anything else you can find out. Then you should try to deeply understand why your product or service will matter to them.


Step 3 - Craft your message. 

With a clear understanding of 1-3 target groups you then work on creating and continually improving your message to communicate what problem your product or service solves/why its valuable to them. Most people make most purchase decisions to solve either an overt problem (like a broke down car) or an internal problem (like hunger or boredom). Your message should communicate...

1) How you solve that problem better, faster or cheaper than alternatives.
2) Who you are and why you are more competent and trustworthy than other options.

Point #2 is very important and sometimes overlooked. There is a reason people buy from their friends and family and it usually has more to do with #2. However it's important that you "sell the sizzle not the steak". What this means is that you need to focus on BENEFITS not features. Apple understands this. They are arguably the greatest marketing company in the world. Watch the ad below and notice they don't mention anything about processing speed, nothing about HD displays, nothing technical at all. They simply, without a single word, show EACH MARKET SEGMENT the benefit of having their device in an incredibly compelling and simple way.

Keep in mind. You are not apple and you don't have to be. However,  focus your messaging to specific target groups and you can craft messages that focus on benefits, on credibility and why you are different than other options in a meaningful way. Is it easy? No. Will it take some time and creativity? yes. This is also an area where mentors can be helpful.   

Step 4- Decide how much time and/or money will be invested.  

In the end you only have 2 things you can invest into marketing time or money. Early on a business owner has little money so they invest their time into marketing. Small business owners all remember the early days when they were out "hustling up business" by telling everyone they knew about their company. Eventually they got customers and began to get business on the fulfillment side of the business. Suddenly they began to invest less and less time into marketing and many don't really invest money either and so their business flatlines.

Its important for a business owner to have a plan in place for what percentage of total sales will be invested back into marketing. The following are some suggested amounts to invest in marketing depending on an owners level of time investment into marketing activities and how quickly you want to grow.

Financial investment in marketing if owner time investment is HIGH.
0%- Weak growth
3%- Moderate growth
5%- Aggressive Growth.

Financial investment in marketing if owner time investment is MODERATE. 
1%- Weak growth
2%- Moderate growth
4%- Aggressive Growth.

Financial investment in marketing if owner time investment is LOW. 
3%- Weak growth
5%- Moderate growth
8%- Aggressive Growth.


So how much time should an owner invest into marketing? Its also important for a business owner to know what they prefer doing and what they are good at. Do they enjoy sales and marketing or do they enjoy working on fulfillment for customers that have made a purchase decision? If a business owner sales and marketing they should put a focus outsourcing fulfillment duties and then reinvest their time back into marketing. If they enjoy fulfillment they should do that and outsource marketing to outside vendors. HOWEVER, (and this is a big however) just throwing money at marketing does not mean you will get results. Owners must be monitoring ROI's on a monthly basis, consult with mentors or outside experts and constantly adapt marketing investments to those which produce the best ROI.

Step 5: Identify, list and prioritize your marketing channels

Many rookies jump right to this step without thinking about and executing the previous steps. The problem with this is that choosing the right place to push your message is no good if you don't have a great message and you can't have a great message if you don't understand in detail who you are and who specifically you are trying to reach. Also if you don't have a plan and a system for how much will be invested in time or money into these efforts you also will likely see sub par results.

Marketing channels are all the ways you can get your message in front of people either directly or indirectly. While serving as a missionary for my church we always were looking for people to teach. We would knock doors, we would get referrals from members, we would seek out part member families, we would teach english, we would do service, we would sing carols at Christmas, we would organize soccer matches, we would visit other churches and all sorts of other things. What most experienced missionaries found was that the best way to find people to teach was, all of the above. Sure some things were more effective in general than others but it seemed that by constantly trying various things we would end up finding people to teach and no one method was the silver bullet.  Below is a list of the marketing channel categories that usually are available to a business owner. The key is having the right marketing mix (aka marketing portfolio) that uses channels that produce the best results.

Phase 1- Free/Super Low Cost Marketing. 

1) Networking / Cold contacting/ Referral Programs. 
2) Email blasting (Press Releases, Newsletters, New Features, Education).
3) Basic social media to existing networks.
4) Free services.

Phase 2- Basic marketing. (Total marketing budget $200-500 a month)

4) Listing and Advertising Websites (Google Places, Yelp, Yellow Pages etc).
5) Small Scale Promo Products/ Branding.

Phase 3- Online Marketing (Total marketing budget $500-$3500 a month.) 

6) Google Pay Per Click PPC and Online Ads. 
7) Getting Ranked on Google. (SEO Search engine optimization).
8) Social Media Advertising and Social Pay Per Click.

Phase 4- Going Beyond Internet. (Total marketing budget $4000+ a month.)

9) Mailers
10) Mass Media
11) Billboards/ Large Scale Promo Products/ Branding.

For more details about marketing channels above see the following blog. Marketing Channels Blog.

Please note that there is no perfect formula for every business on which channels to use or exactly how to use them. It takes time and some trial and error to try and figure out which marketing channels will produce the best bang for the buck. It is recommended that you also put include in your marketing budget (perhaps 10-20% of your marketing budget) funds for experimenting with new marketing ideas. This is also where mentors are VERY valuable. Mentors with industry (or similar industry) experience can help you decide which channels worked best for them. Every industry has its own marketing channels that have been proven successful and often by just learning where others in the industry are doing marketing is a great starting point.

Another thing to remember is the difference between direct marketing activities and brand awareness activities. Direct marketing are things like yellow page ads where a person will see the ad and call because of the ad. Brand awareness is best summed up with an example of from my Dads plumbing company. People often call his company using the number on his yellow page ad or website, but they did not call because of the yellow page ad or website. They called because they saw his trucks around town and recognized his name because he is a political figure in the area. They only used the yellow pages to find his number. His name acted as his brand and his trucks and political work created brand awareness. When people thought about plumbers, his name popped into their head. You do the same thing all the time. You don't look up something on google if you already have a brand in your head for that product or service. Is your brand in anyones head for your product or service category? How did it get there? How can you get into more peoples heads and stay there as long as possible? These are branding/ brand awareness activities.  Both direct marketing (like getting listed on google) and brand awareness are important but brand awareness is much harder to measure accurately and usually doesn't produce quick results.

Step 4: Execute like a farmer and don't forget to evaluate and adapt.  

Diligent and energetic execution of your marketing portfolio is the heart of your business; this is the grind, the battle that you have to fight very hard in the early days of the business to get it off the ground and the ongoing lifeblood of people knocking on your door that will keep your business afloat. Still you need to work smart. You need to evaluate your marketing channels and identify which ones actually produce a return. Measure how much time and money you invest into each channel and the results on at least a monthly basis. Some channels are easier to get clean data on others are a little more challenging. Mentors can sometimes help you find ways to accurately measure your ROI. Over time this data will help you know if your marketing effort is sustainable and/or justifiable.  

Marketing is not easy and it can be a emotional roller coaster as you invest your heart and money into these efforts to get people in the door but when they do come in, and keep coming in it becomes so worth it! However, this also is the reason many businesses plateau too early. Though marketing is important it does not press on you and often when things start getting busy many businesses stop doing marketing or stop focusing on it. This not only stunts business growth it leads to a scramble when things slow down and they try to jumpstart their marketing. Unfortunately, good marketing is like farming, you can't really "jumpstart" it. You have to work day in and day out planting seeds, tilling, fertilizing the ground and doing all you can, then slowly sprouts begin to pop up. Some may die but others will grow and over time through that steady diligent effort your field will begin to flourish. Think like a farmer and keep planting.

 Questions for reflection
- Do I have a specific target market?
- Have I segmented my market into smaller groups that I understand deeply?
- Does my brand and message speak in terms and emotions that are meaningful to them?
- Does my brand have a real identity, style and value system that sets it apart?
- Is my brand and message remarkable/interesting in some way?
- In what way is my product/service unique when compared to the competition?
- ^ Does my competitor say the same thing about their product or service?
- When people think of my industry, does my brand pop into their head?
- What are the ways I can build brand awareness?
- Have I listed and prioritized all my marketing channels?
- What are the marketing channels others in the industry are using?
- Am I consistent and diligent in my marketing efforts? (think like a farmer)
- Do I have specific time set aside to do marketing tasks?

I used to hate working in groups until...

I remember being put in teams while in school and hating it. Usually, a group composed of a couple people doing all the work and a few other freeloaders putting in minimal effort. I then would attend lectures by experts saying how important teams were and how they were essential to success. There was a serious disconnect between what the experts were saying and what I was experiencing. It wasn't until I got out of school that I realized what was going on.

I think the best team analogy I have ever heard is a band. In school a group was a set of people clumped together randomly. On the other hand, a band is composed of  carefully selected individuals with different skill sets.  In a band the diversity of instruments and talents when properly coordinated produces the music of the band. The key is getting the right players in the band and coordinating those differences in a way that produces something beautiful. Each member has their own instrument that they are responsible for playing. It makes no sense to have a band of 6 lead guitarists. It also makes no sense to have band members who all like different kinds of music and have different ideas about what kind of music to play. The same can be said of any organization. Diversity and teamwork are only useful when you have the right team members with diverse skill sets all focused on a common goal.

I remember hearing people talk about mentors when I was in school and again naively thinking very little of it. What a fool I was! A mentor should be the first member of your team but not just any hyped-up pep talker will do. A mentor should be someone who has already walked the path your are about to go down. People starting out generally have a lot of drive, ambition and work ethic, but they should be honest with themselves and realize they probably don't have a lot of experience. This is where the mentor can help. You bring the drive, they bring the experience. The more closely they have walked the path the better they will be able to help you. Hopefully this person will have extensive industry specific knowledge to impart and will help you know about the things you don't know that you don't know. A mentor will be able to help you avoid the pain they experienced when they went down the road you are on. The best thing about mentors is they usually are free. Still, one should not blindly follow a mentor. Mentors are a great resource but with the rapidly changing world we live in you will have to gauge the mentors advice against the changing business world you live in, so be prudent.

I have come to realize that really successful business people are often very humble. Not humble in the weak or unambitious sense but they are very honest about the things they know, and the things they don't know. Henry Ford is credited as saying that he was not very smart, but that he surrounded himself with smart people. Being a "know it all" gets you no where because nobody knows it all. However, if you get people who fill in the gaps in areas where you are weak then suddenly the business or organization becomes bigger than you, greater than the sum of its parts and has the ability to exceed you expectations.

Questions for reflection

- Are you honest about the areas where you lack expertise or ability?
- Do you find and accommodate people who can fill those gaps?
- Does your team all have aligned incentives and commitment to reach a common goal?
- Does your team have clearly defined roles and skill-sets they are responsible for?
- Are you unwilling to get the wrong people off the team?
- Are you trying to build a team or trying to do everything yourself?
- Do you trust others competence?

The Billionaire Told Me To Quit.

I recently read a great article about what a billionaire said was the key to going from a millionaire to a billionaire. It was shocking when he said his advice was to “be a quitter”. (read entire article here: http://darrenhardy.success.com/2013/07/i-quit/). The shocking title made more sense when you understood what the author meant. What he meant was that in order for a business to grow beyond a certain point you eventually have to quit doing everything and get others to do it for you so you can work on the business instead of working in it. To me this is the difference between being a business owner vs being an employee at a company you started. 

The cliche is that “time is the one resource you can’t get more of”. Actually that is false. When you hire someone you not only are purchasing their skills, you are also more importantly purchasing their time.  It is true that you can’t buy yourself more than 24 hours in a day, but you can outsource what you do in those 24 hours to someone else. Business owners who are complaining about never having enough time should keep this in mind. Time is a precious thing that can be purchased, invested and wasted so it is important to use it as wisely as you do your money. This may sound easy but is not that simple. There is a risk in handing over the reigns of what you are doing to someone else. However, it seems to be a risk that must be confronted mitigated and overcome if you want to grow. 

The Risk

The first risk is financial. You work for free, the people taking over for you will not. This can be a substantial expense. However, what you are really purchasing with these extra dollars is free time for yourself. You will have to be the one who creates a plan for how to use this new time and forecasts the profitability of the plan. If you are confident that the extra free time will lead to substantial return then it should make the increase in expenses easier to justify. 

Another risk to consider is the people you are handing things over too. People are an X factor that can be hard to predict, but I believe there are some ways to mitigate this. After taking ASQ’s six sigma program I have become highly aware of process thinking. I once had a COO of a billion dollar company tell me that business owners often by default blame people without ever deeply considering process flaws. Even a good employee working a broken process will produce sub-par results. Before an owner gets someone to take over some of the processes they are running they needs to ensure the process is “outsourceable”. The more standardized, organized and streamlined you can make a process the easier it is for someone else to take over. 

Build, Run, Outsource

I personally have created my own methodology for business development which I call “Build, Run, Outsource”. First, build a process for whatever needs to be done (sales, payroll, accounting etc). Then run that process yourself for whatever amount of time is needed to ensure that the process is producing the desired output and that it is capable of being outsourced. Then go about finding someone with the skill-set to run the process and move on to the next area. 

I think most entrepreneurs tend to be a little ADD. The beauty of this model is that you never are doing the same thing. You are always creating and testing something new and as soon as it gets boring, you give it to someone else. This leads to building and owning a business, instead of simply creating a job for yourself. Don’t be afraid to be a quitter, just make sure you quit things at the right time and in the right way. Thats the advice from a billionaire.   

Questions for Reflection

Do you feel like you don’t have the time to do X even though X is important to your business?

Can you identify things you do that you could streamline into outsourceable processes?

Have you ever taken inventory to where your time goes?

Do you take the time to run the processes you create for your employees so you are aware of what their job is like day to day? (don’t be the boss who is “out of touch”)

Do you feel like a business owner, or that you just created yourself a job?

Do you feel confident that if you had more time it would lead to financial returns for your business?

Have you created a plan for how to effectively use your free time?

Henry Ford was brilliant in ways you probably didn't know about.

I love business, I love history and as a process minded Operations and Supply Chain Management major and Six Sigma Black Belt it is no surprise that I love Henry Ford- the pioneer of mass production and the assembly line.  Early in the last century Henry ford produced one of the strongest companies in American history. Most people know about how he revolutionized mass production but fewer know about his radical ideas about employee compensation. Throughout the industrial revolution labor was abundant and cheap, so most businesses took full advantage by paying the market rate for labor which was quite low, but Henry Ford did something very different. 

 Ford realized that labor was a commodity and that like other commodities you often get what you pay for. So by paying his workers the best rate he got the best workers but more importantly he got the full commitment and loyalty of the best workers. The radical economic idea of Ford was that instead of cutting costs he decided to try and boost production and sales by increasing his investment in people. Still, Ford did not just hand out Gobs of money with faith they would produce. He had a "profit sharing" model in which his employees had very healthy stake in the business and earned more based on performance. This aligned the incentives and goals of the employees with his own and rewarded them generously for doing so. In return for this high pay he also had very high standards for productivity, professionalism and did not tolerate heavy drinking, gambling or "deadbeat dads". Henry Ford understood that people have enormous productive potential and through the right incentive strategy you can unlock it creating more revenue for yourself and those you employ. I know this may come across as idealistic feel good nonsense and it may well be if it is not done in the right way, but Henry Ford and many others have proven that employee compensation does not have to be a win/lose, zero sum game.

Its not as simple as just paying people more.

One of the biggest issues that employers face is getting people who are as committed as they are to the goals of the business. My father has run a construction firm his entire life and many nights I would hear him say "what I need is an employee who is like me". What he rightly was saying is that most employees are not as committed or as skilled as their employer. An employee can be trained to be more skilled but getting their full commitment is much trickier. Don't think for a minute I am saying to just pay people more and they will be more committed. It's not that simple and Ford did not do this. His idea was to offer high pay that was contingent on production. 

I am often baffled by the lack of creativity by most employers in their compensation structures. The standard practice seems to be finding out how little they can get away with. Thus employees return the favor by doing as little as they can get away with. Equally baffling is how often creative compensation structures are used to screw over employees. Just the term "creative compensation structure" has a bad ring to many because they have been the victim of a commission scheme that made big promises but was either deceptive or near impossible to achieve. Throwing money at people without any link to performance and stingy commission structures are the two extremes you need to be aware of and avoid. 

Step 1- Financial compensation and the "enough" point.  

All of us have at some point been an employee. Most of us were not planning on that job making us millionaires, but our goal was for it to provide a reasonable level of financial support for our situation at that time. If it provided "enough" for our situation we felt it was a "good job" if not we generally were looking for the first chance to jump ship. Why would an employee give their all if they feel they are not making enough to support their situation to their satisfaction? This does not mean you have to offer a 70K salary with full benefits to all employees. All people are in different situations and "enough" can vary greatly. The key is to find people whose situation works with what you can offer. Getting a "great deal" on an employee by paying them very little relative to their needs may not be as great as you think.

Most employers don't really deeply think if the compensation structure will genuinely meet the situational needs of an employee in the way Henry Ford did. Most employers find a good person and make the lowest offer possible and hope the other guy takes it. Just because a person takes an offer does not mean they are happy with it. Starting day 1 with an unhappy employees creates high turnover, higher retraining costs, bad company culture, lack of loyalty, a poor experience for the customer, and you and your company getting a reputation for being "cheap". However, this seems to be standard practice for most employers I have encountered. The cost of unhappy employees is much greater than most realize. The funny thing is how often the difference between a unhappy and a happy employee can be a simple bonus/commission structure or just a couple extra dollars an hour and this can be the difference between A grade employees and a good culture vs a B team who just gives the minimum effort. All of this must be done within your financial framework and tight budgets do make it more difficult but if done right a small investment contingent on measurable performance produces returns and avoids costs that can drastically affect your organization.    

Step 2- Non-financial compensation and motivation.

Financial compensation and providing enough for an employee is the starting point not the end point. Anyone with any real business experience knows that just throwing money at an employee to motivate them is simpleminded, risky and unwise. Those on tight budgets will be happy to know that much (if not most) of what can be done to increase performance and commitment doesn't involve spending more money, it just involves being creative.  Dan Pink, a career analyst, recently gave a ted talk on this subject (http://www.ted.com/talks/dan_pink_on_motivation) and made me realize that compensation and employee motivation is not only complex but also vital to the success of a business or organization.

Steven Covey's 7 Habits of Highly Effective People and Dale Carnegie's How to Win Friends and Influence people are my favorite books on human relations and they both have a similar theme. It is the idea of seeing things first from another persons perspective and deeply understanding/empathizing what's important to them and then creating genuine win/win solutions for everyone involved. Most people seem to want very similar things. They want "enough" financially as a starting point, but then they want to be recognized and appreciated, they want to make a meaningful contribution, many want the chance to challenge themselves and to grow, they want to feel in control of a career that they are proud of. You may notice these are the same things you want. It seems if you can offer them all these things you will have a loyal, dedicated, long term team member whose potential is primed for release. Sure sometimes you just need some mindless busywork done, and cheap labor is a good option but it is surprising how often that same "cheap labor" mentality is applied to more important or even mission critical positions within an organization.

Its about people.

Many of us have heard the cliche "I would take a B product with an A team over a B team with an A product" but unlike Ford, most put very little thought is put into how to get and keep an A team. People are the key but people can be complicated! Henry Ford seemed to prove the golden rule is not just a sound moral principle but a sound business principle as well. People have incredible potential if you can learn to unlock it both you and they will benefit greatly. It seems that all eventually come to realize the most important things on our deathbed will be people and relationships. I believe if we take the lessons of Henry Ford to heart, our careers and business ventures have the ability to not just make us wealthy financially, but also in relationships and in the end that seems to be what matters most.

Questions for reflection

1. Do target my search for employees to find people in situations where I can genuinely offer "enough" financially?
2. Is my compensation strategy linked to production/performance that is relevant to the companies goals?
3. Does my compensation strategy offer "non-financial" rewards that give meaning and excitement to the work?
4. Do I sincerely care about providing meaningful employment, do my actions show this? 
5. Do I invest well in getting A grade people for mission critical positions?
6. Do I know the difference between a mission critical position and busywork positions?
7. What do my employees currently think about the financial and non-financial compensation strategies I employ?
8. Do employees think I am cheap? 
9. Are my compensation investments designed as part of the companies budgetary plans and financial strategy? 

Why Doctors Are More Popular Than Sales Reps.

I was fortunate enough to be the nephew of one of the preeminent authorities on sales and selling methodologies in the US. My uncle has written 5 books on the subject and puts on seminars for executives for household names like Kimberly Clark, Time Warner Cable, Zions Bank, and Watson Pharmaceuticals who all use his sales and negotiation methodologies. After reading his books he gave me my first job after leaving the nest and for the past 10 years has mentored me personally in the area of sales. Anytime I talk about sales or selling he is my biggest influence. However, this does not mean I don't put my own spin on all of this, and I certainly bring my own experiences in sales and insight because of them to the table. Still,  I want readers to know that this blog is based not just in what I think, but in what has been proven over and over by his methodologies in many many companies. I will start with a story.


Doctors vs Sales Reps 

Imagine if you went to a doctor and he began telling you about this great new medication for Diabetes. He tells you about all the amazing benefits this drug has and then proceeds to write you a prescription for this wonderful miracle medication. Indeed the doctor is telling the truth, he is not pawning some crummy med on you. This is in reality a miracle drug for diabetics. The only problem is, you don't have diabetes.

Obviously the example above is a little far fetched. Of course a doctor would never write a prescription without first making a proper and thorough diagnosis. But can the same be said of sales reps? Perhaps this is why people like doctors so much more than sales reps. Obviously there are some differences between a doctor and a sales rep but is the difference really that fundamentally different? A doctor is trying to match up certain medical products and services to a patients needs. Isn't that pretty much the job description of a sales rep?

At this point I want to illustrate a difference I make when thinking about sales vs marketing which are related but still very different. In my own methodology sales is not the act of generating initial interest from a "cold" prospect who may or may not have even heard of your company before. The act (and art) of generating initial interest exists in the realm of marketing and really is a science unto itself that deserves its own methodologies and specializations (perhaps this will be the subject of a future post). Often people are called sales reps that are really nothing more than "human billboards" who approach relatively random people, parrot a message and stab in the dark to see who might be interested. This may be effective in certain cases, but the tactics and methods used to generate interest are very different from the ones used to close a sale. Selling is the process by which we take someone who has in some way has shown potential interest (I.E, walking into your store, calling your phone number, asking a question about your services) and turning them into a closed sale.

Beware of the "Show up, Throw up"

The video above perfectly illustrates the classic mistake of novice and sometimes even experienced salespeople. They think they are a sales rep and that means they are supposed to parrot some carefully crafted message that magically generates interest from a potential buyer. Instead of thinking like a doctor and carefully first diagnosing the needs of their client then prescribing products and services that meet those needs.

All of us approach sales reps from time to time. Why? Generally, it is because we think they understand a product or service better than we do and might be able to give us the information we need in order to fully understand if that product or service will meet our needs and be worth the cost. This is why it is so annoying when a sales rep does all the talking and never shows a thorough understanding of the need we are trying to satisfy with his product or service.

Seek First To Understand

I think one of the best sales slogans I ever heard was "lead with need". The only trouble is that you never will know what that need is unless you first listen. If you are a sales rep, the most important of Steven Covey's seven habits is "Seek first to understand, then to be understood". Furthermore, we should not assume we know what people want or need. We must allow them to articulate their needs and show we understand that need and can assist. This can dramatically change the dynamic because it soon becomes clear that you are on their side helping them to accomplish their objective and you become an ally instead of a foe.

Certainly this is not a silver bullet and there is much more to sales than just this. However, this idea of diagnose, then prescribe has totally changed the way I approach sales and has helped me and the others that understand it stand out as sales reps not only in the number of sales we make but as honorable and respectable people the eyes of our clients and customers. Suddenly sales becomes fun because instead of feeling like slick willy the used car salesman pawning crap on others so I can make a buck, I feel like I am a doctor making a living by helping others find solutions to their problems via the products and services I offer. It's a totally different paradigm and a more dignified one in a profession that is often seen as disingenuous.  

Questions for reflection
- Do I separate the tactics and methods for generating interest vs selling or do I combine the two?
- Do I allow buyers to articulate their objectives and needs PRIOR to my pitch?
- Do I genuinely care about the buyers needs and want as much as my own paycheck?
- Does my pitch focus on connecting product/service solutions to buyer articulated needs and objectives?


Note: This blog only scratches the surface of Patrick's sales and negotiations methodologies. If you would like more information visit www.PatrickHenryInternational.com. Also please note I am in no way being compensated for this post and my promotion of Patricks methodologies is based solely in my deeply rooted experiences in their effectiveness. Contact me with any questions. 

Process Thinking Part 1: Input + Process= Output

While in college I had many different professors but the one who stood out to me and deeply impacted me was Professor Castle. He stood out because unlike many of the others he had just come from a COO position in a very large company in Asia. He was a no nonsense kind of guy whose style was more like that of a football coach who demanded high performance from his players. The number one lesson that stuck with me from this expert in the real business world was Input+Process=Output. Personally this concept/mentality has totally changed the way I view a business and the way I go about understanding and improving it.

Input+Process=Output

Every business is essentially a collection of inputs (time, people, money, machines, software etc) that are organized into a process that produces a desired output. Lets imagine a lemonade stand which has two departments the "Lemonade Production Dept" and the "Lemonade Sales Dept". One department would be in charge of the process by which the lemonade was made and the other would be in charge of the process by which the lemonade was sold. Each would design their own process for achieving the output they are in charge of and ideally measuring each step of that process for effectiveness and efficiency. The ultimate "output" for any business is money but each process and sub-process will have an output of its own. These outputs are often called your "success metrics" or "Key Performance Indicators".

Below is an example of the process a the lemonade stand both on a high level and a more detailed level . If it was needed you could even drill down deeper if you wanted and go into more detail (exactly how they mix the ingredients, where they purchase them etc). I have found it to be essential to deeply understand your own processes on both a high and lower more detailed level and to work closely with those running those processes to ensure they produce the output desired.

________________________________________________________________________

A Real Example. 

In my own company we act as a marketing agency that helps vacation rental owners get more bookings. We find homes we can book, we market them online and book the guests who are interested in them. Therefore, I have 3 departments and each is charged with producing 1 output which we measure as follows.

1) Sales Dept= New properties for the Marketing Dept
2) Marketing Dept= New leads for the Reservations Dept
3) Reservations Dept= New bookings for the Owners.

Each department is provided with resources (inputs) and with the help of upper management come up with processes and subprocesses that will produce the output they are in charge of. Input metrics help us measure what we put into the process (IE our effort), output metrics measure the results and our process is the means by which we convert our efforts into results.

Are you making decisions based on data or just gut feelings?

Often the focus is placed almost entirely on the output when really that is only partially in their control. However you have near total control over your input and the process itself, and that is the goose that lays the golden egg. We have all heard the phrase work smarter not harder. This is simply saying that if you put in a lot of effort into a bad process you will get a poor output and you need a better process. The more objective measurement and analysis you do on your process the better you are going to be able to monitor if the process is performing the way you intended it to and you will be able to modify and improve it based on data instead of opinion.

This may all seem like common sense but very few people actually measure their inputs and processes, especially if it involves measuring themselves. It is my opinion that everyone in some way should be accountable for periodically reporting and analyzing both their input and output numbers, even if it is to yourself. By doing this you can more easily identify the source of bad performance (low output) and fix the broken parts of your process.

By collecting data on your processes you now are empowered to make decisions and create strategies based on data instead of a hunch. With this mentality you can easily and objectively identify why you are not getting the output and take the needed steps to get it.

Questions for reflection. 

• Have I mapped out my processes and subprocesses in detail? 
• Do I measure my inputs in my my processes in a meaningful way?
• Are these measurements as objective as I can get them to be?
• Are my input and output numbers reported and analyzed periodically?
• In general is strategy and decisions driven by data or personal whim?