Infocusselling’s Blog

October 19, 2009

Welcome 2010!

Only 75 days to get 2010 launched towards success! Do I mean 75 days left to finish strong in 2009? That might be important, but more important is to start now on 2010. 2009 is basically over. Even if you peak in the holiday season, your product line, inventory, and marketing are probably too far along to change enough to make dramatic differences in your total 2009 results. Therefore, it’s time to focus on 2010.

      To launch 2010 strong, focus on three issues:

  1. Objectively evaluate your market for 2010. I don’t mean take 2009 and add the 40% sales increase you hope you can get. I mean look at all the economic and market indicators and very critically examine what will and will not change in 2010. Determine how big the market will be and set a sales goal that reflects reality, not stupidity. You can grow in a flat market; just look closely at issue 2 and 3 as you set that goal.
  2. Objectively evaluate your strengths in your market and know what will bring you business over your competition. This will form your marketing plan which should be implemented today.
  3. Objectively evaluate your weaknesses against the market and know what weaknesses your competition will exploit against you. This forms your development plan so that before spring comes you have minimized the opening that your competition is going to leverage for their success.

The problem with starting in January is the lag between marketing, prospecting, and gaining commitments. You have 75 days to evaluate, launch, and see immediate results in January instead of seeing the cold winter warm into the spring thaw.          

For a workshop on adding new tactics and skills to use in making 2010 the year you want and need, watch our website for the half day workshop, Launch 2010 Now!

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June 17, 2009

Going Too Far: Appreciation, Incentive, or Inducement?

I recently heard a speaker (David Steele) comment about changes in selling today. He commented that in the past, expensive dinners, golf trips, and high priced tickets were the norm. I know from experience that unless a new car showed up in a driveway or a rep’s beach condo was used by a customer for vacation, no one really gave much thought to corporate gift giving. But today, expensive dinners, golf trips, and front row ticket are much less common. Have the rules changed? And if so, is it due to the economics of business that no longer allow fat margins to cover gifts, or have the ethics of business changed so that the potential impropriety of gifts given in anticipation of or as a thank you for business is no longer acceptable?

When a gift is given, what is the intent? Does the timing matter—a gift given before or after an order? A gift given before a purchase is likely intended to sway a decision than one given after, unless there was a promise of such a gift made during the sales process. Does it matter who initiated the conversation? The seller could say, “I’ve got tickets to the finals every year, and I always take my newest account. I hope you can get this order placed so it can be you.” If so, that could be construed as an inducement. But a buyer could also say, “I want to go to the playoffs this year, and last year my supplier got me tickets. Do you think you can do the same?” This could imply a requirement to the seller as part of the purchase decision, an intent by the customer to extort special favors as a result of his or her discretionary purchasing power.

What about on-going customers? Do we give gifts to on-going customers to maintain their business, or to sincerely thank them for being loyal and supportive to us? Who is more valuable? The first time buyer or the repeat buyer? Sure you have to get the first order to get to the second order, but think how much easier it is when you have on-going customers instead of a long list of one hit wonders. If we only give gifts to repeat buyers, does that look more like a sincere thank you and less like a blatant inducement?

In the end, it comes down to intent. What is the intent of the buyer and what is the intent of the seller. If the intent is to influence a decision, it sounds questionable. If it is done post order and the buyer didn’t know it was coming, it sounds more sincere. I can’t answer the question for anyone but myself, but I’m noticing a change in trend that might mark a new direction in buyer/seller expectations.

To print this as an article click here.

January 5, 2009

Resisting an Invitation to Give Away a Quarter Million Bucks

Article by Chris McEvoy

Setting the stage, back a few years, when I’m president of PALLM, Inc., an Indy-based insurance software company.

 It was the English chap on the phone from Tokyo.

“Good news, you got the deal! They’re OK with your pricing. They want you to bring a technical person to Tokyo to present to the computer geeks while you finalize the deal.”

Continued…

October 14, 2008

Have You Decided to Participate in or Ignore the Media Fueled Economic Blip?

Here’s my solution to the economic “issue” and it times well with the changing seasons.

1.      We fire all members of the media who have made a snide, biased, or politically motivated comment about the economy in the last 90 days, unless they have a Ph.D. in economics. (Trust me, they will all be gone.)

2.      We go outside and rake the leaves in our yard, adding to our mulch pile, burning off a few calories, and providing some much needed oxygen to our brains before the cold weather sets in.

3.      After the leaves are up and we realize how nice it is to be alive and living free in America, we go to our favorite store and buy that one item that you have been putting off buying yourself or someone special.  Here’s mine: http://search.barnesandnoble.com/The-Snowball

Think it would work? I am 99.96% sure that if we did this, we would find the new newscasters on Thanksgiving would be telling of how thankful we are for rising retail sales, increased cash in the economy, lower unemployment, and a decrease in murders and drug use (that’s another whole topic…).

Ok, that is pretty idealistic isn’t it? Unfortunately, the few who might do it could not carry the load for those who don’t do it. Darn. So, my second solution is to come visit one of our sales classes between now and the holidays, free, just to get some ideas on how you can sell more hours, products, or services, at a higher price, to more people. http://www.INFOCUSSelling.com Just let me know when you want to stop by, we’ll send you the material for that week, and you can come in and get some tips to help you battle the bad news that surrounds your prospects every day telling them why not to buy from you. Is this self serving? We might get a client or two out of it. But, bigger picture, I do know what everyone will get—a better attitude all around as everyone’s sales climb the last quarter of 2008 from new attitudes combined with new approaches, and that’s my early holiday gift to Rainmakers. http://www.gorainmakers.com

October 7, 2008

Selling in Down Times

Selling In Down Times

“I’ve had to lower my price to keep sales going.” If there are comments I don’t want to hear a client make, this is at the top of the list. When you cut price, you cut profit. That may seem like one of those “no kidding” comments but let’s look at what really happens.

Let’s say you sell a $100 product with an out of pocket cost of $40 and an overhead allocation of $25, leaving a $35 contribution to profit. If you sell 100 units, you make $3,500. Not too bad. Now let’s say you drop the price 15% to $85 to “keep sales.” Same $40 out of pocket and $25 of overhead, but now you only make a $20 contribution to profit per unit. If you sell the same 100 units, you profit is now $2000—profit takes the entire hit of a price reduction. To make the same $3500, you now have to sell 175 units. Wow! A 75% increase in volume to make up reduced profit. Can you sell 75% more? Not likely—that’s a lot more than just keeping “sales going,” it’s a sales explosion.

Maybe you provide a service where your personal labor is the cost. Your typical project is $400 and takes you 5 hours at $80 per hour. If you complete 5 projects a week, 25 project hours, you are grossing $2000. Not too bad. But, if you decide to drop the price to $350 to “keep sales” you are now making $70 per hour and $1750 per week. But wait, were you working 25 hours before? More likely you were working 1 hour to get each sale, plus 15 minutes per project to bill and file away records after the project (total 1.25 hours), and another 15 administrative hours for a total of 46.25 hours.

To make the same $2000, you have to sell 5.7 projects a week, a sales increase of 14%. That doesn’t sound too bad, except that it is still an increase in unit count just to “keep” the same sales—and now you are working 28.5 project hours instead of 25. After your price drop, you now need 5.7 hours of sales time, plus 1.43 hours to bill and file, plus the same 15 administrative hours for a new week of 50.63 hours…an increase of 4.38 hours per week. No big deal? After a year, you have worked almost 228 additional hours—over five more weeks to make the same amount of income! So much for vacation.

Still want to cut that price? I doubt it. Is cutting your price a good idea to drive sales? Very seldom. When the economy is supposedly having tough times (some of us think the tough times are more a function of the media and election rhetoric, and there is proof to back that up), then you must focus on selling 1) to the right clients who will pay full price and/or 2) selling smaller projects at a higher margin or hourly rate so your profit per sales dollar or billable hour is higher. Is this possible? Sure. How? Go back to what people buy from you, your unfair advantage, and be intensely focused on selling only to those prospects who need the result you can deliver, and walk away from projects that will take too much time away from you finding and delivering high value products and services.

If you must sell at a lower dollar amount, take something out and raise your hourly rate. Remember that you cover your selling and administrative hours by what you generate in billable hours. Tell your prospect that “to meet that price, we can do this” and redefine “this” as less than your regular package where the reduction in hours is less than the reduction in price—reduce project hours by 20%  with a 15% decrease in sales amount which actually increases your profit margin. If the “this” is important to them, they will find those dollars. If you are selling a product, remove a feature and reduce the price only by the cost of the feature—leave any profit or margin in your selling price.

There’s an old joke about a farmer losing money each time he took his goods to the market, so he bought an extra cart so he could make it up on volume and then went bankrupt. You really can’t make it up on volume. Keep your margins, focus on selling to a narrower market, and don’t commit to working an extra month per year just to stay even.

April 24, 2008

How do seasons affect your selling?

How will the change from winter to spring to summer affect your selling? If you think it won’t, I think you are wrong. I don’t want to give out the answer but think about:

1) how you and your customers respond to longer days and more sunshine

2) how vacation time affects your selling and/or the business of your customers

3) what natural seasonality exists in your business and why (tax payment timing, impact of weather on your product, spending variation due to holidays, introduction of new products, etc.)

Every business is affected in some way by the summer. How will yours be impacted? More importantly, if it is not a good impact, what will you do this year to minimize the impact of it AND if you really think ahead, make it a competitive advantage for you over your competition who isn’t thinking enough about it?

Part of successful selling is thinking ahead. What are you thinking about now?

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