Tuesday, September 30, 2008

Five Keys to Drawing a Sales Circle

A fine line exists between convincing a prospect that you want her business and bugging her so much that you chase her away. Though you would like to do so, you can’t make the prospect’s decision for her. However, you can do the next best thing by providing her everything she needs to make an informed choice—which is to select your service.

An advertising maxim likens this process to forming a circle, which you can start, but only the prospect can complete. This applies to you first customer and your fiftieth one. Your job is to arm the prospect with key pieces of information and to make her feel comfortable in making a decision. If you’re using any phrases similar to the ones below, however, you’re trying to complete the circle for her:
- We’re the smart choice.
- Our service is simply the best.
- Our company is the worldwide leader in (fill in the blank)
- We’re so much better than our competition, it’s embarrassing.

Never tell the prospect how great you are. Rather, give her the facts to draw that conclusion. At the other extreme, there is danger in not going far enough, which means you haven’t provided sufficient information. As a result, the prospect can’t reach the conclusion you want because there is too much effort, too much left to question, and too little comfort with you or your service.

Your job is to draw a circle until it’s nearly complete and then hand the pencil to the prospect. The circle begins when the prospect realizes she has a need. The line arcs as you build her interest in your service and then reaches its logical conclusion when the prospect realizes the best way to address her need is by choosing you.

Five easy ways to form a circle
Forming a near circle requires a set of tools that you can draw on for each situation. Here are five basic ones:
1. Testimonials
As a new company, testimonials can about you, from relationships you formed in other positions. It seems like a no-brainer, but third-party validation is such a powerful, yet often under-utilized, tool. Never say anything good about yourself when you have someone else happy say it for you.

2. Mini-case studies
As soon as you've established your first customer, use them as a case study. They are another strong form of third-party validation which help overcome your company's newness. A mini-case study should contain two or three paragraphs that briefly tell how a customer leveraged your service to solve a problem.
Here’s a simple format:
Challenge > Solution > Result
Powerful case studies should mention a return on investment, such as savings in time or the elimination of stress.

3. Trials
Let the prospect give your service a brief test drive. Quite often, a prospect’s time is much more important to her than the cost of your service. If she takes time to try it, she’s serious. Another tip: Arrange with the prospect a specific stop and end point for any trial to ensure she tests your service in a timely fashion. If a prospect has an open-ended trial, she is less likely to feel any urgency.

4. Third-party information
Prospects choose you as much as they choose your service. Prospects—human beings that they are—love getting information about things that interest them. For example, you could say, “Ms. Prospect, I just came across this article that I thought you might find interesting. I know it’s a subject that’s near to your heart.” It’s another way to show you’ve taken time to understand how her business works.

5. Listening skills
It’s natural to be so excited about your service that you can’t help but talk on and on about it. But as much as you want to talk, the prospect wants to talk more. And she wants you to actively listen, which can be the quickest way to making a nearly-complete circle. If you don’t listen, you won’t know which testimonial to share, or which mini-case study compares best to the prospect’s situation. Tip: Record yourself talking to a prospect. Even if it’s just one end of a phone call, it helps to review how you conduct a conversation. As painful as it may be to hear yourself, you will know quickly if you’re listening well or possibly talking over the prospect.

In the end, relax a little. Prospects sense when you’re overly eager to gain a sale and to move them along faster than they want to move. They can equally sense when you’re comfortable enough to let your tools work for you. Soon, the prospect is ready to complete the circle, and you’ve earned the business.

Friday, September 19, 2008

Know Your Numbers, part 2

You'll likely find cold calling a necessary evil unless you already have a handful of solid leads when you start your company, or until your first customers begin to refer others to you.

Outbound plusses:
· If you reach a prospect, or at least a suspect, through cold calling, then she may not know

anything about your competitors.
· When you do your research (always do research before a call), you may catch the prospect

just as she is thinking about buying. It often happens.
· If the prospect has not thought about buying, you get the opportunity to educate her a

little, helping her to identify a business pain that she may not have realized she had. When

she pictures the solution to that pain, perhaps she’ll envision no one but you.

Outbound minuses:
· Nobody likes receiving cold calls.
· You don’t like making them.
· The sales cycle could be longer because the prospect is in less hurry than the inbound caller

to make a decision.
· The prospect, only mildly serious about buying anyway, may never make a decision, other

than the decision to do nothing.
· You really, really don’t like making cold calls.
· The prospect really, really doesn’t like getting them.

· You successfully get the prospect thinking she needs what you're offering, but she decides

to see who else out there offers something similar.

Some mix of inbound and outbound calls is essential to most any new company’s survival. Diligently track your numbers and results so you always know where and how to focus your efforts.

Here’s an example of the ratios you should track:

Inbound inquiries > Appointments > Proposals > Sales
Outbound calls > Appointments > Proposals > Sales

Also, track the sales cycle (time from call to sale) for each prospect, as well as the total initial value of the sale. For example, does it take two weeks to make a sale from inbound inquiries, but six weeks to make a sale from outbound calls? If you’re lucky, you’ll find that the inbound inquiries, though fewer, will generate more revenue in a shorter amount of time than a higher number of outbound calls.

Wednesday, September 17, 2008

Know your numbers

Many sales gurus say a customer is supposed to love you so much that they give you referrals just for the asking. Theoretically, your customers will call their friends, neighbors and the guy they haven’t talked to since high school, just to brag about how wonderful your company is. What the experts don’t mention is that it’s a lot easier to get a customer by referral if you already have a customer. It will take awhile to reach the point where a large share of your business comes via referral, unless your first customer knows everyone on the planet.

For now, you'll have to drum up businss among many prospecgts who’ve never heard of you or anyone you know. That may involve expensive outbound marketing, or ... cold calling. It’s called cold calling because there’s nothing warm and fuzzy about it. You won’t enjoy cold calling any more than the person on the other end of the phone.

There have been volumes written about how to do cold calling effectively. Go to any chain bookstore to find books offering plenty of advice. However, make sure if/when you make cold calls, you pay close attention to your results to determine if it’s worth the effort. Who knows? Maybe cold calling isn’t very effective for you. Maybe you can get customers faster and with less aggravation via other means of direct selling or marketing. You will discover advantages to either approach.

Before you decide to make cold (outbound) calls, consider the plusses and minuses of inbound efforts:

· Word of mouth, referrals, free publicity and other methods of generating a hot lead (the
opposite of a cold call) are a sweet way to start the sales process.
· You have legitimacy. You’re not just some schmuck wasting the prospect’s time with a
cold call.
· If she's contacting you, she's at least marginally interested in what you’re selling. She’s in
the market.
· You’ll uncover potential markets you might not have imagined otherwise.

· In many cases, the prospect is already aware of your competitors.
· By the time she contacts you, she may have already met with some of your competitors.
· It is even possible that she is using you as a measuring stick to see how good your rival
really is. She’s already made up her mind.
· If you decide to prime the pump with direct marketing and other paid advertising, your
cost per lead will be higher. Anything above a 2% response rate on a direct mail piece is
considered wildly successful. (Don’t spend a dime unless you’re going to commit to a long-
term campaign, and you can afford to pay for expert marketing help. The Internet, mail
and other venues are riddled with advertisers who are wasting their money on poor lists,
bad timing, inconsequential offers and pedestrian concepts.)

Next time, we'll look at the plusses and minuses of cold calling.