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8 Procedures to Take Control of Sales and Marketing
The Cash to Cash Cycle We're sprinting toward that million dollar mark...and we're only a couple strides away? Decreasing inventory carried us over the first hurdle, and last week reducing Accounts Receivable sped us through the half-way mark. We're making great time, so let's bring on the next mile marker marketing and sales. Increasing Overall Sales and Marketing Effectiveness If you are an organization spending $500,000 or more on marketing expenses (e.g. advertising, trade shows, print materials, direct mail, etc.) then STOP! We found it again. Why you ask?? Because marketing has the greatest potential of being very unproductive. In fact, many marketing programs struggle to break even, and actually frequently lose money. So if we increase the overall effectiveness, then we can eliminate 50% or more of your wasted marketing efforts, which translates into $250,000 in cash. So now, let's see how this actually works in a real-life scenario. Sales and Marketing Company Policy Case Study An organization with $500,000 in marketing expenses needed assistance. We examined their sales and marketing process to understand and quantify the lead flow, follow-up, and demand forecasting issues. Then we designed and implemented a process to improve their sales cycle efficiency and tie it closer to their customer's buying cycles. After the marketing reductions, we then reinvested $100,000 back into new processes for public relations and Customer Relationship Management (CRM), both of which were suffering badly. The metrics we developed reduced their marketing expenses by 60% overall and increased their sales cycle efficiency from 40% to 60% within 6 months of implementing the new procedures. With these new processes and reports, the company now tracks sales cycle efficiency and life-time value rather than just sales quota achievement, as the measure of their sales & marketing effectiveness. The result: an extra $300,000 in cash plus a 50% increase in process capability (capacity). As we have seen time and time again, time can be our best friend, if only we let it. Methods to Design the New Sales & Marketing Process - Improve Follow-up. Only about two percent (2%) of sales occur on the first contact. Eighty percent (80%) of sales will require five to eight contacts before the sale closes. This means that if you are contacting the prospect less than five times or more than eight times, then you could have a problem with follow-up. - Sales Cycle Efficiency. Time kills deals. The speed at which a prospect is converted into a customer and the number of prospects required to make that conversion determines your sales cycle efficiency. So ask yourself, are you taking the right steps to measure and reduce lost sales? - Life-Time Value. How profitable a given customer is over time defines your LTV or Life-Time Value. Companies spend ten times more to acquire a customer than to keep a customer. However, existing customers are more likely to purchase again, spend more money, and therefore become more profitable. If you don't know your LTV, then how do you know how much money to spend and on which customer segment? - Demand Forecasting. Every customer buys on a cycle. So this means that you should track cycle times and variance to increase the accuracy of your forecasting and the loyalty of the customer. Do you know when your customers need to reorder? - Improve Lead Quality. Do you have methods in place to measure the conversion potential of each lead? Lead generation activities (i.e. forms) should pre-qualify every new lead so that you can take the right follow-up actions for the marketing offer. Strong leads produce strong sales. - Increase Awareness. To keep the sales pipeline full of good quality leads you must continuously increase the awareness of your company and the solutions that it provides. Public relations is more efficient at building awareness than advertising, yet many companies spend wildly on advertising and trade shows while neglecting to fund public relations efforts much at all. Increase your name recognition, not your budget. - Reduce Discounting. Discounts represent deficiencies in the sales & marketing processes, which means that you should use them sparingly. Instead, determine the root cause and then fix the process that's causing the need to discount. Show customers the added value, and they won't focus on price. - Train Personnel. Provide your sales & marketing personnel with regular formal training. This will arm them with better product knowledge, as well as presentation, negotiating and selling skills that will improve effectiveness. This will boost both employee morale and the bottom line a win-win. Control of Sales and Marketing Policy and Procedures Improve your sales cycle efficiency. Reduce your marketing expenses. Tie it closer to your customer's buying cycles. And take control of your sales and marketing program to let it work for you. Improvement with Well-defined Policies and Procedures With well-defined processes and procedures in place, you will increase efficiency by reducing ineffective sales and marketing programs. And, again, we make such improvements to create more cash on hand all toward that million dollar goal and to cross the finish line. Next week, we will hurdle the final $250,000 mark with the Accounting Payables function so close you can see it. Chris Anderson is currently the managing director of Bizmanualz, Inc. and co-author of policies and procedures manuals, producing the layout, process design and implementation to increase performance. To learn how to increase your business performance, visit: Bizmanualz, Inc.
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Careers and Employment Accepting Responsibility for Your Sales Success That we live in a time of relentless and pervasive change is no longer news to anyone. There is one important implication of this situation that continues to be a challenge. That is that our employees need to continually change their behavior to adapt to the world around them. Increasing Sales by Using Coupons - Will it Help Your Business? Increasing Sales by using Coupons. Will it help your business? Well, the Promotional Marketing Association's (PMA) "Coupon Council" shows that 3.8 Billion coupons were redeemed in 2003. Consumers saved over 3 billion dollars. 79% of American's used coupons last year. There are many Coupon Franchises out there with quite a track record. Here are a few of them: Val-Pac; http://www.valpak.com/info/franchise/franchise_faqs_content.jsp. How Your 60-Second Elevator Script Can Transform Your Staff, Your Sales, & Your Business When attending a Chamber of Commerce breakfast networking get-together, I'm always perplexed by the lack of thought and preparation many business owners display when giving a 60-second overview of their business. These people have spent enormous amounts of time, money, and energy on their businesses. Yet, when asked to give a quick synopsis, they fumble for the right words, they ramble, they go off on a tangent, the information is disjointed, or the words are boring and seemingly unimportant. Commodity Sales Prospecting - How to Stand Out From Your Competitors I have received a number of requests for advice from salespeople and sales managers that sell "commodity" products and services. When I refer to commodities, I don't just mean pork bellies or frozen concentrated orange juice. A commodity is any product or service where the target prospect is likely to be thinking: Investing in Your Sales Team While there's no easy answer to this question, there are a few basic points, known as the Training Discrepancy Model, which illustrate key areas that must be targeted for your company's training investment to be 100% effective. Increase Your Sales Accept Credit Cards, Part 2 In part two we will discuss overcoming objections, which credit cards to accept and using the check paying option. Back-to-School List - 10 Tips for Trade Shows There's a new year beginning now - the school year. Whether you have children attending for the first time or finishing university, it's always hectic to get into the back-to-school routine. And, if you don't have school in your family, there might be your own remembrance of the excitement of starting afresh and learning something new. Sales Competence Isn't About Quota Performance! Compounding the problem are two myths regarding measures of competency in sales. Generous Donor Refused (how qualified business slipped away) Generous Donor Refused SEZ WHO? Tips About Recommendations, Sales Cycles, and Trade Shows Here's the scene. You're at the trade show, having a discrete "Sales Call" conversation with a visitor. Things are going well until he says something like... A Real CRM Strategy or Just Tracking Customers? Exactly what is CRM Sales Forecasting For New Businesses Sales forecasting is the process of organizing and analysing information in a way that makes it possible to estimate what your sales will be. This Micro Module outlines some simple methods of forecasting sales using easy to find data. Books containing simple and sophisticated techniques of forecasting sales can be found in libraries and business oriented book stores. Sales & Marketing Plan Strategies Design and Implementation of a new Sales & Marketing campaign must be carefully thought through from the beginning. What message do you want to send about your company, products, and services? What are the anticipated results? What is the execution strategy? What is the cost ratio versus expected return? The Benefits of Catalog Sales For Your Business Things to watch out for when selling your product in catalogs. How to Organize a Seminar or an Event Seminars and events have always been implemented as a holistic experience to participants. Thus, organizing an event requires extensive planning and preparation with most work implemented at least a few months before the actual event. Most of the time, seminars seem to run like clockwork with all events flowing smoothly according to schedule. In reality however, much groundwork has been worked on with the purpose of developing the right atmosphere in addition to a beneficial experience to partipants. Do You Know How to Fire Up Your Sales Staff (When Money Isnt Everything)? Money is the only thing that motivates a salesperson, right? Well, maybe it is time to give your sales staff a little more credit. Not Enough Fresh Sales Leads? Marketing is the New Sales Your sales are down and leads are rare. The phone's not ringing. Let's blame marketing! How Exhibitors Can Move More Attendees Closer to Buying Q. What's the single, biggest change exhibitors can make to move more prospects closer to a buying? Change in Sales Organizations Starts with Me Question: What do the following have in common? Beyond the Golden Rule There are several types and sub types of people in the world. Getting to understand the differences will help you connect with other people. This is taught in sales 101, because the need to connect with the people to make the sale.
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