Tag Archives: Customer

What are the Basics of a One-Page Sales Plan? Four Points

Situation: A CEO wants a simple, one-page plan for her sales organization to help coordinate the company’s sales and marketing efforts. The objective is to boost revenue growth and market penetration with consistent sales messaging. What are the basics of a One-Page Sales Plan?

Advice from the CEOs:

  • The key elements of construction are: research, identification of revenue sources, and construction of a Road Map.
  • Three Examples of a One-Page Sales Plan are:
    • The Customer Survey-based Sales Plan – Ask the top 15 customers what the company’s current share of wallet (SOW) looks like and what they need to do to gain additional SOW. Use the responses to identify additional revenue sources and construct the Road Map.
    • The Service Extension Sales Plan – Construct a grid representing the company’s products and services currently offered to potential customers – particularly the company’s top customers. Create a separate grid showing services that the company does not currently offer and ask customers what the company needs to do to make those services appealing to them. Use the information gained to construct the Road Map.
    • The Current and Potential Revenue Sales Plan – Construct a grid representing the customers and markets currently served and by what product or service. Look at additional customer markets not currently served. Estimate the size, new business closure rates, and the total potential market opportunity. Use the information gained to construct the Road Map.
  • The advantages of a One-Page Sales plan include:
    • One page simplifies the process.
    • Summary of current and new targets.
    • Easy to track and measure.
    • Increases the chance of success.
    • Key people get on the same page.
    • Filters out undesirable customers.
    • A plan that can be completed and implemented quickly, cost effectively with a high ROI.
  • Additional Observations:
    • The company’s principal challenge is prioritizing business opportunities. Creating an “Ideal Customer Profile” helps to produce the desired result.
    • The company has limited resources to invest in new projects. Using an effective, low-cost tool helps to maximize the impact of investment.
    • The ideal customer profile will change over time based on the business environment and the company’s long term goals.

How Do You Design an Effective Sales Compensation Plan? Three Steps

Situation: A young company is redeveloping its sales department and wants to develop an effective sales compensation plan. What advice do members have for the company on effective sales comp packages? How do you design an effective sales compensation plan?

Advice from the CEOs:

  • The first step is to develop broad outlines to the plan:
    • What salary range is the company contemplating? What can the company afford?
    • What skills beyond the ability to sell will be required? For example, will the sales person require technical skills in addition to sales skills? Or will the sales person need engineering design assistance both in making the sale and in providing service post-sale?
    • Who will be the ongoing contact for the customer once the sale is made? Will this be the salesperson, or will ongoing customer contact will be managed by engineering?
    • The higher the skill level and both sales and post-sale responsibilities, the higher the potential salary.
  • Once the broad outline is decided, set parameters and objectives for the position. The compensation plan should reflect and be consistent with these.
  • Third, establish the behaviors that sales people are expected to exhibit. Any compensation plan should reinforce the behaviors desired by the company.
    • If salespeople are expected to bring in high margin business, focus and scale compensation based on the margin generated by the sale.
    • If an objective is to avoid customers who are bad credit risks, then pay sales people on collected funds rather than on invoiced business.

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How Do You Motivate Employees to Ask for Referrals? Four Points

Situation: A company has been growing nicely, but could always use additional business. Employees are very customer service focused – a key differentiator for the company – but do not ask current customers for referrals. This is problematic because management emphasizes the importance of asking for referral business. How do you motivate employees to regularly ask for referrals?

Advice from the CEOs:

  • Talk to the employees one-on-one to determine what would motivate them to ask for referrals. Also ask what prevents them from asking for referrals. It could be that they do not ask for referrals because they see themselves as customer-focused and interpret asking for referrals as not customer-friendly.
    • The reality is that if it is done the right way, it can be flattering to a customer to be asked for a referral.
  • Conduct a customer satisfaction survey – include a question as to whether the customer would refer the company to other potential clients.
    • If the answer is yes, ask for an introduction to target customers that the company seeks.
  • Think about the approach of a company with a cure for cancer. Imagine that this cure could work for any type of cancer at any stage. The job is to pick up the phone, call people and ask them:
    • First, whether they or someone that they care about has cancer?
    • If the answer is “yes”, would they be interested in a cure?
    • If this were the case, would they have a problem calling people with this message?
  • In fact, the company’s product or service is the cure for the needs of both current and potential clients, just as if they had cancer. An important part of the job is to ask current customers whether they know others who would benefit from the company’s services.
    • If employees don’t believe this, they are representing the wrong product or service.

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How Do You Take on Additional Business When You Are Capacity Limited? Seven Suggestions

Situation: A Company has been growing rapidly over the past year. This has strained resources in some departments, including manufacturing. New customer demand just keeps coming in. What can the CEO do to meet customer demand without busting at the seams? How do you take on additional business when you are capacity limited?

Advice from the CEOs:

  • There are three questions to be asked before taking other steps:
    • Is it possible to expand manufacturing by outsourcing?
    • Can the company just hire more people?
    • Is the business that the company is getting good profitable business?
  • First, what a great problem to have – not to belittle the challenge that the company faces.
  • If there is concern about the company’s vulnerability to future downturns and the company is holding off adding staff because of this, look for a filler product that can help the company to smooth business cycles.
  • Farm out constrained work to other departments of the company – for example engineering. Are there independent entities that the company could partner with to add temporary capacity?
  • If there are financial constraints, then look at adjusting the pricing for new business.
  • If there are conflicts between capacity in manufacturing and engineering, consider becoming more of an engineering-focused firm and invest in this area. Look at outsourcing manufacturing capacity.
  • Look for sources of temporary capital to fund the company through the adjustment. Use an existing bank line of credit or a loan to finance short-term capital needs.

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How Do You Minimize Hiring while Launching a New Market? Five Points

Situation: A company is planning to expand operations into a new geography. The CEO wants to avoid hiring a new sales person out of the main office as they make this move because he wants the expansion to fund itself. How do you minimize hiring while launching a new market?

Advice from the CEOs:

  • Start by profiling the ideal customer for the new geography.
    • The definition should include business sector, company size, current capabilities in terms of the service provided by the company, and openness to working with outside service providers.
  • Consider a satellite office or franchise option. The two key employees to staff the office will be an engineer and a principal manager for the office. The principal manager will be the sales person.
  • Target initial clients that meet the profile of the existing business but in the new geography.
  • Use what has been learned over the years in the principal location to build an effective culture in the new location. Select key people for the new location that would fit well into the current location.
  • How can the principal manager network in the new location to attract clients?
    • Clubs
    • Organizations
    • White Papers
    • Advertising and Mass Mailing
    • Author a book or be featured in a chapter of someone else’s book
    • Generate partnerships or affiliations for business development

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How Do You Fund Growth Strategically? Five Approaches

Situation: A CEO is looking at a significant investment in capital equipment. Being considered are not just the cost of the investment, but the opportunity cost of not making the investment and the impact that this will have on the business. An additional consideration is the business mix of the company and whether to shift focus from low volume/high margin to low margin/high volume products. What tools have others used to assess these trade-offs? How do you fund growth strategically?

Advice from the CEOs:

  • Review the company’s approach to contracts. It may be desirable to revise the approach in light of the new objective. The switch from low volume/high margin to low margin/high volume products impacts not only production but also marketing, sales, finance and accounting.
  • Price some early new contracts below market to finance the additional equipment expenditures, as well as to test market response to the new offering. This will help to identify additional adjustments that are needed for the new approach and offering to succeed.
  • Structure the financing options for equipment purchases creatively, for example by allowing for participation by customers and investors.
  • Watch changes in working capital at all times and keep it under control. Working capital is a commitment of resources just as is buying equipment or facilities.
  • Consider all resource commitments as investments, regardless of the way the accountants deal with them as in expensing vs. capitalizing these investments on the balance sheet. For example, a marketing program is an investment even though it will show up as an operating expense. Make sure that this can be justified in terms of future cash flows expected.

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How Do You Target CIOs of Large Companies? Six Suggestions

Situation: A company’s target customers are Fortune 1000 companies, some of whom are simultaneously clients and competitors. The key target is the VP/CIO. A prime concern of that individual is assuring that their IT systems never go down. What could the company do better to approach these target customers and reach the right decision-maker? How do you target CIOs of large companies?

Advice from the CEOs:

  • The approach must be tailored to reach corporate level decision-makers:
    • Conduct a direct marketing campaign strategically as opposed to using a high-volume mailing with a low cost-per-piece.
    • Mail relatively expensive dimensional mailers to a small number of highly qualified prospects. Look for high impact to the best targets.
  • Research and identify the key targets within prospect companies.
    • The best success will come from prospects who have tried other options from the large competitors but are unsatisfied with the results.
  • Consider and research prospects within the large consulting firms. They may have tried IBM or similar options, but weren’t happy with what was provided, either because of cost, time or quality.
  • Also look at next-tier players. Success with these customers can become valuable references to the larger firms.
  • Position the offering as the “safe choice.”
  • Closely monitor customers and their experience with the offering – both pre-installation, during installation and post-installation. The key variables will be quality and ease of installation and adoption of the company’s offering.

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How Do You Create Buzz? Six Suggestions

Situation: A company wants to quickly create high profile buzz around a new offering. What have other companies done or seen that could help the company quickly create this type of market presence? How do you create buzz?

Advice from the CEOs:

  • Buzz is hard to measure. It is also difficult to link buzz directly to sales.
  • Getting press, assuming that it is positive, is often called “free advertising.”
    • If a company is paying a professional public relations (PR) consultant, positive press is not free. When PR is successful and sustained, however, it arguably has a better ROI than advertising.
    • Published articles, particularly those by authors not associated with the company, are viewed by the customer as more legitimate than advertising. Additionally, with the Internet, the longevity of these articles can be quite long. The reach extends far beyond publications’ off-line circulation, and search engines make the articles easy to access.
  • Successful companies want to do business with other successful companies. What can the company highlight to show prospective clients that it is successful?
    • Substantiation is critical to getting positive coverage – assure that there is no “vaporware.” Given the power of social media vaporware can quickly destroy an offering.
  • One member of the group suggested that the ownership of patents might generate positive press and social media coverage.
  • Leverage in-house thought leaders.
  • Seek help from celebrities – “Hollywood” investors and individuals with substantial social media followings.

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How Do You Address the Compensation Side of an Employee Development Plan? Four Points

Situation: A CEO has an employee who consistently performs above expectations. The employee has asked whether they could be rewarded for over-performance on customer retention and for gaining new business from existing customers. How can this be structured? How do you address the compensation side of an employee development plan?

Advice from the CEOs:

  • This is the type of employee that every CEO wants to see. Responding positively to the employee’s request is essential, and an opportunity to assure the employee’s loyalty and retention by the company.
  • One structure is bonus multipliers based on under or over performance. An example of the structure could be to assign and have the employee agree to a target for customer retention or new business acquisition from existing customers. Bonus is then impacted by their performance against this objective as follows:
    • Hit <85% of the target – no bonus;
    • Hit 85-100% of target – receive your standard bonus;
    • Hit 110% of target – get bonus times 10%
    • Hit 120% of target – get bonus times 20%
    • And so on.
  • This is just an example for the purpose of illustration. Variations on the original bonus plan can be negotiated with the employee, and adjusted over time to further encourage continued outstanding performance.
  • The multipliers do not necessarily have to be large, but are there to show that a certain level of performance is expected to receive this portion of the bonus. In addition, the employee can increase the bonus by overachieving their objectives.

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How Do You Shift a Key Employee to Manager? – Pt 2 Three Points

Situation: A CEO wants to promote a key employee from rainmaker to manager. This will not involve a change in expectations or metrics for either the new manager or the employees who will report to her. However, there needs to be more forcefulness and clarity on what needs to be accomplished, both for the new manager and her team. How do you shift a key employee from rainmaker to manager?

Advice from the CEOs:

  • Don’t just measure calls. Measure the outcome from calls. Develop an objective and a metric or set of metrics that they can run to. Link their activity to business results. They will respond because they will be able to impact the firm as well as their careers.
    • Tie individuals’ metrics to the business culture that the management team is creating and create win-win links.
  • What is involved in changing the business focus to new markets?
    • Build a replicable system for servicing a particular channel. Use the lessons from this exercise to build systems for new channels. As the team moves into new channels, tweak the replicable system so that it responds to the specific demands of that channel.
    • For new channels, identify the most important needs of the new customer – from their perspective – and develop a client service model to meet this need. For example, if the goal is to develop an investment service for foundations and endowments, the key variables may be acceptable return with a high degree of safety. Tailor an investment portfolio, as well as a client service strategy to meet the most important needs of this sector.
  • What is involved in creating a smooth hand-off within client relationships?
    • Start bringing in others to whom will be handed off the relationship as early in the client relationship development process as possible. Allow rapport and trust to develop, and prep the client for the expectation that a smooth hand-off is part of the ongoing client relationship.

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