Subscribe
Subscribe via Social
To Break Your Growth Barrier – Sell Through Capacity
Having owned and run multiple small businesses, I know, firsthand, that managing capacity is one of the most difficult challenges facing owners and executives. It’s taken me years of trial and error to learn an important lesson to consistently growing a business – you must sell through capacity.
I’ve learned that capacity is often an illusion at best and an excuse at worst. When small and mid-size companies start thinking about capacity, they take their foot off the proverbial gas pedal.
Two negative things occur when that happens:
- You eliminate your margin for error by doing this. In my experience, executives and (especially) owners tend to see capacity problems before they’re actually there. Then, if by some chance you fail to capitalize on the opportunities before you, you’re suddenly dealing with excess capacity (and possibly higher expenses) and a dead pipeline.
- Even if you are right and you capture your opportunities and get to capacity – you kill your momentum. Once you’re ready to grow again, you have to start all over again with lower margins for error.
Is there danger when you sell through capacity? Absolutely! Frankly, every time I deal with it, it scares the, well, you know what out of me. However, it’s a problem you must deal with if you want to break through your growth barriers.
Is Your Business Ready For Growth?
11 months ago I released my eBook, Successfully Growing In A Recovery. I announced the release of the book with a blog post titled, The Great Recovery. The post turned out to be somewhat controversial, as many readers and business executives expressed their belief that I was, at best, premature in my call.
I tried to remind these executives that, too often, we confuse “recovery” with “expansion.” Recoveries are very bumpy and are quite treacherous. As I share in the book, recoveries can be even more dangerous than recessions if not handled properly.
The main thought I shared was that great companies move before everything is clear. This is the great advantage of a recovery – while most people still see fear and confusion, a few companies will see through that fear and act.
Happily, there were many companies that downloaded the ebook and many of them recorded record-breaking years.
The point of this post is not to congratulate myself for my call. Rather, it’s to point out that the advanced mover advantage is still there, but probably won’t be here for much longer. For those of you that wanted to see more proof of recovery before moving, I’ve got some very good news for you.
The news about the economy is as good as it’s been in five years. Don’t get me wrong, there are still big challenges and barriers facing us; but the opportunities for small and mid-market businesses are plenty.
For those who want some data to back up this claim, here you go:
- David Wessel, economic columnist for The Wall Street Journal, says, “The data is encouraging. Unemployment claims are down to their lowest level in more than three years. Housing starts are up. The stock market is bouncing back. Europe’s last round of bond sales wasn’t a complete disaster.”
- There’s early, encouraging belief that even the housing market is poised for long-term recovery. Gregory Zuckerman, a columnist for The Wall Street Journal, shares, “big money is starting to wager on housing. Hedge funds have been buying housing-related investments, betting on a rebound.”
- 2011 finished with a three and a half year low in unemployment claims, and home sales agreements were up 7.3%. Both of these are clear signs of recovery.
- Just yesterday, The Institute for Trend Research (one of the best group of economists I’ve come across) share this observation, “The Purchasing Managers Index 1/12 rate of change rose in December, a positive sign for the economy. Since the October 2011 tentative low is holding, this indicator is providing further evidence that we will likely see growth in US Industrial Production in the latter half of 2012.”
Bear in mind, recoveries are not all rosy (of course, neither are expansions). As I said earlier, there are still many challenges and barriers that could hold back economic growth. Waiting for the “all clear sign,” however, is a guarantee strategy for failure.
Remember, the companies that gain the advantage and enjoy the rewards are the ones that move forward before the herd. It’s not too late to gain that advantage, but time is running out.
A Key To Getting Your Sales Off To A Fast Start
During last week’s webinar 5 Keys to Getting Your Sales Year Off to a Fast Start, I shared that a major difference between top performing salespeople and average ones is how and what top performers measure and track.
Top performers are maniacal when it comes to measuring and tracking key performance criteria. Average performers measure and track grudgingly.
An even bigger difference is what they measure. Average performers (and their managers) over emphasize activity and/or results. The primary reason for this is that it’s very easy to measure either of these.
The problem with measuring activity is twofold:
- All too often the activities measured have little to no impact on results. For example, making more sales calls does not necessarily translate into success. At best, they may correlate to success.
- The focus becomes activity, rather than results. If we measure and track the number of calls, the natural focus becomes about making more calls. Quality of the call or the appropriateness of the contact is ignored. This often translates into increased activity, increased costs and less success.
It can be just as bad to over emphasize results. Again there are two issues with an over-focus on results:
- We do not control results. I could do everything right and still not make the sale.
- Results are trailing indicators, and are not predictive of success.
Top performers measure what I refer to as efforts. Here’s my definition of an effort:
- It’s a cause of sales.
- It can be influenced, meaning that we have control over whether it happens or not.
- It’s one of a critical few (you should never have to track more than 5 efforts).
Greg Maddux, one of the great pitchers of all times, never kept track of how many hits he gave or, or even balls and strikes. Instead he kept track of how many times he executed his pitch to plan. He knew he had no control over the result of a pitch, and that good execution would lead to good results over time.
Try it; you’ll be impressed with the results.
Getting Your Sales Year Off To A Fast Start
With more demands, fewer resources and tremendous competition, it’s tough for salespeople to focus on critical actions that get big results. On December 13th, we’re hosting a webinar The 5 Keys to Getting Your 2012 Sales Year Off To A Fast Start. We’re going to share our insights from working, firsthand, with more than 5,000 salespeople. We’ll be highlighting the key actions that allow the great ones to get more traction – with less effort. We also have a bonus for attendees (watch the video to learn what it is).
Here’s a preview:
RSS Readers that don’t see this video click here to watch.
I hope you can join us.
Do You Have The Guts to be Great?
Today, the Washington Capitals fired their coach, Bruce Boudreau. The fastest coach to win 200 games is fired with 201 wins.
My first reaction was a little shock. How could you fire a coach who turned the team around, and has one of the greatest win/loss percentages in history?
Then I realized that’s the cost to be great. The management of the Capitals isn’t satisfied with the best record in the regular season. Success is winning The Stanley Cup. As good as Boudreau has been it’s become clear he wasn’t the guy who would get the job done.
Before you write this post off as the musings of a Capitals fan; ask yourself do you have the discipline (and guts) to make these types of decisions? Look around your office, look at your payroll statements. Is every employee on your team up to winning your version of The Stanley Cup.
I’ve lost count of the number of salespeople, managers or long-term employees who are there for no other reason than they’re nice, loyal people who care.
Don’t get me wrong, I’m not saying fire those people. I’m saying that you’re making a choice – and you need to accept the consequences. Bruce Boudreau is a great guy, a lot of fun, extremely loyal, and he’s quite a good coach. The Capitals made the tough decision that he wasn’t enough – kudos to them for having the guts.
Happy Thanksgiving – Enjoy
It’s that time of year again. Have a great Thanksgiving and make sure you take some time to consider all of the great opportunities we have.
Here’s my tribute to Thanksgiving:
I love this time of year. We’ve got the 3-F’s: friends, family & football. There’s the wine, the turkey, the stuffing, the wine. It’s great fun.
And I have a tradition at this time of year that I would like to share with you. I often write about how the old paradigms of business, sales and marketing are letting businesses down. Well, today, I’m not going to get that deep. Today, I’d like to focus on one of the all-time promotion fiascoes, from one of my favorite shows.
The tradition: Watching The Turkey Drop from WKRP in Cincinnati. Have a great holiday everyone.
RSS Readers that don’t see a video below, click here to watch the video.
Changing Behavior
As we prepare for the holidays, thought naturally turns to what needs to happen to make 2012 better than 2011. Assuredly, executive will look at many actions, and create grand plans to improve those actions.
The danger is that the improvement focuses on changing behaviors above all else. Here’s my caution:
Trying to change behaviors without addressing
the systems, structures and strategies?
The key to improving behavior is to ensure that your systems, structures and strategies are aligned together and towards your aims. What’s great is that when those three areas are aligned, behavior and results take care of themselves.
Starbucks To Squeeze Juice Industry! Uhm, Really?
So, what do you think of Howard Schultz’s announcement that Starbuck will “reinvent [the juice] category in the same tonality that we reinvented the basic commodity of coffee?”
Apparently, he sees “a lot of white space.”
What?! Really?! Howard, please, what’s happened to you?
That sounds like Internet CEOs saying they see lots of synergy.
It sounds to me like you’re bored again. I realize that owning the Seattle Supersonics didn’t work out. I guess merely rebuilding Starbucks isn’t interesting enough for you.
How I miss the old Howard Schultz. The one who focused on his core business. The one who, when coming back to run Starbucks, talked about the importance of staying focused and railed against how Starbucks forgot what they really were.
In my experience when a company like Starbucks starts acquiring companies like Evolution Fresh (no offense Evolution) and starts speaking publicly of “white space” what they are really saying is:
We’ve lost our ability to create real value for our customers. We’ve become commoditized. In an attempt to fool our investors and protect our stock price we’re going to transform another industry.
I don’t buy it. What do you think?
Insights When Hiring Salespeople
I’ve been interviewing salespeople for clients lately, and I have to tell you I’m disappointed.
The good news is that companies are engaged in growth, and I’m seeing more of them understand the need to bring on quality salespeople to support the effort. The bad news is that it doesn’t appear most salespeople are ready to take advantage of this.
So I share these insights with those who are hiring, and those sales candidates who are looking for a new place to call home.
What’s interesting is the entire challenge rests in the one part of the hiring process sales people should absolutely thrive – the interview!
Hiring managers should be aware that the salesperson is at their best in the interview. Here’s what that means:
- If the salesperson sounds like every other salesperson in an interview – it’s probably because they are. If they can’t differentiate themselves there, they’ll struggle differentiating your product/service when they’re with a customer.
- If a salesperson doesn’t ask penetrating questions that both takes the conversation deeper and allows you and them to understand your issues better, they’re don’t going to ask penetrating questions to enable you to Move Beyond Price when they’re with a customer.
- If a salesperson doesn’t share with you real mistakes they’ve made, how they’ve learned from them, and how they will apply those lessons in the future – they are lying, have no self awareness or both.
- If a salesperson doesn’t show tremendous curiosity in the interview, they won’t in the job.
- If a salesperson isn’t completely prepared at any stage of the interview process, they won’t prepare once they’re hired. They should understand your business (or have very good questions to understand your business), have a solid idea of the results you’re looking for and be able to discuss barriers from the beginning. If they can’t it’s a good bet they’ll peddle your offering, just like they peddle their services.
Feel free to share any insights you’ve gained in assessing salespeople in the comments below. By the way, I recently updated an article on avoiding the 10 most common mistakes when hiring salespeople.
To Make More Sales: Solve A Big Problem
I don’t know who first said, “Go big or go home.” I’ve been thinking about that a lot lately. I’m often surprised by how small some business executives think about their business and their products or services. Rather than addressing the big problems that their customers and clients face, they waste their time trying to solve the small problems.
The result of this is a failure to stand out or justify the value that a seller brings to the table.
One of the net results of the deep recession and recovery cycle we are going though (yes, we are going through a recovery cycle) is that discretionary budgets have been virtually eliminated. Today, as a seller, you are either indispensable or your are a commodity. If you’re a commodity your business model better focus on delivering your products and services faster, better and cheaper than your competition.
The only long-term strategy to support strong, growing margins is to be indispensable. And the only way to be indispensable is to solve big problems.
This small problem trap is so unfortunate, because most companies are 80% of the way to addressing big problems. For some reason, most businesses fail to go the last 10 – 20% to be able to address the big problems. They seem afraid to dig deeper and understand their customers at a deeper level. They wait for customers to talk about their problems, rather than provoking them. It seems as though business executives are simply afraid to make the big promise – and then work like hell to deliver.
Going forward, it’s the companies that take that last step (or two) and position themselves to the big problems that will earn the lions share of profit. Be one of them.
Steve Jobs’ Legacy
As I’ve been watching and reading over all of the news stories and tributes to Steve Jobs, I notice that they’re missing one of the biggest insights to Jobs’ success.
While every story makes mention of Jobs returning, very few of them acknowledge just how close to death Apple was when he returned. What of the most important lessons I learned in business cam from watching Jobs turn around the company.
How did Jobs do it? He cut to the core. He took 22 products that were in Apple’s go-to-market pipeline and cut them down to 4, 2 consumer products and 2 business products. He knew this would result in Apple becoming (temporarily) a smaller company. He told Wall Street, customers and employees:
“Apple will get bigger, first by getting smaller. We will cut to our core, we will focus on our core, and we will forever grow from our core.”
For nearly 15 years, Apple did just that and the result was transforming a company worth $5 billion (and nearly bankrupt) to the most valuable company in the world, valued at $350 billion. A 70x result!
To me, Steve Jobs will also stand for the power of three critical elements:
- Focus
- Simplicity
- Belief
Thanks Steve.
Successfully Hiring In Business Development
Potentially good news for the economy. A recent article in the Wall Street Journal, reports that “More small businesses plan to hire in the next six months than those that won’t, with demand strongest in sales and marketing, a new survey shows.” Interestingly, 48% of those planning to hire are focusing on sales and marketing jobs.
My hope is that these businesses hiring realize that people are one (critical) part of a successful growth effort. My fear is that these businesses will overestimate the importance of the people decision and underestimate the other components of success; and will fail to achieve the growth they desire. My experience would indicate the latter is the most probably outcome.
I’ve said it before, the key to successful, sustainable growth is the implementation of an effective system that supports people. Like it, or not, the system comes before the people. Hiring someone before the system is in place is a recipe for disaster.
There are two grave mistakes that small and mid-market companies (SME) make time and again when hiring sales and marketing people. If you’re one of those companies that is looking to hire in the next six months I implore you to avoid these common mistakes.
Hiring Someone to “Develop The System”
This mistake is especially common when the founder or the CEO is not the sales and marketing expert. It’s such a dangerous mistake because it seems logical and just makes a lot of sense. It was Bill Parcels who said, “If you want me to cook the dinner, you’ve got to let me shop for the groceries.” Let’s hire someone who has the experience and let them build the system.
So the business goes out, hires someone who sold for (fill in name of major company). Six months later the company is still dealing with the same basic issues they were dealing with before. “It’s okay,” the CEO rationalizes, “these things take time.” One year later, the only thing that has measurably changed is that the SME has higher sales costs. They’re still commoditzed, still fighting for share and price, and still wondering why salespeople just don’t work.
The reason that this fails is that hiring someone to develop and implement a system is a very different hire than a hire to lead, which in turn is a very different hire than one to sell. Just because someone has worked in an effective sales or marketing system does not mean they have the ability to build one.
Confusing Delegation with Abdication
One of the things I’ve learned working with SME’s is that many heads of these companies don’t enjoy the sales or marketing function. They would prefer to do the work or to serve clients than to deal with the insanity called sales and marketing. When they hire on the sales and marketing side, they use “delegation” as an excuse to abdicate.
I’ve got news for the owners/CEOs of 98% of companies with less than $100 million. Like it or not, you are the chief sales officer and the chief marketing officer. You can hire someone to execute. You can even hire someone to lead the effort. But, until the company is truly and totally independent of you, you are the chief there. You must be invested and involved in the process. While this approach can appear to be more painful, it will save you tremendous aggravation in the long run.
Fast Growth Insights
I’m excited to share a new initiative with you. Starting Monday, September 26, we will be introducing Your Weekly Fast Growth Tips for those looking for insights to fast growth. While, we can’t give you a roadmap to fast business growth success – we can provide some markers.
Our weekly tips complement this blog, and in no way replace it. The insights we share there will be different than the content you’ll get on this blog. With Weekly Tips we’ll be focusing on specific areas that are important to your go-to-market efforts. Typically, we’ll spend 6 – 8 weeks on a subject. Here are some of the areas we’ll be focusing on:
- Successful Lead Generation
- Making Marketing Work
- Shortening The Sales Cycle
- Building Effective Sales Processes
- Building a High Performing, Quota Busting Sales Team
And much more.
Every week, you’ll get a short (100- 200 words) insight to making your efforts more effective.
If you’d like to get your weekly tip, just click here.
Has Your Sales Team Made These Adjustments?
The news today is dominated by the challenges and tribulations of our economy. Slow growth, debt ceiling debate, record unemployment, consumers slashing spending and so on. Then you read this headline:
What can small and mid-market B2B companies learn from this? It’s easy to dismiss Apple’s success to the fact that they’re, well, Apple. That would be a mistake. While CEO after CEO has used the recession as an excuse for failed initiatives, Apple just grows.
While the headlines are all about the problems and pitfalls of the economy; quietly, select small and mid-market companies continue to grow, exploit their competitive advantage and drive increased profits and company equity value.
Make The Adjustment
I want to share five critical adjustments that the best small, mid-market B2B sales organizations are making to bypass the economy, take control of their destiny and shorten the sales cycle.
I don’t know about y ou, but I’ve gotten sick and tired of the confusion, frustration and wasted effort inherent in the sales process. As a salesperson and business owner, I simply got tired of living on “the treadmill of life.” Every day I felt like I needed to run faster and faster, just to keep up.
What’s exciting is I’ve learned how to get off that treadmill. How to make the reward I and my company received greater than the sales efforts I put forth.
In this article, I’m going to share with you five, extraordinarily simple actions you can take immediately that will begin to get your company off that treadmill. By embracing these simple secrets will allow you to get off the treadmill, bypass the recession and see your sale and profits grow.
Marketing Defense vs. Attack
There is a tremendous difference in strategies, tactics and the overall approach used by companies defending a market position versus those that are attacking a market.
Very few small and mid-market (SME) companies are in a position to defend a market position. Yet, I constantly see SME’s implement sales and marketing programs designed to defend, when they need to be attacking.
Inherently, the underlying position for a firm defending a market is safety – they’re the safe choice. Think about IBM in its heyday. The battle cry was, “No one ever got fired buying from IBM.” This is the default position for large firms. While they make a bunch of promises, firms like GE Finance, Pacific Life, Wells Fargo, UPS, etc. all promise that if you hire them you won’t look stupid.
When you’re defending a market position popular marketing terms like brand, awareness and top of mind are key. This is large companies advertise during football games. By simply being there, they reaffirming their position. This is true of most traditional marketing approaches.
Implementing “defense tactics” when you are not in a position to defend, not only fails to drive growth, it puts additional pressure on price and margins. Small and mid-maket B2B companies must use attack strategies. Their message must provoke the customer to become aware of issues they’re not currently paying attention to. It must demonstrate that the cost of the problem is far greater than the risk and effort required to solve the problem, and that the status quo is no longer viable. It must open the customer up to take new approaches.
Here are three key attributes about this type of marketing that are far different from traditional marketing:
- The message is about the problem and is anchored in the customers world. At ABC Company we do this, that and the other thing is out.
- The message shares knowledge rather than protects it. Read your next ad, your next marketing piece or prospect letter and ask yourself, if you were the reader, how would you be better off for just having viewed it. If the prospect needs to contact you to gain any real value, it’s not going to work.
- It must be consistent. One message, one email, one paper doesn’t cut it. The effort builds over time.
In my experience, applying these three rules will get you well on your way to growing your markets and expanding your margins. If you have any other rules that work – I’d love to know about them.
-
Resources
Doug's Washington Business Journal Columns- Intelligent Growth Articles
Third Wave Selling Blog
Products to Grow
