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Sales & Marketing 101 - For Entrepreneurs

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    Being an entrepreneur in this economic climate can be a bit nerve wracking, can’t it? 2009 seems full of so much risk on its own, businesses are becoming even more risk adverse than usual to compensate. Many companies are pulling back on innovations and entrepreneurial start-ups are being delayed as a way to batten down the hatches. Consider this though… Consumers are shifting to cheaper products and services if there’s no compelling reason to buy well-known brands. And so redundant products, without strong differentiators, are failing. Differentiation is more important than ever. When we come out of this recession, in most sectors there will be significantly less competition than when we entered it. This climate creates a lot of opportunity for brands that are willing to try something new. The ones that offer something truly unique have the potential to not only survive, but thrive.

    With that in mind, in this session, we’ll talk about how to determine your real points of differentiation. How to identify and prioritize your targeted prospect groups. And how to create the nuts and bolts of a strong sales and marketing strategy designed to ensure you survive the ups and down of the economy.

    The foundation of any good sales and marketing strategy begins with brand differentiation. It is the key to long-term marketing success. Without it, the chances that your company will survive are dramatically diminished. When considering the differentiator for your product or service, be sure you can answer “Yes” to these three questions: Is it valuable to customers? Is it something that I can uniquely claim among my fellow competitors? Do customers see it as an important point of distinction? Let’s face, we are much too close to our business to determine this in isolation. People more objective than we are should be talking to our customers vs. our making assumptions as to what they find valuable, unique and important. And if we ask them ourselves, we will hear what we want to. Money invested in this kind of third party market research is crucial.

    Let’s say, for fun, that you’re selling a product like cereal in the cartoon pictured. This cereal comes with a pop out Swiss army knife – which this business owner clearly sees as its differentiator. Now let’s apply our three questions. Is it valuable to customers? It’s doubtful that customers would find it value in giant metal tools popping out of their cereal box Is it something I can uniquely claim among my fellow competitors? Let’s hope so, but this alone doesn’t make a differentiator. Do customers see it as an important point of distinction? It’s a distinction, but not an important one to consumers. It’s not relevant to the key product attributes they are seeking in a good cereal. Did you know that 90% of companies we work with cite “quality products” and “good customer service” as their key differentiators. Thinking about our three key questions, where are they falling short? So what does a strong differentiator look like. Take Express Scripts - the Fortune 150 Pharmacy Benefit Management Company that we work with. They help large corporations more efficiently manage their healthcare benefits. Their differentiator is: a proven, quantifiable reduction in healthcare costs that’s more significant than their competitors. It’s valuable. It’s unique. And it’s important to their customers.

    Once you’ve determined how you’ll differentiate your company, the next step is to segment your targeted prospect groups and prioritize those segments . Too many start-ups fail by trying the gunshot approach to marketing. It’s very costly and has a lot of waste (marketing dollars thrown away on people who are not likely to buy). You can segment your prospect groups based on: Their demographics , Where they live , How likely they are to buy , The average length of the sales cycle , Or how price sensitive they are – how likely they are to price shop no matter how great the experience was with your product/service You might even consider factors such as: Their likelihood to be a repeat customer , or How likely they are to be a strong influencer (having the ability to influence groups of buyers, but not buying directly themselves. Client example: Sign company : contractors (repeat business and not terribly price conscious – more focused on delivery time which is a competitive advantage for our client) property managers (repeat business but price sensitive) architects (not buyers, but influencers with the potential to drive repeat business) mom and pops (single purchase).

    Now that you’ve determined your point of differentiation and prioritized your targeted prospect segments, let’s talk about the basics in developing your sales and marketing plan. I like to group the plan into several common strategic categories such as branding, sales, target marketing, PR, etc. We’ll talk just briefly about a few of these today. I’ve listed the more common challenges for each that new clients share with us. If you find you’re facing similar challenges, let’s talk over lunch. When most people think of branding, they imagine a company name, logo and tag. But branding is much more; it’s the promise you make to your customers through every communication channel you use. It’s your way of telling them what they can expect from you and how you’re different from the competition. It’s your company’s personality. When developing your brand strategy, consider what the “voice” of your company will be. Is it funny or serious, modern or conservative? You’ll see all of our RedRover marketing messaging delivered from Rover who is known for using excessive dog commands and puns. He explains that sales don’t just walk through the proverbial doggy door, and speaks of the need to get your sales team to SPEAK the right language and to get more BITE out of your marketing. Our marketing voice says that we’re down-to-earth, approachable, and while we don’t take ourselves too seriously, we are dog-gone serious about helping our customers increase sales. What’s your voice?

    f you’re a sales manager, it’s important to know the difference between a farmer and a hunter and ACCEPT that you will not turn one into the other. A farmer is….A hunter is… When recruiting, if you need a hunter, keep a careful eye out for the farmer wearing the mask of a hunter. How can you tell? Close your eyes. Mention 100% commission. Now open your eyes. Are they still in the room? A less dramatic way is to ask them to explain how they prospect today. Who are they calling on? Have them role play those sales calls? How many prospect calls are they making and what’s the lead source? Are they simply following up on leads that walk in the door or are they creating demand. So, how do you recruit a good hunter? Demonstrate the existing pipeline , projecting realistic sales potential. Outline why the sales target you’ve set is achievable. Help them understand what kind of sales support they’ll get by you and the team. Build a case for how they can make a good living. Note: That the worst decision a sales manager can make is…

    Here’s a sample sales cycle for a client of ours that sells employee benefits to large corps . When they came to us, they assumed they could close a sale in 6-9 mos. Upon further investigation, we learned their ave sales cycle was actually 18-24 mos. To prevent our client’s sales reps from the inefficiency of cold calling , we recommended they make initial contact with prospects by presenting at luncheons and conferences or participating in area networking events targeted toward their prospects – essentially turning cold calls into warm leads. Within one month of meeting a prospect at a networking event, the sales rep would work to get a lunch meeting booked. From there, they’d work to sell the prospect on a free trial of the product. When you account for the time to deploy the trial, get Board of Directors approval on purchasing the product for roll-out company-wide, and the time it takes the corporation to roll out a new benefit to all employees, they were looking at another year to year and half. For this prospect, we recommended that they target a prospect with a much shorter sales cycle, simultaneously with corporations. While the average annual revenue was projected to be much lower for this group, it allowed the company to generate short-term cash flow while waiting for larger accounts to flow in. So what might the sales cycle look like for your prospects? If you’re trying to sign a contract with a corporation to use your hotel for their regional employees visiting the corporate office throughout the year, you could be looking at a one-year or more sales cycle if these corporations typically enter into annual agreements. How long will negotiations take? Who all will be involved in the decision-making process?

    What’s a sales funnel? It’s a tool for determining how many prospect calls you need to make per week or month to reach a particular sales target. Take a look at the diagram on the screen. You can complete your funnel from the top down or the bottom up – depending upon which piece of information you have to start with. If you know the maximum number of prospect phone calls that you can make per week (in an attempt to get a meeting booked), then you can start at the top. Let’s say that you have the time to prepare and call 12 prospects per week , including doing the necessary research to make sure each one counts. Of those, let’s say that you’re typically able to reach 50% of those or 6. Of those 6 you reach, let’s say another 50% agree to meet with you , or 3 of them. Of those 3, let’s say that 2/3, or 2 of them, ask you to quote on some upcoming business. And of those 2, 1 gives you some business with average revenue of $5,000. So if you’re THIS sales rep, you’re able to produce $5K per week by making 12 calls . That’s $260K per year. If her sales manager set her goal at $350K per year , this sales rep will struggle, unless she can reach more people per day, improve her close ratio, or increase the average revenue from a sale. If you’re going to set her goal at that $350K level, you have to be able to show her how she can achieve it. Coaching to improve close ratio. Training on how to be more efficient with her day so that she can make more prospect calls each week. Training on how to upsell to increase revenue sale. Once you’ve determined your highest priority prospect groups, you’ll want to then ensure that you really understand the sales cycle for those groups. There’s a standard sales cycle for individual customers, pictured on the screen. You’ve probably seen something similar before if you’ve ever gone through formal sales training. But when you’re selling to other businesses (or B2B) – perhaps trying to sell blocks of rooms, convention groups or even catering jobs – then it pays to dig in to understand the unique sales cycle of the types of businesses you’re targeting. Why does it matter? If you don’t understand the steps and length of the sales cycle for your prospects, then you will struggle setting realistic sales targets.

    Whether you’re a sales rep or sales manager, one of the most effective tools in your sales arsenal is your Ideal Sales Day. Your Ideal Sales Day is what your perfect day looks like if everything goes just right. In your perfect day, how much time would you spend prospecting? Following up on business quoted? Tracking your selling efforts? And planning for the next day of selling? When you identify your ideal day, and start each day with the mindset that you WILL achieve that perfect day – you’ll achieve it more often than not. You’ll see in the sample ideal sales day on the screen, that there are specific goals for most of the planned activities. The idea is to track your performance against these activity goals each day to see how close you came. If prospecting is the task that always seems to fall to the bottom of the priority list, move it to the top. In the example shown , this sales rep should work to not let a single distraction get in his way until he’s completed one hour of prospect calls resulting in three new meetings landed. Starting your day with those kind of results inevitably fires you up for the rest of the day.

    If you’re a sales manager , it’s my experience that you’ll find greater success by coaching and leading by example vs. over-managing. Good sales people like to run their own show . People that love 100% commission , because they like having control of their own destiny, will walk if you try to manage their day-to-day activities. That doesn’t mean you should avoid getting involved if they are under-performing. Instead of beating them up time and time again in sales meeting, offer to ride along with them on sales calls for a day to see if you can uncover first hand where they’re struggling and how you can help. Or interview a few of their customers and prospects to see how they’re doing. My recommendation is to leave alone a sales rep who’s exceeding targets. When they fall a little short, get involved and offer support . When they fall really behind, get really involved – all hands on deck. I’ve telemarketed (cold calling to set up prospect meetings) right along with sales reps I’ve been coaching when their numbers fall short. It’s called underperformance management . A couple very broad tips for effectively coaching a sales team: Role play the sales pitch with your team every time you meet. You play the prospect, and have them go through a typical sales call with you. Throw objections their way and have them role play their response for the group. Try video role play for the greatest impact, where you video the mock sales call and show it back to them in your sales meeting. Have them critique themselves first; then ask their fellow reps to critique their pitch; and then you should critique it. I’ve found that the toughest skill to teach is listening and adapting. Your sales reps should be talking only 20% of a sales call, listening the rest of the time. How do they do that if their prospect is quiet? By asking high-impact open-ended questions ? High-impact means questions that uncover information that will be useful during the pitch. For example, what are the most important criteria you take into account when choosing a hotel like ours for your conference? What other hotels in town have you worked with? What well, when you worked with them, and what do you wish they’d done differently?

    When considering which mass media channel is appropriate for you, consider… How much competition (clutter) there is in the space vying for the attention of prospective customers. Reach and frequency (how many targeted consumers you’ll reach and how many times) – rule of thumb is that it takes 7 impressions to create an action if there’s interest. If you can’t afford enough frequency, make sure your offer is strong enough to generate instant trial. If budget is low, consider selecting a single channel and owning it – great frequency. The credibility of the publication in influencing YOUR targeted prospects. For example, The Memphis Flyer may not be the most credible source for promoting a fundraising campaign for LeBoneur, while Memphis Magazine is. Just because the advertising space is cheap, doesn’t mean it will drive consumers to act on your offer. If your budget is limited, you probably can’t afford to run brand advertising just for the sake of branding. Make it a secondary benefit to a targeted offer.

    Measurement Media training Preparing for a media call – email follow-up Determining what’s newsworthy Understanding the demands on reporters Understanding the risks How to get the most out of press releases – follow up How to make a story pitch Identifying media outlets that appeal to your targeted prospects Saying too much Media competition

    Signage is often used for guerilla advertising. This is a more expensive treatment. Imagine a huge label that looks like a cigar band wrapped around a telephone pole. It would transform a mundane streetscape into a billboard. In my opinion, the key to guerilla advertising is that it forces people to do a little extra thinking, and then they are proud of themselves for figuring it out.

    Guerilla tactics like this may be produced only once but leverage in the media and award shows for additional impact and attention.

    This is the business card for a painting company that takes pride in it’s “masking.” Its business card requires that you “unmask” it.

    This business card is for a recycling company. The cards are produced by stamping waste paper. No two business cards are alike and certainly none are forgotten.

    This is intrusive advertising. You’re minding your own business, putting your shoes in the bin for airport security and what do you see?

    This is an example of stunt marketing. The Mona Lisa image is replicated out of coffee is varying degrees of light and dark. It’s only done once, but the media impact and word-of-mouth multiply that impression astronomically.

    Okay. We’ve gone from weapon wielding cereal boxes to guerilla marketers in the mist in 45 minutes. I bet you didn’t expect either of those on the agenda. Naturally, we’ve just scratched the surface of what it takes to successfully build and market a strong, clearly differentiated brand. My hope, though, is that as we wrap up our time together, you’re feeling energized about the research and commitment needed to formulate your own sales and marketing strategy – a strategy that will ensure you can ride the wave of any recession and come out better for it.

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    Sales & Marketing 101 - For Entrepreneurs - Presentation Transcript

    1. •  What to Say - Determining Your Real Points of Differentiation •  Who to Say It To - Identifying and Prioritizing Targeted Prospects •  How to Deliver It - Developing Your Sales & Marketing Plan –  Branding, Sales, Target Marketing, Advertising, PR, Guerilla Marketing
    2. •  The one thing you offer that is uniquely valuable to customers AND that the competition doesn’t have is your point of differentiation. •  Differentiation is the key to long-term marketing success. It separates you from the middle of the pack and causes customers to choose you first, last, and every time in between. •  To determine your real points of differentiation, you need to step back. Examine your product or service through the eyes of the customer. You are too close to your business to determine this in isolation. •  When considering the differentiators for your product or service, be sure you can answer “yes” to these three questions: •  Is it valuable to customers? •  Is it something that I can uniquely claim among my fellow competitors? •  Do customers see it as an important point of distinction?
    3. •  To avoid waste in your marketing Sample Manufacturing Co. - spend, work to segment your Prospect Segmentation and target audiences and prioritize Prioritization based on: –  Demographics/Geography –  Likelihood to buy Mom and pop retailers –  Length of sales cycle –  Average annual revenue –  Price sensitivity Architects –  Likelihood to be a repeat customer –  Likelihood to refer additional business Property managers –  Likelihood to be a strong influencer •  It’s generally more efficient to attack a single segment or two Contractors at a time – generating significant reach and frequency of message – than a shotgun approach.
    4. •  Your brand is a promise to your customer; it tells them what they can expect from you and how you are different than the competition. •  The foundation of your brand is your company name, logo and other visual elements that identify your company. •  Integrate your brand into every aspect of your business, from how you answer the phones to your email signature. •  Create a “voice” for your business. Is it funny or serious, modern or conservative? •  Challenges? –  Internal/External consistency –  Choosing based on URL availability –  Being too clever –  Branding based on personal vs. consumer preferences –  Skipping market research
    5. 5 branding mistakes to avoid* •  Equating branding with communications. Messaging and advertising are not your brand, business strategy and people are. •  Branding on price. Don't do it. Price-based branding is a race to the bottom--and someone will always beat you there. •  Changing your promise. While your brand promise should be relevant and up-to-date, making a wholesale change will only confuse your market. •  Overpromising. The least expensive way to brand yourself is to have your customers do it for you. How do you get them to become evangelists? By underpromising and overdelivering. •  Me-too branding. Don't try to be like other companies: Be yourself. Asubsegment of the market will like what you do better than what the market leader does. Carve out your own groove. * Adapted from Lynne Parker and entrepreneur.com 8
    6. •  For products or services requiring one-to-one relationship building as part of the sales cycle, this can be the most challenging of all of the plan components. Your sales strategy should outline the structure of your sales team, how you will compensate them, how they will prospect, what your prospect touch-point plan will look like. •  Challenges? –  Understanding farmers vs. hunters –  Setting realistic sales targets –  Ensuring enough prospecting activity occurs –  Sales management with no sales manager in place –  Base pay vs. variable compensation –  Recruiting seasoned sales people into a start-up or unproven sales position –  Prospect tracking –  Establishing a claims list
    7. •  Farmers ≠ hunters – Know the difference and the role each will play on your sales team. •  Farmers are great at cultivating existing relationships – offering exceptional service to your current customers and growing the business you get from those customers organically. •  Hunters enjoy the chase – chasing after new business that is. They look forward to prospecting and the challenges it brings. They typically thrive on 100% commission with no cap, as they like being in control of their own financial destinies and have confidence in their ability to bring in new business. Hunters are generally not great with details and follow through after the initial sale has been made.
    8. •  To set realistic sales targets, take these factors into consideration: •  Past sales trends including year-over-year growth and seasonality •  Retention levels •  Size of your market •  Size and experience level of your sales team •  Depth and interest level of your prospect database •  The length of the sales cycle •  What a reasonable close ratio is •  The average length of a sales call – max # of sales calls per day •  The role influencers and strategic alliances can play •  Your internal capacity to handle sales growth from an operational/ customer service/financial risk perspective •  Sales growth of competing companies •  How saturated the market is with competitors •  Work to create a predictable “sales funnel.”
    9. •  Sample Sales Funnel
    10. •  Each member of your sales team should determine his or her own individualized Ideal Sales Day where office time is minimized, current customer time is appropriate for the business generated and potential for incremental business, and plenty of time is allocated for prospecting each day. Sample day: Time Slot Activity Goal 8:00 - 9:00 am Call new prospects. Talk with 6. Book meetings with 3. 9:00 - 10:00 am Research new prospects. Complete for new prospects booked today. 10:00 - 10:30 am Follow up on pending sales. Close at least 1. 10:30 - 2:30 pm Make in-person sales calls and take Get chance to quote on 1 job lunch. minimum. 2:30 - 3:00 pm Track daily sales activities. NA 3:00- 3:30 pm Send follow-up correspondence on NA day's activities. 3:30 - 4:30 pm Conduct customer satisfaction Generate at least 1 referral and checks and referral requests. follow up on it. 4:30 - 5:00 pm Administrative work NA
    11. •  General tips for effective sales coaching: –  Accept that farmers will never be hunters. –  Everyone needs sales coaching. –  Most everyone is in sales. –  Routine sales shadowing pays off. –  Ensure your team can seamlessly deliver your elevator statement. –  Role play – in person and video. –  The toughest skills you’ll teach are listening and adapting – use 80/20 rule. –  Practice overcoming specific objections. –  Measurement & accountability are key.
    12. Everyone needs a power hour Everyone in your organization needs a power hour, one uninterrupted hour each day to focus on important tasks that otherwise get pushed aside. For example: •  Sales – call and book meetings •  Administration – paperwork or planning •  Technical – system checks, backing up 16
    13. •  Target marketing – in its broadest sense – means delivering the right message to the right audience at the right time. More practically, target marketing is often defined specifically as direct marketing (e.g., physical mailers distributed to a specific prospect segment) or email marketing (with customized messages for various targeted segments). •  Challenges? –  “Typical” direct mail response rates – strength of offer and brand awareness –  Testing – packaging, creative, messaging, offers (hot cell testing) –  Expectations for single mailer not integrated into bigger plan –  Postal saturation vs. household specific lists –  Demographically appending an existing database –  Spam regulations; renting and “borrowing” email lists –  “Typical” click through rates –  Choosing a good email marketing program – triggers, design flexibility, surveys, integration with sales tracking software
    14. •  Within the industry, advertising usually refers to marketing via mass media channels like TV, radio, billboard, print, or Web. •  Challenges? –  Advertising in hopes of driving in sales when traditional outbound one-to-one relationship building is needed –  Brand awareness advertising on a limited budget –  Understanding what it takes to generate enough reach and frequency –  Determining which channel is most appropriate for your message and audience – avoiding personal preference
    15. •  Public relations/media relations is a strategy used to generate “earned media.” Earned media is favorable publicity gained through promotional efforts other than advertising. How can you leverage the power of the media to do more than generate just a positive article – to generate actual business? •  Challenges? –  Lack of call prep – saying too much, not using sound bytes, not having a central message identified –  Not understanding what’s newsworthy –  Not understanding the demands on reporters –  Not understanding the inherent risks of PR –  Not appropriately targeting the right pubs or reporters –  Media competition
    16. •  Guerilla marketing means getting people’s attention in an unconventional way. It’s about maximizing your creativity instead of draining your bank account. It’s often considered low budget marketing – shoestring marketing – but that’s not always the case. •  By far, the most common guerilla marketing tactic is buzz marketing where the goal is to generate excitement and encourage people to talk about you so they spread your message via word-of-mouth or virally. •  Other common forms of guerilla marketing: stunt marketing, experiential marketing, ambient marketing, stealth marketing, viral marketing, mobile and proximity marketing. •  Challenges? –  Low cost often means resource intensive –  Creating bad buzz
    17. Creative Signage 23
    18. Creative Signage 24
    19. Creative Business Cards 25
    20. Creative Business Cards 26
    21. Intrusive Marketing 27
    22. Stunt Marketing 28
    23. Questions •  What are you thinking? 29
    24. •  RedRover Company is a sales, marketing and communications consulting firm with offices in Memphis and Nashville. •  Our focus is on helping sales teams produce more – from teaching sales managers to more effectively coach and lead their teams, to analyzing sales structure and incentive compensation plans, to conducting a thorough assessment of sales rep effectiveness resulting in customized one-on-one sales coaching. •  Other services offered include: brand positioning, target marketing, customer segmentation, promotional marketing, email marketing, market research and communications support. Check out “The Complete Idiot’s Guide to Guerilla Marketing” (amazon.com) with ghost writing by RedRover.
    25. A few of the companies we’ve had the privilege of partnering with:

    + Lori TurnerLori Turner, 1 month ago

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