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Sales Revenue Streams

To say the least, modern day sales revenues routinely range in the billions of dollars.  Making a few million, has become commonplace, even for small one man operations.  So how did we get to making such a vast amount of wealth, in just the last few years?  The answer has it’s foundation in technology.  The advancement of computer technology has made business, BIG BUSINESS.

We can deliver a sales “experience” to the customer, unlike anything in our world history.  One small company, can seamlessly and effortlessly, integrate their business fundamentals with the largest multi-billion dollar companies on the planet.  Take Apple for example.  They have an entire developer network dedicated to assisting the individual with the development of any app/software on the iOS platform.  Never, in the history of business, has any powerhouse leader ever embraced the small entrepreneur with such dedication.  Just imagine if Andrew Carnegie, steel magnate, had established a devoted business division to help pave the way for new steel products developed by small, often one man, entrepreneurs.  The world we live in today would be a much better place, and Carnegie would have destroyed his competition because of the devout customer loyalty.

When we look at history, and see what we could have had, this should have you asking, “What can I do?”  To say the least, there are more business opportunities today, then in any time in history.  The better news is that it’s catching on, and growing at an exponential pace.  Gone are the days of industry leaders simply focusing on destroying their competition.  This new found cooperation is focused on taking new and innovative ideas, often times born from the ideas of small entrepreneurs, and turning them into the next billion dollar product.

To say the least, past business models had their limitations, thankfully those days are gone, and today’s modern business has a wealth of revenue streams to manifest greater profits, and growth.  Here’s just a few of the obvious:

  1. Website integration
  2. Automated reordering
  3. Technical knowledgebase
  4. Apps for that
  5. Social networks
  6. Virtual networking
  7. Video tutorials
  8. Global communication

In the past, businesses had primarily, mail, telephone, television, radio and print publications as their primary means of revenue generation.  Today, as you can see from the list above, we have all this and much much more.  A small town donut shop has instant global communication if they plug their business into the web.  Not only can they simply broadcast, “We’re Open” for business, but they can also use that same technology to actually produce sales.  Place your donut order online, through an app or website, and pick up your order a few minutes later, or schedule it for the next morning.  No waiting, no worries, and the technology takes the customer payment, and delivers the funds right to your bank account.

Let’s put together a scenario that anyone can accomplish with any size business.  Let’s say you’re a large manufacturer of air conditioning compressors.  You have a variety of models, you have a sales staff, and you run that sales staff as all companies do, by using people to maintain customer accounts.  The people involved are your sales staff, your billing, your shipping and your marketing.  Because of the policies you have in place, everything moves in a smooth rhythm and flow.  A customer calls in to your sales staff, asks a few technical questions, places an order, pays for the product, and waits for their new a/c compressor to arrive.  This is all well and good, but this is how all your competition runs their businesses as well.  Is this all that can be done?  Of course not.

Taking this same scenario, now the customer opens your app on their iPhone, enters the model number of the competitor’s broken a/c compressor, which automatically matches the competitor’s model with your product replacement, and they push the “Buy Now” button in the app.  The customer credit card info, is stored with your merchant, and you generate a sale in the blink of an eye.  Shipping receives the order, with proper invoicing verifying payment, and they ship.  You generate a sale, in a fraction of the time it would normally take, and the experience your customer has with your company, is overwhelmingly positive.  The customer’s happy, your happy, and you’ve mastered another revenue stream.

Now you can replace industrial air compressors in the scenario above, with literally any product or service.  Often times, services require no interaction by any personnel, and you make money.  Now that’s the American dream!

So how are you maximizing revenues?  Do you reach out to your customers, or do you cling to the antiquated business models of the past?  If you’re not capitalizing on all revenue streams, you’re leaving 40-60% of your revenues on the table.  That’s 40-60% that your competition can snatch up, and they’re happy to do so.  You may as well hand your business over to your competitors if you’re simply going to ignore the options currently available to you.

So how effective are your sales?  Do you capitalize on all revenue streams, or do you make excuses?  When I look around at how most companies run their business, I have to scratch my head and ask, “Do you hate money?”

Next week, we’re going to look at a few salesman techniques that are guaranteed to deliver higher sales from every order.

Until next time,
Tom Heibel
423-342-6300

 

Leads, Leads, Leads

In sales, leads are everything.  It’s not enough to beat a path to your customer’s door, you need to walk that customer down the path.  How are you going to bring them to the closing table?  To say the least, the first thing you need are good leads.  In most companies, the leads you need are already in the customer database.  Past customers that have been orphaned by previous salesman can count into the thousands.  These are some of your best opportunities, and the best part, the customer is either for you, or against you.  There’s no need to convince them to buy, because they either like you, or they don’t.  They’ll have a very clear opinion about the company, and they’ll tell you right upfront.  This is good, because you don’t have to waste time with angry or disgruntled customers.  You can simply focus on the customers that like your company, and let the marketing department try to win the upset customers over.

Here’s a good point to maximize your revenue potential.  Is marketing running your company, or is sales?  To say the least, most companies put marketing well above sales, and that’s just wrong!  The hierarchy of any company goes in this order:

Sales
Inventory
Management
Everyone Else

If you’re not following this structure, you’re failing.  For some reason, many companies place marketing on a high plain and never consider that marketing is a very tiny percentage of their company.  It’s your sales action plan that brings in revenues, not marketing.  Marketing is simply brand awareness, and an introduction to your products.  It’s what you do with the customer that makes your revenues.

The two words Steve Jobs hated the most, “branding” and “marketing”.  Products aren’t sold because of their company logo, or their funny commercials, they’re sold because of the experience the customer has with your company.  If it’s a good experience, you can have a loyal customer for life.  If it’s a bad experience, then you have an uphill battle to win them back.  These uphill battles are the responsibility of your marketing personnel.

Of course, establishing new customer relations is the responsibility of your marketing department, but in many companies, it’s the responsibility of the salesman.  Unfortunately, this is a waste of a salesman’s time and effort, but it just comes with the territory.  While you want your salesman to be selling, many companies don’t see the need for both marketing and sales.  They just lump it all together.

Take a car dealership for example.  Once a new salesman comes on-board, and proves they can sell, the marketing personnel, usually the ladies in the office, should be sending out postcards, with the salesman’s name on it, to encourage the customer to make contact with the salesman.  The salesman should not be doing anything except taking care of customers that walk through the door, and setting appointments with current and new customers.  Having the salesman do a lot of unnecessary work when you’re paying marketing personnel, is a recipe for revenue loss.  Why generate 60% of your revenues, when you can have 100%.

All this brings me to where you can get leads.  Your marketing department should be looking for leads from compiled government records, credit repositories, and data mining companies.

For example, if you’re selling cars, your State has vehicle records that you can buy.  You can even get records on the types of cars that person has owned in the past.  If they’re brand loyal, you can designate this when you purchase your list.  If you’re a Chevy dealer, just say, “I only want a list of Chevy owners.”  Now if your State doesn’t sell them, there’s sure to be a private company that will.  Data mining, the process of collecting personal data for sale, is a multi-billion dollar industry, and they make their money selling information.  There’s no limit to what you can buy in these lists.  You can get all the basics, and even request personal demographics such as income, car purchase history, number of children, race, religion and more.

These same lists can be purchased for any industry.  It doesn’t matter if you’re selling airplanes or zebras.  If you want to know if someone owns a zoo for your pet zebra, you can buy a list for that.  A lead list is as synonymous as an iPhone app.  If you need one, there’s a list for that.

Let’s say I wanted to start selling bird feeders online.  I’m a one man business, with a small wood shop and I can make some very cool looking bird feeders.  So I start selling my bird feeders on Craigslist, eBay, and Etsy, but I also want them to be in local nurseries.  Local crafts are always a good seller and good for the local economy.  Of course, I could simply look up the local nurseries in town, but what about homeowners that fit my customer demographics.  If elderly white women, that own a home, are my popular buyer, than that’s the list I buy.  Since I have a product that people aren’t going to buy very often, customer’s typically don’t need six bird feeders, I’ll need to cast a wide net.  Of course, mailing postcards to renters and young men still living with Mom and Dad, is never going to pay off, so I make sure to buy a list that fits my demographics.

Yes, you can buy lists of people from a multitude of demographic data.  You can drill into this data and pick out just what you want.  Want to know who owns a Mercedes? There’s a list for that.  Need widowed, white men that own a home?  There’s a list for that.  Want to promote your automotive service department and you want car owners that drive older cars?  There’s a list for that.  Do you sell injection molding parts for industry?  There’s a list for that.  Want to sell crucifixes to Catholics?  There’s a list for that.

To say the least, marketers have it easy these days.  They can buy lists and get a company running and profitable in just a few days, instead of years.  It’s not difficult at all, and data mining companies are anxious to sell you the data.  Here’s a few:

Acxiom
Experian
ThomasNet
GlobalSources

These are just a handful.  There’s many many more and you can easily cross reference the data to verify you have good leads.  Buy a list from Experian, and verify it with corroborating data from GlobalSources.

Next week, let’s take a look at revenue streams and how to generate 100% of your revenue potential, instead of the 40-60% you’re producing now.

Until next week, thank you for reading!
Tom Heibel
High End Sales

Sales vs Marketing – Are They The Same?

To say the least, the world of sales has never changed more dramatically than it has in the last 15 years.  Just 20 years ago, most people had never heard of the internet, and today, if you don’t have the mad skills to make the internet work for you, you’re going to fail.  You might be intimidated by technology, but you have no choice except to master it if you’re striving for successful sales.  The internet is a great place for both marketing and sales.  So where does marketing fit into all of this?  Let’s take a look at both, and make a clear distinction.  While they have overlapping roles and goals, they are very different.  It’s these subtle differences that you must be aware of to make your career a success.

Marketing:  the action or business of promoting and selling products or services, including market research and advertising.
Sales:  the exchange of a commodity for money; the action of selling something.

Do you see how similar these are, and the very subtle differences?  So subtle, you might ask, “What’s the difference?”

Marketing is all about brand awareness, and it is actually subordinate to sales.  This is the single most important part of this post that you must understand to make your business successful.  Marketing supports sales, not the other way around.  This hierarchy is clearly one of the greatest mistakes any business owner can make, and here’s why.

While you can read endless articles about, “How to run a successful business.”, the reality is, there are only two types of businesses.  Those that “hope sales happen“, and those that “make sales happen“.  Yes!  It is that black and white.  What does your business have in place to make sales happen?  If you don’t have a plan, then you’re going to be out of business in no time.  This is why so many businesses fail right from the word go.  Owners think they have a good idea, but they fail to establish a thorough sales action plan.  Simple questions like, how will the customer reach us?  Should we setup a website?  If so, what do we want it to do for us?  What are we going to “do” to “make” that sale happen?  Sales take action (see definition above), and if you don’t have a proper action plan, you’re not going to make it happen.

Marketing, on the other hand, is a part of the sales process.  It’s the method by which your company injects the customer into your sales process.  Marketing is something the business owner should be concerned with, and not something for you, the salesman, to worry about.  With that said, it’s required that in the process of marketing, you guide customers to your sales process.  Offering a “call to action” is the best way to get the sales process rolling.  Don’t just place an advertisement that says, “Here We Are, We’re The Best”.  Make sure your ad encourages your customers to make contact with your sales action plan.  Scan this QR code for a free “beer”, “t-shirt”, “coffee mug”, or some other giveaway.  Get the customer excited about your company, and let your pre-planned sales process take over from there.

In my sales career, during part of my sales process, I’ve always asked a simple question of every customer, “What can I do to make business with us easier?”  Really what I’m asking is, “How can I make your purchase transaction (the exchange of a commodity for money, which is an action) easier so you’ll come back more often?”  Do you see why I ask this question?  You should make it a part of your daily sales conversation, and never forget to ask.  And now that you’ve asked the question, make sure you have a plan to implement that customer’s request.  Often times, my answer is a simple, “I review all my emails early in the morning, and that can be the best way to get your order in right away.  Just send me your list, and I’ll get it down to shipping ahead of everyone else.”  Sometimes I offer the customer a simple reminder email on a daily, weekly, or monthly basis.  These are ridiculously easy to setup, and they can make you the top salesman every month, with little or no effort on your part.  See why you must master technology?

Do you see from the paragraph above, how I take “action” to “make sales happen.”  It’s these sales actions that you need to focus on, and it’s what separates the men from the boys.  This is not about brand awareness, advertising in the local newspaper, publishing a website, social networking, or printing posters.  While these are all actions, they are all beneath the sales process.  Now you need a plan of action to make that sale happen.

So what’s your sales plan of action?  What’s your list of must do’s?  Here’s a short list to help you along:

  1. Focus on your actions, and don’t worry about other salespeople, your boss, or your sales goals.
  2. Have a daily game plan.  Emails in the morning, phone calls done by noon, appointments all afternoon.
  3. Know what to say, and stick to it.  Print a checklist and put it in front of you.  Be scripted.  Write down what you’re going to say.  Don’t just generalize, put the actual questions you’ll speak down on paper.
  4. Be concise and focused.  It’s fine to build rapport, but always move the conversation toward the sale.
  5. It sounds cliche, but always put your customer first.  Their best interest, is your sales success.

Now that you have the customer taken care of, what are you going to do to finish that new sale transaction?  You just landed the biggest sale in the history of the company, something you should always be striving for, but now you need to deliver that sale.  It is part of the sales process to make the commodity exchange.  Never forget that.  It’s one thing to get the commitment, but now you need to tell your co-workers what to do next.  Sales will often times have a few delivery requirements.  The new super computer needs to be built to specific requirements, strapped to a pallet no more than 4 feet X 4 feet, insured, and delivered to the dock before noon.  This is all part of your responsibility.  Even if someone else takes the reigns and gets the commodity delivered, you need to know where your sale is at every step.  Why?  Because it’s also your job to follow up with your customer’s.  It gives them an opportunity to give you feedback, or to make another sale.

The truth about sales is it’s the lifeblood of your business, and it takes an action plan to pump that blood.

If you don’t have a plan, sit down today and make one.  If your company has no clue what they’re doing, and most do not, then it’s up to you, the sales professional, to make a game plan for them.  That’s what they hired you for.

Next week we’ll take a look at what you can do to generate leads, and get right to the doorstep of your customer.

Need a sales plan?  Of course you do.  Just give me a call and book some time to learn how to be a powerhouse business owner.

Thank you,
Tom Heibel
423-342-6300

 

New Is Good, But Old Is Cheap

New technologies that tackle future issues today, are not only inspiring, but they can be expensive.  When you learn about new technologies that can repair, or even cure, ailments we humans experience in our lifetimes, it’s uplifting!  Our optimism can soar, and our outlook on life can be positively transformed in a single press release.  When all is said and done, we would like to believe that new technologies will simply sweep over the land, and our lives will improve overnight.  Unfortunately, this utopian ideal rarely unfolds so eloquently.

New technologies present a challenge because the people that create these new technologies, are true visionaries.  The most obvious being Steve Jobs.  His idea for Apple, once he bought it back, was so far ahead of it’s time, the competition is still riding on his coat tails.  There’s no doubt the iPhone has revolutionized our lives in a way we never saw coming, and still have trouble wrapping our head around today.  Now that it’s here, we can’t imagine living without it.

While driving with my wife to Atlanta, we set out on the road and we always take this Bluetooth device that links our iPhones to our car radio.  It’s a great little piece that just plugs into the car’s electrical port.  Once it’s turned on, we can listen to any radio station, podcasts, videos, iTunes and audiobooks.  Then, the unthinkable happened.  It just quit!  I mean it stopped working and we had to go back to listening to the regular car radio.  I would like to say that it was no big deal, but after several hours without it, the drive really sucked!  You just never know how good you have it until what you have is gone.

Visionary products make our world a better place, because they take us to places we’ve never been.  And these are places we want to be.  So why are they so expensive?!?  By the time you get a product in your hands, typically that product has been a dream of just one person for many years.  Larger, more expensive products, such as medical equipment, has been in the works for decades, and it’s always the fortitude of the original visionary that brings it to life.  These projects can cost millions, if not billions, of dollars and take many years to bring to market.  There’s no doubt they make our world a better place, but sometimes we cling to old technology because it’s so cheap, and it’s familiar.

I have some friends that just recently bought their first iPhones, and to say the least, they were hesitant to make the move from their old phones.  As an iPhone customer myself, I couldn’t understand this, and I always pushed them to get iPhones.  Of course, the iPhones are more expensive than most smart phones on the market, so spending the money can seem a little unjustified at first.  Then, the reality of your new technology sets in, and you can’t imagine your life without it.  You ask yourself, “How did we ever live without this?”

This is the enormous upside of new technology.  At first, most people are hesitant to get their feet wet, but the next thing you know, you’re telling your friends all about it.  So when you hear about new technology coming to market, pay close attention because it’s most likely the next product you’ll be using.

Now let’s look at this on a large scale.  In the medical device world, there’s been a revolution unfolding around the world.  Hospitals need to get patients in and out faster, but to make this happen, patient care has to be elevated to a level never before achieved.  So in one corner we have the DaVinci Surgical Systems by Intuitive Surgical, and in the other corner, a multitude of companies that continue to sell old equipment.  Think of them as the “coat tail riders”.  Robotics and surgery go together like peanut butter and jelly.  It’s going to happen whether anyone wants it to, or not.  To say the least, Intuitive Surgical is making an enormous positive impact in patient care.  Doctors can do faaaaaaaaar more today with a DaVinci robot, than they could just last year, without it.  And as always, this new technology is expensive, while the old technology is considerably cheaper.

The truth of the future lies with Intuitive Surgical.  It’s simply a reality that cannot be avoided and it’s not going to be.  If Intuitive doesn’t do it, someone else will.  Why?  Because it’s that good.  Traditional “open” surgeries that required a weeks hospital stay, can now be performed in an outpatient care center, and recovery time is just a few hours.  Why is this good?  Because the more operations a surgeon can perform, the more people they can help.  The robot assists the surgeon, the surgeon can spend less time on “recovery” patients, and more time on “operative” patients.  Make no mistake about it, doctors spend a fortune becoming surgeons, and they need to be doing what they’re trained to do.  We need them to do so, or the healthcare system will crumble.  New technology is a good thing, and we must move away from the old adage, “They don’t build them like they used to.”  Thank goodness too, because we don’t want them to be built like they used to.

Next week we’re going to take a look at sales vs. marketing.  What’s the difference?  The salesman can do both.  Right?

Grateful,
Tom Heibel
423-342-6300

So You Wanna Be A Cowboy

So your sales career has earned you high praise, big commissions, the respect of your company execs, and caught the eye of your competition … now they want you to be a sales manager.  What do you do?

For many people, this seems like a no brainer, but do you really want to change careers?  You might ask, Tom what are you talking about?  While some aspects of being a sales manager clearly come from your experience as a salesman, you’re daily life is about to be turned upside down.

The difference between a salesman and a manager is as different as wholesale and retail.  It’s an entirely new thought process, goal structure, recruiting tactic, responsibility focus, and of course, headaches.  You just shifted your focus from customer to company in a handshake.  Your new management position makes you responsible for an entire team, and not just your personal sales.

While the lure of big money from such a promotion(?), can be enticing, many sales managers equate their position to a pact with the devil.  In my own sales experience, I have outlasted numerous sales managers, in every job, before moving on myself.  Why? Because managing is a grueling, often thankless, job.

Have you ever seen a salesman/manager?  Now that’s a disaster if there ever was one.  This poor employee has to be both salesman, and manager, but probably didn’t get a raise for it.  This is the worst idea in corporate America!  Let’s take a look at the difference between the two:

Salesman

  • Introduce and maintain customer relations
  • Maintain product knowledge and trends
  • Manage sales process with each customer
  • Exceed company sales goals

Sales Manager

  • Recruit/train sales force
  • Maintain salesman relationships
  • Endless company sales meetings
  • Maintain product knowledge and train salesman
  • Exceed company sales quotas, at all times
  • Cull the sales force, and replace
  • Maintain company relationships

Do you see how your new position moves from customer focus, to company focus?  On one hand, you must perform some of your salesman’s tasks, but on the other hand, your dominant focus will be on the company bureaucracy.

It begs the question, why have sales managers at all?  The company can see which salesman are performing, and which are not.  Surprisingly, this thought process is starting to catch on.  Recently, Zappos eliminated all sales manager titles in their $1.2 billion dollar shoe company.

While this approach has been tried before, many years ago, it had disastrous results.  The idea is to make a “circle” of people responsible for their circle’s sales and goals.  Unfortunately, someone will always be the weak link and has to be fired, but it’s your “friends” that have to do the dirty work.  However, in this day and age of the internet, sales figures, and obvious performance, can be conveyed by something as simple as an email, or as complex as a company intranet.  Sales training can be accomplished via web videos, and communication from the top down, has become instantaneous.

While there will always be a need for sales managers, the mid-level manager is going the way of the Dodo bird.  It’s simply unnecessary for most companies to spend  $400K on a sales manager when they can divide that money amongst high powered salesman and get much better results.  Of course, there’s always a need to cull the herd, and replace salesman that make excuses, but this can be done by an upper level director.

To say the least, being a sales manager is not an easy life.  You’re going to have people complaining from all directions, and it never ends.  If it isn’t the salesman, it’s the executives.  The pay can be outstanding, but in my experience, the mid-level sales manager gets paid as much as they do because they’re going to be looking for a new job every other year.  As a sales manager, you’re in a meat grinder, but your goal should be to get into an executive director position and get out of the mid-level management position as quickly as possible.

So when you’re offered that sales management position, the money might be rewarding, but the headaches and drama will ramp up exponentially.  If your company wants you to be the top salesman and manager, your answer should always be “NO”.  If they decide to get rid of you based on your answer, say “Thank You”, and never consider working for them again.  This is a company that clearly doesn’t understand the value of proper organization based on responsibilities and hierarchy.

Next week I’m going to tackle challenges new, high-tech products face, when old technology is significantly less expensive.

Tom Heibel
423-342-6300