B2B selling can sometimes be such a long sales cycle that it will make you crazy. As a colleague of mine once said, “customers can suck all of the joy out of the sale.” But it is not a lost cause. There are some very specific things you can do as a professional sales person that can cut the sales cycle in half.
First let me define my steps in a sales cycle:
• Define the prospect
• Get the appointment
• Prepare for the presentation
• Present to the prospect
• Close the sale
My steps may be different from others that you have read, but they are all similar. Not only will we help you understand these step buts we are also going to be specific and help you cut out activities that are prolonging the sales cycle today
1. Define the customer. Here is where most people fail. Let me state one important fact…Not everyone is your customer. At Axcelora, we know that people selling small tickets to small retailers are not our customer. While they might want our ability to introduce them to the retail community, they simply cannot afford our price. It doesn’t add up. So, take the time to define who your customer is and who your customer is not. For the first six months don’t vary from your definition. There will many temptations, don’t fall into the trap of “everyone needs what you have”…it simply is not true.
a. Once you have defined who you think your customers are you should define, in the terms of your company, which service or product you have that they need. Here is one of the big time savers of shortening the sales cycles; don’t force what you have on the customer. If it is not an obvious fit, go onto the next customer. You will have plenty of time to fish for the outliers; don’t spend your initial work on this unlikely candidate.
2. Play business geography. If you don’t know how to play you should learn. After you have defined company XYZ you should first take some time to determine who you know that works at that company. It does not have to be at the same department, in headquarters, or still working there (although those would be preferable) just someone that has ties to the company. If that doesn’t work think of someone that works in the same vertical as they are most likely to have connections to your target company. Don’t forget to check out Social networks like LinkedIn to spur your imagination. If you can get an introduction from a person into the target company, you have just cut your sales cycle considerably. Being introduced to a decision maker by a friend of the decision maker breaks down one of the biggest barriers to the sale…lack of trust.
3. Cold call with confidence. As I have mentioned in my previous post, Is your Sales Force Getting the job done? no one likes cold calling. However, one way to improve your success in cold calling is preparation. If you are going to call a prospect on the list you have just spent considerable time to create you should KNOW about the prospect's business. You should certainly use the internet to do your initial research, it is invaluable. I would say it is the 2ND best source of information. The best place to find out about a retailer or a restaurant is in their store or restaurant itself. Visit the store, touch the merchandise, look at the customers, and most importantly talk with the staff. Tell them you are about to call on the home office and you want to be prepared. Ask them what they can tell you about the business. What are the problems they are seeing in the operations of the business? (You should be constantly thinking about how you can help them solve those problems.) The more informed you have before your first call, the more success you will have once you get to chat with the appointment maker. You will KNOW their business. Having this confidence will keep your mind in the game. In the past it typically has taken me 9-10 calls before I got to speak to a live person…most of my colleagues stopped at 2.
4. Visit the customer right BEFORE you visit the customer. Now that you have scheduled the appointment, don’t stop preparing. Go back to either the same store or a different one and do your research once again. Then, go to the stores' competitors. When you go to the appointment you want to have visited the store more recently than the client. You should look for the problems your product or service can solve. Prepare yourself for how your service can deliver increased ROI. While technology is exciting, if it doesn’t deliver increased ROI your prospect will not and should not buy from you.
5. Practice your presentation. It always amazed me when someone would come to the office to present their service, merchandise, or real estate and it would seem like it was the first time they had ever seen the presentation. Practice your presentation; then practice some more. I once went on a presentation with a brand new sales person from our team at Buxton. It was his first pitch so he was nervous. But he did a great job. He knew the presentation as well as anyone in our company. He later told me he had practiced the presentation with his wife as his audience so often, that she could do it as well as he could. He turned out to be one of our best sales people. Because he practiced.
a. Two hints on the presentation. 1- Always start out by asking what the state of the company is. While you did your research, they may have made a big announcement that morning you would know nothing about. 2- NEVER read from the slides. If your client can’t read then you have the wrong client.
6. Stop Selling and Start Listening. I don’t know why, but sales people just cannot seem to shut up. God gave us two ears and one mouth; use them in the correct ratio. This will shorten the cycle faster than anything you do. If you are actively listening, your prospect should be selling herself on your ideas. Listen to the clues. If you are presenting to a group, they will begin by talking with each other; let them talk. You should also be listening by asking questions of the group. If you have done steps 4 and 5 with the necessary diligence you will have no problem guiding the conversation to a successful conclusion. Don’t worry if the conversation gets very animated; that is a good thing.
7. AFTO. AFTO stands for Ask For The Order. The customer knows why you are there; you know why you are there; Ask For The Order. Too many sales people forget that the customer wants you to ask for the order. So you leave the meeting thinking you did a great job. The conversation was animated, the presentation was to the point, and the client seemed to want the service you were presenting. You left the room without ASKING and thus prolonged the sales cycle. A NO answer is better than no answer. If you have a NO answer then you can try and find out the why or you can go onto the next prospect, either way is OK. But if you don’t have an answer you simply go home thinking you did a good job. You wait weeks for the customer to get back to you or not returning your calls. Cut the cycle time and ASK. It won’t hurt.
And now a message from sponsor Axcelora (www.axcelora.com). If you want to cut your cycle time even more (cutting out steps 2 and 3) simply go to www.axcelora.com and set up some time to chat with our team. They can help you determine who the decision maker in most of today’s retailers and then set up a personal appointment to meet with them. So, in accordance with step 7, will you contact us today?
The Board of Directors of every retail organization has one primary responsibility, picking the Chief Executive Officer of the Company. Now, they have other responsibilities which include insuring the integrity of the company, setting the salaries of the top people, agreeing to the strategy of the company, but their most important job is picking and retaining the CEO.
I have been observing boards over the last several years, and I can tell you that some of them seem to have not done the job the way I would like to see it done. So here are the 5 things that I have observed that seem to bring a poor CEO to a retailer. Stay away from these 5 things and you improve your chances of bringing the right leadership to your retail company.
1. Hire someone from outside your company. This is a huge mistake.
a. It gives the current executives of the company an immediate dismal review of their efforts. When you have a retail organization with hundreds, if not thousands of units, you would think a CEO could be developed from inside the company.
b. The new CEO has to spend time to learn the history and culture of the current company.
c. The new CEO wants to bring in friends from other places he/she has worked in the past. To me this says that he is not a teacher and that, without firsthand knowledge, thinks the current staff cannot get the job done. What type of message are you sending?
d. Your new leader should be with your company at least 5 years in leadership positions before being elevated to the CEO role.
Now I must say that there are exceptions to this rule. The best exception is the Pier 1 hiring of Alex Smith. He has done an exceptional job of leading this retailer back to success. Mr. Smith was, and is a merchant first and he has a passion and history in the category.
2. Hire a CEO with a Finance background. Perhaps this should be Number 1 in the list, but it surely is number 2. Retail is an industry of passion and finance is an industry of dispassion. While understanding the financial aspects of your company is a must, it can be taught and it can be hired. You simply cannot hire passion for the product and the customer. I think the downfall of one of our nation’s largest retailers is when they got into the credit card business. The profits from this enterprise were huge. What the board forgot was that unless product was sold there would be no profit. The financial tail was wagging the merchandise dog and the company began its long downward slide.
3. Hire someone for the CEO’s job that is not a merchant. I began my career in retail running stores. I loved and still loved all aspects of store operations. However, the true genius of retail is in the buying not the selling. The Chief Executive Officer, the heart and soul of the company, must come from the merchant ranks. If you want to be a CEO, go spend time as a merchant. Not a store ops person, not an attorney, not in finance, not in logistics but as a merchant. Not that all of those aren’t important, they are vital for the success of the company. But just as a nurse, dietitian, X-Ray technician, and anesthesiologist are important in a successful heart surgery, you really want the cardiologist running the team. The merchant will set the tone for the company. Look what happened to J.Crew when Mickey Drexler came on board. He is a merchant, in fact many have called him a modern day Merchant Prince. He is the soul of J. Crew, and a great hire.
4. Hire a CEO that is not outgoing and doesn’t want to visit the customer, the vendors, or the stores. I know that this sounds incredulous, but there are retail CEO’s that have been hired that simply only talk to the board and investors. The other three constituencies of a retail company (customers, employees and vendors) are totally ignored. I just don’t think customer interaction is one of the topics that is probed during the interview process. If you don’t love the customer, enjoy being with employees, and respect the vendors you simply cannot be a successful retail CEO. That does not mean that you cannot have a successful business career, it means that retail is not the place for you. When we opened one of our stores, not only was the CEO out front greeting consumers for 8 hours in a row, he had his wife were working the grand opening as well. The passion for the business is something that you just cannot fake.
5. Hire a CEO that is worried about his board. As I stated earlier, hiring a CEO that does not care about the employees, customers, or vendors is one of the 5 steps necessary to hire a CEO that will fail. The fifth and final step is to hire a CEO that will care more about pleasing the board than pleasing the other three constituencies. There should not be a fire drill every three months to make a presentation to the board. If leadership is working right, and the first job of a CEO is to be a leader, then pulling the information for a board presentation should be easy. If the board has put such fear into the CEO’s mind, then the board has made another misstep. The CEO should be worrying about the sales report, P&L, Cash Flow, data security, company integrity, the future threats to the business, personnel growth, anything but whether or not the board is happy with the font of the presentation. Don’t worry about the stock price either. If sales and profits are right, the stock price will follow.
Retail and Restaurants are a special place to work. No other business categories have closer ties to their consumers than retailers and restaurants. Picking the right CEO with the right leadership capabilities is vital. As George Santayana said “those that cannot learn from history are doomed to repeat it.”
Over the 25 years that I was responsible for store operations I learned a few practices that made my visits more productive. I thought it was about time I share them with the rest of the world.
1. Look for what the store team is doing right
Too often when a District Manager or Regional Manager goes to visit a store they are on a mission to show the store team how smart they are by finding everything they can that is wrong. While it is certainly everyone’s job to make things better, a more productive way to start is to find some things that the store is doing very well. After all, you would not have made your manager the manager of the store if you had not seen some skill sets in him/her. Ask yourself these questions: Is the pricing correct? Is the merchandise functioning? Are the front windows well displayed? Is the cash and wrap uncluttered? (An interesting side note on clutter - how much does the home office send to the stores that is at cross purposes to itself? Is there a central PERSON that has to approve EVERYTHING that goes to the store?) As you are finding what the store is doing right, ask the store manager to point out what could be better. If they can’t or won’t point out areas that can be improved, you have a problem with your store manager.
2. Look at the store as a customer would see it
When I was first a store manager I learned how to run a store from three people, Bud Hollander (my dad) Sam Golub and Sam’s wife. (store managers in our Ukiah store). All three of them told me to look at the store like a customer. To do that, you should ask the following questions: What overall story is the store telling? Is it neat and clean or is it dirty? Is there something special going on or is it business as usual? Is it easy to find things by themselves or is the signage a mess? Is it a friendly store with excited people or does the store not have any life? If you think about the customer viewpoint as you walk in the store, just for a moment or two, you may very well see a different store. If the store is not aimed at helping the customer shop, then you have a problem.
3. Ask where the “hot spot” of the store is.
Every store I have ever managed has a “hot spot.” This is the spot that every customer spends a bit of time. I was just in Nebraska Furniture Mart in The Colony (Dallas) TX and they have a "hot spot" in each of the sections of the store. Ask the sales team where the "hot spot" in the store is, they all know. Then work with the team to determine what merchandise should go there. Don’t worry about the Plan O Gram, because this is more important. You will be empowering the manager and her team to be successful. What could be more important than that? Write down what item is going to go into the "hot spot" and have the manager drop you a note on the sales. You will be shocked at the results of this empowerment.
4. Go to the bathroom
Now doesn’t this sound odd. However, I have found that this act will give you the opportunity to find out what is really going on in the store. Everyone will, of course, leave you alone on your chore. If the bathroom is clean, then the store is most likely to be clean. If there is no toilet paper on the roll then you probably have a manager who is not looking at the details and has not put pride into the performance of the store.
5. Look around the back room
When you are finished in the bathroom, walk around the back room. Is there merchandise in the back room that should be out on the sales floor? Is there discontinued merchandise that is not out on the floor? The efficiencies that can be had with an organized back room are worth a fortune. If your back room is organized you can spend more time on the sales floor.
6. Sit down at the managers desk
Every retailer should want his store manager on the floor as much as possible. I don’t care what size store you have, your manager must WANT to be on the floor teaching sales people and helping customers. It is easy to find bookkeepers; it is tough to find sales managers that are passionate. By sitting at the manager’s desk you can tell where she is spending her time. If there are magazines that should not be there then continue to look around. If the manager is keeping his personal finance at the office you have found a danger sign.
7. Find something to sell.
Every store has many items for customers to buy. You should walk around the store and help the team find one thing they can sell. It really doesn’t matter what that one thing is; just find one thing. Then help the team create the story they want to tell about that one thing. Then challenge them on how many of that one item they can sell in the next week. You should look for an item that has a more universal appeal but in the end that should be the team’s decision.
8. Look for cell phones.
I think this is a huge issue for retailers today. I can think of NO reason that any sales people should carry a cell phone with them on the sales floor. If there is an emergency they can be reached on the store phone. Phones on the sales floor are like phones in a moving car…they are a distraction. They DON’T belong on the sales floor. And, they don’t belong with you while you are making a store visit. Most likely you are only in this store once a month. While you are visiting the store, pay attention to the people and operations in the store. Make your calls either before you visit the store or after you leave. While you are there talk with the team and the customers…it is your job.
9. Ask what you can do to help them
Ask the team at the store what you can do to help them…and write it down. Listen carefully to both the words and body language. Then follow up with them getting any questions answered within a week of your visit to the store. This is retail so no question should take more than a week. You may not be able to do everything you discuss with the store team, that’s OK. But make sure you let them know what is going on. The best person I have ever seen follow up is Bob Higgins of Trans World Entertainment Corp. He is simply unrelenting. I admire him on this and so many other areas.
10. Ask how we are wasting their time
And finally, find out what the home office is doing to waste their time. I can guarantee that they have been given tasks that are just pure time wasters. The people in your home office think nothing about having the stores count this or more that. They will have the Store Manager go out of the store to see the competitive set of retailers within 100 yards of the store. That is not what you want the store manager to do. Len Roberts once said that “We have two types of employees here those that serve the customer and those that serve the server.” Too many retailers think they have a third type of person in the mix…those that serve the home office. Kill that attitude. Tell the store people that they are not allowed to do anything that does not come through the retail chain of command. You have to keep everyone focused on one thing …Selling.
When you visit the store you are there for one thing, to help the store team become successful. If you follow the guidelines above for three months you will see a startling difference in your results.
For another startling idea go to www.axcelora.com as we would like to chat with you about joining our team.
Help Your Employees Get Rich
Help your employees get rich, you will like how it feels
Today I would like to talk about the stupidity of small thinking. While I worked at Radio Shack (1972-1997) our company was run by Charles Tandy. While we had other leaders during that time, and Charles actually passed away halfway through my time there, we were run by his ideas.
Charles was a brilliant man. He realized early on, that if the people working for him participated in the success or failure of the company the company would do well. I know, you are all saying “duh” about now, but that concept is the history in many of our biggest companies. Everyone in the company only did well if there was success. There were some lean years along the way, where we all suffered, but the years that were successful were very successful.
Charles also realized that you couldn’t pay your winners too much and you couldn’t pay your losers too little. He believed that any store could be turned around. I don’t know how many times I heard about the store in Bakersfield that was a loser until it got the right store manager in it, and then it was a big winner. And when that store turned around, the store manager made a bundle - as did the District Manager, the Regional Manager and the Divisional VP.
That passion of recognizing and rewarding the winners survived past Charles Tandy through Lew Kornfeld, Bernie Appel, and John Roach. They never worried about paying people too much or too little. They followed the pay plan that Charles developed that did not pay anyone anything; rather it let people earn what they were worth. You never had to go in and negotiate with your boss for a raise because you knew exactly how to increase your pay, each and every day. The more you sold, the better you protected the assets, the quicker you got rid of old and excess inventory and the more money you made.
We were paid well. In 1980-81 fiscal year I had the opportunity to run the most profitable district in the history of Radio Shack. The average store manager working for me that year made over $50,000…in 1980. And their average salary that year (not total earnings but salary) was less than $20,000 per year. They earned the rest. No one, not the CEO, CFO, Treasurer, not anyone worried about how much we were paying our team because every single one of these people earned their pay. They worked hard, “owned” their business and worked to develop more people just like them. That year we promoted 20% of our Store Managers to District Managers. Many of these people took pay cuts for promotions because they knew that they could earn more in the next job because we had with no limit on what could be earned-either on the high end or on the low end. We loved to pay big money.
Today, that same company is struggling because they let fear and worry invade their business. They worried about the manager of the small volume stores and they feared paying their top managers too much money (I had 5 store managers make over $100,000 running one Radio Shack in 1980 out of 25 total stores). They should not have worried about the small store managers. They should have spent that energy working with the small store manager to become a big manager by improving that small store. And, they should have looked at the criteria they had to build a new store. With the fear of opening a small store hanging over their head, perhaps they would have been more careful in their site selection. Opening a store just for the sake of opening one is not smart business.
And now, worrying about paying people too much money! I can tell you I never had an easier job as a District Manager than running that district in South Florida. Because the people were doing so well, and our smaller store managers saw how well the big store managers were doing, everyone worked very hard. We improved in every single category we measured. In stock, sales gain, gross margin, names and addresses, inventory turns, every single area showed improvement, because we had people that had a taste of success and they liked the flavor.
As a young DM, Marvin Cash told me that everyone who reported directly to Mr. Tandy was a millionaire. Marvin said Mr. Tandy had the best job in the company because everyone working for him knew what success tasted like and knew that hard work and good execution would keep that taste in their mouth.
Don’t be afraid to let your people earn so much money that they will be rich beyond their biggest dream. Give them a reason, encourage the culture and pay for success. You will enjoy the moment.
Guido Pentsy, the most successful manager in the history of Radio Shack, once told me that if all my store managers got wet in the shower of money, that I would take a shower as well. He was very right. I would like to invite all of you to take a look at Axcelora (www.axcelora.com) and come get wet with the rest of us.
Rich Hollander is a retail expert with over 40 years in the industry.