Category: Sales

Why a Little Dabbling Will Doom Ya

A West Coast Toyota dealer delivered a great lesson to a TV salesperson recently. And I got to watch.

Media sales tip: make sure they eat enough
photo by puhhha/dpc

The dealer was a loyal, consistent radio user — in fact, he told us that he spent nearly $50,000 a month, every month, on radio. He’d done this for years.

He would occasionally advertise on the TV station I was working with. On those occasions, he’d average about $3-4000 a month, generally for a couple of months.

On radio, he runs local ads making a strong offer. On TV, he’d use the manufacturer’s creative — 25 seconds about the Camry with a 5-second dealer tag at the end.

I asked him: “Which works better for you — radio or TV?”

His reply: “Radio’s always worked for us. We’ve dabbled in TV, but it’s never worked as well as radio has.”

This was a needs analysis call, and I have a rule on needs analysis calls — no arguing. So I bit my tongue until the AE and I were back in the car.

  • He spends 50 grand a month on radio, 12 months a year, using copy that sells for his dealership.
  • When he “dabbles” in TV, it’s with less than 10% of his radio investment, for a couple of months at a time, using national image ads.

Of course radio works better for him!

This applies to all media choices. Over the years I’ve seen plenty of cases where the investment levels were reversed — advertisers making a genuine commitment to television and dabbling in radio. Those advertisers invariably decide that TV works better.

I’ve watched major long-time advertisers on TV or Radio Station A  give Station B a small short-term “test”. Inevitably, they conclude what they “knew” all along — Station B just doesn’t work as well as Station A.

As media sellers, we get mad at these clients for not giving our medium a fair shake, but some of the blame belongs with us. Because we let them do it.

Every time we accept a small order from a big advertiser…

Every time we let them “test” our station for a month…

Every time we let them dabble when we know that they need to make a real commitment…

…we create another client who tells everyone that “I tried [name of medium here] and it didn’t work.”

Don’t let ’em dabble.

[reminder]How do you convince new clients to make a real commitment?[/reminder]

 

Pipeline Math: How Many Active Prospects Do You Need?

Are you overestimating the value of your sales pipeline? It may not be as full as you think.

Sales skills: calculate your pipeline the right way
Photo by olly/dpc

“The ball don’t lie.” – former NBA great Rasheed Wallace

Sales Pipeline Math: A Story Problem

This comes from Jeb Blount’s new book Fanatical Prospecting:

Becky has 30 prospects in her pipeline. Her closing percentage is 10%. She closes one deal. How many prospects remain in her pipe?

At first glance, the answer seems easy – she had 30, remove one, now she’s got 29? Right?

Wrong.

As Blount points out, the real answer is 20.

Here’s the math. Becky has a 1 in 10 probability of closing a deal. That means on average she will close only one deal out of 10 prospects she puts in her pipeline. The net result is when she closes one deal, the other nine are no longer viable prospects. This means her pipeline will be reduced by 10 prospects rather than one. She must now replace those 10 prospects to keep her pipeline full.

This is why when you get on a hot streak and close a bunch of business in a month, you wake up the following month with nobody left to close. Your prospect pool has suddenly evaporated, and you wonder where everybody went.

[shareable]The ball doesn’t lie in basketball, and the math doesn’t lie in sales.[/shareable]

Closing a sale creates new responsibilities: credit apps, production forms, creative meetings, collections. It is easy, when you are busy, to put off prospecting. You take a look at your pipeline, figure you’ve got plenty left, and stop making new business calls.

Here’s the problem: making a sale doesn’t just take one prospect out of the pipeline. It takes that one, multiplied by the number of active prospects you need, on average, to close one sale.

The next time you have a quiet moment, do some calculating.

  • How many proposals does it take, on average, to close a sale?
  • How many proposals do you have under active consideration right now?
  • How many prospects will each sale take out of the pipe?

The ball doesn’t lie in basketball, and the math won’t lie on your prospect list. Run the numbers, and then get on the phone.

[reminder]What’s the biggest struggle you have in keeping your sales pipeline full?[/reminder]

Want To Make More Money? Raise Your “Evangelista Number”!

We have this expression, Christy [Turlington] and I. We don’t wake up for less than $10,000 a day.

— Supermodel Linda Evangelista, interviewed in Vogue Magazine, 1990.

bigger sales means more money
photo by pathdoc/dpc

Evangelista may have been joking, but there is a serious principle behind what she said.

If you are a salesperson and want to make more money, you’ve got three options:

  1. Sell to more customers
  2. Increase the number of transactions to existing customers
  3. Increase the average dollar amount of each transaction

All three of these options have merit, but the fastest and most efficient way to increase your income is to increase the average dollar amount of each transaction.

How do you do that? Increase your Evangelista Number.

Ask for more in every proposal.

Here’s an exercise to get you started:

Assemble every direct proposal you made over the past three months (skip the RFP-driven agency ones — direct is under your control). Add up the total dollars you asked for, and divide it by the number of proposals you made.

An example with easy math (your numbers will be different):

  • Let’s say that over the last three months you did 50 direct proposals.
  • The total you asked for was $175,000.
  • This means that your average proposal “ask” was $3500 ($175,000 divided by 50).

If you’re happy with the money you’re making, you can stop right here. Just keep doing what you’re doing, and you’ll make what you’ve been making.

If you want to make more, ask yourself… what if you increased your average proposal size from $3500 to $5000?

What if you made $5000 your Evangelista Number?

To do this, you need to make a commitment to yourself — you won’t start a proposal unless you can ask for at least $5000.

If your workload stays the same, you’ll do another 50 proposals over the next three months.  But your total “ask” will increase from $175,000 to $250,000 — a 42% increase.

This doesn’t mean you won’t accept an order for less than $5000. There will still be negotiation.

But instead of negotiating down from $3500, you’ll be negotiating from $5000. More often than not, the number you wind up at will be larger than it was before.

Over time, you’ll see another benefit: more loyal customers, and more repeat business. That’s because customers who spend more with you will see stronger results, and that makes them much more likely to renew.

A warning: to make this work, you’ll need to shed the customers who can’t even consider a proposal at your Evangelista level.

This is a good thing — those are the customers who are least likely to get good results. They’re the ones who say,  “I tried [name of your medium] and it didn’t work.”

Let them go, and use the time you save to find bigger fish.

So there’s your exercise for the week. Figure out your average proposal “ask”, decide how much more money you want to make, and set a new minimum.

[reminder]How do you decide how much to ask for?[/reminder]

The “Best Time To Cold Call” Myth… Debunked

When is the best day to cold call?

Sales skills: best time to phone
Photo by Gajus/dpc
  • Insight Squared reports that their analysis shows that you should call between 10am and 4pm on Tuesday.
  • Ken Krogue, on the Inside Sales Blog, says that Tuesday is actually the worst day to call. He recommends Wednesday and Thursday.
  • Geoffrey James, writing for CBS MoneyWatch, pointed to data that indicates that Thursday is the best day to call, with 8am-9am and 4pm-5pm as the best times.
  • Mike Kamo of Pointclear says “The best weekday to call is Thursday, followed by Tuesday then Wednesday. On Thursday, the week is nearly over and minds are beginning to focus on the weekend.”

All of these sources have data to back up their assertions, and I’m not about to argue with the data. I will argue, instead, with the premise.

It doesn’t matter what day, or what time, you choose to call sales prospects. The best time to call new prospects is whenever you start calling.

My sales team struggles with call reluctance.  It’s an every day battle.

This came from an East Coast Director of Sales who recently subscribed to this blog. Trying to determine the right time to call generates another excuse to do something else instead.

Ted Keyes, a sales trainer in the freight industry, puts it best:

You can say that first thing in the morning is the best time to call.  In the morning, your prospects have the least amount of fatigue.  They’re well rested from a good night’s sleep. They have more energy.  They have more willpower so they’ll be in a better mood.  Also, they haven’t dealt with their job challenges yet and on and on.

You can also say that first thing in the morning is the WORST time to call.  In the morning, your prospects are being challenged by the amount of work they have to get done.  Perhaps they missed breakfast and their blood sugar is low.  This low blood sugar means they have less time and patience for a stranger calling them and on and on!

In reality, we can make a list of pluses and minuses, like this, for every time of day to call on our prospects: mid-morning, before lunch, after lunch, 4 O’clock, end of the day, after hours.

[shareable]The best time to call new prospects is whenever you start calling” Phil Bernstein [/shareable]

As Keyes points out, there is no “best day”, or “best time”, to call. In my radio selling days, I had a lot of success calling prospects on Friday afternoons… because I was the only one in town making calls.

The hardest call to make is the first one of the day. Once that one’s out of the way, the next one comes naturally.

Don’t worry about what day or time is the right one to call. Just get started.

Call.

[reminder]What’s the best time YOU’VE found to make calls?[/reminder]

How to Unlock Sales Possibilities With This Magic Question

I have no idea who came up with this idea. I only know it works.

Sales skills: the magic wand question
Photo by Elnur/dpc

A Sales Call Surprise

A few years ago a television advertising salesperson on the West Coast took me to meet the marketing director of a medical practice. The practice covered a lot of ground — among their divisions was OBGYN, aesthetic medicine, ear/nose/throat, hearing, plastic surgery, and sleep medicine.

Our conversation quickly focused on the aesthetic medicine department, and we spent 50 minutes talking about botox, fillers, laser hair removal, and chemical peels. In my mind, I had a pretty good idea of the creative strategy I was going to work on; it was time to wrap the meeting up.

So I asked her the “Magic Wand” question:

“Let’s say you had a magic marketing wand. You can wave it and make your advertising accomplish one thing for you that it’s not doing now… what would you use that wand to do?”

I assumed that she’d use the wand to increase Botox sales, or bring in more hair removal customers. Boy, was I wrong.

“I’d use it to sell more hearing aids.”

This sales question can bring a surprising answer
Photo by Ana Blazic Pavlovic/dpc

We’d been talking for more than an hour, and she had not said a single word about hearing aids. But it turned out that the practice owner had been complaining about sales in the hearing division, and she was going to have to do something about it.

Instead of one idea to bring back, I now had two. Instead of one division’s budget to work with, we now had two.

Instead of the $3,500 per month we’d been planning to ask for when we came back, we proposed $7,000 per month. We didn’t get all of it, but we got close.

Sales Skills: Why The Magic Wand Technique Works

In Close More Sales! Persuasion Skills That Boost Your Selling Power, Mike Stewart says that the Magic Wand Technique

…can start the creative juices flowing in your prospect and increase his involvement in the sales process…Encourage your customer to explore different possibilities. You never know what he might come up with, and you never know where he will find a solution that you can provide and that will be the emotional trigger needed to close the sale.

Don Fitzgibbons, author of The Guru’s Rules for Local Advertising, has this advice for making the question most effective:

The wish has to be very specific. A wish for “more customers” is not specific. A wish for “more customers who will buy four wheel drive trucks” is very specific.

The wish must also be realistic. “I want more people to buy air conditioning in December.” Sorry, not gonna happen.

I learned the Magic Wand Question almost two decades ago as a radio Account Executive, and have been using it ever since. It works because it makes clients stop and think about what they really want. There is often a long pause, as the customer gazes at the ceiling and ponders.

How often does the Magic Wand Question elicit a big surprise? Not that often. In a typical week of needs analysis calls with a television station, I might meet with 20 clients and get three genuinely surprising answers.

But those three can be big ones — and I never know which three it’ll be — so I ask the question every time.

[reminder]What’s the most surprising answer you ever got to a sales question?[/reminder]