Tuesday, February 19, 2008

Cost of Acquiring a new Customer

The cost of acquiring a new customer and the formula that goes with it are very simple.

Take your complete marketing budget, add in the salaries and bonuses of Inside/Outside salespeople, take the cost of pre and post sales support and add in the price of a barrel of crude oil on the commodities market, blend in the estimated yearly cost of toner cartridges, pare in the variable cost of picked lobster meat, divide it by the number of business days in a year and take the piece of paper in which you detailed this elaborate formula and promptly set it ablaze.

The only thing smart business people know is it costs A LOT of dough. So much that most businesses concentrate all their efforts on their best prospects…their customers.

And that’s not a bad idea. Reward is not the only thing that comes with Risk.

But if real, organic growth is targeted, you better figure out a way to find new, profitable customers- hopefully within a budget that isn’t going to reduce your business to a third rate lemonade stand. Or the Business Boneyard.

No matter how you slice it, it’s going to cost money and it’s NEVER easy.

Most senior managers choose to beat the crap out of their existing, salaried Sales Managers and salespeople. “Open some new doors!!...what the hell do you do all day?..”

If you’re the guy either meeting payroll or answering to the people responsible for direct-deposit checks arriving in a timely fashion, you probably feel more than entitled to asking that question. I been asked that question many times, usually accompanied with a menacing stare.

If it was easy, every business that sells to other business would be operating at 20-40% gross operating margins.

If your team is smiling-n-dialing with their hats in their hand, good luck with that. I mention this many times in these pieces. Have you or anyone you’ve ever know EVER bought ANYTHING from a cold, telemarketing solicitation?

At best, you fielded a cold call from a highly skilled, very patient sales/businessperson professional and, over a period of time, the relationship grew and a mutual understanding of each other’s unique business challenges and offerings evolved. Eventually, a business problem materialized. You selected that vendor to solve the problem. I just laid out what takes place in approximately .00000401 percent of business-to-business cold telesales calls.

If you’re not creative or the people you’re paying to sell are not creative, things are not going to get any easier. And I don’t mean Guerilla Marketing creative though some of that can be effective. If you’re not positioning your outbound sales and marketing efforts to where the prospects are eventually calling you, it might be time to take a step back.

Friday, February 15, 2008

Sales Guy on Line Two

Has anyone since the fall of Rome ever purchased anything from a cold-call Telemarketing call.

I'm not speaking of the androids who call you at home at night (though they have a special place in heart), I'm talking about this nation's estimated 29 billion ham-n-eggers who refer to themselves as anything from "Senior Account Executives" to "Senior Strategic Marketing Specialist Courtesy Calling Carbon-based B2B Executive Special Advisor to Other Specialists".

Seriously. Since we've been keeping the records, has anyone ever bought anything from one of these calls?

And it's not just the outsourced boiler room telemarketing "firms" that do this. Most of the Fortune 1000 that are in the product or professional services business do this to their customers and the people and companies they want to be their customers. And here we are, early in the year Two Thousand and Eight, waiting for the first big "close"; the first transaction.

While waiting, I advise us all to pack a lunch four times the size of the buffet line @Uncle Tony's Wicked Huge All You Can Ingest Pasta Factory".

Nobody is buying because Cold Call Telemarketing stopped working shortly after that Mother of an Asteroid took down those four-story lizards that the children love so much.

Ask 100 businesspeople who routinely buy things from vendors...Ask them about any recent purchase/transaction. Go ahead, ask them. "How many of you cats bought that widget because some stranger interrupted you in the middle of the work day and pitched you on how you can leverage their strategic, mission-critical, scalable, critical mass, dashboard,infrastructure solution...with two tablespoons of levergable strategery".

Now I'm going to flip this, completely.

Some of those 100 businesspeople have bought from a stranger who approached them first. In fact, several.They just don't think of these people/vendors as strangers because now they think of them as friends or at least advisors or trustworthy vendors.

So how do you do that?

I know how to do that.

I takes some time, at minimum several weeks. Typically a few if not SEVERAL months. But in the end you get a customer, hopefully one of those coveted 80/20 types, but there are NO FLIPPIN' SHORTCUTS. You don't manufacture relationships. It's not a helluva lot different than romantic relationships. It needs to be cultivated and nutured. You don't ask the person you were just introduced to to marry you. 99% of the people who have the words "Sales Weasel/Sales Manager/Sales Director/VP of Sales/ in the Occupation Field on their W2 do not understand this.

And the world keeps spinning.

Monday, February 11, 2008

Lawyer Up

I've heard the same as you. If I or a loved one was in a world of trouble, I would want would the best possible legal representation. One of the reasons my daily "to do's" includes stay the F%$k out of trouble.

I also know every lawyer- from the cub who just passed the bar to the uber-cuddly Alan Dershowitz-believes that due process and every person's right to a fair trial supersedes anything. ANYTHING. Anything like, you know, every fiber in their lawyerly being KNOWS the guy sitting across the table from them is the same guy who molested and carved his wife and children into roughly 4,486 pieces.

Better a bazillion guilty people walk than a single innocent getting locked up, right?

Completely Destroying America's Hopelessly Outdated Legal System and Re-Building It For Dummies...When is that hitting the bookshelves?

The United States Constitution and some of the documents that followed were and are extraordinary. They're not perfect or resistant to addendum. That's already been exhibited.

I understand the fear our founding fathers had in the total and absolute power of The State. The litany of historical horror stories that preceded the establishment of our Union is long and grotesque.

But when does a collective consciousness step in and say "..O'kay, enough. No more serial rapists are walking on technicalities." There is some breathing space between absolute power of the State and crippling everyone who's job it is to catch both the egregious rule breakers as well as the vermin who literally torture others while laughing at the system with their pin-striped posse' in tow.

Thursday, February 7, 2008

Tony Robbins could crack a coconut with that lowel mandibel

Neither myself or the people I affiliate myself with would ever want to be called Sales Gurus. In fact, I might want to throw down if you called me that. Unless you are significantly larger than I. A calm, reasonable exchange of ideas would then suffice.

I think 90+ percent of that How to be a Super-Duper-Can Do Storm Trooper in sales is utter horse feces. 10-15 years ago I would have said all of it should be lining bird cages. The teachers and the messaging, however are getting better. That's a good thing. A discernable drop in the amount of sales automatons attempting to sell you should register soon.

Nothing of worth or value comes easy. Didn't your Grandpappy tell ya that? After he sobered up a little? No? He'd disappear for days, huh?

Let’s go the full-disclosure route, here . I’ve been fired from corporate sales jobs before for not selling enough, not selling fast enough, not selling aggressively enough, not watching and then emulating the ultra high testosterone-laden films like Boiler Room enough. Ho-hum.

Sell, damnit! Close them!! Find new customers…NOW. Close em’ out. You sell anything today, maggott?? That’s pretty much the message (after all these years) in the VAST majority of corporate sales groups. Especially when the numbers get a little light. Good times, huh? I wonder why salespeople are so universally loathed.

Flip side: I’ve approached hundreds of complete strangers in my career who didn’t know me from Batman, what I was representing or the company behind it. They ended up buying my stuff. And then, later, they bought more.

Oh, sure, I like to think it's in part because I’m a pretty clever guy, I learn fairly quickly, I present well and I know I can consistently make people laugh. All in all, fun guy to have a beer with. But that's a relatively small part of.

You know that old sales training line, People are not buying your product...they're buying you!! Unless what you sell is a pure commodity, that line is dog poop.

All joking aside-but only for a moment-I understand and employ some of the methodologies out there that are critical to get in front of the right companies, the right people, at the right time while maintaining and nurturing those relationship. Not exactly Sales 101 but not splitting the atom either.

But the people who buy or have bought my stuff did so because they either wanted it or, more importantly, they needed it. And when they were ready, THEY CONTACTED ME.

Need to buy me some more of them there banner ads

People buy from people they know. That’s the just the way it is. Ask Bruce Hornsby, he knows...he knows lots of stuff.

All your business is coming from your customers. That’s just ducky but, unless they’re receptive to all your new wrinkles, consistently buying new products and services/service agreements while grinning broadly and hitting their Net 30’s every month, not a lot of growth going is going on under your roof.

The short version: You want to grow the business. You’re spending a lot of dough on things that clearly aren’t working.

Not to hit you over the head with this but if you or your team is not consistently sitting across the table, eyeball-to-eyeball with companies and people who haven't done biz with you before, you’re not going to grow. Case closed, Judge Ito.

Doctors don’t do demos.

Physicians, good attorneys and the vast majority of specialized professionals don’t directly solicit business. Their background, experience and possibly even their pedigree puts them in a position as experts or at least gives others that impression.

People call them. No dragged out Dog-n-Ponies. No rain delays.
Unless you’re one of the small handful of companies on the face of the earth, strangers are not calling to call you and simply give your their business.

It doesn't matter how many great reference accounts you have.

-I don’t know you.
-You don’t know my business
-I don’t know if you can solve my unique business problem

-If you can solve my root-canal of a problem, I'm sure one of you many competitors can as well….at a better price.

Options. The buyer always has options unless they're roped into a situation. The Microsoft Corporation sells ropes, by the way.

Sorry, not interested in you or your stuff

There are a ton of products out there in which the buyer/consumer needs little or no human contact.
When I last checked, all but three of them are a mouseclick away on Amazon.com. (Seriously..what aren’t they selling these days? Can I buy a pancreas on Amazon? What are pancreases running these days? With Shipping?)

You’re not so lucky. And it isn’t necessarily a bad thing. It can be an expensive thing (especially upfront) but it isn’t necessarily a bad thing. No matter how you slice it, you need Face Time with the people who can buy your offerings and grow your business.

Problem is, nobody wants to see you. They’re WAY too freakin’ busy, they don’t like salespeople pushing product on them and, oh, they’re all set. Did I mention how they feel about smile-n-dial telemarketers? About the same way you do when you sit down to dinner.

It gets worse before it gets better.

People don’t buy from strangers.

When they have a business problem they need to solve, they’re taking action. They’re getting on the internet, they’re getting on the phone. They calling people they know and they don’t know you.