Archive for the 'Planning' Category
Michael Faul
President
Leads. Everyone wants more leads, but not everyone seems to know where to find them. Perhaps, because of the recession, we should resign ourselves to a no-growth strategy in 2009—then we can all just forget about finding new leads …
Wait! We have a better idea. Suppose we don’t accept that just because the market contracts we have to as well. After all, if our local market remains in a no-growth mode, does that mean all businesses are doomed to achieve zero growth or worse? No!
If the average firm achieves no growth, then some firms will decline, and some will… Well, they will grow. Why can’t you place your firm in this latter category? What’s stopping you—perhaps the lack of significant lead flow?
Throughout 2009, Xsellerate invites you into a conversation about leads. We will explore how to get, grow, and organize leads to fuel your growth. We want to help you learn how to build the pipeline of your dreams.
Interested? Then we invite you to participate in the conversation. Send us topics you would like to see covered. On our blog, post comments, success stories, and questions.
Here’s the plan for dealing with the economic situation—choose not to participate in the recession. Right now represents perhaps the greatest opportunity for your business. Those who whine about the economy and resign themselves to a no-growth strategy will probably get what they plan for. Those of us who dare to move in a more audacious direction will acquire clients, expand market share, and position ourselves well for the day when clients need to spend to win.
Michael Faul
President
You worked hard to deploy a great marketing campaign and the phone rings, your inbox fills, or you start racking up registrations for your next seminar or webinar. Leads are heading inbound and your job is done, right? Not exactly. In fact, your job has just begun, and what you do next and how quickly you do it greatly increases or decreases your sales success. So we came up with some tips to help you maximize your ability to qualify and advance leads toward a sale.
Who took the bigger risk in forming this new relationship: you or your new lead? They just stepped out of the comfort of anonymity to provide you contact information and put their valuable time, energy, and privacy at risk. What your lead experiences first will determine if and how quickly you can replace that fear with trust. Achieving that objective determines when and if you can convert leads into sales. Here are four tips to help you build goodwill with new members of your lead generation community.
Get to know the people contacting you. When someone contacts you they tend to provide you limited contact information. You need to complete contact information and conduct some customer intelligence. Go to your lead’s website and:
· Complete all contact information,
· Make notes about their product or service offerings,
· Note if they have multiple office locations,
· Review their client list, and
· Check their leadership team
Use the information you gathered to personalize questions and comments for your first contact with your new lead. Being able to personalize your first contact will increase trust and differentiate you from the competition.
Roll out the welcome mat. Send every new member of your community a welcome letter or email. Set up your welcome letter or email as a template with mail merge fields. This allows you to generate personalized welcome notes with consistent messaging and little effort or time investment. In addition to welcoming new members, make them aware of other resources they may find valuable.
Provide new community members a copy of your privacy policy. This demonstrates your respect for their trust in you with their contact information. Also explain to them your keep-in-touch program, focusing on the benefits of being a member of your community. Invite them to participate by posting comments on your blog or other online forums and download relevant resources from your website.
Begin interacting with new community members—quickly. The longer you wait to contact a lead, the more dramatically your probability of converting them into a sale declines. How much time do you have? Research published by Insidesales.com and The Sloan School of Management at MIT indicates your probability of sales success begins to decline after the first 5 minutes of a new relationship. By the end of your first business day, your chances of qualifying the relationship can decline by more than 25% and the probability of realizing a sale by as much as 20%. Think about that: if you don’t pick up the phone to contact that lead, you become 1/5 less likely to win the deal. You need a process that ensures phone contact within the first business day of a new relationship.
Begin the process of qualifying leads. In Xsellerate’s community marketing model, anyone can enter your lead-generating community. They only need to exchange contact information with you. But, you still need to qualify your community membership. Qualifying leads is not meant to determine if they are “in” or “out” of the community; rather it determines “where they live” within the community.
Do not over-qualify on the first interaction. This tends to turn off your new lead. Rather, determine if you have only a relationship or if your new friend is a true prospect. To do this you need a check list that describes what a good prospect looks like to your business and which describes the behaviors manifested by a prospect. Work your checklist items into a series of qualification questions. You can learn about relationships and prospects at http://www.xselleratesolutions.com/resources.php.
Keep in mind qualification needs to take place throughout the entire sales process (a subject for a future article.) For your first interaction, work your positioning questions into the conversation. Interweave qualifying questions with informational statements so you don’t sound like you are interrogating your lead. Strategically leave some qualifying questions for your next interaction.
The first step in a strong lead management process involves receiving the lead into your community quickly and establishing a meaningful interaction. This needs to take place within the first business day of the relationship. The interaction should be used to initiate lead qualification, but must add additional value to the relationship while inviting the lead to interact with your organization. Properly executed, a strong lead intake process will increase your close rates and, ultimately, your growth rate.
Going into a new year, many of our clients ask how to determine what to spend on their marketing. While everyone would like a hard number or specific percentage of revenue as a rule of thumb, Xsellerate asserts that what you spend on marketing depends on a variety of factors far beyond the current size of your business and your future revenue goals.
Perhaps instead of asking “How much should I spend on marketing next year?” ask “What drives my budget?” Do you want to make budgetary decisions based on a percentage of sales, a rule of thumb, what you did in the past, or your marketing plan? The following set of common business planning questions will help you build a set of guidelines to plan your marketing and reach your goals. Then you can align your costs and investment to the plan.
1. Are you trying to grow your business or remain flat next year? There is nothing wrong with choosing to remain flat or acknowledging that you do not see growth opportunities in your market. This does not, however, mean you should stop marketing. You want to maintain your presence, retain your current customers and continue to refresh your base to offset any client attrition.
2. What percentage of this year’s budget did you invest in marketing and what were the results?
- Did revenue increase, decrease, or stay the same?
- Did you increase the number of relationships and prospects in your pipeline?
Certainly, looking backward is not a planning strategy. However, evaluating past efforts, expenditures, successes and failures is a first step in moving forward with new plans. This is especially crucial if you do not have primary market research on your business and services.
3. At what rate do you convert relationships to prospects and prospects to clients? How does that rate compare to previous years? If you invested in marketing and your conversion rate increased, then you are seeing results! If you invested in marketing and your conversion rate decreased, then you need to reconsider whether you are targeting the right people with the right message.
4. What is your typical sales cycle? In an organization with a 12 to 18 month sales cycle, it will take a lot of patience to see results from marketing efforts. However, if you expect to see results from just a few marketing initiatives and lose patience before you build up a healthy, ongoing mix of activities and communication channels, you may find a cash flow and pipeline shortfall a year from now. Cutting marketing overhead could cost you revenue you cannot quickly restore. In addition, when you recognize a pipeline problem and try to rush campaigns to market, you will most likely incur higher marketing expenditures.
5. Has the cost of doing business gone up? While The Fed has managed to control inflation with interest rate cuts, the escalating cost of doing business is having a serious impact on day-to-day operations. It is costing you more to keep the lights on, put paper in the printer, and maintain health insurance for your employees. It’s also costing your vendors more, and they are going to pass those costs on to you. In effect, maintaining a flat marketing budget amounts to a budget cut: you can do less and reach fewer people with the same amount of money, which could put your company’s income at risk.
6. Which marketing activities will go into your plan this year? You may save marketing dollars by cutting back on aspects of your campaigns, but at what cost to your results, conversion rates, and overall revenue? Marketers all over the world have proven that you need to reach people six to eight times through multiple communication channels before they will take an action. When you skimp on a channel or an outreach tactic, you will miss individuals who need your services, but do not even know you exist because they overlooked your direct mail campaign, or couldn’t find your website when they searched by keywords you never optimized on your website.
7. What are your competitors doing? If you have successful competitors who you never see actively competing against you for projects and contracts, they are playing in deals where you don’t even have a seat at the table. This means they are reaching leads not on your radar. Their marketing budget most likely outweighs yours and you are losing customers to the competition!
The most successful marketing plans are strategic—they integrate goals from across the organization and take into account factors about your business, your market, and the economy in which you operate. By defining the company’s needs, planning to meet goals, and then budgeting to the plan, you can expect better marketing results.
Michael Faul
President
Normally I don’t like to answer questions with questions, but that has changed on the issue of your marketing budget. In the last 8 weeks we were asked no less than 14 times what percentage of sales equates to a good marketing budget. That question will, from this point forward, get an explanation as opposed to a specific answer. The answer depends on you and your:
1. Annual revenue objective
2. Three year growth objectives
3. Average revenue per project / sale
4. Number of new clients needed
5. Revenue backlog from preexisting clients
6. Marketing philosophy and other objectives,
7. And, much more
Because of this we believe the right response is I don’t know, what is your marketing plan? If you don’t have a plan, then start there. Build a marketing plan and then a marketing budget that supports your plan. No matter how hard you press we will not provide you a general metric.
Will budgeting to plan focused on a future objective cost more? Most certainly! But, until you approach the market differently don’t expect a different result. You need to invest first before realizing a return on that investment. You won’t move off the plateau until you start planning and investing according to your future objectives as opposed to your past performance.
Monica Parham
VP, Marketing
We’re nearing the end of the year, which means companies are thinking about their sales, marketing, and business plans for next year. Many of our clients are asking how to determine what to spend on their marketing. Everyone is looking for us to provide them with a hard number or specific percentage, and I keep telling everyone “It depends.”
On what, you ask? Here are some questions to help you get to your answer.
- Are you trying to grow your business or remain flat next year?
- What percentage of this year’s budget did you invest in marketing and what were the results?
Did revenue increase, decrease, or stay the same?
Did you increase the number of relationships and prospects in your pipeline?
- At what rate do you convert relationships to prospects and prospects to clients? How does that rate compare to previous years? If you invested in marketing and your conversion rate increased, then you are seeing results! If you invested in marketing and your conversion rate decreased, then you need to reconsider whether you are targeting the right people with the right message.
- What is your typical sales cycle? I worked for an organization in which the sales cycle was 12 to 18 months. It took a long time and a lot of patience to see results from marketing investments. By the same token, we found ourselves in a serious revenue shortfall situation 18 months after cost-cutting slashed the marketing budget in half, and it took over two years to restabilize. Ultimately, cutting marketing overhead did not help to control costs, but cost us revenue we could not restore and added marketing expenses when we tried to rush campaigns and programs to market in attempts to make up for the loss.
- Has the cost of doing business increased? While The Fed has managed to control inflation with interest rate cuts, the escalating cost of energy is having a serious impact on day-to-day operations. It is costing you more to keep the lights on, put paper in the printer, and maintain health insurance for your employees. It’s also costing your vendors more, and they are going to pass those costs on to you. In effect, maintaining a flat marketing budget amounts to a budget cut: you can do less and reach fewer people with the same amount of money, which could put your company’s income at risk.
- Which marketing activities will go into your plan this year? You may save marketing dollars by cutting back on aspects of your campaigns, but at what cost to your results, conversion rates, and overall revenue? Marketers all over the world have proven that you need to reach people six to eight times through multiple communication channels before they will take an action. When you skimp on a channel or an outreach tactic, you will miss individuals who need your services, but do not even know you exist because they overlooked your direct mail campaign, or couldn’t find your website when they searched by keywords you never optimized on your website.
- What are your competitors doing? If you have successful competitors who you never see actively competing against you for projects and contracts, they are playing in deals where you don’t even have a seat at the table. This means they are reaching leads not on your radar. Their marketing budget most likely outweighs yours and you are losing customers to the competition!
Perhaps instead of asking “How much should I spend on marketing next year?” ask yourself “What drives my budget?” Do you want to make budgetary decisions based on a percentage of sales, a rule of thumb, what you did in the past, or your marketing plan? I recommend you develop a plan that will achieve your desired results and align your costs to the plan.