PetesWeekly

Sales Funnel Spiders

March 29th, 2011 | by | best business books, selling

Mar
29

I spent three years selling life insurance in the 90s. It was the toughest time of my life. But as a learning experience it remains unbeaten.

About 100 years ago Frank Bettger started selling life insurance in the United States. Some time later he wrote about his experiences in a book that was translated into more than one dozen languages. It’s called How I Raised Myself from Failure to Success in Selling, and you can download it right now for your Kindle or iPad. I read it for the first time in 1992, and I think it is one of the best sales books ever written.

In short, Frank started selling life insurance at a low ebb in his life. I seem to recall that he started without socks, although that might have been my brother. In my case, I had socks but no car.

After 10 months of pain Frank realised something very simple: no matter how good or bad he was at selling, as long as he was able to tell his story to enough people, someone would buy.

Think about that. It doesn’t matter how good or bad you are at selling, if enough people hear what you have to say, someone will buy. And that’s the secret to selling. (I have been selling since 1984 so I have a touch of history in this field.)

Insurance salespeople are amongst the best sellers in the world. And they get taught well. They know that selling is a numbers game. Allow me to explain.

They know, for instance, that for every 20 cold calls they make, they will get 10 appointments. For every 10 meetings they arrange, they will actually meet eight people. (Two people will cancel or just not arrive or set the dogs on them.) They know that for every eight people they meet, they will get four requests for a complete financial report. For each of those four reports they will present three (another no-show). And for each of those three final meetings they will sell one policy.

Let’s work that backwards in terms of money.

The commission on the policy is, shall we say, $10,000. That income is the result of making 20 phone calls, making each of those calls worth $500. That income is also the result of meeting eight people, making each of those meetings worth $1250. And, they had to put in three final meetings to arrive at their income, making each of those worth $3333. (Your own numbers will depend on your process, what you sell, how good you are, the season, and a few other factors.)

Sales is a numbers game. This is easy to measure. And once you are measuring it, it’s easy to improve each facet because you can see where the problem is.

Effort Activity Effect Value
20 Prospects Phoned 100% 500
8 Generates 8 Meetings 40% 1250
3 Which Generate 3 Presentations 37.5% 3333
1 Which Generates 1 Sale 33% 10000

It’s easy to motivate yourself to make each phone call, because each very short phone call is worth a lot of money because 20 of them are going to result in a sale.

And it’s easy to notice when things change, or to focus on improving each facet of your process.

But here’s the thing. In speaking to a whole bunch of business owners this past week, many of whom were their own salespeople, very few had any real idea about just one number: how much their average sale was worth.

And if you don’t know what the average sale is worth, it means you don’t know any of the numbers that are important to your business. You cannot work out the value of a lead, which means you cannot work out how much you can spend on marketing. (Marketing is the process of finding enough leads to get to that one sale).

It means that you don’t have a sales funnel. Your process is more like a funnel spider, and they are fugly boisonous pastards. Maybe that’s why about 96% of small firms fail in the first ten years.

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Learning hurts…

March 23rd, 2011 | by | life, travel

Mar
23

Learning is painful. I know this because I took up skiing this past weekend.

My wife assures me that I wasn’t too bad, but that slowing down is not often done by plowing one’s face into the track ahead, except in extreme emergencies. She also pointed out that screaming four letter words as one hurtles down the side of a cliff is frowned upon by Norwegians, who tend to be somewhat restrained. Especially when the cliff is, in fact, a mere 5 degree incline. Although she was inspired by my doing it all backwards, a feat that attracted quite a crowd.

Frankly, it all hurt more than I expected.

I was inspired to do this by my 13 year old son. He’d been forced into a 20km cross country ski run. (His previous attempt at skiing had been last winter.) I was 30 minutes early to collect him at the designated spot, just before lunch. It was a delight to see these youngsters cruising across the frozen lake, thighs rippling as they gracefully strode across the ice with ski sticks gripping the ice in unison.

Sadly, my son was not in this initial group. Nor the second. After about an hour one of the teachers who had accompanied the kids sidled up to me. “You are waiting for someone?” he asked in Norwegian. At least, I assumed that was the question. I mentioned my son’s name. His face dropped, in the way that your Dad’s does when he is about to tell you that your pet puppy has just been severely injured.

“Ah yes,” he said. “Kristoffer did not have it good. He has no technique. Normally we relax when we can go downhill, but he had to work just as hard to go down as to go up. He will be along, but maybe not soon.”

Kris’s second name is Thor, named after the God of War. When he proclaims “I am Thor!” it is not usually in pride, but rather in pain. And so it was on Thursday.

About 30 minutes later I saw a young man in the distance. Normally when one sees a skier striding across the snow it’s a proud event. If you’re a movie buff, phrases like “crouching tiger” and “lunging lion” spring to mind. This youngster was more of the genre “broken leg”. He shuffled his legs wantonly making slow progress across the level surface, and only occasionally falling over. His ski sticks hung limply from his arms, no longer quite as straight as when they’d left the factory. The left stick had an interesting hook to it that certainly was unusual. My son.

Actually, it wasn’t him, just a boy wearing the same colours and having a similar gait. My boy was still a few miles back, at the top of the last hill. Apparently it is not a good hill to come down if you are unskilled, as evidenced by one youngster who took a sudden left and vanished into a copse at the bottom, completely missing the frozen lake. This was accompanied by a outburst of “Oy, Oy,Oy” from the folk watching. This is a universal Norwegian sound for “Oh gosh, he’s about to die.”

Eventually, even the Norwegians lost patience and sent a vehicle up the hill to rescue the last three boys. Good thing, because it was getting close to supper time.

Now, I was never a great sports player at school. I made captain of the third hockey team, but that was a nominal title because we never had enough players to actually play a real match against another school. But, this sad showing led me to ask “Honestly, how difficult can this be?”

So, when Caroline nudged me on Saturday I was gung ho. Turns out that it is quite challenging. We’ve decided, the boy and me, that next winter will be a good time to ski again.

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Gimme them bankcodes, Dad.

March 14th, 2011 | by | sovereign individual

Mar
14

When I was young I knew almost everything. It was only today that I realised quite how obnoxious I must have been. And, of course, how all-knowing, all-seeing, and self-centred all youth are. Except you, of course, if you read this old man’s rambling each week.

That’s why a few years as an apprentice in somebody else’s mail room is such a good idea. It cannot be Dad’s firm because, frankly, Dad is overpaying you for all those years before you reach thirty. That’s why so many prats drive such nice cars when Dad can’t afford more than his 1997 Ford Excretion. (Said prat knows that he is the only reason the old man remains in business. The twenty prior years were just lucky happenstance.)

This came back to me today as I spoke to yet another Dad trying to help his kid out. The kid, of course, was just trying to help himself out. In this case, the key phrase was ‘Hay Dad, can I have the codes for the bank account?’ Been there, and the T-shirt is still on loan.

Maybe I am a tad prejudiced, but most kids I know think that 12 hours each day spent watching Youtube and chatting via Facebook while playing World of Warcraft qualifies them as IT power users. It’s a life of limited attention spans and instant gratification. And it barely qualifies them for a job in the sanitation industry, throwing bags into the back of those big crunchy trucks.

I am reminded of an old story that keeps me sane when I bump into one of these children that think that because I am older than 27 I must be over the hill and should be under the ground.

An old fellow is handing over the reins to a much younger successor. The youngster asks what the secret has been for the oldsters great success. “Just two words, my boy: ‘Good decisions.’”

“But how do I get to make good decisions?” the young man asks.

“Just one word, my boy: ‘Experience.’”

“And where do I get that experience?” the young man asks.

“Just two words, my boy: ‘Bad decisions.’”

Knowledge is all over the web. But lets not confuse facts and noise with anything useful. Useful is what you become after you stub your toe so often that it bleeds, and you realise that there is no one answer to any question. There are always lots of answers, with a few that might fit your needs. The experience of making all those awful choices is what makes you useful – and makes you ready to run your own business.

So, don’t let my comments dissuade you from diving in. Just give the old man a break, and offer your services to his biggest competitor. He needs the help. (Your old man, that is.)

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Business Owner Guilt

March 9th, 2011 | by | best business books, entrepreneurial life

Mar
09

There’s no shortage of people who want to tell us how to live our lives. I think this is most true for those of us who run our own shows. It does not build much confidence when almost all of us are, to say the least, flying by the seat of our pants.

As a newly minted 53 year old I realise more than ever how much I don’t know. Which gets me to the point of ‘guilt’ as it relates to us self-employed folk. (That’s about 85% of all businesses).

A young boy watches a painter for a few minutes before asking if he can try. The painter gives him a roller and a few tips. The kid’s older brother arrives and after a moment says “That looks terrible. You’re doing a terrible job” Without a pause, the eight-year-old responds “Well, of course, I’m just learning. This is the first time I’ve ever done this.” (Adapted from Blind Spots: Why Smart People do Dumb Things by Madeleine van Hecke.)

Wouldn’t it be great if we could approach life with that sort of attitude? It’s an approach where there are no mistakes, only learning experiences. I’ve had my fair share of those, and a few were world-class. The learning part we carry with us for life. The guilt part we should lose quickly.

All of this bubbled up this week. On Monday night my tummy began to effervesce. By Tuesday I had lost a kilogram (good) and slept for 20 hours. By the time I woke up the kids had started fighting about who would get the Apple laptop.

They’d also started a contest to see who could hear Dad’s tummy the furthest away. I am told that Dani won when she ran outside and into the garden of No. 43. (We live in 39.) And, I understand I achieved some immortality when she yelled out, in Norwegian, that she could still hear Dad exploding. I am now known locally as Krakatoa (bad).

But the worst part? I felt guilty about missing a day off work. Ignore all the weekends, and the 20 hour days worked over the past 30 years. Isn’t that really silly?

Yet I see this in almost all the folk I talk to. We’re quietly getting on with paving our own way. Paying the bills most months is a pretty good record. (Paying them every month is an astounding one.) And throughout this we’re guilty that we’re not doing better, or working harder.

If it helps any, I deeply admire anyone who is in business for herself or himself. It’s frightening, and exciting. And the score doesn’t really matter. The fact that you played the game does.

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My first hint of diabetes.

March 7th, 2011 | by | diabetes

Mar
07

Nobody really knows anything about diabetes, although the concept of daily injections inspires terror in most people. The first time I heard about the existence of such a disease I was about 10 years old. I was standing in a queue outside matrons office, waiting for a vaccination.

Each kid that had gone in had come out clutching his left arm and grimacing. (Sadly it was a school for boys only, with a few exceptions that I will come to shortly.) The fellow behind me mentioned a disease that he had heard about where you needed an injection everyday. I couldn’t imagine anything worse.

As it happened, I got that disease. And, in hindsight, I can imagine a lot worse. Prior to 1925 there was no cure for this disease. The only treatment available was a gentle form of starvation which led to inevitable death 10 months later. And after an astoundingly joyous 40 years as a diabetic, I’m happy to say that there are many, many worse ways to live a life.

The best thing about a school for boys only is if you are the only girl there. When I started, there weren’t any girls, and the teachers bore the brunt of all of our youthful lust. A year later, and a few new teachers arrived with their children. Their children included two goddesses. They could have looked like Frankenstein’s mother, and they would have nonetheless been goddesses. That’s the value of being the only two girls in a school of 200 boys.

One of them was a tomboy. And frankly, she was not genetically blessed. The other, Joanne, was the most beautiful human being I had ever seen. Sadly, 199 other boys felt the same way. She had no shortage of suitors. I hadn’t yet been diagnosed as diabetic, so I stood no chance, not even with the sympathy vote.

Stephen King, I think it was, commented on going back to one of his childhood neighbourhoods, and being astounded at how small some of the big buildings seemed. I went back to my boarding school 30 years later, and, indeed, it was much smaller. The “big” hall wasn’t very big at all. Thirty years on, it was no bigger than a large classroom, which was the role it now served for the kindergarten kids.

In hindsight, I can understand that. Who can forget the food fights? Some of the more accomplished of my peers could throw food from one corner right across the length of the room. This should have been a clue that the room wasn’t all that big.

One of my enduring memories was of the headmaster, Roger Carter, entering the room in the middle of one of these fights. Somebody had just launched a hard boiled egg towards the very door he entered. The egg did not hit him. At least, not quite.

Instead it hit the  wooden floor at speed a yard or so in front of him, left a solid white and yellow streak before gently mounting his left polished brogue, painting it with a jaunty stripe.

Isn’t it astounding how deep and instant a silence can be?

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Diabetes might suck, but life is great.

March 6th, 2011 | by | diabetes

Mar
06

This past week, I started tentatively working on a book about diabetes. I have read a few books written by diabetics. None of us like the disease. All of us agree that the disease defines us. But most of us see the disease as “the enemy”.

Kevin Kelly, in his superb book “What Technology Wants” talks about “events”. I am just such an event. So are you. For a very short time in the history of the universe a bunch of atoms coalesce to form Peter Carruthers. Not only that, but every seven years or so, all those atoms move on to new “events”, most of which are much more exciting than I am, like trees,  penguins, and the carbon fbre casing of a ‘new’ iPad.

The miracle, I think, is that most of us function so well. Most of us start at the front of the queue, genetically speaking. I am not one such person.

The disease is very frustrating. Just when you think the day is going splendidly, your chemical balance doesn’t, and you start stuttering or trying to open the front door with the ignition key of the car. (Or in my most famous family case, taking a leak into the dustbin in my study. I guess that’s not unusual for some men, but mine was a wireframe basket.)

So, yes, that doesn’t add too much joy to the average day. Most diabetics will devote at least 30 min each day just to the task of staying alive. Heck, that’s more time than most people spend washing. (I know a few folk who spend a lot less time that that washing, and make it a habit to avoid them.)

As I see it, however, I am astoundingly lucky. If I had been born in 1908, instead of 1958, then I wouldn’t be sitting at my office in Norway. I would be at one with the universe, so to sepak.

I would have been diagnosed at the same age, and I would have followed the same treatment that most diabetics received early in the 20th century: slow starvation until death.

Imagine reaching into the engine of your new car and randomly pulling out a few wires. Chances are that the car is going to behace erratically in future. Much the same applies to us diabetics.

After 20 years or so of manually balancing our blood sugar levels, and screwing it up far more often than not, it’s no surprise that our atoms begin to dissemble. The things that go wrong are related to small blood vessels – blindness, kidneys, and the tips of fingers and toes.

Blindness, dialysis, and gradual amputations – well – they’re not much fun. On balance, however, I would rather have a pretty full life and face a few challenges at the end than have my life start 6 feet underground. Life is wonderful, and I wouldn’t want mine any other way.

Diabetes is no more my enemy than my left foot is.

(I was diagnosed a type I diabetic in 1971. 2011 is my 40th year as a diabetic.)

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Sales Quotations

March 2nd, 2011 | by | marketing, selling

Mar
02

Here is a true story. (All my stories are true. If I made them up in a novel you would not believe them.)

My new client, Dave (not his real name) sells a product that we all need. It is a high value item. We each buy one every 10 years or so. Dave wants some help finding clients. That’s what we do, so we dive into action.

Within 10 days Dave has received more than 50 leads, some of which are worth about R250,000 if the deals come through. (Hotels need this product en masse.)

Dave calls up. He is not a happy camper. Turns out that the leads are not turning into sales. We hear this often so we start at Dave’s coalface: How does he respond when an enquiry arrives in his email inbox. (Or in the boxes of his office slaves.)

That’s easy. The prospect either gets a quotation or a price list. We ask to look at the covering email.

The covering email is a problem:

  • No mention of Dave’s firm.
  • No gentle thank you for the request.
  • Not even a phone number for the prospect to call to place the order.

In other words he sends a standard SA quotation. Even if a prospect wanted to buy, she could not.

“Dave, please tell me that you at least called that fellow looking for 500 units last week?” (No chance, that prospect got the ‘standard’ email.)

So, no sales, and it’s not the leads that are bad, it’s Dave’s process.

I told this story on Tuesday night to 100 SA business owners. I asked them how many of them had a simple response process in place. (In other words, how many had taken some time to think through the process by which a stranger becomes a client.) Just one in five!

  • It’s not just a prepared response for a possible big sale. (In which case an instant phone call is crucial, in my humble view.)
  • It’s also a response for a possible small sale.
  • And it’s even a response for a NO sale. (That might be someone looking for a job, or for help to do it himself. In this case a polite email response is useful to say that Dave cannot help, but offering links to a few sites like the industry association, or Dave’s biggest competitor who might have the time to get involved.)

We’re finding more than 11,000 sales enquiries each month, and many of our clients treat each one as if it’s the first they have ever seen. Hint: An ounce of routine is worth a ton of inspiration. (Not sure who said that but I heard it somewhere.)

We call the document we send to a person (to persuade them to give us money) a quotation. It isn’t. A quotation is something clever a famous person like Errol Flynn once said: “My problem lies in reconciling my gross habits with my net income.”

I think of it more as a sales proposal. A proposal should come after some dialogue. For instance, you and a stranger snuggling up on the couch to discuss your future. As you find common ground, and find that this person likes your jokes, you get comfortable together. After a while you make a proposal – based on what you know about the other person. And you indicate how much you really, really want to spend the next 200 years in her (in my case) arms.

A sales proposal is not quite so personal, but it also should not be like walking up a stranger on the street and suggesting a quickie – which is the way most small business sales quotations appear.

“Here is our price list.

If you want to buy one of these you must deposit 80% of the purchase price into our bank account within 3 days of ordering, as long as it is a day starting with a ‘T’.

We don’t have time to include any nice words from our clients about how great we are, because, well, you’re not important enough to us. So we’ll just tell you that we offer a unique service and that excellence is our motto.

We know that you wanted this for your children, but we don’t have time to tell you how our children’s product differs from our office product or garden product because, well, you’re not important to us. And besides, we’re too busy making the blerry things.

Our order process is so obvious that we’re not going to waste time detailing it here. Just remember that all orders need to be lodged in triplicate, with an official order number, between 3:30pm and 4:30pm. As long as the day does not start with a ‘T’.”

The good news is that the service bar in SA is so low that my pet earthworm can jump over it. It’s like scuba diving. When a shark appears you don’t have to be an Olympic swimmer. You just need to swim a little faster than Dave.

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