You Need Overflowing Leads

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You Need Overflowing LeadsDo you have new leads overflowing all around you?  As I write this post I have 513 new leads sitting in my inbox.  If you don’t have hundreds of new opportunities in front of you then how can you build your business?  You need overflowing leads.

Find a Free or Low Cost Lead Source

Last night I was at my local casino.  The gambling machine in this picture is the one that you drop quarters into and the more you drop in the more quarters drop over the edge into the payout tray.  The person who designed this was incredibly bright.  They realized that if someone heard that clinking quarter in the payout tray often enough, that they would keep dropping quarters in just because they think that there is a possibility that the whole shelf may drop a big payout.  Unfortunately you can play this machine for hours and not make any money.

One thing that the quarter machine does remind me of is a good lead source.  If you realize that there are hundreds of leads out there just waiting to tip over the edge than you’ll stay motivated and keep working to find, develop, and refine a system that gives you leads constantly.

What you need to find is low cost or free leads.  What if each lead only cost you 25 cents, it would only cost you $250.00 for one thousand leads.  What if instead of dropping a quarter in the leads machine you could put a free metal washer?  It sure would be easier to push some of those leads over the edge if you had a bucket full of washers.

Low cost or free lead options are out there.  You just have to commit to seeking a perfect lead source until you find it.  The 513 leads I mentioned were all free.  Because they are free I’ll probably have to discard over half of them, because the quality might be lower than my standards on half of them, but that still means I have 250+ quality leads.  It took me about 18 months to find a solid lead source that fit me well.  It was worth it though, now I have overflowing leads.  Your lead source will be unique to you, so take time to study what fits and what doesn’t fit, and don’t stop until you are satisfied with the cost and quantity of your leads.

Control the Flow

One thing that is critical to your success in lead management is the ability to control the flow of your leads.  Can you turn them on and off?  Do you know what you’ll get if you turn on the lead source for 90 days?  Remember it’s not really a reliable lead source unless you can control the flow of leads 100% of the time.  You need to know that for every 100 leads you’re likely to close X percentage.  This way you can turn on your leads, get busy closing some new customers and see consistent growth in your company.  Be sure you can control the flow of leads when you look at a new lead source.

Create a Solid Approach for Closing Each Lead

Once you’ve received the lead, reviewed it and pre-qualified it, then you need to put it into a system that allows for the highest possibility of converting it into a sale.  Think about the hours that you invest in each new prospect.  I know for my team we can spend 12-40 hours to close a lead.  Depending on the size of the job 40 hours may be worth it.  In some cases it might take 120 hours to close the deal.  Whatever it is, you don’t want a missing piece in your system to lower your chances of success.  When I wrote Stop Hiring Weak Sales People Now I described a method that allows your strongest sales person (often you, the business owner) to close the sales by using a system that sends all qualified leads to you.  Whatever the approach is, you should be careful to study and refine your prospecting and sales approach so that you can wisely use your team’s resources to close more deals.

Follow Up with Long Term Follow Up on Won and Lost Leads

Last week I looked to see how many dollars I invoice compared to the proposals I send out.  39% of all estimated work in my tech company ultimately becomes an invoice.  I think that is a reasonable close rate.  It’s not where I would like it to be, but it’s a good gauge on how much work I need to quote in order to reach my sales goals.  Basically for every million in sales I want to do, I need to send out estimates for 2.5 million.

One of the important pieces that I’ve been focusing on more recently is long term follow up.  No matter if I close the lead or lose the lead initially, there is a huge opportunity to do more business in the future if I am diligent to follow up.  I use a product called Infusionsoft (affiliate link) because of the intelligent tagging and automated decisions that the software can make for me after I set it up.  Whatever software or method you choose, be certain to put something in place that allows you to follow up with closed and lost leads in a consistent manner.  Follow up is key, no matter what industry you’re in, you have to have a follow up plan if you want to increase your close ratio.  Make a point today put some follow up procedures and methods in place that are automated and don’t get lost in the daily shuffle.  There is a quote in Infusionsoft that really stood out to me and I think it’s important to remember:

Don’t get too hung up on getting your copy perfect.  Following up doesn’t require prefection.  Reaching out is what makes the difference! ~ Infusionsoft

I remember that line every time I build a new automation sequence and every time I sit down to write a new post.  Although my work isn’t always as perfect as I would like it to be, I’ve committed to stepping out and producing content on a consistent basis.  My consistent actions produce results, not the perfection or lack of perfection in each action.

So there you have it, four of the pieces I think about when I work to create overflowing leads for my business or one of my clients.  Take action today and generate yourself overflowing leads!

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How Much is My Business Really Worth?

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What Is My Business Really Worth?From a financial point of view, considering what your business’ real cash value might be is a valuable exercise.  It’s always worth understanding the reality of our business world so we can act responsibly and lead wisely.

There have been thousands of books and articles written on the subject of business valuation, so I’ll leave the in depth explanations to those authors.  The simple calculation you can do to look at your value right now is this:

Income -(minus) Expenses x(multiplied) by a factor of anywhere between 2 and 6 based on your industry.

As a small business owner in most cases you’re really looking at what you draw as a salary and profits out of the business.  So if you did $500,000 in sales last year, and your net profits and salary totalled $75,000 your purchase value could be anywhere form $150,000 to $450,000.

What Factors Make My Business Sellable?

If you walked into the business down the road from you and it was for sale, what would you look for?  There are a two things that I would look for before I would consider purchasing a business.  Without these two items clearly in view I wouldn’t even ask for a full financial statement, or take any other steps towards purchasing the business.  If these pieces are in place it makes it much easier for you to court interested buyers.  Even if you aren’t looking to sell taking this approach will make it easier for you to get financing, and grow your business in other areas.

1. Do You Have Solid Systems in Place?

If you can’t immediately answer yes and bring to mind the systems that help your company operate smoothly then it’s time to look at implementing a systems approach to everything.  Anyone that I have ever seen implement systems into their business benefits in the short term and long term.  When you research and develop systems for each area of your business you build your business’ value as well as the value of you and your team.  Systems thinking and implementation is often the difference maker between struggling to make it and succeeding as a small business owner.

2. Can You Identify Profit Centers in Each Department?

Instead of just looking at your business as a whole, consider what each different department or segment does individually.  If you have a product division and a service division then you should be able to justify each divisions existence based on it’s individual profit and loss sheet.  If one of the divisions only exists to boost your core business and does not make a profit, be clearly aware of that.  This question really ties back into the first question about having systems, but it’s an important thing to consider as your grow and stabilize your business.

When I can have an intelligent discussion about these two questions with a small business owner, systems thinking and profit centers, I know that they’ve been planning and implementing growth strategies for a long time.  Personally I always have to consider my own actions on a daily basis to be sure that my daily objectives line up with my long term goals in the area of growth and stability.

We have just scratched the surface of business valuation today to help you begin thinking about it.  What are you doing to implement systems and more focused profit centers in your business?

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Stop Hiring Weak Sales People Now

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In just a few minutes I can remember over a dozen sales people that I have hired in the past 10 years.  There are probably more than that, but ones I remember at least tried hard to produce results for me.  I have two left that I work with that continue to produce amazing results for me.

Looking back at how I approached hiring sales people as a small business owner I’ve finally learned that it wasn’t the people I was hiring that failed, it was me.  Since I am the leader of my company I am responsible to give my sales people the tools they need to do their job well.  If I’m not doing my job well, how can they succeed at theirs?  After many years of trial and error, I’ve finally figured out a method that is working incredibly well for me.  The approach we’ll cover today should be a fit for any company that is doing under 10 million dollars a year gross.  When you surpass 10 million dollars a year you should modify the approach as needed.  The principles will still apply, but the methods will need to be updated some.  Put this approach in place today so you can stop hiring weak sales people and start seeing results.

Sales Failures

1. Why I Failed with My Former Sales People

  • I Didn’t Give Them Solid Leads
    • If you have not yet found and fine tuned a lead source for your business that produces 50+ leads per week, then you don’t have what you need to hire a sales person.
    • When you rely on new sales people to generate their lead list and sell you are expecting too much.  Only one person out of every thousand can do that successfully.  Lead generation IS NOT sales.  It’s a different department.  Don’t fool yourself.
  • I Didn’t Train Them
    • When you don’t require thorough and appropriate training for new sales people you are setting them up to fail. Two days hanging out with the boss is not training.  Please don’t let yourself think something so foolish.
    • Training has to be documented and tested.  It takes hours of thought, writing, and preparation.  It also takes time from someone who doesn’t have 30 other objectives in the day.  If you are as busy as I am then you don’t have any business training your new sales people.
  • I Thought They Could Close Like Me
    • I don’t know where this ludicrous idea came from, but I used to think that I could bring someone in, have them hang out with me for a few days, and then send them out to close millions of dollars in new sales.  Wow, that has to be one of the stupidest thoughts I’ve ever had.
    • How can you expect a new sales person to step out and have the years of experience, the drive, and the tools that you do to close?  You know the rules, they don’t.  You know the tactics that help you close, they don’t.  You are confident and comfortable, they are not.

Turn Around Your Sales Team

2. Fix the Problem and Build a Winning Sales Team Today

I could go on for days about the stupid mistakes I made when I first hired in sales people, but that won’t make you or I any more money.  Let’s focus on what can make you more sales and more money today.  If you take action and apply these steps I can personally guarantee that you’ll see results much faster.

  • Give Your Sales People Fresh Leads
    • Instead of thinking that it’s reasonable for a new sales person to call through the phone book, google search for leads, or walk around and canvas, give your people fresh new inbound leads.
    • In order to do this you’ll need to find a new lead source and fine tune and adjust it to meet your needs.  Realize that it’s normal to pay anywhere from $25.00 up to $100.00 for a new lead.  Find a source that gives you ample leads in a steady manner.
    • You’ll need to study and update your prospecting approach as well so you that you get high quality leads consistently.
    • Once you’ve located a fresh steady stream of leads, decide who in your company should handle the pre-sales department.  This person never has to talk to customers, they just need to keep your inbound lead list well groomed and flowing steadily.
  • Queue Up Each Day’s Work
    • If you have technicians doing work for you then you know that you have to write up agendas, queue jobs up properly, and hand them a weekly agenda of some sort.  Why would it be any different for the sales department?
    • Write an agenda of who they should call, and what tasks to accomplish each day.  Don’t leave anything to chance.  Give them the agenda and the tools to succeed.
    • In my case my internal sales people are responsible to call and email our new leads.  Each day they have a list to work through, and they understand what to do with extra time.  They are self motivated and achieve great results because of the fact that I’ve properly structured their days.
  • Give It Time and Measure the Results
    • At a minimum I believe you’ll need to put this system in place for at least 90 days and after 90 days measure and review the results.  It’s never reasonable to expect instant results from any new plan.  Dedicate yourself to consistent actions and then look for results.
    • Every single marketing and sales initiative that you do as a small business should have a time frame and be measured.  If something isn’t working then stop.
    • How do you measure what’s going on?  You need to have a good CRM to track your results.  I use an amazing software called Infusionsoft that can intelligently make decisions and update my email marketing and team based on how my prospect interacts with the information that I give them.
  • Adjust Your Course as Necessary
    • No matter what you’ll need to make adjustments in how you approach your sales team’s work.  The important thing you have to remember is that you need to constantly monitor results.  Not just on Friday before you hand out another paycheck.  Throughout the week keep a close eye on what’s going on so you can help make adjustments to the process.
    • Listen in on phone calls, read through emails sent out, and give both positive and constructive feedback on a daily basis.  The more you’re involved with your sale people the better results you’ll get.
    • I also find it incredibly important to listen to what they have to say about the direction that you are taking.  Even if they’ve never sold your product or service before they may have a better approach than you do.  Listen to their ideas and be humble and open to new ideas.
  • You Are the Closer
    • Faulty thinking is probably the number one thing I look for in myself and in others, it’s the first thing that causes trouble for me in business and in life.  One erroneous thought that I used to have was that my new sales people could close as much as I could on a consistent basis.  This is foolish for the reasons I noted earlier in the post and it’s something you have to put out of your mind if you want to get results from your sales team.
    • Setup up a consistent system that ultimately puts you in front of the new customer for the final close.  Because you have the highest level of skill and experience as the owner, it’s most likely that you’ll be the best closer.  There are exceptions to this rule, but in most cases when I meet the small business owner who has succeeded in growing their company it is because they can effectively sell to their customers.
    • Let your sales people know that you are closer.  Compensate them fairly for the work they do to queue up the opportunity for you, and give commissions or bonuses for each successful face to face or phone meeting that they create for you.  Just imagine what it would be like to have 2-3 brand new client meetings a week.  If you can put this method into practice with your sales people then that is what you’ll have in short order.
  • Grow Your Own Closer In-House
    • As you grow in your new sales approach and your team fills in around you you will eventually need another closer besides yourself.  I believe that this position is most frequently going to succeed when you take a skilled individual from within the company to fulfill this role.
    • Internal people have already invested time and are genuinely interested in the company’s success and also have heard a lot about or interacted heavily with your customers.  They undersand you and your customer.  That is the closer you want to represent you.
    • Train them extensively outside the company.  You’ll need them to be professionally equipped to do their job.  Just like an electrician needs certain training and certifications to properly install a circuit, you should properly train your new closer.  Ask around, find the best sales academy for them, and send them there.  Your in house person will appreciate the opportunity and work hard to deliver you results.  If things don’t work out, give them the opportunity to return to their old position in the company.

Define the Position for Your Sales People

3. Positions You Need to Create Internally for Your New Sales Team

We’ve covered a lot of ground here, so I’d like to boil it down into a few simple steps, and positions that you’ll need to create in order for this new sales approach to succeed.

Pre-Sales:

Your pre-sales team member should be in charge of building lists from the lead source that YOU have carefully and personally refined the first few times.  Don’t ever rely on someone else to define your ideal customer.

Pre-sales should then hand this list of to:

Outbound Sales:

Outbound sales people should then work through this list by calling, emailing, and visiting in person based on how your killer marketing approach is supposed to work.

Your sales people are supposed to focus on giving the closers meetings with the decision makers.  Right now that closer is probably you.  Ultimately the closer may also be another team member, but for now refine the system and focus on closing each deal yourself.

Closers:

Closers simply have to show up to the meeting with the new customer, with the lead information, sales person’s notes, and meet the customers needs with the right solution.  Try for one meeting closes, but if you can’t close in the first meeting, be CERTAIN to schedule the next meeting before you leave.

Kick anything back to sales that you need handled before the next meeting.  Then walk in and close.  It’s that simple.

Here is what the whole process looks like:

A Winning Sales Process For New Sales People

Put this plan into action to achieve steady growth and results.  If you need help, contact me.  I’ve helped others implement it before and I’d be happy to help you succeed in your sales efforts.

Two sure ways to fail-

Think and never do or do and never think.

-Zig Ziglar

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What’s Next on GabeArnold.com

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Around this time of the year I like to take time to reflect on what I’ve done and look forward to the coming year.  I lay out my goals and take time away to think.  That’s why you haven’t heard from me in a few days.  I hope you had a terrific holiday and that you are coming back to a productive and profitable week.  Here’s what’s coming next (my rough outline of the next few weeks of posts):

Setting and Achieving Goals:

1. What is the goal?

  • Describe it clearly
  • What will it take?
  • What is the time frame

2. What objectives will it take to reach the goal?

  • Break down the steps
  • Daily review
  • Weekly review

3. Accountability

  • Be public about your goal
  • Track it publicly
  • Ask someone to personally hold you accountable

What is an Entrepreneur?

1. Thinking Large From the Beginning

  • Building with systems
  • Building to scale
  • Mass market appeal

2. Someone Who Provides for Others

  • Grow your business for others
  • Grow other leaders around you
  • Impact your community

3. Resilience

  • Mistakes are our education
  • We know businesses fail
  • We can remake ourselves

Small Business Financial Success

1. Five Things I Wish I’d Known About Finances

  • Pay yourself first – no one else will
  • It’s your money, you decide when and where it goes
  • Monthly expenses will eat you alive
  • You don’t have to pay your bills on time
  • You don’t have to pay “prevailing wage”

2. How Much is My Business Worth?

  • It’s not worth much unless you have systems
  • Rule of thumb 1.5 times revenue
  • Are you building to sell?

3. Five Ways To Save More Money In Your Business

  • Review Your Checking Account Thoroughly
  • Eliminate Services You Haven’t Used Within 30 Days
  • Trim Down Existing Services
  • Turn Down the Heat
  • Eliminate Wasted Labor

4. In Depth Cash Flow Analysis

  • Review Your Statements and Categorize Expenses
  • Look at Actual Collection Amounts
  • Build a Spreadsheet
  • Split Revenue Into Categories
  • Check Your Pulse Monthly

5. Make More Money Without New Products, Services, or Customers

  • Negotiate better pricing from vendors
  • Ask customers if they need more
  • Ask Your Team How To Make

That’s your sneak peak!  If you have any thoughts on one of these points specifically, or if you have something else you’d like me to cover, please let me know.

Here’s to your continued growth and success in 2011!

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