Are You a Better Seller than a 6th Grader?

What a Girl Scout can teach us about the customer experience...and how to sell

Last week I had the pleasure…to my surprise…of hearing my 6th grader work the phone selling Girl Scout cookies. She’s been a Girl Scout for a number of years and has achieved “Cookie Diva” (Cookie VIP this year) status numerous times by selling more than 150 boxes of cookies. Although I had helped her over the years by selling some cookies at work, I never actually got to hear her sales pitch, until last night.

Sure, it’s hard to resist a Girl Scout selling cookies, but as a sales and marketing consultant for the last 12 years, I was struck by how well a simple, honest approach to selling worked. It was an interesting and enlightening 30 minutes.

Here are some of things I heard:

• Niceties/Pleasantries – started every conversation with “happy new year”, and talked about their holiday, children, etc. She invested the time in catching up with them even though she had limited time to make calls between homework and bedtime. She didn’t jump to “getting the order.” It made me think about how often I rush through this important step because of time constraints, pressure on revenues, and/or proposals. If customers think that the only time you call them is when you want something...this certainly confirms it.
  
• Customer Knowledge – no sophisticated databases, profiling or scripts. She did her homework by knowing what they ordered last year, what girls were no longer Girl Scouts, etc. which made it easy for customers to place orders because she knew them well.
  
• Attitude – sometimes people consider sales as a “dirty job” and/or that we may be they are inconveniencing/imposing on someone by pitching them…like a stalker (maybe that’s just me). Could this stem from the fact that perhaps we don’t believe in our product or the value it can deliver to our customers. Listening to my daughter, I heard her talk about how good some of the cookies are and know how much they and/or their children love them, how she likes to put the “Thin Mints” in the freezer because she likes to eat them cold or dunk the “Do-Si-Dos” in a glass of milk before bed. Having seen boxes of GS cookies disappear from our shelves, I can attest to how much she loves her product.
  
  She’s not imposing on others, even though she caught some folks at dinner, she’s turning others on to a great product that she loves. What a difference that makes…
  
• Product Knowledge – not only did she know all the cookies, including the new and classics, but also how many where in a box and how they were packaged. The best part was describing how to consume them…see above. I can’t tell you how many marketers I’ve worked over the years that don’t know the products their companies sell. I’m convinced that this lack of product knowledge is the leading reason why sales organizations dismiss or don’t respect marketing/marketers. Want to improve sales and marketing integration, train your marketers on products and see what happens.
  
• Reference/Customer Testimonies – when her personal testimonials weren’t getting the job done she started to talk about others in the family and/or someone they knew. It made me think, do customers really care to hear reps experience with their own products? Maybe not, but do they listen to how convincingly or passionately they’ll testify…you bet! Customer testimonies are always the best --the more relevant the situation the better, but they also judge reps consciously or unconsciously on how well reps make their case (see the bullet above).
  
• Handling Objections & the True Decision Maker – she went after a new customer who told her that they usually buy from a girl in the neighborhood. She then asked for the lady of the house recognizing the dad/husband was not the real decision maker (home schooled on this trick). She got an order but not the full order…the girl in the neighborhood will still get hers...but it will be a couple of boxes short.
  
  How often do our reps stop at “no” or get stuck dealing with the first contact vs the real decision maker? We all know that we’ll have to work harder to get the order than in the past, maybe we don’t go for the home runs as often, and settle for few singles instead.
• Incentives – simple and straight forward, no complicated % or calculations…sell this much…get this. A compensations consultant’s dream, straight forward and easy to implement. On the order sheet, it lists the prize the girls receive based on their sales. As she reached certain level (25 boxes, 50 boxes, etc) she would tell us what prize she was won and what she was going for next. But the big one, the President Club, the one that screams “I’m the Diva” was the Cookie VIP patch.
  
  Good old fashion recognition for a job well done that lasts all year. Oh, how we’ve complicated incentives plans over the years. The search for the ultimate motivator has many times led us down the wrong path. Is it time to simplify, not sure, but I would bet it’s worth investigating.
  
• Connecting it to Social Causes – this is the primary fundraising vehicle for the Girl Scouts and people know it. Can you write off the $3.50 per box as a donation? No, but you do feel good about placing you order, sure. We’re all so socially aware nowadays, are there opportunities to connect your products to the “greater good?” You may have seen the latest ads from IBM and how they’re products and services can help companies “go green.” It’s time to add this to the value proposition…or at least consider it.

Yes, I know that many of us have much more complicated sales processes and products/services, but how much of that is self inflicted? At the end of the day, don’t all customers want the same thing…a good product or service that satisfies a need/want representing good value acquired through a pleasant experience?
During this difficult economic environment, listening to my daughter was a good reminder of how well having a good product, knowing your customers and believing in the value that you’re providing can work. Is it time to simplify our products, value proposition, how we compensate our reps? It may depend on the company, the situation, the market…but I would bet it wouldn’t hurt.
At the end of the night, ten phone calls, 10 closes and over 70 boxes of cookies sold in the matter of 30 minutes (pleasantries, product description, and an order every 3 minutes). Not bad for a junior telemarketer with no training. The GS’s will sell over 200 million boxes of cookies over the next month…more than any cookie manufacturer will sell the entire year.
Does simple work…for some, extremely well. The question is will it work for you?

Managing the "U"

Happy New Year! Well...I'm not sure if happy is the right word, maybe we should just hope that it will be better than 2008.

Anyway, I know that the current economic conditions have many executives scrambling to cut costs and keep their heads above water. As I mentioned in my post on November 6, 2008 entitled Best Practices from the Last Downturn, we’ve gone back and looked at what leading companies did to weather the storm, steal share and come out of the downturns ahead of their competition.

In the video above, MarketBridge CEO Tim Furey looks at what leading companies are doing this time around, and shares some best practices for firms going into 2009.

In Part 2 of this discussion Tim will more closely examine how a few specific companies (namely HP and CapOne) are utilizing the downturn as an opportunity to position themselves as market leaders.

Pre-register Here

The Myth of the "Foot in the Door"

Given our average deal size we used to think we needed to have a scaled down offer to get a foot in the door. Once in, we could then grow the account. We were wrong.

Considering the current economic situation, I know that many companies may be tempted to come up with a “door opener.” A subscale and/or entry level product/service intended to get a foot in the door with a new client and/or a new business division. You’re also probably thinking about going down market into smaller accounts. Although this shift may help satisfy short term revenue needs it will do little to nothing in helping grow your business. Most likely those accounts will not expand and/or even be retained next year.



Here’s how I know. Looking back at the new accounts acquired over the last four years we found some interesting trends and confirmed some things that we knew intuitively (click on the image). When we measured the value of customers in their first year against the average time spent engaged with the client a few key insights emerged. First, three “clusters” of accounts emerged;

1. Customer that grew to beyond $800K in their first year
2. Customer who had first year revenues between $350-$600K
3. Customers who represented under $250K in total billings from the year.

Let’s start with the bottom and work our way up. Customers in cluster 3 had an average value of $150K. Accounts on the lowest end of the spectrum in the “One and Done" zone” (under $10K for example) were “workshop”…our “foot in the door” offer. Guess what, of the 8 that fit that description zero, zippy, nada, grew beyond the initial workshop. The other bad news…only 2 accounts led to follow on work and no company in that grouping was retained the following year.
I was speaking with Larry Emond, CMO of the Gallup Organization the other day and he mentioned that they saw a similar trend; “We found that only 4% of customers who were acquired under a certain price point grew to be substantial customers.”

On the other end of the spectrum are the occasional customers who are big right out of the gate. The “Rare Birds” zone in cluster 1 includes those few customers who start big and for the most part remain large customers YOY. The key to success with this cluster is that they had/have a tendency to have a need for multiple service lines and/or desire a complex solution. This group was looking for a strategic partner versus a vendor for an immediate need. Year over year retention was also good at over 50% and if they used multiple services lines it was almost a sure thing they be retained….and grow.

As Larry also mentioned; “Our big customers today came in as big customers…”. We’ve had the same experience and have grown our top 5 largest accounts by an average of 90% over the last two years.

Customers in cluster 2, the “Sweet Spot” represented the best of both worlds. Although their value was not as high as the “Rare Birds” they were more plentiful. They also had higher price points, high percent of follow on work and YOY retention than the “One & Dones.” Retention rates although not as high as the "Rare Birds" was good (a little over 33%). Bottom line – they represent the model that we need to build our coverage and services bundle against. We have also realigned our resources to help account development/retention activities against this group.

Why do low price point and short engagement acquisitions perform so poorly? We discovered five main reasons for this;

• Length of the engagement – too short to learn business/issues/meet folks/create a relationship, etc.
• They get the “B” team - the "A" team is on existing accounts, as a professional services firm that measure FTE productivity this will always be the case.
• Short term need vs long term problem - we were successful in building a relationship with target buyers within targeted accounts. So much so that they decided to “give us a try.” The problem with that is that it was usually a piece of work that wasn’t strategic.
• Size matters – our win rate and retention rate dropped dramatically on companies that had under $1B in revenues. The only exceptions were situations we were able to sell a solution as the first engagement.
• Culture/Attitude – some companies just don’t have a culture of working with outsiders. This very difficult to know until you’re in the door.

So as you are thinking about 2009 focus on aligning resources and efforts on;

1. Retaining and expanding your biggest customers with new lines of business.
2. Find your "sweetspot” based on this type of analysis…what is the right mix of services and price.
3. Targeting big companies with big needs…there are many out there now just make sure you have the right offer.

Because at the end of the first engagement…a foot in the door just isn’t enough.

Insurance Companies...turn down the TV!

Why? Why do insurance companies insist on spending so much of their advertising on TV (over 60% of their total ad spend as I mentioned in the Video post below)? I’ll know more in early 2009 based on our current research effort on the Commercial Insurance industry so check back with me to see how well I do. Until then here’s a possible explanation.

My guess is the industry is at a similar point in its advertising thinking as Hi-Tech was 10 years ago. Because the Insurance business operates in a “sell thru” model using captive and/or independent agents they focus their advertising spend in mass market vehicles like Network TV. This is similar to how companies, like IBM and HP spent their money ten to twelve years ago to support business partners. Spread the “Brand” as far and wide as possible so partners can sell under it. The reason they did this…feedback from partners consistently beat up manufacturers on their lack of Brand support. Partners also told them to stay out of demand gen and selling, mostly because it threatened the partner.

That was until hi-tech companies starting paying attention to partner performance. In the past, revenue from the partner channel was collected and not driven. Manufacturers did brand advertising and tossed some marketing development funds (MDF) at the channel and hoped for the best. Today, it’s a whole different world…at least for some. The channel is now a valuable and increasingly important source of revenue, especially for new customers and solutions. As a result of this new focus, manufacturers now want greater control over those investments and better returns…not to mention tracking required by Sarbox.

Companies, like HP have now become much more involved in driving channel sales through their channels. To a point of creating collaborative demand generation campaigns on behalf of partners...telling them what campaigns to run against which customers with what budget. As a result, the internet has become a much more important vehicle. My point, HP’s B2B internet advertising spend in 07’ was 22% of the total spend (TV total was only 25%, with a little over a half going to Network). Insurance companies average spend on the internet...2%.

Insurance companies have the opportunity and need to start thinking the same way. We’ve heard from Carriers that they have a difficult time getting captive agents to grow their book of business and sell new service lines. We also heard that when it comes to non-captive agents that they would like them to better target “profitable” customers. Both needs can be addressed by getting more involved in generating and/or directing business development at the agent/customer level.

To get started companies should:

• Begin directing the TV audience they’re targeting to internet sites with real offers just like the big boys of Fin Serv do…like CapOne.
• Start using Web 2.0 tools to drive demand to agents, even better start helping them undersand how to use the tools.
• If you have to spend on TV, reallocate the budget to Cable so it can be better targeted.
• Finally, approach agents with a value proposition built on helping them build their business don’t just push products to them and hope for the best.

Again, this is just my opinion, but I’ve seen the movie before...or in this case, the TV commercial. Check back next year and see if I’m right.

Results of the 2007 B2B Advertising Spend in Financial Services Assessment

By Scott Gillum
We just finished our annual assessment of B2B Advertising spend in the Financial Services industry (for high resolution video click here and select watch in high quality). Results for 2007 showed that as an industry, Financial Services firms reduced their B2B advertising spend by close to 15% over the prior year.

• The mix of the total advertising spend was similar to the prior year with a slight increase in internet spend (9%, similar to what we saw in our Digital Marketing in FS research) and radio.
• The mix of print advertising as a percent of total spend (typical 30% of total spend) shifted to magazine (up to 14% from 7%) at the expense of newspapers (12% down from 21% in '06).

In sub-segments, the Retail Banks sector, already feeling the effects of the downturn, dramatically cut back advertising spend last year by over 20%.

• Local newspapers were the hardest hit, with only half of the advertising dollars from the previous year. Consumer magazines picking up much that spend, one of the few bright spots from last year.
• The internet continues its streak of growing as a percent of total spend up to 14% from 13%. A milestone was reached by CapOne, which invested more advertising dollars on the Internet than in Network TV which is the first time ever we've seen that. Could this be a trend…yea, I think so.

In the Insurance industry no real change…unfortunately. Overall spend was only down slightly from $48M to $46M with no real change in the mix.

• Local newspapers lost ground (14% of total spend compared to 19% the previous year) with magazines picking up that shift similar to what we saw in Retail Banking, but for the most part all other categories remained the same.
• Advertising spend on the internet was a pathetic 2%...the same as 2006. While the rest of the Financial Services industry is shifting dollars out of TV and into the Internet, the Insurance industry continues to buck the trend, in fact, TV as a percent of total spend increased last year from 60 to 62% of the budget.

I’ll try to provide a reason for this (if i can) in my next blog.