The Power of Five-Creating Personal Financial Goals

In the world of sales you don’t hear many people talking about or discussing ‘personal financial goals’. Know why? Sales managers don’t cover it, companies don’t understand the importance of those goals and salespeople themselves would rather not because of that pesky word accountability. Personal financial goals is one of the 5 basic elements of sales success. Without PFG’s how do salespeople know how much they need to sell? What their sales activities need to be? I can make a strong case that PFGs are the key to success in sales.

Another way to look at this is to ask yourself this question: “How much does it cost you to wake up every day?” Ah, well let’s see. Exactly. Did I ever do this when I was a sales cub? No! My financial goals were usually dictated by the ‘sales targets’ the company set for me. If the target was a million dollars in sales and my commission was 6% on all sales then my income was $60,000 for that year. (That was some decent lettuce in the 70’s folks!) Depending on my tax bracket I knew the approximate net and that was what I had to spend on the basics to keep the family from food stamps.

In a naïve way I guess this makes sense. From a logical, long-term, financially secure perspective this makes no sense. Personal financial goals consist of two ingredients. One is the monthly costs to live. Two is what it costs to bring your dreams to life. Dreams do not include a Lamborghini parked in the driveway. OK, they could include it but it would be way down the list of common sense dreams. Translate dreams to: short-term (5 years) financial goals and long-term financial security. This is the easy part.

Translating these to daily sales activities and then into dollars requires intimate knowledge of planning, your market place, the products you sell, competition, prospecting methods, sales metrics, average revenue per sale, and a sales process. Several of these will appear in later posts over the next several weeks.

Between the ages of 22 and 30 very little of this registers on the conscious mind of a salesperson. Some of it begins to trickle in during the 30’s and that is a mistake. Here’s why. Around a salesperson’s mid thirties is when many salespeople begin to make some serious money. (I don’t see a distinction on gender here. I could probably make a case that women get there faster than men.) That will continue into the 40’s until around age 45. Call it a ten-year window of high earning potential. Does it end after that? No, but other things occur concurrently. Child raising, schools, sports, short-term goals (requiring money) and thoughts about funding college or part of it. Pesky thoughts of mortality may even enter into the mental mix. What people do with their money in this time frame is extremely important. Might as well say critical!

Creating personal financial goals therefore becomes a path to success both in the short-term as well as the long-term. This is not just a ten minute conversation with yourself in the shower. “Let’s see, for 2014 I need to earn around $90K give or take.” That WILL NOT CUT IT! Do yourself a favor and spend a day thinking about this topic. Start to wrap some numbers around your sales activities and goals. When you’re rounding age 60 entering the final glide you will be happy you spent the time pondering.

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The Power of Five

I was asked to give a talk on sales not long ago. There are so many topics relative to sales that it is difficult to choose one that will appeal to everyone. Out of nowhere came The Power of Five. The five topics I covered were:

  1. Define Markets
  2. Create Personal Financial Goals
  3. Build a Prospecting Plan
  4. Own a Sales Process
  5. Get a Coach

I maintain that these 5 are the foundation of sales success. Are there others? I’m sure they are out there but for October 21st these will do.

Market definition, who buys from you, who you should prospect for, what does a perfect client look like are all pretty much the same thing at least in a general way. I started with this one because it helps to know who you need to sell to before you put together a prospecting plan. When I work with clients whether they are individuals or companies I ask that they profile existing accounts to determine if there are common characteristics among them. Again, not rocket science.

Here are a few characteristics:

  1. Industry
  2. Products they buy from you
  3. Company size
  4. Why the customer buys from you
  5. How did you get them as customers
  6. How often so they buy
  7. Do they buy an assortment of products or services

The other important question to ask is: What are You Good at? This has tremendous implications on market definition. What you are good at doing and who you sell to are flip sides of the same coin. Through trial and error (probably more errors than are necessary) I discovered that I am at my best when I work in a small company environment. That has played out over the last 10 years as I morphed from pure sales training to helping smaller companies grow their business. What I am good at also relates to what I like to do. Very large on my list of ‘likes’ is seeing people grow their talents. Nothing makes me happier than to see a salesperson or a company moves past obstacles that previously held them in check. And frankly, it is not about me! Providing the knowledge and experience and showing someone why that knowledge can propel them past their current level of mediocrity is more than enough for me.

Also, be wary of trying to be all things to all people! It is tempting to say “I can do that” when a prospect asks if you can provide specific expertise in an area you are not particularly familiar with. Dollar signs trump experience! My advice is don’t do it. Broadening your markets may mean that you are diluting your efforts and losing opportunities in your main market. And if you don’t succeed in a new market what does that do for your reputation and confidence?

Here’s the last question worth asking yourself: What are the Characteristics of What You do That Appeal to Potential Clients? It really comes down to the more you know about yourself, what you do and who your best clients/customers are.

FEAR

I’ve had fear and it is not fun. A lot of people will tell you that fear can be a learning experience, one that will sear itself into your brain and be easy to recall years down the road. Can’t argue that. Learning about fear and what causes it changes people, it changes the way they deal with life and I suppose that can be both negative and positive.

I don’t think fear is such a bad thing but that might be because I’m 67 and there have been times when my sphincter was so tight with fear you couldn’t have wedged a toothpick in there. I survived. Maybe God has some plans for me down the road that I’m not privy to and that’s why I’m still here. I’ve been fearful enough times in my life to know that there are ways to deal with it. And let’s face it they don’t always work. If you’re sitting in a movie theater and some nut bag 2 rows in front of you opens up with a gun you may not have time to execute a way to deal with it.

Fear is nature’s way of telling you that you were not prepared! I’ve talked with clients who have a mortal fear of calling someone on the phone to schedule a sales meeting. There is a pretty simple reason why they feel the way they do. They have no earthly idea of how to sound professional when asking for 10 minutes of someone’s time who never heard of them. About how I felt prior to asking out a girl for the first time. Of course I stuttered my through that one but did manage to close the deal.

Ya just can’t wing things that cause fear. It does not work and I should know because I spent most of my life “winging it”. A good solid plan helps deal with and avoid much of the emotion of fear. Don’t we already know those things that emotionally paralyze us? So think about them and come up with options on what you’re going to do when the paralyzing situation surfaces. Think of several ways to deal with the situation and role-play them in your head or with someone else. The more you work through the language or the actions the more comfortable you will become in the sphincter closing moment.

Then there is the second thing you’ll want to think about. Let’s assume you’re not in the movie theater! How bad will it be if you screw something up royally? Or if your worst nightmare materializes? What is the worst thing that can happen if you should experience a fearful event? Anger? Embarrassment? A royal chewing out? Chances are pretty good that you will live to review the moment. And that is really the secret of fear. Reviewing the moment. How did the event happen and what can I do to deal with a similar event down the road because the event or one like it will happen again.

Hiring Your First Sales Rep

This is one of those frustrating events that drive small business owners nuts! Picture this. You own a company and you are the main salesperson. Of course you also do the books, clean the bathroom, take orders and anything else that keeps the company moving forward. And you have had it! Your doctor says that another year of this and you’ll be pushing up daisies. Your wife and kids would like to see you more often than Xmas, New Years, and major holidays.

So you decide to take the leap. You’ve never hired a salesperson before so where do you start? Part of this decision depends on the type of industry and product(s) you have. Do you get an order from a customer and hardly ever see them again? Do you get an order and the process demands constant follow-up on that order and future ones? Should the rep have X number of years of sale experience and/or experience in the industry? Is the sale technical? What can you afford? Do you provide a salary and commission or commission only?

As a sales manager I routinely hired people but it was still challenging to find the right people. One of the problems is that owners don’t prepare for the hiring process. It’s like the thought process from I’m overworked to I need a rep to hiring happens over a two-week period. Don’t rush into hiring even though your brain is screaming at you to get someone on board.

I’d look at the these as a to-do list:

  • What are the qualities that make you successful as a salesperson?
  • What do your customers expect from the person representing your company?
  • Research comp plans in your industry.
  • Should you hire the highest quality rep for the money or hire one that has experience in your industry?
  • Age has a way of fine tuning skill sets. Should you hire someone in their 30’s or 40’s or go after the mid-twenty rep?
  • Prepare how you want to interview candidates.
  • Document what you will need in order for the rep to be prepared to sell.

One final bit of wisdom. Never just settle for anyone because you’re flat-out tired and bored with the process. If you hire someone because you want to get it done that rep will not last more than 3 months.

CSR 8: Prospects Won’t Buy Unless There is An Emotional Need!

This no doubt sounds like an over simplification but I’ve witnessed too many sales calls (many of them recently) where salespeople don’t understand this statement. Picture this. You are an avid golfer (defined as someone who plays 2-3 times per week with a handicap of 9) and you have just walked into a store specializing in golf equipment. You say in an excited voice to the salesperson who just walked up to you, “Hi, I need a new driver and I mean I need a new one in the worst way.” The sales dolt says to you, “Come on back with me I have just the driver for you and it’s cheap”.

What the hell is wrong with the sales dolt? In short he fails to comprehend the intensity of the need that you have for a new driver. There is pure unadulterated emotion oozing out of your mouth. One could almost see the weight of the emotion and the need! Our positively dull-minded salesperson only sees a potential sale of a driver; he never thinks even for a moment that there might be something really irritating that’s bothering the prospect. On top of that the sales dolt says c’mon I’ll fix you up with a low-budget club!

Do you know how many times this is played out in every industry by thousands and thousands of salespeople? The sales gods are bent over retching their disgust! PROSPECTS BUY FOR EMOTIONAL REASONS. Who knows what those emotional reasons are? Sometimes even the buyer isn’t completely sure of what those reasons are. You can look at practically every product on the market and find some emotional reason why it appeals to specific buyers. Picture this #2. When I buy a yellow lined pad I only want one specific kind. Know why? Because it tears evenly at the top. I hate pads where there are scraps still attached to the top of the pad after the tear. As insane as that is it is an emotional need.

Suffice to say there are many levels of emotional need. The golfer described above has lost 3 strokes off his handicap because he’s begun to slice every tee shot. (Along with being emotional the golfer is dumb because it isn’t the club that’s the problem.) A buyer at a two billion dollar company bought the wrong color of raw materials which threw off production by three weeks. His emotional need? He loses his job if it happens again.

Tip: When you hear a prospect say something like “We’ve been looking for someone to provide packaging for a new product line we’re introducing” don’t glide by that statement with a dumb ass statement like “Well you’re talking to the right person”. Don’t ever assume that you have all the information because nine times out of ten there is a hidden pearl of emotion that is driving the prospect.

Just for the sake of really believing this go back to several people who recently bought whatever you sell. Ask them if there was something else driving them to buy your product, determine if there was something emotional driving the process.

CSR Number 7: The Most Important Job A Sales Manager Does?

This should probably be on my tombstone so that when people stumble upon it they’ll be forced to ponder the meaning of life and what a sales manager should do with their time. Sales managers can be a dull lot. When promoted from whatever they were doing-assistant to the assistant to the assistant to the president, worst salesperson, best salesperson-they sit in their new office and think wow, this is way cool! And is that an admin assistant I see out there? This is really getting better!!

Poor dumb clutz! Can you imagine how many managers there are that don’t have a clue how to answer the basic question-what is my role? Ah, I’m guessing somewhere in the vicinity of half. Ok, here’s the answer. Job number one for a sales manager is develop the skills of your salespeople. That’s it! If it’s Wednesday in Omaha and you’re traveling with Sam you had better focus on whether this cobber understands the mechanics of selling. And if he doesn’t then your job is to mentor Sam on selling skills.

This is not as easy as it sounds. Where do you start this process? How do you tell ole Sam that maybe he should back off the toothy grin, the break cartilage hand shake, and the latest one-liner about Nebraska football? Let’s face facts, Sam is on the brink of being a sales statistic. He’s getting by only by the thinnest of margins. Moving Sam from social butterfly to skilled sales professional requires base knowledge on specific techniques that apply to specific parts of the sales call. These are repeatable techniques, which means that the sales call on Wednesday in Omaha will be similar to the one made in Lincoln on Thursday. How simple is this? So simple that most managers don’t get it.

This is where I decide whether the post is going to have a 1,500 word count or 550 word count. I’ll stick with the latter. Regardless of whether you’re on day two of your management career or day five hundred you need to dissect the sales process for your company and your product. How do you start the sales call to a new prospect? How do you start the call to a regular customer? How do you probe for needs? How do you discover if there are multiple decision makers? How do you disqualify prospects? How do you cross sell? Wanna make a bet that you can break down the sales process into at least 50 or more components?

Here’s another way to look at this? Hasn’t your VP of manufacturing broken down the manufacturing process into definable steps? I guarantee that he or she has. Your mission as a sales manager is to do the same thing for how your product gets sold. Once that is defined then you can create the techniques to use during each step of the sales process and then make sure your salespeople use these techniques on their sales calls. If all of that sounds like a monumentally difficult task then ask for your sales job back.

CSR Number 6: Know What Your Closing Rate Is!

To me, if you have no idea what your closing rate is how do you know if you’re successful? Am I missing something here? Picture this. I’m your sales manager. You come strolling into my office and tell me that you closed the Larson deal for $125K. You’re excited because not only did you close a deal but you got a nice $5K commission check. Whoopdeedoo! I’m sitting there thinking to myself Big Frigging Deal! So What? Of course being the consummate professional and a manager with a semblance of a heart I don’t want to blow all your enthusiasm out of the water so I say congratulations, well done!

Underneath though I’m wondering about a few things:

  1. How many sales calls have you been on in X amount of time?
  2. How many closes do you now have YTD?
  3. What percentage of your sales calls turn into business?
  4. How many sales calls does it take on the same prospect before business is closed?
  5. How near to making target are you in terms of dollars and percentage?
  6. How many closes do you need for the fiscal year?

Sales is not completely a numbers game but certainly success on a continued basis has a lot to do with repeatable processes. Statistics are part of that. Why does the NFL have a combine in the Spring to evaluate college players? Baseball coaches evaluate potential fielders based on 5 key tools. There are statistics woven into both these sport situations. So why do salespeople blithely wander through their lives hardly ever thinking of a closing rate? Chances are pretty good that no one ever taught them the value of ratios. Nor have salespeople figured out that making significant money depends on performance, which will always tie into how many appointments, presentations, phone calls, connects, closes, average revenue of each close etc. are accomplished. And the coup de grace is how do sales calls relate to closes.

100 Proof Software even figured this out via the app Sales 2 Target. It’s not perfect but future iterations will improve the concept. I’ll make this wager. If you track your sales behaviors and create meaningful relationships between the behaviors (How many sales calls do you need to be on in order to close one sale as an example) you will increase your income by a minimum of 50%.

Have fun out there!