B2B Rainmaker

Winning the professional services sale — The book

Jim Logan — Wed, 11 Nov 2009 16:43:59 +0000

I’m not a slow read, but it took me longer than usual to read Michael McLaughlin’s latest book — Winning the Professional Services Sale.

The problem was I found my self taking notes as I read it.

If you’re not familiar with Michael, he’s the author of Guerrilla Marketing for Consultants and founder of MindShare Consulting – a firm that helps professional services organizations design innovative strategies to reach more clients, land profitable work, and build resilient businesses.

Winning the Professional Services Sale is typical of the work you expect from Michael – well thought, detailed, and rooted in solid practical advice and experience.

Whether your company sells business services or legal advice, outsourcing solutions, or management consulting, Winning the Professional Services Sale is the ideal guide for anyone who wants to close more profitable sales on a consistent basis. ~From the book jacket

Here are two things in particular I like about Michael’s latest book:

Chapter 7 — Who Cares about This Sale…and Why?

Chapter 7 is about knowing your prospective customer and understanding what motivates them as a buyer. Michael walks you through the process of understanding your prospect and assessing your value to their organization.

Chapter 12 — What to Do When You Win…and When You Don’t

Chapter 12 caught my attention because it touches on the critical sales concept of win/loss reporting — understanding why you won a new opportunity and equally important why you lost. For whatever reason, this topic gets little attention in the blogosphere. Another great topic in this chapter is defining the customer experience — setting the tone and expectation of how you’ll implement the project you just won to strengthen your client relationship and smoothly sail through the engagement. Good stuff.

If you’re in the professional services business, you probably ought to give this book a read. It’s something you can reference in a ongoing effort to close more sales.

Seven reasons why customer relationships matter to your business

Jim Logan — Tue, 10 Nov 2009 16:48:43 +0000

Without need for build-up, here’s the point of this post: Customer relationships matter because they create loyalty.

Customer loyalty represents the opportunity for predictable and profitable growth. If you don’t care about those thing, there’s no reason to care about your customers. In fact, if you’re not interested in predictable and profitable growth, simply abandon the customers you have and try to make up the revenue with continual new customer acquisition.

That’s the rub. And the reality many businesses live day-after-day.

Customer relationships matter because of their value to your business. It’s not selfish to say so, it’s more reality, we need loyal customers more than they need us:

Referrals

Loyal customers refer more business our way. The better we treat our customers, help them, and add value to our relationship with them — the more our customers are willing to tell others. We become a story they want to tell. And they’ll tell it often. What results in more people and businesses are drawn to us and the opportunity to become our customer.

Profitability

It costs less to sell to an existing customer than it does to find a new one. We can speak with them differently, like family. We don’t have to sell ourselves for each sale — they already bought that part of what we offer. We simply need to make the right offer at the right time — our relationship creates those moments naturally.

Predictability

Often, customers who purchase more than once do so at predictable intervals. The ability to accurately forecast and count on revenue is critical to a business. Repeat purchases are usually far more predictable than new sales. Predictability reduces pressure on cash flow and expense management.

Asset

Customers are arguably a company’s greatest asset. If the time comes to sell our business or borrow against it, the customers we have help establish the multiple we set on the price of our business and supports our worthiness to borrow.

Definition

We’re defined by the company we keep. And so is our business. The same applies to the company our customers’ keep. We’re part of their ecosystem, as they are part of ours. Quality of customer is greatly established by the customers we claim and routinely engage with in business opportunities.

Viability

Fool me once, shame on you. Fool me twice, shame on me. That saying is one reason ongoing business relationships with customers is important — it proves viability of your offer. This is especially true with new companies. You can sell something once by being a great salesperson. To sell it two or more times to the same person or company, you have to be a real business and your offer has to demonstrate value to the buyer.

Confidence

There are many times in the life of a business when talking openly with a customer has incredible benefit — prioritizing new features and projects, considering business opportunities, evaluating would-be competitors, researching markets, identifying trends, etc. Having a pool of customers you can call on in such times to ask candid questions and explore ideas is invaluable.

Above are seven reasons customer relationships matter deeply to a business. Do you agree? What would you add to my list?

Revenue Management

Jim Logan — Tue, 10 Nov 2009 01:36:29 +0000

The image above is a map of sort. More accurately, it’s a relational pictorial of customer-facing revenue management.

Note: Click on the image above to view it at full scale.

Revenue management is a cross functional responsibility within a company to keep an eye on money coming into a business and all the customer related support systems and processes that support revenue.

There are other elements of revenue not represented on the image above, namely royalties, investments, and other revenue derived from business relationships producing income from operations unrelated to customers.

Typically, when a company refers to revenue management, they’re referring to money earned from sales — customer-facing revenue.

Here are the four major areas of customer-facing revenue management and their importance:

Lead Generation

Lead generation is a function of marketing directed at attracting prospective customers and readying them for sales opportunities. In B2B complex sales, lead generation includes target marketing, direct marketing, and permission marketing.

Sales

For obvious reasons, sales is part of revenue management. Sales includes account profiles, access, customer acquisition, forecasting, etc.

Account Management

Account management is little discussed in relation to revenue — the majority of thought being shared on customer acquisition. But account management is critical to revenue management — without it, repeat business and other loyalty revenue such as referrals aren’t possible. Both create significant revenue for a business.

Customer Loyalty

A lot is written on the importance of customer loyalty, namely repeat revenue and new customer acquisition via referral. But there are other benefits derived from loyal customers, such as avenues for new product and service introduction, and valuable input on direction and priority. Customer loyalty is a big part of revenue management.

Things to consider

Notice a few things about the diagram: 1) tools such as those used to forecast are absent, but necessary to revenue management 2) revenue management relies on a number of interdependent business functions such as lead generation feeding sales and account management feeding customer loyalty 3) all three forms of revenue growth are present in revenue management — new customers, repeat buyers, and increased transaction values.

In reality, revenue management is a function onto itself.

Use the diagram above as a reference to monitor money coming into your business and everything that supports it. Check the customer-facing processes of your business routinely and continuously look for improvement.

What say you?

10 slides to a better sales presentation

Jim Logan — Thu, 05 Nov 2009 21:58:53 +0000

“It’s a complicated offering and we really can’t get through it in less than an hour.”

That’s what I was once told by a start-up technology company I was asked by a friend to meet with. My friend, the majority investor in this company, asked me to review their sales presentation — a 50+ slide presentation loaded with features and functionality.

Abraham Lincoln’s Gettysburg Address, considered by many to be the greatest American speech of all time, defining democracy and our purpose as a nation, took three minutes to deliver. So, why would it take anything more than 30 minutes to describe a company, it’s offering, and benefits to a prospective customer? That’s 15 times longer than Lincoln used at Gettysburg!

In my business, I see an awful lot of presentations. Emphasis should be placed on awful.

Companies spend too much time bragging on themselves and extolling their greatness as opposed to focusing on the meaningful ways they aid the interests and alleviate the concerns of their customer. Customers could care less about the things you do, they’re interested in the things you do for them.

Customers buy benefits, not features. Features and functionality exist to support the benefits you offer. Get to the benefits first.

I don’t believe there is such a thing as the right or wrong number of slides in a sales presentation. That said, never have a sales presentation that is over 10 slides. If you need more than 10 slides to convey your value and benefits, something is wrong. Limit yourself to 10 slides and challenge yourself to get to the main points faster. You don’t have the luxury of time with a prospect — you need to lock their interest early.

An interesting exercise is to make a presentation from the customer’s perspective, addressing information the way they are likely processing your conversation with them. Use the following titles for each slide and put information on the slide that answers that slide’s question. Compare this presentation to whatever you have today. Which is more meaningful to your prospect?

Opening Slide
“Who Are You?”
“What Do You Do for Me?”
“How Do You Do It?”
“How Are You Different?”?
“Why Should I Believe You?”
“What Does It Cost?”
“Do You Offer a Guarantee?”
“How Do We Start Doing Business Together?”
Closing Slide

What do you think?

Cash Flow

Jim Logan — Mon, 02 Nov 2009 17:28:13 +0000

Cash flow is the life-blood of a business. If you can’t timely receive money into your business and smartly spend it each month, you won’t have a business for long. The best idea can’t survive without the consistent and predictable flow of money in and out of a business.

I don’t know the number to quote, but cash flow crisis is undeniably a leading cause of business failure.

There two basic elements of cash flow — money in and money out

Money in is how a business timely receives money for the products, services, and solutions they offer. This includes managing accounts receivable, collections, terms, pricing, promotions, lead generation, sales, etc. Getting money into a business is intuitively important — you have to sell things and get paid for them to survive.

Money out is how a business smartly pays for the things it needs to survive. This includes payroll, partnerships, energy, tools, support systems, facilities, cost of sales, manufacturing, etc. If you overspend or unwisely spend the money you have, any profit you’ve built will quickly disappear and you won’t last long — you may have to delay expansion plans, cancel product development, or cut staff. All of which likely puts more pressure on money coming into your business.

A downward spiral may be created.

I’m mentioning this because cash flow is topic I’ve written about and occasionally consult on from time to time. I don’t mention this often for reasons I can’t explain, except maybe because it’s not something I’ve done as a core business. I write and consult on cash flow mostly because the topic interests me as a study of business.

The Cash Flow Blog

Regardless, my writing on cash flow has resulted in a few interesting business opportunities, speaking engagements, interviews, and publication in a few major news outlets.

If you’re interested, I’m writing on the subject of cash flow at The Cash Flow Blog. I take a business leader’s approach to the subject, not an accountant’s. There, you can find information, how-to, and tips to get more money into your business and maximize it on the way out.

Here are some posts you may find valuable to your business:

Please give The Cash Flow Blog a read. And be sure to subscribe to make sure you don’t miss a single update.

Enjoy!