A very good friend of mine was having no end of problems with his business. After a year of trying different things - spending ‘heaps’ on marketing, hiring telesales people, dozens of direct mail campaigns, printing glossy brochures and everything in between - the realisation finally dawned on him that his problem was not going away anytime soon.
In desperation, Jim (not his real name of course) called me to have a chat about his problem. Now I don’t like working with friends as a general rule but in Jim’s case, I couldn’t resist. He was in big trouble and unless something was done quickly, he wouldn’t be in business much longer.
Yes indeed, it was that bad.
Now before I tell you his story, I’ll jump right to the happy ending. Strange I know, but if you are like me, you’ll enjoy the start and middle bits of the story more knowing everything worked out just fine for Jim.
Would you like a happy ending Mr Jim?
Jim’s problem was himself. Now he knows I’m writing about him today and he is totally fine with that. That’s how far he has moved himself to get out of the mess he was in. Jim was essentially stuck in a mind-set I see all too often: the fear of doing something totally different in order to succeed.
In Jim’s case, though, it was not to succeed, but to survive.
Nine months after our first chat, Jim has lost 13 kilos, is still married, has halved the cost of his sales and marketing overheads, doubled the lead inquiries to the business and increased his sales by 48%.
In a tough industry and during a recession, Jim reckons that’s just brilliant, and so he should.
Yes indeed, Jim and his team (mostly all new by the way) have turned the corner.
Yeah, yeah, but how did you do it?
In the end, it was Jim that did everything. My team simply showed him the way by providing a well-used road-map and a couple of very clever tools. Jim and his team did the rest.
The funny thing though was that Jim knew what the problem was all along, he was just too afraid to make the bold move for fear of something going wrong. The solution I put to Jim was simple: "If you don’t make the bold move now, Jim, you won’t have a problem to worry about and fear won’t exist because you won’t have a business”
From then on the the decision was easy.
What’s the problem Jim?
Jim’s sales team worked on purely on commission and many of them (60%) had not earned more than $30,000 over the previous 12 months. From what I could see, most of them came to work each day for the warmth of the office, the coffee, donuts next door, and chats with Jasmine the receptionist. Being successful and earning a good living was, well, a pipe dream at best.
- Their CRM system was a loathsome device, ‘good only for storing the occasional phone number’ said the sales team. It was scathingly called the ‘Call Reporting for Management’ system.
- Jim’s weekly call reports from CRM provided plenty of good metrics. The problem was, all the metrics were rubbish. The sales team had been entering fictitious calls and ‘client discussions’ in the system for years.
- They had tried telesales people over the last 12 months but nothing had worked. On investigation, we found that not one of them had ever been trained, had never used call scripts, and merely been given sections of the phone book to call at random after 7:00pm in the hope of speaking to the ‘Man of the house’.
- For nine salespeople across Auckland and Wellington, their ‘in-bound’ call rate per week for inquiries was between 4 and 8 calls. No kidding. Of more interest though was their ‘outbound’ call volumes. On average, their nine salespeople made 20 – 26 calls (combined) per week.
- Direct mail and brochures were ‘box dropped’ to mail centres around New Zealand. Their marketing team was very pleased with their efforts, had no idea of response rates but assumed they were around the ‘industry average’ of 2-3%. We found out fairly quickly they were in fact…..ZERO. Like most things at the post shop, they found their way to the trash bin.
- Their website was a ‘dog’s breakfast’. It was full of corporate double-speak and rubbish that made little sense to me, let alone their potential clients. Jim’s old girlfriend and ‘a web friend’ had put it together apparently. Yep, it showed. "It’s just an electronic brochure for people to look at” said Jim. "We don’t pay any attention to it as most of our clients just pick up the phone”. Now I knew we had real problems on our hands when he shared that little gem, since I knew from our analysis how bad his call volumes were.
I didn’t have the heart to tell him then and there that his phones weren’t ringing - but I did later. How wrong Jim’s statement proved to be and what a little gold mine Jim found only a few months later - but enough of that for now, that’s for next week.
Now you might find all of this quite absurd, but we see this all too often in small companies.
Make sure you check in next week and I will tell you what we provided Jim with and how he turned things around with his team.
See you next week.
About Sean McDonald
Sean is the founder and managing director of Sales Systems Ltd. His company and team of consultants help organisations improve the overall effectiveness of their sales and marketing operations through the introduction of new processes, tools and technology to ensure they are operating at peak performance in today’s highly competitive environment.
Sean is a regular contributor to Techday.