Tag Archive: sales

Help Wanted–Sales: When is the Right Time to Hire Your First Sales Rep?

Help Wanted–Sales: When is the Right Time to Hire Your First Sales Rep?by Iris Dorbian.

When David Greenberg launched Parliament Tutors (an academic coaching service targeting students from kindergarten to college), in 2009, he did everything—from sales and marketing to training and recruiting. The multi-tasking paid off because a year later, the twenty-something wunderkind found himself in an enviable position: His startup, whose staff consisted of just himself and an academic advisor, was thriving, having reached $30,000 a month in sales. Upon hitting that figure, the NYU graduate decided it was time to hire his first sales rep.

It was an auspicious move. In January, Parliament Tutors, which now employs more than 500 tutors (most of whom are independent contractors), has four full-time employees and serves customers in 25 states, had its best month ever with sales of $52,000. A large part of that success, according to Greenberg, is attributable to his decision to hire a sales rep.

Still, it wasn’t easy. “Making that step was definitely intimidating because things obviously slowed a bit while [the sales rep] adjusted into his new role,” Greenberg admits. “However, it proved to make sense, while I focused on improving our business model and growth strategy.”

For entrepreneurs like Greenberg, hiring a sales rep can be a pivotal point in a company’s growth. The critical question is: When is the right time to make such a hire? Is it the obvious—when your company starts generating profits and you are unable to meet your business objectives without assistance? Or are there other circumstances that warrant it? Furthermore, how do you train and retain these new sales reps so they will fit in with your corporate culture and not flee for greener financial pastures once another opportunity arises?
Hire when it’s affordable

“New businesses should hire their first sales rep as quickly as they can afford it,” says Michelle Furyaka, executive vice president of NPD Global Inc., a five-year-old executive recruitment firm based in New York City.

However, she acknowledges there’s a catch. “It takes time to find the right personality to work for a small firm,” she cautions. “Don’t be fooled by a sales rep that promises you a lot of business. Small companies struggle to pay a top-notch person and they wind up leaving quickly because they are not used to rolling up their sleeves.”
PQ_SalesRep.jpgFind like-minded souls

For Greenberg, it helps that his first sales rep shared his vision about education and had done plenty of homework about the company well before the job interview.

“When we spoke, he was less focused on the deficiencies in the system, and was incredibly knowledgeable on what was working,” Greenberg recalls. “I was really impressed, considering most of my interviewees focused on the problems when asked to discuss the education environment today.”

NPD Global hired its first sales rep a year after its launch. “We stabilized our expenses and became self sufficient,” relates Furyaka. “Once all operational expenses were covered, we were ready to grow. In the beginning, one of the principals was doing all the sales, but once we reached a certain number and she was needed for another role, we were ready to hire.”

Although NPD Global’s first sales rep did play a key role in growing overall sales, profits were still flat. Management underestimated the total cost of hiring a sales professional. “We found the right person who helped us open a few new accounts, but there were expenses affiliated with him, such as salary, support, and client [costs].”
Analyze your sales cycle

The equation changes if the sales position is a straight commission role, says Tom Armour, co-founder of High Return Selection, which helps small- to medium-sized businesses attract and retain top talent. In this case, the cost can be relatively low.

The length of the sales cycle is a factor as well. “Sales roles vary dramatically across businesses,” continues Armour, an HR executive who once worked at Hewlett-Packard. “Basically there are sales roles that sell products, while others sell services. The length of the sales cycle can vary from one hour to 18 months.” Armour cites retail sales as an industry with a sales cycle that can be completed quickly, typically within an hour, while B2B product or service sales can take months to complete. Longer sales cycle jobs can cost a business 10 percent to 15 percent of new sales, he says.
Time it right

Other than when your company starts growing revenue, when is it time for your small business to hire a sales rep? Here are a few more hints from the experts:

You don’t have the time anymore to generate leads and follow-up with potential or existing customers in a timely fashion.
You are not a skilled sales person.
Your time is better served in working on other areas of your business.

Like a casting director seeking out the right actors for roles, small business owners should be deliberate when bringing on a sales rep that best matches their company’s culture.

Other best practices to employ:

Make sure your first sales hire has values that match your own. “Your first sales rep is going to be the new face and the front line of your business,” advises Greenberg. “Don’t just consider their ability to ‘sell’ a customer.”
Look for people with a solid work ethic. They don’t need to be from the same industry, says Furyaka. “If the foundation is there and they are willing to learn, you will retain them and everyone will be happy.”
Offer competitive compensation and enticing incentives. “A top sales professional can make good money in many businesses,” maintains Armour, “but it is the leadership and recognition that retains them.”

Your Online Storefront: Launching an E-Commerce Site to Increase ROI

Your Online Storefront: Launching an E-Commerce Site to Increase ROI By Iris Dorbian.

Over ten years ago, e-commerce was still an emerging channel. Now it’s become a worldwide phenomenon racking up sales in the stratosphere. According to a new report by the market research firm Forrester, online retail sales in the U.S. are poised to tap $327 billion by 2016. Furthermore, overall online consumer spending is expected to increase to $1,738 per person by 2016 in contrast to $1,207 per person in 2011. For 2012, the forecast is for $226 billion, a 12 percent jump from $202 billion in 2011.

Improvements in mobile devices, coupled with myriad online promotions, may be driving the growth. In the same Forrester survey, conducted in partnership with Bizrate Insights, approximately 75 percent of shoppers polled during last year’s Black Friday and Cyber Monday said they made their holiday purchases online simply because the deals were better. Clearly, for small business owners looking to increase their profits, launching an e-commerce site is not simply a key best practice anymore—but an imperative.

However, if you don’t have an e-commerce site (and you don’t have unlimited capital), how do you start? What should be on your to-do list?

PQ_Ecommerce.jpgFind an inexpensive, user-friendly e-commerce provider

If you don’t have the funds to outsource this (and chances are more than likely you do not), then ask for recommendations among trusted colleagues regarding the e-commerce provider they are currently using. Also, do some research on your own. Make sure that whatever provider you choose for your inaugural site, they offer the most bang from your buck—meaning they offer an affordable price plan in line with the volume of products you would like to sell.

Ask yourself the following questions: Does the e-commerce platform you’re considering require monthly fees? Can they link in directly with any PayPal or bank account? Make sure before you partner up with them that they don’t take a percentage of your sales revenues. Examples of some e-commerce solution providers that small business owners might want to check out are Shopify and Big Commerce.

Check out the competition

What are your rivals doing in this space? Review their sites. What they are offering? What are their payment plans, target audience(s) and their Google search rankings? What can you do to distinguish yourself from the competition and seize a sizable portion of the market share? Offering improved customer service, expedited shopping, or the ability to speak to product experts on the phone may be what distinguishes you from online titans like Amazon.com and eBay.

Make your site search friendly

By leveraging customer service and search marketing, Bill and Lauren Elward were able to position their online store Castle Ink, which sells recycled printer ink cartridges and toners, as a formidable contender against heavyweight competitors such as Hewlett-Packard and Epson. Launched in 2005 by the husband and wife partners for $5,000—a sum culled from their savings—Castle Ink generated $1 million in revenue last year. This is in stark contrast to its first year when the site didn’t quite crack sales of $50,000. Not bad for a venture initially viewed by Lauren, a former high school English teacher, as a way to supplement family income while on maternity leave.

Bill credits search engine optimization (SEO), which he honed as the director of web analytics, digital strategy, and online marketing at the College Board (a day job he continues to hold) as the number one factor behind Castle Ink’s success. “I think that’s been the key to everything,” he explains. “To have our site findable on Google where almost 100 percent of our traffic comes from [has been critical]. We’re able to outrank some of the super large companies that have much deeper pockets than us simply by having a better organic ranking.”

Don’t sacrifice quality for pricing

Another challenge that Castle Ink has had to tackle is pricing. Larger competitors, says Bill, offer low price points as a way to draw in the most customers. But that doesn’t presuppose the quality is up to par. “Because there’s a false sense of inferior products out there, it has turned consumers off to the whole idea of using a recycled product,” he says. “That’s been a battle for us. One of the things we’ve done to overcome that is to give people a 100 percent satisfaction guarantee. We pay for return shipping so basically they can try our products for free; if they don’t like it, they can always send it back.”

Hire staff and make sure they’re qualified

Even if your business does not have the funds to hire a full complement of staff to get your e-commerce site running, it’s still a good idea to bring on someone, even if temporarily, whose sole responsibility will be to launch this component. This is especially true since it might end up yielding more revenue for your company than your other platforms. Take it seriously and don’t treat it like a sideline hobby.

In this vein, make sure you find someone who is qualified. “Don’t go with someone’s nephew who just graduated from college and can program a site,” cautions Julian Barkat, founder and director of e-commerce at Egg to Apples, a Philadelphia-based marketing agency. He adds that one client hired a niece to set up an e-commerce site simply because she “liked colors and studied that in college.”

Barkat, who has managed e-commerce operations for large and mid-sized companies in the past, currently acts as a consultant to small businesses looking to overhaul their site or launch one. Recently, he had a success story with Rescue Rittenhouse Spa, a luxury spa located in Philadelphia. Barkat started working with them in 2010, following the client’s earlier failed attempts at online sales.

After streamlining its SEO efforts, Barkat and his colleagues built out the spa’s e-commerce site via a new platform, Magento. After launching the site in November 2011, the client saw an immediate impact on revenue, while relevant search terms rose up in rankings. For 2012, Rescue Rittenhouse Spa’s year-over-year revenue forecast (which encompasses both the spa and the online store) is up 150-200 percent.

Here are a few other best practices for entrepreneurs to employ when launching an e-commerce site to bolster ROI:

View your e-commerce site as a way to deepen your relationships with your existing customer base rather than pursue new customers already.

Link all of your marketing efforts to your site.
Use Google analytics to track and monitor the visits to your site, particularly your repeat visitors. This will give you a keen sense of what is working on your site and what isn’t.
And finally test your site out before it goes live. Before Bill and Lauren Elward launched their e-commerce site, they spent considerable time and energy testing it and working out the kinks. “In the online space, it’s easy to try something and to wholly invest a small amount in it to see if it’s going to work,” says Bill. “Launch a pilot before you fully embark on a huge display advertising campaign or a huge search marketing campaign.”

Get ‘Em Back: Tactics for Reclaiming Lost Customers

by Iris Dorbian.

When the economy nosedived in 2008, Jeff Weiner, president of Uniondale, New York-based HKM Insurance, felt an immediate effect. Because many of his clients were laying off employees, his 30-year-old firm snagged fewer premiums, leading to fewer commissions for his full-time staff of four. As the recession dragged on and customers cut back or left altogether, Weiner’s business experienced two straight years of tough times financially.

“Learning how to manage that sinking feeling that occurs when a major account says good-bye is a milestone for anyone,” write Jill Griffin and Michael Lowenstein in their 2001 book, “Customer Winback: How to Recapture Lost Customers and Keep Them Loyal.” Written at the onset of the last recession, the book makes clear that, after each customer departure, a business faces a stark choice. “You can give in to the disappointment and despair and purge that lost customer from your data files, thereby ensuring that the customer is gone forever. Or you can get focused on the necessary steps to win back that customer.”

PQ_GetemBack.jpgAs the economy continues to recover from the downturn, some small business entrepreneurs are finding that their road back to success involves tracking down lost customers and wooing them all over again. To do so, however, they must be even more resourceful and enterprising than before.

Reposition your sales proposition

For Weiner, his insurance company’s slide finally stopped when he was able to change his customer’s perceptions about what it had to offer.

“I had to reinvent myself because a lot of people knew me as the health insurance guy,” says Weiner. “I had to expand to new products.” In the wake of the economic downturn, Weiner beefed up his company’s offerings to include life insurance, long-term care insurance and other options. By early 2010, he says his profits started to rebound.

But he didn’t stop there. To stay abreast of what former clients were up to and what others in his industry were experiencing, he fell back on a tried-and-true tactic: He networked.

Schmoozing beats losing

Right around the time his company started its comeback, Weiner started a networking group in Westbury, Long Island, composed of a dozen small business entrepreneurs. (Membership is currently up to 250). Meeting for lunch a few times a week, members briefly discuss their companies and current needs while also exchanging business ideas, referrals, and opportunities. Not only have these casual confabs helped Weiner’s business accelerate its recovery—since its nadir in 2010, HKM’s revenues have grown 25 percent—they’ve reaped handsome dividends for other members as well.

“We had a marketing guy get his single biggest client in 25 years at a session,” says Weiner.

Networking certainly did the trick for Alan Winnikoff, co-principal of the small New York-based boutique PR firm, Sayles and Winnikoff Communications. The nearly 10-year-old company, which employs a full-time staff of six, caters to clients in the so-called glamor sectors—the arts, media, and entertainment—as well as nonprofits and start-ups. After the recession hit in 2008, Winnikoff also experienced a slump, although due to contractual agreements with clients, it was delayed.

“We thought we were getting though it,” he says. “We were able to tap into digital start-ups and, for awhile, we had that but then it stopped. We got hit the worst starting in fall of 2010 for about a year. We’re just coming out of it now; 2011 was our most difficult year in terms of billing.”

Like Weiner, Winnikoff sought to remedy his company’s lost earnings by reaching out to former clients who had either moved on to different jobs or launched new businesses during the recession.

“We had a client who was a president at a major media company,” he recounts. “But in the summer of 2008, that company cut back. We lost them at that point and then this client—we’ll call her Madame X—she left about a year later.” After her departure, Winnikoff made a point of reaching out. Over lunch, the two reconnected and when she later started work at another firm, the ongoing relationship paid off. “They hired us on her recommendation,” he explains. “She introduced me to other people, which led us to more opportunities.”

Less Money Now, More Money Later

Sometimes keeping or winning back a lost customer means accepting leaner profits in the short-term. And while this advice might sound counterintuitive or even self-destructive in an economy that remains precarious, it can reap lucrative long-term dividends.

“We have a client that’s a TV production company,” explains Winnikoff. “They do great work, but in fall 2010, they told us, ‘We’re shutting down for December and going to put you on hiatus for a month and then hire you back for January.’ They did, but they also cut our fee.”

After the move, Winnikoff reflected on his options, trying to gauge the long-term value of the relationship. “I decided to stay with them even though we’re doing the same amount of work for less money,” he explains. To Winnikoff, the tradeoff was worth it, as the decrease in revenue didn’t outweigh the risk of losing the client—and the prospect of more lucrative work in the future—forever.

In their book “Customer Winback,” authors Griffin and Lowenstein try to put this strategy in financial context. Using as an example a customer that regularly spends $200 a month, they estimate that full impact of losing that client, which includes bad word-of-mouth advertising and missed opportunity costs as well as the direct revenue loss, could total up to a staggering $432,000 over 10 years.

Speak Your Way to Client’s Hearts

Another tactic that can drum up business and reclaim former customers involves public speaking. Even if you’re not comfortable with speaking to groups, it’s important to “put yourself out of your comfort zone and try something new, something different to market yourself,” explains Erica Prince, founder and president of The Professional Speaker’s Bureau based in Roslyn, New York. “Don’t be so complacent. Force yourself. Get a topic you’re super knowledgeable about and the comfort level with come.”

Prince, whose company has been around since 1995, says that entrepreneurs who make public speaking engagements part of their marketing arsenal can end up getting better returns on their investment than if they bought print advertising. “If you’re an expert [in a specific area], that’s good,” she says. “That will get you the clients that another person who’s not speaking won’t get.”

And getting more clients—whether they be of the new or long lost variety—is what growing a small business is all about. As someone who’s seen his ongoing customer reclamation efforts pay off handsomely, Winnikoff couldn’t agree more: “I’m very optimistic about 2012.”

6 Reasons You May Need to Reconsider Your Outfit

Dressing for success as an entrepreneur can be a challenge. Your company culture, your clients, your location and your comfort level, can all factor into deciding what works best for your small business. Television shows like “What Not to Wear” illustrate what fashions are in style and how to achieve similar looks. The show also reiterates that the image you project through your attire can have great meaning and speak to your level of confidence. Perhaps most significantly, how you dress and present yourself can make or break a sale depending on whether a potential customer takes you seriously and trusts you with their business.

So how do you know what to wear? Business suits or golf shirts and khakis? A skirt or slacks? Or, something else? The following are some tips to keep in mind as you determine not only what you wear to work, but also the dress code you want to establish for your small business.

Bear in mind that, in some “roll-up-your-sleeves” work environments, business casual is not only appreciated but may help boost productivity, raise morale and create a team-oriented culture (think software start-ups, music industry businesses). Casual dress is becoming more and more common in all industries. In fact, 75 percent of U.S. workers dressed casually on a daily basis, according to a survey from a major clothing manufacturer.
If you do have a casual dress policy, even if it’s only on Fridays, be sure you’re clear about what constitutes casual dress, and what does not. Employees may not realize that there’s a big difference between a t-shirt and jeans versus an unstructured jacket and baseball cap. Some employees may take casual dressing too far.

In challenging economic times, even laid-back companies are returning to the business suit – especially for customer meetings. Customers have said they feel more at ease entrusting accounting and legal services to someone who looks both serious and prosperous.
Dressing formally doesn’t mean being flashy or showing off. Wherever you shop at, make sure your suit is well tailored and well fitting with a secure hem. Your shoes should be polished. Consider things besides your clothes when contemplating your appearance. Haircuts and make up (for women) should be neat and understated.
When in doubt on how to dress, it’s generally better to over-dress than under-dress by preparing for the most formal possibility. Keep a blazer in the office – in the event you need to give your look a more professional edge.

Pull Quote.pngLastly, it’s important to be comfortable with what you’re wearing so that you’re able to concentrate on your work. It’s possible to dress to impress – while keeping your individuality. At the end of the day, you should always feel like yourself.

5 Secrets of Sales Superstars

While I have done my share of sales, like I’m sure you have, I would never call myself a “sales superstar.” Fortunately, in my line of business, I get to meet many people who do in fact fit that description, begging the question, what do they have in common?

Let me suggest it is five things:

Sales Superstar Secret #1: Language is Vital: Brian Tracy, maybe the world’s best salesman, tells the story of how his first sales job was selling soap door-to-door to earn his way to YMCA Camp. He heard rejection after rejection until he oh-so-slightly rephrased his sales pitch. Instead of asking, “Would you like to buy a box of soap?” he said instead that he was selling soap, but that “it was only for beautiful women.” Thereafter he says, getting to camp was a breeze.

Your choice of words is critical, Tracy says.

Secret #2: Know the Most Important Question to Ask: In his great book, The Little Red Book of Sales Answers, author and master salesman Jeffrey Gitomer says there is one question to ask a customer that is critical to sales success:

Ask: “When I say [name of your product], what one word comes to mind?” This tells you what the customer’s hot button or pain point is and allows you to deal with it.

(Gitomer also says that one of the dumbest questions you can ask is, “What will it take to get your business?” You should know.)

Secret #3: Build Rapport: Rapport, once established, will make your sales almost effortless. Once you create rapport with someone, he or she begins to trust you, and with trust, walls and reasons melt away.

There is a sales strategy that suggests that if you quietly mimic your customer’s intonation and physical movements you will subconsciously create rapport. This may or may not be true, but it sure does seem sneaky. Consider instead building rapport the old fashioned way: By being your best self, finding things in common, and being friendly and helpful.

One way to do this is to ask questions, and then actually listen to the answer. Sales king Tom Hopkins says that, “The human body has two ears and one mouth. To be good at persuading or selling, you must learn to use those natural devices in proportion. Listen twice as much as you talk and you’ll succeed in persuading others nearly every time.”

Secret #4: Go the Extra Mile: Because it costs so much more to win a new customer than it does to keep an old one, it behooves you to foster your relationships with your current clientele. Part of that is doing your homework and keeping up to date on where your customers are and what they need. A little extra effort into learning about a customer, for instance, by studying trends in their industry or knowing a bit about a competitor, can go a long way towards impressing that customer and keeping him or her around.

Remember this too – it can takes up to six interactions to close a sale. Going the extra mile means being willing to see a potential customer again and again, continuing to build rapport, until the sale is made.

Finally, going the extra mile also means following up. Sending thank you notes, checking in to see if the product is working out, and that sort of thing builds rapport for future sales.

Secret #5: Sales is Like Golf: If you have ever played even a little golf you know that the harder you try, the less successful you are. But when you ease off the throttle a bit and trust your natural abilities, when you stop trying so hard, that is when the great shots appear.

Well, to a certain extent the same is true in sales. It is a paradox: Just as you make the great golf shot by not caring about the great golf shot, so too can you get the sale by not worrying about the sale. A customer can sense when a sale is your priority, and will back off accordingly. But once he is convinced you are more concerned with helping him solve his problem, rather than being more concerned with selling, you will birdie the sale.