8 Procedures to Take Control of Sales and Marketing

The Cash to Cash Cycle
Part Three of Series

We're sprinting toward that million dollar mark...and we're only a couple strides away?

Decreasing inventory carried us over the first hurdle, and last week reducing Accounts Receivable sped us through the half-way mark. We're making great time, so let's bring on the next mile marker ? marketing and sales.

Increasing Overall Sales and Marketing Effectiveness

If you are an organization spending $500,000 or more on marketing expenses (e.g. advertising, trade shows, print materials, direct mail, etc.) then STOP! We found it again. Why you ask?? Because marketing has the greatest potential of being very unproductive. In fact, many marketing programs struggle to break even, and actually frequently lose money. So if we increase the overall effectiveness, then we can eliminate 50% or more of your wasted marketing efforts, which translates into $250,000 in cash.

So now, let's see how this actually works in a real-life scenario.

Sales and Marketing Company Policy Case Study

An organization with $500,000 in marketing expenses needed assistance. We examined their sales and marketing process to understand and quantify the lead flow, follow-up, and demand forecasting issues. Then we designed and implemented a process to improve their sales cycle efficiency and tie it closer to their customer's buying cycles. After the marketing reductions, we then reinvested $100,000 back into new processes for public relations and Customer Relationship Management (CRM), both of which were suffering badly.

The metrics we developed reduced their marketing expenses by 60% overall and increased their sales cycle efficiency from 40% to 60% within 6 months of implementing the new procedures. With these new processes and reports, the company now tracks sales cycle efficiency and life-time value rather than just sales quota achievement, as the measure of their sales & marketing effectiveness. The result: an extra $300,000 in cash plus a 50% increase in process capability (capacity).

As we have seen time and time again, time can be our best friend, if only we let it.

Methods to Design the New Sales & Marketing Process

? Improve Follow-up. Only about two percent (2%) of sales occur on the first contact. Eighty percent (80%) of sales will require five to eight contacts before the sale closes. This means that if you are contacting the prospect less than five times or more than eight times, then you could have a problem with follow-up.

? Sales Cycle Efficiency. Time kills deals. The speed at which a prospect is converted into a customer and the number of prospects required to make that conversion determines your sales cycle efficiency. So ask yourself, are you taking the right steps to measure and reduce lost sales?

? Life-Time Value. How profitable a given customer is over time defines your LTV or Life-Time Value. Companies spend ten times more to acquire a customer than to keep a customer. However, existing customers are more likely to purchase again, spend more money, and therefore become more profitable. If you don't know your LTV, then how do you know how much money to spend and on which customer segment?

? Demand Forecasting. Every customer buys on a cycle. So this means that you should track cycle times and variance to increase the accuracy of your forecasting and the loyalty of the customer. Do you know when your customers need to reorder?

? Improve Lead Quality. Do you have methods in place to measure the conversion potential of each lead? Lead generation activities (i.e. forms) should pre-qualify every new lead so that you can take the right follow-up actions for the marketing offer. Strong leads produce strong sales.

? Increase Awareness. To keep the sales pipeline full of good quality leads you must continuously increase the awareness of your company and the solutions that it provides. Public relations is more efficient at building awareness than advertising, yet many companies spend wildly on advertising and trade shows while neglecting to fund public relations efforts much at all. Increase your name recognition, not your budget.

? Reduce Discounting. Discounts represent deficiencies in the sales & marketing processes, which means that you should use them sparingly. Instead, determine the root cause and then fix the process that's causing the need to discount. Show customers the added value, and they won't focus on price.

? Train Personnel. Provide your sales & marketing personnel with regular formal training. This will arm them with better product knowledge, as well as presentation, negotiating and selling skills that will improve effectiveness. This will boost both employee morale and the bottom line ? a win-win.

Control of Sales and Marketing Policy and Procedures

Improve your sales cycle efficiency. Reduce your marketing expenses. Tie it closer to your customer's buying cycles. And take control of your sales and marketing program to let it work for you.

Improvement with Well-defined Policies and Procedures

With well-defined processes and procedures in place, you will increase efficiency by reducing ineffective sales and marketing programs. And, again, we make such improvements to create more cash on hand ? all toward that million dollar goal and to cross the finish line.

Next week, we will hurdle the final $250,000 mark with the Accounting Payables function ? so close you can see it.

Chris Anderson is currently the managing director of Bizmanualz, Inc. and co-author of policies and procedures manuals, producing the layout, process design and implementation to increase performance. To learn how to increase your business performance, visit: Bizmanualz, Inc.

---

Building Trust For Lifetime Success

Trust.One word.One very powerful word that can increase both first... Read More

4 Marketing Myths Threaten Your Sales

These 4 marketing myths can cause you to lose sales... Read More

The Benefits of Catalog Sales For Your Business

Things to watch out for when selling your product in... Read More

The Differences Between A Commercial Collections Agency & Lawyer

If your letter writing and phone calls have all failed... Read More

The Sales Carpenter

I remember moving my family to Argentina as Vice President... Read More

6 Steps to Avoid Losing Summer Sales

It's a fact - the online world dies down in... Read More

Sales Competence Isn?t About Quota Performance!

Compounding the problem are two myths regarding measures of competency... Read More

Make Time, Not Excuses

There are four primary activities that successful salespeople engage in... Read More

Book of Lists Marketing for Pressure Washing Companies

The American Business Journals produces a Book of Lists each... Read More

The ACCOUNTABILITY Challenge for Today?s Business Management

In today's 24/7 driven business word, accountability is becoming a... Read More

5 Secrets to Managing Your Sales Manager Productively

Many people believe that the main reason for representatives leaving... Read More

What Is A Proposal? And Why Do You Need One?

Do you know anyone who regularly wins bids? Or can... Read More

Effective Sales Territory Management

How you prioritize your sales territory management activities depends upon... Read More

7 Tips for Testing Your Sales and Marketing

One marketing technique may work wonders for someone, but that... Read More

Increase Your Sales - Accept Credit Cards

Many people today simply prefer the convenience of paying by... Read More

Back-to-School List - 10 Tips for Trade Shows

There's a new year beginning now - the school year.... Read More

Ten Awesome Ways To Incease Your Sales In Holidays

Everybody thinks that the businesses will slow down a bit... Read More

Sales Marketing: 12 Sneaky Tricks To Help You Outsell Your Competition

Business can be like war sometimes.You may have to fight... Read More

Sales Forecasting For New Businesses

Sales forecasting is the process of organizing and analysing information... Read More

How to Beat the 80/20 Rule in Sales Performance -- Part 1

Business executives and sales managers frequently bemoan "80/20" performance on... Read More

Generous Donor Refused (how qualified business slipped away)

Generous Donor RefusedPicture this. You are a fund development director... Read More

Online Sales: Secret To Increase Your Sales By Bundling Your Products

Microsoft has used this online sales secret to become a... Read More

How to Improve Your Management Procedures Usability

Are your people consistently following your procedures? Each year, organizations... Read More

Accepting Responsibility for Your Sales Success

That we live in a time of relentless and pervasive... Read More

Pointless Targets

I recall a heated discussion with a sales director some... Read More

Leadership Lessons for Sales Managers

Leadership, like class, is hard to define, but easy to... Read More

Transforming Your Sales Force by Creating Specific Expectations

I just finished a phone call with a potential client... Read More

How to Keep Projects From Spinning Out Of Control

Are you involved in projects that seem to go nowhere... Read More

6 Common Mistakes in the Sales Hiring Process

Is lack of sales results, more sales training costs, months... Read More

The Art and Science of Managing Expectations in Selling

It is very easy to fall into a trap with... Read More

How Do I Manage Workplace Conflict?

Workplace ConflictConflict is an inevitable part of business life and... Read More

How Exhibitors Can Move More Attendees Closer to Buying

Q. What's the single, biggest change exhibitors can make to... Read More

Is Sales Process & CRM Stopping Sales?

Standard metrics and KPI's (Key Performance Indicators) are created usually... Read More