Out Sell Your Competitors – The Easy Way!

Last week I was onsite with one of my favorite clients, a manufacturer in South Carolina. During a dinner meeting with the CEO and CFO, I heard a great sales story.  My client had been looking  for a new insurance provider.

Seems that the company they had worked with for years sold out to a larger organization, and their account was now being handled out of Texas. My client really wanted a firm with an office in their state, and a representative they could meet with in person. Sounded reasonable, so they started taking bids and interviewing providers.

This is where the story gets good. After two-months they narrowed it down to three candidates, and were close to a decision when out of now where they simultaneously landed two big contracts. All of a sudden Human Resources, the department overseeing this decision, was swamped having to recruit, hire and train new staff to handle all of the work created by these contracts. Needless to say the urgency to find a new insurance provider fell to the back of the line. So did two of the insurance providers desire to stay in touch, follow-up and keep in contact with my client.

Six months later, when the dust had settled and the new staff was in place and working, Human Resources was once again focused on finding a new provider. This time the decision was easy. Originally they had narrowed it down to three candidates, but by the end of this whirlwind of activity it was clear to them there was just one choice.There was only one provider who bothered to stay in touch, provide value, and routinely follow-up.

Besides keeping her name in front of her potential prospect, she built a relationship and ensured that when they were ready to make a decision she was top of mind.

If you want to outsell your competitor then you need to follow-up. I know it is not sexy, not exciting, but it is one of the most powerful ways to outsell your competitors. Research tells us that less than 81% of sales people make more than three follow-up contacts with a prospect. Research also show us that most prospects buy after the seventh contact. (I believe that is even higher now, given the shift in our economy.)

Most sales people "give up" because they have decided the prospect is not interested, or they simply don't want to be annoying. Two very bad assumptions.

The point is, we really have no idea why a hot prospect suddenly goes cold, but more often than not it has nothing to do with us. Perhaps a bigger priority came up at work, they have a family issue, or they simply got behind due to a vacation or holiday. Who knows? You see people are busy, and rarely is what we are selling at the top of their priority list. The sales person who is proactive, makes things easy, and continues to follow-up is the sales person that will win the business.

And this whole idea of being annoying, well you are only annoying if you are making the follow-up contact about you and not about them. Too often, our follow-up systems consist of sending an email or calling every 30-days to ask if they are ready to make a decision. To follow-up effectively you need to keep the focus on the prospect, and follow these three simple steps:

Design A System – you need a process in place that reminds you when to follow-up, who to follow-up with, and one that can record important notes and ideas that you learn from each contact.

Make It Personal – follow-up needs to be customized and individualized to the prospect. Too often I see follow-up systems that are just that a one-size fits all.  Follow-up is about building relationship and establishing trust, so you need to take a very personal approach.

Add Value – however you choose to follow-up with your prospect, you need to add value. Articles providing information about challenges, opportunities they have. Tickets to events they are interested in. Introductions to people they would benefit from knowing. Adding value ensures your client enjoys and benefits from the follow-up process.

My client's insurance new provider did not win the business because she is smarter, had a better product or quoted a rock bottom price. She outsold her competitors simply by following up!

About the Author

"High energy, high impact and highly motivating," that is Meridith Elliott Powell, founder and owner of MotionFirst. A certified coach, speaker and business development expert, Meridith is known in the industry as a catalyst and woman who makes things happen! Work with Meridith to build your network and change your life!

When Should You Pay Sales Commissions?

Commissions can be paid at several different points in the sales cycle. The four most common are on booking, invoicing, receipt of partial payment, or receipt of full payment. Commissions on long projects may be paid in installments throughout the project. The timing of commission payments affects sales force motivation. The ability of the accounting department to compute the commissions promptly and accurately affects their motivation, too. Here are the pros and cons of each type of payment timing.



Booking

Pros: Rewarding salespeople immediately after they make the sale is the most powerful motivator because it provides immediate positive feedback.



Cons: Since you pay commission before you get paid, this can be tough on cash flow. Also, it can be hard to recoup the commission if the order is cancelled or changed perhaps impossible if the salesperson has left the company or the commission was paid to an independent rep.



Computing this type of commission also creates technical problems. Most accounting and ERP systems dont keep an audit trail of order changes and cancellations, Therefore, you wont know when commission should be adjusted due to order changes. Tracking changes manually is guaranteed to create errors, which will adversely affect sales force motivation, yet very few software packages can automate this method of payment.



Although few companies pay on bookings, some do. Paying on bookings is more common for long projects, such as construction. Some companies combine payment on bookings with one of the other methods paying, for example, half of the commission when the order is booked and the balance when its invoiced.



Invoicing:

Pros: Since, after bookings, this is the earliest time to pay, its the second best motivator. Also, if you compute commissions manually, this is the easiest method to use: every accounting system includes reports of invoices for a month.



Cons:

You may pay commission on more sales than you get paid for and salespeople have no incentive to help collect receivables. As with payment on bookings, this can be tough on cash flow. Thats especially a problem if your product is seasonal, creating lean months when you purchase inventory and fat months afterwards when you get paid.



Also, this method will create problems if your customers frequently pay short, have a high default rate, or frequently return goods. However, you may be able to overcome this by clawing back commission if an invoice hasnt been paid in full in a certain number of days.



This is the second most common time to pay commission.



Receipt of full payment:

Pros:

You pay out commission from money you have in hand, so this is good for cash flow. Also, this motivates salespeople to help collect outstanding amounts from customers.



Cons:

If you have commission software that does this for you, the only con is that, psychologically, it isnt as good a motivator as the methods that pay earlier. If youre computing commissions manually, paying on receipt of full payment can be very time-consuming. Some accounting systems have a clear indication that an invoice has been fully paid; others dont. If yours doesnt, youre left with the very manual process of figuring out which invoices were open last month but are closed this month. Most of the transactions closing the invoice will be payments, so you can figure out which payments fully closed invoices, but a credit memo might also close an invoice, so you need to check those as well.



This is the most common time to pay commission.



Receipt of Partial Payment:

Pros:

This is easier to measure than full payment if youre computing commissions manually, because you dont have to figure out if a payment fully paid an invoice, and credits have no effect on commission due. All you need is a list of payments for the period. Also, it has the advantage that you pay out of what youve received, just as the previous method does although, in this case, youve incurred all of the expense but perhaps received only part of the cash.



Cons: If your commission rates depend on the product or service being sold, paying on partial payment is very imprecise. There is no way to know to which invoice line(s) a payment applies. If the lines have different rates, or the invoice includes non-commissionable items, freight or tax, the commission paid will be only approximate.



Not all commission software supports this method of computation. Furthermore, if short payments are generally due to disputes, salespeople will have less motivation to resolve those disputes because theyve received part perhaps most of their commission.



This timing is less common than either payment of receipt of full payment or payment on invoicing, but more common than payment on bookings. If most customers pay most invoices in full, this has about the same effect as paying on receipt of full payment, so you might end up choosing based on which method is easier to compute.



Milestones:

This method is used for long-term projects, such as construction, service contracts, and subscriptions. The trigger to pay commission may be a G/L transaction to recognize revenue, an entry in project management software, or the passage of a certain amount of time. This method is usually used with one of the other methods, most often payment on bookings. It is the least common method.



Pros:

Commission payments are usually linked to the receipt of a customer payment, so youre paying with money you have. Salespeople dont have to wait until the end of a long project to get paid, which would be a very poor motivator, and it encourages them to keep the customer happy throughout the term of service.



Cons:

Commission reports available in most ERP systems dont bring in data about projects. Frequently, projects are tracked either manually or with a different software package. Therefore, this method can involve a lot of manual work, which leads to errors, delays in commissions, and many days of work each period in the accounting department.



Summary:

Timing of commission payments should motivate the sales force and also be practical to compute accurately and promptly. Weve reviewed the alternatives here. Theres no right method for everyone, and each involves trade-offs. The method you choose will depend on the unique requirements of your company.

About the Author

Jo Ann Flaum is President of Flaum Technologies Inc. (http://www.commissioncalc.com), creators of CommissionCalc software. Unlike its competitors, CommissionCalc can compute commissions based on any rules, no matter how complex, paying for itself in less than a year.

Your Environments Impact on Your Sales Presentation

The best speakers can rally a crowd to their cause in the worst conditions imaginable. Few of us are such speakers. But all of us can seek to improve the environment our audience is in before we present, to maximize the impact of our sales presentation.

• Speak early in the morning or right after lunch if possible. When people are hungry and ready to go get lunch, those physical needs can detract from even the best presentation. If you are presenting close to a meal time, provide snacks or juice if possible.
• Keep it short to avoid boredom or interruptions. If a long presentation is necessary, give a break after an hour to prevent disruptions like phone calls and bath room breaks from taking away from the presentation. Breaks can be enhanced by renting a meeting or conference room close enough for a dash to the bathroom but far enough from the lobby to avoid undue noise.
• Would you want to sit in that room to listen to this? Whether it is cramped, smoky, over-crowded, or noisy, the environment can often create a negative impression that the speaker must then overcome. Arrange enough space for the crowd expected to attend. A larger room may cost more money, but the alternatives of forcing people to stand or leaving half of the audience in the hall are worse. If there are surrounding events that add to the noise level, you can move the presentation to where there is less noise, try to implement sound dampening, or turn up your volume. It may be possible to ask other parties to turn down their own volume, but that may or may not be practical. Conference and meeting room selection need to be based on comfort as well as on price.
• Late arrivals distract those who arrived on time. They may also ask questions on matters already answered in the part of the presentation that they missed. If major players are rushed from another event, show consideration by moving your event fifteen to thirty minutes later. Move your presentation to avoid them being late. It shows consideration for these attendees and improves the quality of the presentation for all.

It is easy to ask if attendees have questions. Having time for all the questions is a greater challenge. Be pragmatic in setting a question and answer period. Give ten to twenty minutes for questions if possible. Five minutes or fewer feels rushed and can leave attendees with unanswered questions. Too long of a Q&A drags on a presentation to the point of boredom and can cause a time crunch for others. If there are many questions on topics in the seminar, have ready hand outs with details or information on how they could request a follow-up presentation.

 

About the Author

We Recommend Hubworking, who are the Leaders in Pay as You Go Meeting & Conference Rooms in Central London and offer London Conference Centre and London Meeting Rooms.