Lately several small business surveys I’ve heard mention this idea of feeling “uncertain” about the economy and political climate. But I wonder if there isn’t something deeper behind this—the uncertainty of how many new and returning customers are going to be coming through their doors.
When business is humming and you have all the customers you need then who has time to even think about the political climate or economic environment? But when there aren’t as many customers to service and you don’t have enough money to build or grow your business, then suddenly the cost of health care or rising interest rates suddenly become important elements in your businesses survival.
I’m not saying that you shouldn’t pay attention to these larger issues, I’m advocating putting more of your focus on building a sales and marketing system that you can control and build to deliver you as many customers as you need or want instead of putting your attention on political and economic factors that are impossible to control from your end.
Building sales and marketing money machine in three easy steps
Before you can start to build a predictable process, you’ll need a map. Mapping out your sales and marketing process will make it easier for you to spot waste as well as opportunities to shorten your selling cycle and tweak your marketing campaigns so that you can become more profitable.
Set your baseline. You’ll be tempted to create the perfect process right away. Don’t rush into it. First, create a map of your existing process so that you can set a baseline. Start your process with all of the ways you have to reach out to customers.
This includes both inbound as well as outbound marketing efforts:
- Website or landing pages
- E-mail marketing
- Newspaper advertising
After you list those marketing activities, start mapping out the path your prospects take to becoming customers:
- Sales calls
- Product demonstrations
- Free consultations
Add the numbers
Next you’ll want to attach numbers to each of these milestones of your sales and marketing process. If you send out 10,000 postcards, write 10,000 in the postcard block. Then write down how many of those postcard leads go to the next step—100 of the postcards recipients call for an appointment. Then keep tracking those 100 all the way down until they become customers and then to their next purchase. If the cost of the postcard marketing campaign is $2,000 and you get 100 leads, then your cost per lead is $20. Ultimately, your goal is to get that cost per lead down while increasing the number of leads that you get.
Get your sales conversion rates and cost per lead
At the end of your sales cycle, notice how many of those original postcard recipients became customers. If you were to repeat and track this one process, you would find that for every 10,000 postcards you send you might have gained between 50 and 60 customers. If the total cost of the 10,000 postcards is $2,000 and you closed 50 to 60 new customers at $1,000 per sale, then you have a fairly predictable and profitable process. You know that every time you spent $2,000 on postcards, you will make about $50,000.
Now that you have the idea, you can repeat this process for your entire marketing channel. Another number I like to add into the mix is how much time it takes for people to move through the sales process. If that time from prospect to sale is too long for you, then you can look back into your process to see what the obstacles are that are keeping your customer stuck inside the process and help them get the information they need to make a better decision.
Lessons from the sales masters
One lesson I learned in selling high-dollar industrial items with a long selling cycle was that each step of the selling process was a mini-sale. This got me focused on making sure that there was a defined “call to action” even while selling highly technical industrialized products.
Think of attracting a lead at a trade show. The call to action to convert them from being a qualified lead to a qualified prospect was to get their permission to send a design kit of sample parts. If they said yes to that, then the next “sale” was to set an appointment with them to evaluate the part’s performance in their design. So you can see how using this “call to action” focus guided the prospect through the sales pipeline.
Using a sales pipeline to predict profitability
Now that you have your process all mapped out, you’re ready to start tracking and managing the dollars at each stage of your process. Most sales and business people know all about the sales pipeline—but no one uses it. When I started actively using a sales pipeline, my sales practically doubled, all because I was paying attention to which customers were at each stage of the process.
You can create a quick sales pipeline using a simple spreadsheet:
- Column 1: The customer
- Column 2: Stage in the sales process
- Column 3: Total sales opportunity
- Column 5: Action you need to take to move them to the next stage
This is my daily worksheet. There are more sophisticated templates that will give you much more detail and calculations, and if you use tools like Salesforce.com, Goldmine or ACT, they will have their own pipelines.
It really is a numbers game
When I hear about small business owners wringing their hands over the uncertainty of how many customers they will have or not have, I can’t help but wonder if they have a system in place to help them manage this.
Online and direct marketers live and die by these maps and numbers. They know that if they don’t like the number of customers coming through their digital doors, they simply refer back to the map and make adjustments.
There is something extremely powerful about having the feeling that you can control the outcome of your sales and marketing process. In the past, it was popular to say that you can’t predict human behavior—and to some extent this is true. But you can estimate and get pretty darn close. And the sales and marketing process map and pipeline will help you control your sales and marketing destiny.