Now's the Time to Close the Deal

Every month, I try to help you grow your business by stimulating your thinking and giving you ideas you can turn into action.

Over the past few issues I have shared several ideas with you to help you grow your business. We’ve talked about positioning, differentiation, being remarkable, advertising, PR, social media, the Web and pricing. Not only that but through no effort on my part the economy continues to improve, albeit more slowly tham many of us would like.

How’s your business doing? Has business been picking up for you? Are you seeing more opportunities than early last year? What about your close rate? Is it improving, declining or staying the same? What about your margins? My point in asking these questions is to make sure you know the answers to help you know where to focus for growth.

If you’re seeing a lot more opportunities but not closing more of them, why is that? Are potential customers looking for a new shop, or just looking for you to keep their current shop honest? It’s hard to get business without providing a quote, but remember you are not in the quote business.

There is no profit to be made by providing a quote. The profit comes from winning the job.
Are you closing more business? Great—maybe. What kind of margins are you seeing? Are you closing more business because you dropped your prices “to be competitive” and now make very little money on any given project? Or, better, are your margins increasing either because you are pricing to value and/or because you have lowered your operating costs by removing all waste from your processes?

Some of the shops I hear from feel pressured to lower their prices to keep winning business. What else would you expect? Rarely (maybe never) does a buyer call up and recommend you raise your prices. Their job is to get you to lower your price. They are going to keep up the pressure for you to do that. Your job is to understand the value you offer so you can hold good margins on fair prices.

If you are still investing in getting new business, what is working for you? Is it ads, social media, naturally occurring web traffic? You have to measure and monitor if you want to improve your marketing and sales results.

How are your salespeople doing for you? How much time are they spending selling versus getting ready to sell? One of my clients recently discovered that his salespeople will lose more than 30 percent of their sales time focusing on “improving” their presentations and doing competitive analysis. First, their improvements weren’t, and they should not need to do competitive analysis, that is one of marketing’s jobs. And maybe like you, they did not have a dedicated marketing person to do this work, so they left it to sales.

How much do you think it is costing you in lost time and lost business having sales do a job that a marketing professional should be doing? In my experience companies with no marketing resources in-house lose at least 30 percent of their productive sales time to having salespeople do that work. This does not count the added loss incurred because it is usually not done particularly well.

If your shop is still too small to have more than one or two salespeople, this may be an unavoidable loss. But, if you have three or more salespeople it is probably costing you a full-time sales person equivalent in lost sales time having salespeople do their own sales support or marketing work. Once you have two salespeople and are considering a third, don’t. Consider a part-time marketing person to support sales. This will free them up to spend more time selling with likely better results. Once that happens you can take some of the profit they generate and consider hiring a third sales person to increase your growth.

Every month, I try to help you grow your business by stimulating your thinking and giving you ideas you can turn into action for your company to help it grow. After all these months, you should be seeing results unless you are still thinking about the action you could take. We’re one quarter into 2012 now. What are you doing to get better results this year than last? Hope is not a strategy and intentions don’t automatically turn into actions. It’s definitely not too late to make 2012 a record year for your shop, but you’re going to have to do something about it if you really want that to happen.