Don’t Sell, Don’t Grow

This article also appeared in the 11-7-2014 edition of the Portsmouth Herald

I’ve been talking a lot about keeping customers customers in the past few articles, but this week I’d like to take a giant step back to consider how you get customers in the first place. In my line of work and over my career I’ve been involved with companies of varying sizes, states of maturity and revenue. Some had thousands of customers, and others have had none (at least none who were paying). Some of these little ones grew greatly, and some of the great ones grew, well, little. While the range of contributory reasons varied, a common thread was sales: the sales staff, the sales process and the place of sales within the company.

It may seem axiomatic that it’s tough to sell anything if you don’t have a sales team, but many companies do just that. Look behind the scenes of an active customer list and you often find “referral sales.” That is, customers only gotten because someone moved from an existing customer to another company and brought you with them, or one customer acquired another and mandated the purchase or a pal told another pal to look at you. So what’s the problem? Two things: first, I’ve never seen such a model successfully scale, and second, as a business person you’re stuck being reactive. Neither works for long.

Referral sales most often come along when companies are small, and the entrepreneur/owner/founder gets personal support from an early customer via an introduction to a peer, or maintains a relationship with an individual when s/he moves to another company. As often as not that initial sale was “non-standard” in some way. Might have been software customized in some way to make it more appealing, a construction project with upgrades or additional work than would be standard, in short, anything to get that first deal or two. So here’s the problem: the next guy hears how the referrer got a deal and all this extra stuff included, and now that’s expected. You’re impacting your work plan, your margins, your staffing because no deal can stand on its own—it’s being measured by what you did for the last customer. That doesn’t scale, and certainly doesn’t scale profitably!

The second challenge with this model is the fact that you have absolutely no control where John and Jill are going to go if they leave your current customer, or when. You’re at their mercy for introductions, and in my experience they’re few and far between. I’ve been brought in to numerous clients eager to break the reliance on people they know in the customer world to sell for them. An added risk exists with your initial customer in that all too often the work done or the products bought were done so because of your friendly contact, and once they move on, someone with different ideas and preferences is off to bring in their own brand of stuff.

So what do you do to break this habit and get control of your destiny? Step one is, in spite of what I said above, don’t stop looking for referral customers. They’re new business so take them. Just proactively manage the new deals down toward your standard model for margin and repeatability. And don’t count on them for all your new business!

Step two is to make sure you have a trained salesperson responsible for the selling effort. Just because your great nephew Marvin is in the building and he’s a “college graduate” doesn’t mean he can represent the company, the products or services sufficiently to get someone who isn’t a personal connection to select you. Selling takes a specific set of skills, influenced by innate personality, but ultimately it’s a discipline and a process borne of training and practice.

The third step is to map out a plan of attack—a strategy for prospecting. Consider where you have been successful (or if you’re just beginning, where do you think you will be successful?), identify the attributes that allowed that success and play to strength. Finding potential prospects that look like your current customers is no harder than using Google, LinkedIn or any one of a dozen online directories. So define who your targets are, create a story appropriate to the product or service you’re selling, identify the people within the targets who are most likely to be interested and start the prospecting process.

Finally, and this is why it’s so important to have a professional at the helm of a defined sales process, execute the plan—articulate your value, your competitive advantages, and bring them to a successful deal close. Of course depending on your industry this could take 15 minutes or 15 months, but the basic premise still remains: find the people who would be interested in what you’ve got to sell, get to them, and show ‘em how you’re going to change their lives. Next time we’ll talk more about how Sales and Marketing intersect to drive this process.