Most of you are burning your money
I had lunch about 6 months ago with three successful business owners. Robert owned a successful Manufacturing Company, John owned a successful B2B Insurance Agency, while Richard owned a prominent Stock Brokerage. All three men were millionaires, and had more than 20 years experience each.
As we got caught up on events in our lives, the conversation naturally turned to business. Remarkably, all of them had survived the "economic downturn" of 2006-present, but with reduced sales and margins. They all seemed to gloat about the "cost cutting" measures they had established, and even tried to up-stage each other as to the severity of the measures.
At this point, I asked if any of them had taken any steps to increase market share or revenue during the downturn. In unison, they said "NO". It was then that Robert (Manufacturing Company) blurted out that he had hired and fired 8-10 sales personnel due to dismal results. John remarked that he had 3 salesman, and not one of them paid for themselves. He continued that it seemed as if the salesmen spent all their time "pounding the pavement", or calling on unqualified prospects who never closed. The conversation lingered on and on about how salespeople were lazy, and stupid, and unmotivated. Robert even offered that his sales folks "couldn't close a door", which brought a round of laughs.
At a break in the complaints, I asked them about any digital tools they were using. Without hesitation, they all confirmed they had a website, email, word, and power-point. In my "very most" humble voice, I asked them if they had any type of CRM system, or web presence beyond their website. The table got very quiet, as they shook their heads no. It was then that Richard blurted out, "Why should we, my daughter uses Facebook so I know it's not for me or my business." "Agreed", Robert and John chimed in.
I then continued by asking what type of advertising they were doing. It seemed as if they were all using the same old tools; namely Yellow Pages, Directory Ads, Trade Shows, and Cold Calling. "Do they work" I asked? "Not in the last 5-10 years", they all answered. Continuing, Robert said "seems as if the whole system has changed". "How so", I asked. Robert then continued, "Well, seems as if the sales folks are emailing or calling all day long with no appointments or results. And when we contact folks from the trade shows, they never answer their phone, return voice mails or respond to emails."
Suddenly, I had a vision of the movie "Pleasantville" all black and white, and I was deep inside the script. Three grown men, afraid to change, afraid to upset what "was" (and had always been).
Richard then turned to me and blurted out "you're the Marketing and Sales guy, what do you think is going on?"
"Before I answer you, I want to ask a few more questions." I said; "what do you think you're spending on these useless sales people, and all your advertising in total and what do you think the ROI is?" The answers ranged from $250K to $350K per year among them with a return of less than 15%. "So what do your salespeople do all day?", I asked. "Well I think they spend their time searching for prospects", John answered. "And How much time is that?", I continued. "I'd say 80-90%", he quickly answered.
At this point, I became very quiet and sat very still, looking at each of them in turn. You could tell they were perplexed and maybe a little worried.
I then asked, "Have any of you made a large purchase for your business or home recently?" They all confirmed they had. In fact, John and Roger had just purchased luxury cars in the last month. I then asked "And where did you start your search for the "perfect car?" Very quietly, John mumbled "on the internet".
So I continued, "So, where do you think your company should be, to be found?" In unison they softly answered "the internet".
In summary, all three of my friends now have a very active web presence through Facebook, Twitter, LinkedIn, Pinterest, etc., and although it is early, their sales folks have seen a dramatic uptick in qualified leads, and a 20% increase in inquiries from prospects who are predisposed to their product or service. This is because the "Sales Process" is initiated by the prospect today. So my question to you is, "Are you still burning your money?". You are, if you hire great sales professionals, and send them out to engage in "press the flesh prospecting". As a marketing and sales professional with 35+ years of experience, the game has changed. Although you may disagree with me, even I (with notorious prospecting and sales skills), have had to acknowledge the effectiveness of Internet Marketing. It is no longer "Pleasantville".
4/21/2021 07:57:36 am
This is a great post, thanks
10/13/2022 10:53:54 pm
Wrong town manage. Modern first wide.
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Barry Neighbors has extensive experience working with OEM's and A&D Suppliers on Supply Chain issues. Focused on developing a more efficient supply chain, or helping suppliers in their business development efforts.