More than tall towers fell on September 11. Also crumbled was the notion that business owners need to focus only on revenue to assure the viability of their companies. On the contrary: More than ever, they now need to pay attention to profitability.
ANTIDOTE TO RED INK. Profitability equals the ability to win customers for products and services. Profitability, in other words, equals salesmanship -- and I believe that today's entrepreneurs must become more actively involved in the process of selling. Taking an active role in selling (and training people to sell) is, I believe, one of the best antidotes available to company founders looking for ways to deal effectively with the profitability crisis.
In the past, salespeople could perhaps be forgiven for using tactics that simply don't work in today's world. Perhaps the most obvious of these is the habit of spending far too much of one's precious time calling and recalling prospects who either don't know what they want to buy, aren't really interested in buying, or have no authority to buy.
In today's economic environment -- the climate stressing the bottom line -- that selling approach is a recipe for disaster. Just because a prospect is friendly on the telephone, describes a sales presentation as "interesting," or makes other pleasant (but commitment-free) remarks doesn't mean that a sale is imminent. Just because a prospect doesn't say, "No," in a forthright manner, doesn't mean that the answer is yes.
TIME IS MONEY. Indeed, salespeople these days need to focus their attention and energy on what I call "true prospects" - people who are actually willing to make investments of time to speak meaningfully with salespeople and of energy to learn about the products or services being presented. In a sluggish or uneven economic environment, by contrast, a salesperson simply cannot afford to waste time calling the same inactive leads three or four times a week.
In Getting to Closed, I outline clear steps for identifying and reaching those prospects I've dubbed to be "true," or ready to buy. The book is based on my company's Prospect Management SystemTM, a method for selling that is currently implemented by more than 100,000 salespeople at companies of all sizes, including those that are entrepreneurial.
What follows is a look at some of the most important action steps:
Define and rank prospects according to action and commitment. In other words, how likely are they to buy based on their needs and resources?
Forget "gut feelings." Recognize when a prospect is saying, "No," even if the answer doesn't have the word "no" attached. Have the courage to walk away.
Calculate how many daily cold calls are necessary to hit quarterly and annual targets. Make those calls.
Forecast revenue with accuracy.
Use team selling, which means asking a boss or colleague to follow up with a prospect, to rescue sales that are lost.
Sell at a higher level within the targeted organization.
Back in 1979, when I was engaged in the entrepreneurial task of getting my own company off the ground, I developed a tool for selling that encompasses all six of the steps you just read. Nearly a quarter- century later, in an economic environment forever altered by an unimaginable tragedy, I revisited and refined those steps.
In good times and in bad, the system works. In good times, it is a good idea. In bad times, it is essential.
Stephan Schiffman, 57, is the founder and president of D.E.I. Management Group, a New York-based national success management and sales training firm. He has authored 10 books, among them High Efficiency Selling, The 25 Most Common Sales Mistakes, Cold Calling Techniques (That Really Work!), and Asking Questions, Winning Sales. His latest, Getting to Closed, reflects on the sales environment in the wake of the terrorist attacks on September 11, 2002. Entrepreneur's Byline comes to BusinessWeek Online readers courtesy of EntreWorld.org, which is sponsored by the nonprofit Ewing Marion Kauffman Foundation.