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Michael: You could have the greatest sales people in the world but if the people who you’re talking to aren’t decision makers and aren’t your prospects, there’s nothing that’s going to get them to buy.
(Music)
Guest: We have a company in Calgary with a popular product that we sell over the web.
Michael: Over the web. What is the software product?
Guest: It is a software that uses timesheets and expense reporting software. It automates the whole process.
Michael: Is this your company?
Guest: Yes, this is my company.
Michael: How long have you been in business?
Guest: Since 1963(?).
Michael: So, not a start up company. You’ve been in business for a while. How’s it going?
Guest: Oh, it’s wonderful. We would like you to know that we are growing very slowly and are very happy with it. But we think we could do much more. For example, we get about 1200 leads.
Michael: 1200 leads a month.
Guest: A month, yes.
Michael: Very good. And explain to me a little bit about this software.
Guest: Software is for timesheet and expense tracking. For example, companies could use it for tracking how they are spending their time, what projects are getting done, how much are the projects costing, and are they billing the time properly for these projects.
Michael: Who’s your main customer?
Guest: Our main customers are either small in the type company, or smaller departments within larger companies.
Michael: So, the small company is using it to track projects being done by their employees and sales people?
Guest: Just the employees. We don’t focus much on sales, just project dates.
Michael: So, just their employees. So the small companies are trying to determine what it’s costing them per project.
Guest: Yes, and also for billing our client’s properly.
Michael: Is it billing software, too? Like what an attorney would use?
Guest: Yes, you can use the information to bill your client.
Michael: I understand. Is it a software for the PC?
Guest: It’s for the Internet. You install it on your Internet server. Any number of employees can access it and fill out their time and expense.
Michael: Is it something the small company would require the employees to do?
Guest: Yes.
Michael: Tell me what the benefits of having that software and implementing that system are for the company.
Guest: For the company is to track the project profitability and also to track that the projects are on time. They can bill their clients faster so that cash flow increases. And also today a lot of people don’t fill in their time properly and what happens if the organization ends up not collecting the money.
Michael: So, you’re getting 1200 leads. Are people filling out name, e-mail address, mailing address, phone numbers?
Guest: Yes.
Michael: And what are you doing with those leads?
Guest: We have a telesales process. Basically to follow up on quotes(?). Our quote (?) ratio is 3%.
Michael: Three percent.
Guest: Yes, we would like to move that up.
Michael: Let me as you this. When someone fills out that information on your site, what are they promised? Why are they filling it out?
Guest: When they are filling it out, the offer is 14-day free trial of the product. They can use it 14 days – full use.
Michael: It’s not a download though. It just connects them into the software on the Internet.
Guest: They could download it. They can install it on their machine and they’ll be able to use it.
Michael: So, it’s a free trial offer of the software. And you’re converting only 3%.
Guest: Yes.
Michael: And you’d like to do more.
Guest: Yes, we would like to do more.
Michael: So, what happens is someone downloads the software and then do they get a follow-up telephone call?
Guest: Yes, they do get a follow-up telephone call.
Michael: When?
Guest: We follow up with them once a day for 14 days.
Michael: Fourteen days – one phone call per day.
Guest: Yes.
Michael: How much does the software cost if someone chose to buy it?
Guest: Typically, our average user license is for 25 users and costs about $4000.
Michael: So, it’s a high-end product.
Guest: It’s probably somewhere in the mid-price.
Michael: $4000. And is that your minimum license, 25?
Guest: Yes. The minimum license is 10, but on an average people buy a 25-user license.
Michael: So, that’s $4,000. The person who downloads it gets a call for 14 days.
Guest: Yes.
Michael: Is the person who is calling . . . obviously they are trained on the software and can answer questions and show the person who downloaded it how to do it, right?
Guest: Yes. The process is you follow up, you show them how, get their evaluation on how it’s going, answer any objections, and then close the sale.
Michael: Why isn’t there a higher closing ratio? What do you think? Three percent is pretty low.
Guest: Yes.
Michael: What’s the problem?
Guest: I think the sales process is not being followed. Consequently . . .
Michael: By your telemarketers?
Guest: Yes. Our average sales rep produces only 50% of the top sales rep.
Michael: So, your top sales rep . . . How many sales reps do you have?
Guest: We have six.
Michael: Are they all in-house?
Guest: Yes, they are all in-house.
Michael: And your top guy is doing how much of the business for the whole company.
Guest: For the whole company, he’s probably doing 20%.
Michael: He’s doing 20% of the business. You have six people, so the other 5 are doing what?
Guest: The other five are doing . .
Michael: Eight, nine percent?
Guest: Yes, eight, nine percent.
Michael: What’s your top guy doing that these other people aren’t doing? He’s working harder?
Guest: He’s following the process competently, every day and every month.
Michael: What do you pay your employees who do the telemarketing?
Guest: We pay a base salary, plus commission. Our top rep makes up to about 70 to 80, annually.
Michael: You say you have a base salary. What’s the commission if they make a sale?
Guest: The commission is 4% of the revenue.
Michael: So on $4,000 . . . what’s 4% of 4000. Ten percent would be 400, so it’s a little under $200. Let me ask you this. Once someone signs up with you, and they pay $4000 for the service . . . that’s an unlimited use?
Guest: Yes, it’s an unlimited use.
Michael: Do you have any back end sales, or secondary product that they can be sold, like training or anything like that? Tell me about that.
Guest: We can sell additional modules.
Michael: Additional modules?
Guest: Yes, additional modules.
Michael: Licenses?
Guest: Yes, additional licenses.
Michael: And how are they sold? In packets of ten?
Guest: Yes, packets of ten.
Michael: And what’s a packet of ten additional cost?
Guest: It’s about $900.
Michael: And what percentage are ordering additional?
Guest: About 30%.
Michael: 30%. Does the sales rep make money on that?
Guest: Yes.
Michael: So, he makes the 4% on that, too?
Guest: No, he makes 2% on that.
Michael: So, your top sales guy is making around 70-80 thousand, and your other sales reps are making . . .
Guest: They are making anywhere from 40 to 65.
Michael: So, they must be fat and happy. And you’re telling me they aren’t really doing all their work.
Guest: Yes.
Michael: If you got the other sales reps to do what they are supposed to do, what do you think . . . If only that, let’s look at incremental changes. If we can put a system in place and get your other employees to do what they need to do, what do you think that would mean for business?
Guest: We would have 50% growth.
Michael: Are your sales reps scripted, or are they winging it?
Guest: The top sales rep is scripted. The rest of them are, for most of the time, they are winging it.
Michael: Why aren’t they scripted?
Guest: We are finding it difficult to get the sales process implemented in that we are not able to get them to use the script every time.
Michael: What if you told them if they don’t use the script, they’re fired?
Guest: (laughing)
Michael: I mean who’s working for who? Are you too nice?
Guest: Probably.
Michael: Well, let’s toughen up. This is business. If they don’t use the script, you’re out of here, because there’s lots of people who have lost their jobs who would love to take their place, right?
Guest: (sounds agreement)
Michael: So, I think this, right here, is a management issue. That one change could mean a lot of money. Come on, they’re making good money. They’re sitting in a room doing telemarketing. It’s not that demanding of a job, is it?
Guest: It’s probably more . . .
Michael: Psychologically.
Guest: Yes, psychologically, it’s not demanding, no. It’s probably repetitive.
Michael: It’s repetitive. What are their hours?
Guest: Their hours are they work from 7:00 am to 4:00 pm.
Michael: That’s a long day on the phone. Have you thought about maybe bringing in . . . do you have applicants for new telemarketing people? Do you have other people who you could bring in? Let’s say if you shortened the hours. You may want to shorten the hours so the intensity is better on the phone. Like have a 7 to 1, or a 7 to 12 shift, and then maybe a 12 to 4 shift. Because that many hours on the phone is really tough and if you brought in a fresh group of phone people, that may help you out.
Guest: Having a shift from 7 to 12 and a new shift from 12 to 4.
Michael: Yes. Could you . . . if these people perform . . . think about it. You’re paying them about $200 on an initial sale. What’s the margin on one sale for your company?
Guest: One sale is different from multiple sales. I think it’s probably anywhere between 10 to 30 percent.
Michael: Net margin?
Guest: Yes, net margin.
Michael: Isn’t it a software interface? I know you have costs with your company and stuff, but it’s not a hard product.
Guest: No, it’s not.
Michael: So, you’ve got pretty high margins, right?
Guest: Yes, obviously we have expenses, and everything else is profit.
Michael: It’s nice profit. And all the work’s been done and it’s set up. Now you just need sales. What if you did this? What if you cut their hours down, but paid them double the commission. So, you can approach them this way. You could give them more incentive to follow the script, to sell harder, have more energy, and make the same amount of money within half the time. Because you can afford it. If they just made one extra sale for your company, the margins are there to pay them an extra $200, you know. Then you bring in another shift, and train them, and start them fresh. And when you train them, you bring them in and say this is how it is. You have a script that they have to follow for those 14 days. Even if they’re reading it. What you can do . . . I think finding and training super sales people and programming them – bringing them into your training system – may be good for you because you could weed out all the people who aren’t producing for you and find those super star sales people. Then, if they can work half the time, they can go take the rest of the day off. As long as they are producing for you, right? I think that will be dramatic for you. They will be fresher, it won’t seem like such a long day, they can make more money, even if you pay them the extra $200 – or maybe an extra 20% commission on a sale, that may give them more incentive to make the same amount in half the time. Because the bottom line is, your company is relying on these sales people. This is where the money comes from, right? Everything else is just an expense, correct?
Guest: Yes.
Michael: So, you may as well treat them like kings. And then your scripting. Who designed the scripting for your top producer?
Guest: We brought in a sales consultant last year working with input from our top sales guy.
Michael: In your scripting, I don’t know how detailed it is, are there ways to answer objections?
Guest: Yes.
Michael: You’ve got all that in there?
Guest: Yes.
Michael: And is it organized easily for someone to go to if there’s a question or objection? They can go right to it?
Guest: We are revising that as we go along to be able to act quickly.
Michael: Is there software that can have this scripting in there?
Guest: Yes, there is software available, but we haven’t tried it.
Michael: Are all your sales people sitting in front of computers?
Guest: Yes.
Michael: That’s one link of your business right there. And that’s the most important link. That’s one very important link. But there’s also another link and that’s why your customers aren’t buying. Now you said it’s because your sales people aren’t following the script. But maybe it’s something else. Do you have any other ideas as to why someone who signs up for a free version other than them not having time to look at the software, why they’re not following through. Are they mostly just people looking for free downloads?
Guest: Some of them are, but most of them are playing the waiting game. They don’t want to make a decision. They don’t have time, or are not able to get approval from their boss, or they are still evaluating to see if the features meet their needs. It’s mostly waiting.
Michael: It’s mostly waiting. They kind of like what you have, but . . .
Guest: They are either too afraid to commit right now, to buy the product and use it, or they are . .
Michael: Are they decision makers – these people who are doing free downloads?
Guest: No, they are not the decision makers. We have a two level process there. One is the technical with complementary evaluate. And then there is the decision maker who negotiates. We hardly get asked to be the decision maker, so we have to influence the technical buyers.
Michael: Right. These are just your leads that are coming in off the Internet, correct? Is this a 100% source of your leads?
Guest: Yes, it’s 100% of our leads.
Michael: Sounds like to me, since you’re only closing 3%, and aside from the fact that your sales people – you know you could have the greatest sales people in the world - but if the people you’re talking to aren’t decision makers and aren’t your prospects – there’s nothing that’s going to make them or get them to buy. You might be talking to the wrong people. So you may be getting a lot of downloads, and a lot of free looky-loos, but those aren’t the people who can make a decision. Another approach may be is some direct marketing, directly to the decision makers. Who is your ideal decision maker? The owner?
Guest: For small and midsize businesses, it is typically the owner of the company. But if it is within a large organization, a small group within a large organization, it’s a manager, the department manager. Sometimes its 3 or 4 of these people.
Michael: How easy is it to figure this software out, for the average user?
Guest: Very easy, USB connection, CD; all packaged. Once we get them looking into software, they are wowed.
Michael: What happens on the first follow up? “Hi, you downloaded our software, were you able to get it, was it on the computer . . .”
Guest: Yes, they usually get it loaded on the computer and them we ask them some qualifying questions on when do you want to implement this, is this an actual project, who’s the decision maker . . . those kinds of qualifying questions.
Michael: If they are not a qualified prospect, do you call them back.
Guest: If this is not a qualified prospect, we send a newsletter every month to them.
Michael: Here’s an idea. I would take one of your telemarketers for maybe two or three days and have them do nothing but call customers who downloaded the software and tell them you’re doing research and you understand that they didn’t buy the software and you want to know the reasons why. This should be their job for two or three days and have them write down all the reasons that they compile from all the different people that they talk to of real reasons why they didn’t follow through. Was it price? Was it too hard to understand? It didn’t work with my system. My boss didn’t want it. I’m just an employee here. I was just playing on the Internet. I just like free downloads. Everything . . . compile them. And I think that will give you very valuable information about your customers who are downloading your free software and some real insight into your business. If you look at those reasons why, and realize that these people may not be my perfect market, then you may want to change your strategy in generating more qualified leads. Because, imagine, your dealing – only three percent are buying – 97% of those people – all your resources at your company are talking to what we call dead wood.
Guest: Yes.
Michael: Now that’s expensive. You only want to deal with the most qualified prospects that you can. Just because they download something for free doesn’t mean that they are qualified. A good idea to weed out the dead wood is to charge somebody for the software, even if it’s for $10. Do they have to put a credit card in for the free download?
Guest: No.
Michael: Or to offer a 30-day free trial where they have to commit a credit card number with an expiration date and their card won’t be charged for 30 days unless you hear from them. So if you could qualify them better, then – let’s say you filter out 70% of the dead wood and you only have 30% of these leads, even though it’s not 1200, it may be 360, but they’ll be more qualified and your numbers will jump through the roof . And think of all the money you’re saving – you’re not wasting phone time, you’re not wasting salary time, talking to dead wood.
Now that’s just one idea from the leads coming through from the internet. There’s also a ton of different ways you can generate leads. Multiple, multiple ways you can generate leads that are outside of the internet. But you have to determine – well you’ve determined a little bit who your market is – but now you need to get your USP and your sales message across to them in a different way other than the internet. Maybe through e-mail marketing, maybe through a joint venture relationship with another company who sells to the same customers you sell to. What I tell people is, make a list of every other kind of vendor that sells to your business owner. May be something that’s non-competitive, but related to what you do. And if you had a sales letter outlining all the reasons why someone should consider getting this software and have. Let’s say there was a company that sold these business owners, say computer software that was unrelated to your software, and they endorsed your product and they said, “Look, I don’t usually endorse people, but there’s a company here that’s got some software that we learned about that can dramatically save your company money by organizing your billing system and I recommend you giving it a try.” So it could be a referral from another company endorsing your product. So, it’s not coming from you saying, “Look how great we are. Check our software out.” It’s coming from a trusted vendor that your business owner already has an established relationship with and is buying from and it’s just like a referral. And it’s much more powerful coming from a third party endorsing your product. Does that make sense? So if you wrote a list down of all the other types of vendors that are non-competing but relating, who could logically endorse your product and service and set up relationships with them, where you could pay them the commission, pay them the $200, and that’s another source for generating leads and sales. Does that make sense? That could be very powerful.
All these things – you know I have the marketing materials from Jay Abraham. There’s one thing after talking to you that really sticks out in my mind. It’s the PDQ program that Chet Holmes and Jay Abraham did together. I think it would be perfect for you because it’s about systems. Implementing systems within your organization. How to get super star sales people. There’s some great stuff in there. It’s a combination of Jay Abraham – I mean it’s more system oriented, but I think it would fit well with you. Have you studied any Jay Abraham material?
Guest: No, I’m happy to reading his book.
Michael: Which book? The one from the bookstore?
Guest: Yes.
Michael: That’s a good book. The stuff that he normally sells is a lot more detailed. Have you learned some things in the book?
Guest: Yes, the way to market. . .
Michael: To grow your business. It’s a real general overview. If you want the meat of what that book’s about and some of his more detailed programs, I have that stuff. How do you like to learn? Audiotape, or written material, or what?
Guest: I like both the written material and some kind of coaching.
Michael: The coaching program. Well, I can help you in both those areas. I can help you with ongoing consulting and I can help you with getting you the information on audiotape and written material. Let me ask you this. What kind of investment – where would you be comfortable in starting with some Jay Abraham and Chet Holmes material, with some of this stuff that I’ve been talking about?
Guest: Since we are looking at sales, I would like to start with a book on the sale process, get the sales process implemented. The next would be fixing the qualified leads and bring in other kind of decision makers into the sales process.
Michael: There’s two things I’d recommend. I’d definitely recommend you start with the PDQ. The PDQ is what I talked about – Jay Abraham and Chet Holmes – their audiotapes. I think it’s like 28 audiotapes, or 25, I’m not exactly sure. You can listen to those in the car on audio. Then I have something else – it’s called “The Sales Script Book”. It’s by a guy named Dr. Donald Moyhan. He’s a foremost psychologist in the psychology of sales. You can use this. It has every single answer you can imagine to any objection you get from your prospects. It is incredible. Anything you can think of on all kinds of objections. He gives you word for word scripts that you can implement in your scripting to come back to your sales prospects as you’re on your phone telemarketing them. He uses these scripts with some of the largest telemarketers in the country. They are answers to objections that have been proven to be the most effective in generating sales. I think that would be very valuable for . . .
Michael: I want to thank you for listening. This is Michael Senoff with www.hardtofindseminars.com . If you want to get in touch with any of the people we interview please e-mail me at Contact by Email . That’s Contact by Email .
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