I’ve been on a hectic book tour the past several weeks, and I’ve listened to thousands of small business owners discuss their concerns.  One common problem:  we need more sales.

Yes, we’d all like to increase our revenue and build our businesses.  But hold your horses — not all sales are good sales.  Sounds counter-intuitive, doesn’t it?  In order to build a successful business, you must recognize there are times when less is more.

Allow me to explain.

Many small businesses reduce their prices in order to bring more business in the door — particularly in today’s economy.  However, in most cases the owner doesn’t stop to consider the profitability of the new business.  While the company’s sales figures increase, its profitability often narrows to a point where cash flow issues occur.  In the worst case scenario, the company lapses into a negative cash position.

All new business opportunities need to be carefully considered.  As the business owner, you should understand exactly what it is going to cost to deliver the product or service, including all your business overhead.  Is there enough profit to absorb changes or adjustments?   Do you have the current staffing and resources to manage the project without jeopardizing other business?

I’ll share a real-life example without divulging the company’s name.  ABC Company bid on a large government contract to deliver a particular service without a detailed and thorough analysis of the resources it would take to deliver.  After winning the bid, the additional internal resources and development required to fulfill the contract turned what the owner thought would be a highly profitable project into one that barely broke even.  Furthermore, because of the strain on the company’s resources, other, more profitable projects had to be delayed.

In today’s economy where cash is king, no business should jeopardize its financial health by selling too much for too little.  While it’s hard to turn business away, you can be more successful by concentrating on the types of business opportunities that are most profitable.  And it’s not always just about new business.  Some companies are choosing to fire their low-margin customers or to discontinue less profitable product lines and as a result they are enjoying healthier bottom lines.

So remember, nothing happens until you sell something.  Just make sure you sell it right.

image by Flickr user jakerome

Sales are the driving force behind any company. Let’s face it, without sales there won’t be a company for very long. Because sales are so vital to an organization, how does one create a sales culture that works? Culture is the sum of the values, customs, traditions and beliefs that make a company unique. Basically it’s how you and your staff interpret experiences and behave, individually and in a group. Thus the sales culture is what you do about selling, how you do it, what beliefs you have about selling…everything that you think and do relative to the sales process. What’s important here is to look at how you manage sales people, the sales process and your beliefs about sales people and the sales process. If everything is working as you want, then I suspect you have already created a sales culture that works. On the other hand, if you find sales below targets, turnover rate in your sales team is high, every sale is a struggle or, in your heart, you know something needs to change, then look at your sales culture.

The sales culture of a company needs to change as the business changes. External and internal factors cause companies to change over time. Assuming that what got you here will get you there is foolish and naïve. Sales cultures need to adjust as the needs of the business change. When things aren’t working, the first step is to go back to basics. If sales aren’t what you want, then examine your sales culture. I’m betting it’s outdated or no longer serving your company in the economic climate you live in today.

Through the years, I’ve found two absolutely golden fundamentals about sales and selling for just about anybody:

First, sell only what you believe in.

Second, it’s all about listening. It’s like one percent talking and 99 percent listening. Listen very carefully to the other person and be sure you understand what they want and need. Keep your mind open. Don’t be sitting waiting for them to shut up so you can get your lines in. Determine whether what you’re selling can help.

Third, If what you’re selling can’t solve the problem, recognize that. Don’t kid yourself. Say so. That will enhance your credibility, so that maybe you’ll get another chance later. And you have nothing to lose, because selling something that isn’t in the buyer’s interest is just a future business problem waiting to happen.

David Shear continues his series on the state of retail.

Very mafia, right?  Well, I don’t think the comparison is very far off.  Retail sales require that you know the right people, and that everyone gets their share of the revenue.

The people who sit on the top of the retail food chain are the buyers for each store chain. Buyers tend to be loyal and calculating, and they like to deal with the same group of people year after year.

If your company doesn’t have a large catalog of products in retail, then you probably need to hire a guy who knows a guy. Buyers don’t have enough time to speak with every sales manager from every company who wants to get their product onto shelves.

Each department buyer is responsible for hundreds of products. For every product that makes it onto the shelf, there are a handful of competitors trying to take that shelf space. The buyers don’t have enough hours in the day to speak with everyone who wants a minute of their time. If you can’t get a buyer’s attention, you will never be able to succeed in retail.

Palo Alto Software uses an outside retail sales company to represent their software products, Business Plan Pro and Marketing Plan Pro, in the retail channel. An average outside sales company represents 10 to 20 companies into retail. For a small cut, the reps give you valuable market insight, and even more importantly, they deliver a valuable service that takes years to build. They deliver relationships with the buyers. You are hiring a guy who knows a guy.

As the new sales manager, I started pestering our outside sales company. I wanted to know why sales were lagging and what moves we should be making. I wanted to know why we weren’t selling into the club stores, the mass merchant stores, and why we were not getting any solid marketing opportunities. I was told by our now-fired sales firm that new opportunities were not realistic. I should be happy that our products were still in the office stores. The clubs and mass merchants were not realistic. Retail was just declining and there wasn’t much we could do to slow the slide.

After a month of excuses and lack of movement, our former outside sales firm received their pink slip. I couldn’t take the excuses any longer. I needed an outside sales firm that had vision and a willingness to step outside of the box. After a long interview process, we hired a smaller firm who wanted our business. The reps have become an extension of our sales team. I check in with them as if they work directly for my sales team.

A funny thing happened when we started fresh with a hungry group of retail reps. We got into the clubs. We got into Target. We started receiving marketing opportunities. The new marketing opportunities, new products and new stores started spiking our retail sales.  Instead of managing a declining channel, I was reporting on year-over-year increases.

Quite a difference from the status quo I was supposed to be happy with, and all of that because I’d found the right “guy”.

Next time: Where do your customers shop?

David Shear is the Channel Sales Manager at Palo Alto Software, where he oversees all academic, corporate, government and retail sales. David came to Palo Alto Software from the banking industry where he was a regional and national sales manager for Indymac Bank, Optium Financial and Rainland Mortgage; David worked in correspondent and wholesale mortgages for over a decade.

Having attended University of Oregon’s Law School, David is quick to point out that while the Oregon Ducks are his first love, sales come in a close second.

David Shear continues his series on the state of retail.

Success in retail depends on your company’s current understanding of the overall retail landscape.

You may have understood where retail was two years ago, you may have had your finger on the pulse in 2007, but the market isn’t what it was two years ago. Are you seeing the changes that have taken place, and more importantly, are you seeing and reacting to the changes that are on the way?

One year ago Palo Alto Software (PAS) was watching retail sales decline because of a fall in overall retail software sales. The retail channel had changed significantly over the previous years and now the bad economy was beating up retail even more. We needed a new aggressive strategy to win in the new retail landscape.

There was a sudden realization that our approach to retail was destined to fail because it wasn’t evolving with the market. When a sales plan becomes stagnant, it is a sign of decline. To counter the decline, our management team threw out all of the things we thought we knew about retail and we started to rebuild our sales plan from scratch.

If your company is thinking about entering the retail channel or creating a new plan for your existing products, there are key questions your management team must be able to answer. Starting with:

Who is your competition and how are they positioned?

I know this seems like Sales 101, but these key questions too often get overlooked: Who is your competition? What is their price strategy? Where do they sell their products? Who are they using for distribution? Where is your competition not selling? Where is your product vulnerable and where are your opportunities? These questions must be on your management team’s mind at all times. Once you have the questions answered, you need to ask them again and again, because the answers are always evolving.

A good management team will asses the changes in a market, and look at the competition, and adjust and finesse their strategy. Once we started to really dig into what needed to change, we identified additional distributors we needed to sell through, we revamped sales strategy and we identified a new market we were well positioned to reach.

PAS ultimately created a brand new product, Start Run & Grow Your Business (www.start-run-grow.com)  after assessing the retail landscape, and implementing a new more aggressive retail strategy. Start Run and Grow Your Business appeals to a different type of entrepreneur and small business owner, and its lower price point has opened up new channels and retail outlets.

These key moves have boosted our retail sales enormously and this would not have been possible if we hadn’t been asking the right questions.

Next time: Know a guy who knows a guy.

David Shear is the Channel Sales Manager at Palo Alto Software, where he oversees all academic, corporate, government and retail sales. David came to Palo Alto Software from the banking industry where he was a regional and national sales manager for Indymac Bank, Optium Financial and Rainland Mortgage; David worked in correspondent and wholesale mortgages for over a decade.

Having attended University of Oregon’s Law School, David is quick to point out that while the Oregon Ducks are his first love, sales come in a close second.

Circuit City shut its doors, office supply stores are reporting slow quarters, and consumers are staying home. The slow economy has reduced sales in just about every retail store. If your company is selling in the retail channel (or thinking about it), the news can be frightening.

One year ago I could read the writing on the wall. The retail channel was either dead or mortally wounded. Consumers’ buying habits had changed and product sales in brick and mortar stores were in a steep decline. I had the dubious pleasure of steering a once profitable sales channel into the ground.

During a period when retail sales reports were appalling and getting worse each week, Palo Alto Software chose to review every aspect of its retail channel plan. We didn’t expect to be able to fully rebound; we were hoping that we could find a way to slow the decline. We looked at every partnership, channel position, and retail decision. We challenged ourselves to make wholesale changes where necessary. We threw out all of our preconceived notions and started from scratch.

Was our software selling on-shelf in the right stores? Did our pricing model maximize revenue? Did we know where our customers were shopping? What was our competition’s strategy? Were retail sales in the process of dying off? Every aspect of our retail strategy was researched, challenged and weighed. Our start-from-scratch approach immediately brought glaring problems to the surface.

By asking the right questions, our management team was able to get a better understanding of the retail market. We were able to correct our mistakes and identify some very significant opportunities. A year later, Palo Alto Software has a thriving retail channel that continues to realize significant growth, month over month. Retail is not dead, it’s not wounded, it’s just changing!

In retail, the learning curve can be very steep and unforgiving.

Over the next couple of weeks I will be blogging about the lessons we learned in retail. Hopefully this series will challenge your business to take a fresh look at retail. It is a complicated, time-consuming sales channel, but the returns can be well worth the effort.

David Shear is the Channel Sales Manager at Palo Alto Software, where he oversees all academic, corporate, government and retail sales.  David came to Palo Alto Software from the banking industry where he was a regional and national sales manager for Indymac Bank, Optium Financial and Rainland Mortgage; David worked in correspondent and wholesale mortgages for over a decade.

Having attended University of Oregon’s Law School, David is quick to point out that while the Oregon Ducks are his first love, sales come in a close second.

(editor’s note: David’s status with UofO was incorrectly listed as being an Alum. This is completely a miss on ‘Chelle’s part and not a devious attempt on David’s. )

Lead generation is the process of turning a “suspect”, one that you believe needs what you have to offer, into a prospect, or someone who has “raised their hand” and engaged you or your company in some way.  But in order to turn that prospect into a happy, repeat customer and referral partner your “marketing” or communications must match the experience.

A couple of months ago, I received a direct mail piece from a local dentist promoting his company and trying to engage new customers.  The mailing provided information about the services performed; touted the warm, personal  nature of his practice, and finally provided a discount offer for new customers.  From a marketing perspective, the mailing had most of the key elements of a good marketing piece:  attention grabbing headline, educational copy and an offer to act.  It was the “perfect” storm.  I was looking for a new dentist in my home town and here comes the mail.  So far so good.

I arrived at the scheduled time, filled out the necessary paperwork, gave it back to the front person.  I was quickly escorted into the hygienist for my cleaning.  The hygienist was pleasant, did the job without too much talk or blood and my experience is winding down.  The hygienist handed me a goodie bag with toothbrush, toothpaste, floss and sends me back to the front desk to set my next appointment.  Everything is great, right?  Not so fast.  As I’m walking down the hall to the receptionist, I can’t help thinking, I never saw the dentist.

Well the marketing piece touted the personal nature of the practice and how patients were treated like “family”.  (I”m happy to report, my family doesn’t treat me this way)  What happened?  I asked the receptionist if the dentist was in.  Her reply was yes, he is here.  I said I thought it was a bit odd that the dentist didn’t come in to say hello and check my teeth, especially since I was a new client.  Her reply, “Oh, he won’t see you unless there is a problem”.

Guess what?  There is a problem.   You almost had me but not quite.  Almost everything was done properly; mailing with offer, cordial customer service people, on time with my appointment and a not too painful dental experience.  But, then the dentist drops the ball big time by not at least coming in to introduce himself and thank me for the business.

Moral of the story:  It’s not good enough to say all the right things in your marketing materials; you have to live it; it needs to be embraced by the whole company; the customer’s experience must match the promise or you will have a bunch of first timers that never return again and never refer you to anyone.

Joe Costantino is owner of Business Marketing Success in Boston, a marketing company that helps professional service firms learn how to effectively market their businesses with a step-by-step marketing system.  He is also a certified Duct Tape Marketing Coach and East Coast Regional Guide assisting in recruitment and training of new Duct Tape Marketing coaches.  Joe also provides keynotes, seminars and workshops on a number of marketing topics.  You can learn more about Joe at www.businessmarketingsuccess.com or by e-mail at joe@businessmarketingsuccess.com

We all forget too easily: The best startup funding is sales. Sure, we all think of angel investment, friends and family, and SBA loans; all of those options are necessary for most startups. But sales is better.

If you can, find the early customers. Give them a deal, make them important, work with them to optimize their needs; but make a sale.

Even if you do need to go out and find investment–and I speak now as an actual angel investor–there’s almost nothing as convincing as actual sales. People are spending money on your product or service. It makes a new business proposal far more credible.

True, not all businesses can do that. But a lot of them can. And, as we write about business plans and seeking investment and all, we forget the real sweet spot: financing growth by making the sales.

(Note: this is a repost from Planning Startups Stories, where I posted it a few days ago. I can’t remember the last time I reposted from that blog to this one – it has been a while – but I decided to do that today because it seems to be very appropriate here too. It’s been on Twitter a lot already, from the first time I posted it.  Tim. )

There were times in the past when I was able to listen to a caller on the phone, understand what he wanted, and recommend something else. One that I used to get a lot in the early days of Palo Alto Software was where the customer wanted accounting, not planning.

“No, Business Plan Pro doesn’t do that. You probably want QuickBooks, by Intuit, but you might prefer Microsoft Money or something by Sage or Peachtree. I suggest you call your bank, and get whichever one the bank will interact with.”

I was reminded of this just this morning by Seth Godin’s post How to Lose:

It seems to me that this is the perfect opportunity to be a statesman. This is when you earn the right to be seen as a trusted advisor, not a self-interested shill. Two months or two years from now, when you interact with that person or organization again, they’ll remember that you were the one who spoke up on behalf of the competition, the one who helped them find a better fit, the clearly disinterested advisor who helped them choose between the two remaining good choices.

I think that says it very well. You tell a caller on the phone that you don’t have what she wants exactly, but you know who does, and you give her that phone number. Does that sound crazy? Not really. At that moment, three things have happened:

1. You’ve listened to the person on the phone, understanding her needs. That’s really important in selling.
2. You’ve reinforced your strategic focus. 
3. You’ve sent that core message to a person who now likes you and, when her needs match your offering, might be back.

And that, like knowing your competition, and knowing your ideal customer, is good business.

Purchase incentives are an every-day occurrence. We see them everywhere, from simple coupons to instant rebates to frequent flier miles.

Does your business offer a purchase incentive as a marketing tactic? How much good does it do for your business… really? Does your fulfillment deliver the goods?

I’m a geezer who remembers mailing in breakfast cereal box tops for plastic Moon Rocket kits. These were great marketing tools in the Sputnik age. Howere, sometimes those Moon Rockets never arrived. And boy, was I one angry little kid! I quit eating that brand of cereal… that showed them!

Incentive fulfillment is now an industry in its own right, with good and bad offers and good and bad businesses. We all know the good examples, such as the rebate checks that arrive in three weeks instead of eight weeks. They leave us with a good impression of the offering company.

When fulfillment is slipshod, or poorly delivered, or misrepresented it is the offering company that loses its good reputation, not the fulfillment company. For example, my wife recently decided to try out a different brand of home product because it offered a $15 rebate. However, when the rebate arrived, it was not a check but a voucher for credits at a third party redeem-for-product website. What the….!?!? Grrrrrrrr!

None of the products offered were of any interest so she passed the credits along to her sister. Unfortunately, the third party website company deducted credits for transfer, and deducted credits for checking the credit balance, etc. until there were not enough credits left to redeem a pack of facial tissues (to say nothing of the shipping and handling).

And who is taking the heat for this scam? Not the fulfillment company, not the people who sold this system, and not the third party website that we would never have visited (and never will again). Nope. All the frustration and ill will that was generated by this thoroughly unsatisfactory purchase incentive falls squarely on the product company. The incentive may have gotten them one sale from us, but they’ll not get another.

So this marketing tactic backfired. And any good impressions chalked up by other marketing expenditures by the product company were wiped clean off the board. Money wasted.

If you are going to offer a purchase incentive, decide if you really want to offer something of value, and whether your goal is a bunch of one-time sales or if you want to attract repeat customers. Then, find a reputable fulfillment company with a good track record, and a commitment to serving you and your customers well.

Steve Lange
Senior Editor
Palo Alto Software