If you are an organization spending $500,000 or more on marketing expenses (e.g. advertising, trade shows, print materials, direct mail, etc.) then STOP! We found it again. Why you askÖ? Because marketing has the greatest potential of being very unproductive. In fact, many marketing programs struggle to break even, and actually frequently lose money. So if we increase the overall effectiveness, then we can eliminate 50% or more of your wasted marketing efforts, which translates into $250,000 in cash.
Improve your sales cycle efficiency. Reduce your marketing expenses. Tie it closer to your customerís buying cycles. And take control of your sales and marketing program to let it work for you. So let's look at the top 7 procedures to design the new sales and marketing process.
- Improve Follow-up. Only about two percent (2%) of sales occur on the first contact. Eighty percent (80%) of sales will require five to eight contacts before the sale closes. This means that if you are contacting the prospect less than five times or more than eight times, then you could have a problem with follow-up.
- Sales Cycle Efficiency. Time kills deals. The speed at which a prospect is converted into a customer and the number of prospects required to make that conversion determines your sales cycle efficiency. So ask yourself, are you taking the right steps to measure and reduce lost sales?
- Life-Time Value. How profitable a given customer is over time defines your LTV or Life-Time Value. Companies spend ten times more to acquire a customer than to keep a customer. However, existing customers are more likely to purchase again, spend more money, and therefore become more profitable. If you donít know your LTV, then how do you know how much money to spend and on which customer segment?
- Demand Forecasting. Every customer buys on a cycle. So this means that you should track cycle times and variance to increase the accuracy of your forecasting and the loyalty of the customer. Do you know when your customers need to reorder?
- Improve Lead Quality. Do you have methods in place to measure the conversion potential of each lead? Lead generation activities (i.e. forms) should pre-qualify every new lead so that you can take the right follow-up actions for the marketing offer. Strong leads produce strong sales.
- Increase Awareness. To keep the sales pipeline full of good quality leads you must continuously increase the awareness of your company and the solutions that it provides. Public relations is more efficient at building awareness than advertising, yet many companies spend wildly on advertising and trade shows while neglecting to fund public relations efforts much at all. Increase your name recognition, not your budget.
- Reduce Discounting. Discounts represent deficiencies in the sales & marketing processes, which means that you should use them sparingly. Instead, determine the root cause and then fix the process thatís causing the need to discount. Show customers the added value, and they wonít focus on price.
Chris Anderson is currently the managing director of Bizmanualz, Inc. and co-author of policies and procedures manuals, producing the layout, process design and implementation to increase performance.
To learn how to increase your business performance, visit: http://www.bizmanualz.com/?src=ART80