Selling To Small Business

Selling To Small Business - Strategies to help you sell to small business entrepreneurs

Tuesday, November 17, 2009

How to get a small business owner to trust you

Guest Contributor: Albert Luk

Albert's Posts - Albert's Site

Even though we don't think of them as such, doctors are small business owners too. They have offices. They have staff. They share the same problems most small business owners' have- and maybe even more in our litigious society.

Doctors are also difficult clients to obtain. They typically make, or are perceived to make, a healthy income and their practices have a lower probability of business failure than other businesses. As a result, they are pitched to. A lot. My own doctor is sold to so often that he takes pictures of all his pharma reps since he can't keep track of all of them.

As a result, they are a cynical lot when it comes to salespeople. Give me your pitch, Leave your business card. I'll call you when I am interested. Next. What makes it harder is that Doctors are so specialized in their knowledge that they have little time to learn the difference between your client management system or your competitors or the difference between this insurance product or that one.

Thus, one of the shrewdest sales strategies I ever experienced was an insurance agent who simply acknowledged that Doctors are a difficult sale and found a way around this obstacle. Quite simply, he encouraged all doctors to attend an insurance seminar with their accountants.

This strategy was successful for several reasons:


1. He understood that in a complicated field like insurance, the Doctor was going to refer to her accountant anyway so why prolong the sales cycle when you can invite the accountant as well?


2. Accountants are often the gate-keepers for Doctors so show you have nothing to hide by inviting the gate-keeper.


3. Earn the trust of trusted advisors of your prospects and you will have an ally on your side.


To put this in another context, remember your dating days? If you really wanted to impress that girl you liked, you would be nice to her friend right? They would put in a good word for you. Even though she may not trust you, she trusts her friend and her friend's judgment.

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Tuesday, October 6, 2009

The Value of Empathy

Guest Contributor: Albert Luk

Albert's Posts - Albert's Site

I recently returned to practicing law having worked for a medium sized business on both legal and non-legal matters. At an entrepreneurial function, a contact of mine introduced me to someone as: "a real business lawyer because he actually understands what an entrepreneur goes through day-to-day."

A friend of mine runs a successful business with his vice-president handling the day-to-day end of it. I asked him how he ended up hiring this employee. As it turns out, the employee was his account manager for services he purchased. The employee asked him how he could join him and my friend responded: "run a business for a year and maybe we can talk." Sure enough, this gentleman quit his corporate job, ran a business for a year and contacted him. Impressed with his dedication, my friend hired him.

What do these two stories have in common?

Small and medium sized business owners place a high value on empathy. Specifically, they want to know that you understand the slings and arrows they go through every single day. If you have suffered them before or understand them, their level of respect for you generally tends to be higher which means a greater chance they may buy from you.

See how my friend handled his employee when he was an account manager? In essence, he said you can only work with me if you get out of the glass tower and understand the daily life of an entrepreneur.

One final story then some tips. Real estate agents often lease high-priced vehicles to give their clients the aura of success. I find that this tends to back-fire if you are wooing a potential small business client not interested in the currency of status. In fact, driving up in a high-priced car may provoke the opposite reaction as in: "I see where your commission is going-to maintain your life-style." Like attract like so understand the market you are serving.

The moral of these stories?

1. Don't be just a suit. Be a suit that understands small business.

2. Don't be afraid to show your entrepreneurial credibility. Working in or coming from a family of entrepreneurs gets you far.

3. Any tips or referral to help your small business clients will put you ahead of your competition. After all, you are implicitly saying you understand the day-to-day life of your customers or potential customers.

Good luck.

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Tuesday, September 15, 2009

Where do you find ideal clients?

Guest Contributor: Albert Luk

Albert's Posts - Albert's Site

As we get back from summer, the question always arises where do you find new ideal clients this autumn once you have tapped your hot list?

The traditional line of sight is networking functions. For readers who are veterans of these events, you know the issues with networking functions are primarily three-fold:

1. The same people attend all the events;
2. There are more sellers and buyers (and the sellers are not listening to your pitch); and
3. Your ideal client is too busy building a business to attend a networking event.

This is not to suggest that networking functions do not have intrinsic value. They do. It is that they are subject to these the above limitations.

The same issues also arise at association or industry events but add to it trying to process the sheer magnitude of business cards you receive and the time it takes to determine whether the lead is hot, warm or not a lead at all. In many respects, association/industry events are better for educational/competitive intelligence than pure lead building.

Instead, I would suggest that one adhere to the saying "like attract like." Most entrepreneurs spend time with other entrepreneurs. We like to unwind in each another's company and reinforce the fact that other people are facing the same challenges as us.

Rather than starting cold, ask your clients to introduce you to leads. The key is to narrow in on what you are looking for in a lead. It is not good enough to say "I need business, do you know anyone?"

Instead, be specific as to a "want" and a "need" client. The question to be asked then moves from the general to the specific: "ideally, I am looking for a business grossing between $2-$10 million a year who needs to rebuild their network but I am just as happy being introduced to a client that needs to purchase some redundancies on their existing network."

Implicit in this approach is that you are showing some sense of vulnerability in asking others for help. The salesperson is not the all-knowing expert but an actual human who requires assistance from others.

For some, it can be a tough pill to shallow. But remember people buy from people and showing that you are human is not necessarily a bad thing. Many entrepreneurs are more than happy to assist others and a side benefit of this approach may be that your clients see you as more of a person than a talking head.

Best of luck.

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Monday, July 6, 2009

Do Small Business Owners Like to Play Golf?

Guest Contributor: Albert Luk

Albert's Posts - Albert's Site

With the summer upon us, the obvious question turns to whether it is an effective sales technique to take your small business clients golfing?

Golfing is typically seen as a great way to develop business simply because you have your client or potential client to yourself for 3-4 hours straight. Given that the venue in which you are developing this relationship is outside of the office, it is also a good opportunity for your client to not be focused on their day to day worries and focus on larger strategic issues with you.


Having said that, in my experience, I have found: (i) very few small business owners can golf; and (ii) if they do, they don't play very often. More often than not, small business owners spend so much time running their business that they do not have too much time to develop a golf game or could find more productive means to spend 3-4 hours; the practicality of the situation being that if a small business owner had 3-4 hours of free time, they would probably spend it with family.

Golf seems to be one of those business matters where there is a large business/small business split. Most small business owners, unless they have to golf to woo their own big business accounts, like to use their business development time in other activities (there are obviously exceptions to the rule).

Remember, in most cases, that the small business owner is the ONLY manager and there's no such thing as a day out of the office. Taking them out of the office for 3-4 hours may be seen by some small business owners as a poor use of time and, by association, you are seen as a time-wasting element in their lives.

Instead, I would suggest as a practical summer small business development tip to invite your small business accounts to a lunch on a patio and invite other small business owners to be in attendance. It is typically under-estimated how alone small business owners feel. The ability to create an event where they can interact with an opportunity to exit at the end of lunch, or to stay longer, will be greatly appreciated.


Speaking of the summer, there will be no column in August since I am off for several weeks. Enjoy the summer.

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Monday, June 8, 2009

3 Strategies to Effectively Sell to Small Businesses

Guest Contributor: Albert Luk

Albert's Posts - Albert's Site

Let's assume the following about the small business market:

1. Owner managers have no time for anything much less another sales pitch;
2. Owner managers seek value. If you, or what you sell, cannot provide value, it is seen as just another commodity; and
3. Owner managers are very lonely. Leadership is, by and large, a lonely endeavor.

How do you reach out to a target market with no time, seeks value and doesn't need yet another mouth to feed?

1. Provide information, not a sales pitch. Look at your sales literature and your pitch. Are you actually providing information beyond your good or service? Have you informed the owner-manager about their industry, some specialized knowledge they might not know (for example, here's a tax deduction all your competitors miss) or what problem you are actually here to solve? If you provide information, it is less likely they will see you as just another sales pitch. Try group seminars rather than one on one pitch and, more importantly, ask them to bring their gate keepers too.

2. Find ways to increase their sales. As opposed to inviting them to a round of golf (which, in the eyes of many owner-managers, is a waste of a day), find out who their sales targets are and invite the owner manager to lunch with these targets. If it results in a sale for the owner-manager, they will see you as a value added and not a cost centre. Plus, they can't exactly buy what you are selling without increased revenue right?

3. Be the bartender. The most over-looked pain of an owner-manager is loneliness. Other than their immediate family, they sit at the top and have few people to vent or complain to. Be the bartender and listen to their woes and actually try to help them. If you don't know how, introduce them to a follow owner-manager who may (entrepreneurs love to exchange ideas).

The key to all of the above strategies and tactics requires a true understanding of an owner manager's life. If you are just entering the market and do not know this well, sit down with your prospect and find out before you actually sell. It will make you a better small business sales and marketer over the long run. Good luck.


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Thursday, May 7, 2009

Why being your small business advisors pays off in the long run

Guest Contributor: Albert Luk

Albert's Posts - Albert's Site

One of the running themes of my posts is that achieving true success selling to small businesses involves not merely being a sales person but being an advisor. Entrepreneurs are like Swiss Army Knives- they have to do a lot of different things using the same platform. But with so much going on, not every tool that they have is going to be as sharp as the last one they used.

Thus, they have to rely upon advisors for help. A short-sighted sales representative may think that they do not have time to sell and advise an account. Better to take the money and run right?

Consider this statistic which adds some concreteness to the saying "what goes around, comes around": entrepreneurs who regularly seek professional advice experience 76% higher revenue growth than a counterpart that does not seek professional advice.

To state the obvious, rapidly growing clients are what every account manager dreams of. However, what the study implies is that rapidly growing accounts are not found but, instead, cultivated through active participation in small businesses ready and willing to seek out advisors. The pay-off for all parties appears to be well worth it.

From my own personal experience, I often pursued clients that most other lawyers would not. They were considered too small, in non-traditional growth industries, lacked adequate capitalization etc. etc. However, as a broad generalization, smaller clients with shrewd, albeit broke, management, a willingness to learn and, most of all, a real passion for their business tend to grow exponentially based on a wide range of professional advice (despite its structural issues at start-up).

It is those same clients who I grew with that are also the most loyal and greatest word of mouth referrals. If you are hitting the sales trail and finding no success perhaps it is time to think as an advisor as well as a sales rep. Good luck.

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Tuesday, March 31, 2009

Can Twitter and Facebook help you sell to small business?

Guest Contributor: Albert Luk

Albert's Posts - Albert's Site

Much has been made of Twitter, Facebook and other social media tools as new ways for business to reach their target audience. But is this nothing more than media hype or can Twitter and Facebook help you reach your small business audience?

It depends on several factors.

Given that Twitter and Facebook are both free applications and, since small business owners are value shoppers at heart, the barrier to entry is relatively low to reach your target audience; for curiosity's sake, many small business owners have become Twitter or Facebook subscribers just to see what all the fuss is about; thus, there isn't a large issue getting your potential audience to subscribe for the medium.

The ability to form groups or Twitter tweets also facilitates the ability to create community among other consumers of your good and product. Interactivity is always a constructive way to lower barriers between people.

However, there are also a few things to remember about the nature of the medium itself and your audience. As a personal finance blog pointed out, social media is about connecting people first and sales second. Thus, social media, unless your business is internet based, should not be seen as the primary selling tool to small business.

The other practical issue is the audience. Small business owners work long days and nights. I am not sure, practically speaking, that they have the time to log hours on Facebook or Twitter daily.

The bottom line is that Twitter and Facebook can be useful tools in selling to small business but it does not substitute face to face interaction and the process of building a relationship- the key building blocks of any successful sales strategy.

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Thursday, March 5, 2009

Recognize your clients' pain

Guest Contributor: Albert Luk

Albert's Posts - Albert's Site

Gerhild Somann is a 67 year old retiree who is very upset. Ms. Somann, like most of us lost a lot of money in the stock market last year. That is not what has her upset per se. What has her really upset-enough to generate bad publicity-is the fact her investment advisors don't feel her pain and instead are trying to sell her product! Most of us do not know who Ms. Somann is until she became the feature of an article much discussed in personal finance blogs.

Is attempting to push more product worth all that bad publicity?

The point is that in bad times several things tend to happen: (i) everything that could go wrong, goes wrong; and (ii) you really find you who your friend are. If you sell to small business you have two choices:

1. Run for the hills, deflect blame and keep selling; or
2. Take responsibility, be there for your clients and become a trusted advisor and not "merely" a sales person or an account manager.

It is easy to do number 1. Your legal department will probably advise you to never, ever, admit liability of any sort. Your sales manager just wants you to close. Pursuing this course of action does nothing but reinforce the sense that salespeople are not trustworthy and, as soon as the sales dry up, they will abandon you.

If you treat your clients like a commodity to be dumped at the first sign of trouble, do not be surprised if that behaviour is reciprocated. Bad salespeople always complain that their clients are fickle and demanding but then they turn around and do #1. Any wonder why the clients treat them this way.

Number 2 is the hard choice but, over the long-term, the right one. I am like everyone else, feeling the pinch but you know who I pay first? My vendors who have stuck with me, show loyalty and understand I am going through some pain. The vendors who treat me like a number, I put on the bottom of my payables pile.

Always remember that entrepreneurs don't die, they just come back in different guises so a short term approach will not serve you well in this market.

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Thursday, February 5, 2009

Top 5 ways to lose a small business sale

Guest Contributor: Albert Luk

Albert's Posts - Albert's Site

Let's face it, in a downturn, a small business will find any excuse to close the door on you. It is hard enough creating relationships and proving value in this climate, why hurt yourself by committing one of the following sins when selling to small business.

1. Forgetting the speak English (or whatever the local business dialect is). Nothing turns people off more than jargon who are not in the industry. Small business owners want to understand you. Tell them how your good or service helps them in plain English, stripped of all the industry jargon.

2. Being a time-waster. Entrepreneurs are impatient people. They have so much to do during the day. Be very clear why you are meeting with them and how long the meeting will take. Don't take longer and don't get off purpose unless you have been granted permission.

3. Overly aggressive up-selling. Tolerated in good times. Hated in down times. Big businesses consider how small their profit will be in down times. Small businesses wonder if they will make rent next month. Measure a small businesses' needs carefully and avoid the upsell or you could be talking your way out of a sale.

4. You have every solution to their pain. "We have a software to solve your book-keeping issue and hardware to manage your operations and consultants to increase your revenue..." It may be true but the dialogue sounds all about you. Listen to their pain and empathize but don't try to take advantage of it by trying to sell all the time.

5. Disappearing when times are tough. People are judged by how they react in bad times not in good times. If you run for the hills when your client struggles, they will remember. All small business is personal. As I wrote in November, small businesses don't die, they just morph into other businesses so you could be losing a future customer as well.

Best of luck.

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Monday, January 5, 2009

Why Selling to Small Business is profitable in economic downtimes

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


Happy new year! Best wishes for a healthy, prosperous and rewarding year to all the readers. 2008 obviously ended on a down note: the stock market was down, unemployment up, bankruptcies up. Is 2009 going to be another bad year?

Not necessarily. Several studies, including a recent study by the Kauffman Foundation http://www.kauffman.org/newsroom/entrepreneurs-and-recessions.aspx have shown that downturns are often great periods to start business and that theses businesses become economically important in the long haul. How important? Microsoft, Southwest Airlines and Oracle were all started during economic downtimes.

Why? As the Economist recently wrote: "one reason why downturns tend to be good times to launch new businesses is because established companies abandon promising growth opportunities too fast. Oracle and Microsoft were both born in difficult economic times."

To extend this analysis further, big businesses tend to shrink to core competencies in downtimes and shed any division or product line not immediately returning its investment to the bottom line. In some instances, the "baby may be thrown out with the bathwater" and promising projects put aside and associated staff eliminated.

This often provides opportunities or niches that smaller, more entrepreneurial, companies (often started by the same people who were eliminated from big corporations) can commercialize without the threat of a larger competitor elbowing them out during the critical start-up phase. As the saying goes, change equals opportunity.

Thus, the challenge of selling to small business in downtimes then is not, contrary to popular opinion, that there is shortage of businesses starting but finding one that will grow organically over time.

However, there are always several things to keep in mind when selling to small businesses:

  1. People want relationships not an up-sell. Find ways to help these companies grow which may not necessarily lead to a direct commission and you will earn your client's loyalty.
  2. Sales cycles are slow. There is no readily available pool of capital and small businesses are not flush with money at the outset. Be patient.
  3. Think singles and doubles and not home runs. Many start-ups that become successful are feeling their way around at first. Develop a relationship with smaller products or services rather than over-whelm them with the large items.

Just remember all sales, especially small business sales, are based on forming a long-lasting relationship. Best of luck.

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Thursday, December 4, 2008

Getting to No

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


Small business owners are unfailingly polite. Most of the shrewd ones (i.e. the ones we want as clients) know not to leave any bridges burning so they say "please" and "thank you" a lot. Combined with the fact that our society considers it rude to say no, you have a lot of frustrated salespeople who have small business owners who say "maybe," "call me back in a month" and "let me think about it" when first contact is made.


The elegant "maybe" is sometimes a real maybe but I say "maybe" a lot as a way to get a cold call or a sales call off my back (full disclosure here!). As times toughen, I suspect we are all going to hear the word "maybe," or its variations, in 2009.


Remember that the least desirable answer to any sales call is a "maybe". The best is obviously "yes" followed by a "no." The no allows you to at least move on. The "maybe" leaves you hanging.

Think of your high school crushes. If you asked them out on a date and they said "yes", you were in heaven. If they said "no," you were understandably crushed for a few days or weeks but you got over it and dated others. But the "maybe" was, in hindsight, the terrible answer since you could end up chasing this crush for weeks without any definitive answer when there were other wonderful people you could have dated.

There's nothing wrong with coming back to the maybe- at a later day. The usual question to a "maybe" is "when can I call you back?" You know what though? Whenever I was asked that question, I had no idea how to project into the future to give a definite date so the date was a guess.

Perhaps the better question may be not a date but an event in the future such as "when is your photocopying servicing contract ending?" or "is there a day you usually deal with administration?" If you anchor the date to an event rather than some forecast into an indefinite future, there may be a more accurate answer rather than a good-faith guess.

But remember the goal is to get to a "yes" or "no" quickly.

Have a safe and happy holiday season.

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Thursday, November 6, 2008

It Is Not The End

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


Undoubtedly, given economic uncertainty, some of your small business clients will stop buying your good or service or simply cancel or terminate your contract. Although this is obviously an upsetting event, how you act during the exit of a sales relationship is more important than how you entered it.

Remember that, in life and in business, you are judged by what you do and who you are when times are going bad and not good. Most successful entrepreneurs have had penalty of bad experiences with salespeople who "only care about the sale." The salesperson is gone as soon as they get their commission. Someone else can service the client right? That's not your job.

But an integrated brand takes the client from sale to exit. If your brand is truly small business friendly, you exit gracefully. You thank them for their patronage and you ask how you can help them. Even if this particular client cannot afford your good and services, a graceful exit may have you recommended to their colleagues as a salesperson who actually gets "it." It being the client being more than a commission figure but a person.

There's also something about entrepreneurs. They don't ever die out. They just morph into something else. Entrepreneurship is not a job but a life-style. You never know when they may call you up a year later and ask you to help them in a new business venture.

You want a good example? Take me. I just moved businesses again and guess who I called to be my IT service provider? The firm I hired when I still had my own legal practice another life-time ago, and who I had not spoken to in 16 months, because I remember them so fondly as being timely and profession.

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Thursday, October 2, 2008

Always remember it's a Process...

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site

You ever feel you are being pushed into a sale? The constant phone calls. The strong-arm tactics. The general bullying. What is your immediate reaction? To do the opposite as the desired result. You want to NOT buy no matter how great the good or service.

The credit crisis and the general turmoil in the economy seems to have made some sales-people snap and forget that selling to small business is, ultimately, a process of building a relationship. Perhaps some of succumb to the general panic that the earth will shallow the economy whole. But let us not forget that, in good times, anyone can make a sale and in bad times the true professional salespeople emerge.

I am often reminded of a story once told to me of a vendor who sold to the automotive industry (back when it was actually profitable). They were not on the approved vendor's list of a particular automotive company. However, impressed by the moxy of the owner-manager, a senior executive of the automotive manufacturer made the vendor a deal-meet with me every week for one year for one hour each. If you attend every week without fail, you will be placed on the approved vendor's list.

Sure enough, the vendor did so. Some weeks they spoke of business. Other weeks they spoke of their families. Some weeks they had a Seinfield-esque conversation about nothing. At the end of 52 weeks, the senior executive kept his promise and placed the vendor on the approved vendor's list. Given the size of the orders the company made, they instantly became the vendor's largest client.

Here's the twist in the story though- it turns out this executive made the same deal with every potential vendor and people never took him up on it or gave up after a while.

The morale of the story is that sales is a process and not an end per se. There's a reason why they call it a sales cycle. A cycle is a process of stages. Thus, lest you press the panic button over the ills of Wall Street, just remember to continue to believe in the process of a sale.

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Thursday, September 4, 2008

Seller or Server?

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


My investment advisor left me a message last month informing me that one of my stocks had increased their dividend and wondered whether I wanted to buy more stock. I am a bit of a business news junkie and, obviously being a shareholder, I had a certain vested interest in seeking any good news out about stocks I own (and given the state of the stock market these days, good news is few and far between). But the call got me to thinking whether these types of calls are welcome. As a service provider, it may be seen as good client service but for the client it may be viewed as either a welcome call or a nuisance.

It really depends whether the client needs a seller or a server. A seller, as the name implies, is great at pitching product, exciting potentials to buying and closing the deal. Then, the seller moves to the next deal. The emphasis is more on closing than building the relationship (although both are a priority).

A server may not be great at closing a sale at first but is a very good at guiding the client through post-sales. These are typically people who make great customer service representatives or account managers.

Obviously, I am over-simplifying for ease of analysis and I do not want to suggest that sellers and servers are mutually exclusive sales personnel; a good salesperson can be both. But you have to think about who your client is and ensure you have someone who may be a better seller or server being their representatives.

Sellers tend to be better with clients who are knowledgeable about the product and know what they want to buy and are looking for the best deal on that product. They tend not to need a lot of service post sale since they are pretty knowledgeable.

Servers tend to be better with clients who have to buy the product or service out of necessity and require a lot of after-purchase service to help them get the most out of the product or service. A good example would be a small business that has to buy a server for their network and the owner-manager is not tech-savvy. In this instance, a good account manager could walk them with the technical aspects of the product and ensure their frustrations are minimized so they will upgrade with that company.

Many small businesses need servers. Owner-managers tend not to have the depth of skill-set or managerial experience around them to resolve issues in a wide variety of fields. In many respects, many owner-managers are the jacks of all trades so, outside of their competence, some require servers to give knowledge and expertise. A good server in many respects acts as their informal advisory board.

The key is assessing the need of small business owners are determining whether or not they need someone who can be more of a seller or someone who can be more of a server.

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Thursday, August 7, 2008

Become a Better Salesperson by Selling on the Life-Cycle of a Business

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


This is an opportune time of the year to talk about the relationship between sales and the life-cycle of a business. As the summer ends and the autumn is upon us, it reminds me that everything has a life-cycle; trees turn leaves, flowers cease to bloom and crops are ready to be harvested. Most salespeople concentrate on product, marketing material and branding, but when was the last time you thought about using the life-cycles of businesses to boost your sales and cement client relationships?

Any regular reader of this blog understands the basis of any good SME sales strategy: establish trust, maintain frequent contact and seek opportunities to help. While these are fundamental basics, the tactics involved in such a strategy depends on the life cycle of the business. Having had the privilege of serving as corporate counsel to businesses in various life-cycles, I share the following experiences:

1. The "kids" need help beyond your product or service - be a part of their team. I often define start-ups/early stage businesses as "kids" - full of enthusiasm and energy for their business. At the risk of a gross generalization, most kids are great technicians - they know their product or service inside out; however, they may not have the experience or have developed the skills to know everything about their business (I readily admit there are obvious exceptions to the rule). Kids need a team around them to help them with their business beyond the goods or services they are selling. The priority of a sales-person at this stage is to develop a relationship by providing advice. The advice given may not be about the product or service being sold and it might not lead to an immediate sale, but providing this advice will build credibility with the kids.Those selling administrative support products and services (e.g.: sales tracking software, book-keeping software, computer hardware, accounting and legal services) have a particular built-in advantage at this point. While sales may be modest, it is these types of products and services that most kids recognize they may need. If the salesperson positions themselves as a resource for their team, the kids will turn to them for assistance when needed. This helps build trust and the salesperson may even find they are apart of the team. When a salesperson becomes apart of the team they should be focused on the long term relationship and not an immediate sale because eventually the kids become...

2. Teenagers! They need you to maintain constant contact lest you are perceived to be indifferent to their needs: Teenagers form that "mushy middle" of businesses- they are beyond start-up stage but not large enough to be considered "big business" or institutional. I typically define teenagers as businesses with employees and a significant amount of assets but not so great as to employ divisional managers, multiple vice-presidents or a purchasing/procurement department. Teenage businesses are like teenagers in high school - there is always someone new trying to get their attention - your rival is much like that new cute guy or girl in class. Teenage businesses are at a size where they are desirable targets for your competitors. If you have teenagers as clients or want to sell to businesses in this life-cycle, emphasis should be placed on maintaining contact with them, regardless of whether a sale needs to be made, to ensure you are not perceived to be indifferent to their needs. Indifference, whether perceived or real, is a leading cause of business loss and especially so in this business life-cycle.

3. Adults are mostly self-sufficient and you need to make sure you maintain their trust. Businesses in the "adult" life cycle are mature business with significant revenue and assets. Much like being an adult, their "team" has been established. They are not likely to make too many new friend/service providers. You are already part of the team or they are occupied by so many competing priorities that maintaining constant contact is neither required nor welcomed. At this point, the largest priority is maintaining trust. In my experience, most businesses in this life-cycle only switch service providers and/or product lines if there has been a betrayal of trust (e.g. quoting one price and billing substantially over that, openly putting your needs before your clients) or the product is notably inferior to the competitors. Thus, most salespeople and sales teams need to concentrate on ensuring they do what they say they are going to do and otherwise maintain trust.

There are always exceptions to the rule, but this may be an effective general guideline to help sell based on the life-cycle of your potential clients or clients. Best of luck!

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Thursday, July 3, 2008

Finding Sales where you least expect it

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


We replaced our photocopier in the office last month. While, in and of itself, this may not be a big deal, it was quite instructive in how big businesses miss the easy sale because they pigeon-hole their thinking into only sales people should sell. In fact, every employee should be a salesperson for your good or service. Let me explain.

We leased the photocopier two years ago when the office had 4 people in it. Unbeknown to me (since this preceded my arrival and I am not in charge of the office machinery regardless), the photocopier was refurbished and the needs of an every growing office soon out-stripped the capability of the photocopier. If you are in the office equipment business, you know that heavy use of machinery not intended for such volume leads to predictable results.

Paper jammed. Parts overheated. Toner spilled.

After a while, everyone in the office knew our photocopy repairman by first name. Since the machine was on warranty, I suspect the company was losing money on the warranty considering the cost of labor, travel (gas prices being what they are now) and parts. Our office, now over a dozen people on a busy day, simply outgrew the photocopier. Of course, no one was happy- neither customer, frustrated by frequent break-downs as symbolized by toner stains on the carpet from one repair job (a literal black spot on the vendor), nor vendor, perplexed how a simple photocopier could consume so much time, energy and money.

Do you know how we ended up with a new photocopier? The repairman, completely at wit's end at this point, suggested that there was a new model that would cost us less to lease but do more. It took us a second to say yes.

The point of this story is that easy sales can sometimes be made by non-sales personnel since they are on ground more often than a periodic sales call and can assess client needs better. The repairman knew of our need, having lived it with us, and knew the solution. Since the context which we knew him in was non-sales, we didn't have our "sales defenses" up when he made a sale- which wasn't so much a sale than a solution to everyone's problem.

In fact, if that repairman had said something sooner, the vendor would have had a quicker sale. But the repairman is not trained to think in that manner- sales people sell, repair people repair. However, what if repair personnel are trained to sales situations and offer a situation right then and there in a non-salesy manner or pass this opportunity to sales staff? Would a business be more effective than a salesperson grinding out 6 meetings to make the same sale?

No one wants every employee in a business to be a sales-person but if you silo off your employees to functional job descriptions they won't help you trouble-shot issues and present sales opportunities. Training non-sales staff to be on the look-out to find ways to create solutions for clients is just another way to increase sales in tough times.

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Wednesday, June 4, 2008

Selling to Small Businesses in Down-Times

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site

We are halfway through 2008 and it is clear that the economy is going through some adjustments. The days of easy sales are pretty much over unless your clients are in the oil and gas industry. Small businesses have always been the harbinger of economic tidings- they know when things are going good or bad before big companies do; small businesses simply don't have the resources to see how things will go. They have to adjust quickly to changes in the economic environment.

How does that affect someone who sells to small business?

1. Lowering the price is not the answer (even if headquarters will let you).

Competing on price is a dangerous game. Wal-Mart has no natural competitors for a reason: more often than not, a business with a unique value proposition of the lowest price doesn't survive for long: low prices do not attract customer loyalty, someone will always offer a lower price and what you make up in revenue you lose in profit (which is what the boss is really concerned about). Stick to what works- offering valuable service and building on your relationships.

2. The major threat is not small businesses will buy less but they will take longer to pay for it.

Receivables cycles always lengthen during down-times. People want to max out their financing and it becomes a cascading effect: as small businesses are stretched on their receivables so will their suppliers. If you offer a product with vendor financing, consider adjusting your financing rather than your pricing. Lengthen the amortization to reduce the monthly carrying costs or waive interest for the first month. Small businesses still need your product. They just don't have the same cash flow to pay for it. So alleviate that pain with creative financing.

3. Stop selling and start servicing.

Have you ever heard "you only call me when you want to sell me something?" If you have, you are on the cusp of losing a customer because you do not have a relationship with your client; they are merely another sales call. Statistically, the average length of every recession since 1957 is approximately 8 months. That is a little less than 3 sales quarters. Rather than use those 3 quarters trying to make a sale that may not happen, use that time to tell your client you are there for them and find ways to add value to them beyond selling a product or service. A simple coffee where you do not sell at all could mean a lot. Over the long term, using the down times as an opportunity to strengthen the relationship could pay off in spades down the road.

No one has all the answers in down-times. The leads are not as numerous and the sales cycles lengthen for small sales but that is part of the process. The key is to stick to what made you a good salesperson to small businesses in the first place and not to change your approach 180 degrees to what is, in the long run, a small bump in the road. Best of luck.

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Thursday, April 3, 2008

Connecting Your Way to Small Business Sales

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site

In the last two posts on the effectiveness of referral marketing and on building a small business referral network, I made mention that referral marketing is the most effective strategy to selling to small business and that building a referral network is more of a function of personalities than job titles. Today, I wanted to provide some brief comments on finding the "right" connectors into the small business world.

At the risk of embarrassing the host of this blog, and to reiterate last month's post, Evan Carmichael is a Connector to the small business world. However, Evan is not a member of the Big Three (defined last month as an accountant, lawyer and banker). Evan is a connector because of his personality and not something he puts on his resume.

I met Evan through cosmic accident; as I recall, he was on an advisory board for an organization I was a member of which had taken my annual membership dues and not provided me any service. Evan was the poor soul who fielded my complaint. In a round about way, bad customer service was the impetus for our initial meeting.

As my brief story indicates, finding Connectors is more of happen-stance than by design. There are no databases of Connectors (and one would be leery of anyone who advertised to their world they were connected). You cannot buy a list of Connectors in North America. You cannot join a group of Connectors (they probably know each another anyway so forming a group would be redundant). Instead, you will most likely meet them through some other contact rather than finding them yourself. They are Connectors after all- eventually, they will know someone who knows someone that knows you. As Woody Allen says, 90% of life is just showing up.

Most good salespeople I know end up meeting a Connector because they socialize a lot. In order words, Connectors are found more by chance than strategy. If this conclusion is not extremely analytical, it is because the basis of human interaction is by nature emotional and good people end up finding other good people by circumstance and accident rather than by some strategic and conscious decision.

We tend to downplay the human aspect of business but, in a world where choice has become nearly unlimited, it is this facet which truly binds people together in commercial enterprise. For example, Warren Buffet could donate his multi-billionaire empire to hundred of charitable foundations but chose Bill Gates'. It is not because Gates knows how to sell software. Instead, Buffet and Gates are bridge partners, share common world-views and are friends.

To continue this thread of un-analytical thinking, Connectors help "nice people" get ahead. Thus even if one were, by strategy, end up meeting a Connector, it is not conclusive that a Connector would be your champion to the small business world. I am by no means a Connector but I will champion someone who I feel is a good human being and will make a difference. I am sure most of you would do the same. With a Connector, such championing would be increased a hundred times what I could remotely provide.

At the end of the day, Connectors help you for the same reason that a client buys from you: you articulate a client problem you can solve and you are a trusting individual. Thus, connecting your way to small business sales comes down to the fundamental basis of why anyone would want to buy from you in the first place: will you help your clients in an honest and trusting manner? Can you build a long-lasting and trusting relationship?

If you can, the Connectors will find you. They are Connectors after all.

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Thursday, March 6, 2008

Selling to Small Business: Tips on Building Your Small Business Referral Network

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


Last month, I wrote about the effectiveness of referral marketing in selling to small business relative to cold calling . I wanted to build on this post by providing some tips on building your small business referral network.

My first tip- read Malcolm Gladwell's "The Tipping Point" if you haven't already. If you have, you may want to read it again. The "tipping point" may be one of the most over-used business terms today but Gladwell asserted an interesting hypothesis on why any phenomenon spreads. I propose that in the business world "phenomenon spreading" (if I may short-hand Gladwell's thesis) and referral marketing are one and the same- you are the phenomenon and it spreads most effectively through referral marketing.

I am not going to do Gladwell justice in the space that I have (and errors in paraphrasing his thesis are my own) but the book focused on three different types of personalities which are fundamental in the spread of any idea (and remember again that for this blog the "idea" is you and the product and service you sell):

1. Connectors- in a nutshell, these are people who know a lot of people and, more importantly, will connect you with their network.

2. Mavens- Yiddish for one who collects knowledge- the trend spotters. The people who tells you about a new trend. Gladwell describes them as "the information brokers"

3. Salespeople- this is pretty self-explanatory, these are the people who persuade everyone else that the idea is worth embracing, exploring and, in the business context, buying. If you are reading this blog, YOU are the salesmen

It is not a huge leap of logic to state that a Salespeople needs to have good relationships with Mavens and Connectors in order to build a good referral network. Mavens tell Salespeople what the small business world is thinking and Connectors put you in touch with your ideal clients. Connectors, Mavens and Salespeople are not mutually exclusive; one can be all three although it is rare.

But did you notice something? Gladwell's trinity of important phenomenon spreaders concentrates on personality types and not functional job descriptions/skill sets. Gladwell doesn't state that lawyers and accountants are more likely to be Connectors. He simply writes that Connectors have certain DNA which inherently makes them Connectors. A few designations or degrees does NOT make one a Connector or Maven or a Salesperson.

Why, then, do some salespeople build or expand a referral networking focusing on job descriptions/skill sets rather than personality types? I am often amazed that salespeople attempt to build a small business referral network by first approaching lawyers, accountants and bankers. From what I am told by some salespeople, in conventional sales thinking, these "Big Three" professions are connectors to small business clients because they have a lot of clients.

However, this belief overlooks two fundamental issues. Firstly, what binds the Big Three together is confidentiality to their clients and their clients' affairs. As a lawyer, I cannot divulge my client's names much less whether their business is "ideal" for a particular good or service; in doing so, I am indirectly telling a salesperson that my client is doing well or poorly. Our post 9/11 and Sarbines Oxley world has made most professionals particularly conscious of the concepts of privacy and regulatory sanctions in breaking such duties. Thus, there are structural barriers to approaching the Big Three to build a small business referral network.

Second, and as I have mentioned above, a strategy to build a small business referral networking using job titles as a defining criteria is misguided. Connectors are connectors because of who they are and not want they do or where they went to school. Certainly, particular professionals come into contact more than others but just because someone knows a lot of people does not necessarily mean they will connect you to them. It is a logical fallacy to think lots of clients = Connector.

In a similar vein, I know of some salespeople who try to get their best clients to refer them to their friends without success. However, it does not stand to reason that being a good client or having a profitable business is going to mean they are Connectors. This is not a function of their purchase orders or profitability but of their personality. Perhaps your client is profitable but a dour personality. Meanwhile, your less profitable client may be a poor business person but a great Connector for you.

The point being that starting or expanding your small business network is not a function of what they teach us at school- job titles, education and pedigree do not matter as much as conventional thinking believes. Instead, focus on the personalities.

The question to be asked should move away from "does this type of person do something that brings them in contact with a lot of my ideal clients?" to "who do I know who knows a lot of people who may be ideal clients regardless of what they do?" As someone once said to me- the next person you meet may not be in business or even need a lawyer but they may have a cousin who does.

Next month, I will provide some tips on finding Connectors.

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Monday, February 11, 2008

Referral Marketing: The Best Way to Find Small Business Clients

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


Happy New Year! I hope 2008 will be a healthy and fruitful year for you.

Before the holiday, I started getting a lot of cold calls- from investment advisors, equipment providers and software providers. I did not return any of their calls. Why? I did not know any of them nor was I inclined to start a business relationship in an extremely busy period of time for me, both personally and professionally.

I do not believe I am alone in this thinking; we already have multiple priorities during the holiday season. Simple practicality dictates we would not have an opportunity to return a call from someone we don't know. The morale of the story being sometimes doing less is more. If you are targeting new small business clients, best to wait until they have some time to return your call.

However, on a much larger contextual basis, these calls got me to thinking- does cold calling even work anymore? A 2005 Small Biz Trends survey appears to confirm what most sales/marketing professionals know: cold calling continues to be in the arsenal of small business marketing tools but it is relatively ineffective compared to referral marketing. In fact, the survey finds that referral marketing is over 100% more effective than cold calling.

This leads to the obvious question- why do people still cold call as a means to selling to small business? I would argue that perhaps, counter-intuitively, cold calling is "comfortable" compared to referral marketing. I use the term "comfortable" in a relative sense. Cold calling is an extremely difficult sales strategy. The process is rife with voice mails, gate-keepers and rejection.

Having said that, cold calling is "comfortable" in the sense one doesn’t have to leave the familiar surroundings of the office, fight traffic to make appointments or develop the patience to listen to truly listen to your potentials in a face-to-face meeting. Cold calling is, in many respects, a one way conversation- one pitches off a script with a call to action to arrange some type of appointment. The sales person is in the dominant or control position once contact is made. Dominance or control can be extremely comfortable positions for all of us.

Conversely, referral marketing can be viewed by some as being out of comfortable zone- some meetings are in distant locations, the agenda may not be as structured as a scripted call and there are the inevitable "moving parts" to a face-to- face referral marketing strategy (last minute cancellations, time changes, traffic, emergencies etc. etc.). Referral marketing can be more difficult than cold calling.

If there is one piece of advice one can take from this post it is GET OUT THERE. Get out of the office. Get off the phone. Get out of comfort zone. Initiate a strategy to put yourself in the face of your desired small business clients in 2008.

Next month I will address a related topic- building a connector network to maximize the benefits of referral marketing.

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Wednesday, December 5, 2007

Small Things Count in Selling to Small Business

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


I recently discovered that my financial broker, a large multi-national company, has a department devoted solely to transfer requests. All day, clerks sit and deal with requests to transfer money in and out of other financial institutions. I would suspect, after a while, the clerks would be quite good at these forms.

Small business owners do not have this same luxury of being so specialized in their tasks. Owner-managers have to be schizophrenic- they do everything from strategic planning to taking out the garbage. Their typical day is a jam-packed and they don't have too many waking moments to think things through.

Thus, I am often surprised when companies that sell to small business make small business owners take time out of their already packed day to think about a sale. The best way to a sale is to present a trouble-free sales proposition to their potential client. So why do businesses not do that?

Let me give you a real life example from Malcolm Gladwell's book The Tipping Point (a great general interest book with practical business applications). In his chapter about the "stickness" of trends, Galdwell summarized a study where university students were more likely to get immunization shots if the informational piece on the subject had a map to the health centre. The key factor was always the insertion of the map; no matter how different the copy was written, a higher percentage of students obtained immunization shots if there was a map present.

What I got out of that study is that people know what to do (i.e. go to the health centre to get an immunization shot) but small things help jog their memory and serve as an impetus to a call to action (i.e.: here is a map as your call to action). More often than not businesses presume that SME's have enough time to think through the smaller things in order to take the call to action.

Let me give you a few practical examples of companies missing the small things:

  1. Email/newsletter campaigns that set out the benefits of a product or service but do not imbed in the copy who to call to find out more information. Instead, the phone number is buried in the footer of the email/newsletter.

  2. In the financial industry, failure to set out what steps are required to actually purchase the product being pitched. Do I call an advisor or broker? Can I buy through my existing accounts? What paperwork is required?
  1. Products/goods aimed at multiple markets but the company fails to obtain a 1-800 number to support sales calls or fails to put in the address of the local office where there is one.

One of the best examples I ever saw of a company thinking of the small things was a financial firm that gave a prospects a checklist of what would happen next when they became a client- simple, effective and trouble-free for the client.

Next time you are thinking of making a sale think about the small things to increase your effectiveness. This my last post this year so have a great holiday season!

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Thursday, November 1, 2007

Avoid Cutting Your Own Profit Margin and Sell on Quality

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


"Is that the best price you have?"

"I can get that on-line for cheaper"

"Can you give me a discount?"

Do your potential clients ever say any of the above to you even though you sell a high-end good or service? It is a reality of our existence that our clients and customers have been conditioned to ask for, or demand, loss-leader or low margin pricing- chalk this up to the side-effects of the Made in China/commoditized world we live in. But, if you sell non quantity priced goods or services, how do you avoid falling prey to "the cheapest goes the sale" syndrome?

It is admittedly an uphill battle but here are a few tips to help you avoid cutting your own profit margin and selling on quality:

1. At $4.00/cup, Starbucks' prices brand them as quality. Are you doing the same? Remember that the paramount concern for every client/customer is "what's in it for me?" They may not realize you are selling a quality good or service immediately because they are thinking of the me factor. Show them that you are a quality good or service with your price point, branding and sales/marketing collateral. How does Starbucks get away with charging $4.00 for a cup of coffee? They put the coffee in fancy cups, have a great logo and their stores reflect a high-end design not traditionally seen in coffee shops. Starbucks has set the stage for customers paying $4.00 a cup of coffee without ever saying a word by the environment they create when you walk into their stores. If your product/service invokes the same sense of quality by its pricing, branding and marketing material you are implicitly sending a message that you do not engage in quality pricing.

2. Know who the quantity pricing clients are and walk away. Being a lawyer gives you a glimpse into human nature and I am often surprised by how convinced people are that they can change someone's mind. In my experience, rarely is this the case when it comes to spending someone's hard earned money. If potential client leads with questions or comments like "how much do you charge?", "I would like a free demonstration/consultation" or "I want your best price" at the outset of the conversation, chances are it will be hard to sell on anything other than quantity pricing. Avoiding cutting your profit margin means knowing when to pick your battles and walking away from the quantity pricing clients.

3. People will pay to feel special. The paradox of our market is that people will either demand loss-leader prices or pay for luxury (don't believe me? Look up the stock prices for businesses like Ralph Lauren or Gucci). Small businesses will pay a premium if they feel their solution is a customized for them and just not off the shelf- people like feeling that they are not just another number. For example, I have seen and heard of small businesses paying in excess of $15,000 for a website designer to build a customized and "one of a kind" website tailored specifically for the business. Clients don't usually have a large issue paying for such luxury pricing because they know they are not buying a website built by easily downloadable templates. If you can customize or tailor your product/service, you can increase your chances of charging quality pricing.

4. Keep it simple though. Apple has a very devote and loyal following among certain sub-industries of the small business world. Why? An Apple computer is a luxury item (by industry standards) but it is easy to use. You get what you pay for in life; people will pay a premium for a simple and easy to use product/service if the alternative is cheap but troublesome. For example, Herman Miller, a furniture designer, has not had too many problems selling $1,000 office chairs since they are simple and elegant to use whereas the $100 knock-off may give you a bad back and may have to be replaced every year.

5. At the end of the day, it is always about the relationship. Building customer loyalty and trust will increase sales success no matter what you are selling. Apple's remarkable turn-around is due in large part to the amazing brand loyalty and trust it has built with its clients.

Best of luck. See you next month.

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Thursday, October 4, 2007

Become a Better Salesperson by Selling on the Life-Cycle of a Business

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


This is an opportune time of the year to talk about the relationship between sales and the life-cycle of a business. As the summer ends and the autumn is upon us, it reminds me that everything has a life-cycle; trees turn leaves, flowers cease to bloom and crops are ready to be harvested. Most salespeople concentrate on product, marketing material and branding, but when was the last time you thought about using the life-cycles of businesses to boost your sales and cement client relationships?

Any regular reader of this blog understands the basis of any good SME sales strategy: establish trust, maintain frequent contact and seek opportunities to help. While these are fundamental basics, the tactics involved in such a strategy depends on the life cycle of the business. Having had the privilege of serving as corporate counsel to businesses in various life-cycles, I share the following experiences:

  1. The "kids" need help beyond your product or service - be a part of their team. I often define start-ups/early stage businesses as "kids" - full of enthusiasm and energy for their business. At the risk of a gross generalization, most kids are great technicians - they know their product or service inside out; however, they may not have the experience or have developed the skills to know everything about their business (I readily admit there are obvious exceptions to the rule). Kids need a team around them to help them with their business beyond the goods or services they are selling. The priority of a sales-person at this stage is to develop a relationship by providing advice. The advice given may not be about the product or service being sold and it might not lead to an immediate sale, but providing this advice will build credibility with the kids. Those selling administrative support products and services (e.g.: sales tracking software, book-keeping software, computer hardware, accounting and legal services) have a particular built-in advantage at this point. While sales may be modest, it is these types of products and services that most kids recognize they may need. If the salesperson positions themselves as a resource for their team, the kids will turn to them for assistance when needed. This helps build trust and the salesperson may even find they are apart of the team. When a salesperson becomes apart of the team they should be focused on the long term relationship and not an immediate sale because eventually the kids become...

  1. Teenagers! They need you to maintain constant contact lest you are perceived to be indifferent to their needs: Teenagers form that "mushy middle" of businesses- they are beyond start-up stage but not large enough to be considered "big business" or institutional. I typically define teenagers as businesses with employees and a significant amount of assets but not so great as to employ divisional managers, multiple vice-presidents or a purchasing/procurement department. Teenage businesses are like teenagers in high school - there is always someone new trying to get their attention - your rival is much like that new cute guy or girl in class. Teenage businesses are at a size where they are desirable targets for your competitors. If you have teenagers as clients or want to sell to businesses in this life-cycle, emphasis should be placed on maintaining contact with them, regardless of whether a sale needs to be made, to ensure you are not perceived to be indifferent to their needs. Indifference, whether perceived or real, is a leading cause of business loss and especially so in this business life-cycle.

  1. Adults are mostly self-sufficient and you need to make sure you maintain their trust. Businesses in the "adult" life cycle are mature business with significant revenue and assets. Much like being an adult, their "team" has been established. They are not likely to make too many new friend/service providers. You are already part of the team or they are occupied by so many competing priorities that maintaining constant contact is neither required nor welcomed. At this point, the largest priority is maintaining trust. In my experience, most businesses in this life-cycle only switch service providers and/or product lines if there has been a betrayal of trust (e.g. quoting one price and billing substantially over that, openly putting your needs before your clients) or the product is notably inferior to the competitors. Thus, most salespeople and sales teams need to concentrate on ensuring they do what they say they are going to do and otherwise maintain trust.

There are always exceptions to the rule, but this may be an effective general guideline to help sell based on the life-cycle of your potential clients or clients. Best of luck!

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Thursday, September 6, 2007

Keeping In Touch With Your Small Business Clients

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


Given that small business accounts are generally smaller than their institutional counterparts, most people who sell to small business need to maintain a large client basis at any particular time. This may possibly raise the structural issue of working on new sales rather than maintaining existing relationship, creating perceived indifference among your clients. Perceived indifference, in turn, is one of the leading causes of client loss. How then do you balance pursuing new accounts while maintaining your existing ones?

I wanted to share a few client retention strategies I have been subject to which I found quite effective in a service provider maintaining a relationship with me. None of them involved anything extraordinary or costly but were all effective since they put the human touch back to the relationship:

  1. "Let's do lunch" Simple yet effective, I am often invited to lunch by a particular service provider who also invites his other clients as well. It is done very informally and the purpose of the lunch is to take about business challenges rather than the service the organizer is selling. The lunch is effective for three results: (i) it's a good informal networking opportunity; (ii) it keeps the service provider top of mind; and (iii) everyone has to eat- you may as well network and have fun at the same time. Given that this service provider is the organizer, he becomes a focal point and his name is top of mind without being the need for continuous contact.
  1. "Come to a seminar" Many salespeople conduct seminars as a means to educate and sell a product or service. But have you have been invited to a seminar that has nothing to do with the salespeople's good or service? I have been invited several times to educational seminars to improve my business by a consultant who is not selling anything remotely to do with the seminar topic. However, I always think of him fondly because the invitation represents to me recognition that he wants to help me as an owner-manager and not just make a quick buck. Guess who I am going to buy from next time I need something the consultant sells?
  1. "This email made me think of you" How many times have you received an email from a service provider trying to help your business? Again, the email had nothing to do with selling a good or service but a general interest topic or some competitive intelligence that you may not have enough time to find. These emails represent the fact that you are being an integral part of your client’s team and not just another account on your list. There are enough internet tools now that searching for topical emails doesn't have to consume so much of your time.

I hope these three simple and effective tips help you continue to nurture your relationship with existing clients.

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Wednesday, July 25, 2007

Stop Making it about you- and watch those sales come!

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


I am undergoing quite a radical change in my life lately. After many years of practicing for myself, I have joined a client of mine in an executive position. Instead of selling to small businesses, I am now on the receiving end of being sold to by companies targeting SME (we would be described as a medium sized business). Sadly, this has meant parting ways with many of my clients. It has also meant that I have taken a front-row seat as some of my ex-SMB clients try to find new lawyers. I see the experiences and challenges they face finding service providers who deal in trust. I wanted to share a story and observation with you (on a no-names basis of course).

Fundamentally, your ability to sell to the SMB market depends on establishing trust and the quickest turn-off for any entrepreneur is making the sale all about you. How do you know if the sale is all about you?

An ex-client wrote me two weeks ago saying that he hated lawyers. The reason? Please, no lawyer jokes. To paraphrase, he did not feel that any of the lawyers he interviewed were mean, unlikeable or generally unpleasant. Rather, the sense that he got was that in each phone call or interview the lawyer was immediately trying to "cash in" on his business. Remember that he was finding a lawyer and not being cold-called. To dispel the notion that all entrepreneurs are cheap clients, this was the clincher for me: my ex-client said to me: "it wasn't about the money, and I wasn't asking for a discount- it was the service."

Lawyers tend to make bad salespeople; they are trained to defend and not sell. However, the point remains that making a sale about you by trying to "cash in" is a recipe for a non-sale. People instinctively know when you are putting your own needs ahead of theirs. As a few practical suggestions, try to put your potential clients at ease by avoiding these "all about you" sales techniques:

1. Raising price very early in the conversation when it has not been asked. This comes in two variations - pushing price onto a potential client early or negotiating a discount to a list price before the list price is ever raised. In my experience, it seems to imply you want a quick sale and you really don't care about your potential client;

2. Beginning an up-sell before you got the first sale. Typically, this involves a conversation whereby the salesperson says "and once you buy x software, we can upgrade you to y hardware, bring in our installation team to integrate your system, upgrade your service warranty and hire our partners ABC to do it." These types of conversations convey to your potential client your grandiose plans for you (even if it is well intended and you want to provide a full suite of services). Speaking about a future when there isn't a past or present relationship is something to be avoided. It is like speaking about your marriage plans on a first date- it usually never goes well.

3. Linking every conversational item back to a potential sale. If a potential client voices dissatisfaction with high taxes, do you indicate that buying your product/service is tax deductible? It is a bit of an extreme example but if every conversation has a road that leads back to the salesperson it usually ends in a dead end.

Remember we are all in the business of providing good service. I hope you can use some of these tips in your own sales process. Good luck.

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Tuesday, June 26, 2007

Female Small Business Owners a growing force- is your sales staff reflecting this fact?

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


Do you want to capture one of the largest growing trends in small business? Consider exploring female entrepreneurs as a growing niche market. A survey by the Center for Woman's Business Research found that women-owned businesses grew by 28% between 1997 and 2004. A UCLA study found that female run companies accounted for $2.3 trillion in annual sales in 2005. Finally, another survey found that the number of female entrepreneurs is growing at 3.3% annually which is greater than the number of men who are becoming entrepreneurs.

Selling to female entrepreneurs is another post in and of itself. However, it is an appropriate time to look at your small business sales force and consider whether it is geared towards this niche. There are few things to keep in mind:

- Personal experience and a study by RBC indicate that, statistically speaking, women are more likely to start or operate service based businesses (however, there is also considerable growth in female owner-managers among traditionally male businesses such as construction and manufacturing). Thus, service based companies will feel the impact of female entrepreneurship quicker and appropriate strategies need to be devised.

- Studies show that women are more likely to have home based businesses than men. Home based businesses, regardless of the gender of owner-managers, require special sensitivity in how, where and who will be attending the sales call. Training should be given to sales staff in the event a sales call occurs in a home based office regardless of gender.

- From personal experience, female entrepreneurs tend to be better referrers than men. There tends to be an unfair and built-in bias that female entrepreneurs are not in business as long as their male counterparts; their business is sometimes considered a hobby. However, I have found that granting female entrepreneurs the same level of respect as any other entrepreneur tends to be repaid many times over in quality leads and referrals. Like any successful sales strategy, developing a long term relationship will be fulfilling to all involved.

Much like the green movement, a thoughtful strategy needs to be implemented to address this rising force in entrepreneurship.

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Monday, May 28, 2007

Guarantee SME Client Loyalty

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


In my last post, I shared some sales secrets from a friend of mine on selling technical products/service to SME's. As a provider of legal services, I would classify my services as falling into this category. After all, purchasing legal services is typically not a SME staple consumable.

How, then, does any salesperson selling what is perceived to be an "extra" achieve their sales target much less ensure SME client loyalty?

I have heard many sales/account managers use the term "one-stop shopping" or "full array of solutions for your needs" or some derivative of the above to describe the company/product/service being sold.

Why aren't these salespeople using that same saying to describe themselves?

A crucial step in guaranteeing loyal SME clients is training sales/account managers to think of themselves as advisors for the business as a whole and not just a solution provider for a particular good or service. SME owners are juggling multiple roles daily from CEO to CFO to CIO to Chief Photocopy Officer; you name it, the owner-manager does it.

SME's are OVERWHELMED on a daily basis. SME's also feel like they are ALONE. The last thing that SME's want is a salesperson to increase those feelings by having salespeople who only care about pushing product on them.

Do something to take one thing off the owner-manager's daily plate or be their sounding board for their business. These steps will help win their life-long loyalty, especially if it not connected with the good or service you are selling. Suggest ways for clients to cut costs; Recommend strategies to reduce paperwork; Share some non-confidential industry intelligence with your clients.

Any measure to be their one stop business advisor shows that you care about the owner-manager as a person- and not just another account. Given that people buy on emotions, the empathy that you show will cement the relationship.

Here are two case studies from my own experiences which reinforce my point:

  1. I met SME Inc. two years ago. The owner of SME Inc. is successful but over-whelmed and has no one really advising her on her business- she is a one-woman gang who is constantly being sold something. What the owner-manager wants is to increase revenue to fuel expansion. I recommended she increase prices on certain goods that she was certain the market could absorb without any client loss. She followed my suggestion and the owner-manager is happy to report she has more money in the bank.

    Here's the catch- SME Inc. was not my client when I gave her this suggestion-it was the first time I met her. The suggestion also had nothing to do with the law. The suggestion was driven more by the fact I wanted to help her as an owner-manager because she was (as simple as it sounds) a great person who needed some suggestions and not someone selling him something. Even though the owner of SME Inc. has said to me that she could retain much larger competitors than me, she retained me several weeks later and has been a very loyal client who I am privileged to help.

  1. I once met a SME mirco-lender who really cared about their borrowers beyond the monthly interest payments they received. The lender would visit the borrower before any money was lent and find ways to improve their business- even if that business never became a borrower. They would recommend book-keeping software, suggest ways for their employees to be more productive and advise owner-managers on how to grow their business. Here's the catch- the lender is a one-off lender. In other words, almost all of their borrowers would not use them again because of the nature of the financing. However, they still cared enough to advise their borrowers on how to grow their business knowing that they would not be able to sell any further goods or services to their clients. When was the last time a bank did that? Where does the lender get most of its clients? Good word of mouth based on services which was indirectly related to the good they provided.

If there is one suggestion to take from this post, it would be to understand how a SME business operates on a daily basis and use that understanding to help your clients/potential clients in matters unrelated to what you are selling. It will go a long way to guaranteeing customer loyalty.

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Thursday, April 26, 2007

How to Increase Your Chances of Selling Technical Products/Services to Non-Technical SME's

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


I am going to take it as an assumption that, as a basic sales strategy, one should sell benefits and not features. But what if you are selling products/services which are inherently technical and feature rich? What if your product is cutting edge, first to market or technically difficult to explain in a 30 second sound bite? Do you sell the features as the benefit itself?

The answer-"Shut up and listen."

This simple yet effective piece of advice was once told to me by Nicki Weiss. Nicki is friend of mine who helps technically inclined companies such as NovoNordisk Pharmaceuticals and Fisher Scientific sell more effectively to their clients- whether SME or big business to big business. (I would recommend visiting Nicki's website at www.saleswise.ca and subscribing to her newsletter for sage sales advice).

The underlying theme of Nicki's advice is to focus on the client's needs, talk less and avoid the techie speak. In other words, avoid the following three common downfalls of ineffective salespeople of technical products/services:

  1. Not being curious about the customer and their business: Do you notice that you focus on techie talk, attempting to impress potential clients with sophisticated product knowledge?
  1. Not Listening Deeply: Do you notice that you use your potential client's comments as a springboard for your own comments, experiences or products and the conversation becomes very one-sided?
  1. Not linking the benefits of the product or service to a potential clients needs: Do you notice that you tell the client all about the latest and greatest features of your product or service without making any direct link back to their exact needs?

If you, or your sales staff, have fallen into this pattern, there are a few tips that Nicki suggests (each tip below counteracts the downfall above so tip 1 responses to downfall 1 etc.):

  1. Focus on your clients' objectives and how the technical product or service supports this objective. Ask open ended questions which reveal your client's objectives before focusing on the techie talk. Ask open ended questions such as:

"What things are important to your customers today?"

"What do you want to achieve?"

"What issues will the new fix have to address?"

By being curious about your client, you have created a bridge between your product or service and client needs.

  1. Listen Deeply (or "shut up and listen"): Be curious about the customer and their business issues. Clarify, confirm and explore in your conversation. Understand customer needs. Let the client talk 80% of the time. Notice the underlying mood, tone and impact of your conversation rather than being absorbed in bits and bytes.
  1. Link the benefit of the product and service to the client's needs: Excellent salespeople slow down the conversation in order to hear and pinpoint needs and link the benefit back to those needs. For example, a great salesperson may say: "So, you're looking for a way to improve communication between the branch offices and head office, in order to improve response time to your customers. Is that right?" (pinpointing need) "That makes sense. We have product XYZ, and it works this way...What that means to you is you'll be able to improve the communication between the branch offices and head office, in order to improve response time to your customers." (linking the benefits to the need)."

As a good starting point to implementing more effective SME sales strategy, have a mentor, sales coach or co-worker comment on your current techniques. Based on these comments, refine your sales strategy using some of the tips in this article and have these same people help you practice becoming more effective in your approach.

As a seller of highly specialized and technical services myself, I want to share one tip with you in my next post that has nothing to do with selling the actual product or service. Have a great month.

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Monday, March 26, 2007

It's the People, Not the Product

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


I primarily read two blogs on selling to small business: Rick Spence's blog and this one. In the last month, both Rick and Evan have posted articles on building trust before successfully selling to an entrepreneur. I agree whole-heartedly. A good first step in building trust is finding some type of affinity with small business owner before you can sell anything.

Affinity is typically built through common experiences. Those with common experiences tend to relate better than those with divergent life experiences. For simplicity's sake, I am going to describe account managers I have met who have a lot of success selling to small business and those that do not based on the life experiences of each.

Let's call the successful account manager Mary (Mary is not a real person but rather an amalgamation of many different successful SME account managers I have met). Mary is typically on her 2nd or 3rd career, worked in some type of entrepreneurial setting (or, to put it another way, has not worked in a big corporation all of her life), understands from practical experience the industry she is selling to (or perhaps has worked in it herself) and understands how to create solutions for clients.

Without ever selling a good or service, Mary already has the following unique value propositions:

  1. Entrepreneurs tend to experiment so they appreciate Mary's many life experiences;
  2. Mary can speak from experience and not the text book; and
  3. Having worked in an entrepreneurial environment, she understands the daily life of her clients.

Bob- an amalgamation of many unsuccessful SME account managers I have met- is typically on their first career, spent his entire professional life in an institutional setting, is well educated but never ventured much outside that world.

Bob tends to be a turn-off for many entrepreneurs for some of the following reasons:

  1. Bob is perceived to be too institutional; Bob is a "suit" and "not one of us."
  2. Bob is perceived to be bureaucratic; he understands corporate policy well but does not tend to know how to make that work for his clients; and
  3. Bob speaks "MBA"- big words that do not matter much in the entrepreneurial world.

Mary and Bob are generalizations. Nonetheless, having met both Mary's and Bob's in the course of my practice, my preference is to buy from Mary.

For anyone wanting to selling to the small business market, a good starting point would be to analyze hiring practices and determining whether you have a lot of Mary's or Bob's in your sales staff. After all, sophisticated marketing campaigns only go so far- it's the people selling your good or service that will be the real difference-makers.

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Monday, February 26, 2007

Selling to Small Business - The Long and Winding Road

Guest Contributor: Albert Luk
Albert's Posts - Albert's Site


My name is Albert Luk; I am known as the Entrepreneur-Friendly Lawyer. I have the privilege of being a guest blogger on Selling To Small Business. I was once a big-firm lawyer and now I am a Toronto business lawyer representing the SME market. I hope that my perspective representing both sides of the fence (as well as the fact that I, too, sell to SME's) will be helpful.

Selling to small business starts with the proposition that you want to sell to this market. This may sound self-evident in a blog about selling to small business but let us consider this concept for a second.

Just because there are millions of small businesses, does that necessarily mean that every B2B should target this sector? The answer may not always be a "yes." For example, I understand that Research in Motion found initial success selling to institutional clients before moving downstream to the SME and now the consumer market. Conversely, based upon anecdotal evidence, SME's were the first segment to adopt Skype for commercial purposes.

Why did the SME market adopt one immediately and not the other? It cannot be industry driven since, coming from a Luddite such as myself, they are both in the "technology" segment. I have no definite statistics to back this up but I suspect Research in Motion did not target SME's initially because the sales cycle is long and start-up technology driven businesses need to make money yesterday for their investors.

Skype, on the other hand, was adopted quickly because it was free, it could be discarded quickly and it solved many of the SME's daily challenges (save me time, make it easy to use and make it affordable).

The point being is that if you are Research in Motion and you need to make money quickly to pay for lots of R & D costs, your strategy is not to target the SME market until you are firmly planted on your feet financially.

At the end of the day, selling to small business can be challenging and requires a significant amount of patience. The industries are diverse, the players are fluid and there are geographic boundaries to consider (most institutions cluster in downtown cores or suburban campuses, SME's are more scattered). Think carefully whether you want to target small businesses. There may be a lot of SME's but not every business at every stage of its life should be selling to small business.

Having said that, selling to small businesses can be a rewarding and exciting experience. However, it is not for everyone. If you are committed, patient and persistent, you will do well. Know thy business and plan accordingly.

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Name: Evan Carmichael
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EvanCarmichael.com is the world's #1 website for small business motivation and strategies. Evan also runs a series of successful Mastermind Groups in Toronto for entrepreneurs.


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