Revenue Journal®

In the beginning, the entrepreneur starts a company, and does all the selling himself. Then, as the business grows, he hires a salesperson, then a few more salespeople. This goes on for a couple of years, then he hires even more salespeople and a sales manager.

As this progression occurs, this entrepreneur, now the CEO, makes selling mistakes. All CEOs make these mistakes, even if their background was in sales before they started their company, or before they joined the corporation. There aren't many companies run by salespeople; in my experience, CEOs usually come from engineering, finance, or operations. But even the sales-background guys and gals make these same mistakes. Avoiding these seven mistakes can save you a lot of grief.

Here they are. I'll be stating each mistake as a belief, because it is the belief that gets the CEO in trouble. These beliefs are actually dangerous myths, myths that cost companies millions or billions of dollars every year.

Sometimes you mistakenly hire someone who turns out to be a rationalizer. Even though you've conducted several interviews and carefully checked references, nobody clued you in. You don't realize they're a rationalizer until they've been with you for you a while.

As they make mistakes, and you point them out, you always hear excuses. You start to realize that they are never going to face up to their shortcomings and make the necessary changes. People either change or make excuses. They can't do both.

Well, that's not strictly true. There are some people who protest at first, but after they've calmed down, they realize you're right, apologize, and then start to work on it.

They're in a different category: "knee-jerk-negative at first, but then comes around." These knee-jerkers just hate themselves when they make mistakes, which accounts for the knee-jerk negative reaction. But they will later admit they need work in that area, and they will take care of it. Outside of the frustration you'll feel whenever you get that initial negative reaction, these folks can improve and get the job done.

Back to the hard-core rationalizer. The fundamental problem is, this person sees the situation in a way that does not coincide with the facts.

As I was coaching a salesperson recently, we talked about the differences between leaders and followers. It's an important distinction, especially during turbulent, recessionary times, which require all company leaders - and their employees - to meet new, higher standards. In many cases, the survival of their business depends on it. Leaders must become better leaders and their followers must engage in more leadership-like behavior.

I pointed out that if you were to walk into any conference room, and start observing - even if you didn't know anyone in the room before you arived - you would be able to pick out the leader and the followers in about three minutes. It wouldn't matter where that leader was sitting at the table; it wouldn't matter what the leader was wearing or how old or young the leader was; it wouldn't matter what they looked like.

Employees often believe - and behave as if - managers were "born" into management. Sure, someone can inherit a position, but that's rare. On the whole, leaders are self-made, not born. Leadership is a learned skill. I am not talking about the people who rise in the ranks due to political shenanigans. I am talking about people who have rightfully earned the right to be perceived as a true leader, someone worthy of being followed.

"Fast, right, cheap. Pick two."

Print shop owners used to like to post this little truism near the front desk of their shops. There's a lot of wisdom on those five words. If you do it too fast, it's likely to be wrong. If you take too much time obsessing over details, it isn't going to be fast. And if you get it cheap, you might also get it fast, but it probably won't be right.

The problem is, today's customers assume that they can get "all three" if they just look hard enough. Google has given them a virtual, endless, global shopping mall. If one vendor can't give them all three, they'll just keep looking. Click. Click. Click.

I really enjoy making sales departments more productive. It's one of the most rewarding aspects of what I do, because there's always so much to improve, and because even a few changes can make a huge difference in a company's revenues. As we slip further into group-recession-think, it's time to look at what an economic slowdown really means and what you can do to make sure your business continues to grow - in spite of the persistent recession drumbeat. There are a number of things you can do to improve your sales levels in this economic environment.

1) Ignore the recession drumbeat. It's easy to be spooked by the latest news on the economy. Even if you are in an industry that is directly affected by a slowdown, being distracted from your normal revenue-producing tasks - and lowering your sights - will only make matters worse. Make a personal, definite decision that your business will be an exception to the overall trend.

It is possible to be going "up" when everyone else is going "down" - I've done it myself several times in my career, so I speak from personal experience. Your two biggest enemies are always distraction and fear.

When someone in business says, "He's a micromanager," it's not a compliment. They say, "He's a control freak," "he doesn't empower people," and "he's obsessed with details." The common wisdom is that micromanagers are not anywhere near as successful as...

It doesn't matter what type of business you run. It doesn't matter how small or large your business is. It doesn't matter what you used to do, before you became the leader of your company. What matters - the only thing that really matters, day after day, year after year - is how well you manage yourself.

Why is it so important? Because true leaders - the kind that other people actually want to follow - have mastered self-management. They instill confidence. They are calm, reasonable, and wise. They can consistently be depended upon to do the right thing. They don't fly off the handle at the smallest thing - or anything, for that matter. They don't obsess about one aspect of their business at the expense of other, just-as-important aspects.

It struck me recently that I have become a commerce code-cracker. Companies bring me in when something is stuck, when they can't figure out how to get from "here" to "there." They know what "here" looks like, and they know what they want "there" to look like. But, they have either tried to get from here to there, and failed, or they can't imagine how to get from here to there, knowing what they know. So they bring me in, and I set to work cracking the code.

I investigate until I understand where the problems are. It doesn't take long, because I have been doing this a long time, in many different situations. I know where to look and what to look for. When the solution is clear, I make recommendations.

What's interesting is how often the problem has been self-inflicted. Actually, thinking through the countless situations I've encountered, I'm realizing that "often" isn't the right word. The word should be "always." This means, of course, that if you don't mess yourself up, your chances of success are quite good. On the other hand, if you're like most people, it means that you're messing yourself up somehow.

The problems that I find fall into three categories:

John Smith is a typical customer in the market for a fairly high-end product, one that requires a salesperson to finalize the deal. He has done his research on the web - he's spent hours, in fact, researching. Now he has a couple of questions for the salesperson to answer. Otherwise, he is ready to buy. He decides that the best way to get the answers he needs is to go to an industry tradeshow.

I've been interviewing "John Smiths" for a client, and one of them described what happened next, using these words:

"I had to defend my wallet and my family against The Pitch."

He was there with his wife, and as he was trying to get answers to his questions, the salesperson kept trying to close the sale.

From the customer's perspective, this is irritating. Sleazy. Totally inappropriate. You're just asking someone questions, and the whole time, they keep trying to sneak around to the side of you and grab your wallet out of your back pocket.

Lately I've encountered more entrepreneurs who have bought into the idea that they can just set up their search engine marketing and websites, and the orders will pour in. Oh, how nice it would be if it were true!

There are consultants who will say that it is possible, and say that they have made bundles of money doing it. But they sell one type of product (usually a guide of some sort), using one type of marketing method (usually a combination of search engine marketing, and a dedicated website that makes outrageous promises as it offers the guide for sale on the website). The website contains a single long-winded, direct-mail-like page that sells you on all the things that the guide will do for you, filled with convincing testimonials and "scientific" proof. And they let you pay and download the guide right there. This is a perfect product for the Web, and the method works well for that type of product.

These vendors often sell guides saying you can sell anything on the Web this way. Newbies have bought these guides and have become convinced that this method will work for any type of product - that all they have to do is set up this type of campaign and website, and then sit back and watch the orders flow in. It simply isn't true.

You are the head honcho at your company. You stay awake at night struggling with unsolved problems. You go into work every day and focus on solving them. Your life consists of finding and solving those problems.

You think you know more than anyone in the world about your company. You're right - no single individual knows more than you. But there is critical information that you don't know, information that is sucking the life blood out of your company's potential for growth. Information that, if you knew it, faced it, and dealt with it, you could remove those stubborn barriers to the sale and start your revenues flowing in new ways and at new rates.

Those who follow through make more money than those who don't. This is one of those absolute business truths. It comes into play in two situations: daily interactions and long-term, transformational projects.

Daily interactions

I recently worked on a project with a team. One person on that team didn't bother to go the extra mile. She didn't double-check. She didn't think for a second before answering a question. She acted as if she was thorough, but in fact she was not.

Everyone else on the team always went the last mile. They double-checked before considering something final - even a simple email. They were thoughtful, and deliberate. Very few mistakes were made, and the few that were made were minor and quickly corrected.

"That does it. I've had it."

That declaration is provoked by someone "stepping over the line." They've "gone too far." It's "too difficult."

All of us - low functioning and high functioning - have these lines, drawn over many years of interacting with others. I have an autistic brother, who is considered "low functioning," because he has no concept of the danger of traffic, the need for money, or the need to work. I could point to all sorts of areas where Michael is higher functioning than many "normal" people, and he has shown me more than you can imagine about human behavior, but that's not the subject of this article.

What is important here is that one of Michael's low-functioning traits is his inability to ignore or move beyond his demarcation lines.

There are two kinds of salespeople in the world. One knows that the customer is just trying to get some questions answered, and does what he can to answer those questions. The other sees the customer's questions as "objections" to be overcome - obstacles to his making the sale and getting a commission.

In other words, in the first case, the customer is right - right to be making sure the product will meet his needs. Right to ask questions. Rightfully entitled to getting honest answers to those questions until he has enough information to make a good decision.

In the second case, the salesperson behaves as if the customer is just plain wrong. During the conversation with the customer he is, by turns, evasive, dismissive, and downright rude as he spits out answers. He is combative during the question-asking process. He interrupts the customer, argues with the customer, and treats the customer like an idiot.

A recent experience with such a salesperson convinced me that these salespeople end up in sales because they love to argue but they're not smart enough (or industrious enough) to get through law school. They are wanna-be lawyers.

The problem with marketing and sales is that they are the functions inside companies most likely to be driven more by emotions and anecdotal "evidence" than they are by facts. The result is never as profitable as it could be.

If salespeople dominate decisions, without the benefit of qualitative customer research and buying process analysis, the atmosphere is always dominated by fear of losing the next sale, and activity is always frantic.

The salesperson will send an email to the marketing person: "I just closed this sale. I sent this fax to them, and they read it while we were talking to each other, and the person loved this fax. We need an email and landing page that uses this copy!!!" The marketing person will comply. The salesperson will then talk to another customer, who will react positively to something else, and the salesperson will send another email to the marketing person, demanding another email and landing page.

Fear is a powerful motivator. Entrepreneurs use fear to motivate themselves; CEOs often use fear to motivate themselves and their employees. After a while, it's easy to consider fear as a valuable tool, a friend. Too bad it isn't true.

Every business starts with a dream. Every buyer starts the buying process with a dream.

Every business can turn into a nightmare. And, every buying process - especially those involving large, expensive, important purchases - can turn into a nightmare.

These dreams - and fears of nightmares - drive the decisions and actions of both business owners and buyers.

We've all seen this at work in extreme cases, where an individual will let their own fantasy world overwhelm reality to the point where they lose their job or their business, and the people who supported them along the way.

But these situations are rare. The more usual, day-to-day situation is one where the seller and buyer are trying to find common ground, to negotiate a realistic solution where everyone can be happy.

As you probably already know, the most important aspect of time management is deciding where you will spend your attention.

It's difficult to practice good attention allocation because anyone with a need can interrupt you at any time, using a variety of methods to access you and hijack your attention.

One of the most famous, and still-relevant self-management tools is Stephen Covey's four-quadrant matrix for importance and urgency ("important/not important, urgent/not urgent").

We all know we spend far too much time on the urgent/not important tasks; and, if we are totally honest with ourselves, we also spend too much time in the "not important/not urgent" category.

Why?

If you own or run a company, you're passionate. Certain things matter to you. Every day, in every interaction, your passion determines how you manage yourself and those who work for you - employees and vendors.

Your passion is a powerful force. If you manage it correctly, you will:

• Make the right decisions about what is important and what is not
  
• Allocate the right amount of energy to the important things
  
• Convey the right messages to employees and vendors about what matters
  
• Create and run a balanced company
  

What do I mean by a "balanced company"?

It took a while before the Web really changed the way people bought things, but it has happened. Now people go to the Web first and research the heck out of a subject before they buy.

They scrutinize, analyze, and agonize. They Google and re-Google, fine-tuning their search term until they start getting the desired results. They know exactly what they want and they keep searching until they finally find it, then compare their options, read the reviews, and consider the price and the functions. Once they are satisfied they have found the right product and are comfortable with the company selling it, they place an order.

I'm sorry to say that, over and over, I am finding business owners struggling to make sales because their marketers - in-house or outside - are trying to use yesterday's marketing and selling methods on today's buyers, who have definitely moved on.

Buyers have specific questions. If you're not giving them specific answers, you're not going to capture those sales. All technology aside, this is the biggest difference between "old" marketing thinking and "new" marketing thinking.

The best way to illustrate this is with an example.

There's a certain type of entrepreneur who becomes obsessed with a product idea, and sets up a business to sell it. It's always a guy (yes, for some reason, it's always a guy) who can never understand why "everyone can't see the wisdom of this idea" and why "someone can't give me the money to get this business off the ground."

I hear from these gentlemen because of my blog and book, and my consulting company. The most recent person who contacted me said he had also contacted a famous "marketing guru" company, but that "they won't give me the time of day."

This most recent person says that he lost a great deal of money trying to sell websites for a website creation franchise operation. He is now in debt, and is trying to get out of debt selling a gasoline additive. He tells me that he wants marketing help. But when I make specific suggestions, he responds to my email with more detail about how he got into debt and how he is a nice person who was raised to treat people with respect and courtesy, and how he just needs marketing help. In other words, he asks for advice, advice is given, and then he ignores it and asks for advice or sympathy.

The perfect sales manager is rare. One person seldom has all of the right traits, and seldom behaves consistently in the most effective manner. My goal here is to describe the ideal. If you are recruiting, you'll want to get as close to this ideal as you can, then work with the individual to improve their deficiencies. If you are still managing your own sales force yourself, you will be well-served if you develop and exercise these characteristics.

Before we get into the details, we should note that most salespeople make terrible managers, unless they are so mature that they have overcome their tendencies toward attention-deficit disorder and shifting loyalties. Most salespeople skim through life, from one conversation to the next, and have no patience for the deep thinking that is required of a perfect sales manager.

The most common mistake made by company owners and managers is to promote a salesperson to management - and expect them to shine.

There are countless articles and books on what you should do as you attempt to grow your business. But very little advice focuses on the aspect of your daily business life that has the most effect on your company's success: your character.

For good or ill, your character affects everything you do every day. It affects every decision you make - or fail to make. It determines how your employees perceive your ability to lead the company - and their enthusiasm or discouragement. It affects how much your customers trust you and how much your competitors fear you - or not.

As we go through life, we develop habits of character.

At any given time, in addition to my Fortune 100 and medium-sized company clients, I always have a couple of entrepreneurs on my client list. I enjoy helping startups, and increasing the revenues of existing small businesses.

Typically, someone who starts a business is an expert in a particular area. In other words, their core competency doesn't lie in marketing and sales. As a result, they are constantly searching for any trick or technique that will help them make more sales.

This search - and in some cases it is a desperate search - makes them easy prey for any halfway plausible idea. They are constantly reading articles and books, talking to friends, and listening to vendors selling ad space, website design, direct mail, and so on. I often get questions by email - "I just talked to So and So, and they said..." Or, "I just read an article that said..." The questions are always about doing a specific thing that will supposedly help their sales increase.

The sad thing is, it's never one thing. And it's never the thing that you just read or that someone just told you. 100% of the time, the answer is right in front of you. Yes, I said 100% of the time. Always. Here's how you find the answers you seek.

Well, it's that time again. People are worried about a recession.

Strange, because according to the US Department of Labor, the unemployment rate is at 4.4%. For historical perspective, ten years ago (April 1997) it was 5.1%, rose to a high of 6.3% in June of 2003, and has been falling ever since.

Average hourly earnings have risen from $12.29 in January of 1997 to $17.10 as of January 2007.

How do I know people are worried? The phrase "How to make money during a recession" has started to become more common again in my search term results. Plus, the bigger companies have stopped spending while they wrangle over budget cuts. And entrepreneurs are focusing more seriously on making more sales.

If we do have a recession, what will happen? What typically happens in all recessions?

The longer you head up a company, the more it becomes like a private club. You go to work, and are immediately swarmed by messages, issues, meetings, random hallway and instant messaging conversations - all from members of your own club.

Everyone in the club knows everyone else, everyone knows who the facilitators are - and who are the obstructionists. They know the helpful ones and the spoiled brats. You spend your entire day interacting with everyone in the club, people who make you feel good about yourself, your company, how well your people are doing - and how happy your customers are.

Here's the danger: After a while, it gets harder and harder for anyone outside the club to get what they need from anyone inside the club. Your days are consumed by your interactions with each other.

He's smart. He's quick. He understand things long before others do. He likes to talk. Usually, people like to listen, because he often has something interesting to say. He sees opportunities long before others do, and rushes in to capitalize on them.

People who work for him trust his ability to keep the company on the leading edge. For the most part, they like working for him. He's a salesperson who has turned into an entrepreneur and now he's running a company.

Uh-oh.

What's the problem?

Charm is not a strategy. Charm is not a process, a system, or an answer to the many problems that CEOs have to solve.

Working with CEOs and entrepreneurs, I identify and eliminate barriers to revenue and turn stalled or slowing companies into revenue-growth machines. I have become a revenue engineer. I am an industry of one, and happy to be here.

I'm bringing this up to talk about self-reinvention, a skill that all of us must master in this age of fast-moving markets. As you learn more and become more experienced, and apply those lessons and that experience to your next job, you need to know what you are good at, what you can provide, and what you should call it.

Looking for higher revenues this year? Pay attention to your projects and processes - Part 2

As I mentioned last week, successful companies are characterized by a series of successful projects.

There are other activities, however, that happen every day, which are not as "visible" as projects are. These activities are "processes" that take place as people work on projects, produce products or information, or carry on day-to-day administration such as accounting, IT, marketing, sales and order fulfillment.

If I were to do a "revenue growth audit" of your company, chances are you would get low marks for your processes. Inefficient processes would be inhibiting your ability to service customers and run an efficient operation.

How can I be so sure about that? Because process-centric companies are very, very rare.

As the leader of your company, what you decide to do is what gets done. At least, that's how it should happen. What you have control over (to a degree) are your own decisions, your own actions, and the management of your employees. You have some influence with your business partners. You have no direct control over your customers.

Of course, without customers, you wouldn't have a business - no revenue, no employees, no partners. The people most important to your business are your customers.

Whom do you spend the most time with? Employees.

True story, happened this month.

A man has recently taken up the game of golf. He is working hard on perfecting his swing, visiting the driving range every few days to hit a bucket of balls as straight and as far as he can.

As the fall has turned to winter, he has found it necessary to wear some sort of winter gloves while practicing his swing at the driving range. Normal cold-weather gloves are either too thick or not "grippy" enough to hold a club properly. So the man decides to make a special trip to a "golf warehouse" store. It's a bit of a drive, but he goes there because he knows it has a large selection of golf clothing and accessories. He is expecting to find all of the different models of winter gloves, and try them on.

Let's stop this specific, real-life story for a second and look at the broader implications. Here we have someone with a definite need. Someone who has decided what would meet that need, and is going out of his way to purchase the best solution to that need.

This is the beginning of the buying process, a moment in time that happens literally billions of times a day across the globe.

It doesn't matter what size your company is. I guarantee, at this moment, that your "comfort zone" is keeping your company from getting bigger.

What is your comfort zone? It's what you do best, and what you typically turn to first, when it's time to "do the next thing."

Here are some one-person-shop comfort-zone examples:

The president of a small company recently sent me an email. "We've done well in a lot of areas of business, but what we haven't done is sorely inhibiting our growth. We need to master marketing and are committed to doing just that. Will you point me to the best learning tools?"

I'll bet you can guess where I pointed him…right back to his own customers. Here was my reply:

Well, it's that time again. Elections. Always causes a bit of a dip in productivity, and a slowdown of the buying process, while everyone waits to see how the election will turn out.

Welcome to Distraction City.

In our news-dominated culture, distractions interrupt buying patterns. The larger the distraction, the larger the interruption. I tend to think of these periods as distraction-driven mini-dips. If there are a number of them in succession - especially those involving armed conflict or a terrorist attack - the dips can turn into a recession.

During these distraction-driven mini-dips, it's more difficult to generate revenue. Everyone still goes to work, meetings are still held, contracts are still signed, but if you're on the selling side, it always feels like the world is sliding sideways. As you attempt to finalize a contract, it's like talking to someone who is talking to someone else on a cell phone. Or who is pretending to be paying attention to you while simultaneously watching a movie. Sure, they will answer your questions, but they're not "all there." People are no where near as adept at multi-tasking as they think they are, especially if they have an emotional stake in the other task.

It's not just the buyers who are distracted. Sellers are distracted, too.

Major opportunity for you

As part of my work helping CEOs to re-engineer and rejuvenate their revenue-generation efforts, I help them with their employee issues. We always start by trying to bring their current staff up to a new standard or, if needed, we find a new person for a particular job. I help them recruit, screen, train and manage people in marketing, selling, web, and product management positions. I've been doing this a long time.

Here are a few key lessons I've learned about the difference between people who are a drag on revenues and people whose contribution is exceptional.

Kimberley Deane makes beautiful, reasonably priced jewelry. Her photography skills are top-notch. Her website and printed materials are stunning.

The only problem is, Kimberley hates to sell. She'd rather spend most of her day creating her wares, not "selling." Most artisan entrepreneurs, especially those who open up one-person shops in order to sell what they love to create, hate to sell. Selling is a distasteful, intrusive activity. It grosses them out and causes them to break out in a cold sweat.

Kimberley wants to increase her sales, but she didn't want to have to sell in order to do it. Once I understood her problem, I was able to tell her that she doesn't need to "sell" in order to increase her sales. She just has to make it easy for people to buy from her. That was a comforting thought for Kimberley. Then we started working on exactly how she would do this.

Entrepreneurs, listen up. You may feel like you are alone in your struggle to increase your sales. You're not. Every single entrepreneur struggles with the same issues. And every conversation I have with an entrepreneur follows a similar pattern, and has a similar happy ending, once I show him where his solution lies.

The first conversation always starts out with the entrepreneur telling me what he has been doing about marketing and sales, and what he thinks he wants to try next. His options always involve decisions about marketing vehicles ("Should I do PR? What about my website? Should I follow the advice of this person selling direct mail services? What about this local agency that is trying to get me to run radio ads?")

I listen until he has given me the whole picture. It doesn't take long, because 35 years of selling every type of product helps me fill in the blanks--if he's selling direct, I know what his business model looks like; if he's selling through partners, I know right away the problems he's having in that area.

After asking him a number of questions - including "Are you interviewing your customers on a regular basis?", I can see why he is struggling with his marketing decisions. The problem is, he's focusing on his selling process.

New marketing vehicles rise up, get overused, and fall out of favor faster than ever. Email has been through all those phases. Pay-per-click is currently in the falling-out-of-favor phase. Blogging is still on the rise. Blogging is being touted as...