What are the biggest challenges you are facing in your business right now? I just posted this question on a small business group that I’m a member of on Alignable.com.
As a partner in a consulting firm, we are putting together updated, post pandemic marketing materials and fine tuning our message. I wanted to get an idea of the biggest problems companies are currently facing. Our economy has been through a lot the past few years. The responses I received were wide ranging and touched upon just about every area of business (with some surprises): delegating, ADHD, growing the business, raising capital, finding employees, raising prices, staying motivated, prioritizing, and closing sales to name several.
I thanked all of those who replied and contributed some tidbits of advice. I couldn’t help myself. As a consultant, that’s what I do.
One particular response was a business having difficulty getting his salespeople to close at a rate above 10–15%. I replied that he should check his industry’s standard closing rate because maybe 10–15% was within the norm. Many a company I’ve consulted would be thrilled with a 15% closing rate. (The average sales success rate across all industries is 3%.) I also suggested some sales training, because while research has been mixed on the effectiveness of sales training, some studies suggest it can improve ROI considerably. Lastly, I suggested his sales staff read the book, “The Asking Formula,” by John Baker. It really is a wonderful little book for sales and I recommend that everyone read it regardless of what they’re doing.
He rather sanctimoniously said that he already has three sales trainers that he feels are the best in the world. One of them made $33 million in commissions in 10 years. And that, someone will not rise to his level reading from a book.
Okay, but, what?
Obvious first question, Why not use that guy for your sales instead of as a trainer? Maybe he’s retired? So, Why is your sales staff still struggling with the $33 million guy training them?
Along with the gold, there’s a lot of questions in “them thar hills.”
A Method to Find out What Your Problem Really Is
It brought to mind the Startup Founders Group I was a founding member of many years ago. We met once a month to process issues. We started with a dozen or so entrepreneurs and I appreciated it because being a Startup Founder without a partner can be a lonely endeavor. We had a formal approach for processing our issues:
Begin with a problem and put it into a question. It should take the form of How Do I (HDI). It can be business or personal, because if you’re having personal problems, it can definitely interfere with your business.
After the issue was presented, there was a period of questions which the founder would answer.
After that the other members would suggest a different HDI. We found that the problem members thought they were having, wasn’t really the problem. Almost always!
Here are some hypothetical HDIs to give you an idea of the concept.
1. HDI increase my runway by raising money in a hurry? Could actually be, HDI cut expenses to decrease my monthly burn rate?
2. HDI deal with my partner who is an alcoholic and passing out in the middle of the day? Could be, HDI buy out my partner? (Ask him when he’s on a bender with pen and contract in hand. Just kidding.)
3. HDI reduce my dependency on one large customer? Try, HDI divert resources and update my marketing plan to attract new, smaller customers?
4. HDI get my spouse to be more supportive of my startup? HDI improve my communication skills so that my spouse understands the startup world.
After the HDI is restated and accepted by the processing member of the group, (and they can choose between many suggested HDIs, or even their original HDI), we would enter the period of suggestions. These are ideas of how the member can fix their problem. During this period they need to remain silent and listen. We assign another member to take notes, so the issue processor can just listen.
Upon finishing, the member taking notes will email those to the processor and then, the most important part, they make a promise or commitment to action (CTA).
Relevant Questions to Ask
Back to the sales guy on Alignable.com.
The following are the types of questions he should ask himself after the first two obvious questions I mentioned earlier. Keep in mind some of the questions here included what are called, veiled suggestions. When you are processing, just ask questions. But for this article, I’ll include some suggestions along with the questions.
1. Again, what is the industry average closing rate? You didn’t answer that.
2. The $33 million guy might be a great closer, but a lousy teacher. That’s possible. Can he teach others? Perhaps he doesn’t like the task of training others?
3. Are the sales people you’re hiring any good at sales? Start keeping track of your sales data; who is the most successful and what are their methods?
4. If your sales people are underperforming, is there a problem with your product?
5. Ask top level interviewees that are declining to take a sales job with you, why? Maybe you need to offer a higher salary, commission rate or benefits.
6. In addition to training people to sell, are you training them about your products, all the benefits?
7. If appropriate, do you have a good prepared pitch? If not, maybe you need one. If so, maybe it needs to be better.
8. Are you providing your sales staff with good quality, warm leads? If not, maybe you could do that.
9. Is your product a commodity, based simply on price? If so, maybe you need to adjust your pricing.
10. If your product is not a commodity, have you developed reasons why customers should buy from you? Have you distinguished your company through customer service, or some other benefits?
11. Do you have a detailed marketing program to support your sales people? Do you have a marketing strategy at all?
I could go on. But after all these questions are answered I think a new HDI suggestion would be along the lines of:
How do I help my sales staff to be more successful?
Then move on to the suggestions phase, many of which will be self-evident.
That is the value of questioning whatever you think your problem is. You can use this process yourself, with your own company, for any issues you are facing. Better yet, get your employees to join in. They might know more than you. They’re on the front lines, after all.
Originally published at https://www.datadriveninvestor.com on February 24, 2023.
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