roi | Dave Stelzl's Blog

Posts Tagged ‘roi

Apr

Hackers Grab 1.5 Million – Visa and Mastercard

Categories: Sound Bites
Tags: firewall, heartland security, PCI, roi, selling security, tco

I’ve been saying this for years – detection is the most important part, and your managed services program is a critical component of the detection strategy. I just finished up today’s webinar – the second session of, Accelerating Managed Services Sales. Both sessions, March and April, where full, with a waiting list. This article on Global Payments underscores the problem with most security problems – if you read the quotes from the experts cited in this article you will see the recurring theme, Firewalls and Perimeter security don’t do it.

In today’s session on managed services sales I presented several mistakes being made in the sale of managed services offerings. The biggest one is putting the focus on ROI – Return on Investment, or TCO – total cost of ownership. Is there a TCO savings? Probably – or maybe even a forceful “YES”, but don’t lead managed services sales with this. Risk is the motivator here, and companies are losing the battle according to last week’s FBI reports. If you’ve read my book, From Vendor to Adviser, some sound bites worth remembering from the above article include:

The Heartland Payment Systems breach exposed 130 million credit card numbers – credit card data is still vulnerable.
The Payment Card Industry Data Security Standard (PCI DSS) is highly prescriptive in nature, but simply complying does not ensure credit card security.
The perimeter-based approach is not sufficient and fails to protect critical data and internal resources that bypass these point solutions.
Firewalls, antivirus and [intrusion detection and prevention systems] are no longer enough to protect against rapidly evolving zero-day and insider attacks.

Remember, sound bites build credibility, however, as I explain in my book From Vendor to Adviser, they do not sell. They help you relate to executives as long as the source is credible in the eyes of the buyer – so steer away from Infoweek type sources when gathering these sound bites.

Join me on April 9th – 11th for a deep dive into the world of selling highly profitable security solutions and you’ll also get a one hour one-on-one session with me to review your business and create a more effective strategy for selling more profitable solutions.

Sign up here! Making Money w/ Security (just 5 seats left)

Feb

Financial Pressures Lead to Bigger Losses

By Dave Stelzl's Blog Leave a Comment

Categories: Solution Strategy
Tags: finanicial management, low margin, Managed Services, profit, roi, sales

Today was my second day teaching at Verity College in Indianapolis – working with college students who have not really experienced the pressure of the business world provides some fresh perspective. Today we covered material from my latest book and workshop, in a session I call, Secrets of High Priced Consultants. Over dinner I had the opportunity to meet with two young men, both interested in building businesses and looking for counsel on how to get things started. One question that came up deserves some additional response – “Where do you see companies really getting into financial trouble?”

The other day I wrote about selling unprofitable business. Let me expand on this some, as it applies both to the company and the sales person…

1. Numbers are down, because profits are weak or perhaps sales are low due to competitive pressures – in other words, there are opportunities, but in order to win them, you find yourself cutting the prices. In my From Vendor to Adviser book I show how a 20% cut in price leads to a 40% cut in gross profit (at least when we are talking about services with a standard burden cost).

2. Profits are down which demands more sales, but the profit problem is still there, and with all of the competitive pressure, and need for fast sales, more pressure leads to more discounting, less contract signing, and more deals on a hand shake.

3. Revenue numbers increase when this happens (assuming steep discounts lead to more sales) – and if you are selling managed services, the compensation is likely based on revenue, since there is no gross profit measurement to be had. Often these deals are compensated with 1 to 3 months revenue paid out to the rep up front. The rep is happy, the business will soon be dying. As pressure mounts to keep this contact profitable, the customers are sure to pay with poor services, often resulting in early contract termination. You can try to sue, but this rarely works in your favor – in fact, forget I mentioned it.

4. Competition is bound to come in at this point, sweeping up the pieces and promising to make things right. Whether they do or don’t make good on their promises, chances are you will not get this customer back.

Fix the profit situation first…more contracts don’t equal more profit. Bigger companies don’t mean bigger money. Fine tune the profit machine, then work on the sales end. Once you know your product offering or managed service model works, then you can press forward with a strong sales & marketing program.

Feb

Selling Your Way Out

By Dave Stelzl's Blog 1 Comment

Categories: The Bottom Line
Tags: Managed Services, profit and loss, reseller, roi, sales, var

Selling your way out – it seems like common sense, yet I see this more often than you might imagine. Selling more at a loss never profits. You can’t sell more of something that just isn’t profitable and expect a return. This is likely one of the most frequent causes of business failure. This past week I reviewed financial reports of several resellers, all selling managed services offerings. In once case the numbers were all above 50% margin, with over 300 individual contracts – and for SMB (Small-Medium Business) contracts, reasonably large monthly commitments. In another case, a company who had converted many to managed contracts, using an ROI (return on investment) model – in other words, they sold their clients on moving to a monthly commitment, but didn’t do the math, and tried to save each client some money. The client is now saving money, but the contract isn’t profitable as we look back over the past 12 months.

Blindly pursuing sales, without a clear picture of the efforts involved in filling the contract is like chasing technology. Companies that will create any offering on the spot, or take on any new product, just to fill a contract, as destined for trouble. One of my clients made the astute comment in our weekly meeting, “It is so tempting to just cut the price when it looks like a sure thing,” and he’s right, but then he followed up with, “But it doesn’t make sense to do it – it won’t turn a profit by the end of the year.”

Managed contracts are like that. There is little in the way of upfront cost, so the temptation is to believe you can pull it off – manage it closely, do it more efficiently. But in the end, you will be squeezing the client, trying to get by without actually responding, just to make up for the loses. On the other hand, you might not realize your contract is a loss until it’s just too late. At that point, there’s no turning back. You can’t raise prices across the board and expect everyone to stay with you. Instead, you will be handing over clients that have taken years to build, to your nearest competitor.

Jan

Anonymous – Expect Security Issues to Dominate Headlines

By Dave Stelzl's Blog Leave a Comment

Categories: Opportunities, Sales Strategy and Sound Bites
Tags: anonymous, hacker, Marketing, roi, sales, selling security, Technology, Value Proposition

Anonymous strikes again (read the Article)…if you look through news articles on technology in 2012, most likely you will find Apple, Google, and Anonymous dominating headlines…at least on the business side news (e.g. Wall Street Journal). Of the three, most of us stand to capitalize on security news more than Apple or Google, unless you work for the latter. Do you have a plan for 2012 that leverages security trends? You should. Of all my clients, those specializing in security experienced the greatest bottom line growth. Areas to consider:

1. Companies that offered managed services with a security slant (Messaging), grew the most. When I say “Grew”, I mean, profit. Who cares about top line growth? Manufacturers and very large resellers who are publicly traded, perhaps, but for the traditional reseller and even small, privately held manufacturer, gross and net are more important. Managed services, is always a “security” sale (but often not treated as one), and is the key to developing financial stability.

2. Assessments where also a hot topic. In my latest book, From Vendor to Adviser (which is doing very well since it’s release in late December – buy it here), I discuss the need to move into a more consultative approach using discovery and assessment strategies. Clients who have made this a core part of their business development strategy are building business faster and more profitably than any other group of clients I serve.

3. Marketing events continue to produce strong results! Lunch & Learn marketing has been around as long as I can remember, yet few can tell me how they are benefiting from these expensive and time consuming events – with the exception of those engaged in security. We continue to get large audiences, executive level attendees, and a very strong sign up (Conversion) rate – averaging 75%! Still, companies continue to try other things, looking for diversity and point product selling.

Today we kick off the first 2012 Making Money with Security workshop! (You can still sign up – starts at 1:00 PM). I am looking forward to exploring all three in detail. Those that master security sales, will win in 2012.

Oct

Funding Demand Generation / Marketing Events

By Dave Stelzl's Blog Leave a Comment

Categories: Demand Generation and Opportunities
Tags: David Stelzl, Demand Generation, marketing event, roi, sales coach, Technology Sales

My son's first Dentist Appt.

My new book goes into great detail on this subject, as well as the upcoming webinar on Oct 14 – which is filling up fast: (CLICK) to sign up.

One issue I bring up is the availability of funding – how many times have you been told, “We don’t have any money”, or “Our company doesn’t provide JMF”?

One of my clients received both of these responses…made a call, followed some of the guidelines I give in my book, and a few minutes later received $4000 in sponsorship! How did that happen?

A few tips on acquiring funding…

1. It helps to have a track record. Don’t engage in marketing events that don’t really produce anything. Funding sources don’t want to hear things like, “This is just a customer appreciation event.” Track your results as you go along so that you can use them to sell future potential sponsors on supporting you.

2. Schedule the event – then invite the sponsors to join you. It’s easier to get money when people see you taking off – rather than sitting around looking for handouts. If you have momentum, people will want to join you.

3. Work for those that sponsor you…help them make their numbers. Leverage this with future sponsors. If your partners don’t support you there is no reason to stay with them. There are many great solutions out there…don’t stand by those who don’t stand by you.

4. Have a plan. Show your potential sponsor how you plan to sell their product. In our case we have close to 40 decision makers lined up for this week’s event. Our reports show that we should close about 30 of these attendees on conducting a discovery process, and from there, more than half should turn into some type of business. No one can turn this kind of results away…
Join me on Oct 14 to find out how we did, and how we did it….(CLICK)

Sep

Retail Meeting – David Stelzl Speaking Video (intro)

By Dave Stelzl's Blog Leave a Comment

Categories: Value Proposition and Video
Tags: roi, sales training, technology speaker David Stelzl, value propositiion

Here’s a short clip from today’s conference with retail sales teams…in today’s talk I covered seven principles of building effective value with large retail clients based on my new book, From Vendor to Adviser…should have the final in print by late October!

Sep

Calling the Product, “Weak” – buyer side negotiation

By Dave Stelzl's Blog Leave a Comment

Categories: Negotiating
Tags: negotiating, Negotiating strategies, roi, selling, Strategy, tco, value price

Illustrated By David Stelzl

One of my first experiences with selling cars came early in my marriage when we decided to sell our Dodge van. The vehicle was in great shape, no major problems, and well taken care of. I listed it in the newspaper, and a few days later received a call from a potential buyer. He was a business owner, running a restaurant, and thought he might be able to use this van for his work. After driving the van, he agreed it was in good shape, but then started complaining about modifications he would have to make before this van would really meet his need.

There’s an old Proverb that says, “It is good for nothing, cries the buyer. But when he has gone his way, he boasts”.

The Strategy

In this case, the buyer gives hope that the sale is done, but then starts picking apart the product in an effort to bring the price down. My car buyer had me believing I had made the sale. Once he saw me mentally counting the money, he knew he had me. Instead of paying me, he was looking for sympathy, adding up the costs of modifying the product to meet his needs. In the end, I gave in and sold him the vehicle for much less than it was worth. I felt taken once he left, and I am sure he was boasting on the way home. I see this in business today. Buyers will waver back and forth, moaning about changes or features that aren’t just right, looking for sympathy and price cuts. The seller then feels bad and caves in. Even the best sellers are taken by these tactics when the buyer plays his part well.

The Counter Strategy

1. First, it’s important that you know what your product is worth. I knew the blue book values of my van…so I had this one covered.

2. Don’t try to shoe-horn your product or service into situations where it isn’t really a good fit. In my case, I was not doing this – it was the buyer who called me, yet I do see sales people trying to make their expensive products play in the SMB, while smaller companies accept projects that they are just unqualified to do. In both cases, the pricing is often inconsistent with the real value of the project.

3. Don’t mark your close probability at 100% until the deal is done. When I get a verbal commitment, it’s 90% – if an economic buyer gives the verbal. A verbal from an IT person, representing a new client, should be considered 20%. In the case of my van, I was thinking 100% when he said he liked it. I became emotionally involved in the transaction and gave into his tactics. Looking back I realize this buyer was a shrewd businessman. He knew what he was doing.

4. Stand firm. If the buyer starts whining, go back to success stories, or offer to provide additional consulting with additional fees. Nothing really works out of the box in the IT world, so assume there is work to be done. If he can’t afford it, offer some less expensive options. Chances are he is just working you on price.

Jul

Wrapping up In Buffalo; David Stelzl – Keynote Speaker at the Ingram Micro Technology Solutions Event

By Dave Stelzl's Blog Leave a Comment

Categories: Sales Strategy
Tags: David Stelzl, hiring sales peole, marketing plan, roi, technology keynote speaker

At the Buffalo US Airways Club

This morning I had the honor of presenting to a group of business owners and sales professionals at Ingram Micro’s Technology Solutions Conference in Buffalo. I covered material from my, soon to be released book, From Vendor to Adviser…how do sales people move from point product selling to high-involvement selling; how do they reposition themselves as an adviser. People have been talking and writing about this for decades, yet it still seems to be a hurdle companies have yet to overcome. In a sidebar conversation I was asked, how long should it take a rep to ramp up? This business owner was asking, “If I hire someone to sell, how long should I give them to start producing?” This is a great question, and one more people need to be asking. Whether you yourself are that new rep, or you oversea a team or company, hiring and getting started with a new company in sales is no easy task. Some thoughts are worth considering:

1. Watch out for Retreads. I use this term when referring to sales people who were, at one time, big hitters. They may have managed large accounts, worked for global companies, and earned significant commissions and awards; but for some reason they failed to keep pace with the industry. For the past decade (perhaps) they have been hopping from one company to the next, or maybe the company they work for continues to employ them, but they can’t seem to close. Don’t become one, and don’t hire one. The technology industry moves fast, and old experience is just that; old. I doesn’t matter how old you are, it matters that you are a learner – innovative, creative, hard working, and a student of this industry.

2. Forget the Rolodex. If you’ve worked in sales long enough you may have actually used a Rolodex. Does anyone know what this is anymore? The point here is, don’t expect to find a rep that has numerous contacts who are ready to buy as soon as you hire. It happens occasionally, but don’t count on it. Instead, your company must be prepared to help with lead generation at some level.

3. Lead generation requires marketing. If you run or work for a smaller reseller, like many in today’s session, you can’t expect to hire someone who will go out and generate new leads, with enough GP to make it big in the first few months. I recommend companies hire with a marketing program in force. Paying base salaries, benefits, and guarantees to someone who is going to start from scratch using the Yellow Pages, is a slow way to start in this business. Plan events, webinars, and other marketing campaigns, and hire people while in process. Having a list of qualified leads is the best way to help someone ramp up their territory.

4. The Mentoring Process is important. Michael Gerber in his book, EMyth Revisited, does a great job of explaining what happens when managers hire in new people without any formal ramp up process. While it may seem expensive to ride around with your new rep, send them to some training, or hire a sales coach to work with them (one who understands your business already), the cost of not doing this is higher. Hiring people who take a year to ramp up is far more expensive, and if they don’t make it, you’ve spent a lot of time and money on nothing.

5. Careful who you hire. Learning to interview is one of those things few have gone to school on. It seems like hiring is supposed to just come naturally to those who manage, but this is far from the truth. Years ago, when I was running a large consulting and sales team, I spent a significant amount of time training people to hire great people. This was one of the best investments I have every made.

Jul

Your Marketing Plan Matters

By Dave Stelzl's Blog Leave a Comment

Categories: Marketing
Tags: business plan, David Stelzl, Marketing, marketing plan, planning, roi, sales meeting speaker, security speaker, technology speaker

The Importance of a Plan

Recently I have been working with a couple of different companies on marketing and business plans. This morning, while preparing for a two day meeting with a security software company in Florida, it occurred to me how important it is for every sales person to have a plan in place if they aim to grow their business. Hopefully this will help you put some structure to your next two quarters as we finish out 2011.

You plan should contain some or all of the following:

1. You strategic aim or vision. This is where you are personally headed with your business – your long term goal should be to run an account team (including dedicated presales, inside sales, and admin). You may think this is impossible with the company you work for, however, it’s always a question of return on investment – your management thought you would quadruple sales, they would dedicate some people to you. Even if you are a hunter, you still want to be running a hunting team. To do otherwise is to set yourself up for starting at zero every quarter for the rest of your life.

2. Your niche – what will you be the adviser in. I have written much about this topic, but here you want to identify it. So stop and write something down, edit it later. Where is your focus, and where do you specialize?

3. Your people group – again, stop and write this down. Who do you love calling on, and where will you focus your growth. You may not have complete control over this right now, but put it down and work toward it.

4. Identify your key competition. Often when I ask, I hear, “We don’t really have any competition,” or “IT is out primary competition.” While that may be what seems right, it really isn’t. Know who is out there, and what they say is their value proposition.

5. Pricing – study and understand fee setting and write down some guidelines for yourself on how you will set fees, where you will discount, and under what circumstances. Also, have a plan to learn negotiating skills and work through it in the coming months.

6. Identify key partners; if you resell, include vendor sales people in your region that you can help, understanding that they will often bring you into deals and promote you as the go to channel partner once you establish loyalty. If you are on the product side, the same is true with channel partners. Plan to make this model work.

7. Plan out campaigns and events. Encourage your company and partners to join you in setting up events, speak at local business meetings, write articles, do press releases, and set up webinars. Have a marketing strategy to take this program forward. Also, get a strategy on how to leverage social media – everyone is doing, few understand how.

8. Put a plan in place to build your pipeline. This should include time with existing customers, past customers, and new prospects. Each should be approached differently, but a plan is needed to balance your time and think through your approach.

Print it, update it, use it.

Jul

David Stelzl Talks about Closing the Sale – and Why Some Deals Don’t Close

By Dave Stelzl's Blog Leave a Comment

Categories: Sales Strategy and Video
Tags: channel manager, David Stelzl, event, partner summit speaker, roi, sales trainer, security, selling technology, speaker, tco, technology motivational speaker, training, Value Proposition

(You might have to turn up your volume on this – the audio is weak)…Why do some deals look good, then stall out? In this short clip I explain what it is that makes deal justification strong, and where things fall apart. I invite you to share your comments and experiences.