Archives For Sales Strategy

biometricsHow to Make Assessments Worth Selling

Think Like An Investor When Pricing

Most people invest at the wrong time (according to the Billionaire Investors Interviewed by Tony Robbins in his book, Money, Master The Game).  They jump on the bandwagon when things are high, and they sell when the market drops.

Running a for-profit assessment team in the early 2000s (for a global technology integrator) was more a lesson in financial management than sales for me.

Assessments are often sold at prices that leave little in gross profit.  Free assessments tend to offer no value, and simply leave the prospect disillusioned. And only a handful of these heavyweight documents ever result in any long-term financial gain.

Today I Want To Change This Lack-Luster Profit Prophecy Once And For All!

Here are Three Things to Consider That Will Change Your View of Assessment Profitability Forever.

  • Free Assessments Can Offer Some of The Greatest Returns on Your Investment.
  • High-end Assessments are Expensive To Sell – The Real Profit Is In The Aftermath.
  • Every Assessment Should and Can Lead to Annuity Business.

Free or High Stakes – Which Has The Bigger Payoff?

In my workshop, The Security Sales Mastery Program, assessments are central to the sales process. I covered some of this in an article on scope last week

When I bring up the idea of using free assessments to drive business, I often get pushback. In response, I offer up three examples of assessments I was personally involved in. Let’s take a look…

(Get More Details in My Book, The House & The Cloud)

The $125,000 Hospital Assessment

This first example comes from a large hospital assessment, sold and delivered in the southeast. If you know healthcare (and you work in security) you know it’s a match made in heaven. Lots of needs, endless compliance regulations (many unmet), and an industry with deep pockets.

Our assessment was priced for profit. It took a total of 40 man-hours onsite, and another 40 man-hours of analysis and documentation.  Total burden cost, about $10,000.  $125,000 with a cost of 10K is high margin business, even to lawyers.

However, there were NO follow-on projects.

It’s our fault!!! Back then I did not understand how to create business from an assessment. Most don’t – the conversion rates from assessments like these are low, averaging about 20 percent.

So our total gross profit landed at around $115,000. Not bad for a two week effort. However, the upside potential (had we closed just one of our recommended changes) would have more than doubled our take.

The $36,000 State University Assessment

The university deal was won on a last ditch effort to get in the door. The university was looking at a number of projects to upgrade both the administrative and student networks, however, largely undecided on their direction.

On the way out the door I casually suggested an assessment might bring clarity to their needs, and to my surprise, they agreed. A few days later we signed the $36,000 agreement and scheduled to begin work.

Our team spent about 3 man-weeks on this initiative, engaged with the IT team on campus. When the report was complete, a meeting was scheduled to review our findings with the university’s key stake holders.

Just 5 minutes into it, the leader of the pack put our document on his desk in a sudden pause, and complained, “This is not what we asked for.”

Keep in mind, our three weeks were spent, side by side, with their IT people. They were basically leading the charge…and here we were being reprimanded for missing the mark. As you might have guessed, the IT people stood back, nodding, as though they had nothing to do with our missing the mark. They effectively hung us out to dry.

The meeting ended abruptly, and the invoice was NEVER PAID.

Final gross profit: ZERO DOLLARS. Very disappointing…

Free Assessment: Thanks For Attending This Business Leader Event!

Finally, there’s the dreaded free assessment. My classroom example offers a total of five pages, including the cover letter. This particular example-giveaway was offered to small business owners on the heels of an educational event. Our audience was well qualified – mostly healthcare.

Our total time spent marketing and selling: About 2 Days plus a few days of phone follow up using call scripts from a product on my webstore

At the close of our risk-measuring initiatives (we closed about 30 assessments in that one event – in just 60 minutes!)…

One of the larger prospect-companies signed up for $36,000 in remediation work, signed an $8,000/month – 3 year agreement (and renewed for 3 more years), and went on to do at least two more projects worth $100,000 in revenue (figure 50% burden on projects and manage IT Services).

Total gross profit: $356,000 (and still going)…

It’s important to note the cost of sales. The first two projects required 3 to 6 months of selling. The third, 3 mailings, a couple of days on the phone (done by contractors),  1 live event (with speaker), and about 4 days between starting and delivering the assessment.

Which of these three deals would you choose to get paid on?  If you own a technology business, which would you choose to build your business on?

The Free Assessment Worked, So When Do You  Charge? What Would The Investor Do?

There is a time to charge!

So don’t just read the first half of this and think, “He always gives them away.” Free is RISKY.

Free requires the right audience, and a predictable conversion strategy – it requires knowing how to drive business through an assessment, just like choosing the right asset allocation has everything to do with an investor’s success.

All investments are tied to risk. Your paid assessment is largely a paper document, with a big price tag…If your paper offers tremendous value (like a stack of green paper with government markings on it) it’s worth a lot. On the other hand, if it has my child’s markings, it’s only worth something to me.

I’ve seen free assessments work in all size markets, however, as you scale the corporate ecosystem, closing gets harder. Client expectations grow as you engage with the more sophisticated organizations.

So, if the ROI looks great, you can afford to do assessments for free or for less. However, the likelihood of getting that follow-on business from a new, enterprise prospect is much lower than it would be in the SMB (Small/Medium Business) market.

So, in the larger markets, assume you’re going to charge when you assess.  But charge enough to make it worth your sales and delivery time.

Enterprise deals (like the first one mentioned above) are margin-rich. However, as you can see, we didn’t achieve our goal of long-term financial returns.

So, while the margin was high, the cost of sales was also high.

If you’re the selling agent, you may not care – you still get your fat commission check. On the other hand, if you get paid on bottom line performance, suddenly it matters.

How much does a 6 month sales cycle cost? Drive time, office time, lunches, etc. It all comes straight off the bottom line. Not to mention benefits, base salary, and opportunity costs associated with the seller.

In the SMB market, the financial picture is completely different. Small business prospects rarely spend much on remediation, however, the IT Services deal is there (unlike most enterprise accounts), so there’s your long-term profit.

There’s one more factor though. And it has to do with account control. Every sales person knows that controlling the deal is essential to the close. As soon as you hand in a proposal, you’re at the mercy of the prospect.

In the case of an assessment, once a contract is signed (with a fee attached), you no longer control the deal.

Don’t miss this…

Assessments are like proposals. Unless your company is highly specialized in audits/assessments (with high-end and frequent assessment/audit business), your quota achievement depends on closing follow-on business (projects and managed services). The fee-based assessment is controlled by the buyer – reducing your assessment-deliverable to a quote.

That’s were I went wrong on the University Deal…

IT was in charge – My team was directed by them, and executive involvement was not part of the plan. Yet, an asset owners’ inputs are the most important part of understanding risk! Without Asset Owner Understanding, closing follow on business (with a new prospect) is nearly impossible.

Assessing risk has everything to do with assets and their owners. Their business will live or die based on asset exposure and a realtime detection/response to cyberthreats.

Without leadership involvement, you can’t possibly understand the company’s data value, most crucial systems, and greatest threats. How often do IT staffers know how much down time can be absorbed or how much data can be lost before shareholder value is impacted?

Sure, IT has an opinion, but to deliver risk, your process must look more like a Business Impact Analysis Report than a typical Vulnerability Assessment.

Here’s the thing. When the assessment is free, you’re in control. What does that mean?

Since no one is paying you, you have the right (and authority) to proceed according to your recommended approach. If you’re wrong, you’ll pay for it on the back end. If the client balks, you can always stop the process. It’s free, so you’re in control.  Do it right, and business will follow (along with profits).

When money changes hands, the buyer is in control. If they want you to submit questions and take their written answers (without any face time), it’s their choice.

Since all sales have an emotional component, you know that face time is important to any high-involvement sale…even if that face time is virtual. There has to be trust and advice to be a trusted advisor. And that requires interaction with those making the decisions.

The final analysis – in the SMB market, lead with free assessments almost every time. The $500 to $2500 price tag on SMB assessments leaves no budget for IT services, and will take months to close.

In the enterprise, carefully weigh the risks, and what factors must be present to take on the risk of assessing pro bono. If the cards are stacked against you, go with the fee based, and sell them on the high-ticket approach to ensure your profits are worth doing the deal. Remember, you need asset-owner involvement to justify any assessment worth doing at this level.

Every Assessment Should Be Ongoing Business – Here’s Two Ways To Create Annuity Business

The biggest upside in both free and paid assessments is in the ongoing annuity business.

There are two ways to create annuity business with assessments (and maybe more that I haven’t thought of).

First, let’s look at the theory. Risk is a measure of impact vs. likelihood. You can’t affect impact; losing data or suffering downtime is going to cost the company, no matter how secure the company is.

Your variable is in likelihood. Solid security lowers likelihood (however, even GREAT security does not eliminate threats).

The assessment identifies (at least it should) the threats, and provides a measure of likelihood. Remediation is the process of reducing the likelihood to an acceptable level.

Managed services or MSSP, is your program designed to maintain an acceptable level of risk over a period of time – your long term annuity engagement.

So the first way to sell ongoing business through assessments is to demonstrate an organization’s unacceptable level of exposure, provide a way to reduce it.

And then show them how to maintain it by contracting with you to oversee, or detect and respond to issues as they arise.

The second way, generally better geared for enterprise accounts, and using fee based assessments, is to sell a quarterly update.

Keeping the same scope, and simply updating the document quarterly, can provide tremendous value to the client that houses sensitive data.

Two up-sells come with the ongoing assessment approach.  First, you’ll get a quarterly opportunity to check in on your recommended remediation steps. Over time, and given you are providing value, your client is likely to engage you to keep working on your recommendations as threats grow.

Second, the scope is likely to change over time as new IT initiatives invite you to consider added systems as part of your analysis.  One additional bonus, you’ll be up on all your client’s latest planned initiatives since new projects always affect the client’s security risk analysis.

Going forward, add this quarterly update with just enough money to cover your added cost (in other words, do it at break even). It adds value, costs you nothing, and offers great upside.

© David Stelzl, CISSP

 

00b4a67There’s Big Money In Risk Assessments

If You Know How To Sell Them…

But You Must Start Here If You Plan to Succeed:

A couple of weeks ago I wrote about free assessments – an incredibly fast (yet misunderstood) way to create business, when the prospect doesn’t understand their true needs (which seems to be more often than not).

The question is, is there a time to charge? And if so, how much, what scope, where do you start?

In this Part I article, I’ll show you where to begin when creating new business through fee based assessments…

What Your Client Needs, and Where to Begin Your Sales Process

First, it’s important to start where people are, and then take them to where they need to go. In other words, you can’t sell someone what they need, when they don’t yet know their needs. Great marketing starts by understanding the buyer’s desires, and then reframing that prospect’s thinking.

Most larger (fee based) assessment opportunities start with an IT person. If the prospect-company lacks an IT group, they’re probably too small to command a reasonable price for assessing. In that case, I’d go back to FREE ASSESSMENTS and sell them the recurring revenue-managed services & security program. That is what they really need…

Think Like a Psychologist, And Listen to Your Prospect’s Pressing Need…(But Don’t Sell Try to Sell Them Anything Yet) 

When asked to quote an assessment, you might be tempted to jump in and start your discovery; how many firewalls, how many servers, do you want applications assessed too?

This is the wrong approach!!!!

Leading with technical questions, leads to competing on price.

The IT person has something in mind…is it a true risk assessment? Did they call it something else; Pen Test, Vulnerability Assessment, Audit, etc. Do they know the difference? (Probably not).

Establish your contact’s desire first. Ask them…What is it you’re looking for?” And, “WHY do you need it?”

This second question is the more important question (WHY). Expect answers like, “To see if we’re secure,” or “To show our clients we are secure.” You see the problem here?

First, you know that there is no such thing as being “secure”. Second, the assessment is only going to reveal problems this company didn’t know existed. So the idea of certifying your buyer’s infrastructure is a fallacy.

It’s time to reframe (EDUCATE)!!!

Find out where this request is coming from and what’s been done in the past.

ASK THEM:

  • Is this request coming down from the CIO? The Board? The President?
  • Is there a compliance requirement here, or is this just about internal data security?
  • What are the stake holders looking for in terms of a deliverable? Have you done this before? (Getting a past deliverable can be invaluable).
  • Who else are you considering for this project (This is a key question most are afraid to ask)?
  • And be sure to ask about their selection criteria!

Avoiding the Price Game – And The Steve Jobs Wanna-Be

Chances are your IT contact doesn’t really know what’s going on. He needs an assessment or pen test, and probably doesn’t know the difference. At this point he’s looking to you for a comparison quote.  The last thing you want to do is give him what he’s asking for.

Your IT contact is just a cog in the larger wheel of technology bureaucracy. (Note, if your contact is actually part of a security team, the approach will be different.

I’m specifically talking about IT here – and I started my career in IT, working for two different F500 companies. I’ve seen this from the other side. Don’t over estimate what IT knows about security.

If you simply respond to a bid, or scope out what IT is requesting, the buyer will have nothing to match your price against (in terms of value) other than your competition’s bids and his budget.

Comparison’s against anything other than established need and value are meaningless, and simply lead to price wars.

In every competitive deal there’s at least one guy working out of his garage, offering low-ball prices (and they’re not Steve Jobs or Steve Wozniak). You don’t want the truck-slammers of the world to be the yardstick by which buyers vet your price.

Reframing Your Prospect’s Thinkingimpact-v-likeihood

Here’s what happened the last time I worked on a competitive assessment deal…

I was hired by a reseller to work closely with their sales team as a coach/advisor…

(Years ago I had built and led the Security Team for a large global integrator, where we primarily led with assessments – so this call was not new territory).

As expected, our new prospect was looking for an assessment – in his words, a vulnerability assessment. After going through the steps outlined above, we began our reframing process.

First, we asked him, “Do you know what your board is asking your CIO for?” His answer was predictably vague. How would he know?

Next, my client (the reseller) drew the Impact vs. Likelihood Graph on the whiteboard (Page 194 in my book, The House & The Cloud).  He began to review the five things board members demand:

  1. What are our most important data assets, and where are they?
  2. What are the odds we’ll suffer some major intrusion or outage?
  3. What our estimated impact?
  4. How are we working to minimize this risk?
  5. Are we getting better or worse over time? How are we managing to it?

Get the House & Cloud Book for $1.00 – Limited Time Offer

Time To Bring Out The One Thing That Sets You Apart From the 13…

Without calling out our competition (never a good thing to do), we began to describe what most vulnerability assessments look like, how they’re approached (something for a future article), and why they aren’t going to satisfy the board’s request.

At that point, my client (the reseller I had been working on the House & Cloud Concepts with) pulled out a sample deliverable (with no intention of leaving it with the prospect) and began to go through the type of deliverable that would make an IT Director a hero…

Deal closed…Well, There’s more to it, but this is just Part I of a predictable assessment sales process designed to front-end big profits and future business.

© David Stelzl, 2017

 

canstockphoto6246530

Your Risk Assessment Is The Fastest Way to Drive New Business, But Only if You Follow This Formula…

On one hand, risk assessments are a great way to start an engagement, or close a sale. On the other hand, they offer great value. Should you give all your value and insight away???

It’s a hard question that demands an answer!

The Point of Assessing Risk Is…

Several weeks ago I wrote an article defining the assessment (if you’ve not read it, I recommend going back to better understand the truth behind assessing risk and growing your business).

The bottom line is, Assessments are like health checkups. If the patient has URGENT issues, yet chooses to NOT take action, the doctor’s efforts are wasted.  Even more, if most of that doctor’s patients never enter treatment (and are dying), he has failed.

(More on the Assessment Sales Process – Pg. 194, The House & The Cloud)

If there are urgent issues, action is required.

And it’s your job to sell the customer on taking action – not for money, but for the livelihood of that customer’s business. With remediation in mind, your risk report is a marketing document. You goal is to sell your customer on doing something!

Amateurs Focus On Front-End Selling

When I hear, “We don’t give away the assessment”, I think to myself, “Amateur Thinking”. Front-end, is a funnelology term – It is the process of capturing a lead and ascending that lead up your value ladder.

The sales process starts with a lead magnet (some freemium offering) to attract qualified prospects (Think: Opt-in). You provide value and your buyer wants more. So they ascend over hurdles of indecision to the point of becoming a buyer.

Some prospects will drop out immediately, grabbing the free stuff and moving on (grab and dash). It’s okay…I’ll explain in a minute. Others will buy your initial offer, or perhaps engage with you in basic managed services (New Customers).

A select few will become hyper-buyers…your best customers. Hyper-buyers buy whatever you recommend because they see your value and trust you to advise them.

The front-end has to be easy (think, free or close to it). You might offer a white paper (which I seriously don’t recommend). Better choices include, special reports, quizzes, assessments, lunch & learns, etc. 

Some front-end options convert quickly. Others, not so much. Signing up for your mailing list or free e-zine doesn’t make much sense these days. No one is choosing to get more spam email.

All great front-ends cost money.  The idea is to spend your money with ROI in mind. The company that can spend more upfront (marketing), and still measure a strong return on the back end, wins.

Did you catch that? You’re not trying to minimize the front-end cost (or your marketing budget). You’re trying to maximize conversion and ascension.  If your backend works, you can spend more upfront, beating your competition.

The assessment may be costly, but done right, it can have an extremely high ROI on the backend.

Qualified Prospects Only

Conversion (like getting people to a lunch & learn) is one thing, converting from free to fee is another. You don’t want to invite people for a free iPad…you’ll end up with a bunch of IT folks that want free gadgets (these are not buyers).

If you want qualified prospects, you won’t give your free assessment to just anyone. And that means you won’t advertise it on your webpage. Freemium means high-value and special, and should be guarded.

To qualify, you want to have a freemium offer, like an assessment, and have a clear avatar of your target prospect.

Let’s say its the SMB business owner with 25 to 250 users. Inviting that person to a lunch & learn is a qualifying step that gives you the opportunity to actually meet face to face. It’s costly, but if your conversion is high, you won’t care.

Then converting them (given the right message in your lunch & learn meeting) is easy…We’re converting over 90% right now with a security message designed to instill urgency. It leads to an assessment – we offer this analysis right there in the meeting. But our description is vague…on purpose. You see, we have one more step; it’s a phone call.

On our initial call we have the opportunity to ask them about their business and their role. If they turn out to be someone other than a qualified buyer, we make the assessment a simple over-the-phone questionnaire. If that person is a business owner, in charge of a possible qualified company, we move forward.

Our assessment engagement involves that decision maker all the way through to the deliverable. If our key contact (asset owner, I call them) drops out at any point in time, we stop the process.

Our conversions to business range from 60% to 80%, and our sales cycles averages a couple weeks to a couple of months. (But not 6 to 9 months). These contracts range from $1000 to $5000/month, with a 5 year expected lifetime value. So how much can I spend on customer acquisition (in this case a lunch & learn and assessment)? Do the math, it’s a big number.

Selling The Free One Isn’t Always Easy

But there’s still one more hurdle. Selling free assessments has it’s challenges. Free sometimes means no value. And getting that initial meeting may also prove to be a challenge.

The 60% to 80% close rate is attractive, so I know I want to sell the risk assessment. I am willing to give it away, because my ascension process works predictably well, and the ROI is there. I can afford it and the return is evident.

However, the assessment can’t be the first step in my sales process (or funnel).

Most of my clients sell assessments by using something upfront to attract clients. eBooks, followed by webinars, with an offer to assess, can work. Live lunch & learns, using a hard copy letter invitation work extremely well. And any excuse to get a meeting (such as referrals, product or quotation requests, etc.) can be turned into an assessment.

In my book, The House & the Cloud, I explain how to transition just about any meeting into an assessment (chapter 13), and then later in the book (Pg. 194 – 200) I explain how to move  through the assessment in a way that engages asset owners, and leads to a sale.

The most important thing in this whole process is to track your conversion metrics. Make sure you are at least breaking even. Once you break even, start tweaking your funnel to modify and grow your ascension process.

As you perfect your conversion metrics you will be creating a long term, predictable profit machine.

©2017, David Stelzl

Get more insights on this process in my book, The House & The Cloud..limited time offer $1.00! / Free Shipping in the US.

 

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Do You Have a Solid List to Sell To?

Not Having a Great Prospecting List Just Might Be The End of Your Business Success…

If not, this one weakness may be the thing that keeps you from hitting or exceeding your 2017 goals. This post is my first post of the New Year, so let’s kick this year off with a plan to 10X the business you’re in!

13 Years ago I started my company (Stelzl Visionary Learning Concepts) using a list handed to me by a security product manufacturer. 250 names of companies that would benefit from my offering, if only I could reach them.

I was excited…

After all, lists are expensive and often filled with misinformation. My newly acquired list was clean, up-to-date, and accurate. One problem… I didn’t (at the time) know what to do with it. I emailed each prospect. I also tried calling…I took a great list of names and  turned it into sales resistors.  Now what????

Not one turned into business (at least initially). I was approaching sales like a junior sales rep, not a marketer. I was doing what most sales people do – calling repeatedly (pestering people I don’t know) to get them to buy something.

Business was slow, but I learned a valuable lesson. My friend’s list wasn’t my list.

If you want to sell more, you need one of two things. An organic list of traffic you own, or a way to convert a cold list (or cold traffic) to a list you own. In both cases you need a list you own  But I’m getting ahead of myself….

New Year, New You, New Way To Sell

Conversion: Building a List of Qualified Leads You CAN Sell To

There are four kinds of  traffic (think of each name on your list as “traffic”).  They are:

  1. Traffic you don’t own of control
  2. Traffic you control
  3. Traffic you own
  4. Traffic you used to own (which is like traffic you control but different)

What you want is traffic you OWN…so stop cold calling and start list building…

You’re in sales. And the more traffic you own, the more people you can direct down paths that lead to solutions, and profitable business. It’s win/win. And a win turns a profit. But without the conversion process, you’ll just be cold calling…

The other two types of traffic are made up of people you MUST convert to traffic you own (if you plan on growing your business this year).

Traffic You Own is The Best Traffic To Have – So Let’s Start Here…

Let’s take look at traffic you own. I love owned traffic…this is my personal list. A list I have nurtured and pruned for over ten years, with thousands of names on it.

These are the people  who have opted in to my mailing list or marketing process.

Perhaps they’ve bought something, they’ve downloaded a special report, or attended a live event. They know me by name, and have opted to give me their name and email or phone contact information. Do you have a list like this? If so, how big is it. More importantly, is it growing each month?

If you have a compelling value proposition, and you have nurtured your followers, chances are most of them will eventually do business with you in some form or another.

The key is nurturing, educating, and offering relevant solutions along the way.  Fail to nurture your group, and your tribe will fall into the abyss. Every neglected name eventually becomes  “traffic you used to own”.

In 2007 I taught classes for Cisco direct sales reps around the world. I collected hundreds of names. But lacking the automation necessary, I failed to keep up with each individual.

Occasionally I would send out an email blast but more often than not I would get “Unsubscribes” and complaints about spam. People who had once opted-in for more information and training updates had forgotten me. That’s my fault, not theirs.

Bottom line, you want more traffic you own, and you need a way to keep up with each potential buyer, farming like you would a crop of high-margin, grass-fed beef.

Then There’s Traffic You Control – Another Group I Love

You control traffic when a person subscribes to your blog, Likes your Facebook page, or follows you on Twitter.

When I do a joint venture webinar with Ingram Micro or Speak at the Avnet Partner Summit, I am in front of traffic I don’t own but can control.

In my recent Ingram Micro sessions I converted 90% of my “Controlled Traffic” to “Owned Traffic” using a simple opt-in strategy…and a conversion strategy is exactly what you need if you want to own more traffic.

Notice here that Traffic You Control is highly valuable, and the conversion metrics can be extremely high…

Using lead magnets (such as a video or special report) work well. In my recent 90% conversion event, I used a Text Msg Opt-In to a summary video of my session. It worked like magic…

Over the years I’ve tried all kinds of conversion methods, including handing out cards and brochures, passing around a newsletter sign-up list , and back-of-the-room book sales. Back-of-the-room usually converts about 20%. Following up cards converts 2%.

At an event years ago I offered a free onsite coaching session following my breakout. The conversion was low, but the business I closed was easy and extremely profitable. Some of those clients have been with me for over ten years now.

But the Text Msg Opt-In has by far been the most effective (I’m using FixMyFunnel to convert these leads).

During reseller Lunch & Learn events I doing something similar to convert. The attendee is converted from controlled or uncontrolled (which we will get to in a minute) to owned through a hardcopy letter campaign (Yes, you heard me right – hardcopy snail mail sales letters).

The event itself is an up-sell campaign delivered to controlled traffic. Our conversion with owned traffic at live events is nearly 100%. Notice that we needed to convert them from controlled and uncontrolled to owned before the up-sell could take place. So we are going from hardcopy letter, to event, to assessment…and on to MSP contract.

Finally There’s Traffic You Don’t Control – Not As Good, But Good To Have, If You Can Convert

Even though my new list was clean, the names on that list were uncontrolled traffic. They didn’t know me, had not visited my site, and had not been referred to me. My list was no different than an expensive magazine mail list.

Other examples include Social Media sites like Facebook or Google+. LinkedIn searches, guest blog traffic, youtube channel views, and organic traffic to your website offer more examples.

Converting uncontrolled traffic is similar to controlled traffic. You need a lead magnet.

Right now my oldest son is looking at various sales positions as a next step in his career. We were talking the other day about prospecting and I pointed out that finding traffic and converting it is the place to start. If you’re employer hands you a list of 300 names to call on, that last thing you want to do is start cold calling them to set up an introductory meeting.

Doing so will likely chase those people away. Better to find a lead-magnet they’ll want, and get them to opt-in. Do exactly what I did at the Ingram Micro event. Offer content and a way to get more. Then, once converted, create an ascension path just like the one I created at the Ingram Micro event and target that 90% conversion rate.

Coming later this month, I’ll be discussing how to build effective lead magnets and conversion strategies that will both build your list and create ascension to higher margin solutions you offer.  Stay tuned and feel free to post questions right here…

© 2017, David Stelzl

P.S. Transformation is here – that means security opportunities abound…are you ready?

 

img_4248What’s Your Value Proposition?

Have You Ever Tested it With Customers?

Or are you just going off what some other seemingly successful VAR is doing.

This business is incestuous.

Resellers meet with each other quarterly copying each other’s ideas without actually testing anything.

It’s also deceptive. 

The 1 million dollar reseller looks enviously to the 10 million dollar reseller for direction. But the fact is revenue is meaningless with privately held companies working on single digit margins.

Everyone Has The Same Value Proposition, “Our People Are Better”.

At Ingram ONE this week I’ve met with numerous resellers. It seems like everyone has the same value proposition. Some more sophisticated or sporting bigger certs but at the end of the day everyone looks the same on paper.

Is Your Marketing Working? What About Sales?

Conversion is the measure of success. If your website doesn’t pull in leads it’s broken. If your assessments don’t readily convert to business they’re useless. If your first meeting presentation doesn’t convert to something great it should be trashed. And if your prospecting efforts (cold calling or whatever) are not landing meetings it’s time to reengineer the process.

There are 4 Value Propositions,  Only 2 Work…

in this economy. I list all four in The House & The Cloud, however these two are what you need to know:

  • Risk Mitigation
  • Customer Experience (a form of competitive advantage)

The second points to custom software and digital connectedness with the customer. It’s Amazon morphed into whatever business you’re calling on. The other is minimizing risk.

Different types of risk exist in different vertical markets. The bank is more concerned with account balances being off. Healthcare wants to know life support systems are up and patient privacy is sure.

Stop thinking your people are better, your workflow if more efficient, or that your IT Service Offering somehow provides a more efficient way to handle IT.  It might all be true, however the business owner or CIO is not going to see it as unique.

© 2016, David Stelzl

Process Creates Profit

October 11, 2016 — Leave a comment

processAre You Maximizing Profit w/ Process?

Sales Is a Process That Must Be Built and Perfected

It’s tempting to wing it – shoot from the hip. A small percentage of sales people just seem to hit it out of the park without thinking or strategizing beforehand. But process always outperforms the average.

Jim Collins, in his book Good to Great, told us that even an average process would outperform the average player.

In my Event Marketing Success Kit, I introduced a concept called the conversion blueprint for sales. A flow chart that moves sales reps away from flawed methods like, make 60 calls per day to get 1 meeting…and close a percentage per month.  Instead, I’ve systematized the process of attracting new customers, taking them through a series of steps that create justification and ultimately a decision to buy.$1 HC Book Ad

If one point of conversion is too low, there are strategies that can be used, and tips given to perfect that point. I’ve also given average conversion rates on each, giving the rep something to compare their success to.

It’s been said that the low income earners are working hard while the higher income earners own processes. McDonalds hires and trains low income earners while those who designed and improved the process have done very well for themselves. While sales is not like building burgers, it is a process that can be systematized.

Getting Started with Process

Need a place to start? Selling everything to anyone leads to hard work and chaos. On the other hand, finding an something to lead with can save you time and offer greater value through specialization w/ higher close rates.

For instance, if you know the assessment always leads to business (or converts 60% – 70% of the time as a client told me yesterday), then you know your system works best when you focus on moving people to the assessment first. From there you can branch out into many directions, but the sales are in motion at that point.  Your income naturally goes up.

As Collins points out, the process doesn’t have to be perfect. Better to start with something and tweak it as you go. Eric Ries, author of The Lean Start Up reminds us to build, measure, learn. Rather than building the perfect mousetrap the first time around, get something on paper, begin to work it, and perfect it as you go. In the end you’ll have a much better system.

For more on how to build the right systems to drive margin rich IT services, check out The House & The Cloud…The only book I know of that explains how to sell security services with a simple, easy to implement, sales process.

© 2016, David Stelzl

 

 

graph-going-upHow Long Has Your Company Been This Size?

Can You Multiply It?

In 1995, I joined a couple of guys to build a new commercial focused reseller. Our vision was big. We were funded by an 8 million dollar CAD-CAM reseller, but we expected to exceed this by 10X…

So How Do You 10X Your Business?

First, it takes a lot of work ON your business, vs. being bogged down in the daily grind. There’s a tipping point, or fly wheel, or whatever you want to call it, depending on whose book you read.  Three things that accelerated our growth are important, because they still apply. NewsProCover

RETENTION and MARKET FOCUS…even in the mid 90s we knew we needed recurring revenue and long term clients. Getting a client takes time, but keeping one is far easier. (Check out Shaun Buck’s Book on newsletter marketing for more ideas on client retention – It’s free if you use this link).

Customer experience is a hot topic right now in every business. But the key to our success was problem solving. We weren’t going after the firewall sale, or even the storage sale. We were there to solve problems. When you solve a problem, people take notice, and retention goes up.

The first step might be surprising. It’s going after the right kind of customers. I call this people group. Even today I can point to profitable deals that didn’t create long term business, simply because the client was too far outside my target people group. It’s fine to sell something to someone outside your core market. But don’t spend time marketing to that group. Let them come to you. Take down the business and assume they’ll be moving on. Whatever you do, don’t rebrand your company overnight to find more like that.

The same was true in our 1995 start up. We sold 10s of millions of dollars to one single customer in one single year. But the chances of landing more like it were nearly zero. Not everyone agreed with me on that, but over the 5 years (before the company was sold,) those who tried never succeeded. It was a wasted effort.  On the other hand, those in our target market were by far our most profitable clients.

MAXIMUM LIFE TIME VALUE…next is understanding the lifetime value of a customer. A few weeks ago I entered an ice cream store with my family. Now we have 9 people in our family, so when we buy ice cream at a boutique, it’s a large ticket sale. But in the course of ordering, the owner yelled at my 8 year old son. My son was tired, not feeling well, and accidentally wandered behind the counter looking for a restroom.

Not believing my ears, I confronted the store owner – at first politely. But he remained stubborn, so we all walked out. What did that cost him?  He might be thinking, $30. But no, it’s far more. We travel by that store on trips pretty often. The lifetime value (LTV) far exceeds that $30. Customer experience is essential if you want to increase LTV. What about your business. How long do clients stay on your managed services? What if you increase that average by just one year? What happens to your profit?

When a new client comes on, you need a real problem to solve, and an experience they won’t forget. You need long term retention.

GROWTH AND UPSELL…Finally, the 80/20 rule says that 20 percent of your customers are worth 80% of your revenue. So what can you add for those premium customers, to give them a premium service?

A one off sale does not lead to growth. So start thinking, what can we add to provide higher level services, with recurring revenue, which ultimately increase LTV?

Let’s say you have a base MSP offering of $X per workstation – let’s say you have 100 of these. 20 percent of these customers are going to pay enough to make up 80%, so give them something more expensive to buy.  But don’t stop. The 20 customers are paying a multiple of what the other 80 are paying – and of course getting something far more valuable. But 20 percent of that 20, or 4 of them, will pay enough to make up 80% of the profit coming from the 20. In other words, you can offer a higher level service to the 4, worth a multiple of what those 20 pay.  But wait, there’s one more step – that last 20% is one person, willing to pay for one more level of service.  So go ahead and create one.

If you do the math now, you’ll see that this 100 person group is now worth far more than they were with the original MSP offering.  As your business grows, the group grows, and new levels get created, growing your business.  It took us 5 years to hit the 10X mark. Of course this takes people, time, and vision…but there’s no better time to start than right now.

© 2016, David Stelzl