Forget talk; STALK your customers

Paul Black, co- founder of sales-i, argues there’s no shame in knowing your customer’s shoe size

As the economic slowdown really starts to bite, and sales teams delve deep into their consciences about wasting fuel on poorly planned customer visits, market analysts are reporting a new peak in interest in customer relationship management (CRM) aids.

Here at sales-i that trend is becoming ever more evident as more and more of our clients are now making use of our inbuilt CRM functionality. This gives them sales record background information about customers; keeps track of client interaction, while also giving complete visibility of sales and customer buying behaviour with our core sales intelligence system.

When times are hard, deftness is crucial. Sales teams need to pull every trick out of the bag to secure repeat orders and increase their penetration in existing accounts.

If a customer has been complaining to the customer service desk about a faulty printer, or has indicated a growing interest in rival supplier promotions, your best chance of turning the situation to your advantage will be if you are armed with this information ahead of your next sales call, or are able to plan a pre-emptive, off-diary meeting.

Every little helps
Our CRM capabilities are cleverly integrated with core sales data and extended to mobile workers on their smartphones or Blackberries, so sales teams find they can dispense with laborious paperwork, because key data can now be logged and accessed on the fly. While the hard data (ie actual sales figures) are clearly the most important tool a sales team can have access to, the ability to combine this with ‘soft’ information (personal details about the main contacts and a history of recent correspondence and meetings) can make all the difference when closing a deal.

Having a 360-degree view of the customer, which any ambitious salesperson should strive to have, provides the best possible opportunity to meet objections head on and drive through new business

While, given a choice, most sales people will focus on hard figures rather than soft, personal information (ultimately it’s more important to know that the customer has stopped buying toner, than that he’s vegetarian with a golf handicap of 14), having the best of both worlds will give one sales team the edge over another. And in an unforgiving business climate, every little helps

Taking Care of the Pennies

sales-i's Kevin McGirl looks at how to reduce business leakage

There’s nothing like the threat of impending recession to set sales teams on new offensives, firing on all cylinders as they hunt down new business with powerful promotions and other strategic campaigns. This is all very understandable – panic is setting in and organisations want to make sure that they fire the first shots and take the most customers as the stakes become higher.

The danger with focusing on attack, however, is that it potentially leaves your defences compromised. While you may be bringing in new captives all the time, what’s to say those customers previously considered to be tightly tethered haven’t gradually loosened their ties, ready to make their escape when the opportunity presents itself?

Extensive research we’ve conducted over more than a decade raises more than a few concerns in the way sales people approach difficult market conditions, or indeed the market in general. Our figures show that a typical distribution company, turning over around £2 million, loses about £440,000 in sales to existing customers in any given year, representing business leakage of 22%.


This isn’t necessarily customer attrition, which might be easier to spot, but more the gradual defection of customers to other sources for some of their office supply needs. This slippage may be so subtle that you’d be hard pushed to notice it. Say you’re servicing 1,500 customers, the loss in revenue could be less than £300 per customer each year – that’s under £6 a week!

It’s very true what they say - take care of the pennies and the pounds will take care of themselves. Reclaiming customer share to the tune of £440,000 a year might sound a sizeable, resource-consuming challenge, but think of it in manageable proportions and the leakage becomes a trend any aware sales person is capable of reversing.

Misconceptions about new business

A big part of the problem lies in sales culture, which is geared strongly towards slapping sales people on the back for bringing in new clients and new deals, rather than protecting existing accounts or building incremental business with old customers.

In tough market conditions, this strategy could be potentially highly detrimental, especially if new clients are being lured by cut-price promos, which eat into revenues and, more importantly, profits.


If sales people could only change their own mindsets, and focus on these easier wins, (which do more for the business, ultimately), the sales board could look very different.

Watching your back

When industry figures show average customer retention rates in the office products supply business to be in the 45% ballpark, and the average cost of attracting a new customer to be in the region of £800, it’s clear that sales people aren’t making best use of their time or their talents.

What this basically means is that, as rapidly as you’re snapping up your rivals’ customers, the chances are that your competitors, in turn, are nurturing and luring your own. Which means everyone is paying more to do less business….Nuts, isn’t it?

So make this your goal in the second half of 2008: recession or no recession, form a defensive strategy, know what your customers are up to (i.e. look beneath the surface, remembering that gradual defection may be masked by rogue, one-off sales of larger items), and then have a targeted campaign that brings ambivalent and tired customers fully back on board. If nothing else, your margins will be stronger than those persisting in putting new business first.

Selling in a SaaSy World

How ready is your sales team? – asks Paul Black, sales-i’s co-founder

When we founded sales-i nearly 18 months back, one of our underlying tenets was to deliver a new breed of sales intelligence service exclusively on a Software-as-a-Service (SaaS) model. Now many would see this as a no-brainer. After all Gartner and most other respected global analysts had been forecasting a stupendous growth in this deployment model for some years; and the chickens are definitely coming home to roost as more than 80% of organisations now consider this low risk, pay as you go approach to buying software.

The appeal of procuring software functionality on a monthly subscription basis is growing all the time, as organisations wake up to the associated low cost of ownership, and rapid speed to market in deploying new functionality. Vendors too can look to a future of more reliable and forecastable revenues and feel less vulnerable to market changes. So is it really that simple switching from a product sale to a service sale or do vendors need to address gaps in their sales training or indeed consider recruiting a different type of salesman altogether?

Well for me the sales process is completely different in the SaaS world and not all salespeople will make the switch that easily. The theory behind SaaS is build, manage, deliver, support and sell – and to do all of this remotely. In reality the customers buy because they trust. Although the trust may not come from a face to face meeting as most SaaS sales are conducted over the web and phone. This is a new dimension for the traditional enterprise software sales rep who now needs to sell a long-term relationship that will be tested over time rather than a one-off product sale. Equally the SaaS sales model demands more deals per sales rep at a lower value per sale. Sales compensation plans take this longer term view too often recognising the initial sale but further rewarding increases in account value over time. So the one off ‘glory sale’ and its associated commission, is no more.

This is not a transition that every ‘enterprise software’ sales rep will take to easily. As we expand our SaaS sales force we are looking to develop salespeople who can adapt to ‘service-based selling’ which is all about purpose and passion and being able to sell conceptually. Together with our sales team development specialists, EGOstream we will go beyond simply recruiting sales people and instead develop and mentor the right sales people to adapt to this service-led world. And I’ll be happy to report back on how we get on; warts and all, I promise.

The Show Must Go On

Says Who? - asks Kevin McGirl

Discussing the costs of running a sales and marketing operation with a group of customers – I was shocked to discover that a large percentage of budgets are still ‘religiously’ set aside for trade shows. Having recently attended the Spring Fair show at the NEC – I have to wonder why they bother.

In previous years, getting off at junction 6 of the M42 involved lengthy queues – not this year...straight in...empty buses from the car parks...no wait at the show entrance....have I come on the right day? Inside the Halls the atmosphere is like one of those abandoned ghost towns in Western movies...tumbleweed rolling through deserted streets. Has everybody been kidnapped by aliens?

Unsurprisingly salespeople on the stands looked very jaded – some made the effort to engage in eye contact in the faint hope that the warm body passing their stand might just be a prospect – most were so dispirited that they stayed slumped on their bar stools (only available from the official NEC contractor at £75.99+vat per day). In a recently published article, international analyst firm Bloor Research indicated that the typical ‘all up’ cost of a salesperson is £250 per day – so surely these valuable resources should be in front of customers!

Many of the stands were very impressive – clearly costing six figure sums. Trade show organisers must be able to hypnotise exhibitors – convincing them that if they do not attend they will be treated like lepers by their peers and their customers will assume they have gone out of business. Plus competitive leapfrog leads to bigger, bolder stands and the rush to book the prime spots for next year’s show.
Why do companies fall for it? – answers abound: “we have been coming here for years” (classic inertia); our customers expect to see us here (this is expensive PR and customers aren’t attending anyway so they won’t know if you don’t show up!); “our competitors will be there” (what happened to original thinking?); “we won a big order here 10 years ago” (pure nostalgia); “our sales guys get together and bond” (save a fortune and offer to take them to Spearmint Rhinos if they hit their targets).

Next year – don’t go – invest the considerable sum of cash saved in improving the effectiveness and motivation of your sales team. Plus, target customers with ‘one to one’ marketing techniques: personal, timely and relevant...a ‘sniper’s’ rifle approach rather than the ‘blunderbuss’ of a trade show.

The good news is that sales-i can help you achieve this for just £1 a salesperson per day – less than the cost of a coffee at the NEC.

Kevin McGirl, sales-i.com

Frankfurter SaaSages

One of our hottest markets is the office products industry so my business partner Paul Black and I headed off to Paperworld in Frankfurt last week ....the largest global event in office products....to evangelise about our revolutionary SaaS (Software as a Service) sales acceleration concept.

The Costa Coffee queue at Birmingham airport at 5:00 am included a number of industry characters....protected by the ‘let’s talk later – it’s too early defence shield’ appropriate to the ungodly hour.

We shared a cab from the airport with Aidan McDonough the new MD of Integra, the UK’s largest office products dealer group. The driver was clearly intent on replacing Michael Schumacher as the fastest German on four wheels so we were grateful to exit the vehicle with our lives in tact, even though it was at the wrong hall of the vast Frankfurt Messe Exhibition centre.

We walked for what seemed like 10 miles through Christmas World and a million and one different types of seasonal decorations to reach the office products event. Following the male tradition of never looking at a map for directions we decided to hit the floors of the show without buying the overpriced show guide...a decision that probably caused us to walk many unnecessary miles but we had the satisfied glow of saving 30 euros.

The European Office Products Awards dinner was that evening– and sales-i was sponsoring one of the prizes – “Established Vendor of The Year”. The shortlist included the big names: 3M, Avery, Fellowes.....with the winner being the German pen manufacturer...STABILO. As you can see from the picture the STABILO executives are big lads – next time I’ll stand on a box for the photo opportunity.


We shared a table with Ron Wotherspoon and the team from ECI² the leading accounting system provider to the industry and some Dutch guys from Alpha International – who were over the moon to win an award and celebrated with a round of beers rather than the champagne favoured by the more corporate winners...my informed guess is they were owners of the business rather than managers on an expenses jolly.

Steve Hilleard and the team at Office Products International put on a great show – full details will be in the next issue of OPI magazine and on their new look website. Good to catch up with old friends in the bar...including Peter Birks (ex Acco and Office Depot) who is enjoying life as a shopkeeper...running Staples UK. The main talking point in the bar afterwards was the cabaret – OPI had booked a German comedian (from my ancient memories of schoolboy English lessons I understand this is an oxymoron...like a ‘friendly tax inspector’)...unfortunately he reinforced the stereotype of the German lack of humour....and insisted on completing his 45 minute set without raising a single smile in the audience never mind laughs. Must remember to book him for my funeral...at least I won’t be the only one that died.

Kevin McGirl

Selling; Is it an Art or a Science ?

Welcome to my first and probably my longest blog..

My days are typically consumed with talking to sales people and sales managers about smart ways to reel in drifting customers, cut product leakage, fill gaps in their range, and spot cross and up-selling opportunities in an instant - all this while maximising their share of customer spend, enhancing client relationships and retention, and boosting profitability.

There is a constant debate as to whether a good sales person is born or made - and whether selling is an art, or a science. Whichever side you come down, I am sure about one thing - that even the sharpest sales people miss opportunities because they direct their customer conversations based on assumptions rather than facts. And so the content for my first blog came to life.

A good example to support my belief is the typical approach to so-called milk-round visits, designed to maintain relationships with long-standing clients. These can be the source of many missed opportunities, because the salesperson hasn’t gone into the meeting armed with the right information.

Think about how often you’ve found yourself shifting comfortably from the usual patter about sport and the weather into a confirmation of repeat orders. Perhaps you’re used to measuring your success on the numbers of visits made, relationships kept ticking over, and the level of repeat business secured?

Refocusing the pitch

But what if you had a way of refocusing these activities, by identifying in advance the customers whose purchasing has dropped off or changed over recent months? This is where ‘science’ can have a useful application in sales, on the basis that knowledge is power. If you know before starting a day’s visits that two customers on the list have altered their buying behaviour recently, perhaps reducing orders of one product, or buying fewer higher-margin products, you’d be able to prioritise these clients and go in with a strategy designed to redress the balance.

Unfortunately, many sales people rely on their memories, notes and assumptions or, equally common, arriving unprepared for what they assume will be a standard catch-up meeting, expecting to ‘wing it’. Yet, unfortunately, this is particularly dangerous in the high-volume manufacturing and distribution sectors, where subtle changes in purchasing are harder to spot due to the sheer number of customers.

Woods & trees

As Jon Banger at Chippenham-based Woods Business Services commented after changing the way he approached sales preparation: “With more than 350 customers and a product range in excess of 20,000, I used to struggle to get real visibility of the buying patterns and behaviour of many of my customers. So I relied on manually sifting through information and at best could only do this properly for a handful of key customers.”

This experience is far from unusual, which is worrying given that high-volume businesses typically experience 22% customer leakage during the course of a year (meaning they need to grow sales by 22% just to stand still).

Large businesses with the budgets to invest in sophisticated business analysis tools don’t get into this mess. Regular monitoring of sales figures quickly shows up errant customers so that sales teams can target them before they defect. Unfortunately, for many sales teams, such sophisticated tools are an ill-afforded luxury. They are the toys of middle managers and accountants – expensive to buy, time-consuming and complicated to set up, and difficult to use without a degree in maths.

Thinking differently

Yet that is changing, with the availability of technology solutions that have been developed more with the sales person in mind, providing focused, easy-to-digest sales information, flagging up purchasing trends and changing buying patterns among a particular customer base.

Given that the cost of sale to an existing customer is a fraction of the cost of bringing in new business, being prepared to adopt new approaches to selling is vital if sales teams are serious about growing their revenues – and profitability.

With timely insight into the buying activities of individual customers, you’d have the option to innovate, too, by applying special offers strategically and by cross-selling additional products, boosting margins as well as the total revenue per customer.

As Jon Banger of Woods Business Services has found: “I now have quick and easy access to all of my customers, what they buy, what they don’t buy, how profitable accounts are and the margins we make. This qualitative gap analysis allows me to make informed decisions regarding opportunities and approach each sales call proactively and creatively.”


Sharper promotions

Accurate targeting also improves the effectiveness of promotions. If your team has 2,000 customers and wants to promote toner cartridges, say, this might traditionally involve mailing 2,000 people at a cost of £1 per mailing, requiring a high percentage of large sales even just to break even. With better information to hand, you might instead selectively target only the 50 customers that have bought toner previously, but not in the past two months, increasing your chances of a decent return. By applying this kind of small yet timely, personal and relevant promotion every day, you stand to achieve high hit rates, nibbling away at your rivals’ share of customer.

As it turns out, then, the gift of the gab, sharp suits, fast cars and expanding waistlines from excessive customer entertainment may not be the best indicators of a good sales person. In reality, the best in your profession are probably good listeners, empathise with their customers’ pain points, and win respect by their actions rather than their words. By being well informed, they make intelligent choices about how they focus their time.

While no one could claim that sales is a science, performance can be enhanced by achieving the right blend of pure sales drive and talent with a better knowledge base.

Kevin McGirl, co-founder, sales-i