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To turbocharge your performance in an ever-changing business context, resorting to automation is a must. There are numerous tools for boosting sales accessible at AppExchange marketplace; yet, not all sales reps employ them to reinforce their sales stack. With this in mind, no stones have been left unturned to compile the list of the most useful AppExchange tools.

Selection Criteria:

• AppExchange rating (not less than 4,5 stars)
• Customers’ rating at independent review sites and positive-to-negative reviews ratio

Below you can find the list of most common activities a sales rep can undertake day in day out, of which routine actions can be weeded out due to automation. In the wake of a thorough app-hunt, these top 18 tools do help enhance efficiency:

Email database building

To efficiently build vast email lists, you can use DiscoverOrg – it provides the most accurate source of contact data and intelligence helping sales and marketing teams find, connect with, and sell to the right buyers at the right time with the right message. Being equipped with this app, your sales and marketing teams can find new prospect accounts in your target market and instantly identify decision-makers and other key stakeholders with org charts.

Improving prospecting workflow

To streamline sales process, you can resort to Datafox – it helps keep sales funnel healthy while working with prospects and leads in the way that matches your business model, goals, and sales framework. It helps source more leads and prioritize outreach more efficiently, improving CRM’s quality of data and overall success in targeting prospects.

Data/processes integration

You should actually be using your CRM data, taking full advantage of it, instead of wasting time on creating it; this routine can be delegated to SmartCloud Connect.

SmartCloud Connect is indispensable for data retrieval, storage and updates in your Salesforce CRM. This add-in auto-populates all relevant data from the email message, automatically creating accounts and adding data from the sender’s signature. You can add, edit and store any data in your CRM right from your Inbox.

Managing Email campaigns

To propel sales strategy, you are recommended to resort to Yesware – it allows users to craft, send, manage and improve personalized email communication to those outside their organization. This tool brings features including email tracking, customizable email templates, CRM integration, and automated email campaigns to users’ Outlook experience. Attachment tracking, email automation, and a phone dialer built right in your inbox provide sales teams with actionable data to hone their sales strategy.

Sales Training solutions

Here comes one of the best educational solutions for salespeople to keep teams at full steam. The Hirevue platform helps share videos on the fly and win more with video-based coaching, configured to your specific sales process. It enables your sales team to hone their message with curated, video-enabled content for each stage of your pipeline. You can build a library of A-player messaging, tips and insights so your teams can watch the best messaging anytime, anywhere.

Sales forecasts generation

The art of business tactics and strategy isn’t a privilege of the select few any more, with this sales intelligence solution which is the operating system for high-growth sales teams. InsightSquared empowers sales operations leaders to help their executives produce reliable forecasts, understand pipeline trends, and maximize the impact. It helps sales operations professionals break the vicious cycle of spreadsheets by equipping them with actionable, real-time reporting on virtually all sales KPIs.

Marketing automation

Apart from sales automation, marketing automation is indispensable for any modern business.

Pardot automatically tracks, scores, nurtures and connects with prospects throughout the sales cycle: it tracks all prospect interactions on your site from downloads to page views, then scores prospects based on parameters you set, gives automated lead nurturing and real-time sales alerts, then, it measures the true ROI of your marketing efforts.

Enterprise and Personal data integration

If numerous products from different tech vendors don’t get along well with each other, sales reps need one ring to bind them all. Here the floor is taken by Zapier – it connects Salesforce to all the web apps you use (it offers integration with 600+ apps), automating your entire workflow by copying and moving data for you.

Email drip campaigns managing

A successful email campaign execution is similar to stunting in that it requires top skills and adequate equipment.

MailChimp – an advanced marketing automation platform – is unanimously considered the best ‘equipment’ in its field. It helps design, send, and track email marketing campaigns; wielding it, sales reps can easily view campaign reports, manage subscribers, create custom queries, and more.

Demo / Conferencing tools

In B2B sector, channels of communication are of vital importance, and proper presenting tools can garner great results in cross-enterprise collaboration.

NewVoiceMedia delivers comprehensive Salesforce telephony integration. It gives sales and service organizations the ability to instantly connect their agents to prospects and customers over the phone, through email, and via social channels, without leaving no important clients behind.

Contracts Managing

One of the tough tasks for every sales rep is contract management. The ability to skillfully orchestrate favorable customer experience is a rare innate gift, but there are handy tools.

HelloSign includes digital signature, digital workflow and electronic fax solutions to automate and manage most important business transactions.

Mobile environment enrichment

Mobile business environment is mature and welcoming. One of its leaders is Evernote that connects various types of data, adds meeting notes, and centralizes sales collateral. On top of that, the Evernote Scannable app captures most versatile paper docs and transforms them into high-quality scans ready to save or share on the fly.

Social research

Sales reps can implement their trend-setting social selling strategy with the world’s most widely used social media management platform, Hootsuite, in the most impressive manner. And the Salesforce app for Hootsuite provides the ability to search and view details and activities for leads, opportunities, accounts, contacts and other Salesforce entities, all from the Hootsuite dashboard.

Account-based Sales / Marketing solutions

Account-based selling as present-day default sales framework requires advanced automation tools. The pack is led by Engagio – it helps B2B companies engage target accounts, expand customer relationships, create and measure engagement, and deepen sales-and-marketing alignment, being a highly efficient all-in-one solution.

Performance management solutions

If a business strives to survive and excel in current relentless competition, it needs to assess, train, and develop great professionals behind the brand, as people represent the greatest assets of any enterprise. With adequate tools, it can be done in a very smart way.

The Ambition app allows sales professionals to set goals, visualize process, run contests and leaderboards, track behavior, recognize reps, and coach their teams to reach the acme of skills.

Data analytics leveraging

Newly-bred Chief Data Officers take up a challenge of big data epoch. To become data dominators in the market, you need adequate tools to leverage your analytics with no hassle.

Klipfolio enables users to connect to virtually any data source including hundreds of cloud services and databases. It helps build and create beautiful data visualizations for any metrics you need to run your business, as well as easily share them when and where needed.

Business intelligence

Success means having the right information about the right prospects at the right time. And don’t overlook right tools, like Artesian – it provides contextual, relevant insight into companies and their markets in real time. It gathers information on industries, organizations, individuals and topics from millions of sources and uses clever algorithms to filter and transform the information into commercially valuable insights.

Content Managing

Content is King. The royal quality and great relevance of your content, as well as how you create, share, and manage it, will massively influence your outcome, no matter your business or content type.

Vidyard is the native video solution that empowers you to record, access, share, and personalize content in the video format which consumers and customers demand most. Besides video hosting and management, the tool offers personalized video experiences, powerful insights on audiences, and helps prove the impact of video content.

In case you’ve got even more interested in profound automation of your sales cycle, here you can find various automated solutions classified by particular stages of sales cycle. These tools can be used to build your unique sales hacks and tricks that help you deliver value to customers and enhance your ROI.

All sales leaders must “count their deals before they close,” and this makes many of you nervous. It should: With less than ⅓ of businesses classifying their sales forecasts as effective, it’s easy to see why many sales teams regard forecasting as a guessing game that they’re bound to lose.

The good news is that sales forecasting doesn’t have to be nerve-wracking. Rather than making educated guesses and predictions, overcome anxiety by using a data-guided process for a solid sales forecasting model.

Replace guesswork with data

Don’t rely on the optimism of your sales team or upper management when sales forecasting. Doing so only results in discouragement when forecast numbers aren’t met. Your sales targets should be realistic and achievable.

To do this, develop an objective foundation early on for your sales forecasting model:

• Establish a clear sales process: Have a clear, standardized sales process in place for your sales reps. Sales stages and the steps for each stage should be repeatable and clearly defined, so your reps know how to take a customer all the way through the sales pipeline. You will then have consistent and uniform data to refer to when sales forecasting.
• Focus on accurate data: Forbes found that “84% of CEOs are concerned about the quality of the data they’re basing their decisions on.” Use a CRM to minimize data entry (data will only be entered into one system) and increase accuracy. Data should also be entered in real-time by your sales team to avoid forgetting key information.
• Utilize historical data: Use historical data as a guideline to review what’s worked in the past to predict the future. While historical data should not be the only factor in your forecasting decisions, it does provide a look at past scenarios where sales increased or decreased. Replicate activities that have been effective in the past, and identify areas that need improvement.

Assuming you have the above foundation in place, use the following three scientific strategies to create an accurate sales forecasting model:

• Adjust your scoring strategy to ensure you understand which deals will actually close.
• Analyze stage duration to identify which sales stages are taking the longest and why.
• Measure lead and opportunity performance at each stage along the sales pipeline.

1. Give your scoring strategy a tune-up

To help prioritize prospects and gauge their likeliness to convert, companies score leads based on criteria that they have determined signifies purchase intent, such as content downloads and website visits.

This is one way to lead score, but another method enables businesses to actively seek out and identify high-value prospects based on profile similarities with previously won deals. This method

• enables your sales reps to actively identify high-value prospects based on profile similarities with previously won deals,
• gives your reps confidence that the leads they qualify will eventually turn into paying customers,
• gives you real, data-driven evidence as to which deals you should count on to actually close and include in your forecast.

For example, after analyzing your recent data, perhaps you discover that the CTO was the decision maker in nearly 65% of wins. In that case, score the leads higher where CTOs are the main point of contact, and increase their win likelihood once they enter your pipeline.

You can also follow the same methodology for lost or unqualified deals: If 80% of deals where the CMO was the decision maker were lost, then score leads with this point of contact lower. The same goes for similarities in industry, company size, location – the list goes on.

Once each deal is scored, you have a strong indicator of which deals are going to be won and which will be lost for your forecast.

Taking this smart lead scoring approach not only helps you be more sure that the leads you qualify will eventually turn into paying customers, but it also gives you real, data-driven evidence as to which deals you should count on to actually close and include in your forecast.

2. Pay closer attention to stage duration

As any sales leader who has fallen short of his or her forecast knows, it’s not just about whether a deal closes but about when it closes. Timing matters when it comes to forecasting, and while deals can sometimes encounter unforeseen roadblocks, having an intimate understanding of your stage duration can greatly improve your accuracy.

Stage duration refers to the amount of time each of your deals spends in a given stage of your sales pipeline, such as qualified, quote, or close. Conducting a stage duration analysis allows sales leaders to see more than just the average time deals spend in each stage and the pipeline as a whole. It

• helps sales leaders identify the ideal time a deal should spend in each sales stage,
• highlights bottlenecks within each stage,
• calculates the win likelihood of a deal based on the amount of time spent in a particular stage compared to deals that have been won.

The example below shows the exact number of days that deals are spending in each stage.

This information will help you answer the following questions to create an optimal sales cycle:

• How long are deals staying in the Incoming stage?
• How many days do they languish in the Quote stage?
• At which stages are bottlenecks most common? (And how may your sales process need adjusting?)
• How long does it your sales reps to close deals?
• How can slower reps adopt the winning habits of reps who move through the process more quickly?

Understanding stage duration enables you to identify the types of deals that take longer to close or are more likely to get stuck in a particular pipeline stage. This information is highly valuable when it comes to knowing what deals to bank on and then nailing that forecast.

3. Measure across conversion points

More often than not, very few metrics other than revenue are factored into the sales forecast, with less than 35% of organizations taking critical measures like deal volume into consideration. And when other metrics are considered, their measurements are isolated. What good does it do your business to know how many marketing leads are accepted by sales if you can’t measure the impact this ultimately has on your bottom line?

Think of it this way: Sales revenue is the cumulative result of each key conversion point along your sales pipeline. To accurately predict sales revenue then, your forecasting model must include measurements of leads accepted, opportunities qualified, etc.

To understand how leads and opportunities flow through your sales process and pipeline, use sales metrics called process measures. They break down conversion rates stage by stage, which

• allow you to pinpoint bottlenecks and inefficiencies at various points within your sales process,
• reveal actionable insights around how to increase revenue.

A visual representation of process measures

Process measures are used to understand how leads and opportunities flow through your sales process and pipeline, giving you a more clear and accurate picture of expected revenue over time. One example of a process measure is sales cycle length, a metric that looks at how long it takes for deals to go through your pipeline. The metric shows the effectiveness of varying sales processes, so you can make adjustments if needed.

Average Sales Cycle: Total # of Days to Close Deals / # of Closed Deals

For example, let’s say it takes a total of 98 days to close 10 deals. 98 days to close deals / 10 closed deals = 9.8 days to close per deal. If you can predict how long it will take incoming deals to close, you’ll have a better idea of what your sales numbers will be at any given time.

In addition to the average sales cycle, here are eight other process measures you can use to review leads and opportunities:

With the ability to measure performance across each of these conversion points and see exactly how it affects sales revenue, businesses can create a much more accurate sales forecast.

Take the stress out of sales forecasting

Sales leaders willing to follow strategies like those outlined above and take a data-driven approach to their sales forecasting model will be able to make more accurate sales forecasts — without the stress that educated guesses and predictions bring.

Accurate sales forecasting improves decision-making, identifies problematic issues in advance, tracks sales reps’ performance, and ultimately helps you predict future revenue and growth. For more information around how you can begin understanding and utilizing the science of sales, download our free eBook, From Art to Science: 5 Steps to Predictable Sales Growth.

When you set off on a road trip, you have a vehicle and a road map for directions. On this road map, you mark stops to take along the way.

Think of your sales-process in the same way: The vehicle is your CRM, the road map (showing the entire journey, from “This person is a stranger” to “This person is a customer”) is your sales process, and the stops along the way are the sale stages within your pipeline. Your final destination? Converting a deal to a customer.

Your sales team should receive this standardized sales-process road map on day one to keep reps from jumping from one stage to another without clear guidelines. With a road map, your reps will know the specific route to their destination and how they’re each expected to get there.

Benefits of a sales-process road map

Your road map provides an overall picture of the journey and gives context for the sales process. Sales-stages or stops highlight customer points along the way, where your reps have specific tasks to get the potential customer to the next stop. By understanding what happens at each stop/sales stage, you, as the sales manager, can

• track rep performance, and
• determine which areas need support.

By understanding how each stage brings them closer to closing a sale, your sales reps can

• better manage their sales activities, and
• ultimately improve their sales results.

Each company’s road map is a bit different, depending on its decision-making process, its customers, etc. And some stops may be unnecessary during a sales rep’s journey, depending on their passenger — Qualified can go straight to Won or to Unqualified. A CRM makes it easy to customize your sales-stages. When first building your sales pipeline, however, consider starting with the most common sales-stages.

Each is listed below, along with an explanation of how each one guides your overall sales process.

1. Prospecting: Focus on the right customers

Prospecting is the incoming stage of your sales process. You are finding potential deals and entering them into your pipeline. The goal is to engage with qualified leads who would benefit most from your product/service.

You need to determine whether the potential customer is the right match for your product/service, whether they have the budget, whether you can provide the value they need, etc. Answer this question: Is this deal worth it?

Another way to put it? Potential customers are hopping into your vehicle (your CRM) based on the trust you’ve built and the interest you’ve generated in your product/service. You’re not completely sure whether they’re the right person to be riding shotgun, but there are ways to determine whether this person/company is qualified to take the trip with you.

One way to find qualified leads is to focus on building a relationship and reviewing the customer fit early on in the process. You can do this with customer-centric lead generation strategies, such as the following:

• Solve specific problems on Quora.
• Create videos with a built-in lead-generation form.
• Source leads from support-ticket conversations.
• Offer a helpful email course.
• Interact with potential customers on LinkedIn Groups.

This stage needs a strategy by itself (consider it a pocket-size road map). Have clear buyer personas for your reps to review to ensure that you are attracting the right passengers and that they are clearly interested in what you’re selling.

2. Qualified: Present to decision-makers

If the potential customer meets your initial requirements, you both can pull onto the highway to drive to the next stop (move the deal to Qualified). In this stage, you gather more information and requirements about the potential customer. You identify key decision-makers to know whether they can actually purchase or not, and then present the value of your product/service.

Set up an initial appointment or sales meeting. Find out whether the point of contact in the passenger seat is the one who is able to actually make the purchase. If they’re not, find out who is, and ask to meet with them as well.

The purchasing decisions may be made by key executives, based on price, volume, volatile market conditions, or other reasons specific to their industry. Speak to these points in your meeting.

After that initial meeting (or during, depending on what makes sense), present a demo of your product/service to the key decision-makers. Sell the potential customer on what you’re offering:

• What are you doing better than competitors?
• How does your product/service overcome key objections?
• How does your product/service add specific value to this particular customer?
• What features of your product/service match with customer needs?

Make your presentation customer-centric, and show that you’ve done your research on company needs. Include a call to action at the end of your presentation. Invite the potential customer to sign up for a free trial, or offer a certain discount. These actions encourage your passenger to stay buckled up until the next stop.

3. Quote: Discuss terms and prices

At this stop on the journey, you and your potential customer are ready to seriously discuss terms and prices. Include what features the potential customer will receive at what price.

In addition to helping you understand whether the potential customer is willing to commit to your product/service, this stop along your sales process helps you determine whether

• reps are actually sending quotes,
• quote opportunities are being missed, and
• reps are following up with potential customers often enough.

This stage highlights rep performance and presents opportunities to improve within the pipeline.

Send a quote to the potential customer, and then wait for a confirmation. If the client agrees to the terms of your quote, you can move to “Closure” and draw up the contract. This is where the traveling analogy gets more personal. The sales rep has now put the remainder of the journey on the line. If the potential customer turns him down, the journey is over.

4. Closure: Seal the deal

After the quote is confirmed, negotiate the final terms (e.g., tailored subscription or membership) and seek to close the deal. The success of this stage will be reflected in your company’s revenue.

On this journey, you started as strangers. Now you know the person well enough to get them to the final destination. You’ve come this far together; don’t neglect directly asking for the sale.

Communicate again the problem your product/service solves for your potential customer specifically and what value would be gained. Put what you’ve discussed into writing, and then send it to the potential customer. You should present a mutually beneficial agreement for both you and the customer.

This stage highlights specific ways to improve conversion rates. Strategies (or specific turns on the trips) that work for some deals won’t work for others. If the customer does agree to the terms and signs on the dotted line, highlight what went well, and why. What were the specific factors that led to closing this deal?

5. Won/Lost: Determine what works & what doesn’t

A deal won is a deal closed. Did your potential customer get out of the car, or did they stay with you for the entire journey?

If you won the deal, deliver what you promised. Also make sure that you communicate the terms of the deal with customer support so they can smoothly continue the customer journey.

If you lost the deal, review the reasons why. Pinpoint what’s working and what’s not in order to improve sales. As a manager, this stage also provides you with a view of the performance and the skills that your sales reps need to develop.

And remember, just because a deal may be lost now, that doesn’t mean that you can’t contact the person and their company in the future. Track actions, and record them in your CRM for follow up later on. If you have a good relationship, ask for a referral.

Maybe you just need to take a detour. If the nature of the project has changed, you may move the deal back to either Qualified or Quote and continue working on winning this project. Don’t abandon the journey until you’re absolutely certain that you can’t make it to the final destination.

Implement clear sales-stages in your pipeline

A clear road map for your sales process will ensure that you and your team are successfully working together on your sales process. Review data regularly to find at what stages deals are getting stuck or where you are losing potential customers. Passengers will get out of the vehicle along the way, but new ones will join. Take the opportunity to ask paying customers for referrals.

Also, choose a CRM where you can customize your sales pipeline stages. For example, you may need a stop/stage to move “Unqualified” deals. Or you may need to reorder stages, depending on your business. Review your sales process or road map every few months, and make changes as needed. And don’t forget, the journey doesn’t end at the last sales stage. You want to keep your customers on the journey for as long as possible. Focus on customer-retention strategies and ways to improve the customer experience.

All sales-stages should clearly define the activities your sales reps need to complete to successfully work a deal through the pipeline. An organized sales process increases productivity and improves your overall sales. It’s a journey that requires extensive planning and preparation, but it’s a journey worth taking.

You're probably familiar with the concept of going rate pricing — even if you don't know the term itself. For instance, let's say two parents plan to go out for dinner on a Friday night, but they need someone to take care of their toddler. They reach out to a neighbor who happens to be free and agrees to babysit.

With that straightened out, the parents need to decide what they're going to pay their neighbor, but they don't know where to start. If they wanted to land on fair compensation, they'd likely try to figure out what the going rate for their neighbor's services is — a price based on what all the other babysitters in the area are charging.

As you can probably assume, this strategy isn't specific to local babysitters, several companies and corporations leverage it as well. Let's take a look at what that can look like.

Going Rate

The going rate for a product or service is based on its market price — what competitors with similar offerings are selling their products for. But, how do you find the market price?

Market Price

Most often, the largest player, or leader, in the market for a product or service moves first. And the smaller businesses follow their lead and adjust their prices based on the leader's prices.

For instance, the market price for steel doesn't start with minor manufacturers — they lack the economic weight to make that happen. Manufacturers that produce tens of millions of tons of steel annually gauge demand for the commodity and set their prices accordingly.

Those prices ultimately dictate the market price for steel. Then, those minor manufacturers set their prices at that rate to stay afloat within their competitive landscape and keep customers from purchasing from firms offering lower prices.

When there isn't a clear leader, a business can calculate the mean price for all the competitors in the market.

A going rate pricing strategy is most often used to price products or services that are homogenous and don't vary in design. Businesses that choose a going rate pricing strategy often set their prices based on the leader of the market.

Since competitor prices tend to be similar, it's challenging to differentiate your product or service from the competition. Businesses that excel with this pricing strategy benefit from a strong branding and marketing strategy. Creating a positive brand perception and communicating the value it provides can help your business stand out from the crowd.

Going Rate Pricing Examples

As I mentioned, going rate prices typically apply to industries where firms all sell fundamentally similar or even nearly identical offerings. Commodities and certain services tend to fit that bill.

Commodities

Certain commodities are typically sold in primary form — meaning they're distributed with little to no value addition — with prices that fluctuate with global supply and demand. Firms that sell these products often charge an industry-standard going rate as a result.

For instance, a company that farms and distributes wheat probably won't charge a steeper price than its competition. Since its product is virtually indistinguishable from its competitors', it lacks the means to differentiate itself from its industry peers and justify a higher price point. It will charge the going rate for its community to remain financially viable and competitive in its market.

Metals

Metals are another category of commodity with prices dictated by a going rate. Gold is gold, no matter who's selling it — it's hard to discern its quality and price it on that basis. There's a going rate for it, and virtually every firm that sells gold will charge either at or around it.

Services

The price of certain services in a given market can be dictated by a going rate — particularly ones that don't allow for significant differentiation.

Let's take our babysitting example from the introduction. In this case, they find that most babysitters in the area charge around $15 per hour. If a babysitter asks for $30 per hour, they're significantly overstepping the going rate for their services, and the couple would likely look to the significant base of babysitters who charge the going rate — the price dictated by the market.

If you're selling a product or service that is similar to the offerings above, then a going rate pricing strategy could be a good fit for your business.

• UPS announced its "Efufillment" full-service program on Thursday.
• It will allow third-party sellers to store items in UPS warehouses and sell them on any number of 21 different online marketplaces like Walmart, Ebay, Shopify, and Amazon.
• UPS handles the storage, packing, and shipping all the way to the end customer.
• The service operates similarly to Amazon's popular Fulfillment by Amazon service, but has the advantage of being platform-agnostic and powered by UPS's enormous delivery network.

UPS announced its "Efufillment" full-service program on Thursday.

The new service allows third-party sellers to store items in UPS warehouses and sell them on any number of 21 different online marketplaces. UPS will handle packing up the item and sending it all the way to the end customer.

The program is completely agnostic to what platforms a seller wants to use, and they can list their merchandise across any number of them including Amazon, Jet, Walmart, Houzz, Shopify, Ebay, Etsy, and others. Users use a single sign-on via UPS's portal which manages all of them, as well as easy to understand and simplified pricing.

The new program is aimed squarely at small and medium businesses, which form the bulk of online sellers.

"We saw a need for SMBs that if we could simplify that whole process and give more transparency ... in a easy simple platform, then that could help them be more successful and it would be a good business opportunity for us," Kevin Warren, UPS's CMO, told Business Insider.

Effufillment was designed as a way to give these types of businesses a leg up to compete with the largest players online, Warren said.

"[SMBs] don't have the resources all the time to compete with the big boys with the large players," he said. "It's a way to kind of allow them to compete and somewhat level the playing field so the end customers can get the best products."

UPS has two owned warehouses dedicated solely to Efufillment: Shepherdsville, Kentucky and Bloomington, California. Warren said that UPS will open up additional space as Efuffillment naturally scales and gets bigger.

Notably, the new warehouses are certified to ship via Amazon Prime, and any seller using Efufillment and selling on Amazon is eligible for the Prime tag next to their product on Amazon.

Read more: Amazon is expanding the number of items that are eligible for Prime shipping — and it shows how important the membership program is to the company

This was important, Warren said, due to Amazon's dominant position in the land of marketplaces.

"Amazon is a customer of ours and they are the biggest player in this marketplace," Warren said. "We think ... a lot of these customers [will] be on other marketplaces but ... probably on Amazon as well."

UPS began testing the service in 2017. One customer who participated in the pilot, a New York-based flip-flop maker called Tidal, told UPS it saw a three times increase in sales after enrolling in the program.

Warren says the new service is targeted at customers that were previously not a target for UPS. It integrates these smaller businesses into the UPS family earlier in the life cycle. This can help them grow into large businesses, which are the core customers of UPS' enormous logistic network.

"All large companies at some point started as an SMB,and so the degree that we can kind of grow with them is in our best interest," Warren said.

Efufillment is for merchandise primarily geared toward customers in the US and Canada, but can be used by international businesses looking to sell in those two countries.

The program is similar to Amazon's own popular storage and fulfillment offering for sellers, known as Fulfillment by Amazon.

UPS's offering has two key advantages, however.  It is platform agnostic, meaning sellers can list with as many or as little of the websites as desired, and UPS will add new ones as they pop up or get more popular.

It also uses UPS's enormous logistics network, which is fully integrated into the service, to deliver to the end customer. Amazon is building out its own logistics network, but it is nowhere near that yet. 

SEE ALSO: Amazon will now let Prime members pick which day to get their items delivered, and it's a stealthy way for the company to cut down on its fastest-rising cost

Join the conversation about this story »

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A founder posed me a question earlier this week: Do you have any data/perspective on whether it’s worth keeping the unassisted free trial flow vs. providing only one path which leads to a demo and an assisted free trial? This is a complex question. Let’s break it down.

The unassisted free trial has benefits. There’s a deeper discussion in this post: Confessions of a Perpetual Freeloader.

1. You capture the buyer at the point of maximum intent and reduces the activation energy of the sale.
2. You broaden the universe of people who try the product. You educate the market on your product.
3. You establish longer term relationships with customers since they can engage with the brand and product earlier on in their journey.
4. You create barriers to entry by reducing the cost of customer acquisition and inhibit newer competitors who might disrupt using this acquisition strategy.

There are also costs.

1. Unassisted free trial accounts are likely to be smaller.
2. Many more prospects will email customer support, which can be expensive.
3. It requires a more mature product. Salespeople can gloss over faults and holes in the product during a demo. A solo user is bound to find bugs and rough edges and that can damage your brand. A brand is the sum total of all the interactions a customer has with your company.
4. It may also require dividing the product roadmap because you might serve two different customer segments. The SMBs might prefer unassisted conversion and the enterprise assisted. This has some downstream effects.*
   

Where do startups run into trouble? When the unassisted and the assisted flows target the same customer base and price point. Salespeople spend time with small accounts which challenge the unit economics and quota attainment. And very large customers don’t get the attention they warrant.

To be able to sustain both paths, your company and product should be able to create a fork in the road to divide customers. You should have a pricing plan that clearly separates the customers that will close by themselves at a lower price from those that will pay more but ask/require sales help.

How do you create this fork in the road? Some ask customers to identify which type of customer they are and they are treated differently. Others use lead scoring or enrichment technologies to suss out which flow a customer should pursue. Others may create different landing pages and flows to segment the customer base. And of course, you could treat everyone the same and wait until you get a call from a big customer who wants to buy a broader license: the flywheel model.

To summarize, running both strategies is better, but it’s more work. The key to managing that complexity is having a team that can serve both customers, that can segment the customers well, and a pricing model that makes the unit economics work.

This is a complex topic and I’ve tried to generalize to simplify it. I’m sure I’m overlooking some important facets. If you have another perspective, please write or tweet. I’d love to hear it.

*Unassisted free trial creates PQLs (product qualified leads) and assisted free trials create MQLs or SQLs (marketing or sales qualified leads). These differences are important because they require differences in focus.

To create a successful PQL conversion process, product and engineering and growth marketing work together to optimize a conversion funnel. Prospects move down the conversion funnel by using the product and by receiving emails or in product alerts to educate. On the other hand, to create a successful MQL/SQL funnel requires marketing support, sales execution and customer success.

When someone hands over their email address in exchange to receive information from you, your job is hardly done. Of course it’s important that they opt-in to your offer, but you have to make sure to follow up afterwards to keep in touch, and the best way to do that is to create a welcome email.

Return Path’s research found that the rate at which promotional emails get opened is 23 percent while welcome emails produce an open rate of 34 percent. Users are excited to receive and open their welcome email because they’re fully expecting it. It’s such a simple way to grow your audience and promote your brand yet not enough marketers are taking advantage of the opportunity as part of their email marketing strategy.

If you want to create a welcome email that brings you conversions you can brag about, here are three tips to get you started.

1. Follow up right away

Your welcome email is the pillar of your brand image. If you wait too long to send out your welcome email after a visitor has opted in, it’s likely they’ll forget who you are or will no longer be interested by the time you do send it out. Harvard Business Review says that potential customers are seven times likelier to purchase from you if you respond within an hour of them taking some sort of action.

If your subscribers expect an email and don’t receive one, you look disorganized and aloof. Avoid this by automating your email to send as soon as a visitor opts in. Unless you specifically state they’ll be receiving an email at another time, that welcome email should be in their inbox within minutes.

Setting up automated emails to go out after your welcome email is a great way to stay connected to your audience even when you have a million other things going on in your business and likely don’t have the time to personally email each subscriber on your list. It helps you save time and money by streamlining your workflow so you focus on more important tasks.

2. Set clear expectations

You want to be crystal clear to your new subscribers what they’re in for now that they’re part of your email list. It’s important to lay out the type of content they can expect in the future, how frequently to expect it, and what topics will be touched on. Link to other content on your blog to give them a taste of what future content entails and they can explore your brand.

Stay consistent with your brand image when creating your welcome email. Keep the same color scheme, fonts, language, and logo across all emails so that users know it’s you and identify those aesthetics with your brand. Your brand identity showcases your business and what it represents. If this isn’t consistent across all channels, including social media, you’ll come off disorganized and confused.

Harvard Business Review’s welcome email does a great job of setting clear expectations for their subscribers. They thank the user for signing up, tell them they’ll have an enhanced experience and achieve their goals, and then urge them to check out more of their content.

3. Thank your subscribers

People don’t just frivolously hand over their email address to any email list they come across. If you gain new subscribers, that means they want to get in touch with you, learn about you, and explore your brand further. They’re at the point in the conversion funnel where your business has sparked enough interest in them that they’re willing to hear from you regularly. That’s why you should thank them in your welcome email.

Thank them for joining the community and believing in your brand. Ensure them that there’s plenty more value you have to offer, but don’t stop there. Use this as a way to lead them to more juicy content. Encourage them to follow and talk to you on social media. Give them content that only they’re allowed to see. Show them you appreciate their engagement by offering them a coupon or discount code for any premium products you offer.

Over to you

Creating a welcome email that brings business growth and improved lead generation means doing research to figure out how best to appease your audience. Email is the most valuable way businesses and entrepreneurs can build a relationship with subscribers and help them solve their biggest problems. If you thank users, let them know what they’re in for, and follow up in a timely manner, you’re already on the path to higher conversions.

Demand generation and thought leadership are both terms you need to know if you’re a B2B marketer. But do you actually know what they mean and how they work, or are you using them in a “fake it till you make it” way? We’ve all been there, including me.

When I first got into the marketing game, I can honestly say I didn’t know the difference between the two. Both are buzzwords of sorts that I would throw around without truly knowing how different they are. I speak with dozens of CEOs and CMOs every week, many of whom will also admit they don’t have a full grasp on demand generation or thought leadership. Continuing to educate yourself is key, especially in the always-changing landscape of marketing. Let’s dive into these buzzwords a bit so you can go into your next executive meeting feeling like a marketing rockstar.

What Is Demand Generation?

Demand generation is just that: generating demand. It’s the process of driving inbound interest to your brand and/or services through various channels and methods.

For example, think of the content marketing funnel. First, you start with top-of-the-funnel content to increase awareness of your brand and build credibility. This oftentimes involves getting educational, bylined articles published in third-party publications and/or getting mentioned by other contributors.

From there, to hold the attention of your newly generated inbound traffic, you need on-site content. This could be a blog, case study, infographic, or video. Every piece of content serves a specific role in generating demand, so understanding how your audience members like to consume content and where they are in the customer journey is key.

The next transition piece is imperative: gated content. How do you expect to turn marketing-qualified leads into sales-qualified leads if you’re not capturing them to begin with? After you’ve captured new leads comes the nurture aspect, whether that’s via an email drip campaign or an e-newsletter. This is the last piece that allows you to stay top of mind with new prospects.

What Is Thought Leadership?

Thought leadership can be defined in different ways by different people, but my definition is “the process of positioning yourself or your brand as an expert in your given field while boosting your overall awareness and credibility.” Thought leadership can take the form of off-site articles (like this one), on-site blogs, videos, the list goes on.

The best way I’ve seen executives boost their thought leadership is by creating valuable, educational content. Whether you decide to outsource this activity or bring it in-house, having a dedicated team creating and distributing this type of content is crucial. You’ve spent your whole career gaining valuable insights, so now is the time to share those with the world.

Do I Need Both?

Yes! Don’t fall into the trap of thinking you can do one without the other. Think of it this way: If you don’t have thought leadership to build credibility, there is no way you can boost demand. So many B2B marketers think of these two tactics as living in different silos, and oftentimes they have two separate departments working on these initiatives, but that’s a huge mistake. The biggest reason you need both is to ensure the different aspects of your marketing strategy are aligned with each other and your goals.

All right, Mo, that sounds great, but how do I align both demand generation and thought leadership? I’m glad you asked.

1. Write and Publish Guest-contributed Content

Whether you have a large dedicated team or limited resources, there is no excuse for not prioritizing thought leadership content. There are several options out there: Outsource it, create it in-house, or do it in your “spare time.” There’s no one right method of doing this; the bottom line is that it has to get done. Demand Gen Report found that 87% of B2B buyers give more credibility to industry influencer content like third-party published articles, so this thought leadership aspect is vital to driving traffic to your website.

2. Create Consistent On-site Content

On-site content can have a lot of different looks: an educational blog, a visually appealing infographic, or a captivating video. What’s critical is staying in front of your audience. Continual content creation can be taxing, but there are benefits. According to Content Marketing Institute, content marketing costs 60% less than outbound and generates three times as many leads. Now is not the time to disregard the hard work you put into driving traffic to your website—it’s time to continue walking your prospects through the buyer’s journey.

3. Create Gated Content to Capture Leads

If you’re creating consistent content but still not seeing an uptick in leads, you might be missing this crucial step in the marketing funnel. Research compiled by Intercom shows that 76% of buyers are willing to register and share personal information in exchange for whitepapers, and 63% will do the same for ebooks. This is the step where you turn inbound traffic into marketing leads. From here, using a CRM and marketing automation software will allow you and your sales team to align. Did I mention how important it is to align your marketing strategy and your goals? Well, the same goes for your different teams.

4. Nurture Your Leads

We’re almost there. The last step is to nurture and engage your leads. So many companies I talk with have an old list of emails they admit they’re doing nothing with. This is a common mistake that leaves money on the table. You’ve done the hard work of getting prospects to this point in the buyer’s journey—now it’s time to turn your traffic into actual sales leads. In fact, companies who use email drip campaigns saw an average ROI of 4,400%, according to Campaign Monitor.

Now that you have a better idea of how to align thought leadership and demand generation, it’s time to put that knowledge into practice. Look at your goals. What do you want to accomplish at the end of the day? What are you currently doing well? Where do you see gaps in the content marketing funnel? Once you can answer these questions, you’ll be headed into your next executive meeting like a boss.

The post Demand Generation and Thought Leadership: Why You Need Both appeared first on Marketo Marketing Blog - Best Practices and Thought Leadership.

By definition, the term "sales" refers to all activities involved in selling a product or service to a consumer or business. But in practice, it means so much more.

A lot of effort goes into successfully closing a deal – from sourcing prospects, to building relationships, and providing customers with solutions. We’ll dig into types of sales, common sales terms, and sales methodologies to help you solve for the customer and increase revenue.

Companies staff entire departments with employees dedicated to selling their products and services. Salespeople reach out to contacts that might be interested in purchasing the product or service that their company is selling — prospects that demonstrate interest through actions like visiting the company website or interacting with the company on social media.

The goal is to reach out to leads who have shown interest in or fit the description of the company’s target customer, in hopes of providing them with a solution that results in a purchase of your product or service.

While many sales teams are held to monthly quotas and benchmarks for converting leads and closing deals, the real goal of sales is solving for the customer.

Marketing and Sales

Where can salespeople source leads and prospects? The campaigns and efforts of the marketing organization are some of the best ways to generate qualified leads. And the State of Inbound Report found that salespeople source 28% of their leads from marketing. While marketing and sales use different processes, both business functions impact lead generation and revenue.

So, how do sales teams sell? Let’s review the most common types of sales.

1. Inside Sales

When sales teams engage with their prospects and customers remotely, often from an office alongside their team members, they follow an inside sales approach. This means they are selling from within their company. Organizations that use an inside sales approach often tend to have leaner, more automated processes and structured hours.

Inside Sales in Action: AT&T

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From phone service to internet to TV, AT&T provides products and services for just about any consumer and business. The company's inside sales reps contact leads and prospects to complete the traditional sales process — uncovering the customers' needs, matching them with the right solution, and closing the deal. They might use a sales software to keep track of customer interactions and sales won.

2. Outside Sales

On teams where salespeople broker face-to-face deals with the prospect, they are following an outside sales approach. This implies that they are selling from outside their company — traditionally through door-to-door or field sales. These teams tend to not have strictly regimented processes, allowing freedom and flexibility for reps to develop and implement their own sales strategies.

Outside Sales in Action: Medtronic

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As a leader in medical-grade equipment, Medtronic utilizes the skill set of experienced sales reps to match their products with medical professionals. Medical devices sales reps spend the majority of their time traveling — but once they reach their destinations, they meet with medical professionals and administrators who make decisions about what to purchase.

In addition to traveling to prospective customers, they might attend conferences and events where these decision-makers might be in order to network and build relationships before it’s time to make a sale.

3. B2B Sales

This common acronym stands for "business-to-business" and describes companies that sell products and services to other businesses, instead of individual consumers.

B2B sales tend to have a higher ticket value and more complex terms because the goods sold to other businesses typically play an essential role in how the buyer’s business operates.

Within the realm of B2B, sellers can primarily support SMBs (small to medium businesses) or enterprise customers.

B2B Sales in Action: GetAccept

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GetAccept is a sales enablement platform that helps sales reps build relationships with buyers. As a business that helps other businesses sell better, GetAccept classifies as a B2B company. Its sales reps work with other sales team managers to promote the benefits of the GetAccept products and create long-term clients that generate revenue for the business over time.

4. B2C Sales

Unlike B2B sales, B2C (or business-to-consumer) sales revolve around transactions between a company and its individual consumers. These deals tend to be of lower price-value and complexity than B2B sales and can involve multiple deals with a variety of customers.

B2C Sales in Action: uPack

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Moving companies rely on B2C sales to connect directly with the consumer who uses their services. uPack uses digital ads to source leads which their B2C sales team turns into customers.

Its sales process is simple, but effective — the company gets customers interested in their services by offering them a free quote on their move. Then, the B2C sales reps get to work enticing the prospective customer to choose their moving service over the competition because of lower prices and faster moves.

5. Business Development Sales

Though business development doesn’t account for an entire sales transaction, it’s an important aspect of the sales function for many companies. This role is typically held by Slack

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BDRs at Slack are responsible for the pipeline within enterprise accounts. They drive outreach to several stakeholders at the companies where they work. People in these roles are expected to be product experts and build demand for the Slack product.

6. Agency Sales

This type of sales involves generating and converting new leads to sign onto service packages from an agency. According to HubSpot’s 2019 State of Agency Selling, the average agency sales cycle is between 31 and 90 days, with most agencies bringing on one to three new clients each month.

In the agency sales space, clients are typically signed either by project or on a retainer. For agencies that sign clients by project, they primarily focus on bringing in new business, selling service packages to new clients as their current projects wrap up.

With a retainer model, agencies can engage with clients on an ongoing basis which allows for predictable recurring income with less dependence on bringing in a steady stream of new customers.

Agency Sales in Action: UMG

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The UMG team of brothers started their creative agency using agency sales — selling one-off projects like business plans and ongoing website services to businesses in South Carolina. Now, the business has grown to multi-million dollar heights with several loyal clients on retainer.

7. Consultative Sales

Consultative selling is a style of selling that focuses on building trust with the customer to understand their needs before recommending a specific product or service.

With consultative selling, sales reps focus on building a relationship with the buyer and leading the sale with how the offering will benefit the individual customer, instead of solely focusing on the features of the product to make the sale.

Consultative Sales in Action: Legacy Home Loans

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When shopping around for a mortgage lender, there are a lot of variables that can influence a home buyer’s decision to choose one over the other. The truth is, those variables are cold, hard numbers.

Consultative sales works for mortgage lenders because they can bring a human aspect to the home loan process. Legacy Home Loans does exactly this, even measuring success "one smile at a time."

8. eCommerce Sales

Does your company sell products exclusively online? Is your customer able to research your product, determine whether they want to buy it, and make their purchase online all without needing to engage with someone from your company? If so, you’re following an eCommerce or online sales model.

Though this type of selling is more hands-off than other types, it can work well for lean companies who can’t staff a full sales department, or for companies who offer products that can be effectively sold through targeted digital marketing.

eCommerce Sales in Action: Kissed By A Bee

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Worldwide eCommerce sales grew by more than 27% in 2020, and Kissed By A Bee received a share of that growth. This company provides herbal remedies and beauty products completely online. While it does provide live customer service, most of their marketing and sales efforts take place completely online.

9. Direct Sales

With a direct selling model, individuals are able to sell directly to consumers outside of a traditional retail environment. With this method, sellers conduct the sale one-on-one with their customers, often earning a commission. This form of selling is commonly used by network marketing representatives and real estate professionals.

Direct Sales in Action: Telfar

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Telfar is an international unisex fashion company founded in 2005. As a completely digital business, orders can only be placed online and are not sold in department stores like traditional fashion brands are. The company is known to sell out of its handbags and accessories in minutes which has created a popular second hand retail market for the brand’s merchandise.

10. Account Based Sales

Businesses that have large enterprise accounts with several points of contact look to account based sales to serve these customers. Unlike business development sales, account based sales teams don’t hand off their opportunities to a sales development rep to close.

Instead, the opportunity stays within the account based team to serve that customer from lead to opportunity and all the way through to customer success. The benefit of account based sales is that the sales team gets to build a relationship with the enterprise over a longer period of time which results in a higher LTV.

Account Based Sales in Action: PepsiCo

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Can you imagine how difficult it would be to buy your soda directly from the bottling warehouse? Like many other food and beverage companies, PepsiCo does business with retailers of all sizes, locations, and types to get its products to consumers.

To manage all of this, the company takes an account based approach to sales and account management. The role responsible for managing these relationships before, during, and after the sale is called the Key Account Manager (KAM).

They’re responsible for achieving profitable sales targets for large retail stores like Walmart and Target. KAMs ensure that the demand from the account matches what the sales team has forecasted for the account so that consumers never find a store that’s out of Mountain Dew.

Common Sales Terms

Here are some of the common terms that are associated with sales and selling.

1. Salesperson

A salesperson is an individual who performs all the activities associated with selling a product or a service. Synonyms for salesperson include sales associate, seller, sales agent, and sales rep or representative.

2. Prospect

A prospect is a point of contact at a company that the salesperson would like to sell products or services to. The salesperson uses prospecting techniques like making warm calls, email outreach, and social selling. And if they're interested in the product or service, the sales rep can apply different sales closing strategies to turn the prospect into a customer.

3. Deal

A deal represents the product or service you'd like to sell and the price associated with it. Deals have multiple stages, which can vary depending on the business, its processes, products, and industry — and deal performance can be tracked using a CRM. Salespeople can put together deal plans to make the selling process easier on the prospect and the sales rep.

4. Sales Pipeline

Sales pipeline describes all the steps in your sales process. It gives salespeople a visual representation of where prospects are in the sales cycle.

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According to the Gartner 2021 Chief Sales Officer poll, the top two priorities of sales organizations in the U.S. were building a new sales pipeline and enabling virtual selling.

5. Sales Plan

The sales plan outlines the goals, objectives, and strategies for a sales organization. It includes details about target customers, market conditions, revenue targets, pricing, team structure, and more. It also lays out the tactics the sales teams will use to achieve their goals.

Downloadable Resource: Free Sales Plan Template

Types of Sales Methodologies

A sales process is key to running a successful sales organization. Here are some of the top sales methodologies businesses use.

• Solution Selling: Solution selling is when the salesperson leads the conversation with the benefits that a custom solution will give the prospect. This method acknowledges that prospects are informed and have done their research on the product or service before the sales rep reaches out.
• Inbound Selling: With this sales method, salespeople act as a consultant. They meet the prospects where they are and solve for prospects' pain points.
• SPIN Selling: SPIN is used to describe the four types of questions salespeople should ask their clients: Situation, Problem, Implication, and Need-Payoff. The questions identify the prospect's pain points and help the salesperson build rapport with the buyer.

• N.E.A.T. Selling: This is a framework that's used to qualify leads. N.E.A.T. stands for: core needs, economic impact, access to authority, and compelling event.

• Conceptual Selling: Conceptual selling is a method where salespeople uncover the prospect’s concept of their product and seek to understand the prospect's decision process.

• SNAP Selling: SNAP selling is an acronym for: Keep it Simple, be iNvaluable, always Align, and raise Priorities.
• The Challenger Sale: The Challenger Sale follows a teach-tailor-take control process. Salespeople teach the prospect, tailor their communications, and take control of the sale.

• The Sandler System: This system prioritizes building mutual trust between the sales rep and prospect. The salesperson acts as an advisor and asks questions to identify the prospect's challenges.

• Customer Centric Selling: With this method, the salesperson focuses on communicating with the key decision-makers in the sale, and finding solutions to address their pain points or challenges.
• MEDDIC: MEDDIC stands for: metrics, economic buyer, decision criteria, decision process, identify pain, champion. The salesperson asks questions about these topics to help move the prospect to move forward in the sales process.

Learn the Art of Sales

The primary goals of sales are to create custom solutions for their prospects and generate revenue for the business. Whether you’re looking for growth opportunities within sales or you’re joining the field for the first time, we hope this quick guide to sales has provided you with a basic understanding of the types of sales you can do and how they work within the entire business.

Editor's note: This post was originally published in April 2020 and has been updated for comprehensiveness.

Any marketer will tell you effective campaigning starts with a solid list of segmented prospects. But even that can result in a massive number of leads that don’t ever progress beyond that because they don’t represent the best fit for your organization or there’s no intent to make a purchase or move forward on a solution.

Marketers today, especially if you are implementing an account-based marketing (ABM strategy), have to move beyond market segments and zero in on how to further slice and dice those segments to run highly personalized, creative ABM campaigns. This also enables your marketing and sales teams to prioritize the hottest, most active accounts to progress them through the funnel quicker.

In ABM, your strategy is only as good as the accounts you’re targeting. The analyst firm, SiriusDecisions further drove this point home when they found 91% of teams doing ABM close larger deals from their target accounts than from non-target accounts. That’s why getting your account list and segmentation right is so critical.

From an ABM perspective, there are three ways to segment that enables you to effectively target accounts and allow them to move in and out of campaigns based on specific criteria.

Programmatic

The programmatic, or one-to-many, approach mirrors traditional B2B marketing, however it goes one level deeper. First, look at your total addressable market then begin to group accounts with similar characteristics such as firmographic data. Not a far departure from demand-generation marketing. But here’s where you take a step deeper –– you’ll further group this segment based on fit (rank how good of a fit this account truly is for your company) and intent (how ready are they ready to buy?).

You can leverage predictive and intent data to score best-fit accounts and prioritize your outreach. This allows marketing to allocate budget more efficiently and deliver slightly tailored messaging based on specific keywords. Sales is also then able to focus on accounts that are in an active buying cycle.

The programmatic approach is highly effective in the early stage when you’re trying to establish brand awareness in a crowded market. This is particularly useful in pretargeting, when your potential accounts don’t know who you are and your goal is to build awareness and interest. For example, when Masergy, a software-defined networking solutions company, needed to break into a highly competitive market and establish brand awareness, the team deployed a series of digital ads to their target account list based on specific keywords to drive them to their website and get them in their retargeting sequence.

This could also be done with LinkedIn messages or direct mail pieces. The goal, however, is to provide some sort of value, generate awareness and establish engagement among your target accounts, not necessarily generate a form fill.

One-to-few

At this point, you’ll get more personal with your messaging using engagement data. You’ll be focused on a smaller group of accounts –– those that have shown some level of interest in your content or high-value pages on your site, or are surging on specific keyword searches. This insight would indicate to marketing and sales to transition this account from programmatic to one-to-few.

In this scenario, you could set up workflows to automatically move this account into one of several unique ABM campaigns based on what they are interested in. For instance, this could be relevant, keyword-specific digital advertising that drives to one of several landing pages with different messaging and specific CTAs. If at any point the account disengages or is not “surging” on your site or with a keyword, they’d move back to programmatic.

One-to-one

The one-to-one approach is reserved for your most high-value accounts and those that are highly motivated to buy. You’ll spend a majority of your resources and budget on these accounts, but they also represent a higher potential return. This segment is very narrow –– typically your top 20 to 100 accounts depending on your list size –– and includes only those that are ready for your solution right now. This is also effective for expanding relationships with current accounts.

At this point, you know who is in the buying committee and that they are motivated to buy. You also know what results they are looking to achieve. With this information, you’ll create a very deliberate, highly tactical and well-mapped campaign. We recently took this approach when we were trying to expand our footprint within Salesforce.

With the key personas defined within the buying committees we were targeting, we worked with our product team to develop and deliver customized direct mail pieces. These were high-quality pieces of content that homed in on key points we knew these individuals valued. This was just the first step though. We then followed up highly personalized emails, targeted cadences, personalized videos, and LinkedIn messages, while simultaneously delivering targeted one-to-one digital ads directed to each target persona.

Dynamic campaigning

Keep in mind, however, this is not a one-and-done deal. Not only will you have to diversify your approaches and learn from previous ABM campaigns to improve and drill in on specificity, your accounts will move in and out of various campaigns. In other words, accounts that have moved to one-to-one may, at some point, have to move back to one-to-few.

This is where dynamic campaigns come into the picture. Meaning accounts will automatically move in and out of your ABM campaigns based on account data (intent and engagement signals, predictive, etc.) being pulled into your target account database. But not all campaigns will need to be dynamic. It will depend on the campaign goal and which part of the funnel it is targeting.

In determining which campaign type is right for your team, you’ll also need to evaluate your team’s capacity. Naturally, the one-to-one approach requires more resources, budget, and for your various teams to (marketing, sales, customer success, etc.) work closely together. This isn’t always feasible for some teams to do at scale.

To learn more about launching a success ABM program, download The Blueprint to Account-Based Marketing.

Many people would say sales is about taking advantage of people. It hurts me to hear people say that. I don’t think people would come to that conclusion without relating it to their own personal experience. This tells me that they have either had an unpleasant experience with salespeople or someone has shared with them their disappointing experience.

Sales is not about taking advantage of people. Sales is about helping people. It’s exactly the reason why I say sales is leadership and leadership is sales. A good salesperson is also a good leader. The two should go hand in hand.

Watch this very short video on sales leadership!

To me, sales is not a single event but a continuum of various activities. It’s about creating relationships that help build trust and confidence among every party involved in the sales process.  If you really think about it, sales is just the process of communication that people use to help one another. This is one the reasons why I’m not a big fan of the term “closing the sale.” I think we should be viewing it instead as the opening of a new relationship. We are creating the opportunity for the customer to benefit and to me, that’s truly helping people.

I’m sharing this with you, because it’s a struggle I hear about a lot. The struggle of someone not really knowing why they’re in sales. Often, it’s a struggle simply because they are not keeping people their focus. It’s impossible for every conversation to be perfect and it’s impossible for each day to be perfect. What’s possible though is for you as a sales leader to approach each day with an others-centered goal. That goal should be to earn the right, the privilege, the honor and the respect to be able to meet with that person again. I strongly believe that if you pair that goal with your sales skills, you will be successful. People must be of utmost importance to you.

There’s no reason to think less of yourself because you’re in sales. Honestly, you should think more highly of what you’ve been given the task to do: help people. Make it your job to be the best at earning the right, privilege, honor and respect with every person you meet. In doing so, you’ll build trust and confidence with others and success within yourself.

So, let’s ask the question again: is sales about helping people? Yes, indeed it is!

Copyright 2019, Mark Hunter “The Sales Hunter.” Sales Motivation Blog. Mark Hunter is the author of High-Profit Prospecting: Powerful Strategies to Find the Best Leads and Drive Breakthrough Sales Results

If you are using your personal LinkedIn account as part of your brand’s social selling strategy, you should keep an eye on your social selling index (SSI). And if you’re not using your personal LinkedIn account, you should be.

LinkedIn is the new popular kid

I have loved LinkedIn for over a decade. I feel like I “get” LinkedIn. For most of its existence, LinkedIn was the black sheep of the social media world. Facebook was Prom Queen, Instagram and Snapchat had full dance cards, and even Twitter had plans for Friday night — but LinkedIn sat alone in study hall.

Or maybe that was just me. Anyway …

Now LinkedIn is one of the most effective B2B Sales and Marketing channels. It’s one of the only places where people who are passionate about what they do can talk about the why, the how, and the who of their industry. It’s devoid of fluff, but not of authenticity, inspiration, and positivity.

LinkedIn is home to intelligent discourse on manufacturing, digital transformation, marketing, corporate culture, and so much more. It’s like a neverending networking event, and your SSI is a scorecard of your ability to “work the room.”

What is your Social Selling Index score?

Your SSI measures your effectiveness at using your professional brand on LinkedIn to attract leads and grow your network. It uses four pillars of measurement to produce your score:

Establishing your professional brand.

This metric is tied to your LinkedIn profile. A complete and professional profile with plenty of endorsements and recommendations is a good start. LinkedIn also looks to see how many articles you’ve published and how many followers you have.

Find the right people.

LinkedIn social selling is all about Identifying the right prospects. LinkedIn recommends using its Sales Navigator Lead Builder tool. You can also do this organically, reaching out to key decisionmakers with engaging, insightful content.

Engage with insights.

LinkedIn measures your ability to initiate and nurture relationships through your posts. It scores the number of Likes, Shares, and Comments your posts receive, as well as your incoming and outgoing Direct Messages.

Build strong relationships.

The fourth SSI pillar builds on the previous two. This measures your ability to network with influencers who can introduce you to key prospects. Metrics include your people searches, how many profiles you view, and how many days you’ve been active.

Accessing your LinkedIn Social Selling Dashboard

Curious what your LinkedIn SSI is? Finding your number couldn’t be simpler. Here’s what you need to do:

1. Login to LinkedIn.
2. Click this link.

Your LinkedIn Social Selling Dashboard should appear. You can see where your LinkedIn profile stands compared to the rest of your industry, as well as how you stack up against the rest of your network.

Not surprisingly, LinkedIn boosts your score if you are a Premium member and use its Sales Navigator. If I were a CMO I would certainly pony up the cost for the tool, but at $800 a year, this working mom ain’t got time for that.

I’ve raised my SSI to the top 4% within my industry and the top 15% within my network. I did it organically and without a paid membership. Regardless of whether you’re a paid member or not, there is plenty you can do on LinkedIn to elevate your SSI. And, your SSI is updated daily, so get ready to check-in often!

Your personal LinkedIn page is key

Your LinkedIn company page is still an important channel for sharing company news and content, but your personal LinkedIn account has a greater chance of generating a sale than your company page does.

Why? Because Sales is about relationships, and relationships happen between people.

Before you start social selling, take look at your LinkedIn page. Is it basically a glorified résumé, or is it saying something about your personal brand? Here are a few tips to get your personal LinkedIn account ready to mingle:

Profile pic. Your profile pic doesn’t have to be a professional headshot, but it should be an accurate portrayal of you as a business person. Mine is taken in front of Big Sea headquarters.

Headline. Distinguish yourself by sharing your “Why.” Big Sea’s CEO Andi Graham nails it with, ” CEO at Big Sea. Agile marketing with heart. Empathy and connection fuel growth.”

Summary. Keep this short and focused on your objective. This should be an elevator pitch, but for you as a contact, not for your product.

Experience. Simply put, nobody reads what you did at your last job, let alone a job ten years ago. (Unless they’re a recruiter.) Boil down your experience at previous organizations to a brief statement and bullet points of accomplishments.

All of these things will improve your LinkedIn SSI, setting you up for social selling success.

Using LinkedIn for account-based social selling

Now that you’re personal LinkedIn account is dressed for the party, it’s time to step out onto the dance floor and start mingling. Social selling should be part of your account-based marketing strategy.

First, create your list of target prospect companies. Identify the decision-makers you need to connect with. Click the Follow button to get their updates in your feed. What do they post, what do they comment on, what questions do they ask? Find topics where you align, and join the conversation!

If you have a connection in common, you can reach out directly, but remember: Nobody likes a cold call, even when it’s a LinkedIn direct message. Connections are fine, but you need to show interest in them as a person before you try to convert them into a lead.

Social selling and inbound marketing on LinkedIn

You can also use the insights available from your Social Selling Dashboard for a more inbound marketing strategy. This is my favorite way to connect — because all you have to do is be yourself!

Share things that you love about your role, company, and industry. Be brave and voice your opinion on issues facing your industry, talk about your core values, and tell interesting stories around your successful projects. This is not the space to be self-congratulatory; a humorous anecdote about a project is more engaging than a post filled with bragging.

LinkedIn is also measuring your article engagement. At least once a month you should post a longer piece and share it with your network. A good tip is to identify the post that received the most engagement recently and expand on that topic in an article.

Include relevant hashtags in your posts. Just like on Twitter and Instagram, hashtags on LinkedIn allow folks to easily search and curate the content that interests them. You’ll find prospects who align with your core values or share your love of some aspect of their industry.

Remember, social media is all about the conversation! Reply to comments, ask follow-up questions, Like and Share great posts from others. All of that activity improves your SSI, and more important — it’s fun!

The end result? Your posts and articles help high-quality leads who align with your approach to business find you. In a social context, they can follow you, view your profile, and even connect with you — without the fear of being pitched to immediately.

Which leads me to my final note on LinkedIn and social selling: Please don’t pitch someone who just connected with you. It’s rude.

Ready to make social selling part of your company’s strategy? Need a few pointers on polishing your profile or filling it with insights? You can always send me a note on LinkedIn, or you can contact us right here on our website.

Around the world, institutional asset managers face significant headwinds from smaller, lower-cost firms. As a result, they’re being forced to make a difficult decision: reduce their fees or stand their ground, relying on their track record of performance to justify their cost. Of course, in an environment where active fund managers haven’t always been able to deliver the alpha that investors expect, being able to combat fee compression isn’t always easy.

That’s particularly true when you consider that institutional investors are increasingly shifting their assets away from active managers. In fact, in 2017, actively managed assets accounted for just 69 percent fund sponsor assets, down from 84 percent two decades earlier. It’s because of this and other reasons that more than a fifth of managers planned to lower their fees in 2017 according to a Callan survey of US institutional fund sponsors and investment managers, with others having since followed suit.

Clearly, cutting fees isn’t an attractive option. But those firms looking to avoid that possibility can’t just rest on their laurels. They need to get creative not just in terms of how they structure their fees, but also how they provide and demonstrate value.

Show your clients you’re worth it

If you’re not interested in cutting your fees, you may have to look for ways beyond your track record to ensure that your clients are happy to pay them when lower-cost alternatives abound. Some of the ways you can do that include:

1. Spending more time with your clients

Your clients value face time and want to know that you’re always actively engaged in helping them meet their goals, not just at client review time. Of course, giving clients more attention isn’t just about being in the same room with them. You need to use that time to help educate them about the right products and services for their specific needs. Not only does that raise overall client satisfaction levels, it also creates upsell and cross-sell opportunities. To be able to dedicate more energy to your individual clients, you must be able to free up time in your day. One of the best ways to do so is by automating highly manual processes such as looking for and creating collateral that can otherwise take hours, if not days.

2. Creating more personalized client experiences

These days, clients want custom experiences that are completely tailored to their individual needs. And while that can play out in a variety of different ways, one of the most important is the pitch decks that you create for them. To provide true value to your clients, you can’t just use stock standard collateral with each and every one. Instead, make sure that your pitch decks reflect your understanding of each client’s unique situation, provide just the right solutions to meet their needs, and are appropriately branded. Not only are personalized decks like these much more effective, they also demonstrate that you’re tuned in to your client’s needs and that you see them as the individuals they are.

3. Cutting costs in other ways.

Another path to better service is to cut costs wherever possible in your business. This allows you to dedicate more resources to providing value to your clients. As we’ve seen, automating highly manual tasks like finding and creating collateral is one way to do this. Another is by helping to mitigate your company’s risk by ensuring that all of that collateral is always compliant with the latest regulatory requirements. All of this means that you’re not only able to move faster and more nimbly as an organization, but that you can also devote more attention to your clients, secure in the knowledge that you won’t be slapped with any regulatory fines.

Fee compression moving forward

As an institutional asset manager, you may find yourself between a rock and a hard place. You’re in a fee-compressed marketplace where you either have to reduce your fees or justify why you’re keeping them where they are.

If you’re going to hold your ground in the fee compression, it’s important to find creative ways to demonstrate your value. The right technology and sales enablement strategy can help. By automating your content creation process, it’s not only easier to create better, more personalized, and fully compliant content, but you can also save valuable time that you could then spend helping your clients. At a time when everything you can do to differentiate your firm matters, investing in the processes and technology that drive a customer-first experience is a small but important step.

I wrote The Coming Sales Talent Crisis, focusing on the struggles our customers face in their buying journey. We are all painfully aware of the struggles they face in solving problems and buying. We know that less than 50% result in a buying decision.

We know our customers need help-less in understanding our products and solutions, but in helping them navigate their buying process. This process is complex. Helping our customers requires new sales skills. The traditional solutions and consultative selling skills become table stakes. But new skills, including, curiosity, critical thinking, problem solving, collaboration, facilitation, project management, and resource orchestration become significant in helping our customers navigate their buying journeys.

As I discuss these scenarios with sales leaders, I’m often confronted with the argument, “How can we afford to invest in developing these skills in our people, if they are only going to stay with our company 15-22 months?”

They are referring to the data that we see about the revolving door of sales talent we see in too many organizations.

Since I’ve been writing this blog, we’ve seen a downward trend in sales and sales manager tenure. Several years ago, the average tenure of a sales person was 29 months, now the data shows it in the 15-22 month range. Other research shows that we are turning over our sales organizations every 3-4 years!

Recently, I spoke to a senior executive of a multi-billion enterprise. He cited voluntary/involuntary sales attrition of 42%!

Many people I speak with claim, “This is the current reality, after all we all know that millennials will not stay in any job very long….. Why should we continue to invest if they are just going to leave?”

The data is disturbing, if we accept it as the way things must be, one clearly would begin to despair about the future of our sales organizations and question the investments we must make to engage our customers in helping them solve their problems.

But, clearly, this problem starts with sales management and leadership. It’s a problem we and our companies have created, and it’s one we continue to aggravate—not maliciously, but in our lack of attention to the critical role of people–talent–in executing our strategies with our customers.

Some thoughts:

We fail to recognize each sales person, regardless of level, is a multi-million dollar investment. If we were purchasing a million dollar capital asset or making a million dollar investment in software tools, we would study, analyze, and evaluate the investment, the risk, the ROI, and the alternatives critically. We would involve others in that assessment.

Yet, too often, we treat our sales hiring very cavalierly. We hire based on the basis of chemistry. We interview casually, without deep competency models to assess fit, we don’t assess, test, and understand what we need. We take the best of those we have interviewed rather than matching them to what we need. Too often, I hear managers say, “If this person doesn’t work out, I can just replace him with someone else!”

Yet, these people investments are multimillion investments. It’s not the hiring, onboarding, and sunk compensation costs that kill us; it’s the opportunity cost. It is the lost opportunity that we have through open positions, through inexperienced or hiring the wrong person. It’s the opportunity we lose because we don’t continue to invest in developing the capabilities of our people. It’s our customers choosing to buy from someone else because of the inability of our sales people to engage them in meaningful ways.

High turnover, failure to recruit, develop, and retain the right people results in millions in lost opportunity.

In past decades, too many leaders, not just sales, have a tremendously cavalier attitudes toward people. People have become widgets, much like inventory, or other items. We ramp them up or down, based on projected business needs. Too often, there is little loyalty to our people, yet we expect their loyalty–but are surprised when we fail to get it.

The high churn, voluntary or involuntary, is, largely, a result of what we as managers and leaders have created. We’ve created an unhealthy dynamic where we don’t value people, they don’t value working with us–all costing millions in opportunity costs!

The challenge for leaders is that we have to create work environments where people want to work. We need workplaces that attract and retain the best people, we need to invest in training, developing, coaching them. We need to create work that is meaningful. We need to create work environments that challenge, develop, allow people to grow and contribute, and which make them want to stay.

This problem is not just limited to our people, it extends throughout management, as top leaders, we have to start to recognize the tremendous cost and lost opportunity our organizations face in not recognizing talent—people–as the ultimate differentiators in our success.

I don’t mean to condemn managers and leaders in this, I don’t mean to imply any maliciousness in behaviors. I think this is more a crisis created by inattention, lack of understanding, or lack of experience. It’s created by the focus on the day to day, never taking the opportunity to step back, think and reflect on those things that are critical to growth and sustained performance excellence.

There are many organizations that recognize the importance of talent, that are investing in their people and leaders. They are creating workplaces where people seen their contributions are valued, where they continue to learn, develop, and grow. These organizations will far outpace their competition and differentiated themselves, less because of their products, but more because of their people.

Two things came together last week to frame this post. First, Tomasz Tunguz (one of the best of the VC bloggers, if you don’t already subscribe to his blog we recommend it) published a provocative post asking ‘Should Your Startup Differentiate on Pricing?’ The general conclusion seemed to be ‘No’ (see the rationale below). Second, we have had a lot of responses to our recent value report on Pricing Innovation. One of the key findings from that report was that organizations pursuing disruptive innovation tend to use market following pricing, while those engaged in sustaining innovation are more likely to apply value-based pricing. As strong advocates of value-based pricing, this was a bit of a surprise for us.

This is where the Tom Tunguz post came in. In a conversation with Brad Birnbaum, founder and CEO of Kustomer, the following comment was made:

We wanted to be innovative. We thought innovator pricing would be very important to us. We quickly learned as we started talking to customers that they didn’t want innovative pricing. They wanted repeatable, consistent pricing that mapped to the budget they already had in place.

Go to the Tom Tunguz post to read the complete quote, which is worth reading. The summary is …

Prioritizing how to differentiate in the market is a key aspect of product management … Before changing pricing models, listen to customer perspectives on budget.

When there is a clear budget line into which you fit, and buyers have a well established buying process with clear expectations on pricing, introducing a new pricing model can hurt more than it helps.

That is not the whole story. To really understand the interactions between pricing and innovation, we need to better understand the type of innovation we are delivering to the market. As Rashaqa Rahman, who led this research, noted in her blog post Pricing Disruptive Innovations - market-following or value-based pricing? …

Sustaining innovations are innovating on existing value drivers that are already well understood by the market. This makes it easier to map value creation to value-based pricing. Disruptive innovations can create differentiation through new value drivers (economic and/or emotional) or through new ways of delivering on existing value drivers that the customer cares about.

Let’s unpack this a bit. There are three ways to create value through innovation: one can improve on an existing value driver, find a new way to deliver an existing value driver or uncover and deliver a completely new value driver. One can do each of these for an existing market or for a currently underserved market. Putting these together gives the following two by six matrix.

The three approaches to innovation are framed here in terms of value drivers. Value drivers are the basic building blocks of pricing (and product) strategy. They come in two flavours, emotional and economic, and they can be organized and combined in many different ways. One or two of the economic value drivers generally emerge as critical and are used to build pricing metrics. There are three ways to think about value metrics and innovation. In most cases, at least for B2B, it is the economic value metrics that are used in framing pricing metrics.

1. Improving on an existing value driver. Basically this means tweaking the parameters of the value equation for a specific market segment. This is classic sustaining innovation.

2. Finding a new way to deliver on an existing value driver. This is an important form of innovation as it is often a first step towards disruptive innovation, but it does not become disruptive so long as it is based on existing value drivers.

3. Finding a new value driver, always for a specific segment, ideally a segment that is underserved or not served at all.

Value drivers are the impact your offer has on the business of your customer. The six types are set out below. If your customers are SaaS companies, it can also be useful to define value drivers in terms of their impact on unit economics.

So how does this connect to the choice of pricing method? Restricting ourselves to just two methods, value-based pricing and market following (competitive) pricing, the choices map as follows.

Looking at each of these scenarios:

Existing Market x Improve an Existing Value Driver — Value-Based Sustaining

This is the classic sustaining innovation scenario. To win you need to communicate the incremental value and claim part of this in price. The only way to do this is with value-based pricing.

Existing Market x New Way to Deliver an Existing Value Driver — Value-Based Disruptive

This may or may not be a meaningful innovation. At the end of the day, customers care about what value is delivered and not how it is delivered. The only way to know is with value-based pricing.

Existing Market x New Value Driver — Market Following Disruptive

This is the most difficult scenario, but it is also one of the most common. This is the only case in which one may want to adopt a market following pricing approach. One would do this to focus ones early energies on explaining the new value driver and how it works and keeping the pricing conversation as simple as possible.

Unserved Market x Improve an Existing Value Driver — Value-Based Sustaining:

Entering an unserved market always requires value-based pricing. You have to convince the market of the value of your new (to them) solution.

Unserved Market x New Way to Deliver an Existing Value Driver — Value-Based Disruptive

As far as the market is concerned, this is the same as the preceding scenario as the solution is new to them and the value has to be demonstrated.

Unserved Market x New Value Driver — Value-Based Blue Ocean

These are the most compelling, and the rarest forms of innovation. This is when an innovation creates a whole new market that it can dominate. It is not for the faint of heart. It requires a compelling value proposition, time and determination, and a few early believers. But these believers will still need to understand and be able to sell the value. Value-based pricing is essential.

So, before you choose a pricing methodology, think hard about the kind of innovation you are proposing and ask if you are brining this to an existing market or if you are creating a new market. Don’t default to market-following pricing just because it seems like the easiest route or you are afraid that you don’t understand your customers. If you want to win at innovation you have to invest in understanding your customers. Value-based pricing gives you a framework to do this.

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Editor’s Note: This article was co-authored by Mackey Craven and Sean Fanning. 

A great deal has been written about venture investments, ranging from up-to-date reporting on round sizes and valuations (just read the most recent Crunchbase, Pitchbook or CBinsights blog) to breaking down the complexity of a venture deal into consumable components (Brad Feld’s and Jason Mendelson’s Venture Deals is hands down the best resource on the topic).

Let’s say for a moment that you’ve read all that, executed like hell, and find yourself in the enviable position of choosing between multiple term sheets – how do you choose which one to take?

While the answer is sometimes easy because your favorite firm gave you the best terms, it’s rarely so straightforward. Through supporting CEOs in OV’s portfolio, we developed a simple, yet powerful, framework for picking a term sheet. Our five steps will help you compare the qualitative and quantitative aspects of various term sheets to more easily make the best decision for your business.

Partnership and Terms: The Two Elements of Taking a Venture Investment

Only two things matter when you receive a term sheet: who wrote it and what it says. While it can be straightforward to compare either investors or economics, the challenge is that they come as an indivisible pair. In other words, you should be able to rank the investors issuing term sheets in preference order after spending time with them, referencing CEOs who they work with and getting to know their firm as a whole. In addition, the job of ranking term sheet economics is a straightforward mathematical exercise if each investor is using standard market terms – look at valuation, round size, post-money option pool and other economic factors. The simplest criterion to determine “economic superiority” is your post-money ownership percentage as it takes into account all these relevant factors.

So how do we merge these two elements?

Step One: Make Two Lists

First, rank the term sheets by what you receive (a partner and capital to scale). Then rank the term sheets by what you give (ownership and other rights). Assuming the VCs you are considering offer market terms, the second list will be ranked by post-money ownership.

The challenge emerges when evaluating your qualitative judgements of partners and what you can do with the capital they provide alongside the quantitative economic rankings. While it’s an easy decision if the preferred partner also has the most attractive offer, this is often not the case.

What makes choosing between multiple term sheets challenging is not identifying which deal is better for the company or which partner you prefer, but that they come as a set and often don’t perfectly align.

Step Two: Use Your Judgement

Not all investors are created equal. We find ourselves discussing this topic with CEOs regularly when their preferred partner does not offer the best economic terms. “Gut ” is an important part of the process, but there is a data-driven way to make a decision. Translate your qualitative judgements on each partner into quantitative rankings based on the marginal value working with them will bring over your other options. This is Step 2:

Next to each investor on the first list, write down the percent more value per year (P) that you think your business will gain by working with your preferred partner over working with the investor ranked last on that list. Maybe it’s 1% more valuable, maybe it’s 5%, maybe it’s 50% – that’s something only you can decide. If it’s 0%, then you may want to question whether your preferred partner is truly better for the business.

The reality is not all venture firms or venture dollars are created equal – venture capital is not a commodity. Whether your objective is to maximize the impact of your company’s mission or to maximize value for your shareholders (including you!), you are probably looking to build a large, enduring enterprise. So, the question boils down to, how much more valuable of a company can I build by working with my preferred partner and the capital they provide?

Step Three: Calculate the Value Factor

You can calculate the Value Factor for each term sheet using the equation (1+P)^Y, where Y is the number of years you expect to be working together. Once you have calculated the Value Factor, you can incorporate what was previously a qualitative judgement on an investor into a purely quantitative output.

Step Four: Rank the Term Sheets by Value Adjusted Ownership

Putting It All Together

While the idea that getting a smaller piece of a bigger pie is a truism, it’s also likely to be the reason you’re considering raising venture capital in the first place – to trade off some ownership in your company for partnership and capital to achieve its potential.

Create a third (and final) list rank ordering the term sheets by Value Adjusted Ownership. To calculate this, multiply the Value Factor by your post-money ownership. The term sheet with the highest Value Adjusted Ownership is the best one for the business.

Value Adjusted Ownership incorporates your qualitative judgement on the marginal value your business will gain by choosing a specific partner with the quantitative tradeoff of taking an investment with that partners’ proposed terms. The term sheet with the largest resulting Value Adjusted Ownership is the one you should sign, and the best part is that it’s based completely on your own judgement.

The Power of 5%

Calculating some Value Factors makes the impact of this more tangible. The table below shows the Value Factor for varying marginal enterprise values per year, P, after Y years of partnership.

For example, if working with a given firm over another would add 5% more enterprise value per year to your business for three years, that translates into a Value Factor of 1.16x. As an example, a Value Factor of 1.16x means that raising a $10M Series A at a $20M pre-money valuation from the preferred partner would be more valuable than raising a $10M Series A at $30M pre-money valuation from the other after just three years of partnership. But how?

In Step 1, you would calculate that your post-money ownership after raising $10M at a $20M pre-money valuation is 66.6% of your pre-money ownership, holding all else equal. You would also calculate that your post-money ownership after raising $10M at a $30M pre-money valuation is 75.0% of your pre-money ownership, holding all else equal. The second is clearly worth more on paper today.

In Step 4 you would multiply the Value Factor of 1.16x (based on a P determined in Step 2 and calculated in Step 3 or referencing the table above) by 66.6% to get a Value Adjusted Ownership of 77.3%. The Value Adjusted Ownership of the non-preferred partner would remain the same at 75.0% since it is the baseline from which the percent more value per year (P) is determined.

As 77.3% is larger than 75.0%, you (and all other existing shareholders) would be financially better off by raising $10M at $20M from the preferred partner because you will make more money when you exit – the one valuation that really matters.

While a 50% valuation difference may seem insurmountable at first glance, the Value Factor puts it into perspective. That is the power of 5%.

Step Five: Sign the Term Sheet

Armed with the previous four steps and an understanding of the Value Factor and Value Adjusted Ownership, you have all the tools to confidently make the right decision for your business. Sign the term sheet and get back to what you want to be doing, building the company!

OV’s 5 Step Framework

To recap, here is the condensed version of OV’s 5 step framework to picking a term sheet:

1. Make two lists. First, rank the term sheets by what you receive (a partner and capital to scale). Second, rank the term sheets in order by what you give (ownership and other rights). Assuming the VCs you are considering offer market terms, the second list will be ranked by post-money ownership. If your favorite investor issued the most favorable term sheet – you’re done! You can skip directly to step 5.
2. Use your judgement. Next to each investor on the first list, write down the percent more value per year (P) you think the business will gain by working with them over working with the investor ranked last on the list. If you think the value you’ll get from each investor and their capital is equal, or P = 0 for all terms sheets – you’re done! Choose the term sheet at the top of your second list and skip to step 5.
3. Calculate the Value Factor. Use the equation (1+P)^Y to calculate the Value Factor, where Y is the number of years you expect to be working together.
4. Rank term sheets by Value Adjusted Ownership. You should rank order the term sheets by Value Adjusted Ownership. To do this, multiply the Value Factor by your post-money ownership. The term sheet with the highest Value Adjusted Ownership is the best one for the business, based exclusively on your judgement.
5. Sign the term sheet! Then get back to what you want to be doing, building the company!

We hope you find this framework as valuable as we do at OpenView, and would love to hear if you end up using it to help pick a term sheet!

The post How to Pick a Term Sheet: OpenView’s 5 Step Framework appeared first on OpenView Labs.

PR faces a conundrum. We have loads of examples where a solid PR strategy has contributed to a brand’s growth and visibility. But PR teams still struggle to prove the value of PR to their C-suite executives.

A recent survey from Proof Analytics found that while all but one of the 400-plus C-suite executives surveyed said they believed great marketing and communications create business value, 96% said their marketing and PR teams were “unwilling or unable” to prove return on investment. And 94% of executives reported that they had little or no reliable understanding of the quantifiable value delivered by marketing.

The failure to prove value has a direct impact on PR’s bottom line. In the same survey, 96% of the executives said their 2019 marketing and PR budgets would be cut by at least 10%.

How can you draw a direct line from your PR activities to your company’s bottom line? PR metrics are key to getting everyone on the same page where PR and its value is concerned.

Why Every Brand Needs PR Measurement

PR practitioners know that PR has great power for any business.

Yet.

With little understanding of its value and the inability to prove it, brands view demands for increased communications budgets with a hefty dose of skepticism.

This leaves us with one very important task ahead of us: Prove PR value beyond a shadow of a doubt.

But how?

What Should You Do?

Your first step is to set goals for your company. Without goals in place before you launch your campaign, any metrics you get are merely numbers. If you want to learn where you need to improve and what is working, set goals to measure against those numbers.

The second step to effective PR measurement is investing in good analytics software. This could be a free program, such as Google Analytics. If you are looking for more nuanced analytics capabilities, check out paid services as AirPR or TrendKite.

The third step to setting up a PR measurement strategy is to determine what metrics are key to proving your worth. These might vary from industry to industry and business to business, but there are a few that remain constant, no matter your brand.

With this in mind, let’s take a look at a few key PR metrics that will help you on your journey to proving PR value — and get you a few steps closer to securing more budget and appreciation for your PR strategy.

The Value of PR: 6 PR Metrics You Need to Track

1. New Users

New users are individuals who visit your site for the first time. While this number isn’t the be all to end all, it’s an important first metric to monitor over a long period of time. As more people gain exposure to your site, this number should grow. If it doesn’t, you know you need to start adjusting your strategy.

As part of this metric, you also need to pay attention to where your new traffic is coming from. Are visitors coming from social media? Organic search? Influencer marketing campaigns? A recent PR campaign?

Understanding where people are coming from — and even where they are not coming from — helps you to determine which strategies are working and which need to be let go.

2. Returning Users

Admittedly, it’s exciting to have a new user come in contact with your brand — but it should be equally important to see people returning to your brand. Why?

Not only are returning users more likely to make a purchase, but the more they return, the more trust is built between the visitor and your brand.

This is also why content marketing is such an important part of your PR strategy. As you maintain a steady flow of content creation, it keeps audiences coming back to see what new information they can glean from your site — and continues to build confidence in your brand as a trusted source.

Measuring the amount of people who return to your site over time shows the long-term impact of your strategy.

3. Bounce Rate

A “bounce” occurs when someone visits your website and leaves without visiting another page. Your bounce rate shows you the percentage of your visitors who bounce off of your site.

This number shows you if people are engaged with your site. Granted, new and returning users are important — but this new piece of information can tell you how interested they are in your site.

If your bounce rate is high, it tells you that someone came, took one look, and left. If it is low, it tells you that the visitor browsed a while before moving on.

How can you use this information? Take your pages with a low bounce rate and examine them to see what makes people stay. Is it the subject matter? The visuals? A report you used? Then take that information and apply it to your other pages.

If a page has a high bounce rate, determine what may make people leave once they’ve clicked. Does your title misrepresent your content? Do you have enough visuals and bulleted lists? Is your writing stale and boring? Take a long, honest look at what you can do to improve the page and its bounce rate.

4. Social Media

Social media is an integral part of modern public relations — it is, after all, where your audience consumes the majority of its information. Understanding how many people interact with your social campaigns is key to seeing how effective your PR is.

Number one on your list should be how many people click on your campaigns. This is key since it shows how many people were attracted enough by your message to click through to your campaign or content.

Second, it’s important to monitor your social interactions. How many people liked, commented, and shared your content? This shows how much overall interest there is in your brand — even if they didn’t click through.

The data will pinpoint which social networks are working for your brand. If you’re pouring money into Facebook ads, but you’re getting more results from LinkedIn, then it’s time to adjust your social budget allocation. If you’re spending a good chunk of your time tweeting on Twitter, but you’re seeing little if any interaction, then you might want to go a different route.

5. Mobile Users

In 2019, it’s predicted that mobile phone users will climb to 4.68 billion. Yet, in many PR strategies, mobile users are little more than a footnote. Most often, mobile users are simply viewed as part of their larger audience.

Why should you monitor interactions from mobile users? Smart phones and tablets are becoming the devices of the future, if not moment. It is important to know how your brand is perceived from these devices.

As you monitor your mobile metrics, ask yourself the following questions:

• What devices does my audience use and how do my campaigns appear on those devices?
• Should I invest in a mobile-friendly design when I create my campaigns?
• Should I include a mobile app as part of my campaign?

This information, along with close analysis, will help you to create appealing and effective campaigns no matter where your audience is.

6. Conversions

While the number of new and returning users is helpful information, ultimately you want people to take some kind of action. Whether it’s buying your product or downloading your latest ebook, it’s important for visitors to convert into leads and customers.

Initially, it’s normal for people to check out your brand and not take further action. But if you see that a lot of people are clicking on your campaign but very few people are actually converting, then you need to find out where the problem is. Is your call to action weak? Your landing page a turn off? You offer not a grabber? Start tweaking your conversion tactics one by one to see what’s working, what’s not.

In review…

The value of PR is undeniable! But without proof, you will find it hard to convince others within your brand. Start measuring your PR activities and have real numbers to show the effect that your campaigns are having on your brand’s bottom line.

Every profession goes through changes, especially sales. A certain sales technique may have worked in the past, but that doesn’t mean it’ll work today. To be a top-performing salesperson today and in the future, you must continuously adapt to both market and social conditions.

There are several new business trends taking place—all of which affect salespeople in every industry. Understand what the trends are and how to maximize them so you can maintain a successful sales career.

YOUR PAST SUCCESS WILL HOLD YOU BACK.

People who are in sales long-term tend to be successful. However, success is your worst enemy. Being at the top and doing well means you’re just trying to keep up and meet demand. You’re not looking at future opportunities because you’re busy reaping the rewards of current ones. The old saying “If it isn’t broke, don’t fix it” should be reworked today to state, “If it works, it’s obsolete.” If you just bought the latest device, odds are that the newer, better version is already in existence and about to be released to the public. We must evolve to stay ahead of rapid obsolescence in business.

TECHNOLOGY-DRIVEN CHANGE WILL DRAMATICALLY ACCELERATE.

While it’s human nature to protect the status quo, you have to understand that technology is changing the future, customers’ behavior, and your company’s reality. If you don’t change, you’ll be out of a job. As a salesperson, you need to embrace change wholeheartedly rather than resist and hold tight to the past. Spend some time thinking about where these impactful changes are headed. Change causes uncertainty in customers’ minds, so you bring certainty to them when you display confidence in change.

TIME IS INCREASING IN VALUE.

Time is becoming more important to people, because we have an aging demographic of Baby Boomers in the United States. Time gets more valuable as you get older because you have less of it. The world is more complex, with much more for people to do with their time. With so much going on, everyone is increasingly strapped for time. As a salesperson, make your customers feel that talking to you is actually saving them time. The list of time wasters is virtually endless, and these hurt your sales and profits. Prove that you’re a time saver and people will choose you over the competition.

WE’VE SHIFTED FROM THE INFORMATION AGE TO THE COMMUNICATION AGE.

Many salespeople rely on static marketing tools like company websites, flyers, and sales letters. These methods are a one-way interface. The better way is to have your sales messages be dynamic. For example, you could have a contest that encourages people to go to your site and enter. Instead of just telling people to buy your snack product, you can encourage customers to go online and vote for the next new flavor, getting them involved. The key is to generate communication, engagement, and involvement through your sales and marketing efforts. Don’t just hand out information; you want to listen, speak, and create dialogue to capture your prospects’ interest.

SOLUTIONS TO PRESENT PROBLEMS ARE BECOMING OBSOLETE FASTER.

Almost every salesperson has been told to be proactive by taking positive action. Unfortunately, you must wait and see to know if a certain action is positive. Instead, be pre-active to future known events. You need to look at your customer segment and identify what types of events you are certain they will experience, and focus your actions on what will be happening rather than on what is happening. Being pre-active also means that you change the way people think. When you put out a new product, it takes a while to catch on because you’re not actively changing the way people think about how the product can be used. Constantly educate your customers on the value you and your products or services offer.

THE VALUE YOU BRING TODAY IS FORGOTTEN FASTER.

Sell the future benefit of what you do. Most salespeople sell the current benefits to customers who already know what they are. Your goal as a salesperson should be to establish a long-term, problem-solving relationship with customers, not a short-term transaction. Your most profitable customer is a repeat customer, so help them realize the long-term benefit of your partnership. Show them how the products and services you offer will evolve with their needs by selling the evolution of your products and services. Sit down with your fellow salespeople to create a list of future benefits that you have for your customers, and then get an idea of where the product and service developers are heading to think of future benefits preemptively.

SALES SUCCESS FOR THE FUTURE

The more you understand and adapt to today’s current business trends, the better your sales will be—today and in the future.

Are you anticipating future trends in your sales career? If you want to learn more about the changes that are ahead and how to turn them into an advantage by becoming anticipatory, pick up a copy of my latest book, The Anticipatory Organization.

Originally published here.

Today’s guest post is by Jonathan Wicks (Twitter: @parkingmaster). Jonathan Wicks is a parking consultant with Walker Consultants in Los Angeles. Established in 1965 as a structural engineering firm, Walker Parking Consultants rapidly morphed into a parking design and consulting practice.  By the 1980s, Walker was the leading parking consultant in the United States.

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Too often, decisions about parking in our cities are driven by emotion and intuition. It's a truism that everywhere you go, you'll find people who feel that their neighborhood or street has a parking shortage. Anecdotes and gut reactions often dominate discussion of any possible changes to parking policy or availability.

At the same time, local elected officials often wish they had better data to inform their decisions. A parking consultant, in this situation, can kill two birds with one stone: providing rigorous analysis to policymakers and helping citizens understand the actual parking situation in their city more clearly—thus building public support for decisions that are a win-win for residents, businesses, and the city.

Parking planners are experts in the field of gathering and interpreting data that is applied to evidence-backed principles for how to solve parking problems and implement policy to support parking regulations. The parking planner’s approach is careful to remove emotion from decisions which have impacts for decades. For example, the average expected life of structured parking can extend well beyond 50 years and it requires quite a bit of knowledge and expertise to accurately predict future parking requirements and long-term costs associated with the maintenance and operations of this facility for its lifetime. To achieve these parking solutions, parking planners reach out to stakeholders and engage with the community on upcoming developments to ensure the public has input on the process and economic solutions.

The outreach and education portions of a parking planner’s job are particularly important. For drivers, their vehicle is an extension of their personal space. Their emotions are evident in public comment sessions across the nation. Residents will express concern that strangers are parking in front of their houses. From their perspective, there’s not enough parking. They often see those spaces as part of the same extension of personal space as many home owners assume the public right of way in front of their house belongs to that home owner. In fact, these spaces are public, and the planner knows that use of parking in front of houses in mixed-use neighborhoods is a healthy sign for the entire community and is an indicator that the area is thriving as a destination for both work and play.

When people can’t find a place to park at their destination and find themselves circling or waiting in queues, this is known as parking congestion and businesses tend to lose opportunity and revenue when there is a lack of available parking. Since parking is a limited and valuable resource it should be managed as such.

The Parking Demand Paradigm (Triangle). Source: Walker Consultants, 2019

Framing Parking Trade-Offs

To help smart cities make data-driven decisions, parking planners outline various solutions to parking congestion. They use the Parking Demand Triangle to outline various tradeoffs. The triangle suggests that of the three things you might want a parking space to be—free, convenient, and available—you often get to pick only two:

Free and Convenient spaces are ideally located in front of a popular destination that the community does not charge to use. For example, a free parking space in front of a restaurant. If a location is popular, vehicles will rapidly fill the spaces. As a result, free and convenient spaces may not be available.

Free and Available spaces that require walking a bit farther from a vehicle to a final location. For example, a space in a surface lot behind the building. On-street spaces may be a block or two away, or on a side street. They’re less convenient than a space directly in front of a popular location.

Convenient and Available spaces directly in front of popular locations will only be available with parking controls. Parking controls include time limits and/or paid parking. This keeps the spaces turning over. Additionally, with paid parking, the choice of free versus convenient is starkly outlined for motorists. They can choose between parking for free, but farther away, or paying for the right to park in the more convenient spaces.  The revenue is used to repair roads alongside other civic improvements.

Source: Walker Consultants, 2019. Click to view larger.

Studying Where Parking is Actually Used Most

As part of their role, parking planners often perform parking occupancy studies. They help communities understand how parking is being used, a survey will be conducted of the local streets to determine how current parking regulations affect parking with and without controls.  Parking studies also measure how long vehicles will remain in specific areas to optimize economic solutions.

A typical downtown parking occupancy study often reveals that parking is available at the perimeter of the downtown and limited as you get closer in proximity of popular destinations:

In this example study, the data shows that most spaces in the core business district are routinely occupied. Motorists that circle for free and convenient parking increase vehicle emissions, creating safety conflicts for pedestrians, and becoming stuck in traffic jams to reach their destination.  The community in our study is growing, which is good for the businesses, but bad for free and convenient parking.

Source: Walker Consultants, 2019. Click to view larger.

As part of our study, the parking planner will measure occupancy rates of two different types of spaces throughout the day. The data shows that most on-street spaces in the heart of the business district are full by 10am. Some drivers who want to be in the business district may not be able find parking. This is the proximate cause of the neighborhood’s traffic jams.  The parking consultant would recommend to direct drivers to the off-street parking for longer stays after 10 AM. They would also recommend paid parking to keep the spaces turning over. Pricing parking for turnover and desired availability would allow drivers with short errands downtown to nearly always be able to find a space.

Source: Walker Consultants, 2019. Click to view larger.

This data further goes into types of parking and their occupancy rate throughout the day and shows that there is a demand for on-street parking short-term visitors and customers. The parking planner may recommend that local employees find alternative spaces in a lot or garage for longer duration stays to vacate parking for customers with shorter parking duration needs.

Communicating the Benefits of Paid Parking

Many people have an understandable gut resistance to paid parking, but there are places where it can be appropriate and actually a mutually beneficial outcome for everyone. A parking planner uses data like those gathered in the study above to help explain when, where, and why community members might actually see benefit in a paid parking program.

Paid parking will keep spaces turning over. Visitors will be more easily able to visit local businesses. The parking planner would recommend keeping the perimeter parking spaces free. People would have the option of parking for free, in exchange for walking a few blocks.

Paid parking will also produce revenue to fund efficient parking management that will include less expensive alternatives for those willing to park further-away from their destination. The revenue will be used to maintain and improve parking conditions. This includes enhancing lighting, fixing potholes, and beautifying the streetscape with planters.  The revenue will also be used to improve the downtown core in less visible ways.  It will also support the infrastructure of a paid parking program.

Parking planners help communities grow through studies like the one above. A parking study presents the balance of how different stakeholders’ access different parts of the community and supports decisions that help neighborhoods thrive.

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Amazon has come a long way from its humble beginnings as an online bookseller. Since its launch in 1994, Amazon has grown to become an ecommerce behemoth. These days, it’s one of the first places shoppers turn to buy anything from cleaning products to the latest tech gadgets.

And with over 564 million products sold in the U.S. alone, Amazon is the uncontested ecommerce leader and continues to grow and innovate.

This success took years to achieve and is due in part to Amazon’s strategic approach to growth. Any ecommerce business, regardless of where they start, can learn from Amazon’s example to grow their business and attract and retain more customers.

Here are six lessons that are at the center of why Amazon is so successful. Use them to make your ecommerce business even stronger.

1. Meet the needs of your customers

Part of the reason for Amazon’s evolution from book retailer to “everything” retailer is its ability to tap into the power of referrals.

Jeff Bezos, Amazon CEO, is quoted as saying, “It used to be that if you made a customer happy, they would tell five friends. Now, with the megaphone of the internet, whether online customer reviews or social media, they can tell 5,000 friends.”

News travels at lightning speed across the internet, so to Bezos’ point, by offering customers a positive experience, Amazon grows when their customers share their experiences with their friends and family. This in turn drives new people to Amazon’s store to browse the product pages, experience the benefits for themselves, and then share about it.

The key to sustaining long-term growth with this cycle is to take a customer-focused approach. Bezos explains it this way, “There are many ways to center a business. You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality.”

What you can do

We live in an age where people share their experiences online, and personal referrals hold more weight than brand marketing.

Use this audience preference to your advantage and focus on ways to make your customers happy. If you do a good job, your customers are more likely to share their experiences, which will help grow your customer base and increase your revenue—by lowering customer acquisition cost (CAC) and potentially boosting lifetime value (LTV).

2. Incorporate data analysis into your decision making

Amazon prides itself on its commitment to innovation and testing. They test every aspect of their business—from pricing to product selection—so that decisions are based on customer needs and not what Amazon thinks customers might want.

As Bezos puts it, “Our customers are loyal to us right up until the second somebody offers them a better service. And I love that. It’s super-motivating for us.”

In part, it’s this constant threat of customers switching to the competition that drives Amazon’s innovation. Even though it’s the largest ecommerce retailer, with $232.89 billion in revenue in 2018 across all of its business segments, Amazon is constantly in competition with other businesses.

For example, smart home devices are gaining momentum in the market. More customers are choosing to equip their homes with devices that make modern day living more interactive and seamless. To compete with a smart speaker like Google Home, Amazon continues to upgrade its Echo to include more distinctive features.

In fact, Amazon Echo has grown to the point it makes up 75% of the global smart speaker market:

[Source]

When it comes to features, Alexa on Amazon Echo was one of the first versions of voice-controlled tech. It was designed to make it easier for users to connect to the different devices they use. Amazon has gone further with its smart speaker tech to release the Amazon Echo Dot and the Amazon Echo Show to further cater to customers’ need to be connected.

What you can do

Be strategic about testing your products regularly and coming up with new ideas to meet evolving customer needs. For example, run A/B tests by selling limited edition products to test customer interest, send customer surveys, or use a Net Promoter Score (NPS) survey to find who your promoters are and how many, so you can cater to their specific needs. This is your most valuable customer segment after all. Combine these efforts so that it’s easier to make decisions and create innovative products, features, and service based on data.

3. Get to know your customers

Amazon is constantly learning about its customers. For example, as customers search and add products to their cart, behavioral data shows trends that identify product preferences and buying behaviors.

Amazon takes this information and shows customers products related to items they’ve recently browsed and makes recommendations based on their search habits:

At the bottom of the homepage, customers can also see more recommendations based on recent purchases and a history of products they’ve recently viewed. All of this information serves to personalize customers’ shopping experiences and guides them to buy more.

Amazon takes personalization further by confirming whether or not a selected product ships to the location entered in the customer profile. This is incredibly helpful because it avoids customers adding items to their cart only to find out at checkout that they can’t receive it.

This tactic works because research shows that customers expect personalized experiences. When brands position themselves as partners in the shopping journey, it:

• reinforces the brand/customer relationship
• improves the customer experience
• improves conversions and boosts revenue
• promotes customer loyalty and
• increases retention

Product recommendations based on what Amazon knows about its customers are targeted and in-line with what customers want to buy or are interested in.

What you can do

Personalize your customers’ shopping experience. To start, add a list of products customers recently searched for at the bottom on your product pages. This way, it’s easy for them to link back to these products and eventually add them to their cart for purchase.

On your homepage, list products customers might be interested in based on what they’ve purchased in the past. In the customer dashboard where they manage their profile information, give customers the option to reorder products they’ve purchased in the past. Amazon does this, which makes it quick and easy for customers to find what they need and buy it again.

4. Build a community for your customers

Research shows that 87% of customers prefer product feedback from people they know and trust vs. brands. In fact, 45% of shoppers read reviews before buying.

Add to this the fact that 82% of customers use their cell phones to conduct online research before they buy a product, and you have the perfect opportunity to build a community designed to educate shoppers and move them along the customer journey quicker.

Amazon uses a few different strategies to build its customer community. One way is it proactively asks recent customers to rate and review their experience:

This information is added to the list of customer reviews on the product page. These reviews also appear with a “verified purchase” flag, which adds to the trustworthiness of the review:

Amazon also offers a customer question-and-answer section at the bottom of its product pages to give shoppers the option to ask specific questions before they buy something. Past customers provide some of the answers:

Both of these options make it possible for shoppers to rely on other customers for information and not Amazon. Shoppers can read about honest experiences from other customers and base some of their purchase decisions on this.

What you can do

Send emails to customers after they receive their product and have had a chance to use it. Ask them for a review. Also, post requests for reviews in each customer’s personal dashboard, so when they log in, they’re reminded to submit a review directly on your site.

Also, like Amazon, flag reviews to make it clear that they’re submitted by people who actually bought the products they’re reviewing.

5. Build a loyalty program to incentivize customers

Amazon launched Amazon Prime in 2005 and positioned it as a membership service that offered two-day free shipping and other benefits. Prime has evolved since then to also include exclusive offers at Whole Foods grocery stores, access to award-winning TV shows, access to their music streaming service called Amazon Music, and much more:

Then in 2015, the service gained even more attention when Amazon Prime Day was launched. For one day only, Amazon Prime members have access to deep discounts and exclusive offers.

This annual event, available globally, is a highlight for Prime members. In fact, there were over 100 billion products sold globally during the most recent Prime Day. This beat out sales from Cyber Monday, Black Friday, and the last Prime Day.

While Amazon Prime isn’t like most loyalty programs that customers automatically qualify for—you have to pay to join Amazon Prime—it does a good job of driving traffic to the store and encouraging shoppers to buy something.

Customers want loyalty programs. In fact, 71% of customers choose to join loyalty programs because of the promise to save money on their purchases. 63% join because of the potential to receive products for free.

Amazon has been able to tap into this need customers have to save money instantly when they shop. By offering special discounts and reduced or free shipping rates, shoppers are naturally drawn to Amazon to meet their purchase needs.

What you can do

Create a program that offers incentives that get customers to come back to the store regularly and take advantage of special offers. For example, include access to free shipping, limited time discounts, and other membership perks.

Also, studies show that in addition to saving money, 79% of customers want loyalty programs that care about them. Use this concept to offer special rewards and bonuses during important occasions like a membership anniversary or customer birthday.

6. Think of new ways to evolve

Amazon continues to grow as a result of its dedication to trying new things. Features like product reordering and returning damaged products aren’t standard practice for all ecommerce retailers.

Something as simple as centralizing where customers track their orders:

or manage their returns:

… go a long way to helping Amazon become a company that’s constantly thinking of new ways to make the customer experience simple and seamless.

Plus, once Amazon has shoppers’ attention, they think of new ways to keep their audience engaged. Whether it’s by introducing new TV and movie programming as part of Prime membership or access to new audio content, Amazon is always looking for new opportunities to evolve.

What you can do

To innovate, look at what your competitors offer and find gaps you can fill. Listen to what customers are saying on social media and ask your customer support reps to log any insights they get when customers call in.

Use any avenue where customers share information as an opportunity to learn from them and improve your business and product offerings.

Leveraging examples of what makes Amazon so successful

Amazon was first launched in 1994. It’s experimented and learned lessons over time to become the ecommerce giant it is today. You don’t have to wait years to see results, but tackle your growth strategically. Start with small changes, test, and adjust. Be consistent with the changes you make, and over time you’ll begin to see the results.

Recent years have seen the rise of automated marketing operations, insights, and data analysis. Marketing and Sales organizations are using data from new sources in innovative ways to holistically inform and improve their performance and conversion rates.

These first- and third-party data sources are largely captured and categorized by algorithms augmented by artificial intelligence, natural-language processing, and machine learning.

And contrary to popular fears, the robots haven’t taken over yet, which highlights the reality that there have been business analysts, data scientists, and marketers making sense of these new data streams and intelligence.

In a recent article on martechadvisor.com, author Daniel Raskin predicted that real-time data analysis will become so central to the marketing function that the marketing data scientist profession will emerge and become cemented in the marketing function.

Marketing Data Scientists Abound

Some practitioners consider the marketing data scientist profession to be beyond nascent.

Michael Lock, Aberdeen’s senior vice president of research, argues that the vast majority of an organization’s data processing and analysis is done for the purpose of marketing.

Whether an organization approaches data science as an art or a discipline, the output is “inextricably linked to marketing,” Lock said.

The business analyst role has existed for decades. Many organizations already structure that position within the marketing function because business analysts (who Lock figures are branding themselves as data scientists these days) are analyzing data to open up new markets, determine which products are worth developing, and predict how products will perform and which features will resonate with users.

The work business analysts and data scientists do now is “inherently marketing-driven the vast majority of the time,” Lock said.

The idea of the emerging marketing data scientist role isn’t so much a question of “is there a future in it?” he said, but instead, an argument of “how much of the present is already taken up by data science applied toward marketing purposes — and my sense is that a lot of it is.”

Data Science vs. Marketing Data Science

As for the future of the data scientist role, there will be times when the job isn’t tied into marketing.

At organizations such as manufacturers who deliver unfinished or partially finished goods to other manufacturers, their marketing efforts are not high on the list of organizational priorities. At such an outfit, data scientists will continue to focus on optimizing the product supply chain and new product development process.

At high-tech giants like Oracle, IBM, SAP, or Microsoft, the ability to identify new customers and sell to them is core to the business model, and that responsibility falls under the purview of marketing. So, the majority of their data science efforts are going to be tied to marketing.

“Those companies are gigantic marketing machines,” Lock said. “For any organization that has a significant portion of their budget tied to marketing, you can bet that a large element of data science is going to be applied to those marketing efforts.”

Smaller organizations that lack a current budget allocation for data science need not fret, because user-friendly business intelligence and analytics solutions have proliferated the market.

Rather than trying to hire an expensive data science resource, small- and mid-sized businesses can instead invest in tech that can give “citizen data scientists” the ability to search and identify correlations and buyer intent in their data, Lock said.

The Future of the Marketing Data Scientist

According to Lock, the way that data science is evolving is aligning it to be geared towards marketing, to a large extent.

“With the exception of companies that are purely operational, or almost entirely operational (where data science is going to be applied towards the optimization of supply chain management or whatever it might be), it’s going to have a high degree of relevance in marketing. The connection between the two isn’t going anywhere,” Lock said.

The future of the marketing data scientist may be nothing more than a more accurate title.

What Is Buyer Engagement?

Buyer engagement describes the interactions between buyers and sales reps. Some examples of buyer engagement include opening an email, watching a video, reading content provided by a rep, and answering a rep’s phone call. The more meaningful the interaction, the more likely a buyer is to work with a rep.

Why Buyer Engagement Matters

As today’s buyers rely more heavily on technology and less on human interaction to gather information, a new dynamic between buyers and sellers has emerged. This relationship now rewards sales reps who engage buyers with valuable insights and subject matter expertise swiftly and at every stage of the buyer’s journey. A recent Corporate Visions study found that 74% of buyers choose the sales rep that was first to add value and insight.

This shift in buyer expectations has forced sales leadership to acknowledge the importance of adopting an engagement-centric sales methodology. Modern buyers are now in the driver’s seat of their purchase journey, which means that if sellers hope to win their business, they have to engage them with new and valuable information at the right time. By meeting buyers where they are and providing relevant information, sales reps establish their position as an expert. Dun & Bradstreet reports that 86% of buyers who have received a personalized content experience believe it has an impact on what they purchase.

When sales reps provide buyers with value during each interaction, they create a great buying experience that puts them at the top of the list for the vendor of choice.

Amplify Buyer Engagement with Sales Enablement

However, sales leadership and enablement teams have to know if their sales reps are performing the right activities to engage buyers and to do so they have to quantify the impact of engagements. By tracking the activities of sellers and the resulting engagement data, sales leadership and enablement teams have insight into what practices and content are working, and what’s falling flat. Knowing what sales pitches are opened, what content is viewed, and if those deals move to closed-won provides sales leadership with concrete best practices they can use to coach their sales reps.

Giving sales reps insights into the impact of their engagements also allows them to build an arsenal of effective best practices. With these proven best practices, reps can then confidently interact with buyers, but they must first be equipped with the tools to execute successfully.

Enter sales enablement.

Sales enablement tools like Highspot intuitively integrate into the workflow of sales reps, improving their ability to engage buyers in three significant ways.

1. Reaching Prospects Where They Are
: Sales reps can engage buyers via channels such as LinkedIn and Twitter, email, sales communication tools, and more.
2. Real-time Engagement Tracking
: Reps get real-time notifications and alerts when a prospect has opened, downloaded, or shared content, including time spent on each page or individual slide.
3. Customization Made Easy
: Reps can create custom content for every buyer experience, with inline editing even allowing sellers to Remix content of different types from multiple sources.

Today’s buyers move fast and expect valuable, personalized insights at a moment’s notice. With a sales enablement tool, sales reps can engage buyers at the right time, everywhere they are — while delivering customized content that will resonate and demonstrate value. Sales reps can now find the right content, customize it for their buyer, and deliver it without ever leaving their workflow.

If sales reps are going to increase the velocity and success of their buyer engagements, they will need a sales enablement solution to amplify their efforts.

It’s a tale as old as time. The marketing team is hyper-focused on awareness campaigns, events, and driving more leads to fill the funnel. Meanwhile, the sales team is hyper-focused on meeting sales and revenue goals, and nurturing relationships to empty the funnel. These two teams occupy two very different functional areas within a company. They’re moving at completely different speeds. They’re operating under their own rules. And as a result, there’s tension, misunderstanding, and even … hate. But according to Shahid Javed, Director of Enterprise Marketing for Hughes Network Systems, B2B marketers can be change agents here. They can give and get love from their sales teams. And they can do it in as little as 60 days. How? Shahid says you need a short- and long-term strategy to foster the collaboration, love, and alignment needed to drive results. In his session at B2B Marketing Exhange in Scottsdale, AZ, he focused on the short-term strategy to help marketers understand where they can start and get some immediate traction. Let’s dive in.

The Three Phases of Overcoming Sales & Marketing Beefs

In 2016, Shahid joined the Hughes Network Systems, which is a broadband network provider, team on the enterprise marketing side. When he arrived at the first meeting ahead of a massive annual tradeshow event, he found tension and chaos between the marketing and sales leaders. And he vowed to change it. “We had 23 different sales decks,” he shared. “Now we have two. We also had 500 dashboards in Salesforce—we deleted nearly all of them.” To make change, Shahid leveraged a three-part framework:

Phase 1: Listening & Information Gathering

According to Shahid, the first phase is all about listening. “I met with everyone—the head of east coast sales, the head of west coast sales, the head of marketing, executive leadership,” he shared. “I wanted perspectives. I wanted to know what everyone was thinking and how they saw their roles.” During those meetings he had some core questions that he asked every stakeholder:

• What were your objectives, roles, and responsibilities in the last year?
• What are some of your top highlights from the past year?
• What are some of the misses you experienced this past year?
• What are your goals for this year?
• What do you need from marketing to reach your goals?

It seems simple, but the act of listening is a critical first step. Why? As Bill Gates once said: “Your most unhappy customers are your greatest source of learning.” "Marketing is a service provider to sales—sales is our customer,” Shahid said. “We need to be able to empower them and enable them to solve problems. We need to make them the hero in the buyer’s eyes.” [bctt tweet="#Marketing is a service provider to #sales—sales is our customer. We need to be able to empower them and enable them to solve problems. We need to make them the hero. @shahidj" username="toprank"]

Phase 2: Finding the Sweet Spot

Once you’ve collected all the data, it’s time to analyze and normalize that data so you can create a plan that management and leadership will buy into. “This is where you look for common goals between leadership, sales, and marketing,” Shahid said. “It’s all about finding that sweet spot—and making sure everyone is in agreement on where things fall. You cannot do it on your own because sales and marketing leaders have to be able to sell your end-plan to their managers and teams.” Once the common goals are agreed upon, you can create a plan that helps you hit that sweet spot and sell it to the C-suite. And there are four key steps that Shahid outlined:

• Define and agree on objectives and roles. Who’s doing what and how does that support the overall business goals?
• Identify short- and long-term goals. If you only think long-term, you’ll never get anything accomplished because everyone is so busy. You need a short-term plan to get traction.
• Outline the tactics and strategies you’re going to use to reach those goals. And marketers, be honest about what you can and cannot do. Some things you may not be capable of doing yet, and that’s OK. Your sales team just needs to know.
• Document plans and actions. These are the marching order for each team.

And a bonus piece of advice to work into this phase: Make sure you have agreement on what qualifies as an MQL or SQL—and really, you should let the sales team define that. “The biggest nightmare for us was the MQL and the SQL,” Shahid said with a laugh. “We let sales define it and come up with the scoring. We knew that if we defined these and delivered leads under that scoring, sales would never take them. They needed to define it.”

Phase 3: Empowering Execution

Now it’s time to profess your love to sales by making it easy for them to become that hero for the customer. For Shahid’s team, that meant making it easy for the sales teams to access and internalize marketing materials and messaging. Here’s just a sampling of what that looked like:

• Leveraging Dropbox, Shahid’s team created and shared templates, style guides, brand guides, and more with the sales team.
• The team used Salesforce Chatter, a communications tool, to collaborate and share information.
• They created social messaging and visual assets that sales reps and sales leaders could leverage on their personal social media platforms.

“Most buyers have already made up their mind on the kind of solution they need,” Shahid said. “When it comes time for the sales person to come in, buyers need to know that they’re the problem solver. So we need to help the sales person come in as the superhero.”

Love Has Its Benefits

The collaborative approach to fostering sales and marketing love didn’t just lead to alignment and trust for Hughes Network Systems. It led to big, beautiful business results. In the last year, the sales and marketing teams have seen:

• 120% boost in web engagements
• 118& increase in email engagements
• 108% rise in tradeshow engagements
• 62% lift in social engagements
• 22% jump in win rates

“Twenty years ago, it was an actual best practice for sales and marketing to work in silos,” Shahid said. “But alignment has become absolutely critical now. The expectations are too high, [internally and externally].” So, B2B marketers: Are you ready to give and get love from your sales team? Now is the time. For more updates and insights from the conference, you can follow @toprank, @leeodden, @azeckman, and @CaitlinMBurgess on Twitter. Stay tuned for more by following the blog here.

The post Sales & Marketing Alignment: Shahid Javed Shares How to Go from Hate to Love in 60 Days appeared first on Online Marketing Blog - TopRank®.

By Andrea Bowler, {grow} Community Member

Can one book change your life?

Today, I’ll explain how Mark Schaefer’s book Marketing Rebellion turned around my business in one day.

A true story.

The confused rebel

Over the last couple of years my personal life has changed dramatically. But I think my personal marketing rebellion really started before my big life change.

I had become disillusioned with the constant bombardment of marketing — what I thought I should be doing as a business owner. There was a sense that I was constantly failing because I hadn’t produced many sales funnels, lead generators, and automated everything. Isn’t that what we’re supposed to do?

I’m not saying these things aren’t incredibly important to some businesses. But I was also torn over how sordid and soul-less the whole thing seemed. Was all this automation right for my small business customers?

I’d fallen out of love with what I was doing. I was overwhelmed, trying to keep up with sales automation trends and build a new life at the same time.

Maybe it was time to walk away from this whole mess and get a proper job.

My personal rebellion begins

“Don’t you dare, you will come back from this,” a wise friend told me … and how right she was. Throwing myself into business events and meeting new people, I started to feel some momentum return. But something still wasn’t quite right.

As soon as Mark announced he had a new book coming out, I had it on pre-order to add to my collection.

And then … I dove in.

Page by page I found myself frantically note-taking and excessively nodding.  One quote in particular grabbed my attention, and I could not stop thinking about it:

“Success isn’t measured by the size of your advertising budget but rather how sincerely you connect.”

It got me thinking, how do my clients like to connect? How do I like to connect?

Every day my inbox is filled with automated emails from one expert or another, some new company offering, and blatant sales pitches. I was weary of the relentless barrage.

But I realized I was adding to this spam nightmare through my own marketing automation!

Would a more human approach work better for me and my business?

An instantaneous business turnaround

I’d planned to put together a lovely sales funnel with a lead generator which was a list of 101 blog post ideas for estate agents (the niche market I work in).

But what if we didn’t automate it? What if we just offered this free value to our customers without the annoyance? This would be more work, of course, but I was curious to test the idea of more human-centered marketing.

We posted on our Facebook page, my personal page, and to two groups full of estate agents, and simply asked the audience if they wanted our help through this free guide. There was no sales funnel, no mailing list, just a simple question offering valuable help.

By the end of that evening we had 80 requests from estate agents — most of them I had never spoken to before! Even more surprising, we had 15 requests for more details about our business services and, incredibly, we secured two new brand-new clients!

And that was just Day One.

By the end of Day Two I had 40 new sales leads. By the end of the week it was 90.

I had to admit, I was in a state of shock about this.

I had to tell Mark that his book really worked:

Mark, I can’t tell you what a change your book is having on my business. Today I made a major decision. I scrapped the CRM funnel I’d invested in and went back to directly connecting to people. Instantly we had responses and new sales. Last year I struggled with my business and thought about walking away. But today I feel like a weight has been lifted, I’m kind of child-like, skipping around the office.

I’m back.

This success has continued, and we’ve now had more than 200 leads and counting. And I think it’s significant that several agents said they only reached out to me because they could see they weren’t going to be bombarded with spammy emails!

Stepping away from automation and acting like a human being worked. I’m now having real conversations with the many agents who requested my guide. Most important, I feel really comfortable and happy with the way I’m doing business.

Seeing how the world was working made me think I had to conform to what “business society” thought was a best practice. There was so much pressure to automate my business and it created this conflict in me — it didn’t feel right.

It was as though Mark had carved a new path and given us all permission to find our own authentic marketing approach, one that I could be proud of.

I’m not saying this is right for every business, but I honestly believe that rebelling against the automatic and finding a human approach will benefit almost any business relationship with clients.

As Mark says, “The Most Human Company wins.” I am going to be that company in my industry. How about you?

Andrea Bowler is the proud owner of Citrus Content, a niche agency which specializes in bespoke content for the UK estate agency market. She is passionate about writing, walking in her native Peak District and being mum to her incredible son, Sammy.

 

The post Human-centered marketing case study: A radical business turnaround appeared first on Schaefer Marketing Solutions: We Help Businesses {grow}.

Whether you've set personal or business goals, you likely created a plan to achieve them. Without clearly defined steps, it can be difficult or even discouraging to tackle the goal you've set.

One example of a situation where planning and strategy come in handy is during a job search. Let's say you've spent weeks or months scouring the internet for a new sales job, but none of the job postings seem to match your skill set or career interests.

Have you taken a step back and thought about a specific type of sales job you want? And did you consider the most important qualities you're looking for in an employer or career?

Your online job search will become less tedious and disheartening if you have a clear set of objectives to follow. While you might get more search results for "sales manager", you'll find jobs that are a better fit for you if you clarify by searching for "senior sales manager - medical devices."

With your new search strategy, you've identified a seniority level and the industry you'd like to work in. The next steps you set for yourself are to periodically repeat this search and only apply to the roles that seem like the best fit for you and your career aspirations.

Thinking strategically helps you narrow down your search and use your time more effectively. Plus, you'll increase the likelihood of landing a job that's a great fit for you.

Once you aced your interviews and landed the perfect sales job, you'll find that these types of planning, strategic and tactical, are used by many businesses and sales teams to set themselves up for success.

Your strategic plan provides the general idea of how to reach a goal, and the tactical plan is where you lay out the steps to achieve that goal.

Since the objectives set in the strategic plan are more general and are evaluated over a longer period of time, strategic planning typically occurs at the beginning of a year, quarter, or month. These plans should be reviewed every quarter.

Tactical planning occurs after the strategic plan is outlined, and the tactical plan can be reexamined on a more frequent basis — if need be.

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Here are some high-level examples that touch on the difference between the two types of planning.

Strategy vs. Tactics

Let's consider the perspective of a hypothetical company analyzing different strategies to improve different aspects of its sales operations.

1. Sales Recruitment

• Strategy — We want to develop repeatable evaluation criteria for hiring the right salespeople.
• Tactics — We will narrow down the specific qualities the company wants out of its salespeople, draft appropriate interview questions to shed light on those qualities, and train recruiters to conduct interviews based on those key tenets.

2. Smarketing

• Strategy — We want to improve sales and marketing alignment.
• Tactics — We will clearly define the qualities of an SQL so that marketing can fous their efforts on those, encourage collaboration between departments on the creation of sales content, and hold interdepartmental retrospectives after each marketing campaign.

3. Technological Infrastructure

• Strategy — We want to build a more sound, technological foundation for our sales operations.
• Tactics — We will adopt a CRM, incorporate a conversational intelligence tool for improving sales calls, and make virtual sales enablement resources available to our reps.

Taken together, the strategies and tactics a sales organization employs — like the ones listed above — comprise what are known as sales plans.

Sales Plans

A sales plan encompasses both strategic and tactical planning and contributes to an organization's overarching sales strategy. It outlines the broad goals your sales team and reps should strive for, and it creates an action plan to reach them.

The strategic plan sheds light on the mission, objectives, and future goals of the organization or individual. Managers, VPs, and executives typically create strategic plans for an organization, but this type of plan can also be used by individuals to achieve personal or professional goals.

These are the key components to include in a strategic plan:

• Mission and background of the business or situation: Where do you currently stand? And where do you want to be in the future?
• Goals and objectives: What would you like to achieve?
• DRIs (directly responsible individuals): Who are the people responsible for these goals?

Strategic planning and tactical planning provide guidelines for businesses, teams, and individuals to follow. And the tactical plan outlines exactly how they'll achieve the final result.

For example, a strategic goal may be to develop a company culture that encourages growth and retention. A tactical goal may be to survey all existing employees to gain information on why they weren’t retained. If your tactical planning and your strategic planning are related, then the goals for each should also have a connection between them.

Tactical planning includes the immediate actions that feed into the larger purpose outlined by a strategy. These plans are carried out in the long term and incorporate big, impactful changes. There are nine strategic planning models your business can use as a starting point.

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Strategic Planning Examples

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Since tactical planning is more direct, it’s often more specific to your team or business. Strategic plans, however, are often broad enough to be applied to a whole niche or industry. For instance, strategic planning for sales could involve some similar goals across different companies, but their tactical plans may be unique. Here are a few examples of strategic plans that could apply to different businesses.

• Acquire 50% more clients by the end of the year.
• Improve SEO rankings by 20%.
• Expand the customer service team where satisfaction is lacking.

Once you've created your strategic plan, it's time to determine the tactics you'll use to reach your goals. This is where the tactical plan comes into play.

It's used to outline the steps a business or individual will need to take to accomplish the priorities that have been set. Here are a few things to consider when developing your tactical plan:

• What is the timeline for achieving these goals?
• Are there tools or resources that are necessary to accomplish these objectives?
• What specific actions should be taken to achieve the intended outcome?

Your tactical plan will provide the answers to these questions to help you meet the objectives of the strategic plan.

So, what do strategic and tactical planning look like in practice?

Tactical Planning Examples

While strategic and tactical plans can vary by company or industry, there are some that can apply to many sales organizations and teams.

Here are a few examples that are common for sales teams and reps. The strategic plans are numbered, and the tactical plans are outlined below.

1. Fill my pipeline with more leads over the next two weeks.

• Spend an hour prospecting each day.
• Leverage social selling, and join five LinkedIn Groups that your prospects belong to.
• Attend an industry networking event.

2. Close more enterprise deals each month.

• Enroll reps in a hands-on training session in your Enterprise product offerings.
• Set a goal for each rep to schedule at least three demos with enterprise-level prospects this quarter.
• Create an incentive for those that close the most Enterprise deals in the month.

3. Hire 20 more entry-level sales representatives by the end of Q1.

• Create a hiring profile that candidates should meet.
• Develop a LinkedIn outreach campaign to find and attract new talent.
• Attend career fairs at 15 local universities.

Your Business Needs Both Strategic and Tactical Planning

There is a purpose to both strategic and tactical planning. Each moves your business’ progress closer to larger goals and objectives. With a solid strategic plan and a detailed tactical plan, you'll be well-equipped to grow your business.

Editor's note: This post was originally published on February 28, 2019, and has been updated for comprehensiveness.

The success stories of referral programs all around the world abound:

• Dropbox’s referral program resulted in 4 million users in 15 months and increased sign-ups by 60%.
• Koodo’s Refer a Friend program resulted in a 167% decrease in customer acquisition, and 75,000 new customers over a 2 year period. When the brand doubled its reward from $25 to $50, their referrals quintupled.
• Paypal’s referral program increased daily growth by 7% to 10% resulting in a user database of over 100 million.
• Catapult’ program generated over 4,500 referrals in the first 6 months
• Concept’s referral program generated $20,000 in new sales revenue within one month of the program’s launch.
• Coolbot referral program resulted in 10 times the ROI in just a few months
• Amerisleep’s program resulted in a 150% click-through rate (CTR).

The question, therefore, is…

How did these programs actually measure their performance in order to come up with such precise results?

A simple way to think about the ROI of a referral program is to think in terms of costs and revenue, how much you have spent, and the revenue generated from sales. If your sales revenue is higher, then your ROI is positive.

Using a referral program calculator

You can use our spreadsheet referral program calculator to calculate ROI, you can download for you to use. With our calculator you will need to input your customer data. You can calculate the ROI of a customer referral program or partner referral program. The software presents your results in a graphical format and gives you a 3-year prediction of your ROI.

This article further explores the concept of calculating the ROI of a referral program.

Calculating the Lifetime Value of a New Customer

Customer Lifetime Value (CLV) can be defined as the profit that a business can make from a given or particular customer. CLV informs business decisions like marketing, customer support, and product development. It also helps business people decide on how to allocate their financial resources, what to prioritize, and how much to spend on different departments or aspects that determine customer acquisition and retention. CLV is a more accurate aspect of ROI as referred customers will buy from your company for longer, which means that they will spend more. They are also highly likely to refer others.

How then do you calculate CLV?

There are two methods that you can use. Let’s explore them together.

1. Estimation

The first method is estimation. This has two other methods. We will explore each.

Estimation method 1

To calculate CLV, subtract what was spent to acquire a customer from the revenue your company has earned from that individual customer.

You may wonder whether you are actually able to track down what each customer spent. Sometimes this may be difficult, depending on your business model and industry. Sometimes, you may need to estimate a customer’s lifetime value. An example will help us to understand how you can do this.

An example of how to calculate CLV:

If you run a coffee shop for example, and a mug of coffee goes for $2, and that there is a 10% chance of every customer coming back, and you spend $0.2 to acquire each customer, you would calculate CLV by taking your average coffee price ($2) divide by 1 and subtract the repeat purchase rate (10%).

$2/ (1 – 0.1) = $4.22

You then need to subtract the cost of acquiring that customer. Let’s say it’s $0.5.

So, $4.22 – $0.5 =$3.72

So, your company will make a profit of $3.72 from this customer. Please note that this is a very oversimplified example.

Estimation method 2

Step 1: This other method involves dividing the company’s total revenue over a period of time by the number of purchases made over that period of time. In this case, the period of time can be one year. This will give you the average purchase value.

Step 2: Divide the number of purchases over the period of time mentioned in step 1 by the number of unique customers who purchased during that time period. This will give you the average purchase frequency rate.

Step 3: Multiply the average purchase value by the average purchase frequency rate. This should give you customer value.

Step 4: How many years do you think a customer will buy from your company? This should be the average customer lifespan

Step 5: Multiply customer value by the average customer lifespan.

This step should give you the amount of money your company can expect on average to make from a customer, which is in essence Lifetime Value.

As you may have noticed, the second method, even though an estimate, gives a more accurate picture of customer lifetime value. It is also more customized to your company as it uses real

data from your own customers.

2. Using actual customer data

To calculate Customer Lifetime Value, you need to calculate the average customer lifespan. To do this, begin by calculating your churn rate. This could be the number of people who cancel their subscriptions for instance.

An example of using actual customer data to calculate LTV

Let’s say that you have 500 customers, and 10 cancel subscriptions every month. Then your monthly churn rate should be:

100*(10/500)

100* (0.02) = 2%

Your monthly churn rate is 2%.

Let’s calculate the Customer Lifetime Value (CTV or LTV), using the churn rate we just found.

In our example, this should be:

1/ 2%(our churn rate)

1/0.02 (decimal form of churn rate) = 50

This will give us a Customer Lifetime Value of 50 months.

Note that the longer a customer buys from your company, the higher the amount of money they will spend.

Calculating the Value of your Reward

To some extent, rewards in a referral program should somehow compensate customers for the effort put in making referrals, whether it is making a phone call, follow-ups in person or even sharing on social media. The value of reward should be commensurate to the effort the individual puts into making a referral or becoming a referred customer. This compensation should not affect the ROI significantly though.

In this section, we calculate the real value of a reward to a customer. The reward value also determines conversion. The best conversion rates recorded was 13%. The reward value ranged between $41 and $100. Conversion remained stable after a reward value of $100 to 5 to 6%.

An example of how to calculate the value of your reward

You need to work with a specific time period, for instance, one year or 12 months. Let’s say that your referral program is based on a 10% discount for customers who refer others and 10% discount as well for customers who get referred, and your product or service has a basic plan of $50.

To get the value of your reward, you need to consider both the referrer and the referred. Use this formula to calculate the value of your reward:

In our example, the above variables should be replaced by:

12* ((0.1*50) + (0.1*50))

12* ((5+5))

12* 10 = 120

Calculating the Average Value per Transaction (AVT) in $

The average value per transaction can be defined as the average amount that a customer spends in a single transaction. It is seen as an indicator of changes in customer behavior as a result of changes in merchandising strategy, pricing or even season, depending on the niche or industry.

In order to get more useful insights from the average value per transaction, it is advisable to combine it with foot traffic and conversion.

An example of how to calculate the average value per transaction

Divide the retail sales by the number of transactions over a time period, for instance, monthly or annually.

If your monthly retail sales are $250,000, and these are generated from 200 transactions, you will divide the retail sales by the number of transactions.

250,000/200 = 1250

The average transaction value = $1250 over a period of one month.

In this case, where the average transaction value is $1250 and there is a change in marketing strategy and the AVT changes to $1500, you could conclude that the marketing strategy was successful.

Calculating the Transactions per year, per customer

The average value per transaction (AVT) will show you how much each customer roughly spent during each transaction made. How would you know how many transactions a particular customer made over a time period, for instance, a year?

An example of how to calculate the transactions per year, per customer

In the AVT example above, the AVT is $1250 over a month. If you multiply this by 12, you should get the annual AVT.

$1250 x 12 = $15,000

Thus, the annual AVT is $15,000

The question then becomes, the number of transactions one customer make, on average.

We could find this by dividing the annual AVT by the number of customers. If you have 500 customers, then this would be:

15,000/500 = 30

We could then say that each customer, on average made 30 transactions over a one-year period.

As you can see, if you have the average number of transactions per customer, you can work back to the average daily value per transaction per customer.

Calculating the retention rate

Retention rate is calculated as a percentage of the customers who keep buying from you over a defined period of time, vis-a-vis those who do stop.

In your referral program, retention rate can be seen as the percentage of the customers who stay loyal and keep bringing more referrals, or buying from you, thus keep getting the rewards that come with your program, vis-a-vis those who drop off.

To calculate the retention rate of your referral program, you need to consider 3 factors here:

1. Redemption rate:

This will work best if your referral program is loyalty points based. Redemption rate refers to the percentage of points that are actually redeemed for your referral program rewards. The percentage of redeemed points is a reflection of happy customers and referral program success.

An example of how to calculate the redemption rate:

You could customize this formula based on your reward.

If your redemption rate is less than 20%, you may want to look into your referral program, to determine how effective it is. You may find that customers do actually accumulate points, but do not use them. If this is the case, you need to also check what you could do to revamp your referral program.

2. Active engagement rate

This metric should be used together with the redemption rate. It is a percentage of the customers who regularly engage with your referral program. To calculate the active engagement rate, look at customers who have earned or spent points within a stipulated amount of time.

An example of how to calculate active engagement rate

This metric gives insights into the specific number of customers that are engaging with your referral program and helps you determine your program’s success.

The other metric that you should look at is the participation rate. We will look at this in detail a bit later.

3. The Repeat Purchase Probability (RPR)

RPR can be defined as a percentage of the customers who have purchased more than once. Why would you want to calculate RPR? Because it is repeat customers that keep your business going and growing. Repeat customers contribute to 40% of your revenue. Repeat customers are also highly likely to continue using your referral program and referring customers. They are happy customers and therefore tell others about their happy experiences too. You need to have repeat customers buying from you the longest. They will generate more revenue for your business and give you insights that will help you even get new customers and retain them.

An example of how to calculate RPR

Let’s add numbers.

If the number of customers who bought more than once was 300, and the total number of customers your business has in 365 days is 500 (new and acquired)

Then RPR is:

300/500

Calculating turnover rate

It is widely known in the marketing world that acquiring a new customer is more expensive than keeping your current ones. In fact, this survey confirmed that the cost of acquiring customers has increased by 50%. You need to consider the following metrics:

Churn rate

If you can recall, we had looked at a concept called churn rate, when we were looking at how to calculate customer lifetime value. A reminder? In a referral program, the churn rate refers to the number of customers who drop off from your referral program. It could also mean the number of customers who do not make repeat purchases after being referred to your program or business. Churn rate is one of the aspects that you need to consider when calculating the turnover rate.

An example of how to calculate churn rate

To calculate the churn rate, subtract those who have dropped from your referral program from the initial number of subscribers of your referral program over a period of time, then divide the result by the initial number of subscribers.

Let’s add a few numbers here.

The initial number of subscribers at the beginning of the month: 500

Number of customers who dropped off over the month: 75

500-75 = 425

425/500=0.85

The churn rate here is 0.85

Calculating the number of customers that will participate (participation rate)

Participation rate refers to the number of people that your referral program reaches and that have told others about your brand, referral program, or product. It could also factor in data about how people heard about your referral program.

How do you calculate the participation rate?

You need to consider a number of factors:

• The number of contacts in your customer database
• Number of customers served weekly
• Number of reached customers in a specific period of time (weekly, monthly)
• Social media reach

An example of how to calculate the participation rate

If you have 500 customers, and your expected advocate conversion rate is 15%

Then the participation rate is:

500 x 15% = 75

The participation rate should give you a rough idea of the number of advocates that will register for your referral program.

Why measure the participation rate? It helps to monitor how well-targeted your referral program promotional strategy is. It helps to determine the most accurate channels for your referral program to have maximum reach, the quality of your content and calls to action (CTAs), among other factors.

Defining what constitutes a conversion

Conversion is, in essence, the actions that trigger the issuing of a reward. A conversion can be seen as:

• Clicking on the referral link
• Signing up for the referral program
• Booking an appointment
• Actions that were taken after joining the referral program (buying your product, subscribing to your product or service – actions that generate revenue for your company), or even referring others, sharing experiences on social media and/or word of mouth.
• Tangible results like an increase in sales revenue or referrals/ customer base
• Lead generation where the company can follow up with the leads until they close
• Getting a quote
• Moving up a tier

It is important to note that how you define conversions affects your revenue and profits. More importantly, it needs to be in line with your referral program goals and business goals too.

Calculating the aggregate amount that can be rewarded on each conversion

We have looked at what constitutes a conversion, and how rewards are given based on the defined conversions. How do you calculate the aggregate amount that can be rewarded on each conversion?

An example of how to calculate the aggregate amount

Let’s say that you have a successful referral program where each advocate generates 10 referrals. The program has a conversion rate of 10% and brings in 200 new customers per year. The desired ROI from the program is 5x. The referral cost incurred by the program is $8,000 per year, and the program value generation is $50,000 per year. The LTV is $2000 for each customer, and the maximum referral cost is $ 5,000. The internal management cost of running the program is $800 per year and the administration cost of $2,000 per year.

There are several steps to calculate the aggregate amount:

Step 1: Calculate the ROI of a referral program

50,000/5,000

= 10

Step 2: Calculate the value generated

s x

2000 x 300 x 10 x 10%

2000 x 300 x 10 x 0.1

= 600,000

Step 3: Calculate the referral cost

If the referral program generated a value of $50,000 and the desired ROI was 5x, then the maximum referral cost is:

50,000/5 = 10,000

If the maximum referral cost is $10,000

Then: X + y + 2000 = 10,000

X + y = 10000 – 2000

X + y = 8000

X + y = (referral reward to advocate cost) + (referral incentive to friend cost)

We, therefore, have $8,000 to give advocates and their friends (the people whom the advocates refer)

If there were 200 new customers that resulted from the referral program, you can find the reward value for each advocate and the referral they bring.

$8,000/100 = $80

Remember, the reward value should be commensurate to the effort that customers will put into getting you new referrals.

How to reduce & remove program slippage

No referral program is 100% foolproof. In comes the concept of slippage. What is slippage in the context of a referral program? Slippage can be seen as when customers seek to benefit from the rewards being offered via your program via unauthorized methods.

Examples:

• rewards and incentives being used over and over
• capitalizing on a first-time customer only reward even if one is an existing customer
• customers referring themselves
• customers creating multiple or fake accounts
• sharing referral links on unapproved sites
• using computer bots to “beat the system”

Slippages result in loss of revenue, and less ROI, and worse still, you do not get new customers.

Reducing and removing slippages

Here are a few ways you can reduce slippage.

Give a reward that is balanced

Your reward does not need to be too low, as this will not attract many advocates. Do not give a reward that is extremely valuable, as it is one way to attract referral fraud. A balanced reward will make your customers happy enough to bring in more referrals while reducing the number of people who would want to “beat the system”.

Flag IP addresses

You may want to use a click-fraud detection service that detects multiple referral attempts from the same IP address. The fraud detection service will then automatically block fraudulent IP addresses.

Choose rewards that are not cash-based

Cash-based rewards are highly likely to attract fraudsters. Other reward options like points are much better as they require a prior relationship with the customer.

Use a reputable referral management software

One of the factors that you need to consider when purchasing referral software is whether it can block fraudulent activity.

Implement cookies

You need to control the cookie types that you have on your site to prevent people from fraudulent activities within the same cookie session.

In conclusion

Calculating the ROI of your referral program can be a bit hectic, but the insights gained from the process make the process worthwhile. You need to consider each of the factors discussed above, from the lifetime value of a customer, reward value, average value per transaction, transactions per year per customer, retention rate, participation rate, defining what constitutes a conversion, the aggregate amount that can be rewarded per conversion, and reducing as well as removing program slippage.

Now that we’re more than halfway through this CONNECT2Sell series on how to become a more memorable as a seller, be sure to go back and catch up on any posts you’ve missed. We’re covering 12 different ways you can make a lasting impression with buyers.

The benefits for you of becoming more memorable include differentiation, competitive advantage, confidence, getting more referrals, and making more sales. The benefits to your buyer are also noteworthy – they will have a better experience, feel a sense of trust and connection, and find it easier to do business with someone they feel they can count on.

In this installment, we’ll be looking at one way to be memorable that seems to be more important to younger buyers than to older ones.

When it comes to taking care of customers, sometimes people go a little further than expected. When asked why, they often say, “It was the right thing to do.” There’s no incentive other than the desire to care for someone else. In a sense, that is what customer service is about. While we may be paid to do a job, sometimes doing something that is not required – and therefore not expected – is what the next level of a good customer service experience is all about.

I received a note from M. N. Rao, one of our subscribers to The Shepard Letter. He shared a story that perfectly makes this point. The short version is this:

On a recent trip to Dubai, Mr. Rao took a taxi to his client’s office. About an hour later, he realized he left his phone in the taxi. He didn’t have the driver’s information, so he borrowed a colleague’s phone to call his lost phone and hoped the driver would answer. Sure enough, he did. Mr. Rao explained what happened and an hour later the driver made his way back to the hotel where he had picked up Mr. Rao earlier that day. The driver dropped off the phone at the front desk. He didn’t ask for money even though he had to take time out of his day to return to the hotel. He didn’t leave a phone number or any other contact information. He just wanted to take care of his customer.

I often write about how sometimes problems or complaints aren’t our fault. That doesn’t mean we can’t step up and take care of our customers. When Mr. Rao left his phone in the taxi, it wasn’t like he could complain to someone about it. No, it was his fault. He could only hope that his phone would be returned. While the driver could have demanded to be paid money to take the phone back to the hotel, he didn’t. Yet he would have every right to do so. After all, it wasn’t his fault the customer left his phone in the car. And most reasonable people would expect to pay the driver something for his effort.

But not this time. The taxi driver didn’t ask for money. He even chose to remain anonymous. He did it simply because, in his mind, it was the right thing to do.

That’s what customer-focused people do. They do the “right thing.” They do it because helping a customer—or even a colleague at work—is what they like to do. It makes them feel good. It’s a mindset, and practicing it turns it into a habit. Doing the right thing makes you feel good. Try it. Make it a habit. It’s a habit worth mastering.

Wouldn’t it be nice to have a recipe to follow when it came to writing your emails? A recipe that not only sparks interest among your subscribers, but also encourages them to complete a call-to-action? You can! Many marketers use copywriting formulas, which are proven structures to help you write all your copy faster and with greater likelihood of success. Copywriting formulas provide a starting point to help you organize your message for the most persuasive impact. It’s how you turn so-so copy into killer copy, and convert subscribers into buyers. Take a look at three tried-and-true copywriting formulas that are optimal for email marketing, below. You can also use them on your social media feeds or in blog headlines, too! That way, you reach your audience no matter where they are.

Copywriting Formulas for Email Marketing

Formula 1: F-A-B

You understand your product or service from the inside out, but it can be tough to communicate all the important details about it in an email or two. Plus, you run the risk of losing your reader’s interest if you drone on too long about your product features. Yes, it’s important to explain the features of your product — but where the magic happens is when you connect those features with the advantages and benefits they bring to your customers. With the F-A-B formula (which stands for Features, Advantages, Benefits), you can touch on your product’s bells and whistles, but you focus on why a person would find your product beneficial. Here’s the breakdown:

• Feature: Briefly explain the elements of your product. Keep it short and sweet.
• Advantages: Highlight why these features are unique and how they can make a difference in your customer’s business, life, etc.
• Benefits: Showcase the value of your product and how it can solve your customer’s problems.

The emphasis is on why your product’s features are great and how they can help your customers rather than dissecting each feature ad naseaum. So, how can you implement this formula? It might look something like this:

{Insert feature} will help you {insert advantage} so you can {insert benefit}

Example of F-A-B in a Tweet: Our wireless Smart Robot Vacuum will clean your pet’s hair off floors and carpets, so you don’t have to spend time chasing down hairballs.

These same principles can be used in subject lines or stretched out to serve as body copy. For the latter, you may expand on the advantage and benefits in multiple paragraphs to really drive the value home.

Formula 2: P-A-S

It may not come as a surprise that P-A-S made our list, but it’s a tried-and-true copywriting formula that works for just about every scenario.

In fact, marketing legend Dan Kennedy calls it the most reliable sales formula ever invented.

Let’s take a look at how it works:

• Problem: State your audience’s issue.
• Agitator: Agitate the problem by talking about why it’s a problem in the first place.
• Solution: Solve your audience’s issue by presenting your product or service as the solution.

This copywriting formula works best if you focus on the “A” aspect. To “agitate,” you need to stir up all the negative emotions attached to their problem. Make the reader squirm in their seat. Get inside their head.

And just before they’re ready to scream “Enough!”, present them with a solution (your product or service!).

(Not sure what your audience’s “P” — a.k.a. their biggest problem — is? Here’s a great guide to finding your subscribers’ biggest pain point.)

Here’s how you could use it:

State a problem: Got pet hair all over your carpet or floor?
Agitate the problem: More pet hair means more time sweeping your floors. You’re already busy enough. Do you really want to spend all this extra time cleaning when you could be doing other things? (Like napping or reading or watching Netflix.)
Present the solution: Or you could control your pet hair problem with our new Smart Robot Vacuum. Just charge it, turn it on, and get back to your day.

Like the F-A-B formula, the P-A-S formula translates well on platforms like Twitter, Facebook, or in headlines because of its directness. Using this same example, you could send a Tweet that says:

Pet hair everywhere? Spending more time cleaning up pet hair means less time for the things you want to do — like napping or watching Netflix. You could spend time sweeping every day, or you could let our Smart Robot Vacuum clean it up FOR you.

The P-A-S formula is excellent for subject lines, but it’s also a fast and easy way to explain your value proposition in a quick way. Many email marketing geniuses use this formula in their own emails.

Here’s an example from Paula Rizzo, an AWeber user and a TV producer who has an entire side business called The List Producer. Through this business, she helps customers stay organized with various checklists and courses.

Subscribers who sign up for Rizzo’s email below have stated they’re feeling a lack of control in their digital world. Their inbox is overflowing and they can’t keep up!

In her first email, Rizzo welcomes her new subscriber, tells them a little bit about her business, and then launches into agitating their problem. The agitation section is shown below:

Then, Rizzo hits the reader with a solution: a paid course “Take Back Your Inbox: Stop Drowning in Unread Messages, Respond Quicker and Finally Achieve Inbox Zero.” (Check out all that’s included in her $47 course.)

 

Formula 3: A-I-D-A

A-I-D-A is arguably one of the most-used copywriting tactics of all.

First, here’s what it stands for:

• Attention: Catch the reader’s eye.
• Interest: Pique their interest with a compelling setup.
• Desire: Make them crave the thing you’re offering.
• Action: Tell them how to get the thing.

This is a classic formula for selling, so it makes sense to deploy it in an email environment where you want readers to take action and move from their inboxes to the next stepping stone in the conversion path.

Here’s how you could use it:

Attention: No matter how much you love your pet, there’s probably one thing that drives you nuts.
Interest: Pet hair is a never-ending battle (and it’s one you’re always losing). Right?
Desire: Smart pet owners know it doesn’t have to be that way. The Smart Robot Vacuum is always on top of hairballs (so you don’t have to be).
Action: Click here to get 20% off your purchase today only!

With a simple, actionable setup that solves problem and reduces a customer’s pain points, this formula is a sales-driving machine not only in emails, but also on landing pages and in video scripts.

Stretch it out!

You can use these copywriting formulas in one email — or you can expand it over a series of automated emails.

For instance, with P-A-S, you could use it over the following 5-email series:

Email 1: Introduce the reader’s biggest pain point
Email 2: Agitate the problem
Email 3: Really get in there! Agitate the problem some more. Start to hint that there may be a solution for their issue…
Email 4: Offer the solution — your product or service!
Email 5: If the reader doesn’t convert, you can offer a coupon or special incentive to buy.

Digital marketer gurus like Amy Porterfield, Henneke Duistermaat, and Jeff Walker have used similar email series when they launch a new online course or product.

Additional copywriting tips

Once you find a copywriting formula that works best for you, keep these tips in mind as you begin writing.

Avoid jargon
Using words that your customer may not understand is a quick way to lose their interest. Make sure they understand your message and what value you can provide them.

Nail the subject line
It’s been said a million times, but it rings true. Having a solid subject line that piques the interest of your subscribers will ensure the email content you worked so hard to create has a chance to be seen. Be sure to deploy A/B testing to find your strongest option.

Be conversational
Being personable with your copy is a great way to engage with your customers and show them that there are real humans behind your brand. Conversational tones not only make your brand sound more relatable, but it’ll ensure your customers understand what you’re saying, too.

For more email copywriting advice, check out our full list of copywriting tips.

Formulas save time and maximize ROI

Copywriting formulas are an excellent way to make sure you communicate your message clearly and present it in a way that will be most receptive to your audience. Different formulas work for various products and messages, so keep testing and tracking what you learn from each formula use.

Here’s the scene: you’ve worked hard (really hard) to get a deal to the “verbal yes” stage. Then, your prospect drops this on you:

“We like you, but you need to do something about that price.”

Or this:

“We’re ready to go, but I just need to make little revision to the contract…”

Think about how you’d respond. What would you say that could help you win at this point in a negotiation?

Average salespeople cave at this point. They’ll take what they can get, so long as they close the deal. And buyers know this! They take advantage of salespeople’s fear of losing the deal.

Excellent salespeople overcome their fear of saying no and use key negotiation phrases that protect margins and still get the deal done.

By the end of this post, you will know:

• Why you need a formal negotiation process
• Two main tactics buyers use in negotiations
• Exactly what phrases to use to win a negotiation, and when to use them
• How to overcome a fear of saying “no”

Let’s get started.

Why You Need a Formal Negotiation Process

Simply put, salespeople are the last line of defense of every business’ margins.

But if you need more reason than that, here are some findings from a two-year study of sales negotiations from Huthwaite International:

• Companies with no formal negotiation process had a 63.3% decrease in net income
• Companies with a somewhat formal negotiation process had a 16.2% increase in net income
• Companies with a formal negotiation process experienced a 42.5% increase in net income!

Clearly, sticking to a formal negotiation process is worth your time.

But the same study also found that 80% of the participating companies had no formal negotiation process. And 75% of the companies had no negotiation planning tools.

They weren’t helping their salespeople plan for negotiations! The deal could be for $76 million, yet the salespeople would still spend just 30 minutes to an hour preparing to negotiate.

That won’t cut it. When it comes to negotiating, lack of preparation has major financial repercussions.

Buyers seem to be far more aware of this than salespeople. And they use two very common tactics to win negotiations:

1. The Squeeze
2. The Nibble

The Squeeze: When the Buyer Asks for a Price Reduction at the Last Minute

Buyers will use The Squeeze in negotiations time and time again. It’s a surefire way to get untrained salespeople to decrease the price.

In simple terms, The Squeeze is where the buyer nurtures the salesperson, tells them just how much they want to work together, and gives them hope.

Then, at the last minute, they say something that puts all that hope at risk. For example:

“We like you, but you need to do something about that price.”

Don’t Say This: “Where do you need us to be?”

As a salesperson, this is the worst phrase you could use. It sends the message that there is some flexibility in your pricing, which gives the buyer an in! You also risk losing credibility.

For example, if you agree to a 10% discount without putting up much of a fight, the buyer may wonder why it was so easy. Could something be wrong with the product or service?

Other Phrases to Avoid: “list price”, “standard price”, or “typical price”

I’m a brand ambassador for Gong.io. They did some research and found that when a sales rep uses phrases like “list price,” “standard price,” or “typical price” at any point during the deal, the sales cycle is 19% longer.

This is because these terms needlessly give the buyer hope of flexibility. Don’t set that precedent.

How to Respond to The Squeeze

Responding to The Squeeze can be intimidating. But I’ve got six steps for you

1. Be Confident

Be confident when facing The Squeeze! You’ve come far in this deal, and your buyer just said they like you. Use that.

What you should do:

• Be Brief! Top sales performers use about 102 words to explain their pricing, while the bottom sales performers use roughly 144 words. Brevity exudes confidence.
• Speak in the first person. By using “I” rather than “we” phrases, you’ll humanize yourself and enjoy more success in your negotiations.
• Use phrases like “approved price,” which implies a higher power than you when it comes to setting the price.
• Pause after the pricing component of your presentation. The top sales performers pause for an average of 2.1 seconds, signaling rock-solid confidence.

2. Use “The Clinger”

How do you stand out from your competition? When the buyer says, “We like you, but you’ve got to do something about that price,” cling to the number one differentiator that you uncovered during your discovery call.

The clinger is the top thing that makes you different in your buyer’s eyes. Any mention of a discount should trigger a pivot right back to this hot-button. Cling to it with your life!

What you should do:

• Stand tall with your pricing and explain what separates you from the competition. Is it your 24/7 customer support? The uniqueness of your product? Or possibly it’s a creative reframe that you developed highlighting an unrecognized or misunderstood pain point.
• In addition to requests for a discount, you should also use your clinger phrase whenever a buyer makes mention of your competition. Have the courage to reiterate your clinger multiple times in the conversation.

3. Buy Time

You may feel awkward during the negotiation process, but avoid rushing through it. Instead, when the buyer asks for a lower price, take that as an opportunity to get more information.

Here’s an example of what a top-performing salesperson should say:

“I understand that pricing is something we need to address. But before we do, I’d like to make sure I completely understand your needs—that way we’ll know we’re doing everything we can to make this deal as valuable as possible for you. Is that all right?”

What you should do:

• Find out what’s important to the buyer. To put them at ease, ask for permission to explore their needs further.
• Ask the buyer open-ended questions. Get them talking. The more they talk, the more you’ll learn about what is truly important to them. Begin each question with one of these three phrases to ensure elaborative answers:
  • “Can you help me understand…”
  • “Talk to me about…”
  • “Walk me through…”
• Have the courage to pry into their personal affairs. What they don’t tell you reveals a lot! Every question you ask is like a mini negotiation. Questions are the equivalent to demands, and answers are the equivalent to offers. The bigger your question, the bigger the answer. Begin your prying question with this phrase to increase the likelihood of an answer:
  • “I invite you to say ‘no’ to this question, but [INSERT QUESTION]”

• As Dr. Chester Karrass used to say, “Ask questions like a country boy.” Don’t be too perfect, and polished. People are more likely to answer your questions if they feel comfortable and not intimidated. Be Columbo, not Tom Brady.

4. Use the “If-You” Rule

This countermeasure emphasizes perceived value. It allows salespeople to concede without really having to concede.

Here’s an analogy: Say you go to a deli or a Chinese restaurant, and you pay for your meal at the counter. Often, there’s a bowl of candy by the register. People tend to take more than one piece when it’s free.

However, if the restaurant were to charge 25 cents for every piece of candy, people would be less likely to grab a handful of sweets. Suddenly, they perceive the candy as being of value, and they become more cautious in their decision-making.

Similarly, salespeople should avoid simply giving their product away without asking for something of value in return.

What you should do:

• Trade with the buyer for something of value when they request a lower price. Consider agreeing to a 5% discount, but only if the buyer doubles the order quantity or purchases from a second product line.
• Only concede if you get something in return of greater value to you! If the buyer declines the opportunity to trade, guess what? Your price goes right back to where it started.

5. Trial Balloon

This is an advanced tactic for skilled negotiators. When the buyer says, “We like you, but you’ve got to do something about that price,” consider this response:

“Can you help me understand what you’re looking to achieve with a 20% reduction in price?”

What you should do:

• Consider giving them a discount if they provide lots of information and detail. Then, you can trust what they’re saying, and you know they’re being sincere. If you do concede, remember the “If-You” rule (why not get something back in return, even if it’s an I owe you one).
• Avoid lowering your price if the buyer stumbles over their answer. If they lack evidence in support of their request, stand your ground. They were just digging for a deal.

6. Considered Response

When the buyer asks for a lower price, take some time to think. Let a few minutes go by, make it seem like you’re mulling over their request, and tactfully say “no.”

What you should do:

• Tell the buyer you need a minute. Then, pull out a calculator or a pad of paper, and spend some time looking like you’re trying to make the numbers work.
• Make eye contact with the buyer, and gently tell them that you can’t accommodate their ask. They’ll be more satisfied with your “no” in this case because at least they tried.

The Nibble: When a Buyer Keeps Asking for Lots of Little Things

Like The Squeeze, The Nibble preys on your reluctance to take risks. The Nibble is when the buyer asks for small concessions at the very end of the negotiation process.

They might request more time to pay. They might ask for free shipping, an extra round of revisions, or better terms.

Regardless of the specific ask, professional “nibblers” will make these requests over and over and over again.

Don’t Say This: “We can make that work!”

Salespeople need to understand the cost of the little things they give away. They also need to understand how these costs impact their margin and overall operating profit. They need to care!

How to Respond to The Nibble:

These smaller negotiations can feel less intimidating to respond to. Still, it’s well worth preparing some of these six phrases and tactics to avoid giving up too much ground.

1. Take It or Leave It

If the buyer asks for free shipping or a reduced rate, your response might be as simple as a tactful ‘no’. For example, you could say:

“It’s against company policy to offer free shipping.”

It’s highly unlikely that the buyer will walk away at this point. Rather, they’ll likely shrug their shoulders and move forward with the deal anyway.

| Related: How to Walk Away From a Business Deal Without Burning Bridges

What you should do:

• Take a firm position. Tell the buyer that as a rule, you can’t accommodate what they’re requesting.
• Use legalese phrases like “policy,” “procedure,” and “regulations” to discourage the buyer from pressing the issue. These phrases will imply that your position is non-negotiable.

2. “Are You Kidding?”

This approach is ideal for one-off negotiations. If you’re hoping to enter a long-term partnership with the buyer, think twice before using this strategy. You may come off a little abrasive.

What you should do:

• When the buyer asks for a 3% discount, make eye contact and say, “Are you kidding?”
• Speak with conviction. When most people nibble, they don’t feel great about it. Your response will remind them of that.

3. If-You Rule

This is the same tactic we discussed in “The Squeeze”. It works just as well in response to nibbling buyers. Essentially, you are turning their small Nibbles into small opportunities for you.

4. Inject Time

This negotiation tactic is surprisingly effective. If the buyer wants you to throw in a little extra something for free, or if they request a discount, let them know they’ll have to wait a few extra weeks for the deal to go through if they want to proceed with their ask.

Here’s how you could phrase a response:

“Not a problem, we can do that for you BUT because we’re now changing the structure of this deal, I’m going to need to get our agreement revised by legal. It shouldn’t take more than a few weeks.”

What you should do:

• Stand firm. Let the buyer know it’ll take quite a bit of time to give them what they want.
• Keep in mind that most people don’t want to wait a few weeks for something insignificant like a change in terms or free shipping. And if they do, then maybe it’s worth making the concession.

5. Limited Authority

Similar to injecting time, you can dissuade the buyer from pushing their request by letting them know it’ll add time to the sale process.

The next time a buyer requests free shipping (or something similarly insignificant), think about using a simple phrase like:

“I don’t have the authority to change the contract terms.”

What you should do:

• Don’t back down. If the buyer then asks to talk to someone who does have the authority to update your contract, let them know you’ll gladly put them in touch—but it might take a while for the person to get back to them.
• Be patient while the buyer contemplates their response. Chances are they won’t want to wait, and they’ll agree to the current terms.

6. Nurture

This is more of a preventative measure than an active countermeasure to The Nibble. That said, it’s equally important.

No matter how frustrated you are, aim to be nice and nurturing to nibbling buyers. Never be angry, or show that you’re upset. This will help preserve your confidence and your professional relationship.

What you should do:

• Take a deep breath if you’re mad or irritated. Then, refer to the countermeasures outlined above.
• Let the buyer know you understand where they’re coming from. It may feel like they’re trying to take advantage of you, but they might not be conscious of that.

Now let’s sum up what we’ve learned…

You’ve just read a summary of buyer tactics and phrases salespeople should avoid in negotiations, as well as phrases you can use strategically in your next deal.

In closing, here are three takeaways:

• Take the time to invest in negotiation training, practice and preparation. Research shows your bottom line will thank you.
• Brevity is your friend. Be concise when you discuss your pricing during a negotiation, use “I” phrases whenever possible. Pause after you finish talking.
• Saying “no” may feel uncomfortable. However, by understanding different negotiation styles and by using the phrases in this article as a point of reference, you can do so with confidence.

Now tell me what you think. Which parts of the article surprised you? Did anything validate your existing beliefs? Did you find these insights into negotiation tactics helpful?

The post The Worst Phrases Salespeople Can Use in a Negotiation and What to Say Instead appeared first on Sales Hacker.