Ambition Mission

Change.

The very word sparks emotion (and no I am not attempting to invoke any references to last year’s Presidential election).

When an organization is faced with growth, change is often required to break through the current level of performance. 

The challenge is not deciding that changes are required and necessary.  The challenge, often times, is convincing the staff (or customers) that these changes are good for all involved.

Sure, there are instances when the changes needed for growth are not truly going to be good for everybody (such as an automated process replaces a person’s job; great for company, not so much for employee).  These situations, however are more rare. 

The most common situation is that changes are required and the only barrier to growth becomes the staff’s resistance to the changes.  Short of handing out copies of the popular book “Who Moved My Cheese?”  which is a great thing to do by the way, here are a few tips to keep in mind during this exciting (and challenging) time in a company’s growth:

1. Be real.  Let the staff know the good, the bad, and the ugly.  There is a difference between being excited and optimistic versus exagerating and fake.
2. Be early.  Plant seeds that change is neccessary and coming soon.  Be careful not to scare people.  Early on, be brief, and non specific with an air of excitement.  Even if the staff doesn’t know what changes are coming, the fact that they are expecting some things to change helps a tremendous amount.
3. Be open.  Lay the facts out, and ask for input.  Just like the popular “Matrix” movies, the problem is choice.  If the staff feels like they chose (even a little bit) of the changes coming, it will be easier for them to accept.  Avoid a last minute decree demanding compliance.
4. Be confident.  Once the decision is made, move forward.  Don’t waver mid stream.  Planned changes may be 90% decided prior to asking staff for input, but once the plan is 100%, be confident that that is the way the company must move forward and do so.

Even with these steps, certain staff may not be ready or able to change.  During these times, staff may leave.  Understand that in companies and in life, everything happens for a very good reason.  Focus upon the growth planned for the company and that the changes are required for that growth.

 Good luck and Happy Hunting!

I recently posted a reply to a Cahnnel Insider blog about whether or not pre-sales technical folks should recieve commissions as salespeople do or in some modified form.  Here is my reply:

No commissions for technical staff, whether they assist in the sales process or otherwise.

Rather, include the technical staff in a bonus for the company’s (or sales team’s) group performance.

Also, the pre sales technical role ideally should be rotated among the technical staff on a monthly or weekly basis.  Rotation is always a good thing for the technical staff and it allows ALL staff to cheer ALL salespeople. 

If the sales team does X, then all members of the technical team get Y.

Everyone on the team is motivated to assist “Sales.”  There is no more (or less) “Us versus Them” mentality between salespeople and technical staff.  And finally, ALL staff is aligned in the direction that bringing on new customers is good for all.

Since salespeople and technical staff have hugely different motivations and personalities, commissions should never be applied to a technical staff member - in rarely, if ever, has the desired effect of putting the “carrot” in the proper place.

Matt Makowicz

Matt@AmbitionMission.com

Link to the Channel Insider blog is:  http://blogs.channelinsider.com/content001/careers_salaries/the_channel_sales_commission_conundrum.html

One of the most common questions I constantly am asked is “What should I pay a new salesperson?”Like numerous business issues/questions, I usually ask a few other questions before I answer.the short answer to the above question is - It totally depends!First, no matter how or what a salesperson is paid, the compensation must be justified.  It doesn’t matter whether it is called base, draw, commissions, bonus, expense reimbursement, spiff, or whatever - the sum of that number (Cost of Sale) must be measured in relation to revenue and profitability.Second, BEFORE one goes out looking for a salesperson, it is imperative that the company is prepared to hire such an individual.  Is the sales process documented?  Are prices and offerings established firmly?  What decisions that are related to sales and/or customers are currently only able to made by the business owner?Third, make sure that the new salesperson will be trained and managed properly.  ALL new salespeople need training before he/she will be able to sell the products and services of a company the way the company wants them sold!  NEVER assume a person’s experience translates to not needing training as a salesperson.Salespeople can be whiney, greedy, lazy, and difficult to manage - but none of those are the leading reasons why salespeople fail.  In most cases the failure is due to A) an unprepared company, B) lack of training/direction/management.Comments welcome - but not possible until new web site launched.  Visit Facebook group or email me directly.Let Ambition Be Your Mission!

Any sales trainer worth his salt would stress to salespeople to never “pre-judge” if a prospect is going to buy or not.  All too often we are wrong, or more accurately put, our assumptions are incorrect.As someone who has sold various products and services over the last 18 years, I can definitely attest to the fact that I have been surprised upon numerous occasions.  We’ve all even heard the “war stories” of the “sure thing” that never happened or the “no chance in ___” buying big.Here is an exception to this all important rule:  FOLLOW YOUR GUT!I recently had a sales meeting with what would be a large customer prospect.  The dialogue was healthy, the dynamics of the meeting were fair.  The result of the meeting was statement of interest coupled with a “not now” objection.  However, the body language was off.  The meeting “felt” static.  It was like going through the motions.Everything was done right, but for whatever reason, I just felt that I would be barking up the wrong tree.  I of course followed up appropriately to get sporadic and non timely responses. - the deal is going nowhere, just like I felt I “knew” during the meeting itself.It’s difficult to teach “gut feelings.”  But when you know, you know.Advice to a new salesperson = “Never, ever, pre-judge a prospect.”Advice to a salesperson that is beginning to trust him/herself and her gut = “Never pre-judge, unless your gut tells you different.”Let Ambition Be Your Mission

Today’s coverage of the election is commonly called “Decision ‘08.”  For some, an easy decision, for others a tough decision.  I am certain there are enough blogs out there dedicating something political to the fray today, so I will not add.

 I will however draw a parallel to business.  There is a reason we have term limits and elections.  First, nothing lasts forever.  Second, It is necessary to continue to challenge (and sometimes revisit) previous decisions.  Elections force us to do that with our government’s leadership.  Unfortunately, nothing forces it in quite the same way in a small business.

I speak with hundreds of small business owners each month and some, I am afraid to say are simply on “auto-pilot.”  VERY FEW change the way in which they market, sell, hire, operate, do their books, compensate staff, compensate themselves, or even answer the phone.  I am not advocating change for the sake of change,  (please don’t read into that too much) but it IS necessary to take a look at all areas of one’s business regularly - sometimes a hard look.

Here is an example that is common and based on the conversations I’ve been having with Partners out there seems to be all too familiar in this market/economy, etc…  The scenario is when to cut back on expenses.  In particular, when is it the right time to let an employee go?  This is such an emotionally charged topic, that concepts of fairness, guilt, regret, responsibility and fear all get in the way of making a business decision. 

I was talking with a business owner that had hired staff too quickly.  (hired staff and then began selling)  When business didn’t grow as quickly as anticipated to support the new expense of the additional staff, a decision had to be made.  The options, as the business owner saw them were

1) just sell more, it will take care of itself

2) fire the last person hired (that’s fair right?) [note: this was owner’s least desirable option]

3) cut back on other expenses, such as benefits for all staff

4) dramatically reduce the owner’s compensation (for the time being)

The owner was looking at emotional reasons and NOT looking at his business.  He was not analyzing the P&L, sales pipeline, balance sheet, and cash flow analysis - but he should have been.  In this case, he was considering lowering his pay by 50% to $4,000/mo and cut benefits such as mileage reimbursement and some other healthcare and fringe benefits to all employees.  His total savings would equate to approximately $6,500/mo.  Alternatively, as I saw it his other option was to let go one of his high paid (slightly overpaid) techs.  This single change would save approximately $8,000/mo when everything from payroll, taxes, benefits, mileage, etc was factored in.

Which is more emotionally taxing for the business owner?

Which is more emotionally taxing for the remainder of the staff?

And finally, the most important question (and really the only one that matters) is:

Which course of action is best for the health of the business both long and short term? 

Here is my point. 

When making dramatic decisions in your business, always do two things:  First, Pretend you are not the owner/operator but rather an investor looking out for the long term value of the business.  Second, be certain to look at major decisions from multiple angles and not be clouded by emotion.

Good luck and happy hunting!

P.S.  If you find yourself at this decision point and want an objective opinion from one’s who’s been there, reach out to me, I will be glad to listen and offer my opinion and help however I can.

Let Ambition Be Your Mission!

~ Matt Makowicz

Here in NJ, the slogan goes… “NJ and you, perfect together.” 

While I can practially hear the snickers through the Internet (especially from you folks out West), hopefully one we can all agree upon is the title of this post:  “Projects & Service Contracts - Perfect together!”

Service contracts = recurring revenue.  Projects are (by their nature) transactional sales.  BUT, if we can somehow marry a project sale with a service contract, then Projects (can) equal recurring revenue. 

Here’s how to do just that:

First, understand that the project is what the customer has a perceived need for almost in all cases.  Rarely does a customer complain that they need a monthly IT service contract.  They do, however usually agree with and understand the need for a new server, new equipment, or even new software - it’s easier for a customer to grasp.

 Thus, it is necessary to do a good job demonstrating value for & selling the project.  REALLY addressing the customer’s needs (both perceived and otherwise) as it relates to the PROJECT, will lay the groundwork for the service contract sale.

The problem:

Most IT providers see the project and service contract as two separate sales.  Furthermore, if the IT provider is seeking recurring revenue, the focus is therefore shifted from wanting to make project sales to wanting to make service contract sales.  (the opposite of what the customer thinks they need).

The solution:

Marry the two sales.  Act as if the project is a student sky-diver tethered to an instructor.  Regardless of how much the project may feel the most important, the instructor is in charge.  The service contract (and recurring revenue that goes with it) is always there - an integral part of the sale.  To remove it will… well only the instructor has a parachute. 

Even if not asked for directly, every project proposal should be accompanied by a service contract proposal.  Remember that the real SOLUTION to the customer’s pain is NOT Small Business Server, a new firewall, or even a great line of business software application.  The real solution is YOUR SUPPORT OFFERING!  Would the customer be in the situation they’re in now if they were already on your support offering?  No.  Would they be able to focus upon their business and its growth and sustenance if they were not on your support?  Likely not.  Your offering is the solution.  Presenting your support offering with every project proposal is as critical as having a parachute when skydiving - it simply doesn’t make sense without it!

This is why I advocate a very thorough proposal for the project.  Since that is the part the customer wants to hear about, I would spend the majority of the time presenting the details, options, and scheduling of the project.  All the while demonstrating through “picture painting” and “seed planting” that the company is thorough, has attention to detail, has considered the business’ needs and recommended an APPROPRIATE solution.  These emotional qualities will then be translated by the customer to the support offering and make it an easier sale.

The last critical tethering is that of a discount.  The desired outcome (best for the customer & best for the IT company) is for the customer to go ahead with BOTH the project and the support contract.  So the “carrot” needs to be placed to incentivize that outcome.  This is done, most easily by presenting a built in discount if the customer says yes to the project and yes to try out the support contract. 

The way I used to do this (with greater than 95% success) is to offer the project with two prices A) T&M estimate and B) reduced, fixed price.  The “A” price was really an inflated premium price I would charge the customer because a customer that only wants a project took us outside of our desired business model and therefore had to be charged a premium.  The “B” price was the price I really wanted to charge to be profitable on the project.  The difference between “A” and “B” was usually NO GREATER than one quarter of the support contract.  I then presented this difference as a discount the customer would receive if they “went ahead and gave our support a try.”  The result:  Most customers felt silly to NOT try out the support and of course not one ever cancelled after a quarter, because the customer realizes by then how integral our service was to his business and has trouble contemplating how his business survived without our service for this long. 

 Happy Hunting!

~Matt

Price comparison in a fragile or down economy is of utmost importance and crosses industries…

 My friend, Lisa, owns a territory of FIVE GUYS chain restaurants, here in NJ.  Her sales are UP close to 50% over this time last year.  The reason?  The down economy!

(for those of you who don’t know FIVE GUYS, it is a restaurant chain that serves high quality burgers & fries made from top quality, fresh ingredients)

 Here’s why - in a “good” economy, people “traded-up” from the franchise burger places (McDonald’s, Wendy’s, Burger King and the like).  In a “bad” economy, people “trade-down” from other chains (Fridays, Applebees, etc…). 

When people compared FIVE GUYS with the franchise burger places, i.e. lower end places, the value AND price was higher at FIVE GUYS.  The result was a 50/50 choice… A) lower price and lower value vs. B) higher price and higher value.  Now that the economy is not as good, there is an additional set of customers.  These new customers are those who choose between FIVE GUYS and a chain place where a lunch or dinner with the the family could easily cost twice as much.  In fact, in some ways, the better quality burger at FIVE GUYS is a higher value than one can obtain at a chain.  So these new customers choose between A) higher value and lower price vs. B) higher price and lower or equal value.

This is similar to the topic of today’s Ambition Mission Community webinar - “Comparing Price: Why comparing your managed services offering to an IT department compels prospects to say “I’ll take it.”.  The prospect is more likely to engage  in a managed services offering if what they compare the offering to is higher in price and equal or lesser in value.  This is the case when comparing a fixed price, managed services agreement for a small business customer to that customer having an internal IT department or dedicated IT professional on staff.  The benefits to the business with the managed services offering are equal if not higher than the business hiring full time IT pros and the managed services offering is a mere fraction of the cost.

Here is a slide from today’s webinar that shows where the value and price questions are answered for a customer in realtion to 1) a T &M solution, 2) an in house IT Department or IT Pro, and 3) a proactive maintenance ans support (managed services) offering:

Good luck and happy hunting…

Let Ambition Be Your Mission!

~Matt

So many folks talk about Marketing & Sales as if they are synonymous, but they are not the same.  True, Sales and Marketing are closely related and in smaller companies there can be one individual responsible for both, but they are not the same.

Whether Sales and Marketing are two different departments in your company or simply two different “hats” worn by an individual in a business, it is critical to observe the difference between Sales and Marketing.  It is only in the separation of the goals and responsibilities of each “department” that each can be focused upon properly for the upmost growth of the company.

So simply put, “Sales” is defined as the process by which an opportunity or lead is converted into a customer.  The most common analogy is that of a funnel.  The wide mouth at the top of the funnel is where opportunities and/or leads are put.  “Sales” meets with the customer, determines needs via analysis, presents solutions, prepares contracts, negotiates with prospects, and garners commitments to successfully convert the opportunity/lead/prospect into a customer.  “Sales” final task is to transition the new customer to the Operational or Implementation department of the company to execute the solution just sold and committed to by the customer.

“Marketing” is generating or finding the opportunities or leads for “Sales” to work through the process described above. 

Observe the funnel below…

Clearly “Sales” and “Marketing” need to work together.  If Marketing floods the top of the funnel with too many opportunities for Sales to be able to give attention to, Sales will become frustrated and not work on any of the opportunities for there may be too much “bad” opportunities to get through to get to the “good” or qualified ones.  An example of this would be the purchase of a cold list from a website that sells this information.

Conversely, if Marketing over qualifies opportunities, Sales will likewise become frustrated becuase they will feel that there are not enough opportunities to work on and that Marketing is not keeping them busy enough.  An example of this is when 100% (or close to 100%) of all opportunities come from referrals or word of mouth sources.  Another complication of this situation is that the Sales department usually will be overconfident in their ability to convert opportunities to customers and consequently unprepared to work different types of opportunities (generated from different marketing strategies) through the sales process.

My recommendation is to first, understand the very different roles of “Sales” and “Marketing” in order to execute on each effectively.  Second, add additional marketing strategies to the overall marketing plan rather than simply relying upon referrals only to ensure that the Sales department effectively understands its capabilities and appreciates when an super qualified referral is dropped in their lap.

Happy hunting and Let Ambition Be Your Mission!

Matt Makowicz

My friend Stuart Selbst (www.SecureMyCompany.com) pointed out a website for a Managed Services provider in Tennessee who’s website had a “Managed Services Offering” listed.  The provider (www.DoubleClick-Solutions.com) was kind enough to give me permission to blog about it.

The page speaks to BENEFITS to customers for Managed Services customers, rather than speaking in vague features or technology terms.  I love it!  The only aspect I don’t agree with is the use of the term “Managed Services” in the title of their offering.  It should be, in my opinion, “Double Click Total Support” or something thereof.

 So to visit the page in question click here… http://www.doubleclick-solutions.com/ManagedServices.html

Here are the BENEFITS that impressed me - what a great customer facing message about the value that a customer has working with an MSP!

Unlike other computer consultants who profit from the failures in your IT environment, our purpose is to PREVENT computer problems from escalating into unexpected downtime, data loss, interruptions in business, and financial loss. In fact, our DoubleClick Managed Services program does not allow us to profit from your technology troubles in any way. This program is ideal for business owners who:
 

• Need to have their computer network, e-mail, database, and Internet access up and running 24/7/365 without problems.
• Value the security of their data, and want to do everything possible to prevent loss, corruption, or theft.
• Want to maximize the speed, availability, and performance of their network.
• Hate dealing with–or thinking about–computer problems and other complexities of operating a computer network.
• Don’t have the time or staff or budget to deal with computer network maintenance.

  The Benefits Are Obvious ·         You’ll avoid expensive repairs and recovery costs. Our network monitoring and maintenance will save you money by preventing expensive network disasters from ever happening in the first place.·         You’ll experience faster performance, fewer glitches, and practically zero downtime. Some parts of your system will degrade in performance over time, causing them to slow down, hang up, and crash. Our preventative maintenance and network monitoring will detect these problems early and prevent them from escalating into more expensive repairs and downtime.·         You’ll feel as though you have an in-house IT department–without the costs. As a network maintenance customer, you’ll have access to a knowledgeable support staff that can be reached immediately should you have any kind of problem or question. ·         You’ll receive substantial discounts on IT services that you are already buying.
Most IT firms will nickel and dime you over every little thing they do. Under this program, you’ll pay one flat, affordable rate and get all of the technical support you need. No hidden charges, caveats, or disclaimers. ·         You’ll reduce trip fees and receive faster response to your problems. Thanks to our remote monitoring and maintenance software, we will have the ability to remotely access and repair most network problems right from our offices. If we cannot fix it remotely, we will dispatch a technician to your office the same day.  If you currently work with a technician or technical service company we will partner with them to control your costs, alert them of alarms, and have them dispatched to your site when needed.·         You’ll be able to budget for network support just like rent or insurance. Wouldn’t it be nice to avoid unexpected costs for fixing or restoring your network? Now you can.·         You’ll sleep easier knowing the “gremlins at the gate” are being watched. Cyber criminals never sleep! But thanks to our 24/7/365 monitoring and on-going maintenance, you’ll have one less thing to worry about.  This may require the purchase of some additional hardware or software if necessary components are not present.  This will be identified during the free audit.•    You’ll safeguard your data. The data on the hard disk is always more important than the hardware that houses it. If you rely on your computer systems for daily operations, it’s time to get serious about protecting your critical, irreplaceable electronic information.•   You’ll stop annoying pop-ups and spyware from taking over your computer and your network. Not only are these intruders annoying, but they can introduce viruses and jeopardize the security of your network.  This may require the purchase of some additional hardware or software if necessary components are not present.  This will be identified during the free audit. •   You’ll gain incredible peace of mind. As a business owner, you already have enough to worry about. We’ll make sure everything pertaining to your network security and reliability is handled so you don’t have to worry about it. Happy Hunting!

Matt Makowicz

Everything Channel’s Xchange ‘08 had approx 250 VARs meeting with over 100 leading vendors.  Some highlights of note:

Bandspeed (www.bandspeed.com) - a fantastic WLAN solution that can lead to huge profitability for MSPs who want to deploy and sell managed WLAN solutions for customers.  Once I learned of them and asked other partners if they’ve heard of Bandspeed, I received one of two answers 1) “never heard of them” or 2) “Bandspeed ROCKS!”

Symantec - during our boardroom appointment, someone introduced the “elephant in the room” by asking the exec presenting about Syamntec’s recent partner/channel policy changes notably the practice of going direct to customers cutting out partners on renewals.  The exec tried to play the good cop bad cop routine but was unsuccessful at delivering any feelings that were warm or fuzzy.  At one point he even blamed the new practice on partners (or at least he tried) by stating that “30% of licenses don’t renew”  - my colleagues and I gently pointed out that the reason for the 30% is more likely due to VARs switching solutions for the customers rather than simply forgetting to sell the renewal. 

Overall, many vendors were trying very hard to position themselves as a one stop shop for a VAR.  “we have this product/software, but we’ll also train you, help you grow your business, etc…”  While all of that sounds great, many miss the mark in delivering what VARs are truly looking for - a PARTNERSHIP.  In an era where VARs need partnerships to diversify offerings, “commitment to our channel” has got to be real.  Of course, some vendors get this and others don’t even come close.

Happy hunting…

Matt Makowicz