"Recommendations are the best method of generating new business opportunities." But are they really?

What Drives Your Business Today? Recommendations?

Often we hear and read that recommendations are the best possible method of generating new business (sales) opportunities. In addition to »cold calling«, recommendations are actually one of the few marketing activities that also work well in the complex B2B sales process – this was recently described by my colleague Tamara Ćetković in the article 'Do you really make sure you have enough »meat« for sale'. 

The reason for the effectiveness of recommendations is, of course, very simple. Recommendations work on principle of trust and acquaintances. One to recomend us, is usually a very well well-known person, our relationship is based on mutual trust – with recommendations, there are no concerns about inadequacy, self-interest or even malicious intents.

Such personal information are very much appreciated, as shows the BusinessWeek research which provides clear and convincing evidence: out of 700 companies surveyed, 22% of companies selected recommendations of acquaintances and business partners as the best method for generating new opportunities. Therefore companies strive to be recommended forward.

But is this true? Are personal recommendations really that great? Do they really generate so many sales opportunities and yield? Our experiences tell us no.

Recommendations from acquaintances VS. my ego

An important part of recommendations, one that is often missed in the professional literature and discussions, is the psychological impact that recommendations have on those to whom the recommendation relates.

What does a scenario that is doomed from the start according to our experience look like:

We at the Customer: "Well, do you know anyone else, to whom we might help the same way we helped you?"

Existing Customer ZX: "Yes, the person XY in the company XY also has similar problems. You can call them, here is the contact, and tell him that I sent you!"

We: »Greetings, g. XY. We are XY person from the XY company, and we are offering XY services/products, we also collaborate with your colleague ZX who mentioned that you have similar problems, and recommended you to hear more about it, so that you could find out if we can solve your problems as we solved his.«

XY swallows hardly: »Of course. I'll meet you at that time and there, LP.«

This is a mock example, however. What have we achieved with this? In principle, we were only able to step on XY's ego with this, when we told him, that we know, that something is not working properly. Even more – this was told to us by his acquaintance/business partner, i.e. a person that he is dealing on personal level with. His confidant therefore considers that XY is weak in a certain area, which is almost the worst thing that can happen to any individual's ego. If you already have a 'problem' (and you do), you certainly do not want them interpreted to an acquaintance. Nor to the company by an acquaintance recommendation. Finally, do we discuss the most serious problems with our partners or friends in private life... Or do we pretend to be strong in front of them, and rather repress problems or tell them to a »competent stranger«, i.e. a psychiatrist?

So we really have not done anything. We will get a first meeting, definitely. But we won't acquire more information or even perform a transaction. We are too close to the acquaintance of XY and there is a real concern that XY will be seen as weak, if he has any errand with us.

Are consequently personal recommendations worthless?

Absolutely not. Recommendations are dry gold in sales. However, they require a methodical approach and a well set plan of how to contact the person XY, when to pull recommendations out of the hat and how to do it.

Do you have opinions, comments? A good know-how from personal recommendations? Join the debate on LinkedIn or contact us at +386 (0)1 5444 999 or email us. 

  

Gal Kočar
Market Development Lead

Do you really make sure you have enough "meat" for sale?

A Focus Above the Funnel is Esential to Generate Leads

When we talk about sales management, most of the time is dedicated to monitoring and managing the sales funnel sales opportunities. Too often, not enough emphasis is given to the structured acquisition of leads, although activity in the early stages of a significant impact on the outcome of individual sales opportunities.

 

In order to deal with good sales opportunities, we need greatest possible number of leads and also a clever salesperson would you want as much as possible. The problem is that generating leads is seriously hard work, and the majority of sales that are like in action and on the ground, does not proceed.

    

Below we will mention a few ways of generating leads. All will work if you put them in to practice, and do so in a consistent ongoing way:

• Referrals
• Dependent Referrals
• Networking
• Directories
• Cold Calling

Referrals

Very few actively generate referrals. We think we need to know or "have a relationship with" the person you ask for referrals, but it is not. Referrals can be obtained from a lot of people you deal with in business, from prospects, clients, vendors, tradesmen, even other leads. .It is never too early to ask for referrals, you may not get one right away, but people will know you are ready for them.

Direct Authority Referrals

Part of referrals needs to be exempt from the above categories. These are the referrals of people who have relationships with people who could use our service or product, and are in a position to have to more than strongly influence matters with their authority. They have information that can accelerate the transition stakeholders in a business opportunity and also shorten the sales cycle. These could be lawyers, accountants, business advisors, bankers, ie persons who are entrusted to our interested party and it has a direct impact.

It is smart to connect with companies who offer complementary solutions to ours, and who allready build confidence to our interested party. They help us to sell our solutions, as they are trusted client for those who provide them with a comprehensive solution to the problem.

Irrespective of the nature of the recommendations we may take the initiative to circulate some recommendations in order to build a healthy relationship that will show the long run results.

Networking

Networking is the everyone's task, which does not mean that it is done effectively. All networks are not suitable for every type of sale, but there are always a number that will provide you a steady stream of leads. Since networking is part of the company's strategy, do not exaggerate, but do it properly. It is necesary to set targets to measure and perform networking based on clear objectives and results.

Directories

There are a number of different directories for different prices, but if they provide us the leads we need, the cost are negligible. The advantage of databases is that they can be filtered if necessary, and extracted just what you need.

Cold Calling

In addition, other than referrals, cold calling is still the most time and cost effective way to gain and qualify leads and turn them in to prospects. The survey results showed that the top three ways companies generated quality new leads over the past two years are:

• referrals from clients or partners (22%);
• general referrals (16%); and
• cold-calling or telephone prospecting (13%). 

That wea are able to enter in to transactions, we need opportunities and high-quality cold calling is an effective ay to find those prospects that need us, but do not know how to find us.

Using the above mentoined methods can ensure that you have sufficient and a steady source of leads as well as you can qualify, rank and continuously convert those leads to prospects and then to sales.

Although, it's not easy way, the above-mentioned approaches ensure that interested parties, with whom we have contacted so far, will find our solutions, when they'll need it. 

This article is extracted from: "Lead Management - A Focus Above the Funnel - Part II", Tibor Shanto

http://bit.ly/xoSjQ3

Tamara Ćetković

Consultant, Coach & Project Manager

Unmotivated salespeople? The incentives will not solve the situation.

What motivates a sales force?

When my colleague googled the phrase "Sales Management", he ran into an article, written by Ms. Sabine Petrov, titled: Most Common Errors in Sales Management. The article was very practical unlike many theoretical articles and interviews found in media and was discussing concrete situations in sales departments of our companies. 

I would like to briefly comment one topic from this article -- namely, the negative assessment of the incentive plans expressed by sellers. The article states that the sales people at least agree with the following statements:

1. Everyone in our sales department is familiar with the rewards and sanctions for exceeding or underachieving sales targets;
2. Non-monetary rewards are tailored to meet the individual needs;
3. The manager clearly explains why I have or have not received the award;
4. Financial reward is directly tied to the individual performance or meeting the sales targets. 

Of course we should be aware that in almost all employee satisfaction surveys rewarding usually comes last on the scale and there is nothing wrong with that. Employees are hoping that this will affect the salaries -- who can blame them :) 

   

But above statements are specific and well placed, so disagreement with them is not to be taken easily as general whining about the salaries. Why? 

Because they do not speak about money but about fairness and the so called hygiene.

     

The theory of managing people is blessed with Herzberg's Motivation-Hygiene Theory which basically says that the factors that motivate human beings are not the same as those that demotivate them. For example, poor relationships at work demotivate us, but very good relationships on the other hand do not motivate us. A seemingly useless assertion but let's see an example. For employees it is really great to have excellent relations in the company (conversations, coffee, socializing, etc..) but this will not directly stimulate them to put in extra effort on challenging tasks.

    

More important for the practical aspect of people management and rewarding is Herzberg's claim that motivation can only be built on hygiene. This means that you must ensure first there are no factors that demotivate, only then can you motivate your people with motivators. So what, you say? 

A reward system that is not understood does not work!

Now comes the shock - this means that if your employees perceive the reward system as undefined, nonobjective or even unfair -- awards and sanctions will not work at all. Given the above arguments or denial of above claims by salespeople we can assume that a huge amount of effort and money for incentives in many companies is practically thrown away. 

So, an incentive system needs to be: 

• simple and understandable ("less is more");
• clearly defined in detail (money is a sensitive issue);
• repeatedly communicated (any misunderstanding is dangerous);
• thoroughly discussed (so all is clear and perceived fair). 

only then can it can work. The first point is important so that points 2-4 are not too difficult. If it is simple we can accomplish the rest.

Well, let us now know your comments and questions! And send the link to this post to your superiors, the incentive systems must be improved. 

      

P.S. For managers - do not throw money away for incentives that do not work! 

Tamara Ćetković

Consultant, Coach & Project Manager