What are your growth goals for this year?
And next year?
Do you know the exact plan you will follow to hit your target goals? Is that plan based on the results of what has worked before? And do you know what your options are if you have to tweak, adjust or pivot that plan?
On some level – as business owners – we have a general idea of what we want to accomplish. It is hard to get through the year without that general idea, even if it only exists in our head.
50 new clients.
Hit the $100,000 revenue mark.
$200,000 in revenue from a new service launched.
$1M in total revenue.
Most of our goals focus on how much we want our business to grow…the number of new clients, revenue generated, etc.
Which means we need a client growth or sales strategy in place to hit our goals. A sales strategy – sometimes called a business development strategy – consists of the activities you do to fill the pipeline with prospects, some or most of whom eventually become clients.
Those pipeline-filling activities include networking, cold calling, attending trade shows or conference, direct mail, advertising, free presentations, one-on-one networking, publicity, joining leads groups, SEO, online leads, and more. (Not an exhaustive list of course.)
The general thinking is that business owners need a well-defined sales strategy made up of these different activities. But ultimately what business owners need is an understanding of which activities work for them and then laser focus on the execution of those activities.
But that is not what we do.
First, let’s look at what business owners do when it comes to their strategy or plan to bring on new clients each year. It is helpful to assess where we are with our current client generation strategy and then look at what we should be doing.
SECTION 1: What Not To Do When Building a Sales Strategy
SECTION 2: Three Parts of a Functioning Sales Strategy
SECTION 3: Assessing Your Sales Strategy
SECTION 4: Defining Sales Lingo
SECTION 1: WHAT NOT TO DO WHEN BUILDING A SALES STRATEGY
There are two traps that small business owners fall into when it comes to how they go about generating new clients. They either fall into the “spray and pray” method or the “singular focus, hope it works” method. Neither are the right method, but without a planned approach to how you will generate new clients, we become susceptible to falling into one of them.
Spray and Pray
I can almost guess with complete accuracy that a business owner is operating under the “spray and pray” model when they ask me this question…
“Hey, Stacey – here are all of the things we are doing to generate new clients, can I run them by you for your opinion?”
As a business coach with a focus on business growth, it is a question I am used to receiving. When they start listing off all of the activities (or things as they call them) they are doing in a random hap-hazard way, I know they are just spraying and praying.
Meaning they are doing many different activities – usually more than 10 – which is effectively “spraying’ their effort, time and focus in many different directions and then “praying” one or some of them will pay off in filling the prospect pipeline. It is the haphazard method of their approach – not necessarily the number of activities, though that is a part of it – that makes this method ineffective.
They typically don’t have a process to identify what they should be doing – based on where they are likely to be exposed to their ideal client or people who know their ideal client. They just grabbed a bunch of activities, threw them up on the wall and is looking for what will actually stick (produce results).
It is a trap because it “feels” like we are busy, “feels” like we are doing the right things, “feels” like we are making progress.
But that feeling is just us hiding from acknowledging what we need to do or that we don’t know what to do. We need a laser targeted approach. Our approach may include a number of activities, but we can always answer why we are doing it and the outcome we are expecting.
Singular Focus, Hope It Works
The opposite of “spray and pray” is the singular focus approach…which means we focus in on one activity that we are willing to do and dig in hoping it works. Typically, this activity is something we really enjoy doing…hence why we focus in on it. Think about the person who attends just about every networking event they can find, each and every week.
But we are still just “hoping” it works. Which is actually more dangerous than spraying and praying because at least we stand a chance that at least one or two of those activities will actually work while we are spraying and praying.
Just like the spray and pray method though, we are hiding from reality and hoping if we dig in enough, do it enough…that it will start to work.
But neither of these two methods are how you should be growing your business, managing your client generation, filling your pipeline.
Let’s look at what you should be doing to have a focused approach that will work to help you increase your prospective client pipeline.
SECTION 2: THREE PARTS OF A FUNCTIONING SALES STRATEGY
What every business owner or sales development professional needs when it comes to bringing in more clients is a sales strategy broken down into three buckets or 3 plans. The reasons for the three plans is because your mindset is different when you approach the activities within each plan. By mindset I mean your expected ROI (return on investment), time it takes for results and even the approach you take and the language you use for each plan.
The three plans are:
- the prospecting plan
- the marketing/branding plan
- the referral plan
Most businesses start with one or maybe two of the plans but rarely all three. Most business development professionals only start with one – the prospecting plan – while their company supports them with the marketing/branding plan.
Let’s dive in to understand what each plan is and why you need it.
Three Sales Buckets
This plan is your high activity plan meaning you typically need a number of activities happening in concert with each other to produce any measurable results. The goal is to create short term success of finding those interested in your service and turning them into clients. I describe this plan as the plan you need it you “want to eat tomorrow.” For example – heading to the networking event where you hope to meet one or two prospects who will agree to coffee to discuss the possibility of working together. This is the “pound the pavement or phones” type of plan that can produce results but take a huge commitment of ongoing and consistent activity. When starting out, you will deploy many activities in this plan – hopefully not 10 – and the goal is to decrease your reliance on these activities over time.
Activities in this plan include:
- Direct mail
- Networking events
- Cold calling
- Joining a leads group
- Cold emailing
- 1-on-1 networking (coffee, lunch, etc.)
- Buying leads
- Attending trade shows or sponsoring a booth
The brand building and marketing plan focus on establishing name recognition, building credibility and gaining awareness. Different companies deploy this plan in different ways. Almost all have some kind of an online presence but the other activities you deploy with this plan will vary. A smaller budget may focus on a website and a few social media accounts and a more robust budget may include advertising (online, print) or earned media through publicity. The goal is to build and maintain presence so if a potential new client is searching for you, they will find you in a way you want yourself and your company presented. Keep in mind, if you work for a company or corporation this part of the sales strategy may already be determined for you and provided to you.
Activities in this plan include:
- Public relations
- Content marketing
- SEO (search engine optimization)
- Speaking engagements
- Social media marketing
The holy grail of new client generation is referrals. Where new clients just show up in your inbox because someone connected them to you because you can help solve the problem. Now growing a sustainable and consistent referral plan doesn’t happen overnight and there are no silver bullets but following the right steps can produce consistent results. The best part of a referral plan is it allows you to lessen your reliance on the prospecting plan and marketing/branding plan to fill the pipeline with new prospective clients. My ultimate goal is to allow clients to eliminate as much activity from their prospecting plan as possible because they are experiencing consistent results with referrals.
There are not individual, stand alone “activities” in this plan like the other two plans. The referral plan is a process to follow and effectively execute on. The basic process is:
- Identify who are your referral sources (referral source = people who refer you)
- Build relationships with referral sources
- Know how to plant referral seeds so you never ask for referrals
- Follow a process to turn “soon to be” referral sources into referral sources
SECTION 3: ASSESSING YOUR SALES STRATEGY
Before you jump into creating your customized version of your 3 plans and activities we need to step back and assess how your current sales strategy or activities are performing, meaning how are you filling the pipeline with prospects.
An easy way to understand your sales pipeline is to consider an actual funnel with a top, middle and bottom. Now the steps inside the funnel may differ from one business to another but effectively all funnels work the same way. Your prospects come in the top through sources, the activities you do and then the prospect works its way through your buyer’s journey (the middle) to the bottom of the funnel – hopefully – by becoming a client.[Funnel image]
It is crucial you understand where your clients are coming from, meaning from which sources. Once we know the sources of your prospects we can then map the sources back to the activities to assess which are working and which are not. But first we need to measure and then we judge.
To help you consider the activities you are doing right now to bring in new clients, take a look at the Sales Activities Wheel (below). This wheel is just a compilation of many of the sales activities – and should not be considered your sales plan.
Regardless of how you organize the activities, you need to be clear on what is working and what is not working. So, first step is to compile a list of the activities you are doing currently. List out the networking events you attend, the associations you belong to, if you have repeat clients, do you receive referrals (I certainly hope so), do you invest in advertising, attend trade shows, sponsor community or sports events?
Remember, guessing isn’t the right strategy – you need to look at the data and understand where your clients / prospects are coming from.
The next step is to list out your clients and where they came from. If you can, include the prospects that did not become clients and where they came from too. So, you would write down Client Susie who you met at a networking event and Prospect Tom who saw your advertisement and called but did not become a client.
Then in the third step – compare the sources of your clients and prospects with the list of your current sales activities. Now we are ready to judge.
To make this measuring and assessing (judging) process easier for you, I created a free resource you can download called the Sales Strategy Activity. It is only two pages so you can complete it quickly. It will walk you through the three steps I just gave you above and then allow you to judge your results. The activity provides a simple ratio to consider when determining the success of an activity and allow you to capture your top 3 to 5 sales generating activities.
If your results produce for you an assessment of “Houston, We Have a Problem” or “Not Horrible, But Not Great Either” then you should consider how you are attempting to bring on clients. You need to assess if you are spending time in the right areas. If there is a disconnect between the activities you are doing to generate clients and the results of where your clients are coming from…then you need to get to work fixing that problem.
Another concern to consider is if you can’t tell me where your prospects or clients come from…this is something you need to track because it provides clarity on how your new client pipeline is filled.
Houston, We Have a Problem…
After going through the Sales Strategy activity, you will know – based on data – if you need to eliminate an activity from any of your three sales plans. You may decide to eliminate the activity because it is performing poorly but check the reason it is not performing well. It is either because you aren’t putting enough effort because you don’t know what to do, or because you have limited capacity to make the activity successful, or because you are putting in enough effort but it just isn’t working. Not all sales activities we attempt will work.
Based on this process you can assess the activities that should be a part of your overall sales strategy and group them by each of the three sales plans – prospecting, marketing and referral. Remember the reason to group them by the three sales plans is because your mindset and approach is different when executing on the activities within each of the plans.
Here is a word of caution though…there is a good chance your referral plan is not working as you would prefer. Whatever you do, do NOT eliminate this plan. You need it but you need to know how to execute on it correctly so it works for you, produces the results you want. The ultimate goal is to increase the success of your referral generating plan so you can decrease your reliance on the other two plans – prospecting and marketing – and all of the activities that make up those two plans.
I find following my referral plan to be one of the most enjoyable parts of my sales and business development strategy because it allows me to generate referrals without asking, without manipulation and leverages my time. My referral generating plan provides around 90% of my prospects and clients for my coaching practice.
Keep in mind, when you don’t have a plan in place to specifically grow referrals, they don’t grow. Sure, some referrals may happen haphazardly or sporadically but to truly generate consistent referrals so you can be less reliant on a prospecting plan or a marketing plan you need to treat your referral growth like an actual standalone strategy with a plan you follow and track results.
But before you can move forward with creating a referral plan to go along with your other two plans, you need to be crystal clear on what a referral is in comparison to the other sales lingo to describe the type of prospects that will be generated by the activities in the prospecting and marketing plans.
SECTION 4: DEFINING SALES LINGO
The definition of a referral has become extremely diluted today. Most sales lingo generalizes different types of lead generation and unfortunately groups together terms because they seem similar. Terms like introduction and word of mouth buzz are explained to be the same as a referral. But nothing could be further from the truth.
Being introduced to someone is not necessarily the same as being referred to someone. And even though someone spoke really highly of you to a friend yesterday (word of mouth buzz) it doesn’t mean it’s a referral. I see people confuse and misuse these terms all the time.
So how do you know the difference? How do you know what is a real referral? Let’s take a look.
Definitions & Examples
Now let me say I am assuming you know what a cold lead is – a prospect who doesn’t know you, hasn’t indicated they want to meet with you and you come in contact with them through a prospecting activity like cold calling or cold emailing. A cold lead – based on its name – is pretty self-explanatory. But other sales lingo is not as clear and three terms in particular – warm lead, word of mouth buzz and an introduction – are often confused with a referral.
Let me break it down for you as to what a real referral is and what it is not by starting to define and provide examples of the other three often-confused sales lingo terms.
Definition: When someone you know tells you a company may need your service or product but doesn’t make a connection for you. Yes, it is still a lead even when they tell you to use their name.
Example: “Hi. I know that XYZ company could really use your help and services/product. The contact is Tom and here’s his number. When you call him use my name.”
Word of Mouth Buzz
Definition: When people tell you they have mentioned you or talked about you. They may even share what they said…like how awesome you are.
Example: “Hey I was talking to my client Dan the other week and mentioned you. He’ll reach out.”
Definition: The person connecting you with a possible new client introduces you to each other (normally via email) but doesn’t state you should explore working together. They typically use words like “synergy,” “great connection,” “get to know each other,” etc.
Example: “Ed meet Stacey Randall and Stacey meet Ed Smith. You two are great people and should know each other. Happy connecting.”
Definition: When you are connected with a potential new client by someone (the referral source) and they state the potential new client expressed a need (problem, pain point) and they know you can help them.
Example: “Stacey, I have copied Cindi on this email. She and I were talking the other day about her need to grow referrals in her business and I instantly thought of you. Please connect to schedule time for her to learn more about you.”
To help you keep these terms straight I have created a little cheat sheet for you, please download the Sales Lingo Defined Cheat Sheet.
Can you see the difference?
At the heart of a referral is the connection between you and the prospect by the referral source (the person referring you) and identifying a need in the prospect which is why they would be open to being connected to you in the first place. How you are positioned by the referral source (the person referring the prospective new client to you) is what makes a referral an actual referral.
What keeps a lead from being a referral?
There is no connection to a person who may need your services or products. While being able to use someone’s name is better than not being able to – the person who provided me with the lead didn’t make a connection which could be for a number of reasons (most of them not good). Reasons like what they heard is a rumor and there may be no real need, they think the company needs you but the company doesn’t think that, or they won’t put their name on the line (in writing via an email).
What keeps word of mouth buzz from being a referral?
By not connecting me with Dan via an email so I can reach out removes me from the driver seat and significantly decreases the odds that Dan will reach out. And not because Dan doesn’t want to explore working together…but Dan is busy and he’ll likely forget. Just human nature.
What separates an introduction from being a referral?
While the referral source has made a connection between you and the potential new client (Ed in our example above), there is not an expressed need to work together. By not saying it – that we should explore working together – the intended referral just became an introduction. Which makes it harder to set the first meeting and you have to do some extra work establishing why you are meeting. Positioning is key.
I’m certainly not against introductions and word-of-mouth buzz but they aren’t referrals. To be a referral the key that is needed is for the trust the referral source has for me – to take care of Sally or Dan – to be actually transferred to Sally and Dan and that can only be done by stating why we should meet.
Now I’ve gotten pretty good with how I respond to leads, introductions and word-of-mouth buzz and my responses are now just part of my process. But in the beginning I lost a lot of opportunities and wasted a lot of time on “let’s grab coffee and see where this goes” networking meetings because I didn’t have a strategic response to turn an introduction or word-of-mouth buzz into solid referrals. And I wasted time following up with warm leads that usually didn’t result in moving forward because they were just that…a lead.
If you would like to learn more about the language you use to flip a warm lead, introduction or word-of-mouth buzz into a referral, check out this resource called the Flip Scripts to help you take control of your prospects and turn them into referrals, making them easier to close and become your new clients.
So now you know the difference between referrals, introductions, word-of-mouth buzz and leads. You can download the Sales Lingo Cheat Sheet to keep the definitions and examples handy so you won’t have to guess if a prospect is a referral or not.
You also can complete the Sales Activity to assess your current sales plan and build a better plan. Use this new understanding as a way to build responses to turn all introductions, word-of-mouth buzz and leads into referrals.
I look forward to hearing about the changes you make to your overall sales strategy so you can have the success you deserve!