How I wish I could walk into a
brand new company that hasn't started yet so that at least I won't
have to deal with self
But no luck.
What normally happens is that
the business owner has had years to build the company wrong and I
have to undo the damage.
business owner hasn't a clue that he is damaging his company's future.
There's a huge number of ways
that the business owner is damaging his company's future with self
inflected problems. And he may not even be aware of these
problems! Here's a few
of examples to think about.
I'll talk about:
the Closer. = Giving your business away.
the Closer. = Destroying your marketplace.
Cheap = Painting yourself into the corner.
Here we go!
Hiring the Closer. = Giving your business away.
This one is easy to understand.
You hire a 'closer' and he can
actually sell! You have a couple of these in your business and
they are between 20% and 50% of your business. You're so
happy! But wait a minute! Danger lurks here!
This 'closer' or 2 start
complaining that they are not getting paid enough. They are
right. You're probably giving them anywhere between 10% to 30%
of the gross sale. They want more. You can't give them
more because you have all this overhead which just sort of happened.
One day they leave and take
the busisness with them and find your competitor that will produce
You lose 20% to 50% of your
sales and start losing money and your business dies.
into a terrible one of these years ago.
I got the phone call and went
to visit. I got there to find a huge warehouse that was a
factory. There were pieces of steel everywhere. But there
were no people in the factory. I went up to the second floor
looking for someone and no one seemed to be there. I walked
into this nice office. There he was, the owner. Sitting
behind his desk just staring at the wall, all alone in this big
building. I introduced myself and asked him what happened.
He told me that he produced
clothes racks for the department stores. You've seen them.
They're those chrome racks full of clothes hanging on them.
Well he had a very good sales
left with his best accounts
and left him for dead. He had a huge overhead and losing that
portion of his sales put him cash flow negative. There was no
way he could regain the work because the stores had a relationship
with the sales lady that left. He was stuck with the huge
overhead and couldn't downsize fast enough. He ran out of cash
and didn't make payroll. The workers left.
He was just sitting there and
he looked like he was about to have a heart attack. There was
nothing I could do. I left.
was there for years staring him in the face but he never saw it.
He hired a good 'closer'.
the Closer. = Destroying your marketplace.
This is a little harder to explain.
The business owner thought he
was smart and hired 'closers'. The 'closers' went out to sell
and most failed so the business owner spent most of his time hiring.
He believed in the 80/20 rule
where 20 percent of his sales force sell 80 percent of his
sales. This is only true because the owner or management
haven't a clue how to build a Sales Engine and are depending on the
inate talents of the 'closers'. This is simply a matter
of bad management. Yet no one in management will admit to
this! They just blame their inadequately trained sales people
for their failures.
digress a moment, imagine if all his sales people were given a Sales
Engine to implement and they were all successful! How rich
would you be? Very!
How much money would you
make? A lot! Oh, you don't think this is
possible? Well maybe I'm the only one that can do it.
Here's an example with Palmer
All his sales people were able to be successful because I created a
Sales Engine for them to use. The weren't before I created the
Sales Engine. If they didn't use the Sales Process they
couldn't even get an appointment. With the sales process they
were doing business 71% of the time!
since the business owner can't create a Sales Engine, he had no
control over his sales process.
So the sales people all had
different ways to sell. No problem you say?
if he succeeded for a while he was planting seeds of his own destruction.
This is because he never had a
clearly defined reason why his market place should buy from him.
how these destructive seeds are sown.
Since he does not have a
narrowly defined Marketing Position then the 'closers' are out there
saying whatever they can to make the sale! Every sales person
does it just a bit different. So just think about it.
Each sales person is saying whatever he likes which is different from
the next sales rep.
gets confused and the company never gets a reputation for doing a
particular thing right!
Let's say the business owner's
3 sales employees and went out trying to sell 3 different
people. Each of these people heard a slightly different thing
from the each of the others. So one day they are at a cocktail
party and for some reason they start talking about the business
owner's company. Each of these customers have a different view
of the company because each sales representative said something
slightly different. They look at each other and wonder what the
business is really selling and what is it they are really good at.
never really knows what this business is really good at!
This business owner is just
working hard to get ahead because the marketplace will never grant
the business a position in the world. It will always be an also
ran. It will be vulnerable to a directed attack.
probably can't explain this adequately here.
Maybe you understand what I'm
saying and maybe not. It would take too much background theory
and too many examples. Maybe I'll write a book on it because
it's so important.
Bottom line is that you know
that you haven't ever really grown strongly by hiring 'closers' and
mostly you're frustrated about it and blame your salespeople.
3. Mr. Cheap.
= Painting yourself into a corner.
A business owner was once an
employee and decided that his boss was a moron and he could do better.
After all he only got paid
maybe 20% of what the boss charged. All he had to do is go
independent and charge 50% of what his boss charges and he will be
able to take the business away from the ex-boss. Simple enough.
He charges a cheap price and
of course the customers love him and he gets a whole bunch of these customers.
But then he notices that he
can't do all the work himself and who has time to answer the phones
and keep up with the filing! So he hires an office girl and he
also hires a a technician. Now with his new overhead he starts
to lose money.
me and I walk into the mess.
We need a higher price so he
has adequate margins to pay for his overhead and take something
home. But all of his customers know him as Mr.
So there is no way they will accept higher prices from Mr. Cheap.
stuck. He needs to raise prices but his customer base loves him
at his old cheap price!
this problem is very hard.
We need to replace all of his
customers with a new set of customers that DON'T know him as Mr.
Cheap. And at the same time not alienate his existing
customers. This is hard! It will take more time and
effort to rebuild this company than if he had just started correctly
from the beginning!
How I wish I had met the
business owner when he started so that he would not be between this
rock and a hard place.
are many many other mistakes that business owners make.
These mistakes are self
inflicted problems on the business that the business will die
of. One day I'll write a book with a lot of these examples and
in depth explanations of why they are self inflicted problems.
These self inflicted problems
are the cause of the mess I'm always walking into.
Not only can't the business
owner take market share because he has no Sales Engine, he also has
painted himself into a painful corner with self inflicted problems
that will eventually kill his business.
And I have to fix these.
Oh what a mess!
sometimes it's too late to save the business owner.