What I’m talking about here is forecasts that are accurate.

Accurate enough to base key decisions on, such as whether to order more materials now, in order to be able to meet potential future orders within your stated delivery or lead times.

Accurate enough to be able to decide if you are going to avoid some short-term cash flow issues, or if you need some short term injection of cash – really critical in the smaller business.

Accurate enough to be able to decide when to let employees – or yourself – have time off for vacation.

Many production and operational processes are predictable enough – you, as the business owner or manager, have sufficient control over what’s going on, under normal circumstances.

But what about the sales operation? I mean, customers are in control, ultimately. You can’t force somebody to buy something – not legally or ethically (these 2 aren’t always the same thing!).

Well, you can reduce the degree of uncertainty, ambiguity and complexity that often reduces the accuracy of forecasts, by employing a solid, proven process-based approach to every aspect of your sales operation, not just to what happens once you’ve closed the order…

It won’t guarantee you sales success, but it will increase your chances of sales success overall. You’ll still lose some. But you should win more – partly because you’re better at selecting opportunities with a better chance of success for you, and partly because you’re better at ‘working’ those opportunities to a successful conclusion. You’ll also more likely be winning business at higher rates of margin or profit. And none of this needs you to have additional sales resources – such as sales people – or having to work extra hours – quite the opposite, potentially.

In future posts I’ll be exploring what these processes look like and how you can implement them.

For the moment, let me leave you with a couple of useful hints…!

1. Identifying the key players in a purchase decision, and understanding their position – how they see the need (or not) for the purchase in the first place, and what business results and personal wins they are looking for…
2. Connecting your products, services and/or solutions, in the minds of each key player (especially the very influential ones in this sale), to their individual required business results and personal wins.
3. Being very aware of what gaps you have in your knowledge (especially relating to points 1 & 2 above), what assumptions you’ve made, and taking steps, by way of an explicit strategy and plan, to reduce the negative impacts of these gaps and other knowledge, and maximise the positive impacts…

That’s a hint at some of the ‘what’ that is to come in future posts. The ‘how’ also comes later!

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There are at least 4 elements in every successful sales process:

1. Marketing & promoting
2. Qualifying & screening
3. Proposing & closing
4. Delivering

Some may argue that marketing isn’t part of the sales process. Well, OK. But marketing is nothing unless it’s supporting the transformation of products & services in to revenue – CASH!

Each combination of industry, market, product & service and seller will need its own variation in terms of what goes in to each of these 4 elements.

In figuring out what goes in to each of these 4 elements you simply have to start and end with your focus being on the customer. It’s not enough that you are passionate about your product or have ideas for a fantastic delivery system. If the customers don’t feel you’re meeting their needs, or they just plain don’t like you, well, you’ve got problems – and not much business…

Ideally you should do some research – talk to customers and find out the outcomes they’d love to achieve, what they want, what they need, how they want and need it, and what has to be gotten right for them to be satisfied – enough to come back for more and/or recommend you to others. Find out also what they don’t want. In short, ASSUME NOTHING!

Find out how they want to be marketed to, communicated with etc.

Identify the ideal customer profile for you – it will reflect your own values and the way you want to do business. You’ll need this when you get to qualify possible leads – how well does an opportunity fit your ideal profile? How serious is the opportunity?

When it comes to proposing and closing, again, ASSUME NOTHING. Confirm all you can. Generate alternative solutions, even look for ways to overcome price objections for example by showing how you can save the customer money elsewhere, even if they go with your solution which is costlier than the competition.

Find out how customers want to have their purchase delivered. What’s the industry ‘norm’ and what scope is there for you to be different, and in which aspects?

Then work back from successful outcomes in each of these 4 elements – as Steven Covey says – “begin with the end in mind” – and identify the steps the customer needs to go through, the decisions they need to make, to achieve a successful outcome. Identify indicators of success for each stage.

Finally, identify & develop actions and activities that you can and should undertake in order to encourage and enable the customer to do their buying actions and decisions – in your favour.

From this approach you will be able to map out in fine detail the process your business has to follow to increase the chances of sales success.

Of course, easier said, or written, than done!

This is just to give a flavour of what’s needed – specifics vary from situation to situation.

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In this post I look at the third of 3 stated functions of a sales funnel.

Help you identify opportunities to improve your sales process

There are 2 main areas where you will always want to improve your sales process:

1. Effectiveness
2. Efficiency

Your sales process is more effective when the probability of sales success is increased – you convert a greater number of sales opportunities or prospects in to customers that actually pay. To put it another way, instead of converting 1 prospect in 20, or 5%, you may convert 1 prospect in 19, or 5.3%. It’s not much, but it is an improvement – you’d actually be getting, on average, 6% greater revenue than before!

Your sales process is more efficient when you get a greater return or revenue/cash for the same effort & use of resources. For example you get a higher selling price even though you are putting in the same effort as before and the cost of your sales operation per individual sale stays the same.

A more efficient sales operation leads directly to higher profit for each individual sale. If you are also closing more sales for the effort involved, then you are getting more and more of these higher profit sales – that’s a double bonus!!

Having accurate funnel data, even if at times it makes uncomfortable reading, will quickly point you at opportunities for improving either or both the efficiency and the effectiveness. You’ll be able to look at which stage in your funnel is not as good as it could or should be, and in what way. This will guide you quickly and directly towards the kind of actions to take to improve things, instead of guessing your way to a better set-up, or using trial and error approaches, both of which will take more time and money to maybe get you to a better place…

The exact approaches and techniques to use in improving these have had whole books written about them – big books, some with hard maths in them, so I’ll save these details for another article. Just know at this stage that you can get a 25-40% improvement just by using the simpler of these techniques, with no difficult maths involved.

Let me give just one example. Say you want to increase the amount of profit you make in a given time. You know that it’s unlikely in the time available that you can suddenly bring in new prospects and get them all the way through your sales process and to giving you cash. You look at your funnel and determine that improving the ratio of conversions that each stage achieves means you will have more prospects getting through each stage of your funnel, and this will work right away, with what’s already in your funnel – great! Some quick research suggests adopting different wording in your sales letters may help. You commission a professional copy writer to create what you need. It costs you the profit from 2 sales, but that’s OK – soon your conversion ratios are better, and the increased sales not only cover the fees of the copywriter but give you greater close rates – for ever!

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In this part I look at how to access the second of 3 listed functions of a sales funnel.

Set priorities on where to focus next.

You can use your funnel data to see which parts of the funnel are in need of attention. You can only do so much on any given day so, you’d like to focus on doing things that give you a better outcome without working any extra hours. The challenge is to keep your funnel suitably stocked at every stage with enough prospects.

If your sales process converts 1 in 20 or 5% of all the prospects that come in to it at the top or start of the funnel, then for every sale you make you need at least 20 new prospects coming in at the same time. Anything less than this and in short order your funnel will be delivering falling sales revenue…

Your funnel data can help you spot if a particular stage is low in prospects so you can dome something about it in a targeted way.

You see, the tendency of less experienced sales people is to pay the most attention to the prospect that is just about to buy, and very little on the more numerous prospects at the start or top of the funnel or sales process. This is very understandable, but if you’ve been very helpful and supportive of this prospect all the way through, you’ve done about all you can for and with them at this late stage. Sure, keep in touch with them in the right way, but ‘hassling’ them will probably not speed up the sale much, if at all, and may just annoy them…

But if you neglect your early stage prospects and the business of getting more in to your funnel, at some point the pipeline runs dry and then you go in to panic mode – fine if you have enough cash in the bank to survive, but if not, your business is dead.

Generally only one thing kills a business – gets it every time – a lack of cash flow.

To ensure you don’t suffer from this, you have to keep that pipeline or funnel well stocked.

So your priorities will probably be something like this:

1. Close the sale with those prospects at the bottom of your funnel – just don’t over play it!
2. Get new prospects in to the top of your funnel – if your close ratio is 1 to 20 then get at least 20 new prospects in for every sale you close…
3. Work your way down through descending stages in your funnel as you support & interact with the prospects in each of those stages – move them through the funnel one stage at a time…

With this you’ll know how to allocate your available working time and resources…

Simple!

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In Part 2 I mentioned 3 functions a sales funnel can perform. In this post we’ll look at the first of these – forecasting sales.

Sales forecasting

You can forecast future sales income using the sales funnel by looking at how many prospects you have at each stage and taking account of the time a prospect typically takes to move from the stage they are at to actually paying you cash. You also have to take account of the percentage of prospects that drop out at each stage and the likely value of the potential sale.

Say you have 17 prospects at a certain stage, and it will take 3 weeks on average for a prospect at this point to move all the way through to closing the sale and paying you cash. Say that on average about 25% of these prospects will actually go all the way, the other 75% dropping out somewhere along the way. This means that you will have about

17 * 0.25 = 4.25 prospects going all the way.

Well, you can only have whole numbers of prospects! So let’s call it 4.

You are likely to have 4 of these prospects buy from you. If the average sale is worth $45 then you are looking at $45 x 5 or $180 of sales income in 3 weeks, from the prospects at this particular stage in the sales funnel.

Repeat this process for every stage of your funnel and you’ll end up with a forecast of sales income for the future.

This seems pretty reasonable in terms of approach, though it is full of pitfalls and assumptions and while you do get a forecast it can be way off. The reasons for this are that few prospects in most industries actually behave like an ‘average’ prospect. You also need to collect, and keep collecting, accurate data on how your funnel performs and how many prospects fall out at each stage and how long they take to go through each stage. However, get good at collecting and analysing this data and you’ll soon be getting better forecasts.

There are still pitfalls with this approach, and I’ll go in to these in another article but at this point I’d say in my experience have an imperfect funnel as a sales tool is better than not having one… it helps you make better informed decisions…

How does this apply to internet marketing websites where the sales process is gone through pretty quickly – almost to the point of hardly looking like much of a sales process – or funnel?

Each page you ask a prospect to click to, each action you ask of a prospect, could be equated to a stage in your sales funnel. Prospects can and do drop out at any and every stage, but the data is still useful to know in helping you refine and improve your sales process. More on this later.

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In Part 1 I introduced the concept of the sales funnel and gave an insight in to what it isn’t. Now we get in to the meat!

What it is

A sales funnel is sometimes referred to as a sales pipeline or also a sales tunnel.

A sales pipeline is a simple way of acknowledging that prospective customers go through different stages when they are buying something. For example, first they may simply be asking for information, researching options and so on. Your matching sales activity would be to provide them with the information they are asking for, ask more questions about what they are trying to achieve and so on.

For some prospects this will be the end of the road – they’ll either stop everything right there, at this first stage, or they’ll continue, but not with you.

Some will however want to go further. You may suggest a longer (or initial) meeting or telephone call to explore needs and constraints further. Some will drop out at this point, some won’t.

So over time the prospects and you will go through a sequence of activities that lead right up to a sale.

At each stage some prospects will drop out for what ever reason – price, change of mind, priorities, solution fit, didn’t like your hair colour (seriously!) – you name it almost any reason will apply!

This pipeline is often drawn as a funnel with the wide opening at the top. This is because at the wide, top end is where the majority of the prospects will be, in terms of numbers – the width of the funnel represents the number of prospects at that stage in the funnel.

As you go through your sales process you will see prospects drop out at each stage, so the numbers of prospects at each next stage is generally less than the stage before – hence this narrowing effect.

You only truly have a customer right at the bottom of the funnel, when a prospect not only decides to buy from you – but actually pays too!

And it’s possible that some, perhaps many, of your prospects don’t come in to the sales process right at the start, at the top of the funnel. They may come to you in the middle – they’ve done the research or are just fixated on buying what you have – it doesn’t matter because often you can’t know and few sales people find out fully, fearing that if they take the prospect back to the start of the process, the prospect might change their mind and go away – another lost sale in the minds of many a salesperson (even though that’s not true!)

The secret is in making sure that your funnel is populated – you have enough prospects at every level so that you have a good, steady-ish stream of paying customers (giving you cash!) coming out the bottom of it – always!

Why have one?

A sales funnel or pipeline – what ever you call it – has its uses. For example, you can use it to:

• Forecast future income
• Set priorities on where to focus next
• Help you identify opportunities to improve your sales process

There are other ways to do all of the above, but the funnel’s visual and actual simplicity make it the tool of choice for many sales professionals.

The more successful operations actually design their own funnel that reflects the characteristics of the markets they are in and the nature and structure of their own sales processes, though you can use an ‘off the shelf’ funnel structure to get you started. I’d actually recommend you build your own tailored funnel as quickly as possible though…

In part 3 we’ll look at how to access these 3 functions of a sales funnel.

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There is one question every business person wants an answer to (even if they don’t yet know it!), whether they’re thinking of starting up, or have been operating for a while, and that is…

“… how do I turn my products and services in to cash?”

For those who’ve been in business a little while, you might add “… more cheaply and effectively than before?”

If you can’t turn products and services in to cash, then you don’t have a business.

You simply have an unfulfilled dream…

In my nearly 16 years of being in business every failure I’ve come across (including 1 or 2 of my own!) has suffered the fate you get when you don’t have a good enough answer to these questions.

And I’d go a little further – what ever this process is for turning products and services in to cash – you want to be able to repeat it time and time again…

… perhaps even teach others in your team to do the same…?

I highlighted the word ‘process’ just now because what you are looking for is a sales process, something that is

• Repeatable, so you can benefit from it time and time again, and also teach it to others if needed.
• Manageable, so you can figure out the best way to use and adapt it in order to get the most return for your efforts.
• Consistent, so that it works the same way and gives the same results when you use it the same way.
• Sequential, in that you follow a series of steps (like a recipe), one after the other, in order to increase the chances of sales success.

And I’ll just emphasise that last aspect: increase the chances of sales success.

Why? Because no sales process can guarantee a sale (well, no legal, moral one anyway!).

You know you can’t really force somebody to buy, and nor should you, in my book.

But you can make it more likely that they will buy from you, and enjoy doing so.

If you don’t have an effective, repeatable, manageable, consistent and sequential process for turning products and services in to cash, you’ll never know why or how you got the sales you did get. So when you do have success – and you will (if only a little) – you won’t know really what you need to do again to repeat that success. Sure, you can guess, and you may get lucky, but that’s a hell of a way to run a business!

And if you don’t have this kind of ‘handle’ on your sales process you won’t know what to do and where to do it in order to improve its effectiveness or its efficiency.

Why does this matter?

Well, the effectiveness speaks for itself in a sense – a more effective sales process simply is more likely to lead to success.

The efficiency bit is perhaps less obvious. Operating any process in business costs – if not straight cash then at least in terms of time, effort and opportunity. When you are working ‘Opportunity A’ you can’t necessarily be working ‘Opportunity B’ – and this last one just might bring in more profit…

You need a sales process that helps you target your resources at the best opportunities in order to get the best returns.

So anything you can do (within reason!) to reduce any/all of the costs associated with your sales process means you’ll end up with a bigger profit at the end of the day – more money for the same (or less!) effort.

I guess now you’ll be wondering where you get yourself a sales process from, and what they look like?

Well, you could buy one ‘off the shelf’ – plenty of people will sell you one. But is it right for you?

Possibly.

But probably not. At least, not enough.

So be prepared to build your own.

It will reflect your values and beliefs, the way you like to operate, and, if you have any sense, it will pay a lot of attention to the way your market likes to buy.

Buying is a process too – it may not feel like it sometimes…

And if your sales process is aligned with the way people buy, well, you certainly will be getting a higher chance of sales success!

In the next part of this series on turning products & services in to cash, I’ll be looking at the first steps to creating your own sales process.

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The first big obstacle for many to overcome is one of mindset – the need to treat your second income as a business instead of treating it as a hobby. That said, there are aspects of hobbies that make them attractive, and that can be carried forward in to making running a second income more attractive.

When you treat your second income as a hobby instead of a business it means you pick it up and drop it, just like a hobby. It is almost impossible to develop a big enough base of loyal customers on which to have any reasonable sustained income.

I did ‘this’ myself in the very beginning: I said to myself “Martin, this is a second income, you’re going to spend much less time on it than your main job, you’re doing it from home in your spare time. Enjoy it, and don’t think of it as work (that’s your day job!), but more like a hobby…” And I’ve seen stacks of others take the same view as well.

WRONG!! A hobby is a hobby. This means you can pick it up and drop it whenever you like, and the consequences are measured somewhere around the ‘zero’ mark.

You CAN NOT do this with a second income that has any meaning and significance for you. Successful businesses are run like business but this doesn’t mean there is no room for fun and enjoyment. Very successful owner-managed business are usually full of fun and enjoyment – the two seem to go together!

Cheers

Martin

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Every day more people stop to consider a second or extra income. They do so usually because they are needing extra income now, or because they’re looking to realise a future dream. Many of these people look at network or multi level marketing (or ‘MLM’) as the route to achieving these aims.

Making the right decision here is usually pretty important for those involved. What is amazing is just how many people are able to make an informed decision about something so important. I’m sorry, what I should have said is, it’s amazing how few people are able to make an informed decision.

There are plenty of myths and lies floating around about this kind of second income activity. Some have bad aspects to them, such as “only failures try multi level marketing”. Some have more positive aspects to them, such as “anybody can do this”. And with the advent of the Internet, it is even easier to find conflicting information and advice.

I had to find out about these things the hard way, as did my wife, when we started in MLM many years ago. Now, as the economies seem to be headed for stormy waters, more people are asking about MLM, and there are more opportunities than ever for them to be ’scammed’. This is a prospect that didn’t sit comfortably with me, and wouldn’t let me be, so I pulled together my own experiences, the experiences of others I’ve worked with, plus plenty of research that I’ve done over the years, especially in the last 2 years, and created the “MLM / Network Marketing Manifesto & Workbook”. My research draws on the work, writings and teachings of a wide variety of people, including Colin Powell, Anthony Robbins, Rich Schefren (who has worked with many big names in Internet Marketing, including Mike Filsaime, Jim Edwards, Hans Johnson, Frank Kern, Dan Kennedy), Robert Middleton, Bernadette Doyle, Jay Arthur and yes, even Albert Einstein!

Anybody considering creating a second income or extra income stream, and looking to do so with any combination of network marketing, multi level marketing (or MLM), and internet marketing, would benefit from downloading the Manifesto & Workbook fromhere and spending some hours working through it before coming to any decision.

The purpose of the “MLM / Network Marketing Manifesto & Workbook” is to help people like you come to an informed decision about

1. Whether to create a second or extra income stream at all, and if so
2. How to go about doing so with MLM / Network Marketing for maximum success

I’ve split it in to 2 main parts. The first part sets the scene, providing some definitions and giving an overview of the state of multi level marketing or network marketing as a business approach. The second part is structured around detailed descriptions of the 12 big obstacles to success that I’ve seen so many people experience. By the industry’s own data it seems 95-97% of mlm operators as I call them fail to achieve their desired outcomes. That’s just appalling.

These 12 big obstacles are listed below, followed by a brief description. You’ll find more on how to spot and avoid each obstacle in a separate article/lens.

1. Treating it as a hobby more than a serious business
2. No ‘outcome’ thinking & inappropriate expectations
3. The Great Myths of MLM – believing them!
4. Lack of strategy, being too opportunistic
5. Poor business design
6. Following the MLM company’s “Plan”
7. Poor decisions about what to outsource, and how
8. Not using leverage & scalability
9. Not playing to YOUR strengths
10. Not managing tasks, workload & processes
11. Not using the right metrics to manage business
12. Not engaging in Continuous Improvement

In future postings I’ll expand a bit more on each of these – they’re covered in full in my manifesto, which you can get when you sign up.

Cheers

Martin

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Now I don’t know how many of these are totally true, or mostly true or even a total pack of lies. But I do know I’ve had different emotional reactions to them. I know from my conversations in recent months with many others in the industry, that I’m not alone in this observation.

There were times when I felt truly inspired – there are some wonderful stories out there, even if they’re not true. And stories like these made me reflect on my own situation and want to do something about it.

Yet in one sense reading these stories is a bad idea. Let me tell you how & why, and let you make your own mind up.

Personally I think there’s always something to be learned – just so long as I continue to make informed decisions – not always easy, as we’ll shortly see!

As you read their story, you begin to identify with the situation and the author, or at least bits of the story and perhaps a few characteristics of the author. Why? Because you recognise parts of your own history and self in there… And for the author, their salvation comes in the form of some actions built around some great system or method they came across, and you know what? YOU could also do this – none of the actions are particularly difficult or costly…

As you read on (and some of these really do go on… and on….) you find yourself feeling more and more compelled to sign up for what ever they’re offering, or at least, to find out more with their free report… And so you do – you might even think the $97/$67/$47/$27/$7 price they charge (or even $997!) is good value for money, and you reach for your credit card…

By the way, what is it with all these prices ending in ‘7’?!

But your decision will, according to recent research, be an emotional one, untempered by too much logic, despite you having the perfect logic for your actions… You can get the deeper details in several places, though for an easier read I point you to Robert Ciadini’s work…

Cialdini, a bit of a whiz on psychology and influence (he has letters after his name and everything, and writes accessible books… go see “Influence: Science & Practice” http://bit.ly/xM3Gf) suggests 6 ‘weapons of influence’. Once you’re familiar with them you’ll never look at a sales letter page the same way again… I hope!

Oh, the thing to note with all of this is that this influencing stuff happens at a deep level – you respond in these ways almost without thinking… powerful (and scary!) or what?

• Weapon #1 – reciprocation – you can get a whole bunch of freebies from the author,  who has just seemingly told you how to change your life – so you reciprocate – by signing up…
• Weapon #2 – commitment & consistency – people tend to honour a commitment – you make a commitment when you sign up… so you probably do look at the video/free report etc
• Weapon #3 – social proof – people will do things they see others doing – the testimonials on the sites show people signing up and buying in… the conformity factor increases the liklihood that you too will sign up…
• Weapon #4 – authority – using authoritative phrasing & tones, citing testimonials as being from ‘experts’ or showing how the programme is just like (named) experts, some of whom you may even have heard of…
• Weapon #5 – liking – people are more easily persuaded by people they like – a heart-warming story, a familiar, welcoming style or writing/talking style (video/audio more prevalent now) – this is the “s/he’s one of us, so it must be OK…” effect…
• Weapon #6 – scarcity – limited seats/packs/being one of a few out of millions… or time limiting before price rises etc – sound familiar?

Now imagine the overall effect of 2 or more of these working together…! Yup, you’ll be VERY influenced to do buying/signing up etc.

A well-crafted sales page takes time, effort etc, and is effective, whether to system being sold is what what you need or not – and that’s my point..

And so you end up making an unbalanced decision – mostly emotional, with a little logic… but not enough I’d suggest…

But is it the right solution for YOU? How can you know without looking in to ‘this’ more, including the offering & your unique situation? What are your strengths? What time, money and energy can you invest in this offering you’ve just signed up for? What expectations do you subconsciously have and aren’t aware of, at least until you fail to meet them…? If you want to know where MLM depression/demotivation comes from, this last aspect is a BIG factor…

All of this together is why, in my humble opinion, reading too many of these stories is a bad idea. It doesn’t mean the story is ‘pants’, or the offering is ‘pants’ – it just might not be for you.

So before you decide, before you commit, just check back with yourself if this is the right thing for you to be doing now, and if it’s not, but you still want to do it, come up with an action plan to get you in position to take this forward when you ARE ready for it.

Happy story-reading!!

Cheers

Martin

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