1 / www.nzsalesmanager.co.nz

MAY 2013 Issue 71

NZ’s e-MAg for sAles leAders

Why you should do a stocktake of yourselfDoes cold calling still work?Secrets to a successful business attitude

ARE YOU COLLECTING USELESS DATA OR GROWING YOUR BUSINESS?

www.nzsalesmanager.co.nz / 2

THIs WeeK's MusT reAd

Are You collecTINg useless dATA or groWINg Your

busINess?

Maximising sales, profit and cash

WHY You sHould do A sTocKTAKe of Yourself

Treat your life like a business

TWo MINuTe ToP uP

does cold cAllINg sTIll WorK?

How one study says not

resource corNer

ATTITude 101

What every leader needs to know

QuIcK fIx

secreTs To A successful busINess ATTITude

It’s not what you sell, it’s how you sell

cAleNdAr

THe close

6

10

15

17

18

19

20

coNTeNTs

3 / www.nzsalesmanager.co.nz

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www.nzsalesmanager.co.nz / 4

froM THeedITor

The guys at Rain Group (Shultz and

Doerr) put out a research based free

report a couple of weeks ago called

‘What Sales Winners Do Differently’.

You should take a moment to

download it and have a read.

In the report they refer to another

research based sales approach

called ‘The Challenger Sale’ (2011)

which advocates that relationship

building is losing its importance,

and that the sales person taking

control of the sale and challenging

or provoking their customers, is

what differentiates the best sales

performers. Last year the same

authors proclaimed ‘The end

of solution sales’ in the Harvard

Business Review.

Shultz and Doerr’s research (not

surprisingly to me) shows the

opposite. Controlling, challenging

and provoking customers may work

in some situations, and although we

need to ask the tough questions,

they are not words in my vocabulary

for complex sales.

I guess sales research can be tailored

to support any ‘point of difference’

for sales trainers in what is a very

competitive market place. After

all there are many thousands of

sales books and reports to choose

from. The discerning reader will

need to separate the marketing

spin from the proven methodology

while implementing change in their

sales organisation.

Those who know me will know

my firm view that ‘Mastering the

Complex Sale’ by Jeff Thull is the

best sales book ever written, and

makes many others look pretty silly

in comparison.

Happy selling

Paul

ABOUT /Short and sharp, New Zealand

Sales Manager is a free e-magazine

delivering thought provoking and

enlightening articles, and industry

news and information to forward-

thinking sales managers, business

owners and sales professionals.

EDITOR / Paul Newsom

ART DIRECTOR / Jodi Olsson

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IssN 2230-4762

NZ sAles MANAger Would lIKe To AcKNoWledge THe suPPorT of our MAjor PArTNers

COURSE

We make it easy

to groW your sales

Find the money-burning sales weaknesses that have held you back from your earning potential

learn the inside secret to positioning yourself as an industry expert

Discover how to seize on buying triggers to create a profound influence on your sales figures

learn and develop the 4 different question types that uncover needs, amplify passion, and convert prospects like a dream!

MAy 13 & 14 AUCKLAND CITySimply click here to find out more or phone 09 5240999

“My national team now sells consultatively as a result of the SalesStar.com’s interventions. We have had an overall (32%) improvement in closing ratios as well as a (27%) growth in top line sales with a better margin. They do make it easy to grow sales, and the positive results are instantly measurable.” Matt Cutler – MD Active Safety

COURSE

We make it easy

to groW your sales

Find the money-burning sales weaknesses that have held you back from your earning potential

learn the inside secret to positioning yourself as an industry expert

Discover how to seize on buying triggers to create a profound influence on your sales figures

learn and develop the 4 different question types that uncover needs, amplify passion, and convert prospects like a dream!

MAy 13 & 14 AUCKLAND CITySimply click here to find out more or phone 09 5240999

“My national team now sells consultatively as a result of the SalesStar.com’s interventions. We have had an overall (32%) improvement in closing ratios as well as a (27%) growth in top line sales with a better margin. They do make it easy to grow sales, and the positive results are instantly measurable.” Matt Cutler – MD Active Safety

www.nzsalesmanager.co.nz / 6www.nzsalesmanager.co.nz / 6

MusT reAd

Sales, profit and cash are the key issues to focus on in business financial management. If you can get

these three working you’re well on your way to building a sustainable business with capacity to grow.

Most people focus on sales to begin. I’d like to start with profit! The reason to start with profit is, if

you’re making sales without profit you will go out of business.

ARE YOU COLLECTING USELESS DATA OR GROWING YOUR BUSINESS?Maximising sales, profit and cash

By Sue Hirst

7 / www.nzsalesmanager.co.nz

MusT reAd

The best place to start making enough profit is to

avoid losses. Understanding break-even sales is a

great starting point.

Break-even sales is the amount of sales you need

to make to avoid a loss i.e. to achieve a $0 profit or

loss result.

This is impacted by fixed and variable costs. Fixed

costs are those that you incur all the time, e.g. rent,

admin wages, telephone etc. Variable costs are

those incurred in making a sale, e.g. a product and

associated costs like freight inwards, packaging etc.

If you’re selling a service, it’s labour and materials

on the job.

When you’ve calculated variable costs per product

or job you then calculate gross margin. For example

if a product costs $40 (including all costs associated

with getting the product ready for sale) and you’re

selling it for $100, gross margin is 60 per cent.

Now you need to know fixed costs. Let’s say they

are $30,000 per month. To work out break-even

Most people focus on sales to begin. I’d like to start with profit! The reason to start with profit is, if you’re making sales without profit you will go out of business.

sales - take fixed costs of $30,000 divided by gross

margin of 60%, which gives a figure of $50,000.

This is your monthly break-even total sales. If your

average product sale is $100, then divide the total

sales break-even figure of $50,000 by your average

sale of $100 to come up with a figure of 500 units to

breakeven. In simple language this means you have

to sell 500 units per month at $100 to break-even.

Now you know your break-even, use this as a basis

for setting targets to achieve your desired profit.

For example: with every additional unit you sell

above the break even volume of 500 units, you will

make $60 profit, which is the gross margin per unit

of sale. Therefore if you target to make $6000 profit

you will need to sell an additional 100 units.

Gross margin is one of the most impactful results

in business. If you can’t make a decent gross

margin, it’s going to be very difficult to make a

net profit. One of the biggest issues we find in

financial management is the lack of understanding

of a product or service ‘true cost’. It’s often

thought of as just the raw cost of the product or

service. Items such as freight inwards, currency

exchange, packaging etc. are wrongly omitted

when calculating cost. This is dangerous, because

it means when pricing a product and calculating a

margin the true cost isn’t being accounted for. In

this case the gross margin suffers and this reduces

what’s available to cover fixed costs. The result is

losses and a constant need to focus on more volume

of sales to meet cash flow needs.

www.nzsalesmanager.co.nz / 8

MusT reAd

This leads us nicely onto cash flow. So far we’ve

considered profit, and ‘good cash flow’ comes from

‘good profit’. Surprisingly though bad cash flow

can also come from good profit. This arises due

to the impact of factors other than those that are

profit related i.e. sales less fixed and variable costs.

You can be making money in the ‘Profit and Loss

Statement’ and losing your battle in terms of your

ability to pay your expenses when they fall due (a

cash flow issue). The key drivers for your cash flow

are in the ‘Balance Sheet’.

What’s in the Balance Sheet probably has more

impact on cash flow than anything else. I’m mainly

referring to Accounts Receivable, Accounts Payable,

Inventory and Work in Progress. When you make a

sale it’s a long way for those funds to get into your

bank account. They are invoiced to customers who

may take 120 days to pay (if ever!) They are paid

to suppliers who may or may not offer payment

terms. They sit on your stock room floor in the form

of products waiting to be sold. They sit in Work in

Progress in the form of labour and materials paid

Gross margin is one of the most impactful results in business. If you can’t make a decent gross margin, it’s going to be very difficult to make a net  profit.

9 / www.nzsalesmanager.co.nz 9 / www.nzsalesmanager.co.nz

MusT reAd

sue Hirst is a financial and business advisor who works with open-minded people, committed to business growth and achieving success. To find out more call 0800 180 400 or visit www.cfooncall.co.nz

for before the job gets finished and invoiced to customers. And that’s on top of paying your regular fixed

costs. Your challenge to keep cash flow

All these systems need to be properly set up by someone who understands the overall picture i.e. you need

to understand what you want to get out of them, so they are set up with that aim in mind. Otherwise you

just end up with a load of useless data and more costs.

CFO On-Call is running FREE webinars in May and June on ‘How to Develop a Financial Roadmap’ to

register visit http://cfooncall.co.nz/events/webinars/

HEALTHY IS TO:

• Minimise the number of days customers take to pay

• Maximise the number of days taken to pay suppliers

• Minimise the number of days goods sit in stock waiting to be sold

• Minimise the number of days jobs are in progress before being invoiced

IN SUMMARY:

• Sell the right products/services at the right price

• Understand your true cost to get the price right and achieve a desired gross margin

• Know your ‘break-even’ sales as a basis to calculating a target for desired profit

• Constantly monitor variable costs to maintain your desired margin

• Constantly manage fixed costs to avoid wastage

• Constantly manage Accounts Receivables, Accounts Payables, Inventory and Work in Progress levels

TOOLS YOU CAN USE TO HELP:

• Inventory management system

• Job management system

• Accounts Receivable management system

• Accounts Payable management system

• Budget

• Cash Flow Forecast

• Accounts/bookkeeping system

www.nzsalesmanager.co.nz / 10

Basically, it all comes down to one very simple

massively complex word; ‘DECISION’. How can you

make the best decisions at any given time, or how

do you get that ‘edge’. Whoever you are, this is about you. It

really doesn’t matter who’s reading this because it’s actually

advice for everyone. It was explained to me like this; “It’s

pretty simple really, just treat your life like a business. Do an

inventory, figure out what’s selling and get more of that and

get rid of what’s not, just do that with yourself.”

Treat your life like a business

By Paul King

WhY YOU ShOULD DO A STOCkTAkE

Of YOURSELf

11 / www.nzsalesmanager.co.nz 11 / www.nzsalesmanager.co.nz

So, simple enough then.

Sales people are famously bad at doing this. I’d

been in sales for nearly 25 years when I heard this.

However, since this advice came from someone

standing next to their suspiciously shaped car

covered in a fitted white cover with ‘McLaren’ in red

on the wing mirrors…

There is only one of you. You need an edge. The

problem is that there are very few (well, I can’t

think of any) other careers whereby every day you

wake up to a sea of rejection with a few nuggets

of success (if we’re lucky). I suppose we’re a bit

like gold miners or sea fishermen, we can use

experience, knowledge and technology to improve

the odds but that’s all that’s happening. Sometimes

of course, we can get lucky and markets just go in

our favour, but even then, we need to know when to

cash up.

There’s countless analogies: you can’t win a V8

super car tournament in a standard saloon, you

can’t catch a marlin on trout fly rod, you can’t do an

impressive difficult thing if you’re not able to do an

impressive difficult thing etc.

Continuing with the analogy theme, we’re into

sows ears and silk purses. You can’t make the best

decisions unless you are in the best possible mental

state to make them (and don’t believe the thing

about luck and working harder, sometimes luck

plays a huge part, but you just can’t rely on it). To be

in the best mental state, you need to treat your life

like a business; continually taking stock and making

sure you have the best stuff available and as little of

the rubbish as possible.

That’s easy then.

Take stock of what? Everything! However, rather

like eating an elephant, you do it one bit at a time.

Every ‘thing’ (e.g. ‘work’) consists of a number of

To be in the best mental state, you need to treat your life like a business; continually taking stock and making sure you have the best stuff available and as little of the rubbish as possible.

www.nzsalesmanager.co.nz / 12

variables, some of which you can do something

about and some you can’t. For instance, the boss,

the boss’s boss, co-workers, suppliers, status,

income, benefits, car, holidays, hours, bonuses,

prospects, travel, rush hour, temperature, comfort…

keep going by all means. The idea is to take a

subject and break it down into its variables. The

subject could be broad, like ‘work’ or narrower, like

‘boss’ (age, race, accent, smell, speech patterns,

money, management style… etc.). Another broad

subject could be ‘family’ for instance, you can

probably imagine how this could be broken down,

why not try it. There is no limit to how many

variables a subject or sub-subject can be broken

into. What’s important for you?

When I first started doing this, I designed a grid

and a numerical system so I could have a relative

measurement of how good or bad a variable was

and a way to distinguish which variables I could

change and which I couldn’t. Now, I’m practiced

enough to go through this exercise mentally, but I

do constantly run this stock take on myself.

13 / www.nzsalesmanager.co.nz

Paul King (A.K.A. Mr. Anonymous) is a speaker, coach and mentor. Paul started cold calling insurance sales and has gone on to holds senior roles with large multi-nationals in the uK and New Zealand. To find out more visit www.mranonymous.biz

Let’s assume that the variables are as they are

and you can’t opt out of them (of course, you

will actually have the final choice over whether

something remains in your life or not). The next

step is deciding what you can change and what you

can’t. If you can change something, you’ll need to

figure out the best way to do that, and do it. If you

can’t, there’s another important test to apply which

is, does it really matter? As in, in (say) six months,

will it have made any real difference? If something

can’t be changed and it does matter, you have a

bit of work to do. These things you will need to

accept. The mere act of acceptance usually makes

something much easier to live with because you

will feel more at ease with it. You will feel more at

ease because you are applying a different (or some

different) thought to it. That’s the bit that needs a

bit of work.

What we’re doing here is simply applying good

business practice to ourselves, which if you think

about it, makes more sense for a sales person than

any other professional. We ARE our business, when

we’re the one doing the selling. However, in every

decision we make, it’s important that we are doing

so in the best ‘state’ possible. Good examples of

this are martial arts experts, special forces, surgeons

etc. Of course, they won’t all have perfect lives, but

the best seem to have a ‘calm’ about them, they

make it look easy, they have an edge!

On the subject of perfection (and this is important),

if you think about it, perfection doesn’t exist in as

much as we can create it. This isn’t an invitation

to an argument about babies being ‘perfect’ and

such like nor in any way religious, that’s not what’s

meant. This applies to fallible human beings driving

themselves half mad by striving for ‘perfection’.

There is no such thing as, nor can there ever be, a

perfect business, nor can there be a perfect ‘you’.

So, my advice, relax on this one, just try to be better

than you were yesterday in any way you can.

There are a number of mindful and cognitive

techniques and exercises which can be used in

improving your experience of the variables involved

with the situations which make up your life.

However, if you just ask yourself a simple question:

would a business run better with or without a

regular stock take and a look at how things could be

improved? I hope you’ll agree, it’s a good start!

What we’re doing here is simply applying good business practice to ourselves, which if you think about it, makes more sense for a sales person than any other professional. We ARE our business, when we’re the one doing the selling.

www.nzsalesmanager.co.nz / 14

How one study says not

By Brett Burgess

DOES COLD CALLING STILL WORk

I rank cold calling at the bottom of the list as

far as prospecting activities are concerned.

This often causes a number of comments, so

let’s address them. I define a cold call as “calling

on someone who doesn’t know you and is not

expecting your call or visit.”

Now most experienced salespeople will have their

cold calling story of the “big one” they got as a

result of cold calling a prospect. However for every

one of those there are 100’s of prospects they burnt

along the way as a result of a cold call.

Ask these same successful salespeople if they still

cold call and the answer is always “no”, as their

business now comes from referrals.

“But everyone has to cold call to get started”, I hear

some of you saying. The answer is that if you don’t

have any other prospecting systems, then yes, you

will have to cold call when starting out. The plan

then is to have your prospecting plan organised to

get enough referrals to fill your diaries.

I was reading an article recently by Frank

Rumbauskas the author of “Never Cold Call Again”

2 MINuTe ToP-uP

15 / www.nzsalesmanager.co.nz

and he mentioned some research by the Keller

Research Centre at Baylor University in Texas.

The study was based on a group of 50 experienced

and qualified salespeople who made a total of 6,264

phone-based cold calls over a two week period.

And the results were far worse than even he would

have expected. “Dismal” would be a compliment

says Frank.

Here’s how it turned out:

72 per cent of the calls were outright rejections.

People saying “no way,” hang-ups and so on.

28 per cent of the calls were labelled as

“productive”. These were people who didn’t

hang up right away, showed some interest, gave a

referral, asked to be called at a later time and so on.

But what was most interesting is that the majority

of the two week study period was spent working

on and following up with this 28 per cent of the list.

The time that went into it was extraordinary and

very eye-opening when you see the final results.

That 28 per cent, totalling 1,774 calls, resulted in

just 19 appointments. Out of a total of 6,264 cold

calls made!

The success rate of cold calls to appointments is 0.3

per cent. Assuming an average closing rate of 20

per cent, that would equate to just under 4 sales,

from 6,264 cold calls.

Now that you have seen the horrific numbers

experienced during the study, here is the conclusion

drawn from it.

Experienced salespeople can expect to spend

7.5 hours of cold calling to get one qualified

appointment. That’s an appointment - not a sale!

Cold-calling is a numbers game – a big numbers

game - and one we are bound to loose.

My suggestion is to follow a structured prospecting

plan which will lead to the right number of referred

leads and sales.

brett burgess helps equip salespeople and business owners with processes and systems to increase the amount of sales they make on a consistent basis. To find out more visit www.salesimpactgroup.co.nz

2 MINuTe ToP-uP

Authors: John C MaxwellPublisher: Thomas NelsonPrice: US$8.34 from www.amazon.com

Attitude can make or break you and the

people you lead.

Good attitudes on a team do not

guarantee its success, but bad attitudes guarantee

its ruin. So says New York Times best-selling author

and leadership expert John C. Maxwell in this highly

practical primer, Attitude 101. Anyone who has

tried to lead people with bad attitudes knows the

frustration it can bring.

With this concise and reader-friendly guidebook,

you can master attitude issues. Learn to:

• Recognize how individuals’ attitudes impact

their performance

• Pinpoint problem feelings, behaviours, and

thinking in yourself and others

• Identify six common attitude problems that

undermine teamwork

• Discover the secret to changing a bad attitude

• Create new definitions of failure and success

that will improve performance

• Adopt the attitude that helps a leader keep

going to the next level

Attitude is contagious!

You want to make sure your team is catching the

right one!

ATTITude 101WHAT eVerY leAder

Needs To KNoW

www.nzsalesmanager.co.nz / 16

resource corNer

17 / www.nzsalesmanager.co.nz

SECRETS TO A SUCCESSfUL

BUSINESS ATTITUDE

QuIcK fIx

b u s I N e s s

1. U & I are in it, without U & I, there is no

business

2. U comes before I. U have priority, it is good

business to put the customer first.

3. I is silent. Don’t talk yourself out of a sale.

Master the fine art of shutting up and tuning

into your customer.

4. U is pronounced like an I. The biggest secret

of good business and good selling is to strive

to see the ‘U’ from the ‘I” perspective. Walk in

your customers shoes.

Source: unknown.

QuIcK fIxIT’s NoT WHAT You sell, IT’s HoW You sell.

www.nzsalesmanager.co.nz / 18

2013

dATe NAMe PlAce coMPANY lINK

Tuesday 4th June cold calling and Prospecting

Auckland Top Achievers Sales Training

www.topachieverssalestraining.co.nz

Wednesday 5th June -

Thursday 6th June

Managing Major bids Wellington Shipley NZ http://www.shipleywins.co.nz/public-

training-schedule.html

Thursday 6th June sales Process Auckland Top Achievers Sales Training

www.topachieverssalestraining.co.nz

Monday 10th June -

Wednesday 12th June

franklincovey: The 7

Habits of Highly effective

People

Wellington David Forman www.davidforman.co.nz

Tuesday 11th June Professional

relationship selling

Hamilton The Marketing Company

http://events.themarketingcompany.co.nz/courses/3-professional-relationship-selling

Tuesday 11th June -

Thursday 13th June

scotwork Advancing

Negotiating skills

Auckland Scotwork Negotiating Skills NZ

http://www.scotwork.co.nz/

Thursday 13th June social Media and sales Auckland Top Achievers

Sales Training

www.topachieverssalestraining.co.nz

Thursday 13th June -

Friday 14th June

essential Marketing

boot camp

Christchurch The Marketing Company

http://events.themarketingcompany.co.nz/courses/1-essential-marketing-boot-camp

Monday 17th June -

Thursday 20th June

sales development Wellington David Forman www.davidforman.co.nz

Tuesday 18th June sales basics Auckland Geewiz http://www.geewiz.co.nz

Wednesday 19th June sales Ignition day Auckland

North

The Marketing Company

http://events.themarketingcompany.

co.nz/courses/2-sales-ignition-day

Monday 24th June directors forum Christchurch Shipley NZ http://www.shipleywins.co.nz/public-training-schedule.html

Tuesday 25th June sales basics Christchurch Geewiz http://www.geewiz.co.nz

Wednesday 26th June sales Management Christchurch Geewiz http://www.geewiz.co.nz

Thursday 27th June -

Friday 28th June

capturing business Auckland Shipley NZ http://www.shipleywins.co.nz/public-training-schedule.html

cAleNdAr

2013 19 / www.nzsalesmanager.co.nz

THe close

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“At the age of three, we all possessed three important skills to make the sale:

Persistence, creativity, and the ability to ask one question after another.”

- Dirk Zeller