There are thousands of seasoned pro there to chime in and lend their experience to whatever is keeping you up at night.

I recently spoke with a client that was having a dispute with a former sales rep that had taken a list of customers with them to a new job.

So, I went on LinkedIn and started a discussion. Wow, crazy the wild variance of opinion you find!

The discussion on LinkedIn illustrates clearly that businesses assume they own leads, prospect lists, customer relationship information but, have no formal written agreement with their sales people on the matter. Meanwhile, sales people feel they’ve developed the information and relationships and therefore, it’s theirs.

And never the twain shall meet. Of course, my theory has always been that using an Online CRM gives the business an element of control over this issue that many don’t enjoy.

But, of course, there is more to it than just storing the information in customer database. I published an article on Technorati on the subject. Click here to read the article.

Related posts:

1. 2 Reasons What Your Sales People Tell You About Your Leads and Your Marketing is WRONG
2. Is Online CRM Safe and Secure?
3. Should your sales people spend time on LinkedIn ?

But you need to know right? You need to be able to direct your advertising and marketing dollars to things that work. Things that generate profitable results. But typically all you can do is look at sales results in aggregate and try to make judgments about many discrete marketing channels.

The big guys do it by spending even more money on research, surveys, etc. That’s great if you’ve got the time and money. In most small businesses, you find out how the marketing is working by asking your sales people. After all, they’re the ones in the organization that speaks to most of the respondents to your marketing. This seems perfectly logical but it’s not.

Part of this is obvious. Bonus and commission plans can incentivize sales people to paint a skewed picture of the situation.

This is not to disparage sales people. They’re just trying to increase their commissions by selling more. However, if your sales compensation structure and your business priorities are not aligned well, this can amplify their perception of the value of certain types of leads.

#1 Reasons What Your Sales People Tell You About Your Leads and Your Marketing is WRONG – Sales people see volume as good.

You have to search long and hard to find a sales person that won’t tell you they can use more leads. More leads means more opportunity to them. More leads means more need for the services of a sales person. You may believe more leads is better also. If so, please see Reason #2 below!

You may sell into multiple markets or sell an assortment of different products or services which require marketing in different channels. So, you run an ad in a trade magazine for product A, attend trade shows to market product B and do “pay per click” search ads for product C. It’s very common for sales people to perceive leads from a trade show to be far more valuable than others. They’ll even “feel” like there are more of these leads than others when trade show leads are the lowest by volume.

I say “feel” because most sales people have no means of actually knowing how many leads they’re getting. Frankly, unless they’re paying you for the leads, they have little incentive to keep track.

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Trade show leads “seem” important and valuable to sales people because of the amount of time spent on trade shows and because they actually have met these people already. Sales people are relationship oriented. When they’re looking at a stack of 50 business cards from the trade show that they spend 2 days on last week, all of whom they met personally, they’re going to see those as “warmer” leads than the 500 names of CFOs in an excel file that you just purchased for them to cold call. Also, if they are more experienced with a certain type of lead or product or company, they’ll perceive those as more valuable. So, when you ask your sales people about the leads, they’re going to over emphasize the ones that are warmer and most familiar to them.

This may seem like a minor point but, it can be huge in terms of dollars! If you spend $10,000 on a trade show plus 2 days of your sales person’s time and get 50 leads, you’ve got to close at least 20% of them or your average sale better be well over $2,000 or both or its just unprofitable after you take sales compensation and operational costs out. On the other hand, if you may be able to spend $5,000 to get 100 leads via your website and your sales person hasn’t invested a minute yet.

Which brings us to…

#2 Reasons What Your Sales People Tell You About Your Leads and Your Marketing is WRONG – Can’t measure sales results from leads any better than you can

It’s really all about the quality of the lead. If you’re not using contact management software or a CRM solution to track the leads by source and tie that to results, then you can bet your sales people aren’t either. Sure, you probably have one or two sales people on your team that tell you they use Outlook or contact management systems like ACT! or Goldmine to track the leads you give them but, the fact is that’s not really their job as you’ve defined it and so, it’s likely to get inconsistent attention at best.

Even if you are using an online CRM to capture contact information for all leads that come in, where it came from and which sales person it was given to and your sales people are adding in the actual results once they make contact with the lead, it’s probably not happening all the time. If a sales person is given 100 leads in a month and they forget to log in the results for 5 or 10 of them, it can skew the analysis of this information tremendously.

What you want to know is how many leads came in, tied to each marketing channel and whether they were qualified and if they made a purchase. Seems simple doesn’t it? It’s simple for your CRM system to give you a nice analysis of this information but, it’s another thing to get to the point where you have it all in one place so the analysis can begin. If you’re not using any kind of CRM today, just try and track the leads that come in next month. If you are using a CRM solution already, you know what I mean.

You may be able to capture and track all leads that come in via your website. You may even have the front office trained to track all the call ins that happen when your ad runs in the local business journal. But what about referrals or trade show leads? Those go straight into your sales people’s hands… Even once you’ve figured out how to capture all the leads, it’s getting a good read on the quality of those leads that’s key. And it’s the most difficult part of the equation.

After all, it has to be objective for it to be really useful. Just like your sales people will have a tendency to see volume as good for its own sake, they’ll also have vague “feelings” about the quality of leads from certain sources that have more to do with the difficulty of getting in touch with those leads and generating the first real conversation about need than anything else.

To make it work you have to boil down lead “quality” to a series of objective measurements. Are they in the right industry for you? How much are the currently spending on products or services like yours? Maybe for you it’s as simple as how many employees they have or what their annual revenue is or how much they spend on telecom each month. For many small businesses trying to carve out a niche for themselves, it has to be much more specific.

If you’re using a contact management system or CRM solution, put fields in the system for your staff to enter the answer to these questions. If not, use a spreadsheet or even a printed “lead sheet” with blanks to input these answers. This way you’ll be able to measure leads based on each of these criteria and you’ll know which of your sales people just aren’t asking the right questions.

Remember, this is the 4th chapter in our newest eBook, “Build Your Own Automatic Selling Machine”. Register to receive each new chapter as its released and the entire eBook when complete, free here.

Related posts:

1. 4 Reasons You’re Throwing Money Down the Drain When You Pay for Advertising and Marketing
2. Pour In The Jet Fuel – Part 5 of Double Your Sales in 2009
3. A New Race Car to Success in 2010 for Christmas This Year

4 Reasons You’re Throwing Money Down the Drain When You Pay for Advertising and Marketing

• How failure to set measurable expectations and then measure the results leaves you in the dark.
• How advertising and marketing consultants try to keep it that way. It sure feels that way, doesn’t it?

Of all the places you spend money to run your business, you can probably explain in minute detail where it all goes and how that investment returns you profits.

When you write that check for marketing and advertising, don’t you feel that rock in the pit of your stomach? You know something’s not right about it, but you know you’ve got to advertise to keep selling. So you bite the bullet and spend some more cash.

It’s because you’re unclear about exactly how that investment is going to make you money. There is way too much gray area! Sure, you know what you’re paying for. But do you know exactly how much profit to expect from the expenditure?

If you pay for a booth at a trade show, you don’t know how many people will attend or how many will stop by your booth. If you pay for a magazine ad, you don’t know how many people will see the ad or how many will call you.

In truth, you might as well head to Vegas and put that money on the roulette table, spin the wheel and see what happens. That’s what you’re doing when you spend on marketing and advertising today!

You would not be in business if you didn’t know what you’re doing. You’ve learned to be specific and clear about your expectations in every other aspect of your business. So why do we let ourselves throw money away like this?

#1 Reason You’re Throwing Money Down the Drain When You Pay for Advertising and Marketing:
Advertising and marketing vendors and consultants don’t want you to know what the return on each marketing investment is!

It’s not in the interest of someone selling you ad space or a direct mail campaign or their time to create campaigns to help you measure the return. It’s much easier for them to inflate their invoice if you’re clueless. So they point you to completely unmeasurable benefits like “branding”. They tell you about their huge circulation numbers.

You are not a marketing guru. It’s easy for them to throw around big numbers of viewers or readers or registrants —- and it sounds great.

The fact is, there are hundreds and thousands of minute variables that go into a typical advertising campaign that can make or break the results. Often many different people and vendors are involved. No one wants to be accountable for the whole enchilada.

But you are. So you’ve got to hold them accountable just like you would a vendor that provides you with parts for your manufacturing process or your landlord. If the roof is leaking, it needs to be fixed.

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And there is a HUGE leak in your marketing process!

#2 Reason You’re Throwing Money Down the Drain When You Pay for Advertising and Marketing:
You are not setting expectations for the vendors and consultants and you’re not setting them for yourself.

So, it’s not really the fault of all these marketing folks that you can’t tell what you’re getting out of your ad spending. Just like everything else when you run a business, it comes down to you. You are not tracking what happens when they do what you pay them for.

Sure, they run the ad, you show up at the trade show, your direct mail piece gets sent. And that’s all you expect of the vendor. But that’s not what you’re really paying for. You want the phone to ring!

How many phone inquiries does it take to make that ad worth it? How many business cards do you need to collect at the trade show to make it pay off?

At a minimum, you should know the expectations in measurable specifics each time you write a check. If you spend another $5,000 on updating your website, how is that going to result in more sales and more profits? If you can’t figure it out, don’t write the check!

When you start thinking this way, you’ll find that the ad vendors and consultants working with you become extremely helpful. They can tell you what typical response rates are to this or that type of ad. Put them on the spot. Make them commit to a number. If you hit it, it was a win. If not, you won’t be doing it again. You’ll certainly get that extra bit of focus and creativity out of them to make your campaign a success!

#3 Reason You’re Throwing Money Down the Drain When You Pay for Advertising and Marketing:
“You can’t manage what you can’t measure”

Unfortunately, most businesses aren’t organized enough to track the real results. If you’ve got an ad running in a magazine, a classified ad in the local paper, and a trade show all in the same month, when the phone rings, can you really tell how that prospect heard about you?

Well, the good news is that its not hard to do. You’ve just got to start asking, “How did you hear about us?”

It really is that easy. Just ask. Track it on a simple piece of paper with tick marks if you have to.

Imagine how much fun you’re going to have! A month or two after the ad runs, you can sit down with vendor and show them, “This is how many inquiries we got from this ad.” Do the math with them. “We spent $1,000 and got 20 inquiries. That’s $50 per lead.” That may good or bad in your business. If it’s bad, then I bet you get a better deal on your next ad run with that vendor. Or maybe you don’t bother next time. If its a good result, then you’re probably going to want to spend more money next time. The difference is that you’ll be making decisions about investments that you believe in and because you know what to expect.

#4 Reason You’re Throwing Money Down the Drain When You Pay for Advertising and Marketing:
You’re letting them baffle you with their bullshit.

OK, so nothing we’ve discussed is rocket science. Only one problem… these guys are creative types. They’re expert at painting pretty pictures with words and images and putting the right spin on things. The advertising industry has convinced generations of entrepreneurs and business people that advertising is a creative process and you can’t really measure creativity.

If there is one thing you need to take away from this is that you cannot buy into that thinking. If they refuse to help you set expectations and measure the results, then it’s probably because they know they won’t measure up. Move on.

Find marketing and advertising partners that understand how important measuring the results is and offer solutions to make it a reality for you.

The concept of measuring the return on your advertising investments is not new, but its becoming much more crucial. The world is changing. You can no longer rely on one medium to promote your company and your products. You’ve got be in a lot of different places and the list is growing.

If you don’t have measurable expectations for each channel, that rock in your stomach is going to get much bigger and its going to eat you alive.

In fact, the changes taking place in the way people buy and the way those changes affect small business marketing is our next topic!

Remember, this is the 1st chapter in our newest eBook, “Build Your Own Automatic Selling Machine”. Register to receive each new chapter as its released and the entire eBook when complete, free here.

Related posts:

1. Double Your Sales in 2010
2. Pour In The Jet Fuel – Part 5 of Double Your Sales in 2009
3. A New Race Car to Success in 2010 for Christmas This Year

If you work on the pit crew for Jimmie Johnson and you keep forgetting to put 1 out of 5 lug nuts on the wheels, you probably wouldn’t make it through the first race would you?

Yet each week, as we hold our Wednesday Webinar presenting our online CRM solution to small businesses, I ask the audience what their greatest need is in a CRM. Week after week I hear business owners and sales executives complain that their sales people fail to make their follow up calls.

I could go on with analogies but, really, when you compare it with just about any other profession, we are guilty of letting sales people get away with murder!

At McDonald’s you’d end up with very unhappy customers standing around waiting for their meal. At the race track, you’d probably end up with a serious accident, a expensively damaged vehicle and possibly and injury or two. The point is, in most other businesses, when virtually any employee habitually overlook a key part of their job, customers and other employees are quickly faced with the consequences and action is taken. You’re reprimanded, retrained or fired.

In sales, when you get a new lead and then forget to call them for two weeks, no one really knows it.

So, shame on you sales people for not getting organized on your own so this won’t happen. But, you know it does, too often. Maybe you get a few referrals at the networking breakfast you attend and just never get around to calling them until you discover your notes in your briefcase and can’t remember why they were supposed to be good leads.

That makes it feel less like a blatant failure but, if your responsibility is to find new customers for your business, which we know is a matter of diligence and a bit of luck, isn’t it your responsibility to turn over EVERY rock?

More importantly, shame on you business owners and sales managers. All the most successful human enterprises in history have thrived on common purpose and common procedures that drive efficiency and consistency. You know that. Yet you fail to require it of your sales people.

How many of the leads your marketing delivered in 2009 did your sales people fail to make appropriate follow up to? Based on what I hear from customers every day, its got to be 25 to 50% for many businesses. What did that cost you? A lot of marketing expense wasted. More importantly, a lot of opportunity for new accounts and new sales just left for dead.

As a business owner that spent many years selling, I’ve seen it from both sides of the table. I know as a sales person its easy to get distracted with more urgent matters. If you’re hip deep in closing the biggest deal of the year, you might be right in staying focused on that. The problem is that most sales reps just don’t have a system to be sure that they get back to those leads when the big deal is in the bag.

I also know that as a business owner, its tough to get your sales people to adopt any sort of new system. They will kick and scream and act like the new system is ruining their unique and finely tuned approach to the art of selling.

Well, didn’t 2009 teach us all that we’ve got to grab hold of every new opportunity like its golden?

As we begin a new year in which we’re all hopeful businesses will begin to grow more rapidly and a rising tide will float all of our boats, I suggest that the opportunity to create your own rising tide is only a few hours of work away.

Really. If all your leads get prompt and appropriate follow up, what would that mean to your 2010 sales? Is that worth a few hours of preparation?

It really is simple. All you need is a simple contact management system for new leads to be captured and follow ups to be scheduled.

Salespeople – just because a follow up is scheduled, it doesn’t mean your boss is going to come reprimand you if you’re a day late. It only means you won’t forget anymore and each day you won’t have to spend 30 minutes rummaging through your briefcase to find the leads you need to call.

A good web based contact management system or online CRM should be able to capture and track leads and remind sales people about follow ups literally out of the box. It shouldn’t cost much either. $1 to $2 per day per person is all you should pay for an online CRM with more capabilities than you can imagine. What is a new lead worth to you? Isn’t the expense worth it?

In fact, for that sort of cost, your new online CRM or web based contact management should also be able to do a lot of other very valuable things for you:

Track notes and important details about each lead
Manage documents related to each lead
Create professional quality letters and emails using templates
Email blasts to entire lists of leads
Automatic drip email marketing campaigns

And, Analytics. The interesting thing about analytics is that sales people tend to think they’re just for management.

Even with a basic web based contact management set up that tracks the follow up to leads, you’ll be able to easily and accurately track the number of leads coming in and the results. In my experience, the best sales people are constantly coming up with creative marketing ideas to get more leads. The problem is that their normally working from their gut instincts and can’t express the idea in terms of cost or potential return.

Well, if you know how many leads came in last month and what you spent on your normal marketing activities, then you know the cost. If you know how many turned into real prospects or customers, you know something about the value of those leads. Now you have a benchmark.

With very simple, out of the box, online contact management or CRM capability, you can easily gauge potential new marketing efforts against your benchmark. In fact, what I find is very common is that new online CRM users will discover that some of their most expensive marketing efforts are NOT delivering the results they think they are. That’s a good thing!

When we discover that a regular expense is not delivering the return we thought it was, we can redirect those dollars. We can reduce what we’re spending on the under performing marketing efforts and increase expenditures on more profitable marketing. Now the business and the salesperson win! More leads and more profit!

I know this sounds like a big sales pitch. Honestly, I want to see as many small businesses succeed as possible.

What I know is that your sales and marketing efforts will not be at peak performance without some basic contact management or CRM in place. Sure, I’d love it if you choose to take a look at SalesNexus. In fact, you can start a free trial of SalesNexus today and literally be capturing leads and managing follow ups today.

However, I encourage you to do something. Go to the computer store and get ACT! Do some searches and find the right solution for your business. There are a lot of contact management and CRM options. Just please, do something. Your 2010 will be a much more profitable journey.

Happy New Year!

Related posts:

1. Double Your Sales in 2010
2. A New Race Car to Success in 2010 for Christmas This Year
3. “Contact Management Ain’t Easy, Its Essential”

Todd Miechiels, a Web Marketing guru that I know and trust, just posted a great article about an experience with a client who’s phone system was turning off prospects.

Todd’s article also highlights the value of track-able phone numbers that enable recording the calls.  If you’re spending big bucks on lead generation, these are things you should consider.

Related posts:

1. High Quality Leads You’re Probably Missing
2. Getting to Smile and Dial mode
3. If you can’t measure it, you can’t manage it!