I’ll be up front, I am not a fan of sales people and or books on sales, I’m not comfortable there and I’m sure many others feel the same way. Keep in mind, I am a former Sales Manager from my Radio Broadcast days and I have held what feels like hundreds of sales jobs, so I know what I’m talking about, and I can spot a fraud most of the time. That’s my disclaimer. Before I ask you to read on, I want you to know I endorse this book, I was pleasantly surprised at the ease of reading it, and there are some incredible nuggets buried in this gem for you to use. One more thing, I personally think the book is more about Leadership than Sales, that’s the head fake to watch for, but you won’t know it till after you have read it. One other disclaimer to you & Ron, I don’t write reviews in a fashion you expect, but I’ll let you decide whether this type of review helped you or not. Let’s get on with it.
I was recently asked by a friend on Twitter if I would be interested in reviewing a book, I didn’t know what kind of book or the topic, but I said yes anyway because Leaders are readers, and I trusted her. Now you know what I am. Some time passed by and I never heard anything back on the topic, so I hailed my friend and she said hold your horses. Shortly thereafter, a courier showed up with a package containing the book, I opened it and shrugged my shoulders in disgust. A sales book! I don’t want to review a sales book or anything close to the topic of sales, I want to learn something new, something I haven’t done before. As you can see, I have a bad taste and attitude on the topic. But I said I would, and I am a man of my word, so I dived in and started reading my new sales book. But first, let me share the full title of this book, Lead, Sell, or Get Out of the Way: The 7 Traits of Great Sellers
Here is the BIO as taken from Ron’s book, Ron Karr is a popular public speaker and in demand business consultant known internationally as a business development expert. As President of Karr Associates, Inc., he specializes in helping organizations and professionals generate remarkable sales and operational results. His client list includes such companies as Agfa, Morgan Stanley, MetLife, Wright Medical, and UPS.
Now I’m not going to go on and on because frankly I can’t do the book justice, I highly recommend you get the book and pass your own judgment, rather than take my word for it. There are 10 chapters so it’s not a long endeavor, checkout the table of contents:
1.) The Case For Leadership
2.) The Five Beliefs of Effective Leaders
3.) The 7 Traits of Great Leaders
6.) Building Alliances
7.) Asking Good Questions
8.) Creating Powerful Value Propositions
9.) Communication Persuasively
10.) Holding Yourself Accountable
You can tell by the Table of Contents it’s not your typical book on Sales, some of it’s standard but there is much that is different. Why? Because I think Ron makes it real, he makes it so that your sales success is you the person. At the out set of this book Ron makes what I consider three profound statements, You Can Lead, You Can Sell, You Can Get Out of The Way! In his words, this book is designed to help you make the first two a reality and avoid the third altogether.
My favorite chapters are 4 & 5, Visualizing and Positioning, I think most of us are really bad at understanding these two critical areas. We tend to visualize the wrong things and that leads down the wrong road, we then find ourselves in the wrong position. I’m not here to tell you all that is in the book, otherwise I would just cut & paste and let you read it, I can’t for many reasons.
In visualizing you have to see things most others in your line of work don’t and frankly can’t. Ron lays out 7 Elements of a Clear Vision which reduces the vision to 7 steps, when it’s all said and done, you’ll have a better understanding of you why, and where you’re going. After all, it’s a journey right?
Ron helps you understand the difference between Personal Vision Versus Customer Vision. The bottom line though, it’s not about you, it’s about where your customer wants to go. Be prepared to walk through the process with Ron, it’s not as simple as I make it sound : )
In Chapter 5, Positioning, Ron really starts to make you think like a leader, most business owners have buying habits they don’t even know they have, that’s an opportunity most sales people miss altogether. You’ve probably heard much of this before, I can tell you this, there are many ways of positioning yourself with a prospect or client, but none can tell you as clearly as Ron does in this book.
Those two chapters caught my attention as being different than most other books written on sales, not to say the other chapters aren’t as solid, they are, they’re top draw so don’t skip any of them. That’s an order! The book is only 250 pages! Well, it’s 230 if you don’t count the Epilogue and Index pages, so no excuses. 🙂
I have to say, after reading his book I felt I was getting a good read on the type of person Ron is, and then after talking with him, Ron is just a down to earth, awesome man. Do your self a good service and get to know him on the many social media networks he is on, I triple dog dare ya.
Now that you’ve read this Blog Post, and I hope it makes you want to buy his book, oh, and you must visit Ron’s site, in fact, tell him Owen sent you: http://www.ronkarr.com/
In July I wrote an article for you called, ” Your Break Even Point “. The premise was to help you calculate that number and for you to have a better understanding as to why you might be loosing money everyday and not know why. Your business depends on you knowing! I mean it’s not something real obvious because it’s kind of hidden, if you don’t have the right indicators in front of you everyday you won’t see it. Hopefully you were able to figure out what those indicators might be and you are monitoring them daily. I’ll assume you’ve done that because next I want to walk you through an advertising slash marketing concept with you.
Years ago when I was selling Radio Advertising we used a thing called Return On Investment Selling, it was an education and very interesting. The program was to show how you would be able to pay for a new ad campaign and make money too! Yep, pay for the advertising and make your desired ROI, sounds to good to be true right? Well….yes & no. Let me lay out a scenario and we’ll walk through this together, I think you will find it most interesting.
I’ll change the names and places to protect the innocent, just kidding. I’m going to take you through a simple Growth Objectives equation and an Investment Analysis so you can understand the number at the end when I’m finished. Oh, and the Forward Slash ( / ) means Divide By in my equations if I don’t use the ÷ Symbol, I thought I should clear that up right upfront 🙂
Let’s pick a market, let’s say you are in the furniture business and the Market Potential was say 5 Million Dollars. That means 5 Million Dollars in business is being done in the Market your business operates in. Lets keep it simple and say you have a present Gross Sales figure of $500,000. That means you have a 10% market share. But you want to realize a growth objective of $100,000 out of your market, what kind of additional penetration do you need to achieve your goal? You would need 2.2% more, here’s how I figured it out:
100,000 ÷ 5,000,000 – 500,000 = 100,000 ÷ 4,500,000 = .022 x 100 = 2.2 (actually 2.222222)
If you’re struggling with the equation, get your calculator out and punch it up. It works.
So now we know the Penetration needed to reach a $100,000 Growth Objective in your Furniture market. Next I’ll break down how many customers or prospects it will take per day to achieve your goal of One Hundred Thousand Dollars.
To make this equation work we will need to know a few things first before it will work. We need to know what the average customer worth is in your store, how much each customer spends in your store. We also need to know what your closing ratio is, a great way to see how well your sales staff produces I might add.
For the purposes of this exercise I’ll use an average customer worth of $1,000 and a closing ratio of 40%. That will keep the numbers easy to work with. The equation is somewhat simple, I’ll try to lay it out that way.
$100,000 / $1,000 = 100
Growth Objective / Avg. Customer Worth = Additional Customers Needed
100 / 40% = 250
Additional Cust. Needed / Closing Ratio = Additional Prospects Needed
250 / 312 = .08
Additional Prospects Needed / # of Selling Days (Days Open) = # of Prospects per day
Is the number of prospects needed realistic? Yes No
This is only part of the equation, this merely tells you how many prospects per day you would need above and beyond you current customer base over the course of one year or 312 business days.
OK, we now know what the daily number is, but it still doesn’t tell us what the additional Gross Profit is going to be. Well, if your Growth Objective is $100,000 we now need to multiply it by the Average Gross Margin. Let’s use a simple number and one that might be realistic, let’s use 25%. Using our numbers from above this is how the equations looks:
$100,000 x 25% = $25,000
Growth Objective x Avg. Gross Margin = Additional Gross Profit
So in order to achieve the additional gross profit of $25,000 you were going to need to make $100,000 more (above and beyond) in business over the next year. We figured out how many new prospects / customers it would take to hit that number (0.8 per day) and we felt it was realistic. Now, what kind of ROI did you want to achieve, I’ll assume you wanted 100%! You want to make $100,000 in additional business which would give you an additional gross profit of $25,000 and you want a return of 100%, right?
The question begs to be asked…..HOW?
Well, obviously you would have to do something different than you have been doing to achieve that fine 10% market share. You want to grab 2.2% more of that market right? That means you have to do something above and beyond what you are already doing in your advertising efforts. You WILL have to put more advertising dollars into achieving your goal of 12.2% Market Penetration, your $100,000 Growth Objective and put the additional $25,000 Gross profit in your pocket.
The ROI I’m talking about is what you have to spend in additional advertising dollars to make it happen. You are probably asking yourself how you figure out how much to invest in advertising dollars. the Investment Analysis is quite simple. Here’s the equation:
Desired ROI is 100%
$25,000 / 1 + 1 = $12,500
Gross Profit / Desired ROI as a Decimal (1 + 1) = Maximum Additional Advertising Investment
25,000 ÷ 2
So, you want to get 100% of your advertising investment back, you will spend $12,500 in new advertising dollars plus make $12,500.
You will Invest $12,500 in additional advertising to realize the Growth Objective of $100,000 in additional revenues that will produce and directly impact your bottom line by an additional $25,000. Cool & achievable based on the above numbers.
The above is an over simplified view, achieving a market share growth of 2.2% on top of the already acquired 10% market share is not easy, the numbers don’t tell the whole story. Now you still have to go through the process of doing the creative, copy, layout and cross promotional stuff but now you an idea in advance the hill or mountain you may have to climb.
I hope this helps you when you get the notion to grab more market share, do your homework and crunch the numbers. You will have a much better picture and it will allow you to enjoy the process of achieving it. Keep this in mind the next time your advertising sales rep wants to up sell you. If you want more real gross profit you will invest to get it, it’s a fact of life. Just make sure it fits your goals, think with the end in mind and work hard to reach it.
Until next Time.