Written by Dave Lavinsky on Wednesday, March 31, 2010
Is it possible to double, triple, or even quadruple your sales conversion rates?
It sure is.
And to explain how, you simply have to spend an hour with the world's best salesperson - my daughter.
You see, kids are pretty amazing sales people. They ask for something. And when they don't get it, they ask again, and again, and again.
So, my 7-year old daughter wanted a horse figurine. So she asked me to buy it for her. I said I'd think about it. So the next day she asked me again. And again I replied "Let me think about it."
This routine continued day after day after day. Until finally, I broke down and bought it.
Now the lesson here is simply -- persistence is absolutely critical to sales success.
Consider these statistics from the National Sales Association:
* 2% of sales are made on the 1st contact
* 3% of sales are made on the 2nd contact
* 5% of sales are made on the 3rd contact
* 10% of sales are made on the 4th contact
* 80% of sales are made on the 5th-12th contact
This is truly amazing -- your chances of closing the sale go up 40 TIMES when you try 5-12 times.
Likewise, a recent report from The Bridge Group found that it takes an AVERAGE of seven touches to "convert a suspect to a prospect." These touches may include phone calls, direct mail, email, webinars, or face-to-face encounters among others.
Once again, the key is persistent follow-up. You cannot afford to give up on prospects after the first, second, or even third or fourth contacts. By continuing to follow-up with them, you will skyrocket your sales conversion rates and profits.
The EASIEST way to ensure consistent, high quality persistent follow-up is using Autoresponders. Autoresponders are automatic emails that you send at defined intervals. So, for example, you can automatically send high quality emails to your prospects every 3 days for a month in order to increase your conversion rates. In the Ultimate Internet Marketing System, we dedicate two modules to Email Marketing where we cover how to expertly use emails and autoresponders to increase your conversion rates. Learn more here: http://www.growthink.com/products/internetmarketingsystem
Written by Jay Turo on Monday, March 29, 2010
In 2002, the CEO of Integreon, Liam Brown, sat in Growthink's offices in Los Angeles.
Integreon was just getting started and had 4 employees.
In the subsequent months, we worked with Integreon on its strategy and to developed its business plan.
The rest, as they say is history.
After raising rounds of capital and growing like gangbusters, Integreon is now a global provider of outsourced research, legal and business Knowledge Process Outsourcing (KPO) services. It currently has 2,000 employees and offices throughout the world.
And just today, the company announced that it raised another $50 million in expansion capital.
But the big amount is not what excited me most when I heard about the raise. It was the one tiny phrase in the press release that most others probably missed: "a substantial minority stake."
I like when the $50 million investment only accounted for a "minority stake" in the company. It means the company is worth over $100 million, and probably much more than that.
Yes, the right strategy and business plan can produce amazing results!
Written by Dave Lavinsky on Wednesday, March 17, 2010
There’s one role in an organization that most entrepreneurs and business owners’ don’t really understand.
It’s not the Marketing Manager. That’s pretty easy. The Marketing Manager is in charge of marketing the company’s products. It’s not the Sales Manager. Or the Operations manager either. These roles are also quite evident.
But the CFO (Chief Financial Officer) role confuses most entrepreneurs.
In fact, most don’t really understand what a CFO does, or think that the CFO role doesn’t apply to their business until they’re much bigger.
Well, recently I had the opportunity to learn more about the CFO role when I interviewed Jonathan Weiss.
Unlike many of the interviews I’ve done, Jonathan is not a famous author, investor or renowned entrepreneur.
No, Jonathan was simply a classmate of mine when I went to business school at UCLA (The Anderson School). But when I started speaking with him at our 10-year class reunion a few months back, I realized he had some special expertise.
You see, Jonathan had recently been the CFO of a small company, LA Rose, which manufactures fashionable uniforms for healthcare workers.
The company had been around for a few years and was generating $3 million in annual revenues when he joined it.
But in short order, Jonathan helped grow revenues from $3 million to $10 million, and then he helped sell the company for a nice multiple.
I listened to Jonathan’s story in amazement, and the questions started flowing. What did he do as the CFO of that company? Do all businesses need a CFO? What should my clients be doing to replicate his success?
But rather than monopolize Jonathan’s time at the reunion, I requested a telephone interview to ask these questions, and he was kind enough to oblige.
Here's an excerpt of my interview with Jonathan:
Click here to listen to and/or download the full interview and/or transcript.
Now, before I brief you on some of the interview’s highlights, let me explain the core role of the CFO.
As the title implies, a CFO or Chief Financial Officer is responsible for helping the company achieve it’s financial objectives.
Specifically, the CFO:
Ensures that key financial metrics (e.g., last month’s sales, current inventory levels, etc.) are reported in a timely manner.
Ensures that the company has enough cash to fund its growth
Helps improve the profitability and efficiency of the company
Figures out where assets should be invested
So, for example, some specific things that Jonathan did at LA Rose were as follows:
1. He created a financial dashboard. This dashboard showed the business owners exactly how the company was fairing on key metrics such as month-over-month sales, inventory levels, etc. This helped the company set and accomplish goals. Importantly, he also put key financial figures in terms that the business owners could understand so that they were able to make better decisions.
2. He improved the profitability of the business by better focusing the owners’ time. For example, one owner was amazing at designing new uniforms. But, she was only spending 10% of her time doing that (and spent her other time managing customers, employees, etc.). When those other roles were delegated and she focused more of her time on design, sales and profits skyrocketed.
3. Product sourcing. Jonathan boosted profits by finding new suppliers to manufacture the same quality uniforms at a lower cost.
4. New financing. Jonathan identified that much of the company’s capital was tied up in receivables (e.g., money owed to it by customers). He used a unique combination of factoring and receivables insurance to get this money from third parties at a low cost. The money was then reinvested in the company, and sales went up dramatically.
5. Investments. Jonathan made investments in IT that helped streamline operations and cut costs, boosting long-term profitability.
Whether your company needs to hire a CFO right now is up to you. But clearly someone needs to be performing the CFO role if you hope to really grow your revenues and profits.
To hear Jonathan tell his story and reveal his best CFO tactics, click here to listen to and/or download the full interview and/or transcript.
Written by Dave Lavinsky on Monday, March 15, 2010
Recently I had the opportunity to interview Scott Jordan, founder of All Credit Lending Solutions.
All Credit Lending Solutions was formed in 2005 to help small business owners in obtaining commercial financing from banks and other alternative lenders and can be found online at yourbusinessloannow.com.
Scott gave some nice tips on raising debt capital in today's environment. Click here to listen to the full interview, or listen to a preview below.
To begin, Scott mentioned that building your credit score is key to getting debt financing for your business.
As you may know, Dun & Bradstreet's Paydex is the primary source for business credit scores. Paydex scores can range from 0 to 100, and Scott said that a score of 70 or above is necessary for a business to get unsecured lines of credit.
With regards to startups, who don't have a business credit score, you ideally want to have a personal credit score above 680.
In either case, Scott stressed the importance of spending the time to manage and improve your personal and business credit scores.
For those folks who don't have great credit, Scott revealed two other things that will help in receiving debt financing. The first is having orders in hand from reputable customers, and the second is having assets which you own free and clear that you can use as collateral.
Another key point which Scott revealed is that entrepreneurs and business owners need to "think like a banker." Bankers, according to Scott, think "safety first." You need to show the banker multiple ways in which you can repay the debt; e.g., via revenues, liquidating assets you own, etc.
Scott also mentioned that your chances of receiving a loan multiply when 1) you are very clear on the reason why you need the loan, 2) put together a quality business plan, and 3) get all your financial documents in order for the bank's review.
Click here to listen to the full interview, or listen to a preview below.
Written by Dave Lavinsky on Monday, March 15, 2010
Written by Dave Lavinsky on Thursday, February 25, 2010
Last night at dinner, as my kids were saying "I want this" and "I want that," I said something that you should never tell your kids.
What did I say?
I said, "you know, money doesn't grow on trees."
Why is this so bad?
Well the goal of my saying this was to try to show them the value of money. And that we have to work to make money to spend on the things we want.
The bad part of this saying is that it paints the wrong picture. It paints the picture that we can't always get what we want. Which is the polar opposite of the attitude I want my kids, and all of the entrepreneurs reading this today, to adapt.
What entrepreneurs MUST be thinking is YES, I CAN get whatever I want. Yes, it won't just come to me, but with hard work and ingenuity, I can and I will get what I want.
Fortunately, right after I said that to my kids, I caught myself.
This was partly due to the interview I recently conducted with Ken Lodi about The Bamboo Principle.
Here's the link to that interview in case you missed it the other day:
In the interview, Ken explained that timber bamboo shoots grow very little for four years while their extensive root system is growing and taking hold. But once the roots are firmly in place, the bamboo can grow a shocking 80 feet in just six weeks.
So, I immediately realized that money does in fact grow on trees. The key is to work on the tree's roots. To build such a strong foundation that generating money becomes easy.
Every great company has a strong foundation. They create a brand name, sales systems, delivery systems, etc. And then, they can generate cash and profits each and every day.
So, focus on building an extremely strong foundation. Think through your business model. Learn the best practices for each of the key business disciplines - marketing, HR, finance, sales, etc.
And never let anyone tell you that "money doesn't grow on trees" or that you can't have everything you want. Because money does grow on firmly-rooted trees and you CAN achieve and get everything you want out of life if you resolve to do so.
As you might expect, explaining to my kids (ages 9 and 7) that money can in fact grow on trees wasn't so easy.
Maybe I should have just had them listen to The Bamboo Principle interview.
Written by Dave Lavinsky on Wednesday, February 24, 2010
This is pretty amazing.
After being planted, timber bamboo plants are hardly noticeable above the ground for nearly four years. But once their roots are fully formed around the four-year mark, they can grow a remarkable 80 feet in just six weeks.
The key to their amazing growth is their extremely solid foundation. To learn about how emerging companies can create a solid foundation for their businesses, the other day, I interviewed Ken Lodi, creator of The Bamboo Principle.
What Ken explained to me is that the solid foundation of a company is rooted around its employees. But, importantly, Ken explained that a company's greatest resource is NOT its employees.
Rather, the greatest resource is the TALENT of its employees.
The fact is this - most companies have some great employees that are underutilized. Conversely, great entrepreneurs and business owners are able to figure out what their employees like to do. Interestingly, what they like to do is oftentimes what employees are best at, and what they will achieve the best results at.
Ken equated this to sports. Players on your team, he explained, don't necessarily have to be great at everything. For example, on a football team, the quarterback doesn't need to be a great punter. And the punter doesn't need to be a great quarterback. The problem arises when your quarterback is spending his days punting. The business owner must figure this out and make the requisite changes.
The best way to figure this out is to mentor and coach your employees. You need to figure out what their values and goals are, and modify their roles as needed to leverage them. When meeting with employees ask open ended questions (not just "yes" and "no" questions). For example, ask "if you could spend the majority of your work day doing just one thing, what would it be?"
Employees too must figure out what they value and enjoy and make sure their job roles are in line with this. This is the key to improving employee productivity, satisfaction and performance. It's called "making a vacation out of your vocation."
Both employees and entrepreneurs/business owners should develop a fresh assessment of themselves. What do you/they like to do most in their jobs? What makes you/they say "cool?" And, ask yourself, "if money wasn't an issue and you could do one thing with your work life, what would it be?"
Success requires a solid foundation. Six minute abs don't work. Nothing is fast and easy. You need to work hard to build a solid foundation from which you can build success. And this foundation is your employees. And making sure you are leveraging your employees to their best potential.
So make sure you quarterback is not playing defense. Talk to your employees. Find out what they value and enjoy doing. And create a workplace that supports their values, leverages their talents, and achieves massive and successful growth - just like the timber bamboo.
Growthink University members can listen to my interview with Ken Lodi here. Not a member? Then simply test drive Growthink University for 30 days here.
Written by Dave Lavinsky on Monday, February 15, 2010
To begin, typically when I interview an expert, I only provide access to the recording and transcript to Growthink University members.
However, to thank you for your continued readership of this blog, and to ensure that you learn these key business-building lessons, I'm making this interview available to you.
Click here to listen to the interview and/or download the transcript.
The interview to which I am referring is the one I recently conducted with Louis Crosier. Among other impressive accomplishments, Louis is the author of "Selling Your Business: The Transition from Entrepreneur to Investor."
Specifically, Louis is an expert on helping entrepreneurs realize their financial dreams by selling their businesses and investing their proceeds wisely.
During the interview, Louis made numerous key points regarding things you need to be doing while you are starting, growing, and selling your business, and then what you need to do post-sale.
While you can listen to the interview yourself here, two of my favorite points were as follows:
-1- Your choice of corporate structure (e.g., LLC vs. C-Corp) can potentially save you millions of dollars later on when your company is sold. Fortunately, you can, for the most part, change your corporate structure down the road. But over time, your options become fewer and fewer.
-2- You need to find your weaknesses before it's too late. Specifically, Louis explained that when trying to maximize the price at which your business sells, you need to really think through where the vulnerabilities of your business are.
For example, is your business dependent on a small number of key customers? Are there key employees? What kind of barriers to entry and intellectual property are associated with your business? In other words, where is your business vulnerable to either competitors or major disruptions? You need to identify these vulnerabilities well in advance of a sale, and shore those things up.
Other key questions that Louis answered for me included:
- When deciding to sell your company, who should be on your professional advisory team and when should you start building that team?
- What are the main types of deal structures when selling your business, such as selling for all cash or for all stock? How common are each? Which are the most favorable to the entrepreneur?
- Once you sell your company, how should you re-invest your earnings and what should you be aware of?
- What do entrepreneurs need to know about now, when hoping to sell their businesses in the future?
Once again, you can click here to listen to the interview and/or download the transcript.
Written by Dave Lavinsky on Wednesday, February 3, 2010
Imagine you had been driving to and from work the same way every day for the past 4 years. And let's say that the drive each way typically took 30 minutes. And then one day, a friend told you about a shortcut that would save you 10 minutes each way. So, that's 20 minutes a day in time savings.
At 250 work days each year, that's 83 hours per year. Or 332 hours over 4 years.
I bet you wouldn't be too happy about having wasted 332 hours...
Or would you?
Because you would subsequently save 83 hours this year, and 83 hours next year, and so on and so on. That's pretty cool. The point is this - accomplishing more in less time IS possible. That is, if you know the shortcuts. Importantly, shortcuts shouldn't be quick ways to do things that result in poor quality. Rather, shortcuts allow you to do things more efficiently.
Let me give you an example.
Each of us has peak performance times. That is, times of the day when we have more energy and thus perform better. For many people, that time is early in the morning. Maybe we perform 15% better at those times than average. Likewise, each of us has poor performance times. Like the hour after coming back from lunch. And at these times, we may perform 15% worse than average.
Now, you may recall from my recent blog post how important it is to create a To Do list each day, and to detail the specific time intervals during which you'll accomplish each key task (if not, you can read that here).
So now, imagine you have a really important one-hour project that requires your complete concentration. Well, doing that project during a normal performance time might take you 60 minutes. During a peak performance time it may only take you 50 minutes (and the quality will probably be higher). But during a poor performance time, it may take you 70 minutes.
So, in this example, performing the important task at a peak performance time would save you 20 minutes.
But what about the work you need to do during your poor performance time? Won't that take you 20 minutes longer and even things out? Not if you complete less important and less intensive work during that period.
So the action item I want you to take each day starting today is this:
1. Write down your daily To Do list
2. Schedule your entire day with the time intervals in which you'll complete each To Do item.
3. Adjust the order of the items to ensure that you complete the highest priority and most important tasks during the time periods when you feel you work at your peak.
I trust that this "shortcut" will start boosting your productivity right away.
Written by Dave Lavinsky on Monday, February 1, 2010
Last month I reached my boiling point.
My son Max was driving me absolutely crazy. And something had to be done about it.
What was happening?
Well, a couple of months ago, he started taking forever to get anything done. For example, if you told him to brush his teeth, it would take him 20 minutes. He just didn't have any focus. He would walk upstairs. Then get sidetracked by something on the way to the bathroom. Ten minutes later he still wouldn't have started brushing.
And then the real problem started last month. That's when his fourth grade teacher started cranking up the homework. Homework that should have been completed in 30 or 40 minutes was taking over 2 hours. And my son wasn't getting to sleep until 10PM or so. And I was getting overly frustrated.
Fortunately, at the same time as Max was having these issues, I was knee-deep in developing my productivity course for entrepreneurs and business owners.
And in my research on advanced productivity tactics, I came across Parkinson's Law. Parkinson's Law states that work will always fill the time allotted for its completion. So, if Max was given 2 hours to complete his homework, it would take him 2 hours.
The good news is that by creating a timed To Do list, we can all overcome Parkinson's Law. One example is this essay you are reading now. Formerly, my average essay took me one hour to write. For this one, I gave myself a strict 30-minute deadline. And unless this essay ends abruptly for you, you can assume that I succeeded in finishing it within that time.
So, how did I get Max to overcome Parkinson's Law? Well, I resolved that I was going to get him to use the same business productivity techniques that I was preparing for my course.
So, the first night, I told him that we were going to solve this problem. I sat down with him and we jointly identified the 5 or so tasks he had to accomplish. We determined a fair time period for him to complete each task. And we put a check box next to each task for him to mark as completed (note that checking a box after you complete a task gives you great satisfaction and energy with which to complete your next tasks).
What was most astounding for me was what I saw the next day when I came home for dinner. I got home at 6:35 to find my son reading. Next to him was a timed To Do list that he had completely created on his own. He had already checked off half of his tasks and had just started his 20 minute reading block (see picture above of Max's To Do List).
Max's productivity literally doubled overnight. He completed his homework in half the time as usual, and did a better job of it. He went to sleep an hour earlier. And I got to spend more quality time with my wife.
Let me wrap up here, since I only have 8 minutes left in my 30 minute writing block. The key points are these:
1) You absolutely must have a list of the things you need to accomplish everyday, or key things won't get done.
2) You need to set time parameters for each task. Doing so will allow you to overcome Parkinson's Law and complete your tasks much faster. Having time parameters will also ensure that some tasks don't go over your time budget and force you to forego completing other key tasks.
3) Implementing this for my son was extremely easy and we realized immediate results. Implementing this in your business can also be easy, and you too will realize immediate benefits.
4) Creating timed To Do lists will not only improve your productivity, but the productivity of your team. In my office, everyone now has timed To Do lists, and collectively we are producing more than double than what we were accomplishing a few short months ago.
If you want to raise capital,
then you need a professional
business plan. This video
shows you how to finish your
business plan in 1 day.
to watch the video.
"The TRUTH About
Most entrepreneurs fail to raise
venture capital because they
make a really BIG mistake when
approaching investors. And on
the other hand, the entrepreneurs
who get funding all have one thing
in common. What makes the difference?
to watch the video.
The Internet has created great
opportunities for entrepreneurs.
Most recently, a new online funding
phenomenon allows you to quickly
raise money to start your business.
to watch the video.
"Barking orders" and other forms of
intimidating followers to get things
done just doesn't work any more.
So how do you lead your company
to success in the 21st century?
to watch the video.