I edited this document for a consulting project. This is the original.
Ten years ago, this industry was full of order takers and it was ok because there was little competition. Now the industry is very competitive and order takers [reps and companies] are falling by the wayside. Verizon came down on us two years ago and again last August because our Smartphone Mix and MBB was much lower than their average. That means they considered us as order takers. And I agree with them partially. We were proactive with WOWing customers but we were passive with upselling. So I created the Smartphone/MBB initiative and we hit it hard and now we kill Verizon's average numbers. So no one can call us order takers anymore. I was proactive by creating the initiative and you were proactive by trying hard to make it work. So now we're good with upselling. But there are still two more components of the sales process that we are still passive about [and its not just you, its Jason and I too]; and that's scheduling follow-ups and referrals!
How do Customer Think?
Research shows that the primary reason we make referrals is to enhance our standing with the people we refer. We want to look good!
Because we’re bombarded daily with so many marketing messages, our brains have developed methods to filter these out. This, combined with rising costs, make ‘traditional media’ a much less effective way to communicate your message. People are the new media!
The Benefits of Referral Marketing
- Consumers today have developed cynicism and distrust of advertising messages. When considering a purchase, we’re now much more likely to ask a trusted friend or acquaintance for a recommendation.
- We listen to those we know and trust. When a friend of theirs has referred a potential client to you, a level of credibility and trust has already been established. They are more open to hear what you have to say.
- Most likely, the person referring someone has already described your service or product and you need to spend less time and energy educating them on the value you offer. These leads generally turn into sales much more quickly.
- Referral marketing is more profitable – to generate a steady stream of referrals will take effort, but may cost little or nothing at all. Did you know that Paul spends no money at all to get his referrals? Did you know that Paul gets zero walk-in traffic and earns 100% of his company profit from referrals? [Elliot: Paul is my all commission rep who brings in usually between $12,000 and $20,000 a month and sometimes as much as $35,000 and his numbers keep going up. So I'm just trying to replicate him.]
How to Get Referrals?
- Your service must be top notch. In today’s competitive marketplace, simply meeting your clients’ expectations isn’t enough. Aim to exceed expectations – under promise and over deliver. Remember: the person referring you is putting his or her reputation on the line. They must have confidence in you! So you must WOW them! Make them think, "WOW no cellular-guy has ever done that for me before!"
- Ask for referrals. Your customers aren't thinking about you. You must make them think about you by asking for the referral. Be proactive!
But its not that easy as we all know. So we've come up with a plan to make it easy. But before I explain the plan, I'll explain a little bit about our history and why we've come up with this plan.
Think of it like this. Out of the company profit, we pay rent, advertising, your hourly wages, etc. just to keep our doors open to be able to bring in walk-in traffic. But that traffic is not enough to be profitable; at least not in today's competitive marketplace where our customers can buy from so many places besides our stores. There is too much competition to rely only on walk-in traffic. The only way to survive is to maximize the walk-in traffic by:
- WOWing your customers, [we're already very proactive with this]
- Upselling, [we've already very proactive with this]
- Scheduling follow-ups, [we've been passive with this so far]
- Driving referrals [we've been passive with so far]
So why have we been passive with points #3 and #4? I think it based in psychology. We think that our potential customers will come back to us because we've WOWed them and we think that because we've WOWed them that they will refer people. So it is hope. We 'hope' that they will do these things. But we've learned that hope is disastrous [remember the Sales Jeopardy video?]. We must all realize that our potential customers are not thinking about us as much as we 'hope'. If you don't tell them to buy from us, then they are very likely to forget to do so. If you don't tell them to refer people, it is very likely that it'll never dawn on them to refer people to us. This is all very passive thinking which results in passive behavior.
So we've come up with a Make Your Business initiative. We'll help you learn the tools and habits you'll need to be proactive with scheduling follow-ups and driving referrals. And you know this is going to work. Why? Because when we put our minds to something, it happens. Just think back to the results we got when we started the initiatives to increase Visual Voicemail take rate, 5Star take rate, smartphones mix, and MBB percentage.
So this 'Make Your Business' initiative is very much like those other initiatives. It has three components:
a Training component. We're creating videos to show you how to do the various activities involved with this new initiative. We'll be sending these videos to you separately. There is also the audiobook '7 habits of highly successful people'. I understand that its a 5.5 hour long book so please listen to that ASAP [and reply to the associated email for confirmation].
a Motivational component [increased compensation for increased success]. More details below.
a Tracking component [so that you can input your numbers and management can review them]. There are two new sheets in the Sales Reflection doc called MYB Goals and MYB Daily.
- A note about the tracking; this is micromanagement. I'm sure you don't like us to micromanage. But know that we also don't like to micromanage either. It is our job to help you learn the tools and develop the habits necessary to be successful. So we will micromanage you until you no longer need us to micromanage you. So who will be the first one?
About the MYB Daily sheet. You'll be inputting 9 figures for each day:
- No. of Thank You postcards mailed
- No. [of leads entered into gtasks] from walk-ins
- No. [...] from call-ins
- No. [...] from recurring customers
- No. [...] from 5star calls
- No. [...] from sponsors [these are the referrals]
- No. of calls to your leads
- No. [of lines sold from] referrals
- No. [...] from other
About the MYB Goals sheet. We've already started you guys off with your goals, although you can change them if you want to. We guess that you currently earn less than 10% of your company profit from referrals. So we've set the first month's goals at 10%. Each month we will increase this number. And each month your actual % of referrals will increase too. And of course this means that your company profit will increase and that means lots more commission for you!
A word about the old KPI's commission structure: we're going to stop that and completely replace it with this new Make Your Business commission structure. And I've added another MYB Level as follows:
Starting at @ 8%
$6,000+ @ 12% = at least $720
$8,000+ @ 16% = at least $1,280
$10,000+ @ 20% = at least $2,000
$15,000+ @ 22% = at least $3,300
$20,000+ @ 24% = at least $4,800
Understand that this doesn't mean that you should stop upselling customers. Why? Because you make more profit on smartphones than you do on basic phones and because you make way more profit when you convince customers to also buy MBB lines. So its in your best interest to continue upselling to smartphones and MBB lines to increase your company profit so that you to get to the next MYB Level.
On another note, the old structure was bad because it didn't motivate you to maximize profit. It motivated you to increase smartphone and MBB KPI's while in fact sometimes sacrificing profit. I know that some of you discounted smartphones dramatically in order to upsell but that is a huge loss in profit compared to just selling the basic phone without a discount. We can't afford these losses anymore.
Also, since our KPI's are upto where Verizon needs them [actually way higher], we can stop sacrificing profit. Actually I should have stopped the old structure at the end of Dec-2011 because we shattered Verizon's numbers back then. But I continued because I was being passive. I wasn't being proactive at finding another pay structure that didn't have the sacrificing profit problem that I mentioned above. And honestly I didn't realize how much profit was being sacrificed until I saw how low January sales were.
So all this is about helping you succeed. Who's going to take the lead?
PS. We'll be discussing more detailed information during our next conference call so write down your questions. If you want you can reply to this email with your questions.