Part One: Inventory

Part Two: Accounts Receivable

Next Week: Accounts Payable

We’re sprinting toward that million dollar mark...and we’re only a couple strides away…

Decreasing inventory carried us over first hurdle, and last week reducing Accounts Receivable sped us through half-way mark. We’re making great time, so let’s bring on next mile marker – marketing and sales.

Increasing Overall Sales and Marketing Effectiveness

If you are an organization spending $500,000 or more on marketing expenses (e.g. advertising, trade shows, print materials, direct mail, etc.) then STOP! We found it again. Why you ask…? Because marketing has greatest potential of being very unproductive. In fact, many marketing programs struggle to break even, and actually frequently lose money. So if we increase overall effectiveness, then we can eliminate 50% or more of your wasted marketing efforts, which translates into $250,000 in cash.

So now, let’s see how this actually works in a real-life scenario.

Sales and Marketing Company Policy Case Study

An organization with $500,000 in marketing expenses needed assistance. We examined their sales and marketing process to understand and quantify lead flow, follow-up, and demand forecasting issues. Then we designed and implemented a process to improve their sales cycle efficiency and tie it closer to their customer’s buying cycles. After marketing reductions, we then reinvested $100,000 back into new processes for public relations and Customer Relationship Management (CRM), both of which were suffering badly.

The metrics we developed reduced their marketing expenses by 60% overall and increased their sales cycle efficiency from 40% to 60% within 6 months of implementing new procedures. With these new processes and reports, company now tracks sales cycle efficiency and life-time value rather than just sales quota achievement, as measure of their sales & marketing effectiveness. The result: an extra $300,000 in cash plus a 50% increase in process capability (capacity).

As we have seen time and time again, time can be our best friend, if only we let it.

Methods to Design New Sales & Marketing Process

•Improve Follow-up. Only about two percent (2%) of sales occur on first contact. Eighty percent (80%) of sales will require five to eight contacts before sale closes. This means that if you are contacting prospect less than five times or more than eight times, then you could have a problem with follow-up.

I loved it so much that I thought why not share with other people in hopes it would have same type of effect it had on me.

THE DAFFODIL PRINCIPLE

Several times my daughter had telephoned to say, "Mother, you must come see daffodils before they are over." I wanted to go, but it was a two-hour drive from Laguna to Lake Arrowhead. "I will come next Tuesday," I promised, a little reluctantly, on her third call.

Next Tuesday dawned cold and rainy. Still, I had promised, and so I drove there. When I finally walked into Carolyn's house and hugged and greeted my grandchildren, I said, "Forget daffodils, Carolyn! The road is invisible in clouds and fog, and there is nothing in world except you and these children that I want to see bad enough to drive another inch!" My daughter smiled calmly and said, "We drive in this all time, Mother."

"Well, you won't get me back on road until it clears, and then I'm heading for home!"; I assured her. "I was hoping you'd take me over to garage to pick up my car." "How far will we have to drive?"

"Just a few blocks," Carolyn said. "I'll drive. I'm used to this." After several minutes, I had to ask, "Where are we going? This isn't way to garage!"

"We're going to my garage long way," Carolyn smiled, "by way of daffodils." "Carolyn," I said sternly, "please turn around." "It's all right, Mother, I promise. You will never forgive yourself if you miss this experience." After about twenty minutes, we turned onto a small gravel road and I saw a small church. On far side of church, there was a hand-lettered sign that read, "Daffodil Garden." We got out of car and each took a child's hand, and I followed Carolyn down path.

Then, we turned a corner of path, and I looked up and gasped.