Magnus Marketing Blog

So, I was thinking about the comment about my performance being less than optimal for my client. To some extent, I agreed with that statement and thought about why that was the case.

When I was operating with no targets, I was much more relaxed and freer to explore different priority companies. Meaning, I actively did research, crafted value propositions, targeted companies - particularly larger ones, and took my time. My goal was to get business, good business, from named accounts and leverage some existing relationships the company already had. I was also freer to explore some guerilla marketing tactics which yielded a lead here and there.

When I was under pressure to deliver "sign ups", my focus went to exactly that. Needing to get the "sign up", I began to cut corners. I stopped exploring and started blasting. I quit thinking, and started dialing. I came in, looked at my phone which, if blinking meant someone loved me. I quit asking strategic questions and pitched the company without differentiating. I became a telemarketer and I hated every minute of what I was doing. Gotta get my "sign ups", oh - missed this month, gotta get 3 next month - quality be damned, just get the damn "sign up".

This is why targets are useless for marketing and lead qualification and why, as a VP of Sales (former CEO of a major tech firm) told me - the pipeline is hard to manage. Putting appointment or lead targets may lead to the behavior I just exhibited, behavior leading to quantity or achievement of the goal, but not achievement of ROI or real value business. Conversely, if a salesperson is handed qualified leads, then targets shouldbe achieveable and manageable. Why? Because the value (monetary and strategic) will be assessed properly before it gets to the salesguy. If lead management is done right, the salesguy just has to show up, negotiate, and close.

With proper analysis, qualification, and understanding of realistic conversion rates, it is possible to manage the process so that overall goals are achieved. It is like Kohl's having a monthly credit goal, if everyone is aligned to achieve that end - the "get the business in, quality be damned" mentality will disappear and true marketing, lead management, sales alignment will occur.

Today was a tough day. Filled with anxiety, I went into the CEO's office of a long-term client and officially informed him of my desire to separate from the company. I believe he was very happy by my decision.

My prospect pipeline having grown and new clients taking up more time, I need to optimize my billable hours with people that allow my fledging company to grow. This particular company, noted for its inability to close any deals, was becoming one that did not contribute to the growth of Magnus Marketing Group - financially, challengewise, or growthwise.

A contentious discussion ensued last week upon which a reiteration of the fact that I was to be paid largely on commission, yet only received one commission check, asked for a higher base, only to get a meager "raise", and that my performance hinged on whether I got "sign ups/contracts" not on the quality of account. The CEO said some things that were interesting:
1. You are an expense. I am paying you a few hundred dollars to procure contracts (that are over $20K) and the contracts have yielded no revenue. (What did the bird say as it flew over their headquarters? Cheap, cheap, cheap).
2. If a marketing campaign doesn't work, you change it.
3. I am not happy with your performance, you are not achieving the goals set.
4. You are not happy with what you are doing. (Who would be, with zero results?)
5. If I asked you to quickly develop business for one of my teams can you do it? (No, absolutely not).

I thought about it over the weekend and realized. What this client is talking about is VOLUME, CHEAP, and EASY WORK. The contracts that these folks couldn't close, the meetings that yielded nothing, were all with name or Fortune 1000 companies! A few contracts were with unknown firms, but most were name companies for positions that were very hard. The company could not handle it, they could really only handle particular (rather easy) business. It took many months, averaging 3 to 6 months to get a contract usually. The company has no marketing: the website hasn't changed in 2 years, no advertising, no presence at conferences, nothing!

What will yield EASY WORK in VOLUME at a CHEAP cost? Telemarketing. Reminds me of another client who stated in no uncertain terms he wanted "Laptops, laptops, laptops" and plenty of them. What will yield lots of laptops? telemarketing.

Here ROTE SCRIPT GUY - make lots of calls, ask 10 qualifying questions, get the contract. The more contracts we get in, the more we can pick and choose which ones we will take. The more laptops I can get the more money I make. NO STRATEGY, NO THINKING, NO RELATIONSHIP. Get the "Sign-ups", get the "laptops", get whatever you can get as much as you can get as fast as you can get it. (Quality be damned). Oh, my - no one cares about positioning (except my consultant client who is brilliant).

So, I ended the relationship. Magnus Marketing Group is evolving into a lead qualification firm, a strategic business development firm where QUALITY triumphs over QUANTITY. You want quantity? Call Carisa at Superior Telemarketing, Kaizen Direct, or Paragon. Lots of low paid telemarketers available to bang the phone for business. I recommended my client get in touch with those folks. They do the "retail" stuff and they do it well.

If you want real business - business generated at the "C" or "VP" level, business that can be millions of dollars, strategic business, or real - qualified accounts - then you call ME. And, I do good with marketing also and research! My goal is to position as a selective company working with intellectually or skill growth challenging business that delivers quality information and business for entrepreneurial firms. I don't do "retail" except at Kohls!

Having the opportunity to raise many concerns with the Store Manager about the credit policy yielded a great deal of insight as to what is desired by the implementation of this really poorly timed effort:

1. Saturation is acknowledged, however because of a variety of factors is NOT as great as expected. Therefore, a potential market still exists - based on the data obtained to a degree. And, it is understood that there will be a proportionate amount of rejection encountered.

2. Kohl's associates will NOT be terminated for not making credit goals, although for those who are subjected to particular performance measurements it will affect their standing and consequently their hours. The same rule applies to salesfloor associates who do not demonstrate high levels of customer service.

3. Surprisingly, the store manager acknowledged that most salesfloor people WILL NOT pester customers for credit and the liklihood of people getting annoyed is very low. I was surprised by his "attitude" toward that because many people took the credit goals to heart and will strive to achieve it.

Because so many people at Kohls are conscientious, good, hard-working people, the reaction to the policy was very strong and more anxiety was felt than necessary. Our store manager, who is one of the most professional and decent people (the entire management team at the store is beyond outstanding), took my feedback and tailored a message that informed and calmed many at our nightly meeting.

Once again, I am blown away by the utter professionalism, concern, and attitude expressed by the store management at Kohl's. I wish corporate could adopt such an attitude. My hat is again off and as always I am proud to be associated with Kohls!

Oh, my. The world is filled with consultants. When I talk to prospects, I tell them clearly - I am not a consultant. My role may encompass consulting advice to a certain degree, but I am not a consultant. Why? Because I actually DO the work and provide the advice while I do it.

Recently, one of my major clients who IS a consultant - actually, he is only partially one because he actually does some of the work for clients and teaches them how to do work better - had a request from a prospect for some business documents. He didn't have them. I told him that he needed to get these particular business documents because it would help his business. He listened to my advice, checked it further, and subsequently obtained the appropriate business documents. That is small business consulting at its finest.

There are many "consultants" who are paid hundreds of dollars an hour for developing plans or strategies who then drop a book of paperwork, an invoice, and a computer disk, then leave a client to implement the academic study in a real-world environment. Meanwhile, I would bet you that there are employees with great ideas and insights sitting right under the idiot manager's nose who engaged the overpriced fount-of-wisdom who would love the opportunity to contribute to the organization.

Addenda: Long ago, while I was with Hexaware, the company engaged the services of McKinsey - the most "brilliant" people in the world. They were engaged to provide market insight on offshoring which involved interviewing CIO's at leading companies asking what their thoughts were. They were largely able to do this because they were from McKinsey, however - in retrospect, it probably would be smarter to have the reps call in or myself to converse and generate some interest. But, I do see the point in having McKinsey do that. Conversely, they asked McKinsey to select tradeshows for the company to participate in. I could easily do that, in fact, I had done that quite successfully. The company paid a few million for McKinsey's jr. consulting staff to do work that I could do for a fraction. I do not believe that that work resulted in any earth shattering new strategy either and, if I recall, most of their advice was commonsense crap.

I came across this advisory company, for example, that promised a 25% increase in leads, did talent management, and provided sales coaching. I was amazed because very few people can effectively guarantee a 25% increase in leads, hire people effectively, and make salespeople close more - especially all under one umbrella. My take is, if they can't tell you what the last conversation was with a CIO to sell a solution, then they shouldn't be advising on how to generate leads. If they didn't run an executive search firm and can't talk about sourcing, fill rates, and delivery - then they shouldn't be advising on hiring.

Small businesses especially need to be very cautious of engaging consultants. Unless there is a proven ROI established or, like in my case, results that are demonstrable, then it is wise to question whether there is value in engaging them. If they do the work and provide advice or feedback in the course of execution, then that is valuable. If they provide advice without any execution or indication of reality for execution - dump em.

The link to Inc Magazine talks about terminating relationships with clients. As a company grows or a business starts to gain momentum, it is a natural process to shed clients that do not fit the model or cause problems.

Recently, I had the unfortunate task of terminating a long standing relationship with a client. It was a relationship that had a "friendship" component as well as a business relationship. In this case, the client refused to pay for services rendered - or as related to me, it would be the company's decision as to whether to authorize payment for work done and decide how much to actually pay. The issue also was that I had engaged the services of my associate to assist on the project who put in work and had to be paid. We were talking a matter of a few hundred dollars for many hours of research and execution work, not thousands. I had even made the mistake of discounting the fee because the work was largely administrative, not the usual or core type of research I and my associates do. The response I received was - I will gift you half the amount and never use me as a reference ever again. Nice guy! After all the work and good work I delivered previously!

When someone threatens not to pay for services rendered or empowers himself to decide how much to pay, that is the end of the relationship. I cannot trust that any work undertaken will ever be treated with the respect and value that is deserved. There were other situations with this client, the "gracious half amount" was the straw. I paid my associate and paid myself zero. My associates come first.

I also will never tolerate, as the Inc article relates, the berating or abuse of myself or my staff. I had enough crap delivered to me as an employee, I certainly will not be subjected to it as an independent contractor or CEO of a company, nor will I allow anyone who works with or for me to be subjected to that. No demands, no disrespect, no beration. Take it elsewhere buddy. The demotivation, as Norm Brodsky relates, will kill my business.

Micromanagement is another thing I won't tolerate. You engage me to do a job because I am an expert at what I do. The minute a client tells me what to do, how to do it, how many meetings to set up, and what I should know - bye-bye. I didn't tolerate micromanagers as an employee, can't function well unless I have complete autonomy, and I won't tolerate it as an independent.

My business is about business development, if I can't get new clients then it reflects on my own capability. I believe in complete customer service also and will go out of my way to help people who need it. In return, however, I expect to be paid for my services, treated as an expert, listened to when I provide feedback or advice, and treated with respect. And, no B.S. either.

So, I have an interesting situation which many marketing and inside sales people probably have faced - the salesguy that can't close business. Almost every single opportunity I have brought to this person which was either a VP level meeting or a contract for delivery has resulted in no go-forward or complete lack of delivery.

Here are some examples of that:

1. I was contacted by a key person at a very well known technology firm asking for help with a situation he had. He was bypassing the internal organization and going directly outside to obtain the help he needed. The salesperson engaged with him, signed the contract, said the company would be able to fulfill the request, etc. A month later, there was nothing delivered. I actually got involved in delivery and managed to find some resources which were passed to the salesperson to do further work on. The salesperson proceeded to do nothing. Three months later, both the salesperson and the boss had nothing to show for it. There wasn't any communication with client. The salesperson was too busy, she claimed, delivering for existing clients. Well, folks, it turned out that this high profile tech company NEVER engages external help, it won't, it can't. We had a golden opportunity which could have resulted in a ton of new business, but they sat with the thumb up the ass and let it go by. It will never return again.

2. I pulled in a contract with another high profile company. The boss got involved directly. This took many months of work to get. I communicated directly with the VP of department who forwarded my info to one of his key subordinates who then reached out to me asking for help. The boss got involved, was overjoyed with the contract and assignment. A month went by, then two, then three - I asked what happened to "HPA Company??". The boss tells me, after i worked close to year getting this opportunity in, "Yaaar, it was bad - that guy - he was the wrong person to deal with" and shook his head. Uh. That guy was referred from the head of global department. So, basically the Vice President of the client didn't know the right person for us to deal with?. Right. Another major opportunity flushed down the toilet.

3. I pulled in a contract with a local company in a key vertical. I told the boss that the prospect wanted some samples of work product before they would commit to any kind of delivery schedule. Considering the pathetic history the company had, I thought that was a fair request. What is the big deal anyway, if you are that good and can do the work - showing some samples shouldn't be a big deal. Well, a month went by, when I (for the third time) asked - have you found some work samples to give to the prospect? I was then told by the boss that the salesperson who was to procure the samples was too busy delivering for another client and couldn't do it. (After a month)? The boss said he would do it himself. The night before the boss left on a trip, he procured some work samples which I gave to the prospect. The following message was left on my machine: "I recognized the work product as being the same one I saw a few months ago, there is nothing new here! If you want to do business with us, go back to the drawing board and try a little harder next time". My boss used a canned sample that was publicly available, a shortcut that didn't show the real capability of the firm. I was soo embarassed and I am sure this opportunity will go the way of the others.

Why do I still work with them? I question that myself, maybe because the potential is there, because the cash helps me to survive, because I invested time and energy. Yes, it is a losing proposition - unless the management realizes that a change is needed there and does something to remedy the situation. With the right changes, I think it can be salvaged. I think the management is out of touch also and there are other factors in play, it is not likely to change.

This happened to me before with an employer, I kept generating leads and meetings, and nothing closed. It became clear to me, that the company lacked any sales capability whatsoever. If the business came in through a referral or was handed to them, then they could deliver. Like that company, this one will go nowhere. Unless real sales talent is engaged....

Like many department stores, Kohls emphasizes the importance of signing up customers for department credit cards. Research has shown generally that owners of department store credit cards will stay more loyal and shop more frequently at that particular store. Associates who sign up customers do get a little "commission" which does help out on the financial end.

For 2008, the company has decided to implement what I call a "get credit or die policy", meaning associates (salesfloor and register) now must sign up customers for credit and meet certain goals per month or else risk 1) cutting hours back or 2) termination. Nice way to treat your long term loyal associates!

Let us discuss why this new "credit or die policy" is one of the worst examples of customer retention and spending incentives ever. Kohl's needs to fire its CMO or whoever thought of this one (plus the "rush hours" was outright stupid too..but that is another post).

As many people, except the Corporate Management, seem to realize is that we are in a recession and people will NOT a) spend money on clothing - which prices are going up b) sign up for high rate credit cards when they are trying to stay out of debt by - oh, paying mortgages, gas, electric bills which are going up, food - which has gone up...trying to stay alive??

In this particular region, the Kohl's stores are well known and the rate of new area entrants is not particularly high. What that translates to is SATURATION. Those people who have charge cards - have them, those that don't - probably don't for good reason. Maybe one out of 50 people are new to the area or to Kohl's and would have the propensity to sign for a card. The rate of actual new sign ups will be significantly less overall.

Second. What is more important? A piece of plastic which only gets used when there is a credit incentive (additional discount applied for using the card) or associates who develop relationships and "treat the customer right". I am sure research will show that customers will likely return to a store and/or buy more if they are treated with respect, personal attention, and knowledgeable advisors. The better the treatment, pricing, and environment (neat racks, clean store) the more often they will return and return specifically to a particular store. Emphasis should be on customer service above all. Pressuring associates to solicit credit and threatening them with termination, isn't going to translate to happy associates willing to help a customer first!

Third: Consider the culture change. In the past, floor associates were happy to refer customers to register people and let them take the credit for - credit. Talk to Irene or Joanne, they will set you up with the account! I have to help that gentleman over there, he is lost over a gift for his wife. Now, floor associates will have to stop everything to walk the customer to the register and sign them up, hoping the register person won't steal their credit. Plus, Meghan in juniors is going ask Customer A for credit, Rachel will ask her in Misses, John will ask her yet again in housewares....uh, Customer A is going to drop the merchandise walk out and never return because of the "annoying and pesty salespeople pushing credit". The culture of collaboration and teamwork, plus helpful friendly focus will deteriorate into a competitive environment full of distrust.

Fourth: There are associates who are superior at customer service, cleaning the floor, selling jewelry, putting things away, etc, but who are not good at "selling" or asking people for "things". There are old people, disabled people, and minors...they are not able to fulfill the credit goal. Remember, servicing and selling are two different skill sets. In order to keep a job they now have to do something or yet another task that they are really unable to do. This is not fair.

As far as getting hours cut, I think that is happening naturally as the number and frequency of customers is diminishing resulting from the need for survival elements that overcome the latest "coffee stained shirt" from Vera Wang. So, why threaten to cut them more? Aren't the associates suffering enough? Many have bills to pay, cars to pay for, college educations, medical bills! MY GOD - take care of your employees!!!!!!!!! Talk about how you can give hours to people in light of challenging conditions, not how you can financially hurt them MORE.

The stores should have a credit goal for the month,
everyone should share in achieving that goal, however - this should not be the be all end all of someone's job or hourly assignments. We are in bad economic times, take care of your associates so they will stay with you. Focus on customer service, improving merchandise selection and quality, and incentivizing through credit contests or competitions.