5 Imperatives To Make Q4 Your Best Quarter Ever With Lisa Magnuson
During this pandemic, a lot of businesses are struggling to keep themselves afloat. Lisa Magnuson of Top Line Sales joins Chad Burmeister this episode to share some strategies on how to survive now and prepare to make the 4th quarter your best quarter this year. They discuss five imperatives that you’d definitely want to know when it comes to taking care of your customers and enhancing your closing rates. Understand the immense impact and importance of adding the correct value for your current customers by being different and creative. Learn the power of referrals and know the correct process in order to avoid wasting time and resources, and start increasing your deal size.
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5 Imperatives To Make Q4 Your Best Quarter Ever With Lisa Magnuson
I've got Lisa Magnuson. Welcome to the show.
Adding Value To Current Customers
It is great to have you. Top Line Sales is the company and Lisa can help people 5X their deal size. We're going to talk about five creative ways to survive now so that you can thrive later. We've got some quick back and forth in five topics. Let's dig in. Number one, a lot of companies have had to have layoffs. We faced one of the worst economies, from the best to the worst all within a few months. The pancake flipped and here we are. It's America so we always work our way out. Hopefully, by midsummer, we're all starting to work our way out of this.
How do we survive now? What I've heard in talking to a lot of experts in the sales world is focused on the customer first. A couple of my customers have had to let go of 38% to 40% of their staff, and 50% in one case. They've built their entire business model around, “If I have customers that renew.” They're building their business on that and the rest is an upside. Have you seen that and how would you recommend companies take that approach if that is the right strategy? How would they know if that's the right strategy?
I agree that now is the time to batten down the hatches and focus on your customers. I have seen some of that. I've also seen customers that are okay and strong for now. If you're a salesperson, a sales manager or VP of sales, the first line of defense is to double up on those customers. It's not just a matter of checking in with them. It's a matter of checking in and having a series of ways to add value to them. Now is the time that we don't just want to have the customer first. We want to understand what value means to them and figure out how we can provide that. Sometimes that's hard for salespeople because they feel like they're experts on their products and services. They don't know what other value they can add, yet there are many ways they can add value. They just need to think a little differently and be creative. That is what has to occur now with their clients.
Stu Schmitt was the head of sales training at WebEx when I joined in 2005. He's since been the COO, CRO and has been some pretty big executives. He's a CRO at Leadspace now. He would always say, “When a company comes in as an inbound lead, for example, they may be a commodity buyer.” Our job as a seller is to move them over to the solution box and then ultimately up to the value box. You can command five times the price when you're in that value trusted advisor status. I've always found the way to be a trusted advisor might be something that's not even obvious. If I was a customer and they said, “You know our deal size. We can't get it from $10,000 to save our lives,” I could make the statement, “You should talk to Lisa Magnuson. She's good at that. I'll bet you, she'd invest an hour of her time no cost to you. Let me see if I can make a phone call.” That would be an example of one of those value-added things you can do has nothing to do with your product or service. Try to serve the customer.
Providing valuable resources, tapping into your network, and making meaningful connections. Sometimes the value that you can provide is you're an expert in a customer's industry. You might not even think of it that way as a salesperson. If you sell to multiple customers in a similar industry, then you've got the expertise that you can share that is meaningful for your customer. One of the things that is important and you can also go out and talk to your customers about this, what are they doing, thinking and feeling? I'm doing a training series for one of my clients and we're talking about this whole thing about value.
I interviewed a couple of people in their company. I interviewed their CFO and I said, “What are you doing? What are you thinking? What are you feeling? What are your biggest challenges? What would cause you to take a meeting with a salesperson? What value would they have to bring?” He told me, “Every salesperson has people in their company that are similar to people that they're calling on or most of them do.” That's a great way to see what value people are seeking and then figure out how you can provide it.
The key to that is feeling, because I hired a CMO and that's what we did for the first couple of days. We spent 3 to 6 hours grueling me on, “What are your CRO customers and CEO customers? What are they thinking? What are they feeling? What emotions come out?” He can then build the advertisements to the emotions. It's important to understand that.
Especially now, everybody has a lot of feelings about trying to do business.
We got a lot on our minds in the world. While we're in the customer track, cross-sell and upsell, think about the PPP loan that came out. A lot of companies, if you had 1, 2 or 500 employees, you could submit and the government bailed out the US economy for 4 to 8 weeks. I heard some companies that took a week to get and other companies that took 6 to 8 weeks. By this time, most companies have either gotten that or they haven't. That kept the lights on. It allowed us to keep employees on the payroll. The most interesting thing that hit me is I applied for an SBA loan and it's $150,000 at 3.75%. You can't do that if you get a second line of credit on your house. It's also a layaway plan because you don't even owe us until a year from now and then it's about a $700 a month payment.
If you're selling into small, medium businesses, or anyone who gets an SBA loan, if they're like me, I want to put money back into investing in my company and my people. This may be exactly the right time as those SBA loans start to come through for people. They're going to be figuring out, “What can I do to improve my business?” To your point about that talk with the CFO, what are they thinking and feeling, and what's the emotion that comes up? You need to be there. If you're not there, your competitor will be.
When you're thinking about cross-selling or moving up-market, if you have the products and services where you can do that, you have to be in conversation with not just your one contact, but with all of your contacts and asking them, “What else can we do for you?” Suggest like, “One of the things that we're doing for our other clients is this. Would that be helpful for you or would that be something that you would be interested in as well?” It still focuses on that value. People have a little tolerance now for being sold in the traditional way. It's, “Where are they? What value can you add?” Keep the conversation going. Part of that conversation can be asking them about other divisions, other groups, other departments, other needs they might have. This is not a time as a salesperson where you want to hear, “We just bought that. We just hired that company,” and it's something that you could have done.
It's always good to ask for the referral. Maybe they'll say, “Let me put you in charge of the marketing department.” There might be twenty other departments. The other thing that one of our customers did is reach out through LinkedIn and automated 5 or 10 touches every day. They said, “Let me see all the directors and higher titles in these departments.” She had a list of 150 people and she said, “We're working with this division. Let's connect on LinkedIn. Why don't we have a conversation and see if you might benefit from something similar?” There are some ways you can automate some of that outreach through email, social and phone calls.
You can, if your customers are there.
The Importance Of Referrals
We've started inside the four walls. Let's go outside the four walls. What's the best way or tact? I'm sure you have it in a chapter in your book. How do you ask for a referral appropriately? What's a good way to do that?
I don't know if it's in my book. I don't remember everything in my book, but referrals are important and some people don't ask for them. They feel like it's putting their customer on the spot, but there's a couple of key things with referrals. Joanne Black is the expert, the author of No More Cold Calling. Her whole business is referral selling. She would agree with what I'm going to say, but you have to ask. It's a matter of asking who else might you know that could benefit from some of the things we've done together. You don't say anything. You give them a chance to think about it. This is a live conversation generally, better than email or something.
When they think about it, you make it simple for them. They might go, “I'm thinking of this person or this company.” That might look like saying, “I have an email that others have used when they've referred me. Would it be helpful for you if I sent you that email?” They'll say yes because everybody wants simple. The key part of referrals is you have to remind them to include you in the email introduction. That sounds super basic to us because we live in a world where we're constantly referring to each other and making introductions. We all know that you're going to include those people.
In business, I have found many times where if you don't say that, the person might go, “I'll go ahead and make that referral.” When you follow up, they go, “I emailed that person,” but they didn't include you in it and you can't follow up. It's like a black hole referral. There are all these steps you have to ask. It has to be based on trust and good work. They have to know what good looks like for you. You have to sometimes share that. When you ask, you have to give them a chance to think about it, then you offer to make it simple for them. You make sure that all the connections, all the connectivity is in place so you can follow up.
We're doing a program for about eight different customers now on referrals. We ask for the referral and we do it right. In most cases, they copy. We're seeing about 2 for 10, 1 for 5 referral acceptance rate by the end customer, which is good. We think we can probably double that. There's probably a few tactics like calling the end customer and saying, “Lisa Magnuson sent the note.” Since you're copied, it's not a black hole. I can refer to that.
Once that connection is successfully made, you are increasing your chances of moving forward by 50% or more. That's what Joanne Black would tell us.
I heard up to 181 times more likely to close a deal if it comes through referral.
That’s very high.
Request For Proposals
I have two more topics I want to cover with you before we move on. The RFP, I've always heard that less than 5% of blind RFPs are one and I've experienced that.
That's an accurate statistic.
That’s 1 in 20. If it costs you $2,000 to fill out an RFP and you filled out twenty of them, that would be $40,000 in resource. You better hope your deal supports at least $40,000 in profit to make that kind of a bet. You can leverage techniques to enhance that and move to a way higher number than 1 in 20. What is a good number to shoot for? I'm sure it varies by industry. What are some of the tactics and techniques that you can use to enhance your close rate?
Two things about the RFPs that I want to share. One is they're still occurring. I've helped three of my clients prepare for live virtual finalist presentations, which all three of them had never done before. They always had in-person finalist presentations. Live virtual is a whole other animal and requires a different level of preparation. The second thing, and it ties into what you said earlier about people getting ready for things, looking about if they have funds they want to invest, how are they going to invest those dollars? There's going to be an explosion of RFPs in the fourth quarter of 2020 and maybe going into the beginning of 2021. Planning for an RFP is something that companies can do.
We already know that their committees are getting bigger complex. What can sales be doing if that's the case? The only way to beat those terrible statistics is to have a solid sales approach leading up to the RFP and also to make good decisions on go/no-go if you want to even participate. Part of the information that you have to gather to make that go/no-go decision is to have a sales approach, to learn about the company, to figure out what relationships you have, and what relationships you're going to need. The other thing is I have a Master's course called Improve RFP Effectiveness Now. There's a whole different level of qualifying conversation that has to occur before you would make a go decision on an RFP. That needs to happen early in the process. You have to figure out how you can add some value in there. There are many ways to add value if you get there early enough. They're much the same that you would have value to our customers, but you have to get there early enough and start that sales process early. That's the only way to impact that RFP stuff.
One of my favorite stories on this was that for many years, I had been educated on RFPs. When you're early in your sales career, you are like, “That doesn't make sense. I want my proposal in.” Over the years, I did present proposals that never went anywhere. You learned that 19 out of 20 fail rate is a thing. Finally, one comes in and I'm prepped. Chesapeake Energy came into WebEx and they had PlaceWare at the time, which was bought by Microsoft, which became Live Meeting. WebEx had an 87% market share. They came in and they said, “You have to fill out this RFP and it's blind. You can't talk to anyone.” There was a mid-level IT guy who was making that firm's statement and he said, “No, absolutely not.”
I sent an email and a physical letter over to about five people and said, “Just so you're aware, 87% market share leader, we'd love to participate. These are the requirements for us in order to participate. We need to talk to the three different divisions that are making this decision. We need to have a call with your CIO. What do you think?” They came back and said, “We cannot have WebEx. Are you telling me you're not going to give this an RFP?” I said, “No, I'm not telling you that at all. What made you think that?” I can only do it under these circumstances.” They did it and we closed $150,000 deal. Live Meeting would have been free for them because they served Ingram Micro as a customer and Ingram Micro had free Live Meeting. We ended up selling him $150,000 deals.
The only way that worked was the front part of your sales strategy. I have a story of a $20 million deal and we had three RFPs before my client got that deal. The first one was an RFI and then somehow two RFPs. It took eighteen months, but it was a $20 million deal. That was some years back and they still have that client. That client has expanded tremendously. They did all the sales stuff that was required to be successful.
We need to make that masterclass available through SalesClass once we launch SalesClass.
Yes, we do. It's important because it's either the biggest waste of time, money and resources, or can lend itself like it did for you. It is a huge account and opportunity. My story is a $20 million contract.
Increase Your Deal Size By 5X Part 2
When you think of software companies, $150,000, you multiply that by their 20 to 40 times multiple, that's $2 million market cap on $150,000 deals. You can change a lot of lives by doing RFPs correctly. Last point and this is part two of How to Increase Your Deal Size by 5X. It's equally important, if not more important because if we think back to the PPP and the SBA loans, there's a little bit more money in the market. Maybe there have been some layoffs and people are finally starting to see the light at the end of the tunnel. I had one customer that let six BDRs go. They are now rehiring six BDRs. They called and said, “Can’t ScaleX help us with virtual capacity while we hire?” Talk about 5X in your deal size. What are a couple of takeaways you could share with the audience for a 5X deal size company?
Everybody's trying to do what they can do so it's hard to think about those bigger opportunities, but here's what I would say. I had a BrightTALK webinar on this topic. That's on the BrightTALK channel, but there is so much we can control now. We can identify those opportunities. We can score those opportunities. We can pull our account team together and start the strategy work. We can start to make some relationships, some connections and have some start to develop some of those things. If you're a salesperson, a VP of sales, or a channel, this is not what you're going to be doing with all your time, but can you allocate 10%, 15%, 20% of your time on those big deals? When things free up, they will start to become active and live. I'm talking 5X deals. There are activities we can do now that are going to put us in a position to be able to develop and close those 5X deals later. That's what I would encourage the audience to do is think about what can you do that's 100% in your control to set yourself up?
Let me share one tactic while we're here. The little tumblers with your logo on it, those are cool. I still have two of them from companies who prospect it into me. Sendoso was one and another gentleman out of the East Coast. I still use those things. I see their logo every single day when I go on a hike or wherever. You can invest $50 in something like that. We also partnered with Stu Heinecke, who wrote How to Get a Meeting With Anyone. You probably know Stu. He's a Wall Street Journal artist. He has 3,500 different Wall Street Journal cartoon that he can tweak to the buyer and then sends out physical big cardstock and talk about planting seeds. At the beginning of the lockdown, I was about ready to do a mailer and then everyone moved to work out of their house. I was like, “Pause.” With everyone getting back into their offices, it's a perfect time to send that. It's a neat looking cardstock that has a call to action at the back.
All those customer attraction and differentiating things, but people can’t be working on that relationship map. We know there are many people in a complex B2B environment where you're trying to sell a 5X deal that might be $250,000, $1 million, $5 million more. You know there's a lot of relationships that have to be developed and we have the luxury of time to bolster that relationship map. It could start with some of the suggestions that you're making. There's a lot of work that can be done and the smart salespeople are doing that.
To recap, it's CCRR5. Customer, Cross-sells and upsells, Referrals improve your RFP process and 5X your average deals. If you do that in Q3, then you will have the best quarter ever in Q4, probably in the history of the world. Be ready, plant the seeds, give it to customers, get the referrals, five extra deals. If you're looking for a class on the subject, I highly encourage you to check out Lisa Magnuson and the master RFP class because that would be amazing.
Thank you, Chad.
Thanks, everybody. It's great to see you again. Maybe we'll have to have part three at the end of 2020.
That sounds good to me.
It is great to see you, Lisa.