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Tuesday, April 8, 2008

It's time to embrace risk management

With the debut of Standard & Poor's new enterprise risk rating for non-financials, execs need to start paying attention


By Prakash Shimpi
(Financial Week)

Since the advent of Sarbanes-Oxley, non-financial corporations have faced increasingly strong regulatory and compliance requirements aimed broadly at increasing transparency in their business practices. Risk management has been addressed at times, but usually as an afterthought.

All this is about to change.

In November 2007, Standard and Poor's announced plans to introduce enterprise risk management into its credit ratings criteria for non-financial companies, a move meant to bring a level of consistency to evaluating not only the resilience and profitability of these firms, but also the quality of management.

S&P has been evaluating ERM in the financial sector for some time; now it will apply its ERM ratings criteria to industries as diverse as airlines, pharmaceuticals and retail. While S&P plans to tailor its proposed ERM analysis based on individual companies' unique risks, structure and culture, all companies will be rated against four major criteria that will serve as the framework for analysis—risk management culture and governance, risk controls, emerging risk preparation and analysis of strategic management.

ERM is anything but a trendy concept. In fact, its roots go back more than a decade. In 2005, S&P brought ERM into its ratings criteria in the insurance sector. Later S&P analysis showed that the strength or weakness of a company's ERM was a differentiating factor among insurers impacted by Hurricane Katrina. Those with weak ERM were unable to quantify their exposure, and many were hit with much greater losses than they had thought possible, while those with stronger ERM were able to quickly estimate losses that were within 25% of actual claims.

Several banking firms that implemented ERM and then successfully weathered a similar storm in the subprime market may also have influenced S&P's belief in ERM's value for other industries.

For companies outside the financial sector, taking an enterprise approach to risk management is a relatively new concept. And while only a progressive few look at risks holistically, S&P's move should be a wake-up call. To be sure, some companies with fresh memories of Sarbanes-Oxley compliance exercises will initially react with frustration. However, those who embrace ERM are likely to see a positive impact on their cost of capital and bottom line because S&P will draw a straight line from ERM ratings to better credit ratings. Although ERM won't eliminate risks, it certainly will prepare companies for difficult situations, thereby minimizing their negative financial effects.

In response to S&P's announcement, companies first must take inventory and evaluate any existing ERM processes against the four S&P criteria. Second, management needs to take action to remedy any inadequate processes. S&P will not implement these changes overnight, but it's reasonable to expect that it will start to give official ratings as early as 2009. Companies should start making changes now to prevent any adverse effects on their ratings scores and, thus, their ability to access capital.

ERM is only as successful as the priority it is given by senior management. The C-suite sets the tone for corporations by identifying priorities, and at companies outside the financial sector, ERM has rarely made it onto that list. S&P's initiative should elevate awareness about the importance of risk management and prompt senior leaders to establish a “risk management culture” that communicates the importance of ERM from the top down and forges a connection between business objectives and business performance.

Despite ERM's decade-long presence in some industries, we are only now entering an era when more companies will get serious about ERM and move from just talking about it to implementing robust methods that tackle a range of risks. And it's clear that ERM will need to be higher on the CEO's agenda if companies want to continue to maintain healthy financial performance.

In the future, the focus of ERM will shift from compliance, management and measurement to more business-driven results such as better loss optimization and strategic integration. Now is the time for corporations to honestly assess how well prepared they are to meet the portfolio of risks they face and begin to implement ERM as part of the complete business process. To do otherwise would just be, well, risky business.

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Friday, April 4, 2008

How to Be a Great Salesperson

(Life Learning Today)

This article is for everyone, even for people who are not technically in sales. Why? Because we are all in sales. Anytime you are trying to influence someone’s actions or thoughts, then you are selling. The best selling happens when you are trying to meet someone’s needs. This is when you will be most successful. This guide will outline the top ways to become a superstar sales person.

I’ve condensed my greatest sales learnings from 17 years of sales experience and combined it with the very best tips from the best sales books all into this one article. I’m a big fan of reading books and I reference several of them at the end of this article. At the same time I’m a bigger fan of absorbing some quick basic information and then immediately applying it in real life.

Sales Concepts for Success

1. Be Organized. This is very important. Planning is absolutely crucial to success:
Establish your Yearly Goals and break them down into quarterly, monthly, weekly and daily goals so that you know what you need to be working on. Post your Goals in plain view so you see them all the time, especially your daily goals.

Be sure to do a Weekly Review of your Sales Funnel. Check to see that your results are matching up with your goals. If they’re not, then it’s time to recalibrate your strategy.

Plan your day everyday for maximum productivity and success.
Very Smart Practice: On a yearly basis (and quarterly basis too if you can), analyze what activities or clients brought you the most business? What activities were the least effective? Adjust your plan to do more of the high revenue producing activities and spend more time with clients and prospects who bring you the most business. Eliminate the less effective practices. Work smarter, not harder. Reviewing your results and adapting your strategy over time brings the sales process full circle.

2. Planning is Good, But Remember to Be Action Oriented. Makes your calls. Set appointments. Meet with clients. Have lunch with power networkers with whom you can learn and work for mutual success. Inspire prospects to take the next action. Be bold. There is no failure, just learning experiences. Balance your planning time with action time. Your plan doesn’t have to be A+ perfect. You can hone it over time. Plan and then get moving!

3. Uncover Needs. This is your most important task. If you don’t understand your prospect’s needs, you’ll never sell anything except by accident. So much could be written on this one point alone. But here is what you need to know in a nutshell:
Start with more open-ended questions where the prospect can talk a lot.
Make sure you keep quiet while the prospect is talking!
As your meeting is closing down ask more closed-ended questions which will be answered with one word such as yes or no questions. Be creative with uncovering needs.
Be direct when you can and be indirect when you sense resistance.
Don’t hold back because you think you’re prying. Remember you’re here to help. You can only do this if you understand your prospect’s needs.

4. You’re Here to Help: Meeting Your Clients’ Needs. The reason sales people get a bad rap is because of the ones who try to force feed their clients. That is not selling. That is bullying. Your true role as a sales professional is “Needs Consultant,” helping your clients meet their needs, solve their problems, ease their pain, and bring them joy. Sometimes you need to help clients become aware of what their true needs are. Many people go through life thinking they want X. Sometimes you need to help them turn on the light to illuminate their real needs which may be better served by product/service Y. Always confirm that you understand a need. Then match it with a benefit from your product or service that solves your client’s need.

5. Match needs with benefits. How do you do this? Complete this exercise so that benefits roll off your tongue easily when talking with actual prospects. Here’s what you do:

Title a sheet of paper horizontally or use a spread sheet with the columns: “Features” “Benefits” “Needs” “Benefit statement.”
Write down all the features of your products/services. Next to each feature, write down the answer to this questions “So What?” The answer to that will be your benefit. (You’ve heard about doing this before, but have you really done it? Don’t rely just on what the company puts out either. Be creative and come up with lots of benefits.) Example: Feature: Web access on your phone. So What?! => Benefit: You can access any information from anywhere.
Next take tiny yellow stickies and write down all the different problems, pains, desires, your clients and prospects have.
Under each problem write down what the need is. Example: Problem: Getting lost finding addresses when showing clients real estate. Need: Instant direction information.
Next take all your clients problems and match them to the appropriate benefit.
Write in the needs in the “Needs” column.
Last, write out a Benefit Statement for each feature that you can practice. Example: “You’ll never get lost again with the XYZ phone because it allows you to get information anywhere anytime.”
This exercise takes some time but it is one of the most powerful things you can do to prepare yourself for success. The best salespeople I know do preparations similar to this.

6. Tap into Feelings. Many people will start with a rational approach to making a decision, but in the end, how a person feels in their gut will often determine their final choice. Make sure you find out how they feel in addition to their rational needs. And it is important to use the language of feelings and to demonstrate that you understand. Examples: “How does it make you feel that your current advisor never calls you?” or “What was your feeling about that house we just toured?” A handy phrase is “I know how you Feel. I’ve Felt that way too. And what I’ve Found is..(insert helpful advice here)…” I call this the 3F’s.

7. Get a Read on Your Prospect. Here’s where you need to listen to your intuition a bit.
It’s helpful to assess the level of desire a client has for meeting their need. Where do they fall on the spectrum from desperate (will buy anything) to confident (their awareness and feeling of need is not high enough to spur action)? Use this analysis to decide how much time to spend with them. Don’t knock your head against a brick wall trying to convert someone who feels no pain. But if you see a need that they don’t, then be sure to follow up with them in the future. Be there when they start to feel the pain of their need. Example: Prospect who is looking at new cars, but is very emotionally tied to his old clunker. You can see that he needs a new car, but he can’t see it as clearly as you yet because of his satisfaction with his current car. Be in touch with him so you can be there when his beloved car bites the dust.
The other thing you want to read is your prospect’s personality and style. You will do well to somewhat mirror that style so that he or she will feel comfortable with you. Be too bold with a conservative person and you’ll lose them. Be too “soft-pedal” with a type-A person and they’ll be gone before you can blink. Be yourself, but be aware of how your prospect likes to interact and accommodate them.

8. Know What Your Goal is with Each Sales Interaction. This is important so that you will know when your interaction is finished. In sales you need to be efficient for both your sake and your clients’ sake. This will keep you from wasting time. The best way to do this is to actually write down your goals ahead of the meeting.
Example: I want to:
confirm my client’s top 5 “must haves” in a home.
get their 10-scale rating on each home I show them today.
know their favorite and least favorite thing about each home we see.
schedule our next meeting.
If there is a home they love, I want to establish next steps to keep the momentum moving forward.
ask if I met all their needs for this meeting.

9. Asking for the Sale and Closing. Closing is not just about asking for the sale, but continually moving towards that point. An example is asking for the next appointment and setting mutually agreed upon next steps for both you and the prospect.
Closing, of course, also means asking for the sale. It is amazing how many sales people climb the sales mountain and then fail to take this last crucial step. Don’t be one of them! Ask for the sale! What have you got to lose?
When should you ask for the sale? Once you’ve confirmed that you correctly understand a client’s needs and you’ve explained how the benefits of your product or service meet their needs, then ask for the sale. There are many ways to do this. This is where the art of sales comes in. Read your prospect and ask in the way that will get you a yes. This takes practice. So go ahead and practice, practice! Consult with other top sellers to learn how they speak and then use what will feel natural to you.
If you get a “no,” find out why. Are you dealing with a misunderstanding, an objection, a concern, or perhaps indifference? Explore the root reason for saying no. If the client still has a need and wants to meet it, and if you have a product/service that meets this need, then continue on. If one or more of these elements is found to be missing then it is time to move on to the next prospect. But at least you tried!

10. Follow-up and Service. Follow-up is your continued communication with prospects. Service is your continued relationship with clients.
Follow-Up: Unless there is no need to meet or unless the prospect tells you to not contact them anymore, make sure you find a way to follow-up that not only keeps you in contact, but also provides value, whether via phone, email, newsletter, etc.. This is almost like your audition to show how you will provide service once they become a client.
Service: Once you’ve made the sale, the relationship is just beginning. Make sure that your client gets the best service. Set reminders for staying in touch. It’s easier to make a new sale to an existing client than a prospect. And with a happy clients, you’ll be more likely to earn a referral.

11. Ask for Referrals. The 80/20 rule applies here. 20% of your clients will provide 80% of your referrals. Find those 20% and cultivate them. There are certain people in this world who really LIKE to help others with referrals. You can ask every satisfied client for a referral, but usually it will only be a handful that actually refer you business. That’s ok. And don’t be afraid to be specific about the types of referrals you are looking for. Treat these clients like gold and watch the referrals stream in. There are many ways to ask for a referral. Here are some ideas:
Actually ask for a referral upon completion of a meeting.
Offer an incentive for referrals. Put this on your website and all your marketing materials.
Send out a survey to clients asking their opinion of your service and would they refer someone, “if so please fill in name or call me. If not, how can service be improved? What would make you want to refer business to us?”
Host a seminar for clients (make sure it is valuable and serve food!) and request, encourage, or invite them to bring a friend.
Offer an affiliate program.

12. Perseverance. Sales is a numbers game: SW³ = “Some Will. Some Won’t. So What!” You won’t win them all, and that’s ok. We all know the baseball analogy of how even the best batters miss the ball about 70% of the time. So don’t sweat the individual sales loss. Just move on to the next. With that said you do want to analyze your result patterns over time and adjust your strategy when you want different results. The idea here is to stay disciplined especially on bad days, stay focused on meeting needs, and keep evolving your strategy, tactics and skills. Slow and steady wins the race. Stay upbeat and when you’re down get rest and/or seek out positive people to help lift your spirits.

13. Look for Opportunity. Always be analyzing situations. Is there a local event you can leverage? Watch the news. Always ask yourself, “Is there a need for my business in this that could help me reach my goals? Can I fit it into my schedule? Will it be more or less effective than other activities I have planned?” Look for opportunity, analyze it’s potential, and if it is worthwhile then strike while the iron is hot! If you observe yourself shying away from a high potential idea because it’s something you’ve never tried before, challenge yourself to do it! Seek out helpers or partners! Go ahead, amaze yourself!

14. Become a Networking King. They say eating lunch alone is wasted time. Depending on your field, you should set a goal for 1-10 networking lunches per month. You should attend at least three networking functions per quarter. They don’t have to be obvious things. It might be going to a golf tournament. It might be going to an art gallery opening. Go to where your prospects and industry colleagues hang out. Include networking goals in your overall goals. Like any of these elements networking takes time to build so take it slow and build upon your successes. And by all means, have fun with it!

15. People Buy from Positive People. Be enthusiastic in your own way. Be authentic. Take responsibility if things go wrong. Watch how you speak in front of clients. Don’t blame others. Don’t complain. Don’t trash the competition. Life is Good! Life is challening, and that’s what makes it fun! Let your passion show! And, of course, on the inside, believe in yourself. You can do it!

16. Be Driven. Tap into what motivates you and connect to that everyday. Is it helping people? Is it helping your family? Is it a lifestyle you desire? A home, a car? Find ways to to get your energy flowing. The best way to do that is to move your body. Do some jumping jacks, do some stretching up to the sky, do some crazy facial exercises, and then laugh. Now you’re ready to tackle your cold calling block, or your seminar, your meeting, whatever.

17. Be Your Own Toughest Critic. Be brutally honest with yourself. Are you making real progress? In sales, the numbers don’t lie. Of course at first you need to build, but make sure you’re getting some wins. If you’re not, then don’t get sad or mad, just figure out a new way. The best sales people I know are always tweaking their strategy. Don’t let yourself get comfortable. The only thing that should stay the same is that you constantly seek better ways to improve your results.

18. Seek Guidance from Top Dogs in Your Field. This is one of the most important items. Leapfrog your knowledge by learning from those who’ve already made some mistakes. Offer to take them out to lunch. Ask to “ride-along” on their sales meetings so you can observe firsthand their magic. Ask them the secrets to their success. And offer to help them out in some way to repay their guidance.

19. If I Trust You, I Will Buy from You. Honesty, Integrity, Credibility. Build this with your actions. Do what you say you’re going to do. Answer the phone promptly. Return calls ASAP even if to say, “I got your call and I will be free to talk at this specific time.” Write down questions you don’t have the answers to and then get back to them promptly. Saying “I don’t have the answer to that right now” is not a sign of weakness. It’s a sign of honesty. Following up on that question later is a demonstration of reliability. Use these opportunities well.

20. What is Your Unique Selling Proposition? What is your “elevator speech?” This is the 1-2 minute answer to “What do you do? And, why should I do business with you?” Be outrageously creative. Be memorable. Be concise. Continue to work on this over time to get it just right. And have fun with it!

21. Use the Simplest Method Possible for Tracking Your Sales Funnel. You will have Unqualified Prospects, Qualified Prospects, Best Few Prospects, and Closed Sales. Most likely your company will have a system for this. But if they don’t or if you have your own business, find the simplest system that will do what you need. There are two major players ACT! (software based) and Salesforce (online). And now there’s a new online player from 37 Signals called HighRise. It is free for 250 contacts or less. Above that there is a monthly fee. Make sure you’re constantly feeding your sales funnel and that prospects are moving along through to closing. Analyze what is working and what is missing in your approach.

22. Stay on Top of Your Field. People like to buy things that are shiny, new, and sparkly. If your product or service isn’t new, make sure it is “sparkly” in your clients’ eyes. How? Simple. Make sure that you are meeting their most current needs. Your product or service doesn’t need to be new, but it does need to keep up with customers’ ever evolving needs.

23. It’s Not About Price, It’s About Value and Relationship. People want to solve their problems and fulfill their desires and they want to feel good about how they accomplished that. That’s value. Value is also giving extras to your clients with no extra cost and no expectations. There’s value in a relationship too. People like to be comfortable and trust the person they do business with. Show them how your product or service will meet their needs and give them something to brag about with their friends. Bragging Example: “I bought my new car at ‘Medium Priced Cars R Us.’ Anytime my car needs servicing, I get a free loaner car. And this dealership has been ranked 5-Stars by it’s clients consistently for the last 5 years. The sales person was helpful and patient with us insisting that we take our time. And when it came time to negotiate, they were very fair. And since we’ve bought the car, our sales person has called us to see how things were going with the new car.”

24. Please, Don’t Be Afraid. Really! If you feel the fear or hesitancy inside you, break through it! You have nothing to lose! Remember you are here to help. If someone doesn’t want your help, if someone is rude to you, no problem. Just move onto the next prospect. There’s billions of fish in the sea! Don’t be afraid to fail either. Learn from your experiences. Analyze them. How can you do things better next time? Sales is a big puzzle. You don’t fall apart when two puzzle pieces don’t match, right? Neither should you with sales that don’t pan out. Sales is fun! Enjoy the ride!

25. Celebrate Success and Cultivate Balance. (Balance? What’s that?) No really. Take care of your body, spirit, and personal relationships too. This can be difficult for real ‘Type-A’ personalities, which many sales people are. Make this part of your plan. Schedule it in. If this is hard for you, then enlist the help of people you know are good at this. They’ll love it and it will help you.

The Characteristics of a Great Sales Person

Selling is a profession and not simply a job. It takes time, dedication and commitment to be successful. However it is a profession which pays for the personal commitment of the sales person. Many people outside of the profession are astonished at the amount of time and preparation required to be a successful sales person. The image of the peddler pushing his or her wares is long gone. Today’s sales person is dedicated, educated, highly trained, technically savvy and committed to their profession.
Implications to the Sales Person
Realistically review the nine characteristics listed below and assess your skills and abilities accordingly. While there is no pass or fail in this test, it does serve as a benchmark as to where you want to be if you wish to be at the top of your profession. If you see a need for improvement, develop a mini-plan for each characteristic. Develop your goals, objectives and a timeline to develop the skill. Skill development will take a specific plan and commitment to achieve.
The Application
What makes a great sales person? Here are nine specific characteristics that define success in a very competitive profession.
1) Positive
Attitude is everything. In the face of rejection, failure and endless frustrations, a great sales person is able to keep everything in perspective. They do not take things personally and remain upbeat and positive.
2) Persuasive
A great sales person is able to use of his or her skills, experience and expertise to be persuasive, bring people around to his or her point of view and ultimately make the sale.
3) Patient
A great sales person understands that selling today takes an average of eight calls before a commitment is made. They persist and remain on track until the sale is consummated.
4) Precise
The great sales person doesn’t need puffery or exaggeration to make his or her point. They use the precise details of the products to clearly represent the features and benefits of their products.
5) Polite
The great sales person minds his or her manners. They remain cool, unemotional and professional throughout the sales process.
6) Planning
The great sales person understands the value of planning their time and sales strategies to achieve their goals and objectives.
7) Prepared
The great sales person is prepared for every sales call, focusing on a specific reason or purpose for that call. They are prepared to handle objections and take advantage of the opportunities that present themselves.
8) Punctual
The great sales person understands the value of time. They respect both the time of the prospect and their own time. They make sure they are on time for their appointments and if necessary call to reschedule if they are going to be late.
9) Practical
The great sales person is both practical and pragmatic. They understand failure and rejection are a part of the job. They are able to keep things in perspective and walk away from unprofitable situations.
Something to Think About
Great sales people are committed and purposeful. With that in mind consider the following points:
1. As you review the nine characteristics listed above, think of the various situations where one or more of these characteristics allowed you to make a sale. Explain.
2. What characteristics do you need to work on and polish? What is your plan to improve this skill? Explain.
-- By Timothy F. Bednarz, PhDTimothy F. Bednarz, PhD is the Principal Partner of the American Management Development Group
(Call Center Directory, 20 Oct 08)