This is a literal transcription of the CRM Radio/Podcast interview with Michael Alexander. Permission is granted to quote from this program if credit is given to the speaker, the program and CRM RADIO.
If you would like to listen to the program as a podcast, go here:
Are you running a business or a Lottery?
In a discussion with SLMA Board Member Michael Alexander of the Private Trustees Management Group, he said, "If you can’t describe your company’s sales process you don’t have a business you have a lottery!" Alexander reminded me that companies should review the marketing and sales process to the same degree as they review and improve manufacturing. “Everyone does a high five,” he says, “When manufacturing improves its efficiency by a point or two and yet marketing and sales run fast and loose with few serious measurements in place.” The host is Jim Obermayer
OUR GUEST: MICHAEL T. ALEXANDER, J. D. Managing Principal
Private Trustees Management Group
PRIVATE FIDUCIARY SERVICES
Successful fiduciary management requires a deep understanding of the larger financial, fiduciary and professional context in which the client’s affairs are being conducted. It also requires close coordination and cooperation among all the professionals to ensure that the client’s best interests are served. Our deep familiarity with our clients’ financial affairs uniquely positions us to take the initiative in identifying, communicating, coordinating and collaborating with other trusted advisors.
Paul: Welcome everybody it’s time once again for another episode of CRM Radio Today taking a look at all the latest and greatest developments in this ever-changing space today and tomorrow with your host, the host from the far north, Jim Obermayer.
Jim: Thank you Paul, nice to be here today. I have taken off my Ronald Reagan hat and we’re getting into this CRM Radio program today. It’s got a great subject – Are You Running a Business or a Lottery? And we’re going to talk to a man who has been, my mentor for the last seven years. His name is Michael T Alexander JD. He is a managing principal over at Private Trustees Management Group - Private Fiduciary Services and for full disclosure he is also an advisor to the Sales Lead Management Association.
In one of our discussions, and we meet biweekly to mentor each other and go back and forth about what we are doing in our businesses and he gives me new ideas, he came up with this term – “without a sales process your business is a lottery.” And I ran a little blog post on it. And Michael said at that time if you can’t describe your company’s sales process you don’t have a business, you’ve got a lottery. And he said, you ask them to describe their business and they will talk about manufacturing, not sales. So it’s really interesting.
Michael is responsible for overall management of his firm as well as client relations, in other words he’s in sales. He brings to the firm a deep understanding of fiduciary law and practice as well as 35 years of legal, financial and business experience. Graduate of University of Southern California and served in the United States Marine Corps. He resides in Pasadena and is involved in a wide range of professional community cultural activities. He’s on TV down there quite a bit here and there he is a member of Aesop Associations Center for Employee Ownership et cetera.
Michael welcome! This is a tough subject and we have no notes. We have nothing other than this title – Are You Running a Business or a Lottery? Tell me about that Michael.
Michael: Yeah, Jim thanks first of all let me thank you for being part of our co-mentoring process over the last several years. We of course have known each other for over 20 years and we’ve been very pleased to have you and your wife as clients.
This is a two-way street between us and we never fail I think each of us to come up with a good idea because we have a process, a personal development process related to sales and marketing that takes place every two weeks. And what you and I do highlights both the need for a process that is intelligent, purpose scheduled, described and so forth for us personally and as part of the overall sales process. And as Jim mentioned all you folks in the audience one of the subjects that came up is one of my favorite topics which is business versus lottery.
Over the years as part of my either sitting on the board of directors or helping to advise businesses or manage them in years past, I developed a couple of questions that I think that are best addressed not only to businessmen but to ourselves and that is first of all what business are we in? And if that’s not the topic for today’s discussion but it’s a lot more difficult and nuanced question than you might think. Very often we are in a very different business than we think.
But the next and more fundamental question which really is the first part of the question is do you have a business at all? Well what do I mean by a business? A business can be defined in many ways but most fundamentally, a business, I like to say is being able to do the same thing the same way over again on time on quality, on budget and most importantly on purpose. Anything else in my view is just a random exercise in chance that can be best compared to a lottery.
In other words, if you can’t do it on purpose by design, if you don’t have a documented process, you really don’t have a business you have something closer to a lottery.
Just because you’re winning or succeeding doesn’t mean that you have a business. And here is I think is the most important take away for all of us, is not so much whether you have a business, it’s whether you have an asset.
And the key thing when you go to sell your business and each of us needs to be selling it to our shareholders, maybe we are envisioning a liquidity event by going public or selling our business to somebody else, if you have an asset they want to know, can I come in and make money with that business, with that product or with that service, can you define it? Can I come in and take it over or is it really just you? Am I just buying a business?
So you see this excuse me, buying a job. So you see this question goes right to the very heart of building a business and building an asset and it applies with equal force the sales. Jim?
Jim: Now you mentioned there about really and you ask me that question six months ago when you had to get me refocused here when we opened up the Funnel Media Group and really got down to what business are we in and that’s what helped drive that whole opening of that particular business which then has SLMA underneath it, the Sales Leakage Consulting. So and it came down to you have business or do you have a job? And so do you have a salable asset?
But all of this comes back to, you mentioned this earlier, the process. Manufacturing has a process and if they increase their productivity 2% or 3% everybody jumps up and does a high-five in the company and they all go crazy. But sales is out there, sales and marketing, you are spending anywhere from 10 to 30% of the company’s money on a process that hardly anybody is managing and nobody knows really what the process is and nobody really defines it in most companies. CRM software demands that it be… Requests that it be outlined.
I was talking with a prospect a couple of weeks ago that was supposed to define his process for a CRM system and we were going to sit down with the sales people and really go through their entire process to understand it and look at that and put it into our CRM system. He finally said oh, I did it myself. I just drew up six different steps and that’s what we are going to live with. I know everything because I have been the sales manager for 30 years, we don’t need to do anything else. I just threw up my hands and said well I guess you’ve got a lottery, you don’t have a business. He didn’t like that.
Michael: All right, yeah. And most of us don’t want to face the fact that we can’t really answer that. How embarrassed are we if our banker comes in and asks us for a P&L or a balance sheet and we can’t produce that? How embarrassed are we when a regulatory agency or the accountants or the IRS comes in and asks to see our books and we don’t really have a bookkeeping system, we’ve got a checkbook with money moving in and out of it and the only way we know that we are broke is when the checks bounce but yet we would reject that. But when it comes to sales and marketing were not as careful.
Now that doesn’t apply to all companies and it doesn’t apply to every aspect of sales and marketing but it my experience, sales and marketing is not a full partner in the overall business process. So as you pointed out early on, you ask a business owner, what is it, you ask him what business is he in, he will usually tell you what he makes or the service that he delivers. One of these days we will talk about that question. That’s maybe not for today. But he could tell you with great precision his cost and his measurements and his quality criteria in producing a machine or installing a product or delivering a service whether it’s in software or manufacturing, it doesn’t make a lot of difference.
His finance people, they seem pretty precise, they can tell you, they can give you reasonable projections, tell you profit and loss, they can tell you what their department is costing you. The logistics people, the same way so on and so forth.
Sales and marketing people at different creatures and one of the reasons why they are viewed as foreigners and aliens, I might add, resented by everyone else that regards themselves as running the real business is because they don’t have a process that is well enough defined, and as well defined as that manufacturing or finance or service delivery process. It’s not monitored in any way and they can’t sit down at the table and tell the owner, tell the VP and tell you other stakeholders in your business the same things about your part of the business that they could tell you about yours. And thus those people dismiss the sales and marketing people as a bunch of BS artists, right? And they, worse yet, for the enterprise this is terrible, they view them as a cost center rather than an opportunity center.
Now for all of those who are listening here in, all of us who are sales animals; of course I’ve got two or three hats I am also the managing principal of my company but I have to oversee the sales and marketing process of bringing in new clients and customers into our company. All right.
Now for those of you all of you out there who are mostly having your sales hat on as we are hearing, I would point out to you that the first thing that we know is that no product sells itself. In fact you will tell the manufacturer and the owner when they are beating up over your money and your commissions you tell them look, we are out here selling it, we don’t sell it, you don’t have a job. So we know how to describe that process out in the marketplace but we forget everything that we know when we are trying to sell ourselves, our product, right to management, to our peers inside of a company.
So if we went out to a customer we wouldn’t go out there without a spec sheet, we wouldn’t go out there without a price list, we wouldn’t go out there trying to sell the latest pomp or technology if we weren’t able to demonstrate how much it’s going to save them in time and cut to the bottom line but when we sit down internally we are very undisciplined and take a whole different approach when we are trying to sell to management. You see what I mean?
Jim: So is this sales process you’re talking about both the process to sell management as well as the actual process the sales and marketing department uses to logically present the products to customers in such a way that they are more likely to buy from you than an undisciplined competitor?
Michael: Correct. Absolutely. You know so when we are listening in here today we’ve got two things that we are trying to deal with. People listening into CRM Radio are eager to learn maybe how to sell better or more efficiently to their customers to pick up some tips on that. The focus of our discussion here today is more internally directed, that is dealing with it from a perspective of how we incorporate a sales process into the business.
So let’s stop for just a moment, I will come back to those points, let’s start just a moment with what a sales process is. Well you should be able to pull out a flow chart that describes your organization, this is not terribly hard or complex, you should be able to describe who is in there, you should have the budgets associated with it but in particular you should be able to describe with great particularity and detail, exactly how a lead is obtained, where it’s obtained for and what the flow of that lead is through your system, who converts it into a lead, how the customer gets communicated with, how the process is sold, what your follow-up is, what the emails are, the letters, the literature fulfillment, the follow-up, the clothes, everything. This should be part of a process number one that you should be able to describe. Any good salesman, marketing guy or salesgal should be able to write this down immediately and tell you all of those steps but I am willing to bet you that it’s not documented in that place like your manufacturing process is.
So step one, define it, write it down, go to lunch, write it down on a piece of yellow paper. I am sure you can do it. Number two – gather all that, all of those steps and that information and put it into a binder so that if somebody came in and ask you say hey look if you die tomorrow, how is it that I would come in and pick up your job? How does sales work here, right? Very simple. You’ve got instructions for running your machines there but the most important machine, your sales machine has very little internal documentation.
Number three, do you have to develop metrics? What are your metrics for your business? How do you measure your performance? If you don’t know how to measure your performance, how in the world can you expect management to measure your performance and express its appreciation? Which brings me to one of my favorite words – the sincerest words in the English language are; “not I love you” or “trust me” “or I am from government I am here to help you,” the sincerest words in English language are “paid to the order of.” And if you are doing your job, you are going to know you are doing your job when they increase your compensation, that’s a metric. Be prepared to sell yourself and your process.
Jim: We’ve got four items here. Paul is motioning to me that we’ve got to take a brief break here, go to a commercial. We have been speaking with Michael Alexander our guest today. He is a managing partner over at Private Fiduciary Services and he’s my mentor, my sales mentor, my purest most aggressive most the best Marine salesperson by means … By Marine I mean US Marine salesperson I’ve ever known – Michael Alexander. We are going to come back in just a moment and pick up on this topic – Are You Running a Business or a Lottery? Paul.
Michael: Thank you Jim.
Paul: All right, back to Jim and his guest!
Jim: Our guest today is Michael Alexander and he is the managing partner there over there at the Private Trustees Management Group. He has been tackling the subject today – Are You Running a Business or a Lottery? He has been taking us through the reasons why and how to do it; four items before we left. Most sales processes is not documented, gather that into a binder, make sure the metrics are there to measure performance and he left us off with the most sincere words in the English language – “paid to the order of.” Michael welcome back.
Michael: All right, thank you Jim. I appreciate the good words. Just to pick up that theme, we are starting to get more detailed. So if you are sitting out there listening to us today, your first job, your first step is to sit down by yourself or go out to lunch with one of your teammates there and take the first steps to defining your sales process and understand it in its details. Really take it apart.
You are going to go through a first pass which may have three, four, five steps but later on you’re going to drill down into it and pretend that you are an engineer that’s trying to define each step in the manufacturing process because by understanding those steps you will be able to begin to know what things are truly important and what things that you need to measure. Because if you don’t understand your own internal process and what constitutes really efficiency, you won’t have any means by which to judge your performance, the performance of your team and worse yet, you won’t be able to explain how all of this to your management and to your peers within the overall company structure. This will, without this information you can’t really properly select or implement a client relation, a CRM system or anything else because you don’t know what that system is going to do for you.
You’ve got these wonderful products for example I think Goldmine is your sponsor here for this program, fabulous well-known system but the guys at Goldmine would be the first fellows to ask you, well what are you trying to do and how are you trying to do it? So you don’t just embrace software technology, that technology should be there to implement your process which you have to define first. But likewise once you get to know what CRM is or what technology is, that in turn will help you to improve, eliminate, modify your existing sales process. But it has to be highly disciplined.
When you have these steps in place now you are able to understand what the contributions of each step is and that is the predicate, the foundation for beginning to understand your costs and your profitability within the system. This will also help you understand how and where you can improve communication with the customers and most importantly, get the customer information back up to management. And for example, does your sales process include a way to feedback independently, a customer reaction to the product that is independent of the tech support line are independent of the warranty department or the sales and are marketing people really getting feedback from the customers, to make sure that the company is manufacturing and delivering the right product to the customers?
You guys are… All of us in sales and marketing, we are first responders. We hear the complaints firsts when we get to know. We are the guys that find out what’s going on and it could be that the product is failed and now we are blaming the salesman for a failure in manufacturing or a failure in marketing or failures in a strategic analysis. So we have to play our part here in sales and marketing and take responsibility for the company as well but we can’t take responsibility if we really can’t define what we do and persuade the engineers and the finance geeks and the management geeks that we actually know what we are doing because they see us as something different. You see what I mean?
Jim: Oh yeah, yeah I definitely… This whole sales process I have been spending more time on. I always try to define a sales process as one of the first steps for both the CRM system and to make sure that the company has a sales process when I go into it. And today with the new marketing automation systems and the new CRM systems which are relying on machine learning, machine learning also defines some of these processes so it’s really quite interesting.
Michael we are just really out of time and it’s been fascinating today to have you on to talk about the sales process. And so you’re saying if we define the sales process and you write it down and you live with it and you communicate with it and you define it for the salespeople and for the company, you are going to end up by defining what business you are in and you’re not going to be in a lottery, right?
Michael: That’s correct. Remember, the customers have a say as to what business we are in and the sales and marketing people are the canaries in the coal mine, the first responding, is key to whether we have a business or a lottery. If you can’t define your sales process all you have is a job at best and you don’t have anything that you can sell down the road because nobody can come in and replicate that process without you.
Jim: Really insightful Michael, thanks for taking time out of your busy day.
Michael: God bless.
Jim: We have been speaking with Michael T Alexander, he is the managing partner over at the Private Trustees Management Group one of our advisors, our longest term advisors on the SLMA, Sales Lead Management Association. Michael thank you very much. How can people reach you Michael?
Michael: I can be reached at www.privatetrustees.com or in Pasadena California 626-622-8000. Now I look forward to answering any questions I can and I wish the very best of luck to you and to Funnel Media and to all of you folks out there in sales and marketing. I am proud to be among your number.
Jim: Thank you very much Michael T Alexander. Michael I will see you next Tuesday at our 4 o’clock mentoring meeting. Paul over to you!
Paul: As always you have been listening to another episode of CRM Radio Today, taking a look at the latest and greatest developments in the CRM space today and tomorrow. Part of the Funnel Radio Channel for at work listeners like you.