Setting Your Sales Force Compensation

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Many business owners struggle with salesforce compensation. If this is you, you are not alone.  It comes up all the time in my Revenue Generation consulting practice.  Some feel they are not paying enough and worry their best sellers will leave. Others feel they are overpaying and are giving away margin dollars.  Maybe salesforce compensation is a burr in your saddle? If yes, here’s some thoughts that might get your sales comp plan right sized in short order…

To begin, determine exactly what selling behaviours you would like to incentivize and which you would like to discourage.  If the sales role is primarily hunting and bringing on new business, you want to provide a strong financial incentive for all hunting activities and results. If the requirements are mostly around farming and account management, the plan should reward farming activities and results.

Before setting your comp plan determine if you have the right people in the right sales roles. I’ve often seen farmers in hunting roles, which never ends well. Interestingly, it’s rare that a hunter ends up in a farming role. I think they self-select out of those jobs. If you have a miscast player your comp plan will not do what is designed to do regardless of how well it is constructed.  This means you may need to get the right people into the right seats on the bus before you change your comp plan.

With your hunters and farmers appropriately placed, it is time to look at how your plan is constructed. The best hunters are coin-operated, so ensure your plan rewards bringing on new customers, and is uncapped. I have seen capped plans, you can guess what happens, hunters hit the max compensation and stop selling. You don’t want that.

For your farmers, have your plan reward them not only for account retention, but year-over-year growth. Retaining a customer with significantly declining revenues does not help your business.

The steps to creating a plan for either role are…

  • Begin with the Total Target Compensation [TTC] for the job role.  This number is typically arrived at by looking at comparables within your market.
  • Decide the split of base salary to commission earnings that will make up the TTC.  For hunters you would want a 40% base salary component. For farmers, 60%-65%.
  • A note on hunting roles with a high base salary… I consistently see that hunters with a high base salary produce less revenue than those with a lower base salary. They simply are not hungry enough and have been made too comfortable with the higher base salary.
  • Determine if you would like to base commission earnings on the attainment of achieving a gross revenue or Gross margin sales goal. [Which you pick is based on a number of factors – too much for this posting. Happy to chat about this if you would like].
  • Your commission percentage number will be determined by the sales goal number and the commission earnings needed for your seller to hit their TTC when achieving 100% of their sales target.

As an example…

  • Sales Role: Hunter.
  • Total Target Compensation: $100,000 per year.
  • Base salary/commission split: 40%-60%
  • Base Salary: $40,000 per year
  • Commission Earnings at 100% of Sales Plan: $60,000
  • Sales Goal Type: gross revenue sold.
  • Sales Goal Detail: if a salesperson is required to sell $300,000 gross revenue per year, then the commission percentage must be 20%.

To make this compensation plan uncapped but not break the bank, a few thoughts…

  • After the sales person achieves 100% of their sales goal the commission percentage drops to a lower number for additional dollars sold.  The additional dollars sold could be tiered so that the 1st block of $20,000 sold above sales plan has a lower commission percentage than 20%. The next chunk of $50,000 could have a lower percentage still. You need to play with the numbers to ensure that you maintain your margins, but you get the gist.
  • For your comp plan to work you need to have your sales goal setting correct. If you make the goals too high your sellers won’t earn enough and may go elsewhere. If the goals are too low, you will then be overpaying for your sales results and erode your margins.
  • In terms of the frequency of commissions payout it’s been my experience that monthly is best. This maintains a short time frame between your seller selling and then getting the positive feedback reward for doing that selling. Also, if the base salary is a relatively smaller part of their compensation, regular commissions will help their cash flow.

So, there is a lot to think through when it comes to setting your sales force compensation. If you have any questions, I am absolutely happy to chat [no strings attached!]. Please feel free to reach out [email protected]

 

 

3xROI

3x-5x Your ROI

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The Bottom Line: A business owner should have their sales team generating at least 3x-5x their total compensation annually.

The Pain: When some business owners invest in hiring salespeople their primary measure of ROI is simply relief. “Thank goodness I finally have someone to take care of sales in my business!”.
A common trap/pitfall at this point is to bask in this relief and simply expect the sales team to go out there, drum up business and bring it home.

Nine to 12 months down the road is a frustrated business owner who’s invested significant money in a sales person[s] who did not perform. Not only is the compensation money down the drain, the expected revenue lift did not occur, which of course negatively impacts pretty much every area of the business.

The Fix: Before hiring salespeople set out their revenue goals. If your candidate was a solid fit they should produce the amount that you paid them all in + their benefit costs etc. at minimum in their first year. Good would be 2x that number. After 24 months that person should be producing at least 3x that number. Good would be 5x that number. Considering this will inform the compensation level at which you can afford to hire. It becomes quickly apparent that the best way to compensate a salesperson is to have a medium level base salary with an uncapped commission program. This will keep your fixed costs low and when your seller performs, you can then afford to pay them handsomely.

Next, document your sales process as it exists today. Teach it to your new sales hire[s]. Work with them weekly [yes, weekly!] to optimize it using Deal Opportunity reviews to understand its strengths and weaknesses and course correct as you go. Make CRM your one source of truth around sales. The mantra is “if it’s not in CRM, it didn’t happen”.

“But what if I have a sales team already and they are not producing 3x-5x total compensation?” This of course is a bigger nut to crack. At this point you may need to reengineer a] your sales compensation plan, b] your sales team composition, c] your sales process, or d] all of these.

A business owner is after a sales compensation plan with a lower fixed cost [modest-based salaries] and a higher variable cost [a commission program that incentivizes appropriate selling behaviors]. This is a shared risk & reward model. When sales go up, the sales person is rewarded, as is the company. Note that not every sales person likes this model. If they are a true Hunter they’ll love it. Hire Hunters.

How to Shop for a Sales Consultant

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So, you’re considering bringing in someone to help ramp up your team’s sales productivity. Hiring an FTE doesn’t make financial sense just yet, so you are thinking a consultant might do the trick. There are lots of them out there, so how do you go about selecting the right one? Here are a few things to consider that might make the selection process clearer…

Tap Your Network: Ask your colleagues who they’d recommend. Interview someone they rave about. This will get you started and give you a benchmark by which to measure other candidates by.

Can I Trust This Person: Obvious, right? You are going to put this person in front of your staff and so low trust = a no go. During your selection process go to coffee or lunch with the candidate. You’ll see more of the “real” them vs. in the boardroom setting and can better dial into your trust radar.

Sales Chops: Decide what expertise you need in your situation and probe to learn your candidate’s acumen. Is it in sales method [how to conduct a productive sales interaction with a buyer]? If the way this person sells to you is off-putting, stop there. You won’t like what they teach your team. Is it sales process [mapping the steps to take an opportunity from the Lead stage to closure]? Ask to see the tool set they’d install in your business. Is it Lead Generation [filling the top of the sales funnel]? Again, ask to see their models. Good looks like Intellectual Property that is formal, organized, coherent and branded – maybe even a book. Bad looks like sales tips and tactics verbally delivered, stray MS Word docs and scribbles on your white board.

Years in Business: The longer in business as an active consultant, the better. This means you are dealing with a proven entity. Beware the friend of a friend who’s been a Sales Manager for forever, is between gigs and is “doing some consulting.” Unless they’ve got a solid pedigree [taken a company exactly like yours from start up to $100M] this person may be long on tips and tactics but light on road tested and proven teachable IP.

Company or Individual: One is not better than the other. There are awesome folks in either configuration. Generally, the size of your sales team will dictate which is best. You may need a big firm to manage a roll out to your 1000 sales reps.

Fee Range: You get what you pay for, to a point. If you are quoted fees that look weirdly high, continue looking at other providers to either confirm or deny if they are just high or if their offer is superior. Low fees mean you may be dealing with someone who is new to the role and perhaps not skilled enough to help you sufficiently. Or it may be that they are not comfortable to set fees that reflect the value they bring. If this is the case, you don’t want this person training your sales team anyway. Dig deeper into their sales chops to determine which.

Experience Base: Experience in your industry is an asset but not a necessity unless you are in a crazily narrow niche business. Actual proven success in multiple industries is a clear sign that this party’s methodology and IP produce results.

Skip the School of Hard Knocks

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You likely learned a ton about how to run your business by attending the School of Hard Knocks. You are likely [and justifiably] proud of making it through not only intact but looking pretty good! When it comes to the sales function however, skip school this time. If sales aren’t your passion, your results aren’t great, or you already have 1000 other things to focus on, bring on someone to steer the sales function for you and you’ll be ecstatic with the results. Here’s why…

You are Human – not a machine. Running a business is tough enough without piling on another departmental leadership function on top of that.

Revenue is the Life Blood of Your Company – If you are bootstrapping, Cash is King. If you are funded, revenue lengthens your runway. If your sales results aren’t great, that should be addressed.

Sales is Way Harder Than It Looks – Look at those guys and gals over their blabbing on the phone closing deals. What could be easier? Trying to optimize and implement a sales process requires a lot of bandwidth.

The Sales Cliff Sucks – If the sales wheel isn’t continually turned, funnels dry up quickly, and revenue falls off fast.

Your Options:

Your first and most obvious option is to hire a Sales Manager, or the like. This works if you a) have the money and b) are at a growth point at which this makes sense.

If you are at 2-3 sales people and revenues are trending up, then hiring this person is an investment that will likely have a great ROI. Also, hiring this person lets you work more “on” your business rather than “in” it. If, however, revenue is light at the moment it may not make financial sense to spend the dough on an FTE. The time to payback may be longer than you are willing or comfortable to wait. In this case there is another option.

That other option is to hire a consultant – just as you would for any other business function. There are sales consultancies of all stripes. Some are awesome at pumping up your team with motivational speeches. Others are great at teaching your team how to conduct highly productive sales conversations with buyers. Some work with you to optimize the steps of your sales process to increase sales velocity and deal size. On the upside whatever your need it’s likely you can get it addressed by a credible expert for far less than the cost of an FTE. On the downside if your team needs hourly/daily leading, then a consultant by design can’t fulfill this.

If Sales is a passion for you and you have the bandwidth to tend to the team and run your business as well, by all means, keep managing the sales team. Otherwise, take action now and hand the reins to an individual who can focus squarely on the task at hand and drive your revenue results.

Will Your Sales Approach Support Your Growth Goals?

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How much revenue will your sales team close 90 days from now? If you can’t answer this question with any level of confidence you are not alone. Many leaders I chat with struggle to predict their sales team’s revenue even 30 days out. If you aren’t all over tracking your leading sales indicators, it’s next to impossible to know if how your team is selling will sustain your business’s growth goals. By rigorously measuring the rate at which those “things that cause sales to happen” occur you will quickly get to reliable forecasting and an optimized sales process.

Off the hop let me identify the magic ingredient that makes any dashboarding work – rigour. Sounds almost redundant but I bring up rigor because its the number one challenge in implementing and leveraging dashboards. If your data is inaccurate or incomplete due to lack of rigour you will make poor decisions based on what your dashboards are telling you.

To clarify rigour, I mean accurate recording by your team of their sales activities every day, as they perform them. No “I’ll wait until Friday afternoon to enter in all my CRM stuff” approaches allowed. Who has the energy on a Friday afternoon to enter a whole week’s worth of sales activity micro-data? No one, that’s who!

Moving on, here are the core sales activities that will serve as your leading indicators.

Diagnosis Meetings: Interactions with Sales Leads, the purpose of which is to Diagnose their Pains and determine if they are a Viable Sales Opportunity. Not enough of these each week means a dry sales funnel in no time.

Demo Meetings: Meetings with Viable Sales Opportunities to demonstrate your product or service. Not enough of these weekly leads to a longer closing cycle as buyers often need to see what your product can do before saying yes to paying for it.

Solution Meetings: Interactions with Viable Sales Opportunities, the purpose of which is to finalize the version of your solution they’d like and allow you to solidify price.

Number of Proposals Presented: This value of this one’s pretty obvious.

As far as the goal quantity for each of the above, that varies widely from industry to industry and product/service to product/service. Generally, lower price point sales that are decided upon by a single buying influence require many more of each interaction type per week than high priced multi-buying influence ones.

The thing about sales activity goals is this – have one, for each activity. Work with your team to a) decide which things that cause sales to happen at your company should be measured, b) set the bar, c) adjust it over time until you discover the optimal amount of each activity required for reps to hit sales target. This continual optimization process is the path to confidence that your current sales process will support reaching your business’s growth goals.

An Otherwise Good Walk Ruined

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There is an old saying that goes, “golf is an otherwise good walk ruined”, referring to the frustrations inherent in trying to get that darned little white ball into the hole. Achieving revenue growth may not always happen as quickly as we’d like, but it should not feel as frustrating as golf often feels.

Are you frustrated with your rate of revenue growth? If yes, below are some common causes of Revenue Generation Frustration and how to mitigate them.

You: Business Owner & Sales Manager

Do you have a solid sales pedigree? If not, running even a small department can be challenging. Time ticks by and sales results don’t come.

If you are not a sales management expert, find a resource and get this task off your plate and onto theirs. Doing so is all upside – you lighten your load and have more time to do the stuff you love, such as leading the company into the future rather than being stuck in the sales weeds.

You: Abdicator

More dangerous than managing a function you aren’t an expert in, is not manage it at all. You just let your sales folks loose with a cell phone, laptop and gas card and wait for the sales revenue to come rolling in. This generally always fails. Invariably results are tepid and when you finally dig in you find you are down 6 months sales salary and your revenue future looks pretty grim.

The sales function requires daily monitoring to assess what course corrections are required for success in the ever-changing business landscape. See the advice in the paragraph above for how to fix this.

Low ROI

Your sales department should be self-funding. Salespeople should be generating between 3x to 5x their salary [depending on your margins] to be paying for themselves.

Take a good hard look and determine if your sales team is covering their costs. Factor in all costs related acquiring deals. There can be many reasons why they may be falling short [the comp plan is wrong, quotas aren’t right, headcount is too high, Lead Generation is too light]. Once you learn the underlying causes the fixes will be readily apparent.

No Leading Indicators

If your main sales success measures are primarily lagging ones [revenue generated, new implementations] you’ll continually be running behind. Switch to frequent measurement – think daily, weekly, monthly – of those things that cause sales to happen.

A few to look at are:

a) Pipeline Creation Rate: How many viable sales leads have been generated
b) Number of Sales Calls conducted
c) Number of Demos conducted
Identify your leading indicators and be rigorous in tracking them.

Flying Blind – No Dashboards

The value in measuring lies in using the data toward continuous improvement. Share the dashboards at minimum with the salespeople individually and review them together for coaching purposes.

Work together to determine what the numbers are indicating and what activity adjustments could/should be made to improve results. Depending on your appetite for a competitive sales environment you may share all results with the entire team.

No Recipe for Success

The number one cause of feelings of Rev Gen Frustration is a lack of a defined sales process. If no sales roadmap exists, the team may find their way more often than not, but it will be a continual struggle. This leads to lots of bad stuff [sales goals aren’t hit; commission payouts are low, and staff quit].

Hunker down with your sales team in a boardroom and capture a) your customer’s buying process and then b) your process to help them buy from you. This is the ultimate Rev Gen Frustration reducer.

Revenue Growth Hacking

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Every company wants massive growth, like now! I’ve worked with over 100 companies and here is a list of the top growth hacks [in order of importance] I have seen that actually work.

Staff Up – the top reason companies fail to achieve the hockey-stick-graph-growth is they don’t have enough dedicated staff selling all day, every day. Dual sales & service roles diminish the focus on new revenue acquisition. Hire more sales bodies now. If paying for extra salaries is onerous, scour the landscape and you will likely find either free or matching money to help get interns, or the like, manning a desk at your office.

Divide and Conquer – the sales job consists of several discreet tasks. a) finding leads and nurturing them; b) reaching out to them and scheduling an appointment to talk; c) moving them through the sales process to closure; and d) on-boarding those new customers and up-selling them. At minimum, have one Biz Dev person filling the top of the sales funnel, a Sales person closing them and a Customer Success person on-boarding them. Reengage sales to up-sell when appropriate.

Automate Your Sales – it’s mind-bending how many intuitive tools are available to automate every step of the sales process. Map out your process, then Google “what’s the best app for automating the [insert sales micro-function here] part of your sale?”. Pick your sales stack components, turn the key and fire it up.

Configure Your CRM – bake your sales methodology, language and processes right into your CRM. This is the ultimate scaling growth hack. When your CRM is your sales process, training a new hire on one aspect immediately trains them on the other. CEO’s love the revenue growth that follows.

Stomp on the Sales Gas Pedal Now – if you don’t have a robust Sales Staffing and Process & Tools infrastructure plan, create one asap. You can’t build a thriving business on a non-existent or shaky foundation.

You will definitely have to iterate to optimize all of your systems as you grow, so prepare to iterate over time to iron out the kinks. This way, when your revenue grows, your systems can scale with it.

The Heart of Motivation

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Selling is a funny job. It seems to require an unusual amount of motivation for one to perform consistently at a high level.

I’m not sure why this is. Does accounting require a high level of motivation to do it well? How about Human Resources? I don’t know – I’ve not done either of those jobs. I do know I can name many motivational sales speakers, but no accounting motivational speakers come to mind [if you know of any, please let me know!].

Maybe it’s the self-starting nature sales. Many of us work from home offices or are on the road flying solo, tasked with bringing home the bacon. One needs to be organized and active, efficient and effective and at the end of the month reach your sales quota.

With little [or more often no] supervision, sales people must find opportunities, sift out the bad ones and then close the good ones.

In most job roles the work is brought to you. In sales you have to go find it. Anyone who has opened a new territory or struck out on their own know this challenge well.

At any rate, I get asked so often how to motivate sales people I thought I’d address it here. Over 14 years and across 22 different industries here is what I have learned…

First, hire motivated sales people [duh, right!?]. It sounds obvious but many fail to do this. In doing some digging I’ve found that questions like “what motivates you to work hard to beat your sales quota” and “what jazzes you up about selling day in and day out” are not in the top 10 questions hiring managers ask. I’d take a highly motivated unproven salesperson over a non-motivated seasoned vet any day of the week. Start asking these questions early in the hiring process if you haven’t done so already.

Once hired, train your salespeople weekly – yes, weekly! Think coaching, sales skill practice, sales book of the month club discussions and the like. Motivated people eat training for breakfast, they love it! They want to consistently improve because that’s just the way they are wired. Plus, it helps them to earn bigger commissions. Ignore training at your peril, it is a primary motivator.

Finally, de-hire non-motivated salespeople now! Move them to a different role in your organization where they can soar with their strengths, or exit them from the company. If they are non-motivated keeping them in their current role is unfair for all parties. I will share with you that this is the one piece of advice my clients are slowest to take, but after they do their response is universally consistent, “why did I not do this sooner?”

Once you have your team of champions in place, here are some ways you can inject some additional motivational mojo over the course of the sales year…

Sales contests

You know the drill on this one. The new spin? Have the team select the prize they want. Some want cash, some want gift cards, others want time off. Create a menu of prize options and let each team member decide what they want to run hard for. Winning a big screen tv might pump up one rep, but leave others totally flat.

Trophies

I had a client with an all-female sales team, selling into the spa industry. They jokingly had a sales tiara that sat on the desk of the previous month’s top seller. The competition for the tiara was friendly, but surprisingly fierce. Another client had a sales gong in the office that those who closed a deal could drop the hammer on as soon as they hung up the phone. Interestingly, I find the more quirky the trophy, the more people like it. What would your team’s equivalent to the sales tiara be?

Added Responsibilities

What?? Don’t people want less work, not more? I’m not saying pile more work on your successful sellers, I’m saying add some cool new wrinkles into their role that stoke their internal motivators for personal and professional growth / role enrichment. Give them Key Account selling responsibilities. Entrust them with mentoring your newest and brightest. Bring them to the table for new product development meetings. Include them in marketing meetings and solicit their input on next year’s campaign.

Underneath it all, the true heart of motivating your people is getting to know them outside of their job role. It is proven that one of the top motivators around job role performance is an employee’s relationship with their direct superior. What have you done lately to fan those motivating flames?

Measure These Things Now

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With the ubiquity of CRM sales has become like baseball — you can measure your stats six ways to Sunday. The trouble is, some people do! Don’t get stuck in analysis paralysis. There are but a few things you need to measure to predict your sales future.

Sales is an efficiency and effectiveness game. How much of something do you need to do, and how well do you need to do it to reach your sales quota? Let’s start with the efficiency, or ‘how much’ part.

Measure the number of sales interactions [conversations, the primary focus of which is to move a deal forward. Customer service calls don’t count] executed by your team daily and weekly. Sales interactions are the number one thing for most businesses that cause sales to happen. They are a leading indicator to future revenue generation results.

A quick word about salespeople who don’t want their activities measured. Any resistance you get to weekly sales activity reporting that smells like “that’s a waste of my time” is grounds for a serious conversation. Would your production department balk at measuring their inputs? Of course not, that would be ludicrous. Sales people are in production, they produce sales. You need to know the typical inputs required in your market and industry and geographic location to generate a sale. This is the only way you can embark down the sales process/results improvement road.

Okay, so back to measuring… In only a few weeks you’ll quickly see trends around who is having how many meetings, and can then connect that to the revenue those efforts produce. Use the data to discover what the magic activity levels need to be on a per rep basis and set these as your benchmark. Manage to these benchmarks.

Shifting now to the sales funnel… When it comes to sales funnel measures, most managers and reps work from the end of the sales funnel backwards. They measure the number of closes this week, how many proposals went out the door, etc. The most successful teams I’ve worked with do the opposite. They measure from the very front end of the sales funnel forward. Interesting.

Early stage sales funnel work [finding leads, contacting them, trying like crazy to secure meetings] is the grunt work of selling that most sales people do willingly only when pressed. Sure, they will lilly dip along the way but they’ll only apply nose to sales grindstone when their sales funnel is dry. These folks experience sales peaks [Hurray!!] and dreaded sales valleys [Booo!!] for this reason. Those in the know track their early stage selling activity daily-weekly. They never, ever lose sight of the fact that sales seeds they plant today can take awhile to take root so they sow every day.

Start with measuring Net New Sales Lead Acquisition. How many raw names have been added to the master list this week of sales leads to reach out to? The optimal number is of course based on your product, industry and sales cycle. Generally, the shorter the sales cycle and simpler the sale the more raw leads you need weekly.

Next, measure the number of Sales Leads Researched per week. This is the number of raw sales leads for whom their website, Linkedin and other social media have been scraped to determine if they might be a fit for your products and services. Note – I consider new leads acquired and then researched as being above the sales funnel. They are so raw you simply can’t assign any probability around the amount of revenue they might generate.

Following the research stage is Sales Leads Activated per week. Now we are into the sales funnel. Activation means you have reached out directly [voice or email] in an attempt to book a meeting. The purpose of the meeting is to conduct a diagnosis to determine if your products and services can be of help to them. Bear in mind that it might take several attempts to reach a potential customer. So, each week you’ll need to activate new opportunities as well as reach out to those from last week [and the weeks before] that have not responded.

To stay on top of this, track the Number Of Connection Attempts Per Activated Sales Lead. Now you are going to start measuring sales effectiveness. These days everyone gets either their email, voice mail, or both, regularly. If they are not responding there’s usually a good reason for it. The rule of thumb is if after 3 connection attempts there has been no response you should either try a new tactic or jettison that lead and move on.

Successful lead activations lead to Diagnosis Meetings. These are golden. Measure them actively. Then measure how many convert into viable sales Prospects. The higher the conversion rate, the better. A low conversion rate might mean you are selecting the wrong leads to call on in the first place.

Look at all of the above measures and assess the following:

a) are the results good or bad?

b) if good, why are they good and what can you replicate to get better?

c) if bad, why are they bad and what’s the fix?

d) decide how you’ll implement fixes and optimizations and stick to it going forward.

Getting to great at early funnel stage work is the road to having more revenue pop out the other end reliably and predictably. Measure, optimize, do, repeat. That’s the magic.

Like what you’ve read here? Totally disagree? I’d love to hear from you either way at [email protected]

Social Selling Using LinkedIn Part II

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In my last blog post I showed how investing 10 minutes in Social Selling per day can improve your prospecting effectiveness and eliminate cold calling. [If you haven’t read it, click here]. In this posting I’ll share two effective ways to build the targeted list of buyers you want to be introduced to so you can begin filling the top of your sales funnel.

The path to eliminating cold calling begins with increasing the number of first-degree LinkedIn connections you have in your network. The more first-degree connections you have, the more second-degree connections [and opportunities for connection requests] you will likely have to the buyers you want to speak to about using your products and services.

To make the jump from cold calling to Social Selling you need to tap your first-degree connections and ask them to introduce you to the buyers you’d like to meet. To start down this path you first need to make a list of the buyers you want to be introduced to so you can then ask to be introduced to them. There are a couple of ways to build this list.

The first is for you – or your Virtual Assistant – to do a Google search and create a list of potential companies that fit your Ideal Customer Profile. You can also choose to buy such a list. Buying is faster, but more expensive. There are pros and cons to each approach to list acquisition.

Next, go to LinkedIn and enter the name of each company on your list in the search window. Click on the company name, and LinkedIn will tell you how many first, second and third-degree connections you have within it. Look for the person within that company that, by title, is the right one for you to speak to about using your products and services.

Are they a first-degree connection of yours already? If yes, go ahead and request a telephone meeting with them to talk about using your products and services. You are off to the races!

If they are not a first-degree connection, open their profile. Which second-degree connections do you share with them? Of those second-degree connections, which is the best one to ask for an introduction to your prospective buyer? Generally the “best person” is the one with the optimum combination of a strong/close relationship with you and a strong/close relationship with your prospective buyer.

The second way to create your prospective buyer list is to find someone in your first-degree network that you consider to be well connected within your industry/territory, with whom you have a close relationship, and who would be happy to make introductions for you. LinkedIn gives you access to their first-degree network. Scan it and create a list of people that fit your Ideal Customer Profile who you would like to be introduced to.

The first and most critical step when using this method is to speak to this person directly and confirm that they would be OK to refer you on a regular basis [you don’t ever want to stress your network by “over asking” for referrals]. You might pose the opportunity to them using the “give to get” method.

Say something to them like, “I’m in the process of looking for new business. You are very well connected in my space. Would you mind if I looked through your network for connection opportunities? I’ll then let you know who I am hoping to be introduced to. In return, I would like you to do the same within my network. I want to help you as much as I possibly can.” If they agree, go ahead and begin building your list.

With your list built, it’s now time to proceed with asking for those valuable introductions. Details and scripting around how to do that will be the topic of my next blog post.