Published August 24, 2010

Agency Owners, Do You Have a
Gambling Problem?

Budgets, marketing plans, sales projections-salespeople in the collection
industry (and in most industries, for that matter) either avoid them or have
never been trained to create or update them.

One of the main reasons for this is nearly all collection agencies are
privately held and therefore not accountable to an outside board of
directors or stockholders. But if you borrow money as an owner of a company
of any kind, the bank is going to expect to know how you are going to be
able to pay it back in the form of financial projections with a business
plan. So in that regard, marketing plans and supporting projections are
essentially requests for financing in which the business owner is being
asked to evaluate the risk and likely success of future sales and marketing
endeavors-and disburse funds to support the plan if it's approved. But the
upside here is that the owner's ROI is the interest on the funds, and this
form of usury is legal if the plan works and pays dividends of 1,000% or
more. That's capitalism. If you do this-congratulations, you think like a
banker. The opposite is also true. If you simply put a bunch of money on
the table and hope for the best, you're a gambler. That's no way to run a
business.

Sales & marketing plans and supporting projections make salespeople
accountable for their activities. As a sales representative I never liked
developing and updating these; however, they are crucial to the success of
any business. The fact is that, as an owner or executive manager of an
agency, you have invested in the success of your salespeople and you should
expect good data showing how each has performed in the past and intends to
be successful in the future.

There are some simple steps in the preparation of a sales & marketing plan
that do not require a 40-page PowerPoint presentation. Many times this type
of planning is not completed due to lack of experience; however, after a
couple of attempts it can be learned and then relied upon as a blueprint for
future growth.

If salespeople do not have a plan to follow then they are just waiting to
see what might happen in the future and are hoping for the best. Planning
short term and long term is the only way to successfully manage a sales
territory. Many salespeople want a very long leash in terms of their
activities and, as an owner, you can allow for this over time if you find
that a salesperson can deliver, execute, and update a plan on a regular
basis.

Every agency should have brief sales & marketing plan template that is
updated at the beginning of the year and reviewed on a quarterly or
semiannual basis. Now that we are more than halfway through 2010, it's time
to ask yourself if your road map for success covers the following areas.

1). Territory-This would be the defined geography or market covered by each
salesperson. In some cases this could be too large or too small depending
on the targeted markets and the number of prospects located in the
territory. A territory could be part of a state, a whole state or multiple
states, or a specific market or part of a market.

2). Services-Your infrastructure will dictate what services you can offer to
your target markets. The services could be first party collections, bad debt
collections, or legal services, as well as any number of other ancillary
things. Your services will depend on both your collection expertise and how
such services may benefit the markets you are targeting. I have seen cases
where these elements were not in sync; therefore, the resulting sales
efforts were not successful.

3). Markets-Target markets should be those that fit your infrastructure
best. This does not preclude you from entering new markets; however, careful
planning and investments in technology and people might be required. Many
owners assume they can service any type account and this can be true for the
most part for small clients who are not very sophisticated in managing their
accounts receivable. The larger the client, the more they will be
knowledgeable and will perform more due diligence on your agency and measure
your performance much more carefully once they become a client. The
marketing plan should indicate the number of potential prospects that are
located in each territory.

4). Projected Revenue-A targeted revenue stream should be presented for each month of the year. The revenue should be shown as both the type of client and type of service to be offered. The revenue stream should also be broken down by existing revenue and new business growth. An example line item on a revenue projection for the healthcare industry might indicate clinics with five or more doctors. Each of these prospects might generate $2,000 to
$3,000 per month in revenue. A salesperson might intend to sell 10 of these
clients in the next 12 months. If successful this salesperson would generate approximately $20,000 to $30,000 per month in revenue. In this way the salesperson can also project their potential earnings for the year. Revenue projections are goals that can fluctuate somewhat over time, but overall should be fairly accurate if created using realistic thinking.

5) Other-A salesperson should be able to indicate and quantify the cost of
any help he or she might need to accomplish the plan. This could include
marketing materials, attendance at trade shows, an improved website or other new marketing support items.

Agency owners who think like bankers attempt to evaluate risk and make sound sales & marketing investments based on real data. And they review sales projections periodically as well.

Others think and act like gamblers. If you or someone you know has a
gambling problem, please call me, Paul Morrow, at 877-533-1680, x702, or
email me if you prefer.

Special Offer: The Sales Audit

Too often, owners and managers view the sales process as something foreign, unlike any other business process they manage.  It's not different.  Want to grow by 20% or more like this company has?  Let us come in and audit your sales process.  Just like your accountant may do a financial audit to make sure your financial house is in order, we'll review your sales records to include contacts, appointments, sales, and more to answer once and for all: 1). Are my sales numbers in line with industry leaders? and 2.)  Am I doing everything I can to grow now and in 2010?  This cost-effective, 1-day audit will put you on track to see better results.  Email Paul Morrow to learn more.