Customer Service and The Numbers Game

Numbers.

 
Business always starts with numbers.

 
You cannot do business or marketing strategies without numbers. Business planning is based on numbers, most of the time at least.

 
Enterprise development cannot be deliberately managed for growth without numbers.
 

Number crunching in developing or growing your enterprise is a tedious but unavoidable task every business owner must do. It's almost like a law of nature applied to business.
 

Let's do the business numbers to know if we got our revenue right or our forecast right. If you are always doing sales strategies, you will always deal with revenues and forecasting.

 
When approximating the quantifiable aspect of lead generation and revenue forecasting, it is imperative that you make plausible assumptions.

 
There's a bit of a twist to this. If you have no relevant experience in selling or keeping track of audience or Customers, you will not have a "plausible assumption" about anything related to your business, specially, historical ones.

 
Basis for Plausible Assumptions

In the past, I based most of my assumptions on the following:
  • Actual sales receipts against leads
  • Documented number of people who register for more information against total number of purchases made
  • Actual attendance in an advertising activity or public relations event against total invitations sent out (later on I count the actual number of people in the list who actually call, ask for more info or RFQ
  • Actual inquiries made against total published circulation of the newspaper where the printed ad copy appeared. 
  • Total inquiries or sales made through mail, fax or email campaign against total number of messages sent out. (Careful with these kinds of campaigns. There are laws against these now. More of that in another article.)
  • Total number of purchases online against total number of "unique subscriber" in your opt-in lists. (Remember the Anti-Spam regulations. Careful, careful!)

 
Why Do You Need To Keep Track of These Numbers

Let me illustrate the significance of these numbers.

 
I used to manage marketing campaigns, product launchings, exhibits, seminars and press conferences.

 
In 1996, I managed the product launching of one of the leading PC brands from Germany. The Product Manager was interested in my audience profile.


He wanted a forecast in the likelihood that they do a launch in the city where I was handling distribution. He asked me: "Who do you think will be attending the product launch and how many?"

 
Please note that I'm always asked this same question every time by every brand manager and PR agency prior to a market study or product launching. This is even more so if the purpose is formulating plans for niche marketing or brand management.

 
You can fairly say I have this one covered.

 
In fact I have this covered pretty well with PowerPoint
presentation of my statistics and charts. I always get funding for launchings because of this single presentation I make.

 
Not only can I tell you how many, I can tell you how many will be CEOs, Vice Presidents of Finance, MIS/EDP Managers, and CIOs.

 
I can also tell you how many companies will be coming from manufacturing including what type of manufacturing, service, medical, pharmaceutical, education, insurance, retailing, etc.

 
I can tell this Product Manager all of that in nice colored charts with animation to boot.

 
The real clincher really is when you can show them the numbers.

Showing The Numbers

My experience is that I can get 10% to show up from any category of targets receiving an invitation or message about the event.

 
In 1996, mail campaign was the best way to invite people followed by a fax campaign with slightly modified messages to simply remind them of the event.

 
(Today you will probably get a screaming person in the other line telling you to stop wasting fax paper. Some will actually threaten to sue you and your company.)

 
A launching should have a preparation period of at least 45 to 60 working days prior to the Big Day.

 
(You can probably sign up for a brief online course I prepared on “Participating & Managing A Trade Exhibit” if you are interested in managing your own launching or exhibit without hiring an expensive organizer. I was pretty good at doing events. I can show you small tips on cutting major costs like advertising. Don’t worry. The online course is free.)

 
Mailers should be out at least 30 days prior to the launch date.

 
A celebrity endorser for the event could get double attendance.

 
If you forecast 10% attendance you will get 20% if you have a credible endorser or you make it known that a prominent industry or professional personality will be attending.

 
A simple product launch will get a 5% attendance from a target list.

 
(The problem with simple product launches that merely unveils products is that it's extremely difficult to get the right people to attend. More of that in my online seminar.)

 
The right people in my industry at that time were those who make the recommendations and those who sign the check.

 
At that time, I had very high confidence in my numbers because it was not based on industry or published statistics. It was based on historical records of all events I have managed.

 
Not only that, I had it validated by statistics I get from my own direct competitors when I get copies (discretely of course) of guest lists from their own events.

 
These are the times I thank Microsoft for MS Excel. It helped me a lot in organizing my database and extracting the numbers in all its beautiful colors and charts.


Using the Numbers

Now let's use the numbers.

 
I know I have 5% to 10% attendance for not so glitzy launching and 10% to 20% for the really big budget events.

 
When you ask me for a launching attendance of 500 people or prospects, I give you the figure of 5000 invitations. These are 5000 invitations to be released or sent out at least 30 days prior to the event.

 
You just don't send this to anyone.

 
You actually pick this number also based on a plausible assumption.

 
At that time, there are about 10% to 25% in my database who I know are getting information from me about new computer systems on a regular basis.

 
I get my 5000 qualified targets from this database.

 
Can you now appreciate why you have to do the numbers?

 
I expect only about 3% to 5% of those attending our events to make inquiries in the next 30 to 90 days. The bulk of the grunt work in my sales job falls in this next 30 to 90 days.

 
We can talk more about this grunt work later.

 
By the way, you may have to vary slightly your announcement of how many seats are actually available.

 
If you get a 500-seating capacity, you announce in your information campaign that there is a limited seat for only 300 people. These are for those who confirmed at least two weeks prior to the event.

 
The rush for seats during registration will make your event look even bigger since your guests are really lining up outside in front of the reception area signing up and getting their kits.

 
(You can have more of this kind of tips in my online seminar " Managing Your Own Event" and a lot more.)

 
Now how do you use numbers to forecast potential sales?

 
This is how I do it.

 
I get the total number of inquiries and compare it with my "hot" list. My “Hot List” is a list of customers who signified weeks or months before that they need a solution. I mean solution like my products or have actually asked me to look into how they can address certain issues with technology.

 
I pick these companies first because these are the most likely to be expecting tangible presentation and reports about the technology in the coming days. Plus I know more or less how much they are allocating to acquire a category of technologies like the products I carry.

 
I multiply the number of customers by the minimum value of the best configuration of the product for these groups of customers.

 
If the product as configured for these category of customers is valued at US$5,000.00, and I estimate three of the customers in the hot list are the most likely buyers, then I give a forecast of US$15,000.00 for that product category.

 
This goes for the next product and the next thereafter.

 
(Don't get too excited about the figures. In the field, it is the Customer who actually determines if the forecast becomes an actual sales figure at the end of the year. )

 
In reality, I still could not nail down what will actually trigger the buying decision.

 
When you get from one sales training to another from different high technology builders like HP, IBM, Compaq, Intel, blah, blah, blah... You get tons and tons of binders, reports, statistics, technical evaluations and even a smooth flowchart of the buying process.

 
You would think that the Customers buying process is an exact science from step 1 to step 10.7.a. of the manual. We even have a manual called the Science of Selling.

 
Hello! The really, really bad news is IT'S NOT!

 
It's a good thing we are just talking of numbers here.

 
We're not finished with the Math yet.
 

 
Your Email Stats!

Come 2002, everybody seem to be worried about this Anti-SPAM issues. I wasn't giving it much thought then.

 
It was when I got more request to email brochures, then it dawn on me that I was left out of the communication evolution.

 
I was building brochures from scratch since most of our technology-partners were not too keen about sending information via email. Well, I appreciated their predicament with the Anti-SPAM and all.

 
There was one interesting thing I realized while getting all these requests via email.

 
80% were mostly legitimately interested and concern about our products.

 
When I started studying my records and compared Sent emails with emails in my Inbox, I realized that it's always the people who email that turns out to be the most interested. They are also the names mostly ending up in a list of responses to Request for Quotes or RFQs.

 
One other thing, these are also the people who want information ASAP as in now or in the next fifteen minutes.

 
I always assigned a tracking code for every correspondence and proposal I sent out so I can always keep track of my statistics for certain categories of products. My statistics were screaming for attention.

 
It was an amazing observation.

 
(Of course my superiors never cared about the stats except the forecast and the revenue. They still insisted that I call, I set appointment, knock on office doors, shake hands, take the Customer to a breakfast meeting, send candies to secretaries, Aaarrrggggh kiss the Customer's A--. More of this once we deal with Grunt Work in Sales!)

 
There's also one very insanely simple fact about email messages that request for information about our company and our products.

 
You always get an email address and a name to go with the message. These sets of information are kept together with the message by your mail-server or service.

 
You are actually capturing information without any deliberate action from you or anyone. This process can function 24 hours a day 7 days a week.

 
There is also a bonus. You can sort and actually count each and every inquiry.

 
With emailed inquiries, now I don't have to go out there and pre-qualify contacts to become prospects. Every inquiry is 100% qualified prospect.

 
These are potential customers who are raising their hands and saying: "I'm interested and like more information!" before you even see them.

 
This is the best forecasting system I ever stumbled into.

(You'll get more of this type of forecasting in lead generation in my article called " Putting Your Business or Selling on Auto-Pilot." )

 
Remember how I'm getting my numbers. You can devise your way of doing the Math. The main thing really is get your assumptions right the first time.

 
All your future decisions whether short or long term will depend on sensible or plausible assumptions you make.

 
You still have to do the Math!


 




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