4 tips for sales commission in services businesses

How do I pay sales commission to sales representatives in a services business?

 

Did you miss our case study from when we assisted a full service marketing agency to set the right sales compensation plan for their first Sales BDM hire

The right sales commission plan is critical to your first and subsequent hires, particularly within a new or growing business. Some of the considerations and challenges raised in this blog are particularly relevant to business owners or directors who have come from a non sales background who might be unsure where to start.

Some practical tips for structuring sales commission and planning: 


1) Preparation and planning

  • Consider the line of business you are in and what the market rates are for your industry sector.
  • Talk to some of your industry peers about their experiences.
  • Do your research with some benchmark insights or recruitment reports.

2) Sales budget on FTE (Full Time Employment)

  • Know your financial figures first in terms of your operational and fixed overhead costs, average profit margins and revenue goals.
  • How long are your average sales cycles per service? This determines how your sales pipeline can be developed to reach your monthly required targets based on speed and size.
  • Do you know your cost of sale and what type of sale you are making – invoice upon delivery or on purchase order?
  • Have you calculated your sales revenue targets and established what is realistically achievable?

3) Individual role requirements

  • Do you receive payment on invoice or signing of a contract upfront?
  • Do you need to consider any client KPIs or credits?
  • Are you paying the commission coming out of the client pricing profit margin or from a revenue target?
  • Different structures are appropriate for different businesses and the type of services and products you are selling.
  • Is your sales hire going to be responsible for acquisition or retention business and accounts?

4) Commission considerations 

  • Is it a flat fee percentage uncapped?
  • Do you have a staged payment plan or bonus plan for the team?
  • Have you considered if a contract is cancelled or mis-sold what happens to the commission component?
  • Is there a sliding scale achievement plan based on monthly quotas and for overachievement?
  • Is there a team component to incentivise and motivate team performance around ongoing account engagement or retaining high value accounts?
  • If you are to set a foundation standard, ensure that this will be consistent with how you pay different sales people in the future.
  • Consider how to continuously keep the sales people motivated – what happens if they overachieve or underachieve depending on your sales cycle?sales-commission

Sales commission and planning – what next?


Often smaller or growing services businesses don’t have a structured sales plan, rather the sales responsibilities may be shared between the team.

There is a correlation that sales performance and behaviour is determined by the sales plan and culture created by an organisation. Leadership from the business owner or sales manager needs to develop this.

Sometimes a multi level sales compensation plan is required to guide the sales person to sell the right services, i.e. higher profit managed or retainer services versus a product based transactional model.

sales-commission-planning

If you pay commission on annual or monthly revenue targets without any breakdown then this can lead to account issues and a disincentive to cross sell and upsell with existing or new clients for the year to maximize the revenue opportunity. 

From my experience, the delicate balance of designing a sales compensation plan to support one individual may also need to consider other sales team members, either existing or future hires. The role of the sales leader and business owner here is to develop the right sales strategies and financial budgets and targets, aligned to the sales objectives. 

I don’t have, or recommend, a one size fits all sales compensation model for the purpose of this article, however I can provide some scenarios to different business models – but it’s advised to arrange a consultation and customised solution and approach as required designed to specifically to suit your sales objectives and needs.

If you haven’t come from a sales background or a business owner, this might need more elaboration…. Do I pay a base and commission split of 50 base:50 commission, 60:40 or 70:30 split, or do I consider a shared risk 40:60 (60% at risk component)? Perhaps a guaranteed commission structure or a bonus might be more appropriate.

Look out for our next article around sales commission and compensation examples and scenarios which also apply to you, “How do I pay sales people for acquisition sales or retention sales? 

In the meantime, if you are starting out building your sales team or first sales hire, please reach out to us for assistance or advice in making the right choices at info@alchemiseconsulting.com or @alchemise_cons or call our office on +61392255022 – or click below for a consultation on everything sales, including sales performance and compensation structure! 

 

Case study: What sales commission do I pay my new sales BDM hire?


The right sales compensation plan is critical to your first hire with a new or growing business. Some of the considerations and challenges raised in this example are particularly relevant to business owners or directors who have come from a non sales background who might be unsure where to start.

Overview

A fast growing leading Melbourne full service marketing agency was recently looking to hire their first salesperson to join their successful team, and  shift their focus for active sales growth.

Prior to this new sales focus, sales activity was led by one of the Directors and other sales responsibilities were shared between the Digital Strategist and the Project Management team.

To some extent this hindered their ability to service existing clients and also build a new business funnel with a targeted focus for growth. In earlier days, this marketing agency has historically had more transactional business  and strong referral leads  than focusing on generating ongoing retainer engagements and developing new business sales capability.

Growing a sales team: Making your first sales hire

The marketing agency had decided, after an initial interview and shortlisting process, to hire a Senior Business Development Manager with general market rates and to provide an offer. 

The initial challenge was how to pay them a suitable commission package in line with the direction of agency’s services and business growth plans.

Initially a flat fixed percentage plan was discuss on a high base salary. However, management were initially unaware of the many factors that needed to be considered in sales performance management. A clear aim wasto actively grow the number of new sales opportunities and through certain preferred service lines.

4 sales compensation considerations


This agency is in the process of shifting to a higher value retainer model from transactional project based or time based work. This needs to be considered in how sales plans and commission structure are determined and set.

  • Sales goals for the financial year sales-compensation
  • Services priority – retainer-based, projects and renewals
  • Cashflow and encouragement of team based culture
  • Not having an open ended commission plan initially, until aligned with business and financial objectives.

Proposed client solution.


The agency’s initial view was to offer a flat rate percentage commission.
 

Upon review and with additional market insights, that suggestion didn’t quite make sense given the focus of revenue and profit required in the business to make this successful for both short term with the sales person, and also for establishing a foundation for business growth. The other consideration was to create the ability to scale the sales team in the future beyond Year 1. 

Considerations

When you are looking at sales compensation structures you need to look at the sales function of either retention focus (account management) or acquisition focus (business development) as both of these have an intrinsic mode of sales behaviour and associated type of sales approach.

From a sales structure typically the behaviour of your sales team is based on the incentive you set them. If you are a products or transactional business then sometime this top heavy loading on revenue on order might work from metrics focused on volume and size of revenue.

sales-hire-compensation-balanceIn the professional services area, this principle doesn’t apply and a delicate balance needs to be achieved between blending in gross profit margins for healthy financial considerations, a realistic and achievable individual target (particularly for a growth focused SMB/SME), the balance of acquisition and delivery capabilities, and the consideration of which types of services are best placed to sell during the customer buying lifecycle.

Different compensation plans need to be considered for acquisition mode sales and also retention sales plans, or perhaps a hybrid if the sales resource is responsible for both.

Being a full service marketing agency, most of the business’ client work is project based, and in recognising this, there was a discussion about the risk of setting targets too low – if the Senior BDM were to overachieve easily based on revenue early in the year, then there is always a risk that little motivation and monetary incentive exist for the remainder of the year. This can greatly degrade the productivity of the sales function if rewards for consistent performance aren’t put into place.

Our Sales ROI review highlighted that by aligning the sales strategy, a split commission element needed to be put into place, based on the expected contract renewals focus whilst helping the project team with securing the additional business, cross selling and up-selling.

Aligning the sales targets in line with a tightly linked compensation plan needed to be formulated realistically with the considerations in mind.

We provided some sales based guidance around reverse engineering their sales revenue target and direction of sales and marketing activity required to hit their sales goals for the next financial year.

Improve Your Performance Concept in Flat Design with Long Shadows.

The process of determining a break-even ROI on a sales hire is important as they will typically (depending on the industry) generate about three times the sales pipeline value of their individual sales target.

The challenge of ramp-up time and a comprehensive onboarding process is often not considered, with unrealistic expectations on the sales representative to successfully close business within their first month to justify their hire.

We provided a compensation calculation based on the right behaviour in line with the suite of services to be sold based on setting the right targets and appropriate commission elements to suit the individual’s needs and agency’s business focus.

Recommendations and Outcome

After sending through a compiled market survey from leading recruitment reports to validate market rates, the appropriate sales commission plan needed to be structured correctly and fairly to meet short term and longer term sales goals and a foundation which can scale. 

For sales representatives, typically a base salary component and a OTE (On Target Earnings) is provided based on their sales target.

For Year 1 there was more importance on setting up the foundation, then progressing to Year 2 when the commission plan could be reviewed based on performance in Year 1.

After consideration and analysis of the business’ services and financial plan, our proposed plan consisted of:

sales-hire-next-steps-plan

A commission plan tied into three elements:

  • Revenue for all project and services (Total Contract Value)
  • Retainer Profit (Gross Profit)
  • Team component for new business renewal and contribution (End of FY Team Bonus)

This equals the Year 1 target to hit their new business sales goal.

The structure for Year 2 can be negotiated depending on initial performance and tracking of realistic achievements, as well as a review from Year 1 to determine the success or challenges faced with this method. 

Key takeaways and summary

For SMEs unfamiliar with how to compensate experienced sales people, I would suggest to not just think or assume that the simple plan or flat rate or % commission is sufficient, particularly in small business where cashflow is tight and profit margins are slim. You need to know your market and territory to assign as well as which market segment you are trying to sell into.

If you aren’t diligent in this approach to paying to a sales commission plan and target setting, whether it’s a junior or senior hire, you could risk exposure to overpaying your individual sales resource. A secondary effect is further reducing profit margins to keep them sufficiently motivated if they can achieve their sales target too quickly and easily. 

In highlighting this, it is critical to understand where you are paying commissions from, are this cost built into your service contract and deal, or overall based on your gross profit margins.  Your ability to scale and grow your sales teams requires some analysis on where your ROI can be generated from.

You need to know your business figures thoroughly, such as individual overheads and sunk costs, and impacts on GST and superannuation payments. Fundamentally you need to know your financial forecast of revenue and profit margins first to determine whether you can onboard the right investment in sales headcount and budget to start with. 

The other tip is to ensure that you mutually review the goals regularly and separate commission plans with performance reviews to ensure your growth plans are in line with business needs.

As you grow the sales function within your team and business, building that consistent foundation is recommended with the right sales performance advisor until you are ready to hire a sales manager. Consider the temporary impact of sales resource turnover or ongoing challenges to grow future sales hires.


For more information or an obligation free consultation or guidance please contact us at info@alchemiseconsulting.com or call our office +613 9225 5022.

 

Alchemise Business Growth Newsletter #7 – Q1 – 2018/19


September 2018

Business Growth Newsletter Edition #7 – Q1 2018/19 

Current Market Trends and Observations

It’s increasingly concerning that busy professionals are not making the time or effort to plan in the business. It seems many sales managers and business owners are busy chasing immediate deals and sales revenue without thinking how to scale or systemise their business beyond the next month or quarter.

At the heart of this sales behaviour consideration for customer success and experience needs to be thought about. Can you integrate the sales process and enablement into customer success and with your marketing awareness to service clients holistically to ensure that retention rates and reduction for the cost of acquisition can be achieved? 

We can all relate that New Year’s Eve resolutions can only be kept if there is commitment and intention first, once it is written down commitment turns into an actionable item if you put a date by which the goal or action needs to be achieved.

If I look at the recruitment sites, we have also seen a higher turnover of sales staff between vendors and suppliers. I think an average of 12 months to 18 months in the ICT sector can be experienced for some companies.

Perhaps a glue to all this comes back to leadership teams deciding to align sales and marketing objectives first then seeking some strong management business cases presented to obtain the investment that is needed to grow a business consistently.


Business Owner Challenges

Our recently released information video outlines some key challenges faced by business owners which we consistently hear. 

Well there is a way forward!

  • Mindset – Willing and wanting to make time
  • Having a good idea doesn’t mean commercial success
  • Have no plan isn’t a wise move if you want to scale and attract the right customers without investing in a strategy.

Business Owners – Does this sound like you?
How to address your sales & marketing challenges with growing your business
… Watch the video here:

Business owner video_play


Inbound 2018

Inbound2018-1

In recently coming back from Boston US with 22,000 people attending the Inbound 2018 conference with end users, marketing agencies and digital agencies attending, this is front of mind with this newsletter.

At Inbound 2018, the concept of the flywheel was explained as a shift away from the traditional marketing and sales funnel:

Funnel to full flywheel

Source: HubSpot 

Customer, Marketing and Sales flywheel to shift away the full marketing and sales funnel. The customer is at the core of everything an organisation does but you need to remove the friction to deliver a smooth customer experience including sales engagement and also connected to your marketing activities.

The emphasis is all about customer first at your core with delight, then being able to continue to engaging and attracting customers within the sales and marketing functions.

Reducing customer or buyer friction will help build growth momentum that builds up energy and if you think of it in terms of a three ingredient growth engine that is what help drive forward this growth approach.

To me this makes sense as a continuous feedback integrated approach between customer service first connected to marketing and then sales engagement with building synchronous energy and focus on the customer from a 360 degree view.


Inbound 2018-2
Inbound 2018 – Key Topics of Focus

Content Marketing – why this is a key to effective customer engagement:
When I look at investment in digital marketing, more emphasis needs to be made for quality and relevant content that is going to engage the prospective buyer. 

The use of video content and investment in analytics is even becoming more important for effective prospect engagement.

Without personalised and relevant content, other secondary digital marketing spent isn’t effective to deliver a tangible ROI.

Account Based Marketing (ABM) for small and larger B2B business now applies:
Account Based Marketing and Personalisation is even more important as part of any inbound or outreach approach for B2B clients.  It’s not just limited to Enterprise clients but a “lighter” implementation of the ABM process can be used.

Sales Enablement and development to drive more sales qualified leads:
If you don’t have a content plan or asset list of where all your content is to make available to your sales teams, then you aren’t able to engage effectively.

Having real time response with the right information to send is vital to connect these days. A generic email follow up isn’t good enough. However using a level of sales automation and process can greatly increase the effectiveness and productivity of sales reps.

The increasing challenge of sales is getting customers still getting new contacts to connect and understanding where they are at in the buying journey or cycle.

ROI in 2012 isn’t the same ROI in 2018 as Account Based Revenue is required to deepen the success of Sales Development team

Some useful tips provided about managing sales enablement with teams…

  • Start small – Elevate the outreach and deepen the call to action
  • Balance your financial measures and leadership levers.
  • Know the difference between an Account Centric and Account Based approach
  • To traditional career path of a Sales Development Rep is no to just move them into an Account Executive field sales role as the failure rate is high as many as 1 in 3 should the right nurturing and mentoring not be provided from sales leaders.

The role of the CMO: Insights from Forrester Research CMO
In hearing the CMO at Forrester Research present he raised some important points from a business perspective to consider.

As organisations as under more pressure and budget to deliver projects like digital transformation, the way return on investment is measured or needs to be justified now is more required than before.  Generally a marketing budget of 10% of revenue isn’t sufficient to drive the results expected in the business.

Customer Experience and Success – why it’s more important than ever before:
Some CMO strategy areas to consider to address:

  • Digital Outsourcing – turning technology debt to technology leverage, RPA (Robotic Process Automation) is the current mode and can help digital transformation. 
  • Digital Vanilla – Nearly every company will pursue digital transformation but it’s about where the core is at. How can organisations differentiate through digital and marketing?
  • Crisis of customer loyalty – What is a rational expectation?
    The expectations and evidence varies vastly with Gen X, Y and Z behaviours and mindset for loyalty particularly with the choice of Digital Service Providers as well as new constant offerings always being introduced to the market.

Other Alchemise Consulting News

3D people competing in a race with arrows - isolated over a white background

We have just kicked off a strategic campaign with an account based demand generation campaign for a global data centre provider within the APAC region.


A leading Australian logistics company has benefited from the value of our Digital Readiness Assessment and why a strategic view is so important to consider first with your web and digital strategy:

Great questions, really made me think about what we have existing and what we should, but don’t. Biggest conclusion I got from the whole exercise is to prepare a proper business proposal to the Directors about online and website strategy across the global business rather than an ad hoc approach.”


 Our recent blogs… 

Throughout the quarter we took an in depth look at Sales Enablement and Inside Sales, as well as two different user experience perspectives of marketing automation: 

We also published a blog on exit strategies and wealth protection – How do you ensure your exit strategy from your business partnership has your personal finances protected?

Philip Karlsson, our Alchemise Consulting intern from earlier in the year has also shared a white paper reflecting on global business inspired by his experiences:


3D guy leaning on a calendar - isolated over a white background-1
As we approach the end of 2018, now is a great time to set aside some planning time to strategise and assess your pipeline and situation for this next quarter and looking ahead to 2019. For a complimentary, holistic Business Growth Assessment to independently review your business, sales and marketing performance and operations, please register below.

We’ll assess where your business is at, by collecting meaningful and relevant data and reviewing your goals and strategies.


Reflections on global business: Diversity, leadership and experience

Following his six week internship with Alchemise Consulting in Melbourne earlier this year, Philip Karlsson shared his thoughts on the global business world including the influence of diversity, global leadership and international experience:

global-business

White paper published September 2018

To get a global view of your business, register below for a complimentary Business Growth Assessment.

Exit strategy and wealth protection checklist for business owners

In any business, aside from business owners only focussing on increasing the business sales and profits, a key part of any conscious awareness is with risk management in terms of exit strategy and protection. With all this hard work you put into running your business and not having a personal financial plan for where to direct this wealth what is the real objective of running your business?

I see time and time again business owners not understanding their plan, where to creating wealth outside of the business or getting advice from friends at a BBQ.

Most employees have a superannuation fund, so their retirement is somewhat being looked after. How about your retirement and who is taking care of this?

We partner with the best in the industry and I recommend meeting with one of our associate partners in wealth advisory from Macquarie Private Wealth that looks at businesses like yours and their personal objectives in ensuring you are maximising the hard work you put into your business. With your interests in mind, they look at areas such as investments, structures such as SMSF, and ways to minimise tax. I understand making time is challenging if it’s not prioritised but often it’s when you don’t expect an unforseen event or life event to happen or someone close in your professional or personal circles that force you to take stock about your business and personal risk position. Have you thought about some of the possible real what if scenarios to consider the impact for yourself but also those who you care about in your life?


Is your business partnership agreement watertight in the event of unforseen events or circumstances?

Some key questions to ask yourself if you haven’t already as part of your business risk planning and exit strategy:

1) How profits are to be shared?

2) What would happen if your business partner was to pass away unexpectedly, what debt did he/she carry and what impact would this have on servicing your existing customer base. Who would take on this share of the business? Could it be the wife that you may not get along with?

3) What exit strategies are there if you want to sell the business? What exit strategies are there if your business partner wants to sell?

4) What if someone is not pulling their weight in the business, what do you have currently have in place to control this?

We are fortunate to partner independently with Macquarie Private Wealth that looks at many aspects of a business and one such thing is business contingencies. Have the right foundations in place is paramount so each partner knows the agreement and what contingencies are in place should anything unexpected happen. Everything might be ok now, but like with any of the questions I had for you above it can all change pretty quickly. These things when not applied keep any business owner up at night when an agreement is not in place.

The outcome: by having an agreement allows you to focus on the task at hand, the operations of the business.

If you haven’t reviewed your business arrangements recently or made time yet to look at it, I do encourage you to allow our associate business advisors to connect with you to see if they can help you with this part of your business. Alchemise Consulting is unique as we want to look at every aspect of your business.

Summary 

We usually talk about helping business grow through sales and marketing strategies, however of equal importance from experiencing life defining or moments of unexpected change, I wanted to highlight from a practical view why you need to ensure that all bases are covered for your business end goal and personal financial situation in case. There are many traditional businesses both small and larger businesses are finding it increasingly challenging to generate or prepare for an exit strategy and need some independent awareness of the impact from your business arrangements to your personal finances.

A holistic consulting approach to thinking about the business commitment to people, process and systems in supporting new business growth and exit strategies for business owners is key. The right partnership or buy/sell agreements needs to cover many risk protection scenarios. I would highly recommend for your peace of mind to  speak with a qualified advisor and review your current situation.

The key is to acknowledge that the right investment of time will deliver the right personal ROI required. If you take “it won’t happen to me”,  a “do nothing” or “do the same thing over and over approach”, then it may be took late when something happens.  A positive shift and change in your mindset can reap significant results both for your business and your personal needs.

We are a boutique business growth consultancy based in Melbourne, focused on delivering high value business and sales consulting in APAC with an outcome based focus and shared risk approach.

For further details on any of these points above with a confidential discussion on how we can assist you for business partnership or growth/exit strategies, please contact us on info@alchemiseconsulting.com or register for a free initial consultation.

Alchemise Business Growth Newsletter #6 – Q4 – 2017/18

June 2018

Business Growth Newsletter Edition #6 – Q4 2017/18

Our focus in this update includes a topic around a recent customer experience I had. An example is provided below of a recent personal Australian national retail shopping experience who didn’t deliver a seamless omni channel customer experience that can greatly impact business performance and customer retention.

Another very relevant topic for business owners but perhaps not commonly explored are the potential issues with awareness on why and how to future proofing your business. In this environment simply being complacent isn’t recommended when it comes to business risk and forward planning.

When involved in a business partnership have you thought about planning your exit strategy or growth strategy and how to mitigate business risk? Your hard work and wealth needs to be protected with having the right buy/sell agreements or succession plans in place.

business-strategy

The ‘what if’ scenarios should always be considered just in case and involved in making time to work ON your business not just IN your business.

This month we want also want to raise some points for the impact on Go to Market strategies. There are some specific considerations for start up/scale up businesses when working with investor provided funding.

There may be some pitfalls to consider first such as:

  • Business and Revenue model
  • Cash burn rate and payback period of investment
  • Business valuation considerations
  • Go to Market strategy
  • Brand awareness and marketing investment

We will be publishing an article around some insights during the next quarter.

Our Alchemise Your Sales and Boost Your Business workshop held in Melbourne earlier this month featured guest speakers from Macquarie Group and Maxsum Consulting. Many great insights were shared around the table of business owners who work in high value, high touch relationship based services. 

A trend we have been trying to appreciate more is why so many services business websites are product and brand centric. The current market is making it harder to differentiate and highlight how you can add value and help solve your customers’ challenges.

Over the last 6 weeks, we have hosted Philip Karlsson from Sweden on a short intern placement with Alchemise, hear about his Australian experience below.

Lastly the recent global State of Inbound 2018 report with current sales and marketing trends have been published by Hubspot. Read our analysis of the key highlights and takeaways for this report! Click here.

 


Why your business needs to be more Customer Centric?

Are you customer centric in your marketing messages and conversations as well as online digital presence? To connect with your customers, you also want to focus on thinking about your digital strategy to really prioritise being customer centric.

Hear Marketing and Sales Insights Consultant, Andrew McFayden, in his two short videos around why you need to and how you can shift to being more customer centric.

INSIGHTS VIDEO #1:
Is your website brand or customer focussed?

INSIGHTS VIDEO #2:
How to turn your website into a customer centric approach.

Andrew has also shared his insights and trends noticed in the last quarter from conversations professionals throughout a number of industries, have a read of ‘Andrew’s Corner’ below:

BLOG: Andrew’s Corner June 2018 – Inbound strategy and trends


Customer Data Protection and Security

European GDPR – General Data Protection Regulation
What does this mean for you?

Data Management - Internet Concept. Green Arrow with "Webinar" slogan on a grey background. 3D Render.
We covered this in our last newsletter about GDPR which has now taken effect as of 25th May last month. If you are engaging globally and in within the EU, you need to be aware of the guidelines of around data privacy regulation.

If you are an Australian business, you might need to consider if and how this GDPR requirement impacts you. In general I would suggest updating your Privacy Policy and also send an email notifying your subscribers to opt in again or provide them a choice to opt out for any newsletters or communications, and of course ensure you are meeting the more stringent guidelines if you are dealing with customers or contacts in the EU to manage their data in a GDPR compliant way.


Our recent highlights and activities

  • Alchemise Your Sales and Boost Your Business Workshop

We had 12 attendees as well as our guest speakers in Melbourne on 5th June. There was lively discussion throughout the three sessions with insights and experiences shared from business owners as well as sales and marketing managers. The three sessions were around:

– Current business growth landscape and market insights 

– Boost your business – practical strategies and real examples 

– Future proof your business – how to expect the unexpected

Alchemise Consulting Boost Your Business Workshop Chak Ng June 2018
Alchemise Consulting’s Chak Ng and Andrew McFayden (obscured) 

Alchemise Consulting Maxsum Consulting Rebecca Ciancio Jun 18

Maxsum Consulting’s Rebecca Ciancio

Alchemise Consulting Macquarie Group Rob Crossing Sebastian Jimenez Workshop June 2018

Macquarie Group’s Rob Crossing and Sebastian Jimenez 

If you were unable to attend the workshop but keen to learn more about the topics covered please don’t hesitate to contact us for a one on one conversation.


Some of our recent blogs… 

  • 9 steps to working out your Sales and Marketing ROI 

Aligning your sales and marketing process steps is outlined from our approach covered by our latest blog and the start of the first step is to set your sales revenue target and work backwards to understand what marketing budget is needed to support this goal.

BLOG: 9 steps to calculate your sales and marketing ROI 

CLICK HERE TO FIND OUT MORE ABOUT  SALES AND MARKETING ALIGNMENT PLANNING
Use our ROI calculator to prove to sales that the marketing budget to achieve sufficient leads is not enough or from sales to marketing that the sales targets are not realistic. It can help owners determine once the number of leads required, where and which channels to use in campaigns to deliver the desired outcome – whether it’s inbound or outbound marketing initiatives depends on the marketing strategy.

DOWNLOAD YOUR FREE ROI CALCULATOR


  • My customer experience – A retailer experience

Do you want to differentiate your services, or ways to increase profitability? How do you address customer churn whilst increasing customer satisfaction and loyalty?

customer-experience-retail

Read our blog about our customer experience this month at David Jones which indicated how online and offline experience failed at delivering.
 

Digital transformation and shift involves taking an integrated approach to ensure the end to end experience and communications is a seamless one for the customer. 

BLOG: My customer experience: 5 ways a major Australian department store failed to deliver 

 



Coming soon…

  • Organic SEO and the real costs of digital marketing

Is SEO an art or a scientific approach? How much do you need to spend on SEO ranking and understanding the algorithms which Google use?  What is the ROI for investing in SEO when you have so many other competing costs attached to your digital marketing plan.

Look out for our upcoming blog on this topic including our own experience! 


Philip Karlsson joins as an Associate Intern from Sweden

Philip KarlssonIn partnership with the Intern Group, we have been fortunate to have Philip Karlsson from Stockholm, Sweden for 6 weeks. His first trip to Melbourne and Australia had an objective to understand how to a consulting process works and sales and marketing elements needed for a professional services, and he has shared some reflections below:

As an Associate Intern I have now spent almost six weeks in Australia at Alchemise Consulting. During that time I have been introduced to a number of different business encounters and situations, which has opened my eyes to certain things about Australians and the dynamics of conducting business here. One of the things I have come to realise is that what foreigners say about Australians is true; they are extremely friendly. Whether it is my cab driver, colleague or a business encounter, I have yet to meet someone who does not treat me with respect and kindness. To me this friendliness, or “mateship”, represents a culture of equality, which shines through in the workplace where hierarchies are not as common or obvious as in some other countries. A sense of equality is a great advantage in the world of business and firms should strive for such a setting since it nurtures an environment where all employees can speak up and contribute with ideas, visions and problem solving – regardless of their position, title or experience. This culture is something that Australians should be proud of and cherish, and has certainly opened my eyes to a potential future career in the land down under!


Finally don’t forget our Alchemise Marketing Survey 2018 – Why marketing campaigns fail.

Online Survey on Green Puzzle on White Background.Please feel free to continue to respond or share with people you know and find out Why Marketing Campaigns Fail – our online survey continues from our blog series (available here, if you missed it) to invite approximately 200 Business Owners or Sales and Marketing Managers to share how they have felt and what their experience has been in their marketing campaigns success, failure or ROI expectations and why.

Once we complete this survey we will share with you the findings and insights.

CLICK HERE TO COMPLETE OUR MARKETING CAMPAIGN INSIGHTS QUESTIONNAIRE
 


3D guy leaning on a calendar - isolated over a white background-1
 

Good luck with closing off your sales and the end of financial year!
Don’t forget to start to work on the business not just in the business with forward planning for FY18/19 and your next 90 day focus.

If you are looking for more information or to arrange an obligation free initial consultation with us, please contact us to book in a time.

Email: info@alchemiseconsulting.com or Twitter: @alchemise_cons, or feel free to phone our Melbourne office on +61(3) 9225 5022.

How business owners can maintain focus and discipline for success

How did you develop your personal financial habits and do they correlate with your business habits as a business owner? Perhaps it only takes a short trip down memory lane to understand how attitudes came about, from an early age, and their impacts now on business owners.

This post was prompted recently during reflection about how personal success and habits are formed in running your own business when I was cleaning out some achieved possessions stored away for many years..


Personal discipline and habits

business-owners

I found one of my old bank savings passbooks from when I was a teenager (for those that remember what a passbook is!). For those that grew up in Melbourne and remember, it was a National Mutual Royal Bank (which became Bank of Melbourne) passbook.

When I opened it showed my savings details over about a period of about five years while I was working my first part-time job, a casual role at Coles supermarket. I remember aim to save at least 90% of each weekly pay packet – and somehow, surprisingly, I managed to achieve this.

This sparked my thinking about the fundamentals of developing discipline, resilience and successful habits in business, and how many of these habits develop as a child and as a teenager with your money values.  Many are formed and shaped by your parents’ attitudes and values. Without turning this post into a personal development article,  I do believe that while your influences can draw you into or away from those values, be it positively or negatively, you do have a choice in where you would like to be.

I wonder how many kids these days (with some entrepreneurial aptitude or potential) could have a digital savings account like this. Are the days of the piggy bank or forced savings still strong or is the digital world or cashless society going to further change spending habits? Do parents today still encourage the values of savings for goals or do they give in and provide more for their kids?

digital savings

I remember the only splurges I made as a teenager was to afford to buy myself my original Atari game console for $90 and also saving to buy my first car for $5,000 when I passed my probationary drivers licence test. This was all without my parents assisting me or gifting me any money for these purchases. If the goal is strong enough you will stay focussed and on track.

In basic terms, having only credits and minimal debits must be an ideal situation. For any financial planning or wealth planning exercise these are fundamentals of building wealth. Not spending more than what you earn to be able to save consistently and reinvesting this for compound growth or leverage is a simple ‘how-to’.

It was instilled into me early as part of my financial values to always set goals and stretch to achieve even greater goals. Having strong cashflow has already enabled personal or business decisions and options to be considered. In small business often too much focus is based on driving revenue growth but the importance of cashflow and profitability shouldn’t be made secondary priorities in your financial plan.

In my professional life these values have always applied and the need to have the discipline to not lose sight of this. If you reinvest your profits regularly and utilise the impact of compounding and leverage, the returns will help you increase the value of your investment. The value of passive income streams versus earned income has been emphasised, having seen many businesses put all their eggs in one basket.

From my cultural background, both of my parents traditionally valued the effort of earning a dollar, so every dollar saved was worth something significant to come in the future. Some might call this a very frugal approach but this habit (and discipline) provides the skills in running and managing a business also. I have always believed in delayed gratification also as opposed to “instant gratification” for the purpose of short term spend, but to maintain positive cashflow and sufficient reserves for the “just in case” factor.

So what can business owners do to stay focussed and disciplined?

As a business owner you need to keep your eye on the end goal as well as regularly reviewing your incremental goals and ensuring you have tightly managed your credits and debits (simply speaking). Simply managing your business spend based on knowing your cash inflow and cash outflow isn’t enough.

The first step is to be aware of your early habits for discipline and focus. If you know you are not naturally great at managing money or need more financial management skills, seek someone you trust to help coach you or guide you to be more accountable or responsible on a weekly or monthly basis.

I believe, to some extent, in the ‘slow and steady wins the race’ approach, and that there is ‘no get rich quick’ scheme unless you significantly increase your risk tolerance. For some, luck and timing also plays a part achieving success.

Make sure you know your business financials – don’t just leave it up to someone else to manage your finances and advise or update you. This includes knowing your profit margins and monthly cash inflows and outflows. If it’s outside your budget don’t stray outside what is committed already. 

For any aspirational business owners this is a good simple reminder of how a solid foundation creates success. To help with that, ensure you have the right people, processes and systems setup as part of your foundation and business planning.

Some tips for business owners:

In summary here are some basic business fundamentals for small business owners or someone who is starting out:

  • Set your goals – both short term and longer term strategies
  • Regularly review your goals whilst keeping focus
  • Keep a positive attitude and your business motivation up, particularly in the face of setbacks or disappointments
  • Allow a sufficient financial buffer (‘rainy day’ preparation) for any unforeseen risks and cashflow issues – plan for best case and worst case scenarios
  • Don’t miss out on opportunity costs versus being overinvested in one particular asset
  • Keep an open mind and be open to left field opportunities
  • Always look for ROI in any investments you make, not just speculation (unless you are prepared to lose that amount anyway)
  • Establishing clarity with your overall goal or ultimate purpose of the business
  • Establish multiple annuity revenue streams where possible
  • You must know your business numbers and overall financial position
  • Be open to change – the definition of insanity is doing the same thing over and over again whilst expecting a different result
  • Know your risk appetite and keep managing it amongst your external environment to make sure you are not exposed.

If this resonates with you as a business owner and you would like to get back on track or accelerate your growth please contact us on +61 3 92255022 or info@alchemiseconsulting.com to book in a time to meet with us.

In the meantime, to help kick start your cashflow and growth, here is a FREE copy of our E-Book ” How to increase your profits with seven profit multipliers”

Alchemise Business Growth Newsletter #5 – Q3 – 2017/18

Sales & Marketing
Market Wrap 2018 

Introduction and Digital Risk Awareness  

In this quarterly newsletter, I would like to firstly focus on some broader topics to raise for awareness and why business owners, CMOs and marketers should be really focused on ensuring that business risk is managed for any digital presence or online identities.

Secondly, as any business evolves and focus is on revenue growth and profit targets, the issue of risk management may not be actively thought about or made aware of, so the topic of digital identity risk is really important to understand what can happen in this digital world that could turn a business upside down very quickly if awareness isn’t high and not managed properly. More on this topic shortly!

Marketing Insights Survey
We have just launched our “Why my marketing campaign failed” 2018 marketing insights survey and encourage participation of any business owners or sales and/or marketing managers to share how they have felt and what their experience has been in their marketing campaigns success, failure or ROI expectations and why.

We’ll be sharing data-driven insights and a review of marketing trends and challenges at the conclusion of the survey.

Additional information available later in this newsletter.


How does digital risk relate to your day to day business sales and marketing activities?

If your sales and marketing initiatives heavily depend on your brand and/or reputation with clients online or offline in the market, there are some basic checks to ensure your business has protected your digital identity in terms of (but not limited to) your online security policies, client data integrity, and domain name and social media ownership.

As with any business risk, there is always the flow on effect and direct or indirect impact on your sales revenue and marketing effectiveness if there is a loss of productivity, reputation damage or opportunity cost.

Such examples include having your URL or website down, or if your marketing technology applications aren’t functioning or getting breached by hackers on your customer database.

If you don’t have an SSL certificate on your domain names you may be at risk and as a secondary risk, this can also damage your organic SEO ranking with Google’s search algorithms.

Who actually owns a domain name in a business? Is it the IT department to manage or is it a marketing department responsibility or the marketing agency?

If this is of interest to explore how you can protect your business we have a few simple checks inside our a new blog article that you MUST read!!

How do you protect your business identity and digital risk?

This month I also wanted to share with you some broad news areas to raise the awareness of and how to ensure you are covered.

Customer Data Protection and Security

1) Notifiable Data Breaches Scheme

data-management

In Australia, from 22nd February 2018, small businesses with over $3M in revenue need to be aware of the regulatory requirement to publicly disclose and report any customers’ data breached by hackers or technology problems.

We’ve linked two articles below for further reading:

Businesses unprepared for new data breach notification laws
Which small businesses have mandatory data breach reporting obligations?

2) European GDPR – General Data Protection Regulation 

EU-GDPR

If you are engaging globally and in countries within the European Union, you need to be aware of the new guidelines around data privacy regulation which come into effect on 25th May 2018.

If you are an Australian business, you might need to consider if and how this GDPR requirement impacts you.

This resource from the Office of the Australian Information Commissioner contains more information about, and how to comply with the new requirements for Australian businesses operating within the EU GDPR, available here.


Start of 2018 – What we’ve been up to… 

Welcome Andrew McFayden
Marketing and Sales Insight Consultant andrew-mcfayden

In January we welcomed Andrew McFayden to Alchemise Consulting. Andrew joins us as a Marketing and Sales Insight Consultant and brings over 20 years of experience, across the IT, FMCG, automotive, construction and real estate sectors, to the team.

Andrew has an upcoming podcast series which you can preview here:

 How inbound sales is still unchanged from the 1940s to today

He has also written a blog about protecting your digital business identity and minimising risk, available here:

 How do you protect your business identity and digital risk? 

______________________

Welcome Bryan O’Reilly
Associate Consultant bryan-oreilly

We have also welcomed Bryan O’Reilly into our team recently as an Associate Consultant, and he broadens our experience and capabilities in the technology and telecommunications sector.

On that theme, we recently released a blog about NBN reseller services and how to differentiate amongst the current competition, covering increasing profitability and addressing customer churn as well as satisfaction and loyalty, available here:

6 ways NBN resellers can differentiate their services


 Marketing Case Study

How we helped an IBM Business Partner increase their lead generation conversion rate by 25% 
Case Study

IBM-business-partner

We have helped a leading IBM reseller in one month increase their 2018 campaign for cloud services and outperform a traditional lead generation conversion by 25%.

Using a combination of inbound marketing and a problem-centric approach we managed to generate 8 SQLs, 23 MQLs and 53 prospects in 30 days.

Typically traditional telemarketing typically achieves only less than 3% success rate of conversion from a numbers game.

Read more about the challenge, our solution, and the outcomes here:

IBM Business Partner drives up lead generation conversion rate by 25%


 Alchemise Marketing Survey 2018 

Why Marketing Campaigns Fail

We have just released an open survey on the back of our ‘5 Reasons Why Marketing Campaign Fail’ series (available here, if you missed it)to invite approximately 200 business owners or sales and marketing managers to share how they have felt and what their experience has been in their marketing campaigns success, failure or ROI expectations and why.

online-survey-marketingTo thank you for completing the survey, we will send you a checklist of questions and considerations for you to demand of your marketing agency or team to ensure you are getting the best ROI for your marketing spend! We’ll also send you our ROI calculator to help you work towards aligning your sales and marketing efforts. We are also offering a Digital Readiness Assessment (including a digital identity risk check) to early survey participants!

Once we compile the results, we will report back to you with data-driven insights and a review of marketing trends and challenges.


Alchemise Consulting supports The Intern Group

You may remember we hosted Charlotte Rogers from the UK on an intern placement in 2017 – Chak was featured as a new Host Partner in The Intern Group’s newsletter earlier this year!

intern-group-chak-ngWe believe in provide career opportunities to recent young graduates get a head start with work experience is important and to embrace global diversity with programs such as what Intern Group offers.


 Good luck with your Q4 and the fast approaching end of financial year! 

If you are looking for more information, or to arrange a consultation with us, please contact us at info@alchemiseconsulting.com,@alchemise_cons (Twitter) or phone our Head Office in Melbourne on +61(3) 9225 5022.

sales-marketing-alignment

Stay tuned for the next quarterly release of the Alchemise Consulting Business Growth Newsletter. If you would to like to learn more about how we can help you grow your business in 2018, please click below to make a time to talk!


How to protect your business identity & digital risk?

When you start any business you are, in short, building a brand. One of the biggest aspects that is not given enough thought is the protection of your brand, your business identity, and digital risk and connection to reputation. At the end of the day, your reputation is your passport to do business with other people, corporations, small businesses and so on.


“So how do I protect my Digital Risk and Brand Identity?”
 

business-identity-digital-brand

.au Domain Names and your ABN
If you have recently registered a .au domain name either directly or via a hosting/marketing agency, make sure that the domain name is registered to your ABN. The key point here is your Australian Business Number needs to be listed. If it is not then you will need to make sure that this is corrected as soon as possible.

The risk is if you don’t own the domain name then who ever controls the ABN can have your site brought down in minutes. If that is not enough to make you lose sleep at night then consider if you are trying to win new business, and you have a major contract waiting to be signed. Should a savvy competitor check your domain name ownership and realise that you don’t own it, they may sit on the information until the crucial point and then let the customer know.

It would be very much like me asking for your business and getting you to hand over a significant amount of money, but on behalf of another company when I don’t work for them.

I might have an email address of john.smith@acme.com.au and I might also reply to that email address but if my ABN is Jonny Be Good Promotions it might be worth checking further.

It was not too long ago that con artists were renting houses in expensive neighbourhoods and then selling them to unsuspecting people, only for those people to find out that they had lost a lot of money. 

The sound of reputations being destroyed is loudest to the person who has spent time and effort to build it.

TIP: You can check the registration details of your .com.au domain name HERE

business-reputation-business-identity

Other Relevant Domain Name Spaces
It would be exceptionally easy to go broke before you started your business by securing every conceivable domain name out on the web. DON’T do it.  

 Domain Name Registration

Unless you are a mega-corporation your pockets are not deep enough. Consider a strategic approach and register, where possible, the .com version of your domain name as well as the .com.au. In addition to this I would also look at some of the new GTLD (Global Top Level Domains) as well.

Let us say that your company name is ACME Pty Ltd:

If you have a rent roll then “acme.rental”,
If you are a IT security company “acme.security”,
If you have a café then “acme.cafe” or “acme.cityeats” or “acme.coffee”.

Compiling the list of possibilities and the working out your long term strategy on which to secure should be an early ‘must-do’ on your business plan.

TIP: You can find the full list of available domain spaces HERE

SSL Certificates
Chrome and Firefox are going to be giving priority ranking to websites that have valid SSL certificates over sites that don’t. This is good practise for other reasons as well. It will mean that your visitors should be able to visit and disclose personal information on your site and be comfortable that the information supplied will remain private. There are many SSL providers and you should be able to obtain an effective SSL based on your business and budget requirements.

Information SecurityYou may ask how does this protect my digital brand?
If your site is encrypted with an SSL certificate then you have a greatly reduced chance of confidential information being obtained by expert hackers that are looking for weaker sites to pilfer money or customer information from. If your site gains a reputation as being unsecured then your customer base will soon stop transacting through your site. Reputations are destroyed in minutes and take years to build up or rebuild. 

Your hosting provider should be able to assist you with making sure that you have a valid SSL on your site.

TIP: You can find information directly from Google HERE

Trade Marks
Like domain names, securing your brand and business identity across multiple countries will quickly become costly. The thing to remember is that if you have a trademark and it is infringed, it provides you with the legal avenue to tackle that infringement. It is not an automatic go to jail card and you will still need to employ the services of a legal representative to bring them to heel. 

Likewise when you start a business it is worthwhile performing a check to make sure that you are not infringing on a trademark as well. It is an expensive and time consuming exercise to put a website together around a brand name.

TIP: A good place to start these checks is the IP Australia site.

As all of the above ties into your Digital Brand Identity it does pay to ensure that you have each consideration covered off. Having a sound strategy will give you a strong direction for your business growth and ongoing digital sales and marketing activities.

If you feel that you need advice on any of the above then I am more than happy to provide some further insights on how to protect the various elements of your digital business identity and minimise your digital risk.

For further details on any of these points above with a confidential discussion on how we can assist you for digital marketing and risk strategies, please contact us on info@alchemiseconsulting.com or register for a free initial consultation.

 For a limited time, the Digital Readiness Assessment will also include a domain name ownership check.