Book Summary "Bag the Elephant"
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Bag the Elephant
How to Win & Keep BIG Customers
By Steve Kaplan
Author: Steve Kaplan
Publisher: Bard Press
Number of Pages: 191 pages
ISBN: 188167628
taken from amazon.com
The Big Ideas
Do you dream of landing that one big account that
can dramatically increase your profits or your paycheck? Do you want to hang on
to your big customers and enjoy massive repeat business?
Author and expert entrepreneur Steve Kaplan shares with you strategies that can
help you successfully
Bag the Elephant. Whether
you are a business owner, a salesperson, or an executive, you will be able to
use the tips and techniques to get you over the top!
Part 1 - Your Elephant Is Waiting
The Third Path: Achieving Lasting Growth and Profits
Every business follows one of three paths.
Unfortunately, only one can lead to lasting success. To get to the winning path you must either:
1.
Make a lot of small sales to more and more small
buyers, or
2.
Make a few big sales to a few big customers.
Option number two is better because it takes less
time, fewer employees and a smaller capital.
The Three Business Paths
1.
The Trail of
the Snail. More than half of business owners end up working their tails off
day after day without reaping rewards. This happens when business owners fool
themselves into thinking that success is just around the corner, and yet see no
way to get to it. Others end up following this path because they are afraid of
change.
2.
The Arc of
the Shooting Star. A third of all businesses grow so fast, experience
skyrocketing sales, only to fall back to earth in the end. A shooting star
business fails because it didn't capture more big customers to feed its growing
business or didn't improve the company's infrastructure to meet big customers'
needs and demands.
3. The “Bag the Elephant” Track. Companies
that follow this path grow steadily but never allow their number of customers
to outpace their infrastructure. Here are four tips on how to win big:
a.
You must attract, keep, and leverage big clients.
b.
You must acquire the needed expertise to scale up the
business.
c.
You must instill a big-business culture in your corporation.
d.
You must have the courage to make changes to further
growth.
You’ve Got to Believe: Elephants Need You, Too
Elephant strategy, or targeting big companies as
clients, is inexpensive and very profitable. You must make Elephant hunting a
vital activity in your everyday work routine.
You can not do without it.
To bag prime clients, you must know how big companies
operate. Try to find out how they decide to buy a product or service. After
which, you must try to figure out which of your prospective clients are best
for you. It is only after you have done all these that you can draw a strategy
for approaching them. The best strategy is to seek a champion inside the
company to vouch for you and your business.
Before you begin your hunt for that Elephant, you must
first stop believing that large companies are not interested in the products or
services you offer. Believe it or not, the Elephants need you too.
Part 2 - The Secret Life of the Elephant
taken from third party
The Big-Company Focus: Learning to Think Like an Elephant
You
must learn how to think like an Elephant. This will enable you to see things
from the Elephant's point of view. In fact, everyone in your organization
should start thinking like an Elephant. You must ensure that your entire team
is committed towards a common goal.
Six Keys to Big-Customer Success
1.
One and Done -
Remember that you're have one shot at a potential big client. If you make one
mistake, your shot is over. Do not give your prospect a reason to doubt your
capability.
2.
Priority One -
Everyone needs to feel special. You must make sure that you give your Elephants
special attention. Return their calls immediately and address their problems
immediately.
3.
Whatever It
Takes - Be flexible. If a big client asks you to customize a certain
product, consider saying yes even if it means extra work. If an Elephant wishes
to reset meeting times to suit their schedule, always agree.
4.
Long-Term
Vision. Think of your big client as a partner in a long-term relationship.
Don't go for the one-time, big score and risk losing your Elephant in the
process.
5.
Breath of
Fresh Air. Work should be fun. When you are having fun, your people work
better. Even more important, potential clients will find working with you a
pleasant experience.
6.
Partners. Find
ways for your big clients to save money or to improve their processes and
methods. Find the middle ground between filling your client's needs and keeping
your business healthy and growing.
Tactics
Here are some tactics you can use to instill the
big-company focus in your organization:
1.
Post the six keys to big-customer success for everyone
to see.
2.
Employ performance-based compensation.
3.
Have frequent team meetings.
4.
Have a “right now” policy (e.g. Answer your Elephant's
phone calls immediately).
5.
Give awards and recognition for outstanding
big-customer development.
6.
Provide training and certification on the six keys to
big-customer success.
What to Know About Elephants: Who, How, What, and When
Finding out how purchasing decisions are made by
large companies are a tricky business.
Here are four things that will help you work on this more effectively:
1.
Know Who Does What.
Find out:
a.
Who influences the decision to buy (e.g. marketing
manager, senior buyer, purchasing manager).
b.
Who buys.
c.
Who can kill the deal.
2.
Know How to Get
on the List. Nowadays, a lot of companies use a preferred vendors list.
Make sure that your name is on top and in as many categories as possible. Ask
your contact if they have a procurement program of that sort. Fill up the
necessary forms and meet with the person who runs the program personally.
3.
Know the
Company's Lingo and Quirks. Learn the company's unique acronyms, report
names, buzzwords, and even the nicknames of the employees.
4.
Know the Budget
Season. Find out the details of the company's budget cycle. This way, you
would be able to provide the company the information they need from you at the
right
Embracing the Bureaucracy: Making Their Red Tape Work for You
Bureaucracy and red tape can be very frustrating. The
best way to deal with this is for you to use an Elephant's bureaucracy to your
advantage. Find out how the system works and use what you learn to keep you
ahead of the competition.
Here are the two ways you can learn the system:
1.
Analyze activity.
2.
Review correspondence.
Tune Up Your Elephant
The people employed by your big Elephant probably
dislike the red tape they have to deal with as well. Make it easier for them.
If she needs information from you, give it to her in a useful format. If she
needs to crunch the numbers for a report, volunteer to do it yourself.
Part 3 - Romancing Your Elephant
taken from third party
Drawing Up Your Hit List: Finding Your Best Big-Company Prospects
Now that your entire business has utilized the
big-customer state of mind, you must now get ready to bag your first Elephant.
Before you do so, however, you must choose which Elephant you wish to hunt
down.
Positioning Your Business
Here are the five steps in positioning your business:
1.
Listing your revenue streams.
2.
Identifying and listing your operational mandates.
3.
Initial Elephant positioning.
4.
Big-customer research.
5.
Putting it all together.
Compiling Your Hit List
Start by making a list of all your potential big
customers. Choose companies that might have a need for the product or service
that you provide. Don't make the mistake of overlooking obvious prospects; or
ignoring small companies. Remember, these small companies might very well
become Elephants tomorrow.
Selecting the Best Target
After you've come up with a list of your prospective
clients, you must narrow them down and select only the best targets. Here are
some questions you can use to guide you during your selection process:
1.
Which prospects have the most to spend on your product
or service?
2.
Does the prospect's business philosophy dovetail with
your strengths?
3.
How does the prospect reward the employees who would be
buying your product or services?
4.
How much does the company really need you?
5.
How far afield will the association lead you?
Knocking on Doors: Making That First Solid Contact
Once you have identified the Elephants you wish to target,
you must make sure that you are comfortable with the way they operate and that
you are knowledgeable on the best ways to approach them. Once you've got that
down pat, it is time to approach the big clients.
Here is a step-by-step guide on making that first
solid contact:
1.
Build your prospect database. Divide the prospects into
three categories: hot leads, great fits, and secondary leads.
2.
Send introductory mailings to introduce yourself and
your business. Write a short cover letter to explain what you do. Make sure the
letters are customized, clean and clutter-free.
3.
Make your first phone call two to three days after your
prospects have presumably received the introductory mailing. During this phone
call, gather as much information as you can for future contacts and to set up a
meeting to with a legitimate buyer.
4.
Send detailed mailing immediately after contacting your
prospective client. The mail should provide the prospect more detailed
information about your product and services.
Your letter should also set up a meeting where you can do a
presentation.
5.
Make a follow-up phone call two days after your
prospect has received the detailed mailing. This phone call should help develop
your relationship with the buyer and enable you to set up a meeting where you
can present your products and services.
6.
If the prospect has not agreed to meet with you, it is
time to send creative mailing two weeks after your follow-up phone call. A
creative mailing is more of an advertisement for your business. You
can even send small gifts. Your goal is to get your
prospect to contact you to talk about the mail or the gift that you sent.
7.
Make a third phone call to the prospects who have not
yet agreed to meet with you a week after they receive your creative mailing.
Ask the prospect if he or she had received your creative mailing. Mention that
you would like to stop by for a few minutes to introduce yourself.
8.
Do not be discouraged if you are still unable to set a
meeting. Remember that some relationships take longer to develop. Be patient
and wait for your opportunity. When the opportunity comes, step in and deliver.
Matching the Prospector to the Prospect: Putting
Your Best Face Forward
Putting the wrong personality type in the wrong
selling situation may be disastrous to your business. You must identify your
salespeople by their personality types to enable you to place then with the
right customer. This entails a two-step
process:
1.
Profile your salesperson.
2.
Match him with the company where he'll have the best
chance for success.
Profiling Your Sales Personnel
There are three types of salespeople:
1.
The Sage.
2.
The Pal.
3.
The Pit Bull.
All three types can succeed as long as they are placed
in ideal scenarios and situations. Here is a chart that you can use as a guide
when you are match-making:
Face-to-Face with Your Prospect: Preparing Yourself and Your Pitch
Sooner or later, you will finally be given the
opportunity to meet with your prospect face-to-face. Here are some tips that
can help you prepare for your meeting:
·
Set priorities. Make a list of what you want to
accomplish.
·
Anticipate your prospect's concerns.
·
Make sure that you are fully prepared.
·
Focus on the prospect. Do not talk too much about yourself or your
business.
·
Team up. It might be best to ask some of the
members of your team to join you in this meeting
·
Follow the client's format.
·
Always follow through.
·
Seal the deal. Ask for what you need.
·
Find ways to simplify the prospect's life.
·
Seek ways to boost your credibility.
·
Cultivate relationships.
·
Learn from no.
·
Find out why you didn't get the business and use
the knowledge to improve.
Standing Up to Your Elephant: Negotiating from Your Strengths
Negotiating with your Elephant may seem to be an
intimidating business. Here are some guidelines to help you out:
·
Negotiate with a person, not a company. Do not
believe people who say, “I'd love to say yes but I'm tied by company policy.”
·
Prioritize your gives. You must decide prior to
the meeting the things that really matters and the points you are willing to
concede.
·
Don't surrender too quickly.
·
Give yourself cover. If you own your business, it might be better
not to mention that you are the owner.
·
Don't sell yourself short.
·
Mitigate all pricing concessions. If you lower
your price, you're going to find it hard to raise it again. Make sure you still
make a profit.
·
Create a pricing strategy and stick to it.
·
Do not sacrifice quality for the deal.
·
Handle RFPs (Request for Proposals) with care.
·
Count services as costs.
·
Boost margins with add-ons.
Recruiting Great Champions: Courting and Cultivating Your Inside Sales
Rep
As your relationship grows with your prospect, sooner
or later you will need someone in the prospective company who will vouch for
you and push his or her own company to avail of your products or services. That
individual is called a champion.
Anatomy of a Great Champion
·
Motivated by what's best for his employer's
business.
·
Respected by superiors.
·
Socially networked.
·
Able to navigate the company to get things done.
·
You share the same business philosophy, work ethic
and background.
·
Willing to give credit.
Part 4 - Leveraging Your Elephant’s Power
taken from third party
Keeping Your Champions Cheering: Treating Your Friends Right
Now that you have champions, you must be able to
cultivate your relationship with them. Here are a few tips you can use to
ensure that your champions keep on cheering for you:
1.
Share the limelight.
2.
Known when to back off.
3.
Make a happy family.
4.
Remember your roots.
5.
Express gratitude.
6.
Give them a stake. Not a financial stake, but an
emotional one.
7.
Help champions say thank you by giving new ways to use
your products and services.
Taking the Inside Track: Building Strong Alliances
It is now time for you to seek and form alliances.
Through alliances, you will be able to get business from a certain company's
group or department in exchange for things they need. These needs are:
1.
Power.
2.
Information.
3.
Better work experience.
Putting Your Elephant to Work: Other Ways a Big Customer Can Help You
There are other non-monetary ways that a big client
can help you. Here are a few of them:
1.
New Business
Development - Your big clients can fund the expansion of your business into
new markets or services.
2.
Training and
Expertise - Through your Elephant's knowledge base, you can find ways to
learn and grow.
3.
Help with
Details. - Your big clients can provide you with proven processes,
discounts and the use of their facilities.
Part 5 - Five Killer Mistakes
taken from third party
Mismanaging Client Expectations: He Said, She Said
Sometimes, some situations will occur when your
client's expectations just can not be met. This happens when salespeople are
merely posturing for a sale, or if they are unable to deliver their promises
because they neglected to inform the operations staff.
As a salesperson, you should never make promises you
can't keep. Particularly if you are just doing so because you want to make the
sale at all costs. You must remember that it is important for your company to
gain a reputation for overdelivering. The only way to get this reputation is to
under promise. Here are some tips:
·
Think before you speak.
·
Cut yourself some slack.
·
Define success.
·
Stay hands-on.
·
Perfect your processes.
·
Communicate promises.
·
Pre-chart overdeliverables.
Fumbling Client Crises - Blindsided by Sudden Catastrophe
Your increasing number of sales increases the risk of
a crisis involving your Elephant. Naturally, you do not want catastrophes to
occur. However, if you are able to deal with crisis well, you will gain your
client's trust and confidence even more.
Here are some tips on dealing with a client crisis:
·
Do whatever it takes to fix it.
·
Take responsibility, even if it isn't your
fault.
·
Act swiftly and effectively.
·
Step in and take charge.
·
Don't assign blame or point fingers.
·
Stay calm.
·
Communicate constantly with your client.
·
Keep your eye on the ball.
Operational Explosion: Biting Off More Than You Can Chew
When you
bite off more than you can chew, your business can fall apart to pieces right
in front of your very eyes. You must prepare yourself for the increase in your
business. Elephants expect high quality products and great service. Anything
other than that would be a disaster.
Here are some signs that your business has bitten off
more than it can chew:
1.
Customer expectations aren't being met.
2.
Your business gets into reaction mode to try to save an
account.
3.
Resources (both money and people) are drawn from other
parts of your business.
4.
The customer is upset, your business is at panic mode
and employee morale is low.
5.
Your preexisting business suffers from reallocation of
resources.
6.
Profits go down.
7.
The customers leave.
8.
You find yourself trying to pick up the pieces of your
business.
Mock Elephant Plan
The Mock Elephant Plan is a useful roadmap to use
whenever you are:
·
Attempting to dramatically increase your sales
levels in a short time.
·
Altering your product and services.
·
Fulfilling a promise made to a client that might
impact the way you do things.
Here are the six steps to the Mock Elephant Plan:
1.
Bring the gang. Have a meeting and invite everyone
involved in fulfilling the Elephant's contract.
2.
Review your company's operations.
3.
Anticipate problems.
4.
Communicate.
5.
Include costs in quote.
6.
Have a back-up plan.
The Elephant Trap: All Your Eggs in One Basket
Do not allow yourself to become overly dependent on
your Elephant. Client dependency will leave you exposed and vulnerable. You'll
find yourself in big trouble should the day come when your big client decides
to switch suppliers. Client dependency also gives you poor negotiating
position. Furthermore, other Elephants might not wish to do business with you
because of your association with their competitor.
You must keep things in balance and protect yourself.
Here are some ways to do so:
·
Keep your ear to the ground. Try to know what's
going on behind the scenes.
·
Reinvent yourself constantly. Don't allow
yourself to be a has-been.
·
Be stingy with exclusivity.
·
Seek multi-year commitments.
·
Spread your contracts.
·
Price correctly.
Reducing Dependency
Your dependency on a client is measured by the
percentage of your revenue or sales that comes from one customer. Reduce the
percentage by either replacing the big customer with another big customer or
increasing you r sales to another company. It is always best to get more sales
from other big customers.
Here are tips on how to snag a new Elephant:
1.
Replicate successful sales strategies.
2.
Analyze what worked best with your first big customers.
3.
Leverage your credibility.
4.
Make new business top priority for your sales team.
Losing Sight of the Numbers: Up Cash Creek Without a Paddle
Even
with Elephants and increasing sales, there is still a chance that your business
will simply run out of money. This happens when your customers are not paying
you on time or when your expenses are higher than what you initially expected.
Get Paid On Time
There are usually three reasons why Elephants pay late:
1.
They are bureaucracies.
2.
They make money on your money.
3.
Because they can.
Here are tips you can use to hasten the payment
process:
x
First, get your house in order. Do
not send your invoices late. Adjust your audit procedures.
x
Understand the customer's
processes. Learn how payments are approved and where invoices should be
sent.
x
Meet purchasing people. Find
out who is in charge of payment and meet with that person.
x
Get the numbers. Find out the
P.O. number or internal code of the contract.
Include the numbers in your invoice.
x
Know how to trouble-shoot. Learn
the procedure on how to follow up past-due invoices.
x
Ask your contact. Use this
only as a last resort.
x
Invoice correctly.
Project Your Cash Flow
Here are tips on how to manage your company's cash
flow:
x Know your current payables and
receivables. x Negotiate
with suppliers. x
Draw up a bank contingency plan. x
Create your own investor network.
About the Author
Steve
Kaplan is the man they call The Difference
Maker.
y the age of 35,
Steve had turned his basement business that was earning less than $100,000 in
profits into the number two ranked promotion, marketing, and database company
in America with 1,300 employees in 21 countries and over $250 million in
sales. In addition to being the founder of The Difference Maker, Inc, Steve currently owns several
businesses, including Kaplan
Enterprises, a venture capital group specializing in operating and equity
roles across businesses in a variety of industries. And he is a partner in eSkape, a 60,000 square foot family
entertainment center.
He serves on the
board of Nations Healthcare, a
company that builds and operates day surgery centers in the United Kingdom.
Steve also served on the Executive Committee for EuroRSCG, which set strategy
for its 176 company conglomerate.
He has taught courses in various
business disciplines and has recently written a popular business book, Bag
the Elephant!
