by Tim Connor, CSP
It’s a proven fact based on years of sales experience and research that developing and cultivating strategic relationships or informal partnerships is one of the fastest and least expensive ways to grow your business or organization.
Recent research has indicated that the average cost of a sales call today is close to $1000. This number includes the resources, time, training, etc. required for each salesperson to reach out to a prospect and attempt to close them. Obviously, this varies by industry, but it will prove pretty close with many products/services in the manufactured housing industry.
If you add to this that the average closing new prospect conversion ratio is around 5 or more total closing attempts, I’m sure you can do the math, but I’ll give you a little help.
Here is your business calculation:
marketing costs PLUS
your Staff Overhead costs PLUS
your monthly Location and
Inventory Costs. These costs would include any financing charges you pay for these items.
1) Let's say the above are a modest $75,000 a month.
2) Let’s say you have three salespeople on your team at a retail or busy community location. Let's say you get 10 prospects a day on the phone and through the doors (if you aren't you should call us). Let's also agree you are closed on Sundays. So 60 prospects a week, or 260 prospects a month.
3) In this example, you would have a per lead cost of $288 per contact. But let's be honest, not too many companies that call us for services can honestly tell us they get 10 new contacts a day, maybe 2 or 3 (in some cases, if that). So if it was 2 instead of 10 as in the example above, the per lead cost would be $1,442.31 each.
Some may argue, wait, you are including costs beyond the marketing and sales team in this calculations. That's right! Because you have to have inventory, the location itself and all the other overhead items in order to have that sales person and that marketing.
So, how can you improve your prospecting success, reduce your overall sales costs and improve your per new client profits?
Simple – develop strategic partner relationships with individuals or organizations that can send you better qualified prospects to improve your conversion ratio as well as reducing your overall sales costs and the time it takes to close each new sale.
Thousands if not millions of organizations are using this approach today and it is working to achieve better results.
For example, are you teaming up with local realtors? Our MHMSM's Tony Kovach has successfully teamed up with Realtors to drive more business, in a win-win fashion, for companies based between Mexico and the Canadian borders.
If you are a chamber of commerce member, are you providing them with some literature that they can hand out to prospective newcomers?
In my experience, associations use strategic relationships on a routine basis. Some of the relationships may be free, some paid, but all of them add to the impact and reach of a good association.
For example, while some association's may be lead by or employ an attorney, it would be common to have a lawyer who is also providing contracted services.
Most associations don't do their own major website work. They may use a professional to do an new or updated website, and then get trained to do updated event postings in house. The service provider is clearly a strategic relationship.
Perhaps one of the boldest examples of a need for strategic relationships involves manufactured home communities who have vacancy issues. There may be 250,000 vacancies in the U.S. Or more today. Imagine, if the average site fee were $300 a month, filling those vacancies with good, paying residents would yield $900,000,000 more dollars a year to our Industry. That's close to a billion dollars, and if you are not with the government, you know that is real money.
If those vacancies are filled with new homes, and the average new home would be say $40,000 at retail (let's not give away margin figures, in case a consumer happens to be reading this).
That's 10 billion dollars worth of sales to manufacturers. Even spread out over say 3 years, that would represent a 166% increase in sales over the recent 50,000 +/- new units shipped a year baseline experienced for the past 3 or so years.
Now if you were a factory, would it pay to figure out how to leverage some relationships to make that market blossom? There is only one good answer for that, and it is YES.
The essence of any strategic relationship is to create win-win opportunities for those involved. For the past few years, the Midwest Manufactured Housing Association and Show Ways Unlimited teamed up with MHProNews.com to market their annual Louisville Manufactured Home Show Event. Where they happy? Check this link, and see what they said.
But here’s an important key. These relationships need to be reciprocal in some way. The realtor, or chamber, or association or service provider – everyone in the mix ought to benefit. Win win is the key to success.
Some of the biggest companies in the world use strategic relationships and it has worked for small and mid sized firms to grow as well. Learn how to use them, and get the best strategic ally you can for each and every one of your endeavors. You'll be glad you did. ##
(Editor's Note: Tim Connor is a member of MHSpeakerTrainer.org. Check him out and consider Tim or others for your next association or corporate event).
(Editor's Note: Tim Connor is a member of MHSpeakerTrainer.org)