Tag Archives: Sales

Beware – especially #SMEs

Whether you provide a service or whether you make something and no matter how GOOD you are, you need to tell the world about what you produce. THAT means that a large part of your job is Selling!

Whenever I train people to sell, I tend to major on how to get your product or service in front of people and how to turn value into hard cash. A good Sales Presentation IS useful but as MOST entrepreneurs who fail, do so because they don’t distribute or sell their product effectively, I thought that on this occasion, I would cut to the last bit……the very end of a pitch, presentation or meeting  – so that you recognise the signals which tell you that you have hit a brick wall and have made an error during your pitch.

I have many years experience of pitching my company to senior management – usually the Chief Executive and even though I’ve completed hundreds of pitches, presentations etc, I still find myself making the occasional mistake – usually by simply misreading my prospect’s signals.

Here are some phrases which you may have already come across….ALL of them indicate that somewhere along the line, you have made a mistake. It’s by no means irredeemable but you DO have a bit more work to do:

” Leave me your card, I’ll get back to you.”

” I need to discuss this with my partner/directors/ wife/ HR Director/ Purchasing Manager/ Accountant/ Solicitor etc etc.”

” Call me in a week’s/Month’s time.”

“Let’s get Christmas/ Easter/ Summer Holidays etc  out of the way…then we’ll talk again.”

“Write to me.”

“We’re reorganising/moving premises/installing a new system.”

“At the moment, everything is a bit ‘Up in the air’….I’ll call you when  we’re ready.’

“We’ll definitely go ahead in the New Year/ next month/next financial year  etc.”

If you look carefully, ALL of the above are stalling statements from someone who has not been persuaded that he or she has a NEED or that YOU are the one to satisfy their need.

So, if after the first one or two follow-up phone calls, letters or emails, you are still being stonewalled…..move on and maybe come back in a few months.

Remember: There are NO reasons…only excuses and bad sales presentations!

The rats were digging – now they’re leaving.

karadzic.jpg Alistair Darling

We have devoted quite a bit of time and space to Mervyn King, his band of funsters and their effectiveness in doing anything at all to the economy. Currently, they are totally boxed in. 

They cannot attempt to stimulate the economy by dropping rates because inflation is running away –  it is out of control and as usual, the BoE is just an expensively suited observer.

There is as saying:

1. There are those who make things happen.
2. There are those who watch things happen.
3.There are those who wonder what happened

The BoE has just slipped from Two to Three. They never made it to One.

The USA has responded aggressively because after three years and a gradually collapsing housing market they had to stop it.

Here in the United Kingdom, interest rates will not be seriously played with until 2009.

That will not help our collapsing property market and unlike the States, we are still in the early stages of the collapse-the USA are about two to three years ahead of us.

The main growth driver of the UK economy is the financial services sector.  That sector is running for cover and because the economy is manufacturing-light, we are in deep trouble.

Past Chancellors have made a great deal of the fact that we are the world’s commercial centre and that London is that the epicentre of world trade.  That is all very well  when the world’s economies are booming but leaves us very vulnerable when they are not.

Unlike the States-all that we can do is sit and wait.

Rats deserting the sinking ship.

We thought that things were bad when Eastern Europeans started heading back home. The real reason that they are disappearing is that our own (domestic) unemployment rate is gathering pace which means fewer jobs for foreigners.

Looking at the G8 group , the best-off at the moment are the “resource economies” such as Russia and Canada. They have something to sell.Our problem is that we have nothing to sell – we are as service-based economy.

What Gordon Brown should do is to take back control of interest rates but not give them to Alistair Darling.  Alistair  can go away, grow his hair and beard, put on a large pair of  glasses and work as a new-age therapist.  No-one will recognise him.

Finally, the Securitisation of mortgages should be outlawed. It is far too easy for bad lenders to hide bad lending by bundling mortgages up and flogging them off on the open market. It is like buying a box of bric-a-brac at an auction and when you get home , discovering that you have bought a load of crap.

Lenders should take responsibility for their own lending -like they used to.

By the way…. Northern Rock….Covered Bond issue?  One thing to say. No.

The Stochastic Process and the Delayed Risky Zero.

 a-spiv.jpg“Psst….fancy any Credit Derivatives?…”

iTraxx is a brand-name and it refers to a family of credit swap index products. There is also a US credit index called the CDX.

These types of investments are very technical and speculative. The dealing and computations are carried out by very specialised investment”geeks” who tend to be mathematicians rather than the usual Delboy barrow-boy types who trade stocks.

We mention this because there appears to have been another casualty. This time the home of the casualty is Morgan Stanley in London.

About a month ago, a trader called Matthew Piper was suspended when a routine audit uncovered a $120 million hole in his trading account. The toothless tiger that is the FSA has been called in to investigate (ho! ho!). Let’s hope that they have someone in place who understands the title of this article.

The main clients of the traders who bet on the CDX are the hedge fund managers ( yes, it’s them again) and nothing that the Chancellor says or does will stop these investment bandits from operating. Primarily, because the only people who understand what they are up to is themselves.

Foreign Credit Default swap, martingdales and the Collapsing Numeraire are more of the highly technical and incomprehensible terms that investigators will try and get to grips with. At best, they will be able to suggest another layer of Risk Management to be installed without really having any idea why.

It is far too easy for a trader to hide his cock-ups by simply overstating the value of the securities that he is in charge of hedging.

The really big worry is that traders such as Matthew Piper are probably being “stitched up” by some real wide boys and then being hung out to dry by their companies.

This year, Morgan Stanley ‘s second quarter profits were 60% less than last year – that was in spite of the windfall from the sale of a couple of assets which added about $1billion to the bottom line. Their shares are down about 7% and will fall further. Their income is at 95c per share, whereas last year it was $2.40 per share.

Lehman Brothers – quarterly loss of £2.8billion – and so it continues.

All these negative figures are as a result of huge trading and hedging losses.

Spygun has been involved in many Business Control and Risk management situations – so here is a free lesson to all you CEOs:

There are are only four Business Controls that you need to keep reviewing and appraising. Implement the reviews in a structured way and do them in the following order.

1. Supervision. This is a day-to-day control and the clue is in the title. What is the day-to-day supervision? Is there any?

2. Procedures. Are there any for these traders apart from shouting at each other from 7.00 a.m to 10 a.m and then chatting to their hedge-fund mates? This control is again a short-term day-to-day or week-to-week control. 

3. Organisation. This is about the people who are in charge, their remuneration, qualifications, experience, management, structure. This is a medium to long-term control and needs to be reviewed regularly.

4. Policy. This is a high-level control and is all about what the Board says should be done and how it is implemented by the Senior Management and how it cascades down.

All of the above controls need to be reviewed constantly and not when the FSA blunders into the picture. The control which is usually the Root Cause of this type of problem is the last one and is the responsibility of the Board.

It was the Board that agreed to this type of trading. They can stop it. If they do not want to stop it, they have to form a policy as to how the trading is implemented and continued. If they decide that it is not viable to try and control this type of trading – the answer should be simple.  For instance, they can discourage heavy risk-taking by minimising the associated rewards and/or make the traders’ managers directly responsible and accountable for their charges’ misdemeanours.

Traders such as Matthew Piper are not always at fault. They tend to be non-entrepreneurial  and therefore ripe for a right royal stitch-up by the less scrupulous scum operating in this extremely murky market.

Slow Mervyn – The Traders’ Friend

tortoise_big.jpg  Mervyn King

Mervyn King’s Horlicks has just worn off  and he has  woken up to the fact that City bonuses are high. Breathtaking! He is so on the ball that he makes Ronaldo look like a one-legged tap-dancer.

Mervyn!!!  The outrageously high bonuses, boni or boners are not a new phenomenon. In fact Joseph Stiglitz, the Nobel Prize-winning economist said exactly what you’re saying about a month ago. Mind you, what with one thing and another, I suppose that you’ve only just caught up with your reading.

The primary reason for the outrageously high payments to the designer-labelled barrow-boy City slickers is the  over-simplified reward system.  The City rewards the “ups” but  does  not penalise the “downs”. That encourages risk-taking in a big way.  A trader can make a large bonus from the profit on a deal but when that deal or the share price subsequently falls, there are no sanctions.

Here is an idea from Spygun’s many years experience in Financial Services, illustrated by an example from the life assurance industry:

In the good old days when life was simple, every day was sunny and back doors were left unlocked, a life assurance salesman would be paid what was known as “indemnity commission” on any contracts that he sold. If the salesman sold a £100 per month policy to a client , he earned say £1000 in up-front commission.  Over the next twelve months, the  client paid his £100 per month and at the end of the year, the salesman’s commission had been paid for. However, if the policy lapsed in the meantime, the commission was “clawed back” on a pro-rata basis. That discouraged salesmen from selling policies to high-risk clients.

With the sorts of systems that all banks and financial services companies currently operate , it would be a comparatively simple matter to create a payment system which was more equitable and which took into account the often negative consequences of trading.

The Life Assurance companies employed people who earned millions in commission from unprofitable contracts and eventually, the Financial Services Act helped the industry to rewrite the rules , resulting in a far more sensible pay structure and a much less aggressive culture.

It is now time for those nice people at the Financial Services Authority to loosen their cardigans, bare their teeth and take control.

The argument of having to pay obscene bonuses in order to hire “the best” has been used before. “The best” used to mean the most aggressive and most ambitious salesmen.

We now have the opportunity to enter an era where “the best” means the best-qualified, the most knowledgeable and the most professional.

Crunch or Squeeze?

“Credit Crunch” is one of those phrases which has gone into common usage but in common with “learning curve” “carbon footprint” and, believe it or not “interest rate”, it is a phrase that is often used but not always understood.

The Credit Crunch is a new phenomenon. In the old days, we had a credit “squeeze” which simply meant that credit was only available to those who did not really need it – those with a gilt-edged credit rating. In other words, you had to have a near-perfect credit rating in order to obtain credit. The tap was on but only slightly.

When the tap is turned off, it is a credit crunch. It means that for whatever reason – the banks will not lend to you. By that definition, we are NOT in a credit crunch – we are in a severe credit squeeze. That is because you can still borrow money – you just have to look harder and maybe pay more.

The banking system is a bit of a con. You may be surprised to hear that your money is not kept in a shoebox in your bank’s safe. If you go to your bank today and ask to see your investments, they will not be able to show them to you because they do not physically have them. Your investments are abstract as is your overdraft: “Can I see my overdraft, please?”

Everything is a paper transaction.

Banks borrow money from each other in order to lend to you and me. Hence another mnemonic that you have seen and wondered what the hell it meant- LIBOR.

Libor is the London Inter-Bank Offered Rate. That is the rate at which banks borrow money from other banks so that they can lend to you and me. When we borrow from a bank, we have to produce some sort of collateral. The Banks are the same. Their value is also measured  in terms of  the assets that they own. 

The Americans who started the collapse of this very unstable house of cards lent money to people who had very little chance of repaying the money. These are the so-called NINJA mortgages: (No Income, No Job or Assets).

Nowadays, it is quite common to “securitise”  mortgages. That simply means that a whole bunch of the mortgages are packaged into one large financial lump .   Because a mortgage not-only has a value which is backed by the value of the bricks and mortar, it also produces an income (or cash-flow) it represents an ideal investment. All assets can be securitised so long as they are associated with a  cash flow.

The cash-flow in the case of securitised mortgages consists of the mortgage repayments that are made by the borrowers.  If the borrowers “en masse” are unable of unwilling to make the repayments, the value of the securities falls very sharply.

Many of our own banks invested in these  securitised mortgages so they now are holding investments which are nigh-on useless because those investments are no longer producing the income generated from those American mortgage repayments.

The next stage is simple. The properties which contained these NINJAS have to be sold so that some losses can be recouped. At the same time, lending has slowed down which means that the only way that the properties can be shifted is for them to be sold so cheaply  that they cannot fail to sell.

That is just one of the ways that  house prices can be driven downwards.

Ricky Gervais: Comedian, Con-Artist or Tosser?

Am I the only one who thinks that there is a touch of the Emperor’s New Clothes about Ricky Gervais.

He is not a comedian. He is not funny. His early pop “career” shows nothing more than the fact that his primary motivation has simply been the acquisition of fame.

Stephen Merchant is the main man. Without him, Gervais is a nobody.

Did you see Gervais die on his arse during his first real test – the Diana concert? When challenged about this, he said:

“After the Diana concert there was one guy – who works for a tabloid – and he wrote that the crowd booed. They didn’t boo, they loved it. People love it when something goes wrong and I was standing there and they demanded I do the ‘robot dance’ and it was funny. But this guy wrote, ‘He’s rubbish, everything he’s ever done is rubbish and it’s all over for him’.

The next bit of what Gervais said was the most telling:

“That week I got nominated for four Emmy Awards, sold 100,000 DVDs of Extras and signed up for two Hollywood movies. So bring on the backlash… I want him writing about me every day.”

Where was talk of the Art, the Process, the Comedy, the Triumphs, the Tears, the years spent perfecting the “Act” ?

This man is so two-dimensional, he could probably score a part on the Simpsons.

Ricky – You are not only delusional but without Stephen – you are nobody.

Yes, yes,  we know that you have achieved a record number of Letterman appearances for a “comedian”  but remember that in the land of hand Merchants, the one-handed man is King.

( Do you realise that if Stephen had written that and you had said it (with a ……pause and a bit of….irony) –  then the sycophants, bum-chum Jonathan and the Americans would have thought that it  was a vintage Gervais rib-tickler!!) (OOH!!!)

Ricky – you are as lucky as any Lottery winner.

You can now go on Richard and Judy and say something like: ” Yeh……….I’m not a comedian………I’m just a genius who got lucky. Yeh……” They will laugh at the self-deprecating “irony” . But then again, they have already bought into the scam.

And remember: Sales volume is not necessarily talent.

Please give up the “stand-up”.  The false confidence that you are displaying on stage is a function of your current bank balance. It is not real.

Bucks = Confidence Arrogance.

What did you say?   You sold all the seats?  Future bookings?  Money?  DVD sales?

But you are NOT funny.