CustomerSoft is a start-up company that sells customer relationship management (CRM) software. Thanks to a great product, this start-up has established a position in the marketplace, but the CEO, Ethan, is perpetually in search of good salespeople.

The company’s annual retention rate is less than 15 percent—a terrible figure—and only half of its established salespeople are hitting their quotas. One night, the CEO shares his problems with a good friend, Cecelia, who is CEO of another company. Cecelia’s company does not compete with CustomerSoft, but it does have similar long sales cycles and complex buying patterns.

Ethan tells Cecelia what’s working and what’s not in his sales department and asks her for some advice. Because they are good friends, Cecelia gives Ethan three great pieces of advice that he might otherwise have had to pay a consultant tens of thousands of dollars to get.

The first of those three pieces of advice Cecelia offers sounds brutal:

“Get rid of salespeople who have had six months or more to get up and running with your company but have nothing to show for it,” she tells the CustomerSoft CEO. “They are not capable of managing a long, coalition-driven sales process, which is what people who sell for you have to do. Cut your losses and fire these people today.

The rest of the sales department is demoralized because you are subsidizing poor performers.” Even though it’s tough advice, the minute he hears it, Ethan knows it is right.

Cecelia’s second suggestion is just as direct:

“Start an aggressive new hiring campaign, but hire people who are real strategists and diplomats. Those are the sellers who can handle a complex sales cycle like yours. Your big problem is that you’ve been making ‘gut decisions’ about hiring in the sales department, and your gut has been pointing you toward the wrong people. In addition to looking for relevant experience on the resumé, which you haven’t really been doing up to this point, you should confirm that any new applicant you consider hiring has the right temperament and personality for this job. Not every salesperson can handle a sales cycle of 24 months, so I think you should do some personality testing to confirm that you’ve got the right person.”

Cecelia’s third piece of advice seems just as relevant and useful as the first two suggestions:

“Put any new salesperson you hire on a 90-day probation, and enforce that probation. Make a list of the key performance indicators you’d like to see the person make progress on over the first three months, share that list with the new hire, and assign a mentor to help the new person get up to speed. Check in every week. If the metrics aren’t there, cut your losses and refuse to give the person a full-time position with your company.”

These three suggestions—fire nonperformers, do a personality assessment as part of a new hiring blitz, and set up a meaningful probationary period for new hires—are not ideas that Cecelia came up with out of thin air. She has actually used them in her own company, and she shared them with Ethan because they’re directly relevant to his business. These are good ideas, yes, but they’re more than that. They are best practices.

Better hires. More consistency in manufactured products. Better customer service. Reduced time to market. Improved efficiency. These are the outcomes we want to deliver in our business. Best practices show us what we can do to make those outcomes happen.

Best practices are a specific way of working—through processes, procedures, and standards—to achieve a business’s goals and objectives. A best practice is considered the most effective way for either a group or an individual to achieve a particular outcome.

For instance, a manufacturing company will likely use APICS, the best practices espoused by The Association for Operations Management. APICS stands for “Advancing Productivity, Innovation, and Competitive Success” and provides manufacturing companies with best practices and standards relating to production, inventory, supply chain, materials management, purchasing, and logistics. Similarly, consulting firms that provide project management services rely on the Project Management Institute’s Project Management Body of Knowledge (PMBOK) for best practices and standards for managing projects.

Best practices are not static; they change as ways of doing business change and as rules and regulations change on the local, national, and international level. Best practices also change as individuals and businesses learn of better ways to accomplish their goals.

As new industries—or variations on industries—develop, best practices will arise to support that industry. For instance, the “green” businesses working to reduce carbon emissions and minimize other environmental impacts are continually developing best practices for going green, particularly as new regulations require industries to reduce emissions. One such best practice is the Leadership in Energy and Environment Design (LEED) framework, used by the construction industry as a guideline for designing and building “green” buildings.

Best practices are available for nearly every aspect of your business, including how you manage people, how you handle your finances, the technology you put in place to run your business, how you manufacture new products, and how you manage sales and marketing efforts.

By using the best practices of larger businesses, a small business can run more efficiently, increase profits, be innovative, and improve customer satisfaction. Too often, however, owners of smaller businesses don’t believe that their industry’s best practices will work for them. Smaller businesses can often benefit from the best practices of their industry and those of larger businesses, but they will likely need to “tweak” those best practices to get them to work optimally. This book provides you with many insights on the ongoing task of adapting the right practices for your business’s unique needs.

Competitors, even very large competitors, can teach you a lot. Don’t overlook what others are already doing in your industry. Don’t waste precious time and resources trying to create solutions that others have already found. Using the best practices of others in your industry with minor adjustments to fit your way of doing business can save you a significant amount of time and money in the long run.

Start slowly at first. Take a particular process in your business—how you manage customer service calls on your product, for example—and learn how other businesses effectively manage their customer service calls.

Suppose that your company manufactures and sells car seats for infants and young children. Your customer service department is responsible for handling phone calls from customers who have bought car seats and have questions about installing them. You would like to see a reduction in the amount of time it takes your reps to answer incoming calls; currently, the phone rings four to five times before your customer service department answers. You would like to improve that to a maximum of two rings prior to a customer call being answered.

To improve that business practice, you should take the following steps:

By drawing on data from industry groups and competitors, you can shorten the amount of time it takes to implement best practices in your own business. Rather than starting from scratch, look and see what is already in place out there. Undoubtedly any aspect of your business you are trying to improve has already been addressed by another business.

Here’s one best practice we feel strongly about: join a local chapter of your industry’s business organization. Such industry groups provide member organizations with access to a variety of resources, including conferences, newsletters, and industry experts. Additionally, many industry associations provide education for their members through webinars and instructor-led courses, including the possibility of certification. For example, the Project Management Institute (www.pmi.org) provides certification of project management expertise, such as the Project Management Professional (PMP) designation.

Your first stop for research into best practices should be the association group for your particular industry, almost all of which gather data on what member businesses are doing. Many industry associations hold annual conferences where business leaders discuss best practices their companies have adopted and how they have impacted sales and customer service. Use these conferences to gather information about what has worked elsewhere and how you might use this information for your own business.

There is a right way and a wrong way to apply best practices from within your industry. Although you might be in the same industry as another business, there are always some key differences, whether it’s the type of products you’re developing, how you interact with customers, or how you measure employee performance. Don’t assume that what works for other businesses within your industry will work for your business without some adjustment to suit your unique needs.

For example, suppose you hear that one of your competitors is successfully using newsletters to generate interest in their products and increase sales. You are having a hard time increasing profits in a down economy and are eager to try out this approach. If your competitor is doing it, it should work for you, too, right? Not necessarily. So what do you do? First, do a bit of research.

Sign up for the newsletter from your competitor. Take a good look at what is included and how often the newsletter is published. Research other companies in your industry that use newsletters. Try to find out why they started sending newsletters and how they have benefitted from using them. Many companies are willing to share what works for them and what doesn’t as long as you are not a direct competitor.

If, after researching the newsletter, it still looks like a good idea, do a bit of planning next. As a best practice, consider the following questions:

By thinking through these questions and answering them specifically for your business—and not just based on what companies in your industry are doing—you will be in a better position to determine if newsletters will increase sales and profits for your company.

When you decide to survey your current customers, use the survey to help you gather data to answer the preceding questions; in addition, ask customers about current newsletters they receive and what features of those newsletters are most appealing. You might ask the following questions:

Let’s assume that after gathering this data you have learned the following:

By including this information in your newsletter, you have met the customer’s needs and established a best practice for your business on the use of newsletters.

Benchmark your current processes and practices against similar companies’ processes and practices to understand how your business is currently performing. What is being done well and what needs work?

One particularly good way to benchmark your performance is by surveying your current and prospective customers. Additionally, surveying members of an industry association to which you belong is a good way to understand how they do business.

Let’s look at another example. Assume your business provides financial services to other businesses. You have heard from a few potential customers that they have decided to go with another company rather than yours for financial services. You’ve asked those businesses to tell you what company they’ve chosen and why they made that selection. Additionally, you have decided to send a survey, through a third party, to ask the following questions of companies that purchase financial services:

As you gather and analyze data, you will learn why companies buy from other companies—maybe they offer discounts or additional services or do a better job of responding to inquiries—and why they remain with that company for extended periods of time—maybe that company provides high-quality customer service or reduces fees for long-standing customers. Analyzing this kind of information can help you identify new ways you can improve upon what you currently do in your own business.

Don’t discount best practices from outside of your industry. Businesses in other industries also have customer service departments, hire employees, and use technology for efficiencies, yet you’d be surprised how often small businesses focus solely on their own industry to gather best practices.

Looking outside your industry doesn’t have to be an onerous process. To find out about best practices outside your industry, look to research conducted by companies such as McKinsey & Company, Inc., Forrester Research, and IDG Research Services. Research from these companies is frequently free to members, or can be purchased by nonmembers:

These are just a few examples of websites you can visit to purchase extensive research to help your business make decisions on new products and services and to better reach out to your customer base.

Let’s consider another example. Suppose your business sells invitations for parties, weddings, and holiday events. You want to find out what the best practices are for presenting your product at events such as wedding expos and craft fairs. You currently find that attending such events doesn’t help your business attract any new customers, and you’d like to use these events to increase your customer base.

In addition to looking at how others in your industry promote their products at expos, you are also looking outside your industry. You research how other businesses, such as software companies and training providers, display their products and focus on their services at events. You talk with vendors to get their perspective on best practices for displaying products. Additionally, you talk to other small businesses you have met through the Chamber of Commerce about creative ways to present products to potential customers at conferences and exhibits.

You learn that many businesses offer free samples of their products in a variety of designs, hang posters with customer testimonials, and offer a 20 percent expo discount. You adopt these best practices for your next expo and gain four new customers whose orders total more than $5,000.

Implementing best practices enables you to improve how your business functions overall. Even for the smallest business, best practices can bring efficiencies that enable the business to grow in the most effective way possible.

By improving internal performance in areas such as design, production, sales, operations, accounting, and customer service, small businesses can begin to see quick increases in productivity, a reduction in time to market for new products and services, and short-term improvement in the quality of the products that reach the market. Improving the way work is done within the business also makes it easier to attain long-term strategic goals.

In addition, getting into the habit of capturing lessons learned from specific projects, and then sharing those lessons with others within your company, tends to improve business efficiencies.

Creating customer value enables you to retain your current customers, increase your rate of referrals from current customers, and attract new customers to your business. Obviously, this is an important competitive advantage.

Use surveys and conversations to find out what value you bring to your customers and what else you can do to increase that value. Creating value for your customers earns you their loyalty and increased business.

No company can afford to throw money out the window, but keeping costs down is particularly important for small businesses. Not surprisingly, best practices that help small businesses cut costs tend to be among the most popular. You will find a number of such best practices in this book.